Wednesday, September 3, 2014

Henry George—A Radical American Original

George in his early California Days.

Henry George has been called the most original American economic thinker of the 19th Century.  He was a radical whose theories vied with those of Karl Marx for the allegiance of working people and the labor movement.  He spearheaded a wildly popular movement that at its height was shaking American politics and influencing Populism and later Progressivism.  And chances are very, very good that you have never heard of him.
George was born on September 2, 1839 in Philadelphia into a large family struggling in what was then called genteel poverty.  His father was a devout Episcopalian and an unsuccessful publisher of religious texts and tracts.  Richard S. H. George ardently wanted his son to become what he had not—a priest.  To that end Henry was sent to the Episcopal Academy in Philadelphia for his education.  The boy rebelled at both the stifling religious conformity required and the brutal discipline of the academy.  He dropped out at age 14 ending his education and his father’s hopes for a career.  Evidently his father effectively disowned him.
In 1855 at age 15 George signed on as a foremast boy on the merchantman Hindoo bound for a long voyage to Melbourne, Australia and Calcutta in India.  At the end of his 14 month voyage he apprenticed as a printer’s devil aiming to become a typographer—a career path and trade favored by young working men with literary aspirations.
After completing his apprenticeship George decided to seek his fortune in far off California.  There he found fortune elusive but not love.  Not long after arriving he met Annie Corsina Fox, an eighteen-year-old orphan lass from Sydney, Australia who was living with a prosperous uncle in San Francisco.  The uncle disapproved of the penniless young man with no connections or prospects.  George had to borrow a passable suit of clothes in order to elope with his beloved who brought nothing with her except for a bundle of books. They married late in 1861.
Despite their dire economic straits—they were often actually hungry to the point of starvation and nearly always in the early years on the razor’s edge of homelessness bouncing to ever cheaper and more crowded boarding houses—the marriage was a happy one.  Over the next 19 years they would have four children, all of who not only survived to adulthood, but thrived.  In fact George sired a rather illustrious linage.  Henry George, Jr. was born in 1862 and became a noted journalist who carried on his father’s work and served two terms in the U.S. House of Representatives representing New York State.  Richard S. George, born in 1865 became a noted sculptor.  Daughter Jean came along in 1867.  Youngest daughter Anna Angela George must have been quite a surprise upon her 1879 arrival.  She married quite well into a New York theatrical family and became the mother of dancer and choreographer Agnes DeMille and actress Peggy George. 
Despite George’s nominal Anglicanism, all of the children were raised in their mother’s Catholic faith.
In California George was isolated from the defining experience of most American men of his generation—the Civil War although he was politically a loyal Lincoln Republican.  Still, he found steady work hard to come by.  Inevitably, he gave gold prospecting a desperate try, joining a rush to newly discovered British Columbia fields in 1864.  He returned without any gold.
By 1865 George was working again as a typographer.  Upon establishing himself, he moved to better establishments and newspapers eventually becoming a reporter and editorialist.  By 1870 he was making a name for himself and lifting his family out of desperate poverty.  He began to specialize in an early form of muckraking.  An 1868 article on the economic prospects for the coming Transcontinental Railroad, What the Railroads Will Bring Us, predicted that it would concentrate wealth into the hands of capitalists, and would damage the fortunes of working people when through monopoly the Southern Pacific would drive up the price of everything it carried.  That proved to be exactly the case.  It earned the powerful enmity of Leland Stanford and other moguls.  It also launched a political career. 
On the basis of widely popular acclaim for his article and other pieces exposing local and national corruption, George launched a bid for the California State Assembly.  Stanford and his allies invested heavily in defeating his race as a Republican.  Recognizing that the party of Lincoln had rapidly become the party of Capital, He jumped to the Democrats.
