Tuesday, February 19, 2008

Henry George - Progress and Poverty

Henry George saw first-hand the plight of the American worker at the end of the ninetieth-century. He grew up in Philadelphia in 1839, in a poor family, and like many working-class Americans at the time, he was forced to end his formal education early in order to survive--he was just fourteen years old. When George when out into the world of work, he began to see the ever-growing gap between the wealthy and the working class poor. He wondered why there was such a discrepancy in a society that was supposed to democratic and humanitarian.

In 1857, George moved west to California, and after having difficulty holding down work, he eventually became a newspaper reporter in San Francisco. He decided he would educate himself in economics, in an attempt to understand the situation he saw in America. George came up with the "single tax" concept, which would be published in his 1879 book, Progress and Poverty. The book sought to explain why poverty rates were growing as progress was being made in leaps and bounds.

George theorized that much of the disparity between the wealthy and the poor had to do with land speculation, which made the already wealthy land owners even more rich, while the poor working-class worker received the same meager wages and had to pay more and more in rent. George's "single tax" idea proposed that the unearned appreciation of land value be taxed and taken from the owner, and given back to the community, for the greater good of the people.

The book was a big success, with over one hundred editions and an estimated six million Americans having read it by1906. Progress and Poverty also spawned "single tax clubs" and movements all over the country. One important aspect of the book was that it broke down the economics very simply, so that the average American could understand. While George and his book never directly caused any change in the legislation, it served to help make Americans aware of the increasing problems that the growing Industrialism in the country was causing. Average citizens could see, simply, how the country's economy was working and why they were having such a hard time earning a wage that could support a family.


lvtfan said...

Progress and Poverty is a magnificent book, and I commend it to your attention. It is available online, (see http://www.wealthandwant.com/George_P&P.html) and through Amazon and ebay.

There is a new (2006) abridgment, available online at http://www.progressandpoverty.org/ or in hardcopy from http://www.schalkenbach.org/

You'll never see poverty, or economic justice, in quite the same way again.

The Henry George quote for today, February 19, is this:

"The equal right of all men to the use of land is as clear as their equal right to breath the air -- it is a right proclaimed by the fact of their existence. For we cannot suppose that some men have a right to be in this world and others no right."

A. Mattson said...

A very good post and a nice comment.

The key point is that progress is not a simple antidote for poverty.

George realizes that poverty actually seemed to increase poverty as well as creating wealth for an elite.

In the long run the Industrial revolution did create wealth for a much bigger class of Americans, however, I would arue that George's statement that the connection between poverty and progress is the 'great enigma' of our time still holds true on a global scale.

lvtfan said...

The beauty of "Progress & Poverty" is that HG not only defined the problem, in detail -- and proved his case -- but he saw and laid out the remedy.

Yes, technological progress, and population growth, and public investment in public works such as infrastructure, schools, emergency services and all the other things that we can do more effectively and efficiently as a community than as individuals -- all show up as increased land values, increased economic rent. This is the unearned increment, and it should be used to fund that public investment, not privatized by some of us as a private windfall, while others must pay taxes from their wages and on their purchases to support the very spending that makes the site more valuable next year!

THAT is the cause of poverty, and of much of our wealth concentration. It has nothing to do with the poor person's personal virtues or vices; rather it is a structural problem that we can either leave in place, or do something about.

(I vote for doing something about it. The Remedy, as prescribed by Henry George. See http://www.wealthandwant.com/themes/The_Remedy.html for more on this. And this is one of the finest examples of thinking globally and acting locally.)