Happy Capital Day!, II: The Capital Question

In the late 1860s, the English political economist William Thomas Thornton published On Labour: Its Wrongful Claims and Rightful Dues, Its Actual Present and Possible Future, which he revised in 1870.  In the book, Thornton recognized that both workers and owners of capital have rights.  The problem was how to sort them out and deal with everyone justly.

Happy Capital Day!, I: The Theories of Labor

We’re anticipating a little, but we think that today should be celebrated as “Capital Day,” or (if you prefer) as “Widespread Direct Ownership of Capital Day” (“WDOOCD”), which just rolls off the tongue.  The only question in the minds of our millions of viewers is . . . why?

A Plea for Peasant Proprietors

The position of Charles Stewart Parnell and William O’Brien of the Irish National Land League was very close to that of William Thomas Thornton (1813-1880). Thornton suggested as much in 1874 in his revision of his most important work, A Plea for Peasant Proprietors (1848).

Foreword to W. T. Thornton's "A Plea for Peasant Proprietors" (4)

Today we thought we’d start the week off right by posting the second-to-last portion of our foreword to the annotated edition of William Thomas Thornton’s A Plea for Peasant Proprietors. We should point out, however, that you can get the entire foreword in one piece, as well as all the added appendices and annotation, by purchasing the book itself. Still, to give you a taste for it, here’s the almost-final installment of the foreword:

The two and a half decades between the first and second editions of A Plea for Peasant Proprietors saw the rise and fall of the "Young Ireland" movement, the "Fenian" uprising of 1867, the "dynamite campaign" of terror, growing discontent over the continued failure of land reform and renewed agitation for the repeal of the Act of Union of 1800 and restoration of "Home Rule" to Ireland. Thornton's aim in his revision was to put before the public a "what might have been" scenario had his proposal been adopted in 1848 (1848 also saw the publication of Karl Marx's The Communist Manifesto, that advocated the abolition of private property and (unlike Thornton and Kelso and Adler) has not been ignored.) — thereby avoiding all the violence and discontent that shook Ireland in the latter half of the 19th century.

In his 1874 revision, Thornton did modify his stand somewhat. He expressed the hope that the new land legislation of the 1870s would remove legal disabilities from the Irish so that the broadening of ownership to all citizens could proceed naturally. As we note in Appendix VI on the "Irish National Land League," however, this hope proved ephemeral.

While things are not yet as bad in the world today as they were in Ireland in the 1840s, most people are as dependent on wage system jobs as the Irish were on the potato. The vast majority of today's citizens have no access to other sources of income (from, in particular, capital ownership), except government welfare. The fact is, as we explain in Appendix III, there are other barriers that inhibit or prevent universal access to the means of acquiring ownership of capital and the establishment and maintenance of a just, third way beyond both capitalism and socialism. A major barrier remains lack of democratic access to capital credit for financially feasible projects.

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Foreword to W. T. Thornton's "A Plea for Peasant Proprietors" (3)

We got so interested today in hearing from all the people who are phoning and e-mailing in comments about the “Raw Judicial Power” series that we forgot to finish writing today’s installment! Still, today’s “substitute” posting, the third in the "Thornton foreword series," does relate to the Raw Judicial Power series.

This is because the Great Famine in Ireland seemed to confirm Malthusian theory. Population had, evidently, outstripped existing food supplies. The Four Horseman of the Apocalypse — Famine, Disease, War, and Death — had consequently put in their expected appearance.

The irony is that Ireland was one of the few food exporting countries in Europe. The land provided more than enough to feed the Irish and the propertyless workers of England. Even in 1847, the worst year of the Great Famine, there were massive exports of food from Ireland. (Christine Kinealy, This Great Calamity: The Irish Famine, 1845-1852. Dublin: Gill and Macmillan, 1995, 354.)

To Thornton, the Great Famine represented not a confirmation of Malthusian theory, but its refutation. As he had argued in 1846, "over-population" is caused by systemic poverty and lack of widespread ownership of capital, not the other way around. In Europe, the potato blight caused hardship, as small landowners who depended on the potato for their basic subsistence had to shift to more expensive foodstuffs.

In Ireland, with virtually no small landowning class and afflicted with "tenancy-at-will" (which meant that landlords could evict a tenant for any reason or none at all), the blight was a disaster of unprecedented magnitude. More than enough food was grown in Ireland to stave off the Great Famine, but it did not belong to the common people. They died by the hundreds of thousands as food was shipped out of the country.

Unfortunately, the British government paid no attention to Thornton's proposal for Ireland. As he complained in 1874 in his revision of the Plea, "The time for creating a numerous peasant proprietary in the summary mode suggested has, however, long gone by, and is not now to be recovered. How seldom, alas, does England, in respect of Irish reforms, take time by the forelock!" (William T. Thornton, A Plea for Peasant Proprietors. London: Macmillan and Company, 1874, 261.)

This might be something to keep in mind during the March for Life on Monday of next week.

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Foreword to W. T. Thornton's "A Plea for Peasant Proprietors" (2)

In order to make life easier for us (at least today), we’re having a short break in our series on “Raw Judicial Power” and posting the second of three parts of our foreword to William Thomas Thornton’s A Plea for Peasant Proprietors. Our new annotated edition is starting to generate a little interest in some quarters. Take advantage of the free download on the “Plea” website and (if the spirit moves you) you can get a 20% discount on purchases in bulk (10 or more copies) . . . plus shipping. Or you can just go to Amazon or Barnes and Noble and get an individual copy.

So why all the fuss? Especially at this time of year when “everybody” is focused on the March for Life or the Republican shenanigans in trying to pick someone who can defeat President Obama when they’d be better off trying to find somebody who can do the job better instead of no worse.

Thornton's proposal was a logical development of an analysis he had published two years before. In his first major work in 1846, Over-Population and Its Remedy, (William Thomas Thornton, London: Longman, Brown, Green, and Longmans, 1846.) Thornton refuted Thomas Malthus's scarcity-based theories. Thornton's analysis in A Plea for Peasant Proprietors countered an idea implicit in Malthus's Essay: that ownership of capital must be concentrated if the rich are to accumulate sufficient savings to finance new capital and provide jobs for workers who own nothing except consumer goods and their own labor. Like other philosophers and political scientists through the ages, (A brief list includes Aristotle, the Gracchi (noted by Thornton), Plutarch, the 6th century Byzantine "Farmers' Law," John Locke, George Mason, William Cobbett, Benjamin Watkins Leigh, and Daniel Webster.) Thornton made clear that a program of widespread capital ownership has the potential to make people politically as well as economically free.

