A Short History of Economics...|
– Part 1
1100 - 1400 AD
Separation of Church and State
– Part 2
1500 - 1600
The English Reformation
– Part 3
The French Reformation
Awakening Economic Thought
The French Revolution
– Part 4
1800 - 1900
Origins of Classical Political Economic Theorem
The Law of Rent
– Part 5
Progress and Poverty
The Vision: A Stronger Form of Capitalism
Georgism & Marxism are opposites
Christianity's Missed Opportunity
– Part 6
1900 - 2000
Two Schools of Economic Thought
Classical Political Economic Theorem
– Part 7
Real Estate and Banking
Separation of Church and State
Some familiarity with the shaping of society, politics, and economics of daily life across Europe will provide context for understanding the development of European economic thought. Georges Duby (1919-1996), professor of the history of medieval societies at the Collège de France, specialised in the social and economic history of the Middle Ages, and, has achieved iconic status as the most original and influential postwar historian of medieval society. His most celebrated books are, The Knight, The Lady and The Priest – The Making of Marriage in Medieval Europe (1981, English translation 1983) and The Three Orders: Feudal Society Imagined (1982). Duby was a pioneer of the history of mentalities - Annaliste historians revel in facts: more facts than had ever been treated as history before – the study of not just what people did, but their value systems and how they imagined their world based on The Three Orders (Les Trois Ordres ou L’imaginaire du féodalisme)– those who pray, those who fight, and those who work the land (aka Estates General, politically formalized, 1302, France). Duby explains the complicated machinations of the medieval churchman and the paterfamilias...
(Recommended reading: French Historians 1900-2000s)
1100 - 1400AD
Professor Duby examined the influence of numerous competing interest groups over the vital period from the eleventh to the fourteenth century, during which time the introduction of formal Separation of Church and State laws gave the Roman Catholic Church (RCC) authority over traditional laws around European family life and spiritual dogma, and the introduction of new laws defining land ownership "in perpetuity" based on the argument that since the Church is the "body of Christ" it is immortal, therefore can own land "in perpetuity".
Church Monasteries 'held' large tracts of land across Europe and England, which were worked by farmers with a life interest only. The Viking Age (793–1066AD) aka the North Sea Empire, introduced Danelaw, where land was owned by individuals and could be bought, sold and inherited. The first English Pope, Hadrian IV, aka Adrian IV, (1154-1159) and his close adviser John of Salisbury, extended feudal land tenure to the North Atlantic Islands: for all islands are reputed to belong by long-established right to the Church of Rome.
According to Maurice Sheehy (1975), sometime between November 1155 and July 1156, John of Salisbury spent three months with Pope Hadrian at Beneventum, and it was during this visit that he obtained papal approval for the English invasion of Ireland. He describes the event himself:
[Salisbury] It was at my request that he (the Pope) granted to the illustrious king of England, Henry, the hereditary possession of Ireland, as his letters, still extant, attest: for all islands are reputed to belong by long-established right to the Church of Rome, to which they were granted by Constantine, who established and endowed it.
– Maurice Sheehy, (1975), 1998 Ed., When The Normans Came To Ireland, p.11). *
Pre-empire, Rome traded with Continental Celts, but never 'invaded' Ireland, therefore, Rome never had 'jurisdiction precedents' over Ireland.
"One land alone remained Keltic and not Roman. Far out in the western ocean, cut off from European influence not only by the sea but also by the wild highlands of western Britain... It was not till after the fall of the empire in the west that Ireland came to influence the religion and the art of the continent. That development is so remarkable and its results so far-reaching that it deserves all attention. ...
How little he knew of Ireland is incidentally illustrated not only by his optimism, but by his geographical idea that Ireland lay directly between Britain and Spain."
– F. J. Haverfield, (1913), Ancient Rome and Ireland
Note: Flavian Dynasty, 69-96AD: Agricola, "even under despotism, it was possible to behave correctly, avoiding the opposite extremes of servility and useless opposition."
Of particular interest here is Duby's documentation of the consequences of confiscation of land: methods introduced by the expansion of the role of the RCC’s Inquisition (circa 1231) for the suppression of heresy: extending RCC scope to classify traditional and non-Christian beliefs, including traditional healing arts, as heresy and witchcraft. Since women on the Western rim of Europe traditionally held rights to land ownership, an accusation of heresy or witchcraft allowed immediate confiscation of their property, before trial, and without right to council. Countless numbers of men and women were burned at the stake over a period of five long centuries, ending in the 18th century. This time span includes an initial 250 years of concentrated "witch hunts" and land confiscation, and suppression of the life-style, laws, and medical practices of traditional Western cultures.
In a 2011 ABC-RN interview, on reappraising the fabrication of tradition in the Middle Ages, Professor Felice Lifshitz goes so far as to suggest that the clergy were not allowed to marry to prevent their ownership of land: Why the Middle Ages Matter: Medieval Light on Modern Injustice (2011).
”The word is celebrate – not celibate!”
– Anon. (monastic transcriber 'punchline')
The Great “Fake News” Scare of 1530
In this December 2016 essay, Rick Falkvinge examines, with a touch of lightheartedness, the consequence of the RCC's loss of control of the mass media of the time – book production.
... the prospect of buying one single book would consume an entire family income for four years – or in the $500k to $1M range in today’s value. Gutenberg was convinced his invention would strengthen the Church, as the ability to mass produce books from a single original would eliminate all the small copying errors invariably introduced in the manual book production process. It would therefore, he argued, improve the consistency of Christian bibles. The result was the exact opposite, through mechanisms Gutenberg did not foresee. ... ultimately setting off a century of civil war over the Power of Narrative. The Catholic church went on a rampage and a crusade against this new spread of ideas that would challenge its narrative.
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The English Reformation
On the eve of the Reformation in 1529, Bishop Eustace Chapuys, Spanish ambassador and the Holy Roman Empire's Imperial Ambassador to England, noted that "nearly all the people here hate the priests".
An excellent overview:
Cambridge historian, Professor Jonathan Sommerville, author of Politics and Ideology in England 1603-1640 (1986), is currently Wisconsin University's historian of early modern Britain, and of the History of Political Thought in Europe between the Middle Ages and the Enlightenment:
The years before the Civil War were a critical period in England's political and constitutional development, and have been the subject of vigorous debate. Some historians argue that the Civil War had few long-term origins, while others discern deeper roots. Dr Sommerville here looks at the contemporary view of politics and at the ideologies, both in theory and in action, which contributed to the turbulent years before 1640.
