Thomas Paine and the Importance of Property

ABSTRACT In an age of reason and revolution, Thomas Paine was among the most brilliant theorists of both political liberty and economic justice. Because he was a best‐selling author of political pamphlets, his fame in that area eclipsed his work on economic issues. For example, he may have been the first author of a tract calling for the abolition of slavery, not merely for its reform. But his most original work on political economy dealt with the peculiar problems that arise when land is treated as private property instead of as a common resource to serve as both political ballast and as an instrument for achieving social equity. Like other authors of the late 18th century, he recognized that the rent of land (i.e., the potential annual rental value of any location) is the ideal source of public revenue because land is not created by human effort, and taxation of it does not diminish its supply. In a practical situation, in which Virginia's leaders sought western lands for private gain that endangered the newly independent republic, Paine wrote a treatise defending the central government's claim to that land as a means of retiring the public debt. This experience reinforced his sense that land is the ideal method of financing government and that privatization of land would corrupt the nation and severely harm the prospects for continuous economic growth. His writing on land and liberty on behalf of the new French republic also won him acclaim in that nation, which invited him to help draft their constitution. In his final years, he drafted a plan to establish a fund that was designed to prevent poverty from arising or to slowly dampen its effects. Ideally, he would have financed the fund from land values, but he compromised with his principles to recommend an inheritance tax on both land and personal property. In this way, Paine showed that he understood the value of abstract principles but also the value of compromise when faced with the necessity of doing so.