[An address delivered at the Henry George Club, Sydney NSW; 16 May, 1932]
Although the sciences, generally, are rightly regarded as nature studies, there is an unfortunate tendency to consider economic science to be a set of complicated man-made schemes, continuously amended by even more complicated man-made laws – a hopeless tangle about which there can be endless difference of opinion and which only the very wise and learned may hope to understand.
The following is an endeavour to show that this is not so, but that, on the contrary, economic science (or as it is sometimes termed “economics” or “political economy”) is a simple nature study, that the economist is as much a naturalist as any other scientist, and for him also, there is significance in the well-known lines of Longfellow:
Nature the old nurse, took
The child upon her knee,
Saying, “Here is a story book
Thy Father has written for thee.”
“Come, wander with me,” she said,
“Into regions yet untrod,
And read what is still unread
In the manuscripts of God.”
Nature’s Universal Language
“The manuscripts of God” are many and marvellous; they are revealed to us through Nature; they are written by the Creator in Nature’s universal language of truth, so that Nature lovers and seekers after truth of all nations may find “tongues in trees, books in the running brooks, sermons in stones” and, also, we may add, essays in the activities of man. Throughout all the ages there have been seekers after truth, and the scientific volumes of our numerous encyclopaedias are man’s interpretation of Nature’s manuscripts, or, in the words of the poet, “the manuscripts of God.”
Nature’s manuscript of the science of geology is the earth. Plant life is the manuscript of the science of botany. Nature’s manuscript of the science of medicine is that highly complex organism so fearfully and wonderfully made, the human body, and the manuscript of the science of economics is that larger body or greater man, the social or economic body – a marvellous organism, even more complex, even more fearfully and wonderfully made. Of all the manuscripts that Nature presents to us, this is the most marvellous. It is this that explains the natural laws which govern society and in which the body economic has its origin. It is this that tells us “how of a little village, to make a great and glorious city.” It is this manuscript that reveals, in no uncertain manner, the wisdom and beneficence of the Creator, and for this reason alone, it is not presumptuous to say that it is The Most Wonderful Manuscript.
The Most Faithful Interpreter
There have been many interpreters of Nature’s economic manuscript, but the most faithful and above all, the most logical, is Henry George. Undoubtedly, in economic science he is the noblest the centuries have given us, yet, the place he would take is not that of a teacher who states what is to be learned, but rather that of a guide who points out, what by looking, is to be seen. Far from asking the reader blindly to follow him, he urges him to accept no statement that he himself may doubt and to adopt no conclusion untested by his own reason. As a professor of geology takes his students to a realm of nature where they may see, by looking, how the rocks were made, Henry George takes his students to another realm of nature, that of civilisation, so that they may see how it was made; where they may observe fundamental principles and natural laws in which the social body originates and by which it progresses so that having once seen these principles and laws the student is able to observe their invariable nature at all times and in all places – in occupations from the lowliest to the highest, in mine and in market place, in factory and in field.
Man – His Place and Powers
Let us, therefore, glance at this manuscript which always lies open before us and observe man, his place, and his powers.
We observe man dwelling on the surface of the globe and utterly dependent upon land. The foundations of all his buildings rest upon it. It is the storehouse from which all his needs are supplied. It is, in fact, “the source of all wealth and the field of all labour.” The land was not made by man; it is as much a part of nature as the air or the ocean; therefore, naturally each individual has an equal right to the use of the soil of his own country and the price paid for the exclusive use of any portion of it (apart from man-made improvements) cannot, by nature, belong to individuals in particular but to all. Thus we see that, in accordance with nature, the fund arising from the use of land is a common fund.
We see that man differs from all other animals since he is endowed with reason –- he has the power of relating cause and effect – and also deep within him is a divine spark of discontent. We may rightly call it a divine spark, for it is this that has urged man to his noblest achievements.
