Now the Synthesis: Capitalism, Socialism and the New Social Contract.

• Author: Moss, Laurence S.

This book is intended to help frame economic policy in the twenty-first century. Altogether eleven authors ask us to look beyond socialism and capitalism toward a feasible third alternative that is called the "new social contract." That third alternative is none other than a rehabilitated version of Henry George's teachings complete with the single tax proposal and the elimination of "passive" capital gains on land ownership. This is a Henry George that has forgotten about land speculators and railroad crooks and now is focussed on the evils of ecological mishap and environmental degradation.

The cover-jacket reminds us that the world needs to be taught "how to liberate the creative powers of the individual while protecting our natural habitat." This slender volume contains that lesson for our times. In addition to the ten essays of varying degrees of sophistication, the book contains an "Open Letter to Mikhail Gorbachev" of the then-still unified U.S.S.R. urging that leader not to distribute the land to the common folk. That letter was signed by no less than three Novel prize winners (including J. Tobin, F. Modigliani, and R. Solow) and a host of other distinguished economists (W. Samuels, R. Dorfman, R. Musgrave, etc.). The general reader may conclude that those who signed the "Open Letter" also endorse the analysis and consequent reform package sketched in the volume itself. This implication may not at all be true or even what the signatories were told when they "signed up" in 1990, but that is the practical effect of what is before the reader's eyes.

Let us clear up some background matters. Henry George wrote Progress and Poverty in 1879 when America was mostly rural and tremendous fortunes were made by land speculators, who (with the help of the United States government) cleaned the land of Native Americans. The railroads were built and soon after the villages, towns and cities sprang up as part of what was to become less than a half-century later the most powerful and wealthy democracy on earth. George wanted men and women to benefit from their mental and manual labors but not from the passive appreciation of land values due to circumstances outside their control. The value premiums created as externalities (due to population growth, public creation of infrastructure, etc.) should not be appropriated by existing property owners but be available to the entire community. George was confident that a tax on the site-value of land would...