Q: I want to follow-up on what you had said some
months ago about land reform:
JES: "The main, underlying idea of Henry George is the
taxation of land and other natural resources. At
the time, people thought, "not really that too,"
but what was underlying his ideas is rent associated with
things that are inelastically supplied, which are land
and natural resources. And using natural
resource extraction and using land rents as the basis of
taxation is an argument that I think makes an awful lot
of sense because it is a non-distortionary source of
income and wealth. ...
Q: A former Director of Robert Schalkenbach Foundation
was given a grant recently to research the adequacy of
land as a tax base. He's a professor at the University of
California, Riverside, named Mason Gaffney, and he wrote
a book titled, "The Corruption of Economics." Are you
familiar with his work?
JES: No.
Q: I'll send you a copy of the book. Basically, he
argues that the founders of neo-classical economics,
which, as you know, is the paradigm taught in schools
such as the University of Chicago, distorted the science
of economics to protect vested interests. For example,
Rockefeller money was spent to hire professors of
economics with a view to their discrediting the ideas of
Henry George. Did that happen?
JES: My general impression is that most donors that
give money to universities don't take a very strong view
of [who should be on] the faculty. Sometimes it ends up
on one side, sometimes on the other. It would have been
unusual [at Chicago], but it could have happened there.
What is striking about Chicago as a school of economic
theory is that it's very conservative. One would have
thought that Henry George was someone who would have been
liked by "Conservatives."
Q: In that George wanted to reduce tax on the fruits
of one's own labor?
JES: Exactly. And you want non-distortionary
taxes, so I would have thought that every "Conservative"
would be in Henry George's camp. Now, as far as
I know, I'm one of the few people who keeps emphasizing
that you ought to view Henry George in a broader way, to
include natural resources. I didn't think that people
thought about that a hundred years ago. But if they had,
and maybe Rockefeller was smart — he realized that
he obviously didn't want a tax on natural resources.
Q: He wouldn't have wanted rents flowing from natural
resources to go to the people rather than to him.
JES: Yes, he obviously wouldn't like that perspective.
But I don't know if that view was at that time
recognized, and I just don't know whether he actively
intervened at Chicago. ...
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