Margaret Thatcher, Libertarianism, and the Etherization of the Single Tax – Merion West

Margaret Thatcher was a self-described libertarian from that era. She did something quite different with the single tax problem; she altered the class structure of the country.

No single piece of legislation has enabled the transfer of so much capital wealth from the State to the people. MP Michael Heseltine on the sale of publicly owned housing (Right to Buy), UK (1980)

The introduction of the Right to Buy policy in the 1980s can be considered one of the greatest intergenerational injustices in recent political history. David Kingman at the Intergenerational Foundation, UK (2017)

The Single Tax broke through in elections on two occasions. In 1886, Henry George ran for mayor of New York, leading a party of labour unions, Catholics, and Georgites with a land value tax platform. The Pope himself took part in stopping him. Then, in 1906, in Great Britain, the Liberal Party, propelled by an historic re-emergence of the land reform movement, won a landslide general election victory. The House of Lords sacrificed its legislative veto to halt land value taxation.Two elections, two crises.

The single tax (i.e. the shifting of taxes from labor and capital onto land value) had met formidable opposition. The single tax as something one can vote for ended in Great Britain soon after the Great Warat that time of revolution, imperial dissolution, regicide, epidemic and economic dislocation. Very close to home, Ireland, where the land question had raged for decades, was at war with the British Empire. From Londons point of view, it was not a time for experiments.

The [Liberal-Conservative] coalition dug the grave wide and deep. They flung into it the Land Taxes of Mr Lloyd George, the Land Valuation of Mr Lloyd George and the Land Policy of Mr Lloyd George. They dumped earth upon it. They stamped down the ground over the grave. They set up a stone to commemorate their victory for testimony to the passing stranger. Here buried forever, lies the Land Crusade.Never, it would seem, was a cause so sensationally and utterly destroyed. C. F. G. Masterman, politician and commentator (1920) quoted by FML Thompson in The Land Question in Britain, 1750-1950

Exactly the same thing happened on the Left. The Left was very closely linked to Georgism. A majority of Fabian-socialists either were or had been Georgists, and the Fabian society was formed by activists minted by Henry George himself, by his speeches and debates in the 1880s. Years of trying to reconcile Georgism and socialism followed, but the vanguard of the Left then also abruptly dropped the single tax.

The attempt to put into force any such crude universal measurewhich, it may be explained, is very far from being contemplated by the Labour Partywould inevitably jeopardise the very substance of the nation. B. and S. Webb, A Constitution for a Socialist Commonwealth of Great Britain (1921),quoted in Peter dA. Jones Henry George and British Socialism.

The Representation of the People Act (1918) had added millions to the electorate. The pre-war land crusade, which was especially intense in Ireland, Scotland and Wales, had driven three general election victories in a row. What might it do now, with so many new landless voters? For the sakes of both the old right and the new left, liberalism, this thought-out, land-centric incarnation, had to be buried.

Disappearance was, indeed, achieved, but the burial was a hoax. The Single Tax to this day, lays living, etherized upon a table. The patient is tended to, kept under, by a staff of ex-devotees; lords, liberals, leftists unable to let go completely. Many were libertarians. Libertarianism was borne on the Georgist wave, just as socialism was. But unlike socialism, libertarianism naturally developed on Georgist lines: both are classically liberal and anti-monopoly. Albert J. Nock, the greatest libertarian critic of The State, had no doubt:

[Henry George] was the only [reformer] who believed in freedom, or (as far as I could see) had any approximation to an intelligent idea of what freedom is, and of the economic prerequisites to attaining it.

But post-World War II libertarianism also reached for the anaesthetic. A heavy price was paid. In order to sever roots and accept in toto the current system of state-founded, state-protected land monopoly libertarianism had to sacrifice its first principle: self-ownership. It also had to withdraw its original and most powerful critique of The State. In 1939 the author of Taxation is Robbery, Frank Chodorov,had written: The socialization of rent would destroy taxes. The State (as we know it) would disappear.

That taxation is intolerable, of course, remains central to libertarian rhetoric. But the rhetoric is thin. Does libertarianism today claim, as Chodorov did, that taxation itself can be abolished, transforming the State into something else, free of systemic privilege, i.e. minarchy? Would it say this: The [modern doctrine of taxation] does not distinguish between property acquired through privilege and property acquired through production. It cannot, must not, do that, for in so doing it would question the validity of taxation as a whole. If taxation were abolished, for instance, the cost of maintaining the social services of a community would fall on rentthere is no third sourceand the privilege of appropriating rent would disappear

The answer is no. In 1957, a former student of Georgism, Murray Rothbard, stepped in and ended the single tax debate within mainstream libertarianism. He simply denied the existence of rent: The first consequence of the single tax, then, is that no revenue would accrue from it.

