Henry George
Joseph A. Schumpeter
[Reprinted from History of Economic Analysis,
Oxford University Press, NY, 1954, pp. 864-865]
...But we cannot afford to pass by the economist whose individual
success with the public was greater than that of all others on our
list, Henry George.(1) The points about him that are relevant for a
history of analysis are these. He was a self-taught economist, but he
WAS an economist. In the course of his life, he acquired most of the
knowledge and of the ability to handle an economic argument that he
could have acquired by academic training as it then was. In this he
differed to his advantage from most men who proffered panaceas.
Barring his panacea (the Single Tax) and the phraseology connected
with it, he was a very orthodox economist and extremely conservative
as to methods. They were those of the English 'classics', A. Smith
being being his particular favourite. Marshall and Bohm-Bawerk he
failed to understand. But up to and including Mill's treatise, he was
thoroughly at home in scientific economics; and he shared none of the
current misunderstandings or prejudices concerning it. Even the
panacea - nationalization not of land but of the rent of land by a
confiscatory tax - benefited by his competence as an economist, for he
was careful to frame his 'remedy' in such a manner as to cause the
minimum injury to the efficiency of the private-enterprise economy.
Professional economists who focused attention on the single-tax
proposal and condemned Henry George's teaching, root and branch, were
hardly just to him. The proposal itself, one of the many descendants
of Quesnay's impot unique, though vitiated by association with the
untenable theory that the phenomenon of poverty is entirely due to the
absorption of all surpluses (2) by the rent of land, is not
ECONOMICALLY unsound, except in that it involves an unwarranted
optimism concerning the yield of such a tax. In any case, it should
not be put down to nonsense. If Ricardo's vision of economic evolution
had been correct, it would even have been obvious wisdom. And obvious
wisdom is in fact what George said in 'Progress and Poverty' (ch. 1,
Book IX) about the economic effects to be expected from a removal of
fiscal burdens - if such a removal were feasible.
NOTES:
- Henry George (1939-97) is too
familiar a figure to need introduction. Besides Progress and
Poverty (1879) only the posthumously published 'Science of
Political Economy' (1897) need be mentioned here. His 'Complete
Works', with a 'Life' were edited by his son (1906-11). A
scholarly appreciation of all the backgrounds and affinities of
the Georgian doctrine may be found in E. Teilhac's 'Pioneers of
American Thought' (1936), ch. III.
- Business profits he analyzed
into a premium of risk, wages and interest, exactly like Mill;
therefore he did not consider them to be disposable surpluses.
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