I began as a student at the Henry George School in late 2006, a bit after I got laid off from a 22-year job at New York University, and when I needed a new direction in life.  I found this in the teaching of Henry George.  The school was a very different place then than it is today.  At that time, there were no online classes, nor would there be for over a decade, well after Director Cay Hehner left, and the late Andy Mazzone (https://www.legacy.com/us/obituaries/nytimes/name/andrew-mazzone-obituary?id=20331130) took over as president of the school from the late Dan Kryston (my wife and I attended his funeral. Andy’s was a more private affair but I contributed to his obit page, linked above).

With Cay as the driving force, and Andy as the guiding force, the school was a buzzy happening place, with regular Friday dinners at the 3030 restaurant, long extracurricular meetings with Cay and Andy and various committed students.  The classes were also lively affairs, with active participation from 5-20 students from all kinds of backgrounds.  Economics is the study of how to get finite resources to people who have infinite needs and wants.  That makes for stimulating discussions anywhere it’s encouraged.  The school was such a place.  Certificates of class completion were given out at the end of every semester in a school-wide celebration ceremony, though I think this stopped with Kryston’s death.  They were regularly attended.  Some students came over and over to the same class, absorbing both new knowledge and forging new personal connections.  We thought we were privy to a theory of economics that could change the world, not in a self-righteous cultish way, but in a way based on knowledge and even some successful real world implementations – never enough, which should have been a more cautionary tale, but some of us (like me) chose to ignore that, for a while.  Six to eight of us students had an economics book club for two years too, reading and discussing related material on money and the economy, like “The Lost Science of Money” written by the late Stephen Zarlenga, who was a guest teacher at the school for a few years.  Zarlenga had also been commissioned by the research and publishing focused Robert Schalkenbach Foundation to analyze Henry George’s views of money, which he did in an 80+ page academic paper that was generally positive about George’s views of money.  Many of us feel that George’s money views don’t get enough attention compared to his much better-known views on land as one of the three key factors in the means of production.

Cay Hehner had put together a 3-year course curriculum to become a teacher.  I completed all the courses, which I later found out from him almost no one else had done, even some of the teachers at the time, and took the teacher’s test (See Appendix A below).  I taught a few classes, and had the foresight to record some of them when the internet and social media started exploding on the scene.  I soon realized I could reach 1,000s more people from the videos of my lectures than from the 10-30 students who would show up for a class.  Rather than repeat my lectures for a diminishing group of students – many of whom, both then and historically, would do little with the knowledge afterwards – I gravitated towards more online social media to get the message out.  Today, I help manage the communications initiatives of Common Ground-USA.  At the school, in-person classes have all but disappeared, since the school was sold (and had flooded) and then a new building bought, which was called the Henry George Office by then president Andy Mazzone.  This building was mostly unsuitable for classroom instruction and even when that building was sold and replaced with a more school-capable building, the die had been cast and online courses remain the default format to this day. 

Prior to the sale of the school on 30th Street, I had arranged a tour of the then-vacant classically architecturally styled Touro college building, pictured here: http://midtownblogger.blogspot.com/2011/08/touro-college-building-still-for-sale.html, just down the block from the old school, on the corner.  I invited Cay and Andy for a broker’s tour and then, excited by a growth vision common to Georgist enthusiasts, wrote about it for Common Ground-USA’s Groundswell newsletter (see Appendix B below).  Unfortunately, when I wrote about it, Dan Kryston, who was still president then, read the article and tried to have me expelled for being critical of the school as it was and seeking to expand it and reunite it with the Robert Schalkenbach Foundation in the triple-sized building with tuition courses in addition to the current free but unaccredited courses.  Cay Hehner saved me from that fate by convincing Dan Kryston that I hadn’t done anything wrong by simply expressing ambitions to “Grow the School, Save the World?” – the title of the article.  This is an example of how committed and enthusiastic the school’s environment had made me, and others too; a number of fellow students thought the proposal to expand the school this way was a good idea.  Some of them had joined me by then, in Common Ground-NYC, where I was the new president, taking over from a school teacher, Rita Rowan.  Without Cay’s intervention I would have been kicked out of the school and the chapter would have collapsed too, since the school was the main source of new members.

