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Equality in the Post-War World

Douglas J. J. Owen

[Reprinted from Land and Freedom, September-October 1942]


Liberty is the dominant theme in discussions of war aims and the new order, in Britain, as elsewhere, but little is heard of the note of equality. This may be because Henry George still awaits his rightful place at the sources of opinion. In a recent visit, for example, to the library of a women's college, at Oxford, I found no copy of any of George's works in the economics section, even under the heading Land and Rent. The keynote of Progress and Poverty, of coarse, is the extreme contrast between poverty and wealth; this inequality being shown as the mark of our civilization, and the source of civil and international disturbance and war. Equality, as much as liberty, should plainly be the concern of democracy.

Welcome, therefore, is an important book just published by the Oxford University Press, entitled Reflections on Government, by the well-known writer, Dr. Ernest Barker, in which the question of equality is not ignored. "If democracy is wedded to liberty, liberty, in its turn is wedded to equality." Dr. Barker then argues for equal liberty of thought and action, and that this requires "a large measure of equality in the education of mental capacity." He then continues: "Equality in liberty of action if it too is to have substance and content, must mean some measure of equality in the possession of what we call 'means', and this for the obvious reason that 'means' are the means and conditions of action, and that inadequate 'means' prevent free and liberal activity in the pursuit of ends." How to achieve this, that is the question. It is "not an easy policy to pursue," says Dr. Barker, and he seems to fear that it may be attempted by compulsion. "If equality is wedded to liberty, the marriage must be equal, and liberty must not be dominated or diminished by equality. The compulsory institution of a system of pure equality would freeze the springs of initiative and reduce the variety of a living society to a static and dead uniformity." So far, so good, but Dr. Barker's alternative to an arbitrary equalization by government decree is to make employees as well as employers free partners in industry - "the extension of liberty into the conduct of production and the organization of industry" -- which method, desirable as the aim is, seems to depend on an act of government. It is when it comes to the application of these ideals that we sigh for a breath of Georgeism to reach the cloisters of Oxford and Cambridge, and other centers of learning.

There is an almost studied neglect of what is called "classic" economics in these days. An acquaintance with Adam Smith, to say nothing of Henry George, would have enabled Dr. Barker to give point to his fine sentiments about liberty and equality. The famous Chapter 10 in Book I of The Wealth of Nations deals with inequalities of earnings and sets out the well known factors which account for these differences. They are dealt with again by George in Progress and Poverty where he completes the Law of Wages and correlates it to the Law of Rent If we turn back to Smith's chapter we shall notice that he sets out these five factors -- agreeableness of the employment, ease of learning it, constancy of the job, amount of trust, and probability of success -- not as the causes of permanent inequality, but as the causes of ultimate equality.

"The whole of the advantages and disadvantages of the different employments of labor and stock," says Adam Smith, "must in the same neighborhood, be either perfectly equal, or continually tending to equality. If, in the same neighborhood, there was any employment evidently either more or less advantageous than the rest, so many people would crowd into it in the one case, and so many would desert it in the other, that its advantages would soon return to the level of other employments." But Adam Smith goes on to show the relation between .liberty and equality in a more radical way than Dr. Barker does. "This tendency to equality, at least, would be the case,'' says Smith, "in a society where things were left to follow their natural course, where there was perfect liberty, and where every man was perfectly free both to choose what occupation he draught proper, and to change it as often as he thought proper. Every man's interest would prompt him to seek the advantageous, and to shun the disadvantageous enjoyment."

Smith pointed out that in those days, as in ours, earnings in Europe were extremely different, and that this arose partly from the circumstances of the employments -- the criteria which he laid down -- and "partly from the policy of Europe which nowhere leaves things at perfect liberty." Here is the open secret overlooked in academic circles. True liberty leads naturally to a society of equals, but it must be a liberty not only of education and "means" as Dr. Barker wants, but liberty to produce and liberty to exchange. These great freedoms, the aims of the Henry George movement and its leagues for taxation of land values and free trade, are the essential criteria of the New Order for which half the world is fighting. The "policy of Europe which nowhere leaves things at perfect liberty," is the policy of maintaining the basic land monopoly, and the tariff barriers allied to it. All the evidence shows that private landownership in England is making the most of war conditions to dig itself in.

Mr. Denman of the real estate firm of Jackson Stops and Staff, states that the price of agricultural land has risen by about 30 per cent since the war began, which means that land which was worth £100 in September, 1939, is now in the year 1942, after three years of devastating war with all its destruction and waste, not to be bought for less than £130. This is the increase in price which has to be paid before food is produced.

