Harry Gunnison Brown

Christopher Ryan

[Chapter 10 from the book on Harry Gunnison Brown. Reprinted from the American Journal of Economics and Sociology, December 2002]

Introduction

A BROADER VIEW OF HARRY GUNNISON BROWN'S THOUGHT on political economy must include a consideration of his general philosophical and political views. In addition, his position with respect to Marxist, Institutionalist and Georgist thought are of interest. The effect of Brown's near heretical views on and advocacy of land value taxation on his professional reputation will be explored as well, and a summary reconsideration of his career as an economist will be offered.

As Lester Chandler has noted, Brown today would be considered a "conservative," yet he was very much a "liberal in the nineteenth century sense of the term." (1) Like many economists of the late nineteenth and early twentieth century, Brown championed causes for economic and social reform. Land value taxation, which became his primary interest, is not classified easily as liberal or conservative. He saw the political and economic system as flawed but amenable to improvement. He used the term "economic democracy" in his early writings to denote a goal to be sought. He subscribed to a "limited" faith in democracy to attain an "economic system fundamentally expedient and just." (2) Brown had trust in the functioning of competitive markets in which the proper regulation of natural monopolies and elimination of other monopolies were carried out. Yet he found the resulting distribution of income unjust due to the allowance of a return to the site value of land. Moreover, this allowance led to an inevitable reductio n of economic incentive to labor and save.

Will Lissner, who was a journalist with the New York Times for much of his life as well as Brown's editor, saw his work as attempting to influence American liberalism. For Lissner classical liberalism contained a "heresy" in the form of a natural law that gave "divine sanction to the concentration of wealth and the impoverishment of its producers," and he reported that: "Brown struck at the very foundations of this heresy in The Theory of Earned and Unearned Incomes... ." (3) Lissner concluded his article on Brown's contribution in the following manner:

Through the Roaring Twenties, the Depressed Thirties, the War-Torn 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 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. (4)

Brown was not specific on the philosophical origins of his views. Evidently they were not religious in nature. As different as Henry George, Richard Ely and Irving Fisher were as political economists, they shared Christian underpinnings to the causes they promoted. In neither Brown's writings or preserved correspondence is there a clue as to his personal religious beliefs. His memorial service was conducted under the auspices of the Unitarian Church. He once stated that "more or less utilitarian grounds" were the basis of his belief that income should be classified as earned and unearned. He quoted Herbert Spencer:

Briefly, then, the universal basis of cooperation is the proportioning of benefits received to services rendered. (5)

Reaction to Marxist, Institutionalist and Georgist Claims in Political Economy

BROWN REJECTED THE MARXIST CLAIM that interest was unearned or a surplus. He straightforwardly argued that capital's existence was due to abstinence or savings and that therefore the interest return was earned just as was the return to labor. Thus, for Brown the act of saving was potentially a service deserving of a fair return. Should the "surplus" be taken by the state, economic incentives would be so impaired as to render the economy stagnant or worse. (6) He furthermore based his rejection of socialism on what he saw to be a necessarily coercive allocation of work or vocation.

Brown was familiar with economists whose thought was later to be labeled "institutionalist." He was a colleague of Thorstein Veblen for one year, yet Brown made only scattered references to Veblen and later responded to questions about him with a wry smile. (7) In one letter he recommended Veblen's Theory of the Leisure Class to an inquiring student as his best work. (8) When Paul Douglas was campaigning for Veblen's presidency of AEA in 1925, Brown chose to write a letter of support in lieu of signing the petition that had garnered 214 signatures. As reported by Joseph Dorfman, Brown expressed a fear that those with "radical proclivities" despite outstanding scholarship were being denied the presidency. (9) John Commons once wrote Brown asking for assistance for his presentation of arguments for a progressive land tax in the state of Wisconsin. (10) Horace M. Gray of the University of Illinois linked Brown with economists like Commons "who kept alive the spirit of democratic liberalism against the advancing tide of privileged, subsidized, monopoly capitalism." (11) However, when institutionalist economists tended to dismiss formal economic theory as a key guide to the understanding of the economy, Brown was sharply critical.

