Georgist Definitions of Labor, Capital and Land

Introduction

In trying to figure out what Henry George was talking versus what his many followers say he was saying. I have to look at his definitions, because that is where he starts. He wasn't really using new definitions. But in some cases he was unspinning what most folks were pedalling. In this little exercise I'm going to focus on his three major terms; Land, Labor & Capital In that order.

Land

He defines Land:

"The term land does not simply mean the surface of the earth as distinguished from air and water—it includes all natural materials, forces, and opportunities. It is the whole material universe outside of humans themselves. Only by access to land, from which their very bodies are drawn, can people use or come in contact with nature." [Page 20]

Labor

George pretty much dispenses with most of the Bull and defines Labor as such:

"Wages are the portion of production that goes to labor. Therefore, the term wages includes all rewards for such exertion." [Page 18 paragraph 3]

Then he defines wages:

"Wages, in the economic sense, simply means the return for the exertion of labor."

"Whatever is received as the result or reward of exertion is 'wages.'" Henry also had to explain what Labor and wages are not:

"Wages are not drawn from capital. On the contrary, wages are drawn from the product of the labor for which they are paid." [page 18 Wages and Capital]

Wages are drawn from production.

Wealth and Capital

And part of the argument for why wages are drawn from labor, hinges on what Capital is not:

"they claim, without reservation, that capital limits labor. Then they state that capital is stored up or accumulated labor. If we substitute this definition for the word capital, the proposition refutes itself."

If Capital were a store of labor then labor can't come from Capital. The fact that these folks argue this way just shows they were fascists then. The fact they still argue this nonsense in some circles is evidence they are just conning us. But as Henry George notes, the economists and folks advertising for Capitalism aren't precise. He notes:

"The idea of capital, on the other hand, is so beset with ambiguities that it is difficult to determine a precise use of the term." [page 19]

Wealth And Capital

Therefore he starts by saying what Capital is not, drawing on the writings of Adam Smith and other economists.

"nothing properly included as either land or labor can be called capital."

In order to define Capital he has to define "wealth":

"Wealth, then, may be defined as natural products that have been secured, moved, combined, separated, or in other ways modified by human exertion to fit them for the gratification of human desires." [P & P Ch2]

Capital

This leads to an economic definition of capital:

"Capital is ... [that] part of wealth—that [is] devoted to aid production." [P & P Ch2]

He further refines that definition to be:

Capital is "wealth in the course of exchange."

That is, it is wealth derived from some sort of production, transformation, etc... that is being used to help produce more wealth.

Discussion

The reason for these definitions is to help when differentiating between the rules for his Land Value Taxation. If Wages and Capital are to be excluded from taxation -- then we have to be clear what is meant by those terms.

Further Readings

For this essay I'm using mostly "Progress and Poverty" as a source

I tried to reference the following Online version of Progress and Poverty, but I find it's totally different from the book version I have. The below version seems to try to clarify things, but actually obfuscates.

Schalkenbach version:

http://schalkenbach.org/library/henry-george/p+p/ppcont.html

Also:

http://www.henrygeorge.org/pcontents.htm

Related Articles:

Henry George on the Income Tax and Monopoly:

http://holtesthoughts.blogspot.com/2015/08/henry-george-on-income-tax-and-monopoly.html

Henry George would have been for Social Security! [funded by LVT]

http://holtesthoughts.blogspot.com/2015/08/henry-george-would-have-been-for-social.html

The Target of progressive taxation and LVT is unearned land rents/income

http://holtesthoughts.blogspot.com/2015/03/the-target-of-progressive-taxation-and.html

The Death of Henry George

http://holtesthoughts.blogspot.com/2015/03/the-death-of-henry-george.html

Spencer versus Locke & Henry George

http://holtesthoughts.blogspot.com/2014/11/spencer-versus-locke-henry-george.html

Review of "A Tale of Two Cities" [in 1886, and Events That Shaped a State]

http://holtesthoughts.blogspot.com/2015/06/review-of-tale-of-two-cities.html

Virtue and Vice: An Ethical system based on Justice

http://holtesthoughts.blogspot.com/2015/06/virtue-and-vice-ethical-system-based-on.html

The 1893 revolt of the Georgists Against Henry George

http://holtesthoughts.blogspot.com/2015/08/the-1893-revolt-of-georgists-against.html

Economic Rents are private Taxes

http://holtesthoughts.blogspot.com/2015/07/economic-rents-are-private-taxes.html

The Georgist Constitution

http://holtesthoughts.blogspot.com/2015/08/the-georgist-constitution.html

The Following were posts related to Henry George, John Locke and the so-called "libertarians:

Holte's Law applied to Rothbard on LVT

http://holtesthoughts.blogspot.com/2015/04/holtes-law-applied-to-rothbard-on-lvt.html

Common Property and the Commons

http://holtesthoughts.blogspot.com/2014/12/common-property-and-commons.html

Commonwealth according to Locke

http://holtesthoughts.blogspot.com/2014/09/commonwealth-according-to-locke.html

Libertarians versus Henry George and Marx

http://holtesthoughts.blogspot.com/2015/04/libertarians-versus-henry-george-and.html

I just realized I have enough stuff for a book on Henry George

When the Media is Hostile to the Truth

I've been reading about the 19th century a lot as I continued my delving into our countries actual history in order to un-spin the narrative that I learned in High School and College. In the 1890's reformers had to create their own alternative media because most newspapers were intensely partisan and most were, like Faux news is today, completely unprofessional. If anything the experience has sensitized me to parallels from today. We are facing a hostile media that cannot report anything on progressive issues honestly or without giving "equal" time to RW propaganda.

