Wednesday, November 11, 2015

The Strange Cult of Henry George

Having devoted EconoSpeak space to an argument by Thomas Shearman, a follower of Henry George, it is only fair and balanced to present the contrary view. I stumbled across the following comment on a libertarian(?) website. The possibility occurred to me that it may be satire (see paragraph 3):
We definitely need to strengthen our platform. It needs to be much more hard hitting and radical. 
This is especially true with regard to property rights. We must demand an end to all taxes on property. These are the worst of all taxes. They hurt the economy, causing increased: homelessness, pollution, poverty, resource misallocation, and misdirected infrastructure development. 
There is no such thing as “monopoly rents” or any of the other fascist socialist nonsense from the wacko marxists of the Henry George cult. 
The Libertarian Platform must call for the complete protection of Private Property rights: 
The Libertarian Party calls for the repeal all taxes on property by all levels of government. The property tax is the worst of all taxes. Free people who own their own land, farms, businesse property, apartments, condominiums, houses, homes or any other property must be left free by government to exercise sole dominion over their property. They must be allowed to live tax free and to use their property as they see fit. 
Property taxes deny individuals the right to become free, independent and self sufficient. Without property taxes, millions of Americans would be able to live without any income or participation in the cash economy. They are forced by the property tax to have an income and are forced into the hands of the government. 
The property tax consititues a "taking" of a portion of a person's property each year, without compensation. It should therefore be declared unconstitutional under the Constitution’s "takings clause" that requires compensation for the taking of property by the government. 
The Property Tax is absolutely the most evil of all taxes. It causes the greatest harm to the rights of the individual. It is the essential first component in the government’s tyrrany [sic] of taxation. 
No person can every [sic] be free so long as property taxes are allowed to exist.

16 comments: said...


I am not sure what your view of George's argument is here, although you seem to be quoting libertarians who appear not to like him. I would not that there are some Austrian libertarians who also claim to be "geonomist" supporters of Georgism, most notably Fred Foldvary. Many Georgists have also been more on the left, although not generally full-blown socialists.

As it is, I would note that the basic George argument regarding the virtues of site taxation rather than property taxation, especially within urban environments, has been experiencing a minor revival, with bloggers such as Noah Smith pumping it a bit. The most important support comes from the just-died conventional urban and regional economists, now late Wallace Oates, who did studies some time ago that provided empirical support for it, looking particularly at Pittsburgh, the largest US city to have lower tax rates (not zero) for structures than for underlying land, with evidence supporting less vacant land and more structural rehabilitation and development than in similar urban areas.

So, Henry George may have way overdone it, but he is not someone to just diss and dismiss cavalierly.

Sandwichman said...

Ah, the perils of quotation, amplified by the perils of (possibly) irony. Henry George comes into this only because he wrote a few things that made sense. I can't speak for his entire oeuvre, not being a Henry George cultist, acolyte or scholar.

There can be a gluten-free tendency for systematizers to overdo a few good insights. That's no excuse to throw out the insight baby with the systematic bathwater.

My own position on private property, land and rent owes a great deal to Marx, Elinor Ostrom, and John Maurice Clark and K. William Kapp as well as to the critical response to John Locke's "Of Property." Any resemblances between my views and those of Henry George no doubt have their roots deep in the history of economic thought.

I tend to think that if somebody had a good idea, it is possible to arrive at the same conclusion without relying on that particular authority. Marxism without Marx. Georism without George. Christianity without Christ. By the same token, I don't see any harm in crediting someone who earlier articulated a position that I subsequently arrived at independently of direct influence from that particular writer. "Oh, here! This guy said what I'm trying to say 100 years ago."

The core issue here is that so-called "private property" is a creature of the State. No amount of libertarian immaculate conceptualizing can redeem the original sin of the granting of title in land to his lieges by the Sovereign.

Let's all pretend that history happened differently than it did and the original owners of land pooped it out of their own anuses. That's what Locke would have us believe. "It's mine! I mixed it with my gut flora!"

The ownership of land has come to stand for the ownership (also bestowed by the state) of other tangibles and intangibles. If land seems a poor analogy for "intellectual property" blame the legislators who enshrined it as such, not the critics who point out the dire consequences of the legal fiction of private property in land and ideas. said...

I will comment on George himself and the matter of his "cult," which there certainly has been one, although it is pretty faded at this point. He has traditionally been dismissed by most conventional economists, most notably in his own day in the late 1800s by Alfred Marshall. Too single-minded was the charge, although the orgins of his ideas come pretty straight from Ricardo and Quesnay, not too bad. I think part of the reason he was dismissed was that he was professionally a journalist, and also that he became so active in politics, running seriously for Mayor of New York, although not winning.

