The economic and social ideas of Henry George are as a whole at the
same pre-arithmetical level, the level of those held before and
since his time by all who have held any at all, apart from an
insignificant handful of competent economists and other negligible
exceptions. Henry George's claim to be an economist (or social
philosopher either) rests on the possession of linguistic powers
not uncommon among frontier preachers, politicians, and
journalists, and on the fact that his particular nostrum for the
salvation of society appeals to a number of people, no doubt for
the same reasons that made it appeal to him, and which give many
other nostrums their appeal. (1)
The intensity of Frank Knight's attack on Henry George's system of political economy may come as a surprise to some. For those who know of Knight's attacks on the systems of other philosophers and social scientists of the time--from John Dewey and Mortimer Adler to Jacques Maritain and Terence Hutchison--it has a familiar ring. (2) What comes as a surprise to someone familiar with those other attacks is that, whereas their intensity is matched by their frequency, Knight only makes his attack on George twice--in a review of a book on George's philosophy in 1933 and then again in a short essay on the "single tax" published 20 years later in The Freeman. (3) Other views that Knight attacked with equal ferocity were accorded more frequent attention in his work. Despite the forcefulness of his attack on George, Knight grouped his system with that of Major Douglas and other populist approaches, all of which receive little attention in his work. In the short compass of my comments on this session, I will identify three aspects of Knight's attack on George that may help us to understand the nature of his attack, and why Georgist critiques of Knight such as the one offered recently by Tideman and Plassmann are less a criticism of unique Knightian views than the difference between the philosophical positions underlying George's interpretation of classical economics and neoclassical theory.
Let me preface my remarks by thanking Tideman and Flassmann for providing a Georgist response to Knight that usefully focuses the issues between Knight and George. Their article demonstrates that Knight didn't simply misunderstand George, but disagreed with him on what both authors thought were central philosophical, ethical, and economic issues. As they say at the end of their article:
The heart of the disagreement between Knight and George's
supporters is that George's supporters see an important difference
between the rent of land and other returns. (4)
Knight would agree with this characterization of the disagreement, but refuses to give ground to George's supporters. What we are presented with, then, is a contrast between two economic approaches that disagree strongly about a central assumption. I have no intention of trying to settle the dispute!
The first aspect of Knight's response to George is philosophical. To put it simply, Frank Knight was allergic to proposals that called for single solutions to the problems of modern society. Today, we know him as a pluralist. (5) In his own time, he was known for his skepticism about the overextension of any single principle of social or economic philosophy. George's single-tax proposal seemed tailor-made to draw Knight's ire: The single principle is that land rents should return to the society at large. George's public promotion of his principle emphasized the fact that it would cure the evils of society, ending poverty through common prosperity.
Knight's response to philosophical systems that suggest one remedy for society's ills is encapsulated in his 1951 presidential address to the American Economic Association:
The right principle is to respect all the principles, take them
fully into account, and then use good judgment as to how far to
follow one or another in the case in hand. …