Nor did Thornton ignore the rights or concerns of propertyless non-agricultural workers. In fact, Thornton's proposal bears a striking resemblance to that of Louis Kelso and Mortimer Adler published in the late 1950s and early 1960s. (See Louis O. Kelso and Mortimer Adler, The Capitalist Manifesto. New York: Random House, 1958; The New Capitalists. New York: Random House, 1961) In 1869, Thornton published A Treatise On Labour: Its Wrongful Claims and Rightful Dues, Its Actual Present and Possible Future, (London: Macmillan and Company, 1869) revising it in 1870. This work strengthened his point that the only solution to the conflict between "labor" and "capital" is for workers and owners to form an alliance, with workers becoming owners with defined rights to profits and control. As he summarized the benefits of such an alliance,

"For mistrust and dislike or indifference on the one side, and for envy and jealousy on the other, would be substituted something of that fellow-feeling which can scarcely help growing up between those who, in serving themselves, are helping each other. With those laborers who had taken shares, some sympathy with capital would tincture the old headlong passion in favor of labor. With those who had not yet become shareholders the possibility of their becoming so subsequently would have a like effect." (William Thomas Thornton, On Labour: Its Wrongful Claims and Rightful Dues, Its Actual Present and Possible Future, Second Edition. London: Macmillan and Company, 1870, 394.)

Not surprisingly, this had also been the contention of Charles Morrison in his pivotal An Essay on the Relations Between Labour and Capital (London: Longman, Brown, Green, and Longmans, 1854. Morrison's book was influential in the reform of the Law of Partnerships and adoption of the Limited Liability Act of 1855 (18 & 19 Vict c 133), his goal being to lift one of the chief barriers preventing or inhibiting worker ownership.) published in 1854 — and would be repeated by Pope Leo XIII in the epochal Rerum Novarum in 1891, usually regarded as the first social encyclical, "On Capital and Labor": (Pope Leo XIII, Rerum Novarum ("On Capital and Labor"), 1891. N.B.: "On Capital and Labor" is the current official title in English. Many other titles have been used.)

"We have seen that this great labor question cannot be solved save by assuming as a principle that private ownership must be held sacred and inviolable. The law, therefore, should favor ownership, and its policy should be to induce as many as possible of the people to become owners." (Rerum Novarum, § 46.)

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Foreword to W. T. Thornton's "A Plea for Peasant Proprietors" (1)

Often the exigencies of modern life take their toll. Nowhere is this more evident than when trying to keep up with a daily blog when your time gets taken up elsewhere and you don't have the next installment of your planned series drafted. Since that is the case today, we will sneak in a brief snippet from the foreword to our annotated edition of William Thomas Thornton's A Plea for Peasant Proprietors. If you can't wait for the next unscheduled installment, you can go to the book's website and download the free .pdf or follow the links on the website to Amazon and Barnes and Noble. Anyway, here goes:

Ireland is in crisis. Its economy is on the verge of collapse. Short-term "solutions" are only buying time until the next disaster. Politicians, academics, and business leaders are floundering helplessly in the face of the failure of a global financial system that they never understood in the first place. Proposals to correct the problem are only making matters worse and increasing the magnitude of the inevitable breakdown. In this, Ireland is a bellwether of where the global economy is headed.

Growing agitation about the crisis is spreading throughout the world. People from across the political spectrum are complaining about the economy. From the "Tea Party" movement in the United States, to the recent "Occupy Wall Street" phenomenon, complaints are becoming louder, in some cases violent — but nobody is doing or suggesting anything more than proposals that have already failed miserably.

There is a solution — and one that applies not only to Ireland, but to the United States and the rest of the global economy. The solution is one developed more than a century and a half ago to address a catastrophe in comparison with which today's problems pale in significance. While it was ignored then, Thornton's solution and vision of a more just and humane future for all was relevant 150 years ago. Updated to the needs of a technologically advanced civilization, it is even more relevant today.

Following "Black '47," the worst year of the Great Famine in Ireland (1846-1852), William Thomas Thornton, a clerk in the London office of the East India Company, proposed a solution to the disaster that had struck Ireland. Thornton's remedy was revolutionary, though hardly new or unique: vest the common people of Ireland with direct ownership of the landed capital of Ireland. Thornton believed his solution would end the famine, eliminate widespread poverty, diminish the threat of violence and rebellion, and establish a native "middle class." He published his proposal in 1848 as A Plea for Peasant Proprietors.

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Thornton "Buzz"

We've finalized the text of William Thomas Thornton's 1848 (revised 1874) classic A Plea for Peasant Proprietors, and are now working to get some prepublication "buzz" going . . . besides "makes a great Christmas gift" . . . which it does, but that's not the point. The point is that here is the book proposes a peaceful and practical solution to what, for example, both the Tea Party and the Occupy Wall Street people are demanding, in terms that cause no one to suffer.

The only question that remains (for today, anyway) is why was Thornton's proposal ignored? It might give us clues as to why Capital Homesteading doesn't seem to be getting the attention it deserves. The complications of 19th century Irish political economy offer one possible explanation.

To oversimplify grossly, two events shaped Ireland and its relations with Great Britain in the 19th century. Politically, the "Act of Union" that took effect January 1, 1801 brought together intellectuals and the politically active in a common cause: repeal of the Act and reestablishment of "Home Rule" in some form. Out of the repeal effort of the 1830s came the "Young Ireland" movement of the 1840s, the "Irish Republican Brotherhood" of the 1850s, the "Fenian" uprising of 1867, the Home Rule agitation of the 1870s, the "Land War" of the 1880s, the combination of agrarian and nationalist interests in the 1890s, and, ultimately, the Easter Rising of 1916, the Civil War of the 1920s, partition, and the continuing tensions of today.

Economically, however, the Great Famine was the pivotal event in recent Irish history. It had a disastrous effect on the ordinary people of Ireland, generating popular support for land reform. This manifested in the political activity of the Irish National Land League and its successors, and, eventually, a joining of nationalist and agrarian interests into an uneasy alliance that turned on itself almost as often as it confronted what leading activists considered the eternal British misrule of Ireland.

It is impossible to understand Ireland in the 19th century — or today — without knowing something about "The Great Hunger," An Gorta Mór, as it is known in Irish. The Famine is the defining event in modern Irish history. This is evident in the belief, valid or not, that the Famine was deliberate genocide. Modern explanations that appear to excuse government inaction serve only to confirm the belief that the English were to blame. As Thomas Gallagher described it in his book, Paddy's Lament (1982), the Famine was a "prelude to hatred."

A review of the events surrounding the Famine reveals that, in all likelihood, it was not a fixed policy of genocide, nor even indifference, but a general feeling of helplessness in the face of an unprecedented disaster, and economic institutions that, even today, people do not fully understand, that led to the ineffectiveness of relief efforts. This, in turn, appears to have been caused by reliance on discredited economic theories, notably those of Thomas Malthus. Beneath it all was an unquestioning reliance on assumptions of insufficiency and the fixed (and disproved) belief that it is impossible to finance new capital formation without first cutting consumption and accumulating money savings.

It may be, then, that the key to getting Capital Homesteading on the table as a serious topic of discussion as world leaders search desperately for a solution, whether it be reviving the Irish economy, saving Greece from a financial meltdown, restoring the American economy, or rebuilding Japan's northeast, is to forget about trying to pin blame on someone, and get to work implementing a viable solution.

