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 great problem, of which these recurring seasons of industrial depression
are but peculiar manifestations, is now, I think, fully solved, and the social
phenomena which all over the civilized world appall the philanthropist and
perplex the statesman, which hang with clouds the future of the most advanced
races, and suggest doubts of the reality and ultimate goal of what we have
fondly called progress, are now explained.
The reason why, in spite of the increase of productive power, wages constantly
tend to a minimum which will give but a bare living, is that, with increase
in productive power, rent tends to even greater increase, thus producing a
constant tendency to the forcing down of wages.
Land being necessary to labor, and being reduced to private ownership, every
increase in the productive power of labor but increases rent — the
price that labor must pay for the opportunity to utilize its powers; and
the advantages gained by the march of progress go to the owners of land,
and wages do not increase.*
*Whatever be the fact as to wages, the reader will, of
course, recognize that higher money wages which merely balance higher living
costs, are not to be reckoned as real wage increases. H.G.B
The simple theory which I have outlined (if indeed it can be called a theory
which is but the recognition of the most obvious relations) explains this conjunction
of poverty with wealth, of low wages with high productive power, of degradation
amid enlightenment, of virtual slavery in political liberty.
- It harmonizes, as results flowing from a general and inexorable law,
facts otherwise most perplexing, and exhibits the sequence and relation
phenomena that without reference to it are diverse and contradictory.
- It explains why improvements which increase the productive power of
labor and capital increase the reward of neither.
- It explains what is commonly called the conflict between labor and capital,
while proving the real harmony of interest between them.
- It cuts the last inch of ground from under the fallacies of protection,
while showing why free trade fails to benefit permanently the working classes.
- It explains why want increases with abundance, and wealth tends to greater
and greater aggregations.
- It explains the vice and misery which show themselves amid dense population,
without attributing to the laws of the All-Wise and All-Beneficent
defects which belong only to the shortsighted and selfish enactments of
The truth is self-evident. ... read the whole chapter
Rev. A. C. Auchmuty: Gems from George,
a themed collection of
excerpts from the writings of Henry George (with links to sources)
LET us try to trace the genesis of civilization. Gifted alone with
the power of relating cause and effect, man is among all animals the only producer
in the true sense of the term. . . . But the same quality of reason which makes
him the producer, also, wherever exchange becomes possible, makes him the exchanger.
And it is along this line of exchanging that the body economic is evolved and
develops, and that all the advances of civilization are primarily made. . .
. With the beginning of exchange or trade among men this body economic begins
to form, and in its beginning civilization begins. . . . To find an utterly
uncivilized people, we must find a people among whom there is no exchange or
trade. Such a people does not exist, and, as far as our knowledge goes, never
did. To find a fully civilized people, we must find a people among whom exchange
or trade is absolutely free, and has reached the fullest development to which
human desires can carry it. There is, as yet, unfortunately, no such people. — The
Science of Political Economy — unabridged:
Book I, Chapter 5, The Meaning of Political Economy: The Origin and Genesis
of Civilization • abridged:
Chapter 4, The Origin and Genesis of Civilization
WHEN we, come to analyze production, we find it to fall into three modes, viz::
ADAPTING, or changing natural products either in form or in place so as to fit
them for the satisfaction of human desire.
GROWING, or utilizing the vital forces of nature, as by raising vegetables or
EXCHANGING, or utilizing, so as to add to the general sum of wealth, the higher
powers of those natural forces which vary with locality, or of those human forces
which vary with situation, occupation, or character. — Progress & Poverty — Book
III, Chapter 3, The Laws of Distribution: of Interest and the Cause of Interest
THESE modes seem to appear and to assume importance, in the development of human
society, much in the order here given. They originate from the increase of the
desires of men with the increase of the means of satisfying them, under pressure
of the fundamental law of political economy, that men seek to satisfy their desires
with the least exertion. In the primitive stage of human life the readiest way
of satisfying desires is by adapting to human use what is found in existence.
In a later and more settled stage it is discovered that certain desires can be
more easily and more fully satisfied by utilizing the principle of growth and
reproduction, as by cultivating vegetables and breeding animals. And in a still
later period of development, it becomes obvious that certain desires can be better
and more easily satisfied by exchange, which brings out the principle of co-operation
more fully and powerfully than could obtain among unexchanging economic units. — The
Science of Political Economy unabridged:
Book III, Chapter 2, The Production of Wealth: The Three Modes of Production • abridged:
Part III, Chapter 2, The Production of Wealth: The Three Modes of Production
ALL living things that we know of co-operate in some kind and to some degree.
So far as we can see, nothing that lives can live in and for itself alone.
But man is the only one who co-operates by exchanging, and he may be distinguished
from all the numberless tribes that with him tenant the earth as the exchanging
animal. . . . Exchange is the great agency by which what I have called the
spontaneous or unconscious co-operation of men in the production of wealth
is brought about, and economic units are welded into that social organism
which is the Greater Leviathan. To this economic body, this Greater Leviathan,
into which it builds the economic units, it is what the nerves or perhaps
the ganglions are to the individual body. Or, to make use of another illustration,
it is to our material desires and powers of satisfying them what the switchboard
of a telegraph or telephone, or other electric system, is to that system,
a means by which exertion of one kind in one place may be transmitted into
satisfaction of another kind in another place, and thus the efforts of individual
units be conjoined and correlated so as to yield satisfactions in most useful
place and form, and to an amount enormously exceeding what otherwise would
be possible. — The Science of Political Economy — unabridged:
Book III, Chapter 11, The Production of Wealth: The Office of Exchange in
Production • unabridged
Chapter 9, The Office of Exchange in Production
WE should keep our own market for our
own producers, seems by many to be regarded as the same kind of
a proposition as, We should keep our
own pasture for our own cows; whereas, in truth, it is such a proposition
as, We should keep our own appetites
for our own cookery, or, We should
keep our own transportation for our own legs.— Protection
or Free Trade, Chapter 11: The Home Market and Home Trade - econlib
THE protection of the masses has in all times been the pretense of tyranny — the
plea of monarchy, of aristocracy, of special privilege of every kind. The slave
owners justified slavery as protecting the slaves. British misrule in Ireland
is upheld on the ground that it is for the protection of the Irish. But, whether
under a monarchy or under a republic, is there an instance in the history of
the world in which the "protection" of the laboring masses has not meant their
oppression? The protection that those who have got the law-making power into
their hands have given labor, has at best always been the protection that man
gives to cattle — he protects them that he may use and eat them. — Protection
or Free Trade — Chapter 2, Clearing Ground econlib
IT is never intimated that the land-owner or the capitalist needs protection.
They, it is always assumed, can take care of themselves. It is only the poor
workingman who must be protected. What is labor that it should so need protection?
