Henry George

Henry George (September 2, 1839 â€" October 29, 1897) was an American writer, politician and political economist, who was the most influential proponent of the land value tax and the value capture of land/natural resource rents, an idea known at the time as 'Single-Tax'. His immensely popular writing is credited with sparking several reform movements of the Progressive Era and ultimately inspiring the broad economic philosophy often referred to today as Georgism, the main tenet of which is that people legitimately own value they fairly create, but that natural resources and common opportunities, most importantly the value of land, belongs equally to each person in a community. His most famous work, Progress and Poverty (1879), sold millions of copies worldwide, probably more than any other American book before that time. It is a treatise on inequality, the cyclic nature of industrialized economies, and the use of the land value tax as a remedy.

="Biography">Biography

Life and career

George was born in Philadelphia, Pennsylvania, to a lower-middle-class family, the second of ten children of Richard S. H. George and Catharine Pratt (Vallance) George. His father was a publisher of religious texts and a devout Episcopalian, and sent George to the Episcopal Academy in Philadelphia. George chafed at his religious upbringing and left the academy without graduating. Instead he convinced his father to hire a tutor and supplemented this with avid reading and attending lectures at the Franklin institute. His formal education ended at age 14 and he went to sea as a foremast boy at age 15 in April 1855 on the Hindoo, bound for Melbourne and Calcutta. He ended up in the West in 1858 and briefly considered prospecting for gold but instead started work the same year in San Francisco as a type setter.

In California George fell in love with Annie Corsina Fox, an eighteen-year-old girl from Sydney who had been orphaned and was living with an uncle. The uncle, a prosperous, strong-minded man, was opposed to his niece's impoverished suitor. But the couple, defying him, eloped and married in late 1861, with Henry dressed in a borrowed suit and Annie bringing only a packet of books. The marriage was a happy one and four children were born to them. Fox's mother was Irish Catholic, and while George remained an Evangelical Protestant, the children were raised Catholic. On November 3, 1862 Annie gave birth to future United States Representative from New York, Henry George, Jr. (1862â€"1916). Early on, even with the birth of future sculptor, Richard F. George (1865 â€" September 28, 1912), the family was near starvation.

After deciding against gold mining in British Columbia, George was hired as a printer for the newly created San Francisco Times, and was able to immediately submit editorials for publication, including the popular What the Railroads Will Bring Us., which remained required reading in California schools for decades. George climbed the ranks of the Times, eventually becoming managing editor in the summer of 1867. George worked for several papers, including four years (1871â€"1875) as editor of his own newspaper San Francisco Daily Evening Post and time running the Reporter, a Democratic anti-monopoly publication. The George family struggled but George's increasing reputation and involvement in the newspaper industry lifted them from poverty.

George's other two children were both daughters. The first was Jennie George, (c. 1867â€"1897), later to become Jennie George Atkinson. George's other daughter was Anna Angela George (b. 1879), who would become mother of both future dancer and choreographer, Agnes de Mille and future actress Peggy George (who was born Margaret George de Mille).

Economic and political philosophy

George began as a Lincoln Republican, but then became a Democrat. He was a strong critic of railroad and mining interests, corrupt politicians, land speculators, and labor contractors. He first articulated his views in an 1868 article entitled "What the Railroad Will Bring Us." George argued that the boom in railroad construction would benefit only the lucky few who owned interests in the railroads and other related enterprises, while throwing the greater part of the population into abject poverty. This had led to him earning the enmity of the Central Pacific Railroad's executives, who helped defeat his bid for election to the California State Assembly.

One day in 1871 George went for a horseback ride and stopped to rest while overlooking San Francisco Bay. He later wrote of the revelation that he had:

I asked a passing teamster, for want of something better to say, what land was worth there. He pointed to some cows grazing so far off that they looked like mice, and said, 'I don't know exactly, but there is a man over there who will sell some land for a thousand dollars an acre.' Like a flash it came over me that there was the reason of advancing poverty with advancing wealth. With the growth of population, land grows in value, and the men who work it must pay more for the privilege.

