This was an (unsuccessful) entry for the inaugural Ben Pimlott Prize for political writing. I publish it here as an introduction to the life and thought of Henry George.
Few people today have heard of Henry George, yet just a century ago he was among the best known figures in the United States. His impact on British politics is largely unknown but indisputably significant. When he died, in 1897, a hundred thousand people joined his funeral procession; not until the death of Franklin Roosevelt would Americans turn out in such numbers to celebrate a life. By 1901, his book, Progress and Poverty, had sold over two million copies, at the time only the Bible had sold more. It remains the world's best-selling economics text.
The subsequent disappearance of Henry George from the radar of public consciousness is not just a matter of historical interest. It illustrates how difficult it is to question economic orthodoxy and be taken seriously where it matters: among the political and academic establishments. It also shows how effectively wealthy elites can counter any challenge to the conditions through which they secure their advantage. George's moral philosophy and economic analysis are as relevant today as they were during his lifetime. His current anonymity suggests we are less persuaded by the possibility of a more just and inclusive world than were people a century ago.
Henry George was born in 1839, a stone's throw from the Old State House in Philadelphia where the Declaration of Independence was signed. His parents were secure but never wealthy; his home environment was loving and devoutly religious. His Episcopalian upbringing prompted an unusually early interest in social justice, but the young George did not take well to formal education. At 12, he asked to be taken out of the Episcopalian academy, and he attended only three months of high school before opting to educate himself whilst working at menial jobs.
At 16, a year long voyage to Australia opened his eyes to the injustices arising from the competing interests of employer and labourer, and to the persistence of poverty amid conditions of great opportunity. After returning home and being apprenticed as a typesetter, he departed once again, this time for California.
Arriving in San Francisco in early 1858, George found an America quite different from that of his east coast experience - a frontier civilisation still in its infancy; a real life laboratory for the rapid establishment of a new society, yet one fully equipped with the accoutrements of industrial civilisation. George struggled to establish himself, eventually finding printing work. In his early twenties he bought shares in The Evening Journal, but the paper failed to prosper, losing out as the new transcontinental telegraph provided more established titles with better access to east-coast sources.
With his precarious economic situation threatening his relationship with a woman named Annie Fox, George proposed and they were married immediately. But they soon fell victim to the catastrophic depression of the mid-1860s. Determined to insulate his young family from the effects of future depressions, George decided upon a programme of educational self-improvement. Within a year he had three articles published in the San Francisco Times where he rapidly progressed from the composing room to managing editor. In an article entitled What the Railroad Will Bring Us, he forecast that despite the economic potential of new transport links, few people would feel any tangible benefit. "As California becomes populous and rich," he wrote, "let us not forget that the distribution of wealth is even a more important matter than its production".
The puzzle of deepening poverty with rapid economic advance was becoming a recurring theme. On a visit to New York in 1869, George was struck by the extent of poverty in the richest city in the world; far deeper and more ingrained than in less-developed Californian cities. Whilst out riding one day, he enquired of a stranger the price of land. Learning that an acre could sell for a thousand dollars, he wrote "Like a flash it came upon 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 the privilege."
California Governor Henry Haight was sufficiently impressed by George to appoint him managing editor of the Democratic party newspaper, The State Capital Reporter. With railroad interests becoming all powerful and manipulating the political process to secure huge public subsidies, George attacked railroad bosses for lining their own pockets at the expense of ordinary people, many of whom were becoming visibly poorer. So effective was George's campaign, that only nine months into his editorship his opponents bought a controlling interest in the newspaper and forced his resignation.
But George's reputation was growing: Haight sponsored the publication and distribution of a pamphlet on The Subsidy Question and the Democratic Party. George was appointed secretary to the 1871 state democratic convention, and secured for himself a nomination to the state legislature. But railroad interests funded a campaign against the Democrats and both men were defeated. George's next pamphlet, Our Land and Land Policy, National and State, further cemented his reputation as a serious social commentator. When his own newspaper, The Evening Post, folded after ambitious expansion plans were undermined by a run on the banks, he wrote to newly elected Democratic governor, William Irwin, asking for a job which would allow him time for writing. He was duly appointed State Inspector of Gas Meters, and spent the next eighteen months researching and writing his masterpiece.
Progress and Poverty was published in 1879, first in a private edition after no publisher would bear the cost of producing a volume of six hundred pages. Eventually, having produced the plates himself, George received an offer to publish from Appleton of New York. He sent out numerous review copies including one to William Gladstone who replied that "there is no question which requires a more careful examination than the land question". But the book was slow to take off. George moved to New York and found work preparing reports for Congressman Abram Hewitt. Six months after publication he received his first review in the New York Sun. It could not have been more positive; many more quickly followed.
