Review of the Book:

The Golden Key to Continuous Prosperity
Steven Cord

Ralph W. Conner

[Reprinted from GroundSwell, March-April 2005]

How can an illustrious individual who was the third most famous man in the United States during his lifetime (1839-1897) be relegated to the obscure dustbins of neglectful history? By what means can an economic prophet be written out of history when his arguments and premises remain as valid today as 125 years ago?

Leo Tolstoy remarked, "The chief weapon against the teachings of Henry George was that which is always used against irrefutable and self-evident truths... the method of hushing up ... people do not argue with the teachings of George, they simply do not know it."

Henry George was a political economist who wrote his master-work, Progress and Poverty, in 1879, over 125 years ago. He postulated that there was a middle way of socio-economic truth between socialism and capitalism, which could be achieved by capturing wealth from the taxation of land values and distributing it to the poor.

He believed that economic problems such as poverty and depressions stemmed from too much wealth being tied up in land ownership monopolies. He believed the solution was to remove taxes from labor and capital, and to place a single tax on land values. He advocated government ownership of railroads and telegraph utilities.

At the height of the Industrial Revolution, replete with robber barons endowing major colleges and academic institutions, vested interests conspired to keep Georgist philosophy dormant and obscured. "The truth that I have tried to make clear will not find easy acceptance," wrote George. "If that could be, it would have been accepted long ago. If that could be, it would never have been obscured."

Dr. Steven Cord has written a new book, The Golden Key to Continuous Prosperity: How to Vote Yourself a Tax Break (Without any reduction in Government Revenue), that attempts once more to break the obscurity.

Cord is qualified for the task. He served as president of the Henry George Foundation of America and also of the Center for the Study of Economics, and is currently founder and executive director of the Center for a Better Economy, in Columbia Maryland. An eminent Georgist for over 54 years, Dr. Cord taught economics at Indiana University of Pennsylvania for nearly 25 years and is the author of Henry George: Dreamer or Realist?, published by the Robert Schalkenbach Foundation. He helped persuade some 20 localities in Pennsylvania to shift property taxes from improvements to land values.

Cord provides volumes of empirical evidence to prove the efficacy of land rent taxation (LRT) as a successful social strategy. An appendix corroborates that LRT can eliminate the need for payroll, social security withholding taxes, sales taxes and other taxes on production, labor, and sales.

The evidence includes Web sites and summaries of 22 of the 237 empirical studies conducted by Dr. Cord and others. A list of prominent endorsers of LRT includes Milton Friedman and other Nobel Prize Winners for Economics. How the LRT would help a comprehensive strategy for reducing the threat of terrorism (the single tax strategy is invoked to eliminate terrorism by creating a viable middle class in the Middle East!), aid farmers, and help fight sprawl are judiciously reviewed. The obvious benefits of a redeveloped Mexico, resulting in less illegal immigration and "job gobbling" by aliens, are vetted.

Cord then eloquently reminds us of the urgency of implementation. He enjoins all readers to feel the apocalyptic dangers of failure to act to enact these policies to eliminate poverty and war or terrorism in modern society.

Cord uses a question and answer section to allow skeptics to hear their own concerns voiced and soundly answered. He concludes with a well-documented appendix and an admonishment to contemporary Georgists to talk to their neighbors and friends about tax reform.

Several things set this book apart from other efforts to promote Georgism. First, Cord is careful to explain how the land rent tax (LRT) is not the same as simply taxing the selling price of land. George's goal, according to Cord, was "to reduce the private collection of the annual rent of land to zero." The highest and best use of land based upon an imputed rental value constrained only by zoning is the correct valuation for the land rent tax formula.

Second, Cord attempts to distance himself and LRT from Henry George in order to make it more credible with contemporary policymakers. For example, he criticizes the standard Georgist presumptions that land monopoly is the sole cause of depressions, and that poverty is a major social pandemic, as George had predicted it would be. Cord says we now know that depressions can have many difference causes, so George was wrong for claiming depressions result primarily from land speculation. Yet he then reports that George advocated "counter-cyclical bank borrowing" as a remedy for depressions, which suggests that George had a more sophisticated understanding of the dynamics of fiscal and monetary policy.

Progress does not necessarily breed poverty according to Cord, who cites much evidence to the effect that "in the last 40 years U.S. poverty, according to government statistics, has decreased." (page 74). But Cord and the experts he cites overlook the stubborn and persistent pockets of poverty that exist across the U.S. that show little or no signs of shrinking. Indeed, they seem to be spreading as more people are unable to transition to new jobs as corporations downsize and manufacturers outsource production. More people are serving time in U.S. prisons than at any other time in U.S. history. These are signs of a systemic problem that George would not have ignored, or felt were irrelevant to the LRT reform effort.

Cord also distances himself from George's embrace of natural law. Natural law as a philosophy means the body of ethical imperatives inherent in human beings and discovered by human reason. Natural law opposes the notion that moral law is subjective, evolutionary, pragmatic, or existential. It affirms that all humans share a set of supposedly ethical norms and imperatives that they commonly perceive without dependence on supernatural disclosure and illumination.

Natural law, according to Cord, is passe' and not respected by modern economists. Policymakers want a more secular or empirical justification for taking policy positions. But here, too, one suspects that George was closer to the truth than Cord admits. Conservatives have plainly gained ground politically in recent years by identifying themselves with the re-emergence of these principles. Cord's discourse on ethical and moral relativity is confusing and inconsistent with the call for social justice that is at the very core of Georgism and the reason for its great moral appeal today.

In his final trimming of the Georgist program, Cord says Georgists ought to consider bribing landowners by paying them compensation for their loss in a transition to LRT. He also says it is probably more effective to target policymakers with ideas for reform than it is to appeal to the general public.

I have deep reservations about both of these recommendations. Compensating land owners to turn over land to government or common ownership takes the greatest secular idea known to man and empties it of its moral content and probably would greatly reduce its economic effectiveness. It would be a half-measure that has none of the messianic zeal of the true Georgist movement. Similarly, to envision the LRT as a way to empower politicians to take lucid constructive action to change our society is to turn George's theory of social change on its head. The reality check comes when we examine the "how to" aspects of implementing these lofty goals: Who will ultimately be the implementers, common citizens or politicians driven by enlightened citizens around the world?

I feel Henry George at heart was a populist who believed in citizen action from the bottom up and not the top down. George said, "The people must think, because the people alone can act! Social reform is not to be secured by noise and shouting, by complaints and denunciation, by the formation of parties, or the makings of revolutions, but by the awakening of thought and the progress of ideas. Until there be correct thought, there cannot be right action, and when there is correct thought, right action will follow."

A true how-to book of this nature must subscribe to the eternal wisdom of the sage of Philadelphia.

This book does not achieve its overall objective of being a primer on how to get a tax break. It contains many utopian options for relief via federal or state actions, but no political plan for arousing the various legislative bodies with a time-table for reforms.

This book does succeed in collecting usable data for future discussion groups, but Cord's strategy of debunking Henry George to increase his credibility appears to be counter-productive. With all of George's obscurity and academic detractors, it is curious why a true follower would resort to such "outside the box thought" when the basic premises of grass-roots advocacy have not been fully deployed in action models or governance on an expansive basis.