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Thornton On Ownership

We've gotten a little bit away from our obsession with William T. Thornton during the Halloween Horror Special series, now over for another year. In light of the continuing failure on the part of the powers that be to appreciate the potential inherent in the Just Third Way to resolve the economic crisis, we thought we'd lay another quote on our readers about the value of capital ownership for keeping an economy going and lessening conflict.

Thornton did not confine his concerns to the rights only of propertyless non-agricultural workers. In fact, Thornton's proposal bears a striking resemblance to that of Louis Kelso and Mortimer Adler published in the late 1950s and early 1960s. (See Louis O. Kelso and Mortimer Adler, The Capitalist Manifesto. New York: Random House, 1958; The New Capitalists. New York: Random House, 1961.) In 1869, Thornton published A Treatise On Labour: Its Wrongful Claims and Rightful Dues, Its Actual Present and Possible Future (London: Macmillan and Company, 1869), revising it in 1870. This work strengthened his point that the only solution to the conflict between "labor" and "capital" is for workers and owners to form an alliance, with workers becoming owners with defined rights to profits and control. As he summarized the benefits of such an alliance,

"For mistrust and dislike or indifference on the one side, and for envy and jealousy on the other, would be substituted something of that fellow-feeling which can scarcely help growing up between those who, in serving themselves, are helping each other. With those laborers who had taken shares, some sympathy with capital would tincture the old headlong passion in favor of labor. With those who had not yet become shareholders the possibility of their becoming so subsequently would have a like effect." (William Thomas Thornton, On Labour: Its Wrongful Claims and Rightful Dues, Its Actual Present and Possible Future, Second Edition. London: Macmillan and Company, 1870, 394.)

Not surprisingly, this had also been the contention of Charles Morrison in his pivotal An Essay on the Relations Between Labour and Capital (London: Longman, Brown, Green, and Longmans, 1854). Morrison's book was influential in the reform of the Law of Partnerships and adoption of the Limited Liability Act of 1855 (18 and 19 Vict c 133), his goal being to lift one of the chief barriers preventing or inhibiting worker ownership.  Morrison's book was published in 1854, but the same theme would be repeated by Pope Leo XIII in the epochal Rerum Novarum in 1891, usually regarded as the first social encyclical, "On Capital and Labor":

"We have seen that this great labor question cannot be solved save by assuming as a principle that private ownership must be held sacred and inviolable. The law, therefore, should favor ownership, and its policy should be to induce as many as possible of the people to become owners." (Pope Leo XIII, Rerum Novarum ("On Capital and Labor"), 1891, § 46.)

All of this was a good idea then. It's a better idea now.

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William Thomas Thornton and Distributism, Part II

Given all that we said in yesterday's posting, there still seems to be a strong affinity between Thornton's goal and that of distributism. That makes it all the more baffling as to why neither Chesterton nor Belloc, nor any of their latter day followers have done any serious investigation of Thornton's proposal or, especially in light of the current economic problems and the general failure to advance the goal of establishing "the Distributist State," of the Just Third Way as applied in Capital Homesteading.

One possibility presents itself. It appears that Chesterton and Belloc accepted without question the disproved dogma that you can't finance new capital formation without first cutting consumption. Under that assumption most people are permanently cut off from ownership if they rely on existing financial tools and institutions that depend on past savings.

To their credit, Chesterton and Belloc refused to consider the dishonest Keynesian expedient of "re-editing the dictionary," that is, changing the definition of natural rights such as life, liberty, and property. Consequently they may have felt they had no choice but to retreat into a romantic Never-Could-Be Land and hope things would get better after the inevitable crash.

Chesterton, Belloc and their followers could — and do — assuage their frustrations by poking feathers at the obvious fallacies on which the Powers-that-Be rely. The most obvious, of course, is the belief in the necessity of concentrated ownership of capital. The latter day distributist, however, continues to ignore the most obvious fallacy of all that makes concentrated ownership seemingly inevitable: the slavery of past savings.

The presumed necessity of past savings to finance new capital formation can excuse the lack of action and general ineffectiveness of the distributist movement. Failure of the rich to open their purses for the benefit of others can be blamed on the personal greed and lack of virtue on the part of the capitalist or politician. The necessity of organizing in social justice for the common good and restructuring such basic institutions as money and credit can then be ignored, trivialized, or set aside as impracticable in light of the presumed lack of virtue on the part of the people in power.

Another possibility is that the very specificity of Thornton's proposal and Capital Homesteading might strike the modern distributist as just a little . . . unclean. Thornton's continual references to manure are . . . well, perhaps just a little too . . . earthy, if you know what I mean. As for Capital Homesteading, all that talk about natural rights and duties and rigid insistence on the right definition and what it means . . . so judgmental . . . money and credit, and all those complicated financial transactions and institutions . . . isn't money the root of all evil? People should just share what they have, right? and everyone would have enough, right?

As a matter of fact, that is right — and what people should be sharing are viable ideas like Thornton's proposal and Capital Homesteading that have the promise of turning things around.

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William Thomas Thornton and Distributism, Part I

The response to "All Things Thornton" is mildly astounding. It's not every day that an obscure 19th century economist experiences a revival . . . especially when much of what he says runs directly counter to everything they've been teaching in the colleges and universities about economics and finance since 1844. So, to satisfy the growing Thorntonist Movement(tm) (you got the pun there, we hope), here's a short series on Thornton and distributism.

At first glance, William Thornton's proposal for vesting the people of Ireland with direct ownership of at least a part of the arable land of the country seems to be a virtual blueprint for an arrangement of society that in the early 20th century G. K. Chesterton and Hilaire Belloc would call "distributist." As described by Chesterton, the chief spokesman for the duo that George Bernard Shaw ruefully termed the two-headed "Chesterbelloc" beast, distributism is the economic arrangement of society into a system where a sufficiently large number of people directly own the means of production. This approach posits ownership of capital as the primary means of generating income. There is a preference, socially and legally, for the small, family-owned enterprise. As Chesterton put it, distributism is "a policy of small distributed property." (G. K. Chesterton, "The Beginning of the Quarrel," The Outline of Sanity. Collected Works, Volume V (San Francisco, California: Ignatius Press, 1987), 45.)

Given this definition, Thornton's A Plea for Peasant Proprietors reads like a distributist manifesto put together by someone with practical experience in the "real world." One of the flaws of distributism, however (admitted by its founders), is that it is rather vague both as to specifics and on how to achieve the desired results. Reading one of Chesterton's romantic fantasies or clever essays, we are struck with the unreality of his realism. There are a number of profound insights into human nature, but very little about the "grunt work" that occupies most of the time of the happy villagers and carefree cottiers who will presumably inhabit the distributist idyll once (by some unspecified miracle) it is established.