Interdependence of Reason and Discontent
There is a certain interdependence between man’s gift of reason and his discontent. Were he merely discontented but without reason he could not advance; and were he ever so highly gifted with reason but contented with a mere animal existence, there would be no progress. In observing the difference between man and the lower animals, Henry George explains that it is true that the beaver builds a dam and the bird a nest, but while these are of the same plan throughout all the centuries the house that man builds changes from the rude hut of leaves and branches to the magnificent palace. As George points out, man is not like the ox of which it may be said, so much grass, so much grain, so much water, and he will be content. On the contrary, the more he gets the more he craves; as soon as he has enough food he wants better food, as soon as he has a shelter he wants a more commodious and tasteful one, as soon as his animal wants are satisfied his mental and spiritual desires arise. This restless discontent is of the nature of man – of that nobler nature that separates him from the animal by so immeasurable a gulf and shows him to be, indeed, created in the likeness of God. It is not to be quarrelled with, for it is the motor of all progress. It is this that has weighed suns and analysed stars, and opened page after page of the wonderful works of creative intelligence; it is this that has narrowed the Atlantic to an ocean ferry and trained the lightning to carry our messages to the remotest lands; it is this that is opening to us possibilities beside which all that our modern civilisation has as yet accomplished seems small.
Rich and Poor
It is this discontent that will not allow man to be satisfied with society as it is –- that will not let him rest so long as there is want in the midst of abundance, while the few, because of special privilege, are rich without service, and the many, in spite of continuous service, are poor. But as there are many cases of deserving wealth and also of deserving poverty, it is interesting to notice that Henry George defines exactly what he means by the terms rich and poor when he says:
“Here is the normal line from which what we call wealthiness and what we call poverty take their start. He who can command more service than he need render, is rich. He is poor who can command less service than he does render or is willing to render. The one has more than he ought to have; the other has less. Rich and poor are thus correlative of each other; the existence of a class of rich involving the existence of a class of poor and the reverse; …To put this relation into terms of morals the rich are the robbers, since they are at least sharers in the proceeds of the robbery; and the poor are the robbed. …This is the reason, I take it, why Christ, who was not really a man of such reckless speech as some Christians deem him to have been, always expressed sympathy with the poor and repugnance of the rich. In His philosophy it was better even to be robbed than to rob. In the kingdom of right-doing which He preached, rich and poor would be impossible, because rich and poor, in the true sense are the results of wrongdoing. And when He said, ‘It is easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of heaven,’ He simply put in the emphatic form of Eastern metaphor a statement of fact as coldly true as the statement that two parallel lines can never meet. Injustice cannot live where justice rules, and even if the man himself might get through, his riches – his power of compelling service without rendering service –- must of necessity, be left behind. If there can be no poor in the kingdom of heaven clearly there can be no rich!”
Hope for the Reign of Justice
There is hope for this reign of justice, so long as man is discontented with injustice. Discontent, therefore, is the divine spark that will eventually bring that kingdom of right doing wherein none will command service without giving service, thus conforming society with the Christian command, “Whosoever will be chief among you let him be your servant.”
Having seen that man with his reason and his restless discontent is the producer of all wealth and that he is dependent on land which is the source of all wealth, we now come to the fundamental law of economics –- that “men always seek to satisfy their desires with the least exertion.” This law is so obvious that we cannot fail to observe it at all times and in all places. Across unfenced allotments are well-worn tracks trodden by pedestrians who naturally avoid exertion by taking the shortest way, but should there be any obstruction, however small, there will the path deviate to the right or to the left.
The Central Law
Henry George advises, “Whoever would see this disposition of human nature exemplified in trivial things has only to watch the passers-by in a crowded street or those who enter or depart from a frequented house. He will be interested and perhaps not a little amused to note how slight the obstruction or semblance of an obstruction that will divert their steps.” This desire to avoid exertion should not be confused with selfishness or laziness. It is, on the contrary, a manifestation of intelligence. In the words of Henry George:
“It is this law of nature that is the fundamental law of political economy –- the central law from which its deductions and explanations may with certainty be drawn and indeed, by which alone, they become possible. It holds the same place in political economy that the law of gravitation does in physics. Without it there would be no recognition of order and all would be chaos.”
