Review of Citadel, Market, and Altar

A review of Citadel, Market, and Altar by Spencer Heath

Wikipedia describes Spencer Heath as an “American engineer, attorney, inventor, manufacturer, horticulturist, poet, philosopher of science and social thinker.” This biography doesn’t quite do Heath’s extraordinary life full justice, as he could also be described as an educator that played a key role in establishing the Henry George School in New York. In an earlier era, he might have been described as a “renaissance man,” a gentleman from a bygone time who was able to make meaningful contributions to diverse fields.

Born in 1876, Heath was one of the last such figures. As society became increasingly bureaucratized and regimented, fewer people were able to find success across many different industries as he did. Beginning his career as an engineer, later becoming a patent attorney, Heath found his financial success as an industrialist, inventing a mass-produced propeller that was used by 70% of American aircraft during World War I.

His success in business was perhaps outweighed by his remarkable courage. His grandson, Spencer MacCallum, enjoyed telling one illustrative story. During World War I, a young Franklin Roosevelt was Assistant Secretary for the Navy, managing arms procurement. Heath was worried a propeller design Roosevelt wanted would break at high speeds. Roosevelt insisted they ship the propeller, threatening imprisonment or worse for Heath.

Faced with no other options, Heath shipped the propellers. However, before shipping, he broke into the warehouse and stamped the crates, “Condemned by manufacturer”. His decision likely saved the lives of dozens of American airmen. While I am often skeptical about the veracity oral histories, my friend Zachary Caceres conveys it in the same way in his obituary for Spencer MacCallum, suggesting the oral telling preserves the truth.

Heath retired in 1929. He did what one does after being a successful industrialist, attempt to create a new social science based on the natural sciences. His book, Citadel, Market, and Altar, is that vision. Published in 1957 by the Science of Society Foundation, like its author, it hearkens to an earlier era. It is a treatise, offering a bold vision for a new form of social science that can be used to first understand, and then improve the lot of mankind.

Before going further in depth on the book, it’s worth exploring the intellectual climate Heath was writing in. Heath was a Georgist, joining the movement in 1898. Though largely relegated to history today, Henry George was a worldwide force at the turn of the century. In 1906, a Parliamentarian survey in the United Kingdom found that Henry George was more popular than John Stuart Mill or William Shakespeare. George’s book, Progress and Poverty, sold more copies than all other books, except the Bible, during the 1890s.

George was a classical liberal, or what might be described today as a libertarian, with one major exception: he advocated a single tax on the unimproved value of land. Imagine two identical plots of land, one in the city and one in the country. They are the same size, have the same soil, and so on. The plot in the city will sell for far more than the plot in the country, despite no meaningful improvements. The Georgist would argue that the higher value of the land in the city is an unearned rent enjoyed by its own, and therefore should be taxed. From an economic perspective, the elasticity of land is zero, so higher taxes won’t reduce the supply as taxes on goods and services would do.

While George is remembered for his focus on the land tax, he was not a one trick pony. His goal was to develop a comprehensive explanation for human society. He argued that land speculation was the cause of booms and busts. He wrote another book, Protection or Free Trade, which economist Tyler Cowen described as “perhaps the best-argued tract on free trade to this day”.

Heath cites George, as well as 19th century luminaries John Stuart Mill and the unfairly slandered Herbert Spencer. These were men with big ideas. They were uninterested in tinkering with society on the margins, but instead sought to understand the world within which man lived and how to improve it.

By the early 1930s, Heath comes to see flaws in Georgist reasoning and is kicked out of his teaching role at the Henry George School in New York as a result. He first etches out his ideas about proprietorship in a 1936 manuscript, Politics or Proprietorship. While George argued for government to institute a single land value tax to alleviate social ills, Heath argued that a single landowner could contractually provide the relevant public goods without the need to resort to coercion.

After World War II, Heath finds an intellectual home within the nascent libertarian movement. He often hosted Rothbard and the circle Bastiat in his New York apartment. Rothbard was influenced by Heath’s critique of George, citing him multiple times in his magnum opus, Man, Economy, and State. When Baldy Harper founded the Institute for Humane Studies, Heath offered use of his Baltimore mansion, which Harper declined, instead choosing the better weather in California.

Spencer Heath died in 1963 at the ripe old age of 87. Citadel, Market, Altar is his Magnum Opus.

The citadel represents the need for physical protection. The market is trade. Altar is spirituality. The book can best be understood as three separate books. First, Heath develops socionomy, a ‘new natural science of society’. Next, Heath develops his theory of proprietorship. Lastly, he synthesizes the two to develop a model of social evolution.

In the first fourteen chapters Heath develops the foundations for his theory of socionomy. Inspired by the natural sciences, mostly physics, he develops a ‘coefficient of social potentiality’. E = (avg duration of work – 20)/(avg duration of work). These chapters are hard to understand. A randomly chosen sentence reads, “a population, organized as a societal life-form or organism, is resolvable into a succession of energy manifestations in its generations of men.”

