Progress and Poverty
By Henry George
Yes, in certain ways, the poorest now enjoy what the richest could not a century ago. But this does not demonstrate an improvement – not so long as the ability to obtain the necessities of life has not increased.
What we call progress does not improve the conditions of the lowest class in the essentials of healthy, happy human life. In fact it tends to depress their conditions even more.
These new forces do not act on society from underneath. Rather, it is as though an immense wedge is being driven through the middle. Those above are elevated, but those below are crushed.
So long as the increased wealth that progress brings goes to building great fortunes and increased luxury, progress is not real. When the contrast between the haves and the have-nots grows ever sharper, progress cannot be permanent.
To base a state with glaring social inequalities on political institutions where people are supposed to be equal is to stand a pyramid on its head. Eventually it will fall.
The old theory of wages had the support of the highest authorities, and was firmly rooted in common prejudices. Until proven groundless, it prevented any other theory from even being considered. Similarly the theory that the earth was the centre of the universe prevented any consideration that the earth circled the sun. There is in fact a striking resemblance between the science of political economy, as currently taught, and astronomy prior to Copernicus.
We are able to explain social phenomena that have appalled philanthropists and perplexed statesmen all over the civilised world. We have found the reason why wages constantly tend to a minimum, giving but a bare living, despite increase in productive power.
As productive power increases, rent (the price of monopoly rising from individual ownership of the natural elements which human exertion can neither produce or increase) tends to increase even more – constantly forcing down wages.
Rent (as understood above) does not in any way, represent any aid or advantage to production. Rent is simply the power to take part of the results of production.
Land is required for the exertion of labour in the production of wealth. Therefore, to control the land is to command all the fruits of labour, except only enough to enable labour to exist.
The simple truth, and its application to social and political problems, is hidden from the masses – hidden partly by its very simplicity and in greater part by widespread fallacies and erroneous habits of thought. These lead us to look in every direction but the right one for an explanation of the evils that oppose and threaten the civilised world.
In the back of these elaborate fallacies in misleading theories is an active, energetic power. This is the power that writes the laws and moulds thought. It operates in every country, no matter what its political forms may be. It is the power of a vast and dominant financial interest.
The great cause of inequality in the distribution of wealth is inequality in the ownership of land.
Unequal ownership of land causes unequal distribution of wealth and because unequal ownership of land is inseparable from the recondition of individual property in land, it necessarily follows that there is only one remedy for the unjust distribution of wealth:
We must make land common property.
But this is a truth that will arouse the most bitter antagonism, given the present state of society.
Vice and misery, poverty and pauperism, are not the legitimate results of growing populations and industrial development. They follow them only because land is treated as private property. They are the direct and necessary result of violating the supreme law of justice – giving to the excusive possession of a few, what nature has provided for all.
The unjust distribution of wealth stemming from this fundamental wrong is separating modern society into the very rich and the very poor. The continuous increase of rent is the price labour is forced to pay for the use of land. It strips the many of wealth they justly earn and heaps it in the hands of the few who do nothing to earn it. The few receive without producing while others produce without receiving. One is unjustly enriched – the other is robbed.
Ownership of land is the basis of aristocracy. It was not nobility that gave land, but the possession of land that gave nobility. All the enormous privileges of the nobility of medieval Europe flowed from their position as owners of the soil. This simple principal of ownership produced the lord on one side and the vassal on the other. One having all the rights, the other having none.
Of all kinds of slavery, this is probably the most cruel and relentless. Labours are robbed of their production and forced to toil for mere subsistence. But their taskmasters assume the form of inescapable demands. It does not seem to be one human who drives another but ‘the inevitable laws of supply and demand.’ And for this, no one in particular is responsible. Even the selfish interest that prompted the master to look after the well-being of this slaves is lost.
It seems to be the inexorable laws of supply and demand that forces the lower classes into the slavery of poverty. And an individual can no more dispute this power than the winds and the tides.
But in reality it is the same cause that always has and always must result in slavery:
The monopolisation by some of what nature meant for all.
We are so used to treating land as individual property that the vast majority of people never thing about questioning it. It is thoroughly recognised in our laws, manners and customs.
The dangerous classes politically are the very rich and the very poor.
A tax on land values is the only tax that cannot be passed on to others. It falls only on the landowners. There is no way they can shift the burden to anyone else. Hence, a large and powerful interest is opposed to taxing land values.
Businesses do not oppose taxes they can easily shift from their own shoulders. In fact, they frequently try to maintain them. So do other powerful interests that might profit from the higher prices such taxes bring about. A multitude of taxes had been imposed with a view toward private advantage, rather than raising revenue.
The ingenuity of politicians has been applied to devising taxes that drain the wages of labour and the earnings of capital. Nearly all these taxes are ultimately paid by that indefinable being, ‘the consumer’.
All civilised countries have unequal distribution of wealth that grows steadily worse. The cause… is that ownership of land provides greater and greater power to appropriate the wealth produced by labour and capital as the material progress goes on. We can counteract this tendency by removing all taxes on labour and capital – and putting them on rent. If we went so far as to take all the rent in taxes, the cause of inequality would be totally destroyed.
If it were possible to calculate the full cost of poverty, it would be appalling…Yet spending by government, private charities and individuals combined is merely the smallest item on the agenda. Consider the following items: the lost earnings of wasted labour; the social costs of reckless and idle habits; the appalling statistics on mortality, especially infant mortality, among the poor; the proliferation of liquor stores and bars as poverty deepens; the thieves, prostitutes, beggars and tramps bred by poverty; and the cost of guarding society against them.