Despite the misunderstanding, he got away with it. Chodorov had placed the single tax at the center of the libertarian critique of the state. The prolific Rothbard, the quietist, the etherizer, overwrites Taxation is Robbery. The meme taxation is theft was then appropriated and etherized and has become a mantra. State transformation via tax reform is a cancelled option; the most a libertarian can aspire to now is tax evasion: We should welcome every new loophole, shelter, credit, or exemption, and work, not to shut them down but to expand them to include everyone else, including ourselves.

Such was the transition to Royal Libertarianism.

Margaret Thatcher was a self-described libertarian from that era. She did something quite different with the single tax problem; she altered the class structure of the country. Before Thatcher became Prime Minister, she was grilled on land economics and the unearned increment by William F. Buckley (a Georgist) on television. She skillfully tiptoed around the subject but did, when pressed, give a nod in the direction of the single tax. She clearly understood the Georgist diagnosis of economic malaise. However, a few years later, after the election, she administered the anti-Georgist cure. The policy was called Right to Buy, the sale of publicly-owned real estate (council houses and, crucially, the value of their locations) to tenants. Around two million took up the offer. A boom in the wider real estate market followed. The government, in the Parliamentary debate on the bill, was frank: No one can dispute that the home owner in recent decades has gained immensely from the fact of ownership. The gain has accrued partially from the judgement and thrift associated with the saving to buy, but even more from the tax-free windfall gains that have accrued to virtually everyone once he has bought his own home.

Heseltine then went on to describe how the tenant paying rent (i.e. the non-landowner) is in a very different boat. The tenant receives no benefit from rising land value. On the contrary, the renter pays higher rents. This, of course, is the Georgist thesis on inequality in a nutshell, presented as common fact. But instead of using that fact to advocate for the single tax, it is used to advertise real estate:

There is in this country a deeply ingrained desire for home ownership. The Government believe that this spirit should be fostered. It reflects the wishes of the people, ensures the wide spread of wealth through societyand stimulates the attitudes of independence and self-reliance that are the bedrock of a free society.

The aim was to create an incentive society, a property owning democracy. The home-owner was a variation on libertarianisms entrepreneur ideal-type. This entrepreneur does not see Chodorovs distinction between production and privilege: between an innovator-entrepreneur (production), and a rentier-entrepreneur (privilege).

The Bill has two main objectives: first, to give people what they want, and, secondly, to reverse the trend of ever-increasing dominance of the State over the life of the individual,Heseltine said in 1980.

The language is deflecting; it is the people who want the expansion of the land windfall. Thatcher was following Rothbard to the letter; she achieved the radical expansion of a tax loophole. It was a brilliant move, and it laid in a voting block hostile (we are told) to any attempt to revive the sleeping patient.

In recent years, the results of Right to Buy have been examined. The first Right to Buy house, a two bedroomed terrace was sold in 1980 to its council tenants. Located near enough to London, this is what happened to its price:

1980: 8,000 (average wage 6,000)

2020 301,000 (average wage 36,000)

332,000 (current est.)

That price rise, that increment, was privatized in 1980, an act of enclosure. However, in widening land monopoly, Thatcher ignored the law of monopoly: The big eventually devour the small. The attempt to engineer a permanent property owning middle class has failed.

40% Of Right-To-Buy Homes Now In Hands Of Private Landlords.

In The Huffington Post, 2017

For 25-34 year-olds earning between 22k and 30k per year, home ownership fell to just 27% in 2016 from 65% two decades ago.

In The Guardian, 2018

Adults in their mid-30s to mid-40s are three times more likely to rent than 20 years ago.

In The Guardian, 2020

Margaret Thatcher engineered a new landowner class large enough to keep the Single Tax out of politics. But she used the poison as the cure. The home-owning class is now shrinking. Monopoly feeds on monopoly. The patient lays etherized.

Darren Iversen is an independent student of Georgist history in England.

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Margaret Thatcher, Libertarianism, and the Etherization of the Single Tax - Merion West