Andy and Cay were consistent members and contributors to the local common ground chapter.  After meeting early on in Rita Rowan’s apartment – another teacher at the school whom I learned a lot from and have kept a relationship with still – the membership outgrew her living room and we started renting space for monthly meetings at a local YMCA.  The membership grew to 24, with some other non-members looking in and sometimes interfering, but fractional disagreements ultimately doomed the chapter.  Andy Mazzone and Cay Hehner helped defuse tensions, but ultimately it was not enough.  The school camaraderie was not enough to make a successful activist group, which requires a different skill set, discipline, and thinking.

Even after the school moved again to another building, it was never the same.  Andy and Cay were gone by then – Cay back to Germany to be with his sister, and Andy, who died in 2017.  The online classes are sometimes good, though these days I look for things I haven’t already covered, with not a lot of homework either.  Age, impatience for social change, and life-weariness, have all taken a toll on my idealism.  The school also is not the center of learning it used to be, certainly not the New School type vision I had hoped it could become. 

During my time at the school, and subsequently, I learned that many who had taught, led, and in some ways were associated with the Henry George School, like me, had also had roughly similar visions of growing the school into something more socially and academically influential – emphasis on “roughly” because Georgists are nothing if not argumentative over the largest and smallest details, often to the detriment of forwarding the movement.  Some of these efforts are excellently detailed in former school Director Edward Dodson’s video series of “The Remarkable History of the Henry George School of Social Science:” https://www.youtube.com/watch?v=B3pzVGMK-jg.  The school remains a flickering, if still bright, source of knowledge and enthusiasm, albeit one less distinguishable from the massive online community of teaching institutions.  The time for its special solution may yet come.

Relevant links below.

Scott Baker,

President, Common Ground New York

Board Member of Common Ground-USA

Opednews Managing Editor/Economics Editor

Author: “America is Not Broke!” Tayen Lane Publishing, 2015

Video/Radio/TV Appearances & Slideshows: https://www.slideshare.net/ScottOnTheSpot

Appendix A

Scott Baker   9/19/14

Henry George School of Social Science

121 E. 30th Street – New York, NY. 10016

Final Exam: Teacher Training & Development Program 2014

Based on Progress & Poverty by Henry George

This is an open book exam based on Progress & Poverty by Henry George.

1. Summarize the problem of poverty and the inequitable distribution of wealth as described by Henry George.

The problem of poverty is not one of lack of progress, says George; there has been material progress aplenty.  The inequitable distribution of wealth has to do with monopoly of Land (all of nature’s resources, including location) by the few, necessitating the payment of rent from whatever surplus accrues to labor and capital, to the Landowner. Since Land is required for existence, there is no getting out of this obligation, nor of lessening it, if there exists no productive and free (i.e. non-monopolized) land.  Further, the Landowner collects a large and continuing share of wealth without working at all, but just because he has a monopoly and can demand rent.  This funnels wealth from the bottom to the top.

2. Describe the terms: Wealth, Land, Labor, Capital as used by Henry George.

A.  Wealth: Wealth consists of “natural products that have been secured, moved, combined, separated, or in other ways modified by human exertion to fit them for the gratification of human desires.” In short, Wealth is man made.  Wealth must also have exchange value with others, both to be commonly acceptable as wealth and to be able to be used to create more wealth (another part of the definition).

B.  Land: Land is all the resources created by nature – including actual land, minerals, air/water, and especially importantly, location.

C.  Labor: Labor is that effort which is produced by Man, including mental effort, to gratify his desires.

D.  Capital: Capital is the product of labor and land (and perhaps other past capital).  Capital can be of many types, ranging from fixed capital (buildings, trucks, factories, etc.) to technical knowledge (Labor is involved in applying this knowledge). The store of capital applied to land and labor results in the further production of capital wealth. Capital allows labor to be employed with greater efficiency and productivity, through the use of technology and instruments and with increased human skill and knowledge.  Unlike the other two factors of production, Land and Labor, Capital is not strictly necessary to produce something, e.g. it is possible to build a bridge across a river using just the available rocks, sticks, and mud (land) and one or more person’s labor, albeit perhaps very difficult.  Capital like steel beams and bulldozers make the job easier and the result sounder.

