Nobody had expected the French economist Thomas Piketty’s Capital in the Twenty-First Century to become the bestseller that it did in 2014, yet another bestseller from yesteryear is equally relevant, equally incisive in its analysis, though its prose is difficult to negotiate at times. Read these observations:
What has destroyed every previous civilization has been the tendency to the unequal distribution of wealth and power.
Going to work for a large company is like getting on a train. Are you going sixty miles an hour or is the train going sixty miles an hour and you’re just sitting still?
It is as though an immense wedge were being forced, not underneath society, but through society. Those who are above the point of separation are elevated, but those who are below are crushed down.
Unlike Piketty who has a doctorate, the author here had nothing more than a sixth-grade education; he would become a successful editor and journalist, a self-made man, when he wrote Progress and Poverty in 1879. He dared to ask why poverty increased with material and technological progress, why his America was beset with violent labor strikes and why workers were deprived of opportunity. Henry George had prophesied that Big Business was the greatest threat to the country.
George placed the blame on corporate monopolies, those entities that swallowed up land, controlled resources and set prices. Today, we think that monopolies no longer exist after Teddy Roosevelt sparked antitrust legislation in the early years of the twentieth century, yet revisiting Progress and Poverty reveals how utterly amnesiac and brainwashed we have become in our perspective of capitalism.
We celebrate the entrepreneur as an American hero, though we show some fear and respect when we call the successful businessperson a shark, We admire him or her for their ingenuity, their creative solution to an ineffective process: Henry George would have no quarrel with that interpretation. He would agree with our modern sociological observations and conclusions: poverty begets social injustices, racial tensions, and poor health outcomes.
Where George’s point of view is different than ours is that he believed that wealth and power vested in one individual or a corporation is patently un-American, that the America around him was becoming European, the very social construct that the Founding Fathers had fought against: the robber baron and his company act like tyrants, foster an aristocracy and privilege that furthers class distinction and warfare. George’s conclusion, however, is more than the Haves versus the Have-Nots that we understand today. The robber baron is an individual with appetites, George would say, but state governments have created the unintentional despot. We have forgotten the secret history of corporations in America.
Many colonial governments before the Revolutionary War were founded as corporations. State governments, after the Revolutionary War, granted corporate charters, using England’s creation of the East India Company as their model. These charters offered special privileges. The first corporations created public works: roads, bridges, and later, railroads. As time went on, the state’s control of corporations decreased, corruption and the size of the corporations increased, as did the power of the few over so many, thereby limiting employment opportunities.
There are jobs in town, but only one boss. Americans in George’s day interpreted Carnegie, Gould, Rockefeller, and Vanderbilt as the new aristocracy, like their titled and decadent counterparts across the pond. They had money and they were arrogant, living in opulent mansions, sending their children on Grand Tours, tracing their family trees back to the Revolution and marrying off their daughters to European nobility for prestige and pretense. Today’s wealth disparity rivals that of the Gilded Age. The difference is that in the interim between the sunset of the nineteenth century and the sunrise of the twentieth century, America had several Koch Brothers and each man was determined to have his way with the country’s politics and economy.
Henry George surveyed the landscape and saw that class lines were established and entrenched. While the violence was not equivalent to the French Revolution, the working class was angry and violent: the United States would experience 37,000 labor strikes between 1880 and 1905. America maintains the record for having the most violent labor history for any industrialized nation. Henry George’s book presaged a decade of protest and violent reprisal. He had had the deadly Great Railroad Strike of 1877 behind him while he was writing his book. The Great Southwest Railroad Strike of 1886, the formation of unions, and the Pullman Strike of 1892 were ahead of him. George died in 1897. His solution to inequality was to propose a single tax on the rental value of land.
We have forgotten that, up to a certain point in time, Americans had equated corporate titans with tyrannical George III. Then came the brainwashing. Andrew Carnegie may have given his wealth away, dotted towns with libraries; George Pullman and Milton Hershey may have built company towns with their company stores and houses, where their employees could spend their wages, but celluloid dickeys would denote “white collar”; denim, “blue collar.” Class distinction had been established. When the smoke cleared after the labor stoppages in the early twentieth century and especially after World War II, the concentration of power had been redefined in terms of popular culture: consumer choice; a middle class, and the call for less government and intrusion into daily life.
740 Park Avenue still remains the largest concentration of American wealth in the nation, the wealthiest apartment building in the world, and lobbyists in plain sight have replaced men such as Henry Frick, who had done Andrew Carnegie’s dirty work.