Progress and Poverty


THIS hook is a good example of a large class of books which are coming from the modern press. They assume that civilization, or progress, whichever we choose to call it, is wrong, and that in some way society must be reorganized before the social current can be turned into the right channels, or can be moved in the right direction.

Mr. George starts with the assumption that material progress, the growth of comfort and luxury, so characteristic of modern life, inevitably brings with it more poverty and want; and that this condition of poverty extends to an everincreasing number of persons. He does not prove this proposition. He argues that because in an agricultural or “ new ” community the poorer classes are more independent than the same classes are in great cities, and the tendency of population is toward the city, therefore modern life drags down with each step of progress an increasing number of persons into poverty. We think the contrary can be readily shown: that the condition of the poor as a whole has generally, almost constantly, improved through the modern centuries. But we are now concerned only with the statement on which the argument rests, — “ the problem,” as he terms it. He further assumes that poverty is the impelling cause of vice and crime.

Our author now proceeds to discuss with vigor and the greatest ingenuity the doctrines of political economy. He shows that capital (as the term is generally used by economists) should mean “ wealth in the course of exchange ; ” that labor is not paid out of capital, but out of the product of labor ; that consequently there is no wage-fund.2 He believes the Malthus law — “ that population naturally tends to increase faster than subsistence ” — to be no law at all; and it is easy to adopt his view, for common sense would teach us that until the world shall be filled up to running over there can be no facts sufficient to prove that the Author of the human race made so melancholy a mistake.

But when he reaches the law of rent, he comes to firm soundings. He agrees with the masters of political economy that “ the rent of land is determined by the excess of its produoe over that which the same application can secure from the least productive land in use ; ” and this potent axiom, according to Mr. George, causes all the mischief of poverty in modern times. There is no difference between capital and labor ; each is necessary to the other, and each would get its “ natural ” (whatever this may be) reward if it were not for land held individually, or, in other words, the landholder. The land-owner gets all the increase of modern industrial progress, formulates it in rent, and grinds the face of the poor by means of this crushing law. The “ remedy ” would be to abolish all individual titles in land. Yet when our author fairly states this he recoils from the drastic operation of his medicine. Instead of this heroic treatment, he proposes at present to tax land so heavily that the principle of ownership would be of little value, and the main usufruct would revert to the state. How this would help the proletariat or diminish poverty is not so clear, for we believe that it is universally admitted that an increase of taxation finally bears more heavily on labor than on any other element in society.

Mr. George’s argument is diffuse, but always interesting. He earnestly deprecates the ills of modern life, and, vaguely conceiving that if the concentration of wealth in individual hands could be prevented all would be well, he would demolish land-holding, the main foundation of all private property. But, as we have noted, he has not the courage to apply a treatment involving such vast consequences.

As it seems to the present writer, Mr. George starts with a fundamental error, which he shares with many thinkers and social theorists. From Locke and from Adam Smith onward, many of the best men have said, “ Labor produces all things.” Mr. George says, “ It is not capital which employs labor, but labor which employs capital.” He is wrong, they are all wrong, if we are considering civilized life. Try the proposition out of your own experience. Create a single product of civilized life by labor alone. You say, reader, that you will go into the wilderness, and from virgin soil bring back a bushel of corn untainted by progress or the conditions of this jangling modern time. We will leave out of the question the seed you plant, and consider only the spade you must have, or you would perish before your fingers could subdue the reluctant earth. The spade does not belong to labor, nor to capital qua capital; it belongs to society, though it exists in the form of capital. You say that you will win your product from old nature in another form. You will go to the untracked forest, hew out a deal plank, bring it to market on your own shoulders, and prevail over organized industry and commerce by the labor of your own hands. The axe you use is not yours through the essence of labor, though you may have made it with your own hands instead of buying it in the market. The idea of the axe, its potentiality which enables it to prevail over nature, does not belong to you. This is the result of long generations of development, from the rudest stone tool to the elegant steel blade which rings through the pine woods of Maine. This belongs to society ; neither the laborer nor the capitalist owns this principle, though either may for the moment hold the thing which represents it.

You and I, everybody, all acting together, beget a want, a social motive, which, issuing forth, sends the axeman to the tree, the log to the mill, the plank to the joiner, and finally produces this table, the complex result of the whole movement. Mr. George and all the economists cannot arrest this progression at any one point, and say, This is labor alone, that is capital alone, that is land — he includes all the forces of nature in the element land — alone. Therefore, we say, neither capital nor labor employs the other; society employs them both. How it employs them is not so apparent as the ordinary socialist imagines. Just here is the difficult step in setting forth the principles of social order, the enigma of simple everyday life.

