Saving Communities
Bringing prosperity through freedom, equality, local autonomy and respect for the commons.

Henry George
The Science of Political Economy
Book II, The Nature of Wealth

Chapter VII
Ineffectual Gropings Toward a Determination Of Wealth

Showing The Opposition to the Scholastic Economy Before Progress and Poverty

Illogical character of the Wealth of Nations -- Statements of natural right -- Spence, Ogilvie, Chalmers, Wakefield, Spencer, Dove, Bisset -- Vague recognitions of natural right -- Protection gave rise to no political economy in England, but did elsewhere -- Germany and protectionist political economy in the United States -- Divergence of the schools -- Trade-unionism in socialism

01

The Wealth of Nations won great vogue by its striking qualities and its prudence in avoiding antagonism with landowners. It made a nucleus around which the scholastic classes could rally, assuming that they were teaching a science of political economy, without seriously hurting any powerful interest. What Smith had done was after all an evasion -- a settlement which left the cardinal principles unsettled. He had shown how greatly the division of labor increases the productiveness of labor, and without daring to go too far had shown that to leave labor unrestricted would increase the annual product. He had in short turned the aggressive side of the science against the protective, or, as he styled it, the mercantile system, thus putting on its feet a political economy which taught a sort of free trade that did not seriously object to taxes on labor and the products of labor for raising the revenues of government.

02

What wealth, or its sub-term, capital, was, Smith did not really say, nor yet did he make clear the division of their joint produce between the human factor and the natural factor, nor venture to show what was the cause and warrant of poverty. In political economy as he left it there were no axioms -- nothing that would correlate and hold together. But such was his genius and prudence, and his adaptability to the temper of his time, that he got a hearing where more daring thinkers failed, and a science of political economy began to grow on his foundations. Malthus by giving a scientific semblance to a delusion which tallied with popular impressions, and Ricardo by giving form to a scientific interpretation of rent, soon provided what passed for axioms, one of which was wrong, and the other of which was wrongly or at least inadequately stated. While between them, all was left at sea.

03

Yet such was the feeling that there ought to be a political economy, and so agreeable to the ruling class was what was offered as such, that chairs for the study of it began to multiply. They were of course filled by men who taught what they had learned, with the constant pressure on them of the class dominant in all colleges -- a class which, whatever be the faults of a political economy, are disposed to accept things as they are as the best order of things possible, and to view with intense opposition any radical change that would provoke real discussion. And as nearly every professor of political economy thought it incumbent on him to write a text-book, or at least to do something to show a reason for his existence, there was much going over old ground and picking out of small differences, but no questioning of anything that could arouse vital debate. And given a state of society in which the many were poor and the few were rich, any attempt to point out a true political economy, if it got attention, would inevitably arouse much debate.

04

Thus in fact political economy, as it found teachers and professors and the standing of a science, was to the class who had appropriated land as belonging to them exclusively a very comfortable doctrine. It applied the doctrine of "letting things alone," without any suggestion of the question of how things came to be. It was, as it was styled by Clement C. Biddle, the American translator of Say, "the liberal doctrine that the most active, general and profitable employments are given to the industry and commerce of every people by allowing to their direction and application the most perfect freedom compatible with the security of property." As to what constitutes property there was no dispute. And if one did not look too closely, and beyond the usages of the times, in the more advanced European nations there could be no dispute. Property? Why property was of course what was susceptible of ownership. Any fool would know that!

05

Nor after the surrender of the Peel ministry, in time to prevent it, was any question of the sanction of property raised. English slavery had disappeared in its last forms before the nineteenth century began, and though the question of the ownership of slaves in the tropical colonies, and finally in the Southern United States, was likely if continuously debated to bring up the larger question, this did not appeal to the feelings of the people. So it was settled for the time, as to the colonies by the device of buying off the slave -- owners at public expense; and in the United States by the arbitrament of war.

06

The question of the validity of property was never really raised in England until after the publication of Progress and Poverty began to call it up. But the attention which that has aroused has since brought to light some definite utterances, which show, as I take it, that the doctrines of the French Physiocrats would have found hospitable reception in Great Britain had it been possible at the time to have really made them known.