Well may a correspondent in the Daily Herald say: "Equity in our post-war world will never come while 'accident of birth' continues to give to the few the legal but unnatural right to deny the rest of the community the means of living, except on payment of an unearned levy in the form of rent or purchase price." The pages of the Tory paper, the Daily Telegraph frequently carry details of sales of estates, the present being a rising market for land. The features often quoted are proximity to main roads, licensed premises, and other elements of economic rent, which are enhanced in value, rather than otherwise by war conditions, They disclose, too, how ancient is this incubus of exploitation upon the life of the people. "For centuries," we read, this process of rent extraction has gone on in the same family, in so many instances. Where is the equality, or liberty, in such a system?

As if to raise a further obstacle to those influences which Adam Smith said caused a "tendency to equality," a new anomaly is now brought to light. In Land & Liberty for June, Mr. A. R. McDougal, our well-known farming authority, and Henry Georgeist, is quoted as follows: "It is not generally known that rent is not liable for Excess Profits Tax. The official explanation is that rent being assessed under Schedule A (of the British Income Tax law), is not a profit. This, of course, is pure quibbling. The result of this is that in districts where farmers are prospering and paying E.P.T; landlords are encouraged to demand huge rent increases, which they are doing and getting.

"The tenants who normally would resist at risk of eviction say, 'Well, I must pay away my excess profits of say £500 or £1,000 in tax, so why risk losing my farm by arguing. I will just agree to pay more rent.' So the rent goes up say £400. This £400 is lost to the State as E.P.T. and goes into the private pocket of the landlord untaxed for E.P.T. This increases the value of the land for sale, and if sold for occupation by a new owner the Government will not enforce the recent Defense of the Realm Act Regulation to forbid a Notice to Quit being served.

"So we have evictions becoming common, and rent raising is rampant. The next step will be demands for higher prices (for produce) in order to pay these increased rents and prices of land, so the "vicious game of land inflation goes on. There is now no doubt, after reviewing the Government Agricultural Land Policy, that its main principle is that everything must be done to maintain or increase land values in the interests of the landlord and the mortgage holder."

These are significant words from a practical large scale farmer. They illustrate the many devices by which the "policy of Europe (and Britain)" -- to use Adam Smith's mild way of putting it -- "nowhere leaves things at perfect liberty." In fact every step is taken to restrict liberty and prevent any tendency to equality. The whole system of tariffs, quotas, etc., has this effect.

An example of the trend of things is given by Hannen Swaffer, the well known journalist, in the Daily Herald of March 26. Mr. Swaffer says sadly, "Heaven knows, war is a complicated business. Everything done stops something else. We used to export 2,000 tons of horseshoes to Southern Ireland every year. Now to save metal, there is a limit of 250 tons." Mr. Swaffer then explains that as the price of petrol prevents farmers in Eire from using cars, and with no horseshoes they will not be able to use carts, their export of butter, eggs and cheese to England will soon stop. Only another example of paternalism in government, otherwise known as planning.

Another example of the longing for paternalism is given in an article in the New Statesman & Nation of April 4, entitled "The Future of Empire." The author rightly says, "In Africa ... the paternalism of our colonial government had its economic side. ... If you turn over paternal government you will always find on the other side of the coin economic exploitation." He then argues for a reversal of policy. "We must give the individual African the same economic opportunities, the same power to control his economic fate as we demand for ourselves." There is, however, no recognition that this ideal can only be realized by giving the African access to his own lands, instead of confining him to reserved areas and in other ways robbing him of his economic freedom. The author continues: "The whole framework of economic society into which this individual African will have to fit himself must be changed. ...It is the change from the profit-making system of capitalism to an economy controlled and planned in the interests of the community." The author seems quite oblivious to the inconsistency of this proposed change from colonial paternalism to State paternalism with the plea that the African control his own economic fate.

And so we have on the one hand special privileges registering themselves in the value of land, import duties, franchises of one sort or another, and on the other government restrictions and proposals for increased state planning -- all hindrances to those processes which under conditions of freedom would, as Adam Smith showed, bring about, without further acts of government, those natural tendencies to equality of means and of earnings to which Dr. Barker's gaze is so wistfully turned. Henry George has shown how rent is the great equalizer, but only when it is publicly shared by making it the source of public revenue. This and the freeing of trade from the shackles of State interference would make for free production and free exchange, the indispensable requisites of any true system of human equality. Without this all the hopes for a new world are vain.