The Social Charge On Henry George and the question of private property
[email protected] 4th February 2001 Revised 27th April 2003
It is known that the Magisterium of the Church, from Rerum Novarum onwards, maintains that private property is by nature loaded with a social charge. Quoting Aquinas, Leo XIII says that "man should not consider his outward possessions as his own, but as common to all, so as to share them without difficulty when others are in need" and adds, "it is a duty to give to the indigent out of that which is over (n. 24)."
Centesimus Annus spells out: "Ownership of the means of production, whether in industry or agriculture, is just and legitimate if it serves useful work. It becomes illegitimate, however, when it is not utilized or when it serves to impede the work of others in an effort to gain a profit which is not the result of the overall expansion of work and the wealth of society, but rather is the result of curbing them or of illicit exploitation, speculation or the breaking of solidarity among working people (n. 43)."
It has never been the Magisterium's task to propose practical solutions.
It is less known that the principle of the social charge was in force throughout Christendom, for ecclesiastical as much as for secular power, during the seven centuries of feudalism. The feudal lord, controlling land on the king's behalf, discharged the costs of administration and defence. The Church, controlling land much on the same behalf,1 discharged the costs of social services: health, education, hostelry, etc.
The people, largely dedicated to agriculture, paid taxes in kind to whatever feudal lord they were vassals to. Such tax amounted to about four weeks of work. To live, a farmer and family needed another 14 weeks. The extras (bacon, beer and such luxuries) required another ten weeks. The 150-odd days left over were days of leisure dedicated to help in building cathedrals, to craft household objects of common use, etc. Whatever still remains of both are still objects of admiration or contemplation.
The English barons of Magna Charta fame (1215) first cracked the system. Much like today's transnational corporation, they wanted freedom, but for themselves, not for the people. They wanted to be free from the obligations of defence and administration, i.e. from the social charge attached to ownership of land. From England, baronial irresponsibility spread like an oil slick throughout Christendom.
Relentlessly, the responsibility for the costs of defence and administration moved from the nobility to the sovereign, now forced to tax the people to maintain bureaucrats and soldiers. Social security remained in the hands of the ecclesiastical bureaucracy, but not for long. The confiscation of Church property, far from enriching the royal coffers went to the already rich landlords. These, now free from all obligations, rack rented their tenants leaving barely enough for subsistence. Later the same landlords devised indirect taxation to get rid of whatever shred of fiscal responsibility they still had and to transfer the whole burden onto the people.
Slavery, slowly ousted during the first millennium, sneaked in during the second. There exist in fact two ways of unjustly exploiting the work of others: either considering their persons as private property, or preventing them from accessing land, thus forcing them to work for whoever monopolises it. A philosophical distinction between the two species of slavery is possible, but not very useful for those at the receiving end of it.
The expellees from their ancestral lands sought refuge in the commons, until their enclosure followed by a second expulsion towards the end of the 18th century.
What saved the landless from death by starvation was the Industrial Revolution. Far from causing poverty, as careless historians want us to believe, the Industrial Revolution alleviated its hardest effects, albeit unwittingly.
"Reverend" Malthus added insult to injury by blaming the landless for overpopulating (!) the slums around the cities, and proposing that they breed less. This monstrous lie survives today in quite a few so-called history textbooks. Malthus was more moderate than Jonathan Swift, who having noticed the phenomenon a century earlier, had actually proposed (tongue in cheek one hopes) to serve the babies of the poor as food at the tables of the rich.
Others also noticed. Quesnay (1694-1774) "the European Confucius" as he was dubbed, recommended the impôt unique on the land as a modern means towards replacing the old social charge. Turgot (1727-81) tried to break the tax-free lifestyle of the privileged classes without social duties, but the landlords fought back causing his ruin. Adam Smith (1723-90) noticed too, but the fat pension by the Duke of Buccleuch prevented him from biting his "benefactor's" hand. The last to take notice was Prof. Thorold Rogers (1823-90), expelled from his Oxford chair in 1867 for having dared putting his finger on land grabbing, the real cause of British (and European) poverty.
