Viggo Starcke / Centuries of Experience with Land Taxation in Denmark — 1967


From: School of Cooperative Individualism Library

Centuries of Experience with
Land Taxation in Denmark

Viggo Starcke


Land existed before man. Man cannot exist without land, but land can
exist without man. It is the land, the earth, the globe which provides
man with food, raw materials, and sources of energy.

The relationship between the enduring but inert soil, and the passing
but living generations of a people is a most important element in
history. The eternal bedrock of a people is the territory. Here is the
beginning of human life, of national life and of economic life. Here
is one of the constant factors giving rise to class warfare and wars
among nations.

Denmark existed before the Danes. The land in which they live, was
cleared of stones and stumps by their ancestors. They erected
dwellings, villages and towns, linking them together with track, road
and waterway.

The soil of Denmark is good, but not rich. Providence intended
Denmark to be a farming country, as Denmark is a country without raw
material, without metals, without minerals, coal or oil.

In all those periods of history wherein the Danes had access to the
soil of their fathers, homes were built, land was plowed, and
productive activity flourished, so that the population grew strong and
rich. But when the climate deteriorated or methods of agricultural
technique failed, then mighty men, Kings, Church Prelates, or great
landlords sometimes would seize the land and drive a wedge in between
man and earth. Then it was as if the soil was washed away from beneath
the roots of the people so that the growth was stopped, production
hampered; and labor reaped but poor fruit. The people then were in
danger of sinking into serfdom and villeinage, bondage and socage, or
being weighed down under the pressure of mortgages, taxes, and debt.

The Danes live in a land where no people other than their own
ancestors has ever lived. All other nations in Europe have migrated
and intermingled. They live in lands where other tribes have lived
before them. Today Denmark is the land with the highest percentage of
its surface under plough and with the highest percentage of its
farmers living in occupying ownership.

The sea, grey and restless, cuts deeply into the flanks of Denmark,
dividing the country by sounds and belts and fjords into islands and
peninsulas. About 500 islands, some smaller, some larger, lie between
the peninsula of Jutland to the west and the peninsula of Scania to
the east. Three hundred years ago Denmark lost this eastern part
through her abuse of the important international channel, the Sound.
Town after town and harbor after harbor, lie along the coasts. Few
other lands have as many harbors in proportion to their population,
and few countries have as large an import and export per capita.

Providence intended that Denmark should not alone be a farming
country but also one of shipping and trade. The shores, the harbors
and the sea around us are indirectly part of the land problem, because
the means of transportation to a great extent influence the value of
land. Seen from above one should never have expected that such a
divided medley of islands and peninsulas could ever be assembled to a
united realm. But as soon as man could assemble a raft or hollow out
the trunk of a tree, he could cross the fjord and the sound to other
islands. There, perhaps, he discovered a new method of chipping an
arrowhead or a fresh way of tanning a deer skin. He exchanged goods
and experience, and shipping developed initiative and inquisitiveness
and inspired a spirit of daring and a desire to see and explore new
parts of land across the sea.

The Swedish historian, Curt Weibull, says:

“The Sound, the Belts and Kattegat did not separate
the various parts of Denmark. On the contrary, they served as great
connecting highroads. These waters and the ease of communication
they offered, created a means by which the Danish lands could
coalesce into political unity in early times.”

In all those periods of history wherein the seas were open and trade
was free, the goods and riches of other countries could flow in across
the borders. This brought prosperity, so that the goods imported were
to be found on the counter of every merchant, and on the table of
every housewife. But when in severe winters the waters froze, or when
hostile fleets blockaded the seas, there was a shortage of
commodities, prices rose and affluence declined. Exactly the same
conditions occurred when the Danish government in regrettable
protectionist periods isolated herself by means of artificial customs
barriers and unnatural restrictions on importation.

In the affinity between the people, the land and the sea lies the
other fundamental component of Danish history. The sea united the
kingdom. The sea established useful connection with other countries.