Money is included under some definitions of capital (even those purporting to represent George’s view), but George took great pains to show that money is not capital, but is a means of exchange and a store – however imperfect – of value.

3. What does Henry George believe are the two Axioms of human behavior upon which the laws of distribution are based?

1. Man seeks to gratify his desires with the least exertion. (p. 12)
2. Man’s desires are unlimited. (pp. 135-136)

To make sure that people get what they deserve, but no more then, we must ensure that:

A. Each person has an exclusive right to the results of his or her productive powers.

B. No one can claim to own land, since no one produced it. People do have rights to the productive opportunities that nature offers, which are here for our use, but the rights of each person are limited by the equal rights of all other persons.

4. Explain the Laws of Distribution: The Law of Rent; The Law of Wages; The Law of Interest, as used by Henry George. Include George’s hypothesis on the cause of Interest.

A: Law of Rent: The rent of land is determined by the excess of its produce over that which the same application can secure from the least productive land in use. (p. 168)

B.  Law of wages: Wages depend upon the margin of production. That is, wages depend on the yield labor can obtain at the highest point of natural productiveness open to it without the payment of rent. (p. 213)

C.  Law of Interest: The relation between wages and interest is determined by the average power of increase that attaches to capital from its use in reproductive modes. Depending on the margin of production, interest will fall as wages fall, or rise as wages rise. 

On the cause of Interest: If interest rises above the equilibrium with wages, it produces two results: It will direct labor to produce capital. It will also direct wealth to be used as capital. Meanwhile, if wages rise above the equilibrium, that will also produce two results: Labor will turn away from producing capital. And the proportion of wealth used as capital will be reduced, as some will now be diverted to nonproductive uses.

Thus, there is a certain relation between wages and interest, which changes slowly, if at all. Hence, interest must rise or fall with wages.

There must also be an allowance for risk in setting interest rates on capital.  Interest does not depend on productivity of labor and capital, for interest is actually lower where productivity is highest.  Interest rises as wages fall and vice versa. 

“Interest springs from the power of increase which the reproductive forces of nature, and the in effect analogous capacity for exchange, give to capital.  It is not arbitrary, but a natural thing; it is not the result of a particular social organization, but of the laws of the universe which underlie society. It is, therefore, just.” P. 188 P&P.

5. Explain the effects of material progress on the production and distribution of wealth.  This includes Inventions, innovations, and new discoveries; an increase in the general level of education; and additions to the infrastructure like roads, bridges, and public utilities.

Material progress will have no positive effect on the distribution of wealth so long as Land is monopolized.  The use of all of these improvements depends upon the use of Land, and if Land is monopolized, it is the same as if society was in the most primitive state and only the hunting and gathering Land was monopolized and rent charged upon it.  No innovation or discovery will change this relationship, save the collection of rent upon the Land for public use.

Monopoly of land will tend to dampen material progress by rewarding Land ownership over production, innovation and discovery.  Education alone will do nothing to change this relationship.

6. Explain why people speculate in land (hold it in an unused and under-used condition), and how that affects the production and distribution of wealth.

Land is held out of use/underused so that it may be sold later by the landowner at a higher price than that which he paid for it originally.  As long as the rent, created by common demand, is not collected, Land can be held indefinitely, even while the common demand for it increases (whether due to population increase or to general improvements).  Land held out of use is, by definition, Land not being used for production.  The imputed Land Rent is collected by the private Landowner instead of being distributed among those whose demand for Land increased its value, or who might use the Land more efficiently, if given the opportunity.  The restriction of distribution of wealth to those few who have monopoly on Land will dampen production further.

7. Explain the depression or recession cycle from Henry George’s perspective, and list the three things that he believes tend to restore the previous levels of employment.

Speculation in Land values lead to cuts in production and return to labor and capital.  Although there are other proximate causes, the “great initiatory cause” is the speculative advance of land values (propelled by the instinct of Men to get the greatest return for the least amount of effort). 

