We're in for a wild ride. Exponentially accelerating technological, cultural, and socioeconomic evolution means that every year will see more developments than the previous one. More change will happen between now and 2050 than during all of humanity's past. Let's explore the 21st century and ride this historic wave of planetary transition with a confident open mind.

Wednesday, March 10, 2010

Landlords Are Feudal Parasites

Promotion of Georgist Land Value Tax, housing cooperatives, and abolishing of medieval parasites


It is remarkable how the last key remnant of pre-capitalist feudalism (private land ownership) persists to this day. What is even more surprising is that a solution to deal with the oppressive problem has been around for over a hundred years in the form of Henry George's Land Value Tax. A Georgist system would eliminate income and sales tax and just tax the previously parasitic do nothing feudal landlords who live off their often hereditary privilege. In essence it was assumed under the LVT scheme that since the American government is the one protecting them and conquering new land for them, the landlords should be paying rent to the government based on the value of their property.

As I have written in the Story of Joe the Land Baron, land ownership is the worst monopoly in terms of potential for abuse and exploitation on micro to macro scales. Those who would immediately say that it'd be even worse and more dangerous for the government to be the final singular landowner should reevaluate the moral justifications, allowances, and slippery slope arguments for taxes on income, product sales, and the like.

Sydney, Taiwan, and Singapore (a more pro-capitalist society than USA for those scared of government as your landlord) have had great success in improving economic efficiencies through Land Value Tax. That is because the tax does not produce deadweight loss the way property or income tax does. And yes it only applies to land and not any improvements on it since land was not produced by anybody and there is a finite supply of it (thus supply cannot be cut as in case of say, tax on luxuries).

Henry George was immensely popular back during Laissez Faire America since early capitalists (unlike their aristocratic descendants in the present day who have congress in their pocket) were still resentful of nobility and its wealth by default. In his own words,

"Like a flash it came over me that there was the reason of advancing poverty with advancing wealth. With the growth of population, land grows in value, and the men who work it must pay more for the privilege"

Indeed, there is a reason why a tiny city state of Singapore is one of the first to adopt this taxation scheme that broad range of thinkers (from the American founding fathers to Karl Marx) have an agreement on. Henry George really wanted to make America safe for capitalism by finishing a long struggle against landed feudalism that began in 1789.

"Furthermore, on a visit to New York City, he was struck by the apparent paradox that the poor in that long-established city were much worse off than the poor in less developed California. These observations supplied the theme and title for his 1879 book Progress and Poverty, which was a great success, selling over 3 million copies. In it George made the argument that a sizeable portion of the wealth created by social and technological advances in a free market economy is possessed by land owners and monopolists via economic rents, and that this concentration of unearned wealth is the main cause of poverty. George considered it a great injustice that private profit was being earned from restricting access to natural resources while productive activity was burdened with heavy taxes, and indicated that such a system was equivalent to slavery"

What often makes a large landlord the ultimate parasite and monopolist is the additional fact of him renting out rooms within land improvements to capitalists (who then use them as offices to run their wage slavery business out of). This makes the actual land baron a slave master to the second power and a real sturdy power center through pressure on company tenants. Obviously poor people who own a few acres of land and don't collect rents are not the focus of attack here (plus they would pay very little LVT due to lower social value of their land). Those people and corporate entities who own prime acres throughout large cities like London, NYC, and Moscow are the real problem. This feudalism and the poverty that it causes is a lot more noticeable when it's a large plantation in 1880s with poor people toiling on it. It is a lot less noticeable and allows the parasites to get away with it when it's a chain of apartment or office buildings.

Yeah but installing LVT is politically a very long and difficult road!! What can be done in the meantime?

Thanks for asking. In the meantime, the most obvious thing to do is mass social and political promotion of housing cooperatives. The cooperative corporation is a legal landlord entity that is collectively owned by the renters. Each person owns stock in this "landlord corporation" but the overhead is tiny since most of the "profits" are given back to renters in the form of lower rent (rather than maximized to go to non-tenant shareholders or some aristocrat's new jet plane). The feudal entity thus becomes decentralized among the people and controlled by them democratically.