It becomes obvious that, for all the similarity of language and goals, Thornton's homely practicality is in sharp contrast to Chesterton's idealistic flights. Where Chesterton has suppositions and reasonable-sounding if unproved hypotheses, Thornton has statistics and hard data to back up a careful analysis. Chesterton continually matches wits with ideologues and ridicules the practicality of the worldly; Thornton matches the experts fact for fact, meeting them on their own ground and beating them on it.

For all his talk about commons and cows, there is very little in Chesterton about such mundane subjects as drainage and that inevitable, unpleasant, but extraordinarily necessary and valuable byproduct of livestock: manure . . . which Thornton mentions more than thirty times in this single work. Thornton might give in to the temptation to use a little overblown language once in a while. This was, after all, expected when writing of the Irish, those masters of the English language, as Carlos Fuentes reminded us. Thornton might, for example, refer to the contents of the farm urine tank as "libations to the Sterculine Saturn." This cleverness, however, seems to be presented as a bit of comic relief while making an important point. It is never itself the point of a passage as it so often seems to be with Chesterton.

Chesterton rambles on about how it should be possible to lead the simple life and enjoy one's self on a small bit of land. Thornton explains exactly how much land there should be, how long it should take to develop and get into full production, what crops to plant, and how to maintain fertility of the soil — and even the amount of backbreaking toil to be expected and how many hours of it per day can be expected. Where Chesterton hints that simple technology is to be preferred, Thornton states precisely why the spade is often preferred to the plow on small plots of ground, and duly acknowledges the beneficial effects of advanced machinery, even railroads — when appropriate. Chesterton might rhapsodize over a pint and a pipe. Thornton would tell you how to grow and cure tobacco and brew beer. It is difficult to imagine Thornton sending a telegram from a distant town to his wife asking where he was supposed to be.

With respect to the "small is beautiful" aspect of distributism, Thornton would have had little sympathy for the idea that "big business" or anything beyond a vague "human scale" or not produced on a small farm or in the village workshop is somehow anti-human. As he made clear in the article he contributed to the Encyclopedia Britannica,

"The extended use of iron and steel in the construction of agricultural implements is materially adding to their durability, and generally to their efficiency, and is thus a source of considerable savings. While great improvement has taken place in this department, it too commonly happens that the village mechanics, by whom a large portion of this class of implements is made and repaired, are exceedingly unskilled, and lamentably ignorant of the principles of their art. They usually furnished good materials and substantial workmanship, but by their unconscious violation of mechanical laws, enormous waste of motive power is continually incurred and poor results are attained. This can probably be remedied only by the construction of the more costly and complex machines being carried on in extensive factories, where, under the combined operation of scientific superintendence, ample capital, and skilled labor, aided by steam power, the work can be so performed as to combine the maximum of excellence with the minimum of cost." (William Thomas Thornton, "Agriculture," Encyclopedia Britannica, 7th Edition (1875).)

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Who Was William Thomas Thornton (and Why Should We Care?)

For two weeks now we've been telling you about some Dead White European Male by the name of William Thomas Thornton, and the book he wrote in 1847 during the worst year of the Great Famine in Ireland, and published in 1848: A Plea for Peasant Proprietors. Joseph Schumpeter mentioned Thornton briefly in his monumental History of Economic Analysis (which you should have purchased years ago when the "trade paperback" could be had for around $20 instead of the $90 they're charging now for the same thing, and, oh, gee, the Kindle is $81, but you can rent it for $36.14 . . . better renew your library card; it's free most places) in connection with the "wage fund doctrine" of Nassau W. Senior (there's a name for you; English economist, 1790-1864; won't be on the test) and that's about it. So why should we get all worked up over somebody who wrote about something that is ancient history, and who wasn't even Irish?

Because Thornton focused on the need for systemic change in light of the growth of industrial capitalism and the continuation of agricultural capitalism, especially in Ireland, Britain's "Elder Sister." As Charlotte Brooke said in the introduction to her 1789 anthology, Reliques of Irish Poetry, "The productions of our Irish bards exhibit a glow of cultivated genius. The British muse is not yet informed that she has an elder sister in this isle." Thornton evidently felt some respect and consideration was overdue.

Thornton saw that a "one crop economy," such as had been inflicted on the Irish, was a certain recipe for disaster, and (like Harold G. Moulton in the 1930s and the shift to Keynesian economics), had the misfortune to see his predictions come true in the same year in which he originally published his solution in Over-Population and Its Remedy (1846). The system in Ireland badly needed change, and (within certain limitations), the solution Thornton proposed would have gone a long way toward establishing a more just system based on the private property and free markets to which the Powers-that-Be of 19th century Great Britain paid so much lip-service and from which they kept the great mass of people from sharing in the benefits.

So, although "Thornton" isn't uncommon in Ireland — remember John Ford's The Quiet Man, the greatest movie ever made? (Unless you're from the South, in which case we'll spot you GWTW . . . and there was a bit of the Irish there, too) — William Thomas Thornton was an English (gasp) economist. He was born at Burnham, Buckinghamshire, on February 14, 1813. In 1836 he became a clerk in the London office of the Honourable East India Company, "John Company." In 1858, after the British Crown assumed direct rule of India following the Great Mutiny (one of these days we'll tell the economic story of that and its aftereffects), he became secretary for public works in the India office, a post that he held until his death, a servin' of 'Er Majesty the Queen. In 1873 Thornton was created a C.B., not "Crunchberry Beast," but a "Companion of the Most Honourable Order of the Bath," a title and order conferred on British and Commonwealth citizens in recognition of conspicuous service to the Crown.

As we mentioned above, Thornton's first major work was Over-Population and its Remedy (1846), a counter to Thomas Malthus's 1798 Essay on Population. It was in this book that Thornton first proposed a plan by means of which propertyless Irish peasants could "homestead" waste (unused) land in Ireland after a fashion by having the government purchase undeveloped land at a low price and allocate it to people who would develop the land and repay the government out of future profits, becoming freeholders in the process.

In 1848 Thornton published A Plea for Peasant Proprietors, in which his proposal was developed in greater detail and urgency in light of the Great Famine. This was followed by On Labour (1869) in which he engaged in a friendly dispute with John Stuart Mill over the latter's adherence to the "wage fund doctrine"; and Old-Fashioned Ethics and Commonsense Metaphysics, a volume of essays, published in 1873. The following year, in response to the reoccurrence of famine and an upsurge in discontent in Ireland over the ineffectiveness of the various land reform acts, Thornton published a revision of A Plea for Peasant Proprietors.

William Thornton died in 1880.


Now you know.

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And More Again . . .

Looking at the common sense of William Thornton's proposal to deal with the Great Famine in Ireland from 1848 to 1852, we have a hard time trying to understand why the British government completely ignored it. The only thing we can figure out is that, as with many otherwise feasible plans, it came to grief over the financing.