Although Brown came to be Henry George's most prominent academic proponent, he was also a critic of George. Brown clearly rejected George's "all-devouring rent thesis" and was critical of his interest and population theories. Brown found in George's interest theory an invalid distinction between "mechanical" and "biological" capital, which led George to an erroneous, productivity-of-nature explanation for interest. Brown found George's refutation of Malthusianism unconvincing and was himself an advocate of birth control. Also, he felt that George's theory of business depression was "hopelessly on the wrong track." (12) Despite these substantive differences with George on economic theory, Brown gave almost complete support to George's general proposal for tax reform and its ethical underpinning. Brown, of course, did not attempt to emphasize the "singleness" of the tax, nor did he form his ethical arguments in natural rights as did George. Yet Brown guments in natural rights as did George. Yet Brown considered George's errors to be dwarfed by his contributions to political, social and economic thought. Brown mentioned not only George's single-tax proposal but also his contributions to the theory of marginal productivity and his defense of free trade principles. Brown criticized George only when he felt his "errors" distracted from the fundamental message. Accordingly, these criticisms were presented only in Georgist publications. Brown found no inconsistency in transplanting the single-tax idea into neoclassical theory as he interpreted it.

Brown's Position in the Profession

BROWN's OPEN ADVOCACY OF LAND VALUE TAXATION did not make him a pariah in the profession. He quickly attained his full professorship at Missouri and expressed in a letter his satisfaction with his position. (13) He never reported any infringement of his right to express his opinions. However, he did state in several articles (without mentioning names or institutions) that he had heard of cases where professors or graduate students were "razzed" for expressing an-interest in land value taxation or advised-for their own good-not to pursue such an interest. (14) Paul Douglas, noted by Brown (15) to favor land value taxation, never brought up his views in professional journals or in the Senate. (16) In another instance, Russell Bauder, a former colleague of Brown's and graduate of the University of Wisconsin, wrote of his apprehension about his application to teach at another university because of his past association with Brown. (17) Bauder reported that he had been advised by John Commons, who expressed a high regard for Brown, to defend the professor should his interviewers raise the subject. When Bauder did so, he felt that he was not well received and was not offered the position he sought. Brown in several instances noted that he knew personally economists who were "definitely friendly to land value taxation," yet were reluctant to make this known and thereby lessen their influence.

Although Brown received several honors in his career, (18) he was never nominated for the presidency of the American Economics Association. Given the extensive nature of his contributions by the late 1930s, it is a question of some interest that he was not considered for this honor. An exchange of letters with Frank Knight in 1939 provides some insight into this matter. Brown wrote Knight on departmental matters but enclosed a copy of a letter he had sent to the members of the nominating committee of the Association. In it he proposed the candidacy of John Ise of the University of Kansas. In Knight's reply he said:

The first thought that comes to mind is the name of another man who ought to be recognized in this connection, before too long, a man whom I have felt for years did not seem to get recognition in accord with his merits by the profession generally, and that is the man to whom this letter is addressed. (19)

Knight further stated that he would mention Brown as a possible candidate in his letter of support for Ise. Brown replied that he did not wish to be so mentioned for three reasons. First, he did not want his candidacy to rival that of Ise; second, he did not wish to be burdened with the responsibilities of the office, given his priorities; and third, he recently had failed to be elected to one of two vice-president posts of the Association and was asked to fill a temporary position on the executive committee, normally an elective position.

It seems unlikely that I could be elected to any position in the Association despite the support of good friends like yourself. I am not unhappy about this, whatever may be the honor and distinction involved, because I am really more interested in persuading others of the logical justification for views I hold, than I am in filling any office and more so if the filling of an office would interfere in any way with my other purposes. (20)

Despite Brown's well-intentioned reservations, he would have accepted the presidency of the Association for the particular reason that he was most likely to have been denied it. The tradition of the presidential address presented those chosen with a unique opportunity to express their views. Brown would have utilized no small part of the address to state the case for land value taxation, and the nominating committee was likely to have made this a consideration of importance in its selection.

Brown's credentials, however evaluated, were comparable to those of many who served as president. Eccentricity as a criterion for denying the office to someone did not prevent the nomination of such economists as Irving Fisher (1918), Thorstein Veblen (declined), Herbert J. Davenport (1920) and Frank Knight (1950). Brown's occasionally caustic criticisms of other economists may have prompted disfavor, yet in 1939 Jacob Viner, a harsh critic, was selected. The denial of this honor also cannot easily be attributable to Brown's personality; he is reported to have been outgoing, courteous and friendly as evinced in his collegial friendship with Knight and longtime personal friendship with John Bauer despite their differences. In 1985 Martin Bronfrenbrenner might have been thinking of Brown when he commented: "The popular picture of the single-taxer has however become the aged crank whose ideas have been refuted, who has outlived his usefulness, and who need not be taken seriously." (21) Yet Crauford Goodwin relat es a story of Bronfenbrenner's chance encounter with Brown on a train ride from Chicago to Detroit to attend the American Economics Association annual meeting of 1938. According to Goodwin, Bronfenbrenner remembered: "With nothing better to do, Professor Brown spent several hours translating for my benefit the complexities of 'modern economics' into the simpler language of his own generation.... Much of my later floundering represents attempts, seldom successful, to apply the lessons of that one evening with Professor Brown." (22) Although several scholars of distinction were never chosen to be president of the Association, one may reasonably entertain the suspicion that Brown's views prevented him from attaining this esteemed position.