07

Thus H. M. Hyndman has dug up from the British Museum a lecture by Thomas Spence, delivered before the Philosophical Society of Newcastle, on November 8, 1775, a year prior to the publication of the Wealth of Nations, and for which the Society, as Spence puts it, did him "the honor" to expel him. In this lecture Spence declares that all men "have as equal and just a property in land as they have in liberty, air, or the light and heat of the sun," and he proposes what now would be again called "the single tax" -- that the value of land should be taken for all public expenses, and all other taxes of what ever kind and nature should be abolished. He draws a glowing picture of what humanity would be if this simple but most radical reform were adopted. But so much against the wishes of all that had authority was he, that his proposal was utterly forgotten until dug out of its burial -- place more than a century after.

08

So, in 1889, D. C. Macdonald, a single-tax man, and a solicitor of Aberdeen, dug out of the Advocates' Library of Edinburgh, and the British Museum, in London, copies of a book printed in 1782 by William Ogilvie, Professor of Humanities in King's College, Aberdeen, entitled An Essay on the Right of Property in Land, with Respect to its Foundation in the Law of Nature, its Present Establishment by the Municipal Laws of Europe, and the Regulations by which it might be Rendered More Beneficial to the Lower Ranks of Mankind. Professor Ogilvie, though he makes no reference to any other authority than that of Moses, had evidently some knowledge of the Physiocrats, and most unquestionably declares that land is a birthright which every citizen still retains. He advocates the taxation of land, with the entire abolition of all other taxes, though, as if despairing of so radical a reform, he proposes some palliatives such as allotments to actual settlers, leases, etc. He doubtless saw the utter hopelessness of making the fight under existing conditions, for it seems probable that his book was never published, only a few copies being printed for private circulation by the author.

09

Among the scholastically accepted writers in the first thirty years of the century are two who seem to have some glimmerings of the truth perceived by the Physiocrats, of the relations between land and labor, though in a curiously distorted way. Dr. Chalmers, who was a divinity professor in the University of Edinburgh, and a strong Malthusian, contended that the owners of land ultimately paid all taxes levied on labor, and contended that titles (which he regarded as so much retained by the state for beneficial purposes) should be maintained. All others he would have ultimately abolished, and the revenues of the state ultimately raised from the value of land. This, he thought, would be simpler and better, and avoid much dispute, "relieving government from the odium of taxes which so endanger the cause of order and authority." He was a stanch supporter of primogeniture, opposed to anything which aimed at the division of the land, and would have the country enjoy the spectacle of a noble and splendid aristocracy, of which the younger branches should be supported by places of at least £1000 a year in the public services. And, while he would have the landlords pay all taxes, he thought it "wholesome and befitting that they should have the political ascendancy also." For "the lords of the soil, we repeat, are naturally and properly the lords of the ascendant." Chalmers was a good example of the toadying spirit of so many of the Scottish ministers. He afterward joined in the disruption of the Kirk by the Free Kirk movement. Yet, in spite of his obsequience, he did not succeed in popularizing the single tax with the British aristocracy, who fought the repeal of the corn -- laws as long as they could. He passed as an economist almost into oblivion.

