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ALLIANCE TO RAISE WAGES AND END POVERTY (ARWEP)
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ARWEP, The Alliance to Raise Wages and End Poverty, is an ad hoc alliance of concerned individuals who seek to transform the politico-economic structure of modern society by the abolition of all taxation save that upon land values. As demonstrated by Henry George, this reform -- the appropriation of economic rent by taxation -- "will raise wages, increase the earnings of capital, extirpate pauperism, abolish poverty, give remunerative employment to whoever wishes it, afford free scope to human powers, lessen crime, elevate morals, and taste, and intelligence, purify government and carry civilization to yet nobler heights."
(Pictured is Henry George, 1839-1897, the Philadelphia-born economist whose ideas ARWEP seeks to promote.)
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ARWEP simultaneously advocates the untaxing of labor, capital, commerce and industry and the full collection by the community of those values that the community, by virtue of its very existence, creates -- namely, the annual rental value of land and natural resources, including the value of petroleum and minerals in the ground or seabed; urban and suburban site or location values; the value of the broadcast spectrum, be it used for TV, radio or cell phone transmission; and the value of monopoly rights-of-way across land, such as cable TV and public utility franchises. Businesses that cannot operate competitively because they are in their nature monopolies should be taken over and operated by the public.
These reforms would put an end to land speculation -- the systemic non-use or suboptimal use of valuable land in expectation of higher future rents and land prices -- a phenomenon which constantly drives down wages and causes unemployment by denying labor access to potentially productive natural opportunities.
Boom-and-bust business cycles and financial upheavals would also be remedied by these reforms, which were fully set forth and explained by the American economist and social philosopher Henry George in his 1879 classic "Progress and Poverty -- An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth...the Remedy" and in his other works.
"Progress and Poverty" focuses on and answers this question, which appears in italics in the original: "Why, in spite of increase in productive power, do wages tend to a minimum which will give but a bare living?"
Alfred Russel Wallace, the great English naturalist and evolutionist considered nearly equal to Darwin, called "Progress and Poverty" "undoubtedly the most remarkable and important book of the present century."
In 1882, as a result of hearing Henry George speak in London on land and labor, the then 25-year-old George Bernard Shaw decided on the spot to become what he called "a soldier in the Liberation War of Humanity." Failing to fully grasp George's message, however, Shaw became a socialist rather than a Georgist.
Because "Progress and Poverty" was written and first published in San Francisco, its author was derisively dubbed "The Prophet of San Francisco" by a Scottish duke (a hereditary landlord), but the label stuck to George as a badge of honor.
In 1886 George was drafted to run as labor's candidate for mayor of New York and is widely considered to have won and been counted out by Tammany Hall; he officially finished second, ahead of Theodore Roosevelt, future president of the United States. George died in 1897 during his second mayoral campaign.
Before 1914 it was Georgism, not Marxism, that was the primary driving force behind social reform in the United States, Britain, Germany, Russia, China and a host of other countries. Among George's adherents were an aspiring young politician in England named Winston Churchill, who rose to serve as prime minister during the Second World War; the famous and beloved Russian novelist, philosopher and nobleman Count Leo Tolstoy; and Sun Yat-sen, the father of modern China.
Eventually, however, the world's privileged and powerful landed class, with the aid of the academic economists whom it largely supports and in conjunction with the implacably anti-Georgist Roman Catholic Church -- perhaps the world's largest and wealthiest private landholding entity and a major ground-rent collector (see the New York Times article below for an excellent example of this) -- succeeded in jettisoning George's market-based economic analysis and freedom-loving message from public consciousness. Extremely popular and influential until the First World War, George's teachings have been largely suppressed and hidden for most of the past century.
In the section of "Progress and Poverty" headed "How Modern Civilization May Decline," George accurately predicted, in an era when the world's intellectual elite generally exuded only optimism, that civilization would plunge "back toward barbarism" if his economic reform proposal, which came to be known as the "Single Tax," was not adopted. A widescale reversion to barbarism did in fact occur in the 20th Century, particularly in the aftermath of the Great Depression.
On p. 528 he writes: "...whoever will look may see that though our civilization is apparently advancing with greater rapidity than ever, the same cause which turned Roman progress into retrogression is operating now.
"What has destroyed every previous civilization has been the tendency to the unequal distribution of wealth and power. This same tendency, operating with increasing force, is observable in our civilization today, showing itself in every progressive community, and with greater intensity the more progressive the community. Wages and interest [meaning the return to true capital, such as industrial equipment] tend constantly to fall, rent [meaning land values] to rise, the rich to become very much richer, the poor to become more helpless and hopeless, and the middle class to be swept away.
"I have traced this tendency to its cause. I have shown by what simple means this cause may be removed...if this is not done, progress must turn to decadence, and modern civilization decline to barbarism, as have all previous civilizations."
George's granddaughter was the noted choreographer Agnes de Mille, whose essay "Who Was Henry George?", written in the centennial year of "Progress and Poverty," can be found by clicking on the link at the bottom of this page.
(NOTE: To learn more about this fascinating and important subject, please CONTINUE by also clicking on the TWO OTHER WEB PAGES ON THIS ARWEP SITE as indicated below: "Political Economy in a Nutshell" and "The Law of Rent.")
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The New York Times, December 29, 2000
What's Fair Rent on the Palace? Royalty and the Church Disagree
By CHARLES V. BAGLI
It is a rent fight for the ages.
The Archdiocese of New York is battling with the royal family of Brunei over the rent for the land under the 54-story Palace Hotel, which sits across Madison Avenue from St. Patrick's Cathedral.
