The
Role of Technological Progress
and its unintended — and avoidable — consequences
This, along with social progress, is the "progress" in "Progress & Poverty." If
increases in productivity don't go to the producers, but to the landholders,
it is not surprising that
wealth is becoming increasingly concentrated in a relative few of us.
If the concept of "technological progress" being related to land
values doesn't come naturally to you, let me suggest a few technological
innovations
which have had particularly important effects on the value of the land holdings
of various
groups of people:
- the steam engine: made far-off ports and railroad depots
much closer to major markets for goods, extended the commuting range
for major cities
- the elevator: made possible taller buildings, allowing
for more density in cities' central business districts
- air conditioning: made much of the American south far
more hospitable during the summer months
- fiberglass boats: made waterfront living far more appealing,
by reducing the work involved in boat ownership
- jet airplanes: made urban centers more accessible to
each other, delivering people and goods quickly
- earthmoving equipment: technology developed during World War II made
affordable the development of difficult sites that previously would have
been very expensive
- increasingly long bridges: make parcels of land on both
sides of a bridge more valuable; consider the George Washington, Golden
Gate, Tappan Zee, Verrazano Narrows and PEI bridges
- the cotton gin: made both southern land and slaves more
valuable
Who benefitted from each of these technological advances? Those with land
to sell or rent. (And others who profit from those transactions — brokers,
lenders, etc. — the FIRE sector.) At whose expense? The expense of all of us who depend on land: all of us!
We pay them more, for value they didn't create — couldn't create! And then we still have to pay taxes, based on our wages and our purchases! (See paying twice.)
Is the alternative to attempt to slow progress? Of course not! That would
be silly! Rather, the alternative is to collect that increase in land value
as our common treasure,
instead of relying on taxing productive activity in order to fund our common
spending. Don't even think of taxing wages — or sales, or buildings
— until we've exhausted the current taxable capacity of land.
Henry George: Progress & Poverty: Introductory:
The Problem
The present century has been marked by a prodigious increase in wealth-producing
power. The utilization of steam and electricity, the introduction of improved
processes and labor-saving machinery, the greater subdivision and grander scale
of production, the wonderful facilitation of exchanges, have multiplied enormously
the
effectiveness of labor.
At the beginning of this marvelous era it was natural to expect, and it was
expected, that labor-saving inventions would lighten the toil and improve the
condition of the laborer; that the enormous increase in the power of producing
wealth would make real poverty a thing of the past.
- Could a man of the last century — a Franklin or a Priestley — have
seen, in a vision of the future, the steamship taking the place of the
sailing
vessel, the railroad train of the wagon, the reaping machine of the
scythe, the threshing machine of the flail;
- could he have heard the throb of the engines that in obedience to human
will, and for the satisfaction of human desire, exert a power greater
than that of all the men and all the beasts of burden of the earth combined;
- could he have seen the forest tree transformed into finished lumber — into
doors, sashes, blinds, boxes or barrels, with hardly the touch of a
human hand; the great workshops where boots and shoes are turned out by
the case
with less labor than the old-fashioned cobbler could have put on a
sole; the factories where, under the eye of a girl, cotton becomes cloth
faster
than hundreds of stalwart weavers could have turned it out with their
hand-looms;
- could he have seen steam hammers shaping mammoth shafts and mighty anchors,
and delicate machinery making tiny watches; the diamond drill cutting
through the heart of the rocks, and coal oil sparing the whale;
- could he have realized the enormous saving of labor resulting from improved
facilities of exchange and communication — sheep killed in Australia
eaten fresh in England and the order given by the London banker in the
afternoon
executed in San Francisco in the morning of the same day;
- could he have conceived of the hundred thousand improvements which
these only suggest, what would he have inferred as to the social condition
of mankind? ... read
the entire chapter
H.G. Brown: Significant
Paragraphs from Henry George's Progress & Poverty, Chapter 4: Land Speculation
Causes Reduced Wages
There is a cause, not yet adverted to, which must be taken into consideration
fully to explain the influence of material progress upon the distribution of
wealth.
That cause is the confident expectation of the future enhancement of land
values, which arises in all progressive countries from the steady increase
of rent, and which leads to speculation, or the holding of land for a higher
price than it would then otherwise bring.
We have hitherto assumed, as is generally assumed in elucidations of the
theory of rent, that the actual margin of cultivation always coincides with
what may
be termed the necessary margin of cultivation — that is to say, we
have assumed that cultivation extends to less productive points only as
it becomes
necessary from the fact that natural opportunities are at the more productive
points fully utilized.
This, probably, is the case in stationary or very slowly progressing communities,
but in rapidly progressing communities, where the swift and steady increase
of rent gives confidence to calculations of further increase, it is not the
case. In such communities, the confident expectation of increased prices produces,
to a greater or less extent, the effects of a combination among landholders,
and tends to the withholding of land from use, in expectation of higher prices,
thus forcing the margin of cultivation farther than required by the necessities
of production.
In communities like the United States, where the user of land generally prefers,
if he can, to own it, and where there is a great extent of land to overrun,
this cause operated with enormous power. ... read the whole chapter
H.G. Brown: Significant
Paragraphs from Henry George's Progress & Poverty, Chapter 5: The Basic
Cause of Poverty (in the unabridged: Book
V: The Problem Solved)
The truth is self-evident. Put to any one capable of consecutive thought this
question:
"Suppose there should arise from the English Channel or the German
Ocean a no man's land on which common labor to an unlimited amount should
be able
to make thirty shillings a day and which should remain unappropriated and
of free access, like the commons which once comprised so large a part of
English
soil. What would be the effect upon wages in England?"
He would at once tell you that common wages throughout England must soon increase
to thirty shillings a day.
And in response to another question, "What would be the effect on rents?" he
would at a moment's reflection say that rents must necessarily fall; and
if he thought out the next step he would tell you that all this would happen
without
any very large part of English labor being diverted to the new natural
opportunities, or the forms and direction of industry being much changed;
only that kind of
production being abandoned which now yields to labor and to landlord together
less than labor could secure on the new opportunities. The great rise in
wages would be at the expense of rent.
Take now the same man or another — some hardheaded business man, who
has no theories, but knows how to make money. Say to him: "Here is a little
village; in ten years it will be a great city — in ten years the
railroad will have taken the place of the stage coach, the electric light
of the candle;
it will abound with all the machinery and improvements that so enormously
multiply the effective power of labor. Will, in ten years, interest be
any higher?"
He will tell you, "No!"
"Will the wages of common labor be any higher; will it be easier for
a man who has nothing but his labor to make an independent living?"
He will tell you, "No; the wages of common labor will not be any higher;
on the contrary, all the chances are that they will be lower; it will not
be easier for the mere laborer to make an independent living; the chances
are
that it will be harder."
"What, then, will be higher?"
"Rent; the value of land. Go, get yourself a piece of ground, and hold
possession."
And if, under such circumstances, you take his advice, you need do nothing
more. You may sit down and smoke your pipe; you may lie around like the lazzaroni
of Naples or the leperos of Mexico; you may go up in a balloon, or down a hole
in the ground; and without doing one stroke of work, without adding one iota
to the wealth of the community, in ten years you will be rich! In the new city
you may have a luxurious mansion; but among its public buildings will be an
almshouse. ...
... For land is the habitation of man, the storehouse upon which he must
draw for all his needs, the material to which his labor must be applied for
the
supply of all his desires; for even the products of the sea cannot be taken,
the light of the sun enjoyed, or any of the forces of nature utilized,
without the use of land or its products. On the land we are born, from it
we live,
to it we return again — children of the soil as truly as is the blade
of grass or the flower of the field. Take away from man all that belongs
to land, and he is but a disembodied spirit. Material progress cannot
rid us of our dependence upon land; it can but add to the power of producing
wealth from
land; and hence, when land is monopolized, it might go on to infinity without
increasing wages or improving the condition of those who have but their labor.
It can but add to the value of land and the power which its possession gives. Everywhere,
in all times, among all peoples, the possession of land is the base of aristocracy,
the foundation of great fortunes, the source of power. ... read
the whole chapter
H.G. Brown: Significant
Paragraphs from Henry George's Progress & Poverty:
11 Effect of Remedy Upon the Sharing of Wealth (in the unabridged P&P: Part
IX Effects of the Remedy — Chapter 2: Of the Effect Upon Distribution
and Thence Upon Production
But great as they thus appear, the advantages of a transference of all public
burdens to a tax upon the value of land cannot be fully appreciated until we
consider the effect upon the distribution of wealth.
Tracing out the cause of the unequal distribution of wealth which appears
in all civilized countries, with a constant tendency to greater and greater
inequality as material progress goes on, we have found it in the fact that,
as civilization advances, the ownership of land, now in private hands, gives
a greater and greater power of appropriating the wealth produced by labor and
capital.
Thus, to relieve labor and capital from all taxation, direct and indirect,
and to throw the burden upon rent, would be, as far as it went, to counteract
this tendency to inequality, and, if it went so far as to take in taxation
the whole of rent, the cause of inequality would be totally destroyed. Rent,
instead of causing inequality, as now, would then promote equality. Labor and
capital would then receive the whole produce, minus that portion taken by the
state in the taxation of land values, which, being applied to public purposes,
would be equally distributed in public benefits.
That is to say, the wealth produced in every community would be divided into
two portions.
- One part would be distributed in wages and interest between individual
producers, according to the part each had taken in the work of production;
- the other part would go to the community as a whole, to be distributed
in public benefits to all its members.
In this all would share equally — the weak with the strong, young children
and decrepit old men, the maimed, the halt, and the blind, as well as the vigorous.
And justly so — for while one part represents the result of individual
effort in production, the other represents the increased power with which
the community as a whole aids the individual.
Thus, as material progress tends to increase rent, were rent taken by the
community for common purposes the very cause which now tends to produce inequality
as material progress goes on would then tend to produce greater and greater
equality. ... read the whole chapter
Henry George: Political Dangers (Chapter 2 of Social Problems, 1883)
[01] THE American Republic is today unquestionably foremost of the nations — the van leader of modern civilization. Of all the great peoples of the European family, her people are the most homogeneous, the most active and most assimilative. Their average standard of intelligence and comfort is higher; they have most fully adopted modern industrial improvements, and are quickest to utilize discovery and invention; their political institutions are most in accordance with modern ideas, their position exempts them from dangers and difficulties besetting the European nations, and a vast area of unoccupied land gives them room to grow.