10

Another curious example of the perversion of the doctrine of the relation between land and labor was given by Edward Gibbon Wakefield, who visited this country in its more democratic days in the first quarter of the century, ere the natural result of our thoughtless acceptance of land and true property as alike wealth, and our desire to get in the first place an owner for land had begun to show so fully its effects. He was impressed with the difference between the society growing up here and that to which he had been used, and viewing everything from the standpoint of those accustomed to look on the rest of mankind as created for their benefit, he deemed the great social and economic disadvantage of the United States to be "the scarcity of labor." To this he traces the rudeness of the upper class -- its want of those refinements, enjoyments and delicacies of life, common to the aristocracy of England. How could an English gentleman emigrate to a country where he might actually have to black his own boots, and where no one could count on a constant supply of labor ready to accept as a boon any opportunity to perform the most menial and degrading service? He saw, as Adam Smith before him saw, that this "scarcity of labor" came from the cheapness of land where the vast area of the public domain was open for settlement at nominal prices. Without the slightest question that the land was made for landlords, and that laborers were intended to furnish a supply of labor for the upper classes, he wished the new countries which England had yet to settle to be socially, politically and economically newer Englands; and, without waiting for the slower process of speculation, he wished to bring about in these new countries such salutary "scarcity of employment" as would give cheap and abundant labor from the very start of settlement. He, therefore, proposed that land should not be given, but sold at the outset, at what he called a sufficient price -- a price high enough to make laborers work for others until they had acquired the fund necessary to pay a price for what nature offered without money and without price. The money received by the state in this way he proposed to devote in paying the passage of suitable and selected immigrants. This would give from the start two classes of immigrants to settle the great waste places which England still retained, especially in Australia and New Zealand -- the better class, who would pay their own expenses, and buy from the government their own land, which would at first have a value; and the assisted class, who, being selected from the best workers in the old country, would at once be able to supply all the required labor. Thus the new country where this plan was adopted would from the first, while wages were still enough higher than in England to make working -- men, especially if assisted, desire to go there, offer the inducement to a wealthy and cultivated class of a "reasonable" and ready supply of labor, and save them from such hardships from the lack of it as made the United States so unattractive to the "better class" of Englishmen.

11

This plan was very attractive to the more wealthy and influential class of Englishmen concerned in, or thinking of, emigrating to the newer colonies, and was finally adopted by the corporation concerned in settling West Australia, and afterwards the other Australian colonies. But even its obvious inferences never affected the teaching of political economy.

12

In 1850 two works appeared in England, which, though neither of them was from the ranks of the scholastic economists, were both premonitions of a coming demand for a political economy which would take some consideration of the interest of the masses. One of these was by Herbert Spencer, then young and unknown, and was entitled Social Statics, or The Conditions Essential to Human Happiness Specified, and the First of Them Developed. Chapter IX of this book, "The Right to the Use of the Earth," is a telling denial of what the economists of Smith's school had quietly assumed could not be questioned, the validity of property in land. It got no attention in England, having been noticed in the British Quarterly Review only in 1876, when his sociological works began first to be heard of. It was however reprinted in the United States in 1864, with a note by the author, and when, about 1877, Appleton & Co., of New York, became the American publishers of his philosophical writings, they reprinted this with his other works, and on the strength of them it began to get into circulation.

13

This was the only work of the kind I knew of when writing "Progress and Poverty;" and in A Perplexed Philosopher (1892), I have given a full account of it, and of Mr. Spencer's shifting repudiation and final recantation of what he had said in denial of property in land.

14

In the same year (1850) appeared in London The Theory of Human Progression and Natural Probability of a Reign of Justice. It was published anonymously and dedicated to Victor Cousin of France. The argument of The Theory of Human Progression is that there is a probability of the reign of justice on earth, or millennium, foretold by Scriptural prophecy. One of his primary postulates is the inspiration of the Bible and the divinity of the founder of the Christian religion, which in his view is Scottish Presbyterianism, and which he treats as the true religion, all others being false. But, though adhering to the doctrine of the fall of man, who is by nature vile and wicked, he is an evolutionist in believing in the natural necessary advance of mankind by the progress of knowledge, or to use his phrase, by the progress of correct credence in the natural order and necessary sequence of the sciences, to a reign of justice, in which is to grow a reign of benevolence.

15

The elements of correct credence as he enunciates them (p. 94) are:

16

1. The Bible.
2. A correct view of the phenomena of material nature.
3. A correct philosophy of the mental operations.

17

The three things which he links together as respectively cause and effect, involving the conditions of society, are (p. 120):

18

Knowledge and freedom.
Superstition and despotism.
Infidelity and anarchy.

19

And the four propositions which best give an idea of the scope of his work and the course of his thought are (p. 160):

20

1. On the sure word of divine prophecy we anticipate a reign of justice on the earth.

21

2. That a reign of justice necessarily implies that every man in the world shall at some future time be put in possession of all his rights.

22

3. That the history of civilized communities shows us that the progression of mankind in a political aspect is from a diversity of privileges toward an equality of rights.

23

4. That one man can have a privilege only by depriving another man or many other men of a portion of their rights. Consequently that a reign of justice will consist in the destruction of every privilege, and in the restitution of every right.