Excerpts: Henry VIII's break with Rome was an act of state, prompted primarily by political motives, but many of those who supported Henry were appalled at the abuses rife in the Catholic Church and at the corruption of the Papacy. Some of these went further and sympathized with the growing Protestant movement. ...
1. Medieval universities were dominated by clergymen debating theology and philosophy in barbarous Latin. These academics were the mediocre heirs of the great medieval philosophers Thomas Aquinas, William of Ockham, and Duns Scotus.
2. Italian universities never became as immersed in scholasticism as their Northern counterparts. Instead, the study of medicine, law, and rhetoric/eloquence played an important part in their curricula; these studies were based on the texts of classical antiquity.
3. In this milieu was born humanism - a movement that wanted to restore original, uncorrupted classical texts and pure language (Latin and Greek).
4. The Christian humanists, Desiderius Erasmus, John Colet, and Thomas More applied these ideas to Scripture, and strove to understand the Bible's real message as a basis for leading truly Christian lives. They exposed clerical ignorance and promoted educational reform.
5. The Christian humanists' influence was limited to the small literate intellectual elite, but they did influence reformers such as Martin Luther, whose message was broadcast more widely. >>> more
Levellers, Ranters and Quakers:
"Reformation Restoration Colonies"
and the American Dream
During her tenure as professor of history at The University of North Carolina at Chapel Hill, Northern Irish historian Noeleen McIlvenna probed the archives on early American settlement, and in A Most Mutinous People (2009), she unlocked key insights on post-English Reformation in America: "These ideas, ...and all those very mutinous people, eventually became accepted as the quintessential American values." See a longer excerpt here
In 1637, the introduction of a new Arminian prayer book into the liturgy roused a strong resistance movement in Scotland, leading to mass signing of a national covenant. The covenant constituted both a religious and a nationalist statement, proclaiming that all signees committed themselves to Presbyterianism and to the independence of the Scottish Parliament. Charles wanted to crush this rebellion against his authority and called up a new Parliament in London that he hoped would supply the funds to raise an army against Scotland.
Pushing the king and the House of Commons even further apart was the news of the 1641 Irish Rebellion, a serious uprising interpreted in England and Scotland as one part of an international papist plot, with Archbishop Laud as a leading conspirator…
The idea that promotion depended on merit rather than class rank was a revolutionary doctrine in a nation of monarchy and aristocracy. … An array of religious sects sprang to life, zealously challenging clerical control of faith and practice, the imposition of tithes for a state church, and the elaborate system of patronage that allowed the ruling class to select the clergy. … The most radical among them, known as the Levellers, developed a program demanding that the franchise be extended … They argued against the enclosures of the common lands of each town, asking that those lands be "laid open again to the free and common use and benefit of the poore."
… In late 1648, the army moved against Parliament, believed to be too conciliatory toward the king. The members of Parliament allowed to remain voted to try Charles on charges of treason. He was executed in January 1649, and the monarchy and House of Lords were abolished, creating a republic. … Cromwell ordered their suppression. He and his major generals seized control of the commonwealth and ruled England through the 1650s. The Leveller movement suffered defeat, but its ideas did not. …
A new group that emerged in the early 1650s, the Society of Friends, commonly referred to as the Quakers, attracted many Ranters. … A contemporary politician labeled Quakers "all Levellers, against magistracy and property." … Quaker theology went beyond anything previously seen since the breakdown of censorship, for they even posited a leveling of the patriarchal order. The English Revolution had offered women a window of opportunity for involvement in the political sphere. … One historian calls 1659 the summer of the 'Quaker terror.' ...
Even the Anglican Church would be reestablished as a safeguard against the spread of meritocracy and the danger that such ideas posed to their property. ...
Monck, at the head of an army he had purged of both royalists and "fanatics," partnered with Shaftesbury and switched sides. In negotiations with the dead king’s son, Charles, exiled with his close adviser, Hyde, at Breda in Holland, Shaftesbury and Monck asked Charles to sign an agreement protecting land settlements of the commonwealth and guaranteeing some measure of religious toleration. ... Charles signed the deal in April 1660, and he returned to England and the throne a few weeks later. ...
... In 1663, three years after the Restoration, Charles II carved up his portion of the globe to thank his faithful supporters. He issued a charter for the area from the coast of the Carolinas to the Pacific Ocean to eight well-connected "lords proprietor"’: … The plan was that the immense acreage would serve as a lucrative and potentially perpetual source of income for the lords of colonization. Quitrents from settlers, profit from commodities such as tobacco, and of course gains from the sale of humans and their labor would flow home to the coffers in London. Four of the proprietors belonged to the Royal Adventurers to Africa, and two others already owned or had investments in Caribbean plantations. … Ironically, the Crown’s favorites, rewarded for restoring order to the realm, would establish a colony filled with people inspired by the Quakers and Levellers the ruling elite had suppressed.
See more excerpts here.
| Part 3
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The French Reformation
The Cambridge Modern History (1907), CH IX, The Reformation in France,
by Arthur Augustus Tilley (1851-1942), states:
THE Reformation in France never developed into a national movement. Though the Protestants under the stress of persecution consolidated themselves into a powerful and well-organised party, they never formed more than a minority of the nation. The majority, whose attachment to the Catholic Church was stronger than their desire for her reformation, detested the Reformers as schismatics and separatists even more than as heretics. ... The result was a succession of religious wars, which lasted, though not continuously, for more than thirty years. It was not till the beginning of the seventeenth century that France, once more at peace with herself, was able to work out on her own lines a Counter-Reformation. Yet at the beginning of the sixteenth century nearly all enlightened men were agreed as to the necessity for Reform. The evils under which the Church in France laboured were those which prevailed elsewhere; rapacity and worldliness among the Bishops and abbots, ignorance in the inferior clergy, great relaxation of discipline, and, in some cases, positive immorality in the monasteries and nunneries; and as the result an ever-widening separation between religion and morality.
See full transcript: The Reformation in France CH IX
Awakening Economic Thought.
"Is any study simpler than Economics?
A child could grasp it!" – Leon Mclaren
Centuries of turmoil brought France to the verge of bankruptcy.
