The Corruption of Economics (Georgist Paradigm) [Paperback]

In the late 19th century, economist and social philosopher Henry George achieved international fame by calling for the abolition of all taxation save that upon land values -- a tax reform that would reconcile the conflict between economic liberty and social justice. So persuasive were George's arguments that landed elites, desperate to protect their vested interests in unearned wealth, set out to undermine George's immense popularity.

In "The Corruption of Economics," the precise manner in which Henry George was neutralized is uncovered by professor Mason Gaffney. That manner -- which later became known as neo-classical economics -- was to corrupt economic science. How? By blurring the traditional distinction between capital and land (and hence between earned and unearned income), by glossing this blurred distinction with jargon and abstract models, and by recasting economics generally to make free-riding by landowners seem just and moral.

Unable or unwilling to address Gaffney's arguments head-on, some economists are fond of dismissing this book out of hand as nothing more than a "conspiracy theory." In reality, it's a scholarly analysis of the anti-Georgist origins of the neo-classical school of economics, and how this school made an artform out of justifying landed privilege. Every single one of its claims in that regard are supported by credible references.

"The Corruption of Economics" is a must-read for anyone who suspects there is something inherently flawed with "mainstream" economic theory -- particularly when it comes to reconciling the seeming conflict between economic liberty and social justice -- but is unsure as to what that flaw is.

Anyone who has ever spent a half a day in a university getting lectured on economics should read this book. To academics it is a must. To ordinary folks it reads like a crimi. Best insight book on the market as why economics is such a muddled science and why lawyers, historians, politicians and journalists have no clue about todays whereabouts. Or did you ever wonder why you work like a slave and get stripped down to nearly nothing by the state and its "social" agencies. Ever wondered why we face so much sprawl, poverty, blight? This book explains neatly what happened to the once grand sience of political economy and the real effects on todays world.

Mr. Gintis is schooled in contemporary neoclassical economics that trivializes and sometimes even denies the existence of Ricardian rent, and naturally has difficulty separating and identifying natural resource rents from other components of the economy. This is most disappointing, as substantial strides have been made in showing the amount and significance of rents since the advent of computer power and data can be tapped. Australian economist Terry Dwyer, himself Harvard educated, shows that just the ground rent from earthly locations is about a third of GDP. And Professor Gaffney's most recent article in the International Journal of Social Economics shows the numerous ways in which rent has been under-estimated. Professor Gintis gets a number of his facts wrong in this review: Henry George's Progress and Poverty was first published in 1879 and not 1987, and by 1906 had been translated into fourteen languages and sold more copies than any book published except the Bible. Contemporaries of the era were intellectual luminaries and statesmen, among them Bernard Shaw, Winston Churchill, Sun Yat Sen, Leo Tolstoi, and Alfred Russell Wallace. More recently, Illinois economics professor and later Paul Douglas was a strong supporter of these ideas, as was Albert Einstein. John Dewey wrote an introduction to one edition of Progress and Poverty, saying "It would require less than the fingers of the two hands to enumerate those who, from Plato down, rank with Henry George among the world's social philosophers. No man, no graduate of a higher institution, has a right to regard himself as an educated man in social thought unless he has some first-hand acquaintance with the theoretical contribution of this great American thinker." Later, at the depth of the depression, Dewey gave a radio broadcast in homage to George. More recently still some eight Nobel laureates in economics have endorsed taxing economic rents, and Columbia University Professor Bill Vickrey was on his way to a Georgist convention when he died.

Professor Gaffney's collected work spans seven decades, and he continues to be active -- his most recent book, After the Crash, is printed by Wiley Blackwell. As evidence mounts in recognition of the importance of economic rent in our contemporary economy, only those who wear blinders will continue to deny its significance. He continues to inspire many young scholars. It is fortunate that we have the benefit of Mason Gaffney's enormous corpus of articles, www.masongaffney.org, for it is now, as neoclassical economics is collapsing of its own contradictions, that the tradition of classical economics is being looked to once more. One could do far worse than to start by exploring the many Georgist websites that continue to explore and amplify this venerable tradition. Links can be found readily on Professor Gaffney's site.