It is this natural law, this desire to avoid exertion that causes men to compete with one another for the most remunerative occupations and for land on which the easiest living can be made. This law is the cause of the higgling of the market and of all competition. As men compete with one another for the best land, whether for business, home, or farm, there arises, out of this competition, the law of rent – rent being the price paid for the privilege of using land, and it is this that brings before us the most important and beneficent aspect of economic science. The rent of land depends upon its value, and value depends upon competition; competition for land grows keener with the increase of population and the march of invention. Thus we see that ground rent arises apart from conscious effort of man.
Progress of Civilization
Observe closely that man’s desire to avoid exertion causes him to invent and to trade. He invents machinery in order to obtain more wealth with less drudgery. By trading or exchanging services he enjoys more and a greater variety of wealth, and at the same time more leisure than by satisfying his desires by his own direct labour. Therefore he does trade and he does invent, and the more he invents and the more he trades, the richer he becomes, but the greater the ease with which he acquires wealth the greater is the price he must pay for the use of land. Thus it is evident that progress and ground rent originate from the same natural law.
When population is very sparse and there is no need for government service and consequently no need for government revenue, no value attaches to land; but when, with the increase of population, the need for such service arises, with the consequent need for government revenue, land becomes valuable and rent also arises; then as society progresses and the need for revenue increases, rent also increases.
From this we may infer that civilization is natural to man – that in nature there is provision not only for primitive man, but also for civilized man, for whose state there arises an ever-increasing fund to provide for his ever-increasing need of public service.
Natural Provision for Social Needs
To recapitulate: the desire to avoid exertion causes competition for land; this competition causes ground rent, hence ground rent arises from nature; because of nature, it is therefore the natural revenue of the State. Of this law, Henry George says, “In the natural growth of the social organism there is developed a fund which is the natural provision for the natural needs of that organism – a fund which is not merely sufficient for all the material needs of society and may be taken for that purpose, its intended destination, without depriving the unit of anything that is actually his, but which must be so taken to prevent the greatest injuries to individuals and the direst disasters to the State.”
Having observed the most important of the natural economic laws and principles, let us now consider the great social organism which is manifest in what we call civilization.
What Civilization Means
Civilization may be defined as the social State which results from the co-operation of men to supply their wants, and it is this co-operation that constitutes that wonderful social organism that Henry George so ably defines as the body economic or greater man. He says:
“It does indeed, I think, best present itself to our apprehension in the likeness of a larger and greater man, arising out of and from the co-operation of individual men to satisfy their desires and constituting a new and seemingly illimitable field of progress. …”
“It is not made by pact and covenant, it grows; as the tree grows, as man himself grows, by virtue of natural laws. ….”
“With the beginning of exchange or trade among men, this body economic begins to form, and in its beginning civilization begins. The animals do not develop civilization, because they do not trade. …”
“We are accustomed to speak of certain peoples as uncivilized and of certain other peoples as civilized or fully civilized, but in truth such use of terms is merely relative. To find an utterly uncivilized people we must find a people among whom there is no exchange or trade. Such a people does not exist, and so far as our knowledge goes, never did. To find a fully civilized people we must find a people among whom exchange or trade is absolutely free and has reached the fullest development to which human desire can carry it. There is, as yet, unfortunately, no such people.”
Thus we see that civilization is dependent upon the growth and development of the body economic. It is indeed, the visible expression of this greater man. The man-made laws and customs, good, bad or indifferent, the stately buildings and the squalid hovels, the churches and the gaols, the triumphs of engineering, the exquisite arts, the marvellous progress and the deepening poverty, all in fact that we associate with civilization, are the result of the activity of this greater man, this body economic.
Unnatural Laws Which Impede Progress
Civilization is, as yet, far from perfect and as Henry George says, there is point in the satire which tells how men who had lost their way in the wilderness, exclaimed at length, when they reached a prison, “Thank God, we are at last in civilization.”
As Civilization results from the activity of the body economic, perfect development of the former is dependent upon perfect development of the latter and the body economic cannot develop in the harmonious proportions necessary to perfection until it is freed from the unnatural laws that impede its progress. And here we may observe that the body economic is, in many ways, analogous to the human body.
