Yang is not the first person to bid for the city’s mayoral office with a flashy promise to solve economic ills quickly. Just such a candidate took part in a three-way race in 1886. That race included a novice Teddy Roosevelt, who came in third; the machine favorite and winner, Abram Hewitt; and second-place finisher Henry George — the Yang of the 1880s.
Like Yang, George was not an experienced politician. He, too, wrote a book that reflected deep engagement with the problems of his historical moment. Yet George’s “Progress and Poverty,” published in 1879, and his political career both came up short because they resorted to gimmicky antidotes — something that plagues Yang’s analysis and could also threaten to undermine his political ambitions.
George wrote “Progress and Poverty” to make sense of the Gilded Age. The last three decades of the 19th century saw a strident belief in technology’s ability to solve problems — “Progress” — confronted by the growth of inequality, particularly at the low end of the scale — “Poverty.” George saw new technologies lead not to broad-based material progress but to “involuntary idleness of workers” existing simultaneously with “capital massed and waiting.”
Railroads played a key role in turning technological progress into economic stagnation. George argued that it was the corporate and legal structure of the railroad business, rather than the steam-and-steel technology itself, that impoverished Americans. Steam locomotives revolutionized the transportation of agricultural goods. Monopolies ensured that the benefits of railroads were not widely distributed.
A San Francisco newspaperman, George witnessed California railroad corporations, under the control of men such as Leland Stanford, become the most corrupt in the country. Stanford persuaded the federal government to give the railroads land that they could sell to finance construction of their lines. George was skeptical. He complained that the land grant system “tends to disperse population” and “causes the monopolization of land” in places such as California’s Central Valley.
George was right. Railroads did spur economic development, but on a vastly unequal basis. Railroads had a marked tendency to raise the value of nearby land. Cattle-grazing land could, in the speculative frenzy that accompanied a proposed railroad, fetch $1,000 an acre. Those who owned the land — having done nothing to improve it — reaped the benefits.
Yet, simultaneously, railroads could hurt the very farmers whose crops they hauled. Railroads regularly calculated freight rates based not on the cost of transportation but on the difference between the market price of agricultural goods and the cost of farming the goods. If the market price swung upward, as grain prices sometimes did, railroads simply raised their rates by the same measure, eroding profits for farmers.
George and his allies offered a framework for understanding this new situation. Railroads had distorted the economy. It wasn’t work that made people rich; instead, it was ownership of natural resources — land, in particular. “Nature herself had endowed these men with wealth; labor had contributed little to it,” wrote a contemporary who sympathized with George’s views. Property, not technology, made inequality.
“Poverty and Progress” resonated with readers across the country. George grew his ideas in the countryside, but urban workers became some of his biggest fans. “Georgist” clubs — akin to the Yang Gang — sprang up across the country to meet and discuss George’s work. Many prominent intellectuals eagerly read and disseminated it. Terence Powderly, the head of the Knights of Labor, the nation’s largest labor organization; a young lawyer named Clarence Darrow; and a steel magnate and mayor of Cleveland named Tom Johnson were all “Georgists.”
The last third of George’s book put forward his solution to the problem. Inequality could be solved, he wrote, not by changing the corporate practices of railroads but by taxing property. George argued for a high tax on property, the “single tax,” which aimed to force landowners to put land to its most remunerative use. If railroads left good farmland fallow, then the single tax would force them to use it or sell it. The same in cities: Urban landlords who did not use their lots to their highest extent would be forced out by property-tax rates that were based on the best possible use of the land.
The single tax worked pretty well as a catchphrase, but it failed miserably as a political project. Houston’s mayor managed to enact it, but it was ruled unconstitutional by the unsympathetic and corrupt Texas Supreme Court. Similarly, Johnson, who bankrolled George’s unsuccessful run for New York mayor, could not manage to push the tax through the Cleveland city council while mayor there. On a national level, about the only scale at which the single tax would have been able to affect railroad policy, the proposal went nowhere.
Like all proposed panaceas, the single tax also oversimplified the relationships between the various problems that it promised to solve. Sometimes the consequences were striking. George was anti-Chinese and at times argued in favor of Chinese exclusion on the grounds that Chinese laborers were the tool (rather than the victim) of American monopolies. The single tax would destroy all tools of monopolies, including Chinese immigration, or so George’s twisted logic went.
Yang, whose parents immigrated from Taiwan, shares George’s skepticism of California companies. George didn’t like the railroads; Yang is worried about what companies such as Uber, which promise cheap products and services to consumers, are doing to employment in the United States.
He also promises a simple solution to the problems that stem from centralized economic control exercised by companies like Uber and Amazon. (Jeff Bezos, founder and CEO of Amazon, owns The Washington Post). The argument for the “Freedom Dividend” is that we do not need to deal with the legal and corporate structure of such companies. To borrow from the title of Yang’s book, we do not need to end “the war on normal people.” That’s too complicated. We only need to compensate its victims.
George lost the 1886 race to Hewitt. Yang might lose, too. Whatever the outcome of Tuesday’s mayoral race, the deep and persistent social problems that he points to are not going to go away quickly.
Like George’s single tax, Yang’s cash payment idea turns a serious problem into a catchphrase. Hard problems have hard solutions. A real citywide (or worldwide) reckoning will have to be gimmick-free.