Bill Batt says we’d have fairer taxes and a richer economy if we followed Henry George

Bill Batt
 

GUILDERLAND — Bill Batt is a man of ideas — big ideas.

Right now, he’s organizing the annual Council of Georgist Organizations conference to be held this year in Albany, from July 15 to 17.

Batt’s signature sign-off on his emails is a line from the ancient Greek poet Archilochus, “The fox knows many things — the hedgehog one big one.”

“I tend to see things in very global perspectives,” says Batt in the week’s Enterprise podcast.

Over his lifetime, he has embraced three paradigms to explain the world.

The first was the cognitive developmental psychology of Jean Piaget and Lawrence Kohlberg, understanding the stages of learning and moral development that people go through.

Soon after graduating from college, where he studied political science, Batt was among the very first Peace Corps volunteers. He lived in a small village in northern Thailand and didn’t speak English for two years.

“Their ways of thinking were very limited by their own experience ….,” he said of the villagers. “That led also to their cognitive limitations. But of course, those people who were more sophisticated were the ones that had exposure to cities and literature and history.”

In his thirties, Batt found a new way to look at things through the integrative psychology of Ken Wilbur. Wilbur’s integral theory maps human experience with a four-quadrant grid, along the axes of “individual-collective” and “interior-exterior.”

The paradigm that currently enthralls Batt is a modern take on the 19th-Century political economist Henry George. Batt became enamored of George’s theories after he stopped teaching as a university professor to serve for a decade on the New York State Legislative Tax Study Commission.

The commission was made up of two lawyers, two economists, an accountant, and Batt — a political scientist. It was formed by Stanely Fink, as Speaker of the State Assembly, and dissolved by Sheldon Silver when he became Speaker. The commission’s ideas were dismissed out of hand as politically unworkable, Batt said.

However, he said, “That experience of 10 years looking at tax policy led me to very different notions of what was a good tax and what was a bad tax. And it led me to the thoughts of Henry George, who was really abandoned until his resurrection in recent days.”

George’s book, “Progress and Poverty,” published in 1879, “sold more copies than any book ever written except the Bible,” said Batt. “And he became world famous, along with Edison and Mark Twain. He was the most famous man in America. He traveled the world.”

George’s ideas were the culmination of classical economics, Batt said, and were widely popular in the late 19th and early 20th centuries. Classical economics was built on the idea that there were three factors of production: land, or elements of nature; labor, or people’s work; and capital, things made by human beings.

What George called “land,” said Batt, are “the free gifts of God or nature.” He contrasted this with labor and capital. “They are creations of our hands and minds,” said Batt. “So, if we just tax those elements that were given to us and not our own creation, we would have a much more efficient economy.”

He went on, “And, if we had a more efficient tax structure, we would be much wealthier as a society …. Taxing people’s labor, people work less; taxing capital, people make less; taxing sales, people buy less; taxing savings, people save less.”

However, he said, taxing land doesn’t reduce the amount of land and therefore the economy becomes richer.

“Henry George saw that the earth should be seen as a common resource and its value taxed to benefit everyone,” Batt writes in his paper, “Saving the Commons in an Age of Plunder.” “This would restore economic equilibrium to market services and pay for government services.”

Batt believes that the commonly accepted three-legged stool of taxation — taxes on income, property, and sales — is faulty.

Taxation, he says, took a radical turn at the beginning of the 20th Century because of two powerful forces in the American economy, railroads and banks, which were threatened by Georgist ideas. Since then, taxes have been based on labor and capital.

“Land is integrated into capital, and all of the economics that is taught in universities in the 20th Century is based on these ideas,” said Batt. “That is the neoclassical economics, so-called. But now, with the advent of computer power and available data, there are many of us that are saying, ‘Not so fast.’ There’s something very special about land that can’t be folded into capital goods.”

Batt is a board member of several groups promoting Georgist ideas, including the Robert Schalkenbach Foundation and The International Union for Land Value Taxation, based in London.

The International Union writes that, for nearly a century, it has campaigned for governments to address the root causes of inequality, poverty, war, and environmental degradation through a “global awakening to the realization that the earth is the birthright of all people.”

Asked about modern applications of George’s theory, Batt said cities as near as in Pennsylvania — he named Harrisburg and Allentown — are gradually phasing out the taxes on buildings to tax only the land value. He said similar approaches are underway in cities in Canada, Germany, and Australia

Society should recover the value from land and “use it to support public goods and services in lieu of taxing people’s labor and goods, which arguably we own ourselves,” said Batt. “You’re taxing that which you didn’t create; you’re taxing that which was made by the community.”

“Land, broadly defined,” Batt has written, likening it to Native American concepts of ownership, “belonged to everyone and was the common heritage of all humanity. One could no more ‘own’ land than one could own water, air, or other parts of nature, at least in the sense of ownership people often use today.”

Batt went on, “As John Stuart Mill put it, landlords earn money in their sleep. They don’t earn it; they grab title to a piece of land and the value flows to them.”

Mill, in 1848, in his book, “Principles of Political Economy with some of their Applications to Social Philosophy,” wrote: “Landlords grow richer in their sleep without working, risking or economizing. The increase in the value of land, arising as it does from the efforts of an entire community, should belong to the community and not to the individual who might hold title.”

Batt concluded, “Most really, really, really wealthy people don’t earn the money by their labor. They collect what economists call … unearned income or lazy income … You can sit back and eat cherries and the income comes to you.”

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