[02] At the rate of increase so far maintained, the English-speaking people of America will, by the close of the century, number nearly one hundred million — a population as large as owned the sway of Rome in her palmiest days. By the middle of the next century — a time which children now born will live to see — they will, at the same rate, number more than the present population of Europe; and by its close nearly equal the population which, at the beginning of this century, the whole earth was believed to contain.
[03] But the increase of power is more rapid than the increase of population, and goes on in accelerating progression. Discovery and invention stimulate discovery and invention; and it is only when we consider that the industrial progress of the last fifty years bids fair to pale before the achievements of the next that we can vaguely imagine the future that seems opening before the American people. The center of wealth, of art, of luxury and learning, must pass to this side of the Atlantic even before the center of population. It seems as if this continent had been reserved — shrouded for ages from the rest of the world — as the field upon which European civilization might freely bloom. And for the very reason that our growth is so rapid and our progress so swift; for the very reason that all the tendencies of modern civilization assert themselves here more quickly and strongly than anywhere else, the problems which modern civilization must meet, will here first fully present themselves, and will most imperiously demand to be thought out or fought out.
[04] It is difficult for any one to turn from the history of the past to think of the incomparable greatness promised by the rapid growth of the United States without something of awe — something of that feeling which induced Amasis of Egypt to dissolve his alliance with the successful Polycrates, because "the gods do not permit to mortals such prosperity." Of this, at least, we may be certain: the rapidity of our development brings dangers that can be guarded against only by alert intelligence and earnest patriotism.
[08] But to the changes produced by growth are, with us, added the changes brought about by improved industrial methods. The tendency of steam and of machinery is to the division of labor, to the concentration of wealth and power. Workmen are becoming massed by hundreds and thousands in the employ of single individuals and firms; small storekeepers and merchants are becoming the clerks and salesmen of great business houses; we have already corporations whose revenues and pay-rolls belittle those of the greatest States. And with this concentration grows the facility of combination among these great business interests. How readily the railroad companies, the coal operators, the steel producers, even the match manufacturers, combine, either to regulate prices or to use the powers of government! The tendency in all branches of industry is to the formation of rings against which the individual is helpless, and which exert their power upon government whenever their interests may thus be served. ...
read the entire essay
Henry George: Coming Increase of Social Pressure (Chapter 3 of Social Problems, 1883)
[01] THE trees, as I write, have not yet begun to leaf,
nor even the blossoms to appear; yet, passing down the lower part of Broadway
these early days of
spring, one breasts a steady current of uncouthly dressed men and women, carrying
bundles and boxes and all manner of baggage. As the season advances, the human
current will increase; even in winter it will not wholly cease its flow. It
is the great gulf-stream of humanity which sets from Europe upon America —
the greatest migration of peoples since the world began. Other minor branches
has the stream. Into Boston and Philadelphia, into Portland, Quebec and Montreal,
into New Orleans, Galveston, San Francisco and Victoria, come offshoots of
the same current; and as it flows it draws increasing volume from wider sources.
Emigration to America has, since 1848, reduced the population of Ireland by
more than a third; but as Irish ability to feed the stream declines, English
emigration increases; the German outpour becomes so vast as to assume the first
proportions, and the millions of Italy, pressed by want as severe as that of
Ireland, begin to turn to the emigrant ship as did the Irish. In Castle Garden
one may see the garb and hear the speech of all European peoples. From the
fiords of Norway, from the plains of Russia and Hungary, from the mountains
of Wallachia, and from Mediterranean shores and islands, once the center of
classic civilization, the great current is fed. Every year increases the facility
of its flow. Year by year improvements in steam navigation are practically
reducing the distance between the two continents; year by year European railroads
are making it easier for interior populations to reach the seaboard, and the
telegraph, the newspaper, the schoolmaster and the cheap post are lessening
those objections of ignorance and sentiment to removal that are so strong with
people long rooted in one place. Yet, in spite of this great exodus, the population
of Europe, as a whole, is steadily increasing.
...
read the entire essay
Henry George: The Condition of
Labor — An Open Letter to Pope Leo XIII in response to Rerum Novarum (1891)
God’s laws do not change. Though their applications may
alter with altering conditions, the same principles of right and wrong
that hold when
men are few and industry is rude also hold amid teeming populations and complex
industries. In our cities of millions and our states of scores of millions,
in a civilization where the division of labor has gone so far that large
numbers are hardly conscious that they are land-users, it still remains true
that we are all land animals and can live only on land, and that land is
God’s bounty to all, of which no one can be deprived without being
murdered, and for which no one can be compelled to pay another without being
robbed. But even in a state of society where the elaboration of industry
and the increase of permanent improvements have made the need for private
possession of land wide-spread, there is no difficulty in conforming individual
possession with the equal right to land. For as soon as any piece of land
will yield to the possessor a larger return than is had by similar labor
on other land a value attaches to it which is shown when it is sold or rented.
Thus, the value of the land itself, irrespective of the value of any improvements
in or on it, always indicates the precise value of the benefit to which all
are entitled in its use, as distinguished from the value which, as producer
or successor of a producer, belongs to the possessor in individual right.
To combine the advantages of private possession with the justice of common
ownership it is only necessary therefore to take for common uses what value
attaches to land irrespective of any exertion of labor on it. The principle
is the same as in the case referred to, where a human father leaves equally
to his children things not susceptible of specific division or common use.
In that case such things would be sold or rented and the value equally applied.
It is on this common-sense principle that we, who term ourselves single-tax
men, would have the community act.
We do not propose to assert equal rights to land by keeping land common,
letting any one use any part of it at any time. We do not propose the task,
impossible in the present state of society, of dividing land in equal shares;
still less the yet more impossible task of keeping it so divided.
We propose — leaving land in the private possession of individuals,
with full liberty on their part to give, sell or bequeath it — simply
to levy on it for public uses a tax that shall equal the annual value of
the land itself, irrespective of the use made of it or the improvements on
it. And since this would provide amply for the need of public revenues, we
would accompany this tax on land values with the repeal of all taxes now
levied on the products and processes of industry — which taxes, since
they take from the earnings of labor, we hold to be infringements of the
right of property.
This we propose, not as a cunning device of human ingenuity, but as a conforming
of human regulations to the will of God.
God cannot contradict himself nor impose on his creatures laws that clash.
If it be God’s command to men that they should not steal — that
is to say, that they should respect the right of property which each one
has in the fruits of his labor;
And if he be also the Father of all men, who in his common bounty has intended
all to have equal opportunities for sharing;
Then, in any possible stage of civilization, however elaborate, there must
be some way in which the exclusive right to the products of industry may
be reconciled with the equal right to land.
If the Almighty be consistent with himself, it cannot be, as say those socialists
referred to by you, that in order to secure the equal participation of men
in the opportunities of life and labor we must ignore the right of private
property. Nor yet can it be, as you yourself in the Encyclical seem to argue,
that to secure the right of private property we must ignore the equality
of right in the opportunities of life and labor. To say the one thing or
the other is equally to deny the harmony of God’s laws.
But, the private possession of land, subject to the payment to the community
of the value of any special advantage thus given to the individual, satisfies
both laws, securing to all equal participation in the bounty of the Creator
and to each the full ownership of the products of his labor. ...
That it does mean this and nothing else is confirmed if we look deeper still,
and inquire not merely as to the intent, but as to the purpose of the intent.
If we do so we may see in this natural law by which land values increase
with the growth of society not only such a perfectly adapted provision
for the needs of society as gratifies our intellectual perceptions by showing
us the wisdom of the Creator, but a purpose with regard to the individual
that gratifies our moral perceptions by opening to us a glimpse of his
beneficence.
Consider: Here is a natural law by which as society advances the one thing
that increases in value is land — a natural law by virtue of which
all growth of population, all advance of the arts, all general improvements
of whatever kind, add to a fund that both the commands of justice
and the dictates of expediency prompt us to take for the common uses of society.
Now, since increase in the fund available for the common uses of society
is increase in the gain that goes equally to each member of society, is it
not clear that the law by which land values increase with social advance
while the value of the products of labor does not increase, tends with the
advance of civilization to make the share that goes equally to each member
of society more and more important as compared with what goes to him from
his individual earnings, and thus to make the advance of civilization lessen
relatively the differences that in a ruder social state must exist between
the strong and the weak, the fortunate and the unfortunate? Does it not show
the purpose of the Creator to be that the advance of man in civilization
should be an advance not merely to larger powers but to a greater and greater
equality, instead of what we, by our ignoring of his intent, are making it,
an advance toward a more and more monstrous inequality? ...
For in this beautiful provision made by natural law for the social needs
of civilization we see that God has intended civilization; that all our discoveries
and inventions do not and cannot outrun his forethought, and that steam,
electricity and labor-saving appliances only make the great moral laws clearer
and more important. In the growth of this great fund, increasing with social
advance — a fund that accrues from the growth of the community and
belongs therefore to the community — we see not only that there is
no need for the taxes that lessen wealth, that engender corruption, that
promote inequality and teach men to deny the gospel; but that to take this
fund for the purpose for which it was evidently intended would in the highest
civilization secure to all the equal enjoyment of God’s bounty, the
abundant opportunity to satisfy their wants, and would provide amply for
every legitimate need of the state. We see that God in his dealings with
men has not been a bungler or a niggard; that he has not brought too many
men into the world; that he has not neglected abundantly to supply them;
that he has not intended that bitter competition of the masses for a mere
animal existence and that monstrous aggregation of wealth which characterize
our civilization; but that these evils which lead so many to say there is
no God, or yet more impiously to say that they are of God’s ordering,
are due to our denial of his moral law. We see that the law of justice, the
law of the Golden Rule, is not a mere counsel of perfection, but indeed the
law of social life. We see that if we were only to observe it there would
be work for all, leisure for all, abundance for all; and that civilization
would tend to give to the poorest not only necessities, but all comforts
and reasonable luxuries as well. We see that Christ was not a mere dreamer
when he told men that if they would seek the kingdom of God and its right-doing
they might no more worry about material things than do the lilies of the
field about their raiment; but that he was only declaring what political
economy in the light of modern discovery shows to be a sober truth. ...
