“What has destroyed every previous civilization has been the tendency to the unequal distribution of wealth and power.”
– Henry George
Progress and Poverty has been praised by Tolstoy, Einstein and Milton Friedman. Friedman, predictably, was the least effusive of three. He said the “least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago.” George disagreed with Thomas Malthus’s gloomy forecasts of widespread of famine; geometric population growth did not seem likely to him. While it is beyond the scope of this blog, in a future post I will explain why neither man was right.
Whereas the contemporaneous textbooks authored by Walras and Menger were strictly academic tomes about the theory of political economy,
Progress and Poverty is succinct and accessible. The clarity of its arguments made it such a success with the men listed above, but its rallying cry for equality is what endeared its author to people from all walks of life. His thesis is simple: a land tax would encourage people to make use of their property while allowing those without land to keep all of their income. Also, and this should not even need to be said, his thoughts on real estate speculation are more pertinent now than when the book was published.
Henry George, like C.S Peirce, was an autodidact who had no ties to the ivory tower. Unlike Peirce, George became famous in his lifetime. Milton Friedman, though he is despised by the left for defending the unrestrained market and defamed by the likes of Mises for his “socialist” views on monetary policy, was an outstanding economist. He sits on the opposite end of the fence of the types commonly associate with modern Georgism, which is unfairly pegged as a populist movement composed of agrarian class warriors. Nothing could be farther from the truth about the man or his followers. An observer of the industrial revolution, George understood there are a myriad of benefits to capitalism, innovation and urbanization. What troubled him was not private ownership or competition, but the level of inequality he observed in terms of material wealth and opportunities to advance one’s self. Unlike Piketty, what George saw was deplorable by the standards of any era. What he decried was reality, not his own dire predictions.
Slavery in antiquity was not a humane institution, but before the advent of labor laws (preceded and largely made possible by rises in the marginal productivity of capital) one can say it was abolished in name alone. One would have to be incredibly dense to think the formal renunciation of human chattel did anything to improve the lot of the freed or the already free. One only need to read The Condition of the Working Class in England or other period pieces to understand that a slave by any other name is still a slave. Even today English and Americans happily import mountains of consumer goods made by the “free” citizens of India, Cambodia, Vietnam and Malaysia without the slightest twinge of guilt. Nothing makes a sweater feel better than knowing the 8 year old who made it is not legally anyone’s property. He or she has chosen to forego childhood and education to work sixteen hour days without anything remotely resembling fair compensation, but they have the right to starve to death. In civilization’s brief history dreadful working conditions are the rule, not the exception. Urbanization, positions demanding specialized knowledge and the concentration of wealth into smaller geographic areas, along with political activism, are what changed this situation.
To me George’s genius does not necessarily lie with his advocacy of the land tax but with his realization that capitalism, in spite of all its triumphs, has flaws. I do not entirely agree with his thesis, but I believe Progress and Poverty is worth reading for the clarity of its exposition and its historical value. I wonder what he would have thought of Keynes, robots and all the other wonders and oddities that came after his death in 1897. One can only guess.