Thank you for this article, it's comprehensive and well researched.
I know basically nothing about farming, but I'm pretty fanatically in favor of Georgism. However, while I think that Georgism is perfect for urban (and basically all non-agricultural) real estate, where it is very easy to separate the land (the part contributed by nature) from improvements (created by the employment of capital and labor) for agricultural land, it seems harder, which George admits in Progress and Poverty:
"There are improvements that, in time, become indistinguishable from the land itself. Very well, then the title to the improvements becomes blended with the title to the land. The individual right is lost in the common right. It is the greater that swallows up the less; not the less that swallows up the greater. Nature does not proceed from humans, but humans from nature. And it is into the bosom of nature that we and all our works must return again." (Chapter 26)
Quite honestly, as much as I respect George and hate the Land Monopoly and as little as I know about agriculture in general, I find George's answer here unsatisfactory on some level. As I understand it, farming is a multigenerational enterprise, investments can be made in the land in terms of improving soil quality, planting tree cover to prevent wind erosion, etc. that can take generations to come to fruition. It really seems unfair, and counter-productive to not allow a farmer to profit from these investments, even if they were made by his forbearers.
This issue is discussed a bit amongst Georgists, with some half baked remedies suggested, like just trying to capture all land rents for non-ag real estate but only some guesstimated part for agricultural real estate. The problem is that most Georgists are city people and urban policy nerds, we don't know much about farming. Though Georgism is a universal theory, I'm comfortable admitting that it is, at heart a theory that's built around the problems of cities and towns where land value of a particular parcel is primarily driven by what people are doing around that parcel. George himself came up with the whole thing when trying to figure out why 1870's San Francisco had almost no extreme poverty while 1870's New York had loads of it, despite New York being the far more developed and richer city. For agricultural land, where value is driven more by the characteristics (soil, climate, etc.) of the parcel itself (though proximity to transportation is also a factor) it seems to me the methods and rationale behind determining the land value tax may need adjustment.
In my opinion, agricultural issues are a part of our thought that really needs some work. Given the absolutely catastrophic history of city-born social reform movements wreaking havoc on previously stable systems of agriculture, we are rather hesitant to simply trust in the sweet simplicity of our theory.
It would be highly beneficial to have some people who seriously understand agriculture and agronomics to work on the problem of coming up with a fair, comprehensible, and relatively easy means for determining what value is due to labor and investment and what value is due to nature itself.
I think you're thinking on the right track, but I’m not sure if I agree that the two are so hard to separate out. Especially if there were to be LVT thrown into the mix, we would likely see quantifiable improvement in soil quality happening in a matter of years, not generations. Changes in cultural practices that result in better quality farm land absolutely should be rewarded, but I think George underestimates the ability to make those changes in a fairly quick time.
Likewise, these things more or less follow the same logic as other forms of capital - they must be tended to, updated, fixed, etc. A windbreak of trees is hard to mistake for a natural occurrence, and they must be maintained, mowed around, etc. The only way that things like that (tree plantings, practices which increase soil organic matter, etc) would really be "returned to the bosom of nature" would be if someone stopped tending to it. If you stop mowing your fields, you will have a forest. If you stop using soil conservation practices, you will get erosion. The quality reflects what you put in, just like leaving a building alone will lead to its decline and eventual destruction. The quality of land above or below the next door neighbor's is generally a matter of labor more than nature. And so you are right! The farmer should be compensated for those things. When they sell to the next farmer a field with windbreaks, with soil that is nicer than the competition's due to their careful hand (these things can be measured easily, and just like we do home inspections when we buy a house, farmers can and should do soil tests before they buy land), the price should reflect those things because they are improvements, not land. Good farmers take records. Your records should show your soil tests when you start farming as well as your soil tests thirty years later. If you end up with something better than what you started with, it seems to me that this is due to labor and/or capital, not land. Just like Carfax shows you what has been done to your car, or permits and receipts show you what work has been done on a house. With LVT I think the separation between land and improvements would likely become even more obvious, more quantifiable, because fertility and therefore yield and therefore the quality of farmland would largely be a question of capital investment (drainage tile, irrigation, nutrients brought in like manures or composts) combined with labor as land use intensifies as using more land becomes less of an option.