The fact is that if private individuals or, especially, the government have inadequate or flawed ideas about money, credit, banking and finance, serious economic problems are going to crop up, just as they have in our day. Money, like the State itself, is a very powerful social tool. A well-regulated and sound financial system is invaluable for a just social order.

Unfortunately, when the financial system is not well-regulated, or the principles on which the system is based are not sound, then disaster is never but a short step away. Fortunately, getting a grasp of sound principle isn't too difficult, if we don't allow ourselves to be blinded by the mistakes and preconceptions of the past.

Even more fortunately, anyone who can understand the convolutions of 19th century Irish politics that provided the context of Thornton's proposal should have little or no trouble with the theory of "pure credit." This is not surprising. The modern struggle between economic development based on what Louis Kelso and Mortimer Adler called the slavery of past savings, and that based on pure credit and "future savings," is the direct result of something related to the event that set the tone for relations between Great Britain and Ireland for the whole of the 19th century.

The story is almost comic in an ironic fashion. In 1797 the news that the French had landed an invasion force in Wales swept through England. This was an event that came to be known as "the last invasion of England."

As invasions go, it wasn't much. Four French warships carrying 1,400 men landed at Carregwastad Head near Fishguard on February 22. This was supposed to be coordinated with Theobald Wolfe Tone's planned rising in Ireland.

Originally intended as a diversion, on February 23 the French force got drunk on some looted casks of wine, fought a few engagements with local militia and one of the local housewives — no, really! — got drunker, and surrendered on February 24. The British captured two of the French vessels, a frigate and a corvette (a vessel smaller than a frigate), and the other two French warships returned home. After waiting for additional French aid, the Irish rose in 1798, the "Wexford Rebellion."

Word of the "invasion" spread through Wales and England, panic hard on its heels. People rushed to their banks to withdraw all their funds in gold. Reserves got so low that Sir William Pitt's government permitted (or ordered, depending on your source) the Bank of England temporarily to suspend convertibility of its banknotes into gold. This temporary measure lasted for more than two decades. Convertibility of the paper pound into gold was not restored until 1821.

Trying to figure out why England didn't immediately go into a financial meltdown when the paper currency wasn't convertible into gold was productive of a knockdown, drag-out political and economic fight for the next half century. This was between people who thought that money consists of coin and State-issued banknotes, and people who thought that money is anything that you can use to settle a debt. What we need to understand the situation — and William Thornton's financing proposal — is the theory of pure credit, and some economic history.

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More on William Thornton's "Plea"

For some reason last week's series on William Thornton's 1848 A Plea for Peasant Proprietors seems to have fired the imagination of a number of people. Maybe we'll have to come out with a "Just Third Way edition" or something. In the meantime, we thought we'd post an extract from the Appendix that Thornton added to his 1874 revision.

This appendix consists of some remarks made by Émile Louis Victor de Laveleye (1822-1892), a Belgian economist in favor of "primitive property." (It's not entirely clear, but "primitive property" might mean capital that the owner uses him- or herself in production, without being an "absentee owner.")

Anyway, here are the remarks by M. de Laveleye on "the Anti-Revolutionary Influence of Peasant Proprietorship" that appeared in the 1874 revision of A Plea for Peasant Proprietors:

It may be thought a matter for surprise that, in Flanders, feelings hostile to social order nevertheless do not manifest themselves, and that agrarian outrages are never perpetrated as in Ireland, although I think it certain that, in consequence of excessive competition, the Flemish farmer is much more ground down by his landlord than the Irish tenant. The fact that in Flanders, as in all countries in which landed property is distributed among a large number of owners, the ideas called socialist in the bad sense of the word do not obtain, is to be accounted for as follows:

"The Flemish tenant, although ground down by the constant rise of rents, lives among his equals, peasants like himself, who have tenants whom they use just as the large landowner does his. His father, his brother, perhaps the man himself, possesses something like an acre of land, which he lets at as high a rent as he can get. In the public house, peasant proprietors will boast of the high rents they get for their lands, just as they might boast of having sold their pigs or potatoes very dear. Letting at as high a rent as possible comes thus to seem to him to be quite a matter of course, and he never dreams of finding fault with either the landowners as a class, or with property in land. His mind is not likely to dwell on the notion of a caste of domineering landlords, of "bloodthirsty tyrants," fattening on the sweat of impoverished tenants, and doing no work themselves; for those who drive the hardest bargains are not the great landowners, but his own fellows. Thus the distribution of a number of small properties among the peasantry forms a kind of rampart and safeguard for the holders of large estates; and peasant property may, without exaggeration, be called the lightning conductor that averts from society dangers which might otherwise lead to violent catastrophes.

"The concentration of land in large estates among a small number of families is a sort of provocation of leveling legislative measures. The position of England, so enviable in many respects, seems to me to be in this respect full of danger for the future." (Cobden Club Essays, First Series, pp. 273 and 274.)

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A Plea for Peasant Proprietors, Part IV: The Citizens Land Bank

While things are not yet as bad in the world today as they were in Ireland in the 1840s, most people are as dependent on wage system jobs as the Irish were on the potato. Not surprisingly, however, Thornton's observations and remedies can readily be applied to the current situation. If we understand that both land and technology are capital, and that we don't have to confiscate, condemn, or redistribute existing capital for people to become owners of capital, then it is possible for everyone on earth to become an owner of a capital stake that has the capacity to generate an income sufficient to meet common domestic needs adequately. The new capital would not come from existing productive assets, whether land or technology, but from capital that has not yet been formed, that is, financed.

Due to the disproved belief that it is impossible to finance new capital formation without first cutting consumption and accumulating money savings (and being careful to realize that "increases in production" and "decreases in consumption" are two different things), new capital has remained a virtual monopoly of the already wealthy. By returning to the Banking Principle and rejecting the Currency Principle, however, it is possible to finance the acquisition of as-yet unformed capital out of "future savings" instead of past savings, thereby making it possible for everyone to become an owner of capital.

There is also the problem of giving the State a broader role than it really should have. Thornton's amended proposal from 1874 does make sense when we take the nature of land and natural resources into account. There's only so much there. How do you ensure equality of opportunity to all and, at the same time, respect the natural right of private property . . . without redefining the substantial nature of private property, thereby abolishing it? As Thornton commented,

"To insist upon the immense benefit to the entire peasantry of these transformations, immediate and prospective, would be but to repeat once again what has already been repeatedly urged throughout this volume. What rather I feel to be incumbent upon me is to admit that completest realization of the benefit anticipated would still fall far short of what I conceive would result from a really perfect land system. According to my ideal on that subject, there should be no property in land save that of the whole nation in its corporate capacity; and those Asiatic countries in which the State, as trustee for the nation, is sole landed proprietor, would, in my opinion, be infinitely to be congratulated, were there but adequate security that the rights involved in the trust would be duly appreciated and judiciously exercised by those who have to administer it."

