Spencer Heath Archive

Item 1414

Original letter from Heath on letterhead of The Science of Society Foundation, Roadsend Gardens, Elkridge, Maryland, to Franz Oppenheimer at Hollywood, California, not sent when Heath found that Oppenheimer had died two months earlier, on September 30th. Marx attacks private ownership of both land and capital. Oppenheimer demolishes Marx’s argument against private ownership of capital, but defends his stricture against private ownership of land. Heath shows that the argument against Marx with respect to capital is equally valid against Marx with respect to land.

November 25, 1943

Dear Dr. Oppenheimer:

 

I have read your contributions to the October number of the Journal of Economics and Sociology and take the liberty of addressing you, as one logician to another, and relying upon your intellectual honesty, not to say good sportsmanship, if I make it appear that you, too, may be a “prisoner of a principle” and thereby constrained to think with fixed marching orders.

     Your admirable and long sustained forensic attacks on the Marxian deduction, from a basic philosophy of con­flict, that all ownership of the means of service and production is, in its essence, monopoly is exceeded only by your own inveterate propaganda, under the same or a similar deduction, against ownership of the natural means, namely, land and its resources. You show how Marx de­nounced both of these ownerships as monopolies, but you expose his petitio principii only with regard to the artificial means, capital. He, as you say, and rightly, “surreptitiously assumes the proposition as proved.”  He assumes that both ownerships, capital and land, are mono­polies and thus the cause (secondary assumption) of social strain and distress.

     Very happily you expose this logical vice, so far as it applies to capital, but are you not particeps criminis with him, so far as the same false reasoning is directed against the ownership of land? You seem to assume that Marx was right as regards the ownership of land but his same reasoning wrong with respect to capital ownership being a monopoly and thus causing social distress — that because he is wrong in the one both of you must be right in the other. To borrow your own language: “The alleged alternative is no alternative at all, as more than two cases are possible.” Do you not, with respect to “land monopoly”, lie with Marx in the same bed of “surreptitious” assumption, but the assumption no less overtly and persistently proclaimed. You, of course, deny this; you believe that where Marx stands with you he is sound, for you claim the support of sound logic for a question that he only begs. You rely on “a kind of calculation ‘more mathematico,’ which can be verified just like an arith­metical sum.”

     Doubtless you refer to the mathematics of our patron saint, Henry George, — him of the single sword for but the one dragon no less naively and surreptitiously assumed. In his Progress and Poverty, seeking the “laws of dis­tribution,” he begins his examination by calmly remarking that government, through taxation, is a constant participant in the distribution of the total produce and then immedi­ately tosses taxation aside and out of consideration so far as the “laws of distribution” are concerned, saying that the bearing of taxation, if any, upon them can be inquired into “after we have discovered the laws of distribution.” (italics mine) And yet, in all innocence, he follows immediately with a statement that we must dis­cover these laws for ourselves because the current poli­tical economy does not correctly apprehend them, “at least as a whole.” (italics mine) (Memorial Edition, PP 155, 156.)

     George lays it down (p. 160) that: “The laws of the distribution of wealth are obviously laws of proportion, and must be so related to each other that any two being given the third may be inferred.” And: “The proof that we have found them will be in their correlation — that they meet, and relate, and mutually bound each other.”

“Or to put it in algebraic form: As Produce = Rent + Wages + Interest, therefore, Produce – Rent = Wages + Interest.”

“Thus wages and interest do not depend upon the produce of labor and capital (sic) but upon what is left after rent is taken out; … no matter what be the increase in productive power, if the increase in rent keeps pace with it, neither wages nor interest can increase.” (italics mine) “The moment this simple relation is recognized, a flood of light streams in upon what was before inexplicable, and seemingly discordant facts range themselves under an obvious law.”

     What a flood of light, indeed!! Our cal­culation “more mathematico” actually proves that if P = R + W + I then P – R = W + I or, to use numerical terms, if 6 = 1 + 2 + 3 then 6 – 1 = 2 + 3 or, any one of three parts taken from their whole leaves the remaining two parts, and this, of course, has nothing whatever to do with their respective magnitudes.