Natural circulation of the blood stream is necessary for health of the human body. If this circulation is restricted, or in any way impeded, there is disease. If it is definitely stopped the result is death. And so with the body economic, the blood stream of which is trade. Any restrictive measures that impede the circulation of trade bring disease to the body economic. Should these measures be sufficiently drastic to stop that circulation the result would be the death of the body economic and the collapse of civilization. Also the human body needs natural exercise, either of occupation or recreation. Likewise the body economic needs the natural exercise of fair competition. When and where competition is eliminated there do monopolies thrive and monopolies are the parasites of the body economic. Trade is the blood stream of the body economic and competition is the natural stimulus to circulation.
The Two Ways of Co-operation
Let us now consider more minutely the wonderful co-operation of the body economic. In the words of the greatest economist:
“All increases in the productive power of man over that with which nature endows the individual come from the co-operation of individuals. But there are two ways in which co-operation may take place. The first is by combination of labour and the second by division of labour.”
Perhaps of more importance than the two ways are the two kinds of co-operation. “There is one kind of co-operation proceeding, as it were, from without, which results from the conscious direction of a controlling will to a definite end. This we may call directed or conscious co-operation. There is another kind of co-operation proceeding, as it were, from within, which results from the correlation in the actions of independent wills, each seeking but its own immediate purpose and careless, if not indeed ignorant, of the general result. This we may call spontaneous or unconscious co-operation.”
In the growth of civilization both kinds of co-operation may be readily observed. In the latter stages of construction of all things no matter how great or small, from the massive structure of a harbour bridge to the tiniest brooch in a jeweller’s show case, there is, of necessity, direction by conscious will –- that is the conscious co-operation. But the materials that are assembled in all these various structures, result from the unconscious co-operation.
Conscious and Unconscious Co-operation
In various places various individuals with no other object than that of earning a living are engaged in extracting metals from the earth, in felling timber and in adapting these things for use; but when, where, how, or by whom, or for what purpose, such things are to be used, they may neither know nor care. Nor is it possible for individuals directing the latter stages of construction to direct when, where, how or by whom the materials are to be produced. Another example of the unconscious co-operation is the continuous supply for the daily needs of the inhabitants of a great city. A city worker may exchange his service, by medium of money, for raisins from Mildura, butter from the North Coast, cutlery from Sheffield, tea from India and silk from Japan. In the same way innumerable citizens are exchanging services for innumerable things desired. And in a marvellous way, all these things are ready when required because of the unconscious co-operation that is utterly beyond human wisdom to direct. To decide when, where, by whom, and how all these things had to be grown, extracted, adapted and transported so as to be ready at the right time, in the right quantities, and at the right places, to satisfy human desire is something that no man or body of men is capable of directing. And here we find the failure of socialistic interference with that which should be left to private enterprise; it seeks to direct by conscious will that which is possible only by unconscious co-operation.
The Two Kinds of Co-operation
It is in the two kinds of co-operation that the body economic is most closely analogous to the physical body. Man walks, writes, speaks and performs innumerable actions by conscious will; but the beating of his heart and the marvellous and vital functioning of his organs are beyond the control of his will. He need not even think of them; he may be entirely ignorant of physiology, but though he consciously directs his innumerable activities, while he sleeps this unconscious and vital functioning continues.
The unconscious co-operation of the body economic is as vital as the unconscious functioning of the physical body and to attempt to direct either by conscious will, is to attempt to impose man-made schemes on Divine Providence.
As the growing child needs sufficient control and direction to safeguard his physical and moral welfare and to fit him for service, so does the growing body economic need sufficient control and direction for the safety of its units and to fit it for the high service of constructing civilization. But as over-control tends to hinder and sometimes to prevent the normal development of the child, so does over-government tend to hinder and prevent the normal development of the body economic.
Why Society Suffers from its own Improvement
The body economic is the victim of too many restrictions and repressions and therefore its handiwork, civilization, is unbalanced. If we would make civilization beautiful and harmonious as nature meant it to be – if we would “Clear away the almshouse and the slum, that the little homes and garden plots may come,” we must give to the maker of civilization, the body economic, the freedom intended by nature – freedom from the repression of unnecessary taxation, freedom from restriction of trade, freedom from restriction of the use of the earth.
