Though not widely remembered today in the pantheon of economic theorists, Henry George was a notable writer on the topic of political economy in the mid-to-late 19th century. His keystone work, Progress and Poverty, inspired many reformers of the Progressive Era and even launched a branch of economic philosophy known as “Georgism.” His challenge to the foundational economic principles of theorists such as Adam Smith and J. S. Mill laid the way for many New Economics thinkers in the 20th century. His writings can be found in the collections of Richard Bliss, Hazel Henderson, E.F. Schumacher, the TRANET Journal, Martha Shaw, as well as the library’s general collection.
In Progress and Poverty Henry George sets out to answer the question of why poverty tends to increase, rather than decrease, as societies progress and build wealth. To understand such a foundational question, George begins with the foundations of economics: land, labor, and capital. He asserts that all wealth is the product of labor applied to land. Capital can be used to multiply the productivity of labor, but it is not essential to produce wealth.
Thus, George argues, the limiting factor preventing people from generating wealth is not a lack of access to capital but a lack of access to land. While the capitalist might expropriate a portion of wealth from the laborer, George sees this as a sort of “wages of supervision.” The landowner who charges rent for the use of land, on the other hand, truly takes the wealth generated by labor applied to land without doing any work himself. This leads him to the conclusion that poverty amid progress is due to the private ownership of land, which leads to the monopolization of access to land and the charging of rent to anyone who would wish to use it.
The great cause of inequality in the distribution of wealth is inequality in the ownership of land. … The ownership of land is the great fundamental fact which ultimately determines the social, the political, and consequently the intellectual and moral condition of a people.
This understanding of primary importance of access to land became an important source of inspiration for many thinkers in the development of the community land trust model such as Ralph Borsodi and Robert Swann. It also so inspired Leo Tolstoy that he included George’s thinking as a key plot element in his last novel, Resurrection. Tolstoy, in turn, did much to inspire the thinking of Mohandas Gandhi whose life work influenced Vinoba Bhave who launched the Bhoodan (Land Gift) movement in India.
Henry George advocated a different approach to addressing the inequality of land access than Bhoodan or the community land trust. He argued that it was not necessary to actually end private ownership, only to abolish rent by means of taxing landowners for the full value of the land. Regardless of his difference in mechanism, though, his underlying vision remains central to the community land trust model.
To extirpate poverty, to make wages what justice commands they should be, the full earnings of the laborer, we must therefore substitute for the individual ownership of the land a common ownership.