Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth: The Remedy is an 1879 book by social theorist and economist Henry George. It is a treatise on the questions of why poverty accompanies economic and technological progress and why economies exhibit a tendency toward cyclical boom and bust. George uses history and deductive logic to argue for a radical solution focusing on the capture of economic rent from natural resource and land titles.
Progress and Poverty, George's first book, sold several million copies,[1] becoming one of the highest selling books of the late 1800s.[2][3] It helped spark the Progressive Era and a worldwide social reform movement around an ideology now known as Georgism. Jacob Riis, for example, explicitly marks the beginning of the Progressive Era awakening as 1879 because of the date of this publication.[4] The Princeton historian Eric F. Goldman wrote this about the influence of Progress and Poverty:
For some years prior to 1952 I was working on a history of American reform and over and over again my research ran into this fact: an enormous number of men and women, strikingly different people, men and women who were to lead 20th century America in a dozen fields of humane activity, wrote or told someone that their whole thinking had been redirected by reading Progress and Poverty in their formative years. In this respect no other book came anywhere near comparable influence.[5]
Progress and Poverty had perhaps even a larger impact around the world, in places such as Denmark, the United Kingdom, Australia, and New Zealand, where George's influence was enormous.[6] Contemporary sources and historians claim that in the United Kingdom, a vast majority of both socialist and classical liberal activists could trace their ideological development to Henry George. George's popularity was more than a passing phase; even by 1906, a survey of British parliamentarians revealed that the American author's writing was more popular than Walter Scott, John Stuart Mill, and William Shakespeare.[7] In 1933, John Dewey estimated that Progress and Poverty "had a wider distribution than almost all other books on political economy put together."[8]
Context
Progress and Poverty seeks to explain why poverty exists notwithstanding widespread advances in technology and even where there is a concentration of great wealth such as in cities.
George saw how technological and social advances (including education and public services) increased the value of land (natural resources, urban locations, etc.) and, thus, the amount of wealth that can be demanded by the owners of land from those who need the use of land. In other words: the better the public services, the higher the rent is (as more people value that land). The tendency of speculators to increase the price of land faster than wealth can be produced to pay has the result of lowering the amount of wealth left over for labor to claim in wages, and finally leads to the collapse of enterprises at the margin, with a ripple effect that becomes a serious business depression entailing widespread unemployment, foreclosures, etc.
In Progress and Poverty, George examines various proposed strategies to prevent business depressions, unemployment and poverty, but finds them unsatisfactory. As an alternative he proposes his own solution: a single tax on land values. George defines land as "all natural materials, forces, and opportunities", as everything "that is freely supplied by nature". George's primary fiscal tool was a land value tax on the annual value of land held as private property. It would be high enough to end other taxes, especially upon labor and production, to provide limitless beneficial public investment in services such as transportation, since public investment is reflected in land value, and to provide social services such as a basic income. George argued that a land value tax would give landowners an incentive to use well located land in a productive way, thereby increasing demand for labor and creating wealth. This shift in the bargaining balance between resource owners and laborers would raise the general level of wages and ensure no one need suffer poverty. A land value tax would, among other things, also end urban sprawl, tenant farming, homelessness, and the cultivation of low value monoculture on high value land.
Soon after its publication, over three million copies of Progress and Poverty were bought, exceeding all other books written in the English language except the Bible during the 1890s. By 1936, it had been translated into thirteen languages and at least six million copies had been sold.[9] It has now been translated into dozens of languages.[10]
Excerpts
The following excerpt represents the crux of George's argument and view of political economy.[11]
Take now... some hard-headed business man, who has no theories, but knows how to make money. Say to him: "Here is a little village; in ten years it will be a great city—in ten years the railroad will have taken the place of the stage coach, the electric light of the candle; it will abound with all the machinery and improvements that so enormously multiply the effective power of labor. Will in ten years, interest be any higher?"
He will tell you, "No!"
"Will the wages of common labor be any higher; will it be easier for a man who has nothing but his labor to make an independent living?"
He will tell you, "No; the wages of common labor will not be any higher; on the contrary, all the chances are that they will be lower; it will not be easier for the mere laborer to make an independent living; the chances are that it will be harder."
"What, then, will be higher?"
"Rent, the value of land. Go, get yourself a piece of ground, and hold possession."
And if, under such circumstances, you take his advice, you need do nothing more. You may sit down and smoke your pipe; you may lie around like the lazzaroni of Naples or the leperos of Mexico; you may go up in a balloon or down a hole in the ground; and without doing one stroke of work, without adding one iota of wealth to the community, in ten years you will be rich! In the new city you may have a luxurious mansion, but among its public buildings will be an almshouse.