Is not labor the creator of capital, the producer of all wealth? Is it not the
men who labor that feed and clothe all others? Is it not true, as has been said,
that the three great orders of society are "workingmen, beggarmen, and thieves?" How,
then, does it come that workingmen alone need protection? — Protection
or Free Trade — Chapter 2, Clearing Ground econlib -|- abridged
WHAT should we think of human laws framed for the government of a country which
should compel each family to keep constantly on their guard against every other
family, to expend a large part of their time and labor in preventing exchanges
with their neighbors, and to seek their own prosperity by opposing the natural
efforts of other families to become prosperous? Yet the protective theory implies
that laws such as these have been imposed by the Creator upon the families of
men who tenant this earth. It implies that by virtue of social laws, as immutable
as the physical laws, each nation must stand jealously on guard against every
other nation and erect artificial obstacles to national intercourse.— Protection
or Free Trade, Chapter 4: Protection as a Universal Need econlib
TO attempt to make a nation prosperous by preventing it from buying from other
nations is as absurd as it would be to attempt to make a man prosperous by preventing
him from buying from other men. How this operates in the case of the individual
we can see from that practice which, since its application in the Irish land
agitation, has come to be called "boycotting." Captain Boycott, upon whom has
been thrust the unenviable fame of having his name turned into a verb, was in
fact "protected." He had a protective tariff of the most efficient kind built
around him by a neighborhood decree more effective than act of Parliament. No
one would sell him labor, no one would sell him milk or bread or meat or any
service or commodity whatever. But instead of growing prosperous, this much-protected
man had to fly from a place where his own market was thus reserved for his own
productions. What protectionists ask us to do to ourselves in reserving our home
market for home producers, is in kind what the Land Leaguers did to Captain Boycott.
They ask us to boycott ourselves. — Protection or Free Trade,
Chapter 11: The Home Market and Home Trade - econlib
WHEN not caused by artificial obstacles, any tendency in trade to take a certain
course is proof that it ought to take that course, and restrictions are harmful
because they restrict, and in proportion as they restrict. To assert that the
way for men to become healthy and strong is for them to force into their stomachs
what nature tries to reject, to regulate the play of their lungs by bandages,
or to control the circulation of their blood by ligatures, would be not a whit
more absurd than to assert that the way for nations to become rich is for them
to restrict the natural tendency to trade. — Protection or Free Trade,
Chapter 6: Trade - econlib
MEN of different nations trade with each other for the same reason that
men of the same nation do — because they find it profitable; because
they thus obtain what they want with less labor than they otherwise could. — Protection
or Free Trade, Chapter 6: Trade - econlib -|- abridged
TRADE is not invasion. It does not involve aggression on one side and resistance
on the other, but mutual consent and gratification. There cannot be a trade unless
the parties to it agree, any more than there can be a quarrel unless the parties
to it differ. England, we say, forced trade with the outside world upon China
and the United States upon Japan. But, in both cases, what was done was not to
force the people to trade, but to force their governments to let them. If the
people had not wanted to trade, the opening of the ports would have been useless. — Protection
or Free Trade, Chapter 6: Trade - econlib
TRADE does not require force. Free trade consists simply in letting people buy
and sell as they want to buy and sell.. It is protection that requires force,
for it consists in preventing people from doing what they want to do. — Protection
or Free Trade, Chapter 6: Trade - econlib -|- abridged
IF all the material things needed by man could be produced equally well at all
points on the earth's surface, it might seem more convenient for man the animal,
but how would he have risen above the animal level? As we see in the history
of social development, commerce has been and is the great civilizer and educator.
The seemingly infinite diversities in the capacity of different parts of the
earth's surface lead to that exchange of productions which is the most powerful
agent in preventing isolation, in breaking down prejudice, in increasing knowledge
and widening thought. These diversities of nature, which seemingly increase with
our knowledge of nature's powers, like the diversities in the aptitudes of individuals
and communities, which similarly increase with social development, call forth
powers and give rise to pleasures which could never arise had man been placed
like an ox in a boundless field of clover. The "international law of God" which
we fight with our tariffs — so shortsighted are the selfish prejudices
of men — is the law which stimulates mental and moral progress; the law
to which civilization is due. — Social
Problems — Chapter 19: The First Great Reform.
AND will not the community gain by thus refusing to kill the goose that
lays the golden eggs; by thus refraining from muzzling the ox that treadeth
out the corn; by thus leaving to industry, and thrift, and skill, their natural
reward, full and unimpaired? For there is to the community also a natural
reward. The law of society is, each for all, as well as all for each. No
one can keep to himself the good he may do, any more than he can keep the
bad. Every productive enterprise, besides its return to those who undertake
it, yields collateral advantages to others. If a man plant a fruit tree,
his gain is that he gathers the fruit in its time and season. But in addition
to his gain, there is a gain to the whole community. Others than the owner
are benefited by the increased supply of fruit; the birds which it shelters
fly far and wide; the rain which it helps to attract falls not alone on his
field; and, even to the eye which rests upon it from a distance, it brings
a sense of beauty. And so with everything else. The building of a house,
a factory, a ship, or a railroad, benefits others besides those who get the
direct profits. Nature laughs at a miser. He is like the squirrel who buries
his nuts and refrains from digging them up again. Lo! they sprout and grow
into trees. In fine linen, steeped in costly spices, the mummy is laid away.
Thousands and thousands of years thereafter, the Bedouin cooks his food by
a fire of its encasings, it generates the steam by which the traveler is
whirled on his way, or it passes into far-off lands to gratify the curiosity
of another race. The bee fills the hollow tree with honey, and along comes
the bear or the man. — Progress & Poverty — Book
IX, Chapter 1, Effects of the Remedy: Of the Effect upon the Production of
CONSIDER the effect of such a change upon the labor market. Competition
would no longer be one-sided, as now. Instead of laborers competing with
each other for employment, and in their competition cutting down wages to
the point of bare subsistence, employers would everywhere be competing for
laborers, and wages would rise to the fair earnings of labor. For into the
labor market would have entered the greatest of all competitors for the employment
of labor, a competitor whose demand cannot be satisfied until want is satisfied — the
demand of labor itself. The employers of labor would not have merely to bid
against other employers, all feeling the stimulus of greater trade and increased
profits, but against the ability of laborers to become their own employers
upon the natural opportunities freely opened to them by the tax which prevented
monopolization. — Progress & Poverty — Book
IX, Chapter 1, Effects of the Remedy: Of the Effect upon the Production of
... go to "Gems from George"
Mark Twain Archimedes
As I owned all the land, they
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
Louis Post: Outlines of Louis F. Post's
Lectures, with Illustrative Notes and Charts (1894)
2. THE PRODUCTION OF WEALTH
When considered in connection with primitive modes of production, the vital
importance of this truth is self-evident. 55 If those modes prevailed, involuntary
poverty would be readily traced either to direct enslavement through ownership
of Labor, or to indirect enslavement through ownership of Land. 56 There
could be no other cause. If both causes were absent, every individual might,
if he wished, enjoy all the Wealth that his own powers were capable of producing
in 'the primitive modes of production and under the limitations of common
knowledge that belonged to his environment.57
But in the civilized state this principle is so entangled in the complexities
of division of labor and trade as to be almost lost in the maze. Many, even
of those who recognize it, fail to grasp it as a fundamental truth. Yet it
is no less vital in civilized than in primitive modes of production.
