Max Hirsch (economist)
Encyclopedia
Maximilian Hirsch (21 September 1852? – 4 March 1909) was a German-born businessman and economist who settled in Melbourne
, Australia
, where he became the recognized intellectual leader of the Australian Georgist
movement and, briefly, a member of the Victorian Parliament
.
in the German
state of Prussia
on 21 September, the year being either 1852, as stated in newspaper reports of his death, or 1853, as stated in the biography prepared by his memorial committee. His father was a writer on economic subjects, and a member of the Reichstag
who ran into trouble with the German authorities due to his democratic principles. Young Hirsch was educated at a high school and also did some work at the University of Berlin, but aged 19 began a career as a commercial traveller. Before he was 20 he was sent to Persia to buy carpets and obtained many fine old specimens. These were brought to London
via Russia
. Hirsch spent some time in Italy
studying art, and taking up his travelling again became a representative of British linen manufacturers. Hirsch visited Australia in 1879, and in the following year returned to Germany. Hirsch next went to Ceylon
and engaged in coffee
planting and was also for a time a member of the civil service. While in Ceylon he found that the rice tax was driving native cultivators off the land. His sympathies were aroused and he wrote several pamphlets on the question, which led to the removal of the tax.
. In that year he settled in Melbourne
, capital of the Australia
n colony of Victoria
, and became a founding member of the Victorian Single Tax League
, of which he was to serve as president for a total of about ten years. In 1892 he gave up business to devote himself to the twin causes of free trade
and land value tax
ation. This decision gave him time for writing. His early works included The Fiscal Superstition (published in 1895), and Economic Principles: A Manual of Political Economy (1896). These were followed in 1901 by Social Conditions: Materials for Comparisons between New South Wales
and Victoria, Great Britain, United States and Foreign Countries.
Hirsch's largest and most acclaimed work, Democracy versus Socialism, was published by Macmillan
in London, also in 1901. Its short title declares its emphasis but understates its scope. The work anticipates Ludwig von Mises
in its coverage of both the economic and political aspects of socialism
, and in predicting that socialism would lead to tyranny by depriving public policy of objective points of reference. But it also contains the most complete statement of Hirsch's economic doctrine. In lieu of Henry George's theory of interest (based on the productive and reproductive capabilities of capital), it establishes the compatibility of the Austrian theory
of capital and interest with the Georgist theory
of land and rent. In Pt.II, Ch.VIII, it proposes a correction to David Ricardo
's Law of Rent
. The traditional formulation of this law states that the rent of land is the advantage of using that land relative to the advantage of using the best land that can be had for no rent, given the same application of labour and capital. Hirsch argued that the proper basis of comparison was not the same application, but the optimal application in each case.
In Melbourne in July and August 1904, Hirsch gave a series of three public lectures against socialism. These were subsequently published as a pamphlet by Francis Neilson
, who wrote in his introduction: "No sounder, no fairer analysis of the proposals and conceptions of socialism is to be found in the literature on the subject."
Hirsch made several attempts to enter political life without success, but in 1902 was elected to the Victorian Legislative Assembly
for Mandurang
(near Bendigo, Victoria
). Hirsch resigned this seat in November 1903 to contest the Wimmera
constituency in the Federal house of representatives
as the fiscal question was now purely a federal matter. However, Hirsch was defeated by 160 votes by the incumbent Protectionist Party
member, Pharez Phillips
. Hirsch had become the recognized leader of the single tax movement, and his ability in both handling this question in public debates and in his writings brought him many supporters. In his fight for free trade, then a live question in Australia, Hirsch met with much hostility from vested interests, and his opponents did not forget to remind the public that he was German and a Jew. It was even suggested that he was opposed to reasonable wages being paid to the workers. This was quite contrary to the facts, as Hirsch was essentially democratic in his views, and held strongly that the higher the wages paid the better for trade. In 1906 he again failed to win the election for Wimmera. In October 1908 Hirsch left Melbourne on a business mission to Siberia
. His health had not been good and it was hoped that the sea voyage would benefit him. Hirsch died at Vladivostok
after a short illness on 4 March 1909. He never married.
