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12 Walker: the general leads the charge - Part III: nineteenth-century Americas critics
American Journal of Economics and Sociology, The, Nov, 2003 by Steven B. Cord
Francis Amasa Walker, the son of a noted political economist, followed illustriously in his father's footsteps, also achieving eminence as a leading statistician and educator of his time. After taking his baccalaureate degree at Amherst and reading law with a distinguished firm, he enrolled as an enlisted man in the Union Army, rising through the ranks as an adjutant, to retire, after sustaining severe wounds, with the brevet rank of brigadier general at the ripe age of twentyfive. Soon afterward he was appointed to the Bureau of Statistics, where he gained further acclaim by reorganizing it on an efficient and scientific basis. At various points in his career he served as superintendent of the Census, commissioner of Indian affairs, and professor of political economy and history at Yale. In 1881 he became president of the Massachusetts Institute of Technology, modernizing and enlarging that institution until his death in 1897. Recipient of numerous honorary degrees both at home and abroad, when the American Economic Association was organized in 1885 he was made its first president virtually by acclamation.
As an economist, Walker published extensively. In his book, The Wages Question (1876) he was the first professional economist to oppose John Stuart Mill's wages-fund theory, which maintained that wages were wholly dependent upon the amount of preexisting capital. Three years later, in Progress and Poverty, Henry George cited Walker's attack upon this theory as the most vital that he knew, but criticized it for conceding too much. (1) Although generally conservative, Walker was capable of intellectual courage: he favored international bimetallism despite adverse attitudes in his home state of Massachusetts and in his profession.
The controversy between Walker and George began with a skirmish over figures when George, in an article in Frank Leslie's Illustrated Newspaper entitled "The March of Concentration" (later included as a chapter in his Social Problems), challenged certain statistics about landholding that had just appeared in the Compendium of the Census of 1880, and for which Walker was responsible. This elicited a contemptuous but careless rejoinder in Leslie's by Walker, followed by a devastating counterthrust by George, another effort by Walker at rebuttal, and a coup de grace by George. Six months later, in the preface of a new Census volume, Walker was obliged to admit that his earlier statistics had contained disparity and error.
In 1883 Walker published a book, Land and Its Rent, which contains some of the most detailed criticism ever presented of the economic analysis in Progress and Poverty, and that was admittedly written for the express purpose of refuting George. It was based upon a series of lectures delivered by Walker at Harvard University.
The argument begins inauspiciously with a misrepresentation of George's proposal. According to Walker, George contended for "the natural and inalienable right of all individual members of the human race indiscriminately to enter and enjoy at will each and every lot and parcel of land upon the globe, and every building which may have been or may hereafter be erected thereupon." (2) In point of fact, George asserted that each man's equal right to land could be achieved if the government would only appropriate the land rent by taxation, and he vigorously opposed government seizure of land titles. He constantly defended private property in buildings and other improvements, even insisting that they should be subject to no taxation whatsoever.
George on Speculation
Walker did not really warm up to his argument until later in the book, when he plunged into a lengthy attack upon George's economic system. "How much is there in the view," he wrote, "that commercial disturbance and industrial depression are due chiefly to the speculative holding of land? ... Mr. George makes no point against private property in land unless he can show that it is, of all species of property, peculiarly the subject of speculative impulses." (3)
Max Hirsch rightly observes that George's position does not require that he show anything of the sort. For "is it not possible that whereas speculation in [unmonopolized] labour-products might inflict little or no harm on the community, speculation in land might inflict infinite harm, though land were no more subject to speculative impulses than labour-products?" (4) In any case, George had, in fact, stressed at least one peculiarity of land speculation--that it withholds a vital inelastic factor from production, whereas the higher prices induced by speculation in produced commodities attract additional producers, and the increased supply causes prices to adjust themselves back downward. Furthermore, as Hirsch remarks, the problem is not merely one of agricultural land, to which Walker confines it, but of all land. "Which are the main objects of speculation at Stock Exchanges? Railways, tramways, mines, gas and water shares and similar securities based on the ownership of land or special privileges to land, easily come first. Moreover, any inflation, whether it be a paper-money inflation, or any large addition to capital seeking investment, results first and foremost in the speculative rise of urban properties.... By far the greater part of land values, therefore, are not merely 'peculiarly the subject of speculative impulses,' but are pre-eminently the object of speculative transactions and excesses." (5)
