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On Reconciling Rerum Novarum with The Condition of Labour.
 

Can We Reconcile Rerum Novarum and  The Condition of Labour?

Tony Fitzgerald


INTRODUCTION


I will be comparing and contrasting Rerum Novarum and The Condition of Labour.[1] I am very favourably disposed to both Leo X111 and Henry George. Probably I would never have come to Georgism if it was not for Leo X111. The Aquinas Academy through which I became introduced to Georgism could really be counted as a fruit of his pontificate because it brought about a revival of Thomistic Philosophy in Catholicism. [2] Even though there may be a deep chasm in regard to how each views private property and some other philosophical and religious differences, I think there is a good deal in common between the two outlooks. [3] I will provide a series of quotes to compare and contrast their language on different issues so that you can get the flavour of both documents and their commonality. I will thus suggest how their ideas may be reconcilable. Apart from its religious considerations, which will not be dealt with that much in this paper; I believe Leo’s work to be principally a work in the field of social and political philosophy. Now George on the other hand, is an economist who really could be considered a “founder” in the field of political economy. He also expresses a social philosophy based on natural rights and indeed a Christian outlook on social justice, but this seems to rest on his economic ‘discovery’ of the distinction between private property in land and private property in products. They both appeal to natural law and natural rights and really that of itself is a good ground for further discussions between their respective views from those disposed to each. I will examine briefly whether the universal destination of all goods is compatible with Georgism and also whether the Leonine insistence on ownership of land could be accommodated within the scheme of the single tax. I will also suggest that Leo’s idea of associations such as the family between the individual and the state is of enduring significance and desirable even in a society based on equal rights.


LEO XIII AND GEORGE: SOME QUOTABLE QUOTES ON “SHARED” CONCERNS


Both Leo and Henry George have no hesitation about using the generic term, ‘man’ to represent all people to whom their writings are both really addressed, as they are writing before inclusive language became politically correct. I wonder whether George’s sharp criticism of Leo XIII not distinguishing between types of property could be applied to their shared use of ‘man’. Although Leo’s document is much shorter than CL, as George did not observe any equal time or space considerations customary in actual debates or else he did not want to curtail his own eloquence with anything less than a book, [4] Leo’s language when describing human beings is much richer. [5] He uses these synonyms, the people, the whole human race, the whole of humanity, individual persons, individuals, citizens, men, working classes, working men, the working population, mankind and human beings. Further, he attests eloquently to human dignity! His most impressive reference to this is, “No Man may outrage that human dignity which God Himself treats with reverence …..[6] George uses these terms besides man: Individual, unsatisfied animal, religious animal, land animal and political animal. I actually think Leo’s language in these matter is better in that it in it the person is something of absolute value. Even though George is opposed to materialism and to forcible communism and he is not lacking a view of human dignity he does not give it such explicit endorsement.


Both Leo and George are concerned with the problem of poverty facing humanity. Leo XIII: “The law should favour ownership and its policy should be to induce as many of the people as possible to become owners” and so “property will certainly become more equitably divided.” [7] George when speaking of his single tax says: “it would secure the largest production and the fairest distribution of wealth.”[8] Both are trying to respond to real social evils. They both want justice for workers.  Leo wants to save the workers from the grasping speculators whilst George wants to spare them from the iron law of wages. Significantly, whilst George will be at times rather provocative and somewhat belittling with the Pope, he often expresses his agreement with Leo, for example: “Yet as you perceive, it is also true that the state is the divinely appointed order.” [9] Yet both want to defend private property and both are critical of socialism. With regard to private property, Leo says its “inviolability” is his “first and fundamental principle” while for George there is an exclusive right of the worker to what he produces. [10] The latter also says, “the true rights of property are sacred.”[11] To be sure they define private property differently and possibly Leo is possibly accommodating some kind of mild socialism. So far as socialism is concerned, George says, “It is with socialism in its various phases that we do battle.” [12] and Leo states, “The Socialists may do their utmost, but all striving against nature is in vain.”[13] They are both appealing to natural law and a religious conscience. On Natural law we have L: “private property is according to natural law.” HG: Many references including, “God’s laws do not change” [14] and “Here is natural law by which as society advances the one thing that increases in value is land….”[15] They both assert the natural harmony between capital and labour.  Leo: “each requires the other; capital cannot do without labour, or labour without capital.”[16] George with this implied reference to labour and capital although he is referring to human beings more generally: “Their true interests are harmonious and not antagonistic.” [17] So far as their attitude to wages is concerned Leo wants the just wage insured by the mechanism of the state but for George the just wage is that set by natural market forces under conditions of equal rights in land.