Land Values Taxation in Practice, a survey by Hirsch of recent legislative reforms in multiple jurisdictions, was substantially completed by 1908, but was published posthumously in 1910. A collection of Hirsch's shorter writings, under the title The Problem of Wealth and Other Essays, was published as a memorial volume in 1911.
Democracy versus Socialism went into a second edition in England
in 1924. When the third American
edition appeared in 1940, Albert Jay Nock
wrote in the Atlantic Monthly:
Melbourne
Melbourne is the capital and most populous city in the state of Victoria, and the second most populous city in Australia. The Melbourne City Centre is the hub of the greater metropolitan area and the Census statistical division—of which "Melbourne" is the common name. As of June 2009, the greater...
, Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
, where he became the recognized intellectual leader of the Australian Georgist
Georgism
Georgism is an economic philosophy and ideology that holds that people own what they create, but that things found in nature, most importantly land, belong equally to all...
movement and, briefly, a member of the Victorian Parliament
Parliament of Victoria
The Parliament of Victoria is the bicameral legislature of the Australian state of Victoria. It follows a Westminster-derived parliamentary system and consists of The Queen, represented by the Governor of Victoria; the Legislative Council ; and the Legislative Assembly...
.
Early life
Hirsch was born in CologneCologne
Cologne is Germany's fourth-largest city , and is the largest city both in the Germany Federal State of North Rhine-Westphalia and within the Rhine-Ruhr Metropolitan Area, one of the major European metropolitan areas with more than ten million inhabitants.Cologne is located on both sides of the...
in the German
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
state of Prussia
Prussia
Prussia was a German kingdom and historic state originating out of the Duchy of Prussia and the Margraviate of Brandenburg. For centuries, the House of Hohenzollern ruled Prussia, successfully expanding its size by way of an unusually well-organized and effective army. Prussia shaped the history...
on 21 September, the year being either 1852, as stated in newspaper reports of his death, or 1853, as stated in the biography prepared by his memorial committee. His father was a writer on economic subjects, and a member of the Reichstag
Reichstag (German Empire)
The Reichstag was the parliament of the North German Confederation , and of the German Reich ....
who ran into trouble with the German authorities due to his democratic principles. Young Hirsch was educated at a high school and also did some work at the University of Berlin, but aged 19 began a career as a commercial traveller. Before he was 20 he was sent to Persia to buy carpets and obtained many fine old specimens. These were brought to London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
via Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
. Hirsch spent some time in Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
studying art, and taking up his travelling again became a representative of British linen manufacturers. Hirsch visited Australia in 1879, and in the following year returned to Germany. Hirsch next went to Ceylon
Sri Lanka
Sri Lanka, officially the Democratic Socialist Republic of Sri Lanka is a country off the southern coast of the Indian subcontinent. Known until 1972 as Ceylon , Sri Lanka is an island surrounded by the Indian Ocean, the Gulf of Mannar and the Palk Strait, and lies in the vicinity of India and the...
and engaged in coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
planting and was also for a time a member of the civil service. While in Ceylon he found that the rice tax was driving native cultivators off the land. His sympathies were aroused and he wrote several pamphlets on the question, which led to the removal of the tax.
Career in Australia
By 1890 Hirsch had become convinced by the "Single Tax" theory of Henry GeorgeHenry George
Henry George was an American writer, politician and political economist, who was the most influential proponent of the land value tax, also known as the "single tax" on land...
. In that year he settled in Melbourne
Melbourne
Melbourne is the capital and most populous city in the state of Victoria, and the second most populous city in Australia. The Melbourne City Centre is the hub of the greater metropolitan area and the Census statistical division—of which "Melbourne" is the common name. As of June 2009, the greater...
, capital of the Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
n colony of Victoria
Victoria (Australia)
Victoria is the second most populous state in Australia. Geographically the smallest mainland state, Victoria is bordered by New South Wales, South Australia, and Tasmania on Boundary Islet to the north, west and south respectively....
