HoltesThoughts: The Death of Henry George

Unsound Followers And Authoritarian Thinking

In my last blog on the subject I noted Henry George's undated quote about a newspaper article that had gotten his ideas wrong where he said the:

"unsound supporter is, in fact, more dangerous than an opponent. . . . " [http://holtesthoughts.blogspot.com/2015/03/the-target-of-progressive-taxation-and.html]

I know from wide reading that such "unsound supporters have undermined or corrupted the legacy of many people. And even when an integral movement is spawned, they will appear again and again, using sound ideas for unsound purposes or turning sound ideas into an unsound ones by corrupting the logic and messages. Sometimes they invent narratives that never happened, or forge authorship onto something they themselves wrote. Unsound followers base their reasoning on the a-priori assumption that their teacher's logic is infallible.

Authoritarian Thinking

When someone accepts everything someone says on faith that is known as "authoritarian thinking." Taking the word of a teacher is taking that word on "authority." Some of this faith or trust is unavoidable. Few or us are mature enough to understand every nuance of a persons' thought without considerable study. And even when we study extensively we are all subject to delusions, fear and mistakes - and so even if we study everything on a person we can get it wrong. As a friend noted:

"Faith Saves Time" ~ Garrison Keilor, entertainer.

The words "unsound follower" refer both to people who run with ideas on "faith" and to those whose reasoning is faulty, deluded, or mistaken. The reason that teaching critical thinking is critical to the survival of humanity is that even the most faithful follower, "fan" really can turn out to be an "unsound follower" without the ability to use critical thinking. Even the greatest of our sages is, was, a fallible human being. Even great thinkers like Sir Isaac Newton, or Aristotle, were not, ultimately, infallible. If they can teach people the use of reason and critical thinking. Then they can analyze the logic of a set of syllogisms and decide for themselves whether they are "sound" or "unsound." This is important because even what starts as a "sound" ideology and prove unsound as circumstances change. And as I said before, even the most sound ideas can prove unsound in the hands of fanatic follower who don't read between the lines.

Thus it is better to train people to think for themselves than to have followers who don't bother to understand what is being said and the purpose of what it is said for. Sometimes what looks like an unqualified truth can turn out to be "more complicated." In life circumstances change. When circumstances change and the policies no longer work as intended, those followers, who never really understood the concept or reasons, in the first place will drop the whole line of reasoning for some other. The faithful lose faith not due to the unsoundness of their teachers, but for not understanding the context of the teachings or being willing to bring those teachings into the real world. Thus the Foolish hold onto unsound faith despite not understanding reality and do crazy things. Faith should be a source for joy and wisdom, not a set of shackles tied to a sinking ship.

Unsound followers versus enemies

This is what happened to Keynesian thinking (which wasn't just the product of Keynes as many of his ideas were developed in parallel by American Scholars) when the issue was Stagflation and the conditions of the 70's, instead of liquidity traps and the conditions of the thirties. People who never understood Keynes in the first place dumped him for Friedman's "Monetarism", which in turn failed completely. Many of those economists had never really been part of the Keynesian Critique in the first place. They were only too happy to jump back on Neo-liberal, "Austrian", or neo-classical ideas and once again preach the myth of the sanctity of markets and other modern pagan notions. Essentially some enemies of Keynesian ideas used the excuse of it's purported "failures" to bring back their own failed ideas or resurrect ideas that were more convenient to their employers - as Keynesianism was based on a deep critique of Capitalism.

Other folks, who understood what the economists of the thirties labored for, continued to labor in obscurity to develop "Neo-Keynesianism" by continuing to develop the mathematical principles of Keynesianism and develop models and understandings that were even broader than his generation. Older economists like John Kenneth Galbraith resisted the anti-Keynes narrative and even fought back against it. The younger ones simply laid low, because the monied men were buying chairs and being an open Keynesian in the late 1970's or 1980's guaranteed obscurity and inability to get tenure. Even so by understanding the principles, the methods, the logic and the observations they were able to apply the reasoning to other situations. Now "neo-Keynsianism" is making a comeback thanks to Paul Krugman, Joseph Stiglitz and Piketty.

Rebellion And Corruption

By simply taking a teachers principles on faith as a formula for solving all the problems in the world one makes a teacher an "authority" but in the process destroys the integrity of the subject. Teachers aren't gods. The greatest teachers teach others to think for themselves. There are Marxists critical of other Marxists. There is even room for rebelling against a teacher and saying "you were wrong."