There is a book by Peter Kropotkin called Fields, Factories, and Workshops, written over 100 years ago. It's not a georgist text but he touches on a lot of similar themes. In it, he describes the methods of agriculture used by small, very efficient market gardeners and interestingly he actually mentions that these small farmers would "take their soil with them" when they switched leases. They did this because what he's talking about is basically compost. A product made by the labor of these small farmers, often grown in things like raised beds. The labor they put into making this very fertile soil is a large part of the very high yields that they were getting off of their small market gardens. He even says something like "It wouldn't matter if these farmers were growing on top of asphalt, they would still be out producing bigger farms because they make their own soil". Which is actually how a lot of urban farms today do things! On bigger farms it may be a little harder to separate but it's not fundamentally different. All together I think it is a pretty solvable problem, but still something to be worked out. Much like the assessment problem. We have the technology to do it, we basically know how, but there are still some justifiable concerns.
In those cases where some things really do take generations like for example, an orchard of nut trees which may take 40 years before they come to their peak bearing age, again it is not so different from any other form of capital. In Chapter 3 of P&P (wages not drawn from capital) George writes, "And this is obvious in agriculture also. That the creation of value does not take place all at once when the crop is gathered, but step by step during the whole process…It is tangible in the case of orchards and vineyards which, though not yet in bearing, bring prices proportionate to their age". That orchard grows in value as it grows in age, and an orchard of half-mature walnut trees will sell for less than an orchard of fully mature, heavy bearing ones. But both will go for more than a hayfield, and as a direct result of the farmer's work in planting and maintaining those trees.
The one thing he is right about as far as "the greater swallowing the lesser" is in those unfortunate situations where a city or town begins to eat into what used to be farmland. As sad as it is to lose farmland, as a matter of rights here, it isn't really different than someone with a giant SFH taking up space that could be better used in a hundred different ways. That would be a matter truly related to land values, not improvements, and in that case, the farmer isn't necessarily entitled to any different treatment than anyone else. That being said, I don't see why long term leases couldn't be a thing, even under LVT which could protect farmers in those cases.
I hope this was helpful at all and that I'm not misunderstanding your comment somehow. Basically, I think it is not so hard to separate out improvements from land, even in the case of agriculture. Those cases where improvements become lost to the land are actually hard to imagine because a person naturally has an interest in showing that they have made and maintained improvements, unless lost to time in such a way as to be totally irrelevant. The fact that the land under a random restaurant or store in England may have had Roman drainage tiles installed 1800 years ago, for example. Those may have served a farmer then, but they are not relevant now. Or less dramatically, someone's grandfather may have dug a well that has since dried up or is no longer in use. That might be an improvement but it is probably of no value to a potential buyer. But basically, all of those cases where land and improvement have become one seem to fall under the umbrella of some sort of "abandonment". In which case, they really don't have any great value at all. But in every case I can think of where improvements are made that have value to the current farmer, I don’t see why the farmer wouldn't be able to be rewarded provided they can show that the improvement is actually there (such as in the case of soil quality, where it's not necessarily obvious just by looking).
This all sounds good, and again, I don't know enough about farming to quibble with anything. The only thing that I will say is that, in my experience people involved in very hands-on professions like farming are not impressed by mere sound theory and good ideas about how things could be done. (I deal with a lot of people in construction trades for my job). What they like to see are exact specifications of how things will be done (signed in triplicate).
Therefore, it would be helpful for Georgist inclined agronomists and agriculture experts to develop comprehensive but comprehensible methods of evaluating each aspect of agricultural land (soil quality, water quality and availability, erosion control, topography, etc.) that is aimed at making sure that no aspect of a farmer's work gets swept into LVT.
In addition, one has to take into account the land's suitability for different types of "agriculture" which does seem a bit difficult to me. For example, good pastureland and timberland can arise both naturally and through human effort, how do we account for that?
These methods should, once developed, be widely circulated as possible and modified as appropriate in response to feedback and criticism, even from anti-Georgists. Honestly, if we mess up the evaluation of urban land, it's a problem we can correct in a few months with minimal overall damage to the economy. Messing this up with agricultural land seems like it could have deeper long term consequences. We may, for that reason, have to err to the side of mistakenly setting the LVT to low rather than too high, even if it does allow farmers to capture a small bit more than a nominal sliver of land rents.
Most Georgists don't think we can literally set even the LVT of Urban real estate at 100%, the risk of over assessment (and therefore no one using the land at all) is just too great. So, most of us say that we need to set it at 85-90%, just to be safe. If a ton of farmers, agronomists and related professions were to insist to me that agricultural land needed a greater safety margin by 10%-15% or so, I think I might be inclined to agree even if I were slightly suspicious of their motives. Furthermore, since the idea of getting rid of farm subsidies is even more politically infeasible that instituting an LVT, this extra slice of Land Rents could serve as a simple and easy replacement for the current byzantine setup of farm subsidies.
