Edward T. O’Donnell has a Google Alert in place for “Gilded Age,” and lately it’s been popping up with great regularity, as the term is invoked to describe the 21st century: whirlwind innovations in technology; a huge and growing gap between rich and poor; and deep unrest among the “99 percent” who toil far out of reach of top-tier wealth.
The economist sounding the alarm about extreme inequality today is Thomas Piketty, whose 700-page Capital in the Twenty-First Century became a bestseller. The towering figure of the late 19th century in the original Gilded Age was Henry George, whose Progress and Poverty was equally if not more popular. In the penultimate Lincoln Lecture of the spring series last month, O’Donnell, Associate Professor of History at Holy Cross College in Worcester, Mass., and author of Henry George and the Crisis of Inequality: Progress and Poverty in the Gilded Ageposed he question, what would Henry George say today?
George occupies a special place in the history of the Lincoln Institute. John C. Lincoln was an inventor and industrialist based in Cleveland, and co-founded Lincoln Electric at the turn of the century with his brother, instituting progressive employee policies that are studied at Harvard Business School to this day. (The story is chronicled in the book Spark). He also became interested in land policy and the ideas of Henry George, establishing the Lincoln Foundation in 1946; in turn the Lincoln Institute of Land Policy was founded in 1974.
George grew up in Philadelphia, and seemed to be a distracted young man, training as a printer, heading to California to pan for gold, and ultimately returning to journalism. Struck by the contrast of lavish mansions on 5th Avenue and the poor Five Points neighborhood of New York City, and how landowners outside San Francisco were holding onto land in hopes of cashing in as the city expanded, George came up with the idea of a single tax on land.
A select few landowners were benefitting handsomely from owning land, entirely because they owned parcels in good locations; they weren’t actually making anything – the comparison being perhaps the hedge fund managers of today. Attempting to translate his ideas into political power, George ran for mayor of New York City in 1886, and finished second behind Hewitt, though in front of a young Teddy Roosevelt. Ultimately he ended up fading from the spotlight and died in 1897.
In addition to the broad point that extreme inequality threatens democracy, the most relevant part of the legacy of Henry George today may be the land value tax, O’Donnell said. Land-based financing tools that promote municipal fiscal health, such as the property tax and value capture – based in the notion that government action creates value for the private sector – are also prominent, especially in Latin America. Leading figures such as Warren Buffett and Joseph Stiglitz have underscored the importance of George’s identification of wealth in land.
“In the seventies, Henry George would have gotten half a sentence -- now he’s getting a paragraph!” O’Donnell said.
In addition to Henry George and the Crisis of Inequality, O’Donnell is author of Ship Ablaze: The Tragedy of the Steamboat General Slocum (Random House, 2003), and co-author of the U.S. history college-level textbook, Visions of America: A History of the United States 2nd edition (Pearson/Prentice Hall, 2012). His scholarly articles have appeared in the Public Historian, Journal of Urban History, and the Journal of the Gilded Age and Progressive Era. O'Donnell has created video courses for the Great Courses Company titled, "Turning Points in American History" and "America in the Gilded Age and Progressive Era." He also writes a blog on American history, www.InThePastLane.com.
The lecture, “Are We Living in a Second Gilded Age?” can be viewed in its entirely in our video library here.