In Progress and Poverty, George argued that as long as land ownership remained the preserve of a minority there could be no end to poverty. This conclusion drew on David Ricardo's law of rent which then, as now, was accepted by most economists, but routinely ignored. Without access to land, people have no option but to labour for whatever wages they can get. Consequently, a disproportionate share of the benefits of economic growth is enjoyed by landowners at the expense of wage labourers. George had witnessed the effects of this unavoidable truth, first in Australia, then in San Francisco and New York.
Some who agreed with his analysis suggested the solution was to nationalise land, but George believed that the factors of production - land, labour and capital - should be privately owned, as only under these conditions could the market mechanism facilitate the equitable distribution of wealth. The market's failure to promote equity resulted from the entitlement of landowners to keep the 'economic rent' of land - the wealth absorbed by rising land values. For George, this was an entirely unearned income, not the result of any improvements made by landowners, but the natural consequence of economic activity.
The economic rent of land was common wealth and should be used for the benefit of all members of society. He therefore argued for an annual tax on the full market value of land, and that ultimately this replace all other forms of taxation. Such a tax would have no disincentive effect on enterprise, would prevent land speculation and the accumulation of large land holdings, would reverse the downward pressure on wages, and would permit the equitable distribution of the immense wealth arising from industrialisation. A century earlier, Thomas Paine, and the French Physiocrats, had drawn similar conclusions, but never had these ideas been so eloquently or persuasively articulated.
With his reputation growing, George visited Ireland and became involved in the political struggle for land reform. Many Irish families were starving as absentee English landlords demanded impossible rents despite repeated crop failures. George's involvement cemented his reputation as a leading campaigner for social reform and ensured that by the time he arrived in Britain, his was a household name.
In London, George was a guest of Henry Hyndman, founder of Britain's first socialist party, The Social Democratic Foundation. Among the distinguished audience for his first London lecture was a young George Bernard Shaw who subsequently wrote that "When I was thus swept into the great socialist revival of 1883, I found that five-sixths of those who were swept in with me had been converted by Henry George". At only the second meeting of the Fabian Society, in January 1884, reports were received on a lecture by Henry George. In Socialism in England, Sidney Webb wrote that "George's optimistic and confident tone and the irresistible force of its popularisation of Ricardo's law of Rent sounded the dominant note of Fabianism."
If the Labour Party was to heed George's injunction to avoid revolutionary tactics in favour of Fabian incremental change, it would rapidly abandon his economic analysis, focusing instead on redistribution through taxing incomes and profit while leaving the unearned wealth of landowners untouched. George's vision of an equitable society in which the full potential of all citizens might be realised was rejected by the left, which seemingly lacked the courage and ambition to face down the powerful interests of land ownership.
George also found allies in the Liberal Party. Joseph Chamberlain was an early supporter, but argued only for wider land ownership, opposing the tax on rent. His true colours showed when he wrote "If something not be done quickly, we may live to see theories as wild and methods as unjust as those of the American economist adopted as the creed of no inconsiderable portion of the electorate". Like many of his class, Chamberlain recognised the threat posed by George's proposal.
George's next book, Protection or Free Trade, illuminated a question that would dominate political debate in the United States throughout the twentieth century: Whether the US should embrace the world in order to secure new opportunities and markets, or turn in on itself and pursue isolationist policies of protectionism? On moral and economic grounds, George rejected isolationism, arguing for free trade under conditions of economic equity, so that the people of all nations may prosper.
Although George came to be regarded as a key influence on the progressive era in the United States, it was the man himself, rather than his ideas, which had the stronger impact on American politics. In 1886 he was nominated by New York trade unions as candidate for mayor. The all-powerful 'Tammany' machine which controlled the Democratic party had little support among working people, and George's popularity soon had the Democrats worried. The Tammany candidate was Abram Hewitt whose view of George had changed somewhat. He promoted himself as the saviour of society against "anarchists, nihilists, communists, socialists and mere theorists", and urged the Republican party not to field a candidate lest the vote be split and George be let in. But the Republicans chose a young aristocrat named Theodore Roosevelt, and, following a thrilling election campaign, George lost to Hewitt, although he easily beat Roosevelt into third place. Had the election been run as a secret ballot, it seems likely that George would have won.
By the mid-1890s, amid a worsening depression, interest in George's ideas had begun to wane. In the congressional elections of 1894, only one of a group a six George-supporting congressmen was re-elected. But the 1896 presidential campaign gave him renewed focus, as he returned to journalism and found much to support in the candidacy of William Jennings Bryan.