a. Division of Labor
The essential difference between primitive and civilized modes of production
is not in the accumulation of capital which characterizes the latter, but
in the greater scope and minuteness of its division of labor.58 Capital is
an effect of division of labor rather than a cause. Division of labor, by
enhancing labor power and relieving man from the perpetual pursuit of mere
subsistence, utilizes capital and makes civilization possible.59
58. It is his failure to realize this that accounts for
the theory of the socialist that laborers in the civilized state are
dependent upon accumulated capital as well as upon land for opportunities
to produce. See ante, note 49, and post, note 81.
59. Here are two men at a given point. Each has an errand
to do a mile to the east, and each has one to do a mile to the west.
If each goes upon his own errand each will travel a mile out and a mile
back in one direction and the same in the other, making four miles' travel
apiece, or eight miles in all. But if one does both errands to the east
and the other does both to the west, they will travel but two miles apiece,
or four in all. By division of labor they free half their energy and
half their time for devotion to other work, or to study, or to play,
as their inclinations dictate.
The productive power of division of labor may be illustrated by considering
it as a means for utilizing differences of soil and climate. If, for example,
the soil and the climate of two sections of a country, or of two different
countries (for the effects of division of labor are not dependent upon political
geography 60), differ inversely, one being better adapted to the production
of corn than of sugar, and the other, on the contrary, being better adapted
to the production of sugar than of corn, they will yield more wealth in corn
and sugar with division of labor than without it.
6o. No more than are the effects of a healthful climate.
Protectionists who argue that there should be free trade between villages,
cities, counties and states in the same nation, but protection for nations,
thus making the effect of trade to depend upon the invisible political
boundary line that separates communities, are like the colored woman
who, when her house, without being physically removed, had been politically
shifted from North Carolina to Virginia by a change of the boundary line,
expressed her satisfaction in the remark that she was very glad of it,
because she "allus yearn tail dot dat yah Nof Kline was an a'mighty
sickly State," and she was glad that she didn't "live dyeah
Let us imagine a Mainland and an Island, which, as to the adaptability of
their soil and climate to the production of corn and sugar, so differ that
if the people of each should raise their own corn and their own sugar they
would produce, with a given unit of labor force, but 22 of Wealth — 11
in corn and 11 in sugar. Thus: [chart]
Production in that manner would ignore the opportunities afforded by nature
to man for utilizing differences of soil and climate; but by such a wise
division as Labor would adopt in similar circumstances, if unrestrained,
the same unit of labor force almost doubles the product. Thus: [chart]
Nor is it alone because it utilizes differences of soil and climate that
division of labor is so effective. Its effectiveness is enhanced in still
higher degree by its lessening of the labor force necessary to accomplish
any industrial result, whether in mining, manufacturing, transporting, store-keeping,
professional employments, agriculture, or the incidental occupations. Minute
division of labor, instead of accounting for poverty in the civilized state,
makes it all the more unaccountable. ...
But division of labor is dependent upon trade. If trade were wholly stopped
there would be no division of labor; 61 if it be interfered with, division
of labor is obstructed. 62 In the last preceding chart, which illustrates
the effect of division of labor without trade, the Mainland gets 20 of corn,
but no sugar, and the Island gets 20 of sugar, but no corn. Yet each wants
both sugar and corn; and if they freely trade, their wants in these respects
will be better satisfied than if each raises its own corn and sugar.
61. Men who devoted themselves to specialties, unable to exchange their
products for the objects of their desire, which alone would be the motive
for their special labor, would abandon specialties and resort to less civilized
methods of supplying their wants.
62. Division of labor, whether adopted to take advantage of the different
varieties of land or to secure the benefits of special skill in labor, cannot
continue without trade; and to the degree that trade is impeded, to that
degree division of labor will languish. It is only under absolute free trade
between all people and in respect of all products that division of labor
can flourish. Any interference with it is economically an enslavement of
labor in a degree proportioned to the degree of interference.
Compare the first chart of this series with the following: 63 [chart]
The comparison 64 illustrates the advantage to each individual, community
and country, of division of labor and trade over more primitive modes of
production. It is like the difference between raising weights by direct application
of power, and by means of block and tackle.65
63. It will be seen from this chart that the people of
the two places, by dividing their given expenditure of labor in such
a manner as to utilize
the natural advantage peculiar to each place, secure a clear profit of
And this is a substantial profit, consisting not merely of figures upon
paper, but of real wealth — artificial external objects which serve
to satisfy human desires.
64. The people of the Mainland have now sent 10 of their corn to the Island,
and the people of the Island have paid for it by sending 10 of their sugar
to the Mainland.
For simplicity. the cost of effecting the trade is omitted. It does not
affect the principle. If the cost were so high that more sugar and corn could
be got without division of labor than with, division of labor would be abandoned
as unprofitable; if low enough to admit of any profit at all, the trading
would go on, unless restrained, precisely as if it involved no cost. It may
be well to state, however, that the nearer we get to no cost in trading,
the better are we off. Hence, any tariff on trading, whether domestic or
foreign, like railroad and shipping rates for freight, is prejudicial; for
tariffs add to the cost of trading just as freight rates do. Protection has
that for its object. When it does not add enough to the price of a foreign
product to prevent importation it fails of its purpose. And though revenue
tariffs have no such object they produce the same effect, only in minor degree.
65. If every man were obliged, unassisted by the co-operation of others,
to supply his own needs directly by his own labor, few could more than meagerly
satisfy even the simplest of those desires which we have in common with lower
animals. Though each labored diligently the aggregate of wealth would be
exceedingly small compared with the necessities of those who wished to consume
it, while in variety it would be very limited and in quality of the poorest
kind. But by division of labor, which has been carried to marvelous lengths
and is still developing, productive power is so enormously increased that
the annual wealth products of the present time, in quantity and quality,
in variety, usefulness and beauty, almost appear to be the work of giants
And what this series of charts illustrates regarding two places and two
forms of wealth, is true in principle of all places and all forms of wealth.
