HOW BINARY IDEAS TRASH WORLD ECONOMIES

Friedrich Hayek’s “There is no such thing as society” was a thought promoted by Ayn Rand which also happened to appeal to Margaret Thatcher. To consider there might be some community coherence amongst individuals is seen as collectivist and Marxist – a threat to liberal democracy. Proposing community–just look at that word!–or ‘society’ has clear overtones of socialism, which we know is a slippery slope, tantamount to communism itself!

On the other hand, Marxists have been given Thomas Piketty’s confirmation to work with: that capital has been stealing from workers and therefore it needs to be controlled by the state if suppressed wages are to have any chance of being clawed back from the capitalist’s grasping hand. Unions must fix this!

Such is fundamentally the thesis and antithesis of the current economic debate. Could there be a synthesis to mend the maddening bifurcation?

There is indeed a workaround, a binding synthesis that would repair capitalism’s excesses, but it has long been rejected and buried by neolib and neo-Keynesian alike.

The workaround was the case made in Henry George’s seminal Progress and Poverty: An inquiry into the cause of industrial depressions and of increase of want with increase of wealth …. The Remedy, in 1879.

Supporting ideas promoted, amongst many others, by Adam Smith, David Ricardo and JS Mill, George held that land was humanity’s common property, ergo capturing its rent, instead of taxing productivity, offers an elegant solution to many of our economic and social woes. Although the idea has a history throughout millennia, George expressed it so clearly and achieved such an influentail following that he was seen as an existential threat by the uber-wealthy, an attack on their modus operandi, and he had to be countered.

Mason Gaffney provides chapter and verse suggesting the development of neoclassical economics, which was to fudge natural resources with capital, proved to be that counter. [Neo-classical Economics as a Stratagem against Henry George, 1994] The new economics was successful in burying George’s ideas. Economists today will attack the name of Henry George without being able to gainsay his case, their main ‘argument’ seeming to be that “It is a very old idea!” Apparently, an old idea can’t be a good idea.

In putting his pro-capitalist/anti-rent-seeker economic synthesis, George held that “Karl Marx is the prince of muddleheads” – to which Marx replied, “Henry George is the capitalist’s last ditch.

Left and right are now fighting in endless tribal economic discord. The idea that the rent of land might be the glue to resolve and bind socio-economic differences is missing entirely.

This is more than a pity, because without a synthesis–George’s “remedy”–to resolve economic turmoil and increasing poverty, the world has a history of throwing up populist demagogues, then turning to war as a ‘solution’.

Official portrait of President Donald J. Trump, Friday, October 6, 2017. (Official White House photo by Shealah Craighead)