(Roughly) Daily

(Roughly) Daily readers have encountered Henry George here before. An economist who wrote late in the 19th century, he was hugely influential in his time and into the early 20th century. Indeed, his philosophy was the inspiration for (original) version of the game Monopoly. Michael Kinsley argues that we should take another look…

So, you’re a Silicon Valley billionaire and you’ve already got the private plane. What you need next is a philosophy, something to live by, and to help finance, and—most important—to use to explain or justify yourself. Don’t just grab the next philosophy to come along. Chances are that will be Ayn Rand and her extreme form of capitalism, which she called objectivism.

Rand has a lot going for her, to be sure. First, you may have actually read her in high school and may have been genuinely influenced. Second, in a nutshell, she rationalizes greed, which you have nothing against. Third, she was into mildly kinky sex—something else you may have in common. Fourth, she was associated in some way you don’t quite follow with Alan Greenspan, who is respectability itself, whatever other Rand enthusiasts may have been up to.

But you’re too late. Ayn Rand, who never was really undiscovered (The Fountainhead became a movie, starring Gary Cooper as a heroic architect, a few years after it was published), has by now been thoroughly re-discovered. According to James Stewart (the prominent business journalist, not the even more prominent actor), writing in The New York Times, President Trump says Ayn Rand is his favorite writer and that The Fountainhead, her pulmonary embolism of a book, is his favorite novel. Travis Kalanick, the onetime Übermensch of Uber, is on board, as is (liberal foodies, please note) John Mackey, co-founder and C.E.O. of Whole Foods.

My dear billionaire, you need an economist almost no one has heard of. One who addressed the most pressing problems of today, which do not include the insufficient greed of rich people. But one who was not completely out of sympathy with rich people, either.

May I nominate Henry George (1839–97)—economist, pamphleteer, journalist? Once famous, he is now widely forgotten. He described himself as a man who came out of the great American West, which he did—but only after he got there via Philadelphia, where he was born. He later moved to New York City, ran for mayor, and attracted 10,000 people to a political rally (but lost nonetheless). He made the best-ever short defense of free trade: You wouldn’t fill your harbor with rocks to keep out goods your citizens want to buy, would you? Well, that’s what you’re doing when you slap tariffs on imports.

George’s masterwork, published in 1879, was Progress and Poverty, which set forth to explain how “increase of want” could go hand in hand with “increase of wealth.” Thus George took on precisely the question we face today: not the general question of poverty or inequity, but why specifically are middle-class incomes stagnating, and incomes of people at the bottom falling, while those at the top continue to rise?

George was no vulgar Marxist. You might call him a “supply-side socialist.” All products of the economy, he reasoned, are ultimately derived from three sources: labor, capital, and land. What else is there? Labor and capital are both productive. Put them to work and you end up with more. But land is different. As the man said, “They aren’t making any more of it.” When you work for an hour, you increase society’s wealth (and your own) by an hour’s worth of wages. When you save a dollar rather than spending it, you increase society’s (and your own) wealth by a dollar. But when you buy a piece of land for $10,000 and sell it for $20,000, you haven’t increased the total wealth of society by a nickel. Yet the price of land keeps going up, up, up, as the population increases and society grows richer. Where does that money come from? It comes from the pockets of the other two factors of production, labor and capital.

George distinguished, in other words, between the capitalist who is truly productive and the capitalist who is simply a “landlord.”… You’ve got to think of “land” as a metaphor for all unproductive forms of capitalism. Much of the financial industry, for example: hedge funds, private equity, I.P.O.’s and I.R.A.’s. Some might defend finance as an industry that makes the making of what other industries make more efficient. But when you read that Goldman Sachs is getting some enormous fee for fuck-all or that two companies are merging that unmerged a few years ago and will unmerge again in a few years, you gotta wonder…

Henry George’s theories might have something to offer people who want to put their money to good use today: “The Obscure Economist Silicon Valley Billionaires Should Dump Ayn Rand For,” from @michaelkinsley in @VanityFair. Eminently worth reading in full and pondering.

* Henry George (who, to Kinsley’s observation that he might be considered a “supply-side socialist,” also said: “Laissez faire (in its full true meaning) opens the way to the realization of the noble dreams of socialism.”

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As we return to first principles, we might recall that it was on this date in 1996 that Oprah Winfrey launched Oprah’s Book Club (with he then recently published novel The Deep End of the Ocean by Jacquelyn Mitchard). In total the club recommended 70 books during its 15 years in its original (Oprah Winfrey Show form), and has subsequently been revived via OWN: The Oprah Winfrey Network, O, The Oprah Magazine, and Apple TV.

While the selections have occasionally generated some controversy (e.g., Michale Franzen, James Frey), they have for the most part been warmly– and enthusiastically– received, adding massive sales to the chosen titles. Indeed (per Business Week), publishers estimate that her power to sell a book is anywhere from 20 to 100 times that of any other media personality.

This year, Oprah was awarded the PEN/Faulkner Literary Champion award, which “recognizes a lifetime of devoted literary advocacy and a commitment to inspiring new generations of readers and writers.”