Apparently unconnected symptoms pop here and there throughout the centuries. When the German landless spurred on by Luther were leaving 100 000 casualties on the battlefields of the Peasants' War, massacred by their landlords, the Spanish and Portuguese landless were crossing the Atlantic as "conquistadores." It didn't take long before they changed from European landless to American landlords. When the Jesuits tried to thwart them by founding their Reductions, thus hindering their attempt at enslaving the Guaraní Indians, the landlords declared war, winning it in about two centuries.
The French nobles, called to Paris by Louis XIV to prevent a new Fronde, lived carefree in the capital, pocketing the rent of land left in the care of State bureaucrats. The same phenomenon was taking place at the same time in Sicily, giving rise to the Mafia. The ruins of the feudal system served as seedbeds for the weed of landlordism.
The large estate, which had been the ruin of Rome in Pliny's time,2 was now becoming the ruin of Christendom. In Europe it was serfdom; in America, traditional slavery by importing shiploads of Africans bought cheap on the West coast of the continent. The slave trade could not go to the Old World, already full of landless. Indeed, the British government used to get rid of "surplus" population by systematically deporting petty criminals to recently discovered Australia, with its millions of square miles easily grabbed from the Aborigines.
At the time when Don Bosco (1815-88) was gathering his urchins in the streets of Turin where the same policy had thrown them, the blight was wreaking havoc on the potato crop in Ireland, the only resource left to its landless. Eight million Irish, kept out of their land by a couple of a hundred landlords, were reduced to mixing turf and marine algae to manufacture their own soil, with which to fill rock crevices left them for subsistence. The landlords went on exporting produce, indifferent before hunger and misery. Who did not starve migrated. Textbooks still "explain" that "overpopulation" did it. The Irish and later the Italians, militarily weak, went to enrich America at their countries' expense. The British, militarily strong and chased out of America three generations earlier, found their opportunity in Africa. They enclosed all the land they could. The locals had to work for them, as any landless must to survive.
The similarity between the two forms of slavery came dramatically to the fore at the end of the American Civil War (1861-65). The economic victors were the militarily vanquished plantocrats and former slave owners. To pay wages was much cheaper than to feed, clothe, shelter and look after a slave.
Henry George (1839-97)
On 27th January 1865, a 26-year old jobless printer accosted a well dressed gentleman in a San Francisco street, begging five dollars.
The stranger produced the five dollars. "If he had not," the ex-printer would recall years later, "I think that I was desperate enough to have killed him."
The printer was Henry George. At his death, this is what said of him:
Leo Tolstoy (1828-1910): People do not argue with the teaching of George, they simply do not know it. And it is impossible to do otherwise with his teaching, for he who becomes acquainted with it cannot but agree.
For more information consult www.henrygeorge.org and like sites.
The doctrine: Progress and Poverty
Henry George was born in Philadelphia, Pennsylvania, into a devout Episcopalian family whose piety would mark him for life.
After primary school he went out to sea as a cabin boy, sailing across the Pacific to Australia and India. His diary, still extant, showed his budding writing talent inherited from his mother, a primary school teacher.
Back in Philadelphia he apprenticed himself to a printer, but because of unemployment he migrated to San Francisco, at the peak of gold fever in 1849. He had no luck as a digger. Two failed attempts brought him hunger and vagrancy.
He tried his hand at printing once more, but work and unemployment alternated out of control. Young Henry was powerless towards getting a stable, well-paying job.
In 1861 he met Annie Corsina Fox, a 17-year old orphan, a Catholic. During an umpteenth economic crisis, broke and jobless, he proposed to her. He drew a 50-cent coin from his pocket:
After a short period of prosperity, an economic downturn sent the print shop into bankruptcy towards the end of 1864. It was destitution, which forced him to beg the five dollars to give Annie and their two children something to eat.
For quite some time a question tormented him: Why are wages always higher in new territories than in old ones? Why do prosperity and poverty not only appear together, but also the gap between them ever widens? Why is charity, public or private, impotent to eliminate social evils like vagrancy, begging, prostitution?
