Henry George Interrogated by Senate Committee
|November 26, 2002||Posted by Staff under Archive, Progress Report, The Progress Report|
Senate Committee Quizzes America’s Top Economist
The Interrogation of Henry George
We are pleased to present a record of little-known testimony given to the United States Senate by the economist and social reformer Henry George. George testified as part of the investigation conducted in 1883 by the Senate Committee Upon the Relations Between Labor and Capital. For this portion of the testimony, George is questioned by Senator Willkinson Call of Florida (1834-1910).
Senator Call. You have been engaged for some years, I believe, in looking into the labor question, the condition of the laboring population, and the relations of labor and capital, have you not?
Henry George. For some time, with a great deal of attention.
Senator Call. We should be glad to have a statement from you in your own way of any facts that may be within your knowledge in regard to the condition of labor in its relations to capital, and any suggestions of remedies which you think would bring about an improved condition of things.
Henry George. As for specific facts I presume you could get them with much more advantage from other persons, from those who are familiar with each locality and the particular facts relating to it. The general fact, however, is that there exists among the laboring classes of the United States a great and growing feeling of dissatisfaction and discontent. As to whether the condition of the laboring classes in the United States is getting any worse, that is a difficult and complex question. I am inclined to think that it is; but whether it is or not, the feeling of dissatisfaction is evidently increasing. It is certainly becoming more and more difficult for a man in any particular occupation to become his own employer. The tendency of business of all kinds, both in production and in exchange, is concentration, to the massing of large capital, and to the massing of men. The inventions and improvements of all kinds that have done so much to change all the aspects of production, and which are still going on, tend to require a greater and greater division of labor, the employment of more and more capital, and in make it more and more difficult for a man who has nothing but his labor to become his own employer, or to rise to a position of independence in his craft or occupation.
Senator Call. Can you state any economic reasons why that is the case?
Henry George. I do not believe that there is any conflict of interest between labor and capital, using those terms in their large sense. I believe the conflict is really between labor and monopoly. Capital is the instrument and tool of labor, and under conditions of freedom there would be as much competition for the employment of capital as for the employment of labor. `When men speak of the aggressions of capital and of the conflict between labor and capital I think they generally have in mind aggregated capital, and aggregated capital which is in some way or other a monopoly more or less close. The earnings of capital, purely as capital, are always measured by the rate of interest. The return to capital for its employment, risk being as nearly as possible eliminated, is interest, and interest has certainly, for some time past, been falling, until now it is lower than it ever has been in this country before. The large businesses which yield great returns have in them always, I think, some element of monopoly. Do you wish me to go right on and give my views generally, or do you desire me to limit myself to answers to your questions?
Senator Call. I wish you would first give us the economic reasons why there are such aggregations of capital. I would like also to have you explain the sense in which you use the term “monopoly” when you speak of these aggregations of capital.
Henry George. I use the term “monopoly” in the sense of a peculiar privilege or power of doing certain things which other persons have not. There are various kinds of monopolies. As, for instance, the monopolies given by the patent laws which give to the inventor or to his assigns the exclusive right to use a particular invention or process. There are certain businesses that are in their nature monopolies. For instance, in a little village if one puts up a hotel which is sufficient to accommodate all the travel there, he will have a virtual monopoly of that business, for the reason that no one else will put up another to compete with him, knowing that it would result in the loss of money; and for that reason our common law recognizes a peculiar obligation on the part of the innkeeper; he is not allowed to discriminate as between those who come to him for lodging or food. Again, a railroad is in its nature a monopoly. Where one line of road can do the business, no one else is going to build another alongside of it, and, as we see in our railroad system, the competition of railroad companies is only between what they call “competing points” where two or three roads come together, and as to these the tendency is to do away with competition by contract or pooling. The telegraph business is in its nature a monopoly; and so with various others. Then again, there is a certain power of monopoly that comes with the aggregation of large capital in a business. A man who controls a very large amount of capital can succeed by underselling and by other methods, in driving out his smaller competitors and very often in concentrating the business in his own hands.
Senator Call. You see the term in a broader sense then, than that of a monopoly created by law. You include in it any exclusive right, whether created by facts and circumstances or by law?
Henry George. Yes. As I have said, there are businesses which are in their very nature monopolies. The two most striking examples of that are the railroad and the telegraph.
More testimony next week, focusing on the trend toward economic insecurity for most people in spite of our civilization’s great material progress.
What is your reaction to Mr. George’s testimony? What would you add? Tell The Progress Report!