The Menace of Privilege, by Henry George Jr.
Installment 45

We are pleased to present, in installments, a very rare yet significant book written by former Congressman Henry George Jr. in 1905.

Earlier installments are available at the Progress Report Archive.


Monopoly Invades the Halls of Ivy

The truth of the situation is presented in an incident that Mr. Louis F. Post of Chicago relates. "Why don't you endow a chair in economics in our university ?" a distinguished educator asked a millionaire. "Well," was the reply, "I suppose it might be because I haven't much respect for the kind of economics the universities are teaching." "Oh," came the rejoinder, "that could be easily arranged to suit you."

The "touch," as Mr. Post calls it, was refused, for while the millionaire, unlike his class, was one who held extremely liberal views on economic questions, he had no more respect for this kind of college administration than he had for the regular brand of college "economics." (The Public, Chicago, Feb.27, I904)

Adam Smith observed, in his "Wealth of Nations," that he believed college endowments rendered teachers free of any sense of responsibility in their work. "In the University of Oxford," he declared, "the greater part of the public professors have, for these many years, given up altogether even the pretense of teaching." But if the authority to which, as the source of income, the teacher is made subject, resides, not so much in the body corporate of which he is a member, "as in some other extraneous persons," that extraneous jurisdiction "is liable to be exercised both ignorantly and capriciously."

The person subject to such "jurisdiction is necessarily degraded by it, and, instead of being one of the most respectable, is rendered one of the most contemptible, persons in the society. It is by powerful protection only that he can effectually guard himself against the bad usage to which he is at all times exposed; and this protection he is most likely to gain, not by ability or diligence in his profession, but by obsequiousness to the will of his superiors." ("Wealth of Nations," Book V, Chap. I, Part III, Art. II.)

But if such "extraneous jurisdictions" were in the great Scotsman's time exercised "ignorantly and capriciously," those of our time heed the Hebrew proverb: "Get wisdom; and with all thy getting, get understanding." Privilege nowadays knows what it wants and what it will not have. And first of all, it will not have Adam Smith. He teaches too much of "natural laws"; he breathes too freely of the spirit of equal rights. Consequently the "father of political economy," as he was for a century called, is relegated to the rear in our higher institutions of learning. His immortal work, "Wealth of Nations," which Buckle, in his "History of Civilization in England," pronounces "probably the most important book that has ever been written," is, along with works based on that, made into a category called "the classical school of political economy."

It is put high up on the shelves, and is no longer to be seriously studied as in the main defining the fundamentals of an everlasting science, but is only to be consulted by such as desire to examine the exploded notions of a past and less enlightened age!

And what kind of political economy is put in place of the teachings beginning with Smith and running down to John Stuart Mill? A thing emasculated like its name, for it goes commonly under the title, not of "political economy" but of "economics." No longer is taught the science of the natural order in social economy, but the science of disorder, if we may link the word "science" with the word "disorder." For with constant protestation of scientific method, the shining lights among the "economists" of our universities pursue methods devoid of the first essentials of science.

They do not trouble to define their terms too clearly, for that would show at once that the monopoly principle is not wealth, cannot be defended in political economy, and must stand condemned as interfering with the operation of natural laws. To make that truth too evident would tighten the purse-strings of Princes of Privilege, who are now lavish with endowments.

And so, setting out with this avoidance of precision as to the very subject-matter of the science - for political economy is the science of the nature of wealth, and of the natural laws governing its production and distribution - the thing "economics begins anywhere, usually however, with a display of historical learning, and then proceeds with a hodgepodge of erudition, German metaphysics, hair-splitting distinctions as to non-essentials, excursions into fields belonging to other provinces, and new and bewildering uses of particular words.

Geometry, geology, zoology, philology, have their beaten ways, their ordered procedure, their separate knowledge, methodically formulated and arranged in a rational system, and their natural laws distinguished and defined. What are conceived to be the essential princinples of each of these studies are hard and fast. They do not change, as between authorities or as between colleges, or as between ages. They rest upon eternal natural laws.

Not so with the university presentation of the science that deals with the social life of man. Its essential principles are no more hard and fast than is a fresh piece of putty, which may be pressed into a thousand and one shapes as it passes from hand to hand.