If he had seen progress grow side by side with poverty in San Francisco, he would see their maturity in New York in 1869, during a vain attempt at subscribing the San Francisco Herald to Associated Press. The "shocking contrast between monstrous wealth and debasing want," in his own words, led him "to seek out, and remedy if I could, the cause that condemned little children to lead such a life... in the squalid districts." The quest became an obsession.
The answer came to him not in New York but in San Francisco a few months later. During a ride in the hills east of the city, he briefly dismounted. He asked a passer by, just to converse, what the price of land was around there. "I don't know," the man replied, "but further down someone's asking $1,000 for an acre."
What was happening "further down" for an acre of land to be worth a fortune in the California of 1869?
The transcontinental railway was about to arrive. Land values in the whole Oakland region were shooting sky-high, as speculators fought to assure possession of land before the arrival of those who would need it to work.
George understood. With the increase in population, land values also increase. Those who need it must pay for the privilege of using it. But land is the primary source of all that is needed for human beings to live. If there is such thing as a universal right to life, there must also be a universal right to the gifts of nature necessary to sustain life. Bad laws allowing a privileged minority to monopolise landed property, confer on the same class the power to exploit and oppress the rest. All ideological debate about republicanism, democracy, socialism, communism etc. is but idle talk.
The remedy suggests itself. Justice demands that private property be loaded with a social charge with which to cover public expenditure. Let anyone who occupies land pay in direct proportion to quantity and quality subtracted from common natural resources. And let him recover part of that value in the form of public services. No one would thus be deprived of the fruits of one's labour, and taxation would no longer fall on production.
There was nothing new in Henry George's vision. He had reached the same conclusions as had the feudalists, Quesnay, and Turgot, whose writings he was unaware of. He began to gather material and to write.
In 1879, at the age of 40, he finished the manuscript of Progress and Poverty. As he himself wrote years later,
George knew he had written an important book. He sent one of the first copies to his father Richard in Philadelphia:
All the prophecies came true. By 1905 Progress and Poverty had sold two million copies. By 1920 it had been translated into 24 languages. It has sold more than all of Marx's works put together, and is still in print.5 We shall see why it continues to be banned from all the faculties of economics.
The merit of the book is to have touched a raw nerve: how to turn land ownership from an instrument of oppression into one of solidarity and social peace.
A careful reader will probably have reached the conclusion that Georgism transcends capitalist and Marxist platitudes. In George's own words,
Marxism must of necessity propose a remedy as defective as its diagnosis. If capital and labour are the only two factors of production, land must be assimilated to the first, and therefore nationalised together with all the means of production. The result is that everybody is landless, and all are forced to work for the State, the sole landlord. In the same terms employed above, C, D and E coalesce into the Moloch socialist State, whose bankruptcy the last 70 years of the 20th century have proved in no uncertain terms.
Georgism proposed to divert the attention of tax collector D from the fruits of A and B's exertions towards the fruits of non-labour of landlord C and parasite E.
Result: no one would find it profitable to be landlord C or monopolist E without at the same time being either capitalist A, or labourer B, or both. In other words, all would enjoy 100% of their fruits of labour, plus the fruits of the social charge spent on public services. Social security would no longer need to be run by State machinery, for everyone would have an income sufficient to meet the costs of education, health and the rest. Bureaucracy would be deflated to a bearable minimum of the extent to which capitalism or Marxism have inflated it... I go no further. Let the reader work out the practical consequences that a restored social charge on private property would entail.
Invited by the Irish National Land League, struggling at the time for the elimination of the unjust exploitation of tenants by absentee landlords living it off in Paris, London and other European capitals, George resided in Ireland during a year as correspondent of The Irish World of New York. He was struck to find that the bishops of Clonfert and Meath had reached the same conclusion as Progress and Poverty. The rest of the Irish episcopate was of the contrary opinion, supporting to the hilt monopolistic landed property without social commitments.
120 years later one can see a large problem of misunderstanding. George talked in terms of "confiscation of rent," sounding dangerously similar to the "confiscation of private property" recommended by the Marxists, who were beginning to attract attention. The misunderstanding provoked a crisis still today at the basis of the practical failure of the social doctrine of the Magisterium.