They both comment on economic slavery: Leo: “a small number of rich men have been able to lay upon the masses of the poor a yoke little better than slavery.” HG: “The essence of slavery is in empowering one man to obtain the labour of another without recompense. Private property in land does this as fully as chattel slavery.”[18] They both have strong belief in Divine Providence. Leo: “Nature, therefore owes to man a storehouse that shall never fail the daily supply of his daily wants.” HG: Quite a few examples including agreement with this principle, but a succinct one is where he refers to God as “the All-Provider?” [19] Their attitudes to taxation both make reference to justice. Leo is concerned that: “a man’s means not be drained by excessive taxation” and further on, taxation ought to be “just”. HG: “All such taxes violate the moral law.” [20] Note well, the single tax does not fall under this statement because “He who ordained the state with its needs has in the value which attach to land provided the means to meet those needs.”[21] They both use the words force or fraud but in regard to different issues. Leo:  “Finally the rich must religiously refrain from cutting down the workman’s earnings, either by force, by fraud, or by usurious dealing…. HG:  “for is in not universally true that existing land title do not come from use, but from force or fraud?”[22] Another instance of their language coming together is with respect to the words, “equal rights”. Leo: “the Family has at least equal rights with the State in the choice and pursuit of those things which are needful to its preservation and its just liberty.” HG has numerous references to the equal right we have in the things produced by God. Although George is family oriented he does not posit the family explicitly as an institution between the individual and the state. He however speaks favourably of some other intermediate entities though with the possible exception of unions, which he is less positive about than Leo.[23] Finally, on the score of religion, Leo: Society can only “be cured by a return to Christian life and Christian Institutions.” HG: “the social question is at bottom a religious question.”  [24]


THE SEARCH FOR COMMON GROUND


In addition to any potential for dialogue with respect to the above issues there are grounds for some kind of synthesis in the matter of property. For George, there are no private property rights to be had in land. Private property can only be had in terms of the products of labour. He maintains that we have an equal right to use land which can be expressed in a private possession of land. He defines this private possession as entailing being able to sell, lend or bequeath this land. It may thus seem to be a super fine distinction from Leo’s ownership of land, just a quibbling over words were it not understood that society or the nation has the right to the rent.  It could be noted that the private possession concept was not prominent in Progress and Poverty whereas he uses it a good deal in CL, maybe with a view to winning the Pope over to his cause. Land not being private property proper is only a matter of a limited right to individuals or groups thereof such as the family.


A major part of CL is George trying to ‘hit home’ to the Pope his distinction between private property in land and private property in goods. For Leo both of these are true private property while for George only the latter can be. Not having the benefit of this distinction, the Pope and just about anyone not alert to the difference would of course have to resort to some sort of scheme of re-distribution by way of taxation, union power and state welfare. Even George says as much, where he criticizes Leo’s reliance on unions, “Yet, so long as you insist on private property in land what better can you do?” [25] Although Leo appeals to the time honoured claims of private property he nevertheless asserts the private possession and common use doctrine that can be traced back to the key figures in the natural law tradition he is conversant with, namely Aristotle and Aquinas. It is interesting that George also quotes these two figures although more sparingly. The doctrine is explained by Hawkins, “everything which a man may possess has at bottom its natural being which he did not make and which was not of itself destined for his exclusive use.”[26]


I actually like this argument philosophically and it actually works better than a rigid adherence to “exclusive” property rights in certain instances. Take the example of the fighter pilot who ditched his Spitfire before parachuting into the Chanel in an effort to save his Wing Commander who was stranded in its freezing waters after being shot down. This Australian pilot actually, did have the decency to tell Fighter Command of his intentions, although one would have to surmise that they were not too impressed at the non-combat loss of a Spitfire and possibly of the pilot himself. This Pilot sacrificed Fighter Command’s Spitfire in order to save a human life in a great act of heroism. Tragically, his efforts were to no avail and this would-be saviour also gave up his own life in this brave attempt. [27] Or then there is the old example of ‘stealing’ when in grave need from someone’s excess.


A too strict application of the ‘absolute’ idea could see this fellow’s next of kin as being up for the replacement of the Spitfire or the ‘desperate thief’ punished by the law, whereas most people would see that these responses as absurd. The principle is well explained by Hawkins, “No property right is so absolute that it can never be justifiably modified or superseded for the sake of those whose need is more urgent.” [28] Actually George seems aware of this principle because although private property in products is seen as “unlimited” and “full and complete”,[29] in a matter of life or death these more basic rights take precedence. Speaking as an economist though, these rights cannot be compromised by way of taxation even to underwrite Leo’s somewhat broader moral demands (e.g. charity) or even his intermediate bodies.


