spgb 1936 henry george - georgism - land value taxation

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Henry George and Karl Marx

By Frank McEachran, M.A., B.Litt.

AB the title of this address may suggest too extensive a range of subject,I will begin by stating more concisely the points I wish to make. These arethree in number and start with a general remark on capitalism, ita relationto Liberal" and Marxist policy, and the respects in which the Communist attitude differs from ours. The second illa study of the mentality of Henry Georgeand Karl Marx on the background' of economic environment end the poasi-bility, arising out of this, of explaining Marxism in a new way. The third isthe Marxist dialectic and its relation to social history, in particular its relationto our own point of view and future development. These three points arebound up closely together and form a definite whole, explaining the realcharacter, not always realized, of world conditions at the present day.

Ifthe conclusions drawn seem somewhat pessimistic, I will allege the events ofrecent times and point out that if an element of truth is ascertained, thensomething positive is achieved. More than this we cannot claim to do.

Modern capitalism, M we interpret it, failed to develop along BOundandnormal lines owing to a very simple reason. This was the failure, in post-feudal times, to collect land values for revenue and the consequent creationof a population permanently unable to buy the wealth it produced. Themanufacturer, bent simultaneously on depressing wages and on selling goods.t

was never able to solve the contradiction and in consequence was forced intoa. constant and chronic search for markets. A solution was found in thenineteenth century in overseas expaneion, export of goods, capital and men,culminating at the present day in the" imperialism" of modem capitalisticPowers which has boon so fruitful It cause of war. To-day the spectacle ofthe Japanese in Manchuria. and of the Italians in Abysainia. may belp to remindUII, somewhat starkly, of our own past development and suggest, perhaps toolate, what tho world is really like.- There are now no new markets, and, shortof opening up the moon, a limit has come to expansion. So the crisis comes

home to stay and under various rubrics, Nationalism, Fascism, Hitlerism, etc.,is with us everywhere.

Wit.h this simplified analysis of the tendencies of capitalism the Marxistwould in the main agree, and it is only in the diagnosis of its character that ..radical disagreement arises. For where we make a fundamental distinction

------ - -------- ------- -------. _-------- -

'I'he word Liberal i.~ not used in any political party 8"''''''but as describing the pointof view of thos e who hold that the economic problem call be solved without thoclictA.l('rnhip of the ~t"w.

t A contradiction "diseovf'Tf,d" Tfw.


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between" wealth " and its source, between perishable " goods" (food, clothes,houses, machines, etc.) and imperisha.ble " lund," the Marxists fail to makeany distinction and approach the prohlem from the angle of value pure andsimple. Again, where we at tribute the defeet---and the only defect-s-ofcapitaliam ';0 the private appropriation of land values, they attack capitalism

root and branch and regard it as fundamentally unethical. Analysing itbriefly as-- .

(1) private enterprise ;(2) investment (use of savings for further investment) ;

we maintain that it is perfectly ethical and that its apparent defects are reallydue to an external (:aUse,l:.c., it foolish system of land tenure, All values inthe long run accrue as rent and although the superatructure of modern cupital-ism conceals the faet, vast accumulations of finance capital depend finally Oil

land values. Granted therefore the public appropriation of land values,capitalism in it.!! CR!'R1H'C would xt.ill re-rna.in, hut, Rn (,hR,ng",J in raT'W' and manner.of operation that the first, to derive benefit from it would be the worker andthe worker, moreover, 11 . 1 3an individual. What the Marxists call "Rurplusvalue" and what is really an effect of land values accruing privately wouldreturn to the worker by the ordinary forms of competition and by moans of aconstantly rising level of wages. All this, however, the Marxists are preventedfrom seeing for historical reasons and they go on to condemn all forms ofprivate enterprise and all interest on private capital, so coming to the erroneousconclusion that the social urge has primacy over that of the individual. Henceto a large extent their condemnation of Christian ethics, which are primarilyindividualistic, and their substitution of relativistic codes, varying from sociallevel to social level." They are right, of course, in pointing out that til"la~8ezJaiTe of the nineteenth century led to enormous evils, hut the reasonis not the one they allege. Far from being too laissez-faire the nineteenthcentury was not lai8sez-Jaire enough and it is possible that in pointing thisfact out we may perform a service of the greatest importance.

The history of the nineteenth century was distinguished by the presence,

almost contemporaneously, of two famous economic philoeophers, HenryGeorge and Karl Marx, each of whom diagnosed in his own way the economicHituH.tioll of hill age. Both were original ill Lhuugh ~ and both were influencedby the age they lived in, most of all by a certain difference of environment.But before following this point up, let us notice that the free market in goodsand ideas, which we regard aa the fundamental basis of the Liberal outlook,was the baekground for both Marx and George and without its wide horizonand immense factual knowledge Marx himself and hia work would be ineon-ceivable. For this reason, if for no other, the contempt of the Marxists for

Liberal thought is, to say the least, ungrateful. The point is small, yetsuggestive. It may undermine the absolutism of Marxist theorizing.