Back in America in the fall of 1882, in the wake of hundreds of speeches and conferences, Henry George had another pleasant surprise: his doctrines were openly being canvassed by Dr Edward McGlynn, parish priest of St Stephen's in New York. Two years Henry George's senior, he had been ordained priest in St John Lateran in 1860. Progress and Poverty had so struck him as to turn him into an indefatigable Georgist. His fiery speeches had convinced thousands of people.
Dr Michael Augustine Corrigan was at the time (third) Archbishop of New York, helped by his Vicar General Msgr Thomas Preston. America was still mission country, its ecclesiastical affairs being conducted by Propaganda in Rome. Corrigan and McGlynn, former classmates in Rome, were soon on collision course.
30 thousand signatures gathered by George's friends had given him the mandate for his candidacy as Mayor of New York in the 1886 elections. McGlynn introduced him to Archbishop Corrigan. In vain did George present him with copies of all his books, and in vain did he mention that the Irish bishops of Clonfert and Meath concurred with his views. Corrigan not only absolutely refused to listen, but also suspended McGlynn for supporting George. The civic candidate of Tammany Hall, Abram Hewitt, was so terrified at a possible triumph of George to ask Archbishop Corrigan for support. Corrigan condemned Georgism as "erroneous, dangerous and contrary to the teachings of the Church." At the same time he solicited Rome to have McGlynn excommunicated and Progress and Poverty placed on the Index of Forbidden Books.
Corruption, intimidation and fraudulent counting conspired to bring about Hewitt's victory over George by 90 thousand to 60 thousand votes. On 14th January 1887 Cardinal Simeoni of Propaganda requested McGlynn publicly to retract George's theories and to go to Rome. McGlynn refused, alleging health reasons. It was true, but the basic reason for the refusal was the absence of specific charges, as well as of a canonical trial justifying the episcopal decree of suspension. Cardinal Gibbons of Baltimore, favourable to George, was in Rome at the time. He convinced the Vatican not to place Progress and Poverty on the Index.
Things precipitated. On 4th July 1887, on the expiry of the 40 days of grace, McGlynn was excommunicated, so to remain for five years.
Such condition, however painful, made it possible for him to denounce certain abuses of ecclesiastical power that as a communicant priest he could not have. The most glamorous was the denial of Christian burial to John McGuire, a labourer who had died of heart attack at the meetings of the Anti-Poverty Society of 17th February 1887. For two years the deceased's brother, in the absence of ecclesiastical tribunals, had pursued the case all the way up to the Supreme Court, but secular justice had declared itself incompetent to judge the case.
But when Prince Rudolf of Absburg, who had died suicide at Mayerling in February 1889, was granted a religious funeral with full pomp, McGlynn made a preferential option for the poor:
With the ceased duties of office, McGlynn was also able to absolve the painful but necessary function of looking after his sister's four young children orphaned by the sudden death of both parents in a matter of weeks.
"Your Holiness:" Open letter by Henry George to Pope Leo XIII
The encyclical Rerum Novarum saw the light in May 1891, while Henry George was busy compiling his magnum opus The Science of Political Economy. Spotting in the document a condemnation of his doctrines, George stopped at once (the work would remain unfinished) to write an open letter of more than 100 pages to Leo XIII. The opening sentence reads:
Comparing the two doctrines, one cannot help noticing that Leo XIII's argues against socialism in the latter's terms and strategy, i.e. considering capital and labour as the sole factors of production and distribution. It follows that the remedies proposed in the encyclical cannot go beyond recommending Christian charity between capitalist A and labourer B, plus a certain amount of State intervention to regulate possible abuses. The unjust privileges of landlord C and monopolist E remain intact, so that tax collector D cannot but go on vexing A and B. George did not hesitate in baring the consequences of this omission:
It was the policy that would explode in the carnage of the Great War.
Globalisation is doing just that before our very eyes, especially by exporting industrial plant from high-wage to low-wage countries like China.
It was by a deep impulse that of old when threatened and perplexed by general disaster men came to the oracles to ask, In what have we offended the gods? Today, menaced by growing evils that threaten the very existence of society, men, conscious that something is wrong, are putting the same question to the ministers of religion. What is the answer they get? Alas, with few exceptions, it is as vague, as inadequate, as the answers that used to come from heathen oracles.