Part of the reason that conventional economists dismissed him and also that his followers were so cultish, which also pushed the more regular types to dismiss him, was the perfervidly eloquent nature of him main book, Progress and Poverty, which was the biggest selling economics book in the United States for the entire 19th century. It is a really normative stemwinder, a denunciation of unearned wealth, which he saw as coming from land ownership, with stem-winding oratory. Its last ten pages may be the most fired-up ten pages in all of economic literature by anybody, including even Marx at his most denunciatory of capitalism and capitalists. George really gave those undeservedly wealthy landowners hell, which fired up his followers, but angered many others of a more establishment orientation. Hence, the cult and its enemies.

There still are remnants of his cult, with the main publication outlet for remnant Georgists being the American Journal of Ecnoomics and Sociology, although its Georgist origin and leanings are now at most a vaguely lingering remnant and not the main thing going on in the journal.

Personally I prefer the more staid empirical studies by people like Oates that eschew all the shouting and handwaving. But those studies do suggest that George was not a completely wacko nutcase, as many seem to think.

Sandwichman said...

I'll have a look at P&P some day, Barkley. There's also a conspiracy theory element that claims marginalism was a little more than a plot to get rid of George. I find that hard to swallow, mainly because it attributes too much agency-after-the-fact to a lot of random noise.

Dan Lynch said...

@Sandwichman said "The core issue here is that so-called private property is a creature of the State."

Matt Bruenig's theory of violence vouchers is useful for understanding how private property would not exist without the state.

If we were to do away with state rules, regulations, and enforcement, we'd be left with Somalia/Afghanistan/Ukraine.

Sandwichman said...

"If we were to do away with state rules, regulations, and enforcement, we'd be left with Somalia/Afghanistan/Ukraine."

We don't know that. A "done away with" state may not be the same thing as a collapsed state. Private property may not be an entirely bad thing. But because it is a creature of the state, the state has an obligation, as well as an inherent right to regulate it.

Thanks for the tip about Matt's violence vouchers. I will look into it. Sounds like fun.

Typo Boy said...

For what it is worth, Peter Barnes (Capitalism 2.0, ) described himself at least once as a Georgeist , though he is by no means a cultist. Natural resources of all kinds fall under the economic rubric of "Land", so anyone who calls for large scale comprenensive pollution taxes redirected into progressive use (either returned directly to the people or directed to preserving the resources being taxed) is making an argument George would have recognized. And Barnes moves beyond what we usually think of as natural resources to socially created common resources such as the stock market and large fortunes. Barmes om case you have not read him advocates a large economic sector neither state nor private he calls "The Commons" to be run by non-profit trusts and funded by taxes and natural resources and on monopoly rents. Some of the money would be used to fund a basic income, a sort of social stipend for all , the rest for preservation of the commons to the benefit of all. Many flaws, a few of which are obvious even in this summary, but none the less a proposal with a lot of good suggests and a lot of good critiques of actually existing capitalism. Available free online. Tom, both the social stipend and the concern with common resources might be of interest to you, intersectiong to some extent with your thinking (and differing a great deal as well, as you might expect from a book by a progressive millionaire. )

Typo Boy said...

And of course George himself went far beyond a simple land tax in his proposals, so I really think Barnes has a good case for describing himself as a Georgist or at least George influenced, if he likes the label.

Typo Boy said...

Sorry, Capitalism 3.0 not 2.0 Have not looked at it in a long time.

Sandwichman said...

Yes, Typo Boy, I know and admire Peter and his work. Also our sadly deceased mutual friend, Jonathan Rowe. Peter edited a collection of Jonathan's writings, Our Common Wealth. I spent a couple of weeks at the Mesa Refuge writers' retreat, right next door to Peter's house, that he founded. I didn't know -- or had forgotten -- that Peter had described himself as a Georgist. Of course, he's actually a bit of an eclectic (so am I) who could as easily describe himself as a Schumacherian or a Buddhist socialist.

Magpie said...

I have also heard those stories that marginalism was devised to counter Georgism. I think they don't hold water.

For one, because Progress and Poverty, apparently George's most important publication, appeared in 1879, after the works of Jevons, Walras, and Menger (not to mention H.H. Gossen, whose book was published in 1854). That I am aware, George never published any book before 1870.

Neither can I recall Jevons, Menger, or Walras ever mentioning George by name, as they did mention Ricardo.

Additionally, I understand that Philip Wicksteed was himself not only a marginalist, but -- according to those stories -- he was also a follower of George (Georgists claim Wicksteed had priority over John Bates Clark on devising marginal product theory and don't seem to find it incompatible with Georgism).

In my opinion, and for what it might be worth, those stories seem rather tendentious historic revisionism.

