History of Capital
Lesson 1: The Demand for Obfuscation
in the 20th Century
Reading: The Corruption of Economics, prologue, to p. 28; Supplement: “Deconstructing an
Economics Text”
Who’s Afraid of Henry George?
1. Why was Karl Marx viewed as less of a threat to the economic establishment than Henry
George? (8-9)
2. According to Harrison, what is the relationship between war and structural economic
injustice? (10-11)
3. What will it take in order to change society without resorting to war? (11)
4. Why is the Georgist remedy being ignored by today’s leaders? (12-13)
5. What was Marx’s main disagreement with the platform of the Gotha Socialists? (13)
6. How did the Marxists’ basic theoretical error resemble the obfuscationary tactics of neoclassical economics? (15)
7. How, according to Harrison, were neoclassical economists to blame for the “Soviet experiment”? (16)
8. What was the basic error in J. K. Galbraith’s characterization of land as an economic
factor? (17)
9. Why is it ironic that Progress and Poverty receives such slight mention in today’s histories of economics? (20)
10. What four objections does Galbraith raise against Henry George’s theory? (21-23)
11. What is the basic disagreement between Georgists and Neoclassical economists about the
business cycle? (25)
12. What evidence do we have that Galbraith’s disagreement with George is not as strong as
it is generally thought to be? (26)
Deconstructing an Economics Text
13. How does the definition of land given in this textbook differ from Henry George’s definition of land?
14. According to this textbook, which factor receives income from the location value of
land?
15. How does the definition of labor given in this textbook differ from Henry George’s
definition of labor?
16. Using the definitions presented in this textbook, which of the four factors would collect
any returns from monopolies?
Lesson 2: Neo-Classical Economics
as a Strategem Against Henry George
History of Capital
in the 20th Century
Reading: The Corruption of Economics, pp 29-59.
1. What challenge does Gaffney pose to today’s students of economics? (30-31)
2. Why does Gaffney refer to the slogan “There ain’t no such thing as a free lunch” as a
shibboleth? (31)
3. Why were the theories of Keynes and Laffer popular with voters? (32-33)
4. Despite Laffer’s citation of Henry George, how were Reagan/Bush economic policies antiGeorgist? (32; note 5)
5. What Single Tax-influenced policies were adopted in New York City? (37)
6. Describe the effects of the Wright Act on farming in California. How does this show the
power of the Single Tax movement in the early 20th century? (37-38)
7. Explain, in your own words, the three ways Gaffney cites in which George’s economic
remedy would help the poor. (40)
8. Contrast conventional models of “fiscal stimuli” with George’s “true fiscal stimulus”. (42)
9. What is the major environmental effect of Georgist tax policy? (42-43)
10. In general, how were landowners portrayed by the classical economists? (45-46)
11. According to John B. Clark, how is wealth produced? (48)
12. How were US colleges changing, around the turn of the 20th Century, and what effect
did this have on the field of economics? (50-51)
13. What two events in 1886 ended Clark’s “socialist posturing” and led him to solidify his
neoclassical theories? (52-53)
14. Compare Clark’s and Marx’s conceptions of capital. (53-54)
15. Compare Clark’s conception of rent with Henry George’s (57-59)
History of Capital
Lesson 3: The New Paradigm Becomes Entrenched
in the 20th Century
Reading: The Corruption of Economics, pp. 60-103
1. What was Seligman’s role in advancing Clark’s neoclassical theories? (61-63)
2. Describe Seligman’s application of Clark’s capital theory to the housing market. How does
this point out the obvious error in Clark’s theory? (62; note 38)
3. How were Wicksteed’s views on marginal productivity misconstrued? (64)
4. What problem did Marshall and Cannan find with locally-applied land value taxation?
What was the solution to this problem? (66)
5. Why is there an inverse relationship between rent and interest? Why do neoclassical
economists fail to notice this relationship? (69)
6. What was Henry George’s main political reason for opposing tariffs? (67, 71)
7. Describe Ezra Cornell’s role in advancing the status of neoclassical economics. (73-76)
8. What was Alvin Johnson’s chief objection to the single tax? What proof did he offer to
support this contention? (76-77)
9. What is the marginal utility theory of value? What is its role in neoclassical theory? (79)
10. Why was Johns Hopkins University particularly important to the development of neoclassical economics? (85-86)
11. What important theoretical insights came out of the research done by Richard T. Ely’s
land research institute? (92-96)
12. What did Ely predict would happen when new York City exempted new buildings from
taxation for ten years, starting in 1921? What actually did happen? (97)
13. Why did Ely favor taxes on income and consumption? (97)
14. Explain the concept of “ripening land.” (100)
15. What happened to Ely in the Great Depression? (101)
16. How has history judged Ely’s contention, in 1929, that land values represent savings and
therefore should not be confiscated? (103)