The tone of the letter is evidently not that of a Catholic, but George managed to unite severity to an uncommon respect. He concluded:
Even this closing sentence was prophetic. Leo XIII survived George by six years and McGlynn by three. The pope was handed a copy of the letter, translated into Italian and richly bound, from the Prefect of the Vatican Library. He did not reply, but acted.
It was evident that Vatican remote control of the ecclesiastical affairs of the United States was the first anachronism and anomaly to set right. Archbishop (later cardinal) Satolli arrived in America in 1892, with instructions to remain there as first Apostolic Delegate and to sort out all the possible differences between bishops and clergy, starting with the McGlynn case.
Satolli convoked McGlynn to the Catholic University in Washington. A commission of experts, excluding friends and sympathisers of the excommunicated priest, asked McGlynn to draft a written summary, as concise as possible, of Georgist doctrine. They found it exempt from error and reinstated McGlynn. By Christmas he had the great joy of being able to re-celebrate Mass. He died as parish priest of Newburgh on 7th January 1900. George had gone to his grave ahead of him, cut down by a heart attack four days ahead of the elections of 1997.
Marx defrauds George of the 20th Century
What would have been a Georgist 20th century instead of one imbued with the doctrines of the "prince of muddleheads" as George dubbed Marx?
We shall never know. What cannot be denied is the resounding failure of all economic doctrines that in vain seek for the solutions of the social question by putting the finger not on the sore but on other features of the wounded body.
Serious students of current affairs know well that the American masses are not socialist, but conservatives. U.S. billionaires tend to be socialist and collectivist, the more, the more money they have. Marx is the prevailing oracle in the most important universities of the country. In Great Britain the London School of Economics, founded by the Webbs in the 1930s, has the precise aim of spreading the gospel of Fabian socialism. Almost all Third World leaders educated in English-speaking universities are Marxists, either in name, or in fact, or both.
What does Marxism have to offer? Power. Seeking power, and having money to buy it with, all one has to do is to capture the centres of intellectual formation, which is what university founders did at the beginning of the 20th century. That's why to the question, "Have you ever heard of Henry George?" every student of economics answers in the negative.
When it is not Marxism, the reigning paradigm in the economics teaching is neo-classicism. It teaches that landlord C, capitalist A and monopolist E are one and the same person. Only tax collector D is allowed to vex independently worker B and capitalist (non-landlord) A. The difference with Marxism is not that great.
21st Century on the march
Modern economics rightly includes, in the definition of land, all the natural resources uncovered by 19th and 20th century technology. Beginning with the electromagnetic spectrum, one can go on with the capacity of the environment for absorbing polluting substances, the extraction of the various forms of energy, air and cosmic space beyond earth and water, etc. If those who make use of such resources were to pay a social charge for value subtracted from them, to be used as public revenue for public services, the gains due to their exertions would stay 100% in their pockets. And reform would be true and permanent, thus putting an end to a century-old anomaly cause of so many evils.
The other plague
If land monopoly has been, and continues to be, instrument of oppression and exploitation, money monopoly, or usury, is not far behind. Death caught up with George before he could develop his thought in the unfinished work on political economy. The one who put his finger on this other sore, and as radically (i.e. ignoring who should control money, but paying attention to money as such) was Silvio Gesell (1862-1930), who will be the object of another article.
1 Donations, grants and purchases gave control to monasteries, dioceses and the papacy over very large stretches of land, the rent thereof going to social security but also to benefices great and small. back
2 Latifundia perdidere Italiam in his own words. The slaves necessary for their cultivation were not ready to risk their lives to defend a land not their own. back
3 Letter to Fr Thomas Dawson, 1st Feb. 1883. back
4 Letter to Richard George, 15th Sep 1879. back
5 The Schalkenbach Foundation, N.Y., keeps all of H.G.šs works in print. back
6 The Standard, May 14th 1887. back
7 The Corruption of Economics. Shepheard-Walwyn (Publishers) Ltd. London 1994. back