First things first: keep the government out whenever possible. The government is a very powerful and very specialized tool essential to a well-run social order. That does not mean, however, that the government can do anything and everything better than the private sector. As Thornton himself admitted, unconsciously undermining his amended proposal, "Really, it does look as if private energy were unable to survive the torpedo-like touch of governmental support. Certainly, from Indian railways downwards, every private enterprise languishes which government guarantees." (William T. Thornton, A Plea for Peasant Proprietors. London: Macmillan and Company, 1874, 255.)

In other words, if you want to guarantee failure, get the government involved in what should be private enterprise. The problem is, can the private sector do what it appears that only the State can do?

That raises the question of the State's proper role, which is to ensure that everyone has equal opportunity (not results), and that abuses are corrected and the malefactors punished. The solution is that, instead of vesting corporate ownership of the land, natural resources and infrastructure in the State, why not vest corporate ownership of such capital in . . . a private, for-profit corporation? If owned by every citizen as a right of citizenship by granting each citizen a single no-cost, non-transferable, voting, fully participating share in the corporation, we could achieve Thornton's "corporate ownership" of land without vesting it in the State. Everyone would thereby become an owner of the land.

Tenants who are also shareholders of the land-owning corporation would take leases. As tenants, of course, their rights would be defined by the lease — into which, as owners, they would have some say-so. Having clearly defined rights of property as actual owners and a just leasehold is much more secure than having the State protect the sometimes vague "beneficial ownership" conferred by statute, and infinitely better than the tenancy-at-will that afflicted Irish agriculture throughout the 19th century.

We've embedded these principles in CESJ's proposed "Citizens Land Bank" (CLB) that is a private sector alternative to State ownership of land and infrastructure. A CLB would be a for-profit, professionally-managed, citizen-owned-and-governed community land planning and development enterprise, designed to enable every citizen of a community of any size to acquire a direct ownership stake in local land, natural resources and basic infrastructure.

• A social vehicle for every man, woman and child to gain, as a fundamental right of citizenship, a single lifetime, non-transferable ownership interest in all the Bank's assets, share equally in property incomes from rentals and user fees from leases or use of the Bank's assets, accumulate appreciated equity values from enhanced land values, and gain an owner's voice in the governance of future land development.

• An innovative legal and financing tool empowered to borrow on behalf of all citizen-shareholders and service the debt with pre-tax dollars to meet the land acquisition, capitalization and operational needs of the Bank. The CLB shelters from taxation the equity accumulations of citizen-shareholders and protects the outside assets of the citizens in the event of loan default or if the enterprise fails.

• A social tool designed to encourage a just, free and non-monopolistic market economy. It applies the democratic principles of equal opportunity and equal access to the means to participate as an owner as well as a worker. It demonstrates that anything that can be owned by government can and should be owned, individually and jointly, by the citizens.

• A major feature in a proposed national economic agenda known as "Capital Homesteading for Every Citizen," which is designed to reform existing monetary, credit and tax barriers to provide every American an equal opportunity to share in the governing powers and profits from new entrepreneurial ventures, new technologies, new structures, and new rentable space built upon the land. Capital Homesteading offers a "Just Third Way" of reversing unsustainable federal deficits and debt, and revitalizing and growing the American free enterprise system in a sustainable and environmentally sound way.

What a CLB is Not:

It is not socialism or communism (which are systems based on the abolition of private property in the means of production). It does not take away property rights from present owners, nor does it redistribute current accumulations of wealth or income.

It is not the Wall Street model of capitalism (where ownership of the means of production and ownership power are concentrated in the top 1% of society and artificial barriers exclude non-owners from equal ownership opportunities).

It is not a non-profit Community Investment Corporation, Land Trust, Land Bank, Land Foundation, or any other legal vehicle in which ownership of land, natural resources and basic community infrastructure are owned collectively (i.e., where no one has a property stake) or by any state monopoly.

It is not a land monopoly owned or controlled by a small elite of local or outside investors or political leaders.

It does not provide shares that can be sold, transferred, pledged to others or used as collateral to meet a citizen's consumption needs.

It is not an amateur or unstructured approach to land development or "management by committee."

It is not a vehicle for owning or financing local enterprises competing in the marketplace.

Benefits of a CLB

It would provide a private sector means by which homes, enterprises, rentable space and technologies built upon the CLB-owned land can be broadly owned by workers and other local stakeholders.

It would generate a new source of taxable incomes from new and expanded private sector jobs and ownership stakes.

It would empower each citizen and family with the means to build an adequate and secure income, and with a real voice in the development decisions of the community.

It would provide every citizen with income to contribute to the costs of running an effective local government and providing essential public services, as well as for his or her own well-being.

It would offer hope of eventually eliminating the dependency of any citizen on welfare or charity of others or fear of technological displacement.

How Could We Get the CLB?

Suggest to President Obama that he abandon his half-trillion dollar "job creation" boondoggle to rebuild infrastructure and persuade Congressional leaders to support CLBs as part of a program to accelerate rates of non-inflationary, private-sector economic growth, green jobs and energy independence.

Get your legislator(s) behind a Federal law or executive order that provides comparable tax and capital leveraging features as is presently provided under Federal laws governing employee stock ownership plans (ESOPs) for the benefit of private sector workers and the corporations and worker cooperatives in which they work.

Obtain state and federal exemptions from property taxation on assets held by a citizens land bank.

Finance the rebuilding and development with Federal Reserve monetization of loans made by local commercial banks to enable citizen land banks to acquire development land from current owners and investors.

There. Could anything except Capital Homesteading itself be easier?


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A Plea for Peasant Proprietors, Part III: Thornton's Proposal

As we saw in yesterday's posting, the way to sustainable economic and social development lies in opening up opportunities for people without capital to own capital. In this way they can participate in the production of marketable goods and services with both their human (labor) and their non-human (capital) inputs. As technology advances and displaces human labor from the production process, it becomes critical that people without direct ownership of capital become owners of capital.

The question then becomes how people without savings are supposed to acquire capital? This was a critical issue for Thornton, because the capital with which he was concerned was landed capital, the chief form of productive asset in Ireland in his day.

Thornton proposed that the vast tracts of idle "waste land" in Ireland be purchased by the government and allotted in economic plots to Irish families, who would be supported by an allowance until they could grow their own food. After a period of time sufficient to bring the land into full production, the families would start making payments on the land, and within 20 years would own it freehold. The scheme would rely on being able to purchase the waste land at a low price — its current value as waste land — with the money provided by floating government bonds, backed by the purchase value of the land itself. (Thornton did not explicitly state this, but spoke of interest being paid on the loans, which — as the money had to come from the government — could only be the result of issuing State bonds.)

The new money created by the bonds would first be used to finance the purchase and development of the land, and then be cancelled or retired as the payments for the land were received. Thus, the money could be created as needed, as long as what the money was spent on provided the "future savings," that is, sufficient income in the future from the production of marketable goods and services, to pay back the money. There would thus be no problem with either inflation or deflation.

