Henry George.

Progress and poverty, an inquiry into the cause of industrial depressions and of increase of want with increase of wealth; the remedy online

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THE LIBRARY
OF

THE UNIVERSITY
OF CALIFORNIA



BEQUEST OF

Mrs. Marion Randall Parsons



OTHER BOOKS BY
HENRY GEORGE



The Science of Political Economy, i voL,

8vo, $2.50.

A Perplexed Philosopher. 1 2 mo, cloth, $1.00;
paper, 25 cents.

Social Problems. i2mo, cloth, $1.00; paper,
25 cents.

Protection or Free Trade? i2mo, cloth,
$1.00; papt-r, 25 cents.

The Land Question. Paper, 20 cents.

Property In Land. A Controversy with the
Duke of Argyll. Paper, 20 cents.

The Condition of Labor. An Open Letter to
Pope Leo XIIL i2ino, cloth, 75 cents;
pr.pcr, 20 cents.

Property In Land, The Condition of Labor
and The Land Question, bound together
in one volume, irmo, cloth, Si. 00.

Our Land and Land Policy. With E.'^says ar.d
Speeches, i vol., cloth, gilt top, $2.50.

Uniform Library Edition of all these \vorks,
including The Life of Henry Oeor}2:e by his

son, 10 vols., i2mo, green buckram, gilt top,
$17.00.

The Life of Henry George, by Henry George,
Jr. I vol., cloth, S illustrations, $1.00.




From i)lii>ln;4rai.li t:ikfii in San Francisco siinrtly after wrilin
" I'rogress and Poverty."



PROGRESS AND POVERTY



AN INQUIRY INTO THE CAUSE OF INDUSTRIAL

DEPRESSIONS AND OF INCREASE OF WANT

WITH INCREASE OF WEALTH



THE REMEDY

BY
HENRY GEORGE

Author of "The S^ienre of Politiral Economy," "Protection or f'ree Trade?"

"Social Problems," "A Pcri>lexed Philosopher," "The Condition of

Labor," "The Lund Question," "Property in Land," etc.



THEXTY-FIFTn ASMVERSARV EDITION

WITH MEDALLION PORTRAIT OF HENRY GEORGE

BY HIS SON, RICHARD F. GEORGE




GARDEN CITY NEW YORK

GARDEN CITY PUBLISHING COMPANY, Inc.

1926



Entered according to act of Congress in tho year 1879

By Henry George

In the office oi the Librarian of Congress.

ALL RIGHTS RESEXVBb



AddU
GIFT



TKINTED IN THE UNITLD STATES

AT

THE COUNTRY LI}B TRESS, GARDEN CITY, N. Y.






TO THOSE WHO,

SEEING THE VICE AND MISERY THAT SPRING FROM

THE UNEQUAL DISTRIBUTION

OP WEALTH AND PRIVILEGE,

FEEL THE POSSIBILITY OF A HIGHER SOCIAL STATE

AND WOULD STRIVE FOR ITS ATTAINilENT

San Fbamcisco, March, 1873.



m82;5805



Make for thyself a definition or description of
the thing which is presented to thee, so as to see
distinctly what kind of a thing it is, in its sub-
Btanee, in its nudity, in its complete entirety, and
tell thyself its proper name, and the names of the
things of which it has been compounded, and into
which it will bo resolved. For nothing is so pro-
ductive of elevation of mind as to be able to ex-
amine methodically and truly every object which
is presented to thee in life, and always to look at
things so as to see at the same time what kind of
universe this is, and what kind of nso everything
performs in it, and what value everything has
with reference to the whole, and what with refer-
ence to man, who is a citizen of the highest city,
of which all other cities are like families; what
each thing is, and of what it is composed, and
how long it is the nature of this thing to endure.
—Marcus Aurelius Antoninus.



INTRODUCTION TO THE TWENTY-FIFTH ANNI-
VERSARY EDITION OF ''PROGRESS
AND POVERTY"

Out of the open West came a young man of less than
thirty to this great city of New York. He was small of
stature and slight of build. His ahna mater had been
the forecastle and the printing-office. He was poor, un-
heralded, unknown. He came from a small city rising at
the western golden portals of the country to set up here,
for a struggling little newspaper there, a telegraphic
news bureau, despite the opposition of the combined
powerful press and telegraph monopolies. The strug-
gle was too unequal. The young man was overborne by
the monopolies and his little paper crushed.