To roturn to tho economic argumont, The Liberal" Ia.im u.nd even ;'\.-1,-,rxhimself agreed, that the fundamental basis of exploitation was 'historicallyland enclosure and that if the land had been really free no monopoly of


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Ernnlc McEachran

was brtJllgh t 11P in (Amcrica) d iffered procisely i l this point of the land question,and we shall see on examination how ~ig:nitic


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allies the merchant bourgeoisie who made their wealth hy means of large sheepruns and export of wool, etc., were wresting political power from the now effetefeudal landowners. The following diagram will illustrate this:-

feudal landowners agricultural entrepreneur. ctc.,thesis antithesis

_ ... _ .. _. -------- _ 1640 }1638

English bourgeoisiesynthesis.

Similarly, the French bourgeoisie, uneasy and resentful under the weakeningyoke of Ii France which was still feudal in form, forced their way to power in1789 even more violently than the English and established a. new equilibrium.In our own time the Ruseiana have effected in quick succession two majorrevolutions (March-November, liB 7), first a bourgeois, then a workers' revolu-tion, thus catching up and also outstripping, in their own estimation, thenations of tho West. For notice, tho same inevitability or destiny whichchango in the means of production brought about for the bourgeoisie in thepaat, is now working for the proletariat and cannot be evaded. Capitalism,in order to be more efficient, must continually concentrate. Concentration inits turn implies bigger plant, vaster congeries of workers, and massed. workers,in the end, moan revolution. Finally the day comes when the workers,properly organized, find themselves so numerous that the revolution occursalmost of itaelf. This is what happened in Russin. in l!H7 where in proportionto their numbers, tho workers were massed in fewer factories than anywhereelse on earth, not excluding America. So Russia, having stolen a march onthe rest of the world, now waits for our revolution to follow hers. Evolutionis for it, destiny is for it, we are doomed.

Obviously, for us who still believe in human freedom there is no certaintyin this prophecy, whatever other elements of truth it may contain. Yet itbehoves us to examine carefully the implications of the dialectic and to Ul!(Ifor our own purposes the parts which affect us. In the first place we mustnote that Marxist Commrmism, in the light of past experience, dOO6 p.ppc!n' tobe the culmination of the evolution of a. century, even if, in our opinion, it isan undesirable culmination. The growth of land monopoly (increase of privaterent values), of tariffs, of quotas, of currency restriction, of taxation, etc.,widening and hardening hindrances to production. leading to great relativepoverty and unemploymont--aU point in the same direction. The worker,unable to find work, and the employer, unable to sell his goods, both appealto the State and find in it their only salvation. What is surprising then inthe point of view of the Communists, which sees no hope apart from the Stateand in its name seizes everything, removing completely the whole Liberalfoundation 1 Having failed to break monopoly ill its inception and to makethe individual selfsupporting the only alternative is to " go the whole hog"with the power of tho State. It is true that Marxism is ultimately" anarchic,"


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!!~nry Gwrge a_~_1f_~r l__~aT;t;

Russia. to-day conditions are being created, and at terrific speed, which by theirown nature and future development demand centralized control and mustalways do so, and from which it- is inconceivable that freedom should arise.Huge towns, rivalling and out-distancing London and New York are not, inour opinion, the right wayta solve the age-long problem of town versus country.and a " planned" and" concentrated" industry, after all, is the culminationrather than the negation of capitalism, Finally, in between the Faseist, andBuesian opposites we have the despised Liberal policy which alone offers notonly the abstract hope of freedom, but also a concrete, if difficult, way ofachieving it. There Me, in our terminology, two sources of wealth and noother, land and human beings, and in the free interplay between the two, wealtharises. For many centuries chattel slavery was a legal and moral institution,declared and pronounced by economic experts to be absolutely necessary.Later, slavery was found unneceasary and one of the sources of wealth WIIBmade free, The other source of wealth-the more passive one-is still. heldin bondage by a foolish economic system and it may remain so for years tocome, but only when it is free will a free society arise. In conclusion, I wouldlike tosay that the Liberal tradition now suffering eclipse is the oldest andbest in the world and if it collapses there is nothing, positively nothing, whichcan be put in its place. Freedom of the intellect comes from the Greeks, ofthe spirit from the Christians, and both 'are rooted in the freedom of matter,the incarnation of the immaterial in the material world, Free the body andthe soul may flourish, . Trap the body and the soul may wither, The ancientworld, with all its cultural splendour, died of the slave monopoly of Rome:let us beware lest our own die from a similar cause.

This paper- was presented at the InternationalCOl ifer en ce, Lon do n, Sep tember ,1936 .

Published byTHE ROBERT SCHALKE:NBACH FOUNDAT10N

GOEast 69th Street, New York 21, N, y,

spgb 1936 henry george - georgism - land value taxation

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