Kerry gave an excellent speech yesterday. But it wasn't reported well. CNN and CSPAN reported it. NBC spun it. and I'm not sure what the other channels did. But I doubt Fox even mentioned it. The media are playing "Hearst Newspapers" with Iran. In the 1890's when the Hearst family wanted a war -- they and allied papers would hype up what they wanted people to know -- and they'd get their war. The media conglomerates are doing something equally irresponsible now by hyping faulty information about the Iran deal (both here and in Israel) while not covering, or poorly covering information to the contrary.

http://www.nbcphiladelphia.com/news/local/John-Kerry-Nuclear-Deal-Philadelphia-National-Constitution-Center-Iran-323876571.html

Media Matters

Media Matters is covering this skewed coverage and notes:

"Media outlets are playing up" a faulty poll "that found a majority of Americans opposed to a deal recently signed by the U.S. and major world powers with Iran, believing it will make the world "less safe." But that poll gave respondents no information about the deal, while other more comprehensive polls have found that when respondents are actually informed about the terms of the deal, a majority support it."

They are doing their best to ensure that nobody, especially the Jewish community in both countries, finds out the real details of the treaty until after the vote.

http://mediamatters.org/research/2015/09/01/media-hype-poll-showing-public-disapproval-of-i/205313

Mephistopheles and Human Rights

The arguments about what to do in the Middle East are nuanced. Do the wrong thing and this is what you see. Do nothing, the same. The fact our system is corrupt doesn't negate the duty to try to help, or diminish the virtue of when better strategies actually work. But it's hard. Foreign policy requires being Goethe's Dr. Faustus to Mephistopheles. And fundamental darkness is as matched as the power of enlightened thinking. Even when we do the right thing - this is what we might see anyway. But when we do the wrong thing, we are partly culpable in the deaths.

Joseph Stiglitz Slams Bad Economic Models

In a paper by Joseph E. Stiglitz titled; "Towards a General Theory of Deep Downturns" [GenTheory], Joseph Stiglitz lays out what is right and what is wrong about most of current Neo-liberal (Friedmanista) and Neo-Keynesian (he calls it "New" Keynesian) thinking about current economics.

Enormous Hubris!!!

he writes:

"deep downturns have marked capitalist economies since the beginning. It took enormous hubris to believe that the economic forces which had given rise to crises in the past were either not present, or had been tamed, through sound monetary and fiscal policy."

Continuing:

"Those who attempted to defend the failed economic models and the policies which were derived from them suggested that no model could (or should) predict well a “once in a hundred year flood.” But it was not just a hundred year flood—crises have become common. It was not just something that had happened to the economy. The crisis was man‐made—created by the economic system. Clearly, something is wrong with the models." [Stiglitz GT]

Tribunals, Admiralty Courts, Privateers versus Common Pirates

The thing you learn when working with bureaucratic organizations is that bureaucracies operate on inertia. Once something is set rolling it moves like a Giant Ship. Even if the captains of the ship see an iceberg ahead, even if every crew-member sees that iceberg, if the charter says "full steam ahead" they'll keep steaming according to their orders. That is why the most effective bureaucracies have a dictator at the top, a bottom up legislature, and some means to tell the Captain he can change course and not hit the Iceberg dead center. Bureaucracy is a feature of human organization. Armies are the oldest example of it. The next oldest is the Imperial Government, but that is an extension of military bureaucracy. What you don't want is concentrated power. Bureaucratic law is often unjust by design unless it is subject to democratic controls like appellate rights, jury trials & representative structures..

When the military, or any other bureaucracy, administers justice, the result is even more rigid than the bureaucracy on the Titanic. And unfair. So it has been with Admiralty Courts and the Investor State Tribunals. Admiralty Law has been "Investor Law" since ancient times. When State agents (factors) steal it is loot, when it is you or I, we hang for our crimes.

Why DC versus Heller was badly decided

I believe that DC versus Heller was badly decided. But since I'm not a lawyer and I agree that people should have a regulated right to own a gun under some circumstances. There are two fundamental reasons for this:

One: You can't sever the right to bear arms from the requirements for a "militia of the whole."

Two: The term "bear" is not synonymous with "carry" it means to use a weapon in a military/self defense capacity, not simply walk around with a weapon in ones hand.

The 1893 revolt of the Georgists Against Henry George

I reported the 1890 Formulation of the Georgist platform in my last post and how his 1890-1892 platform supported attacking monopoly at it's source. Modern Georgists don't seem interested in that part of his efforts. Well the Georgist movement revolted against Henry George on this issue!