Publisher's ForwordWE OWE Bob Drake a debt of gratitude for this meticulous condensation and modernization of Henry George's great work. The original version had an elegance that evoked a passion for social justice among millions of readers in the nineteenth and early twentieth centuries. However, by the beginning of the twenty-first century, George's complex prose stood in the way of that intention for large numbers of people. Now his ideas can once again be widely accessible.
What were those ideas and why are they still important today? When Progress and Poverty was published in 1879, it was aimed in part at discrediting Social Darwinism, the idea that "survival of the fittest" should serve as a social philosophy. That ideology, developed by Herbert Spencer, William Graham Sumner, and others, provided the intellectual basis for 1) American imperialism against Mexico and the Philippines, 2) tax policies designed to reduce burdens on the rich by shifting them onto the poor and middle class, 3) the ascendancy of the concept of absolute property rights, unmitigated by any social claims on property, 4) welfare programs that treat the poor as failures and misfits, 5) racial segregation in education and housing, and 6) eugenics programs to promote the "superior" race. The intellectual defense of racism is in abeyance, but the economic and political instruments of domination have changed little. The renewed defense of taxing wages and consumer goods rather than property holdings, expanded intellectual property rights, and vast imperial ambitions are indications that Social Darwinism is back in full force.
The revival of Social Darwinism continues to justify social disparities on the basis of natural superiority or fitness. Progress and Poverty, by contrast, reveals that those disparities derive from special privileges. Many economists and politicians foster the illusion that great fortunes and poverty stem from the presence or absence of individual skill and risk-taking. Henry George, by contrast, showed that the wealth gap occurs because a few people are allowed to monopolize natural opportunities and deny them to others. If we deprived social elites of those monopolies, the whole facade of their greater "fitness" would come tumbling down. George did not advocate equality of income, the forcible redistribution of wealth, or government management of the economy. He simply believed that in a society not burdened by the demands of a privileged elite, a full and satisfying life would be attainable by everyone.
Henry George is best remembered as an advocate of the "single tax" on location values. (I say "location" rather than "land" to avoid the common confusion that George was primarily interested in rural land. In fact his attention was focused on the tens of trillions of dollars worth of urban land that derives its value from location.) Yet, for George, wise tax policy was merely a vehicle to break the stranglehold of speculative ownership that effectively limits the opportunity to earn an decent living and participate in public life.
Perhaps the image that best captures George's ultimate intention is the final scene in a popular science fiction film, when the hero is able to restore the oxygen supply to the surface of a planet so that people will no longer be enslaved by the man holding the oxygen monopoly. Freeing people from the oppression of monopoly power in any form was Henry George's great dream. Those who have conceived of George as being concerned only with tax policy should closely read the last third of Progress and Poverty, which reveals his larger vision of justice and genuine freedom.
Progress and Poverty stands the test of time. It contains profound economic analysis, penetrating social philosophy, and a practical guide to public policy. Those who read it today will find in George's work a great source of vision and inspiration.
Cliff Cobb, Robert Schalkenbach Foundation
Editor's PrefaceTHOSE WHO FIRST pick up this book are likely to share some concern about the problem of poverty; those who finish it may also find some cause for hope. For the great gift that Henry George gave the world was a systematic explanation—logical and consistent—of why wealth is not distributed fairly among those who produce it. But he did not stop there—he also gave us a simple yet far-reaching plan for a cure. It was, and still is, a plan for peace, prosperity, equality, and justice.
Progress and Poverty is an enduring classic. It has been translated into dozens of languages; millions of copies have been distributed worldwide.
Why, then, the need for a modern edition, and an abridged one at that? Simply put, Henry George, like many late-19th century authors, wrote in a style that modern readers may find unduly complex. As editor, I have endeavored to break long and intricate sentences into shorter ones, creating what I call a "thought-by-thought translation."
Furthermore, references to history, mythology, and literature that do not advance the central argument have been removed. Gender-balanced language has also been incorporated. However, I have not attempted to update financial statistics or technological examples.
I prepared this edition in two distinct stages: modernization and condensation. I have sought to ensure that nothing of substance was left out.
In modernizing the text, I reduced the average sentence length and increased the number of sentences. Sentences were shortened by about one-third. For example, one passage showed a decline in average sentence length from twenty-eight words to nineteen words. By comparison, the average sentence in Time magazine was fifteen words in 1974, perhaps fewer today.
By simplifying language, I reduced the number of syllables per hundred words by about ten percent, to about 1.7 syllables per word. The number of sentences per hundred words was increased by fifty percent.
The combined effect of these changes transformed the text from one comprehensible to only a small fraction of the population to one that can be easily read by a high-school senior. An early test I performed showed that students were able to read the modernized text about twenty-five percent faster than the original, even before condensation. Although no formal testing for comprehension was done, anecdotal reports indicate that comprehension was greatly improved.
In the second stage, I condensed the modernized text by rewriting sentences using simpler language, removing multiple examples where one would suffice, and generally editing for brevity. Although I occasionally rearranged sentences for clarity and continuity, keeping George's original thesis intact was of utmost importance. In doing this, I followed the exposition as Henry George presented it. I endeavored to remove what is excessive and retain what is essential. In the end, this edition is less than half the size of the original.
This project has been a collective endeavor. Many people contributed to the various drafts, starting with those teachers and students at the Henry George Schools in Chicago, New York, and Philadelphia who provided suggestions and encouragement.
