Henry George and the Crisis of Inequality, by Edward T. O'Donnell

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Introduction

More than a million people gathered in New York City on October 28, 1886, to witness the unveiling of the completed Statue of Liberty. Among those present were President Grover Cleveland, various members of Congress, representatives of the French government, and other foreign dignitaries. The theme of this grand civic occasion, as well as of the many speeches and editorials that marked it, was the celebration of progress and the health and vitality of the American republic. “We will not forget,” proclaimed the president, “that Liberty has here made her home.” The editors of the New York Times concurred, gushing, “On our shores . . . has been realized . . . with all its imperfections, the most successful and hopeful of all the social systems that have grown up in the history of mankind.” Chauncey Depew, a railroad magnate and a powerful figure among the city’s elite, seized upon the occasion to deliver his own speech lauding democracy and self-government as the best remedy for the social unrest then rocking the nation. “The problems of labor and capital . . . of property and poverty will work themselves out,” he declared, “under the benign influence of enlightened law-making and law-abiding liberty, without the aid of kings and armies, or of anarchists and bombs.”1

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Two days later, in that same great city, a very different set of citizens organized a very different event, the central message of which challenged the rosy assessments of the few days past. On the evening of Saturday, October 30, 1886, thousands of spectators lined the sidewalks of lower Manhattan to witness one of the more extraordinary events in the city’s history—a “Monster Parade” of some thirty thousand workers of virtually every rank, trade, and ethnicity marching in support of an insurgent political campaign. Outraged by an unprecedented campaign of repression by business and civic leaders against organized labor that spring and summer, workers had formed the United Labor Party (ULP) and selected the reformer Henry George as their candidate for mayor. The motivation behind both the campaign and parade was the conviction that the American republic was actually in crisis, its sacred principles of liberty and equality in jeopardy. Expressing this sentiment, the ULP’s announcement of the parade described workers as being “unjustly deprived of the blessings which should be secured by [republican] society . . . because avaricious men have possessed themselves by means of unrepublican laws of the free gifts of nature.” This parade, and the larger political campaign, represented an effort to secure, “equal rights, social reform, true Republicanism, and universal Democracy.” Days later, Henry George would stun the city and the nation by garnering more than 68,000 votes and finishing second in a three-man contest.2 These two starkly contrasting events, separated only by a few days, illuminate the dramatically dualistic character of the Gilded Age, a period defined roughly between the years 1865 and 1900. As the name suggests, many at the time considered it a golden age, one marked by spectacular advances in industrial output and technological innovation that transformed the United States from a predominantly agricultural nation ranking well behind England, Germany, and France to the world’s most formidable industrial power by 1900. Americans celebrated one astonishing achievement after another, from the completion of the transcontinental railroad (1869) to the opening of the Brooklyn Bridge (1883), from the laying of the Atlantic Cable connecting London and New York by telegraph (1866) to the unveiling of the Statue of Liberty (1886). Nowhere was this ebullient spirit more evident than at the World’s Fairs held in Philadelphia (1876) and Chicago (1893), massive events that afforded superb opportunities to

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showcase the wonders of American technological genius. On these occasions and seemingly at any opportunity, Americans invoked the optimistic themes of ingenuity, progress, expansion, growth, and success. “Our growth has not been limited to territory, population and aggregate wealth, marvelous as it has been in each of those directions,” posited President Benjamin Harrison in a typical address in 1889. “The masses of our people are better fed, clothed, and housed than their fathers were. . . . No other people have a government more worthy of their respect and love or a land so magnificent in extent . . . and so full of generous suggestion to enterprise and labor.”3 And yet for many other Americans there was abundant evidence that there was more to this upbeat vision of national development than met the eye. Put another way, the name of the era—the Gilded Age—also suggested a disturbing superficiality to all this evidence of progress. As with a gilded piece of jewelry, it suggested that one need only to scratch the surface of the thin gold layer to find the baser metal that lay beneath. When Americans peeked beneath the surface of progress, they saw the darker consequences of industrialization, especially the immense power accrued by large corporations and the men who ran them, the growing number of workers living in squalid slums, and the frequent episodes of labor-capital violence (the years 1880–1900 alone witnessed nearly 37,000 strikes). If these were the trends of the future, warned an aging Walt Whitman in 1879, then “our republican experiment, notwithstanding all its surface successes, is at heart an unhealthy failure.”4 Conservative middle- and upper-class Americans interpreted this increase in social turmoil and poverty in cultural rather than economic terms. Praising and embracing laissez-faire individualism and its offshoot, social Darwinism, as never before, they determined that the greatest threat to the American republic was not the widening gap between the rich and the poor, but rather the possibility that the poor would mobilize collectively against their betters, via either the ballot or the bullet, and take what did not belong to them. Accordingly, they demonized the poor as unfit, grasping losers and took steps to sharply curtail charity and other social assistance, which they deemed dangerous to the morals and manners of the needy. This spirit of social Darwinist hostility toward the poor was most famously captured in a widely reprinted sermon by

