Mr. Henry George:

An Examination of Mr George's position as a
Systematic Economist and a Review of the Competitive
and Socialistic Schools of Economy

Robert Scott Moffat

[Book V / Chapter I / 1885]



Mr. George says in the second chapter of his fifth book,

"The reason why, in spite of the increase of productive power, wages constantly tend to a minimum which will give but a bare living is that with increase in productive power rent tends to even greater increase, thus producing a constant tendency to the forcing down of wages."

We know now that according to Mr. George's definition, supplemented by his reasoning in Book III., wages include all return for labour; that capital is a form of labour, and that the remuneration of it is in equal ratio to the sacrifice or exertion by which it is earned with the reward of labour.

In Book I., Chapter III., Mr. George has said,

"It is at first glance evident that the economic meaning of the term wages is lost sight of, and attention is concentrated upon the common and narrow meaning of the word, when it is affirmed that wages are drawn from capital."

Taking then Mr. George's terms in his own sense it is obvious that the proposition he propounds in setting out to explain his remedy is manifestly and wholly false. As it is exactly what I have already inferred from his arguments in the four books in which he has discussed the problem, I need not discuss it farther. It may be worth while in passing, however, to make the illustrative remark that the poverty of the reward of all labour fully accounts for the unsatisfactoriness of the salaries or earnings of archbishops, chancellors, leading barristers, popular authors, prima donnas, and high-class professionals. I have already noticed the fact that rent, when realized, becomes capital in the hand of its owner, so that the extinguishment of capital through the growth of rent is a fact somewhat difficult to account for, and we know, according to Mr. George himself, that if this capital is employed it matters not whether in agriculture, manufactures or commerce, the distribution of rewards between it and labour will be equitable. In this country after Mr. George's process of impoverishment has been going on for at least a couple of centuries, we possess the largest capital, apart from "land values," ever held by any country in the world, and "wages," in Mr. George's sense of the term were never higher anywhere. If our progress towards poverty and extinction goes on at the same rate we bid fair in another two centuries to beat the growth of Adam's baby or the puppy's tail.

Instead of being now in a position to solve the problem, Mr. George has forgotten the very terms in which he himself propounded it. In his introduction he says:

"It is true that wealth has been greatly increased, and that the average of comfort, leisure and refinement has been raised; but these gains are not general. In them the lowest class do not share."

Instead of showing how such a result is produced, he describes a wholly different, and purely imaginary result, one that not only never has existed, but by its very conditions is incapable of existing anywhere, a result, as we have seen, deduced from premises bristling all over with self- contradiction. Moreover, he has condemned his own definitions and upset his own conclusions by warning us in advance against reasoning on our terms io one sense and applying them in another.

By what process have conclusions so remarkable been reached? In the answer to this inquiry rests the appreciation of Mr. George's merits as a systematic economist.

It cannot be said, certainly, that they are derived from a rigid application of logic to erroneous premises, for Mr. George's facts, tried by strict logic, would hardly have left a greater residuum than the Kilkenny cats.

It is more difficult to say whether, in his reasoning, Mr. George may be credited with consistency, or accused of ambiguity, in the use of terms. I have already shown that any application of his conclusions to actual occurrences cannot possibly be reconciled with his definitions; but logical processes [unreadable] out real premises are a very severe exercise of intellectual ingenuity. Most people, when they reason, occasionally glance aside from the words they use to the things they intend them to signify, and when a reasoner's premises are such that it is impossible any consistent conclusions can be derived from them, it is difficult for a follower of his processes to say whether, his premises being purely imaginary, he has always consistently adhered to his imaginations, has occasionally substituted for them the real meanings for which his imaginations are substitutes.

Mr. George has distinctly requested his readers to bear in mind his definitions, as otherwise he could not hope to make himself understood, I have considered it the safer course to assume that he has himself adhered to them. It really costs nothing either to author or reader to do so; for whatever meaning the reader might in charity be disposed to lend his author, it would be impossible for him to pull him out of one of the quagmires into which he voluntarily plunges. Certain even of his most extravagant conclusions looked at in this way, that is in the light of unsubstantial definition, acquire among themselves a … harmony; but this is only when the conclusions are selected, and when any real application of them is kept out of view. The reader will have seen that the system which may thus be produced has a wonderful aerial elasticity and power of expansion, and it must be acknowledged that high praise is due to Mr. George for the unflinching courage with which he draws the most stupendous conclusions when the conditions of his logic require them.

And Mr. George's reasoning has a curious resemblance to logic. If it had been intended to parody the style of some celebrated school of reasoning, with a view to insinuate a suspicion of the soundness of its method, it ought to have earned for its author a distinguished success. It has all the qualities of sound logic except consistency; absence of gratuitous assumption in the statement of facts; certainty as to the meaning of terms; and coherence between premises and conclusions. There is grammatical clearness and force of language; conciseness and completeness in the form of propositions; consecutiveness in the arrangement of parts, and in the flow of language. Never, in short, was nonsense arranged to look more like sense. If Mr. George were only making a fool of us, he would be an exceedingly clever man.

The literary style, with the exception of some flaws which have already been noticed, a somewhat stronger infusion of Americanisms in the illustrative portions than appears in the argumentative, which I have chiefly cited, and the excess of rhetoric, through which pellucid medium shines the self-conceit of the author, is thoroughly appropriate to the subject. There is no obscurity of any kind, except such as arises from the nature of the propositions affirmed, and the nature of the evidence adduced in support of them. Non-technical words are used with clearness, and usually both with grammatical and logical precision.

