Main currents in American thought An interpretation of American literature from the beginnings to 1920
life. It was left for a younger generation to examine the problem of
sovereignty, and to that business John W. Burgess turned with zest.
A thoroughgoing Austinian, a disciple of the German state-cult, a
Hegelian, he would seem to have been ill fitted to interpret the
functions of the state to America. And yet by virtue of his European
detachment he saw clearly the direction in which America[611]
IV • Buttressing the Democratic Theory
1 • A Democratic Economics--Henry George
While the academic economists were thus providing a new body of
capitalistic theory, from the ranks of the people came a group that
was bent on bringing economic principles into greater conformity to
what they considered democratic needs. The economics of bankers and
manufacturers they regarded as a selfish class economics and they
proposed to democratize the body of economic thought as Tom Paine and
Jefferson had democratized the body of political thought. Since the
days of John Taylor such amateur economists had been plentiful in
America, and in the post-war days when the country was in the throes
of the Industrial Revolution, they sprang up at every cross-roads.
George Henry Evans, Horace Greeley, Peter Cooper, Parke Godwin, Wendell
Phillips, Albert Brisbane, Hinton R. Helper, “Coin” Harvey, were only
a few out of the many who in their own way were seeking in economics a
road to freedom. They were not formal economists; they were little read
in the history of economic thought; in so far as they may be accounted
a school they were mostly the unclaimed progeny of French Physiocratic
theory who did not recognize their own father. Yet they were vastly
concerned to bring economic theory into some sort of realistic contact
with the facts of American experience and the ideals of democracy;
and their immediate objective was the overthrow of current Manchester
principles and the erection in their stead of a body of theory based on
the needs of the producer and the consumer rather than the middleman.
Of this characteristic native group, largely ignored by our formal
historians, by far the ablest and most influential was Henry George,
a thinker created by the impact of frontier economics upon a mind
singularly sensitive to the appeal of social justice, singularly
self-sufficient in its logic. He remains still our most original
economist. Beyond the Ricardian theory of rent, with its corollary of
unearned increment, he owed little to Europe and nothing to academic
American economists. From the first he was a free-lance, returning
to the origins of things--as Tom Paine had advised long before--and
thinking “as if he were the first man who ever thought.” His major
doctrines he arrived at largely independently, ignorant of the fact
that his _impôt unique_ had been earlier elaborated by the Physiocratic
school, till long after he had come to identical conclusions. His
matured philosophy was the outcome of the meditations of a Jeffersonian
idealist contemplating the divergence between the crude facts of
exploitation all about him and the eighteenth-century ideal of natural
justice; and he became, in consequence, the voice of idealistic America
seeking to adjust the economics of a rapidly changing society to the
ends of democratic well-being. The passion of the reformer was in him,
but wedded to the critical mind of the analyst; and this accounts
for the wide appeal of _Progress and Poverty_ that for thousands of
Americans removed economic theory from the academic closet and set it
in the thick of political conflict. Henry George humanized the dismal
science and brought it home to the common interest. With his extreme
simplification no doubt he fell into the same error the classical
school had fallen into before him; he left too many elements out of
his equation; but he succeeded in the same way they had succeeded--he
made of economic theory a weapon to use in the struggle between the
exploiters and the exploited. After _Progress and Poverty_ the social
economist could cross swords with the Ricardians.
Henry George is readily enough explained in the light of his
environment. He was intellectually native to the West, but it was the
West of the Gilded Age with its recollections of an earlier agrarian
order. Upon the gigantic exploitation of post-war times, carried
forward in the name of progress, he threw the experience of two
hundred and fifty years of continental expansion. That experience had
undergone a subtle change as the settlements moved through the Inland
Empire, a change marked by the spirit of capitalistic expansion with
its crop of unearned increment. On the frontier, land speculation
was often the readiest means to wealth. To the west of the Allegheny
Mountains land had long been the staple commodity, with the buying and
selling of which every community was deeply concerned; and from the
dramatic repetition of that experience in California, Henry George
clarified the principle upon which he erected his social philosophy,
namely, that a fluid economics begets an equalitarian democracy and
homespun plenty, and that with the monopolization of natural resources
a static economy succeeds, with its attendant caste regimentation and
augmenting exploitation. In the days when he was meditating his social
philosophy, California was still in the frontier stage of development,
but amidst the hurrying changes a fluid economics was visibly hardening
to the static, with a swiftness dramatic enough to impress upon him
the significance of a story that had been obscured in earlier telling
by the slowness of the dénouement. The vast cupidity of business in
preëmpting the virgin resources of California, and in particular the
technique of Leland Stanford and the Central Pacific Railway group,
provided an eloquent object-lesson that set him to examining the long
history of land-jobbing in America in its remoter social bearings. From
such inquiry emerged the cardinal principles of an economic theory that
must be reckoned the ultimate expression of a school of thought that
beginning with Quesnay a hundred years before, and first interpreted
for America by John Taylor and the Jeffersonians, was finally buried in
a common grave with the kindred doctrine of natural rights.