In 1871 George was able to become editor and publisher of his own daily paper, the San Francisco Post which gave him a platform for his reform ideas.  The corruption of the Grant administration and scandals like the Crédit Mobilier Affair confirmed all of his criticisms of the railroads, monopoly power, and Republican corruption.  He allied himself firmly with the west coast labor movement and advanced their causes including the eight hour day, and end to child labor, and immigration restrictions on Chinese laborers who were seen as cutting the wages of American workers.
It was shortly after taking the reins of the Post that George had a kind of epiphany that changed his life and launched a movement.  He was out about the city on a horseback ride and paused at a scenic overlook of the broad San Francisco Bay.  In his own words:
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.
This notion reinforced an observation that he had made on a recent trip to New York City that the poor in that long-established city were much worse off than the poor in less developed California where land was still available. 
George began working out the implications of this insight in articles that appeared in the Post.  Some of these were collected and edited into an early book, Our Land and Land Prices in which he explicitly laid out his fundamental understanding—that everyone owns what he or she creates, but that everything found in nature, most importantly land, belongs equally to all humanity.  This was the basis of what became known as Georgism.
After 1875 George left the Post to concentrate on public speaking about his ideas and drafting his magnum opus, Progress and Poverty which was published in 1879.  Few books in history had such an immediate and stunning impact.  Within a few years more than 3 million copies of the book had been sold in various editions at a time when a bestselling novel might sell ten or twenty thousand copies.  In the 19th Century only Uncle Tom’s Cabin came close to matching it in sales and influence.
George argued:
The reason why, in spite of the increase of productive power wages constantly tend to a minimum which will give but a bare living, is that, with increase in productive power, rent tends to even greater increase, thus producing a constant tendency to the forcing down of wages…
…It is true that wealth has been greatly increased, and that the average of comfort, leisure and refinement has been raised; but these gains are not general. In them the lowest class do not share. This association of poverty with progress is the great enigma of our times. There is a vague but general feeling of disappointment; an increased bitterness among the working classes; a widespread feeling of unrest and brooding revolution. The civilized world is trembling on the verge of a great movement. Either it must be a leap upward, which will open the way to advances yet undreamed of, or it must be a plunge downward which will carry us back toward barbarism.
George’s solution was what he called the Single Tax on Land.  Essentially he argued that land and other resources from it should be the common property of all humanity and that those seeking to use it need pay society a rent in the form of tax on the unimproved value of the land.  Taxes would be eliminated from income resulting from the improvement or use of the land and from any other productive activity—that meant no tariffs, income, excise, or sales tax.  The single tax on land should be set high enough for the government to operate effectively and efficiently for the common good, including the provision of common assets like schools, roads, railroads, and other infrastructure as well as supporting the minimum needs of those who could not care for themselves.  This came close to the socialization of production and a theory of wages akin to that of Marx’s wage slavery.
George was not a self-proclaimed socialist, but his ideas influenced a generation of those around the world who became socialists.  For his part observing the international rise of George’s reputation from England, Marx was alarmed and highly critical.  He felt the Land Tax was a reformist step backward from the inevitable clash of labor and capital and that George failed to understand that the value added by labor, not land, was the source of wealth.  For his part George felt that Marx’s dictatorship of the proletariat would inevitably become just a totalitarian dictatorship.
Despite these differences, Marxism and Georgism existed side by side in the 1880s.  Many, especially in the labor movements at home and abroad were influenced by both.  In the end, many who started as Georgists ultimately became Socialists. 