That every one is better served when each does for others what relatively
he does best, in exchange for what relatively they do best, is as true of
communities and nations as it is of individuals. Indeed, it is true of communities
and nations because it is true of individuals; for it is individuals that
trade, and not communities or nations as such.66
66. Mankind as a whole may be likened to a great man, with
eyes to see, brain to invent and direct, nerves for intercommunication,
and various muscles
for various actions. As different parts of the bodies of men do different
things, each part contributing co-operatively to a general result, so it
is with the body politic, whose different parts — individual men — contribute
in different ways to the common good. Trade is to the body politic what digestion
is to the physical body. To prohibit it is to deprive the great man of his
stomach; to restrict it is to give him dyspepsia.
Says Emerson in the "American Scholar," an oration delivered at
Cambridge in 1837: "It is one of those fables which out of an unknown
antiquity convey an unlocked-for wisdom, that the gods, in the beginning,
divided man into men, that he might be more helpful to himself; just as the
hand was divided into fingers, the better to answer its ends."
Reflection upon the labor-saving power of trade makes it
clear that the notion of protectionists that free trade is prejudicial
to home industry
has no foundation. It would interfere with "home industries" that
could be better conducted elsewhere; but by that very fact it would strengthen
the industries that belonged at home.
When we decide to buy foreign goods we do not thereby decide to employ foreign
labor instead of American labor; we decide that the American labor shall
be employed in making things to trade for what we buy, instead of making
the things that we buy. And we get a better net result or we wouldn't do
Free trade and labor-saving machinery, which belong in the same industrial
category, increase the aggregate wealth of the country where they flourish.
Whether or not they tend to impoverish individuals or classes, depends upon
the manner in which the increased wealth is distributed. If they do so tend,
the remedy surely does not lie in the direction of obstructing trade and
smashing machines so that less wealth may be produced with given labor, but
in altering the conditions that promote unjust distribution.
c. The Law of Division of Labor and Trade
Now, what is it that leads men to conform their conduct to the principle
illustrated by the last chart? Why do they divide their labor, and trade
its products? A simple, universal and familiar law of human nature moves
them. Whether men be isolated, or be living in primitive communities, or
in advanced states of civilization, their demand for consumption determines
the direction of Labor in production.67 That is the law. Considered in connection
with a solitary individual, like Robinson Crusoe upon his island, it is obvious.
What he demanded for consumption he was obliged to produce. Even as to the
goods he collected from stranded ships — desiring to consume them,
he was obliged to labor to produce them to places of safety. His demand for
consumption always determined the direction of his labor in production.68
And when we remember that what Robinson Crusoe was to his island in the sea,
civilized man as a whole is to this island in space, we may readily understand
the application of the same simple law to the great body of labor in the
civilized world.69 Nevertheless, the complexities of civilized life are so
likely to obscure its operation and disguise its relations to social questions
like that of the persistence of poverty as to make illustration desirable.
67. The term " production" means not creation
but adaptation. Man cannot add an atom to the universe of matter; but
he can so modify
the condition of matter, both in respect of form and of place, as to adapt
to the satisfaction of human desires. To do this is to produce wealth.
"Consumption" is the ultimate object of all
production. We produce because we desire to consume. But consumption
does not mean destruction.
Man has no more power to destroy than to create. His power in consumption,
like his power in production, is limited to changing the condition of
things. As by production man changes things from natural to artificial
to satisfy his desires, so by consumption he changes things from artificial
to natural conditions in the process of satisfying his desires.
Production is the drawing forth of desired things, of Wealth, from the Land;
consumption is the returning back of those things to the Land.
"All labor is but the movement of particles of matter from one place
to another." — Dick's Outlines, p. 25.
Production consists merely in changing things — Ely's
Intro., part ii, ch. i; Mill's Prin., book i, ch. i, sec. 2.
"As man creates no new matter but only utilities, so he destroys no
matter, but only utilities. Consumption means the destruction of a utility." — Ely's
Intro., part v. ch. i., p. 268.
Production means "drawing forth." — Jevons's
Primer, sec. 17.
"Man cannot create material things. . . His efforts and sacrifices
result in changing the form or arrangement of matter to adapt it better for
the satisfaction of wants." — Marshall's Prin., book ii, ch.
iii, sec. i.
"It is sometimes said that traders do not produce; that while the cabinet
maker produces furniture, the furniture dealer merely sells what is already
produced. But there is no scientific foundation for this distinction." — Id.
"As his [man's] production of material products is really nothing more
than a rearrangement of matter which gives it new utilities, so his consumption
of them is nothing more than a disarrangement of matter which diminishes
or destroys its utilities." — Id.
"In like manner as by production is meant the creation not of substance
but of utility, so by consumption is meant the destruction of utility and
not of substance or matter." — Say's Trea., book ii, ch. i.
"All that man can do is to reproduce existing materials under another
form, which may give them a utility they did not before possess, or merely
enlarge one they may have before presented. So that in fact there is a creation
not of matter but of utility ; and this I call production of wealth. . .
There is no actual production of wealth without a creation or augmentation
of utility."— Say's Trea., book i, ch. i.
68. It is highly significant that while Robinson Crusoe had unsatisfied
wants he was never out of a job.
69. Demand for consumption is satisfied not from hoards of accumulated wealth,
but from the stream of current production. Broadly speaking there can be
no accumulation of wealth in the sense of saving up wealth from generation
to generation. Imagine a man's satisfying his demand for eggs from the accumulated
stores of his ancestors! Yet eggs do not differ in this respect from other
forms of wealth, except that some other forms will keep a little longer,
and some not so long.
The notion that a saving instinct must be aroused before
the great and more lasting forms of wealth can be brought forth is a
mistake. Houses and locomotives,
for example, are built not because of any desire to accumulate wealth,
but because we need houses to live in and locomotives to transport us
goods. It is not the saving, but the serving, instinct that induces the
production of these things; the same instinct that induces the production
of a loaf of bread.
Artificial things do not save. No sooner are the processes of production
from land complete than the products are on their way back to the land. If
man does not return them by means of consumption, then through decay they
return themselves. Mankind as a whole lives literally from hand to mouth.
What is demanded for consumption in the present must be produced by the labor
of the present. From current production, and from that alone, can current
consumption be satisfied.
"Accumulated wealth" is, in fact, not wealth
at all in any great degree. It is merely titles to wealth yet to be produced.
A share in
a mining company, for example, is but a certificate that the owner is legally
to a proportion of the wealth to be produced in the future from a certain
Titles to future wealth may be both morally and legally valid. This is so
when they represent past labor or its products loaned in free contract for
future labor or its products; for example, a contract for the delivery of
goods of any kind today to be paid for next week. or next month, or next
year, or in ten years, or later.