The three things that tend to restore the previous level of employment are:

A.  The speculative advance in rents is lost, or

B.  The increase in the efficiency of labor, owing to the growth of population and the progress of improvement, has enabled the normal rent line to overtake the speculative rent line (for a while, anyway), or

C.  Labor and capital have become reconciled to engaging in production for smaller returns.

Most probably all 3 of these factors would happen simultaneously.  None of these stops the rent cycle for long, however, and the rent would eventually rise again, causing a new recession/depression.

8. Give the justification for and the remedy proposed by Henry George.

Collection of the rent on Land is fair and just because Land is produced by nature, not Man.  Demand for Land comes naturally as population increases and possibly as improvements demand more of some kinds of Land (resources and location).  There is no need to collect the rent on Land on Robinson Crusoe Island….until another person sets foot on it and needs Land too.  Each person then, has an equal right to the Land.

9. Explain how collecting the rental value of land for public purpose will result in full employment, continually raise wages, and fund the increasing needs of society.

The rental value of Land will increase as population increases.  Collecting this rent will allow for general improvements and other public purposes in an increasingly complex society.  Full employment and rising wages will result from the continual stream of improvements that will result from the efficient use of Land encouraged by the Land Value Tax, and from the removal of the deadweight loss of taxes on improvements and on labor.  It is a mutually beneficial and continuously virtuous cycle. 

10. Explain how to determine the rental value of land.

Rent is ultimately whatever the market will pay for use of a given bit of Land.  It can also be expressed in the selling price, whereby the future rent is capitalized until such time as anticipated, that the Land will be resold.  Rent is the share of the wealth, which is given for having exclusive rights to the Land.  Note that the rental value of land does NOT depend on whether the rent is accrued to individuals or to society in general, at least in the immediate term (longer term, rental value will increase with new opportunities, as explained above).  This is why collecting the Land Rent will not increase the amount of the Land Rent. 

11. Explain the difference between the effects of shifting taxes to the value of land in a single city o(r) state and collecting the rental value of land throughout the country.

If a city or state collects the rental value of Land, while another does not, speculators may exit to the latter, while innovators and developers migrate to the former.  To be most effective and constructive to society, therefore, the full rental value, or close to it, should be uniformly collected nationwide.  This can be done, through successive layers, as was done under the original Articles of Confederation, Article 8, that taxed property first at the local level, than apportioned part of that to the State, and then a smaller part to the Federal government.  Such a system would effectively end speculation on Land and the consequent boom/bust cycle, and increase opportunities for all, while eliminating most poverty.

Appendix B

Grow the School, Save the World?

            The Henry George School of New York, founded in 1932 and one of the oldest continuing schools teaching the philosophy of Henry George, currently churns out 1,800 students a year and does so without charging tuition.  Therein lies a problem.

            As Lindy Davies, Program Director of the Henry George Institute and editor/publisher of the Henry George Journal put in his excellent, albeit alarming, speech to the annual Georgist Conference this past summer, as a movement, “We are nowhere.”  Of course, we are somewhere in the sense that we produce papers, support conferences, and even in some cases, bend a politician’s ear, though very rarely enough to pass legislation favoring a Land Value Tax, and even then only in the narrowest realm of some property tax adjustment.  Henry George called for much more than that; his best-selling economics book of all time, “Progress and Poverty” called for nothing less than the abolishment of poverty, while actually taking steps to enhance progress and prosperity by untaxing productive activities.  In that sense, we really are nowhere, and are actually worse off than in George’s time, and not even as well off as during the best of times during the history of the school.

            What is it that keeps the theory of Tax the Land, Untax Production, from being embraced?  Well, of course, it is a rich class of speculators and their enablers who are small in numbers, but large in power, working night and day to prevent it.  It is the Corruption of Economics, as delineated by Mason Gaffney and Fred Harrison in the book by the same name.  It is simple failure to “see the cat” by the public as well as their leaders, and even the belief that it is our right, at least to try, to grow rich from the simple appreciation of the Land, without working.  It is all of these things, significant hurdles all.