The ultimate salute--a cigar box label.

In 1880 George moved to New York City from which he split his time between extensive national and international speaking tours and a deep involvement in local politics.  He wanted to show that his ideas were not mere abstractions but could be practically implemented through the democratic process.
His speaking tours drew thousands of ardent supporters where ever he went.  However popular he was in the United States—where powerful forces quickly rallied to label him as a dangerous radical in the popular press like Harpers Weekly, and Frank Leslie’s illustrated, he was even more warmly received on his four tours of Ireland, Great Britain, and Europe.  Right in Marx’s back door he was attracting followers and influencing a whole generation. 
Paul Thompson argued in his book, Socialist, Liberals and Labour that: The real socialist revival [in Britain] was set off by Henry George, the American land reformer, whose English campaign tour of 1882 seemed to kindle the smouldering unease with narrow radicalism. This radical voice from the Far West of America, a land of boundless promise, where, if anywhere, it might seem that freedom and material progress were secure possessions of honest labour, announced grinding poverty, the squalor of congested city life, unemployment, and utter helplessness.
Among those who listened and were moved toward socialism were such key figures as the Scott Keir Hardie, future Fabian Socialist George Bernard Shaw, and the trade union leader Tom Mann. 
Back in New York City George quickly allied himself, despite his English ancestry and Episcopalianism, with the large Irish nationalist immigrant community in the city which was rapidly becoming a political force against the still native dominated Tammany Hall regular Democratic organization.  He allied himself with liberal independent democrats.  Even more importantly, he became firmly allied with the local labor movement including the Central Labor Union and Lodges of the Knights of Labor. 
In 1886 George ran for Mayor of New York on the Central Labor Union’s United Labor Party with the backing of independent Democrats.  In the hard fought election George stunned the city and nation by whipping up and coming Republican reformer Theodore Roosevelt only to be edged out by Tammany Hall’s Abram Stevens Hewitt in an election that was widely viewed as stolen.  The next year he ran third in a race for New York Secretary of State.
In these campaigns in addition to his Single Tax, George’s platform called for the adoption of the secret or Australian ballot—a position he advocated in California as early as 1867—as the safeguard against election corruption.  He also advocated the use of government issued paper currency—the Greenback—and opposed of the gold standard and currency issued by private commercial banks.  This influenced the soon to rise Populist movement.
But it was his open avowal of Free Trade as a way of combating domestic monopoly and keeping living costs low for working people that eventually brought him into conflict with key members of his political coalition.  His dedication to Free Trade should have been no surprise since he always acknowledge himself the heir of classic liberal economists like Adam Smith.  Free Trade had traditionally been one of the founding and most enduring principles of the Democratic Party.  And, of course, the tariff would be eliminated with the adoption of the Single Tax.  But labor increasingly was coming to support a high protective tariff to preserve American jobs from low-wage foreign competition.  Terrance V. Powderly of the Knights of Labor was a particularly staunch opponent of Free Trade and withdrew his support from George’s New York political operations.
Meanwhile hundreds of George Clubs had sprung up around the country offering weekly lectures and special introductory classes to the Georgist philosophy.  They energetically circulated George’s books, pamphlets, and tracts with a missionary zeal.  George himself toured so relentlessly that his health suffered.
During an 1890 world tour George suffered a stroke from which he never fully recovered.  None the less, he pressed on, resuming touring in less than two years against his doctor’s orders and planning an electoral comeback in New York.

George's last campaign button.

He ran for Mayor again in 1897 as an Independent or Jefferson Democrat.  He retained some significant labor support, but the fading Knights abandoned him as did the rising numbers of committed Marxists in the Central Labor Union.  But he did get strong support from Democrats buoyed by the strong showing of William Jennings Bryan on a similar platform in the 1896 Presidential Election.
But the strain of the campaign was too much.  Just four days before the election on October 29, 1897 George suffered another massive stroke and died at age 58.  An estimated 100,000 people attended his funeral the next day on Sunday, October 30, 1897 where the Rev. Lyman Abbott, New York’s most influential liberal Protestant divine delivered the eulogy.  He was buried at Greenwood Cemetery in Brooklyn where his grave is marked by an impressive monument and bust.
Henry George, Jr stood for his father in the election and continued to tour and work in support of his father’s legacy.  He would be elected to the House of Representatives twice as a Democrat in the 20th Century.
As for the movement he founded, well it faded.  In the end most of his labor followers became socialists of one stripe or another and the reformers were re-absorbed into the Democratic Party where echoes of Georgism could long be heard.  By the 1920’s only remnant societies hung on in this country, although he retained a following abroad.  Today a handful of George Clubs in big city can still be found offering their Single Tax courses.
George’s legacy as an economist is more complex.  Both libertarian and progressive economists have drawn inspiration from parts of his philosophy.  On one hand no less a personage than Milton Friedman said in 1980 “In my opinion, the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago.”  On the other hand European socialists have adopted some of his policies and Martin Luther King, Jr. cited him in support of arguments for a guaranteed minimum income.  The U.S. Green Party advocates a land tax matched to heavy fines and fees for abusing the resources of the land.
In 1977, economist Joseph Stiglitz demonstrated that under certain conditions, spending by the government on public goods will increase aggregate land rents by an equal amount. This result has been dubbed by economists the Henry George Theorem, as it characterizes a situation where George’s Single Tax may not only be efficient, but also may be the only tax necessary to finance public expenditures.

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