Injustice and corruption were widespread. The need to prevent anarchy and maintain social order led to new ideas in political economy, out of which emerged the "économistes": A new school of economic thought launched the first strictly scientific system of economics, preceeding Classical Political Economists in writing about the importance of "Land" in terms of economic significance.
The school was dominated by Royal physician and economist Francois Quesnay (1694-1774) and economist and statesman Anne-Robert-Jacques Turgot (1727–1781), later joined by economist Jacques Claude Marie Vincent de Gournay (1712-1759) and writer, economist and government official Pierre Samuel du Pont de Nemours (1739-1817) who supported the revolution and advocated for genuinely free trade.
Recognising France as primarily an agricultural economy, the "économistes" modeled their 'solutions' on laws of nature, which led P. S. DuPont de Nemours to coin the term "Physiocrats" – from the Greek: rule of Nature.
In 1758, Francois Quesnay wrote "Tableau Oeconomique" documenting the Physiocrats' precept: "that the wealth of nations was derived solely from the value of land agriculture or land development."
Over a hundred years ago there arose in France a school of philosophers and patriots– Quesnay, Turgot, Condorcet, Dupont– the most illustrious men of their time, who advocated, as the cure for all social ills, the "impot unique", the "single tax". – Henry George (1839-1897)
The Physiocrats took inspiration from China's 4000 year history of taxing land.
Three very different reports:
(i) "China: 4000 years of taxing land" – notes from a lecture presented by Dr Peter Bowman at the British School of Economic Science's IU Conference, London, July 2013. Dr Bowman cites The Land Tax in China (1918) by Han Liang Huang, published by Columbia University (read or download here).
(ii) Judith Berling's excellent 1976 essay on neo-Confucianism,
(iii) Overview of the role Confucian philosophy played in sustaining China's imperial status-quo, by Professor Derk Bodde, (2005) Chinese Ideas in the West, Columbia University:
To men infected with these new ideas, China provided a powerful stimulus. For in China they saw a great civilization that had evolved quite independently of, and earlier than, their own. Although not a Christian nation, it had nevertheless developed in Confucianism a high system of morals of its own. And, unlike Europe, it had done so without permitting a priesthood to become so powerful as to challenge the state's authority. The emperor of China, furthermore, though seemingly an absolute ruler, was in actual fact limited by the teachings of Confucianism, which declared that "the people are the most important element in the state; the sovereign is the least." Particularly was China admired as a land where government did not rest in the hands of a feudal aristocracy, as in Europe. Instead, it was managed by the mandarins — a group of highly educated scholars — who gained their official positions only after proving their worth by passing a series of state-administered examinations. We know today that this highly favorable picture of China was somewhat over-painted. Yet there is little doubt that the China of the seventeenth and eighteenth centuries was, both politically and economically, in many ways ahead of Europe (Bodde, 2005, p. 4.).
The French Revolution
"Let them eat cake!"
This misattributed phrase illuminated the impact of a thousand years of hardship, despair, desperation, and fundamentalism underpinning the politics of dominionism and ascendancy.
The End of Feudalism via the "Single Tax"
The Fall of the Bastille on July 14, 1789, marks the beginning of the French Revolution, but August 4, 1789 was The Night the Old Regime Ended – the end of feudalism, serfdom and class privileges in France, when a National Assembly, aka the Estates General, resolved not to repress the revolt of the peasants but to remove the cause of inequality by changing tax laws: privileged nobles and clerics agreed to abandon their feudal rights and privileges, including tax exemption and tithe tax, bringing the feudal order to an end.
According to Arthur Augustus Tilley, the French historian François Aulard (1849-1928) believed the Revolution (1789-1799) led to "the emancipation of the individual, in greater division of landed property, the abolition of the privileges of noble birth, the establishment of equality, the simplification of life".
Arthur Tilley, ed. (1922), Modern France: A Companion to French Studies, (see also Google Books scan, p.115.)
Louis XVI (1754-1793) promoted religious tolerance and wanted to end serfdom, and he supported the ideals behind the American Revolution. However, he inherited the throne unexpectedly, without training for a role based on absolute authority, thus, his efforts were blocked at every turn by divisive elites determined to maintain their own social order. Joe McGasko's (2014) insights on the private lives of young Louis XVI and Marie Antoinette “may help to add a human dimension to our understanding of these often maligned historical figures”. >>> more
See also Edmund Burke's classic text, Reflections on the Revolution in France, 1790. According to Daniel O'Neill (2016), Burke’s defense of empire was in fact ideologically consistent with his conservative opposition to the French Revolution. … and shows that Burke’s argument …prefigured later intellectual defenses of British imperialism.
“Rights of Man” (1791) by American Founding Father Thomas Paine, was written in defense of the early liberal phase of the French Revolution, in response to Edmund Burke’s critique.
Excerpt from the Preface:
“Rights of Man” by Thomas Paine
FROM the part Mr. Burke took in the American Revolution, it was natural that I should consider him a friend to mankind; and as our acquaintance commenced on that ground, it would have been more agreeable to me to have had cause to continue in that opinion, than to change it.
At the time Mr. Burke made his violent speech last winter in the English Parliament against the French Revolution and the National Assembly, I was in Paris, and had written him, but a short time before, to inform him how prosperously matters were going on. Soon after this, I saw his advertisement of the Pamphlet he intended to publish: As the attack was to be made in a language but little studied, and less understood, in France, and as every thing suffers by translation, I promised some of the friends of the Revolution in that country, that whenever Mr. Burke’s Pamphlet came forth, I [viii] would answer it. This appeared to me the more necessary to be done, when I saw the flagrant misrepresentations which Mr. Burke’s Pamphlet contains; and that while it is an outrageous abuse on the French Revolution, and the principles of Liberty, it is an imposition on the rest of the world.
|Origins of Classical Political Economic Theorem
|Adam Smith(1723-1790), the reputed founder of Classical Political Economics, visited the Physiocrats in France while touring across Europe (1764-1766) as tutor to the young Scottish nobleman Henry Scott, 3rd Duke of Buccleuch. Smith was influenced by the Physiocrats' economic theorem: the wealth of nations was derived solely from the value of land agriculture or land development.
Ten years later, Classical Political Economics theorem was formally launched with the publication of Adam Smith's
The Wealth of Nations (1776).
