That was then, this is now — Henry George edition

It took Dr. Edward Taylor’s inside perceptions to say, on publication: “It is not merely an American book, but a California book.  We do not mean merely that it is a book written in California by a Californian, but that it is distinctively and peculiarly Californian, for not only are its illustrations drawn from this coast, but the freshness of its views bespeak the novel and suggestive circumstances that have been presented in California.”

That is from Charles Albro Barker’s Henry George, still a useful biography.  Barker points out, by the way, that the notion of a “single tax” on land barely appears in Progress and Poverty, as at that time George was more focused on land nationalization.  The single tax idea became more prominent a bit later in the 1880s.

Comments

https://en.m.wikipedia.org/wiki/Georgism

Interesting comment uttered many places is that land taxes are equitable, because landlords cannot shift the tax burden to the tenants. That seems in contradiction to the accepted theory about supply and demand curves. I expect a higher land tax results in a decreased quantity supplied at a given price, thus driving up the equilibrium rent.

Why? Land can be supplied at zero cost. Any landlord will take 50% less profit (pure rent) over no profit.

Is this the type of nonsense response I get when for once I make an argument grounded in economics?

I suspect you don't understand what makes land different from other factors of production.

My inner snark says that Dr. Edward Taylor must have died a long time ago. Because if this was a modern Californian book, it would have been written by someone who identifies as a yellow dragon.

One thing the Industrial Revolution seems to have done is added change to people's thoughts. Before the Industrial Revolution, the economy may not have been a zero sum game, but it sure would have looked like it. There was so little economic growth that you may as well kill the rich and share their property now because the pay offs for not doing so would be a few generations down the line. Likewise, property values may have increased before, but they would have done so so slowly no one would have noticed. In the past you might buy a farm, and your grandson might sell it, and it probably did not increase in value at all. It took the California gold rush and economic growth afterwards for such a land boom to exist that George noticed it. Which led to thinking about the morality of increasing property prices.

Only know about Henry George because to him playing important role in one of the Tolstoy's novels.

Cowen's interest in Henry George isn't just an academic interest, at least that's my impression. George was concerned with both the high level of inequality and the cyclical nature of an industrial economy. We sometimes forget the severity of the bottom of the cycles in the 19th century. Today's global economy is marked by both similarities and differences, and it's the similarities that should interest an economist. I know: historical patterns can be misleading, as correlations do not causation make. In his column today, Bret Stephens asks: Is There Life After Liberalism? What Stephens is searching for is a reinvigoration, which he thinks can be found in "a rededication to localism and community, from which some alternative political and economic order might gradually develop" (citing Patrick Deneen's new book "Why Liberalism Failed"). Of course, any casual student of history knows what reinvigorated liberalism in the last great crisis. Stephens quotes Steve Bannon for Bannon's plan for reinvigoration: “It will be as exciting as the 1930s.” "As exciting as the 1930s", writes Stephens, repeating Bannon's quote, suggesting that Bannon must be daft, but then Stephens observes that it "would be a terrifying prospect but also an exciting one". What any casual observer should have noticed is that the prevailing economic consensus has been to restore the very conditions that preceded the most recent crisis. Cowen laments the complacency that the economic consensus has created, and promotes instead "disruption" as the path to a reinvigorated liberalism. Cowen's Austrian friends at Mercatus might agree with Bannon, but I'm not going to promote disruption that is "as exciting as the 1930s". And I don't believe Cowen would either. Thus, Cowen's interest in Henry George and other political economists. There has to be a better way than Bannon's. My fear is that time is short, and that if a better way isn't found soon, markets will do what markets always do and provide a reinvigoration "as exciting as the 1930s".

Ross Douthat, not Bret Stephens. https://www.nytimes.com/2018/01/13/opinion/sunday/life-after-liberalism.html

I was gonna say. Stevens is a neoliberal true believer who, for obvious reasons, is highly suspicious of blood and soil types or just soil types for that matter.

