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Wealth and Want | |||||||
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Wage
Disparities
Henry George: The Crime
of Poverty (1885 speech)
But I have not time to enter into further details. I can only ask you
to think upon this thing, and the more you will see its desirability.
As an English friend of mine puts it: "No taxes and a pension for
everybody;" and why should it not be? To take land values for public
purposes is not really to impose a tax, but to take for public purposes
a value created by the community. And out of the fund which would thus
accrue from the common property, we might, without degradation to
anybody, provide enough to actually secure from want all who were
deprived of their natural protectors or met with accident, or any man
who should grow so old that he could not work. All prating that is
heard from some quarters about its hurting the common people to give
them what they do not work for is humbug. The truth is, that anything
that injures self-respect, degrades, does harm; but if you give it as a
right, as something to which every citizen is entitled to, it does not
degrade. Charity schools do degrade children that are sent to them, but
public schools do not.
But all such benefits as these, while great, would be incidental. The great thing would be that the reform I propose would tend to open opportunities to labour and enable men to provide employment for themselves. That is the great advantage. We should gain the enormous productive power that is going to waste all over the country, the power of idle hands that would gladly be at work. And that removed, then you would see wages begin to mount. It is not that everyone would turn farmer, or everyone would build himself a house if he had an opportunity for doing so, but so many could and would, as to relieve the pressure on the labour market and provide employment for all others. And as wages mounted to the higher levels, then you would see the productive power increased. The country where wages are high is the country of greatest productive powers. Where wages are highest, there will invention be most active; there will labour be most intelligent; there will be the greatest yield for the expenditure of exertion. The more you think of it the more clearly you will see that what I say is true. I cannot hope to convince you in an hour or two, but I shall be content if I shall put you upon inquiry. ... read the whole speech Henry George: Concentrations of Wealth Harm America (excerpt from Social Problems) (1883) 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....
The progress of civilization
requires that more and more
intelligence be devoted to social affairs, and this not the
intelligence of the few, but that of the many. We cannot safely leave
politics to politicians, or political economy to college professors.
The people themselves must think, because the people alone can act. ... 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. ...
Can Anyone Be Rich? The comfortable theory that it is in the nature of things that some should be poor and some should be rich, and that the gross and constantly increasing inequalities in the distribution of wealth imply no fault in our institutions, pervades our literature, and is taught in the press, in the church, in school and in college. This is a free country, we are told -- every man has a vote and every man has a chance. The laborer's son may become President; poor boys of to-day will be millionaires thirty or forty years from now, and the millionaire's grandchildren will probably be poor. What more can be asked? If a man has energy, industry, prudence and foresight, he may win his way to great wealth. If he has not the ability to do this he must not complain of those who have. If some enjoy much and do little, it is because they, or their parents, possessed superior qualities which enabled, them to "acquire property" or "make money." If others must work hard and get little, it is because they have not yet got their start, because they are ignorant, shiftless, unwilling to practise that economy necessary for the first accumulation of capital; or because their fathers were wanting in these respects. The inequalities in condition result from the inequalities of human nature, from the difference in the powers and capacities of different men. If one has to toil ten or twelve hours a day for a few hundred dollars a year, while another, doing little or no hard work, gets an income of many thousands, it is because all that the former contributes to the augmentation of the common stock of wealth is little more than the mere force of his muscles. He can expect little more than the animal, because he brings into play little more than animal powers. He is but a private in the ranks of the great army of industry, who has but to stand still or march, as he is bid. The other is the organizer, the general, who guides and wields the whole great machine, who must think, plan and provide; and his larger income is only commensurate with the far higher and rarer powers which he exercises, and the far greater importance of the function he fulfils. Shall not education have its reward, and skill its payment? What incentive would there be to the toil needed to learn to do anything well were great prizes not to be gained by those who learn to excel? It would not merely be gross injustice to refuse a Raphael or a Rubens more than a housepainter, but it would prevent the development of great painters. To destroy inequalities in condition would be to destroy the incentive to progress. To quarrel with them is to quarrel with the laws of nature. We might as well rail against the length of the days or the phases of the moon; complain that there are valleys and mountains; zones of tropical heat and regions of eternal ice. And were we by violent measures to divide wealth equally, we should accomplish nothing but harm; in a little while there would be inequalities as great as before. This, in substance, is the teaching which we constantly hear. It is accepted by some because it is flattering to their vanity, in accordance with their interests or pleasing to their hope; by others, because it is dinned into their ears. Like all false theories that obtain wide acceptance, it contains much truth. But it is truth isolated from other truth or alloyed with falsehood. To try to pump out a ship with a hole in her hull would be hopeless; but that is not to say that leaks may not be stopped and ships pumped dry. It is undeniable that, under present conditions, inequalities in fortune would tend to reassert themselves even if arbitrarily leveled for a moment; but that does not prove that the conditions from which this, tendency to, inequality springs may not be altered. Nor because there are differences in human qualities and powers does it follow that existing inequalities of fortune are thus accounted for. I have seen very fast compositors and very slow compositors, but the fastest I ever saw could not set twice as much type as the slowest, and I doubt if in other trades the variations are greater. Between normal men the difference of a sixth or seventh is a great difference in height -- the tallest giant ever known was scarcely more than four times as tall as the smallest dwarf ever known, and I doubt if any good observer will say that the mental differences of men are greater than the physical differences. Yet we already have men hundreds of millions of times richer than other men. That he who produces should have, that he who saves should enjoy, is consistent with human reason and with the natural order. But existing inequalities of wealth cannot be justified on this ground. As a matter of fact, how many great fortunes can be truthfully said to have been fairly earned? How many of them represent wealth produced by their possessors or those from whom their present possessors derived them? Did there not go to the formation of all of them something more than superior industry and skill? Such qualities may give the first start, but when fortunes begin to roll up into millions there will always be found some element of monopoly, some appropriation of wealth produced by others. Often mere is a total absence of superior industry, skill or self-denial, and merely better luck or greater unscrupulousness. ... An acquaintance of mine died in San Francisco recently, leaving $4,000,000, which will go to heirs to be looked up in England. I have known many men more industrious, more skilful, more temperate than he -- men who did not or who will not leave a cent. This man did not get his wealth by his industry, skill or temperance. He no more produced it than did those lucky relations in England who may now do nothing for the rest of their lives. He became rich by getting hold of a piece of land in the early days, which, as San Francisco grew, became very valuable. His wealth represented not what he had earned, but what the monopoly of this bit of the earth's surface enabled him to appropriate of the earnings of others. A man died in Pittsburgh, the other day, leaving $3,000,000. He may or may not have been particularly industrious, skilful and economical, but it was not by virtue of these qualities that he got so rich. It was because he went to Washington and helped lobby through a bill which, by way of "protecting American workmen against the pauper labor of Europe," gave him the advantage of a sixty-per-cent, tariff. To the day of his death he was a stanch protectionist, and said free trade would ruin our "infant industries." Evidently the $3,000,000 which he was enabled to lay by from his own little cherub of an "infant industry" did not represent what he had added to production. It was the advantage given him by the tariff that enabled him to scoop it up from other people's earnings. This element of monopoly, of
appropriation and spoliation
will, when we come to analyze them, be found largely to account for
all great fortunes....