Since man can live only on land and from land, since land is the reservoir
of matter and force from which man’s body itself is taken, and on which
he must draw for all that he can produce, does it not irresistibly follow
that to give the land in ownership to some men and to deny to others all
right to it is to divide mankind into the rich and the poor, the privileged
and the helpless? Does it not follow that those who have no rights to the
use of land can live only by selling their power to labor to those who own
the land? Does it not follow that what the socialists call “the iron
law of wages,” what the political economists term “the tendency
of wages to a minimum,” must take from the landless masses — the
mere laborers, who of themselves have no power to use their labor — all
the benefits of any possible advance or improvement that does not alter this
unjust division of land? For having no power to employ themselves, they must,
either as labor-sellers or as land-renters, compete with one another for
permission to labor. This competition with one another of men shut out from
God’s inexhaustible storehouse has no limit but starvation, and must
ultimately force wages to their lowest point, the point at which life can
just be maintained and reproduction carried on.
This is not to say that all wages must fall to this point, but that the
wages of that necessarily largest stratum of laborers who have only ordinary
knowledge, skill and aptitude must so fall. The wages of special classes,
who are fenced off from the pressure of competition by peculiar knowledge,
skill or other causes, may remain above that ordinary level. Thus, where
the ability to read and write is rare its possession enables a man to obtain
higher wages than the ordinary laborer. But as the diffusion of education
makes the ability to read and write general this advantage is lost. So when
a vocation requires special training or skill, or is made difficult of access
by artificial restrictions, the checking of competition tends to keep wages
in it at a higher level. But as the progress of invention dispenses
with peculiar skill, or artificial restrictions are broken down, these higher
wages sink to the ordinary level. And so, it is only so long as
they are special that such qualities as industry, prudence and thrift can
enable the
ordinary laborer to maintain a condition above that which gives a mere living.
Where they become general, the law of competition must reduce the earnings
or savings of such qualities to the general level — which, land being
monopolized and labor helpless, can be only that at which the next lowest
point is the cessation of life. ...
What is producing throughout the civilized world that condition of things
you rightly describe as intolerable is not this and that local error or
minor mistake. It is nothing less than the progress of civilization itself;
nothing less than the intellectual advance and the material growth in which
our century has been so preeminent, acting in a state of society based
on private property in land; nothing less than the new gifts that in our
time God has been showering on man, but which are being turned into scourges
by man’s “impious resistance to the benevolent intentions of
his Creator.”
The discoveries of science, the gains of invention, have given to
us in this wonderful century more than has been given to men in any time
before;
and, in a degree so rapidly accelerating as to suggest geometrical progression,
are placing in our hands new material powers. But with the benefit comes
the obligation. In a civilization beginning to pulse with steam and electricity,
where the sun paints pictures and the phonograph stores speech, it will not
do to be merely as just as were our fathers. Intellectual advance and material
advance require corresponding moral advance. Knowledge and power are neither
good nor evil. They are not ends but means — evolving forces that if
not controlled in orderly relations must take disorderly and destructive
forms. The deepening pain, the increasing perplexity, the growing
discontent for which, as you truly say, some remedy must be found and quickly
found,
mean nothing less than that forces of destruction swifter and more terrible
than those that have shattered every preceding civilization are already menacing
ours — that if it does not quickly rise to a higher moral level; if
it does not become in deed as in word a Christian civilization, on the wall
of its splendor must flame the doom of Babylon: “Thou art weighed in
the balance and found wanting!” ...
But worse perhaps than all else is the way in which this substituting of
vague injunctions to charity for the clear-cut demands of justice opens an
easy means for the professed teachers of the Christian religion of all branches
and communions to placate Mammon while persuading themselves that they are
serving God. Had the English clergy not subordinated the teaching of justice
to the teaching of charity — to go no further in illustrating a principle
of which the whole history of Christendom from Constantine’s time to
our own is witness — the Tudor tyranny would never have arisen, and
the separation of the church been averted; had the clergy of France never
substituted charity for justice, the monstrous iniquities of the ancient
régime would never have brought the horrors of the Great Revolution;
and in my own country had those who should have preached justice not satisfied
themselves with preaching kindness, chattel slavery could never have demanded
the holocaust of our civil war.
No, your Holiness; as faith without works is dead, as men cannot give to
God his due while denying to their fellows the rights be gave them, so charity
unsupported by justice can do nothing to solve the problem of the existing
condition of labor. Though the rich were to “bestow all their goods
to feed the poor and give their bodies to be burned,” poverty would
continue while property in land continues.
Take the case of the rich man today who is honestly desirous of devoting
his wealth to the improvement of the condition of labor. What can he do?
- Bestow his wealth on those who need it? He may help some who deserve
it, but will not improve general conditions. And against the good he may
do will be the danger of doing harm.
- Build churches? Under the shadow of churches poverty festers and the
vice that is born of it breeds.
- Build schools and colleges? Save as it may lead men to see the iniquity
of private property in land, increased education can effect nothing for
mere laborers, for as education is diffused the wages of education sink.
- Establish hospitals? Why, already it seems to laborers that there are
too many seeking work, and to save and prolong life is to add to the pressure.
- Build model tenements? Unless he cheapens house accommodations he but
drives further the class he would benefit, and as he cheapens house accommodations
he brings more to seek employment and cheapens wages.
- Institute laboratories, scientific schools, workshops for physical experiments?
He but stimulates invention and discovery, the very forces that, acting
on a society based on private property in land, are crushing labor as between
the upper and the nether millstone.
- Promote emigration from places where wages are low to places where they
are somewhat higher? If he does, even those whom he at first helps to emigrate
will soon turn on him to demand that such emigration shall be stopped as
reducing their wages.
- Give away what land he may have, or refuse to take rent for it, or let
it at lower rents than the market price? He will simply make new landowners
or partial landowners; he may make some individuals the richer, but he
will do nothing to improve the general condition of labor.
- Or, bethinking himself of those public-spirited citizens of classic
times who spent great sums in improving their native cities, shall he try
to beautify the city of his birth or adoption? Let him widen and straighten
narrow and crooked streets, let him build parks and erect fountains, let
him open tramways and bring in railroads, or in any way make beautiful
and attractive his chosen city, and what will be the result? Must it not
be that those who appropriate God’s bounty will take his also? Will
it not be that the value of land will go up, and that the net result of
his benefactions will be an increase of rents and a bounty to landowners?
Why, even the mere announcement that he is going to do such things will
start speculation and send up the value of land by leaps and bounds.
What, then, can the rich man do to improve the condition of labor?
He can do nothing at all except to use his strength for the abolition of
the great primary wrong that robs men of their birthright. The justice of
God laughs at the attempts of men to substitute anything else for it. ... read
the whole letter
Henry George: The
Increasing Importance of Social Questions (Chapter 1 of Social
Problems, 1883)
[08] In the rude beginning, each family produces its own food, makes its
own clothes, builds its own house, and, when it moves, furnishes its own
transportation. Compare with this independence the intricate interdependence
of the denizens of a modern city. They may supply themselves with greater
certainty, and in much greater variety and abundance, than the savage; but
it is by the cooperation of thousands. Even the water they drink, and the
artificial light they use, are brought to them by elaborate machinery, requiring
the constant labor and watchfulness of many men. They may travel at a speed
incredible to the savage; but in doing so resign life and limb to the care
of others. A broken rail, a drunken engineer, a careless switchman, may hurl
them to eternity. And the power of applying labor to the satisfaction of
desire passes, in the same way, beyond the direct control of the individual.
The laborer becomes but part of a great machine, which may at any time be
paralyzed by causes beyond his power, or even his foresight. Thus does the
well-being of each become more and more dependent upon the well-being of
all — the individual more and more subordinate to society.
[09] And so come new dangers. The rude society resembles the creatures that
though cut into pieces will live; the highly civilized society is like a
highly organized animal: a stab in a vital part, the suppression of a single
function, is death. A savage village may be burned and its people driven
off — but, used to direct recourse to nature, they can maintain themselves.
Highly civilized man, however, accustomed to capital, to machinery, to the
minute division of labor, becomes helpless when suddenly deprived of these
and thrown upon nature. Under the factory system, some sixty persons, with
the aid of much costly machinery, cooperate to the making of a pair of shoes.
But, of the sixty, not one could make a whole shoe. This is the tendency
in all branches of production, even in agriculture. How many farmers of the
new generation can use the flail? How many farmers' wives can now make a
coat from the wool? Many of our farmers do not even make their own butter
or raise their own vegetables! There is an enormous gain in productive power
from this division of labor, which assigns to the individual the production
of but a few of the things, or even but a small part of one of the things,
he needs, and makes each dependent upon others with whom he never comes in
contact; but the social organization becomes more sensitive. A primitive
village community may pursue the even tenor of its life without feeling disasters
which overtake other villages but a few miles off; but in the closely knit
civilization to which we have attained, a war, a scarcity, a commercial crisis,
in one hemisphere produces powerful effects in the other, while shocks and
jars from which a primitive community easily recovers would to a highly civilized
community mean wreck.
[13] There is in all the past nothing to compare with the rapid changes
now going on in the civilized world. It seems as though in the European race,
and in the nineteenth century, man was just beginning to live — just
grasping his tools and becoming conscious of his powers. The snail's pace
of crawling ages has suddenly become the headlong rush of the locomotive,
speeding faster and faster. This rapid progress is primarily in industrial
methods and material powers. But industrial changes imply social changes
and necessitate political changes. Progressive societies outgrow institutions
as children outgrow clothes. Social progress always requires greater intelligence
in the management of public affairs; but this the more as progress is rapid
and change quicker.