The Danes like other human beings were consumers long before they
learned to produce. The land gave fruits and roots, seeds and weeds,
deer and fish. Collecting satisfied the appetite. Storing reserves
gave a feeling of security against rainy days and dreary winters.

The creative power developed concurrently with the division of labor
into several disciplines such as hunting and fishing, agriculture and
cattle breeding, construction of pottery, tools and weapons. The
meaning of production is to make goods that can be consumed, or stored
for future consumption; or to make things that cannot be consumed, but
can facilitate the creative faculty. The tools, the machines are what
we call capital. They cannot be consumed today, but they can help in
producing more and better consumer goods for tomorrow.

It is the land that gives building site, raw materials and motive
power for productive labor. To collect, to save, to produce and to
invest in order to plough the invested capital back into the producing
organization of society is the secret of progres.

Trade, transport, and commerce serve production in bringing the raw
materials from where they are found to where they can be worked up,
and serve consumers in bringing the finished products from where they
are manufactured to where they are to be used.

These fundamental economic functions are common to most nations. All
nations have their problem concerning the relationship between the
people, the land, and its resources.

From the long dark period of the older Stone Age we know little about
the land problem, but from the younger Stone Age we know more. It
began about 5,000 years ago with the introduction of agriculture and
cattle breeding. The Megalithic graves of the farmers are numerous and
their flint implements are so numerous that they must be reckoned in
wagon loads. The Norwegian archaeologist, A. W. Brogger, says:

“The Megalithic graves are in fact large cemeteries
where the village families were buried in a common grave. They
present the picture of small communities with a communal sharing of
food, property and work which not even death could separate. As a
fragment of the early history of communities and society, it is
symbolic of what has been the strongest element in Danish history
right down to our time.”

The Bronze Age lasted through a millennium from about 1500 to about
500 B.C., a period in which the Danes made the remarkable feat to
create the finest Bronze Age implements in Europe north of the Alps,
in a country without metals. Every piece of copper, tin, bronze and
gold was bought from distant lands, transported and transformed and
paid for by an export. They understood that import is important.
Export is the secondary payment for the imported goods. The Swedish
historian, Curt Weibull, says:

“The Bronze Age is a period of greatness in the
history of the ancient Danish lands. A leading expert has stated
that the Bronze Age in these lands attained a unique perfection such
as had never before been seen nor will be again. Along with the
Creto Mycenaean era, it is one of those remarkable periods in the
history of man kind when culture rose to a pinnacle and in which
were established values which will endure for all time.”

At the end of the Bronze Age the climate deteriorated, and created
difficulties for the farmers. The trading facilities deteriorated due
to the Celtic cutting through of the old trading routes along the
rivers from the Baltic to the Mediterranean thus hampering import and
trade. The new metal, iron, jeopardized the handcraft and the export
of fine bronze tools and weapons, so that in some way an industrial
crisis aggravated the agricultural and commercial crises. When a
densely populated area undergoes three simultaneous crises,the densely
populated area will be over populated and consume more than the land
can provide for. Here we find some of the causes behind the succession
of tribes in the migration of the peoples from the north. They overran
Europe and the western Roman Empire.

The most interesting of the migrations are the crossing of the North
Sea by the Jutes from Jutland, the Angles from Angel in southern
Jutland, and the Saxons from Holstein and Hanover. Professor John
Richard Green said:

“It is with the landing of Hengest and his warband
at Ebbsfleet on the shores of the Isle of Thanet that English
history begins. No spot in Britain can be so sacred to Englishmen as
that which first felt the tread of English feet.”

1500 years ago there were no Englishmen in England. There were
Britons in Britain but the landing in 449 A.D. of Hengest, King of the
Danish Jutes, started the westward movement of the English speaking
nations. Dr. Gordon Ward says about Hengest:

“He even left intact the taxation system, the land
tax, which was the basis of political economy. This was collected
from the units set up before the Romans left. In due course these
units fell into the hands of the Jutes, but no other basis for
taxation was needed or devised.”