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Rev. Henry Ward Beecher, the nation’s most renowned preacher. Dismissing the claims of workers that they could not live on wages as low as a dollar a day, he asserted that too many workingmen “insist on smoking and drinking beer.” A frugal workingman could support his family on a simple diet of bread and water, argued Beecher, and “the man who cannot live on bread and water is not fit to live.”5 Central to these middle- and upper-class dismissals of the plight and protests of workers was the conviction that these agitators had become infected with one or more of the varieties of European radicalism, such as socialism, communism, or anarchism. The United States, they insisted, was a classless society. “We have among us a pernicious communistic spirit,” wrote Allan Pinkerton, head of the infamous Pinkerton Detective Agency in the wake of the great 1877 railroad strike, “which is demoralizing workmen, continually creating a deeper and more intense antagonism between labor and capital. . . . It must be crushed out completely, or we shall be compelled to submit to greater excesses and more overwhelming disasters in the near future.”6 Workers and farmers, however, offered a very different interpretation of the problems besetting the nation. In 1878, for example, the Knights of Labor adopted a constitution, the preamble of which denounced the “recent alarming development and aggression of aggregated wealth” that if left unchecked “will inevitably lead to the pauperization and hopeless degradation of the toiling masses.” One of the most pointed and widely read analyses of the Gilded Age’s social turmoil was Progress and Poverty, published in 1879 by Henry George, the man nominated by the ULP as labor’s candidate for mayor of New York in 1886. The book’s title itself perfectly captured the vexing duality emerging in late nineteenth-century America: the great progress for some and the increased poverty for many brought about by rapid industrialization. “It is as though an immense wedge were being forced, not underneath society, but through society,” wrote George.

“Those who are above the point of separation are elevated, but those who are below are crushed down.” George warned that the very fate of the republic was at stake. “This association of poverty with progress,” he asserted, “is the great enigma of our times. . . . It is the riddle which the Sphinx of Fate puts to our civilization, and which not to answer is to be destroyed.”7

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The year 1886, the year which would be long known as the Great Upheaval, marked the highpoint of labor radicalism in nineteenthcentury New York City and the nation. How did this remarkable mobilization by labor originate and how did Henry George come to assume so important a place in it? Labor’s mobilization began nearly a decade earlier in the aftermath of the economically devastating 1870s. The legacy of the 1870s—depression, wage reductions, unemployment, evictions, devaluation of skills, alienation from employers, and government repression of strikes— forced workers to challenge the veracity of antebellum free labor mantras and embrace new modes of thinking and action. Critical to this development was the rise of a small but influential group of socialists and the Knights of Labor, which provided both organizational and ideological strength to workers.

In New York City, the capital of capitalism in the United States, labor activists faced an enormous challenge. The city’s great size, dynamic economy, and diverse ethnic and cultural demography made for difficult conditions in which to encourage working-class solidarity and build a lasting labor movement. Nonetheless, following the depression years of the 1870s, New York City experienced a remarkable resurgence in working-class activism. Workers benefited not only from the energy and leadership provided by the Knights, but also from the creation of the Central Labor Union (1882), an umbrella labor organization dedicated to fostering solidarity among working men and women, organizing new unions, and coordinating strikes and boycotts. By mid-1886, after city and state officials responded to a wave of strikes and boycotts by arresting more than a hundred labor activists, the ranks of the CLU swelled to over two hundred member unions representing more than 150,000 workers from the New York metropolitan area. It was a combination of confidence stemming from four years of successful activism and fury over the recent crackdown that led these workers to launch a full-scale political challenge, one that would culminate in the formation of the ULP. Similar efforts to crush working-class activism across the country led labor activists in nearly two hundred towns and cities to field independent labor parties and candidates in 1886 and 1887.8 If these events explain in part the rise of working-class solidarity and mobilization in the 1880s and the Great Upheaval of 1886, how do we explain the rise of Henry George? Or, put another way, how did a

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middle-class English-American Protestant calling for land reform gain such a widespread following among landless urban wage-earners, especially among Irish Catholics? George’s rise to prominence among American workers represents one of the most intriguing—and revealing—stories of late nineteenth-century labor history. He had been born in the Age of Jackson and reared on the principles of antebellum Christian perfectionism and free labor ideology. Yet, in adulthood, he experienced the hard times and frustrations of the hardscrabble 1860s and 1870s. These influences and experiences placed him in a unique position from which to observe and interpret the revolutionary changes in social, economic, and political relations brought on by advanced industrial development.

