Henry George

File:Henry george.jpg

Henry George

Henry George (September 2, 1839 – October 29, 1897) was an American reformist and political economist, famous for his advocacy of the "single tax" on land.

Life

Henry George was born in Philadelphia, Pennsylvania, into a lower-middle class family. He left the school in his mid-teens to be able to travel around the world. In April 1855, in the age of fifteen, he visited India and Australia. The two countries, especially the life of the people there, left a strong impression, that was visible in the formulation of his theories.

After returning home to Philadelphia, he worked for some time as an apprentice typesetter, but eventually decided to move and settle in California. He dreamed of getting rich in the Gold Rush, but his plans did not work out. Instead, he found a job as a typesetter.

In 1861, he married Australian-born Annie Corsina Fox, and the couple had two sons. The family was in debt and lived in poverty. George accepted a job as a journalist and started to work his way up through the newspaper industry. He worked as a printer, then a writer for the San Francisco Times. After that he became a reporter for the San Francisco Daily Evening Post, finally becoming an editor and proprietor. His articles dealt with the treatment of Chinese immigrants, ownership of the land, and the railroad industry.

With time George was able to build a reputation as a journalist, and soon engaged in local politics. He shifted his loyalty from Abraham Lincoln’s Republicans to the Democrats, and became involved with social activism. He criticized the railroad industry and corruption in government. He ran as a Democratic candidate for the state legislature, but failed. He then worked as a state inspector of gas meters.

In 1871, he published a pamphlet, Our Land and Land Policy, in which he presented for the first time his theory of rent as the primary cause of poverty. In 1879, he wrote his masterwork Progress and Poverty, which made him world-famous.

In 1880, George and his family moved to New York City, where he spent time writing and lecturing. He became acquainted with the Irish nationalist community, and was invited to Ireland and England by the radical Irish World to study the land problem. He spent one year there, from 1881 to 1882, and formed a friendship with figures such as Michael Davitt and other leaders of the Irish Land League. He met also many English socialists and radicals, such as Henry Mayers Hyndman and Helen Taylor. The visit was a total success, and George received strong support to run for the mayor of the New York City in 1886. He ended up second, behind Abram Stevens Hewitt and ahead of Theodore Roosevelt.

During this period George produced works such as Protection or Free Trade (1886); A Condition of Labor: An Open Letter to the Pope (1891), and A Perplexed Philosopher (1892). He visited Britain again in 1888 and 1889, and Australia and New Zealand in 1890. He was also known as a great lecturer.

In 1897 he was persuaded to run again for the mayor of the New York City, but suffered a stroke and died just four days before the election. An estimated 100,000 people attended his funeral.

Work

Henry George was perplexed by the apparent paradox that the poor in the long-established city of New York lived under much worse conditions than the poor in less developed California. This paradox supplied the theme and title for his 1879 book Progress and Poverty. George made the argument that a sizeable portion of the wealth created by social and technological advances in a free market economy is captured by land owners and monopolists via rent, and that this concentration of unearned wealth is the root 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 held that such a system was equivalent to slavery, a concept somewhat similar to wage slavery.

The appropriation of oil royalties by magnates of petroleum-rich countries may be seen as an equivalent form of rent-seeking activity: since natural resources are given freely by nature rather than being products of human labor or entrepreneurship, no single individual should be allowed to acquire unearned revenues by monopolizing their commerce. The same holds true for every other mineral and biological raw resource.

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 pushing up land values and rents as fast or faster than wages were rising.

Based on his observations, Henry George became a strong proponent of the "single tax" on land, based on the unimproved value of the land, that is the value that the land would have in its natural state. This idea of George's was not new, but based on David Ricardo's theory of rent. George, however, suggested that the tax levied on unimproved land would be sufficient to support all government programs.

Although best known for advocating the replacement of other taxes by "land value taxes," Henry George also formulated a comprehensive set of economic policies. He was highly critical of restrictive patents and copyrights (though he amended his views on the latter when it was explained to him that copyrights do not constrain independent reinvention in the manner of patents). George advocated replacement of patents with government-supported incentives for invention and scientific investigation and dismantling of monopolies when possible – and taxation or regulation of natural monopolies. Overall, he advocated a combination of unfettered free markets and significant social welfare programs made possible by economically efficient taxes on land rent and monopolies.

George also tried to explain the nature of interest and profit. 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—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, that interest would be but the robbery of industry, and could not long exist.

Criticisms

George's theory drew its share of critiques. Austrian school economist Eugen von Böhm-Bawerk expressed a negative judgment on George's ideas. Another spirited response came from British biologist T.H. Huxley in his article "Capital - 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. George's theory of interest is nowadays dismissed even by some otherwise Georgist authors, who see it as mistaken and irrelevant to his ideas about land and free trade.

The separation of the value of land into improved and unimproved is problematic in George's theory. Once construction has taken place, not only the land on which such improvements were made is affected, the value of neighboring, as yet unimproved, land is impacted. Thus, while the construction of a major attraction nearby may increase the value of land, the construction of factories or nuclear power plants decreases its value. Indeed, location is the single most important asset in real estate.