I read these sections carefully, knowing that I would write this review and wanting to interpret them charitably, but I still walked away confused. His grandson, Spencer MacCallum, told me that Heath expected to be remembered for his writing on socionomy. It is certainly the most original writing in the book.

As Heath moves out of the discussions of socionomy, his genius shines through. He is a genuinely innovative thinker, the type that is rare to find. In a few chapters I find more ideas than I do in the entirety of most books.

His primary point is that proprietary communities, a community with a single landowner who has a contractual relationship to all parties, can be an effective form of governance. This flips Henry George on his head. Instead of a land value tax serving the government, there is a proprietor with the profit motive who provides public goods to lessees.

Examples of proprietary communities include shopping malls and trailer park homes. Heath’s grandson, Spencer MacCallum, wrote a book, The Art of Community, exploring how these communities governed themselves. He found that such governance tended to be better than communities with different forms of social organization.

Heath sprinkled the discussion with other insights. He hates the Romans, describing their “ideology and tradition of political domination and power” (p114). This critique echoes James C. Scott, focusing on the coercion and slavery of early states. Though Scott is a left anarchist, or at least presents as one, Heath is a full-fledged propertarian, believing in the supremacy of Anglo-Saxon property rights as a mechanism of social organization.

In lieu of supporting the Romans, he finds his sympathies lie with the barbarian Germans who conquered Rome. “They had no multi-millennial tradition of slave subservience or of abject loyalty to an abstraction under cover of which priest and potentate alike claimed sanction for naked force and conquest of arms” (p114). While the German tribes which conquered Rome were corrupted by Roman mythology and power, the Anglo Saxons who settled Britain created Heath’s ideal proprietary communities.

The proprietary government which was developed in Britain was “not taxes but rent or rent service was the public revenue. And it was not arbitrary; for it was determined by contract or common custom of the market, thereby gauged to the value of the public administration, and assessed by automatic consent of the freeholders themselves” (p118). For Heath, the Anglo Saxons developed a sedentary agricultural society that was not based on coercion and slavery. Everything was contractual.

My brief reading of the history suggests that Heath’s interpretation might be true. My priors suggest that it probably isn’t. Heath’s citations, of which there are few, give no hint to further reading. Nor does Heath discuss how the Anglo Saxons manage proprietary communities given the constraints on contract imposed by the difficulty of moving to a new community. Unfortunately, there is little available research on Anglo Saxon social structures.

There is the broader question of how we judge civilizational accomplishments. Great monuments, literature, science, and art are used to judge past civilizations. However, civilizations produced more than monuments. The Fall of Rome demonstrates that as Rome collapsed, a previously existent middle class also collapsed. Trade, advanced pottery, roads, and urban centers all fell into severe decline.

For Heath, the barbarism of Roman slavery was enough to discount their successes. This focus on just governance pervades the book, but I am left wondering about Heath’s views on technology, innovation, and the importance of agglomeration, which all play a role in human progress. Would the British Anglo Saxons have achieved the industrial revolution centuries earlier had they not been conquered by the Normans?

Another interesting tidbit arises when Heath predicts the current tension with China. He writes, “but whatever Atlantic power at last prevails will reckon with Oriental empire under some Asiatic banner in contest for supremacy over the Pacific and, thereby, a destructive dominance over all the world” (p90). Mind you, while the book was published in 1957, it was finished in 1946, in the immediate aftermath of World War II.

Perhaps the theory that Heath was operating under was as simple as, ‘comparably powerful nations are likely to challenge each other for supremacy’. He didn’t devote more than a few lines to this discussion. However, given the discourse over the last few decades, American strategy over the last few decades could have benefitted from clear eyed thinking based on first principles.

The third major idea in the book hearkens back to the 19th century. Heath gives his own version of the social evolution theories. Think of Henry Sumner Maine’s famous quote, “movement of the progressive societies has hitherto been a movement from Status to Contract”. Societies advance as they develop institutions that allow for contractual engagements, rather than just based on status.[1]

Heath splits social evolution into eight phases: tribal and familial groups, primitive village communities, early voluntary feudalism (Anglo Saxon), predatory slave states, servile feudalism, predatory political states (current order), proprietary community service authorities, and world association of proprietary community service authorities.

For Heath, it is possible to imagine an alternative history where early voluntary feudalism, if left unmolested, can evolve into modern advanced societies. I am unconvinced, but this is a genuinely new argument. Most alternative histories imagine, ‘what if Hitler was killed as a baby’ or ‘what if the Soviet Union won the cold war’. Heath hints at, but doesn’t develop, an alternative institutional history which presumably could have matched, or even beaten, the current level of civilizational development.

Heath is optimistic. He believes that human society is evolving towards proprietary communities. First, people form small, proprietary communities, before evolving a set of overlapping networks and contractual obligations, in an Ostromian manner, that govern everyone without coercion.

