The Most Popular Economist

Henry George was born on September 2nd 1839 in Philidelphia to a family of English and Scottish heritage. He was the second of ten children in a roughly middle class family. Not poor enough to be deprived but not wealthy enough to avoid toil and labor. George’s father Richard was a publisher of Episcopalian religious texts. Though not a particularly successful publisher, George’s father impressively managed to support a large family through his work.

George considered himself a religious man throughout his life, but he never fit neatly into any particular denomination within Catholicism and Protestantism. Regardless, George’s early life was shaped by the pious attitudes and habits of his family. As a boy, George was constantly exposed to the language and style of the King James Bible, a resource he would draw upon for the rest of his life.

George’s father sent him to the Episcopal Academy in Philadelphia for his education, an institution George did not enjoy or appreciate. Eventually, George convinced his father to hire a tutor instead while he independently supplemented his education through reading extensively and attending lectures.

Despite being a precocious young mind, George’s formal education ended when he was 14. He immediately began work as a clerk for an importing house. Out of economic necessity, in 1855 at the age of 15, George found work as a foremast boy on a ship sailing to Melbourne and Calcutta. George returned to Philadelphia, learning the ropes of typesetting. During the economic depression of 1857, George returned to the sea once again bound for the Pacific Coast, but George left the ship when he hit San Francisco. George traveled to Canada to take part in the gold rush but he, like many others, was too late to make it large overnight.

Today we are accustomed to the idea of childhood and our teenage years being a time of innocence and exporation, but for most of history childhood did not have any rosy or positive connotations. The vast majority of children had to work just like their parents or they would starve. In George’s lifetime there was a great deal of economic growth and progress alongside an unprecedented level of urban poverty. Potential intellectuals and innovators like Henry George received what education they could until their studies were cut short by economic necessity. Despite his youth and meager amount of schooling, George’s papers from his time at sea show the budding intellect of a curious young man writing about politics, religion, thrift, and poetry. But education comes in many forms, one form being personal experience. Working as a clerk at an importing house and a crewman on a ship, from a young age George observed and appreciated the benefits of trade and cooperation. It is no surprise that popular and effective advocates of free trade such as Henry George and Frederic Bastiat grew up in a mercurial environment. George’s commitment to trade was not a dry abstract theory, but a belief he held due to personal experience and moral conviction, but I am getting ahead of myself for now.

At the age of 19 in 1858, George emigrated to California a decade after the gold rush. With few opportunities for employment, George helped his cousin open a store for gold miners. Eventually George and his cousin had an argument causing George to leave his employ. Contemplating working in the grueling mines, George thankfully decided to find work as a typesetter; however this job was short lived. George quickly found work as a rice weigher in a warehouse. With little money and few friends in his new home, George spent his spare hours studying economics. When the warehouse closed, George was unemployed again. He landed another typesetting job which quickly evaporated.

Though this was undoubtedly a tough period in George’s life, it was in California that at the age of nineteen he met the love of his life, Annie Corsina Fox, a seventeen-​year-​old girl originally from Australia. Annie was orphaned and was under the care of her uncle who upon meeting Henry George quickly rejected him as a candidate for marriage due to his impoverishment. Ignoring her uncle, George borrowed a suit and married Anna without a penny to his name. Though madly in love, the first years of the George’s marriage coincided with the civil war and a miserable job market. The couple moved to Sacramento where George could set type, but the firm George worked for collapsed and upon returning to San Francisco he realized the job market was dire. When Henry and Anna had their second child, George was reduced to begging to feed his family. He recounted that one day he spotted a man and decided if he didn’t hand him any money he would attempt to mug him to feed his family. Thankfully the stranger simply obliged when George asked for the money. Reflecting on this event, George admits that he contemplated killing the man to help his family. Economists today might research and analyze poverty, but few experience the visceral poverty Henry George suffered.

After hitting rock bottom, George finally found a steady printing job for the San Francisco times. Doubling down on his studies to make up for his lack of formal education, George began to write articles on the policy debates of his day. Though it is hard to pin down for certain what George was reading at this time, later in his life we can confirm he had read Adam Smith, David Ricardo, John Stuart Mill, and Robert Malthus. By 1867, George secured a position as managing editor. George began to work for multiple newspapers and even started his own called the San Francisco Daily Evening Post, which he managed as an editor for four years until 1875 when credit issues forced George to abandon his newspaper. George was forced to beg on the streets again, however this time he had no murderous machinations thankfully.