Furthermore, on a visit to New York City, he was struck by the apparent paradox that the poor in that long-established city were much worse off than the poor in less developed California. These observations supplied the theme and title for his 1879 book Progress and Poverty, which was a great success, selling over 3 million copies. In it George made the argument that a sizeable portion of the wealth created by social and technological advances in a free market economy is possessed by land owners and monopolists via economic rents, and that this concentration of unearned wealth is the main cause of poverty. George considered it a great injustice that private profit was being earned from restricting access to natural resources while productive activity was burdened with heavy taxes, and indicated that such a system was equivalent to slavery â€" a concept somewhat similar to wage slavery. This is also the work in which he made the case for a land value tax in which governments would tax the value of the land itself, thus preventing private interests from profiting upon its mere possession, but allowing the value of all improvements made to that land to remain with investors.

George was in a position to discover this pattern, having experienced poverty himself, knowing many different societies from his travels, and living in California at a time of rapid growth. In particular he had noticed that the construction of railroads in California was increasing land values and rents as fast as or faster than wages were rising.

In 1880, now a popular writer and speaker, George moved to New York City, becoming closely allied with the Irish nationalist community despite being of English ancestry. From there he made several speaking journeys abroad to places such as Ireland and Scotland where access to land was (and still is) a major political issue. In 1886 George campaigned for mayor of New York City as the candidate of the United Labor Party, the short-lived political society of the Central Labor Union. He polled second, more than the Republican candidate Theodore Roosevelt. The election was won by Tammany Hall candidate Abram Stevens Hewitt by what many of George's supporters believed was fraud. In the 1887 New York state elections George came in a distant third in the election for Secretary of State of New York. The United Labor Party was soon weakened by internal divisions: the management was essentially Georgist, but as a party of organized labor it also included some Marxist members who did not want to distinguish between land and capital, many Catholic members who were discouraged by the excommunication of Father Edward McGlynn, and many who disagreed with George's free trade policy. George had particular trouble with Terrence V. Powderly, president of the Knights of Labor, a key member of the United Labor coalition. While initially friendly with Powderly, George vigorously opposed the tariff policies which Powderly and many other labor leaders thought vital to the protection of American workers. George's strident criticism of the tariff set him against Powderly and others in the labor movement.

Death

George's first stroke occurred in 1890, after a global speaking tour concerning land rights and the relationship between rent and poverty. This stroke greatly weakened him, and he never truly recovered. Despite this, George tried to remain active in politics. Against the advice of his doctors, George campaigned for New York City mayor again in 1897, this time as an Independent Democrat. The strain of the campaign precipitated a second stroke, leading to his death four days before the election. An estimated 100,000 people attended his funeral at Grand Central Palace, with countless more crowding outside and lining the streets of the funeral procession. On Sunday, October 30, 1897, the Reverend Lyman Abbott delivered an address, "Henry George: A Remembrance". Commentators disagreed on whether it was the largest funeral in New York history or the largest since the death of Abraham Lincoln.

Policy proposals

Tax on land and natural resource monopoly

Henry George is best known for his argument that the economic rent of land should be shared by society rather than being owned privately. The clearest statement of this view is found in Progress and Poverty: "We must make land common property." By taxing land values, society could recapture the value of its common inheritance, and eliminate the need for taxes on productive activity. George believed that this would provide disincentives toward land speculation, but would continue to incentivize development, as landlords would not suffer tax penalties for any industry or edifice constructed on their land. Broadly applying this principle is now commonly known as 'Georgism'.

Many environmentalists, such as Bolton Hall and Ralph Borsodi, have agreed with the idea of the earth as the common property of humanity. The US Green Party platform has endorsed the idea of ecological tax reform, including land value taxation and substantial taxes or fees on pollution as a replacement for "command and control" regulation.

Free trade

George was opposed to tariffs, which were at the time both the major method of protectionist trade policy and an important source of federal revenue (the federal income tax having not yet been introduced). He believed that tariffs kept prices high for consumers, while failing to produce any increase in wages. He also thought that tariffs protected monopolistic companies from competition, thus augmenting their power. Later in his life, free trade became a major issue in federal politics and his book Protection or Free Trade was read into the Congressional Record by five Democratic congressmen.

Spencer MacCallum wrote that Henry George was "Undeniably the greatest writer and orator on free trade who ever lived." Tyler Cowen wrote that George's 1886 book, Protection or Free Trade "remains perhaps the best-argued tract on free trade to this day."