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The Law of Rent
Around 1809, English Economist David Ricardo (1772-1823) defined the income derived from the ownership of land and other free gifts of nature as "The Law of Rent" (aka Economic Rent, Ricardo's Law, Resource Rent), with collection methods referred to as Single Tax | Resource Rent | Land Value Tax | Site Value Tax, and more: A philosophy and economic theory that follows from the belief that although everyone owns what they create, land, and everything else supplied by nature, belongs equally to all humanity.
... without a knowledge [of The Law of Rent], it is impossible to understand the effect of the progress of wealth on profits and wages, or to trace satisfactorily the influence of taxation on different classes of the community. – David Ricardo
However, Sir William Petty (1623-1687) actually applied what came to be known as Ricardo’s Law of Rent (which is the basis for the theory of land valuation), some 150 years before Ricardo. Famously, Sir William Petty used the principle of capitalisation of the rent of land to value England and Ireland. Australian Tax Office (retired) land valuer and researcher Bryan Kavanagh wrote about this obscure piece of Irish history in an article published in THE AGE Newspaper in 2005: Resource rents hold the property key and, in June 2012, Bryan Kavanagh also wrote, on his blog, about William Petty's valuation of England:
WHERE IT ALL GOES HORRIBLY WRONG:
Classical Days – When the role of land rent in the economy was understood.
With no disrespect for Adam Smith, some still see Sir William Petty (1623-1687) as the father of modern economics and its first econometrician. In many respects, I think Petty was the true founder of classical economics because he had an even deeper understanding of the role (and the sheer extent) of rent within the economy than Adam Smith. Being both a valuer and an economist, he had a much broader picture of the economy than today’s superficial economists.
– Bryan Kavanagh, Land Valuer (Ret.), Australian Tax Office and various Australian banks.
Sir William Petty, Political Anatomy of Ireland (1772):
The political anatomy of Ireland with the establishment for that kingdom when the late Duke of Ormond was Lord Lieutenant ... : to which is added Verbum sapienti, or, An account of the wealth and expences of England, and the method of raising taxes in the most equal manner ...
In the summer of 1676 Petty once more took up his residence in Ireland, where, save for visits to London in the spring of 1680, he remained almost five years6. It was during this period that he wrote the “Political Anatomy of Ireland,”... >>> more
Sir William Petty, Ireland, and the Making of a Political Economist, 1653-1687
By Adam Fox
The importance of Sir William Petty in the history of history of economics is well established. In his principal published works of economic theory …outlined a number of theories and concepts that are now staple components of the modern discipline. >>> more (pdf)
250 years of debate:
The Law of Rent aka Economic Rent
Over the past two hundred and fifty years, many legendary philosophers and economists contributed to the advancement of the Physiocrats' ideas, now known as Classical Political Economic theorem.
Early contributors to classical political economic theorem include Sir William Petty (1623-1687), John Locke 1632-1704, William Penn 1644-1718, Francois Quesnay (1694-1774) Benjamin Franklin 1706-1790,Jacques Claude Marie Vincent de Gournay (1712-1759), Adam Smith 1723-1790, Anne-Robert-Jacques Turgot (1727–1781), Thomas Paine 1737-1809, Pierre Samuel du Pont de Nemours (1739-1817), Thomas Jefferson 1743-1826, David Ricardo 1772-1823, Edwin Burgess 1807-1869, John Stuart Mill 1806-1873, Patrick Edward Dove 1815-1873, Herbert Spencer 1820-1903, Alfred Russel Wallace 1823-1913, Leo Tolstoy 1828-1910, Mark Twain 1835-1910, Henry George 1839-1897, Michael Davitt 1846-1906, William Ogilvie 1846-1912, Clarence Darrow 1857-1938, Sun Yat-sen 1866-1925, Sir Winston Churchill 1874-1965, Walter Burley Griffin 1876-1937, David Lloyd George 1893-1945, and more.
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Progress and Poverty
The Vision: A Stronger Form of Capitalism
It fell to 19th century American journalist Henry George (1839-1897) to popularize the theorem with the 1879 publication of the all-time best-selling book on economics, Progress and Poverty (pdf), leading to the term Georgism, or Georgist. In writing his book, Henry George's aim was to understand why economic growth, aka progress, always led to more entrenched poverty.
Henry George dedicated Progress and Poverty, "To those who, seeing the vice and misery that spring from the unequal distribution of wealth and privilege, feel the possibility of a higher social state and would strive for its attainment. – San Francisco, March 1879."
Georgism & Marxism are opposites
Karl Marx (1818-1883) died four years after "Progress and Poverty" was published in 1879, and in that short time, he SAW an 'opposing idea' in the ideas of the American Henry George (1839-1897), and the reason is clear to anyone who reads their philosophies:
– Marx wanted both land and capital to become public property.
– George recognised private property in capital but wanted the community to recover, from landowners, the full value (Economic Rent aka land, site or resource value) of all unimproved land. The idea is to turn "landowners," a position of contrived privilege, into people who, like everyone else, simply rent the land from the community via elected government.
In Progress and Poverty (1879), Henry George explained how collection of Economic Rent via a "Single Tax" (Land or Site Value Tax, or Resource Rent) on all private use of The Commons could replace all taxes on productivity - all income, pay-roll, business and sales taxes.
Free Market Holistic Thinking
– freedom from oversight and dictation by centralist, monopolistic, authoritarian administration.
It is possibile to enjoy the benefits of a genuinely FREE market as well as economic justice and ecological sustainability. While Kaynes and Friedman, and Hayek too, were familiar with ideas around the value of Economic Rent, they made the mistake of treating "Land" as Capital.
The same can be said for Marx.