Thanks to the newspaper industry George had found a steady source of income for his family. With his newfound comfort, George began to ponder getting involved in politics. Influenced by his family, George had begun life as an ardent admirer of Lincoln, a Republican, and a protectionist. Though still an admirer of Lincoln, by manhood, George became a Democrat, what was then the party of free trade and low taxes, oh how things change. Throughout his early writings George had made a name for himself as a critic of land speculators, corrupt officials, and railroad interests. He ran for office as a member of the state assembly executives from the Central Pacific Railroad company intervened and cost George his bid for a seat.

But George was not discouraged. In 1876 he was appointed state inspector of gas meters, a job he took seriously working tirelessly to improve the safety standards of California’s infrastructure much to the chagrin of gas related business interests.

For the first time in his life, George experienced a degree of economic stability. While living in Sausalito in 1877, looking over the San Francisco Bay, George reports he had an epiphany that explained why such prosperity and poverty can coexist. While riding his horse, George stopped and conversed with a cattle driver asking him how much the land was worth. The man replied he did not know what the land was worth but you could buy an acre for a thousand dollars a pop. George explains that like a flash it came to him, “with the growth of population, land grows in value, and the men who work it must pay more for the privilege.” A potential article for a magazine eventually grew thank to the encouragement of friends into Progress and Poverty, Henry George’s magnum opus.

In Progress and Poverty George aimed to identify how in an era of unprecedented prosperity there was also unprecedented poverty. George argues that the wealth from recent progress is concentrated in a small class of people who boast massive personal fortunes leading to massively unequal distributions of wealth. Thus progress and poverty strangely coexist. While visiting New York, George was shocked to see so many living in poverty in a well-​established city compared to the frontiers of California.

George discusses some possible solutions to poverty including reducing the national debt, educating workers, unionizing efforts, and socialist means such as redistributing land or government intervention in the economy. George rejects all of these answers as none attack the true cause of poverty.

Henry George follows a similar philosophy to John Locke, he argues that the natural right of ownership is derived ultimately by the producer of said goods. George explains that our right to the fruits of our labor come from “the natural right of man to himself.” But this means a distinction needs to be made. For George, humans can only rightfully hold some as their ow if its source is human labor. For George, there exists “ a real and natural distinction” between the results of labor and the “gratious offerings of nature.” For George there is no moral basis for private property in land, the current distribution of land is not based on any principle of justice or natural law but instead buttressed by the artificial laws of man.

If a man be rightfully entitled to the produce of his labor, then no one can be rightfully entitled to the ownership of anything which is not the produce of his labor, or the labor of some one else from whom the right has passed to him. If production give to the producer the right to exclusive possession and enjoyment, there can rightfully be no exclusive possession and enjoy- ment of anything not the production of labor, and the recognition of private property in land is a wrong.

Now I know what you might be thinking, how can this guy be a liberal if he is against private property of all things?

But George is no socialist or communist by any means. He promptly rejects the idea of distributing land equally explaining that “an equal distribution of land is impossible, and anything short of that would be only a mitigation, not a cure, and a mitigation that would prevent the adoption of a cure” George argues that land ownership is not the target in his sights but instead the what he argues are the unjust earnings of landowners, rent.

But why does George believe rent is unearned exactly? By George’s standards what we have a moral right to hold onto is produced by our individual labor. Imagine a newly emerging city, a wealthy tycoon begins buying up apartment blocks. Being a newly founded city the apartment blocks have few amenities or options for transport. But over time roads are paved, infrastructure is built, and businesses open up near the tycoon’s apartments. The value of the tycoon’s apartments has increased thanks to their central location and the bustling environment, but the tycoon did not produce any of the wonderful things that make his buildings worth living in to begin with.

A huge amount of the wealth generated by technology and the free market possessed by monopolists and landowners, who, through economic rents become wealthier. While landowners and monopolists thrived, everyday workers experienced increasingly burdensome taxes all while natural resources are monopolized and restricted leading to a sort of wage slavery where the average worker has no choice but to take the work they can find.

Henry George posed a unique solution to this problem, one that is not wholly socialist nor wholly capitalist, yet appealing to both sides’ intuitions. Landowners can hold onto their land and hold onto any improvements they make to their property, no mass expropriation is necessary. However, landowners pay what is now dubbed a land value tax, the rent or accrued gains of land would be taxed by the state. Now libertarians might be cringing but here is the catch, Henry George argues the land value tax should be the only tax. In the compromise from private ownership to private possession, George recommends the removal of all taxes upon labor or any that distort market prices. That means in the Georgist utopia, tariffs, sales taxes, and income tax are all replaced by the land value tax, a tax that specifically targets the well to do. He explains that “We may safely leave them the shell, if we take the kernel. It is not necessary to confiscate land; it is only necessary to confiscate rent.”