George may have been better-known in the U.S. and Britain -- and to some degree in other English-speaking countries -- but I doubt he was a concern for German-speaking authors.

Myrtle Blackwood said...

The objection to land rent would be better focussed on the extent of 'rent' income relative to the effort involved to earn it. Land ownership has the potential to create a basic income, once the land acquires a quality of productivity. Once the income begins to rise there's an argument to tax it, gradually; but not before this basic income is provided. The nature of the tax (or the absence of such a tax) may be the critical feature, rather than from where taxes are sourced.

Many people have land but fail to work it. (I don't include native grasslands, forests, waterways here).

media said...

Themes in this thread have also appeared recently in two other threads i read ( lesswrong (self-described rationalists,, though i don't think they have a standardized (or (new)normalized measure of that) and the FB page of a local Pacifica radio news staff person (who also seems to be a very nice person and as an aside, is a member of the nation of islam ) . One concerns the issue of boycotting black friday and/or supporting black owned business (which i think may something to do with what i learned is called 'the race issue' in the usa---i just heard of it). The other was basically exactly on the topic of this post, tho i am not sure they mentioned H George.

I did---i gave them a reference to a paper by N Tideman (who i once met at Va Tech, when i was staying with an MIT PhD student of R Solow (some obscure guy who won a contest on 'wheel of fortune' or maybe a different one involving gunpowder). This guy lost his job teaching at V Tech, not because he brought a gun on camous (as one person did once) but because he started giving his lectures under the influence of LSD, rather than using DSL. Tideman loaned me his book which i didnt return since place i was staying got raided so i ran as fast as i could up to mountain lake (was there 2 weeks ago too). . That paper is in the archive of old working papers binghamton university 2002. (i dont know if that is suny--where d s wilson works, sort of the biological missing link to elinor ostrom). Its co-written with Plassmann who also has papers with John Lott, a brilliant economist and humanitarian in the tradition of ef schumaker about 'more guns less crime'.

Its a sort of interesting paper (Tideman was a hard core georgist in my view) and in my view may make a case (tho i just skimmed it) . But i think it shows the limit of Georgism or any other silver bullet type 'theory of everything' ('evolution is the universal acid'---d dennett, r dawkins (others said its spelled lsd, not daesch, isis or radical islam), marxism, capitalism, or say 'hamiltonian statistical mechanics' or its inverse, paul davidson's infite chorus about the 'ergodic theorem' (my recent comment on real word econ review mentions this , and unlike many it was actually posted---basically after saying this for 20 years maybe you might want to talk to a physicist ), or frances cress welsing's 'isis papers:the key to the colors' (she lives near me); there's also i-sis of mae wan ho---instittue for science in society 50% wack.) I told Tideman this also---youre less wrong but only half right.

As for 'violence vounchehrs' that is a sort of consistant argument or analogy (tho redundant and mostly uneccesary), or theory of everything ---that person i think is one of those limousine liberals, who aiming to be admitted to anarchist scenes. 'property is theft' (produhon). I personally dont think there's anything wrong with private property, states, rule of law, bylaws, inlaws, outlaws or theft. Just call them what they are ---a spade is a shovel.

Unknown said...

Interesting debate on George from 6 years ago. Readers should visit for recent materials.

Unknown said...

Interesting material from 6 years ago on George. Suggest people visit for new materials.

Grege Porcus said...

There was never any theory that marginalism was created against Henry George. In fact, both Gossen and Walras were in favour of complete land nationalisation and abolishment of all taxes. Walras became an economist because of his father, who was a self-taught classical economist who believed in complete land nationalisation and Walras believed that mathematical economics proved his father's theory.

The "theory" that you are confused about is that John Bates Clark created his influential neoclassical two-factor economic model (labour and capital, where land is part of capital) as a response to Henry George. But this is not a theory, this is a fact. He mentioned George himself many times in his work,and Frank Fetter, himself a proponent of the two-factor model, wrote about 'capital and its earnings' that:

" The probable source from which immediate stimulation came to Clark was the contemporary single tax discussion. ... Events were just at that time crowding each other fast in the single tax propaganda. [ Henry George's ] Progress and Poverty... had a larger sale than any other book ever written by an American. ... No other economic subject at the time was comparable in importance in the public eye with the doctrine of Progress and Poverty. Capital and its Earnings "... wears the mien of pure theory .... But ... one can hardly fail to see on almost every page the reflections of the contemporary single-tax discussion. In the brief preface is expressed the hope that 'it may be found that these principles settle questions of agrarian socialism.' Repeatedly the discussion turns to 'the capital that vests itself in land,'...

Clark himself wrote in the foreword that he 'hoped that this would settle the question of argrarian socialism', thereby falsely framing Georgism.