This young man was Henry George and the tune was
1869.

But though defeated, Henry George was not van-
quished. Out of this struggle had come a thing that was
to grow and grow until it should fill the minds and
hearts of multitudes and be as " an army with banners. ' '

For in the intervals of rest from his newspaper strug-
gle in this city the young correspondent had musingly
walked the streets. As he walked he was filled with
wonder at the manifestations of vast wealth. Here, as
nowhere that he had dreamed of, were private fortunes
that rivaled the riches of the fabled Monte Cristo. But
here, also, side by side with the palaces of the princely
rich, was to be seen a poverty and degradation, a want
and shame, such as made the young man from the open
West sick at heart.



Vni INTRODUCTION

Why in a land so bountifully blest, with enough and
more than enough for all, should there be such inequality
of conditions? Such heaped wealth interlocked with
such deep and debasing want? Why. amid such super-
abundance, should strong men vainly look for work?
Why should women faint with hunger, and little chil-
dren spend the morning of life in the treadmill of toil?

Was this intended in the order of things? No, he
could not believe it. And suddenly there came to him
— there in daylight, in the city street— a burning
thought, a call, a vision. Every nerve quivered. And
he made a vow that he would never rest until he had
found the cause of, and, if he could, the remedy for, this
deepening poverty amid advancing wealth.

Returning to San Francisco soon after his telegraphic
^news failure, and keeping his vow nurtured in his heart,
(Henry George perceived that land speculation locked up
ivast territories against labor, Every^vhere he perceived
an eifort to *' corner " land; an effort to get it and to
hold it, not for use, but for a " rise." Every^vhere he
perceived that this caused all who wished to use it to
compete with each other for it; and he foresaw that as
population grew the keener that competition would be-
come. Those who had a monopoly of the land would
practically own those who had to use the land.

Filled with these ideas, Henry George in 1871 sat
down and in the course of four months wrote a little
book under title of " Our Land and Land Policy." In
that small volume of forty-eight pages he advocated the
destruction of land monopoly by shifting all taxes from
labor and the products of labor and concentrating them
in one tax on the value of land, regardless of improve-
ments. A thousand copies of this small book were
printed, but the author quickly perceived that really to
command attention, the work would have to be done
more thoroughly.

That more thorough work came something more than
six years later. In August, 1677, the writing of "Prog-



INTRODUCTION IX

ress and Poverty" was begun. It was the oak that grew
out of the acorn of * ' Our Land and Land Policy. ' ' The
larger book became "an inquiry into industrial depres-
sions and of increase of want with increase of wealth,"
and pointed out the remedy.

The book was finished after a year and seven months
of intense labor, and the undergoing of privations tha;t
caused the family to do without a parlor carpet, and
which frequently forced the author to pawn his per-
sonal effects.

And when the last page was written, in the dead of
night, when he was entirely alone, Henry George flung
himself upon his knees and wept like a child. He had
kept his vow. The rest was in the Master's hands.

Then the manuscript was sent to New York to find a
publisher. Some of the publishers there thought it
visionary; some, revolutionary. Most of them thought
it unsafe, and all thought that it would not sell, or at
least suflSciently to repay the outlay. "Works on po-
litical economy even by men of renown were notori-
ously not money-makers. What hope then for a work
of this nature from an obscure man — unknown, and
without prestige of any kind? At length, however,
D. Appleton & Co. said they would publish it if the
author would bear the main cost, that of making the
plates. There was nothing else for it, and so in order
that the plate-making should be done under his own di-
rection Henry George had the type set in a friend's
printing-office in San Francisco, the author of the book
setting the first two stickfuls himself.

Before the plates, made from this type, were shipped
East, they were put upon a printing-press and an
"Author's Proof Edition" of five hundred copies was
struck off. One of these copies Henry George sent to
his venerable father in Philadelphia, eighty-one years
old. At the same time the son wrote :

It is with deep feeling of gratitude to Our Father in Heaven that
I send you a printed copy of this book. I am grateful that I have



X INTRODUCTION

been enabled to live to write it, and that you have been enabled to
live to see it. It represents a great deal of work and a good deal of
sacrifice, but now it is done. 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. But the belief that I have expressed in this book —
the belief that there is yet another life for ns — makes that of little
moment.