24

These propositions are extended to twenty-one main propositions and twelve sub-propositions, but they are all involved in the first four. The tenth sub-division of the twentieth proposition and the twenty-first proposition as a whole are, however, well worth quoting as giving an idea of the character of the man and his thought:

25

... Knowledge does necessarily produce change, as much as heat necessarily produces change; and where knowledge becomes more and more accurate, more and more extensive, and more and more generally diffused, change must necessarily take place in the same ratio and entail with it a new order of society, and an amended condition of man upon the globe. Wherever, then, the unjust interests of the ruling classes are required to give way before the progress of knowledge and those ruling classes peremptorily refuse to allow the condition of society to be amended, the sword is the instrument which knowledge and reason may be compelled to use; for it is not possible, it is not within the limits of man's choice, that the progress of society can be permanently arrested when the intellect of the masses has advanced in knowledge beyond those propositions, of which the present condition is only the realization.

26

21. We posit, finally, that the acquisition, scientific ordination, and general diffusion of knowledge will necessarily obliterate error and superstition, and continually amend the condition of man upon the globe, until his ultimate condition shall be the best the circumstances of the earth permit of. On this ground we take up (what might in other and abler hands be an argument of no small interest, namely) the natural probability of a millennium, based on the classification of the sciences, on the past progress of mankind, and on the computed evolution of man's future progress. The outline alone of this argument we shall indicate, and we have no hesitation in believing that every one who sees it in its true light will at once see how the combination of knowledge and reason must regenerate the earth and evolve a period of universal prosperity which the Divine Creator has graciously promised, and whose natural probability we maintain to be within the calculation of the human reason.

27

The book which, so far as my knowledge goes, The Theory of Human Progression most nearly resembles in motive, scope and conclusions is Herbert Spencer's Social Statics, published in the same year, though evidently without knowledge of each other. Both seem to have little knowledge of and make slight reference to writers on political economy -- Spencer referring in one place to Smith, Mill and Chalmers, while Dove quotes no authority later than Moses. Both go largely over the same ground, and both reach substantially the same practical conclusion; both assert the same grand doctrine of the natural rights of men, which is the essence of Jeffersonian democracy and the touchstone of true reform; both declare the supremacy of a higher law than human enactments, and both believe in an evolutionary process which shall raise men to higher and nobler conditions. Both express clearly and well the fundamental postulates of the single tax, and both are of course absolute free traders. Spencer devotes more space to the land question, and more elaborately proves the incompatibility of private ownership of land with the moral law, and declares the justice and necessity of appropriating rent for public revenues without saying anything of the mode; while Dove dwells at more length on the wickedness and stupidity of tariffs, excises and the other modes of raising revenues from taxes on the products of labor, and clearly indicates taxation as the method of appropriating rent for public purposes. But while the English agnostic might have regarded the Scottish Calvinist as yet in the bonds of an utterly unscientific superstition, there is one respect in which the vigor and courage of Dove's thought shines superior to Spencer's. Spencer, after demonstrating the absolute invalidity of any possible claim to the private ownership of land, goes on to say that great difficulties must attend the resumption by mankind at large of their rights to the soil; that had we to deal with the parties who originally robbed the human race of their heritage, we might make short work of the matter; but that unfortunately most of our present landowners are men who have either mediately or immediately given for their estates equivalents of honestly earned wealth, and that to "justly estimate and liquidate the claims of such is one of the most intricate problems society will one day have to solve."

28

But the orthodox Presbyterian utterly refuses thus to bend the knee to Baal in the slightest concession. While he is not more clear than Spencer in demonstrating that landowners as landowners have no rights whatever, there is not one word in his book that recognizes in any way their claims. On the contrary, he declares that slavery is man-robbery, and that the £20,000,000 compensation given by the British Parliament to the West India planters on the emancipation of their slaves was an act of injustice and oppression to the British masses, and (p. 139) adds:

29

No man in the world and no association in the world could ever have an equitable right to tax a laborer for the purpose of remunerating a man-robber; and although the measure is now past and done with, we very much question whether some analogous cases will not be cleared up by the mass of the nation ere many years pass over the heads of Englishmen. When the question of landed property comes to a definite discussion there may be little thought of compensation.