They may be legally but not morally valid. This is so when they represent
the product of a franchise (whether paid for in labor or not) to exact tribute
from future labor; for example, a franchise to confiscate a man's labor through
ownership of his body, as in slavery, or a franchise to confiscate the products
of labor in general through ownership of land.
Or they may be both legally and morally invalid, as when
they are obtained by illegal force or fraud from the rightful owner.
The poverty of Food-makers as to clothing is thus removed. They are working
all they care to at food-making, their own chosen employment, and they are
paid in clothing, their own chosen compensation. So long as Personal Servants
withdraw food and Clothing-makers supply clothing, Food-makers cannot be
poor. With them business will be brisk, labor will be in demand, and wages
will be high. That all the other workers may enjoy the same prosperity we
shall see in a moment. Clothing-makers pour clothing into the commercial
reservoir because they wish to take something out, and know that in this
way they can get a larger quantity and better quality of what they require
than if they undertake to make it themselves. They are skilled in making
clothing; they are not skilled in other ways. Accordingly they utilize the
claim against Personal Servants, which has passed to their credit in exchange
for clothing, by drawing from the commercial reservoir the particular commodity
they desire. Suppose it to be shelter. They proceed as Personal Servants
and Food-makers have already done, and so set Shelter-makers at work. Shelter-makers
in turn utilize the claim against Personal Servants which has now been credited
to them, by taking luxuries out of the reservoir. This sets Luxury-makers
at work. Luxury-makers then pass the claim over in exchange for services,
and Personal Servants redeem it by rendering such services as Luxury-makers
demand.72 Everybody is now paid for his own products with the products of
others; and by demanding more food, Personal Servants may perpetuate the
interchange indefinitely.73 And Personal Servants will continue to demand
more food until their wants as to food are wholly and finally satisfied.74
72. The mechanism of these exchanges should be explained.
Personal Servants upon demanding food may pay money for
it. The retailers might thereupon pass the money along, and it would
ultimately return to Personal Servants. Or the Personal Servants may
give notes payable at a future time, which being endorsed over would
at last be redeemed by them in services. Or they may give checks on banks,
which assumes previous work done by them or the discounting of their
notes by the banks. As the world's exchanges are almost wholly adjusted
by means of checks, and other commercial paper which is in economic effect
the same as checks, let us illustrate that mode by a series of charts
adapted from Jevons.
We will begin with two traders, A and B. They have no
money, but every time that one demands anything of the other he must
offer in exchange something that the other wants. There must be what
is called "a double coincidence" of demand and supply; each
must want what the other has. This is primitive barter. It may be represented
by the following chart :
In the civilized state, even in its beginnings, primitive
barter must be obstructive to trade, and it gives way to the use of currency — some
common medium which is taken for goods not because the taker wants it
but because he knows that be can readily exchange it for the goods that
he does want. With currency in use, when A wants anything of B he is
not obliged to find something that B wants. All he needs is currency.
Thus currency reduces the friction of trading.
But as the volume of trade augments, demand for currency
increases; and because it is scarce, or troublesome or dangerous to transmit,
or all together, easier means of exchange are resorted to, and bookkeeping
takes the place of currency as currency took the place of primitive barter.
At this stage, when A wants anything of B, B charges him; and when B
wants anything of A, A charges him. Their mutual accounts being adjusted,
the small balance is paid with currency. Thus the demand for currency
is greatly lowered by bookkeeping, and the friction of trading is correspondingly
Now let us bring in two more traders, C and D:
Though all four of these traders keep mutual accounts,
the settlement of balances requires more currency than before, and scarcity
of currency, together with the danger and expense of transmission, evolves
an extension of bookkeeping. A common bookkeeper, called a "Bank," is
employed, and all need for currency disappears:
Balances are now settled by checks, and all accounts are
adjusted in the central ledger at the bank.
But the introduction of another group of traders, another
community, renews the demand for currency, and another bank appears.
And now the two banks are in the same position that A
and B were in before any bank came. They keep mutual accounts, but they
must have currency to settle their balances. And if we bring in more
communities the demand for currency further increases. Thus:
Now the four banks are in the same situation that A, B,
C and D were in before there were any banks. This evolves a bank of banks — a
All necessity for currency once more disappears.
These charts illustrate the principle by which mutual
trading is effected. In practice, the need of currency is never wholly
done away with, but the tendency is constantly in the direction of doing
away with it. And it is said that over ninety per cent of the trading
transactions of the world are adjusted in this manner, and less than
ten per cent by means of currency.
The clearing-house principle extends over the civilized
world. In illustration of this, observe the following chart:
These five cities are like the five banks. The bookkeeping of each city is
conducted by local banks and clearing-houses, and the central bookkeeping
by those of the market town of the world, which at present is London.
In this way the mobility of labor is in effect enormously
increased. Labor in every corner of the world is brought into close trading
relations with labor everywhere else, so that only war, pestilence, protection,
and land monopoly interfere with the full freedom of its movement.
73. Personal Servants, on the basis of their employment
by Luxury-makers, demand more food, which keeps Food-makers at work;
Food-makers demand more clothing, which keeps Clothing-makers at work;
Clothing-makers demand more shelter, which keeps Shelter-makers at work;
Shelter-makers demand more luxuries, which keeps Luxury-makers at work;
Luxury-makers demand more services, which keeps Personal Servants at
work. And so on indefinitely.
If now we add progressive invention, so that every one
produces more and more wealth with less and less labor, instead of finding
poverty upon the increase, instead of being harried by periodical "hard
times," we shall find business brisk and every one becoming richer
and richer. That is to say, though all labor less than before, each obtains
better results from others while giving better results in exchange.
And should we improve the verisimilitude of the illustration
by bringing in the fact that all workers in civilized society are specialists
in a much more minute degree than the division into Clothing-makers,
Food-makers, etc., would imply — that every one who works does
over and over some one thing in one of these branches, as the making
of shoes or the baking of bread, or even only part of a thing, as the
cutting of shoe soles, and that while giving out a great deal of his
own product he demands in pay a little of every other kind of product — the
same effect would naturally result.
Every man who demands anything for consumption thereby
determines the direction of labor toward the production not only of that
thing, but also of all the artificial materials and implements, from
the simplest tool to the most expensive and complex machine, that are
used in its production. The actual process is much more intricate than
that of the charts, but the charts illustrate the principle so that any
intelligent person who understands them can apply — it to the most
complex affairs of industrial life.