[14] And that the rapid changes now going on are bringing up problems that
demand most earnest attention may be seen on every hand. Symptoms of danger,
premonitions of violence, are appearing all over the civilized world. Creeds
are dying, beliefs are changing; the old forces of conservatism are melting
away. Political institutions are failing, as clearly in democratic America
as in monarchical Europe. There is growing unrest and bitterness among the
masses, whatever be the form of government, a blind groping for escape from
conditions becoming intolerable. To attribute all this to the teachings of
demagogues is like attributing the fever to the quickened pulse. It is the
new wine beginning to ferment in old bottles. To put into a sailing-ship
the powerful engines of a first-class ocean steamer would be to tear her
to pieces with their play. So the new powers rapidly changing all the relations
of society must shatter social and political organizations not adapted to
meet their strain.
[17] A civilization which tends to concentrate wealth and power in the hands
of a fortunate few, and to make of others mere human machines, must inevitably
evolve anarchy and bring destruction. But a civilization is possible in which
the poorest could have all the comforts and conveniences now enjoyed by the
rich; in which prisons and almshouses would be needless, and charitable societies
unthought of. Such a civilization waits only for the social intelligence
that will adapt means to ends. Powers that might give plenty to all are already
in our hands. Though there is poverty and want, there is, yet, seeming embarrassment
from the very excess of wealth-producing forces. "Give us but a market," say
manufacturers, "and we will supply goods without end!" "Give
us but work!" cry idle men.
[18] The evils that begin to appear spring from the fact that the application
of intelligence to social affairs has not kept pace with the application
of intelligence to individual needs and material ends. Natural science strides
forward, but political science lags. With all our progress in the arts which
produce wealth, we have made no progress in securing its equitable distribution.
Knowledge has vastly increased; industry and commerce have been revolutionized;
but whether free trade or protection is best for a nation we are not yet
agreed. We have brought machinery to a pitch of perfection that, fifty years
ago, could not have been imagined; but, in the presence of political corruption,
we seem as helpless as idiots. The East River bridge is a crowning triumph
of mechanical skill; but to get it built a leading citizen of Brooklyn had
to carry to New York sixty thousand dollars in a carpet bag to bribe New
York aldermen. The human soul that thought out the great bridge is prisoned
in a crazed and broken body that lies bedfast, and could watch it grow only
by peering through a telescope. Nevertheless, the weight of the immense mass
is estimated and adjusted for every inch. But the skill of the engineer could
not prevent condemned wire being smuggled into the cable. ...
read the entire essay
Mark Twain Archimedes
As I owned all the land, they
would
of course, have to pay me rent. They could not reasonably expect me
to allow them the use of the land for nothing. I am not a hard man,
and in fixing the rent I would be very liberal with them. I would
allow them, in fact, to fix it themselves. What could be fairer? Here
is a piece of land, let us say, it might be a farm, it might be a
building site, or it might be something else - if there was only one
man who wanted it, of course he would not offer me much, but if the
land be really worth anything such a circumstance is not likely to
happen. On the contrary, there would be a number who would want it,
and they would go on bidding and bidding one against the other, in
order to get it. I should accept the highest offer - what could be
fairer? Every increase of population,
extension of trade, every
advance in the arts and sciences would, as we all know, increase the
value of land, and the competition that would naturally arise would
continue to force rents upward, so much so, that in many cases the
tenants would have little or nothing left for themselves.... Read
the whole piece
Henry George: Thy Kingdom Come
(1889 speech)
Yes; we are His children. We in
some sort have that power of
adapting things which we know must have been exerted to bring this
universe into being. Consider those great ships for which this port
of Glasgow is famous all over the world. Consider one of those great
ocean steamers, such as the Umbria, or the Etruria, or the City of
New York, or the City of Paris. There, in the ocean which such ships
cleave, are the porpoises, there are the whales, there are the
dolphins, there are all manner of fish. They are today just as they
were when Caesar crossed to this island, just as they were before the
first ancient Briton launched his leather-covered boat.
Humanity today can swim no better
than humanity could swim then,
but consider how, by our intelligence, we have advanced higher and
higher, how our power of making things has developed, until now we
cross the great ocean quicker than any fish. Consider one of these
great steamers forcing her way across the Atlantic Ocean, 400 miles a
day, against a living gale. Is she not in some sort a product of a
God-like power — a machine of some sort like the very fishes
that swim underneath.
Here is the distinguishing thing
between humankind and the
animals; here is the broad and impassable gulf. We among all the
animals are the only maker; we among all the animals are the only
ones that possess that God-like power of adapting means to ends. And
is it possible that we who possess the power of so adapting means to
ends that we can cross the Atlantic in six days do not possess the
power of abolishing the conditions that crowd thousands of families
into houses of one room?
When we consider the achievements
of humanity and then look upon
the misery that exists today in the very centres of wealth; upon the
ignorance, the weakness, the injustice, that characterise our highest
civilisation, we may know of a surety that it is not the fault of
God; it is the fault of humanity. May we not know that in that very
power that God has given to His children here, in that power of
rising higher, there is involved — and necessarily involved
— the power of falling lower. ...
There is a way of securing the
equal rights of all, not by
dividing land up into equal pieces, but by taking for the use of all
that value which attaches to land, not as the result of individual
labour upon it, but as the result of the increase in population, and
the improvement of society. In that way everyone would be equally
interested in the land of one’s native country. Here is the
simple way. It is a way that impresses the person who really sees its
beauty with a more vivid idea of the beneficence of the providence of
the All-Father than, it seems to me, does anything else.
One cannot look, it seems to me,
through nature — whether
one looks at the stars through a telescope, or have the microscope
reveal to one those worlds that we find in drops of water. Whether
one considers the human frame, the adjustments of the animal kingdom,
or any department of physical nature, one must see that there has
been a contriver and adjuster, that there has been an intent. So
strong is that feeling, so natural is it to our minds, that even
people who deny the Creative Intelligence are forced, in spite of
themselves, to talk of intent; the claws on one animal were intended,
we say, to climb with, the fins of another to propel it through the
water.
Yet, while in looking through the
laws of physical nature, we
find intelligence we do not so clearly find beneficence. But in the
great social fact that as
population increases, and improvements are
made, and men progress in civilisation, the one thing that rises
everywhere in value is land, and in this we may see a proof of the
beneficence of the Creator.
Why, consider what it means! It
means that the social laws are
adapted to progressive humanity! In a rude state of society where
there is no need for common expenditure, there is no value attaching
to land. The only value which attaches there is to things produced by
labour. But as civilisation goes on,
as a division of labour takes
place, as people come into centres, so do the common wants increase,
and so does the necessity for public revenue arise. And so in that
value which attaches to land, not by reason of anything the
individual does, but by reason of the growth of the community, is a
provision intended — we may safely say intended — to meet
that social want.
Just as society grows, so do the
common needs grow, and so grows
this value attaching to land — the provided fund from which they
can be supplied. Here is a value that may be taken, without impairing
the right of property, without taking anything from the producer,
without lessening the natural rewards of industry and thrift. Nay,
here is a value that must be
taken if we would prevent the most
monstrous of all monopolies. What does all this mean? It means that
in the creative plan, the natural advance in civilisation is an
advance to a greater and greater equality instead of to a more and
more monstrous inequality. ... Read the
whole speech
Henry George: Ode to
Liberty (1877 speech)
Our
primary social adjustment is a denial of justice. In allowing one man
to own the land on which and from which other men must live, we have
made them his bondsmen in a degree which increases as material progress
goes on. This is the subtle alchemy that in ways they do not
realize is extracting from the masses in every civilized country the
fruits of their weary toil; that is instituting a harder and more
hopeless slavery in place of that which has been destroyed; that is
bringing political despotism out of political freedom, and must soon
transmute democratic institutions into anarchy.
It is this that turns the
blessings of material progress into a curse. It is this that
crowds human beings into noisome cellars and squalid tenement houses;
that fills prisons and brothels; that goads men with want and consumes
them with greed; that robs women of the grace and beauty of perfect
womanhood; that takes from little children the joy and innocence of
life’s morning. ...
In the very centers of our civilization today are want and
suffering enough to make sick at heart whoever does not close his
eyes and steel his nerves. Dare we turn to the Creator and ask Him to
relieve it? Supposing the prayer were heard, and at the behest with
which the universe sprang into being there should glow in the sun a
greater power; new virtue fill the air; fresh vigor the soil; that
for every blade of grass that now grows two should spring up, and the
seed that now increases fifty-fold should increase a hundredfold!
Would poverty be abated or want relieved? Manifestly no! Whatever
benefit would accrue would be but temporary. The new powers streaming
through the material universe could be utilized only through land.
And land, being private property, the classes that now monopolize the
bounty of the Creator would monopolize all the new bounty. Land
owners would alone be benefited. Rents would increase, but wages
would still tend to the starvation point!
This is not merely a deduction of political economy; it is a
fact of experience. We know it because we have seen it. Within our
own times, under our very eyes, that Power which is above all, and in
all, and through all; that Power of which the whole universe is but
the manifestation; that Power which maketh all things, and without
which is not anything made that is made, has increased the bounty
which men may enjoy, as truly as though the fertility of nature had
been increased.
- Into the mind of one came the thought that harnessed
steam for the service of mankind.
- To the inner ear of another was
whispered the secret that compels the lightning to bear a message
around the globe.
- In every direction have the laws of matter been
revealed; in every department of industry have arisen arms of iron
and fingers of steel, whose effect upon the production of wealth has
been precisely the same as an increase in the fertility of nature.
What
has been the result? Simply that land owners get all the gain.
The wonderful discoveries and inventions of our century have neither
increased wages nor lightened toil. The effect has simply been to
make the few richer; the many more helpless! Can it be that the
gifts of the Creator may be thus misappropriated with impunity? Is it
a light thing that labor should be robbed of its earnings while greed
rolls in wealth — that the many should want while the few are
surfeited? Turn to history, and on every page may be read the lesson
that such wrong never goes unpunished; that the Nemesis that follows
injustice never falters nor sleeps! Look around today. Can this
state of things continue? May we even say, “After us the
deluge!” Nay; the pillars of the state are trembling even now,
and the very foundations of society begin to quiver with pent-up
forces that glow underneath. The struggle that must either revivify,
or convulse in ruin, is near at hand, if it be not already begun. The
fiat has gone forth! With steam and
electricity, and the new powers
born of progress, forces have entered the world that will either
compel us to a higher plane or overwhelm us, as nation after nation,
as civilization after civilization, have been overwhelmed before.