The prophecy of reco<]:nition of the book's greatness
•was fulfilled very quickly. The Appletons in New York
brought out the first regular market edition in January,
1880, just twenty-five years ago. Certain of the San
Francisco newspapers derided book and author as the
"hobby" of "little Harry George," and predicted that
the work would never be heard of. But the press else-
where in the country and abroad, from the old "Thun-
derer" in London down, and the great periodical pub-
lications, headed by the "Edinburgh Review," hailed
it as a remarkable book that could not be lightly brushed
aside. In the United States and England it was put
into cheap paper editions, and in that form outsold the
most popular novels of the day. In both countries, too,
it ran serially in the columns of newspapers. Into all
the chief tongues of Europe it was translated, there
being three translations into German. Probably no
exact statement of the book's extent of publication can
be made; but a conservative estimate is that, embracing
all forms and languages, more than two million copies
of "Progress and Poverty" have been printed to date;
and that including with these the other books that have
followed from Henry George's pen, and which might
be called "The Progress and Poverty Literature," per-
haps five million copies have been given to the world.

Henry George, Jr.

New York,
January 24, 1905.



PREFACE TO FOURTH EDITION.



The views herein set forth were in the main briefly stated in a
pamphlet entitled " Our Land and Land Policy," published in San
Francisco in 1871. I then intende<^l, as soon as I could, to present
them more fully, but the opportunity did not for a long time occur.
In the meanwhile I became even more firmly convinced of their
truth, and saw more completely and clearly their relations; and I
also saw how many false ideas and erroneous habits of thought
stood in the way of their recognition, and how necessary it was to go
over the whole ground.

This I have here tried to do, as thoroughly as space would permit.
It has been necessary for me to clear away before I could build up,
and to write at once for those who have made no previous study of
such subjects, and for those who are familiar with economic reason-
ings;, and, so great is the scope of the argument that it has been
impossible to treat with the fullness they deserve many of the ques-
tions raised. What I have most endeavored to do is to establish
general principles, trusting to my readers to carry further their
applications where this is needed.

In certain respects this book will be best appreciated by those who
have some knowledge of economic literature; but no previous read-
ing is necessary to the understanding of the argument or the passing
of judgment upon its conclusions. The facts upon which I have
relied are not facts which can be verified only by a search through
libraries. They are facts of common observation and common
knowledge, which every reader can verify for himself, just as he can
decide whether the reasoning from them is or is not valid.

Beginning with a brief statement of facts which suggest this in-
quiry, I proceed to examine the explanation currently given in the
name of political economy of the reason why, in spite of the increase
of productive power, wages tend to the minimum of a bare living.
This examination shows that the current doctrine of wages is founded
upon a misconception; that, in truth, wages are produced by the
labor for which they are paid, and should, other things being equal,
increase with the number of laborers. Here the inquiry meets a



XU PREFACE.

'ioctrine which is the foundation and center of most important
economic theories, and which has powerfully induenced thought in
All directions — the Malthusian doctrine, that population tends to
Increase faster than subsistence. Examination, however, shows that
this doctrine has no real support either in fact or in analogy, and that
when brought to a decisive test it is utterly disproved.

Thus far the results of the inquiry, though exl'-'ivitly important,
are mainly negative. They show that current theories do not satis-
factorily explain the connection of poverty with material progress,
but throw no light upon the problem itself, beyond showing that its
soluti2fl.inust be .sought in the laws which govern the distribution of
wealth. It therefore becomes necessary to carry the inquiry into
this field. A preliminary review shows that the three laws of dis-
tribution must necessarily correlate with each other, which as laid
down by the current political economy they fail to do, and an ex-
amination of the terminology in use reveals the confusion of thought
by which this discrepancy has been slurred over. Proceeding then
to work out the laws of distribution, I first take up the law of rent.

' This, it is readily seen, is correctly apprehended by the current
political economy. But it is also seen that the full scope of this law
has not been appreciated, and that it involves as corollaries the laws
of wages and interest — the cause which determines what part of the
produce shall go to the land owner necessarily determining what
part shall be left for labor and capital Without resting here, I pro-
ceed to an independent deduction of the laws of interest and wages.