"This principle is so simple and obvious that it
needs no further illustration, yet in its light all the complexities
of our subject disappear, and we thus reach the same view of the real
objects and rewards of labor in the intricacies of modern production
that we rained by observing in the first beginnings of society the simpler
forms of production and exchange. We see that now, as then, each laborer
is endeavoring to obtain by his exertions the satisfaction of his own
desires; we see that although the minute division of labor assigns to
each producer the production of but a small part, or perhaps nothing
at all, of the particular things he labors to get, yet, in aiding in
the production of what other producers want, he is directing other labor
to the production of the things he wants — in effect, producing
them himself. And thus, if he makes jackknives and eats wheat, the wheat
is really as much the produce of his labor as if he had grown it for
himself and left wheat-growers to make their own jackknives." — Progress
and Poverty. book i, ch. iv.
74. There is no end to man's wants.
"The demand for quantity once satisfied, he seeks
quality. The very desires that he has in common with the beast become
extended, refined, exalted. It is not merely hunger, but taste, that
seeks gratification in food; in clothes, he seeks not merely comfort,
but adornment; the rude shelter becomes a house; the undiscriminating
sexual attraction begins to transmute itself into subtle influences,
and the hard and common stock of animal life to blossom and to bloom
into shapes of delicate beauty." — Progress and Poverty, book
ii, ch. iii.
A labor agitator was arguing the labor question with a
rich man, the judge of his county, when the judge as a clincher asked:
"what do workingmen want, anyway, that they haven't
Promptly the agitator replied with the counter-question
"Judge, what have you got that you don't want?"
Let us now complete this chart. When we began it a distinction was noted
between Personal Servants, who render mere intangible services, and the other
classes, who produce tangible wealth. But essentially there is no difference.
By referring to the chart and observing the course of the arrows, Food-makers
are seen working for Personal Servants precisely as Personal Servants work
for Luxury-makers. We may therefore abandon the distinction. This makes it
no longer necessary to mention particular classes of products in the chart;
it is enough to distinguish the different kinds of labor.76 Thus:
76. "This, then, we may say is the great law which
binds society — 'service for service.' "— Dick's Outlines,
For simplicity the workers have been divided into great classes, and each
class has been supposed to serve only one other class. But the actual currents
of trade are much more complex. It would be practically impossible to follow
them in detail, or to illustrate their particular movements in any simple
way. And it is unnecessary. The principle illustrated in the chart is the
principle of all division of labor and trade, however minute the details
and intricate the movement; and any person of ordinary intelligence who wishes
to understand will need only to grasp the principle as illustrated by the
chart to be able to apply it to the experiences of everyday industrial life.
All legitimate trade is the interchange of Labor for Labor.77
77. In the light of this principle how absurd are some
of the explanations of hard times.
Overproduction! when an infinite variety of wants are
unsatisfied which those who are in want are anxious and able to satisfy
for one another. Hatters want bread, and bakers want hats, and farmers
want both, and they all want machines, and machinists want bread and
hats and machines, and so on without end. Yet while men are against their
will in partial or complete idleness, their wants go unsatisfied! Since
producers are also consumers, and production is governed by demand for
consumption, there can be no real overproduction until demand ceases.
The apparent overproduction which we see — overproduction relatively
to "effective demand" — is in fact a congestion of some
things due to an abnormal underproduction of other things, the underproduction
being caused by obstructions in the way of labor.
Scarcity of capital! when makers of capital in all its
forms are involuntarily idle. Scarcity of capital, like scarcity of money,
is only an expression for lack of employment. But why should there be
any lack of employment while men have unsatisfied wants which they can
Too much competition! when competition and freedom are
the same. It is not freedom but restraint, not competition but protection,
that obstructs the action and reaction of demand and supply which we
have illustrated in the chart.
... read the book
Nic Tideman: A Bill of
Economic Rights and Obligations
Article 6: People have
to trade freely with persons in all other localities, subject only to
restrictions of the localities of the trading persons. Every locality
has an obligation to allow goods to pass freely through its
territory, except that, to the extent that the passage of goods
causes cost, those costs may be recovered.
Tideman: Basic Tenets of the
Incentive Taxation Philosophy
When the principle that the value
opportunities should be received by the public treasury is violated,
the result is "privilege," which from its Latin roots means
"private law," that is, law that permits one person to do what
others are not permitted to do. Thus what we stand for is an end to
Numerous examples of privilege are
incorporated in our
- Farm legislation restricts the growing of tobacco to those
who have been assigned acreage allotments.
- For numerous commodities, trade legislation limits
shipments from individual countries to specified quotas.
- In many cities, only persons who have been given permits
are allowed to operate taxis, and new permits are not issued.
- To operate a radio or television station requires a
license, and there are no opportunities for new licenses to be issued.
- In most cities, construction of commercial or multi-family
residential structures requires zoning permission that is granted to
some and not to others.
- But the single most important category of privilege is
This list of examples of
privilege, which is by no means
exhaustive, contains some privileges, such as acreage allotments and
import quotas, that would be best reformed by eliminating
restrictions and permitting all to do what now only some may do. For
other privileges, such as broadcast licenses and land titles, great
productivity results from the social understanding that a specified
individual will have the use of a given resource. For these
privileges, the best reform is the introduction of the requirement
that any person who is assigned such an opportunity must pay to the
public treasury an annual fee equal to what the opportunity would be
worth to someone else. ... Read
the whole article
Weld Carter: An Introduction to
However, what is the effect on
production of taxes levied on
products and of taxes levied on the value of land?
Of taxes levied on products,
George said: "The present method of
taxation operates upon exchange like artificial deserts and
mountains; it costs more to get goods through a custom house than it
does to carry them around the world. It operates upon energy, and
industry, and skill, and thrift, like a fine upon those qualities. If
I have worked harder and built myself a good house while you have
been contented to live in a hovel, the taxgatherer now comes annually
to make me pay a penalty for my energy and industry, by taxing me
more than you. If I have saved while you wasted, I am mulct, while
you are exempt. If a man build a ship we make him pay for his
temerity, as though he had done an injury to the state; if a railroad
be opened, down comes the taxcollector upon it, as though it were a
public nuisance; if a manufactory be erected we levy upon it an
annual sum which would go far toward making a handsome profit. We say
we want capital, but if anyone accumulate it, or bring it among us,
we charge him for it as though we were giving him a privilege. We
punish with a tax the man who covers barren fields with ripening
grain, we fine him who puts up machinery, and him who drains a swamp.
How heavily these taxes burden production only those realize who have
attempted to follow our system of taxation through its ramifications,
for, as I have before said, the heaviest part of taxation is that
which falls in increased prices" (1879, rpt. 1958, p. 434).
Turning to taxation levied on the
value of land, George went on to
For this simple device of placing
all taxes on the value of land
would be in effect putting up the land at auction to whosoever would
pay the highest rent to the state. The demand for land fixes its
value, and hence, if taxes were placed so as very nearly to consume
that value, the man who wished to hold land without using it would
have to pay very nearly what it would be worth to anyone who wanted
to use it.
