SA64. Making Use of History by Roy Douglas

To celebrate the 100th article in LANDISFREE  we ask our chair to write a special essay.

Is history a mere chronicle of events or are there patterns in history? If the second view is correct, then a study of those patterns may not only help us understand how things happened in the past, but may also give us some idea as to how things are likely to happen in the future. If, furthermore, the future is not completely predetermined, it is possible that people may intervene and give future events a twist in the direction they wish them to take. In other words, history – properly understood – is not just a record of the past, but can also be a profoundly important guide for the future.

Many historians have sought to see patterns in history, often to fit their own ideologies. To pagans in the 4^th and 5^th Centuries, the decline of the Roman Empire was due to Romans forsaking the old gods and turning to Christianity. The gods therefore abandoned the Empire. This view was denied by another man living through the same events. St Augustine of Hippo saw all history as a working out of the purpose of the Christian God and argued that the Christians were a force of preservation, not a force of destruction. Marxists have a view of history radically different from both. To them, the development of feudalism, capitalism and socialism, and the fate of empires, derive, not from intervention by any kind of divinity, but from struggles between social classes.

“Georgeists” – the followers of the 19^th Century economist Henry George – have long argued that economics is a “science”. In their view, an understanding of the nature and interactions of land, labour and capital[1] is of great value in understanding

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[1] As in the natural sciences, words are (or should be!) given precise definitions in economics, which are not always the same as the meanings they hold in ordinary speech,

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economic patterns and events. In particular, they lay emphasis on the importance of fluctuating values of “land”. By the word “land”, they mean all natural resources, which they distinguish from the things which people have added to “land”, like houses or factories or fertilisers or machinery or mine workings.

Fine! But how far does that take us? Consider a modern example. The Georgeist writer Fred Harrison produced impressive evidence for the view that there were forces at work in the economies of Britain and other countries in the late 20^th and early 21^st Centuries which made the development of a slump late in the first decade of the present century predictable.[2] What is particularly striking about his work is that he

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[2] Fred Harrison, Boom, Bust: house prices, banking and the depression of 2010. Shepheard-Walwyn, London, 2005.

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was not being “wise after the event”. The book in which he analysed earlier events and foretold the slump was published several years before the slump occurred. At one stage, it appears, action could probably have been taken which would have averted the slump, but – as time went on, and the necessary action was not taken – that slump became inevitable.

What is no less impressive, perhaps alarming, about this particular study is failure by all the “experts” to predict that slump .Both the Prime Minister of the day and the Leader of the Opposition made confident predictions that all would be well, not long before the slump happened. Bankers and estate agents got their fingers badly burned because they had not anticipated the slump. Why did the “experts” get it wrong? Because they did not look at the developing situation in the light of the Georgeist interpretation of economics, and, specifically, the fluctuations in land values. They failed to realise that the boom through which they were living did not derive in the main from better productivity but from speculation based on land values. Furthermore, a great many of the speculators had no idea that they were really speculating on land values!

What is the lesson for the future? As Winston Churchill once said in a different context, the use of recriminations about the past is to enforce greater efficiency in the future. There are currently similar forces at work which, unless controlled in time by appropriate economic policies, will lead to another slump in the future. If we seek to persuade the people who operate economic policy to act differently in order to avert the future slump, we must try to mobilise all possible evidence to show them why that view is correct. There is plenty of room for further research into past slumps, to analyse still more closely the forces which brought them about, which should give useful clues as to how to avoid future disasters.

The boom-slump cycle is but one of many problems which are susceptible of historical study in the light of the Georgeist analysis. An even wider and more general problem is the one which was studied by Henry George himself in his first and most famous book, Progress and Poverty[3]. Writing in the last quarter of the 19^th Century, George

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[3] Progress and Poverty has appeared in many editions and in many languages since its first publication in 1879, and is still in print

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observed the enormous technological progress which had occurred in the previous hundred years. If anybody living at the beginning of the period had foreseen that progress, he would have considered it almost axiomatic that poverty would disappear. And yet poverty didn’t disappear. In George’s view, a study of the mechanism which allowed poverty to develop and persist in the past could throw great light on how to eliminate poverty in the future.

More than a century on, the problem of poverty is still unsolved. Poverty, real poverty, still exists in Britain and in most of the wealthy, advanced countries of Europe and North America. In other parts of the world, poverty is far more extreme and far more widespread.

It is not a bad idea to start by studying something of history to understand how poverty came into existence. Poverty is a very ancient phenomenon – much older than capitalism or even feudalism. So the ultimate cause of poverty is also likely to be ancient. Some clues as to where to start in our investigations may come from the observation that the most intense poverty is not to be found, as one might expect, in places particularly short of natural resources, like hot or cold deserts or barren mountain areas, but rather in places which seem particularly favoured by nature, like warm countries where it is possible to collect two or even three harvests in a year, or places with large quantities of useful minerals.

It is also worth noting that the societies with intense and widespread poverty tend to be societies where a few people are extremely wealthy. In some parts of the modern world that is evident enough; but it is also apparent in ancient societies – but not in the very oldest societies of all, for which we need to look to archaeology. To take but one example, as far as we can infer from their remains, Egyptians living before the time of the pharaohs did not experience particular poverty, and at that time there were no individuals with particular wealth. The big change took place later, when some individuals were provided with pyramids or luxuriously-appointed tombs, while a great many other people who lived in poverty were compelled to work very hard to generate those delights for the lucky few.