Take the great Vanderbilt fortune. ... Or take the great Gould fortune. ... So, like wise, of the great fortunes which the Pacific railroads have created. .... Or take the fortunes made out of successful patents. ... Through all great fortunes, and, in fact, through nearly all acquisitions that in these days can fairly be termed fortunes, these elements of monopoly, of spoliation, of gambling run. The head of one of the largest manufacturing firms in the United States said to me recently, "It is not on our ordinary business that we make our money; it is where we can get a monopoly." And this, I think, is generally true. ... Consider the important part in building up fortunes which the increase of land values has had, and is having, in the United States. This is, of course, monopoly, pure and simple. When land increases in value it does not mean that its owner has added to the general wealth. The owner may never have seen the land or done aught to improve it. He may, and often does, live in a distant city or in another country. Increase of land values simply means that the owners, by virtue of their appropriation of something that existed before man was, have the power of taking a larger share of the wealth produced by other people's labor. Consider how much the monopolies created and the advantages given to the unscrupulous by the tariff and by our system of internal taxation -- how much the railroad (a business in its nature a monopoly), telegraph, gas, water and other similar monopolies, have done to concentrate wealth; how special rates, pools, combinations, corners, stock-watering and stock-gambling, the destructive use of wealth in driving off or buying off opposition which the public must finally pay for, and many other things which these will suggest, have operated to build up large fortunes, and it will at least appear that the unequal distribution of wealth is due in great measure to sheer spoliation; that the reason why those who work hard get so little, while so many who work little get so much, is, in very large measure, that the earnings of the one class are, in one way or another, filched away from them to swell the incomes of the other. That individuals are constantly making their way from the ranks of those who get less than their earnings to the ranks of those who get more than their earnings, no more proves this state of things right than the fact that merchant sailors were constantly becoming pirates and participating in the profits of piracy, would prove that piracy was right and that no effort should be made to suppress it. I am not denouncing the rich,
nor seeking, by speaking of
these things, to excite envy and hatred; but if we would get a clear
understanding of social problems, we must recognize the fact that it
is due to monopolies which we permit and create, to advantages which
we give one man over another, to methods of extortion sanctioned by
law and by public opinion, that some men are enabled to get so
enormously rich while others remain so miserably poor. If we look
around us and note the elements of monopoly, extortion and spoliation
which go to the building up of all, or nearly all, fortunes, we see
on the one hand now disingenuous are those who preach to us that
there is nothing wrong in social relations and that the inequalities
in the distribution of wealth spring from the inequalities of human
nature; and on the other hand, we see how wild are those who talk as
though capital were a public enemy, and propose plans for arbitrarily
restricting the acquisition of wealth. Capital is a good; the
capitalist is a helper, if he is not also a monopolist. We can safely
let any one get as rich as he can if he will not despoil others in
doing so.
There are deep wrongs in the
present constitution of society,
but they are not wrongs inherent in the constitution of man nor in
those social laws which are as truly the laws of the Creator as are
the laws of the physical universe. They are wrongs resulting from
bad
adjustments which it is within our power to amend. The ideal social
state is not that in which each gets an equal amount of wealth, but
in which each gets in proportion to his contribution to the general
stock. And in such a social state there would not be less incentive
to exertion than now; there would be far more incentive. Men will be
more industrious and more moral, better workmen and better citizens,
if each takes his earnings and carries them home to his family, than
where they put their earnings in a "pot" and gamble for them until
some have far more than they could have earned, and others have
little or nothing. ... Read the entire article
Real-estate land rent and
rentals arise from the differing productivity
of various sites: rent is the
differential between the productivity of
a site relative to the least productive marginal sites. This is
the
same as the "marginal product" of land as used in economics. Buying
land for speculation anticipating higher future rentals not paid for by
the landowner can induce higher prices for land that shifts the margin
to inferior lands,
raising the rents on superior lands and lowering
wages set at the margin. ...
The public and community collection of rent puts land at its most productive use, maximizing the wages of workers while minimizing sprawl as well as boom/bust cycles. We need to understand rent to fully understand the market process and the cause and remedy of many of today's social problems. Read the whole article
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Wealth
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... because democracy
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