But not so for Henry George.
|Professor Mason Gaffney, in The Corruption of Economics (1994): To most modern readers, probably George seems too minor a figure to have warranted such an extreme reaction. This impression is a measure of the neo-classicals' success: it is what they sought to make of him. It took a generation, but by 1930 they had succeeded in reducing him in the public mind. In the process of succeeding, however, they emasculated the discipline, impoverished economic thought, muddled the minds of countless students, rationalized free-riding by landowners, took dignity from labor, rationalized chronic unemployment, hobbled us with today's counterproductive tax tangle, marginalized the obvious alternative system of public finance, shattered our sense of community, subverted a rising economic democracy for the benefit of rent-takers, and led us into becoming an increasingly nasty and dangerously divided plutocracy. >>> more
|[Henry] George's theme was that the fundamental reason for the maldistribution of wealth in a free enterprise society was the private ownership of natural resources. He did not advocate the nationalisation of land as did some of his socialist contemporaries but a concentration of revenue-raising, or a single tax as it came to be known, upon the value of land, so that its yearly worth or economic rent would be taken into the public treasury in lieu of taxes on labour and production. He regarded the economic rent or annual value of raw land as society's natural income, increasing as the need for revenue grew with expanding population and social progress. These were not original ideas for they followed the track blazed by the French Physiocrats and later by political economists such as Adam Smith, David Ricardo, JS Mill and Herbert Spencer. But George carried their implications further than his predecessors and expressed them in unsurpassed prose and with compelling logic. – MD Herps, FAIV, DipLaw (BAB), FSLE:
The Walsh Memorial Bequest Address delivered at Macquarie University School of Economics 27 May 1988. Doug Herps was Deputy Valuer-General, New South Wales, and consultant to the Commonwealth Grants Commission in connection with Australia's land values.
Christianity's Missed Opportunity
In his time, Henry George became the third most famous man in the United States, behind Thomas Edison and Mark Twain, due to his success in promoting "The Law of Rent" theorem. In 1891, Pope Leo XIII was forced to constrain the growing number of priests and laity supporting Henry George's work by issuing an encyclical Rerum Novarum – "of revolutionary change" or "Rights and Duties of Capital and Labor"
Professor Mason Gaffney's 1997 lecture, updated in 2000, provides a thoroughly referenced report, and is a must-read for those wishing to understand the central role of the Vatican in shaping economic history.
PDF format: Henry George, Dr. Edward McGlynn, and Pope Leo XIII
“It was a time when Dr. Edward McGlynn, the must popular Catholic priest in NYC and the nation, could dream of modernising the American Catholic Church, leading it to shake off medieval trappings and old-world control, and leading the U.S. to genuine unity.” – Mason Gaffney
On page 6, Professor Gaffney states: Rerum Novarum ... was a watershed document: It was a new venture into social theology. ...the first far-reaching formulation of Catholic teaching since the long Council of Trent in the middle of the 16th Century. ...refuting false modern doctrines advanced by George and [Father] McGlynn. ...championing private property in land against various attacks, real and imagined, and specifically against Georgist land taxes. It was the Catholic counterpart of the attacks on George led by sanctimonious Protestant laymen and academicians like John B. Clark and Richard T. Ely.
[Rerum's] sequel, Quadragesimo Anno, 1931, was issued by Pius XI to steer a course between socialism and laissez faire, seeking 'social justice through social action' (p. 12)
In 1997, economics reporter for the New York Times Will Lissner wrote an article on Father Edward McGlynn, the beloved priest of New York Irish Catholics, revealing how ecclesiastical bureaucrats in Rome had been misled:
...forming the mistaken opinion that Henry George and Father McGlynn held doctrines which were inconsistent with those traditionally held by the Church. ... And it is interesting that in the end, Henry George and Edward McGlynn won the greatest vindication — adoption of their position by the Magisterium, the teaching authority of the Church. ... Pius Ninth’s effort to save the monarchs, of whom he himself was one, from their inevitable doom, lost to the Church millions of workingmen and intellectuals who allied themselves with the growing democratic movement around the world.
When Leo XIII became Pope one of his first concerns was to undo the damage. In furtherance of this campaign he issued the encyclical letter, Rerum Novarum (On the Condition of Labor), on May 15, 1891. This document did much to update the antedeluvian thinking of Catholic conservatism. But it was muddled on radical land reform; it left the impression that there was a private right to possess land which superseded the common right of all men to the use of the earth — that common right that had been asserted by the Latin and Greek Fathers of the Church from the Apostolic Age onward. Henry George read the Pope a lesson in the history of economic doctrines and in the relations between economics and ethics in his The Condition of Labor, an Open Letter to Pope Leo XIII. This work of George’s had a profound influence upon Catholic social thinking in Europe and America.
When Father McGlynn was invited to write out a memorandum of his beliefs, it was fortunate that he had at his elbow Father Richard Burtsell. Like McGlynn he was a product of the Roman seminaries — a very quiet man who believed with McGlynn in the things he spoke about and in his right to say them. What they did was to set out that there are two rights: the common right to the use of land and the private right to possess it, and that an ethical land policy reconciled the two rights. On this basis the theologians judged that there was in McGlynn’s belief nothing contrary to Catholic doctrine, and he was restored to his full offices.
But there is an aspect of the McGlynn case that is often overlooked. The position for which McGlynn was condemned was not the one held by George which admitted the necessity for private possession of land, but rather the view [suggested] in Progress and Poverty, that land was common property. Indeed, McGlynn went further than George and held that private possession of land was immoral. >>> more
(See also Will Lessner 1937 report on Franco's Spain)
|In a 2007 lecture, Going My Way? Winding Through the Stumbling Blocks Between Georgism and Catholicism, Professor Gaffney stated:
This essay surveys the issues between Georgists and Roman Catholics in three classes: issues that are not peculiarly Roman Catholic (RC) but play out across faiths and denominations, issues that are peculiarly RC, and points of similarity and agreement. Addressed in this fashion are the tensions that arise between the social gospel and individual salvation, between specifics and glittering generalities, between noblesse oblige and governmental reform, between the doctrine of original sin and tabula rasa, between the rich and the poor, between the dignity of labor and the honor of predation, between democracy and authority, between the regulatory emphasis rooted in the philosophy of Aquinas and free markets, and between plain talk and gobbledegook.
Professor Gaffney's comes to an optimistic conclusion:
I was pleasantly surprised, as I worked along, how few of the stumbling blocks I had listed are peculiar to Catholicism; and how many are passable. The ones listed in “B” may remain, but I am optimistic that with good will on both sides we may find pathways through them, or over or around or even under them, to work together towards our common goals. I have not minced words to avoid tough problems, but tried to define issues clearly as a prelude to resolving them. Catholics of good will will not take offense, but detect the search for reconciliation beneath my frank words. I look to Catholic Georgists like Kelly, Kromkowski, and Dwyer to carry this resolution further. >>> more
|“The intelligence required for the solving of social problems is not a thing of the mere intellect. It must be animated with the religious sentiment and warm with sympathy for human suffering. It must stretch out beyond self interest, whether it be the self interest of the few or of the many. It must seek justice. For at the bottom of every social problem we will find a social wrong.”
