Progress and Poverty
Encyclopedia
Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth: The Remedy was written by Henry George
in 1879. The book is a treatise
on the cyclical
nature of an industrial economy
and its remedies.
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. This would be a tax on the annual value of land held as private property. It would be high enough to allow for all other taxes -- especially upon labor and production -- to be abolished. George argued that a land value tax would give landowners an incentive to use the land in a productive way, thereby employing labor and creating wealth, or to sell the land to those who could and would themselves use the land in a productive way. This shift in the bargaining balance between resource owners and laborers would raise the general level of wages and ensure no one need suffer involuntary poverty.
Soon after its publication, over three million copies of Progress and Poverty were bought.
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.
Henry George
Henry George was an American writer, politician and political economist, who was the most influential proponent of the land value tax, also known as the "single tax" on land...
in 1879. The book is a treatise
Treatise
A treatise is a formal and systematic written discourse on some subject, generally longer and treating it in greater depth than an essay, and more concerned with investigating or exposing the principles of the subject.-Noteworthy treatises:...
on the cyclical
Business cycle
The term business cycle refers to economy-wide fluctuations in production or economic activity over several months or years...
nature of an industrial economy
Economy
An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...
and its remedies.
Context
Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth: The Remedy seeks to explain why povertyPoverty
Poverty is the lack of a certain amount of material possessions or money. Absolute poverty or destitution is inability to afford basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live...
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. This would be a tax on the annual value of land held as private property. It would be high enough to allow for all other taxes -- especially upon labor and production -- to be abolished. George argued that a land value tax would give landowners an incentive to use the land in a productive way, thereby employing labor and creating wealth, or to sell the land to those who could and would themselves use the land in a productive way. This shift in the bargaining balance between resource owners and laborers would raise the general level of wages and ensure no one need suffer involuntary poverty.
Soon after its publication, over three million copies of Progress and Poverty were bought.
Excerpts
The following excerpt represents the crux of George's argument and view of political economy."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 the common labor be any higher...?" He will tell you, "No the wages of common labor will not be any higher..." "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."
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.
See also
- GeolibertarianismGeolibertarianismGeolibertarianism is a political movement that strives to reconcile libertarianism and Georgism .Geolibertarians are advocates of geoism, which is the position that all natural resources – most importantly land – are common assets to which all individuals have an equal right to access; therefore if...
- GeorgismGeorgismGeorgism is an economic philosophy and ideology that holds that people own what they create, but that things found in nature, most importantly land, belong equally to all...
- Henry George TheoremHenry George TheoremThe Henry George Theorem, named for 19th century U.S. political economist and activist Henry George, states that under certain ideal conditions, aggregate spending by government will be equal to aggregate rent based on land value...
- History of economic thoughtHistory of economic thoughtThe history of economic thought deals with different thinkers and theories in the subject that became political economy and economics from the ancient world to the present day...
Further reading
- England, R. W . (2010). Ricardo, gold, and rails: Discovering the origins of Progress and Poverty. The American Journal of Economics and SociologyThe American Journal of Economics and SociologyThe American Journal of Economics and Sociology is a peer-reviewed academic journal established in 1941 by Will Lissner with support from the Robert Schalkenbach Foundation. The purpose of the journal was to create a forum for a continuing discussion of the issues raised by Henry George, a...
, 69, 1279–1293.