, and became a founding member of the Victorian Single Tax League
Prosper Australia
Prosper Australia is a non-profit, privately funded Georgist association incorporated in the State of Victoria, Australia. Founded in 1890 as the Single Tax League of Victoria, it was later known as the Henry George League of Victoria, then as Tax Reform Australia, before adopting its present name...
, of which he was to serve as president for a total of about ten years. In 1892 he gave up business to devote himself to the twin causes of free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...
and land value tax
Land value tax
A land value tax is a levy on the unimproved value of land. It is an ad valorem tax on land that disregards the value of buildings, personal property and other improvements...
ation. This decision gave him time for writing. His early works included The Fiscal Superstition (published in 1895), and Economic Principles: A Manual of Political Economy (1896). These were followed in 1901 by Social Conditions: Materials for Comparisons between New South Wales
New South Wales
New South Wales is a state of :Australia, located in the east of the country. It is bordered by Queensland, Victoria and South Australia to the north, south and west respectively. To the east, the state is bordered by the Tasman Sea, which forms part of the Pacific Ocean. New South Wales...
and Victoria, Great Britain, United States and Foreign Countries.
Hirsch's largest and most acclaimed work, Democracy versus Socialism, was published by Macmillan
Macmillan Publishers
Macmillan Publishers Ltd, also known as The Macmillan Group, is a privately held international publishing company owned by Georg von Holtzbrinck Publishing Group. It has offices in 41 countries worldwide and operates in more than thirty others.-History:...
in London, also in 1901. Its short title declares its emphasis but understates its scope. The work anticipates Ludwig von Mises
Ludwig von Mises
Ludwig Heinrich Edler von Mises was an Austrian economist, philosopher, and classical liberal who had a significant influence on the modern Libertarian movement and the "Austrian School" of economic thought.-Biography:-Early life:...
in its coverage of both the economic and political aspects of socialism
Socialism
Socialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...
, and in predicting that socialism would lead to tyranny by depriving public policy of objective points of reference. But it also contains the most complete statement of Hirsch's economic doctrine. In lieu of Henry George's theory of interest (based on the productive and reproductive capabilities of capital), it establishes the compatibility of the Austrian theory
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
of capital and interest with the Georgist theory
Georgism
Georgism is an economic philosophy and ideology that holds that people own what they create, but that things found in nature, most importantly land, belong equally to all...
of land and rent. In Pt.II, Ch.VIII, it proposes a correction to David Ricardo
David Ricardo
David Ricardo was an English political economist, often credited with systematising economics, and was one of the most influential of the classical economists, along with Thomas Malthus, Adam Smith, and John Stuart Mill. He was also a member of Parliament, businessman, financier and speculator,...
's Law of Rent
Law of Rent
The law of rent was formulated by David Ricardo around 1809, and this is the origin of the term Ricardian rent. Ricardo's formulation of the law was the first clear exposition of the source and magnitude of land rents, and is among the most important and firmly established principles of economics. ...
. The traditional formulation of this law states that the rent of land is the advantage of using that land relative to the advantage of using the best land that can be had for no rent, given the same application of labour and capital. Hirsch argued that the proper basis of comparison was not the same application, but the optimal application in each case.
In Melbourne in July and August 1904, Hirsch gave a series of three public lectures against socialism. These were subsequently published as a pamphlet by Francis Neilson
Francis Neilson
Francis Neilson , was an accomplished actor, playwright, stage director, political figure avid lecturer, and author of more than 60 books, plays and opera librettos and a leader in the Georgist movement.-Early:Born as Francis Butters, the eldest of nine siblings, in the Claugton Road,...
, who wrote in his introduction: "No sounder, no fairer analysis of the proposals and conceptions of socialism is to be found in the literature on the subject."
Hirsch made several attempts to enter political life without success, but in 1902 was elected to the Victorian Legislative Assembly
Victorian Legislative Assembly
The Victorian Legislative Assembly is the lower house of the Parliament of Victoria in Australia. Together with the Victorian Legislative Council, the upper house, it sits in Parliament House in the state capital, Melbourne.-History:...
for Mandurang
Electoral district of Mandurang
The Electoral district of Mandurang was an electoral district of the Victorian Legislative Assembly , around Bendigo.-Members of Mandurang:-See also:*Parliaments of the Australian states and territories...