The Danes and their Scylding Kings were a tribe on Sealand from which
island, in the years between 400 and 600 A.D. they seem to have taken
control of Scania to the east and Jutland to the west. Among their
ancient place names the towns with the termination ‘lev’ take an
interesting position. The meaning of the word ‘lev’ is closely related
to the English word ‘leave’, meaning property handed over or given in
trust, a sort of official property, perhaps a fief. Some historians
believe that they reflect the traces of an ancient military or
administrative organization, being the basis of assessment and land
taxation or recruitment of warriors. It is a hypothetical, but
attractive, explanation.

The Danish Viking Period, often considered an attack from the Danes,
in fact started as a defensive measure and retaliation against
Charlemagne’s aggressive military policy and restrictive commercial
policy. Charlemagne, who controlled the six countries which today
constitute the Common Market of deGaulle, closed the entrance to the
important trade routes, the rivers. For centuries Danish shipping and
commerce had been able to use these water ways. The extermination of
the Saxon nation just south of the Danish border, the conquest of the
river Elbe, and the threatening advance towards the river Eider, which
served the same purpose as the Kiel Canal of today, was an
imperialistic provocation against Danish shipping and trade.

Hodgkin said:

“Charlemagne had stirred up a wasp’s nest” and
Baker said, that the long ships of the Vikings were “the
military answer of the North to the empire of Charlemagne”.

The Danish King Gudfred, who opposed Charlemagne, ruled from about
790 to 810. His realm had military and land statutes which must have
been one of the reasons for the kingdom’s strength and cohesion. He
ruled a realm which had Kattegat as its center, thus comprising
southern Norway, where in the districts around the Oslo Fjord, we have
clear traces of old Danish administrative divisions for levy of land
taxation in peace time, or military recruitment in war time. Professor
Poul Johannes Jorgensen said:

“There has been a tendency to place the system of
summons to arms in the late Viking Period and to regard it as a
consequence of the levy statute of the Viking expeditions. It is
more likely, however, that it belongs to an earlier period, some
think possibly to the 10th century and perhaps to an even earlier
time. Directives issued by the State or the King must have been
necessary to give it the uniform, compulsory, and universal
character which appears in the sources.”

With the clash between Charlemagne and Gudfred the long and dramatic
Viking Period began. During two or three centuries a swarm of
shippers, traders, explorers, warriors, pirates and conquerors lifted
a continent off its narrow door case and opened the doorway to a new
world and a new time, full of energy, activity and enterprise.

The Scandinavian invasions in England have two culminating points.
One is the period of the Sons of Lodbrog from about 840 to 880 when
three fourths of England were conquered and colonized, the other is
the period of the Jelling Dynasty from about 950 to 1045 when all
England was made a part of Canute’s mighty Anglo Danish Empire.

Presumably Iver Lodbrog’s son was the brain behind what Professor
Collingwood calls a resolute scheme of conquest played with the skill
of a chessplayer on the field of Empire. He says:

“We cannot but suspect, however, that on the side
of the Vikings there was one who, if we knew more about him, would
deserve mention with the Hannibals and Napoleons of history.”

Iver died in 873 and his brother Halfdan then became the leading
spirit. His land reforms have put the hallmark of his genius on
English history ever since.

In 875 he ordered the land of Northumberland to be surveyed and
parceled out in smallholdings. In 878 the land of Mercia in the
Midlands was similarly distributed, and in 880 Gurthrum in East Anglia
followed suit. These land reforms are interesting because it is very
unusual that conquerors build up their power on small, independent
farmers. Sir Frank Stenton and his school have studied the practical
policy of the Danes. He says:

“Individually, they were men of small estate,
possessing only one or two plough oxen and farming on an average
some twenty to thirty acres. But they were certainly independent of
anything that can be called manorial discipline. The plan of the
Domesday survey shows that they were responsible for the taxes due
from their land, and they were scattered over the land in a way
which shows that they cannot have been subject to any heavy
agricultural service to their lords. They gave no opportunity for
any general extension of seignorial control nor for the development
of severer forms of customary labour.”