For George and indeed Georgists, from an economic point of view, it is rather problematic how things can be ‘commandeered’ for public purposes anyhow and this is the upshot of his argument. Many , albeit incorrectly say, it is by way of taxation, but according to Georgist political economy, income taxes are actually paid by the employer, who then passes them on to the consumer. Even so-called company taxes are paid by the consumer. Really both capital and income taxes are misnomers. The taxes are real and they ought to be replaced with the single tax but there incidence is otherwise than their names suggest. The consumer is really the unwilling and suffering subject to all taxes but the single tax. George gives the reason for the last point in an important footnote, “Taxes on land values or economic rent can therefore never be shifted by the landowner to the land-user, since they in no wise increase the demand for land or enable landowners to check supply by withholding from use.” [30] The ‘buck stops’ with the consumer so far as other taxes are concerned because he is at the end of this vicious line.


There is also enormous waste in this game of ‘taxation dominoes’ or ‘taxation charades’, which really needs no illustration but the idea of ‘a dead weight’ is helpful. Even if all taxation comes out of rent, as an economic truism suggests, what a monstrously profligate way to collect it, when the direct means is available through annual land value taxation? The Leonine insistence of owning land could be accommodated with Georgist teaching if it is remembered that George merely wants the land value to be collected for community purposes whilst the title remains privately possessed.


Full and complete, private property in goods actually could sound better to the  moral  views of the Pope if it is assumed that there is sufficient for revenue the state. There is ‘no knocking out’ of taxation, as the Tea Party would have it, without the restoration of the natural revenues of government. Even if it was doubted that land value revenue would be sufficient for the government, it can’t be doubted that taxes other than the single tax make people worse off and act, like robbing Petra to pay Pauline. According to the law of rent, rent grows with the advance of the community and in a greater proportion than returns to capital and labor. This common wealth thus becomes more and more significant in other words and the products of labor and capital less so as “the value of products does not increase.” [31] Because the community is ‘awash’ with products and they are so easy to obtain people could actually spend less time in bothering about either obtaining them or hoarding them. More weighty matters of culture and civilization even if sponsored by Leo’s ‘intermediate’ groups become ever more of a realistic possibility. Even sharing or lending products becomes a much ‘smaller deal’, if this was so desired and why wouldn’t it be on occasions, when it is so much easier?


Actually in this analysis there is not much difference in that Catholic social teaching idea of the universal destination of all goods with the idea of an ever growing rent. This rent is for community purposes and so this accords well with distributive justice.


Commutative just will deal quite adequately with the private products side of the economy. It should be clear that even this economy falls under the universal destination of goods idea and without any ‘help’ on the part of government. You don’t need re-distribution in a Georgist economy because the wealth circulates according to natural law and the distribution effected by it is better than mere mortals can devise or plan. In this context it could be noted, Henry George describes a natural law “as a tendency willed by the Creator.”[32]


Therefore, what would help the universal destination of all goods idea better than anything else, including so-called re-distribution and Leo’s significant bodies below the state, would be the equalization of land rights.  George shows in this work and in most of his others how we may equalize these rights in land by an extraordinarily simple adaptation of natural law; by collecting the market value of land held privately. Our equal rights in common or public land are pretty much recognized and we are left with little to do here than to maintain and safeguard them from privatization. His reform recognizes that individuals or even groups of free individuals will hold varying amounts of land for their private use and lands of even greatly varying economic value but they remit to the community annually the value of the advantages of this personally unearned income or increment. Of course he does not want ‘to touch’ personal income or rather the state ‘to touch’ it and it is really much harder ‘to touch’ if my previous few paragraphs could be accepted or understood. To reiterate the point, the proverbial ‘the taxation axe can only fall’ (indeed only regressively) on this kind of income at the point of consumption and that is hardly desirable. His single tax  reform, however, throws open the storehouse of nature spoken of by both Leo and Henry George to those who need it to live, which is of course everyone whether they join groups or not!