Legacy

George’s ideas were taken up to some degree in South Africa, Taiwan, Hong Kong, and Australia – where state governments levy a land value tax, albeit low and with many exemptions. An attempt by the Liberal Government of the day to implement his ideas in 1909 as part of the People's Budget caused a crisis in Britain which led indirectly to reform of the House of Lords.

In his Freiwirtschaft, Silvio Gesell combined Henry George's ideas about land ownership and rents with his own theory about the money system and interest rates and his successive development of Freigeld. In his last book, Martin Luther King referenced Henry George in support of a guaranteed minimum income. Many other influential people were themselves heavily influenced by George, such as George Bernard Shaw, Leo Tolstoy, and Herbert Simon.

Henry George was also familiar with the work of Karl Marx – and predicted (accurately) that if Marx's ideas were tried, the likely result would be a dictatorship.

Henry George's popularity declined in the twentieth century; however, many Georgist organizations continue in existence and many of his ideas continue to be influential. environmentalists have resonated with the idea of the earth as the common property of humanity – and some have endorsed the idea of ecological tax reform, including substantial taxes or fees on pollution as a replacement for "command and control" regulation. A follower of George, Lizzie Magie, created a board game called "The Landlord's Game" in 1904 to demonstrate his theories. After further development, this game led to the enduringly popular "Monopoly."

Publications

• George, Henry. 1930 (original published in 1891). The condition of labor: An open letter to Pope Leo XIII. Henry George Foundation of Great Britain
• George, Henry. 1931 (original published in 1887). Justice the object, taxation the means. United Committee for the Taxation of Land Values.
• George, Henry. 1936. Why the landowner cannot shift the tax on land values. United Committee for the Taxation of Land Values, Ltd.
• George, Henry. 1950. Blood & coal. Dorrance
• George, Henry. 1988 (original published in 1892). A Perplexed Philosopher: An Examination of Herbert Spencer's Utterances on the Land Question. Robert Schalkenbach Foundation. ISBN 0911312803
• George, Henry. 1992. The Science of Political Economy: A Reconstruction of Its Principles in Clear and Systematic Form. Robert Schalkenbach Foundation. ISBN 091131251X
• George, Henry. 2004. The Law of Human Progress. Athena Books. ISBN 1414700334
• George, Henry. 2005 (original published in 1881). The Irish Land Question: What It Involves and How Alone It can be Settled. Adamant Media. ISBN 1402162790
• George, Henry. 2005 (original published in 1884). Social Problems. Adamant Media Corporation. ISBN 1402198140
• George, Henry. 2006. The Carer. Vanguard Press. ISBN 1843862824
• George, Henry. 2006 (original published in 1871). Progress and Poverty. Cosimo Classics. ISBN 1596059516
• George, Henry. 2006 (original published in 1886). Protection Or Free Trade. Obscure Press. ISBN 1846645735

References

ISBN links support NWE through referral fees

• Andelson, Robert V. 2004. Critics of Henry George: Studies in Economic Reform and Social Justice. Blackwell Publishing. ISBN 1405118296
• Barker, Charles A. 1991. Henry George. Robert Schalkenbach Foundation. ISBN 0911312854
• George, Henry Jr. 2004 (original published in 1900). The Life Of Henry George. University Press of the Pacific. ISBN 1410214559
• Hooper, Charles. "Biography of Henry George (1839-97)" retrieved December 1, 2006 from The Concise Encyclopedia of Economics.
• Rose, Henry. 1891. New political economy: The social teaching of Thomas Carlyle, John Ruskin & Henry George; with observations on Joseph Mazzini. Spiers
• Wenzer, Kenneth C. 2002. Research in the History of Economic Thought and Methodology, Volume 20: Henry George's Writing's on the United Kingdom. Elsevier Limited. ISBN 0762307935
• Wenzer, Kenneth C. 2003. Henry George: Collected Journalistic Writings. M.E. Sharpe. ISBN 0765610663

External links

• The Henry George Foundation of America – Website of the Henry George Foundation
• The Henry George Institute – Website of the Henry George Institute
• Who Was Henry George? – An article on George by Agnes George de Mille on the Robert Schalkenbach Foundation website
• The Henry George School of Social Science - Website of the Henry George School
• Georgist Economic Philosophy – Website of the Georgist Movement
• Henry George Papers – Biography and bibliography on the New York Public Library website
• Biography of Henry George – Short biography on the Library of Economics and Liberty website
• Progress and Poverty, by Henry George - Complete, free, definitive edition (1912, first published 1879), on the Econlib website
• Protection or Free Trade, by Henry George - Complete, free, definitive edition (1905, first published 1886), on the Econlib website
• The Crime of Poverty by Henry George - Complete, free, definitive edition (published 1889)
• The Center for the Study of Economics – Lobby group that promotes the adoption of Land Value Taxation
• The Complete Works of Henry George – Online edition of the book

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