Professor A. F. Pollard says,

“It was upon the land and not the person that the
service was imposed.”

Professor Trevelyan says:

“So far were they from enslaving their neighbours,
that their Danelaw contained many freemen and no slaves, in sharp
contrast to Wessex.”

Professor Dorothy Whitelock observes:

“It proved particularly difficult to prevent slaves
from running away to join the Danish forces during periods of Viking
ravages. The English slave who joined the Viking forces ravaging his
district might seize the opportunity to turn the tables and pay off
old grudges on his former master…”

The Domesday survey of William the Conqueror shows that in the old
Anglo Saxon parts of England most of the land was owned by great
landlords and priestly magnates, the majority of the population living
as slaves or tenants, while in the districts under Danish law — the
Danelaw most of the population were free men with occupying ownership,
obliged to pay their land tax but no other taxes.

There we find one of the important causes explaining why the Danes
were able to conquer England. The common man had nothing to defend. He
did not own any part of his own fatherland. In a way the Danes
appeared as liberators.

Sir Winston Churchill says,

“The Danish sailors from the long ships who fought
ashore in England as soldiers brought with them into England a new
principle represented by a class, the peasant yeoman proprietor. The
sailors became soldiers, the soldiers became farmers. The whole of
the East of England thus had seen a class of cultivators who, except
for purposes of common defence, owed allegiance to none;
independence and discipline were thus conjoined.”

In the days of King Svend Forkbeard (986 1014) and Canute the Great
(1015 – 1035) all land in England was taxed to the King and the
people. Most of the ground rent was collected in the so called
Danegeld, a land tax, a single tax, which became the cornerstone of
English finance from the days of Canute until modern times when
political democracy is considered more important than economic

Trevelyan says:

“The Danegeld holds indeed a great place in our
social, financial and administrative history. Direct taxation began
in this ignominious form. Under the weak Ethelred it was the normal
way of buying off the Danes. Under the strong Canute it became a war
tax for the defence of the realm. Under William the Conqueror its
levy was regarded as so important a source of revenue that the first
great inquisition into landed property was with this end in view.
Domesday Book was originally drawn up for the purpose of teaching
the State how to levy Danegeld.”

Green says:

“They were in fact the first forms of that land tax
which constituted the most important element in the national
revenue, from the days of Ethelred to the days of the Georges. As a
national tax levied by the Witan of all England, this tax brought
home the national idea as it had never been brought home before.”

“The establishment of a land tax has been attributed in
popular fancy to the need of paying Danish tribute, as its name of
Danegeld shows. But its continuance from this moment, whether Danes
were in the land or not, shows that the need of meeting their
demands had become inevitable, and which was necessarily carried on
under Ethelred’s successors. The land tax thus imposed formed the
chief resource of the Crown till the time of the Angevins; and
though the taxation of person ality was introduced by Henry II, the
land tax still remained the main basis of English finance till the
beginning of the eighteenth century. Its direct effects from the
first in furnishing the crown with a large and continuous revenue
gave a new strength to the monarchy, while its universal levy on
every hide in the realm must have strengthened the national feeling.”

Little is known about land taxation in Denmark proper from the Viking
Period, but when a century later we see the well developed land
valuation and land value taxation of the Danish Valdemar Kings (1157
1241), founded on ancient traditions, and we find that in England the
Danes brought with them a similar system across the North Sea in the
days of Regner Lodbrog’s sons and during the reigns of Svend and
Canute, it is a sound conclusion that in the Viking Period, Denmark
had a similar system of land taxation. This land tax seems to have
been a single tax with the effect that the capitalized selling price
of land was kept down and that personal skill and industry were not
hampered by taxes.

