Deeply-rooted racial inequalities have once again burst onto center stage of the American consciousness. Like the capture of fugitive slaves in the 19th century, the murder of George Floyd, and many others in recent months, has brought back into attention the deep inequalities that are all too easy for many Americans to ignore. There are myriad ideas for how to move forward and represent the entire spectrum of views on race and policing in the United States. However, one thing almost all agree on is that the deaths of Black people at the hands of police are just one symptom of a far deeper system of inequality.
The unfortunate fact is that there is no one cause and therefore not one solution. Racism in the U.S. is complex and multifaceted, and it would be a mistake to describe any single reform as an overall solution. Economic measures are not a panacea; improving material circumstances will not cure the racial biases – implicit or explicit.
But, while they are insufficient, economic solutions are necessary for making progress on racism in the U.S. The material conditions of the Black community reflect and perpetuate centuries of racism, and thus those conditions need to be addressed as part of any effort to root out continued systemic racism. This is why Dr Martin Luther King, in his 1967 address ‘Where Do We Go from Here’, was so insistent on the elimination of poverty as a tool:
“The poor, transformed into purchasers, will do a great deal on their own to alter housing decay. Negroes, who have a double disability, will have a greater effect on discrimination when they have the additional weapon of cash to use in their struggle.”
It is no coincidence that Dr. King approvingly cites Henry George’s work Progress and Poverty in that address. George was not primarily a racial reformer, and while his own views on race were ahead of most of his white contemporaries, they were still imperfect. Nonetheless, he set out a comprehensive economic vision for the elimination of poverty from society. Both George’s understanding of the etiology of poverty and social problems, and his specific understanding of land and economic rent, are needed to help bring about greater material equality in the United States.
The first and perhaps most fundamental truth George laid out for 19th century Americans, and which still must be grasped today, is that poverty is not natural. He professed that it is indeed a symptom of profound injustice. In his essay, “The Crime of Poverty”, George wrote:
“the thing of things I should like to show you is that poverty is a crime. I do not mean that it is a crime to be poor. Murder is a crime; but it is not a crime to be murdered; and a man who is in poverty, I look upon, not as a criminal in himself, so much as the victim of a crime for which others, as well perhaps as himself, are responsible.”
Too often the response to deep poverty in this country is ‘yes, that is terrible, but that’s the way of the world’. When it is brought up that perhaps working conditions or wages are unfair, workers are simply told that ‘scarcity’ is the reason for their suffering – goods are simply scarce, and can’t possibly be provided to everyone if those in need aren’t working precisely according to the whims of their employer. Georgism takes a fundamentally different view – in a productive industrial society, the continued existence of poverty is an indictment of the economic structure.
George’s works also deny that people in poverty are responsible for their own condition. Too often, the inequality and misery of Black people and other poor people in the U.S. is blamed on their own behavior – if only they committed fewer crimes, or didn’t have children they couldn’t afford, all would be well. George explodes both arguments. In the aforementioned essay, he plainly states that “Poverty is the mother of ignorance, the breeder of crime”. In Progress and Poverty, he explicitly lists both the costs of crime and the costs of police as part of the unavoidable burden of “the present unjust and unequal distribution of wealth”. Moreover, in the same work he flatly and boldly denies the validity of Malthusian arguments for the source of poverty that had been accepted by previous generations of liberals, with unequivocal language: “I assert that in a state of equality the natural increase of population would constantly tend to make every individual richer instead of poorer.”
These basic beliefs are a necessary starting point – otherwise, the discussion of how to help communities is too quickly derailed by efforts to blame the victims of poverty for their own misery. By tracing poverty to its root – a fundamentally unjust system of property – George gives a perspective that avoids that distraction, without denying (as Marxism does) the important role played by both workers and entrepreneurs. While he shares with other materialists his diagnosis of poverty and violence as being rooted in economic circumstances, his focus on rent seeking and land ownership is a powerful tool many other perspectives lack.
Why would a focus on ‘land’ (in an economic sense, including water & natural resources) serve to further racial equality? It may not be a silver bullet, but a land value tax would be materially beneficial to Black Americas because of the specific ways in which wealth and income are distributed today.