And it must be remembered that
this would apply, not merely to
agricultural land, but to all land. Mineral land would be thrown open
to use, just as agricultural land; and in the heart of a city no one
could afford to keep land from its most profitable use, or on the
outskirts to demand more for it than the use to which it could at the
time be put would warrant. Everywhere that land had attained a value,
taxation, instead of operating, as now, as a fine upon improvement,
would operate to force improvement (1879, rpt. 1958, p. 437).
A few pages before this he had
told us that, "It is sufficiently
evident that with regard to production, the tax upon the value of
land is the best tax that can be imposed. Tax manufactures, and the
effect is to check manufacturing; tax improvements, and the effect is
to lessen improvement; tax commerce, and the effect is to prevent
exchange; tax capital, and the effect is to drive it away. But the
whole value of land may be taken in taxation, and the only effect
will be to stimulate industry, to open new opportunities to capital,
and to increase the production of wealth" (1879, rpt. 1958, p. 414).
In other words, according to
George, taxation of products checks
production, whereas taxation of land values stimulates
production. ... read
the whole article
Karl Williams: Social
Justice In Australia: ADVANCED KIT - Part 2
TRADE OR PROTECTION?
free enterprise, friends: freedom to gamble, freedom to lose. And the
great thing -- the truly democratic thing about it -- is that you don't
even have to be a player to lose." - Barbara Ehrenreich (1941-
), American author and columnist
Lots of provisos can be added later, but this is the basic
believe in free trade only if it's fair trade. Today it's is hardly
ever fair and it's far from free, since it is dominated by ruling
monopolies in all the larger economies such as the US, Japan, Germany,
the UK, etc - but it can be.
The great advantages of free trade were never more eloquently
than by Henry George himself, but these benefits have been overshadowed
and confused by the way the threatening aspects of globalisation have
spread in recent years. Globalisation has appeared all the more
menacing because of the way the plutocrats who control transnational
organisations have been calling for the last barriers to free trade to
be removed. The trouble is, they don't give a damn about freedom!
Instead of allowing real free trade, the big boys seek to further
strengthen their monopoly privileges and political influence in order
to produce greater disparities in wealth.
MANY DISADVANTAGES OF FREE TRADE
Cultural diversity is one of the things that undoubtedly makes
more interesting, and its erosion by unrestrained free trade would be
an irretrievable loss. Who wants McDonald's and other global chain
stores in every shopping centre? This evaluation obviously requires
difficult value judgments to be weighed against the possible economic
benefits. But cultural heritage and diversity have been grossly
undervalued by the bean counters who ignore it for not having a $ tag
National independence and security can be threatened by free
that a country can become too dependent on trading partners to provide
essential goods and services up to basic foodstuffs.
There are often hidden environmental costs to free trade,
when goods are transported over vast distances and exporters are not
paying the full costs of using scarce resources and of polluting the
global commons. Furthermore, recent trade agreements have been based on
environmental standards coming down to the lowest common denominator
when they could just as easily have been based on the highest.
Perhaps the loudest outcry against free trade and globalisation
been against the increasing exploitation by transnationals of "factory
fodder" in developing nations. Even the threat of the physical transfer
of industrial plant to low wage countries further erodes the bargaining
power and wages of workers in the West.
And transnationals can bully their way and dominate markets with
monopoly or cartel powers, often playing off nations against each other
to extract all sorts of tax concessions. But, when the time comes to
pay what little tax is owed, transfer pricing allows them to shift
their profits to low-taxing offshore locations. Furthermore, the rapid
movement of capital in and out of nations exacerbates economic
uncertainty and instability.
BUT DON'T DISCOUNT ECONOMIC
Having made these admissions, we must hasten to add that free
given rise to enormous economic prosperity. The efficiencies from fully
utilising each nation's natural advantages are evident in any
supermarket or electrical goods store. Self-sufficiency has enormous
costs, keeping people working far longer than they need to. Those who
cry loudest for protectionist policies are often the most wasteful and
inept domestic producers, who are effectively subsidised by the public.
But will Geonomics address the current problems of free trade,
bring about fair trade? Let's examine the problems one by one.
HOW GEONOMICS FITS IN
Concerning the erosion of cultural diversity, Geonomics can help
little. The LVT assessment process can assist in quantifying the
intangible cultural benefits of, say, retaining a traditional inn
rather than replacing it with a global-franchise motel. In the end each
community, knowing the cultural costs of certain moves towards free
trade, would decide how badly it wants to preserve its culture and how
far to cash in on it without underselling its cultural heritage.
Geonomics would easily solve the rest of the problems arising
trade. The collection of full resource rentals would prevent any
underselling of the environment. Exploitation of Third World factory
fodder could never continue after addressing the root cause of
unemployment. The way Geonomics opens up a multitude of domestic
investment opportunities in both the public and private sectors would
no longer coerce developing countries to beg for investment by
transnational monopolies. And transnational tax avoidance would most
clearly end - no one can hide land or evade the tax assessed on it!
Max gets to Heaven he won't last long. He will be chucked out for
trying to pull off a merger between Heaven and Hell...after having
secured a controlling interest in key subsidiary companies in both
places, of course." - H. G. Wells, (1866-1946), referring to
Lord Beaverbrook. ... Read the
Henry George: Justice
the Object -- Taxation the Means (1890)
Bring almost any article of
wealth to this country from a foreign
country, and you are confronted at once with a tax. Is it not from a
common sense standpoint a stupid thing, if we want more
wealth — if the prosperous country is the country that increases
in wealth, why in Heaven's name should we put up a barrier against
the men who want to bring wealth into this country? We want more
dry-goods (if you don't know, your wives surely will tell you). We
want more clothing; more sugar; more of all sorts of the good things
that are called "goods;" and yet by this system of taxation
we virtually put up a high fence around the country to keep out these
very things. We tax that convenient man who brings goods into the
If wealth be a good thing; if the
country be a prosperous
country — that is, increasing in wealth — well, surely, if we
propose to restrict trade at all, the wise thing would he to put the
taxes on the men who are taking goods out of the country, not upon
those who are bringing goods into the country.
We Single Tax men would sweep
away all these barriers. We would
try to keep out small-pox and cholera and vermin and plagues. But we
would welcome all the goods that anybody wanted to send us, that
anybody wanted to bring home. We say it is stupid, if we want more
wealth, to prevent people from bringing wealth to the country. We
say, also, that it is just as stupid to tax the men who produce
wealth within the country. Read the
Dan Sullivan: Are you a Real
Libertarian, or a ROYAL Libertarian?
The English free-trader Cobden
remarked that "you who free the
land will do more for the people than we who have freed trade."
