George 100 Years Later
The Great Reconciler
By M. Mason Gaffney, Ph.D.
Henry George (1839-1897) is best known today for Progress and
Poverty (1879). Eloquent, timely and challenging, this book soon
became and remains the all-time best-seller on economic theory and
In 1879, George electrified the world by identifying one underlying
cause for two great economic plagues: chronic poverty arising from
insufficient demand for labor, and cycles of boom and bust. These
twin plagues arose from concentrated ownership of land, compounded
by land speculation. Large landowners and speculators (often one
and the same) held the best land idle or underused, forcing labor
onto marginal land and driving down wages. Collapse of speculative
land price bubbles caused periodic slumps.
(By "land" George meant exclusive rights to use natural
resources in a specified territory. It included mining, water, fishing,
and timber rights, road and rail rights-of way, and some patents.
George emphasized the high value and productivity of urban land,
which facilitated communication and trade. Today, we would add to
"land" such items as taxi medallions, telecommunications
licenses and pollution "rights".)
George followed his analysis with a plausible, practicable remedy:
eliminate all taxes except for a tax on land values. The "single
tax," as it later became known, would invigorate the economy
by breaking up large idle holdings, making land available to those
who would use it. And it would suck the air out of speculative bubbles,
damping the boom and bust cycle. Taxing land is very progressive
because land ownership is highly concentrated among the most wealthy,
far more concentrated than income. Taxing land is fair, because
the community rather than the individual landowner creates land
values. Taxing land is economically efficient, because the owner
cannot avoid a land tax ("shift" it) by choosing less-taxed
Both George's analysis and his remedy sprang directly from classical
economic theory. Such giants as Adam Smith, David Ricardo, and John
Stuart Mill, had already decried the evils of concentrated land
ownership, which they called "land monopoly." George carried
classical economics to its logical conclusion-and popularized that
conclusion with stunning effect.
George emerged from a raw new colony, California, as a scrappy marginal
journalist. Yet his ideas exploded through the sophisticated metropolitan
world as into a vacuum. Progress and Poverty sold millions of copies
worldwide, in dozens of translations, second only to the Bible.
Returning from Ireland as reporter for The Irish World of New York,
George was lionized by Irish-New Yorkers for his stand on the Irish
land question. With ethnic, union and socialist backing, he formed
the United Labour Party in New York, and ran for mayor in 1886.
Seven short years after leaving California, George nearly took over
as Mayor of New York City, the financial and intellectual capital
of the nation. He beat Theodore Roosevelt, but lost to the Tammany
candidate, Abram S. Hewitt-by electoral fraud.
In three more years, George had become a major influence in sophisticated
Britain, as "adviser and field-general in land reform strategy"
to the Radical wing of the Liberal Party. He was not even a British
subject. In 1891, the Party adopted a land-tax plank, the "Newcastle
Programme." Successive Liberal Governments of Campbell-Bannerman,
Asquith, and Lloyd George carried forward modified "Georgist"
George toured the world as an immensely popular political activist,
orator and folk hero. He died suddenly in 1897, while running a
second time for Mayor of New York City. A hundred thousand mourners
marched at his funeral.
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In the US, "Georgism" melded into the populist movement,
and later into the Progressive Movement. At the national level,
the Progressive Movement dominated both major political parties
for 17 years, 1902-19. At the local level, its influence continued
through the early 1920s. Local property taxation was modified along
Georgist lines: land assessments were raised relative to improvements
and rates were increased substantially. California water districts
financed by land taxes catapulted California to the top-producing
farm state in the Union, using land that had been desert or range.
California generated farm jobs and homes, while other states destroyed
them by allowing well-connected speculators and "robber barons"
to grab large tracts of land. A Georgist, Congressman Warren Worth
Bailey of Pennsylvania, drafted the first Federal personal income
tax law on Georgist lines: falling mainly on very high incomes from
In 1913 William S. U'Ren, "Father of the Initiative and Referendum,"
created this system of direct democracy expressly to push single-tax
initiatives in Oregon. In 1910, as a by-product of U'Ren's single-tax
campaigns, Oregon had adopted the first presidential primary law.
This law was quickly imitated by many other states. The passage
of these major electoral reforms during Woodrow Wilson's Governorship
of New Jersey allowed him to win populist support and the Democratic
nomination for President in 1912, and then defeat Taft. Wilson's
mentor in New Jersey was an earnest Georgist, George L. Record.
Record had gotten railroad lands up-taxed to the great benefit of
public schools in New Jersey, and to the impoverishment of special-interest
election funds. President Wilson included Georgists in his Cabinet
(Newton D. Baker, Louis F. Post, Franklin K. Lane, and William B.
Wilson), and collaborated with single-tax Congressmen like Henry
George, Jr., and Warren Worth Bailey.