One reason for Heath’s optimism, which he doesn’t mention, is the self-reinforcing mechanism of proprietary communities. A successful proprietor, as an entrepreneur, will become wealthy. That will cause them to expand their communities, as well as attract copycats. Most mechanisms of social change ignore or deride the value of the profit motive.

Despite the optimism, there are a handful of objections which Heath doesn’t deal with. First, his concept of coercion is the libertarian one. What about Proudhon’s, for which property is theft? What about common pool resources? Society has evolved a variety of mechanisms to govern scarcity. Second, is a set of contractual relations what we mean by freedom? Is a cruise ship, on which everything is organized by strict contract, the ultimate form of social organization? Third, is a homeowner’s association meaningfully different from a local government if they all have the same powers and were formed with 100% consent?

Perhaps it is too much to expect such a book to engage all of these questions.

There are several lessons we can draw from Citadel, Market, and Altar. First, the society should have more room for weird thinkers. Second, intellectual traditions are good, Spencer Heath would be forgotten without the diligent work of his grandson. Third, it is possible to imagine an alternative and superior form of social organization.

Society has relegated weirdos to the margins. To contribute, one needs the right credentials, must know the right people, and has to use the right words. Marginalizing weirdos allows for progress within the existing social framework. However, it necessarily limits the ability of society to create alternate frameworks. Most progress, most new ideas, come from the margin. Albert Einstein was a patent attorney. Vitalik Buterin was a teenager. Isaac Newton wrote more on alchemy than physics. More recently, Katalin Karikó played a major role in researching mRNA but was demoted by the University of Pennsylvania in 1995 because her work wasn’t seen as promising. Even if nine out of ten ideas a weirdo generates are bad, one really good idea could still make engagement worthwhile. Allowing space for those with ‘out there’ ideas is crucial for progress.

We are undergoing a flattening of acceptable opinion. Ideas that were once socially acceptable to voice are now spoken in hushed whispers. The result is a loss of knowledge. Strong intellectual traditions help fight this flattening.  

Take the Austrian school of economics. In the late 19th and early 20th centuries, the Austrians made substantial contributions to economics. From Menger and marginalism to Bohm Bawerk and capital theory to Mises and socialist calculation to Hayek and the business cycle. Paul Samuelson lists the middle two as likely winners of the Nobel Prize in economics had it been established earlier. If you ask a mainstream economist today, they will say that the key insights of Austrian economics have been incorporated into the mainstream, a charge the Austrians will vehemently deny. Having a distinct tradition allowed the Austrians to keep alive ideas that otherwise would have been ignored.

This is particularly important given the monoculture that pervades today’s society. I often find myself turning to old books to find new ideas. Having a network of people studying such books allows you to identify the ones worth your time and better incorporate their insights. Citadel, Market, and Altar would certainly be forgotten today if not for Spencer MacCallum, Heath’s grandson.

In fact, I would not be where I am today without MacCallum. My interest in charter cities was sparked listening to a talk by Ben Powell where he mentioned Michael van Notten, a Dutch lawyer who wanted to build a freeport in Somaliland. My interest piqued, I read van Notten’s book, The Law of the Somalis, and reached out to MacCallum, the editor, as Van Notten was deceased.

I was 21, just out of college, without a clear idea of what I wanted in life. MacCallum responded to my email query, inviting me to visit him in Mexico. Strange old men on the internet inviting me to foreign countries, let’s go! I stayed with him in Casas Grandes for three weeks, visiting him again several years later. MacCallum welcoming me into his life and introducing me to key connections helped inspire me to start the Charter Cities Institute.

Lastly, and perhaps most importantly, it is possible to imagine a better social order. The industrialization of the late 19th and early 20th century brought with it a pioneering spirit to make the world a better place. There was an air of definite optimism, that we can solve human challenges, conquer diseases, ensure clean water, travel at hitherto unknown speeds. That spirit has been lost.

Citadel, Market, and Altar gives a glimpse of what that spirit is. A flawed book, it is nevertheless worth engaging for its breadth, its insights, and what it represents. In case you don’t make it to the end of this book, I’d like to borrow its last paragraph to end this foreward.

In this contractual and non-coercive relationship of free enterprise, Western man has attained vast capacity to build order into his material world in accordance with his desires and dreams. But he has not evolved out of the disorder of his bondage to the iron rule of government in the administration of his community services and affairs. Hence his civilization is a house divided against itself and must periodically rise and fall. His future now depends on the further development of the free enterprise system and its extension, through the community-wide organization of real estate for the creation of community services and their contractual distribution to the inhabitants peacefully and for profit to all concerned.

[1] As an aside, sometimes I wonder whether the increasing restrictions on speech, though privately imposed, as well as the entrenchment of certain professional classes, means we are moving away from contract to status. 

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