Notwithstanding all the fine distinctions of the economists dividing things into capital fixed and circulating, wealth, commodities, land, etc., the common use of language is gradually throwing all these things into one term, — capital. Capital and labor represent to the popular mind substance and property on the one side, individual effort with brain or hands on the other. This popular use of the term capital — for it is quite modern — signifies some positive progress in our comprehension of the facts of our common life. It is often remarked that capital is labor saved; “ stored up ” is one author’s expression. This expression does not wholly explain the relation of labor and capital which we have sketched in our social movement. Some simple principles have been long in reaching our comprehension, and wo believe this principle is such a one. To illustrate: grass is a product of nature ; hay preserved and stored up is a product of civilization. Grass, while being cut and cured, is a joint product of capital and labor, and often perishes while passing into hay, which is a definite thing, and can be handled like any other form of capital. This process of grass cultivation and hay-making typifies every possible movement of labor and capital. The economists formulate labor, capital, rent, wages of superintendence, as the whole rule of social movement and of the science of wealth. No one of these terms expresses the delicate process of transmutation which capital and labor undergo from the instant they together start to produce anything, whether it be a bushel of wheat or a chronometer watch. It has been asserted that the farmer is the greatest gambler we know. He who plants a seed— a something of value, a necessary article of subsistence — and trusts it to all the uncertainties of nature and of labor, even though the labor be his own, commits his property and possibly himself to a most uncertain fate. But every operation of producer or exchanger is of exactly the same nature. The grease and the alkali must be sacrificed, but the soap may not follow the effort. Flour, yeast, and fire are solid forces, which are passing away, but the bread may never appear, or it may be only a worthless cinder. This process which is constantly going forward in our modern life the present writer terms capitalizing; that is, the converting of capital and labor into more capital. Whatever be the word of definition, the principle must be held steadily in mind, or we shall fail to reach some of the main springs of modern society. It is not a force like capital itself, either active or passive; but it is a function. This function must be embodied in a person or persons, just as teaching the mind is embodied in a teacher, or administering a steam-engine is embodied in an engineer. The administrator of capital and labor is not a mere middleman; he is a capitalizer. Capital, labor, and capitalizing cover all the necessary forms of wealth and individual activity in so far as we can define social life in material terms.

It looks easy, but the lack of this simple definition, taken from every-day life, has caused many blunders in social science. We believe this to be the cause of Mr. George’s curious error respecting land. He says, “ Land is the source of all wealth. It is the mine from which must be drawn the ore that labor fashions. It is the substance to which labor gives the form. And hence, when labor cannot satisfy its wants, may we not with certainty infer that it can be from no other cause than that labor is denied access to land ? ” This is an example of the reasoning which our author, with great acumen, applies in many parts of his argument. It is a specimen of much of the present socialistic philosophy. It is true in a sense, but not true as he means it. The source of wealth is not in land, but in society, as we proved with the axe, the lumber, and the table. The land is no more the source of the civilized crop growing on it than the water is the source of the steamship which it bears upon its bosom. Let us make a fanciful but none the less true illustration. Suppose the great Atlantic water-way should become so crowded that the civilized governments should find it necessary to track it from Europe to America, to divide it into courses for swift and slow vessels, as they do for wagons on London Bridge, and finally to employ a great corporation to police this arrangement and collect tolls for the service. We should then have all the difficulties on water which socialists make on land. But society would say, Civilization needs this water for the better movement of its daily life. If you wish to sail your vessel “free,” go where there is less civilization. This is in principle what old communities have done with land, and what new communities have so far been obliged to do when they have fenced in the common domain.

Mr. George expends much force in trying to establish the principle that property in land essentially differs from all other kinds of property. “ Property in a house,” he says, “ is rightful, because the product of labor; property in the lot on which it stands is wrong, because it is not the result of labor. The sanction which natural justice gives to one species of property is denied to the other ; the rightfulness which attaches to individual property in the produce of labor implies the wrongfulness of individual property in land; whereas the recognition of the one places all men upon equal terms, securing to each the due reward of his labor, the recognition of the other is the denial of the equal rights of men, permitting those who do not labor to take the natural reward of those who do.”