'I have stopped to determine the real cause and justification of in-
terest, and to point out a source of much misconception — the con-
founding of what are really the profits of monopoly with the legiti-
mate earnings of capital. ^' Then returning to the main inquiry,
investigation shows that interest must rite and fall with wages, and
depends ultimately upon the same thing as rent — the margin of
cultivation or point in production where rent begins. V A similar but
independent investigation of the law of wages yields similar har-
monious results.^ Thus the three laws of distribution are brought
into mutual support and harmony, and the fact that with material
progress rent everywhere advances is seen to explain the fact that

\wages and interest do not advance.

,' ' What causes this advance of rent is the next question that arises,
and it necessitates an examination of the effect of material progress
upon the distribution of wealth. Separating the factors of material
progress into increase of population and improvements in the arts, it
is first seen that increase in population tends constantly, not merely



PREFACE. XIU

by reducing the margin of cultivation, but by localizing the econ-
omies and powers which come with increased population, to increase
the proportion of the aggregate produce which is taken in rent, and
to reduce that which goes as wages and interest. Then eliminating
increase of population, it is seen that improvement in the methods
and powers of production tends in the same direction, and, land being
held as private property, would produce in a stationary population
all the effects attributed by the Malthusian doctrine to pressure of
population. And then a consideration of the effects of the continuous
increase in land values which thus spring from material progress
reveals in the speculative advance inevitably begotten when land is
private property a derivative but most powerful cause of the increase
of rent and the crowding down of wages. Deduction shows that
this cause must necessarily produce periodical industrial depressions,
and induction proves the conclusion; while from the analysis which
has thus been made it is seen that the necessary result of material
progress, land being private property, is, no matter what the in-
crease in population, to force laborers to wages which give but a
V^bare living.

This identification of the cause that associates poverty with prog-
ress points to the remedy, but it is to so radical a remedy that I have
next deemed it necessary to inquire whether there is any othei
remedy. Beginning the investigation again from another starting
point, I have passed in examination the measures and tendencies
currently advocated or trusted in for the improvement of the condi-
tion of the laboring masses. The result of this investigation is to
prove the preceding one, as it shows that nothing short of making
land common property can permanently relieve poverty and check
the tendency of wages to the starvation point. ^
'The question of justice now naturally arises, and the inquiry
passes into the field of ethics. An investigation of the nature and
basis of property shows that there is a fundamental and irreconcil-
able difference between property in things which are the product of
labor and property in land; that the one has a natural basis and
sanction while the other has none, and that the recognition of ex-
clusive property in land is necessarily a denial of the right of prop-
erty in the products of labor. Further investigation shows thai
private property in land always has, and always must, as develop-
ment proceeds, lead to the enslavement of the laboring class; that
laud owners can make no just claim to compensation if society choose
to resume its right; that so far from private property m /and being
in accordance with the natural perceptions of men, the very reverw



XiV PREFACE.

is true, and that in the United States "we are already beginning to
feel the efifects of having admitted this erroneous and destructive
principle.

C" The inquiry then passes to the tield of practical statesmanship.
It is seen that private* property in land, instead of being necessary to
its imj^rovoment and use, stands in the way of improvement and use,
and entails an enormous waste of productive forces; that the recog-
nition of the common right to land involves no shock or disjwssession,
but is to be reached by the simple and easy method of abolishing
Ull taxation save that upon land values. And this an inquiry into
the principles of taxation show.? to be, in all respects, the best subject

I of taxation.

C A consideration of the effects of the change proposed then shows
that it would enormously increase production; would secure justice
.in distribution; would benefit all classes; and would make possible
'«n advance to a higher and nobler civilization.