Good response. I agree, only I don't find the situation with farmland exceptional. New, better assesment tools are going to be key across the board, but yes, we should be developing specific tools and methods to fit the situation. Again, I think that in order to account for the things you mentioned (timberland, pastureland) we only have to compare to surrounding plots. Often you can literally see the effects of good and bad management by looking down a fenceline and seeing the difference between someone's field and their neighbor's. Good pastureland isn't notable when you're surrounded by millions of acres of equally good pastureland. It is clearly not the work of the individual's labor in those cases. But when the quality of pasture is better on one farm than it is on the farm right next to it, it's obviously related to the management of the farm. A timber plantation likewise, is not the same as a natural forest that is getting logged, and we can see that very clearly.
The US already has very comprehensive soil surveys for the entire country done by (I believe) the USGS, so we know about average soils for basically every county in the country. We also are fortunate enough to have the Agricultural Extension network. Every county in America has a USDA office staffed with people who's job it is to inform farmers of the newest research, best practices, connect them with professionals and universities to help them answer questions and solve problems they may be facing, etc. It's a very cool thing, and it's already established in the country. Seems like that existing network could be leveraged to collect data/send out surveys to farmers to report on things that would be indicators of the quality of their land in order to help in the assessment process.
Ultimately, setting the LVT/split rate below 100% seems to be the move because it's just less harmful than setting it too high on accident, even if does leave a bit of unearned increment in private pockets. In some cases, I've heard even Georgists argue that allowing a tiny bit of private rent capture may be necessary not just for pragmatic reasons of avoiding political clashes but even for economic reasons. But yes I see where you're coming from and ultimately agree. I just don't know if I see it as an exceptionally challenging puzzle compared to the assessment problem elsewhere, but I definitely think it is part of the overall work that needs to be done.
"I've heard even Georgists argue that allowing a tiny bit of private rent capture may be necessary not just for pragmatic reasons of avoiding political clashes but even for economic reasons."
You mean because allowing 10% (let's say) capture of land rents would allow for a land sales market to continue to exist and therefore provide data that would make assessments easier?
That's the most common one, but I think the other case I've heard it had to do with incentivizing discovery for things like oil. It was a while ago, but I think the idea was that since you're not sure that there actually will be oil (or whatever mineral resource) where you mine for it, taxing 100% of land values could disincentivize even the act of looking for oil. It was a while ago, so I might be misremembering.
Thank you for this article, it's comprehensive and well researched.
I know basically nothing about farming, but I'm pretty fanatically in favor of Georgism. However, while I think that Georgism is perfect for urban (and basically all non-agricultural) real estate, where it is very easy to separate the land (the part contributed by nature) from improvements (created by the employment of capital and labor) for agricultural land, it seems harder, which George admits in Progress and Poverty:
"There are improvements that, in time, become indistinguishable from the land itself. Very well, then the title to the improvements becomes blended with the title to the land. The individual right is lost in the common right. It is the greater that swallows up the less; not the less that swallows up the greater. Nature does not proceed from humans, but humans from nature. And it is into the bosom of nature that we and all our works must return again." (Chapter 26)
Quite honestly, as much as I respect George and hate the Land Monopoly and as little as I know about agriculture in general, I find George's answer here unsatisfactory on some level. As I understand it, farming is a multigenerational enterprise, investments can be made in the land in terms of improving soil quality, planting tree cover to prevent wind erosion, etc. that can take generations to come to fruition. It really seems unfair, and counter-productive to not allow a farmer to profit from these investments, even if they were made by his forbearers.
This issue is discussed a bit amongst Georgists, with some half baked remedies suggested, like just trying to capture all land rents for non-ag real estate but only some guesstimated part for agricultural real estate. The problem is that most Georgists are city people and urban policy nerds, we don't know much about farming. Though Georgism is a universal theory, I'm comfortable admitting that it is, at heart a theory that's built around the problems of cities and towns where land value of a particular parcel is primarily driven by what people are doing around that parcel. George himself came up with the whole thing when trying to figure out why 1870's San Francisco had almost no extreme poverty while 1870's New York had loads of it, despite New York being the far more developed and richer city. For agricultural land, where value is driven more by the characteristics (soil, climate, etc.) of the parcel itself (though proximity to transportation is also a factor) it seems to me the methods and rationale behind determining the land value tax may need adjustment.
In my opinion, agricultural issues are a part of our thought that really needs some work. Given the absolutely catastrophic history of city-born social reform movements wreaking havoc on previously stable systems of agriculture, we are rather hesitant to simply trust in the sweet simplicity of our theory.
It would be highly beneficial to have some people who seriously understand agriculture and agronomics to work on the problem of coming up with a fair, comprehensible, and relatively easy means for determining what value is due to labor and investment and what value is due to nature itself.
