provide opportunities of work for all men and secure to each the full reward of his labor; and that as a result involuntary poverty will be abolished, and the greed, intemperance, and vice that spring from poverty and the dread of poverty will be swept away."

Mr. George's proposition rests upon an extreme application of the doctrines of individualism and natural rights. Man, he holds, has an inalienable and equal right to live, and consequently an inalienable and equal right to those natural agents which we call land, and without which human life cannot exist. This right which attaches to the individual cannot be abrogated by law or custom, nor can it be alienated by one generation or set of law givers. Moreover, it is an equal right. A, B, and C each have a right to the soil, but A has no right to better soil than B or C; in consequence of which that part of land values which arises from the differential qualities of land belongs to society as a whole, and not to particular individuals. But the differential value of land expresses itself in the economic rent which it yields, and consequently, if society seizes this rent by taxation, it will satisfy the demands of the doctrine of natural rights, while leaving the actual management and exploitation of land in the hands of individual occupiers, thus avoiding the perils of direct public management.

Man also has an unalienable right, Mr. George held, to the fruits of his own labor. As the outcome of this right, Mr. George concluded that ordinary taxation upon property other than land, upon the product of labor as distinguished from land, the gift of God, is robbery. In his view it is as immoral to levy an ordinary tax as it is criminal to fail to tax that surplus which attaches to the better classes of lands, and which we call economic rent.

The policy embodied in Mr. George's scheme differs fundamentally from the policy which we have seen creeping into recent legislation. The latter purposes to reserve only a part of the value given to some forms of land by social development. Mr. George proposes to confiscate all of the " unearned increment." Most important of all, the former proposition applies only to the future unearned increment, and purposes only to take a part,

and that only after fair notice is given. Mr. George proposes to take all the unearned increment, past and present, and that whether the present owners have been encouraged to believe that they might be permitted to appropriate the whole unearned increment or not. Herein lies the essential injustice of Mr. George's scheme. As a nation we have induced immigrants and settlers to take up lands, clear them, and develop them with their labor and toil, with the promise that the values thus created by themselves and their neighbors should belong to them. Their risks and their sacrifices have been great. The "unearned increment" is not always unearned. Even if we assume that the State made a mistake in pursuing this policy, the results of the mistake must be cheerfully borne by the party at fault, the State itself. This of course does not mean that if the private ownership of land is socially harmful, it must nevertheless be perpetuated. It does mean, however, that if the state is to divest private owners, it must in equity compensate them.

Mr. George not only proposes to confiscate all economic rent without compensation, and to abolish all other forms of taxation, but the assertion is made in explanation and justification of the policy that it will abolish poverty. Such a policy might, indeed, prevent landowners, who do not care to use their land, from keeping it out of the hands of those who would use it; but how it would effect all the other predicted blessings is difficult for most people to comprehend. In the first place, it is difficult to imagine how the pure economic rent of agricultural land can be separated in practice from the annual value of separable improvements on the land. But apart from this difficulty, the appropriation of economic rent by the public without compensation to the owners will probably never appeal to the conscience of the American public as a just thing to do. No abstract reasoning, based on "natural rights," will persuade a modern nation to so radical a step. This honestly and earnestly advocated policy is only one more illustration of the danger of basing social reasoning on any theory of "natural rights."

In cities it is easier to separate the pure economic rent from the earnings of improvements, such as buildings. Moreover, it

is in cities that the principal evils attendant on private landholding are discoverable. Therefore the objections to land nationalization do not in the same degree apply to land municipalization. Many who will reject the one will favor the other. Even here, however, it is well to proceed very cautiously. Confiscation, at any rate, should not be tolerated. If great and expensive changes along this line should approve themselves to the people, the burden of the changes should be widely diffused throughout the community by means of inheritance and other taxes.1

Public Industries. In the beginning, let us briefly pass in review the principal classes of industrial enterprise in which the modern State engages for the satisfaction of other than State wants; because, obviously, we are not concerned with enterprises like the government printing office, the government navy yards, and in general, those incidental industries whose products the government consumes but does not regularly sell.