It
is the delusion which precedes destruction that sees in the popular
unrest with which the civilized world is feverishly pulsing only the
passing effect of ephemeral causes. Between democratic ideas and the
aristocratic adjustments of society there is an irreconcilable
conflict. Here in the United States, as there in Europe, it may be
seen arising.
- We cannot go on permitting men to vote and forcing them
to tramp.
- We cannot go on educating boys and girls in our public
schools and then refusing them the right to earn an honest living.
- We
cannot go on prating of the inalienable rights of man and then
denying the inalienable right to the bounty of the Creator.
Even now,
in old bottles the new wine begins to ferment, and elemental forces
gather for the strife! ... read the whole speech
Henry George: The Crime
of Poverty (1885 speech)
Poverty necessary! Why, think
of the enormous powers that are
latent in the human brain! Think how invention enables us to do with
the power of one man what not long ago could not be done by the power
of a thousand. Think that in England alone the steam machinery in
operation is said to exert a productive force greater than the
physical force of the population of the world, were they all adults.
And yet we have only begun to invent and discover. We have not yet
utilised all that has already been invented and discovered. And look
at the powers of the earth. They have hardly been touched. In every
direction as we look new resources seem to open. Man's ability to
produce wealth seems almost infinite—we can set no bounds to it.
Look at the power that is flowing by your city in the current of the
Mississippi that might be set at work for you. So in every direction
energy that we might utilise goes to waste; resources that we might
draw upon are untouched. Yet men are delving and straining to satisfy
mere animal wants; women are working, working, working their lives
away, and too frequently turning in despair from that hard struggle
to cast away all that makes the charm of woman.
If the animals
can reason what
must they think of us? Look at one
of those great ocean steamers ploughing her way across the Atlantic,
against wind, against wave, absolutely setting at defiance the utmost
power of the elements. If the gulls that hover over her were thinking
beings could they imagine that the animal that could create such a
structure as that could actually want for enough to eat? Yet, so it
is. How many even of those of us who find life easiest are there who
really live a rational life? Think of it, you who believe that there
is only one life for man—what a fool at the very best is a man
to pass his life in this struggle to merely live? And you who
believe, as I believe, that this is not the last of man, that this is
a life that opens but another life, think how nine tenths, aye, I do
not know but ninety-nine-hundredths of all our vital powers are spent
in a mere effort to get a living; or to heap together that which we
cannot by any possibility take away. Take the life of the average
workingman. Is that the life for which the human brain was intended
and the human heart was made? Look at the factories scattered through
our country. They are little better than penitentiaries. ... read the whole speech
Henry George: The Wages of
Labor
The organisation of man is such,
his
relations to the world in which he is placed are such – that is to say,
the immutable laws of God are such that it is beyond the power of human
ingenuity to devise any way by which the evils born of the injustice
that robs men of their birthright can be removed otherwise than by
opening to all the bounty that God has provided for all!
Since man can live only on land
and from land since land is
the reservoir of matter and force from which man’s body itself is
taken, and on which he must draw for all that he can produce – does it
not irresistibly follow that to give the land in ownership to some men
and to deny to others all right to it is to divide mankind into the
rich and the poor, the privileged and the helpless?
Does it not follow that those
who have no rights to the use of
land can live only by selling their labor to those who own the land?
Does it not follow that what the
Socialists call “the iron law
of wages,” what the political economists term “the tendency of wages to
a minimum,” must take from the landless mass of mere laborers – who of
themselves have no power to use their labor – the benefits of any
advance or improvement that does not alter this unjust division of land?
Having
no Power to employ themselves, they must, either as labor-sellers or
land-renters, compete with one another for permission
to labor; and this competition with
one another of men shut out from
God’s inexhaustible storehouse, must ultimately force wages to their
lowest point, the point at which life can just be maintained.
This is not to say that all
wages must fall to this point, but
that the wages of that necessarily largest stratum of laborers who
have only ordinary knowledge, skill, and aptitude, must so fall. The
wages of special classes, who are fenced off from the pressure of
competition by peculiar knowledge, skill, or other causes, may remain
above that ordinary level.
Thus,
where the ability to read and write is rare its
possession enables a man to obtain higher wages than the ordinary
laborer. But as the diffusion of education makes the ability to read
and write general, this advantage is lost. So, when a vocation requires
special training or skill, or is made difficult of access by artificial
restrictions, the checking of competition tends to keep wages in it at
a higher level. But as the progress of invention dispenses with
peculiar skill, or artificial restrictions are broken dawn, these
higher wages sink to the ordinary level. And so, it is only so long as
they are special that such qualities as industry, prudence, and thrift
can enable the ordinary laborer to maintain a condition above that
which gives a mere living. Where they become general, the law of
competition must eventually reduce the earnings or savings of such
qualities to the general level.
Land being necessary to life and
labor, where private property in land has divided society into a
landowning class and a landless class, there is no possible invention
or improvement, whether it be industrial, social, or moral, which, so
long as it does not affect the ownership of land can prevent poverty or
relieve the general conditions of mere laborers.
For, whether the effect of any invention or improvement be to
increase what labor can produce or to decrease what is required to
support the laborer, it can, so soon as it becomes general, result only
in increasing the income of the owners of land, without benefiting the
mere laborers.
How true this is we may see in the
facts of today. In our own
time invention and discovery have enormously increased the productive
power of labor, and at the same time greatly reduced the cost of many
things necessary to the support of the laborer.
Have not the benefits of these
improvements mainly gone to the
owners of land – enormously increased land values?
I say mainly, for some part of the
benefit has gone to the
cost of monstrous standing armies and warlike preparations; to the
payment of interest on great public debts; and, largely disguised as
interest on fictitious capital, to the owners of monopolies other than
that of land. ...
The effect of all inventions and
improvements that increase
productive power that save waste and economise effort, is to lessen the
labor required for a given result, and thus to save labor, so that we
speak of them as labor-saving inventions or improvements.
Now, in a natural state of
society, where the rights of all to
the use of the earth are acknowledged, labor-saving improvements might
go to the very utmost that can be imagined without lessening the demand
for men, since in such natural conditions the demand for men lies in
their own enjoyment of life and the strong instincts that the Creator
has implanted in the human breast.
But,
in that unnatural state of society where the masses of
men are disinherited of all but the power to labor when opportunity to
labor is given them by others, there the demand for them becomes
simply the demand for their services by those who hold this opportunity
– and man himself becomes a commodity. Hence, although the natural
effect of labor-saving improvements is to increase wages, yet in the
unnatural condition which private ownership of the land begets, the
effect, even of such moral improvements as the disbandment of armies,
is, by lessening the commercial demand, to lower wages.
If labor-saving inventions and
improvements could be carried,
to the very abolition of the necessity for labor, what would be the
result? Would it not be that landowners could then get all the wealth
that the land was capable of producing, and would have no need at all
for laborers, who must then either starve or live as pensioners on the
bounty of the landowners? ...
What is producing throughout the
civilised world the present
condition of things is not this and that local error or minor mistake.
It is nothing less than the progress of civilisation itself; nothing
less than the intellectual advance and the material growth in which our
century has been so pre-eminent, acting in a state of society based on
private property in land.
It is nothing less than the newer
gifts that in our time have
been showered on man, being turned into scourges by man’s impious
resistance to the benevolent intentions of his Creator.
The
discoveries of science, the gains of invention, have given
to us in this wonderful century more than has been given to men in any
time before, and, in a degree so rapidly accelerating as to suggest
geometrical progression, are placing in our hands new material wonders.
But
with the benefit comes the obligation: In a civilisation
beginning to pulse with steam and electricity, where the sun paints
pictures and the phonograph stores speech, it will not do to be merely
as just as were our fathers. Intellectual advance and material
advance
require corresponding moral advance. Knowledge and power are neither
good nor evil. They are not ends but means evolving forces that if not
controlled in orderly relations must take disorderly and destructive
forms.
The increasing perplexity, the
growing discontent, mean
nothing less than that forces of destruction swifter and more terrible
than those that have shattered every preceding civilisation are already
menacing ours; that if it does not quickly rise to a higher moral
level; if it does not become in deed as in word a Christian
civilisation on the wall of its splendour must share the doom of
Babylon: “Thou are weighed in the balance and found wanting!” ...
The
principle is clear and irresistible. Material progress makes land more
valuable, and when this increasing value is left to private owners land
must pass from the ownership of the poor into the ownership of the
rich, just as diamonds so pass when poor men find them.
There is one way, and only one
way, in which working people in our civilisation may be secured a share
in the land of their country, and that is the way that we propose – the
taking of the profits of land ownership for the community! ... read
the whole article
Henry George: The
Land Question (1881)
IMAGINE an island girt with ocean; imagine a little world swimming in space.
Put on it, in imagination, human beings. Let them divide the land,
share and share alike, as individual property. At first, while population is sparse
and industrial processes rude and primitive, this will work well enough.
Turn away the eyes of the mind for a moment, let time pass, and look again.
Some families will have died out, some have greatly multiplied; on the whole,
population will have largely increased, and even supposing there have
been no important inventions or improvements in the productive arts, the increase
in population, by causing the division of labor, will have made industry
more complex. During this time some of these people will have been careless,
generous, improvident; some will have been thrifty and grasping. Some of
them will have devoted much of their powers to thinking of how they themselves
and the things they see around them came to be, to inquiries and speculations
as to what there is in the universe beyond their little island or their little
world, to making poems, painting pictures, or writing books; to noting the
differences in rocks and trees and shrubs and grasses; to classifying beasts
and birds and fishes and insects – to the doing, in short, of all the
many things which add so largely to the sum of human knowledge and human
happiness, without much or any gain of wealth to the doer. Others again will
have devoted all their energies to the extending of their possessions. What,
then, shall we see, land having been all this time treated as private property?
Clearly, we shall see that the primitive equality has given way to inequality.
Some will have very much more than one of the original shares into which
the land was divided; very many will have no land at all. Suppose that, in
all things save this, our little island or our little world is Utopia – that
there are no wars or robberies; that the government is absolutely pure and
taxes nominal; suppose, if you want to, any sort of a currency; imagine,
if you can imagine such a world or island, that interest is utterly abolished;
yet inequality in the ownership of land will have produced poverty and virtual
slavery.
