The Search for the Just Society
Edward J. Dodson
INSTRUCTOR'S MANUAL, LESSON 7
This lesson presents the nineteenth century influence of Marist
and Socialist philosophy as a response to the recognition that
industrial-landlordship (incorrectly but commonly referred to as
capitalism) had to be restructured to meet the needs of the general
population and not just a privileged few.
The philosophy of change was more Marxist (and, therefore, more
radical) in central Europe and France.
In England and the United States, where a general spirit of
individualism prevailed, reform took a more moderate path. The
direction of reform was spearheaded in England by intellectuals who
formed the Fabian (Socialist) Society and by labor leaders. In the
United States, a new class of university educated professionals and
social scientists initiated the Progressive movement.
Quite apart from these efforts, Henry George and those he
attracted to his cause, espoused the restructuring of all societies
based on principles of justice contained within a philosophy
appropriately referred to by the term cooperative individualism
(a term attributed to a supporter of Henry George's ideas named E.B.
THE RISE OF MARXIST-SOCIALISM IN EUROPE
By the mid-1800s, Europe was experiencing tremendous social and
political unrest. The French and German people lived under
conditions approaching military dictatorship.
Two socio-political philosophers appeared calling for dramatic
structural changes. The first was Pierre-Joseph Proudhon, the
philosophical leader of the communitarian movement in France, who
advocated the creation of a society built on voluntary associations.
The second was Karl Marx (working in collaboration with Frederick
Engles), who called for an end to private property and communistic
ownership of the means of production.
Without competition for property accumulation, Marx predicted the
State would wither away, an unnecessary relic of class conflict.
Marxism is fundamentally redistributive concerning wealth, calling
for a policy of "from each according to his ability, to each
according to his need."
Another fundamental tenet of Marism is the labor theory of
value, which states that the value of wealth is related to the
quantity and quality of labor required in production. Neither the
contribution of capital goods nor the willingness of others to give
wealth or services in exchange are considered.
In contrast, Henry George's theory of value is based on demand.
The price one is able to obtain for goods or services in the
marketplace establishes value in exchange. While one generally would
not expend the labor or capital goods on production without the
expectation of some specific ability to exchange the finished goods
for other goods or services, changes in demand may either increase
or decrease what other are willing to give in exchange for what one
produces. This is the inherent risk of markets.
The Communist movement in Europe was severely suppressed by the
governments; Marx and Engles were forced to flee the continent for
England, where Marx had limited influence.
In the 1880s, a group of English intellectuals and political
radicals formed the Fabian Society to advance an agenda that
combined government regulation (and limited nationalization) of the
means of production, while protecting a considerable degree of
private property in consumer goods.
Leading socialists included George Bernard Shaw, Eugene Debbs, and
Many Fabians in Britain and Progressives in the U.S. credit their
zeal for socio-political reform to Henry George, who wrote and
lectured extensively between 1880 and his death in 1897.
PROGRESSIVISM IN THE U.S.A.
Large-scale industrialization after the War Between The States
required a large (and cheap) labor pool. Immigration to the nation's
large cities was encouraged but resulted in overcrowding, increased
crime, poverty, and the threat of plague associated with unsanitary
University-trained architects, engineers and social scientists
began to call for rebuilding of the nation's decaying cities, the
establishment of free public education (to Americanize
immigrants and their children), libraries and hospitals. Another
aspect of this movement was an effort to reform the political system
and end widespread corruption; this resulted in the secret ballot,
civil service and open primaries.
In late nineteenth and early twentieth century, the Progressives
made significant strides in gaining government support for reform.
Theodore Roosevelt and Woodrow Wilson were each considered as
leaders of the Progressive movement. Roosevelt was an unapologetic
THE APPEARANCE OF HENRY GEORGE
AND HIS CHALLENGE TO THE SOCIAL SCIENTISTS
Henry George was a journalist and newspaper editor who became
seriously interested in finding solutions to the mass poverty that
plagued the U.S. and other societies during his lifetime.
George identified characteristics in the socio-political
arrangements and institutions of all societies that virtually
guaranteed the worsening of poverty, even under conditions of only
modest population increases.
George's major contribution to science was in the skeptical
re-evaluation of all that the classical political economists had
written about human behavior and the natural laws operating in the
production and distribution of wealth.
With respect to human behavior, George used history and
observation, as well as reason (empiricism and rationalism) to
support a crucial general principle; namely, that man seeks to
satisfy desires with the least exertion. In Lockean terms, this led
him to conclude that individuals will act to monopolize natural and
unnatural opportunities (i.e., seek privilege or license under
whatever societal structure they live under).
George accepted (as more nearly self-evident than had Hobbes and
others) that all human beings had rights inherent to our equality as
members of the same species.
Our most basic human right is that of an equal opportunity for
survival. And, since one cannot survive without access to nature and
the resources naturally available, our rights extend to equal access
to the earth.
Just socio-political arrangements, then, exist only when all
individuals are guaranteed the right of equal access to the natural
opportunities provided by the earth.
Equal access cannot be achieved,
practically speaking, without an understanding that the
efficient use of land for purposes such as agriculture,
forestry, mining, etc. require that some individuals are
permitted to control large tracts of territory. Also, within
towns and cities, the most central locations are unique and
normally come to have a value superior to those less
centrally-situated. This presented the challenge to Henry George
and other political economists to devise a means by which
equaity of opportunity could be reconciled with these practical
From this, George built a definition of natural property that tied
ownership of property to production. One acquired property by
applying one's labor to the earth and producing something material
(or by providing services to others that in some meaningful way
TITLEHOLDINGS TO NATURE
Landownership As The Primary Form of Economic License
Nature has a zero production cost (i.e., no labor is exerted to
produce nature). The earth has been provided to mankind for
exploitation; thus, our moral sense of right and wrong tells
us that individual or group of individuals has a legitimate claim to
nature (i.e., to locations and natural resource lands) as private
Locke Differs From George
John Locke argued that once an individual applied his labor to
nature, the two became intertwined and the contribution of the
individual could no longer be distinguished from nature, justifying
claims to property in nature.
