According to Karl Marx in his Communist Manifesto (1848) and the first volume of his i>Kapital (1867); and according to his disciples who are known as socialists and communists; and according to many "intelligentsia" who do not call themselves communists or socialists but who promote Marxist ways of thought; according to the ideology of this movement, modern "capitalism" represents the victory of the "bourgeoisie" over the ground-landlord aristocracy of Europe.

Marx wrote his Kapital in England, where he had found refuge after being driven out of continental Europe. But England gives the lie to his Communist Manifesto and to the first volume of Kapital by the very facts of her history. Becoming "the work-shop of the world," England, for that reason, became the pattern for modern Parliamentary Democracy. And what is the essence of legislative popular government? The modern British Parliament has grown up at the point of a long-drawn-out compromise between ground-landlord interests, represented since the seventeenth century by the Tory party, and commercial-manufacturing interests represented by the Whig-Liberal party. This compromise finds no explicit recognition in substantive law. It was a tacit, under-cover agreement by which the powerful elite owners of the island gave increasing parliamentary representation and political power to the "middle class," and finally to the laboring class, on the understanding that fiscal burdens were to be laid more and more upon industry, while at the same time, taxes were to bear more lightly in proportion upon ground-rents of leased land as well as upon the value of land held out of use on speculation and in private parties and hunting preserves. This compromise came silently to a climax under Chamberlain, who "de-rated," or untaxed, all vacant land in Britain.

These facts and their economic implications find no place in the standard ideology of Marx and his followers, whether called socialists, communists, or by any other label.

The innocent reader of Marx's Kapital (vol. I), or of Schuman's International Politics, would not suppose that the system so glibly called "capitalism" is affected by, or has anything to do with, such trifling such mundane such insignificant matters as taxation, ground-rent, enclosure of "common" lands and the speculative withholding of city lots. These matters complicate the entire system and process of modern industry; and yet they find no mention in the picture of what Prof. Schuman calls the "comtemporary tragedy" of capitalism (p. 525). The ultimate conclusion of Marxism, therefore, is that the entire situation discloses a simple, open-and-shut issue between the "bourgeoisie," on the one hand, and the "working class," on the other. Our old friends, "Capital and Labor"!

Marxism, in fact, got away to a wrong start by underwriting the uncritical, indiscriminate war between laboring people and their employers.

Ignoring the specific issues raised above, Professor Shuman makes no reference to Henry George and his writings, while giving ample recognition to Marx. Thus George and the proposals of Progress and Poverty are beneath notice in a large volume on contemporary politics.

On the other hand, many Marxists, instead of ignoring the specific issues raised by Henry George, declare condescendingly that Georgeism is valid as far as it goes. Thus, Norman Thomas proclaims that the ground-rent of land is the greatest legalized racket! Yet socialists and communists, and all persons who adhere to Marxian ideology, say that if taxation is transferred from productive capital to ground-rent and to vacant sites, the big private capitalist will have power to exploit labor, oppress the public and put other capitalists off the map.

Georgeism plants itself squarely across this current Marxist assumption by pointing out that untaxed capital, on an earth set free of speculation and monopoly by the taxation of both used and unused ground, will be regulated by free competition for the first time in history. Productive capital instead of being simultaneously penalized by heavy taxes and compelled to earn ground-rent, will be encouraged by fiscal exemption and by the break-up of land monopoly. Ground-rent will be absorbed as public revenue in lieu of taxes on production. Capital will thus flow more freely into productive use, will assist in the employment of more labor and the creation of more goods, with augmented buying power among the masses of the people.

The Marxist apparently is unable to rid himself of mental habits acquired in a monopolistic world where the ground is undertaxed, while capital and merchandise are heavily over-taxed. Here is the crux of the argument between Marxist and Georgeist. Large aggregates of capital can exploit labor, oppress the public, and put other capital off the map only in a regime such as now prevails, where unused land is held on speculation in city and country; where occupied sites are ground-rented; and where industry is compelled to carry a burdensome tax-load.

Marxist assumptions could not run in a Georgeist economy; because a capitalist who deliberately undertook to be oppressive could be liquidated by competitive capital in a free market, on the ground of service as against exploitation.

All Georgeists freely admit that labor is exploited by the present economic set-up; and consequently the huge productive mechanism of modern industry is, to a large degree, "unearned" by its ownership. But at the same time, Georgeism declares that whatever may be the origin of capital, it should be untaxed in order to be freely employed in private enterprise under conditions which create a rising demand for labor everywhere. The danger attaching to capital under prevailing fiscal methods is the fact of its operation within the terms of a restricted economy which not only gives the owners of capital too much control over labor, but, at the same time, blockades the onward march of business itself by unemployment, low buying power, and periodical "crises."

Privately owned capital-equipment possesses no arbitrary control over labor and the general public. When working people, for instance, are thrown out of employment by installation of new productive machinery, capital seems to deprive labor of the opportunity to earn a living. But labor-saving machinery would not appear so despotic if land monopoly, together with over-taxation of capital and merchandise, were not artificially restricting the progress of industry and limiting the amount of employment. In other words, new kinds of machinery would not spell tragedy to labor if capital in general were untaxed and had freer access to land throughout the nation. For in a Georgeist regime (with no fiscal penalty on productive capital; with ground-rent socialized by taxation; and with speculative landholding impossible), the discharge of workers at a given point would tend to be followed by re-employment elsewhere.

PALLIATIVES ARE FUTILE

When the crash of 1929 came, the Republican party, after being in power for a decade, was helpless. The Democratic party presently took over the government; and while its policy has had no effect in relation to the fundamental problem, it has fed the poor by taxing the rich, and has prevented an uprising of the masses. But while the "New Deal" is only a stop-gap, its Republican opponents are paralyzed by their inability to offer constructive criticism in a time of great national emergency. The Republican politicians, in fact, are showing up as poorly as did their predecessors the Whigs in the days of Webster, when that party was on the way out. If the Republicans carried the country, they would have to continue most of the New Deal, or confront a situation which nobody would care to face. There is no constructive statesmanship in either of the big parties; and the country will have nothing to do with Marxism or Nazism.

"But," says a reader, "suppose the Republican party should come into power and reduce taxes fifty per cent. Would not that program be constructive?"

Such a questioner would do well to observe that while Republican Congressmen are quick to demand cuts in expenditures for the New Deal, they are quick to vote increased appropriations for a gigantic navy. But sup- pose, for the sake of argument, that a fifty per cent cut in federal taxes were actually effected by the Republicans, or by any other party! The resulting stimulus to capital investment would infallibly (as in the period before 1929) promote inflation of land values and ground rents all over the country, thus burdening industry with liabilities equal to, or exceeding, the tax reduction; and the result would be another "crash."

No policy will now give relief except one which goes to the root of our economic problem, reversing our lopsided, aristocratic, European-made system of taxation by transferring fiscal burdens from productive capital and merchandise to the ground rentals of occupied sites and to the value of unused land. This policy would not only encourage private enterprise, the most precious economic force in human society; but it would create a growing demand for labor, a consequent reduction in "relief," an increase in wages and purchasing power; while at the same time, it would call into existence an immensely greater structure of industry and property which would more equitably bear the expenses of government. There is no other way out of our present confusion.

Anyone who really fears a revolution in America ought to re-read Henry George's Progress and Poverty, one of the great social documents of all time. ... I first read Progress and Poverty thirty years ago. ... In all these years I have never known his premises to be shaken in the least.