Secret ballot

George was one of the earliest, strongest and most prominent advocates for adoption of the secret ballot in the United States. George's first article in support of the secret ballot was entitled "Bribery in Elections" and published in the Overland Review of December 1871. His second article was "Money in Elections," published in the North American Review of March 1883. The first state to adopt the secret ballot, also called The Australian Ballot, was Massachusetts in 1888 under the leadership of Richard Henry Dana III. By 1891, more than half the states had adopted it too. For a more complete discussion of the adoption of the Australian Ballot, see Saltman, Roy G., (2006), The History and Politics of Voting Technology, Palgrave Macmillan, NY, pp. 96â€"103.

Currency and national debt

George supported the use of government issued paper currency such as the greenback. He opposed the use of metallic currency (such as gold or silver) and money issued by private commercial banks.

Citizen's dividend

George proposed to create a pension and disability system, and that excess public revenues from land rents could be distributed to residents "as a right" instead of as charity. Georgists often refer to this policy as a Citizen's dividend in reference to a similar proposal by Thomas Paine.

Other proposals

Henry George also proposed the following reforms:

• to end or restrict the use of intellectual property,
• to have government own and manage all right-of-way and "natural" monopolies, such as utility companies and mass transportation,
• to dramatically reduce the size of the military,
• to replace contract patronage with the direct employment of government workers, with civil-service protections,
• to build and maintain free mass transportation and libraries,
• to extend suffrage to women, and even to have one house of Congress entirely male and the other entirely female,
• to implement campaign finance reform and political spending restrictions.

Legacy

Henry George's idea known as Georgism had enormous influence in his time but slowly waned throughout the 20th century. Nonetheless, it would be difficult to overstate George's impact on turn of the century reform movements and intellectual culture. George's self-published Progress and Poverty was the first popular economics text and one of the most widely printed books ever written. The book's explosive world-wide popularity is often marked as the beginning of the Progressive Era and various political parties, clubs, and charitable organizations around the world were founded on George's ideas. George's message appeals broadly across the political spectrum and has attracted strong support from labor movements, socialists, anarchists, abolitionists, suffragists, middle-class reformers, wealthy industrialists and investors. As a result, Henry George is still claimed as a primary intellectual influence by both the classical libertarian and socialist movements. Edwin Markham expressed a common sentiment when he said, "Henry George has always been to me one of the supreme heroes of humanity."

A large number of famous individuals, particularly Progressive Era figures, claim inspiration from George's idea, now known as Georgism. John Peter Altgeld wrote that George "made almost as great an impression on the economic thought of the age as Darwin did on the world of science."

Franklin D. Roosevelt praised George as "one of the really great thinkers produced by our country" and bemoaned the fact that George's writings were not better known and understood. Yet several decades earlier, William Jennings Bryan wrote that George's genius had reached the global reading public and that he "was one of the foremost thinkers of the world."

John Dewey wrote, "It would require less than the fingers of the two hands to enumerate those who from Plato down rank with him," and that "No man, no graduate of a higher educational institution, has a right to regard himself as an educated man in social thought unless he has some first-hand acquaintance with the theoretical contribution of this great American thinker."

In 1892, Alfred Russel Wallace stated that George's Progress and Poverty was "undoubtedly the most remarkable and important book of the present century."

Albert Jay Nock wrote that anyone who rediscovers Henry George will find that "George was one of the first half-dozen [greatest] minds of the nineteenth century, in all the world.” The anti-war activist John Haynes Holmes said nearly same thing: that Henry George was "one of the half-dozen great Americans of the nineteenth century, and one of the outstanding social reformers of all time."

The social scientist and economist John A. Hobson observed in 1897 that “Henry George may be considered to have exercised a more directly powerful formative and educative influence over English radicalism of the last fifteen years than any other man.” Many others agree with Hobson. George Bernard Shaw claims that Henry George was responsible for inspiring 5 out of 6 socialist reformers in the 1880s who created socialist organizations such as the Fabian Society. The controversial People's Budget and the Land Values (Scotland) Bill were inspired by Henry George and resulted in the Parliament Act 1911 to reform of the House of Lords, which had blocked Georgist land reform. In Denmark, the Danmarks Retsforbund (known in English as the Justice Party or Single-Tax Party) was founded in 1919. The party's platform is based upon the land tax principles of Henry George. The party was elected to parliament for the first time in 1926, and they were moderately successful in the post-war period and managed to join a governing coalition with the Social Democrats and the Social Liberal Party from the years 1957â€"60, with diminishing success afterwards.