(near Bendigo, Victoria
Bendigo, Victoria
Bendigo is a major regional city in the state of Victoria, Australia, located very close to the geographical centre of the state and approximately north west of the state capital Melbourne. It is the second largest inland city and fourth most populous city in the state. The estimated urban...
). Hirsch resigned this seat in November 1903 to contest the Wimmera
Division of Wimmera
The Division of Wimmera was an Australian Electoral Division in the state of Victoria. It was named after the Wimmera region in which it was located. It originally encompassed the towns of Mildura, Swan Hill and Warracknabeal, but by the time it was abolished in 1977, it had drifted south and grown...
constituency in the Federal house of representatives
Australian House of Representatives
The House of Representatives is one of the two houses of the Parliament of Australia; it is the lower house; the upper house is the Senate. Members of Parliament serve for terms of approximately three years....
as the fiscal question was now purely a federal matter. However, Hirsch was defeated by 160 votes by the incumbent Protectionist Party
Protectionist Party
The Protectionist Party was an Australian political party, formally organised from 1889 until 1909, with policies centred on protectionism. It argued that Australia needed protective tariffs to allow Australian industry to grow and provide employment. It had its greatest strength in Victoria and in...
member, Pharez Phillips
Pharez Phillips
-Biography:Born in Mount Blackwood, Victoria, he was educated at Grenville College in Ballarat before becoming a shopkeeper, farmer, and St Arnaud Town Councillor. He was a notable community leader in the Wimmera area. In 1896, he was elected to the Victorian Legislative Council, and was made an...
. Hirsch had become the recognized leader of the single tax movement, and his ability in both handling this question in public debates and in his writings brought him many supporters. In his fight for free trade, then a live question in Australia, Hirsch met with much hostility from vested interests, and his opponents did not forget to remind the public that he was German and a Jew. It was even suggested that he was opposed to reasonable wages being paid to the workers. This was quite contrary to the facts, as Hirsch was essentially democratic in his views, and held strongly that the higher the wages paid the better for trade. In 1906 he again failed to win the election for Wimmera. In October 1908 Hirsch left Melbourne on a business mission to Siberia
Siberia
Siberia is an extensive region constituting almost all of Northern Asia. Comprising the central and eastern portion of the Russian Federation, it was part of the Soviet Union from its beginning, as its predecessor states, the Tsardom of Russia and the Russian Empire, conquered it during the 16th...
. His health had not been good and it was hoped that the sea voyage would benefit him. Hirsch died at Vladivostok
Vladivostok
The city is located in the southern extremity of Muravyov-Amursky Peninsula, which is about 30 km long and approximately 12 km wide.The highest point is Mount Kholodilnik, the height of which is 257 m...
after a short illness on 4 March 1909. He never married.
Land Values Taxation in Practice, a survey by Hirsch of recent legislative reforms in multiple jurisdictions, was substantially completed by 1908, but was published posthumously in 1910. A collection of Hirsch's shorter writings, under the title The Problem of Wealth and Other Essays, was published as a memorial volume in 1911.
Legacy
Friends of Hirsch considered that had he would have become a rich man if he had devoted himself entirely to business. He was, however, devoted to his ideals, and preferred to work for causes which could bring him little personal reward but which would be for the good of the people. He was a clear and vigorous writer and speaker, keenly logical, careful of his facts, and always prepared to meet the difficulties of his case. He was no revolutionist, and stated on one occasion that if he were appointed dictator he would bring in the single tax system gradually, so that people who had acquired property under the present system should not be unfairly treated.Democracy versus Socialism went into a second edition in England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
in 1924. When the third American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
edition appeared in 1940, Albert Jay Nock
Albert Jay Nock
Albert Jay Nock was an influential United States libertarian author, educational theorist, and social critic of the early and middle 20th century.- Life and work :...
wrote in the Atlantic Monthly:
External links
- What Determines the Value of Land by Max Hirsch, at The School of Cooperative Individualism
- Democracy versus Socialism by Max Hirsch, at the Open Library
- Newspaper Report on a Lecture By Max Hirsch