1. First, we find states like Switzerland monopolizing the manufacture of alcohol and certain alcoholic beverages, Japan monopolizing the opium traffic in Formosa, or commonwealths like South Carolina engaging at one time in the retail distribution of intoxicating beverages. The purpose of the State in engaging in such industries is primarily sumptuary; it is desired to regulate the traffic almost to the point of suppression, perhaps. Ordinarily a good revenue would be secured, but revenue is a very secondary consideration. Prices will be placed above the level of highest net profit, and not improbably the ideal of regulating consumption will be so vigorously pursued that profits will disappear altogether.

2. Secondly, we have the group of so-called “fiscal monopolies." France, for instance, monopolizes the manufacture of matches, cigarettes, and tobacco in general; Japan has recently gone farther than any other country in the creation of fiscal monopolies; while Prussia, Austria, Italy, Spain, and other European countries maintain public lotteries — as did many of the American colonies during the eighteenth century. The

1 See pp. 425 and 706 for further discussion of the single tax.

primary object of the State in undertaking these enterprises is public revenue, gain; and naturally a monopoly price is charged, the price which will yield the greatest net revenue.

3. Next, we have a group of enterprises consisting principally of the so-called "natural monopolies," which the State undertakes not for suppression, not for profit, but primarily for regulation to regulate the quality of the product, as in the case of water; to maintain effectively what have been called "equitable conditions for the prosecution of private business,” as in the case of railways; to prevent monopolistic extortion and corporate abuse, as in the case of lighting companies, the post office, the telegraph, and the telephone; or to prevent crime and preserve intact the foundations of commercial prosperity, as in the monopoly of coinage. The charges here are ordinarily adjusted to either the "revenue" or the "cost" principle, that is to say, the State will either aim to make a fair business profit such as is secured in competitive private enterprises, or it will endeavor approximately to meet expenses by adjusting its charges to the cost of production. England, France, and Germany, in ordinary years, obtain handsome revenues from their respective postal departments, but in the United States the accounts of the Post Office Department usually show an annual deficit, and taking the world over, the cost principle in this group of industries is probably more common than the revenue principle, and deficits more common than net profits. In the United States the post office has always been regarded as a developmental agency rather than a business enterprise, and might more logically, perhaps, be included in the next category.

4. Finally, we have a large and heterogeneous group of industries which are maintained principally for service, for their educational and developmental influence, not primarily for regulation, and not at all for profit, but "for the public good." We include here not only schools and educational institutions of all kinds, but roads and canals; the savings banks and public pawn shops maintained in several countries of continental Europe; workingmen's insurance as developed by Germany, Austria, and several of the Australian commonwealths; and model manu

facturing establishments such as France maintains for the production of tapestries and fine porcelains. In this group charges will sink to a minimum, and in some lines of enterprise, such as education, practically disappear. Revenue here is not only a minor, but is almost a negligible, consideration.

A brief consideration of the incomplete list of State industries given above brings out several important truths. In the first place, it is evident that only a few of these industries, the fiscal monopolies, have been taken over by the State for the purpose of revenue, and fiscal monopolies are decreasing rather than increasing in relative importance. In the second place, it is equally as clear that, on the whole, public industries are sources of expense and not of profit. When Professor Bastable, for example, tells us that in England, in the fiscal year 1893-1894, only 6 per cent of the national revenue came from public industries and other non-tax sources, that in the local revenues of England and Wales (1891-1892) taxation stood to other sources of revenue in the ratio of five to one, that in Prussia about 20 per cent of the national revenue comes from the domain and industrial enterprises, and in India something less than 50 per cent from " quasi-private sources of revenue," he is careful to warn us that the statistics take no cognizance of interest payments chargeable to the several industries, or of depreciation, or of related industries in which deficits and not profits were secured. When estimating the importance of State railway earnings in the revenue account, no cognizance is ordinarily taken of the canal deficit. In the third place, we perceive from the nature of the industries that they cannot wisely be operated for profit in many cases. Education, for instance, has been taken over by the State for the very purpose of charging less than the cost of the service. The unquestionable tendency is for the prices of goods and services supplied by a democratic State to sink below the cost of production, and this, in itself, is neither good nor bad, fortunate nor unfortunate. The public financier, in adjusting the charges, must not look to profit. His only aim is the salus populi, and this policy requires here a prohibitive price, there a cost price, and again free service. Finally, it