Henry George and the reconstruction of capitalism

WITH THE FALL OF THE IRON CURTAIN, people all over the world seem to be searching for a "Middle Way." Except in North Korea and Cuba, doctrinaire Marxism has been repudiated virtually everywhere, even by the left. Socialism has become passe. Its adherents are no longer riding the crest of the wave of the future. Even the most energetic apostles of federal meddling, John Kenneth Galbraith, for example, eschew the socialist label. Yet, on the other hand, the free market economists of the classical period would scarcely recognize capitalism as we know it in America today. Such luminaries of industry and finance as Lee Iacocca and Felix Rohatyn advocate a measure of government intervention that would have seemed entirely insupportable to Cobden or Ricardo. In the political field, the major candidates differ mainly on matters of degree. It is not so much a question of "Shall there be federal aid?" as of "How much federal aid shall there be?" or "How shall it be administered?" As long ago as the late 1940s, "Mr. Conservative" himself, Senator Robert A. Taft, sponsored a bill for federal housing. Later, another Senate Republican leader, Bob Dole, was a chief architect of the food stamp program, which is itself a dole, not just for the poor but, above all, for agribusiness. A Republican president, Richard Nixon, instituted price controls, and cut the dollar loose from its last tenuous backing with the cynical quip that "we are all Keynesians now." But what we are presented with, from right to left, is not a coordinated structure embodying the best elements from both sides, not even a well-thought-out attempt at syncretism, but rather a bewildering welter of jerry-built solutions, each one based upon political and emotional considerations and lacking any functional relationship to a unified system of socioeconomic truth, let alone any rootage in a grand scheme of teleology or ethics. A little Socialism here, and a little Capitalism there; a concern for the "public sector" here, and a concession to the profit motive there; a sop to the "underprivileged" here, and a bow to incentive there--put them all together and what have you got? Nothing but a great big rag-bag, a haphazard pastiche of odds and end without any bones and without any guts! Nevertheless, there is a Middle Way. There is a body of socio-economic truth which incorporates the best insights of both Capitalism and Socialism. Yet they are not insights which are artificially woven together to form a deliberate compromise. Instead, they arise naturally, with a kind of inner logic, from the profound ethical distinction which is the system's core. They arise remorselessly from an understanding of the meaning of the commandment: "Thou shalt not steal." This Middle Way is the philosophy associated with the name of Henry George. I like to picture economic theory as a vast jigsaw puzzle which has been distributed across two tables, one called Capitalism and the other Socialism. But mingled with the genuine pieces of the puzzle are many false pieces, also distributed across both tables. Most of us are either perceptively limited to one table, or else we are unable to distinguish the genuine pieces from the false. But Henry George knew how to find the right pieces, and, therefore, he was able to put the puzzle together, at least in its general outlines. I don't claim that he was infallible or that there isn't further work to be done. But if I find a little piece of puzzle missing here or there, it doesn't shake my confidence in the harmony of the overall pattern he discerned. It doesn't make me want to sweep the puzzle onto the floor and start all over again from scratch. His genius has been glowingly acknowledged by such renowned figures as educators Nicholas Murray Butler, John Dewey, and Mortimer J. Adler; authors Leo Tolstoy, Aldous Huxley, and Helen Keller; Presidents Woodrow Wilson, Franklin D. Roosevelt, and Dwight D. Eisenhower; columnists William F. …