- Henry George, Social Problems, 1883, (Ch.1/20)
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Two Schools of Economic Thought
"A closer look at what has gone on suggests that a large fraction of the increase in wealth is an increase in the value of land, not in the amount of capital goods." – Professor Joseph Stiglitz, Columbia University, Jan. 2015
Capitilization of land is the basis of our current economic system: Inflation followed by deflation in roughly 18-year Real Estate Boom-Bust Cycles, whereby speculators and financial institutions capitalize on property sales.
The Delusion: "If nothing suppresses competition, progress will continue forever." – John Bates Clark (1847 – 1938), academic originator of Neo-Classical Economic 'concept "Land" = capital, and first Professor of Economics at Columbia University (1926).
1. Classical Political Economic Theorem
The Law of Rent: Economic Rent, Resource Rent
Classical Political Economists developed the theorem that land is distinct from capital: "land, labor, and capital" were the three basic classical "factors of production" and were considered mutually exclusive.
Classical Political Economists recommend tax reform:
Collect a "Single Tax" and eliminate all other taxes.
(i) collect Economic Rent aka Resource Rent on all private access to land and natural resources.
(ii) provide a social wage or citizen dividend to all citizens.
(iii) remove all taxes on productivity – no income, business and sales taxes, etc.
"Land Value Tax is efficient because the tax reduces the price of land but does not affect how it is used, or how much is used."
– Dr. Ken Henry, Treasury Secretary (2001-2011), Australian Government.
Mason Gaffney, Professor of Economics at University of California, Riverside since 1976, co-authored (with Fred Harrison and Kris Feder) the authorative documentation of The Corruption of Economics (1994) – a detailed history of the suppression of Classical Political Economic theorem in favour of the current neo-classical speculative system.
See excerpt here.
In The Corruption of Economics the precise manner in which Classical Political Economic theorem was 'neutralized' is clearly explained:
In short, (i) economic modelling became fundamentally corrupted via blurring of the traditional distinction between capital and land and hence between earned and unearned income, (ii) by glossing this blurred distinction with jargon and abstract models, and (iii) by recasting economics generally to make free-riding by landowners seem just and moral.
2. Neo-classical Economics
"Land" = Capital
aka: Laissez Faire, neoliberalism, economic rationalism, market fundamentalism, Thatcherism, Reaganism, neoconservatism, neo-imperialism.
Neo-classical economists changed the definitions of factors of production from "land, labor and capital" to labor and capital.
Neo-classical economic theorem, which promotes real-estate speculation and land capitalization, was first introduced as an academic economic theorem in 1926, when Columbia University launched the first Chair of Economics, funded by land speculators. John Bates Clark became popular with speculators when he developed the neo-classical economic theorem defining "Land" as capital, and, hence, became the first Professor of Economics at Columbia University.
Under Professor Clark's tenure the word "Land" was printed in quotes in economics textbooks:
"Land" = capital, when "Land" doesn't turn over in the way that capitalism defines production turnover. In other words, neo-classical economists advocate making profits from real-estate speculation, based on the escalation of "Land" prices in boom-bust cycles and repeated recessions.
Neo-classical economic theorem continues to be promoted by the American Economics Association which annually awards
"The John Bates Clark Medal" to an economist under age 40.
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|Real Estate and Banking
"The current financial crisis proves the neo-classical economy is working – not failing."
– Phillip J. Anderson, The Secret Life of Real Estate and Banking (2009)
Excerpt from Phil Anderson's BLOG:
Economists delight in recalling the Dutch tulip mania of 1636, the South Sea bubble of the 1720's, and in current times the internet investment bubble of the 1990's, because it involved colourful characters in what turned out to be awesome booms that turned quickly to bust. These were random events, responses to either luck (such as the alleged discovery of gold) or invention (money-making schemes of fertile imaginations). They could not have been predicted using the standard tools of the economist.
The financial crisis that broke in 2007 is different. This crisis was pre-determined by the structure of the economy. The present crash is NOT a market failure: it is actually proof that the monopoly capitalist system is working, and working well.
The instability of the system is inbuilt into the DNA of the economy. The process is underpinned by the enclosure of the economic rent, a concept first formalised by English economist, David Ricardo. Ricardo's Law of Rent states, simply, that the economic rent is not a cost of production. A house costs pretty much the same to build, wherever you build it – wages are the same, and materials costs are the same. But the selling price will depend on the location. >>> more
In the interest of absolutely accurate prophecy
Seeing what sort of political leadership the common man invariably chose to follow, and the kind of issue that invariably attracted him, [George] ended the argument of Progress and Poverty with a clear warning, too long to be quoted here, against the wholesale corruption of the common man by the government which the common man himself sets up. It is well worth reading now, whether one finds the root of this corruption in the common man’s weakness of mind and character, or whether one finds it, as George did, in the unequal distribution of wealth. Whatever one may think about that, there is no possible doubt that George’s warning has the interest of absolutely accurate prophecy.
– A. B. Nock, Henry George: An Essay(1939), William Morrow & Company:
“If land value is taxed, the land will not flee, shrink or hide.”
– Fred Foldvary, San Jose State University
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Go To: Solutions
| "A prince should have no other aim
or thought but war
and its organisation and discipline."
Roman Senator Tacitus, in Agricola (98AD),
credited Caledonian (Scotland) Chieftain Calgacus with the following
response to upheaval
caused by the Roman Empire:
"...Out of sight of the shores of the conquered, we could keep even our eyes unpolluted by the contagion of slavery. To us who dwell on the uttermost confines of the earth and of freedom... Robbers of the world, having by their universal plunder exhausted the land, they rifle the deep. If the enemy be rich, they are rapacious; if he be poor, they lust for dominion; neither the east nor the west has been able to satisfy them. Alone among men they covet with equal eagerness poverty and riches. To robbery, slaughter, plunder, they give the lying name of empire; they make a solitude and call it peace."
"The eve of the triumph of Christianity."
The Hidden People:
The Spirit of Communication and 'The Craic' (1997)
By Maireid Sullivan
On the history of struggle over Roman Catholic Church dogma and traditional Celtic philosophy.