But Marxism went wrong because of Marxists. They turned Marxism into a religion, together with inquisitions, claims of "orthodoxy" versus "heresy" and in the process they robbed it of integrity and turned it into another instance of the Chicken Dance Hierarchy game.

Rebellion is only a betrayal if the result is corruption, lies and failure. Even Friedman was not a Friedmanista. I remember reading an article where he praised Keynes' writing. Even so Friedman clearly saw himself as Keynes enemy. Sadly Reason doesn't guarantee "the right thing" as we have moral choices over which principles we value the most.

And likewise, Henry George's followers divide into camps that see him as a Godlike authority and others who understand the principles behind what he said.

Henry George and The Principle behind the point

So, back to Henry George, when he talked about the "unsound follower" he was referring to the integrity of his economic theory of Taxation. Already folks were distorting the principles of Land Value Taxation (which is why I was trying to find out what year he made those comments). He wanted to enforce that for his followers:

"Unless he sees that taxes on land values or economic rent, which is what we mean by the Single Tax, must be borne by the owners of the valuable land from which it is collected, and that it cannot fall on users of land as users" [http://www.cooperativeindividualism.org/george-henry_on-whom-does-the-single-tax-fall.html]

He first made his statements about the "Single Tax" in the context of a world where wealth was almost exclusively embodied in land, where capital formation was an unalloyed good, and where the issue with land ownership was more about monopoly and oppression in governing land, than availability:

"in his famous book, ‘Progress and Poverty’ which he wrote in 1879. The book was greatly accepted selling a huge 3 million copies and above. In the book George discussed that poverty was an invariable result of the mass land ownership held by land owners and monopolists via economic rents through the advancement brought about by free market economy that gave rise to great wealth amassed by social and technological advances." [http://www.thefamouspeople.com/profiles/henry-george-192.php#XqHFujmBG82R5xcx.99]

Henry George printed that book during a period of great transitions, including the end of Reconstruction:

"in 1877, allies of the Republican Party candidate Rutherford Hayes met in secret with moderate southern Democrats in order to negotiate acceptance of Hayes’ election. The Democrats agreed not to block Hayes’ victory on the condition that Republicans withdraw all federal troops from the South, thus consolidating Democratic control over the region. As a result of the so-called Compromise of 1877 (or Compromise of 1876), Florida, Louisiana and South Carolina became Democratic once again, effectively marking the end of the Reconstruction era." [http://www.history.com/topics/us-presidents/compromise-of-1877]

Henry George's "Single Tax" was predicated on a world where corruption and legal abuse were mainly centered on land ownership and abuse. But with the end of Reconstruction, the corruption of reconstruction was turned national and centered on the spread of banking power, trusts and corporations.

First Henry George wanted State Control of Utilities:

"George was a staunch advocate of state ownership on certain things like land, telegraph, water supplies, invention and scientific investigation. George proposed taxation and state regulation on natural monopolies like water and electricity which formed the base for an industry to grow. George was liberated on the railroad constructions which he willingly suggested, to be given to private ownership systems if need be as far as the rail tracks were state owned. George criticised state monopolies and proposed a more flexible and open system of government-supported incentives for invention and scientific investigation. George proposed municipal control on water supplies and state sanctioned telegraph systems." [[http://www.thefamouspeople.com/profiles/henry-george-192.php#XqHFujmBG82R5xcx.99]]

Indeed in his 1890 platform he had explicitly laid out the rationale:

"With respect to monopolies other than the monopoly on land, we hold that where free competition becomes impossible, as in telegraphs, railroads, water and gas supplies, etc., such business becomes a proper social function, which should be controlled and managed by and for the whole people concerned, through their proper governmental, local, state or national, as may be. " [Paragraph 11 of 1890 Georgist constitution]

And the foundation for this argument is the same as his argument for Land Value Tax. Railroads, telegraph lines, water supplies and ultimately invention and scientific discovery ultimately belong to the commons and are a common inheritance. A person has the right to own the rent from an invention, but not to hoard the invention itself. A railroad has the right to operate and own railroad cars, but not to build or tear up railroad tracks where-ever it pleases. The arguments are the same as for the land value tax.