Comments and Conclusion

On Brown's economic thought, Alfred Kahn wrote:

What impressed me more about his economic thinking was its coherence, its through internal consistency and its apparent sufficiency. (23)

He added:

It is an admirable system of economic thinking and Brown expounded it with grace, intellectual incisiveness and persistence. (24)

Although Kahn served only one year with Brown as a teaching assistant, his comments are remarkably insightful.

The neoclassical approach Brown adopted was not a precisely delimited model. He disliked the term "neoclassical," as he felt it signified too great a departure from classical thinking in economics. Although he made no signal, original contribution to the theory, his skill in its application allowed him to make many important contributions in several areas of thought. The consistent purpose in his writing was to make economic theory applicable to the perennial problems of a capitalistic economy. His studies in tax incidence are one example of his efforts. In them he strove to refine existing theory to form a sounder basis for tax policy decisions. The same was true of his careful and detailed work on finding principles for efficient regulatory practices. As a monetarist, he demonstrated flexibility and imagination quite outside of the usual caricature of pre-Keynesian monetary thought. His free trade advocacy was rooted in a concern for economic efficiency and growth.

Yet in all of these areas, as one may note in the preceding chapters, Brown found land value taxation to be a relevant and important consideration. Brown's espousal of the single tax idea was consistent with his theoretical position in economics. As more economists tended to merge land and capital, not infrequently for reasons of expediency, and thereby make more difficult his advocacy, he moved to justify the separation of land from capital on theoretical grounds. He saw economic rent as the marginal product of land space in the neoclassical manner, yet also as a surplus over interest and wages in the classical fashion. The return to land space was an absolute amount "measured and determined by the surplus over production at the extensive margin." (25) Brown differed with Fisher's view on capital and interest, arguing that the value of capital was in large part determined by its cost of production or reproduction. Thus, the situation value of land having no cost of production was determined by the capitaliza tion of expected future rent at some previously determined rate of interest. Brown supported land value taxation as a tax that would not result in the distortion of market prices and that was in accord with distributive justice. Also, greater taxation of land values would to some extent reduce the taxation of labor effort and investment and thus further economic efficiency and growth.

One, as Alfred Kahn noted, may well question the sufficiency and lack of specificity of the neoclassical approach Brown employed. However, he himself often pointed to the need for further elaboration and refinement of the theory and consistently worked to this end.

Statements by M. Slade Kendrick in his 1951 Public Finance demonstrate an open-mindedness Brown felt was all-too-lacking in the profession. Kendrick commented:

From Henry George in latter part of the nineteenth century, to Professor H. G. Brown, brilliant economic theorist of our day, the single tax has not lacked advocates whose views command respect. The clear logic with which the case for the single tax is presented, warmed by the fires of conviction, is ample reason for an examination of the issues. (26)

Despite the personal compliment, Brown would not have been pleased with Kendrick's subsequent rejection of the single tax. Kendrick's consideration of the single tax as opposed to more general arguments for land value taxation tended to bias his examination.

However, his fair and objective presentation of the arguments is due in large part to Brown's influence. In 1969 Dick Netzer responded to a letter from Brown complimenting Netzer's Economics of the Property Tax and stated: "I hope that my work, and what seems to be a growing body of work by other economists, so long after you had begun to write on land value taxation, can affect the climate of opinion sufficiently to lead to adoption of land value taxation by some major jurisdictions." (27) I was, in 1984-5, in the original version of this study, uncertain as to whether especially the "climate of opinion" had been much changed. Now I would venture to say that it has.

Robert Heilbroner commented that upon Henry George's death his reputation "went straight into the underworld of economics." (28) Whether Heilbroner's assessment of the fate of George's thought is correct or not, the reputation of Harry Gunnison Brown as an economist appears to have suffered as a result of his persistent espousal of George's cause. This, and Brown's other viewpoints which have waxed and waned in popularity over the course of the century, explain the present-day neglect of his contributions. However, the verdict of history is open-ended, and Brown's dedication to carry on with the "zest of anticipated usefulness" may yet find vindication.

Notes

(1.) Lester Chandler (December 17,1978). Cited in Paul Junk's Preface to Selected Articles by Harry Gunnison Brown. New York: Robert Schalkenbach Foundation, 1980: xv.

(2.) Harry Gunnison Brown (1925). The Taxation of Earned and Unearned Incomes. Columbia, MO: Lucas Brothers: 49.