            But there is something else too.  For too long, Georgists and Geoists (who look to expand George’s concept of Ground Rent into a more broadly based Resource Tax on all of nature’s resources), have voluntarily played the underdog role.

            Now, I know what some of you may be thinking: voluntarily played the underdog role?!  There was nothing voluntary about it!  We fight like dogs to be, well, the top dog!  Well, in some sense that is true, but what about our public face: the schools?  Why do we persist in offering only free courses, as if the classes are not worth paying for?  Yes, I understand it was Robert Clancy’s mission to provide free education for the masses, and we have done that, but we have also restricted ourselves to whatever the endowment of the school can support, since voluntary student donations don’t amount to more than a few percent, I have it on good authority.  In fact, for the most part, students are, for all practical purposes, liabilities, who consume more resources than they deliver.  That is certainly not what either George or Clancy had in mind!  Many students cannot afford even a donation, but that does not mean that George’s solutions are only of interest to them, as if they benefit only the poor and would not make society richer, and even cleaner and greener, overall.  Frankly, if we believe that, we should give up the struggle right now; the poor alone will not produce a sustainable revolution, and never have.  But I believe that the middle class, and even most of the upper classes, will benefit from George’s ideas, once they adapt to them.

            Lets’ take another example in New York City, The New School, founded in 1919 and morphed more recently into New School University (http://en.wikipedia.org/wiki/The_New_School).  The history of the New School includes strong Marxist leanings, and yet the proletariat never had trouble paying tuition, nor did the school’s philosophy prevent the school from expanding and becoming a major city institution. We know Henry George had a better solution to our economic problems than Karl Marx ever did – and world history since the founding of both philosophies has borne this out – yet, here we are, in a 5 classroom building, nearly irrelevant to both the political and scholarly discussions of our time.

            As Vladimir Lenin once said, “What is to be done?”

            Shall we be content to remain on slow boil, fizzing out new students at a trickle, who don’t have accreditations and training that professional organizations and decision-makers take seriously?  Or shall we “go boldly where no Gerogist has gone before” – to paraphrase another more modern philosophy?  Let’s see how the latter might work, using an actual example of a new location to house a new type of school, just steps from the current one.

            I am speaking of moving the school to Touro College. 

Property Shark, and my contact with the broker, reveals that this 7-story 1909 Land-marked building has roughly 22,000 square feet, 10 classrooms plus a lab, 2 reading rooms and a basement library. In short, it has roughly three times the capacity. Plus, it is being fixed up inside.  Yet, it has been unable to attract a buyer since it was bought in 2006 for $8.2 million.

            Now, even if we assume the school’s endowment is over ten million dollars, which it must be to run the school year after year, without a deficit, given overhead costs I won’t, or can’t, detail here, they will need additional income.  Fortunately, there is a good option for an anchor tenant: The Robert Schalkenbach Foundation.  Their property downtown is currently leased and the lease will run out in a few years. If they could be persuaded to rejoin the school – they were part of the school until a separation many years ago, initiated by players who are no longer with either institution – their contribution might go towards a substantial portion of the new school’s mortgage, perhaps even a third.  Every other major college has an in-house publishing arm.  Why not the Henry George School?

            But, the school needs more income than that to support the larger headquarters.  We here at Common Ground-NYC, where I am president, would like an office in the building, but our account is so small we could not afford to pay, and would have to work out the balance in services, perhaps such as manning a Henry George School store.  This store could sell not only all of George’s books, and similar books produced by the Schalkenbach foundation, but also t-shirts, mugs, and key-chains.  Tacky it may be, but it is completely in keeping with George’s embrace of Free Enterprise, and more importantly, these items can help re-familiarize a public with George, from which his insights have been expunged.  Presently, it’s difficult to even find the Schalkenbach foundation except online, as I can attest, after having walked up and down its street three times before realizing where the building was downtown.  However, let’s conservatively assume even a broad new storefront would not add much income beyond what Schalkenbach already produces, say, 20% more, since they would then have a ready audience and a ground level storefront they don’t currently have.