It was no accident that his mind fastened upon land monopoly as the
deeper source of social injustice. As a child of the frontier he
thought in terms of land as naturally as the money-broker thinks in
terms of discounts. His psychology was that of the producer rather than
the middleman. Land, with all its potential wealth of field and orchard
and forest and stream, with its unmeasured resources of coal and iron
and oil and timber, was the fruitful gift of nature to man; and the
true measure of social well-being, he believed, is the measure in which
labor is free to use such natural resources for productive purposes.
Land monopoly was an ancient evil that had laid its blight on every
civilization. The expropriation of natural resources was the origin of
rent, and rent was a social tax parasitic in nature. Unearned increment
was a moiety wrested from the producer, that waxed ever greater with
the increase of production. Henry George was well aware how deeply
rooted in American psychology was the love of unearned increment.
Since the far-off days when the agent of the Transylvania Land Company
wrote in 1775 that the Ohio Valley abounded in land-mongers, the rage
for expropriative speculation had mounted steadily; and the railway
land-grants of his day were a fitting climax to a policy that in every
generation had brought forth such fruits as the Yazoo frauds. The land
question was a perennial western problem. For years Horace Greeley in
the _Tribune_, had spread amongst the farmers the “Vote Yourself a
Farm” propaganda. The protest of the small western settler against the
middleman policy of the government in alienating great blocks of the
public domain to speculative companies, had added thousands of votes to
the Republican party, and the result was the Homestead Act of 1862. But
the fruits of the Act were partly destroyed by huge grants to railway
promoters, and the time had come, George believed, when the problem
must be envisaged in all its complexities and the American people
brought to understand how great were the stakes being gambled for.
The disease had so long been endemic in America that the remedy
must be drastic. No patent nostrums would serve. The vividness of
his experience in the West had thrown into sharp relief his earlier
experiences in the East, and made him distrustful of all social
panaceas that hopeful idealists were seeking in Europe. With any form
of collectivistic theory he would have nothing to do. Marxian socialism
he looked upon as an alien philosophy, inadequate in its diagnosis and
at fault in its prescription. The ills of America--perhaps of Europe as
well--must be cured by another regimen. _Progress and Poverty_ grew out
of his experience as he watched the heedless alienation of the public
domain. It was his reply to the policy of preëmption, exploitation, and
progress of the Gilded Age. Philadelphia-born, he early suffered in his
personal fortune from the periodic hard times that ran so disastrous a
cycle in the days when America was in thoughtless transition from an
agrarian order to an industrial. His scanty schooling came to an end
before he had reached his fourteenth year, and at sixteen he saw no
better opening in life than to ship before the mast to Australia. On
his return he learned to set type, but times were bad and opportunity
declining to knock at his door, he worked his way through the Straits
of Magellan, landing in San Francisco in 1858, on his way to Salem,
Oregon, where he worked for a time in a shop. With the exhaustion of
the diggings he made his way back to San Francisco, and began a long
series of restless ventures in the newspaper field, with only his hands
for capital--none very successful, none quite a failure, but returning
him useful dividends in the form of a serviceable prose style. At
twenty-two he plunged into an improvident marriage with a girl of
eighteen, and the next dozen years brought many privations to the
little family.
Fate had not yet taken Henry George in hand to lead him into his
life work. All the economics he then knew had been learned in the
rough and tumble ways of a western print-shop. In 1869, at the age of
thirty, while on a business trip to New York City, he was confronted
by the contrast between wealth and poverty there nakedly exposed--so
unlike what he had known at San Francisco. It was a prod to his social
conscience, and as he contemplated the wretchedness of the East Side he
registered a vow to explore the hidden causes of social disease. He had
given no serious thought to economic questions, and now almost casually
he went to the Philadelphia public library to look into John Stuart
Mill’s _Political Economy_. He accepted Mill’s views on wages without
critical examination, and wrote his first important article--on the
Chinese question in California. In the meantime a group of California
railway promoters had been buying and selling legislators in their work
of building up private fortunes out of a public monopoly; and it was
the contemplation of wealth acquired by such methods, together with the
gamble of land speculation in Oakland in consequence of the proposal to
establish there the western terminal of the continental railway, that
clarified for Henry George the great principle he was to expound in
_Progress and Poverty_ ten years later.
The first drift in his intellectual development had been a drift back
to the old Jeffersonianism from which the country was swiftly moving.
As an editor he was an outspoken Democrat of the primitive school,