The Menace of Privilege
[Reprinted from the Henry George News,
I HAVE come here with an important question which I have considered
gravely. Are we giving Henry George a fair deal? Are we forcing him
into the limbo of forgotten reformers because we do not let him speak
his whole philosophy? To me it seems a half truth to teach the
single tax as complete in itself. It is only a measure offered by
Henry George to institute his true reform, which was justice and
equality in association for all.
Where would his emphasis be today? Would he be on the barricades with
the disinherited and protestors against special privilege? Would he
confine his thinking to his masterpiece Progress and Poverty
and the single tax? He finished his book in 1879 but he was not lulled
by thoughts that the recognition of each man's right to exist would be
sufficient to implement the collection and distribution by the
community of community-created values, or that the fundamental reform,
the single tax, would banish poverty.
He expanded his ideas to cover the then current injustices which he
incorporated into Social Problems, published four years later.
A careful reading of these essays makes one aware that he was vehement
in denouncing all economic privilege as well as the private ownership
of the rent. Privilege to him was anathema. He used the word as
Webster defines it: A right or immunity granted as a peculiar
advantage or favor
especially in derogation of common right; a
franchise or patent.
In 1886 Protection or Free Trade emphasized his concern about
the evergrowing powers conferred on a privileged few by special
legislation. George saw these menaces eliminating competition and
opportunity, changing the structure of true capital, obstructing man's
desire for peace, and denying the many to benefit the few.
In both books he flails privilege, showing great aggregations of
protected "non-competitive capital" wielding terrible power
over unorganized labor and legislatures. Consider how great these
powers can be by reviewing our early colonial times. Here was a vast
open frontier available to all settlers, but let's not be deceived,
for while the colonists were far better off than European workers,
England held them in thrall. She reserved the colonies as an exclusive
market for the benefit of her English manufacturers and traders.
Colonial industrial development was forbidden. Frederick G. Jensen in
Capital Growth in Early America says, "England's
mercantilism kept New England in debt; the midcontinent colonies on
subsistence farming; and the southern planters robbed of their profit
margin." This, with a great continent open to settlement,
indicates the importance of trade and money power. The colonists'
rebellion amounted to refusal to remain subservient to such
monopolies. A free margin was not the whole answer, and Henry George's
later writings attest to this.
Let us hurry on to the twentieth century. In 1906 Henry George, Jr.,
influenced by his father's thinking, wrote The Menace of Privilege,
giving evidence of malpractice in the attainment of great wealth and
concentrated power. In 1968 Ferdinand Lundberg published his best
seller, The Rich and the Super Rich - A Study in the Power of
Money Today. Why is the first a forgotten, unread book and the
other a controversial best seller? Perhaps our times now show the
superstructure of privilege more clearly to many concerned with
inequality, and therefore make Lundberg significant today. But place
them side by side and the last book is almost a plagiarism of the
first. Both deal with welfare for the wealthy.
This has been and is the great game in government. It has taken so
much from the consumer through legislated privilege that its power to
raise prices, limit markets, accumulate vast noncompetitive profits
and reduce output has denied to labor the opportunity to create wealth
and has beggared many who now need relief. Yet it has made billonaires
of those few who hold us like a conquered people. Attempts at
anti-trust legislation are often ineffective. Read Henry George,
Jr.'s, and Lundberg's history of the Standard Oil Company. Both point
to the price wars, price rebates and railroad discrimination in favor
of Standard Oil, as its cause of ascendancy. Many owned oil lands, but
none had the secret and unlawful arrangements that made John D.
Rockefeller a triumphant billionaire.
Look at the 1969 farm subsidies - 3.1 billion for nonproduction - a
legislated welfare for the wealthy. Five owners received over one
million apiece; 13 over one-half million - the poor receive grants of
food stamps if their states permit. Listen to the latent of a
prosperous textile industry leading for more tariff protection, which
sends Commerce Secretary Stans abroad like a messenger to institute
voluntary foreign quotas. Mighty U.S. Steel claims it needs tariff
protection; American Export Lines opts for $80 million of the $130
million the administration allots to build merchant ships 1970.
Consider the patents gratuitously given to our large corporations.
For a rogue's gallery of the twenieth century turn to the pages of
the Wall Street Journal. SEC permanently bars former securities man on
Mary Carter dealings; Vesely accepts consent order on its sales
activities; $1.3 million triple damage awarded against Standard Oil,
California to Clyde Perkins, squeezed by that giant to force
compliance. Monsanto files suits on a rival charging infringement of
patent; U.S.A. asks damage in plumbing suit for fixed prices; $120
million refunds go to customers in drug suit against five
manufacturers; $22 million settlement reached in a price fixing suit
against 13 large copper and brass producers. On and on the unlawful
conspiracies continue. Knock on any door and the big business boys are
behind it, conspiring to fix prices, limit markets and undo the
customer. So much easier and more profitable than competitive capital.
No need to own the natural resources, just grow big enough to gain
legislated privileges and throw the tax burden on the consumer. Join
the club of the captains of industry and live the good life, with the
stockholders paying the fines if the corporation is caught and
But as Henry George, Jr. and Lundberg stress, it is the money market
that gives greatest power. Mellon didn't invent aluminum, but he
heaped up a fortune by arranging bank financing (other people's
money). Bank trust departments, the custodians of vast trust funds,
vote huge amounts of stock, join boards of directors and influence
company decisions. Banks give credit where they decide it is to their
interest. They support the credit needs of corporate giants while the
average man finds it difficult to obtain needed credit. Banks profit
by a rise of interest rates but the poor suffer and lose businesses,
homes and savings. Employment is directly averted by the tightening
and loosening of credit. The undisputed fact remains that an ability
to tighten credit will cause unemployment. If done too rapidly it will
cause a recession, even a depression. Should we continue to teach land
value speculation as the chief cause of depressions when we know the
tremendous power of the Federal Reserve Bank to influence the economy?
Shouldn't we stress money power as well as landowner power?
Can we offer as the answer to housing problems only land value
taxation and gradualism? Restrictive union practices, local building
and zoning codes, high cost of money, zooming construction costs due
to inflation (a money problem), delays and favoritism from government,
all will keep new houses deteriorating faster than they can be built.
To offer as the remedy, LVT with gradualism, is to be faced with a
repudiation of our reform if the cities do not react as expected,
unless we are wary enough to point out many other necessary measures
to free our economy.
Can we permit Henry George to be remembered merely as having written
Progress and Poverty? His works are like an opera, a great
drama of many parts in which he presents justice and equality
constantly being menaced by the evils of privilege. To free labor and
true capital he wrote that all economic privileges must be rescinded.
Eliminating monopolies in any form through corrective measures, be it
land monopoly, credit, money, franchises, unions, patents, subsidies,
tax preferences, tariffs - these are the steps to cure poverty and
Concentrating on land reform only instead of revealing the whole
score, is not to reach the multitudes who understand vaguely that
there are many evils surrounding them which keep them in poverty and
subjugation to the few. Let's do the whole job. Let's shout against