Even though Leo was a champion against chattel slavery and a promoter of free associations, it is hard to see how anything other than the Georgist definition of property rights in products of labor defeats all kinds of slavery, including the economic, so effectively. It is quite plain in George’s theory of property that you can’t own the bodies of other human beings, which is the essence of slavery. George also shows that to own land leads inevitably to owning other human beings. In other words, treating land as a commodity soon becomes treating labour as a commodity. The fact is neither land nor labour can be produced from an economic point of view. Land owners as land owners, also do not produce. However, ‘they reap where they do not sow’, as they hold onto the rent, which is the produce of the community. This will mean that land becomes sought after for this gain and becomes a kind of commodity. This unnatural demand for land, in conditions of private ownership distinct from private possession, pushes its price up and results in it being held out of use so that it continues to rise in price. Less and less land is available for those that want to use it. Many have to resort to using sub-marginal land or be resigned to unemployment. As wages are set by the wages at the margin and there is likely to be a pool of unemployed workers, the general level of wages is thus lessened. Free land, on the other hand, if I may use the metaphor, ‘yields’ free human beings who obtain the full product of their labour!


CONCLUSION

Leo uses the words, “Practical economy “in the first sentence of his Encyclical and hardly if ever, uses the word economic after that, and indeed in one case it is in the matter of individual or household economy not political economy. He may have been modestly describing his ‘economics’ in contrast to that of the experts, which had the name, Political Economy. Alternatively, he may have seen his work as mainly a contribution to Political and Social Philosophy and how these relate to the social economy. He does refer to labour and capital but his main concern seems to be the “equilibrium of the body politic.”[33] George on the other hand, seems more concerned with the body economic, and thus he has strong doses of pure economic theory rather than much to say about the body politic. For him the economy is under natural law and does not need much propping up by human laws, however, seemingly wise.  He does see a role for the body politic; say in bringing about the single tax or equalizing rights to private land and even owning and running ‘natural’ monopolies, (although I have been unable to deal with this today).  Therefore, even for him there is the application of principle to the relevant circumstances. Some of Leo’s derivation of principles seems to me the result of his observation of the parlous economic conditions prevalent at the time. Economic liberalism, without equal rights in land was showing real signs that it could be turning to the extremes of socialism and communism. Although Leo did not have the economic prescription for these ills described by Henry George, he tried to steer a middle course. If his economics was not up to the mark, his political suggestion of bodies like the family and other societies between the individual and the state is a valuable bulwark against the threats of political extremism even if they were to be much  reduced in a Georgist  social economy due to its economic success. Leo’s emphasis on personhood and bodies below the state is fine, so long as they imply a true association in equality with no concession to Robin Hood. Henry George’s reform would safeguard this kind of association of persons from the very foundations.




[1] Both of these works are found in Henry George’s The Land Question and Related Writings, (New York: Shalkenbach Foundation, 1982). I will use the abbreviation RN for the former and CL for the latter for references along with relevant page numbers. At times in the body of the paper these abbreviations will also be used for convenience.

[2] Some Catholics from this institution suggested to me long ago that Leo XIII and George were at cross purposes in these works.

[3] This is basically the paper I presented at the Association for Good Government’s Conference in Kiama, on “The Condition of Labour-Its Ideas and Historical Context” on Sunday 17th July 2011.

[4] Thomas Larkin points out in his preface pertaining to this book that it was not George’s intention to debate the Pope but to define his own views. He quotes a letter by the author to his son in which he says, “What I have really aimed at is to make a clear, brief explanation of our principles, to show their religious character and to draw a line between us and the socialists.” George, The Land Question and Related Writings, viii.

[5] Occasionally I use Leo for short.

[6] RN, 136. Leo’s emphasis!

[7] RN, 140.

[8] CL,14.

[9] CL, 10.

[10] RN, 118.

[11] CL,56.

[12] CL ,57.

[13] RN, 119.

[14] RN, 114, CL, 7 Initials HG are used at times in lieu of the author’s name in this section.

[15] CL, 16.

[16] RN, 120. Leo is at times used for brevity in this section.

[17] RN, 120, CL, 12. George explicitly asserts this harmony in Progress and Poverty.

[18] RN, 111, CL, 26.

[19] RN, 113, CL, 94.

[20] RN, 141, CL, 11.

[21] CL, 16.

[22] RN, 122,CL,36.

[23] RN ,116.

[24] RN ,127,CL, 67.

[25] CL, 80.

[26] D.J.B. Hawkins, Man and Morals, (London: Sheed and Ward, 1960), 99.

[27] Even though the Spitfire is public property it is administered by a few, viz. Fighter Command. I may have been better to pick an example plainly involving private property. The one I did choose has many ethical considerations.

[28] Hawkins, Man and Morals, 99.

[29] CL, 5.

[30] CL, 14.

[31] CL, 16.

[32] CL, 16.

[33] RN,120.

Anthony Fitzgerald

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