Excerpt: The Celtic philosopher, Pelagius (354-420 AD), believed that the Church doctrine of original sin, expounded by Augustine of Hippo, would lead to personal irresponsibility since it was based on the theory that everything is preordained and that we are all imperfect sinners because we have inherited the original sin of Adam. This theory denied people's capacity to live openly, with courage, and with free will. >>> more
LAW of the Land
At the Council of Elvira, held in Spain in the early 4th century AD, the Roman Catholic Church formally extended its new order across Western Europe. Christian theocratic domination and repression of Western European cultures, arts and science led to the European Dark Ages (500 - 1000AD). Canons enacted at the Council of Elvira, all-disciplinary, ... deal with marriage, baptism, idolatry, fasting, usury, vigils, excommunication, frequentation of Mass, the relations of Christians with pagans, Jews, heretics, etc. >>> more
The Synod of Whitby
led to the liturgical and administrative unification of the Roman Catholic Church in England. Delegates from the North and the South came together to debate whether the Celtic or the Roman customs were to be followed. A decision was made to follow the Roman liturgical customs introduced by Augustine of Canterbury in place of the Celtic practices that were formerly followed. Supporters of the Celtic traditions withdrew to Scotland. St. Wilfrid of York (634-710), chief spokesman for the southern Roman church, described the Synod in his biography, written long after the events. The Venerable Bede in his Ecclesiastical History of the English People describes the proceedings in detail about seventy years after the events. >>> more
The origins of the United Kingdom can be traced to the time of the Anglo-Saxon king Athelstan, grandson of Alfred the Great, who in the 10th century secured the allegiance of neighbouring Celtic kingdoms and became “the first to rule what previously many kings shared between them.” >>> more and more
The Charter of Liberties
aka The Coronation Charter, was a written proclamation by Henry I of England, issued upon his accession to the throne in 1100. It sought to bind the King to certain laws regarding the treatment of church officials and nobles. It is considered a landmark document in English legal history and a forerunner of Magna Carta.
>>> more, and pdf
The Concordat of Worms
aka Pactum Calixtinum by papal historians, was an agreement between Pope Calixtus II (1119–24) and Holy Roman Emperor Henry V (reigned 1106–25) on September 23, 1122 near the city of Worms. It brought to an end the first phase of the power struggle between the Papacy and the Holy Roman Emperors and has been interpreted as containing within itself the germ of nation-based sovereignty that would one day be confirmed in the Treaty of Westphalia (1648); in part this was an unforeseen result of strategic maneuvering between the Church and the European sovereigns over political control within their domains. >>> more
aka Magna Carta Libertatum or The Great Charter of the Liberties of England, was the first document forced onto a King of England by a group of his subjects, the feudal barons, in an attempt to limit his powers by law and protect their privileges. The charter was an important part of the extensive historical process that led to the rule of constitutional law in the English speaking world. SOURCE: Magna Carta: a precedent for recent constitutional change.
The Great Charter
aka Carta de Foresta, sealed by young King Henry III, acting under the regency of William Marshall, 1st Earl of Pembroke, was a complementary charter to the Magna Carta, providing rights, privileges and protections for the common man against the abuses of the encroaching aristocracy. >>> more
Statute of Merton
This statute is the forerunner of our parliamentary legal system – the first entry in the Statute Book – consisting of eleven chapters. The term "Statute of Merton" is usually reserved for ch. 4 because of its role in forming The Commons Act 1236. This statute allowed a Lord of the Manor to enclose common land (provided that sufficient pasture remained for his tenants), and set out when and how manorial lords could assert rights over waste land, woods, and pastures against their tenants. It quickly became a basis for English common law, developing and clarifying legal concepts of ownership, and was one of the English statutes carried over into the law of the Lordship of Ireland.
Read the history–well told (pdf)
• 1279 and 1290AD
Statutes of Mortmain
Two enactments by King Edward I aimed at preserving the kingdom's revenues by preventing land from passing into the possession of the Church—to re-establish the prohibition against donation of land to the Church, which was originally proscribed by the Magna Carta aka Great Charter of 1217. Magnates were asked by what warrant they claimed rights of jurisdiction and other franchises. By the Statute of Mortmain of 1279 it was provided that no more land was to be given to the church without royal license. This created much argument, which was resolved in the Statute of Quo Warranto of 1290. >>> more and more
• 1275 and 1285AD
Statutes of Westminster
...of the commons had been summoned; the other two statutes were promulgated in parliaments attended only by the great lords and councillors. The second statute (1285) has become known as De donis conditionalibus (“concerning conditional gifts”) from its first clause, which sought to restrain alienation of land and preserve entail. >>> more
"Concerning Gifts" Statute of Westminster II. Legislation at the end of the 13th century (statute De donis conditionalibus, 1285) allowed a conveyor of land to limit its inheritance to the direct descendants of the conveyee and to claim it back if the conveyee’s direct line died out. >>> more
forbade subinfeudation, the process whereby one tenant granted land to another who then considered the grantor his lord. Thus, after passage of the Quia Emptores, if A granted land to B in fee simple, B's lord would not be A but A's lord. The statute prevented the growth of the feudal pyramid, and in the course of time most land came to be held from the crown and not from intermediate lords. Quia Emptores was critical to the development of the English law of real property, especially the establishment of the right of free alienation. >>> more and more
(This is the law that denied land ownership to the Irish, the Quia Emptores Act of 1290 AD, is still on the Irish statute book. >>> more)
Confirmation of Charters
As the most recent version of the Magna Carta, remains in legal force in England and Wales.
#4. And that archbishops and bishops shall pronounce sentences of greater excommunication against all those that by word, deed, or counsel shall go against the foresaid charters, or that in any point break or go against them. And that the said curses be twice a year denounced and published by the prelates aforesaid. And if the same prelates or any of them be remiss in the denunciation of the said sentences, the Archbishops of Canterbury and York for the time being, as is fitting, shall reprove them and constrain them to make that denunciation in form aforesaid. >>> more
Statute of Uses
An English Law enacted to end the practice of creating uses in real property by changing the purely equitable title of those entitled to a use into absolute ownership with the right of possession. "the statute would work to transfer into common law interests that could not have been created at common law prior to the statute." >>> more
Statute of Wills
abolished primogeniture and gave landholders the right to devise their property to whomever they pleased in a written will and testament. However, Parliament did not abolish the Statute of Uses. >>> more
Statute of Merton was revived
to enable lords to enclose their land at their own discretion — out of keeping with the traditional Tudor anti-enclosure attitude. >>> more
List of Medieval statutes
governing English, Scottish, Irish laws issued under royal authority in the Kingdom of England before the development of Parliament. These instruments are not considered to be Acts of Parliament, which can be found at the List of Acts of the Parliament of England
The impact of this 1891 Encyclical by Pope Leo XIII echoed through the 20th Century and, for Catholics, dominated it, according to Professor Mason Gaffney's 1997 lecture, updated in 2000. View in PDF format:
Henry George, Dr. Edward McGlynn, and Pope Leo XIII
|"Understanding the role of land in the economy was critical to classical economic analysis. Although it is even more critical today, it is ignored. Instead of surface land rent remaining near Petty’s estimation, as about 30% today, the neoclassical economist continues to promote the lie that it is now only about 1%. This Great Untruth is the main reason for the global financial collapse – and the 0.1% manage to keep it in circulation by way of the pathological study into which modern economics has degenerated. Bring back the intellectual rigour of Sir William Petty and the classicists!"