And this is what is taken for mathematical proof, “which can be verified like an arithmetical sum,” that “neither wages nor interest can increase” if the increase in rent keeps pace with and “swallows up” the increase of production. And what a fine “surreptitious assumption,” this last that all increase of production goes to rent! It is contrary to all fact and based on nothing more sub­stantial than David Ricardo’s very surreptitious assump­tion that the most desirable land in use has no more capital and labor applied to it than does the poorest in use and his trite truism, so often treated as though it were mathematics, that rent is always precisely the dif­ference between rent and no rent.

     We are now so ravished by the “flood of light” and “obvious law” it would seem impertinent to inquire “what bearing, if any, taxation has.” But on page 190 taxation to pay interest on public debts is referred to as “leaving so much less for wages and so much less for real interest.”

     The parallelism between the Georgian fallacies and those of Marx is striking indeed. The “value hatching surplus value of Marx is matched by the “increasing land values” of George. Both are assumed always to increase and this assumed increase is further gratuitously assumed to be the cause of low wages. Both writers, having made their surreptitious assumptions, disregard all alternatives. Neither is deterred or impressed by what George refers to (p 426) as “schemes of taxation which drain the wages of labor and the earnings of capital as the vampire bat is said to suck the lifeblood of its victim.” We are not told “what bearing, if any,” this taxation has upon “the laws of distribution,” nor is taxation considered as a possible cause of low or declining wages. Once the question has been begged, no alternative can be entertained.

     This facility of unconscious fallacy is common to nearly all the protagonists of the Georgian a priori misconceptions. Again, in your own case, at page 61 of the journal referred to, you allege that “monopoli­zation of the soil by large agrarian property is the cause of the reserve army [of unemployed] and its contin­uous reproduction, and of all the evils connected with its presence on the labor market.” You state this as a “genuine law” deduced from the “basic principle of economics” [not specified] and supported by a “statisti­cal regularity.”

     If this alleged causal connection be­tween property in land and unemployment is anything more than sheer gratuitous assumption should there not be evidence that the possibility of any alternative cause has been excluded, and particularly that those “schemes of taxation which drain the wages of labor and the earnings of capital as the vampire bat is said to suck the life-blood of its victim.” (Progress and Poverty p 426) have been considered and found of no effect as causing unemploy­ment and low wages? I have looked through your writings in vain for any sort of reasoning that did not beg the question in support of your perennial thesis that “land monopoly,” and not the distortions and perversions of the markets by the anti-social technique of taxation, is the mother of all economic ill. Even your book reviews in the same number are shot through with this barren petitio principii.

     Have not we, too, been “prisoners of a principle?” Surely, it ill becomes us, who for so many years (some 33 years in my own case) have swallowed and followed those fallacies of Marx with respect to “monopoly of the land-owners” to which Henry George gave such rhetorical elaboration, to attack those same fallacies when applied to the ownership of capital while cherishing them with respect to the ownership of land. We should remember the mote and the beam. Exposing a particular fallacy in its one application does not make it valid for another application. Demonstrating that Marx begged the question as to the ownership of capital being a monopoly is certainly no proof that he was not begging the question when he included land. Rather should we strive earnestly to clear up the “confusion.” We do not truly honor the master by neglecting his high general principles and perpetuating his misconceptions. To do him honor and acquit ourselves we should rather cherish his noble philosophy of freedom and perform the trust that he reposed in us “to carry further their applications where this is needed.”

     It is a greater thing that he should nobly inspire us than that his dead hand should guide. His spiritual philosophy far transcended the gross materialism of Marx; he believed in and tried to understand the social organization in contrast with the anti-social, the political; and he glimpsed the technique of an enduring state of freedom in free-men rendering to some suitable public authority the market equivalents of public services received. He apostrophized Liberty but did not fully trust her, for he relied on the predatory political state, on the tech­nique of politicians, for a just and productive adminis­tration of the gifts of God to man. Yet his voice is still a herald of the social dawn, a day long dreamed.

     We need to learn from him how right thinking leads men into right action and to its high rewards with none coerced or enslaved. It is for us in our day and by our own light to lift the curtains of the dawn.

     Have you ever considered proprietary versus political public administration — the social-ization of government into an agency of service by exchange in lieu of rulership by force?

Sincerely,

Spencer Heath