Harry Gunnison Brown's Influence
On American Liberalism
[Reprinted from the Henry George News, July
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
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
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
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.