30

Yet neither in England nor in the United States, where an edition seems to have been published in Boston at the expense of Senator Sumner, did Dove get any attention, and I never heard of it until after the publication of Progress and Poverty, when, in Ireland in 1882, I was presented with a copy by Charles Eason, head of the Dublin branch of the great news-publishing house of Smith & Sons.

31

In 1854 appeared another book by Patrick Edward Dove, in which the authorship of The Theory of Human Progression was announced -- The Elements of Political Science, in two books: first, on Method, second, on Doctrine. And in 1856 appeared a third book, The Logic of the Christian Faith, being a dissertation on skepticism, pantheism, the a priori argument, the a posteriori argument, the intuitional argument and revelation, also under title of the author, and with a dedication to Charles Sumner, Senator of the United States, who, without his knowledge, had procured a republication of Dove's first book in Boston, being moved thereto doubtless by its vigorous words on slavery.

32

In 1859 appeared in London The Strength of Nations, by Andrew Bisset, who has since (1877) published The History of the Struggle for Parliamentary Government in England, a review of the systematic attempt of the families of Plantagenet, Tudor and Stuart to enslave the English people, which is mainly occupied with the attempt of Charles I, the resistance to it, and his final execution. The Strength of Nations very suggestively calls attention to the fact that feudal tenures were conditioned on the payment of rent or special services to the state, and thus the much -- lauded abolition of what was left of the feudal incidents by the Long Parliament was a relief of the landholders of the payment of what measured at present prices would suffice for the whole expenditure of England, and the saddling of it on general taxation; and that from this dates the beginning of the English national debt.

33

These books have produced very little effect upon political economy, and some of them have passed out of print without any perceptible effect at all. It is likely that there were others in addition to what I have mentioned, and it is certain that there were others that occasionally found their way into print which irregularly and spasmodically expressed some touch of the idea formulated in lines of the Wat Tyler rising:

34

When Adam delved and Eve span,
Who was then a gentleman?

35

Some notion of the incongruity of the idea that a small fraction of mankind were intended to eat, and eat luxuriously without working, and another and far larger portion to have nothing but work to enable them to eat, and be compelled to beg as a boon the opportunity to do that, runs in broken flashes through much of the reform literature. But in political economy as it up to 1880 existed all such questioning was tabooed, and the utmost that could be found in any of the writers recognized by the schools was a timid suggestion that the future unearned increment of land values might sometime be recognized as belonging to the community, a proposition that, though it amounted to nothing whatever, as landlords were ready to sell land for what would give them any unearned increment not yet in sight, caused John Stuart Mill who had been giving some adhesion to it to be looked on askance by some, as an awful radical.

36

The struggle for the repeal of the corn-laws in England did not lead to any development of a protectionist political economy. Books and pamphlets enough were written in favor of protection, but they were merely appeals to old habits of thought and vulgar prejudices, and the forces in favor of repeal carried them down. Elsewhere, however, it was different. On the Continent the conditions under which the tentative victory of free trade was won in England were lacking. Cut up into hostile nations, burdened with demands for revenue, the mercantile system got a practical hold that could not be broken by the half-hearted measures of its English opponents, and the gleam of hope which came with the English -- French treaty negotiated between Cobden and Napoleon III was destroyed by the tremendous struggles which followed the fall of the latter. In Germany the outburst of national feeling which followed the struggles with France and the unification of German states gave rise to a school of German economists who taught a national economy, in which under various names, such as romantic, inductive and national, protectionism was advocated.

37

When it came to making peace between England and the United States after the War of Independence, the American Commissioners were instructed to stipulate for a complete free trade between the two countries. They failed in this, owing to the prevalence of the protective sentiment in Great Britain at the time. When the Articles of Confederation gave way to the Constitution, the need for an independent source of revenue took the easy means of laying a Federal tariff upon foreign productions, though free trade between the States was guaranteed; and the growth of selfish interests caused by and promotive of a constantly increasing demand for greater revenue built up a strong party in favor of protection, which had its way when the slavery question taking sectional shape put the States in which protectionism was dominant in control of the government with the secession of the South. This interest sought warrant in a scheme of political economy, and found it in drawing from the German economists and in the writings of Henry C. Carey of Philadelphia, whose theory in many respects differed from the English philosophy, noticeably in its advocacy of protection. In America this protectionist semblance of a political economy had its chief seat in the University of Pennsylvania and the support of a powerful party in which the ideas of Jefferson were opposed by those of Hamilton; while in Great Britain the works of Carlyle and the course of modern study and development had in scholastic circles popularized the German.