—Book V, Chapter II: "The persistence of poverty amidst advancing wealth"
An often-cited passage from Progress and Poverty is "The Unbound Savannah", in which George discusses how the building of a community increases the value of land.[12]
Notable recognition
After completing Progress and Poverty, George accurately wrote to his father: "It will not be recognized at first—maybe not for some time—but it will ultimately be considered a great book, will be published in both hemispheres, and be translated into different languages. This I know, though neither of us may ever see it here."[13]
Emma Lazarus wrote, "Progress and Poverty is not so much a book as an event. The life and thought of no one capable of understanding it can be quite the same after reading it", and even that reading it would prevent such a person, who also "prized justice or common honesty", from being able to ever again "dine or sleep or read or work in peace". Many famous figures with diverse ideologies, such as George Bernard Shaw, Friedrich Hayek, H. G. Wells,[14] and Leo Tolstoy, mark their first encounters with Progress and Poverty as literally life-changing experiences.
John Haynes Holmes wrote, "My reading of Henry George's immortal masterpiece marked an epoch in my life. All my thought upon the social question and all my work for social reform began with the reading of this book".[15] He knew of "nothing more touching, in all the range of our American literature".[16] Holmes also said that "Progress and Poverty was the most closely knit, fascinating and convincing specimen of argumentation that, I believe, ever sprang from the mind of man."[17]
In 1930, during the Great Depression, George W. Norris entered an abridged version of Progress and Poverty into the Congressional Record and later commented that an excerpt from the book was "one of the most beautiful things" that he "ever read on the preciousness of human liberty".[18]
Some readers have found George's reasoning so compelling that they report being unwillingly forced into agreement. Tom L. Johnson, a streetcar monopolist and future progressive reformer, read and reread Progress and Poverty, finally requesting assistance from his business associates to find flaws in George's reasoning. Johnson took the book to his lawyer and said, "I must get out of the business, or prove that this book is wrong. Here, Russell, is a retainer of five hundred dollars [about $16,300 in 2022[19]]. I want you to read this book and give me your honest opinion on it, as you would on a legal question. Treat this retainer as you would a fee."[20][21][22]Frank Chodorov, a pacifist libertarian of the American 'old right', claims to have read Progress and Poverty many times, and almost constantly for six months straight, before finally accepting George's conclusions.[23] The literary critic Horace Traubel wrote that "George died in the charge of battle. But his book is battle spared. It has been in all battles and has survived all. Antagonism no longer has surprises for it."[24]
Philip Wicksteed wrote that Progress and Poverty had opened "a new heaven and a new earth"[25] and that it was "by far the most important work in its social consequences that our generation or century [1882] has seen".[26]Alfred Russel Wallace later echoed this opinion when hailing Progress and Poverty as "undoubtedly the most remarkable and important book of the present century", placing it even above Darwin'sOn the Origin of Species.[27] Nobel laureate Gary Becker said that Progress and Poverty was the first economics book he read, because Henry George "was famous in those days" and "influenced a lot of us in economics". Becker also said that the book was wonderful and had a lasting impact on his thinking.[28][29]Ilya Tolstoy said that the book was a revelation to his father.[30]
William Simon U'Ren wrote that he "went to Honolulu to die", but that a chance encounter with Progress and Poverty gave him a sense of purpose and renewed his desire to live. U'Ren went on to become a pioneering reformer of municipal elections and activist for direct democracy.[31]
Clarence Darrow wrote that he had "found a new political gospel that bade fair to bring about the social equality and opportunity that has always been the dream of the idealist".[32]Sara Bard Field wrote that Progress and Poverty was "the first great book I ever encountered", for how it impacted her thinking on poverty and wealth.[33]
Albert Einstein wrote this about his impression of Progress and Poverty: "Men like Henry George are rare unfortunately. One cannot imagine a more beautiful combination of intellectual keenness, artistic form and fervent love of justice. Every line is written as if for our generation."[34]
In the Classics Club edition forward, John F. Kieran wrote that "no student in that field [economics] should be allowed to speak above a whisper or write above three lines on the general subject until he has read and digested Progress and Poverty".[35] Kieran also later listed Progress and Poverty as one of his favorite books.[36]Michael Kinsley wrote that it is "the greatest economic treatise ever written".[37]
After reading selections of Progress and Poverty, Helen Keller wrote of finding "in Henry George's philosophy a rare beauty and power of inspiration, and a splendid faith in the essential nobility of human nature".[38][verification needed] Father Edward McGlynn, one of the most prominent and controversial Catholic priests of the time, was quoted as saying, "That book is the work of a sage, of a seer, of a philosopher, of a poet. It is not merely political philosophy. It is a poem; it is a prophecy; it is a prayer."[39]
Among many famous people who asserted that it was impossible to refute George on the land question were Winston Churchill, Leo Tolstoy, John Dewey, and Bertrand Russell. Tolstoy and Dewey, especially, dedicated much of their lives to spreading George's ideas. Tolstoy was preaching about the ideas in Progress and Poverty on his death bed.[40]
In his 1946 foreword to Brave New World, Aldous Huxley writes "If I were to rewrite the book, I would offer the Savage... the possibility of sanity... where community economics would be decentralist and Henry-Georgian".