I think you're thinking on the right track, but I’m not sure if I agree that the two are so hard to separate out. Especially if there were to be LVT thrown into the mix, we would likely see quantifiable improvement in soil quality happening in a matter of years, not generations. Changes in cultural practices that result in better quality farm land absolutely should be rewarded, but I think George underestimates the ability to make those changes in a fairly quick time.
Likewise, these things more or less follow the same logic as other forms of capital - they must be tended to, updated, fixed, etc. A windbreak of trees is hard to mistake for a natural occurrence, and they must be maintained, mowed around, etc. The only way that things like that (tree plantings, practices which increase soil organic matter, etc) would really be "returned to the bosom of nature" would be if someone stopped tending to it. If you stop mowing your fields, you will have a forest. If you stop using soil conservation practices, you will get erosion. The quality reflects what you put in, just like leaving a building alone will lead to its decline and eventual destruction. The quality of land above or below the next door neighbor's is generally a matter of labor more than nature. And so you are right! The farmer should be compensated for those things. When they sell to the next farmer a field with windbreaks, with soil that is nicer than the competition's due to their careful hand (these things can be measured easily, and just like we do home inspections when we buy a house, farmers can and should do soil tests before they buy land), the price should reflect those things because they are improvements, not land. Good farmers take records. Your records should show your soil tests when you start farming as well as your soil tests thirty years later. If you end up with something better than what you started with, it seems to me that this is due to labor and/or capital, not land. Just like Carfax shows you what has been done to your car, or permits and receipts show you what work has been done on a house. With LVT I think the separation between land and improvements would likely become even more obvious, more quantifiable, because fertility and therefore yield and therefore the quality of farmland would largely be a question of capital investment (drainage tile, irrigation, nutrients brought in like manures or composts) combined with labor as land use intensifies as using more land becomes less of an option.
There is a book by Peter Kropotkin called Fields, Factories, and Workshops, written over 100 years ago. It's not a georgist text but he touches on a lot of similar themes. In it, he describes the methods of agriculture used by small, very efficient market gardeners and interestingly he actually mentions that these small farmers would "take their soil with them" when they switched leases. They did this because what he's talking about is basically compost. A product made by the labor of these small farmers, often grown in things like raised beds. The labor they put into making this very fertile soil is a large part of the very high yields that they were getting off of their small market gardens. He even says something like "It wouldn't matter if these farmers were growing on top of asphalt, they would still be out producing bigger farms because they make their own soil". Which is actually how a lot of urban farms today do things! On bigger farms it may be a little harder to separate but it's not fundamentally different. All together I think it is a pretty solvable problem, but still something to be worked out. Much like the assessment problem. We have the technology to do it, we basically know how, but there are still some justifiable concerns.
In those cases where some things really do take generations like for example, an orchard of nut trees which may take 40 years before they come to their peak bearing age, again it is not so different from any other form of capital. In Chapter 3 of P&P (wages not drawn from capital) George writes, "And this is obvious in agriculture also. That the creation of value does not take place all at once when the crop is gathered, but step by step during the whole process…It is tangible in the case of orchards and vineyards which, though not yet in bearing, bring prices proportionate to their age". That orchard grows in value as it grows in age, and an orchard of half-mature walnut trees will sell for less than an orchard of fully mature, heavy bearing ones. But both will go for more than a hayfield, and as a direct result of the farmer's work in planting and maintaining those trees.
The one thing he is right about as far as "the greater swallowing the lesser" is in those unfortunate situations where a city or town begins to eat into what used to be farmland. As sad as it is to lose farmland, as a matter of rights here, it isn't really different than someone with a giant SFH taking up space that could be better used in a hundred different ways. That would be a matter truly related to land values, not improvements, and in that case, the farmer isn't necessarily entitled to any different treatment than anyone else. That being said, I don't see why long term leases couldn't be a thing, even under LVT which could protect farmers in those cases.
I hope this was helpful at all and that I'm not misunderstanding your comment somehow. Basically, I think it is not so hard to separate out improvements from land, even in the case of agriculture. Those cases where improvements become lost to the land are actually hard to imagine because a person naturally has an interest in showing that they have made and maintained improvements, unless lost to time in such a way as to be totally irrelevant. The fact that the land under a random restaurant or store in England may have had Roman drainage tiles installed 1800 years ago, for example. Those may have served a farmer then, but they are not relevant now. Or less dramatically, someone's grandfather may have dug a well that has since dried up or is no longer in use. That might be an improvement but it is probably of no value to a potential buyer. But basically, all of those cases where land and improvement have become one seem to fall under the umbrella of some sort of "abandonment". In which case, they really don't have any great value at all. But in every case I can think of where improvements are made that have value to the current farmer, I don’t see why the farmer wouldn't be able to be rewarded provided they can show that the improvement is actually there (such as in the case of soil quality, where it's not necessarily obvious just by looking).
