In some of the States of our Union, we have instituted a system of politico-economic “tax-farming”[1] by which the amount of state tax to be paid by each farmer or householder is first based upon his need for gas, light, water, electric-power, transportation or telephone facilities; to this tax upon his need and activities is added the cost of these necessities plus a state-guaranteed profit which often looks very large to the bankrupt victim of the system. The State has full political power to sanction the extravagance of such public-service corporations, to approve the undue remuneration of their officers and, by preventing competition, to bar the normal reaction against extravagance or coercion. So close is the economic whirlpool to a focus that some of these corporations are now endeavoring to prevent this boasted economic system from crushing them in turn, as it is bound to do some day with a sudden veering of the political wind. Such a detail in the economic progress of democracy shows, at any rate, that while we have moved rapidly, we have, nevertheless, carried with us at least one of autocracy’s most valued instruments of economic oppression—the state-sanctioned profit-sharing monopoly; and the new complication that has recently arisen is as old as the original idea. It is not due to consideration for the victim, but is a quarrel over the division of the spoils.
What we have done politically under democracy is to disperse and divide a sovereignty which, at its flower, exercised without question control of two of the basic factors,—population and land-area; and as this sovereignty was forced openly to relinquish authority over population, it held on to the control of area. Owing to the vitiated relationship between economic cause and effect, due to arbitrary taxation, we foolishly allowed irresponsible retention of the most dominant factor: for the control of territory, or land-area, is also control of the time-value of effort. It is the control of land-area that is really sovereignty: most of the so-called “values” of land can be shipped into a political area on a flat-car or a freighter; but this is not so with superficial area or acreage. Let us drive this home:
- ↑ This significant phrase is employed by Dr. Rowland Estcourt. See “Conflict of Tax Laws,” University of California.