Physiocracy is an economic theory developed by a group of 18th-century Age of Enlightenment French economists who believed that the wealth of nations derived solely from the value of "land agriculture" or "land development" and that agricultural products should be highly priced. Their theories originated in France and were most popular during the second half of the 18th century. Physiocracy became one of the first well-developed theories of economics.
A land value tax (LVT) is a levy on the value of land without regard to buildings, personal property and other improvements upon it. It is also known as a location value tax, a point valuation tax, a site valuation tax, split rate tax, or a site-value rating.
Henry George was an American political economist and journalist. His writing was immensely popular in 19th-century America and sparked several reform movements of the Progressive Era. He inspired the economic philosophy known as Georgism, the belief that people should own the value they produce themselves, but that the economic value of land should belong equally to all members of society. George famously argued that a single tax on land values would create a more productive and just society.
The iron law of wages is a proposed law of economics that asserts that real wages always tend, in the long run, toward the minimum wage necessary to sustain the life of the worker. The theory was first named by Ferdinand Lassalle in the mid-nineteenth century. Karl Marx and Friedrich Engels attribute the doctrine to Lassalle, the idea to Thomas Malthus's An Essay on the Principle of Population, and the terminology to Goethe's "great, eternal iron laws" in Das Göttliche.
Georgism, also called in modern times Geoism, and known historically as the single tax movement, is an economic ideology holding that, although people should own the value that they produce themselves, the economic rent derived from land—including from all natural resources, the commons, and urban locations—should belong equally to all members of society. Developed from the writings of American economist and social reformer Henry George, the Georgist paradigm seeks solutions to social and ecological problems, based on principles of land rights and public finance that attempt to integrate economic efficiency with social justice.
Geolibertarianism is a political and economic ideology that integrates libertarianism with Georgism. It favors a taxation system based on income derived from land and natural resources instead of on labor, coupled with a minimalist model of government, as in libertarianism. The term was coined by the late economist Fred Foldvary in 1981.
John Rogers Commons was an American institutional economist, Georgist, progressive and labor historian at the University of Wisconsin–Madison.
John Bates Clark was an American neoclassical economist. He was one of the pioneers of the marginalist revolution and opponent to the Institutionalist school of economics, and spent most of his career as professor at Columbia University.
Spencer Heath was an American engineer, attorney, inventor, manufacturer, horticulturist, poet, philosopher of science and social thinker. A dissenter from the prevailing Georgist views, he pioneered the theory of proprietary governance and community in his book Citadel, Market and Altar. His grandson, Spencer Heath MacCallum, popularized and expounded on his ideas, most notably in his book The Art of Community.
The history of economic thought is the study of the philosophies of the different thinkers and theories in the subjects that later became political economy and economics, from the ancient world to the present day in the 21st century. This field encompasses many disparate schools of economic thought. Ancient Greek writers such as the philosopher Aristotle examined ideas about the art of wealth acquisition, and questioned whether property is best left in private or public hands. In the Middle Ages, Thomas Aquinas argued that it was a moral obligation of businesses to sell goods at a just price.
In economics, distribution is the way total output, income, or wealth is distributed among individuals or among the factors of production. In general theory and in for example the U.S. National Income and Product Accounts, each unit of output corresponds to a unit of income. One use of national accounts is for classifying factor incomes and measuring their respective shares, as in national Income. But, where focus is on income of persons or households, adjustments to the national accounts or other data sources are frequently used. Here, interest is often on the fraction of income going to the top x percent of households, the next x percent, and so forth, and on the factors that might affect them.
Count Lev Nikolayevich Tolstoy, usually referred to in English as Leo Tolstoy, was a Russian writer regarded as one of the greatest and most influential authors of all time. He received nominations for the Nobel Prize in Literature every year from 1902 to 1906 and for the Nobel Peace Prize in 1901, 1902, and 1909.
Ricardian socialism is a branch of classical economic thought based upon the work of the economist David Ricardo (1772–1823). The term is used to describe economists in the 1820s and 1830s who developed a theory of capitalist exploitation from the theory developed by Ricardo that stated that labor is the source of all wealth and exchange value. This principle extends back to the principles of English philosopher John Locke. The Ricardian socialists reasoned that labor is entitled to all it produces, and that rent, profit and interest were not natural outgrowths of the free market process but were instead distortions. They argued that private ownership of the means of production should be supplanted by cooperatives owned by associations of workers.
