From June 17 to 22 the Council of Georgist Organizations held its annual meeting in Santo Domingo, Dominican Republic. The conference was organized by the Henry George School of Social Science of Santo Domingo. The energetic and much-loved, Lucy Silfa, the founder and director of the School, hosted the gathering of economists, tax experts and scholars. Ben Sevack of Montreal attended in his capacity as President of the Canadian Research Committee on Taxation and represented Canada along with the writer.

Why would representatives from the United States, Argentina, the Cayman Islands, Canada and the Dominican Republic itself meet to discuss as a matter of vital contemporary concern the little known works of the nineteenth-century American philosopher and economist Henry George? The answer lies in recognizing the cause of the malaise that is currently gripping the political, economic and social institutions of societies around the world and in the studied inability of these institutions to account in a convincing way for the problems they perpetrate. These institutions systematically discourage what is beneficial to the community while subsidizing and rewarding the unproductive and environmental degradation.

There is a tendency today to link intuitively the global and the competitive. On the other hand, seldom are the reasons for the current worldwide economic downturn universalized so that the distortions of economic life which make it possible and profitable to grow bananas in Scotland are not unlike the distortions of the property tax in Montreal which contribute to urban blight, unaffordable housing and the wasteful subsidization of land speculation. It is primarily the structure of taxation not necessarily its level which impedes economic life.

Henry George's fundamental theme in his well known Progress and Poverty, and in other works such as Social Problems, Protection or Free Trade, and the Science of Political Economy is that the burden of running society should fall the least upon those activities that are beneficial to the well-being of the community and more on those activities that are a detriment to social and economic betterment.

What does this philosophy mean in practice? A good example would be the current efforts of Georgist organizations in Canada to promote meaningful and genuine reform to a system of taxation that has become in all its prosaic complexity a tremendous burden on the Canadian economy and indeed on the spirit of the nation.

The two tier or two rate method of property taxation, advocated by some Georgist organizations such as the Peterborough, Ontario Two Tier Property Tax Committee in its Report of January, 1992, lowers the tax burden on buildings and improvements. The trade-off is that revenue from holding land idle and underutilized is increased. The tax system is thus adjusted to give those who are contributing constructively to the community a break. High housing costs, land speculation, costly urban sprawl and the overall deterioration of our cities are some of the negatives ameliorated by this tax. Fairness in taxation is not simply a matter of promoting greater equity, it must be a matter of structuring taxes so as to reduce social overhead costs while at the same time creating more wealth for all to share less unequally.

Henry George is not only the inspiration for equitable land reform and economic advancement in impoverished countries like the Dominican Republic. Canada and the U.S. are becoming more and more impoverished and polarized primarily because the counter-productive tax and expenditure policies of the government work incrementally to undermine the social, economic and psychological fabric upon which the liberal democracies were founded. There is a cruel irony here for traditional liberals. Progressive social programs do not achieve their objectives because the revenue engine created to fund them exacerbates the conditions which necessitate the programs. Hence the current downward spiral of increasing expenditures achieving less and less social justice and increasing taxes requiring greater social expenditures.

It is the knowledge that there are viable, and yet generally unknown, alternatives to the current malaise that brought participants in the various Georgist organizations together in Santo Domingo. George's life and work encompass abiding insights into human nature and socio-economic relations. The non-profit Georgist research organizations, their paid professionals and volunteers, work diligently to undertake and promote research into the detailed economic application of Georgist principles to modern economic circumstances. The result has been a diverse yet coherent and still growing body of research that is beginning to have a wide-ranging influence in academic, governmental and business circles.

While in Santo Domingo, a delegation from the Georgist organizations met with President Joachim Balaguer, who was a student of the Georgist philosophy while in exile in the U.S. in the 1960s. The Dominican Republic, like many other countries, is burdened with an immense foreign debt, increasing poverty and malnutrition, and the continual decay of basic infrastructure. The persistent interruption of electrical power in Santo Domingo is just one of the more visible hardships. Land and tax reforms on the Georgist model in the Dominican Republic will be difficult on account of the concentration of landownership among 35 or 40 families. Everyone was enthusiastic that a reform would finally be undertaken which would result in real change for the 7 million citizens of the Dominican Republic. How long can the institutions of the status quo hold out against a philosophy of economics that is a theoretical and practical answer to the same detrimental policies that have strangled such seemingly different economies as those of Canada and the Dominican Republic?

- Francis K. Peddle, Ph.D.
Canadian Research Committee on Taxation