This recalls some of the reasoning of Mr. Ruskin, and others of the same school. These writers must consider both the house and lot in their social relations. It is as places of abode or of use for human beings that these particular things interest any of us. Now the house, with its arrangement of doors, windows, and rooms, its fabric of wood, stone, or iron, is a product of labor, is a social entity; all will admit that. But what is the lot, fenced in by an inclosure embodying all the results of order and government, bordered by a street or road which makes residence there endurable, or surrounded by cultivated fields from which subsistence may be drawn ? This bit of ground, whether it be subdued in the remote agricultural district, or carefully improved in the most crowded city, is equally a conquest made by man from nature ; it is a social entity.

There may be reasons for putting all the accumulations of society which are now tended and husbanded by individuals into the immediate control of the whole people : the state it may be, the mob it may be, according as the issue may turn out. That is the socialistic idea: to try to constitute a better form of capital, a better organism for civilized effort, than that in which we now live, where each individual is encouraged to push his own want, and the social impulse is the mutual expression of all the individual desires. There may be arguments, and there are plenty of arguments, urged in favor of such a social change. But whatever they may be, they apply to all forms of property equally. Land is not different from a government bond, a chronometer watch, or a woodsman’s axe. Each is a social creation, a thing in substance, which represents weighty social ideas ; these ideas are far more potent than any material in the watch or any soil in the land. Whether society will ever dare to take this bold plunge into a new system is of course matter of interesting speculation. But society will never take it, unless it be fully comprehended, for it must unsettle every present social institution in the passage to other goods and other ills we know not of. No juggling of the terms will ever convince the great average intelligence that property is not property ; or that social earnings embodied in land differ from other social earnings, whatever they may be.

The main question is and must always be, Can we find better trustees for property, capital, land, than those persons who, in their constant use and exchange of it, prove their ability to keep it ? Without doubt, the average sober sense of the community answers that the individual holder is the safest trustee of those social accumulations which have been so painfully acquired by the generations gone before. The basis of this common conviction, that which alone can make it common sense, is in the principle I have stated. It is not a mere stupid instinct of conservatism; it is the universal knowledge of experience. It is in that principle of capitalizing before mentioned, the every-day philosopher’s stone, the ability to turn capital and labor into new capital. No high aspiration, no scientific knowledge, no power of state or armies, can forward or control this simple and elementary movement of society. The great operations of society are made up of these little movements of capital, labor, and capitalizing, just as certainly as the river or ocean currents come from drops of water.

Our reformers are mistaken when they imagine that it is the possession of capital which society is anxious about. It is the movement of it, the transmutation of capital and labor, which vexes the mind of man. This constant restless renewal of material substance through individual effort, the uncertainty, the immense chance, of daily life, even in the narrowest lives, while it distresses also fascinates mankind. All capital, all labor, and, more important than all, that fine social organization, the sum of life either for capitalist or laborer, are staked every day on myriads of subtle operations which involve the material substance of capital, the instant effort of labor, and the social coöperation of all. The immense majority of these operations are of small amount, and principally affect individuals and families. But all these operations, small or great, are linked in the vast social movements and impulses which modern trade, commerce, and manufacture embody. It is not the ownership of the capital which interests us so much in essence as how it shall be used and improved. In a large sense great monopolies cannot forward themselves without advancing the larger interests of society.

Can we get trustees on the whole better than these property-holding individuals ? — that is the vital social question. For they are trustees of these capitals. The amount the richest monopolist can consume is ridiculously small considered as a social factor. If he distend his stomach with nightingales’ tongues, it is a trifle in the meat market; if he cover his body with diamonds, like a barbaric potentate, some one is paid for digging them, and the diamonds remain solid material embodiments of the social desires of mankind.

This organic principle, this social movement, which employs the material substance of capital on the one hand, the turbulent, restless effort of labor on the other, both at once and altogether, is not a something belonging to either capitalist or laborer. Both these are parts of it, are in it and of it. Many laborers are and all may be capitalists, if they will practice the necessary thrift. The laborer likes to toil in great streets, and to smoke his pipe in the company of crowds of people. It is useless to tell him how happy he would be on a prairie, holding the land either in fee or under state proprietorship. He answers, I like civilization, to enjoy all that I see, to possess what I can ; but I must enjoy in the company of kindred spirits. This common desire makes cities, builds great communities, calls for all the resources of modern industrial progress.