George observed that the free operation of buying and selling in
the market would, in the form of price, reveal the value of
whatever improvements were added by individual effort versus the
price people were willing to pay for access to unimproved sites of
equal natural amenities.
When society allows individuals to monopolize a part of nature for
whatever purpose, society is effectively granting to those
individuals a privilege or license. Whatever exchange value accrues
to such a titleholding is distinct and apart from the property the
individuals produce by applying their labor (and capital goods) to
When the availability of free land of equal potential productivity
disappears as a result of society handing out and protecting
titleholdings, then the demand by non-titleholders for access to
nature allows the titleholders to charge a fee, in effect, make a
claim against the production of others simply because of possession
of the legal evidence of ownership rather than a moral claim to
LICENSE TAKES TWO FORMS
Titleholdings (i.e., license) in nature that give special
advantages in commerce to individuals or groups are economic
licenses that generally come to have an increasing exchange value
(i.e., an increasing claim on production).
Justice demands that these licenses be regulated and that any
exchange value associated with such licenses be collected by
government for distribution to all citizens, equally. By the
democratic decision-making process, the citizens may direct that
government perform certain services that private citizens are unable
to provide efficiency (e.g., societal defense from external attack).
Individuals also exercise licenses that violate fundamental norms
of moral and ethical behavior. These are generally described as
Criminal licenses by their nature have no exchange value; rather,
they involve actions that impose physical harm on others or damage
to the property of others. Preventive measures must be provided by
government (by appropriate use of police powers); or, when this
fails, by the imposition of punishments.
The nature of punishments involve principles of justice of another
sort. Democracy alone will not guarantee establishment of
punishments appropriate to the criminal license exercised. Moral and
ethical principles must be applied; and, here, a society most
plagued by crime tends to be most violent in its response to crime.
LAWS MUST MEET AN OBJECTIVE TEST OFJUSTICE
A synthesis of the socio-political philosophies of Locke, George
and Mortimer Adler is best represented by a fundamental principle of
cooperative individualism contained in the following
definition of liberty:
Liberty is freedom constrained by justice.
And, justice demands that the exchange value of economic licenses
is collected by government (as agent for all individuals within
society) and distributed equally.
Also, justice demands that criminal licenses are prohibited and to
the extent possible prevented. Where criminal licenses are taken,
action by government is taken to ensure such crimes are not repeated
and that the victims are justly compensated by the criminal.
Thus, a society is just the degree to which its laws are
consistent with the above principles and the extent to which
government enforces just laws.
INCREMENTALISM AND THE WELFARE STATE
The Experience of the West
Although the writing and public speaking of Henry George
influenced thinking of a large number of reform-minded individuals
throughout the world, the social movement he started lost momentum
after his death in 1897.
Hatred of the aristocracy eventually brought a peasant revolution
to Russia, out of which the Bolsheviks (under the leadership of
Lenin) emerged as the architects of a new society. Their rhetoric
was Marxist (i.e., communist) but their actions established a
centrally-controlled form of state-socialism.
Elsewhere in Europe, the military states continued to control
socio-political institutions in conjunction with a lingering landed
aristocracy and mercantilist industrial enterprise.
Political, religious and economic oppression sent millions of the
Old World's citizens to North and South America. In Britain, the
Fabian socialists eventually gained support from industrial
A growing Labour Party (sometimes joined with Liberals who adhered
to many of the principles of cooperative-individualism) fought for
The Conservatives resisted and fought to retain the privileges of
the status quo.
PROGRESSIVISM BECOMES LIBERALISM
In the U.S. the Progressives were successful in getting many
reforms adopted. Yet, some were ill-conceived or subverted by
Up until the 1930s and the Great Depression, the adoption of
social welfare program were modest and very incremental. Government
intervention in the economic system was largely restricted to the
creation of the Federal Reserve System (another compromise that
eastern banking interests conceived to prevent creation of a central
bank actually owned and operated by the government).
The Depression brought massive unemployment and unrest. Franklin
Roosevelt, who had been elected on a platform of fiscal conservatism
and a balanced budget, introduced a program of government
expenditures on public works to stimulate production and give
workers purchasing power. This effort was modest and designed to
prevent what many felt could become a Russia style upheaval.
Toward the end of the Second World War, political leaders and
professional economists pressed for greater safeguards against deep
and prolonged recessions or depressions. At the same time, social
legislation was created to more evenly balance the power between the
industrial-landlord group (owners of most of nature and capital
goods) and the propertyless who worked for legal tender wages.
Government fiscal and monetary policy was from 1945 on directed by
demand management theory, relying on loosening or tightening credit
availability (and price of credit) as well as changes in taxation to
stimulate investment to maintain full employment.
Tax theory made no distinction between income received based on
the exchange value of titleholdings and other licenses as opposed to
either production or services rendered.
Supply-side economic theory arose in the late 1970s to argue that
heavy taxation acted as a disincentive against investment in plant
and equipment. As a result, in Britain, the U.S. and other countries
the marginal tax rates on high incomes and the tax rates on
so-called capital gains were reduced. The longer-run results of this
strategy were two-fold: (a) the liquidity provided to markets was
speculatively invested in land and securities; and, (b) the price of
land rose so rapidly as to make profitable development impossible in
many areas, leading to crashes in regional economies.