After the death of Canute and his sons it is related that King Harold
Godwinson’s brother, Toste Godwinson, as Earl over the Danes in
Northumberland, tried to set aside the laws of Canute with the
intention of imposing taxes on the Danes. The result was that the
Danes unanimously declared:

“We were born free and brought up as free men. We
will not tolerate a domineering and haughty chieftain, having
learned from our fathers to live free men or die.”

In Denmark agricultural production was at a high level throughout the
whole of antiquity. The Megalithic peasants were able to feed a
sizeable population, and the peasants of the Iron Age were able to
survive a severe agricultural crisis. The peasants of the Valdemar
Period were corn exporting, and later on they had a considerable
export of bullocks.

The system of land taxation and the levy of military service appear
to have been two sides of the same problem expressing the idea of the
people’s duty to defend the soil from dangers within the country, and
the duty to defend the soil from external violence.

The old valuation of land in ‘bol’ was continued in eastern Denmark,
but in Jutland it was modernized in a new form, peculiar to Denmark,
the gold valuation. The earliest known application of this dates from
1180 under Valdemar the Great. It was an assessment of the capital
value of land, the selling price. On this was levied a land tax of
more than 4%. In Sealand was in 1213, under Valdemar the Victorious,
introduced the so called ‘Skyld Valuation’. This was a more rational
assessment directly on the ground rent, based on the amount of seed
sown, not the amount actually used, but to the measure which a parcel
of land normally could absorb when in middle good cultivation.

By this practical and just solution of the land problem the complete
rent of all the land values in Denmark was drawn into the King’s
chest, and a firm foundation for the royal rule and the people’s
inheritance was created. The fruits of the individual man’s effort
remained in his own hands.

One night in May 1223 King Valdemar was kidnapped by the German Count
Heinrich availing himself of the King’s hospitality while hunting on
one of the small islands. A splendid era was shattered. The wealthy
landowners who could afford the expenses of equipping the armored
soldiers and cavalry men secured for themselves the most important
privilege of nobility: exemption from land taxation. In peace time
this enabled them to purchase land from their neighbors. In the
Valdemar Period there were no big estates in Denmark. Most of the
peasants, at least 75%, were independent with occupying ownership. A
century later they had dwindled to about 10%, and in 1660 only 5% were
free. The landowning squires spread and the influence of nobles grew.

The noble families owned about one third of the land. The Catholic
Church had collected another third of the land, and as the great
nobles appointed their favorites to the high offices in the
administration and in the Church, these families became a domineering
geopolitical power, enabling them to dictate the King’s coronation
charters. The common man was burdened with taxes, villeinage, socage
and bondage.

The Danish historian, Svend Aakjaer, says:

“King Valdemar and his legislators would have
turned in their graves if they could have seen how their sensible
economic system had later been dealt with.”

Aristocracy and democracy are not incompatible, but if the
aristocracy shrinks into a selfish, arrogant geocracy, its connection
with the life of the nation is lost, and thereby its social

At the Reformation in 1536 the power of the landowning aristocracy
received its first blow, because the enormous estates of Church
property passed to the King, whereby the Crown estates were trebled.
This gave the Crown geopolitical superiority over the nobles, which in
1660 led to the next step. After the devastating wars with Sweden King
Frederik III achieved Hereditary Rule and Absolute Monarchy. Count
Hannibal Sehested was partly responsible for these results, and after
1660 he succeeded in re establishing the land policy of the Valdemars
by imposing a land tax, the so called ‘hartkorn taxation’, and
abolishing the tax on consume. In a few years Denmark was restored
after the destruction of war and plague. If we bear in mind how slow
was the pace of production in those days, we have in some ways an
experimental proof of the value of the reforms. Under the next King,
Christian V, (1670 1699), the land registration, assessment and
taxation were improved to be the best in Europe with the exception
that the large estates again won tax freedom on condition that the
landlords were made responsible for the taxes of their tenants. This
opened new roads for inequalities such as the adscription of 1733
which bound the peasants to the soil of their region.

