Clue to the Economic Labyrinth By Michael Flürscheim Michael Flürscheim Clue to the Economic Labyrinth * Chapter I: Wanted, A new Gospel Chapter II; The Land Digitalized 2012 By grundskyld.dk remaining chapters Chapter III: Money Chapter IV: The effect of Scientific Paper Currency Chapter V: Free Trade or Protection Chapter VI: Banking Chapter VII: Interest Chapter VIII: Capital and Capitalism Chapter IX: Exchange Banks and Co-operation Chapter X: Democracy Chapter XI: Socialism Chapter XII: Conclusion may follow. I DEDICATE THIS BOOK TO THE PEOPLE OF NEW ZEALAND Michael Flürscheim Progress The time is ripe, and rotten-ripe, for change; Then let it come: I have no dread of what Is called for by the instinct of mankind; Nor think I that God's world will fall apart Because we tear a parchment more or less. Truth is eternal, but her effluence, With endless change, is fitted to the hour; Her mirror is turned forward to reflect The promise of the future, not the past. He who would win the name of truly great Must understand his own age and the next, And make the present ready to fulfil Its prophecy, and with the future merge Gently and peacefully, as wave with wave. The future works out great men's purposes; The present is enough for common souls. Who, never looking forward, are indeed Mere clay, wherein the footprints of their age Are petrified forever; better those Who lead the blind old giant by the hand From out the pathless desert where he gropes, And set him onward in his darksome way. I do not fear to follow out the truth. Albeit along the precipice's edge. Let us speak plain: there is more force in names Than most men dream of; and a lie may keep Its throne a whole age longer, if it skulk Behind the shield of some fair-seeming name. Let us call tyrants tyrants, and maintain That' only freedom comes by grace of God, And all that comes not by His grace must fall; For men in earnest have no time to waste In patching fig-leaves for the naked truth. —James Russell Lowell, 3 CONTENTS CHAPTER I .................................................................... 6 WANTED: A NEW GOSPEL ...............................................6 The Old Gospel...................................................................................6 Change of the Problem........................................................................8 The New Gospel ............................................................................... 15 Help given by Religion....................................................................... 15 CHAPTER II THE LAND .................................................. 17 Bridge Building................................................................................. 17 Principles of Land Reformers .............................................................. 19 Monopoly Character of Land............................................................... 20 Free Trade in Land............................................................................ 24 Defence of the Freehold .................................................................... 25 Peasant Proprietors........................................................................... 25 Concentration of Properties................................................................ 27 Power the Basis of Land Titles ............................................................ 31 Despotism better than Anarchy .......................................................... 32 Equal Division impossible................................................................... 33 What destroyed the Mark .................................................................. 34 Why not make the Community the Owner? .......................................... 35 Difference between the Lease System and that of Mark or Mir................ 36 Distribute the National Rental for Pensions or for the Relief of Taxation ... 36 How to limit Land Accumulations ........................................................ 39 Value .............................................................................................. 41 Improvements a Title to Ownership .................................................... 42 Interest on Improvements ................................................................. 44 The Single-Tax ................................................................................. 45 Principles of Taxation ........................................................................ 46 Income, Mortgage, and Bond Taxes .................................................... 46 Indirect Taxes .................................................................................. 47 Rent not included in Price .................................................................. 48 Shop Rents and Prices....................................................................... 50 Objection......................................................................................... 50 Rating: of Ground Rents .................................................................... 52 Cheapening of unimproved Land changes the Case ............................... 52 Rating on unimproved Values............................................................. 52 Confiscatory Nature of Land Tax......................................................... 53 4. The Abrogration of Private Land Ownership ...................................... 53 Progress and Poverty ........................................................................ 53 Land Taxation is not Land Restoration................................................. 55 Land Taxation would not prevent Land Monopolisation .......................... 56 Land Taxation would not put an End to the Abuses of Landlordism.......... 57 Self-interest does not insure best Use ................................................. 58 The Case changes under Land Nationalisation ...................................... 59 "Cash Payment is not the sole Nexus of Man with Man, ......................... 59 Henry George's Motives..................................................................... 61 Confiscation or Compensation ............................................................ 61 Force against Force........................................................................... 63 The Seller calling his Customer a Thief ................................................ 63 A bad Precedent ............................................................................... 64 4 Honesty the best Policy ..................................................................... 64 Attack against Herbert Spencer .......................................................... 64 Compensation for a Tax .................................................................... 65 A Grievance against Spencer.............................................................. 65 Land Nationalisation a Shock to present Customs and Habits of Thought . 66 Land Nationalisation involves Extension of Government Machinery.......... 66 No fear of Corruption in Tax Collection ................................................ 67 Single-Tax the easiest Method of carrying the Reform ........................... 67 Certainly the most Dangerous ............................................................ 67 Rebate of Rent Bill ............................................................................ 68 Referendum as a Protection ............................................................... 69 Occupation, not Freehold the old Form ................................................ 69 Opposition of Land-owners to Single-Tax............................................. 70 Appeal to the lower Motives ............................................................... 70 Danger of mixing Land and Tariff Problem ........................................... 70 The Mortgage the most serious Obstacle ............................................. 71 Cutting the Dog's Tall piece-meal gives more Compensation than immediate Land Purchase.................................................................. 71 The most Practical and Honest Method ................................................ 72 The State's Right of Pre-emption at present Prices................................ 74 Building Regulations do not affect House Rents, but Land Values ............ 75 Taxing vacant Building Lots ............................................................... 75 Defence of Non-Compensation ........................................................... 76 The Freehold doomed........................................................................ 77 Unearned Increment made by Public Improvements ............................. 78 Limitation of Right of Pre-emption ...................................................... 78 Effects of the Law ............................................................................. 79 Tax and Take ................................................................................... 80 Lease in Perpetuity ........................................................................... 81 Administration of the Public Land........................................................ 82 Length of Leases .............................................................................. 82 City of Wellington Leases................................................................... 83 Risks of the Tenant ........................................................................... 83 Betterment Clause...........................................................................