Things get more Complicated

Had this vision been implemented from the beginning his "single tax" would have been enough to reform things and keep the political economy stable and free. But by 1891 things were getting more complicated. By the 1880's we had entered the “Gilded Age”

"“Gilded Age” of the 1880s and 1890s, the influence of large-scale corporations dominated not just the U.S. Congress but also the courts. Nowhere was this more evident than in the U.S. Supreme Court’s decision in the 1886 Wabash case, excerpted below. With Wabash, the Court overturned its 1879 decision (Munn v. Illinois) allowing states to regulate railroads. Perverting the original intent of the Fourteenth Amendment, the Court decreed that corporations were legally “persons” entitled to the Amendment’s protections. (Just three years earlier, the Court had ruled the Civil Rights Act of 1875 unconstitutional on the basis that the Fourteenth Amendment was binding only on states, not individuals, thereby severely jeopardizing the very rights—of freed slaves—the amendment was explicitly designed to protect.) The Wabash case barred states from regulating interstate commerce, asserting that only the federal government could do so. In 1887, Congress passed the Interstate Commerce Act, which railroad barons found more appealing than the more restrictive state laws." [http://historymatters.gmu.edu/d/5746/]

Corporate Privilege and Money Privilege

We had to create three income taxes instead of a single tax on economic Rents from land, because in the corrupt period that George Witnessed after his the money power increasingly shifted from "monied men" with Gold and Silver, to bankers holding mountains of paper nominally backed by inadequate deposits supposedly secure in vaults and treated as a bailment both legally and morally, but actually lending all but a token amount to anyone who needed money and could be induced to borrow it. This unstable form of money creation did two things.

First it created money, properly inflating and stimulating the economy for a time like someone getting a shot of Cocaine. But second, the money lent into existence rarely could create enough of a return to continue such an expansion forever, and since it always was lent against assets mortgaged or otherwise offered as security, the wealth created by the money privilege had a way of falling into the hands of the bankers. The bankers win when the investment pays. And they collect ownership when the economy runs into trouble due to inevitable war, disaster, economic dislocation or bad weather. This banking power is really the power over the government of money and it was regulated via an income tax that was meant to fall on the privilege of lending notes not printed under congressional authority. Secondly, when the money is paid back, instead of continuing to circulate, it would begin to contract. Banks could not treat their deposits as bailments because they would loan notes against them. Eventually people would go to the bank trying to get their notes back, and find the bank owners and managers had made off with the funds. The term for this sort of con artist is a 'grifter' and my friend John Turmel explains that every Banker is essentially a grifter. [see http://holtesthoughts.blogspot.com/2015/02/satans-usury-john-turmel-and-some-basic.html

The other thing it did was to create the incentive for creating means of avoiding liability for this sort of grifter behavior. That means was the "Trust" and the "Corporation", both of which are legal instruments for hiding ownership and concentrating power over that ownership. The earliest corporations were governments of cities and towns, or Religious Orders. Corporations allowed people to take a "vow of poverty" and live like kings. The title of CEO or President is equivalent to that of a Duke or a King.

Henry George and the Fight Against Corruption

Henry George was a Reformer. Unlike Marx, who practically lived in a library, or Keynes who was an academic and a bureaucrat, George actually ran for office and fought for his principles. His fame from writing "Progress and Poverty" helped him some in his career running for Office, first in California and later in New York City:

"In 1880 George moved to New York City. By this time he had turned into a notable writer and a great public speaker. During this time George associated himself with the Irish nationalist community although he had a British origin. This alliance made him start his travels abroad for giving speeches in Ireland and Scotland where land was a politically held issue" Read more at [ http://www.thefamouspeople.com/profiles/henry-george-192.php#XqHFujmBG82R5xcx.99"]

Fighting Tammany Hall

He also fought Tammany Hall:

"In 1886 George ran for the election of mayor for New York City being the United Labour Party candidate. This party was a short-lived political society of the Central Labour Union. George had many votes that made him come second only to Republican candidate Theodore Roosevelt. According to popular belief (by great many supporters of Henry George) the election was fraudulently won by Tammany Hall candidate Abram Stevens Hewitt. In 1887 George tried for the third time in the 87’ New York state elections where he came third in the election for Secretary of State of New York. George’s United Labour Party was soon struck by divergence within the party that led to internal rifts. United Labour Party comprised of many Marxist members. ‘Georgist’ notions played the central belief system for the party. George was greatly criticised for his free trade policy." [Read more at http://www.thefamouspeople.com/profiles/henry-george-192.php#XqHFujmBG82R5xcx.99]

Tammany Hall was an incredibly corrupt institution from 1887 until at least the 1960's. Reformers had a hard time defeating the machine. Henry George literally gave his life fighting it.

