Fairhope, 1894–1954: The Story of a Single Tax Colony
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On November 15, 1894, a small group of men and women met on a remote stretch of Mobile Bay’s eastern shore to establish a colony. It was a decidedly utopian undertaking in a period characterized by many similar social experiments and ideal communities, most of them failures. This group, which gathered at “Stapleton’s pasture” to found Fairhope, hoped to demonstrate the benefits of the single tax as a means of curing social and economic evils, making a practical test of the doctrines of economist Henry George.
Today, the wealth of parks, public and private schools, art galleries, and restaurants, combined with quaint shops and residential areas and a vibrant nautical life, all attest to Fairhope’s unique position among many older communities in the same region. Its residents represent a diverse array of interests and talents, and with a strong civic regard for individualism and creativity, Fairhope is also a haven for painters, potters, writers, and musicians.
Paul E. and Blanche R. Alyea’s Fairhope, 1894–1954, first published in 1954, is the history of this unique and improbable community and the single-tax social experiment that gave rise to it. This new edition offers an introduction by historian and Fairhope resident Tennant McWilliams, giving invaluable context and entertaining anecdotes not just regarding Fairhope’s founding but about the Alyeas themselves—all to the abiding value of their story for today’s residents and visitors.
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Fairhope, 1894–1954 - Paul E. Alyea
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THE FAIRHOPE SINGLE TAX THEORY
FAIRHOPE is the name of the oldest and largest single tax colony in America. It is also the name of an Alabama municipality with a 1954 population of about 4,200. Fairhope is located on the bluffs of the eastern shore of Mobile Bay, midway between the communities of Montrose and Battles Wharf, and about twenty-five miles by highway from Mobile. Its location very well could have been somewhere in Tennessee, or in any of five states visited by the location committee, but Baldwin County, Alabama, was chosen by the Fairhope Industrial Association because of its climate, its beauty and the cheapness of its land in 1894. The first colonists occupied their chosen site in the winter of 1894-1895; the municipality of Fairhope was incorporated in 1908. The original implementing agent, the Fairhope Industrial Association, was incorporated under the laws of Iowa in 1894, and gave way in 1904 to the Fairhope Single Tax Corporation, incorporated under Alabama law.
In its beginning the Fairhope colony contained a considerable admixture of socialism; but the core of the colony plan, and the features which survived, were contained in those provisions of the constitution that permitted it to experiment with a simulated single tax.
The term single tax as used in Fairhope refers to the suggestion made by Henry George in Progress and Poverty that the ageless and universal problem of poverty and other economic and social evils might be cured by a simple fiscal reform. The remedy urged by Mr. George was simply that government would tax away the full annual use value of land and would refrain from any other mode of taxation. Under his plan there would be no taxes on the value of or income from buildings, industrial equipment, household furniture, jewels, stocks of goods or other intangible personal property. There would be no customs duties, no income taxes and no sales, excise or business license taxation. To the maximum extent practicable, however, all economic rent would be taken for community purposes.
Singletaxers offer a two-fold justification for this simple fiscal program, and they maintain this justification is based on natural law. Morally, they argue, economic rent belongs to the community for the simple reason that it is a product solely of community demand for land. The supply of land is fixed by nature, thus providing a basis for differentiating land from labor and capital. Since the supply of land cannot be increased there is no cost of reproduction, hence no basis for any individual or private claim to its income. In taxing away economic rent the community is merely taking that which it has created independent of any action by the landowner. Taxation of the products either of capital or of labor would be robbery; singletaxers recognize no ethical justification for the community compelling individuals to contribute to its support any part of incomes individually earned.
The second justification for this fiscal program is rooted in several adverse economic consequences which singletaxers believe follow from the private appropriation of economic rent. The most serious ill effect of such appropriation is that it encourages speculation in land. Singletaxers maintain that land speculation is wholly evil; that no useful purpose is served comparable to that served by speculation in commodities. Land speculation causes better endowed and better located land either to be wholly withheld from use, or grossly under-used. As a consequence, they reason, the community income is lower than it would otherwise be, it is maldistributed, and the economy is much more vulnerable to cycles of boom and bust.
If, they maintain, government would simply tax away all income from land, as differentiated from capital, this would be sufficient to destroy the most basic and wholly evil monopoly, i.e., the land monopoly. If all economic rent were taken in taxation no profit would remain for the land speculator; hence, there would be no reason why land would not be made available for its highest use. Wages and interest would tend to be higher in any community using the single tax. If the plan were used internationally, general industrial booms and depressions would be greatly mitigated, and one fundamental cause for war would be eliminated. Society would become more stable and more wholesome. More of the benefits of progress in technology, in the growth of capital, in improvements in government and in the spread of educational opportunities, would redound to the general benefit; the landlord, who contributes nothing in this capacity, would not be able, under the single tax, to forestall such general sharing of the benefits of progress by pre-empting economic rent.
The single tax doctrine is more than a fiscal reform and a logical argument for its support; it is a blueprint for a free society. There are alternative means of accomplishing some of the benefits singletaxers hope for. For example, land might be nationalized or periodically redistributed. Poverty might be mitigated by private charity and governmental largess. Other kinds of taxation might be used primarily to redistribute income. The economic system might be made somewhat more secure by means of social insurance, market supports and monetary and fiscal policies. Or the economy might be planned in detail and operated through some sort of corporate state, i.e., fascism, communism, or a middle course of more democratic collectivism. Singletaxers reject most of these alternative remedies because of the social compulsion involved. The essence of the single tax philosophy is a profound belief in freedom, in individualism under institutions compatible with natural law. Henry George is said to have replied to a sneering question by a heckler, who asked whether he thought that the single tax was a panacea: No, but freedom is!
Whether a fair trial of the single tax on a world-wide basis would demonstrate the benefits hoped for by ardent singletaxers must remain conjectural. At the time the Fairhope plan was conceived and placed in operation, most literate people either had read or were somewhat familiar with Henry George’s Progress and Poverty. Countless throngs had heard Mr. George speak from the lecture platform. There were several flourishing periodicals dedicated to explaining and spreading the single tax gospel. As a consequence, many individuals professed an understanding of, and a belief in, the single tax in principle.
In 1894 it must have been easy to hope that the world just might adopt George’s remedy and thus pursue political, social and economic individualism within his frame of reference. At any rate, in 1894 the projection of a single tax enclave did not seem incongruous, although neither Henry George, nor many of his followers, believed in a colony as a proper device for propagating the "true course of