This soft, unresisting kind of pseudo-science can be made anything that Privilege wills, varying in this or that institution with the particular form of Privilege that there dominates. For instance, in the University of Pennsylvania, which lies within the sphere of influence of the huge steel-making and allied industries, a high protective tariff is taught to be an essential part of "economics"; whereas at Yale, where other forms of Privilege have sway, the protective principle is repudiated and cast out.

The more comprehensive question of the trusts affects Williams College in New England and the Rockefeller endowed University of Chicago antithetically. Says Professor John Bascom, holding the chair of Political Economy at Williams: "The question of trusts is an economic, social and civic question, and it is the duty of every college to meet it in all these relations. A college that is thriving on the money of the Standard Oil Trust is precluded by courtesy, by honor and by interest from any adequate criticism of its methods. It has foreclosed discussion on one of the most important questions which can come before it for consideration." (Signed letter in the Chicago Chronicle, Jan. 8, 1903.)

On the other hand, Professor J. Lawrence Laughlin, of the political economy department of the Chicago University, ignoring the monopoly principle and treating the trusts only as large combinations of capital, says that "billionaire wealth is billionaire power," but the effect of such power upon production and upon our political and moral growth is not necessarily derogatory, but results well or ill, according to the use to which it is put. (Signed article in New York Journal, Dec. 5, 1898.)

This is only to say that any power whatever, from the despotism of the Caesars to that of the president of a modern railroad empire, may be benevolently or malignantly used, according to the purpose or caprice of the individual holding it. But human actions are no part of political economy, which embodies natural laws. What men generally want to know about trusts is whether the coercive principle in them is a natural manifestation or an artificial one. If natural, it belongs to natural law and is inevitable. If artificial, it arises from human enactments and can be destroyed.

But it is not so much what the spokesmen of the Chicago University say as what they fail to say that constitutes their gravest offense. Yet how can they be expected to enter upon an examination of questions that vitally concern the fortune of its founder, Mr. John D. Rockefeller? Rev. Dr. Washington Gladden but phrases popular thought in saying: "I do not think any school that accepts money from Mr. Rockefeller will ever investigate trusts scientifically. It would not do this because it wouldn't investigate and publish the truth about Standard Oil, which admirably illustrates all the evils of the trust system. No school which takes money from Mr. Rockefeller will be honest in its treatment of Mr. Rockefeller's trust."

The Chicago University is an outgrowth of a small Baptist college, built in 1855 on land given by Stephen A. Douglas. Thirty years or more later the Baptist Educational Society was moved by the idea of a new college. Mr. Rockefeller, who belongs to that denomination, was approached. He promised $600,000 on condition that $400,000 should be added to it, which was done. Large contributions have followed rapidly, until now the institution has received $20,000,000, of which Mr. Rockefeller has given more than $14,000,000. On all the official paper of the institution his name appears as founder.

Is it in human nature to take this huge sum of Rockefeller money and then question its origin? Is it not easier to accept what Mr. Rockefeller says about it? "God gave me my money and I gave it to the university," he told the trustees in a formal address. Whatever they may think about it, will they openly dissent from this?

People generally know that this was not its origin. Railroad rebates, pipe lines and all manner of sharp practices gave the start to the Rockefeller Standard Oil fortune, and with that were acquired privileges of all sorts and descriptions. This was the livery the Chicago University put on when it accepted the $14,000,000. It cannot question the giver. It must hold its tongue; and in so doing, tacitly deny the great truths which as a higher institution of learning, it should make plain at all costs. It passes under the yoke of an intellectual and moral slavery, since it must needs forbear to tell that the source of its life and the chief means of its growth are at variance with the things clear to all men - with equal rights, with the natural order.

"The wrongful and unflinching way in which this wealth has been won," says Professor Bascom of Williams College, "the long period over which these extortions have been extended and the surprising success which has accompanied them, have made the Standard Oil Company the pioneer in a policy, the embodiment of methods which threaten the very existence of our institutions. Is a college at liberty to accept money gained in a manner so hostile to the public welfare? Is it at liberty, when the Government is being put to its wits' ends to check this aggression, to rank itself with those who fight it? It is not anti-trust laws that we need nearly so much as it is an anti-trust temper. If equal conditions were given to all forms of production, the trust problem would shortly disappear." (Letter in Chicago Chronicle, Jan. 8, 1903.)

Next Week: Spirits of Rockefeller and Carnegie versus College Spirit

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