Henry George and his Stroke

Henry George worked himself hard. After years of struggle his book success only meant, more years of struggle:

"In December 1890, at the end of a new round of speaking tours of Britain, Australia, and New Zealand, George suffered a stroke, which left him, in Louis F. Post's words, "a victim to premature old age in his fifties." He turned his attention to writing a comprehensive Science of Political Economy" [http://www.anb.org/articles/15/15-00261.html]

Ultimately his son would have to finish his "Science of Political Economy." He was too busy practicing his teachings to devote full attention to creating an academic work.

Rerum Novarum

The author says he was "distracted" by reading "Rerum Novarum" and diverted from writing a refutation. But the reality is that "Rerum Novarum" was an incredibly important work that influenced and still influences politics. Rerum Novarum influenced Catholic Fascists and General Reformers alike. And George's reply was itself a masterful exegesis that owes to John Locke and masterfully responds to the Claims it made for the rights to property.

"Being created individuals, with individual wants and powers, men are individually entitled (subject of course to the moral obligations that arise from such relations as that of the family) to the use of their own powers and the enjoyment of the results. There thus arises, anterior to human law, and deriving its validity from the law of God, a right of private ownership in things produced by labor — a right that the possessor may transfer, but of which to deprive him without his will is theft." [http://www.wealthandwant.com/HG/the_condition_of_labor.htm]

This of course is the Natural Rights argument as argued from the POV of monotheism. And the benefit of using a Religious argument is that it is an answer to the authoritarian arguments of religious authorities. That further emphasizes the distinction between property acquired by labor (mans part in creation) and that that comes from creation:

[condition of Labor]

"This right of property, originating in the right of the individual to himself, is the only full and complete right of property. It attaches to things produced by labor, but cannot attach to things created by God." [condition of Labor]

He then uses a number of examples starting with:

"Thus, if a man take a fish from the ocean he acquires a right of property in that fish, which exclusive right he may transfer by sale or gift. But he cannot obtain a similar right of property in the ocean, so that he may sell it or give it or forbid others to use it...." [condition of Labor]

And citing other examples he then concludes:

"To attach to things created by God the same right of private ownership that justly attaches to things produced by labor is to impair and deny the true rights of property. For a man who out of the proceeds of his labor is obliged to pay another man for the use of ocean or air or sunshine or soil, all of which are to men involved in the single term land, is in this deprived of his rightful property and thus robbed." [condition of Labor]

He then goes on to explain the right of property in similar fashion:

"While the right of ownership that justly attaches to things produced by labor cannot attach to land, there may attach to land a right of possession." [condition of Labor]

And he wisely quotes the Pope:

“God has not granted the earth to mankind in general in the sense that all without distinction can deal with it as they please,”

And then he argues with the Pope, drawing on his earlier arguments and on Locke:

"regulations necessary for its best use may be fixed by human laws. But such regulations must conform to the moral law — must secure to all equal participation in the advantages of God’s general bounty." [condition of Labor]

The Pope had condemned socialism in "Rerum Novarum" [http://w2.vatican.va/content/leo-xiii/en/encyclicals/documents/hf_l-xiii_enc_15051891_rerum-novarum.html] And George segues off of one of the Popes arguments when he says:

The principle is the same as where a human father leaves property equally to a number of children. Some of the things thus left may be incapable of common use or of specific division. Such things may properly be assigned to some of the children, but only under condition that the equality of benefit among them all be preserved." [condition of Labor]

The Pope had argued:

"he first and most fundamental principle, therefore, if one would undertake to alleviate the condition of the masses, must be the inviolability of private property." "Rerum Novarum"]

And Rerum Novarum would become the the banner of the counter-reformation against Socialism for the next 100 years and into the present. It being quoted by Mussolini and early Fascists, and by later fascists, neo-liberals and conservatives. George was arguing against Authority. He had to be careful. So his exegesis had to be more extensive:

"This right of private possession in things created by God is however very different from the right of private ownership in things produced by labor. The one is limited, the other unlimited, save in cases when the dictate of self-preservation terminates all other rights. The purpose of the one, the exclusive possession of land, is merely to secure the other, the exclusive ownership of the products of labor; and it can never rightfully be carried so far as to impair or deny this. While any one may hold exclusive possession of land so far as it does not interfere with the equal rights of others, he can rightfully hold it no further." [condition of Labor]