For the people we have supposed are human beings – that is to say,
in their physical natures at least, they are animals who can live only on
land and by the aid of the products of land. They may make machines which
will enable them to float on the sea, or perhaps to fly in the air, but to
build and equip these machines they must have land and the products of land,
and must constantly come back to land. Therefore those who own the land must
be the masters of the rest. Thus, if one man has come to own all the land,
he is their absolute master even to life or death. If they can live on the
land only on his terms, then they can live only on his terms, for without
land they cannot live. They are his absolute slaves, and so long as his ownership
is acknowledged, if they want to live, they must do in everything as he wills.
If, however, the concentration of landownership has not gone so far as to
make one or a very few men the owners of all the land – if there are
still so many landowners that there is competition between them as well as
between those who have only their labor – then the terms on which these
non-landholders can live will seem more like free contract. But it will not
be free contract. Land can yield no wealth without the application of labor;
labor can produce no wealth without land. These are the two equally necessary
factors of production. Yet, to say that they are equally necessary factors
of production is not to say that, in the making of contracts as to how the
results of production are divided, the possessors of these two meet on equal
terms. For the nature of these two factors
is very different. Land is a natural element; the human being must have his
stomach filled every few hours. Land can exist without labor, but labor cannot
exist without land. If I own a piece of land, I can let it lie idle
for a year or for years, and it will eat nothing. But the laborer must eat every day, and his family
must eat. And so, in the making of terms between them, the landowner has
an immense advantage over the laborer. It is on the side of the laborer that
the intense pressure of competition comes, for in his case it is competition
urged by hunger. And, further than this: As population increases,
as the competition for the use of land becomes more and more intense, so
are the owners of land enabled to get for the use of their land a larger
and larger part of the wealth which labor exerted upon it produces. That
is to say, the value of land steadily rises. Now, this steady rise in the
value of land brings about a confident expectation of future increase of
value, which produces among landowners all the effects of a combination to
hold for higher prices. Thus there is a constant tendency to force mere laborers
to take less and less or to give more and more (put it which way you please,
it amounts to the same thing) of the products of their work for the opportunity
to work. And thus, in the very nature of things, we should see on our little
island or our little world that, after a time had passed, some of the people
would be able to take and enjoy a superabundance of all the fruits of labor
without doing any labor at all, while others would be forced to work the
livelong day for a pitiful living.
But let us introduce another element into the supposition. Let us
suppose great discoveries and inventions – such as the steam-engine,
the power-loom, the Bessemer process, the reaping-machine, and the thousand
and one labor-saving
devices that are such a marked feature of our era. What would be the result?
Manifestly, the effect of all such discoveries and inventions is to increase
the power of labor in producing wealth – to enable the same amount
of wealth to be produced by less labor, or a greater amount with the same
labor. But none of them lessen, or can lessen the necessity for land. Until
we can discover some way of making something out of nothing – and that
is so far beyond our powers as to be absolutely unthinkable – there
is no possible discovery or invention which can lessen the dependence of
labor upon land. And, this being the case, the effect of these labor-saving
devices, land being the private property of some, would simply be to increase
the proportion of the wealth produced that landowners could demand for the
use of their land. The ultimate effect of these discoveries and inventions
would be not to benefit the laborer, but to make him more dependent.
And, since we are imagining conditions, imagine laborsaving inventions to
go to the farthest imaginable point, that is to say, to perfection. What
then? Why then, the necessity for labor being done away with, all the wealth
that the land could produce would go entire to the landowners. None of it
whatever could be claimed by any one else. For the laborers there would be
no use at all. If they continued to exist, it would be merely as paupers
on the bounty of the landowners! ... read the whole article
Louis Post: Outlines of Louis F. Post's
Lectures, with Illustrative Notes and Charts (1894)
Poverty is widespread and pitiable. This we know. Its general manifestations
are so common that even good men look upon it as a providential provision
for enabling the rich to drive camels through needles' eyes by exercising
the modern virtue of organized giving.32 Its occasional manifestations in
recurring periods of "hard times"33 are like epidemics of a virulent
disease, which excite even the most contented to ask if they may not be the
next victims. Its spasms of violence threaten society with anarchy on the
one hand, and, through panic-stricken efforts at restraint, with loss of
liberty on the other. And it persists and deepens despite the continuous
increase of wealth producing power.34 ...
c. Significance of the Upward Tendency of Rent
Now, what is the meaning of this tendency of Rent to rise with social progress,
while Wages tend to fall? Is it not a plain promise that if Rent be treated
as common property, advances in productive power shall be steps in the direction
of realizing through orderly and natural growth those grand conceptions of
both the socialist and the individualist, which in the present condition
of society are justly ranked as Utopian? Is it not likewise a plain
warning that if Rent be treated as private property, advances in productive
power
will be steps in the direction of making slaves of the many laborers, and
masters of a few land-owners? Does it not mean that common ownership of Rent
is in harmony with natural law, and that its private appropriation is disorderly
and degrading? When the cause of Rent and the tendency illustrated in the
preceding chart are considered in connection with the self-evident truth
that God made the earth for common use and not for private monopoly, how
can a contrary inference hold? Caused and increased by social growth, 97
the benefits of which should be common, and attaching to land, the just right
to which is equal, Rent must be the natural fund for public expenses. 98
97. Here, far away from civilization, is a solitary settler.
Getting no benefits from government, he needs no public revenues, and
none of the land about him has any value. Another settler comes, and
another, until a village appears. Some public revenue is then required.
Not much, but some. And the land has a little value, only a little; perhaps
just enough to equal the need for public revenue. The village becomes
a town. More revenues are needed, and land values are higher. It becomes
a city. The public revenues required are enormous, and so are the land
values.
98. Society, and society alone, causes Rent. Rising with
the rise, advancing with the growth, and receding with the decline of
society, it measures the earning power of society as a whole as distinguished
from that of the individuals. Wages, on the other hand, measure the earning
power of the individuals as distinguished from that of society as a whole.
We have distinguished the parts into which Wealth is distributed as Wages
and Rent; but it would be correct, indeed it is the same thing, to regard
all wealth as earnings, and to distinguish the two kinds as Communal
Earnings and Individual Earnings. How, then, can there be any question
as to the fund from which society should be supported? How can it be
justly supported in any other way than out of its own earnings?
If there be at all such a thing as design in the universe — and who
can doubt it? — then has it been designed that Rent, the earnings of
the community, shall be retained for the support of the community, and that
Wages, the earnings of the individual, shall be left to the individual in
proportion to the value of his service. This is the divine law, whether we
trace it through complex moral and economic relations, or find it in the
eighth commandment. ...
Q39. Why does not labor-saving machinery benefit laborers?
A. Suppose labor-saving machinery to be ideally perfect — so perfect that
no more labor is needed. Could that benefit laborers, so long as land was owned?
Would it not rather make landowners completely independent of laborers? Of course
it would. Well, the labor-saving machinery that falls short of being ideally
perfect has the same tendency. The reason that it does not benefit laborers is
because by enhancing the value of land it restricts opportunities for employment.
... read the book
John Dewey: Steps to Economic Recovery
I do not claim that George's remedy is a panacea that will cure by itself
all our ailments. But I do claim that we cannot get rid of our basic troubles
without it. I would make exactly the same concession and same claim that
Henry George himself made:
"I do not say that in the recognition of
the equal and unalienable right of each human being to the natural
elements from which
life must be supported and wants satisfied, lies the solution of
all social problems. I fully recognize that even after we do this, much
will remain
to do. We might recognize the equal right to land, and yet tyranny
and spoilation be continued. But whatever else we do, as along as we fail
to recognize
the
equal right to the elements of nature, nothing will avail to remedy
that unnatural inequality in the distribution of wealth which is fraught
with
so much evil
and danger. Reform as we may, until we make this fundamental reform,
our material progress can but tend to differentiate our people into the monstrously
rich
and frightfully poor. Whatever be the increase of wealth,
the masses will still be ground toward the point of bare subsistence
-- we
must still
have our great
criminal classes, our paupers and our tramps, men and women driven
to degradation and desperation from inability to make an honest living." ... read the whole speech
William Ogilvie: An Essay on
the Right of Property in Land (Scotland, 1782)
There are districts in which the
landholder's rents have been doubled
within fifty years, in consequence of a branch of manufacture being
introduced and flourishing, without any improvement in the mode of
agriculture, or any considerable increase of the produce of the soil.
Here, therefore, the landlords are great gainers, but by what industry
or attention have they earned their profits? How have they contributed
to the progress of this manufacture, unless by forbearing to obstruct
it? And yet from the necessity under which the manufacturing poor
lived, of resorting to these landholders to purchase from them the use
of houses and land, for the residence of their families, they have been
enabled to tax their humble industry at a very high rate, and to rob
them of perhaps more than one-half of its reward.
Had the manufacturers of such districts possessed what every
citizen
seems entitled to have, a secure home of their own - had they enjoyed
full property in their lands; would not then the reward of their
industrious labour have remained entire in their own hands?... Read
the entire essay
Ted Gwartney: Estimating
Land Values
Adam Smith, in The Wealth of Nations, suggested that any "tax" should be
a charge for services which benefit all people and are more efficiently preformed
by a single cooperative effort. He postulated
four principles of taxation which any source of revenue should
meet:
1. Light on the production of wealth, and does not impede
or reduce production;
2. Cheap to collect, requiring few collectors, and easy
to understand;
3. Certain; can't be avoided, little opportunity for corruption,
and provides adequate revenue;
4. Equitable and fair, payment for benefits
received, impartial,
and just.
Collecting public revenue from land rent is the only revenue
source, or "tax", that meets these criteria.
While the major argument for raising public revenue from land rent
and natural resources is because it is equitable and fair, it is also
the most efficient method of raising the revenue which is needed for
public facilities and services. Land is visible, can't be hidden and
its valuation is less intrusive than valuations of income and sales.