Non-political means have also been attempted to further the cause. A number of "Single Tax Colonies" were started, such as Arden, Delaware and Fairhope, Alabama. A follower of George, Lizzie Magie, created a board game called The Landlord's Game in 1904 to demonstrate his theories, which later turned into the popular board game Monopoly.

Although both advocated worker's rights, Henry George and Karl Marx were antagonists. Marx saw the Single Tax platform as a step backwards from the transition to communism. On his part, Henry George predicted that if Marx's ideas were tried, the likely result would be a dictatorship. Leo Tolstoy deplored that a silence had fallen around George, for he viewed Georgism as reasonable and realistic, as opposed to other utopian movements, and as a "contribution to the enlightenment of the consciousness of mankind, placed on a practical footing,” and that it could help do away with what he called the Slavery of Our Times.”

Henry George's popularity waned gradually during the 20th century. However, there are still Georgist organizations. Many influential people who remain famous, such as George Bernard Shaw, were inspired by George or identify as Georgists. In his last book, Where do we go from here: Chaos or Community?, Martin Luther King, Jr referenced Henry George in support of a guaranteed minimum income. Bill Moyers quoted Henry George in a speech and identified George as a "great personal hero". Albert Einstein wrote that "Men like Henry George are rare unfortunately. One cannot imagine a more beautiful combination of intellectual keenness, artistic form and fervent love of justice. Every line is written as if for our generation. The spreading of these works is a really deserving cause, for our generation especially has many and important things to learn from Henry George."

Before reading Progress and Poverty, Helen Keller was a socialist who believed that Georgism was a good step in the right direction. She later wrote of finding "in Henry George’s philosophy a rare beauty and power of inspiration, and a splendid faith in the essential nobility of human nature."

Mason Gaffney, an American economist and a major Georgist critic of neoclassical economics, argued that neoclassical economics was designed and promoted by landowners and their hired economists to divert attention from George's extremely popular philosophy that since land and resources are provided by nature, and their value is given by society, land value â€" rather than labor or capital â€" should provide the tax base to fund government and its expenditures.

Joseph Stiglitz wrote that "One of the most important but underappreciated ideas in economics is the Henry George principle of taxing the economic rent of land, and more generally, natural resources."

The Robert Schalkenbach Foundation [2] publishes copies of George's works and related texts on economic reform and sponsors academic research into his policy proposals. The Lincoln Institute of Land Policy was founded to promote the ideas of Henry George but now focuses more generally on land economics and policy. The Henry George School of Social Science of New York and its satellite schools teach classes and conduct outreach.

Henry George Theorem

In 1977, Joseph Stiglitz showed that under certain conditions, spending by the government on public goods will increase aggregate land rents by at least an equal amount. This result has been dubbed by economists the Henry George Theorem, as it characterizes a situation where Henry George's "single tax" is not only efficient, it is also the only tax necessary to finance public expenditures.

Economic contributions

George developed what he saw as a crucial feature of his own theory of economics in a critique of an illustration used by Frédéric Bastiat in order to explain the nature of interest and profit. Bastiat had asked his readers to consider James and William, both carpenters. James has built himself a plane, and has lent it to William for a year. Would James be satisfied with the return of an equally good plane a year later? Surely not! He'd expect a board along with it, as interest. The basic idea of a theory of interest is to understand why. Bastiat said that James had given William over that year "the power, inherent in the instrument, to increase the productivity of his labor," and wants compensation for that increased productivity.

George did not accept this explanation. He wrote, "I am inclined to think that if all wealth consisted of such things as planes, and all production was such as that of carpenters â€" that is to say, if wealth consisted but of the inert matter of the universe, and production of working up this inert matter into different shapes â€" that interest would be but the robbery of industry, and could not long exist." But some wealth is inherently fruitful, like a pair of breeding cattle, or a vat of grape juice soon to ferment into wine. Planes and other sorts of inert matter (and the most lent item of all â€" money itself) earn interest indirectly, by being part of the same "circle of exchange" with fruitful forms of wealth such as those, so that tying up these forms of wealth over time incurs an opportunity cost.