Joseph Fels, an idealistic American manufacturer, threw himself
and his fortune into the English land tax campaign, culminating
in the Parliamentary revolution of 1909, which stripped the House
of Lords of its power to veto tax bills. Subsequently, he threw
millions into single-tax campaigns in the US. In 1916, a "pure
single-tax" initiative, led by Luke North, won 31% of the votes
in California. Even while "losing," campaigns like these
kept the issue highly visible. Assessors consequently focused more
attention on land. By 1917 in California, land value constituted
72% of the assessment roll for property taxation-a much higher fraction
George's ideas were carried worldwide by such towering figures as
David Lloyd George and George Bernard Shaw in England, Leo Tolstoy
and Alexandr Kerensky in Russia, Sun Yat-sen in China, Billy Hughes
in Australia, Rolland O'Regan in New Zealand, Chaim Weizmann in
Palestine, Francisco Madero in Mexico, and other leaders in Denmark,
South Africa, and around the world. In England, parts of Lloyd George's
budget speech of 1909 could have been written by Henry George himself.
Some of Winston Churchill's speeches were written by Georgist ghosts.
Twentieth century historians Raymond Moley and Eric Goldman emphasize
George's impact. According to Moley, George "touched almost
all of the corrective influences which were the result of the Progressive
movement. The restriction of monopoly, more democratic political
machinery, municipal reform, the elimination of privilege in railroads,
the regulation of public utilities, and the improvement of labor
laws and working conditions-all were ... accelerated by George."
According to Goldman, George inspired most of the major reformers
of the early 20th Century: "... no other book came anywhere
near comparable influence, …[it was] a volume which magically
catalyzed the best yearnings of our grandfathers and fathers."
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Where is the Georgist movement today?
World War I broke the momentum of the Progressive movement in the
U.S. and the Liberal movement in England, allowing Georgist enemies
to regroup. And enemies of course there were, because Georgism aims
a dagger at the heart of unearned wealth and privilege. Enemies
ultimately succeeded by a dual strategy. They tarred Georgism with
the brush of Socialism or Communism, evoking images of the terrifying
new regime in Russia. And they redefined economic theory, eliminating
land as a significant category. In the US, the robber barons even
financed the establishment of anti-Georgist economics departments
at several major universities, including Columbia and Chicago, a
story detailed by Mason Gaffney in The Corruption of Economics.
Today an army of neo-classicists preach dourly that we must sacrifice
equity on the altar of "efficiency." Thus they would stifle
the demand for social justice that runs like a thread through the
Bible, the Koran, and other great religious works.
Yet George's ideas are with us still. As historians often note,
the Populist and Progressive movements faded out partly because
they were co-opted by the leading parties. Ideas that we associate
today with "liberal" Democrats-belief in the fairness
of taxing "unearned" income, concern for "root causes"
of poverty and unemployment, concern for social and racial justice-these
ideas have strong Georgist roots. Likewise, ideas we associate today
with free-market Republicans and Libertarians -the productive power
of capitalism, the need for free trade, the need to liberate labor
and capital from burdensome taxation and regulation-these ideas
have equally strong Georgist roots.
There are also today's Georgist success stories, rarely recognized
as such: the Asian "tigers:" Taiwan, South Korea, Hong
Kong and Singapore. Founded on the twin principles of access to
land-implemented by land reform, land taxes and land leasing-and
universal education and health care, the tigers' booming economies
make them models for developing countries. Mainstream economists
may have forgotten land taxes, but development economists still
advocate them-circumspectly of course, lest they offend the third
world rulers they hope to influence.
Today, Georgists face both danger and opportunity:
Danger. The great Georgist reforms steadily erode,
undefended by those who do not understand their significance. Property
taxes, once the mainstay of local and state governments, increasingly
give way to local and state sales and income taxes. Generations
of propaganda have convinced even good liberals that property taxes
fall squarely on the poor-to the mega-million dollar benefit of
corporations like Standard Oil of California, the largest beneficiary
of Proposition 13's 1979 property tax rollback and freeze. The federal
income tax, which once targeted unearned income from land, now devolves
steadily into a payroll tax.
Opportunity. Over the last twenty years, wealth
and wages have grown ever more unequal, while the death of the Communist
bogeyman reveals the ugliness of capitalism without fair laws or
equal opportunity. Neo-classical economists, trundling through a
Mars-scape of dusty statistics and forbidding formulas, can proffer
only unpleasant tradeoffs. In the debate over the newly-passed 1997
income tax "reforms," Democrats complained that cuts in
estate taxes and capital gains taxes for the rich were "unfair."
Republicans argued-successfully-that such tax favors are essential
to investment and growth.
Neo-classical economists give us only a hard choice: we may have
equity, or efficiency, but not both. By contrast, George's program
reconciles equity and efficiency. Think of it! George takes two
polar philosophies, collectivism and individualism, and composes
them into one solution. He cuts the Gordian knot. Like Keynes after
him, George inspires us by saying, "Forget the bitter tradeoffs;
we can have it all!"