When discussing economic inequality, the most used metric is wage inequality. This gap is severe – white workers earn over a quarter more wages than Black workers. But, that’s not even a fraction of the real story. The greatest difference is found in net worth; the average white household net worth is ten times greater than the average Black household. A land value tax would begin to address this inequality in two distinct ways: 1) by reducing the economic power attached to land ownership, which is deeply inequal in the United States, and 2) by reducing the burden of other taxes that fall more heavily on Black Americans.
The USDA recently released a report on who owns agricultural land in the United States, and the results are incredibly lopsided: 97% of the value of agricultural land is owned by the 70+% of Americans who are white. Residential land ownership is less dramatically skewed, but far from equal. Housing stock, a great percentage of which is land value, is a major contributor, with far more white than Black families owning their homes (73% vs 45%); among those who do own homes, white families have on average far more equity in those homes ($215,000 vs $95,000). A land value tax would begin to directly address this wealth disparity. Commercial land is more difficult to categorize, because much of it is owned corporately. However, the leadership in commercial real estate enterprises is overwhelmingly white, and white households are far more likely to own publicly traded stocks, the closest most individuals get to profiting from rising commercial real estate values.
None of this is coincidental: centuries of racist policy and practice have conspired to keep Black people from owning land, and to reclaim it for white interests at the first opportunity. The most valuable land in the U.S. was claimed before slavery ended; while most of those lots may now have new owners, practices such as redlining (refusing mortgage insurance or other financial services in Black neighborhoods) , racial covenants preventing people of color from purchasing homes in ‘white’ areas, and official and unofficial discrimination were used to ensure that most Black people have always been liable to pay rents.
Taxing land at or near its rental rate would lower the purchase price of land, or at least slow its appreciation. Because landowners would pay more yearly in taxes, they would be less willing to pay high upfront prices, and those prices would fall. This would reduce the massive advantage that white-dominated land ownership creates. Moreover, if successful in reducing land purchase prices, such a policy could also diminish the importance of home loans, making Black families less dependent on banks that still discriminate against them. Making rents and land appreciation community assets, rather than the assets of individuals and corporations who are overwhelmingly white, would not erase the legacy of racial discrimination that created these land ownership patters, but could blunt its impact significantly.
Reducing the tax burden on labor and families could also be a boon for Black workers and consumers. Although the current federal income tax structure is ostensibly progressive – introducing higher tax brackets for higher earners – details of this structure, as well as the structure of state and local taxes, conspire to ensure that taxes overall fall more heavily on lower income individuals than on the very highest.
Regressive local taxes – especially sales tax – are among the biggest contributors to this situation. Almost everyone in the country is impacted by sales taxes, but for the working class, they take a much greater percentage of income than for wealthier Americans. Moreover, urban areas frequently impose additional sales taxes, increasing the overall burden. Communities concentrated in urban areas, and those with less access to transportation, end up paying more. Historically, the tendency for sales taxes to fall more heavily on Black communities than other methods of taxation has been a feature, not a bug, for white-dominated governments.
The other major source of local revenue – property taxes – are better, but inferior to land taxes in a significant way: they are easier to pass on to tenants. A tax on property, ceteris paribus, leads to less overall investment in physical property, raising prices and rents. In this way, renters indirectly pay part of property taxes, in a way that they do not for land taxes. Because the quantity of land is not impacted by the tax, there is no disincentive to physical investment and rents do not rise; by incentivizing more efficient land use, a land tax will likely decrease rents. In effect, a shift from property and sales taxes would shift burdens from renters and workers to landowners. Due to the patterns created by centuries of unequal treatment, this would effectively diminish the tax burden on African Americans.
None of this is to say that even a full implementation of George’s ideals would put a stop to racism; there is not an economic solution for every problem. Addressing racism means changing minds and weakening the power of established bigots, neither of which is, at least entirely, susceptible to simply material solutions. Nonetheless, as Dr. King laid out in his later speeches and writing, creating economic parity between racial and ethnic groups in the United States is a necessary step. This is where Georgism, and the focus on land and rent seeking, can be a powerful tool for improving lives of millions of Americans.