The vice of Mr. George’s argument, and of those arguing with him, is that they attempt to separate the laborer from this general social tide, and represent him as a caged animal, hating all around him because he cannot possess the fee of the property he sees. It would be just as good philosophy to depict Vanderbilt or Rothschild or Flood cursing and moaning because he cannot hold the ocean in his grasp and control its continental tides. It is but little either of these magnates possesses in person or enjoys to himself alone. He can no more divert his capital from its social functions to his own desires than he can shut up the bay of San Francisco or the harbor of New York. He is a public servant, whom a strict social surveillance hardly allows to wear purple and fine linen, at least outside his own doors. He is well paid so long as he does what the public generally want. Let him deviate from this prescribed course, and society soon rids itself of a useless burden.

It is true that poverty, vice, and crime abound most in large communities. It is simply because everything abounds there. Great cities and thickly populated districts contain the great objects of human desire, — the desires of all conditions of life, whether rich or poor. Wealth and want lie together ; not as cause and effect, but as incidents in the social life of all civilizations the world has known. Where most people congregate, there the most civilization prevails and the greatest chances, both for success and failure, tempt the individual man and woman, capitalist or laborer. Whether poverty has increased in relative quantity is a nice question, and the discussion of it would extend far beyond the limits of this paper. But whether the proportion be more or less, the changing of land titles from individuals to the state will not affect it, except to make it worse. It is not pleasant to make a dogmatic statement, but it rests with the socialistic philosophers not only to prove the ills of progress, but to show a civilization, or the germs of one, which has borne better fruits than the historic civilization which we know. This historic current has passed from common and tribal property to individual property in one form or another. To revert to common property in land would be a backward course, and societies never go backward, unless they are falling into decay.

William B. Weeden.


Like many other writers who have proposed remedies for the poverty of the masses, Mr. George first attempts to overthrow most of the established principles of political economy. The current doctrine “ that wages depend on the ratio between the amount of labor seeking employment and the capital devoted to its employment ” would cause, Mr. George rightly claims, if true, that high wages should be accompanied by an abundance of capital, and low wages by a lack of capital. But is it not true, he asks, that in embarrassed times, when wages are lowest, capital is most plenty? But capital which is employed is not plenty ; it is capital which is seeking employment. It is the ratio of the laborers to the employed capital which regulates wages, and as in embarrassed times much capital is idle, wages must fall. Mr. George also claims that, “ as the efficiency of labor manifestly increases with the number of laborers, the more laborers, other things being equal, the higher wages should be.” An increase in the efficiency of labor does not necessarily increase wages. Capital is selfish, and will pay in wages no more than it is forced to pay. This increased efficiency does not come from any improvement in the mental or physical condition of the laborer so much as from the advance in the division of labor and the use of machinery on a scale so grand that the laborer is daily more dependent on the brains and capital of his employer. The want and imprudence of the laborer always work for the capitalist, and force the former continually to compete with his co-laborers in bringing wages down to the mere means of subsistence. If the efficiency of labor should be increased fourfold and the ratio between laborers and capital should remain the same as before, wages would not rise, although private charity might be more profuse. Probably, however, such an increase in the efficiency of labor would create capital so fast that it would cause competition for labor and thus raise wages. But if the increase in production were spent in luxury as fast as created, wages would not rise in the least.

Mr. George claims that the margin of cultivation determines wages: it is true that wages cannot long remain below the standard which a laborer can obtain by his own work on land which he can cultivate without payment of rent, and this is without doubt one cause of the high wages in newly settled countries. But in settled countries all land except the most worthless is used, and such is the advantage furnished by cultivation on a great scale that large farmers can cultivate advantageously land on which an independent laborer could hardly subsist. The division of labor has therefore taken from the laborer the resort to poorer soils in settled countries, while even in our own West the laborer can do better as the employee of the large farmer than in tilling his own few acres. The great mass of proletarians are also in no condition to resort to abandoned or remote soils, and are consequently at the mercy of their employers.