These are just part of the full burden that unjust distribution of wealth places on the aggregate society. The ignorance and vice produced by inequality show themselves in the stupidity and corruption of government and the waste of public funds.
(Tax on land value would mean that) Wealth would no longer concentrate in those who do not produce, taken from those who do. The idle rich would no longer lounge in luxury while those who actually produce settle for the barest necessities…The great cause of inequality - monopoly of land - would be gone.
We could eliminate an immense and complicated network of government machinery needed to collect taxes, prevent and punish evasion and check revenue from many different sources.
A similar saving would occur in the administration of justice. Much or the business of civil courts arises from disputes over the ownership of land. If all occupants were essentially rent-paying tenants of the state, such cases would cease.
Wages would rise and everyone would be able to make an easy and comfortable living. This would immediately reduce…thieves, swindlers and other criminals who arise from the unequal distribution of wealth. This would lighten the administration of criminal law, with all its paraphernalia of police, prisons and penitentiaries. We should eliminate not only many judges, bailiffs, clerks and jailers, but also the great host of lawyers now maintained at the expense of those who actually produce wealth.
Governments would change its character and become the administrator of a great cooperative society. It would merely be the agency by which common property was administered for the benefit of all.
We are apt to assume that greed is the strongest human motive and that fear of punishment is required to keep people honest. It seems selfish interests are always stronger than common interests. Nothing could be further from the truth.
The changes I have proposed would destroy the conditions that distort these impulses. It would transmute forces that now disintegrate society into forces that unite it. Take, for the benefit of the whole community that which growth of community creates. The poverty would vanish.
One thing alone prevents harmonious social development: the wrong that produces inequality.
Association in equality is the law of human progress.
But the greatest inequality is the natural monopoly given by possession of land.
When population is sparse, ownership of land merely ensures that the just reward of labour goes to the one who uses and improves it. As population becomes dense, rent appears. This institution ultimately operates to strip the producer of wages earned.
Once inequality is established, ownership of land tends to concentrate as development goes on. This finally counteracts the force by which improvements are made and society advances.
Inequality dried up the strength and destroyed the vigour of the Roman world. Long before Vandal of Goth broke through the legions, Rome was dead at heart. Great estates – latifundia – ruined Italy. The barbarism that overwhelmed Rome came not from without, but from within. It was the inevitable product of a system that carved provinces into estates for senatorial families. Serfs and slaves replaced independent farmers. Governance became dictatorship, patriotism became subservience… Everywhere inequality produced decay: political, mental, moral and material.
Civilisations advance as their social arrangements promote justice. They advance as they acknowledge equality of human rights. The advance as they insure equal liberty of every other person. As they fail in these, advancing civilisations come to a halt and recede.
Every pervious civilisation has been destroyed by the unequal distribution of wealth and power. When the first emperor was changing Rome from brick to marble and extending the frontier, who would have said Rome was entering its decline. Yet such was the case.
Yet anyone who looks will see that the same cause that doomed Rome is operating today – with increasing force. The more advanced the community, the greater the intensity. Wages and interest fall, while rents rise. The rich get richer, the poor get poorer and the middle class is swept away.
A representative government may become a dictatorship without formally changing its constitution or abandoning popular elections. Forms are nothing when substance had gone. From there despotism advances in the name of the people. Once that single source of power is secured, everything is secured. An aristocracy of wealth will never struggle while it can bribe a tyrant.
When the disparity of condition increases, democratic elections make it easy to seize power. Many feel no connection with the conduct of the government. Embittered by poverty, they are ready to sell their vote to the highest bidder or to follow the most blatant demagogue. One class has become too rich to be stripped of its luxuries, no matter how public affairs are administrated. Another class is so poor that promises of a few dollars will outweigh abstract considerations on election day. A few roll in wealth while the many seethe with discontent at things they don’t know how to remedy.
Honest and patriotism are handicapped, while dishonesty brings success. The best sink to the bottom, the worse float to the top. The vile are ousted only by the viler. Unequal distribution of wealth inevitably transforms popular government into despotism. Political parties are passing into the control of what might be considered oligarchies and dictatorships
Many believe that there is no honest person in public office; or worse, that if there were one, he or she would be a fool not to seize opportunities. Democratic government is running the course that must inevitably follow under conditions producing unequal distribution of wealth.
Civilisations do not decline along the same paths they came up. Governments will not take us back from democracy to monarchy and to feudalism. It will take us to dictatorship and anarchy
Invention marches on, our cities expand. Yet civilisation had began to wane when, in proportion to population, we have more prisons, more welfare, more mental illness. Society does not die from top to bottom; it dies from bottom to top.
The evils arising from the unequal and unjust distribution of wealth become more apparent as modern civilisation goes on.
Poverty, with all the evils that flow from it, springs from the denial of justice. By allowing the few to monopolise opportunities nature freely offers to all, we have ignored the fundamental law of justice.
Equal political rights will not compensate for denying equal rights to the gifts of nature. Without equal rights to land, political liberty is merely the right to compete for employment at starvation wages.
Allowing one person to own the land – on which and from which others must live – makes them slaves. The degree, or proportion, of slavery increases as material progress goes on.
This is what turns the blessing of material progress into a curse, what crowds human beings into squalid tenement houses, and what fills prisons and brothels. This is what plagues people with want and consumes them with greed.
It is a universal fact – seen everywhere – that the contrast between wealth and want grows as the value of land increases. The greatest luxury and the most pathetic poverty exist side by side where land values are highest.
In short, the value of land depends entirely on the power that ownership of land gives to appropriate the wealth created by labour. Land values always increase at the expense of labour. The reason greater productive power does not increase wages is because it increases the value of land. Rent swallows up the whole gain.
That is why poverty accompanies progress.