This Thing Called Capitalism
[Reprinted from The Freeman, July, 1943]
Put a Socialist, a Communist, a
Republican, a Democrat and a New Dealer in a room together and
ask them what Capitalism is. You'd get a couple of fist fights
and a dozen definitions, fourteen of which would be wrong. JOHN
HARRINGTON knows, as you will discover when you read this
article. He was started on the way to knowing many years ago
when, as a student at the University of Wisconsin, he heard
Henry George lecture. His chief impression of George, he now
relates, was the man's attractive personality. Mr. Harrington's
home is in Oshkosh, Wisconsin, where he has been engaged in the
practice of law for more than fifty years. He is the author of
that excellent pamphlet, "The People's Land," which
was reviewed in The Freeman for February, 1943.
THE WORD "CAPITALISM" is much in use in current political
and economic discussion in the newspapers, magazines and pamphlets of
the day. In the same literature we find the expressions "Free
Enterprise," "Rugged Individualism," "The American
Way," and like expressions, used as more or less synonymous
terms; intended as describing the freedoms, individuality and
initiative existing in this country as contrasted with the way of life
of the "common man" in other countries. Also as contrasted
with the principles and policy known as Socialism.
Capitalism is especially applied to our system of production and
distribution of wealth, the product of our labor and enterprise, and
physical resources. The term Capitalism is, of course, derived from
the word Capital, a word of blessed connotation, the third of the
factors of production. Without the invention of capital, man would
never have arisen out of the savage state. For capital includes all
the buildings, machinery and tools of production from the fish-hook,
spear, bow and arrow and canoe of the savage, down to the most
complicated machinery of today. Hence the attractiveness of the name
In recent years Capitalism has been taking on a more sinister
meaning, especially in certain levels of society. The hungry, ill-clad
and ill-housed blank per cent; the dwellers in the slums of our great
and medium cities; unemployed labor, sharecroppers, the under-equipped
physically and mentally -- among these there is growing suspicion that
Capitalism is not a blessing to them, but in some way a burden of
which they are in some measure the victims.
And they are right -- for Capitalism wears a false front in its name.
The assets of what is commonly referred to as Capitalism consists
chiefly of Capital and Land. These assets in large part are buildings
and machinery, railroads, ships, docks, wharves and other structures.
These constitute capital.
The Land element consists of extremely valuable city locations;
railroad locations and rights of way, street railway, telephone,
telegraph franchises; mines and mineral lands; oil, coal, iron, copper
and other metals and minerals; water powers, water fronts, forest and
grazing lands, and other natural resources. These lands and rights to
land are probably greater in value than all the capital. Capitalism
could with equal accuracy be called "Landlordism." And
Landlordism throughout the world has anything but a savory reputation.
The procedure necessary to re-establish the good name of Capitalism
is to take land out of the present unholy union. This can be
accomplished only by educating the people to the knowledge that land
belongs to the people. Land is a free gift of nature, the Creator, to
the human race. It is governed by a different set of natural laws from
those governing capital.
Socialism is not the remedy, for its proposal is to take over all the
means of production and distribution, capital and land, to be operated
for the equal benefit of all. This makes the state the owner and
manager of all, and the people the slaves of the state. It may be a
benevolent slavery, but is still slavery. Observation tends to
convince us in such case that the state tends to become one man who
must be "heiled" with the upraised palm.
Capital belongs to the man who made it or who paid for the making.
This is the natural law. The child who makes a doll or a bow and arrow
knows who the owner is. But land belongs to the people. It was here
before man. These truths are not yet taught in the schools. Capital is
always in demand. It wears out, disappears, and needs to be replaced.
The land remains. From the land comes all livelihood; and all are
entitled equally to life, and are therefore entitled to free access to
When Capitalists are assured of their right to their capital, to its
possession and its earned interest; and when they are deprived of
their land, except on the condition that the excess value, ground
rent, be paid into the public treasuries for the use of all the
people, then Capitalism will be a blessed thing, and Landlordism will
have disappeared. That will be when children are taught in the schools
that the land belongs to the people. That a man shall live by the
sweat of his brow implies that he need not pay another for a piece of
the earth on which to work. Simple as this truth is it is difficult
for men to see it. Such is the power of habit and custom.