Progress and Poverty
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Progress and Poverty © Robert Schalkenbach Foundation Henry George Progress and Poverty Why there are recessions and poverty amid plenty— and what to do about it! Edited and abridged for modern readers by Bob Drake Robert Schalkenbach Foundation © Robert Schalkenbach Foundation Progress and Poverty (modern edition) Edited and abridged for modern readers Author: Henry George Editor: Bob Drake Paperback ISBN: 9780911312980 First Published 2006 Copyright © Robert Schalkenbach Foundation The Robert Schalkenbach Foundation (RSF) is a private operating foundation, founded in 1925, to promote public awareness of the social philosophy and economic reforms advocated by famed 19th century thinker and activist, Henry George. Today, RSF remains true to its founding doctrine, and through efforts focused on education, communities outreach, and publishing, works to create a world in which all people are afforded the basic necessities of life and the natural world is protected for generations to come. Robert Schalkenbach Foundation [email protected] www.schalkenbach.org © Robert Schalkenbach Foundation Contents Publisher’s Foreword by Cliff Cobb Editor’s Preface by Bob Drake Author’s Preface to the Fourth Edition Introduction: The Problem of Poverty Amid Progress First Part: Wages and Capital Chapter 1 Why Traditional Theories of Wages are Wrong Chapter 2 Defining Terms Chapter 3 Wages Are Produced By Labor, Not Drawn From Capital Chapter 4 Workers Not Supported By Capital Chapter 5 The True Functions of Capital Second Part: Population and Subsistence Chapter 6 The Theory of Population According to Malthus Chapter 7 Malthus vs. Facts Chapter 8 Malthus vs. Analogies Chapter 9 Malthusian Theory Disproved Third Part: The Laws of Distribution Chapter 10 Necessary Relation of the Laws of Distribution Chapter 11 The Law Of Rent Chapter 12 The Cause of Interest Chapter 13 False Interest Chapter 14 The Law Of Interest Chapter 15 The Law Of Wages Chapter 16 Correlating The Laws of Distribution Chapter 17 The Problem Explained Fourth Part: The Effect of Material Progress on the Distribution of Wealth Chapter 18 Dynamic Forces Not Yet Explored © Robert Schalkenbach Foundation Chapter 19 Population Growth and Distribution of Wealth Chapter 20 Technology and the Distribution of Wealth Chapter 21 Speculation Fifth Part: The Problem Solved Chapter 22 The Root Cause of Recessions Chapter 23 The Persistence of PovertyDespite Increasing Wealth Sixth Part: The Remedy Chapter 24 Ineffective Remedies Chapter 25 The True Remedy Seventh Part: Justice of the Remedy Chapter 26 The Injustice of Private Property In Land Chapter 27 The Enslavement of Labor Chapter 28 Are Landowners Entitled to Compensation? Chapter 29 History of Land as Private Property Chapter 30 History of Property in Land in the US Eighth Part: Application of the Remedy Chapter 31 Private Property in Land is Inconsistent with the Best Use of Land Chapter 32 Securing Equal Rights To Land Chapter 33 The Canons of Taxation Chapter 34 Endorsements And Objections Ninth Part: Effects of the Remedy Chapter 35 The Effect on Production Chapter 36 The Effect on The Distribution of Wealth Chapter 37 The Effect on Individuals and Classes Chapter 38 Changes in Society Tenth Part: The Law of Human Progress Chapter 39 The Cause of Human Progress © Robert Schalkenbach Foundation Chapter 40 Differences in Civilizations Chapter 41 The Law of Human Progress Chapter 42 How Modern Civilization May Decline Chapter 43 The Central Truth Chapter 44 Conclusion: The Individual Life Afterword: Who Was Henry George? by Agnes George de Mille © Robert Schalkenbach Foundation Publisher’s Foreword We 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 twentyfirst 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 risktaking. 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 © Robert Schalkenbach Foundation 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 a 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 © Robert Schalkenbach Foundation Editor’s Preface Those 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 farreaching 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 late19th 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 “thoughtbythought translation.” Furthermore, references to history, mythology, and literature that do not advance the central argument have been removed. Genderbalanced 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 twentyeight 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 highschool senior. An early test I performed showed that students were able to read the modernized text about twentyfive percent © Robert Schalkenbach Foundation faster than the original, even before condensation. Although no formal testing for comprehension was done, anecdotal reports indicate that comprehension was greatly improved.