Many thanks to Terry Topczewski, Bob Jene, the late Roy Corr, and Chuck Metalitz for their help and encouragement at various stages; Wyn Achenbaum, Herb Barry, Cliff Cobb, George Collins, Josh Farley, Damon Gross, Heather Remoff, and Tom Smith of the Robert Schalkenbach Foundation board for their editorial reviews; and George M. Menninger, Jr., John Kuchta, Scott Walton, Sue Walton, Bruce Oatman, and Steve Zarlenga for their moral support. Particular thanks to Lindy Davies and Mark Sullivan for their assistance in the final stages of editing and text preparation. Thanks also to the Robert Schalkenbach Foundation and the Center for the Study of Economics for institutional support.
Finally, special thanks must go to my wife (and great jazz singer) Spider Saloff. Without her love and support, none of the rest would have mattered.
Bob Drake, Henry George School of Chicago, April 15, 2006
Preface to the Fourth EditionIN 1871, I FIRST PUBLISHED these ideas in a pamphlet entitled Our Land and Land Policy. Over time, I became even more convinced of their truth. Seeing that many misconceptions blocked their recognition, a fuller explanation seemed necessary. Still, it was impossible to answer all the questions as fully as they deserve. I have tried to establish general principles, trusting readers to extend their application.
While this book may be best appreciated by those familiar with economics, no previous study is needed to understand its argument or to judge its conclusions. I have relied upon facts of common knowledge and common observation, which readers can verify for themselves. They can also decide whether the reasoning is valid.
I set out to discover why wages tend to a bare minimum despite increasing productive power. The current theory of wages, I found, is based on a misconception [namely, that wages are paid from capital]. In truth, wages are produced by the labor for which they are paid. Therefore, other things being equal, wages should increase with the number of laborers.
This immediately confronts the influential Malthusian doctrine that population tends to increase faster than subsistence. Examination shows that this theory has no real support. When brought to a decisive test, it is utterly disproved.
Since these theories cannot explain the connection between progress and poverty, the solution must lie in the three laws governing the distribution of wealth. These laws should correlate with each other, yet economists fail to show this. An examination of terminology reveals the confusion of thought that permits this discrepancy.
To work out these laws, I first take up the law of rent. Although economists correctly understand this law, they fail to appreciate its implications. For whatever determines the part of production that goes to landowners must necessarily determine what is left over for labor and capital.
Nonetheless, I independently deduce the law of interest and the law of wages. Investigation shows that interest and wages rise together when rent falls, and fall together when rent rises. Therefore, rent, wages, and interest are all determined by the margin of production, the point in production where rent begins. I also point out a source of much confusion: mistaking the profits of monopoly for the legitimate earnings of capital.
The laws of distribution are thus brought into harmony. The fact that rent always increases with material progress explains why wages and interest do not.
The question is, what causes rent to increase? Population growth not only lowers the margin of production, it also increases productivity. Both factors increase the proportion of income taken by rent, reducing the proportion of wages and interest. Yet, technological and organizational improvements lead to the same results. Even with a constant population, these alone would produce all the effects Malthus attributes to population growth—as long as land is held as private property.
Further, progress inevitably causes a continuous, speculative increase in land values if land is private property. This drives rent up and wages down. It also produces periodic industrial depressions.
This analysis points to a remedy, although a radical one. But is there any other? Examining other measures advocated to raise wages merely proves our conclusion. Nothing short of making land common property can permanently relieve poverty.
The question of justice naturally arises, so I next examine the nature and basis of property. There is a fundamental and irreconcilable difference between property in the products of labor and property in land. One has a natural basis, the other none. Recognizing property in land inherently denies the right to property produced by labor.
Landowners have no claim to compensation if society chooses to resume its natural rights. Private property in land always has led—and always must lead—to the enslavement of workers as development proceeds. In the United States, we are already beginning to feel the effects of accepting this erroneous and destructive principle.
As a practical matter, private ownership of land is not necessary for its use or improvement. In fact, it entails enormous waste. Recognizing the common right to land does not require any shock or dispossession. It can be reached by the simple and easy method of taxing only land values. The principles of taxation show that this is the best means of raising revenue.
What would be the effects of this proposed change? It would enormously increase production. It would secure justice in distribution. It would benefit all classes. And it would make possible a higher and nobler civilization.
The inquiry now rises to a wider field. My conclusions assert certain laws. If these are really natural laws, they must be apparent in universal history. As a final test, therefore, I must work out the law of human progress.
Investigation reveals that differences in civilization are not due to differences in individuals or races, but rather to differences in social organization. Progress is always kindled by association. And civilization always declines as inequality develops.
Even now, in modern civilization, the causes that have destroyed all previous civilizations are beginning to appear. Political democracy, without economic opportunity, will devolve into anarchy and despotism.
But the law of social life agrees with the great moral law of justice. This shows how decline may be prevented and a grander advance begun.
If I have correctly solved the great problems I set out to investigate, my conclusions completely change the character of political economy. They give it the coherence and certainty of a true science. And they bring it into sympathy with the aspirations of humanity, from which it has long been estranged.
What I have done in this book is to unite the truth perceived by Smith and Ricardo with the truth perceived by Proudhon and Lassalle.* I have shown that laissez faire—in its full, true meaning—opens the way for us to realize the noble dreams of socialism.
This work was written between August, 1877, and March, 1879. Since its publication, events have shown these views to be correct. The Irish land movement, especially, shows the pressing nature of the problem.
There has been nothing in the criticisms received to induce me to change or modify these views. In fact, I have yet to see an objection that was not already answered in the book itself. Except for correcting some verbal errors and adding this preface, this edition is the same as the previous ones.*
Henry George, New York, November, 1880