Bryan Kavanagh, Land Valuer (retired) Australian Tax Office
and Measuring Economic Resilience
Professor Lino Briguglio (2006)
Conceptual and methodological framework for the analysis and measurement of economic resilience. Islands and Small States Institute, University of Malta.
The working definition of economic resilience adopted in this paper is the “nurtured” ability of an economy to recover from
or adjust to the effects of adverse shocks to which it may be inherently exposed. Download the PDF here
|"A great change is going on all over the civilized world similar to that infeudation which, in Europe, during the rise of the feudal system, converted free proprietors into vassals, and brought all society into subordination to a hierarchy of wealth and privilege. Whether the new aristocracy is hereditary or not makes little difference. Chance alone may determine who will get the few prizes of a lottery. But it is not the less certain that the vast majority of all who take part in it must draw blanks. The forces of the new era have not yet had time to make status hereditary, but we may clearly see that when the industrial organization compels a thousand workmen to take service under one master, the proportion of masters to men will be but as one to a thousand, though the one may come from the ranks of the thousand. "Master"! We don't like the word. It is not American! But what is the use of objecting to the word when we have the thing?"
Henry George, Social Problems, Ch. V. (PDF)
|"... Seeing what sort of political leadership the common man invariably chose to follow, and the kind of issue that invariably attracted him, [George] ended the argument of Progress and Poverty with a clear warning, too long to be quoted here, against the wholesale corruption of the common man by the government which the common man himself sets up. It is well worth reading now, whether one finds the root of this corruption in the common man’s weakness of mind and character, or whether one finds it, as George did, in the unequal distribution of wealth. Whatever one may think about that, there is no possible doubt that George’s warning has the interest of absolutely accurate prophecy."
A. B. Nock's 1939 essay on Henry George.
The Fanatic Feminist
Who Created ‘Monopoly’
"it turns out the truth is more tortured, and more fun." The Monopolists, by Mary PIlon
The Landlord's Game
The Game of Monopoly, patented in 1904, was originally invented as a teaching tool, played with reverse rules, to help explain Henry George's economic principles.
"It's an American classic: each new generation of Monopoly players learns to love (harmlessly) indulging its cutthroat, ruthless, greedy impulses. Players begin the game as equals. Luck – and a bit of strategy – eventually enables one player to dominate all others." Source: The History of The Landlord's Game
The Original Monopoly was Deeply Anti-Landlord
By Tristan Dnovan
May 24, 2017
The game of cutthroat capitalism was actually intended as a lesson on wealth inequality. >>> more
The TRUTH about the Nobel Prize
How global banks helped Sweden’s central bank usurp the REAL Nobel Prize: "many economists including those who had been awarded the Bank of Sweden Prize – actually mis-used mathematics by creating unrealistic models of social processes."
"THE “NOBEL” PRIZE THAT WASN’T"
by Hazel Henderson
An unusual row erupted at the recent annual Nobel Prize awards. Peter Nobel, heir of Alfred Nobel, who endowed the Prizes added his voice to the growing outrage of many scientists at the confusion over The Bank of Sweden Prize in Economic Science in Memory of Alfred Nobel. Over the years since this $1 million prize was set up by Sweden’s central bank in 1969, it has become conflated with the real Nobel Prizes and is now often mis-labeled as the so-called “Nobel Memorial Prize.” >>> more
Biblical quotes re. land 'ownership
Compiled by Alanna Hartzok, who makes a case for a new form of democracy based on human rights to the earth as a birthright... Read her paper: Public Finance based on Early Christian Teachings
The land must not be sold beyond reclaim, for the land is Mine; you are but strangers resident with me. - Lev. 25:23
The profit of the earth is for all. - Eccles. 5:9
Woe unto them that join house to house, that lay field to field, till there be no place. - Isaiah 5:8
Restore, I pray you, to them even this day, their lands, their vineyards, their olive yards, and their houses.- Nehemiah 5:11
Land quotes from the Patristic Period:
Ambrose: How far, O ye rich, do you push your mad desires? Shall ye alone dwell upon the earth? Why do you cast out all the fellow sharers of nature and claim it all for yourselves? The earth was made in common for all. Why do you arrogate to yourselves, exclusive right to the soil?
St. George the Great (Pope 590 - 604) rebuked the Romans when he said: They wrongfully think they are innocent who claim for themselves the common gift of God.
Clement of Alexandria: (The functions of land) -"to be shared," "to minister to" and serve "the welfare of all"; "not for personal advantage as being entirely one's own" but "for those in need"; "to achieve autarkeia" and "to foster koinonia"
St. John Chrystostom: God in the beginning did not make one man rich and another poor; nor did he afterwards take and show to anyone treasures of gold, and deny to the others the right of searching for it; rather he left the earth free to all alike. Why then, if it is common, have you so many acres of land, while your neighbor has not a portion of it?
Augustine of Hippo: He (according to Avila's research) saw that the poor are poor because they have been deprived by the propertied few of the wealth that should belong to all. He laid the blame for this unjust situation squarely on the doorstep of an absolutist and exclusivist legal right of private ownership. He reminded his audience that they were all "made from one mud" and sustained "on one earth" under the same natural conditions, having the same essence and called to the same destiny. He rejected the legalized status quo as inappropriate for human living. Holding that legal arrangements of property rights were of human origin, he asserted that they should be changed, in theory and in practice, in function of a faith-informed ethic based on the true meaning of ownership.