As a reform-minded California newspaper editor in the 1870s, George had become disturbed by the growing conflict between labor and capital and the increasing gap between the rich and the poor. The resulting book, Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth (1879), went on to become one of the most widely read and compelling works of the latter half of the nineteenth century. Advocating radical land reform (via land-value taxation that came to be called “the single tax”) as a means of eliminating the crushing mass poverty, restricted opportunity, and increased inequality that accompanied industrial progress, the book became immensely popular among the urban working class. George’s work of radical republicanism hit the presses at precisely the moment that these Americans were struggling to refashion earlier forms of republicanism rendered increasingly hollow in the face of modern industrial capitalism. Written in an engaging, easily understood style and employing traditional American political idioms and concepts infused with new, radical meaning, Progress and Poverty provided American workers with an ideological framework with which to analyze their predicament and changing circumstances. It succeeded because it assured workingmen and workingwomen that a new and just republican order was possible, and that they were the key actors in the struggle to attain it.

Central to George’s growing popularity and influence on Gilded Age thought was his decision to move from San Francisco to New York City in 1880. Not only did this change of venue allow him to promote the book on

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a bigger stage, it also brought him into contact with a wide range of radicals, ranging from Irish nationalists who sought to apply his land reform ideas to the situation of the Irish peasantry to socialists and progressive trade unionists. By the mid-1880s, Progress and Poverty had become the largest selling book on political economy in American history. In the words of one contemporary economist, “Tens of thousands of laborers read Progress and Poverty who have never before looked between the covers of an economics book, and its conclusions are widely accepted articles in the workingmen’s creed.”9 So when New York City workers formed the ULP in the summer of 1886, they chose George as their nominee. George came to lead one of the most energetic and democratic campaigns in the city’s history. The ULP lacked the money, experience, and access to institutional power enjoyed by the wellestablished Republican and Democratic parties, but it nonetheless managed to garner a groundswell of popular support for their candidate, as evidenced by the tens of thousands of workers and spectators who braved the drenching rain on the eve of the election to be part of the Monster Parade.

Three days after the parade, George and the ULP stunned contemporaries by garnering an impressive 68,110 votes (31 percent), finishing second to Democrat Abram Hewitt (41 percent) and ahead of the third-place finisher, Republican Theodore Roosevelt (28 percent). Labor activists believed the results pointed to a dramatic resurgence of working-class political power, one destined to upend the status quo and pave the way for a national labor party. “It was an unprecedented uprising of the working classes which shook this city,” declared John Swinton, the influential editor of a weekly labor newspaper. “It was a revolt that signifies the opening of a new political era.” Observing events across the Atlantic from London, Frederick Engels concurred: “The Henry George boom . . . was an epochmaking day. . . . The first great step of importance for every country newly entering into the movement is always the constitution of the workers as an independent political party, no matter how, so long as it is a distinct workers’ party. And this step has been taken, much more rapidly than we had a right to expect.”10 However, these optimistic hopes were soon dashed as the ULP collapsed just one year later, riven by ideological factionalism (much of it stoked

by George himself ). Nationally, the rising tide of worker mobilization

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foundered in the face of internal dissention, government repression, a more unified front by business interests, and the successful co-optation of selected labor agenda items by the major political parties.

But the story of Henry George and the Great Upheaval did not end in 1886 and 1887. While George the man lost credibility among working-class Americans, his ideas lived on in public discourse. His advocacy of a radical break from the nation’s liberal past by abolishing absolute private property rights and empowering the state to secure a just republican society was a significant contribution to the emergence of progressivism in American political culture.

Because the broad details of the life of Henry George are well known, I have chosen not to write yet another traditional biography of the man. As a result, this work combines biography, intellectual history, and social history to examine and make sense of his time and thought as a thinker and activist. It seeks to explain the origins and meanings of his influential writings on social reform, especially Progress and Poverty, while also examining how and why they gained such great traction among Gilded Age workers struggling to comprehend the revolutionary changes brought on by industrial capitalism. It is, therefore, what some have called a “social biography,” a study concerned as much about the era as the man. As a result, there are times in the course of this book when Henry George is not the main focus.

