Senate Committee Interrogates Henry George — Part Four
|January 9, 2007||Posted by Staff under Progress Report, The Progress Report|
American Reform Leader Testifies for Justice
The Interrogation of Henry George: Part Four
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.
Part Four: Senator Blair Jumps In and Learns Some Economics
Henry George has just explained how “the raising of the price of land is the raising of a barrier between labor and its natural opportunities.”
Senator Blair. Now there is a point that I would like to have you explain. You say as to land, yes; but I do not see how, logically, you can apply that principle to land and not carry it further. That is the difficulty in my mind as to your theory, I do not see any difference between a piece of land unoccupied and a piece of the same land occupied — real estate. I do not see any difference between land as a productive power and the mowing machine or the yoke of oxen or any other form of thing which is material, which is property. and which is made the tool of production. I do not understand why von stop the application of your theory at unoccupied land.
Henry George. I do not stop at unoccupied land, not at all. Land, I say, including occupied and unoccupied land,
Senator Blair. I do not understand why you stop at land.
Henry George. In short, you do not understand the distinction I make between land and such other kinds of property as you have spoken of — the mowing machine, oxen, etc.
Senator Blair. It looks to me like this, and I would he glad to have it made clear: This division of production, or of the market price realized for production, from which wages and interest and rents are paid, from which all parties and all forces entering into the produced article are compensated — It looks to me as though this matter of division was one, as Mr. Smith said, of higgling in the market, and success in the higgling depends upon the intelligence and power which each higgler has to make his higgling successful. But I do not see how the working man, the wage-worker, unless we first produce the millennium or some entirely new order of things which cannot result until we are all dead and until our children and grandchildren are all dead (and that is too late for the purposes of this investigation) — unless by some such means I do not see any way by which the wage-worker can get any more pay out of it, unless by his intelligence and his personal force or his personal force combined with the forces of others of his own class, he can stand up and say, “I will not work until you give me so much.” And he must have accumulated something so that he can live a part of a year, or a year, in order to enforce his demand. Capital cannot live forever. It is the annual production that keeps the world in motion, and when a combination of laborers are able to take care of themselves one year, capitalists and monopolists must agree to a fair distribution or a fair payment of wages, or else submit to destruction. And the destruction of the capitalist in that way, or of his property, continued for a year or for a reasonahle length of time, makes him “hungry” and places him upon the same level as the wage-worker, whose personal necessities and sufferings, in the shape of cold and starvation, often compel him to yield.
Henry George. You have asked me questions that involve a great deal, and I shall have to go over a good deal of ground to answer them. You ask me first what distinction I make between land and other species of property — oxen, machinery, etc. There are very essential distinctions. In the first place, the land is a natural element, the machine, the house, even the yoke of oxen, are the product of human labor. In the next place, land is something that exists from one generation to another, which each generation in its turn and in its time must apply to for its subsistence.
Senator Blair. Permit me to ask you if the land in our condition of things is any more necessary to the existence of the man, to his actual existence, I mean, than is the milk which is produced by the cow which feeds upon the land, or the grain which grows from the land? We do not eat the land; we do not wear the land. The land is the primary cause, just the same as the Almighty is, and you might as well say that we must distribute the AImighty pro rata among human beings, or that He must become common property, as to say that the land which He has created must become common property. It is the necessity that I feel today for protection against the elements and for the nourishment of my body that is the exacting thing, and I do not think the land is any more necessary to human life than the other elements.
Henry George. You must certainly agree to this, however, that while those other forms of property exist for a little while, land is something that exists from one generation to another.
Senator Blair. How is that? “Land” is not a definite mathematical term; land is of no use unless improved by human labor. It is only as it can be immediately utilized that land is of any consequence. Land in Africa is of no consequence to us because we cannot use it. Land here is of consequence to us provided we can use it; but even land here is of no account unless we can use it — of no more account than if it was real estate in the moon or the distant stars. It must be improved and utilized by actual immediate occuption in order to be useful to us, and it may be that land which is of some account today will he of no account tomorrow. So that it is not a fact that the same land is a perpetuallv available element in the matter of human sustenance any more than personal property which perishes in the using.
Henry George. Please let me go on to state the differences between land and other property. There is a difference in the origin; there is a difference in the permanence, and there is a difference as to value. The value of a cow, of a machine, or of a house, depends upon the amount of labor that. upon the average, is required to produce it. The value of a piece of land is not that. Nobody produces land. The value of it is the amount of the produce of labor that the ownership of that land will enable the owner to get from the man who does use it. Take these buildings that we see around here, thet big building over there of Mr. Bennett’s, for instance; that building represents a certain amount of labor expended in getting the materials, putting them upon the ground, and erecting the structure. That is something that Mr. Bennett has done, or has had done. The value of the land on which that building stands results not from the exertions of Mr. Bennett, but from the fact that there are two million people around this place. It is they, and not Mr. Bennett, who have given that land its value.
Senator Blair. Now, is it so? Does it not result from the additional fact that Mr. Bennett has obtained raw material and has combined it with the land?
Henry George. Not at all,
Senator Blair. Until that land is utilized is it of any more account than a piece of somebody’s cow pasture?
Henry George. Certainly. Right here near it is another lot which is vacant, with a board fence around it, yet that lot is worth $500,000. What gives that land its value?
Senator Blair. The fact that it can be combined with human labor, and nothing else.
Henry George. If that land was in the interior of Africa it could be combined with human labor just as well, but it would not have the same value.
Senator Blair. It could not, without an enormous cost for transportation and building up a city around it; and this land is only valuable because it has been utilized; and it is utilized only because you have that city around it. I do not see the distinction in this respect between land in the unoccupied condition you speak of and land in that condition which affords opportunities of transacting business.
Henry George. Take the Astor House across the street. Suppose you go out on the plains and put up a building as good as the Astor House; do you thereby make the ground on which that building stands as valuable as that on which the Astor House stands.
Senator Blair. No; and why not? Simply because the Astor House in a desert supplies no human wants. It is like property destroyed. And so this vacant lot here is of no value.
Henry George. Until you surround it by a great city.
Senator Blair. But you leave this lot unoccupied, surrounded as it is by a great city, and it is of no more value than the land in the desert so far as the supply of human wants is concerned. It has a market value now because it is available for such purposes.
Henry George. You were speaking of the value of the land.
Senator Blair. But what is it that sells? It is not the value of the land. It is the availability of the land for use. Henry George. Unquestionably it arises from the fact that it is here in the center of a great city.
Senator Blair. And if you do not convert it to use it is not available. Its availability for conversion to use, and the conversion of it in combination with labor and other things, is what makes it valuable.
Henry George. But that vacant land is not so combined. It is still lying to all intents and purposes in a state of nature.
Senator Blair. But it is not the land in and of itself that is valuable. It is the land plus its situation which makes it available, that gives it value. Until that availability is made use of it does not yield actual valuable results, but it can be so made use of at any time.
Henry George. Precisely. Therefore the value of that land is only the power which the owner has to obtain a revenue from it whenever he wishes to.
Senator Blair. Precisely.
Henry George. And that revenue must come from the labor of other people.
Next week, Senator Blair and Henry George dispute further and the testimony concludes.
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