By early 1897 George was in poor health. His eldest daughter died unexpectedly and he was struggling to finish what he hoped would be his greatest work, The Science of Political Economy. One supporter felt George was overstretching himself in attempting "to weld all the material that could be grouped under the shadowy classification of political economy into a unified and comprehensive system of thought." It was too ambitious a project for the greatest intellect at the height its power; for George, broken in body, and shattered in spirit, it could only end in failure. The book remained unfinished at his death, to be completed by his son and published posthumously to generally negative reviews.
This was not the end of a remarkable life, however. George was again persuaded to run for Mayor of New York, recruited, as before, by reform Democrats to oppose the Tammany candidate. This time, progressive factions in both parties fielded alternative candidates, leaving George little chance of victory. Initially reluctant, he finally accepted the accolade against his doctors wishes saying "But I have got to die. How can I die better than serving humanity. Besides, so dying will do more for the cause than anything I am likely to do for the rest of my life."
On the night of his death, five days before the election, George spoke at several meetings. At one he said "I have never advocated nor asked for special rights or special sympathy for working men. What I stand for is the equal rights of all men." He knew the struggle for social justice would yield little if it was fought out between opposing class interests, and if it were not underscored by a moral commitment to the equal rights of all to a share of the natural resources of the earth. George remained optimistic to the end, believing his ideas would one day be accepted in establishment circles. "Men who now hold back," he said, "will then acknowledge that I have been speaking the truth." On this point George could not have been more wrong.
George's influence in Britain continued after his death, however. In 1906, despite a Commons majority, attempts to introduce a land value tax were scuppered by the House of Lords. In 1909 Lloyd George attempted to evade the Lords' veto by concealing similar proposals in his 'People's Budget'. But the upper house overturned a 250 year tradition by rejecting the budget, unwilling to countenance any threat to the basis of their wealth and privilege. In 1911, after two general elections which supported the right of the Commons to enact legislation without hindrance from the unelected chamber, the first Parliament Act was passed; a consequence of the rejection of George-inspired policies by the vested interests of the landed aristocracy.
Events conspired to prevent further attempts to adopt George's solution until 1931, when Labour chancellor Philip Snowden came closest to introducing a land value tax. On this occasion, the legislation fell to a run on the bank of England's gold reserves, and the scepticism of Labour MPs who demanded immediate action to relieve the suffering of their constituents.
Despite this record, George's influence today is negligible, and his reputation, quite unfairly, is in tatters. Although local land taxes are in place in Pittsburgh, Denmark, Australia, and South Africa, the economic analysis underlying the argument for taxing economic rent is generally ignored. Many practitioners of the now dominant neo-classical economics expediently dispense with the earlier classical theory because it largely confirms George's thesis. The academic arguments against George are littered with factual inaccuracies, yet this poor scholarship has been allowed to pass. As Leo Tolstoy wrote in 1905, "The chief weapon against the teaching of Henry George was that which is always used against irrefutable and self-evident truths. This method, which is still being applied in relation to George, was that of hushing up."
Today, politicians argue there is no alternative to prevailing economic arrangements because economists assume a fixed model of economic organisation in which the private appropriation of economic rent by landowners is unchallengeable. In Britain, 74 per cent of land is still owned by just 2 per cent of the population who pay no tax on their land assets, the value of which grows steadily as a natural consequence of economic advance, not through their own effort. Although redistributive policies have facilitated a more equitable distribution of opportunity and wealth, George's thesis remains valid, and is currently being played out in the housing market, to which growing numbers of young people are denied access despite a successful economy. George would surely conclude that our current commitment to make poverty history is bound to fail until we recognise the underlying cause, and take measures to counter it.
But George also made mistakes. After 1888, instead of working to persuade audiences of the moral argument for change, he focused almost exclusively on the idea of the Single Tax. In pushing the remedy before people were ready to accept the seriousness of the illness, and in attacking socialists, he undoubtedly alienated many potential supporters. Ultimately, socialism was better able to rally support among the labouring classes, and the state would take on the role of supporting the poor by taxing the rich, rather than supervising an economy in which everyone would have the opportunity to provide for their own needs.
Henry George's funeral service ended "amidst tremendous and prolonged applause." That such a show of public affection should be provoked by a social philosopher who never held public office suggests the magnitude of George's impact in America. His New York Times obituary said, "His courage, moral and intellectual, was unwavering, unquestioning, prompt and steadfast. Whatever one may think of his ideas, no one can dispute their benevolent spirit." During George's life, those ideas at least got a hearing. He opened the minds of millions to the prospect of a more just and inclusive world, and a non-revolutionary means to that long-cherished end. Were those ideas to be revived today, not only may we rediscover the basis for a solution to many of the ills now plaguing the world, but the name of Henry George might become as familiar as it was a century ago.