This characteristic reflects the fundamental belief that it is impossible to understand George without fully understanding the political culture into which he was born, to make sense of Progress and Poverty without addressing the social context which produced it, or to discover the impact of the author and the book without delving into the world of the workers who found them so compelling.

Like many historians, I always want my research and writing to have some relevance to the age in which I live. And yet it is with profoundly conflicted emotions that I acknowledge the sudden, terrible relevance that Henry George and Gilded Age America have taken on in the wake of the great financial meltdown of late 2008 and the subsequent deep economic recession. There were a good number of scholars, activists, and social critics in the decade prior to 2008 who warned Americans about rising corporate

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power, wealth inequality, and poverty and the threats they posed to the nation’s republican values. Some even invoked the phrase “Second Gilded Age” to describe this current era in an attempt to conjure up images of an age of unrestrained robber baron industrialists and financiers, roiling social conflict, and a widening chasm between rich and poor.11 But few people seemed to pay them any heed until after the collapse occurred and the ensuing debate over government aid to bailout banks and large corporations such as General Motors commenced. Since that moment, however, the phrases “Second Gilded Age” or “New Gilded Age” have become increasingly popular. Indeed, a rough search of the Lexis-Nexis database for the term “Gilded Age” shows 11 articles employing it in the 1970s, 76 in the 1980s, 184 in the 1990s, and 541 in the 2000s. And the trend shows no sign of abating; the period between the years 2010 and 2014 already has generated well over a thousand articles. Many books since 2008 now bear the phrase “Gilded Age” in their titles, such as Larry M. Bartels’s Unequal Democracy: The Political Economy of the New Gilded Age.12 The sudden return of “Gilded Age” to common American parlance reflects a keen awareness of the eerie similarities between the United States of today and that of the last third of the nineteenth century. The nation then and now was consumed with intense debates over wealth inequality, labor unions, immigration, terrorism, women’s rights, family values, money in politics, voter eligibility, Wall Street recklessness, political polarization and paralysis, religion vs. secularism, individualism vs. the common good, free market capitalism vs. regulation, and wars of choice vs. diplomacy. Taking a closer look at just one of these issues, we learn that in 1890 the top 1 percent of Americans owned 51 percent of all wealth, while the lower 44 percent of Americans owned just 1.2 percent.13 Income taxes, inheritance taxes, and other measures adopted since the early twentieth century reduced the 1 percent’s share significantly by 1979 to 20.5 percent. But the trend has shifted dramatically back toward increased wealth and income inequality after 1980.

By 2010, the top 1 percent owned 35.4 percent of all wealth, a statistic that helps explain the successful popularization of the pejorative phrase “the 1 percent” by progressive protesters like the Occupy Wall Street movement.14 Little wonder then that many observers believe the United States has entered into a second Gilded Age. These are, of course, similarities to the

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Gilded Age of the late nineteenth century, not identical trends and events.

(It should be noted that Americans in the first Gilded Age did not worry about climate change or online privacy, just as Americans in the twentyfirst century no longer worry about the Indian Wars or the annual ravages of typhoid fever.) Mark Twain, the man who coined the phrase “gilded age,” reminds us that “history doesn't repeat itself, but it does rhyme.” It is this rhyming that many Americans who possess a sense of history and political values to the left of center find so disturbing.

History does not offer a specific map, formula, or blueprint for dealing effectively with contemporary social, economic, and political challenges.

But we study history in part because we believe it allows us to understand where we as a society have come from and why things—institutions, ideas, practices, customs, and power arrangements—are as they are. We believe these insights have the capacity to guide individuals and societies as they make the choices that will shape the future. “Trying to plan for the future without knowing the past,” Daniel Boorstin once quipped, “is like trying to plant cut flowers.”15 In the late nineteenth century, the United States faced a host of vexing challenges regarding policies related to economic opportunity, democracy, citizenship, freedom, and human rights. Ultimately political leaders—prodded by labor unions, farmers’ alliances, muckrakers, goo-goos, and visionaries like Henry George—chose to adopt policies that ameliorated many of them, preserving and in many cases expanding the promise of a republic of liberty founded “of the people, by the people, for the people.” The United States in the early twenty-first century also faces a great many problems that remind us of that past Gilded Age. What choices the American people and their political leaders make in the coming years will, as they did in the late nineteenth and early twentieth centuries, have a profound impact on the future vitality of their nation and its cherished values.