There was, of course, the question of maintenance during the period it took for the land to become fully productive. Thornton estimated this at three to five years, judging from the rate of improvement on land of lesser quality in Flanders and other areas in Europe. He noted, however, that the government was spending millions of pounds sterling on relief efforts and on infrastructure for which there was currently no demand. Using the same funds to maintain families relocated on to unproved land would result in an estimated immediate savings of £5 million a year for two years until the land became productive.

The plan fell through because of two factors. One, landowners simply refused to sell the unused land, and the government refused to condemn the land and force a sale for the common good under eminent domain.

Two, although he might not have realized it, Thornton's method of finance was an application of "the Banking Principle," based on Say's Law of Markets and the real bills doctrine. Unfortunately, parliament had just enacted the Bank Charter Act of 1844 that, after decades of debate, repudiated the Banking Principle of Adam Smith, Henry Thornton (no relation) and Jean-Baptiste Say that allowed for an "elastic" banknote currency backed with private sector hard assets supplemented with gold and silver coin that expands and contracts with the needs of commerce, industry and agriculture and is thus neither inflationary nor deflationary. The new Act went with the Malthusian/Ricardian Currency Principle that imposed an "inelastic" banknote currency in fixed amount, backed with government debt and supplemented with gold and silver coin.

Parliament was not going to nullify its own act barely four years after it had passed it, regardless how bad the situation was . . . for Ireland. Of course, when the government itself and the private business interests of the City of London demanded an increase in the money supply in 1847, 1857, and 1866 to meet a continuing series of currency crises, the Bank of England was instructed to inflate the currency, backing the increase with more government debt rather than private sector assets.

In the 1874 edition of A Plea for Peasant Proprietors (that's the 1848 edition over there), Thornton explained why he reiterated the proposal, even though he thought it impracticable under current conditions. One, the government had completely ignored the "plea" a quarter of a century before when it would have been to the great benefit not only of Ireland, but the entire United Kingdom.

Two, Thornton wanted the reader to compare what the situation could have been like in the 1870s had the proposal been adopted. In all likelihood, for instance, there never would have been a Fenian uprising, an 1867 revolt that led eventually to the 1916 Easter Rising and partial Irish independence. It was noted that, while many small landowners were sympathetic to the Fenians, few of them actually took part, or gave more than "moral support."

Three, the proper institutional framework was not in place, and there was no sign that the British government had any intention of taking advantage of an obvious opportunity. Even if carried out without institutional reforms supporting private enterprise, it would fail. The situation would simply duplicate the same pattern into which Ireland had been locked for centuries. As Thornton noted,

"The time for creating a numerous peasant proprietary in the summary mode suggested has, however, long gone by, and is not now to be recovered. How seldom, alas, does England, in respect of Irish reforms, take time by the forelock!" (p. 261)

What Thornton did suggest in light of changed conditions, however, was corporate ownership by the State, with rights secured to leaseholders almost as if they were freeholders. This is vaguely suggestive of Henry George's proposal in Progress and Poverty five years later.  Thornton's proposal would have the advantage of dealing with the problem of a limited form of capital, but from the Just Third Way perspective had two problems.

One, as Thornton himself admitted, it let the State in, and the State is usually the worst choice to do anything that the private sector could do. As he put it, "Really, it does look as if private energy were unable to survive the torpedo-like touch of governmental support. Certainly, from Indian railways downwards, every private enterprise languishes which government guarantees." (p. 255)

Two, State ownership is almost certainly to be administered politically, rather than economically or in accordance with market principles.

Three, it does nothing to address the problem of limited land realistically, or open up access to the means of acquiring and possessing other forms of capital.

Tomorrow we'll see how Thornton's proposal has been updated in accordance with Just Third Way principles.

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A Plea for Peasant Proprietors, Part II: The Principle of Binary Growth

In yesterday's posting we saw that Ireland in the late 1840s was what could only be described as a disaster area. Whatever the cause, the fact remains that the country was hit with a catastrophe that could easily have been avoided, and even after it happened, could have been solved almost with ease. The baffling thing about the Famine, however, was that nothing was done except to make a bad situation worse. This was justified on the grounds that nothing should be done to interfere with the free market, and that the Great Hunger — "An Gorta Mór" — was a graphic proof of the Reverend Thomas Malthus's theories. These were first published in Malthus's 1798 Essay on Population, and discredited many times since, as Joseph Schumpeter reported in his History of Economic Analysis:

"The teaching of Malthus' Essay became firmly entrenched in the system of the economic orthodoxy of the time in spite of the fact that it should have been, and in a sense was, recognized as fundamentally untenable or worthless by 1803 and that further reasons for so considering it were speedily forthcoming. It became the 'right' view on population, just as free trade had become the 'right' policy, which only ignorance or obliquity could possibly fail to accept — part and parcel of the set of eternal truth that had been observed once for all. Objectors might be lectured, if they were worthy of the effort, but they could not be taken seriously. No wonder that some people, utterly disgusted at this intolerable presumption which had so little to back it began to loathe this 'science of economics' quite independently of class or party considerations — a feeling that has been an important factor in that science's fate ever after." (Joseph A. Schumpeter, History of Economic Analysis. New York: Oxford University Press, 1954, 581-582.)

We might compare the today's slavish reliance on similarly discredited Keynesian theory with the unquestioning acceptance of Malthusian fantasies as economic orthodoxy, but we have better things to do — for now, anyway. (Although, if you're interested, Harold Moulton's dissection of Keynesian "Multiplier Theory" in The Formation of Capital pulls the rug out from under Keynesian monetary and fiscal policy.) What we need to look at today is the validity of William Thornton's claim that capital of which the ownership is well-divided is inherently more productive than capital of which the ownership is concentrated, and that the rate of growth and development is much faster when direct ownership of capital is broadly distributed throughout an economy.

We have, of course, seen this argument before. Dr. Robert H. A. Ashford, professor of law at Syracuse University, in Binary Economics claimed that in binary theory, the concept of "binary growth" holds that economies grow steadily larger as private capital acquisition is distributed more broadly among the population on market principles. This concept also focuses on the importance of unleashing the unutilized or underutilized capacity of all economic systems to produce in greater abundance. (Robert H. A. Ashford and Rodney Shakespeare, Binary Economics: The New Paradigm. Lanham, Maryland: University Press of America, 1999, 37-41, 273-306, 320-325.)

