Thursday, February 13, 2014
It seems peculiar that in 2009 no one has heard of Henry George, if only for the fact that during his prime a hundred years past his was easily one of the most recognizable names on Earth. Just a journalist really, George’s hardscrabble upbringing, his early experience in the business world, and maybe just a little OCD inspired him to craft an entirely new approach to economic theory. Its publication very quickly garnered him international acclaim, respect, and supportive friendship from many of the greatest figures of his day. Many, encountering his work for the first time today, would no doubt label him a Commie, particularly given that George’s work followed Marx and Engels’ by three decades. This misinterprets George. His thinking split the difference between Adam Smith and the Communist theorists in many ways, sharing common ground with both camps but firmly establishing his own territory. His work deserves a second reading.
George was born in Philadelphia, September, 1839, to a family headed by a hardworking but low-budget printer. By providing the Church cut-rate printing services, George’s devout father enabled Henry to garner a relatively high-standard primary education from the Episcopal Academy. He left home after high-school seeking his own way, and after a brief period of adventuring, found himself in San Francisco where he joined the Printer’s Union, following in his father’s footsteps after all.
George lived a poor man’s life--same as any tradesman at the height of the Robber Barons’ power--until an editor at the San Francisco Times came across a piece he had written and left lying around. He accepted an offered staff writing position at $50 a week, which seemed a princely amount compared with his father’s $800 a year. He traveled quite a bit for the Times, and in 1868 on assignment in New York City first encountered the squalid conditions surrounding and adjoining vaunted islands of luxury and power that would inform and undergird his writing for the rest of his life.
Having gained considerable respect as a newsman and a fair amount of seed-money, George and a partner, William Hinton, established the San Francisco EveningPost in 1871. George unabashedly used the paper as a human rights platform until 1877, when, some say, powerful railroad interests against whom he had written since his SF Times days shut the Evening Post down. Quickly landing a government post through highly-placed friendships he had developed, he used the leisure time it afforded to produce his magnum opus, Progress and Poverty, and published it in 1879. George moved to New York in 1880 and promptly left for England and Ireland, touring there to support Irish land support. By the time he returned, his life had changed forever. Progress and Poverty had made him a celebrity (de Mille 1-152).
George’s political economy laid out in his roughly 600 page book begins with his assertion that Smith’s approach established private land ownership as the foundation of economic and social structure, referring often to “the sacred rights of private property” (Smith, par. 1.11.79). So far few would argue, but George figured this skewed, and brazenly wrote that, “[t]he great cause of inequality in the distribution of wealth is inequality in the ownership of land. The ownership of land is the great fundamental fact which ultimately determines the intellectual and moral condition of a people....[I]t necessarily follows that the only remedy for the unjust distribution of wealth is in making land common property” (295, 391). He argued that as a foundational natural resource there is no basis for sequestering land in private hands. He proposed to hold land in common and allot it to users for as long as they needed, for whatever production they could derive from it, and the holder would pay tax, (rent), on its assessed value until relinquished. The holder and any capital or labor involved would keep whatever profit came from the working of the land, and the public would base taxation only upon the land itself. Note that this negates both income and capital gains taxes. (During George’s prominence, no federal income tax existed in the United States). George insisted the extensive system described philosophically in Progress and Poverty, and rather more technically in The Science of Political Economy, would adequately supply the government’s fiscal needs without additional taxes while simultaneously encouraging entrepreneurship and curtailing development of a landed class.
Marx, whose seminal works came before George, but close enough that both wrote from the surrounding milieu of the Industrial Revolution, addressed similar problems. He and those following took the matter to a deeper extreme, however, allowing for no private ownership of either property or capital. Marx expressed a well known hostility to capital. The familiar Communist adage, “Property is Theft,” represents a drastic condensation from Marx’s arguments that labor always seems to wind up on the short end of dealings with those holding either land or capital (Marx, chap. 6, par.2). Like George, Marx chafed at the inequities this arrangement produced, especially with the exacerbations of capital lording over labor, which industrial development had completely disassociated from the land producing the wealth. “The means of production and of exchange, on whose foundation the bourgeoisie built itself up,” says Marx, “were generated in feudal society,” (Marx, and Engels 1848, chap. 1, par. 21).The Communists implemented a far more radical seizure of all private property, including both land and capital, consolidating it under a central federal power (chap. 2, par. 75). Contrarily, George felt that capital deserved its due, and sought to rectify the problems he saw by implementation of a more enlightened “single tax.”
A few germane observations present themselves for discussion. Smith, George, and Marx all expressed notions we might call idealist—Utopian even. Each sought to solve timeless conundrums with an incredibly optimistic approach. Jaded 21st century readers might consider any one of them painfully naive, in retrospect. None of them had the advantage of the hindsight we enjoy, however, and fruitlessly denying the problems each pointed out in his broader work does not help at all. Smith wrote when, fresh from the collapse of European Feudalism, land served as the key to wealth of any kind, and still viewed as an unlimited resource for the grabbing. The vast inequities the Industrial Revolution had abruptly produced vexed George and the Communists. None of these could have predicted today’s technological, information-based economies, with the problems they addressed dispersed over the entire planet. Today, the rate of separation between the “Haves” and the “Have Nots” poises to exceed the conditions affecting either set of writers.
George did not design a perfect system. Neither, as amply demonstrated by both history and current events, did Smith or Marx. Henry George thoughtfully and humanely addressed a terribly intractable matter in human affairs, however, and deliberately allowed for future thinkers to expand his work. His work deserves contemplation as we forge into a new century fraught with uncertainties. Our present crisis may help encourage just that.
De Mille, Anna George. Henry George: Citizen of the World. Chapel Hill: University of North Carolina Press, 1950.
George, Henry. Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Want with Increase of Wealth: The Remedy. 1898. New York, New York: The Robert Shalkenbach Foundation, 1979. 17 February 2009
Marx, Karl. Wage-Labor Capital. 1849. 17 February 2009 <http://www.marxists.org/archive/marx/works/1847/wage-labour/index.htm>
Marx, K. and Engels, F. Manifesto of the Communist Party. 1848. 17 February 2009 <http://www.anu.edu.au/polsci/marx/classics/manifesto.html >
Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. 1776. Ed. Edwin Cannan. 5th ed. London: Methuen & Co., Ltd., 1904. 17 February 2009 <http://www.econlib.org/library/Smith/smWN.html >
United States Department of the Treasury. Fact Sheets: Taxes. 17 February 2009 (This link is obsolete).