Henry George and Europe: in Denmark the big landowners scuttled the age-old land tax but the smallholders, moved by George, restored it

American Journal of Economics and Sociology, The,  Oct, 1994  by Michael Silagi,  Susan N. Faulkner

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I

Danish Anticipations of George's Ideas

IN DENMARK, the reception of Henry George's thoughts took a different course than in England, Ireland, Germany, Hungary and Austria. Here, the taxation of land was not proposed--prior to the appearance of George's classic Progress and Poverty, by only a few scarcely noticed writers, as was the case, for example, in England. Free trade had been introduced in Denmark by the government as early as 1797, half a century earlier than in Great Britain, together with the abolition of all duties and import taxes.(1) Similarly, the land value tax was here, as we shall see, a traditional instrument of tax practice, so much so that the Copenhagen Member of Parliament and Secretary of State, Viggo Starcke, could say in 1957: "The ideas of land value taxation and free trade are old in Denmark. Therefore, the philosophy of Henry George is popular in Denmark. It is blood of our blood."(2)

In other words, Henry George did not bring to Denmark a new discovery, the possibility and practicality of taxing the land; rather, he delivered, at the turn of the century, to the advocates of a long-existing domestic tax mode, new arguments for its imposition.

The impact of Georgism in Denmark is peculiar insofar as here the theses of the American social philosopher evoked the strongest echoes in rural areas, among the broad class of smallholders and not, as in other continental countries (as well as in the United States), in the cities. On November 8, 1902, the delegates of about a hundred agricultural cooperatives, at a meeting in the coastal town of Koge, passed the following Georgist-styled resolution:

The Smallholders Association does not ask to be favored by the abolition of established real estate taxes and tithes which already exist at the time the property is taken over, and which are already taken into consideration by being deducted from the purchase price. The abolition of such burdens would, in effect, because of the resulting diminution of society's assets and at a loss to the unpropertied classes, accrue unjustly to the advantage of a single generation, and for the most part only to the large landowners.

The Smallholders Association does demand, however, the earliest possible abolition of all duties and taxes which are imposed directly or indirectly on consumer products, as for example food stuffs, clothing, buildings, livestock, tools, machinery, raw materials, and labor-produced earnings, because such taxes place an unfair burden on labor and on the little man.

In their place, the Smallholders Association asks that, to cover public expenditures, that value of the land be taxed which is not derived from individual labor, but which is due, rather, to the growth and development of society. This value reaches, especially in the large cities, tremendous proportions and enriches, undeservedly, private speculators, instead of being collected by the State or the community. Such taxes will not inhibit labor, but will make the land cheaper and will enable everyone to establish his own home.(3)

How did the delegates, belonging chiefly to the class of small farmers, arrive at these tax law concepts? What prompted them to entertain such argumentation based on natural law, not on class interest? The answer to these questions no doubt lies in the uniqueness of the historical development of the Danish farm classes. We will discuss these matters first, before taking up briefly the presuppositions of Danish tax history.

Until far into the 18th century, social conditions existed in rural Denmark similar to those in the rest of Europe: The farming population largely owned no land and was, since 1733, generally in bondage.(4) During the last third of the 18th century, a change, brought about by the spirit of the Enlightenment, took place which led within a few decades to the emancipation of the Danish rural population.(5) Initially hesitant attempts at reform were made under the aegis of the Court physician and Cabinet Minister of the ailing King Christian VII, Johann Friedrich Struensee.(6)

The coup d'etat of Crown Prince Frederic (1784) signaled the beginning of thorough and systematic reforms of the legal and economic situations of the farmers. In 1786, a Land Cultivation Commission was appointed, consisting of landowners and royal officials, whose Secretary was the Norwegian jurist Christian Colbjornsen (1749-1814).(7) He was an advocate of the Enlightenment's doctrine of natural law and was, therefore, opposed to all class differences. He was able to win through in the Commission with his views, and in agreement with his conceptions, the decisive step was taken in 1788 toward the goal sought by him of a free farmers' class. A gradual elimination of land servitude was decided upon, and at the same time, regulations were laid down which re-ordered the relationship between landowners and tenants in favor of the latter. In addition, legislative changes were made which facilitated, and even promoted, the transfer of land to ownership by the farmers. Together with the legislative measures, steps for the modernization of agricultural methods were undertaken which resulted in "an increased production and a greater feeling of self-esteem" (Carlsson(8,9)).