Progress and Poverty
|Subjects||Economics, capitalism, socialism, Georgism, tax policy, land, economic rent|
|Media type||Print (Hardback)|
Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth: The Remedy was written in 1879 by the social theorist and economist Henry George. The book is a treatise on the questions of why poverty accompanies economic and technological progress and why economies exhibit a tendency toward cyclical boom and bust. George uses history and deductive logic to argue for a radical solution focusing on the capture of economic rent from natural resource and land titles.
Progress and Poverty is Henry George's first book, which sold several million copies, exceeding all other books except the Bible during the 1890s. It helped spark the Progressive Era and a world-wide social reform movement around an ideology now known as 'Georgism'. Princeton historian Eric F. Goldman wrote this about the influence of Progress and Poverty:
"For some years prior to 1952 I was working on a history of American reform and over and over again my research ran into this fact: an enormous number of men and women, strikingly different people, men and women who were to lead 20th century America in a dozen fields of humane activity, wrote or told someone that their whole thinking had been redirected by reading Progress and Poverty in their formative years. In this respect no other book came anywhere near comparable influence, and I would like to add this word of tribute to a volume which magically catalyzed the best yearnings of our fathers and grandfathers."
Progress and Poverty had perhaps even a larger impact around the world, in places such as Denmark, United Kingdom, Australia, and New Zealand, where Henry George's influence was enormous. Contemporary sources and historians claim that in the United Kingdom, a vast majority of both socialist and classical liberal activists could trace their ideological development to Henry George. George's popularity was more than a passing phase; even by 1906, a survey of British parliamentarians revealed that the American author's writing was more popular than Walter Scott, John Stuart Mill, and William Shakespeare.
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 poverty 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. The 2008 financial crisis and the 1997 Asian financial crisis are classic examples of a mania of "housing" (land) speculation leading to economic depression, though this connection is rarely recognized by neoclassical economists who remove land and rent from models.
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. George defines land as "all natural materials, forces, and opportunities," as everything "that is freely supplied by nature." George's primary fiscal tool was a land value tax on the annual value of land held as private property. It would be high enough to end other taxes, especially upon labor and production, to provide limitless beneficial public investment in services such as transportation, since public investment is reflected in land value, and to provide lavish social services such as a basic income. George argued that a land value tax would give landowners an incentive to use well located land in a productive way, thereby increasing demand for labor and creating wealth. This shift in the bargaining balance between resource owners and laborers would raise the general level of wages and ensure no one need suffer poverty. A land value tax would, among other things, also end urban sprawl, tenant farming, homelessness, and the cultivation of low value monoculture on high value land.
Soon after its publication, over three million copies of Progress and Poverty were bought, exceeding all other books written in the English language except the Bible during the 1890s. By 1936, it had been translated into thirteen languages and at least six million copies had been sold. It has now been translated into dozens of languages.
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.
In a remarkably accurate prophesy, after completing Progress and Poverty, Henry George wrote to his father: "It is with a deep feeling of gratitude to Our Father in Heaven, that I send you a printed copy of this book.... 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."
Emma Lazarus wrote, "Progress and Poverty is not so much a book as an event. The life and thought of no one capable of understanding it can be quite the same after reading it," and even that reading it would prevent such a person, who also "prized justice or common honesty", from being able to ever again "dine or sleep or work in peace". Many famously opposed figures, such as George Bernard Shaw, Friedrich Hayek, and Leo Tolstoy also mark their first encounters with Progress and Poverty as literally life-changing experiences.
John Haynes Holmes wrote, "My reading of Henry George's immortal masterpiece marked an epoch in my life. All my thought upon the social question and all my work for social reform began with the reading of this book,". He knew of "nothing more touching, in all the range of our American literature." Holmes also said that "Progress and Poverty was the most closely knit, fascinating and convincing specimen of argumentation that, I believe, ever sprang from the mind of man."
George's reasoning is compelling enough that some readers report being unwillingly forced into agreement. Tom L. Johnson, an industrialist and future progressive reformer, read and reread Progress and Poverty, finally requesting assistance from his business associates to find flaws in George's reasoning. Johnson took the book to his lawyer and said, "I must get out of the business, or prove that this book is wrong. Here, Russell, is a retainer of five hundred dollars [$13,000 in 2015]. I want you to read this book and give me your honest opinion on it, as you would on a legal question. Treat this retainer as you would a fee." Frank Chodorov, a pacifist libertarian of the American 'old right', claims to have read Progress and Poverty dozens of times, and almost constantly for six months straight, before finally accepting George's conclusions.
Philip Wicksteed wrote that Progress and Poverty had opened "a new heaven and a new earth" and that it was “by far the most important work in its social consequences that our generation or century  has seen.” Alfred Russel Wallace later echoed this opinion when hailing Progress and Poverty as "undoubtedly the most remarkable and important book of the present century," placing it even above Darwin's Origin of Species.
William Simon U'Ren wrote that he "went to Honolulu to die," but that a chance encounter with Progress and Poverty gave him a sense of purpose and renewed his desire to live. U'Ren went on to become a pioneering reformer of municipal elections and activist for direct democracy.
Clarence Darrow wrote that he had "found a new political gospel that bade fair to bring about the social equality and opportunity that has always been the dream of the idealist." Sara Bard Field wrote that Progress and Poverty was "the first great book I ever encountered", for how it impacted her thinking on poverty and wealth.
Albert Einstein wrote this about his impression of Progress and Poverty: "Men like Henry George are rare unfortunately. One cannot imagine a more beautiful combination of intellectual keenness, artistic form and fervent love of justice. Every line is written as if for our generation. The spread of these works is a really deserving cause, for our generation especially has many and important things to learn from Henry George. It almost seems to me as if you had no conception to what high degree the work of Henry George is appreciated by serious, thinking people."
In the Classics Club edition forward, John F. Kieran wrote that "no student in that field [economics] should be allowed to speak above a whisper or write above three lines on the general subject until he has read and digested Progress and Poverty." Kieran also later listed Progress and Poverty as one of his favorite books.
After reading selections of Progress and Poverty, Helen Keller wrote of finding "in Henry George’s philosophy a rare beauty and power of inspiration, and a splendid faith in the essential nobility of human nature."
Among many famous people who asserted that it was impossible to refute George on the land question were Leo Tolstoy, John Dewey, and Bertrand Russell. Tolstoy and Dewey, especially, dedicated much of their lives to spreading George's ideas. Tolstoy was preaching about the ideas in Progress and Poverty on his death bed.
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