While Mr. George is clear and precise in his statements, it is also evident that he is serious. This is a psychological phenomenon. That any man and especially that an educated man, capable of considerable observation, and of using with mastery the forms of literary speech, should be able to imagine that the processes of language which Mr. George has put together constitute actual reasoning upon a real subject is a marvel, of which an approximate explanation may be found in Mr. George's antecedent circumstances and opportunities. It would seem as if the power to go through long processes of involved reasoning were less a common faculty even of civilized men, than a habit developed in a few through successive ages of inherited experience. Mr. George, a citizen of one of the youngest States of a young confederation has acquired a liking for abstract reasoning; he selects subject suited, as he believes, at once to his taste and his experience; he studies the subtlest reasoners on the subject; he catches the spirit of his models, and imitates their style and method with the instinct of an ambitious but not indocile admiration, and the result is a farrago of superficial absurdities that any unprejudiced man of common education and common sense can detect. Yet throughout Mr. George*s book there runs the evidence of a profound conviction of the solidity of structure of the author's reasoning, and of the vast importance of the conclusions to which it is conducting him.

These results may be accounted for in two ways, either Mr. George may have been an incompetent scholar, or he may have had untrustworthy instructors. Clearly the responsibility for Mr. George's aberrations cannot be thrown entirely on his teachers. His reasoning abounds with indications of a foregone conclusion. It also betrays indications of an unexampled crudity in his conceptions not only of economical reasoning, but of mental discipline generally. I have noted throughout, these and other signs of individuality, which show that Mr. George would have been a remarkable person by whomsoever he had been trained.

On the other hand, Mr. George's guides cannot be acquitted of the a priori suspicion of false guidance on the mere plea of Mr. George's incompetency as a scholar, for the plain reason that Mr. George's idiosyncracies will not suffice to explain the entire result actually produced.

Notwithstanding the greatness of his faults Mr. George is not without considerable merits, to which I shall presently allude. I have already shown that he is an admirable imitator. But this is not all. There is in Mr. George a curious resemblance in one respect to John Stuart Mill. To understand either thoroughly you must know that you are dealing not with one man, but with two. On the one hand Mill is an expositor and developer of the high "orthodoxy" of Ricardo; on the other he has, without the least suspicion of inconsistency, deeply leavened his doctrine with the ferment of communistic socialism. It appears from his autobiography that he was under the influence or Ricardo on the one hand and of Mrs. Mill on the other. While extremely susceptible to externals influences, and very subtle in casuistic reasoning, Mill seems to have been nearly destitute of any crime of logical consistency, or coherence in the entire parts of a scheme or argument. His power of self-illusion was vast, and he could adopt the sophisms of others as readily as he could invent sophisms for himself.

When Mr. George's extravagances and self-contradictions, which belong to his own creed, which Mill's is at bottom socialistic, are swept away, there remains an undercurrent of closely reasoned doctrine, and this doctrine is Ricardo's. It is remarkable that, with all his deadly hatred of Malthus, even Mr. George's anti-Malthusianism is "Wholly superficial, and disappears in the development of his doctrine. I have already shown how this is brought about. What Mr. George refuses to take from Malthus, he accepts at the hand of Ricardo. But Mr. George, when his doctrines are reduced, as I have indicated, is not a mere imitator, he is a developer of Ricardo. In the last chapter of this book a detailed comparison will be given of the leading conclusions of Ricardo and Mr. George in regard to the growth of population and the distribution of wealth, from which it will be seen that Mr. George is a far more legitimate developer of Ricardo than John Stuart Mill.

Now this circumstance is important in two ways. It shows that the coherence, such as it is, which Mr. George has endeavoured to give to socialistic doctrine, in the blending for example of communism in relation to land with competitive organization in regard to industry generally, is a coherence which does not pertain to the socialistic scheme itself but comes from a wholly different source, while the socialistic doctrine remains in its original chaos. It also, as we shall find, throws a valuable light on the competitive doctrines of Adam Smith, as developed by the master systematizer of his school.

Notwithstanding his wide divergence from them on some points, Mr. George has evidently a secret admiration of his models, and it is by their method that he professes to establish his conclusions.

Moreover in every science there is much to do besides systematizing. As an explorer and original investigator Mr. George is something more than respectable. He is no importation from Tahiti, but a world-wide observer, and although his observation is at times extremely superficial, at others he has shown, as I have indicated, considerable discernment, and that on matters of such importance that he has certainly made good one part of his indictment against his predecessors, that of basing their system on inadequate information.

Not only has he brought the powers of a fresh observer to his subject; but though deficient in power of sustained reasoning, he has frequently shown an intuitive perception of true relations, and this, as has already been seen, has led him to several important generalizations directly opposed to the teaching of his masters, and to the current of common belief, in which he is unquestionably right.

I have already said that Mr. George is entitled to fair credit for attacking in front the true economic problem of the day, that of the remuneration of industry with which our economists have but evasively fenced. They do not pretend that the actual distribution of wealth is satisfactory; but their attitude is one of negative and indifferent scepticism as to any possibility of improvement. Now scepticism on this point is a condemnation of their own science. It convicts it, as I have said, of sterility. It effectually turns away from it the … and interest of the public; and as there is no reason to believe that any physio-psychological problem is insoluble in itself, it is utterly unscientific. Mr. George justly says of the answer to this problem:

"It must be within the province of political economy to give such an answer. For political economy is not a set of dogmas. It is the explanation of a certain set of facts." (Introduction.)

Accordingly if Mr. George has failed to find the answer he is at least entitled to praise for having sought it. In assenting to Mr. George's inclusion in this sentence, however, I must not be understood to imply that facts can be explained without dogmas, but only as expressing my disrespect for the dogmas which do not explain the facts.