This all sounds good, and again, I don't know enough about farming to quibble with anything. The only thing that I will say is that, in my experience people involved in very hands-on professions like farming are not impressed by mere sound theory and good ideas about how things could be done. (I deal with a lot of people in construction trades for my job). What they like to see are exact specifications of how things will be done (signed in triplicate).
Therefore, it would be helpful for Georgist inclined agronomists and agriculture experts to develop comprehensive but comprehensible methods of evaluating each aspect of agricultural land (soil quality, water quality and availability, erosion control, topography, etc.) that is aimed at making sure that no aspect of a farmer's work gets swept into LVT.
In addition, one has to take into account the land's suitability for different types of "agriculture" which does seem a bit difficult to me. For example, good pastureland and timberland can arise both naturally and through human effort, how do we account for that?
These methods should, once developed, be widely circulated as possible and modified as appropriate in response to feedback and criticism, even from anti-Georgists. Honestly, if we mess up the evaluation of urban land, it's a problem we can correct in a few months with minimal overall damage to the economy. Messing this up with agricultural land seems like it could have deeper long term consequences. We may, for that reason, have to err to the side of mistakenly setting the LVT to low rather than too high, even if it does allow farmers to capture a small bit more than a nominal sliver of land rents.
Most Georgists don't think we can literally set even the LVT of Urban real estate at 100%, the risk of over assessment (and therefore no one using the land at all) is just too great. So, most of us say that we need to set it at 85-90%, just to be safe. If a ton of farmers, agronomists and related professions were to insist to me that agricultural land needed a greater safety margin by 10%-15% or so, I think I might be inclined to agree even if I were slightly suspicious of their motives. Furthermore, since the idea of getting rid of farm subsidies is even more politically infeasible that instituting an LVT, this extra slice of Land Rents could serve as a simple and easy replacement for the current byzantine setup of farm subsidies.
Good response. I agree, only I don't find the situation with farmland exceptional. New, better assesment tools are going to be key across the board, but yes, we should be developing specific tools and methods to fit the situation. Again, I think that in order to account for the things you mentioned (timberland, pastureland) we only have to compare to surrounding plots. Often you can literally see the effects of good and bad management by looking down a fenceline and seeing the difference between someone's field and their neighbor's. Good pastureland isn't notable when you're surrounded by millions of acres of equally good pastureland. It is clearly not the work of the individual's labor in those cases. But when the quality of pasture is better on one farm than it is on the farm right next to it, it's obviously related to the management of the farm. A timber plantation likewise, is not the same as a natural forest that is getting logged, and we can see that very clearly.
The US already has very comprehensive soil surveys for the entire country done by (I believe) the USGS, so we know about average soils for basically every county in the country. We also are fortunate enough to have the Agricultural Extension network. Every county in America has a USDA office staffed with people who's job it is to inform farmers of the newest research, best practices, connect them with professionals and universities to help them answer questions and solve problems they may be facing, etc. It's a very cool thing, and it's already established in the country. Seems like that existing network could be leveraged to collect data/send out surveys to farmers to report on things that would be indicators of the quality of their land in order to help in the assessment process.
Ultimately, setting the LVT/split rate below 100% seems to be the move because it's just less harmful than setting it too high on accident, even if does leave a bit of unearned increment in private pockets. In some cases, I've heard even Georgists argue that allowing a tiny bit of private rent capture may be necessary not just for pragmatic reasons of avoiding political clashes but even for economic reasons. But yes I see where you're coming from and ultimately agree. I just don't know if I see it as an exceptionally challenging puzzle compared to the assessment problem elsewhere, but I definitely think it is part of the overall work that needs to be done.
"I've heard even Georgists argue that allowing a tiny bit of private rent capture may be necessary not just for pragmatic reasons of avoiding political clashes but even for economic reasons."
You mean because allowing 10% (let's say) capture of land rents would allow for a land sales market to continue to exist and therefore provide data that would make assessments easier?
That's the most common one, but I think the other case I've heard it had to do with incentivizing discovery for things like oil. It was a while ago, but I think the idea was that since you're not sure that there actually will be oil (or whatever mineral resource) where you mine for it, taxing 100% of land values could disincentivize even the act of looking for oil. It was a while ago, so I might be misremembering.