People in cooperative housing pay a much lower rent than say their neighbors who depend on temporary contractual agreements with their often erratic master. It makes sense for a group to overcome the middleman land owner by collectively becoming the owner and splitting the money. It is already done in numerous areas of the world and United States and should be promoted on a mass scale at the expense of the landed oligarchy. In middle ages, the peasants often wanted to split and/or collectively own the master's farmland land they work on but do not own. Once Americans find out how much less they can be paying if they just force out the middleman, the same desire and motive will reignite itself. Only this time in urban jungles where most people now live.

It is good to close with a quote from presidential candidate Eugene Debs' anti-war speech that sent him to prison during WW1.

"And now among other things they are urging you to “cultivate” war gardens, while at the same time a government war report just issued shows that practically 52 percent of the arable, tillable soil is held out of use by the landlords, speculators and profiteers. They themselves do not cultivate the soil. They could not if they would. Nor do they allow others to cultivate it. They keep it idle to enrich themselves, to pocket the millions of dollars of unearned increment. Who is it that makes this land valuable while it is fenced in and kept out of use? It is the people. Who pockets this tremendous accumulation of value? The landlords. And these landlords who toil not and spin not are supreme among American “patriots.”  

In passing I suggest that we stop a moment to think about the term “landlord.” “LANDLORD!” Lord of the Land! The lord of the land is indeed a superpatriot. This lord who practically owns the earth tells you that we are fighting this war to make the world safe for democracy—he who shuts out all humanity from his private domain; he who profiteers at the expense of the people who have been slain and mutilated by multiplied thousands, under pretense of being the great American patriot. It is he, this identical patriot who is in fact the archenemy of the people; it is he that you need to wipe from power. It is he who is a far greater menace to your liberty and your well-being than the Prussian Junkers on the other side of the Atlantic ocean."

Stumble Upon Toolbar


  1. Nice piece on landlordism as a holdover from our feudal past. People who say capitalism is not working are correct but we do not have capitalism but a corrupt form of feudalism. In terms of capitalism and the idea of free markets the only time there is a free market in land is when there is a very heavy tax the value of land or rather on the rental value of land since as land value itself is taxed it is driven down while rent is not. Since we are now near to the time when this idea is about to get attention we must start making this distinction in our speaking and talk in terms of taxing the rental value of land which stays steady whether it is taxed or not.

    When the owner of land has a high holding cost he comes more into equal footing with labor whose holding cost is an empty belly every day and with capital properly defined as the tools of production which must be put to immediate use or lose its value from obsolescence and decay. The untaxed landlord has no holding cost because land per se needs no maintenance and thus the landlord can hold out for betters terms infinitely longer than can labor and capital. By the way land is not capital despite what corrupt economists have said. The real battle in cap[italism has never been between labor and capital but between labor and capital on one side and landlords on the other. Landlords were only too happy to have leftists point the finger at capital while they themselves could hide in the skirts of what is valid about capitalism. The high holding cost of land requires the landowner who otherwise has no incentive to make efficient use of his land any where near the incentive nay compulsion that labor and capital has to put themselves to work/use.

  2. Excellent point on landlords staying out of the spotlight and benefiting from the diversion of capital-labor conflict. Very often the strength of humanity's exploiters is inversely related to their public visibility. Good thing we don't have Internetlords yet to stop the current gently exponential informational awakening.

    Regardless of one's thoughts on how our economic system should continue to evolve, we can't move forward much without tackling landlordism. This may be a unique opportunity to bring factions within labor and libertarian movement into powerful agreement. They're already coming together due to our economic crisis and sheer necessity and having a common foe that is not a bankster for once may be healthy in this convergence process.

    Big time landholders are relatively easy to objectify (objectification being key component of domination), single out, and lump into the same group as banksters, bought off politicians, etc. Vast majority of the world's population already has this intense emotional resentment of landlords even if that resentment isn't eloquently verbalized.

    One day, as the paradigm shifts, the landed monopolists will all of a sudden seem very silly.