The inquiry now rises to a wider field, and recommences from
another starting point. For not only do the hopes which have been
raised come into collision with the widespread idea that social prog-
ress is possible only by slow race improvement, but the conclusions
we have arrived at assert certain laws which, if they are really nat-
ural laws, must be manifest in universal history. C As a final test, it
therefore becomes necessary to work out the law of human progress,
for certain great facts which force themselves on our attention, as
soon as we begin to consider this subject, seem utterly inconsistent
with what is now the current theory. This inquiry shows that dif-
ferences in civilization are not due to differences in individuals, but
rather to differences in social organization; that progress, always
kindled by association, always passes into retrogression as inequality
is developed; and that even now, in modern civilization, the causes
which have destroyed all previous civilizations are beginning to
manifest themselves, and that mere political democracy is running
its course toward anarchy and despotism. But it also identifies the
law of social life with the great moral law of justice, and, proving
previous conclusions, shows how retrogression may be prevented
and a grander advance begun. This ends the inquiry. The final
chapter will explain itself. ^

The great importance of this inqtiiry will be obvious. If it has
been carefully and logically pursued, its conclusions completely
change the character of political economy, give it the coherence and
certitude of a true science, and bring it into full sympathy with the
aspirations of the masses of men, from which it has long been fB-



PREFACE. XV

tranged. What I have done in this book, if I have correctly solved
the great problem I have sought to investigate, ia, to unite the truth
perceived by the school of Smith and Ricardo to the truth perceived
by the schools of Proudhon and Lasalle; to show that latssez /aire
(in its full true meaning) opens the way to a realization of the noble
dreams of socialism; to identify social law with moral law, and to
disprove ideas which in the minds of many cloud grand and elevat-
ing perceptions.

This work was written between August, 1877, and March, 1879,
and the plates finished by September of that year. Since that time
new illustrations have been given of the correctness of the views
herein advanced, and the march of events — and especially that great
movement which has begun in Great Britain in the Irish land agita-
tion — shows still more clearly the pressing nature of the problem
I have endeavored to solve. But there has been nothing in the
criticisms they have received to induce the change or modification
of these views — in fact, I have yet to see an objection not answered
in advance in the book itself. And e.xcept that some verbal errors
have been corrected and a preface added, this edition is the same as
previous ones.

Henry George.

New York, November, 1880.



There must be refuge ! Men
Perished in winter vrinds till one smote fire
From flint stones coldly hiding what they held,
The red spark treasured from the kindling sun ;
They gorged on flesh like wolves, till one sowed com,
Which grew a weed, yet makes the life of man ;
They mowed and babbled till some tongue struck speech.
And patient fingers framed the lettered sound.
What good gift have my brothers, but it came
From search and strife and loving sacrifice?

Edwin Arnold.

Never yet
Share of Trnth was vainly set
In the world's wide fallow;
After hands shall sow the seed.

After hands, from hill and mead,
Reap the harvests yellow.

Wliittier.



CONTENTS.



Introductory.

PAGB

The Problem 3

Book I.— Wages and Capital.

Chapter L —The current doctrine of wages— its insufficiency 17

n.— The meaning of the terms 30

UL— Wages not drawn from capital, but produced by the labor 49

rv. — The maintenance of laborers not drawn from capital 70

v.— The real functions of capital 79

Book II.— Population and Subsistence.

Chapter I.— The Malthusian theory, its genesis and support 91

n.— Inferences from facts 103

IIL— Inferences from analogy 129

IV.— Disproof of the Malthusian theory 140

Book III.— The Laws of Distribution.
Chapter I.— The inquiry narrowed to the laws of distribution— necessary

relation of these laws 153

n. — Rent and the law of rent 165

HI. — Interest and the cause of interest 173

rv.— Of spurious capital and of profits often mistaken for interest. • 189

v.— The law of interest 195

VI. — V/ages and the law of wages 204

VU.— Correlation and co-ordination of these laws 217

VIII.— The statics of the problem thus explained 219

Book IV.— Effect of Material Progreps upon the Distribution of Wealth.

Chapter I.— The dynamics of the problem yet to seek 225

n. — Effect of increase of population upon the distribution of wealth 228
IIL— Effect of improvements in the arts upon the distribution of

wealth 242

IV.— Effect of the expectation raised by material progress 253

Book V.— The Problem Solved.
Chapter I.— The primary cause of recurring paroxysms of industrial

depression 261

n. — The persistence of poverty amid advancing wealth 280



Online LibraryHenry GeorgeProgress and poverty, an inquiry into the cause of industrial depressions and of increase of want with increase of wealth; the remedy → online text (page 1 of 44)