Henry George's seminal 1879 work, Progress and Poverty, delves into one of the most perplexing paradoxes of his time: why industrial and technological advancements, leading to unprecedented wealth, often coincide with deepening poverty and economic inequality. George sought to understand why, despite increasing productive capacity, the working class frequently experienced stagnant wages and worsening living conditions. This "great enigma," as he called it, formed the central inquiry of his influential treatise, which significantly impacted progressive and labor movements globally.
The book progresses by first critiquing prevailing economic theories of the era, notably those of Adam Smith, David Ricardo, and Thomas Malthus. George challenged the notion that poverty stemmed from an oversupply of labor or a scarcity of capital. Instead, he meticulously defined key economic terms like labor, capital, and land, and their interrelationships, often arriving at conclusions contrary to popular thought. For instance, he argued that wages are furnished by labor itself, not capital. Through rigorous logic and historical examples, George systematically dismantled the idea that population growth inherently leads to poverty, asserting that increased population, by fostering greater division of labor, can actually enhance wealth creation.
George identifies the root cause of this paradox in the private ownership of land and the resulting increase in land rents and land-value speculation. He posits that while labor and capital contribute to production, the increasing value of land, driven by societal progress and public services, is disproportionately captured by landowners as rent. This dynamic, he argues, diverts wealth away from producers (laborers and capitalists) into the hands of those who merely own land, regardless of their productive contribution. This appropriation of unearned increment, according to George, stifles wages, reduces returns on capital, and ultimately leads to economic downturns and persistent poverty.
In the latter half of Progress and Poverty, George outlines his radical remedy: a single tax on land values. He argues against the forced confiscation of land or compensating landowners from public funds. Instead, his solution proposes taxing the full annual value of land, thereby capturing the unearned increment for public use, while simultaneously abolishing all other taxes on labor and production. George believed this "single tax" would free up immense wealth for public spending, incentivize productive land use, increase wages, and reduce government bureaucracy and corruption.
The economic and social implications of George's proposed land reform are extensively explored. He envisioned a society where the burden of taxation shifts from productive activities to the monopoly income derived from land ownership. This, he contended, would stimulate economic activity, reduce speculation, eliminate urban sprawl and homelessness, and create a more equitable distribution of wealth. George viewed this reform as crucial for the long-term health of civilization, as he subscribed to the cyclical theory of civilizations rising and falling due to unequal wealth distribution and lack of communal cooperation.
Progress and Poverty thus culminates in a powerful argument for a fundamental shift in how societies manage land and wealth. George believed that by aligning economic systems with natural laws of distribution, societies could escape the cycles of boom and bust, and achieve sustained material progress that benefits all. Though his ideas, often referred to as Georgism, faded from mainstream discourse by the mid-20th century, the book’s influence in the late 19th and early 20th centuries was profound, sparking reform movements across the globe and inspiring notable figures like Leo Tolstoy and Albert Einstein. Its central challenge — the persistence of poverty amidst growing wealth — remains a relevant and thought-provoking inquiry today.
nateb2022•7mo ago
Henry George's seminal 1879 work, Progress and Poverty, delves into one of the most perplexing paradoxes of his time: why industrial and technological advancements, leading to unprecedented wealth, often coincide with deepening poverty and economic inequality. George sought to understand why, despite increasing productive capacity, the working class frequently experienced stagnant wages and worsening living conditions. This "great enigma," as he called it, formed the central inquiry of his influential treatise, which significantly impacted progressive and labor movements globally.
The book progresses by first critiquing prevailing economic theories of the era, notably those of Adam Smith, David Ricardo, and Thomas Malthus. George challenged the notion that poverty stemmed from an oversupply of labor or a scarcity of capital. Instead, he meticulously defined key economic terms like labor, capital, and land, and their interrelationships, often arriving at conclusions contrary to popular thought. For instance, he argued that wages are furnished by labor itself, not capital. Through rigorous logic and historical examples, George systematically dismantled the idea that population growth inherently leads to poverty, asserting that increased population, by fostering greater division of labor, can actually enhance wealth creation.
George identifies the root cause of this paradox in the private ownership of land and the resulting increase in land rents and land-value speculation. He posits that while labor and capital contribute to production, the increasing value of land, driven by societal progress and public services, is disproportionately captured by landowners as rent. This dynamic, he argues, diverts wealth away from producers (laborers and capitalists) into the hands of those who merely own land, regardless of their productive contribution. This appropriation of unearned increment, according to George, stifles wages, reduces returns on capital, and ultimately leads to economic downturns and persistent poverty.
In the latter half of Progress and Poverty, George outlines his radical remedy: a single tax on land values. He argues against the forced confiscation of land or compensating landowners from public funds. Instead, his solution proposes taxing the full annual value of land, thereby capturing the unearned increment for public use, while simultaneously abolishing all other taxes on labor and production. George believed this "single tax" would free up immense wealth for public spending, incentivize productive land use, increase wages, and reduce government bureaucracy and corruption.
The economic and social implications of George's proposed land reform are extensively explored. He envisioned a society where the burden of taxation shifts from productive activities to the monopoly income derived from land ownership. This, he contended, would stimulate economic activity, reduce speculation, eliminate urban sprawl and homelessness, and create a more equitable distribution of wealth. George viewed this reform as crucial for the long-term health of civilization, as he subscribed to the cyclical theory of civilizations rising and falling due to unequal wealth distribution and lack of communal cooperation.
Progress and Poverty thus culminates in a powerful argument for a fundamental shift in how societies manage land and wealth. George believed that by aligning economic systems with natural laws of distribution, societies could escape the cycles of boom and bust, and achieve sustained material progress that benefits all. Though his ideas, often referred to as Georgism, faded from mainstream discourse by the mid-20th century, the book’s influence in the late 19th and early 20th centuries was profound, sparking reform movements across the globe and inspiring notable figures like Leo Tolstoy and Albert Einstein. Its central challenge — the persistence of poverty amidst growing wealth — remains a relevant and thought-provoking inquiry today.