George's theory had its share of critiques. Austrian school economist Eugen von Böhm-Bawerk, for example, expressed a negative judgment of George's discussion of the carpenter's plane. In his treatise, Capital and Interest, he wrote:

(T)he separation of production into two groups, in one of which the vital forces of nature form a distinct element in addition to labour, while in the other they do not, is entirely untenable[...] The natural sciences have long ago told us that the cooperation of nature is universal. [...] The muscular movement of the man who planes would be of very little use, if the natural powers and properties of the steel edge of the plane did not come to his assistance.

Later, George argued that the role of time in production is pervasive. In The Science of Political Economy, he writes:

[I]f I go to a builder and say to him, "In what time and at what price will you build me such and such a house?" he would, after thinking, name a time, and a price based on it. This specification of time would be essential.... This I would soon find if, not quarreling with the price, I ask him largely to lessen the time.... I might get the builder somewhat to lessen the time... ; but only by greatly increasing the price, until finally a point would be reached where he would not consent to build the house in less time no matter at what price. He would say [that the house just could not be built any faster]....

The importance ... of this principle â€" that all production of wealth requires time as well as labor â€" we shall see later on; but the principle that time is a necessary element in all production we must take into account from the very first.

According to Oscar B. Johannsen, "Since the very basis of the Austrian concept of value is subjective, it is apparent that George's understanding of value paralleled theirs. However, he either did not understand or did not appreciate the importance of marginal utility."

Another spirited response came from British biologist T.H. Huxley in his article "Capital â€" the Mother of Labour," published in 1890 in the journal The Nineteenth Century. Huxley used the principles of energy science to undermine George's theory, arguing that, energetically speaking, labor is unproductive.

See also

• Henry George Birthplace
• Geolibertarianism
• Georgism
• Henry George Theorem
• Land Value Tax
• Left-libertarianism
• Libertarian socialism
• New York City mayoral elections
• Spaceship Earth
• Tammany Hall#1870-1900
• Charles Hall â€" An early precursor to Henry George
• History of the board game Monopoly
• Andrew Bisset (barrister)
• Thomas Piketty

References

Notes

Bibliography

• Our Land and Land Policy" 1871
• s:Progress and Poverty 1879
• Progress and Poverty (1912, first published 1879. Definitive, free, searchable on Econlib.)
• The Land Question 1881 (The Irish Land Question)
• Social Problems 1883
• Protection or Free Trade 1886
• George, Henry (July 1887). "The New Party". The North American Review (University of Northern Iowa) 145 (368): 1â€"8. ISBN 0-85315-726-X. 
• Protection or Free Trade (1905, first published 1886. Definitive, free, searchable on Econlib.)
• The Condition of Labor" 1891
• A Perplexed Philosopher 1892
• The Science of Political Economy 1898

Further reading

• Barker, Charles Albro Henry George. Oxford University Press 1955 and Greenwood Press 1974. ISBN 0-8371-7775-8
• George, Henry. (1881). Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth; The Remedy. Kegan Paul (reissued by Cambridge University Press, 2009; ISBN 978-1-108-00361-2)

External links

• The Henry George Foundation (United Kingdom)
• Land Value Taxation Campaign UK
• The Henry George Foundation of Australia
• The Life of Henry George, by Henry George Jr, 1904
• Henry George (1839â€"1897). The Concise Encyclopedia of Economics. Library of Economics and Liberty (2nd ed.) (Liberty Fund). 2008. 
• The Center for the Study of Economics
• The Henry George Institute â€" Understanding Economics
• The Henry George School, founded 1932.
• Works by or about Henry George at Internet Archive
• Works by Henry George at LibriVox (public domain audiobooks)
• Online Works of Henry George
• Wealth and Want
• Prosper Australia
• Henry George at Find a Grave
• Henry George Foundation OnlyMelbourne
• The Complete Works of Henry George. Publisher: New York, Doubleday, Page & company, 1904. Description: 10 v. fronts (v. 1â€"9) ports. 21 cm.. (searchable facsimile at the University of Georgia Libraries; DjVu & layered PDF format)
• The Crime of Poverty by Henry George
• Centro Educativo Internacional Henry George (Managua, Nicaragua), in Spanish
• The Economics of Henry George's "Progress and Poverty", by Edgar H. Johnson, 1910.