Indeed, how can anyone speak of free trade when the trader has to pay
tribute to some favored land-entitlement holder in order to do
This imperfect policy
of non-intervention, or
laissez-faire, led straight to a most hideous and dreadful economic
exploitation; starvation wages, slum dwelling, killing hours,
pauperism, coffin-ships, child-labour -- nothing like it had ever been
seen in modern times ... People began to say, if this is what State
abstention comes to, let us have some State intervention.
Bill Batt: The
Compatibility of Georgist Economics and Ecological Economics
But the state had intervened; that
the whole trouble. The State had established one monopoly--the
landlord's monopoly of economic rent--thereby shutting off great hordes
of people from free access to the only source of human subsistence, and
driving them into factories to work for whatever Mr. Gradgrind and Mr.
Bottles chose to give them. The land of England, while by no means
nearly all actually occupied, was all legally
occupied; and this State-created monopoly enabled landlords to satisfy
their needs and desires with little exertion or none, but it also
removed the land from competition with industry in the labor market,
thus creating a huge, constant and exigent labour-surplus. [Emphasis
Nock's] --Albert J. Nock, "The Gods' Lookout" February 1934 ... Read
the whole piece
During the late 19th century,
the burden of various direct taxes was
not so large that many common people felt their acute impact. It was,
however, a time of extreme disparities between the poor and the
wealthy, and the single tax was a means by which to redress some of
those disparities. It would also foster the availability of employment
by making labor more attractive relative to land and capital
investment. In a word, people would more likely have to earn their
money. The fruits of land wealth, distributed among people equally in
the form of government services, would go far toward both enhancing
economic opportunity and correcting inequality.
Georgists today adhere to much the same points of view, although
are some significant differences. George
himself was an ardent free
trader, mainly because he believed that the single tax should supplant
tariffs. After Ricardo, he accepted the idea of comparative
that arose from trade, but only after land (resource) rents were
collected so as to preclude the raping of the natural environments of
countries rich in such resources. He also believed that population
growth was good — the more the better, and took special pains to refute
Malthus. But one should also recall that he was living at a time when
the expanse of the American continent was still open to any homesteader
who chose to do so. Population growth was not a problem at that time.
These elements of George’s thought are inconsequential to his
followers today. Yet it is important
to note that Georgists are not socialists; they do not
subscribe to the view that society should own the means of production.
These should remain privately owned by and large (except perhaps as
today’s economic theory would call for, i.e., natural monopolies,
public goods, and other government instruments). They are, rather,
free-marketers in the full sense of the world, even more ardently than
many contemporary American conservatives. He believed that
accretion of economic rent from landsites would restore self-regulating
equilibrium of the marketplace, thus obviating the need for the heavy
hand of government controls. ... read the whole article
Judge Samuel Seabury: An Address delivered
upon the 100th anniversary of the birth of Henry George
WE are met to celebrate the 100th anniversary of the birth of Henry George.
We meet, therefore, in a spirit of joy and thanksgiving for the great life
which he devoted to the service of humanity. To very few of the children of
men is it given to act the part of a great teacher who makes an outstanding
contribution toward revealing the basic principles to which human society must
adhere if it is to walk in the way which leads to freedom. This Henry George
did, and in so doing he expressed himself with a clarity of thought and diction
which has rarely been surpassed.
... The second principle to which I wish to refer is Henry George's advocacy
of freedom of trade among the nations — not free trade introduced overnight,
but freedom of trade as an end toward which the nations should move. When he
wrote his great work on "Protection or Free Trade," he demolished
the protectionist argument and in chapter after chapter he showed the absurdities
to which the protectionist principle led if carried to its logical conclusion.
But even he, penetrating as his vision was, could not foresee that mankind
was heading for a world order of economic nationalism and isolation, based
upon the principle of protection carried to its utmost extreme. And yet
that it is precisely the doctrine which is now currently accepted. If it
general, it can serve only to sow the seeds of destruction of that measure
of civilization which we now have and force a lowering of the standard
of living throughout the world.
There are two ways by which the people of one nation can acquire the property
or goods of the people of another nation. These are by war and by trade. There
are no other methods. The present tendency among civilized people to outlaw
trade must drive the states which prescribe such outlawry to acquire the property
and goods of other peoples by war. Early in man's struggle for existence the
resort to war was the common method adopted. With the advancement of civilization
men resorted to trade as a practical substitute for war. The masses of men
wish to trade with one another. The action of the states alone prevents them
from so doing. In prohibiting trade, the state gives an importance to territorial
boundaries which would not exist if freedom of trade existed. In accentuating
the importance of mere boundary disputes, rather than assuring the right of
peoples to trade with one another, the nations put the emphasis upon the precise
issue which is, itself, one of the most prolific causes of war.
All the great modern states are turning away from freedom of trade, and indeed,
from trade itself, and forbidding their people the right to earn their own
livelihood and to associate freely with one another in industry. In order to
accomplish this end they are compelled to regiment the lives of their people
under state bureaucracies and this can be accomplished only by a despotic state.
If the powers of the modern states are to be augmented by conferring upon them
the right to run all industry, despotism is inevitable. A dictator may, by
reducing the standard of living and regimenting the people, run all industry
within the state over which he rules, but a democracy, which, if it is to be
true to itself, must preserve individual initiative, can not do so without
transforming itself into a dictatorship. ... read
the whole speech
Henry Ford Talks About War and Your
Future - 1942 interview
Albert Jay Nock — Henry George: Unorthodox
George was moreover the terror of the political routineer. When the Republicans
suddenly raised the tariff issue in 1880 the Democratic committee asked him
to go on the stump. They arranged a long list of engagements for him, but after
he made one speech they begged him by telegraph not to make any more. The nub
of his speech was that he had heard of high-tariff Democrats and revenue-tariff
Democrats, but he was a no-tariff Democrat who wanted real free trade, and
he was out for that or nothing; and naturally no good bi-partisan national
committee could put up with such talk as that, especially from a man who really
Yet, on the other hand, when the official free-traders of the Atlantic seaboard,
led by Sumner, Godkin, Beecher, Curtis, Lowell, and Hewitt, opened their
arms to George, he refused to fall in. His free-trade speeches during Cleveland’s
second campaign were really devoted to showing by implication that they were
a hollow lot, and that their idea of free trade was nothing more or less than
a humbug. His speeches hurt Cleveland more than they helped him, and some of
George’s closest associates split with him at this point. In George’s
view, freedom of exchange would not benefit the masses of the people a
particle unless it were correlated with freedom of production; if it would,
it that the people of free-trade England, for example, were no better off
than the people of protectionist Germany! None of the official free-traders
answer that question, of course, for there was no answer. George had already
developed his full doctrine of trade in a book, published in 1886, called Protection
or Free Trade — a book which, incidentally, gives a reader the
best possible introduction to Progress and Poverty. ...read the whole article