I don't think that the Pope ever read his reply. But it was important that he write it. As otherwise it would have been his word against God's. So he goes on:

"Thus Cain and Abel, were there only two men on earth, might by agreement divide the earth between them. Under this compact each might claim exclusive right to his share as against the other. But neither could rightfully continue such claim against the next man born. For since no one comes into the world without God’s permission, his presence attests his equal right to the use of God’s bounty. For them to refuse him any use of the earth which they had divided between them would therefore be for them to commit murder. And for them to refuse him any use of the earth, unless by laboring for them or by giving them part of the products of his labor he bought it of them, would be for them to commit theft." [condition of Labor]

His argument from "The Perplexed Philosopher" is simpler, but it's the same one. The Pope wasn't arguing for an "equal right to land. He used his arguments to argue for an absolute right to land. Something that Henry George rightly notes when enforced denies the right to property in land to the majority:

"God’s laws do not change. Though their applications may alter with altering conditions, the same principles of right and wrong that hold when men are few and industry is rude also hold amid teeming populations and complex industries. In our cities of millions and our states of scores of millions, in a civilization where the division of labor has gone so far that large numbers are hardly conscious that they are land-users, it still remains true that we are all land animals and can live only on land, and that land is God’s bounty to all, of which no one can be deprived without being murdered, and for which no one can be compelled to pay another without being robbed. But even in a state of society where the elaboration of industry and the increase of permanent improvements have made the need for private possession of land wide-spread, there is no difficulty in conforming individual possession with the equal right to land. For as soon as any piece of land will yield to the possessor a larger return than is had by similar labor on other land a value attaches to it which is shown when it is sold or rented. Thus, the value of the land itself, irrespective of the value of any improvements in or on it, always indicates the precise value of the benefit to which all are entitled in its use, as distinguished from the value which, as producer or successor of a producer, belongs to the possessor in individual right." [condition of Labor]

Henry George as late as 1891 knew that the foundation of an equal right to property in land, is the recognition of the concept of the commons. It was the same argument for land reform in Ireland or New Zealand, England or the United States, or in other countries. An absolute right in property infringes on an equal right to property in home, industry, survival. His was a deductive argument from principle.

And he concludes by stating some basic principles of fairness in taxation:

Taxes and legal policy must:
No "taking" unfairly:: "not take from individuals what rightfully belongs to individuals."
Equality:: "not give some an advantage over others, as by increasing the prices of what some have to sell and others must buy."
Temptation to corruption:: "not lead men into temptation, by requiring trivial oaths, by making it profitable to lie, to swear falsely, to bribe or to take bribes."; "not confuse the distinctions of right and wrong, and weaken the sanctions of religion and the state by creating crimes that are not sins, and punishing men for doing what in itself they have an undoubted right to do."; "not repress industry. It must not check commerce. It must not punish thrift. It must offer no impediment to the largest production and the fairest division of wealth."
Other Posts on Henry George:: Progressive Taxation and Land Value Tax; Spencer Versus Locke and Henry George; Review of "A Tale of Two Cities" article
Excerpts:
General Articles on Economics: http://hgarchives.org/historical-collections/books-and-periodicals/; Satans Usury [http://holtesthoughts.blogspot.com/2015/02/satans-usury-john-turmel-and-some-basic.html]; http://historymatters.gmu.edu/d/5746/; Rerum Novarum: [http://w2.vatican.va/content/leo-xiii/en/encyclicals/documents/hf_l-xiii_enc_15051891_rerum-novarum.html]

John Locke

For more information on John Locke and his relationship to other people read any of these posts:: Spencer Versus Locke and Henry George; Edmund Burke Versus John Locke; Locke Talked of the Importance of the Collective; The Concept of Commonwealth as Antidote to Tyranny; Commonwealth According to Locke; The Real Right to Property is Contingent on Reason; Common Property and the Commons; Rights Come from Below; Ayn Rand Argues against the Enlightenment; John Locke on the Virtues of Liberty; Tyranny Definition - John Locke

Post Script

suffered something close to a stroke last spring. I had untreated high blood pressure and that seems to have contributed. For that reason I guess I can relate to Henry George and the difficulties of his last years. I know that he felt very strongly about his theories and had struggled with the logic and reason that created them.

Unrelated information related to future inquiries

http://www.dailykos.com/story/2005/03/18/100364/-George-H-W-Bush-links-to-the-Kennedy-Assassination

HoltesThoughts

Saturday, March 28, 2015

The Death of Henry George