Harry Gunnison Brown's Influence
On American Liberalism

Will Lissner

[Reprinted from the Henry George News, July 1958]

For the first nine years of this century Harry Gunnison Brown was a student at Williams College and at Yale University. Those were stirring times for an economics student. [Formation of great trusts, consolidation of railroads, regulation of banking, exploitation of labor, all gave rise to protests by liberals and radicals in the United States and England.]

One of America's great social prophets once wrote "the struggle to come will be fiercer and more momentous than the struggles that are past." Dr. Brown lived to see it, take part in it for fifty years, and now he is beginning the second half century of struggle.

Noting that ours is an era of tremendous upheaval, he once asked, "Can it possibly be that the relative fairness of different economic systems has some causal significance in the changes in the centers of military power and prestige and so in the rise and fall of nations and of empires?" Of one thing we may be sure. For those now passing from youth into maturity, history will furnish the answer.

Dr. Brown first attacked the problems of competition versus monopoly as they affected railroad rate-making. Then he subjected to his analytical apparatus the process of price-making under conditions of competition and of monopoly, in their several forms.

Next he went on to money, banking and interest rates, and then to international trade and exchange, a field in which he exposed the hallowed claims to special privilege of the protectionists. Before the United States entered the first world war he had produced a series of articles and books in these fields.

The natural law heresy of classical liberalism gave divine sanction to the concentration of wealth, and the impoverishment of its producers. Dr. Brown struck at the very foundations of this heresy in The Theory of Earned and Unearned Incomes, published in 1918, and in The Taxation of Unearned Incomes, issued three years later.

Out of the recognition that he had presented an unanswerable analysis came the earned income credit in the income tax and the agreement among economists that land and other natural resources were especially suitable sources of government revenue.

But Harry Gunnison Brown was not satisfied with partial victories. He wanted land tenure and use reformed on a rational basis. He wanted taxes reformed on an economic basis. Some of his contemporaries would not go the whole way with him in relieving, as far as possible, labor, thrift and enterprise from taxation and in appropriating all or nearly all the economic value of land and other natural resources to finance the legitimate public services maintained by the people through their governments. He rocked the academic world with attacks on their "single tax complex."

Dr. Brown has made many technical contributions which were absorbed into the corpus of American economic thought, among them his analysis of opportunity cost.

But he is honored, too, by his academic colleagues for his fierce insistence that certain economic processes cloaked with an aura of mystery though they are basic in the distribution of income and wealth are subject to rigorous logical analysis and empirical investigation.

One of these processes involve the ways in which taxes are shifted from one economic functionary to another and in which they finally come to rest upon those who really bear the tax burden.

Another involves the ways in land value taxation would operate to allocate resources rationally, to curb antisocial speculation with all its attendant economic evils and help to make economic reward commensurate with economic and social contribution.

Another, and perhaps the most important, involves the way in which the results of such analyses can be woven into a coherent system that blueprints the foundations of a new democratic capitalism, one from the exactions of monopoly and privilege, the windfall gains of position and power and anti-social speculation, would be banished.

Others have captured the public imagination with the utopian vision of a Welfare State which, now that it has come within our grasp, proves to have its foundations in the quicksands of inflation. Dr. Brown has shown that the democratic state can serve the common welfare if its foundations be laid in the bedrock of rigorous economic science.

Through the Roaring Twenties, the Depressed Thirties, the War-Town Forties and the Booming Fifties he has lambasted liberals, radicals and conservatives alike, seeking to make them confront the realities of economic logic.

Our people run after the nostrums of cartelization or socialization, though no theorist has succeeded in discovering how to make them work. Whether in the future we shall discover the unworkability of the alternatives to democratic capitalism the hard way, by trying them, or the easy way, by studying them and making rational choices, I would not care to predict. In any event Dr. Brown's democratic capitalism will have its day.