George Who?

This is a paper from some time ago, well prior to the advent of Occupy events. Henry George wrote from a sensibility one rarely finds expressed so explicitly today. The modern reader should note that Christian underpinnings in no way disrupt either the reasoned logic or the passionate humanity behind George’s arguments. Follow the links! Many Occupiers have promoted education, the deeper aspects of which are rarely available in 3 page tracts….

For Eric Stephenson
16 February 2009

George Who?

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 Evening Post 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.

Works Cited

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

Marx, K. and Engels, F. Manifesto of the Communist Party. 1848. 17 February 2009

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

United States Department of the Treasury. Fact Sheets: Taxes. 17 February 2009 (This link is obsolete).

Wall Street is a drunken bum in the gutter- speech by our President

Poor Dubya, he tries to make out like he’s another George Carlin but comes up only as a totally lame George Bush. But who else other than Dubya to make this analogy, that Wall Street ‘got drunk’? … See for yourself… He’s great at economic theory, isn’t he???!

Knowing we are in over our heads

One reason we have governments, for you inquiring civil libertarians, is for guidance. I can certainly think of two matters which might always evade common man’s grasp: nutrition and economics.

In spite of all best efforts to educate a public, we may have to agree that nutrition and economics are too big for the layman to grapple. We elect representatives to Washington to advise our lives about complexities like these.

Take for example the fudgsicle, it’s “low fat” but probably not on the whole going to make you skinnier. By the taste, the fudgsicle is made of sugar. So where does that put it, as obesity causal factors go?

Regulating calorie intake vis-a-vis carbs, electrolytes, supplements, additives, toxins and who knows what, is not a static math problem. It’s about maintaining a buoyant equilibrium as we move our bodies forward in our mortal trajectory. It’s like keeping the steam pressure up on an old locomotive, there was a reason the train drivers were called engineers. A steam engine didn’t start and go like its Lionel Train facsimile, it had to be tended, coaxed and fed lest it a) falter or b) explode.

Not everyone can be an engineer. We can read how-tos, and feel good about taking the levers, but ultimately the pop-guides are written to take us in circles to the next self-help over-simplification.

Likewise, not everyone can understand economic theory. We like to apply our bookkeeping common sense, our coupon-clipping savvy, and Nike GTD ethic to the federal budget: just balance it, but spreading greater prosperity is much more complicated than that. Try conducting even domestic trading with “neither a borrower nor a lender be.”

That’s why we elect administrators, that’s why we make them give big speeches to demonstrate their competence. We know we want smart people to be in charge. You’d think that concern would be intuitive, but we have learned it to be otherwise.

Evidently we need at the very least to be taught in our schools that our leaders must have more than the common sense of our drinking buddies. Our educational system must keep citizens up to speed to appreciate that governance is a demanding task. We don’t need to know the complexities, but we need to know enough to tell buffoons like Rush Limbaugh, Bill O’Reilly, and Sean Hannity that their homespun drivel is for uneducated morons.

Getting high with Darwin and Keynes

stop the war on drugsThe war on drugs. Oh yes, it’s a nasty endless little war, one that’s filling our prisons with small-time users/entrepreneurs and costing the taxpayers billions. It’s a war that hasn’t helped our poor addicted countrymen one iota, and it’s a war for which win-happy Bush has not yet declared victory. But neither has he hung his head in defeat, which he certainly should.

The DEA bigwigs ought to be lamenting the indisputable fact that its decades-long fight against drugs is not working. In fact, it’s making things worse. After spending more than six billion dollars to cripple the Medellin and Cali cartels, the IBM and General Motors of the drug industry, cocaine production and trafficking in Colombia has actually increased. Hundreds of smaller and more efficient cartels have filled the void left by the blue chip cartels, kind of like the explosion, except the brilliant, creative, innovators happen to run drugs. And the DEA hasn’t a clue who they are or how to stop them.

The war on drugs has penalized and incarcerated thousands of small-time drug dealers/users, the weak and dumb, the poor souls who would never be counted among the fittest in a Darwinian assessment. Years of artificial selection have given rise to the super drug-dealer, the one who, like the virulent bacteria that have arisen from overuse of antibiotics, is more efficient, more cunning, more innovative and much more difficult to eradicate. How can politicians hope to win a war with a strategy that ensures that only the most efficient and creative drug traffickers survive?

The relentless persecution of small-time drug dealers has decreased the supply of drugs on our streets. I suppose this can be seen as a good thing. However, the demand remains. Thus, according to accepted economic theory, interdiction has supported higher prices for the super dealers and provided incentive for more traffickers to enter the drug economy.

Alas, the war on drugs has been a complete waste of time and money. It’s time for the DEA to huddle in the war room and come up with a new strategic plan. They should bring in some new generals, hopefully with public health backgrounds. They might even want to get off their moral steeds and decriminalize recreational drug use, thereby decreasing the demand for illegal drugs. They might decide to throw their allotted resources at dangerous criminals and our underlying social problems and let the small-time stoners be. That is if success is truly their goal.

After all, wouldn’t it make sense to address the underlying demand for drugs? Shouldn’t the DEA stop focusing on supply and address the unchanged demand for illicit drugs? Of course, this would mean funding public health initiatives and educational programs which are not nearly as fun as fighting a war against cagey dark-skinned enemies in exotic foreign locales. No, the men in suits aren’t really interested in giving up their fat federal budgets in order to win the struggle against drug abuse.
The war is too much fun.

So we will keep building expensive prisons and filling them disproportionately with people of color, too poor to make waves. We’ll keep propping up the super-drug dealers we’ve created. We’ll ask Congress for $1.4 billion to fight the drug-crazed Mexicans from Merida, the enemy du jour. And we’ll rejoice that, as is true for all of our wars, there is no end in sight.