By George!

A forgotten San Francisco economist survives, barely, in his adopted city

"People call it socializing rent, but what we do now is socialize goods and services," explains Giesen from his tiny office. "Sales tax and income tax are nothing but socialized produce and labor."

Giesen points out that California gets less revenue from its land than other states, partly because a law passed by Proposition 13 in 1978 froze many property values at then-current levels for tax assessment. Right now, of course, local real estate is booming, and the recent scandal over Doris Ward, the city's assessor-recorder, plays right into Georgist theory. (Ward has been accused of underassessing property values, depriving the city of almost $100 million in revenue from the rocketing market prices.) But there's a deep difference between property tax -- which lumps land with the value of a building -- and a Georgist land tax, which considers only the value of a site (to keep from penalizing improvements). No one is quite sure what effect such a radical rejiggering of the tax laws would have; never mind the fact that every level of government -- federal, state, and city -- has more money right now than it knows what to do with.

But Henry George might have recognized a few local conditions we take for granted. "Sixty-five percent of Oakland is owned by absentee landlords," claims Giesen. "That is taking away a significant portion of the income of those who are working in Oakland. ... But just to isolate that part of the problem, without looking at what the private appropriation of land rent does to wages, is also to miss the point. It doesn't tell the whole story of what's causing relative poverty in Oakland."

Hence the Henry George School. There you might learn why privately appropriated land rent depresses wages; why labor and capital are not natural enemies; how the Depression could have been avoided; and the interesting tidbit that Willie Brown was once a member of the school's board of directors. Several California politicians flirted with Georgism in the early '70s, and Brown even tried, twice, to push a land-value tax bill through the state's Lower House.

"I was badly defeated with that legislation both times," he wrote in a 1973 letter to a school associate, "but I am still convinced that land-value taxation should be given a try. The experience of those countries utilizing the land-value taxation indicates that it is in fact a way of reducing slums and fostering better development, and I hope that one day we will see it tried in California, if only on a trial basis." Brown has since distanced himself from Georgism, though, and says there was no political will for a land tax in "the body politic. ... It doesn't carry enough weight on merit to persuade a majority of the people who need to be persuaded."

According to David Giesen, the Georgists' biggest PR problem is convincing people to distinguish between capital and land -- "stuff created by human beings, as opposed to the earth," is how he puts it -- which are now universally lumped together as "property." Giesen once asked journalist William Greider about Georgist reform in the U.S., and Greider's response on tape is something he cherishes as evidence of how mainstream thinking is marshaled against Georgist theory. Because if Rolling Stone's economic writer won't discuss the difference between capital and land, who will?

"I resist choosing sides in those distinctions," Greider told Giesen, "because I own a home.

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