Some classical liberals and libertarians might be uneasy with Henry George and decry him as a socialist. But George’s contemporary Karl Marx loathed George’s land value tax and described it as “merely an attempt, tricked out with socialism, to save the capitalist régime and, indeed, to re-​establish it on an even broader basis than at present.” Marx is correct, Henry George was no enemy of capitalism or free markets. Unlike socialists, George saw no contradiction or tension between labor and capital. He observed that socialism

“fails to see that oppres- sion does not come from the nature of capital, but from the wrong that robs labor of capital by divorcing it from land, and that creates a fictitious capital that is really capitalized monopoly.” Furthermore he argues that “it would be impossible for capital to oppress labor were labor free to the natural material of production.” George was an advocate of markets and wanted to see any tax upon labor or income abolished. While some might refer to Georgism as a sort of third-​way between capitalism and socialism, Henry George undoubtedly saw the free market as an engine for prosperity. Later in life, Henry George would write, “we see no evil in competition, but deem unrestricted competition to be as necessary to the health of the industrial and social organism as the free circulation of the blood is to the health of the bodily organism.” While some might be uneasy with Henry George’s system of taxation, it is undeniable that he is a friend of markets, the institution that forms the lynchpin of classical-​liberal thought.

After spending a year and a half writing Progress and Poverty it was finally published in New York in 1880. Though sales started slow, they rapidly grew alongside George’s reputation. Progress and Poverty eventually sold three million copies, an unheard of achievement for a book on economics. The only book sold more than Progress and Poverty in the US during the 1890s was the Bible, a testament to Henry George’s newfound popularity.

George embarked upon a tour of Europe within the year preaching his solution to poverty. Despite his English heritage, George received his most enthusiastic welcome from Ireland, a nation then under the thumb of the British empire with most of the population working land rented to them by a select few powerful landlords. After a year in Europe, George returned to America and began touring the country giving lectures on his book and distributing cheap copies that sold at an uncanny speed for a book on economics of all things. Movements across the US and Europe sprung up demanding land reform using the arguments of Progress and Poverty.

In 1886, George ran for mayor of New York City against Abram Hewitt, a beneficiary of the Democrat controlled political machine of the time. Fearing George’s popularity, Democrat members offered him a congressional seat if he would simply drop out of the election. George declined, saying that he wanted to “raise hell.” George lost the election, possibly due to foul play, but either way it was an impressive showing with him beating the republican candidate and future president Theodore Roosevelt. George ran yet again for office in the 1887 election for New York’s secretary of state but he came in a distant third.

Roughly during the same period of political activity, George wrote Protection or Free trade. Following the depression of 1873-1878, the issue of tariffs took the national stage. After the blinding success of Progress and Poverty, George was ready to spread awareness of the destructive nature of tariffs. In Protection or Free Trade, George argues that the real world effects of tariffs is “to lessen aggregate wealth, and to foster monopolies at the expense of the masses of the people.” Tariffs can never make a nation wealthier. If the US was at war with another nation the navy might establish a blockade around the country or the legislature might pass sanctions on the opposing nation. George believed that tariffs are no different. He wrote “what protection teaches us, is to do to ourselves in times of peace what enemies seek to do to us in times of war.”

George illustrated how most of the protected industries in the US were capital intensive, not labor intensive. This means a few rich capitalists are increasing their wealth using poorly thought out laws and tax payers money. Dispute all of the rhetoric of protectionists, George explained that “the real motive of protection is always the profit of employing the capitalist”, the benefits of tariffs are not felt by the everyday worker. Far in advance of his contemporaries, George saw how the machinery of the state is hijacked by concentrated interest groups to pass laws that are beneficuial to a small minority but harmful to the general public.

But George’s argument for free trade went beyond mere efficiency, he viewed the free market as a vehicle of moral and social change. He writes that trade has always been “the extinguisher of war, the eradicator of prejudice, the diffuser of knowledge” because thanks to trade and cooperation with others “prejudices are worn down, wits are sharpened, language enriched, habits and customs brought to the test of comparison with new ideas.” A market unhampered by unnecessary restrictions or protectionist policies, would allow for greater progress materially, but also morally.

After years of constant activity touring across the country, in 1890 George suffered his first stroke. Though substantially weakened, George was determined to make his mark in politics. In 1897 he campaigned again for Mayor of New York City knowing full well this campaign might be his last. Tragically, George suffered a second stroke four days before the election and passed away.

Over 100,000 thousand people turned out to observe his funeral procession. Newspapers both domestic and abroad were filled with obituaries dedicated to the great Henry George. There has never been since such a public outpouring over the death of an economist. But Henry George was much more than an economist, he was a moral crusader for the rights of the poor. Unrelentingly dedicating the latter half of his life to the alleviatuion of poverty and the removal of tariffs.