The change seems to have something to do with the development of settled societies. In earliest times, hunter-gatherers could wander anywhere in search of food, clothing and shelter, and there was no way in which some people could become immensely richer than others. With the advent of settlement, land was apportioned to particular individuals. At first, no doubt, when communities were small, care was taken to ensure that everybody got enough land for his ordinary requirements. But as time went on, and communities got bigger, some people found ways of getting much more land than others. Nobody can live without access to land and its products, and so those people with a lot of land were in a much stronger economic position than those with little or no land.

This points to a very important area of historical study, with immense practical relevance. If we can understand the mechanism by which some people got a monopoly of big areas of land, while others were more or less landless, we are getting close to an understanding of the deep roots of poverty. A lot of historical studies of ways in which people in different societies at different times managed to get control of lots of land to the exclusion of most others, many of whom were left in dire poverty, would seem to provide a useful step. It will not, of course, provide an immediate cure for poverty, but it should point our minds in the appropriate direction.

We have said something about booms and slumps, and something about poverty. There are many other matters with economic components where a historical approach influenced by the ideas of Georgeists could provide useful hints about how things might be improved in future.

Consider a few of the modern problems linked with housing. Half a century ago, it was much easier than it is today for a young couple with a moderate income to acquire a home of their own. Why? The simple answer is that house prices have gone through the roof. But what element of the price of a house has risen so much? Costs of labour and building materials have, of course, risen, but at a similar rate to prices of everything else. What has gone up disproportionately, most particularly in popular urban areas, is the price of the land on which the building stands. How, why and when this happened is an important field of historical study which could throw useful light on how matters might be improved in future.

Or consider another aspect of the “housing problem”. People talk about a “housing shortage” – yet there are a lot of empty houses. There are also many under-occupied houses – where one or two people are the owners of a property which could easily accommodate a lot more people. At the same time, pressure is generated for development of housing in “green belt” or other rural land. This problem also calls for historical studies to point to modern solutions.

Another kind of modern problem also invites historical study. Agriculture has undergone some astonishing changes in the last eighty or ninety years. Between the wars, much agricultural land lay derelict, unused. In the war period, there was desperate pressure to bring every available acre into use or food production. Since the war there have been huge changes in farming practice. Great lengths of hedgerows have vanished, huge fields have appeared. Farm labourers have become fewer and fewer and in many parts of the country small farmers have virtually disappeared. Is all this the inevitable result of “progress”, or are there other factors at work? People speak of the desirability of “efficiency” in agricultural production, but what do they mean by the word “efficiency”? Do they mean that agriculture should yield the maximum per pound spent on it, or do they mean that it should yield the maximum per acre? If they mean the former, then big farms of monocultures with few labourers are probably inevitable, while if they mean the latter, the picture is very different. In many parts of the country, there is plenty of room for varied production on small farms with considerable numbers of farm workers. Again, there is a need for a close historical study of what has happened in the past.

A study of history in the light of Georgeist thinking should help In a direction which has not received very much recent attention, but could prove important in the future. Many people tend to assume that, because there have been great improvements in human comfort (at least for those who have avoided the worst poverty) in the past few centuries, that process will go on for ever, and certainly that it will not be put into reverse.

Yet the historian reminds us that there have been many occasions in the past when “progress” – whatever we mean by that word – has been set into reverse. For most people living in Britain, and for most people living in the Mediterranean world, life was probably a lot more comfortable and secure in the second century AD than it was for people of the same social group living in the fifth century, or at any point in the next thousand years. There are plenty of other examples of societies going into decline. In ancient Egypt, and in the history of China and many other places, there were several occasions on which everything seemed to go into decline. A study of what went wrong, and why, in these various places might help us avoid similar calamities in future. Maybe the occasions of decline had something to do with the ownership of land.

Quite a lot has been written about the history of the Georgeist movement itself, from Henry George jr.’s biography of his father onwards.[4] What has not received enough

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[4] See, for example, Henry George jr., The life of Henry George, Heinemann 1900, etc.; Roy Douglas, Land, people and politics, Allison and Busby, London, 1976; E. P. Lawrence, Henry George in the British Isles, East Lansing, Mich., 1957; John Saville, Henry George and the British Labour movement; a select bibliography with comments. Bulletin for the study of Labour History, 5 (1962), 18-26; F.M.L. Tompson, Land and politics in England in the 19^th Century. Transactions of the Royal Historical Society 5s, 15 (1965), 23-44, and innumerable articles, and references in other works.

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attention is a consideration of how George’s ideas relate to an understanding of other historical events. Fred Harrison’s book mentioned above is a recent example of the potential value of that kind of study; but – if George’s analysis is correct – it should inform most kinds of historical study. Karl Marx’s views have undoubtedly influenced how people – and by no means exclusively avowed Marxists – look at history, and what factors seem to them important in their studies.

If schools of history can be developed which encourage scholars to look at past events at least partly in the light of the Georgeist analysis, this will not only add an extra dimension to academic studies. It will also colour the way in which leaders of thought and leaders of action come to look at the contemporary problems with which they are faced, and the remedies which they propose for defects in the workings of society. The real value of history is not just the many fascinating things it tells us about the past, but the many useful hints it gives us about what should be done in the future.