Taxes on labor and capital cause people to consider alternative
options, including working with less effort, which produces less real
goods. For example, a tax on wages will reduce after-tax net wages
and weaken the incentive to work. A person might be willing to work
hard for a wage of $20 per hour, but decide to drop out if the taxes
take $8 and the net wage is only $12 per hour. Economists claim that
present taxes account for a 25% loss in production in the United
States. Production and consumption would be greatly improved if
public revenue came primarily from land rather than a wage tax. The
same would occur when buildings and machinery are taxed. The tax on
building reduces the quantity and quality of buildings produced. A
tax on sales, commerce or value added reduces consumption, production
and net wealth. Sales tax evasion in the United States has exceeded
30% in recent years.
As new inventions and more
efficient ways of producing goods are
discovered, people's economic well-being is not improved, because
they have lost access to land and must pay both rent and taxes. (5)
Instead of rent being used to provide community services, capital and
wages must be depleted, which obstructs private enterprise.
When the rent of land is taken for public purposes production and
distribution are not held back. This is because the same amount of
rent would otherwise have been taken by some private individual. The
rent would be the same, the difference is how it is utilized. There
is evidence that communities who raise their revenue from land,
rather than from labor and capital, are more prosperous, many
increasing productivity by more than 25% (6) ... Read
the whole article
Kris Feder: Progress and Poverty
Today
As this book was written, the
Industrial Revolution was
transforming America and Europe at a breathless pace. In just a
century, an economy that worked on wind, water, and muscular effort
had become supercharged by steam, coal, and electricity. Canals,
railroads, steamships and the telegraph were linking regional
economies into a national and global network of exchange. The United
States had stretched from coast to coast; the western frontier was
evaporating.
American
journalist and editor Henry George marveled at the
stunning advance of technology, yet was alarmed by ominous trends.
Why had not this unprecedented increase in productivity banished
want
and starvation from civilized countries, and lifted the working
classes from poverty to prosperity? Instead, George saw that the
division of labor, the widening of markets, and rapid urbanization
had increased the dependence of the working poor upon forces
beyond their control. The working poor were always, of course, the
most vulnerable in depressions, and last to recover from them.
Unemployment and pauperism had appeared in America, and indeed, were
more prevalent in the developed East than in the aspiring West. It
was "as though a great wedge were being forced, not underneath
society, but through society. Those who are above the point of
separation are elevated, but those who are below are crushed down."
This, the "great enigma of our times," was the problem George set out
to solve in Progress and Poverty.
... Read the whole article
Henry George: Concentrations
of Wealth Harm America (excerpt from Social Problems) (1883)
There is in all the past
nothing to compare with the rapid
changes now going on in the civilized world. It seems as though in
the European race, and in the nineteenth century, man was just
beginning to live -- just grasping his tools and becoming conscious of
his powers. The snails pace of crawling ages has suddenly become the
headlong rush of the locomotive, speeding faster and faster. This
rapid progress is primarily in industrial methods and material
powers. But industrial changes imply social changes and necessitate
politic changes. Progressive societies outgrow institutions as
children outgrow clothes. Social progress always requires greater
intelligence in the management of public affairs; but this the more
as progress is rapid and change quicker...
The mere growth of society involves danger of the gradual
conversion of government into something independent of and beyond the
people, and the gradual seizure of its powers by a ruling
class -- though not necessarily a class marked off by personal titles
and a hereditary status, for, as history shows, personal titles and
hereditary status do not accompany the concentration of power, but
follow it. The same methods which, in a little town where each knows
his neighbor and matters of common interest are under the common eye,
enable the citizens freely to govern themselves, may, in a great
city, as we have in many cases seen, enable an organized ring of
plunderers to gain and hold the government. So, too, as we see in
Congress, and even in our State legislatures, the growth of the
country and the greater number of interests make the proportion of
the votes of a representative, of which his constituents know or care
to know, less and less. And so, too, the executive and judicial
departments tend constantly to pass beyond the scrutiny of the
people.
But to the changes produced by growth are, with us, added
the
changes brought about by improved industrial methods. The tendency of
steam and of machinery is to the division of labor, to the
concentration of wealth and power. Workmen are becoming massed by
hundreds and thousands in the employ of single individuals and firms;
small storekeepers and merchants are becoming the clerks and salesmen
of great business houses; we have already corporations whose revenues
and pay rolls belittle those of the greatest States. And with this
concentration grows the facility of combination among these great
business interests. How readily the railroad companies, the coal
operators, the steel producers, even the match manufacturers,
combine, either to regulate prices or to use the powers of
government! The tendency in all branches of industry is to the
formation of rings against which the individual is helpless, and
which exert their power upon government whenever their interests may
thus be served. ... Read the entire article
Nic Tideman: Applications
of Land Value Taxation to Problems of
Environmental Protection, Congestion, Efficient Resource Use,
Population, and Economic Growth
With resources such as oil,
which are depleted over time, new
issues of efficiency and justice arise. Depletable resources ought to
be regarded as part of the heritage to which everyone has equal
rights, though some provision must then be made to provide incentives
for discovery. Equal rights
are expressed by requiring everyone who
uses a depletable resource to pay for the resulting depletion.
Efficiency requires that a resource that is to be depleted over time
be sold in such a pattern over time as will maximize the present
value of receipts. This generally means using a lot in early years,
then less and less as time goes by, with the price of resources in
the ground rising at the interest rate. If the receipts were spent as
they were received, more would go to early generations than to later
generations. A principle of equal rights to natural opportunities
means that the receipts should be put into a fund, from which equal
payments are made to all persons in all years. Furthermore, later
generations are disadvantaged by the higher price of oil that they
face. A principle of equal rights for all persons would allocate
additional payments to later generations to compensate them for the
higher price of oil they faced, though this could be
offset by later
generations having access to technology that earlier generations did
not have. Thus a nation that provides the rest of the world with
technology that eases the task of providing for future generations
should receive a credit for this, although there will be difficulty
in estimating the contribution of any innovation. (If one person
had
not discovered something, the chances are that eventually some else
would have.)... Read the entire article
Nic Tideman: Global Economic Justice, followed
by Creating
Global Economic Justice
Resources
that Fluctuate over Time
The natural opportunities that
have been considered to this point
are ones that, to a first approximation, yield constant returns over
time. A new set of issues arises when this theory of social justice
is applied to resources that yield returns that necessarily vary over
time. Now the issue of intergenerational justice arises along with
that of international justice.
Consider first the issue of
intergenerational justice without the
complication of international concerns. The efficient use of
depletable natural opportunities requires that they be allocated over
time in such a way as to maximize the present value of net revenue
from sales. As economists have long known, this requires that prices
charged for resources that are being depleted rise at the rate of
interest. But this is just efficiency. It says nothing about who
should get the money.
The axiom that all persons have
equal rights to natural
opportunities suggests that when we deplete a resource such as oil,
there are two steps that must be taken to achieve intergenerational
equity. In the first step, when oil is sold we must share the
proceeds over generations in such a way that every person in every
generation can receive a payment of the same real value every year.
To satisfy this obligation when the number of people alive in
different years is not proportional to the amount of oil used in
those years, we need to invest the proceeds of oil sales in a fund
that would make annual payments to all persons of a size that could
be maintained for all generations.
This first step provides
intergenerational equity with respect to
oil revenue, but it does nothing about the fact that, if oil is
allocated efficiently over time, later generations will face a higher
price of oil than early generations. To provide equity with respect
to the changing price of access to natural opportunities, there must
be a second step that redistributes money among generations to offset
the changing price.
This second step implicitly
assumes a world with no change in
technology. If an early generation provides later generations with
improved technology, then the later generations are treated justly if
the combination of prices of commodities, technology and money
received from the earlier generation permits them to attain the same
overall level of satisfaction as the earlier generation. This
specification of justice presumes that everyone has the same tastes.
When tastes differ, an improvement in technology that more than
compensates some persons for a greater scarcity of some natural
resources will provide inadequate compensation for others. Such
inequality cannot be avoided. All that can be expected is that those
who use exhaustible resources will, by limiting their use and
providing endowments for future generations, make it possible for the
typical member of every future generation to attain the same level of
well-being as the typical members of the earlier generations of
resource users. Success in such an effort cannot be guaranteed. We
don't know the tastes of future generations. We don't know the rate
at which technology will advance. We don't know the rate at which new
resources will be discovered. Estimates of all these things must be
made to determine the proper rate of resource use and the proper
endowments of future generations. The most that can be asked for is a
good-faith effort to achieve the standard required by justice.
Now consider the international
dimension of intergenerational
equity. What one nation owes to others with respect to
intergenerational equity is compensation for making it more difficult
for the other nations to provide adequately for their future
generations. If all nations are using the same amount of oil per
capita, then no nation can complain about what the others are doing.
But if one nation is using more oil per capita than the others, then
it owes compensation to the others for making it harder for the
others to provide all of their future generations with equal rights
to natural opportunities. If oil is being allocated efficiently and
equitably among generations, the amount of compensation that an
excessively consuming nation owes will be the market value of its
excess oil consumption, valued in terms of the price of oil in the
ground. The same result is obtained if all nations include the
resource value of all oil that they consume, and all other depletable
resources, in the calculation of what they appropriate for themselves
from everyone's common heritage.
One of the ways that a nation can
compensate other nations for
disproportionate use of natural opportunities is by creating
technology that other nations can use to compensate their future
generations for scarcer natural resources. If gasoline costs twice as
much but cars are twice as efficient, people are not, on net,
disadvantaged by the higher price of gasoline. This line of reasoning
requires contestable judgements about the value of new technology and
how long it would have taken before someone else would have made the
same discovery. Nevertheless, technological improvements are a valid
form of compensation for resource scarcity.
One issue that arises when
technological improvements are used as
compensation is that not all nations place the same value on
technology. If some island nation wishes to maintain a way of life
that does not involve cars, then that nation is not compensated for
an increased scarcity of fish by increased efficiency of car engines.
What compensates a particular nation must reflect the typical
preferences of that nation.
Another troublesome issue with
respect to natural opportunities is
that people have different ideas about which creatures are properly
treated simply as resources and which deserve a higher level of
respect. When creatures are non-migratory, the right to control them
can simply go with the land they occupy, and bids for the land will
reflect values with respect to the creatures that occupy the land.
