The Case for Modern Georgism
An obscure political philosophy that deserves a second chance
I’ve become a pretty anti-nostalgic person. Proclamations that “things were better in the good old days” tend to be both factually wrong and socially harmful. This is true in politics and in other areas of life (do you really miss having to rewind VHS tapes, or do you just miss the carefree innocence of childhood?). 21st-century problems require 21st-century solutions. That said, there is one old idea that I think never really got its due, and which might be well-suited to our current climate.
Georgism, named after American economist Henry George, began as a political philosophy that advocated moving the tax burden away from things like income and consumption. Instead, Gerogists argued, the bulk of tax revenue should be collected from a land value tax. The rationale behind this was multi-faceted. For one thing, while most people earned their living by working hard or producing valuable goods, landlords acquired their wealth by simply sitting on a piece of land that they were lucky enough to own (often by inheritance) and renting it out to be used by others. This seemed rather unjust to many people at the time (and to many of us, still does). So instead of letting a few private citizens capture and exploit the value of land, Georgists believe that all land should effectively be publicly owned and rented out to those who intend to make good use of it. The revenue collected from these landowners (or “landrenters”) could then be redistributed to all citizens in the form of a guaranteed basic income, or other basic public investments.
Georgism could certainly be updated for the present day. Among the contemporary Georgists that remain, there’s a strong emphasis on not just taxing land value, but fundamentally changing the way we view taxes and ownership. Instead of looking only at land, economist Noah Smith has argued that a modernized Georgism might try to place more of the tax burden on any type of wealth that people acquire without producing anything of value — such as estates, or the data collected by big tech companies. Furthermore, it would penalize negative externalities like pollution and carbon emissions. Intuitively, this just seems like a fairer way to collect tax revenue than taking a big chunk out of everyone’s paycheck, only to have the majority of that paycheck end up lining the pockets of a landlord. If governments can collect revenue and disincentivize negative outcomes at the same time, why shouldn’t they? This lays the groundwork for a market economy where growth is sustainable and wealth is distributed in a more equitable way. Sounds like a win-win!
While Georgism largely fizzled out in the U.S. before gaining much traction, it has been put into practice elsewhere in the world, and in particular, Asia. Economist Wolf Ladejinsky was a Georgist who pushed for land reform policy in several East Asian countries during the mid-20th-century, encouraging governments to repossess land from rich landowners and redistribute it to poor farmers. Despite being smeared as a “communist” during the Red Scare, Ladejinksy’s policies likely prevented more Asian countries from devolving into communist revolutions. And the message seems to have stuck. Taiwan’s government has long endorsed explicitly Georgist housing policies, and Japan is now renowned for its ability to keep housing costs in big cities relatively low (compare that to NIMBY strongholds like Southern California).
Part of the appeal of Georgism seems to be its “best of all worlds” nature that transcends the outdated left-right spectrum. One could almost look at it as a kind of progressive libertarianism, in which both negative and positive liberty are given equal emphasis.
As political economists like Daron Acemoglu and James Robinson have pointed out in their work, most people crave “freedom,” or the absence of being dominated by others. While domination can certainly come from government, it can also come from your landlord, your boss, your religious leaders, etc. Simplistic libertarianism tends to focus solely on warding off domination by government, but is quick to shrug off the other variants. On the other hand, socialists are often quick to suggest the opposite, entrusting awesome power to the state in order to bludgeon the other sources of domineering authority. Historically, this has tended to result in more domination, not less.
Georgism, meanwhile, is firmly rooted in the liberal tradition, with its strong emphasis on personal autonomy. Free markets are good because they provide people with an abundance of choice, but that doesn’t mean a lot if our choices are constantly constrained due to financial burdens (“a starving man is not free”). Somewhere along the way, many Americans lost sight of the fact that liberty and wealth redistribution are complementary, not contradictory.
(And this is certainly anecdotal, but in my experience, Georgists also just tend to be less ideologically rigid and more civil people online. So that’s nice.)
And for what it’s worth, Georgism already has an awesome slogan (at least if you’re a cat person). The backstory here is a little vague, but the phrase, “Do you see the cat?” came to be used by early Georgists to mean something similar to “taking the red pill,” minus the neo-reactionary connotations that term has taken on. Basically, one has “seen that cat” when they understand the importance of land in the economy. Clear as a bell, right?
Also, in the super-super-likely event that Georgism actually takes off again, I’d like to preemptively nominate this song as the official Georgist anthem.
In any case, the time is right for Americans to start pushing for modern, bold-but-workable ideas that can attract broad appeal without seeming too weak-kneed or technocratic. The Biden administration has already put forth some good proposals, from meaningful immigration reform to a livable minimum wage, but still faces potential GOP obstructionism (unless they can do something about that pesky filibuster). On the other hand, some Republicans have signaled that they might be more willing to compromise on certain legislative initiatives this time around — at least the ones that have become broadly popular. But that remains to be seen.
In that light, an idea like Georgism seems especially promising. More Americans across the political divide seem to be forgetting the late-20th-century aversion to redistributive policies, but it also seems to be the case that these policies are more popular when divorced from partisan rhetoric. A political outlook that reconciles individualist and communitarian impulses may help advance the conversation. Let’s take another look at that cat.