38

Among the schools, moreover, there was a divergence which began to assume greater proportions as the success of the anti-corn-laws struggle began to be shown in the accomplishment of all that any of its advocates dared to propose. This took shape in a contention as to value, which inclined to emphasize the fact that the admission that some immaterial things were conceded to be wealth destroyed the ability to keep any immaterial things having value out of that category, and consequently that wealth in the common sense was the only thing to be considered in political economy, which was really a science of exchanges. With the efforts of Jevons, Macleod and others this began to make way, and naturally affiliated with the historical, the inductive, the socialistic and other protectionist schools which grew from the Continental teachings. Instead of working for greater directness and simplicity, it really made of political economy an occult science, in which nothing was fixed, and the professors of which, claiming superior knowledge, could support whatever they chose to.

39

During the century another form of protectionism had been growing up, originating in England, but gaining adherents everywhere. Like the others, it recognized no difference between land and products of labor, counting them all as wealth, and aimed by main strength at improvement in the conditions of labor. Recognizing the workers as a class naturally separate from employers, it aimed to unite the laborers in combinations, and to invoke in their behalf the power of the state to impose restrictions, shorten hours, and in various ways to serve their interests at the expense of the primarily employing class. The German mind, learned, bureaucratic and incomprehensible, put this in the form of what passed for a system in Karl Marx's ponderous two volumes entitled Capital, written in England in 1867, but published in German and not translated into English until after his death in 1887. Without distinguishing between products of nature and the products of man, Marx holds that there are two kinds of value -- use value and exchange value -- and that through some alchemy of buying and selling the capitalist who hires men to turn material into products gets a larger value than he gives. Upon this economic proposition of Marx (it can hardly be called a theory), or others similar to it, political schemes with slight variations have been promulgated after the manner of political platforms.

40

Under the name of socialism, a name which all such movements have now succeeded in appropriating, all such plans are embraced. We sometimes hear of "scientific socialism," as something to be established, as it were, by proclamation, or by act of government. In this there is a tendency to confuse the idea of science with that of something purely conventional or political, a scheme or proposal, not a science. For science, as previously explained, is concerned with natural laws, not with the proposal of man -- with relations which always have existed and always must exist. Socialism takes no account of natural laws, neither seeking them nor striving to be governed by them. It is an art or conventional scheme like any other scheme in politics or government, while political economy is an exposition of certain invariable laws of human nature. The proposal which socialism makes is that the collectivity or state shall assume the management of all means of production, including land, capital and man himself; do away with all competition, and convert mankind into two classes, the directors, taking their orders from government and acting by governmental authority, and the workers, for whom everything shall be provided, including the directors themselves. It is a proposal to bring back mankind to the socialism of Peru, but without reliance on divine will or power. Modern socialism is in fact without religion, and its tendency is atheistic. It is more destitute of any central and guiding principle than any philosophy I know of. Mankind is here; how, it does not state; and must proceed to make a world for itself, as disorderly as that which Alice in Wonderland confronted. It has no system of individual rights whereby it can define the extent to which the individual is entitled to liberty or to which the state may go in restraining it. And so long as no individual has any principle of guidance it is impossible that society itself should have any. How such a combination could be called a science, and how it should get a following, can be accounted for only by the "fatal facility of writing without thinking," which the learned German ability of studying details without any leading principle permits to pass, and by the number of places which such a bureaucratic organization would provide. However, through government repression and its falling in with trade-union notions it has made great headway in Germany, and has taken considerable hold in England.

41

This was the condition of things at the beginning of the eighth decade of the century, when the English political economy, the only economy making any pretensions to a science, received from a newer and freer England what has proved a fatal blow.