The Profits of the Earth

Charles A. Green

[Excerpts from Chapter 1, "Motive" from The Profits of the Earth, 1934]

Henry George devoted three chapters to the discussion of interest. He treated the subject under three titles, as follows.

1. Of interest and the cause of interest.

2. Of spurious capital and other profits often spoken of as interest.

3. The Law of interest.

His treatment of the subject of interest is one of the greatest contributions to the Science of Political Economy. It ranks second only to his masterful treatment of Land and Rent.

He has taken the tangled web which was known as Political Economy and straightened it out and discovered for humanity, fixed principles; principles ignored entirely by all so-called political economists who preceded him.

As I am addressing full fledged Georgists in this book rather than beginners I shall deem it quite unnecessary to discuss those principles at length but merely to allude to them, except as they relate to the subject of interest, taking for granted that my readers fully concur in them as they relate to the subjects of Land, Labor, Rent and Wages.

The great Philosopher discovered those principles and they are essentially and distinctively Georgean. For convenience and to give them prominence I shall italicize the Georgean principles:

That men seek to gratify their desires with the least exertion.

That wages are not drawn from capital but are produced by labor.

That maintenance of laborers is not drawn from capital.

That capital does not employ labor but labor employs capital.

That all capital is the product of labor applied to land.

That the natural wages of labor is the full product of labor.

Though not the first to announce the law of rent, he followed it to its logical conclusion, correlated it with the law of wages and the law of interest and thus made the Science of Political Economy intelligible. He refuted the Malthusian theory, the acceptance of which cast a menacing shadow athwart the paths of men. He emphasized the fact that the Universe is ruled by immutable laws; that these laws are friendly to man; that they govern all human action, individual and social and that man's happiness is attained only by conforming human enactment to Natural Law. He gave us a Science which will explain and solve all of our social problems.

And yet, in face of all that he has done in this direction, men who can not define the laws of rent, wages and interest, nay, men who do not even know that tbere are such laws, presume to criticize him because he said of interest: "It is therefore just."

That he proved beyond peradventure that interest, as he defines it, "is not an arbitrary, but a natural thing; is not the result of a particular social organization, but of laws of the Universe which underlie society", can not be denied by those economic morons who, though they have no practical means of abolishing interest themselves, criticize him because he did not propose to abolish it.

These four words of Henry George "it is therefore just", have been a stumbling block for many years, both to Georgists and Socialists. To Georgists because they do not see, what it is my purpose to show, that George proved conclusively that interest, though a natural thing, never could go to individuals if or when the entire rent of land is appropriated by the community, but would be swallowed up by rent and wages. This is made so clear by George that if it were a dog it would bite.

To say that a thing is natural and therefore just in itself does not imply that its misapplication is just. I do not recall that Henry George, in any of his writings, ever said that rent is just. But if he had, would not every Georgist understand him to mean it is just only when collected by the community?

Those four words have been a stumbling block to that potpourri of superficial thinkers which includes all of the different shades of Socialist, Communist and Laborites, because George, to them, is an unknown tongue. They have no more idea of what George is talking about than I have about the fourth dimension.

Their absurd notions that capital must be accumulated before men can go to work; that no one can realize a profit without someone else sustains a loss; that the Universe is a blunder which needs to be corrected by an army of Socialist politicians whose wisdom, they believe, Is greater than that of all of the people and that rent, wages, interest and profits can be abolished by legislative enactment, precludes any possibility of their comprehending this or any other economic problem.

There are but two economic philosophies: George and Malthus. George stands for the truth that there is a natural order and that all social problems can be solved by conforming human enactment to natural law.

All other groups accept the Malthusian theory and seek, by artificial means, to control all social and individual activities to correct, as they suppose, the faults of a blundering Creator.

Georgists are united, at least, on the stand that there is a natural order and that whatever discord may exist is not the result of a faulty creation but follows man's disobedience to Natural Law.

Malthusians, though one in spirit, are divided into many queer groups. Malthusianism is the Hydra-headed monster with which the followers of George must do battle.

The Georgean movement, which, during the lifetime of our prophet, seemed destined to cover the earth as the water now covers the seas, has languished during the last three decades. And I think I can tell the reason.

No movement can prosper without opposition. Every Georgist should welcome opposition. But instead we find our people were more concerned about making friends, and too, with those who are our natural opponents.

We have allied ourselves with them in the political field of action. We supported their candidates when we should have had our own candidates in the field. We dared not publish a pamphlet which did not bear the mark of Malthus: Union Label, lest we offend these Malthusians.

And, even now, many Georgists think that we should join the Socialist Party. If we do and should we succeed in electing them to office, no matter how much they promised, before election, to collect for social needs the land rent, the first thing they would do upon taking office would be to piddle with child welfare or old age pensions or some other non-essential. Then where would we be? Just where we are and have been after forty years of flirtation with Cleveland, Bryan, Debs, Wilson, Thomas and Roosevelt.

What we lack is not friends but opponents. Socialists and Unionists are our natural opponents. Socialism stands for artificial control. We stand for the Natural order. Unionism is the backbone of protectionism; we stand for real free trade.

But there is one good thing about these two groups. They will talk! The rest of the world overwhelms us with silence. And what a grand back-ground these groups offer for Georgean philosophy. If we attack Socialism and Unionism, the discussion which must follow will give the Georgean philosophy a respectable hearing and attract the thinking men and women of the world to our side.

But the position of many Georgists on the subject of interest is a handicap to us in a contest which necessarily must force the issue to the logical conclusion.

I purpose, in the following pages of this book, to show that interest, though the result of Natural Law, can not go to individuals for the use of capital but will go in part to labor as wages and part to the community for common needs.

If I succeed in this I shall feel that I have placed in the hands of our people a weapon which can be used with deadly effect upon the hordes of Malthus.