Neo-classical Economics as a Stratagem Against Henry George
Gaffney's historical argument that neoclassical economics was deliberately shaped to obscure land as a distinct factor and to defeat Henry George's reform movement.
Summary
This essay — the centerpiece of The Corruption of Economics (1994), co-authored with Fred Harrison — is Mason Gaffney's most provocative work. It argues that the rise of neoclassical economics around 1900 was, in part, a deliberate intellectual response to the political threat posed by Henry George's single tax movement.
The Argument
Gaffney marshals archival evidence that early American economics departments were funded by landed and corporate interests, and that influential economists (notably John Bates Clark) reframed economic theory to merge land into capital — erasing the classical distinction between earned income (from labour and capital) and unearned income (from land rent). Once land was no longer a separate category, the moral and economic case for taxing its rent lost its analytical foundation.
Reception
The thesis is controversial and contested by historians of economic thought, but the underlying archival record on the funding of early economics, and the disappearance of land from the standard factors of production, is well documented and widely acknowledged even by critics.
Bears On
- People: Mason Gaffney · Henry George
- Concept: Land Monopoly
Sources
- Mason Gaffney (1994), "Neo-classical Economics as a Stratagem Against Henry George." PDF
- Mason Gaffney & Fred Harrison (1994), The Corruption of Economics (book).