A corporation tied to the royal family has owned the hotel since 1993, and has paid the archdiocese $1 million a year in rent, a sum unchanged since 1979. But property values in Manhattan have risen enormously since then, and the rate is now up for review under the terms of the lease.
The church wants to get close to $9 million a year for one of the most valuable blockfronts in the city. But according to people involved in the negotiations, the fabulously wealthy royal family of Brunei, a tiny oil- rich sultanate on the Southeast Asian island of Borneo, does not want to pay more than about $4.5 million.
The family contends that the landmark Villard Houses, which adjoin the Palace on Madison Avenue and house the hotel's Gold Room and Le Cirque 2000 restaurant, drag down the value of the hotel.
As with all good real estate disputes, the lawyers are poring over the terms of the lease, which was first signed in 1974 by Harry Helmsley, the original owner of the Palace, and Cardinal Terence Cooke.
The archdiocese is to file suit in State Supreme Court today asking a judge to rule that in valuing the land, according to the language of the lease, it is to be "considered vacant, unimproved and unencumbered," and therefore unaffected by the buildings on the ground.
The next step would be for the two sides to pick an impartial "umpire" to determine the current value of the land, and ultimately, the rent.
"They've been paying $1 million a year since 1979," said David S. Brown, director of real estate for the archdiocese. "You can see it's been quite a bargain. We want a fair result. We don't bring lawsuits very often, if ever. But the diocese uses its funds to serve the religious, charitable, and basic human needs of millions of people in this area."
Real estate experts said it would be next to impossible to separate out the value of the Villard Houses, which are an integral part of the hotel's operations today. Indeed, the hotel's tower soars to 54 stories because the builder transferred air rights from the houses and agreed to renovate the brownstones.
Mr. Brown said that a representative of the royal family sent a letter to the archdiocese shortly after Thanksgiving saying that the two sides were too far apart on the current value of the land. The royal family believes the land is worth about half of the figure the archdiocese has in mind.
It is no simple matter to figure out just who is in charge of the Palace: Prince Jefri Bolkiah, whose company bought the hotel seven years ago for $202 million, or his older brother Sultan Hassanal Bolkiah, who runs the country. Prince Jefri, who has a reputation as a profligate playboy, was forced to resign as finance minister in 1998 after his investment company lost an estimated $27 billion. And earlier this year, the sultan's government sued Prince Jefri, accusing him of misusing billions of dollars in state money.
In May, Prince Jefri reached an out-of-court settlement with his brother's government in which he relinquished control of all the hotels, buildings and property he acquired with government money. To cover the prince's financial losses, the sultan has sold assets ranging from a Boeing 747 to 150 Rolls-Royce cars and several hotels. But it is unclear whether the Palace was involved in the settlement.
Thomas Russell, a director of the prince's company, Amedeo Hotels L.P., did not return calls requesting comment.
In the 1990's, the prince did give the New York Palace a plush $100 million makeover, erasing all the vestiges of its previous operator, Leona Helmsley.
And while its 901 rooms are often full and unusually spacious for New York hotels, the Palace itself is no longer counted in the top tier. According to hotel experts, the Palace has an average room rate of $345 a night, or about half that of the St. Regis or the Four Seasons.
"It's a serviceable hotel at a good location," said Michael Fishbin, a hotel consultant at Ernst & Young. "In its heyday, it was among the top 10. It's not on that list anymore."
The Palace Hotel was born amid controversy and has endured one scandal after another over the last 25 years. In the mid-1970's, Harry B. Helmsley, the developer who controlled office buildings, hotels and apartment complexes throughout the city, touched off a stormy protest by preservationists when he announced plans to lease the property from the archdiocese and demolish the landmark but crumbling Villard Houses to make way for a large hotel.
Critics wanted the brownstones restored as part of the city's historic legacy. In the 1880's, the railroad tycoon Henry Villard hired the firm of McKim, Mead & White to design the six houses around a central courtyard in what is regarded as one of the finest evocations of the Italian Renaissance in New York.
After lengthy negotiations, Mr. Helmsley was carried, in his own words, "kicking and screaming" into preserving the houses and incorporating the brownstones into the hotel, which opened in 1981 as the Helmsley Palace.
And for the next decade, the Palace was where the developer's wife, Leona, fashioned herself as the "queen" of hoteliers in national advertising campaigns for the family's hotel empire.
Mr. Helmsley signed a 99-year lease in 1974 with Cardinal Cooke, who wanted to consolidate the archdiocese's offices in a single building on First Avenue, but retain ownership of the Madison Avenue property. Rent started at $1 million a year in 1979, with the lease specifying reviews in 2001, 2051 and 2073. Real estate executives said that land leases today would include annual rent increases that would at least kept pace with inflation.
In any event, Mr. Helmsley, a consummate dealmaker who died in 1997 at age 87, was not worried about a rent increase in 2001. "I remember sitting at the original meeting with Helmsley when he said, `The heck with it; it's 25 years from now,' " said one executive who worked with the developer at the time.
The Palace got top rates and a reputation for impeccable service for many years. But after Mrs. Helmsley's 1989 conviction for tax evasion, her partners in the hotel, including the actor Paul Newman, filed suit, claiming that the Helmsleys had engaged in fraud and mismanagement of the Palace. Occupancy dropped below 30 percent during the Persian Gulf war and the recession in 1991, and the hotel's reputation went into decline.
In 1993, the partners finally forced the sale of the hotel, one of the Helmsleys' most cherished assets, with the prince emerging as the winning bidder.
Copyright 2000 The New York Times Company
http://www.nytimes.com/2000/12/29/nyregion/29PALA.html?ex=1116907200&en=72a32d452a35e2e9&ei=507
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