Alternative Realities

A Comparative book review by Dr. Adrian Wrigley

Comparing:

Progress & Poverty: An inquiry into the cause of industrial depressions and of increase of want with increase of wealth, The Remedy, 1879 by Henry George, author and writer with The Thunderer (now The London Times)

With:

Unjust Rewards, 2008 by Polly Toynbee, author and writer for The London Guardian with David Walker

Introduction

Both books represent serious attempts by their authors to uncover the fundamental reasons why the rich have been getting richer so rapidly, while nations are stretched to breaking point by poverty, misery and class division.

Toynbee identifies the “winner-take-all” rewards of contemporary capitalism, and advocates an increase of taxes on the rich and the creation of an anti-tax avoidance culture. Further, to address poverty, she calls for worker's minimum pretax wage rates to be increased using existing minimum wage laws.

George identifies the monopoly power of landowners and their collection of unearned economic rents as the bogeyman of capitalism. He calls for abolition of all taxes on workers, rich or poor, including taxes on income, sales and capital. In their place, he calls for a Land Value Tax, collected regularly from all landowners in accordance with the rentable value of the land they own.

So do either of these claimed solutions have anything to offer?

Effects of the “solutions”

George's solution, the Land Value Tax has never been implemented fully. Denmark has a partial implementation, and to a lesser degree Australia, Hong Kong. Denmark has the greatest national happiness in the world, combining a capitalist system with a high level of wellbeing. And when the system is left unfettered, proves itself to benefit the economy significantly.

Toynbee's solution, punitive taxes on high earners coupled with home-owner and landowner subsidies and full tax exemptions on all natural rents has been tried in the United Kingdom, the United States, and to a large degree still exists. Toynbee has described the flawed outcome of the present system, and demanded more of it as a “solution”. While this reasoning may appeal to the readership of The Guardian, economists would question its credibility.

We'll leave it to you to decide on the best effects...which in the former remain largely unproven and in the latter have shown a litany of failure to hard working citizens.

About the authors

Henry George (1839-1897) became the most famous person in America (except the President) following his widely acclaimed analysis of the economic system, Progress and Poverty. The book was been translated into over forty languages and sold millions of copies. Alongside Adam Smith, George was one world's most influential economists until the 20th century and the neo-classical revolution.

Polly Toynbee (1946-) is renowned for her commentaries in The Guardian and TV chat shows. Her credentials in the field of economics have yet to be proven. If she turns out to be right we can expect a new land of plenty. If not, misery will dissolve into catastrophe.

David Walker, the social affairs editor of The Guardian is a new writer in the field of economics.

Dr. Adrian Wrigley, a Cambridge-based entrepreneur writes at systemicfiscalreform.org