(3.) Will Lissner (1958). "Harry Gunnison Brown's Influence on American Liberalism." Henry George News (July).

(4.) Ibid.

(5.) Herbert Spencer (1942). Quoted by Harry Gunnison Brown in The Basic Principles of Economics. Columbia, MO: Lucas Brother: 220.

(6.) Harry Gunnison Brown. "Academic Freedom and the Defense of Capitalism." American Journal of Economics and Sociology 15 (January): 173-182.

(7.) Pinkney Walker (December, 1983). Interview by author. Personal files Iowa City, IA.

(8.) Harry Gunnison Brown (October 22, 1928). Letter to Lung Chung. Joint Collection, University of Missouri Western Historical Manuscript Collection, Columbia, MO.

(9.) Thorstein Veblen (1973). Essays, Reviews and Reports: Previously Uncollected Writings. Ed. Joseph Dorfman. Clifton: Augustus M. Kelley: 272.

Joseph Dorfman quoted the following portion of the letter from Brown to J. M. Clark dated September 24, 1925: "So far as I am aware, no academic American economist of equal years and distinction, has ever failed of election to that office and a considerable number have been chosen whose distinction is far less. But there is another aspect of the problem, to which I believe attention should be directed; viz., the growth of the feeling, in the minds of many members, that the system of election throws control into the hands of an 'Old Guard' and that, under the circumstances, there is no chance of ever electing as president a person, no matter how distinguished for scholarship, of such radical proclivities as Veblen. It seems to me that the election of Veblen should do something to hearten those members who believe that scholarly contributions of importance should bring no less honor to radical than to conservatives."

(10.) Harry Gunnison Brown (June 10, 1926). Letter to John Commons. Joint Collection University of Missouri Western Historical Manuscript Collection-Columbia and State Historical Society of Missouri Manuscripts.

(11.) Horace M. Gray (April 2, 1975). Letter to Weld Carter. Cited in Paul Junk's Preface to Selected Articles by Harry Gunnison Brown. New York: Robert Schalkenbach Foundation, 1980: iv.

(12.) Harry Gunnison Brown (November 29, 1930). Letter to Walter Verity. Joint Collection University of Missouri Western Historical Manuscript Collection-Columbia and State Historical Society of Missouri Manuscripts.

(13.) Harry Gunnison Brown (October 13, 1927). Letter to John H. Sherman. Joint Collection University of Missouri Western Historical Manuscript Collection-Columbia and State Historical Society of Missouri Manuscripts.

(14.) Harry Gunnison Brown (1956). "Academic Freedom and the Defense of Capitalism." American Journal of Economics and Sociology 15 (January): 178-179.

(15.) Harry Gunnison Brown (1928). Significant Paragraphs from Henry George's Progress and Poverty. New York: Doubleday, Doran & Co.: 80.

(16.) Douglas, however, as Chairman of the National Commission on Urban Problems, did in its minority opinion support tax reforms. Report of the National Commission on Urban Problems to the Congress and to the President of the United States. Washington, DC: U. S. Printing Office, 1968.

(17.) Russell Bauder (February 18, 1930). Letter to Harry Gunnison Brown. Joint Collection University of Missouri Western Historical Manuscripts Collection-Columbia and State Historical Society of Missouri Manuscripts.

(18.) Brown was president of what is now the Midwestern Economics Association in 1942. Williams College awarded him an honorary doctorate.

(19.) Frank Knight (April 29, 1939). Letter to Harry Gunnison Brown. Joint Collection University of Missouri Western Historical Manuscript Collection--Columbia and State Historical Society of Missouri Manuscripts.

(20.) Harry Gunnison Brown (May 2, 1939). Letter to Frank Knight. Joint Collection University of Missouri Western Historical Manuscript Collection-Columbia and State Historical Society of Missouri Manuscripts.

(21.) Martin Bronfenbrenner (1985). "Early American Leaders-Institutional and Critical Traditions." American Economic Review 75 (December): 17.

(22.) Craufurd D. Goodwin (1998). "Martin Bronfenbrenner, 1914-1997." Economic Journal 108 (November): 1777-1778.

(23.) Alfred Kahn (September 5, 1984). Letter to author. Personal files, Iowa City, IA

(24.) Ibid.

(25.) Harry Gunnison Brown (1942). The Basic Principles of Economics. Columbia, MO: Lucas Brothers: 427.

(26.) M. Slade Kendrick (1951). Public Finance. Boston: Houghton Muffin Co.: 233.

(27.) Dick Netzer (February 11, 1969). Letter to Harry Gunnison Brown. Personal files, Iowa City, IA.

(28.) Robert Heilbroner (1961). The Worldly Philosophers. New York: Simon and Schuster: 163.