The only just, practical, and natural way of giving this freedom is to abolish taxation and restriction and to collect ground rent, the natural revenue. So long as we fail to do this society is, in the words of Mrs. Fels, “doomed to suffer from its own improvement”; to suffer from its own improvement because all progress causes the price of land to advance, and therefore improvements that should benefit society as a whole increase the profits of land monopoly at the expense of society.
The Cancer in the Social Organism
Land monopoly is the root of all monopoly. It is the terrible and malignant growth on the body economic. And as cancer grows at the expense of the afflicted physical body, and all that may be done to nourish that body will but nourish the cancer while the body starves, so, in the same way, all attempts to benefit the social body will, while the cancer of land monopoly remains, feed this social cancer, while the social body starves. Unfortunately, as the cause of cancer of the physical body is not definitely known there is no cure without considerable discomfort and even danger; but the cause of the social cancer of land monopoly is known and may be removed without disturbance or danger to the body economic.
It is the failure to use the natural fund for its intended purpose that allows valuable land to be withheld from those who would otherwise use it, thus checking production at its source and disinheriting the masses of men from the great estate of nature. It is this that prevents self-employment, drives men into the bitter competition of the labour market, and forces wages down.
The failure to collect ground rent is the cause of the continuous robbery of taxation, of inflated land values and extortionate rent, all of which so impoverish the disinherited that they are unable to purchase even a small portion of their birthright from their wealthier brothers. It is this that divides society into classes of rich who command so much more service than they need render and into classes of poor who command so much less. It is this that is turning man’s discontent – the natural force of elevation – into a force of destruction.
The Hope That Inspires
The overcrowding and squalor of the cities, while within a few miles of their boundaries are unused acres that ought to be covered with homes and gardens; the denizens of the underworld, the tramps upon the highways, the increasing horde of criminals, and the tenements or scrub wastes that shelter them; all that is unjust and abnormal in civilization, is the story of that greatest tragedy of history – the appropriation by private individuals of the fund that nature produces for the benefit of all.
Yet in spite of social injustice, in spite of repression and restriction, so good is human nature and such is man’s power to overcome difficulty, that the triumphs he has accomplished are a source of exultation. And although our civilization is unbalanced and even puny compared with the noble achievement that it should be there is deep pleasure in viewing the cities that have sprung from little villages, even though these cities are not as yet truly great or glorious.
Who can contemplate a city with its stately buildings and tapering spires, a harbour bridge with its colossal grace and massive strength, the mighty liners passing under it and the aeroplanes soaring above; the sound of a city’s festivities and the music of its massed bands heard simultaneously even in the remotest parts of the world – who can contemplate all these things without thought of the great All Maker, in whose image man is made, the great Master Musician, the Master Mechanic, the Master Architect, and above all the Master Economist. Who in His wisdom has provided, not only for the needs of each individual unit but also the revenue for the needs of the great social organism.
The Brighter Picture
It has been well said of individual men that if he is not “rising upwards to be an angel, depend upon it he is sinking downwards to be a devil.” And in the same way the greater man, the body economic, and the civilization dependent upon it is either advancing or declining. Henry George reminds us that “this world is the tomb of dead empires,” and “that the ruins of dead empires testify that the civilization that is not founded upon justice cannot endure. This is the universal law, this is the lesson of the centuries.” The picture of a decadent civilization, with future generations believing the crumbling remnants of its mighty structures to be the work of giants, is not without grave possibility; but fortunately there is another picture – that of a civilization that shall develop in perfect freedom, a civilization of harmonious beauty and glorious beyond the limited perceptions of this age.
Economic science is by some considered “dismal,” but those who have not suffered the mental distortion of a university economics course, those who understand natural economic laws, know that it is radiant with hope.
Therefore, all who would build on the enduring foundations of justice and freedom can do no better than to accept the guidance of that most fearless and faithful interpreter of nature’s most wonderful manuscript, Henry George, the great economic naturalist of whom also it may be said that –
“Nature, the old nurse, took
The child upon her knee,
Saying, ‘here is a story book
Thy Father has written for thee.’“