Under succeeding Kings the economic conditions worsened, aggravated
by the mercantilistic trade policy with tariffs, restrictions on
import and preferential treatment of export. Taxes rose, prices rose,
poverty spread and forced labor laid its yoke on the neck of the

The future looked rather dark; but then it happened in 1784 that a
group of gifted statesmen, after a small, unbloody revolution, came
into power. Thanks mainly to Count Christian D. Fr. Reventlow and
Count A. P. Bernstorff the most amazing reforms were carried through,
so that Denmark, in a peaceful way, solved the problems which the
bloody French Revolution left unsolved. They were one of the first
countries in Europe to adopt free trade policies, and as early as the
latter part of the 18th century, solved the land question of their
day. In 1788 the yoke of adscription was abolished. The common lands
of the villages were parceled out, the peasants got occupying
ownership to their farms, and as the first country in the world, the
slave trade in the Danish colonies was prohibited in 1792.

After the battle of Copenhagen in 1801 against Lord Nelson’s fleet,
the Danish economic expenses were assessed on the land values. In 1804
Reventlow with his leading public officers wrote to the King:

“Even within the same province, land of equal
quality is more valuable near the greater towns and in densely
populated areas than it is far from a town and in sparsely populated
areas. We believe, therefore, that it will be most impartial to
assess the land tax (hartkorn) according to the total value of land,
because that will give better evidence of how much the land can
yield economically. On this total value and not on the quantity of
farm land alone, taxes could fairly be paid by everybody.”

After the long expensive war with England (1807 1814) Denmark and
Norway were separated, Copenhagen bombarded, the Navy captured and
more than 1,000 merchant ships seized; Denmark was ruined. But free
trade and the land reforms remained.

After the bankruptcy in 1813 the famous founder of modern science of
jurisprudence, Anders Sandoe Orsted, restored confidence in the Danish
currency by giving the money a foundation as a mortgage in the land
values. In 1801 he made the following observation:

“If the laws permit the citizens to erect funds of
their possessions, such a right should only comprise their money and
movables, but should never be extended to their landed property,
because land is the safest and most indispensable basis of society.
The withdrawal of land from the coming generations might force all
citizens who were not privileged members of the establishment to
emigrate, because no spot of earth was left for them.”

This distinction between the land of a nation and the things made by
man is of paramount importance in dealing with land taxation. A
similar observation was made by Sir Winston Churchill in his famous
speech in Edinburgh:

“Land, which is a necessity of human existence,
which is the original source of all wealth, which is strictly
limited in extent, which is fixed in geographical position land, I
say, differs from all other forms of property in these primary and
fundamental conditions.”

Reventlow, who had been the driving force in the great reforms, met
with many difficulties in his work due to the war and the poverty of
the country. But he persevered and laid so firm a foundation that, in
the main, his great reform could be accomplished seventeen years after
his death. The land value taxation of 1844 yielded about one half of
all the taxes around the middle of the 19th century.

The result of the land reforms and free trade could be read on the
Exchange of London. Before the reforms Danish agricultural products
were rated at the bottom of the exchange list. A few decades later
they were rated topmost. This is like a laboratory experiment proving
the effect of sensible land reforms.

On the Liberty Memorial of 1797 in Copenhagen is justly written:

“The King commanded/ the fetter of Adscription shall
be broken/ the Land Legislation given Order and Power in order that
the free peasant may be brave and enlightened/ industrious and good/
honest citizen/ happy.”

The most democratic economic reforms were carried out under the
Absolute Monarchy in Denmark. Perhaps the old statesmen were wise to
establish economic democracy before establishing political democracy.
It was not until 1849, under the first Slesvig war with Germany, that
Denmark had a free Constitution. Under political democracy the
politicians have sometimes forgotten how important economic democracy
is. In 1849 Grundtvig, the great poet and historian, who laid the
foundation of the Danish Folk Highschools, said:

“Every Nation is the right Land owner of its own
Fatherland. By no Law can the People ever be deprived of this Right.”

