Review of the Book:

The Great American Land Bubble
by Aaron M. Sakolski

George Raymond Geiger

[Reprinted from Land and Freedom, July-August, 1933. The Great American Land Bubble, by A. M. Sakolski. Harper and Bros., New York City]

Here is the tale of that peculiar American phenomenon land speculation. From the pre-Revolutionary days to the Florida of 1924-1928 the exciting story races on, now humorous, now tragic; at one time merely entertaining, at another heavy with portentous implications (implications, however, which Prof. Sakolski deliberately or unwittingly avoids indicating.) Across the pages of the book parade famous American figures, all of them land speculators: Washington, with his thousands of acres of wild land; Robert Morris (who graces the frontis piece as "America's foremost land boomer") and his 6,000,000 acres of unused land; Franklin, Patrick Henry, Fremont, Sutler, Aaron Burr, Daniel Webster. ...Even names resounding in Europe -- Madame de Stael and Joseph Bonaparte, found themselves playing with that great American bubble, for, as Dr. Sakolski states in his opening line, was not America itself a speculation? Alexander Macomb, buying the whole Adirondack country for eight pence an acre; speculation in the City of Washington ruining the plans of its early builders the engineering of the notorious Yazoo frauds and other equally malodorous swindles all are drawn as with the touch of fiction.

Prof. Sakolski's book is a brilliant example of contemporary economic research. First of all, it presents to us a field which previously had been almost untouched by scholarly efforts, and its presentation is clear, calm and convincing. Then, it is extremely well written, graphic, not over-wordy, and shot through with a strong vein of ironic humor, the book is remarkably entertaining reading. It perhaps might be criticized for occasionally falling into that most modern technique of "over-smartness" but, after all, that may easily be excused when an author is dealing with the unsavory activities of historic big-wigs.

Finally, its niche in modern scholarship is assured by its splendid aloofness. Prof. Sakolski never gets excited. He is telling us and not judging. His bubble-puncturing is quite dispassionate.

Of course it is this last aspect that will irritate those who are most actively interested in land and its functioning in the dimension of economic exploitation. Here Dr. Sakolski permits himself to draw some conclusions, although the ones that he does draw are most suggestive. He finds that land speculation is indeed a bubble, bursting in every case. He admits that land speculation brings no permanent benefit to anyone, although he assumes that speculation seems to be valuable in opening up new lands for use. The speculators themselves, he shows, ended in almost every case as bankrupts and paupers, the real lasting fortunes in land being made by those who bought land hold and not to trade. Perhaps most important of all Dr. Sakolski elaborates the well-known connection between land speculation and the panic of 1837.

The land reformer will wish that the author had expanded some of his conclusions. For one thing, a presentation of the connection between land speculation and all of our periodic business depressions (the book was published a little more than a year ago) might have had an example of such an expanded conclusion. Again, a more [indepth] treatment of land as an agency in the processes of economic production and distribution might well have been included in a supplemental volume on land speculation. But such wishes certainly are not intended as criticisms of Prof. Sakolski. He can reply very easily that he was not writing such a book, perhaps that he is not even interested in such a book; and a man cannot very well be criticized for something he has not written,

But Dr. Sakolski can be criticized for his rather cavalier reference to Henry George (page 255.) He states that George saw the evils but not the benefits of land speculation. Now, it must be confessed that the present reader of the book found no convincing arguments or even attempts at convincing arguments, on the part of Prof. Sakolski that disclosed any such benefits. It is true that there is the suggestion of the speculator's function in opening up wild land for use. But, after all, is not the very criticism of land booms a criticism which this reviewer certainly has found outlined even with some bitterness in the book the argument that speculation throws marginal land into use sooner than necessary, forces unneeded improvements and resulting in lavish borrowing on the part of local governments, and results finally in a collapse as population refuses or is unable to sustain these artificially swollen land values? Is that not the reason why land speculation is indeed a bubble? Normal demand will throw land into use; ballyhoo is not required. The press of population directs the use of land; not the hoop-la of the land speculator.

Prof. Sakolski also states that had Henry George lived during some of the fiascos of land speculation, such as in the post-Revolutionary days or in the town-jobbing prior to 1837, and had he witnessed the loss of great fortunes instead of seeing the California land boom, his economic philosophy might have been quite different. It is obviously idle to speculate on what George's work might have been had he been a different man. But it does not seem that Dr. Sakolski had seriously underestimated George's contribution by such a remark. He has apparently not permitted himself to regard George's fundamental concepts as anything more than a parochial by-product of a land boom.

But to get back to the book and ?way from such digressions. The Great American Land Bubble is a psychological volume as well as an historical and economic one. It deals with the American spirit as much as with the American speculator. It gives exposition to that perennial urge for gambling which is hardly indigenous to these shores. The Colonials, for example, had little else to gamble with except land. Unfortunately they did not have stock markets. And so they bought land merely to re-sell. Prof. Sakolski's book is thus a picture of American culture and it will certainly take a place in the bibliography of American cultural history. It is none the less a portrait of personalities. Colorful rogues and profound patriots, fools and philosophers all present themselves here as bubble-blowers.

The work is an excellent piece of historical research. It is diverting, instructive, disillusioning. It is not, and does not pretend to be, a work in economic theory or in economic reform.