This is substantially the same claim made by Thornton in the 1848 edition of A Plea for Peasant Proprietors, and strengthened in the second edition, published in 1874. Although Thornton's examples were limited to landed capital, the same principle applies to all other forms of capital. Thornton noted that, in areas where people owned the land they tilled, they never ceased to improve the productiveness of their capital. The same or even larger size plots of better land in other areas, when farmed by tenants or hirelings, even with better technology, invariably produced at a lower level. As Thornton reported, noting that most manufacturing in Switzerland was carried out in the 1840s by peasants who worked their land in the summer, and spent the winter producing other goods,

"Switzerland, however, notwithstanding the general happiness of her people, is not absolutely free from pauperism a disease which would almost seem to be inherent in the constitution of manufacturing communities. But even the pauperism of Switzerland furnishes additional proof of the excellence of peasant proprietorship, for paupers are most rare where landed property is most divided, and are found in the greatest number in those districts which contain the largest estates. In the whole of the Engadine, the land belongs to the peasantry, and 'in no country in Europe,' says Mr. Inglis, 'will be found so few poor as in the Engadine.' In the Valais, the land belongs to a few great proprietors, and, according to Mr. Bakewell, the peasantry are among the poorest in Switzerland. Inglis, however, assigns the 'bad pre-eminence' to the canton of Berne, in which he says the greatest landowners reside, and which, 'for this reason, contains the greatest number of poor'."

From Thornton's language on this point and his argument, we suspect that he might have been a primary source for Chesterton and the distributists.

Thornton also went on at some length about conditions he had observed in the Channel Islands, Guernsey, Jersey, and Alderney. These islands, too, were characterized by large numbers of small farms owned by those who worked them, were invariably prosperous, and there were few extremes of wealth or poverty. For the 1874 edition Thornton added several pages of historical examples of countries and empires that had grown strong and wealthy when ownership of capital was well-divided, and which fell into decay once ownership of capital became concentrated.

Of interest to both the Pro-Life and Pro-Choice camps is Thornton's observation, in common with a number of other critics of Malthus's Essay, that while poor people seem to reproduce beyond their ability to support themselves, the population of middle class small proprietors grows more slowly, and is frequently stable, matched to the productive capacity of the local economy.

John Weyland had noted the same thing in 1816. In The Principles of Population and Production, Weyland claimed that poor people tended to reproduce at great rates, the middle class tended to reproduce at replacement rates, and the rich below replacement. Weyland concluded, as did R. Buckminster Fuller a century and a half later, along with Jane Jacobs, that the level of economic development determines the rate of population growth, not the other way around, as Malthus had asserted, and as many people still affect to believe. Thus, the solution to the "population problem" is to develop economically. If you want to raise living standards and slow population growth, you encourage widespread participation in economic development through direct ownership of capital. You do not reduce population and hope that standards of living will rise.

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A Plea for Peasant Proprietors, Part I: An Gorta Mór

Following "Black '47," the worst year of the Great Famine in Ireland (1846-1851), William T. Thornton proposed a solution that would, he believed, at one and the same time end the famine, eliminate widespread poverty, diminish the threat of violence and rebellion, and establish a native "middle class" in Ireland. This was A Plea for Peasant Proprietors, published in London in 1848.

Thornton's proposal was relatively simple and straightforward. From the perspective of the Just Third Way, the "plea" might almost be viewed as a precursor of Abraham Lincoln's Homestead Act and Emancipation Proclamation a decade and a half later.

The basic problem was that in Ireland most of the people did not own any capital, whether in the form of land or otherwise. The land they rented was in sub-economic plots as a result of the prevalence of "rack renting." Rack renting was a seemingly endless process of subletting that ensured plots would be as small as possible, and rents as high as possible.

Only the potato made it possible for people to survive even marginally on such small plots of land. Consequently, not only was poverty widespread, the country was subject to all the dangers of a one crop subsistence economy. In 1826 Dominic Corrigan, a Dublin physician, was warning the government of the dangers of a one-crop economy, and predicting that "a pestilence and disease of unprecedented magnitude will befall us" unless some means was found to diversify crops and provide new sources of food. These warnings increased in frequency in the early 1840s, as the reform movements sweeping through Europe, and that culminated in "the Year of Revolution" — 1848 — engendered an increasing level of protest over conditions in Ireland.

In September 1845 disaster struck. A blight that had affected the potato crop all across Europe finally reached Ireland. Where the failure of the crop had caused hardship in Europe, in Ireland it caused almost instant disaster. By 1851, a population that has been estimated as being between 6 to 12 million prior to 1845 was reduced to less than 4 million, of which approximately 1 to 2 million were believed to have emigrated. The rest died from starvation or starvation-related disease.

Ironically, there was more than enough food grown in Ireland to stave off the famine, just as in other parts of Europe where other crops were able to take up the slack when the potato crop failed. Unfortunately, most of the Irish did not own the land on which these other crops were grown, and most of the food was shipped out of the country to generate cash income for the largely absentee landlords. Consequently, the most obvious step in any famine — prohibiting the export of food — was not taken, ostensibly for fear of interfering with the free market, even though this had been one of the first steps taken in the 1780s (over the protests of the merchants) when crops failed.

As John Mitchel (1815-1875) of the "Young Ireland" movement (and mentioned in William Butler Yeats's poem, "Under Ben Bulben") commented in his pamphlet, The Last Conquest of Ireland (Perhaps) (1861), "The Almighty, indeed, sent the potato blight, but the English created the Famine." Mitchel had published similar comments during the Famine, culminating in his being charged with sedition in 1848.

Following a confused line of reasoning by the court, Mitchel was convicted of treason by a packed jury under a new "Treasonous Felony Act." This Act appears to have been rushed through parliament in order to convict Mitchel. He was sentenced to 14 years transportation to Bermuda. As Mitchel's defense Counsel, Robert Holms, reported the outcome,

"The foreman of the Grand Jury, gentlemen, having been asked if the jury had found bills against the prisoner — replied — 'Oh yes, we find him guilty of sedition.' 'Gentlemen,' said the officer of the court, 'he is not indicted for sedition.' 'Well,' said the foreman, 'we find him guilty of treason.' 'But, gentlemen,' again interrupted the officer, 'the charge against Mr. Mitchel is for felony.' 'Oh, no matter!' said the foreman, 'sedition, treason, or felony, it is all the same to us.'"

Whether or not the Famine was engineered as Mitchel and many others claimed, however, the fact remains that the so-called "free market" that allegedly justified the lack of measures taken by the government was far from free. Not unnaturally, this datum did not seem to occur to the Powers-that-Be. When the vast majority of the population was not free to own capital, whether in the form of land or technology, and the bulk of the marketable goods and services did nothing to increase the wealth or wellbeing of the country in which they were produced, the Irish could only be described as subsisting within a system in which they were burdened with "a yoke little better than that of slavery itself." (Rerum Novarum, § 3)

Mitchel, in fact, aroused fury in the United States when he came out in defense of slavery in the South. He claimed that black slaves in the United States were better treated and better fed than most of the ostensibly free Irish. In his opinion, the Northern abolitionists were hypocrites for championing the rights of slaves while ignoring the barbarism of the system the English imposed on Ireland.

It is no wonder, then, that the cause of Irish nationalism and socialism came to be so intertwined. The evils of agricultural and, later, industrial capitalism had kept the Irish in a state of complete economic subjugation. The problem was that, whether capitalism or socialism, ordinary people were powerless before the economic and political power of the elite, both private and State.

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