Charity, Prosperity, Economics
|January 9, 2007||Posted by Staff under Archive, Progress Report, The Progress Report|
The Ethics of Macro-Compassion
Poverty Relief Always Necessary?
When we achieve a world full of economic justice, will there be any need for charity? Should government spend money on direct assistance to the needy? How can we be sure?
Here is the second installment of a six-part exploration by David H. Chester, looking into the topics of charity, compassion and economics.
by David H. Chester
PART TWO (click here for Part One)
Poverty Relief – The Missing Ingredient
Henry George recognized that the entrepreneur’s motivation for economic activity is due to a natural law of the optimal utility of resources, and as a corollary to it he contended that only private enterprise can efficiently supply the driving force for production.4 His T.L.V. [the taxation of land values] proposal was based on this premise and up to the very end of his life, George insisted that he never set out to favor any particular part of the community.5
Consequently, he did not prescribe the use to which the collected land revenues (as a single tax) should be put. Nor did he discuss what proportion of the national income should be used for relieving the effects of poverty (even though he did criticize the uses to which this subsidy was being applied at the time6).
This omission is strange, for on the one hand George took a firm ethical stand on the shared right of access to land, which he regarded as the Creator’s gift to humanity7. Although his original inquiry was into the cause of poverty amid an abundance of wealth, the cure that he prescribed was without any compassionate allocation to those who cannot help themselves.
To understand the reason for this apparent deliberate neglect it is necessary to separate the concept of the structure of society at large from that of the position of the individual, family unit or firm. The former comes under the category of macroeconomics whilst the latter is classed as microeconomics. Unfortunately these small-scale aspects of our social lives must be put aside, when one sets out to examine the nationwide control of the economic forces and to consider their overall effects. The unhappy result is that macroeconomics is completely blind to the needs of the individual. This situation is similar to Lord Tennyson’s verses “In Memoriam A.H.H.” (Stanza LV)8, about the indifference of Nature:
- Are God and Nature then at strife
That Nature lends such evil dreams?
So careful of the type she seems
So careless of the single life.
Hence in common with this predicament, macroeconomics the science of the national economy deals only with “the social whole”, as George put it9. Without stopping to discuss the microeconomic aspects of poverty, he implied that after treatment on a macroeconomic level it would disappear, once T.L.V. became a reality.
But even with its raised level of economic justice, it is doubtful whether T.L.V. really would have so great an effect that the direct relief of poverty would become unnecessary. In common with the religious and political attitudes to aiding the impoverished classes and in view of the Great Enigma that was introduced by his book “Progress and Poverty” previously cited, it is disappointing to find that this generally accepted ingredient for easing the plight of the poor has been excluded from the Georgist recipe for economic reform.
Next week: Charity and the Paradox of Social Responsibility
REFERENCES AND NOTES
4. “Progress and Poverty” cited above, Book III, Chapter VI, pp 171-173.
5. L.F. Post provided a biography of Henry George in “The Prophet of San Francisco” (Chicago, 1904). This sketch includes the answer that George gave at his last public address. In response to the suggestion that he was a great friend of labor, George replied that he never claimed to favor this sector of the community and that “he stood for the equal rights of all men”. Exhausted from the political campaign he died the following morning.
6. “Progress and Poverty” cited above, Book IX, Chapter II, pp 371-372.
7. “Progress and Poverty” cited above, Book VII, Chapter I, pp 283-290.
8. The Poems and Plays of Alfred Lord Tennyson The Modern Library, Random House Inc. New York, 1938.
9. See page 66 of The Science of Political Economy, by Henry George. This work was published posthumously by his son and reprinted by The Robert Schalkenbach Foundation, New York 1941.
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