Critique of political economy or simply the first critique of economy is a form of social critique that rejects the conventional ways of distributing resources. The critique also rejects what its advocates believe are unrealistic axioms, faulty historical assumptions, and taking conventional economic mechanisms as a given or as transhistorical. The critique asserts the conventional economy is merely one of many types of historically specific ways to distribute resources, which emerged along with modernity.
Protection or Free Trade is a book published in 1886 by the economist and social philosopher, Henry George. Its sub-title is An Examination of the Tariff Question with Especial Regard to the Interests of Labor. As the title suggests, George examined the debate between protectionism and free trade.
George Gunton was an influential figure in the labor movement of the United States around the turn of the 20th century and was an avid supporter of industrial combinations and trusts. He was a close colleague of Ira Steward, and upon Steward's death in 1883 he agreed to complete and prepare for publication a book that Steward had been writing. Gunton found only notes, not a nearly complete book. Deciding the notes were not sufficient for editing, Gunton discarded them, instead building on the ideas of his colleague to formulate his own book on the labor movement, Wealth and Progress, which was published in 1887, followed by Principles of Social Economics in 1891. He founded a school, the Institute of Social Economics, in 1891, with the aim of educating the masses in the path of responsible citizenship.
Economic democracy is a socioeconomic philosophy that proposes to shift ownership and decision-making power from corporate shareholders and corporate managers to a larger group of public stakeholders that includes workers, consumers, suppliers, communities and the broader public. No single definition or approach encompasses economic democracy, but most proponents claim that modern property relations externalize costs, subordinate the general well-being to private profit and deny the polity a democratic voice in economic policy decisions. In addition to these moral concerns, economic democracy makes practical claims, such as that it can compensate for capitalism's inherent effective demand gap.
Capital: A Critique of Political Economy, also known as Capital, is a foundational theoretical text in materialist philosophy and critique of political economy written by Karl Marx, published as three volumes in 1867, 1885, and 1894. The culmination of his life's work, the text contains Marx's analysis of capitalism, to which he sought to apply his theory of historical materialism "to lay bare the economic laws of modern society", following from classical political economists such as Adam Smith, Jean-Baptiste Say, David Ricardo and John Stuart Mill. The text's second and third volumes were completed from Marx's notes after his death and published by his colleague Friedrich Engels. Das Kapital is the most cited book in the social sciences published before 1950.
The Robert Schalkenbach Foundation, founded in 1925, is a private operating foundation dedicated to the social and economic philosophy of Henry George through publication and research. Among its activities, the Foundation publishes The American Journal of Economics and Sociology, funds the Henry George Chair in Economics at St. John's University, and supports the Henry George Lecture Series at the University of Scranton.
↑ Frederick, Peter (1976). Knights of the Golden Rule the Intellectual as Christian Social Reformer in the 1890s. Lexington: University Press of Kentucky. ISBN0813152313.
↑ Boast, Richard (2008). Buying the land, selling the land: governments and Maori land in the North Island 1865–1921. Wellington N.Z.: Victoria University Press, Victoria University of Wellington. ISBN9780864735614.
↑ Rose, Jonathan (2010). The intellectual life of the British working classes. New Haven, Conn: Yale University Press. ISBN978-0300153651.
↑ Traubel, Horace (1896). "Progress and Poverty". The Conservator. 7–9: 252–53. Retrieved 13 December 2015.
↑ Laurent, John. Henry George's Legacy in Economic Thought. Cheltenham, UK: Edward Elgar Pub., 2005
↑ Flatau, Paul (2004-06-22). "Jevons's one great disciple: Wicksteed and the Jevonian revolution in the second generation". History of Economics Review. 40 (Summer 2004): 69–107. doi:10.1080/18386318.2004.11681191. S2CID53971900.
↑ Buder, Stanley. Visionaries and Planners: The Garden City Movement and the Modern Community. New York: Oxford University Press, 1990.
↑ Bryson, Phillip (2011). The economics of Henry George: history's rehabilitation of America's greatest early economist. New York: Palgrave Macmillan. p.145.
↑ Tolstoy, Ilya (September–October 1928). "Leo Tolstoy and Henry George". Land and Freedom. XXVIII (5). Retrieved 1 February 2016.
↑ Johnston, Robert (2003). The radical middle class: populist democracy and the question of capitalism in progressive era Portland, Oregon. Princeton, New Jersey: Princeton University Press. ISBN0691126003.
Edgar H. Johnson, "The Economics of Henry George's Progress and Poverty," Journal of Political Economy, vol. 18, no. 9 (Nov. 1910), pp.714–35. In JSTOR
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