Authored by Chris Andrew and Mustafa Zaidi of Clarmond Wealth
A Time To Howl
“No nation can be freer than its most oppressed, richer than its poorest, or wiser than its most ignorant,” declared Henry George the American economic writer of the late 19th century. His book of 1879 ‘Progress and Poverty’ focused on how economic inequality actually increased with technological progress; the book sold 3m copies.
Henry George sounds like a modern-day liberal; he advocated for the secret ballot, a universal basic income, women’s suffrage, the abolishment of creditor enforcement, an Old Testament style debt jubilee, limited military spending, free public libraries, a mass public transport system, a restriction on political spending, the elimination of monopolies and debt free money. This was all to be funded by taxing land and not labor.
These ideas were picked up across the Atlantic by another George - David Lloyd, whilst he was the Liberal Chancellor of the Exchequer. He adjusted them to fit his political landscape. In 1909 Lloyd George put forward the ‘People’s Budget’; it was a “war budget…to wage warfare against squalidness and human degradation.” Its core was social welfare including free school meals, old age pensions, labour exchanges, and a national insurance scheme. This was all to be funded by higher income taxes, an estate tax, an income supertax and a land tax.
This radical budget was rejected by the peers in the House of Lords for the first time since the Glorious Revolution of 1688; it was Commons vs Lords. Two elections in the next two years resulted only in hung Parliaments. The only way to pass this legislation was to threaten to stack the House of Lords. The new King, George V, agreed to this and the Lords immediately rolled over and committed ritual hara-kiri. By the Parliament Act of 1911, the House of Commons reigned supreme over the Lords. The minority Liberal government, with the help of Irish nationalists and a growing Labour Party passed this radical legislation, which remains the basis of modern welfare states around the world.
This marked the end of the Edwardian age and its American cousin, the Gilded Age. Progressive policies backed by a surge in populism had trumped the establishment elites.
Our own Gilded Age 2.0 has been in full flower for the last few decades, but just like the past it seems that the revolutionary voices of the two Georges can again be heard. In the UK, the increases of welfare spending and nationalizations, all funded by versions of wealth taxes, are high on the agenda. Across in the USA, the political contenders have identified their society’s key weak spots of health, education, and old age; solutions for these are also to be funded by a wealth tax, a wall street tax, and increasing income taxes.
The progressive populist is alive and well on both sides of the Atlantic. A hundred years ago aristocratic Lords and plutocratic businessmen stood on one side with the populists on the other. Today there are are two strands of populism, progressive and nationalistic, embedded on both sides. In the UK we have “Take Back Control” versus “Not for Sale”. In the US you have “Make America Great Again” versus “Medicare 4 All”. The populist battle lines are drawn and our gilded elites are by themselves in no mans land, like the peers of a century ago.
Gilding the Lily
Today’s stranded elites, like Ray Dalio or Mike Bloomberg, to name a couple, offer us frightening visions of the future; that we are heading into the Fascist / Communist 1930’s, a period of dictators and depression. They need to pick up a history book as they are off by multiple decades. They have forgotten the chain of events that led to 1930s: we need progressives in power, followed by a world war, hyper inflation, an economic boom, an economic bust, and finally depression. Don’t worry, dictators will soon follow after this!
Keeping an eye on the past is a key responsibility of the political elites. Our credit driven world, which has created such inequality, has brought us to this nationalist vs. progressive narrative. Whoever is in power must now ensure they do not follow the path of the early 20th century and enter an unnecessary war; that will lead to much more uncontrollable set events which would leave us longing for the political divides of today.