How are Henry George's ideas different from Marxist ideas? I understand from wiki that both were antagonists. But the ideas seem quite similar. Can anyone elaborate?

Also why did Georgism never take off in US? Were his ideas regarded as dangerous? Did either political party ever take him seriously?

Having recently run across the records of an idealogical community from the late 1920's and extending into the Great Depression, which group was founded on the idea of a single land tax, I would say not that Georgism never took off, but that, like any decent zombie, it is rotten and never dies.

"How are Henry George’s ideas different from Marxist ideas?"
Henry George made a distinction between natural resources men doesn't make and should not individually profit from and the other forms of capital. He regarded natural resources as a common property of mankind (such thinking is reminiscent of Thomas Paine's Agrarian Justice). A typical point of interest was the fact, say, urban land gets more valuable if the government makes infrastructure investments nearby (the owner did nothing ro extract those rents, it is, in theory, different from the factory owner who produces things).

Georgism was popular and polarizing in the closing days of the 19 th Century and the early days of the 20th Century. There were Georgist clubs and communities and Georgist parties. It was (obviously) regarded as dangerous by natural resources owners and people who did not want to interfere with the market system of valuing property. It was not regarded as radical enough by marxists and protectionists (Henry George was pro-free trade). Ultimately, like Bryan's bimetallism, Georgism could not muster enough strenght to break the mainstream system and was overshadowed by other systems of political/economical challenge of the status quo, such as Marx's. Marx, of course, wanted to do away with all private property of means of production.

Thanks. That helps.

By the way on a separate note, was Marx a protectionist? Not aware of his ideas on free trade.

Making allowance to the fact that Marx's ideas have been interpreted in many different ways, I would say he saw free trade as basic to the full development of the productive forces under Capitalism and the growth of the proletariat. See https://www.marxists.org/archive/marx/works/1888/free-trade/index.htm

Remember: it was the guy who saluted America's victory over the Mexicans because Americans would develop the region much better and faster. However, since Marx also thought that, at some point, capitalist property would make progress stagnate, I am not sure if at that point free trade would still matter (i.e. would world economy shrink instead of stagnating if free trade were removed at that point?). Like people expecting Christ's Second Coming pretty, pretty soon, anytime now and advocating abstaining from meddling in wordly affairs, I think the issue of free market had comparatively little interest for Marx and his disciples as proletarian revolution could be happening prerty soon and proletarians would not be divided by petty national interests anyway.
If a socialist in a world of capitalist countries (i.e,. where the fabled world revolution failed, the socialist government probably choose state monopoly over foreign trade as the Bolsheviks did in the 1920s - Trotsky considered it essential - and use it according to the interests of the state).

Still about Marx and Henry George, Marx stated "The whole thing (Georgism) is ... simply an attempt, decked out with socialism, to save capitalist domination and indeed to establish it afresh on an even wider basis than its present one." - https://en.m.wikipedia.org/wiki/Georgism#Criticism

> Barker points out, by the way, that the notion of a “single tax” on land barely appears in Progress and Poverty, as at that time George was more focused on land nationalization. The single tax idea became more prominent a bit later in the 1880s.

Is this all true? It's been awhile since I've read, but I recall nationalization (or expropriation, or ... I don't recall what word is used in the book) being put forth as moral but not necessary, land value tax being more practical. I also don't recall emphasis on _single_ tax, which may indeed have come later (and was a big mistake), but again, not due to a focus on nationalization.

The country that needs to listen to George is India. Everyone rants on how the indian income tax base is small. Almost no one comments on how low Indian property tax rates are. Another "everyone knows it, but no one talk about it" factoid about Indian land is that it is the preferred method of hiding ill gotten gains of the pols and the babus.

A brief frisson of excitement came about in the news about the linking of properties to the unique ID system to identify obvious owners of property without income trails, but nothing came of it. The idea was dismissed the very next day.

Comments for this post are closed