The expense of the war with Germany was levied as a land tax where
the titleholder and the bondholder were equally made responsible.

When in 1901 the first cabinet with parliamentary responsibility was
appointed, great reforms were expected. The next year, therefore, the
smallholders issued their famous ‘Koge Resolution’ in which they
demanded full land value taxation, freetrade and taxfreedom of
consume, production and buildings. The liberal government did the
opposite abolished the old land value taxation (Hartkorn) and
introduced taxes on income, capital and buildings. The result was a
rise in the land value, a rise in the mortgage debt, and a rising
national debt.

Since then attempts have been made to regain the loss. In 1908 a tax
on unearned increment due to railroad construction was carried. In
1916 a law of separate assessment of land as the prerequisite of
production, and of buildings and improvements as the result of
production, was carried.

The land reforms of October 4th 1919 solved the problem of the State
taking over land from the large entailed estates and from the glebe
land. This land was parceled out in smallholdings and young farmers
could obtain the land free of selling price, but with the obligation
to pay to the society the economic rent of the land after the
periodical valuations.

In 1922 a bill on land value taxation to the state was passed. Four
years later a similar bill on municipal land value was passed. In 1933
a bill on taxation of the unearned increment in land was carried.
Through these different forms of taxation it was estimated that about
half of the land rent created by society was collected for the people
who created it.

Denmark has a small georgeistic party called the Justice Party,
‘Retsforbundet’. I had the honor of being its parliamentary leader
through 14 years. At the election in 1957 it rose from 6 to 9 seats.
As the three parties, the Social Democrats, the Social Liberals
(Radicals) and the Georgeists to a greater or lesser extent – all
claimed progress in land reforms, and the three parties together had a
majority in the House, they formed the so called Triangular

The idea of participating in a government was this: to obtain results
which would not have been obtained under any other government, and in
return to participate in fulfilling some of the wishes of the other
two parties, proposals which under another government in any case
would have been carried into effect.

The results for the country were good. In this country no other
government after having been in power for only three and a half years,
has been able to meet the electorate with similar results. There was
progress in every sphere of economic life. Production rose with more
than 30%. Savings, especially in the private sector, increased
enormously. Investments rose 44%, and investments in industry rose
135%. Consume and standard of living improved 20%. The building
industry flourished after abolition of some of the worst restrictions
and the change from government control and public financing to private
initiative and responsibility. The foreign exchange reserves rose
drastically from a deficit of a quarter of a billion Kroner to a cash
of nearly one and a half billion (1 US $ = 7 Danish Kroner). This
result was not due to borrowing, since the public debt was reduced
with more than a billion Kroner. The rise in foreign exchange reserves
started immediately after the formation of the government, and
expressed a confidence in the currency. A devaluation had been
ventilated but, it was known that the Justice Party was strongly
opposed to devaluation and inflation.

Taxes were reduced so that a family which in 1960 had the same income
and the same consume as in 1957, had a tax reduction of more than 10%.
The government joined the E.F.T.A.. The restrictions on import were
abolished, the Supply Office and Exchange Control Office were closed,
and the protective customs duties came under rapid abolition between
the E.F.T.A. countries. This was the greatest liberation of trade
since the days of Reventlow.

In 1957 Denmark had considerable unemployment. In 1960 the
unemployment had given way to full employment.

It is most interesting that in the years before the triangular
government, inflation had been about 4 or 5% annually, transferring
values of about two billion Kroner every year from wage earners and
small depositors to owners of real property. During the three and a
half years the triangular government was in power, inflation was
practically stopped or reduced to about 1% a year. The municipal land
value taxation was more than doubled, from 1.2% to 2.6%, the law
stipulating that the revenue of this taxing should be used to reduce
the personal taxes on income. The annual revenue of this improvement
represented the rent of 2.8 billion Kroner in land value. They were
transferred from the privately owned land monopoly to the population
of the cities.