However, with migratory creatures such as whales and songbirds, a
different mechanism must be created to deal with desires to protect.
If nations representing 80% of the world's population want to protect
whales, then they should be able to protect 80% of whales. How such a
rule would be implemented in practice is a problem that I leave for
others to wrestle with. ... Read
the whole article
Mason Gaffney: Property
Tax: Biases and
Reforms
Priority
#1. Safeguarding the property tax
Priority #2:
Enforce Good Laws
- Reassess Land
Frequently
- Use the
Building-Residual Method of Allocating Value
- Federal Income Taxes
Priority
#3. De-Balkanize Tax Enclaves
- A. Rich and Poor
- B. Timber and
Timberland
- The
Role of Timber and Timberland
- Two More
Areas Deserving Attention
- Offshore Oil
- Tax All
Natural Resources Uniformly and Comprehensively
Priority
#4. What Tax to Fight First?
Priority
#5: Make Landowners Pay Their Taxes
Tax All Natural
Resources Uniformly and Comprehensively
Advances in the arts and sciences
keep disclosing new values in
old resources. Owing to institutional lag, these values can grow huge
without finding their way onto the tax rolls. A thoughtless reaction
is, "Bureaucrats want to tax everything!" The point is to tax all
natural resources uniformly and comprehensively, to end the lowering
taxes on incomes, productive business, and sales! Land taxation
will
not win wide support, nor will it deserve to, if it is perceived as a
tax focusing on median homeowners, farmers, and merchants, while
exempting oilmen, media tycoons, and timber barons.
In addition to newly awakened resources,
many resources long known (like water)
are held in odd tenures that
have not been recognized as taxable property, although they should
be. Any comprehensive move toward using resource rents for public
revenue must include these varied resources and tenures. I have a
list of 30 or so, too many to treat here. To give a sampling, they
include
- pollution easements over air and water;
- aircraft landing
time-slots and gates;
- aquifers;
- benefits from covenants;
- access
easements;
- power drops;
- concessions;
- fisheries;
- franchises;
- the gene
pool;
- grazing licenses;
- minerals;
|
- orbits;
- soils;
- radio spectrum;
- rights-of-way;
- shipping lanes;
- standing to sue;
- strata titles;
- use of
the streets;
- wildlife;
- wind; and
- zoning.
|
In tapping
these many varieties of resources and tenures for
public revenues, citizens and their representatives may have to set
priorities. Two practical criteria rise to the top:
Jeff Smith: What the Left Must
Do: Share the Surplus
In An Intelligent
Woman’s Guide to Socialism and
Capitalism (1928), George
Bernard Shaw told how he began his political career as a
Georgist but left to found the Fabians in order to promote a social
salary. HG Wells likewise faulted
George for not faulting the state’s misspending and focusing squarely
on taxation. While more famous for his tax shift, Henry George did
endorse the idea of a dividend. Martin
Luther King in his own "Where
Do We Go From Here?" cited
George then proposed an extra income that would be dynamic, that would
“automatically increase as the total social income grows.” This is
precisely what a Citizens Dividend does; as progress pushes up site
values, one’s share of the resultant Rent rises, too. The stratospheric
land costs in Silicon Valley, Silicon Forest, and silicon anywhere
exemplify how the advances in machines show up in the costs of
locations. Read the whole article
Herbert J. G. Bab: Property
Tax — Cause of Unemployment
Ricardo believed that ground
rents and the value of land have a
tendency to rise continuously and that this benefits solely the
landowners. The progress of industrialization and urbanization in the
second half of the 19th century resulted in a rapid increase in the
value of urban land and the owners of such land reaped tremendous
profits. This led John Stuart Mill to
observe, that "Only the landowners grow richer, as it were in their
sleep without working, risking and economizing". He called for the
taxation of land in order to recapture the unearned increment accruing
to the land owners.
The apostle of land
taxation is Henry George. In his famous book Progress
and Poverty he develops
his single tax theory. He tries to show that poverty and unemployment
and other evils are caused by the land monopolists. Henry George's
theory is similar to that developed by John Stuart Mill. Land values
are based on ground rents which are created by the community and not by
the land owners. Therefore the community is justified in recapturing
these rents by a single tax on land. ...
If John Stuart Mill or Henry
George would be alive today, they would be disappointed that the
taxation of the unearned increment in land values has not made more
progress. They would be surprised that the rise in urban land
values has not been as steep as they had expected. Yet the universal
use of automobiles has in an unforeseeable way multiplied the land
available for residential use. It has made possible the exodus of a
large part of the middle class out of our towns into suburban areas.
Thus the invention of the automobile has upset the dire predictions and
expectations of the economists who advocated the taxation of
land. Read the whole article
Fred Foldvary: See the Cat
Picture an unpopulated island
where we're going to produce one
good, corn, and there are eleven grades of land. On the best land, we
can grow ten bushels of corn per week; the second land grows nine
bushels, and so on to the worst land that grows zero bushels. We'll
ignore capital goods at first. The first settlers go the best land.
While there is free ten-bushel land, rent is zero, so wages are 10.
When the 10-bushel land is all settled, immigrants go to the 9-bushel
land.
Wages in the 9-bushel land equal
9 while free land is available.
What then are wages in the 10-bushel land? They must also be 9, since
labor is mobile. If you offer less, nobody will come, and if you
offer a bit more than 9, everybody in the 9-bushel land will want to
work for you. Competition among workers makes wages the same all over
(we assume all workers are alike). So that extra bushel in the
10-bushel land, after paying 9 for labor, is rent.
That border line where the best
free land is being settled is
called the "margin of production." When the margin moves to the
8-bushel land, wages drop to 8. Rent is now 1 on the 9-bushel land and
2 on the 10-bushel land. Do you see what the trend is? As the margin
moves to less productive lands, wages are going down and rent is
going up. We can also now see that wages are determined at the margin
of production. That is the "law of wages." The wage at the margin
sets the wage for all lands. The production in the better lands left
after paying wages goes to rent. That is the "law of rent." If you
understand the law of wages and the law of rent, you see the cat! To
complete our cat story, suppose folks can get land to rent and sell
for higher prices later rather than using it now. This land
speculation will hog up lands and make the margin move further out
than without speculation, lowering wages and raising rent even more.
Now we have good news and bad
news. The good news is that when we
put in the capital goodsThe bad
news is that the technology enables us to extend the margin to less
productive land, which lowers wages again. So there is this constant
race between technology raising wages and lower margins reducing
wages. ...
we first left out from the example above,
the tools and technology increase the productivity of all the lands.
If production doubles, rent doubles, and wages go up. Wages won't
double, because workers have to pay for the tools, but even if wages
go up 50 percent, that's good news, and why industrialized economies
have a high standard of living. Also, high skills enable educated
workers to have a wage premium above the basic wage level. Read the
whole article
Henry Ford Talks About
War and Your Future - 1942 interview
Gems from George, a themed collection of
excerpts from the writings of Henry George (with links to sources)
FIVE centuries ago the wealth-producing power of England, man for man,
was small indeed compared with what it is now. Not merely were all the great
inventions and discoveries which since the Introduction of steam have revolutionized
mechanical industry then undreamed of, but even agriculture was far ruder
and less productive. Artificial grasses had not been discovered. The potato,
the carrot, the turnip, the beet, and many other plants and vegetables which
the farmer now finds most prolific, had not been introduced. The advantages
which ensue from rotation of crops were unknown. Agricultural implements
consisted of the spade, the sickle, the flail, the rude plow and the harrow.
Cattle had not been bred to more than one-half the size they average now,
and sheep did not yield half the fleece. Roads, where there were roads, were
extremely bad, wheel vehicles scarce and rude, and places a hundred miles
from each other were, in difficulties of transportation, practically as far
apart as London and Hong Kong, or San Francisco and New York, are now.
Yet patient students of those times tell us that the condition of the English
laborer was not only relatively, but absolutely better in those rude times
than it is in England today, after five centuries of advance in the productive
arts. They tell us that the workingman did not work so hard as he does now,
and lived better; that he was exempt from the harassing dread of being forced
by loss of employment to want and beggary, or of leaving a family that must
apply to charity to avoid I starvation. Pauperism as it prevails in the rich
England of the nineteenth century was in the far poorer England of the fourteenth
century absolutely unknown. Medicine was empirical and superstitious, sanitary
regulations and precautions were all but unknown. There were frequently plague
and occasionally famine, for, owing to the difficulties of transportation,
the scarcity of one district could not "be relieved by the plenty of
another. But men did not as they do now, starve in the midst of abundance;
and what is perhaps the most significant fact of all is that not only were
women and children not worked as they are today, but the eight-hour system,
which even the working classes of the United States, with all the profusion
of labor-saving machinery and appliances have not yet attained, was then
the common system! — Protection or Free Trade — Chapter 22:
The Real Weakness of Free Trade.
MENTAL power is the motor of progress, and men tend to advance in proportion
to the mental power expended in progression — the mental power which
is devoted to the extension of knowledge, the improvement of methods, and
the betterment of social conditions. — Progress & Poverty — Book
X, Chapter 3, The Law of Human Progress
To compare society to a boat. Her progress through the water will not depend
upon the exertion of her crew, but upon the exertion devoted to propelling
her. This will be lessened by any expenditure of force required for baling,
or any expenditure of force in fighting among themselves or in pulling in
different directions.
Now, as in a separated state the whole powers of man are required to maintain
existence, and mental power is only set free for higher uses by the association
of men in communities, which permits the division of labor and all the economies
which come with the co-operation of increased numbers, association is the
first essential of progress. Improvement becomes possible as men come together
in peaceful association, and the wider and closer the association, the greater
the possibilities of improvement. And as the wasteful expenditure of mental
power in conflict becomes greater or less as the moral law which accords
to each an equality of rights is ignored or is recognized, equality (or justice)
is the second essential of progress.
Thus association in equality is the law of progress. Association frees mental
power for expenditure in improvement, and equality (or justice, or freedom — for
the terms here signify the same thing, the recognition of the moral law)
prevents the dissipation of this power in fruitless struggles. — Progress & Poverty — Book
X, Chapter 3, The Law of Human Progress ... go
to "Gems from George"
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