Leaving, however, broad questions of political economy, we come to the portion of Mr. George’s work for which he is better fitted, — the description of our social and industrial state, and the investigation of means for improving the condition of the laborer. The cause, according to Mr. George, that, with the increasing productivity of labor, wages and interest do not proportionately increase is due to the fact that to the land-owner accrue all the advantages consequent upon the increase in population. The settlement of men together in large numbers permits the division of labor; central locations assist production by facilitating communication ; and consequently land in thickly populated districts becomes very valuable. Competition will in time cause the land-owner to receive as rent all the advantages accruing from the collection of people together, because producers in thinly populated districts will wish to transport their business into cities, and will eventually offer the city land-owner as rent the excess of profit which their capital can obtain in the city over what it can obtain in the country. Whenever rent rises above that point, capital will leave densely populated districts for those more thinly settled ; whenever rent is below that point, capital will compete for the advantageous positions which thickly settled districts afford, and the rent will rise. The interest which capital receives in manufacture or production on land which furnishes no advantages on account of its population is the interest which must regulate capital which is engaged in the most densely populated districts.

Such in the main is Mr. George’s explanation of the effect of civilization in increasing rent. The idea is by no means new, but Mr. George’s addition is in his practical method of applying the theory, to whose action is due, as he claims, every period of commercial distress as well as the hard lot of the laborer. For speculation in prosperous times, he thinks, will always carry the price of land so high that the manufacturer is obliged to pay to the land-owner a sum so large that a sufficient surplus cannot remain for profit. Production will then cease, and hard times will continue until the price of land is again brought to that point where the manufacturer can employ his capital to advantage. “ This relation is observable throughout the civilized world. Periods of industrial activity always culminate in a speculative advance of land values, followed by symptoms of checked production, generally shown at first by cessation of demand from the newer countries, where the advance in land values has been greatest.”

That an excessive rise in the price of land would naturally stop production is true, and Mr. George has well stated it, but it is not the only cause of bringing on commercial embarrassment. Waste of capital in ruinous investments would likewise cause a diminution in demand, which would be transmitted through all the ramifications of industry. It is also possible that all other commodities may rise proportionately with the price of land. In that case speculative values in land would not check production; but it still remains true that whenever the price of land is excessively high, times of commercial embarrassment are imminent.

The remedy which Mr. George proposes is the taxation of land by the state to such an extent that the holder will retain only a sufficient sum to recompense him for acting as the agent of the state in using or transferring the land. That is, the land is to be taxed for almost its whole rental. By this means Mr. George expects to remove the causes of all commercial crises, and especially to raise the price of labor to its proper rate. The real effect will be to rob the land-owners, and the rent which capital before gave to them will now go to the state. Capital will thus be relieved of all taxation ; for the proceeds from the taxation of land will be more than is necessary for the needs of the state. But where will the laborers gain ? They are still at the mercy of the capitalist, and their competition will drive their wages down to the lowest point. The gain will then be wholly to the capitalist, unless the excess of the proceeds of taxation over the necessary expenses of the state are spent for the education and amusement of the public ; in this way the laborers will gain ; they can never fight unprotected against capital and obtain move than a mere subsistence. And here we come to the pith of the problem. Under laissez faire the laborers in the long run must be at the mercy of capital; they cannot individually raise their wages. Is it not best, then, to take some such collective and indirect means as Mr. George proposes ? If land is taxed only sufficiently to carry on the necessary expenses of government, the laborers are not assisted, and the whole gain falls to the employer of labor. If, however, land is taxed at a high rate, and the excess over the amount required for government be expended in public baths, amusements, education, etc., the laborer will have the advantage of these benefits, while his wages cannot go below the amount required for the necessaries of life. It surely seems unjust that the land-owner should simply by the possession of land draw to himself a large part of the material advantages consequent on the growth of population. It may be called right or wrong thus to tax land-owners who have purchased the land at a high price. The whole question is one of expediency; it is simply a question as to what is the greatest benefit for those who have the power, — for the greatest number. Mr. George claims that land-owners would not be injured by the innovation; they surely would lose their land, at least indirectly, although it is true that land would be no higher than at present, and the laborer who wishes to own his house and garden could do so as before, by paying a moderate rent to the state. While it is true that in production capital must go hand in hand with labor, it is also true that, in the distribution of what is produced, whatever capital gains labor loses, and vice versa. The distribution of wealth is determined by a battle which goes on continually : capital has on its side the power of waiting, which has hitherto been all successful; but labor has on its side brute force, which more and more seems liable to be exercised. We confess we see no other means by which the laborers can ultimately better their condition, and Mr. George’s plan is one of the least objectionable means of that character.

Willard Brown.

  1. 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. New York: Appleton & Co. 1880.
  2. This has already been clearly established by F. P. Walker in his work on Wages.