Twice the law concerning taxes on unearned increment was improved.
If, as the law demanded, the administration and the assessments had
registered the real market price of developing land, in the future the
whole value of rising prices on land would have been collected for the
nation which created them. The amount of land is limited. The number
of inhabitants is increasing. The abolition of unemployment and the
rise in income will necessarily lead to a higher demand for building
sites resulting in rapidly rising prices on land. The taxation on
unearned increment will not stop the rise in rent, but it will stop
the rise in the selling price.

The results were good for the country. For the Justice Party they
were not. At the election of 1960 the party was defeated and lost all
its members in Parliament. This result was unfair. It was mainly due
to two sets of factors. The first was the continued, organized attacks
from the parties representing big money and great monopolies,
controlling 80% of the newspapers, suppressing information of the good
results, and distorting the content of the laws and reforms. The brunt
of the attacks were directed against the Justice Party, and this
party, not having one single newspaper, was severely handicapped. The
attacks proved that the vested interests, which know more about the
importance of the land question than most politicians, were aware of
which party was most dangerous for their economic interests. These
difficulties could have been overcome in the election campaign, if not
internal disasters had overtaken the party. After the election of
1957 the Justice Party had 9 members in Parliament. Three of the
veterans became members of government, leaving six members, of which
two were newly elected. The most efficient of the six members, Mr.
Knud Tholstrup, in the first year had to give up his seat, because he
could not overcome both his world wide business and the heavy strain
of being a member in a small party participating in all the
committees. Therefore, his substitute was called in. Then the
experienced member, Mr. Alfred Jorgensen, died and his substitute was
called. Then, in the next year, the chairman of the parliamentary
group, Mr. Helge Madsen, died and his deputy was called. The next year
again Miss Gudrun Bjorner died and her successor came in. Then my
health was wrecked due to coronary thrombosis so that the doctors
ordered: No more election campaigns. Of the six ordinary members of
the parliamentary group only one experienced veteran was left. More
than half of the crew on deck was lost. The defeat, therefore, was not
due to insufficient efforts or results. It was not a political defeat
but a physiological breakdown. The results had proved the truth of
what we had said. The land problem can be solved.

In 1957, after the government was formed, the rise in the land values
was held or reduced for fear of what the coming legislation would
bring. This result was seen before the laws were even represented in
Parliament. After the extermination of the Georgeists in Parliament we
have seen how influential are the mighty vested interests and how
timid are the other parties. Within a few years the laws of land value
taxation have been wrecked.

The law of land value taxation to the State was abolished. The law of
publicly owned land on ground rent terms was abolished. The law of
local land value taxation has been made voluntary for the
municipalities. And the results? A rise in the land prices as never
before – and a fresh outbreak of inflation.

In the years before the triangular government inflation grew about 4
or 5% and after the abolition in 1965 of the tax on unearned
increment, it rose to 8%, which means that a capitalized value of at
least 5 billion Kroner a year is lifted from the common man to the few
privileged men. In between these periods we see that in the three and
a half years of a land taxing government inflation only rose about 1%
annually. This is an interesting experiment proving the near
connection between inflation and land speculation.

Through a millennium the land values in Denmark have risen from the
days of the Vikings until 1957, excepting periods of wars and plagues.
Within the six years since 1960 the land values have risen more than
they did through all the preceding thousand years together. A value
equivalent to the value of the whole Kingdom has been gained by forces
in society who possess and acquire without taking part in the creative
productive process of man. This, also, is an interesting experiment
proving how important is the land problem.

The land problem remains unsolved in nearly all nations. It can be
solved and it can be mismanaged. If so, it can be solved again because
land is more enduring than man.

There is a clear distinction between what God has given and man has

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