            Again, such a move in space and ambition is only possible if we, as Georgists, come out of the underdog shadows and say, “We’re here!  We’re clear (on the economics)!  Get used to it!”…or something to that effect. 

Charging tuition, at least for some courses, will allow the school to hire professional economists and teachers with office hours, who give grades and guidance, publish scholarly papers under a Graduate or PhD program, and generally lift the profile of the school so those in power will have to listen.  The extra space will allow new student groups, as well as Common Ground, to conduct lively meetings, discussion and reading groups, and allow the school to explore other lines of research and instruction.  Currently, student groups, including a reading group I belong to, have to scrounge the crowded city to find a place to meet, and the school is closed most weekends.  Instead, imagine a charged-up and engaged student body, not just at special functions, but all day, every day.  Learning happens as much outside the classroom as inside it and as George recognized, it is through the interaction with our fellows that the Law of Human Progress takes place.

Having extra room will allow the school to provide space for visiting scholars, host meetings, and even show relevant films to a larger audience than the current 60 or so people who cram themselves currently into the present auditorium.  It will allow for a central library, with computer services to host modern programs like Lindy Davies Real Estate Database of all 1 million New York City properties, mapping software, and other tools of the 21rst century (the building already has a Local Area Network).  This would be particularly useful to students who have the drive, but not the resources, to research and be activists on the complex economic issues of our day.

            Perhaps the lab could be used to conduct economic research, finally disproving that people make rational decisions, as the Chicago school keeps telling us they do, for example, or proving George’s theories in some as-yet-to-be-determined experimental way.

            What about teaching about State Banks?  The example of the Bank of North Dakota, started in 1919, and used to put North Dakota firmly in the black ever since, along with similar public banks, is worthy of a class in its own right.  These new banks could be funded by the trillions stored in government agency Comprehensive Annual Financial Reports (CAFRs), but first some enterprising graduate students would have to research their true amounts. 

The history of money, with Stephen Zarlenga’s excellent book, “The Lost Science of Money” serving as a textbook, is another ignored area of economics.

            And, my personal favorite, Economy and the Environment, is another area that has for too long been neglected in Georgist thought, and indeed, in mainstream economics, which assumes an infinite supply of natural resources and has no model to account for periodic shortages and the destructive economic effects of speculation and overuse and abuse.

            From George:

“…12,000 head of cattle (are) killed weekly in…New York…as to the elements of fertility, which, instead of being returned to the soil from which they come, are swept out through the sewer of our great cities.  The reverse of this is the destructive character of our agriculture, which is year by year decreasing the productiveness of our soil, and virtually lessening the area of land available for the support of increasing millions.” – p. 234, Social Problems.

So, George, writing in 1886, when the American population was about 1/6th what it is today, and our resource usage an even smaller fraction than that, was already concerned about the wasted effluence of cattle (at a time before commercial fertilizers) in the cities, and about destructive soil erosion on farms.

Later, George made it even clearer:

“Man produces by drawing from nature…In the production of wealth land cannot act; it can only be acted upon.” – p.p. 408-409, The Science of Political Economy.

Is it not worth building upon George’s early inquiries by asking in what way we are acting upon land, and if those actions are ultimately hindering Land’s wealth-producing potential, the potential upon which our very lives depend?

            Perhaps, as the school expands its focus to political economy in other countries, at other times, and in theory, it will turn out that three times the space is not enough for the vibrant new student body, mixed and enhanced by both paying and non-paying students. 

            Given the aging demographic of Georgists and even the younger offshoot of Geoists, and the deteriorating state of the economy and the planet, the time is both right and urgent for a new paradigm.  The only question is whose will it be? Ours, or the rapacious landowners who work steadily to denude the planet without paying rent for its resources? 

            Our time is now.  We only have to seize it.

– Scott Baker, President of Common Ground – NYC

http://www.commongroundnyc.org/

http://groups.google.com/group/common-ground-nyc

Rights to the Products of Earth for All, and Rights to the Products of Labor for Each.

Tax what you Burn, not what you Earn.

“Let no man imagine that he has no influence. Whoever he may be, and wherever he may be placed, the man who thinks becomes a light and a power.” – Henry George