Wealth, Poverty, Rent

From: Henry George versus Henry George


“For all the improvements which add to productive power as civilization advances, consist in, or necessitate, a still further sub-division of labor, and the efficiency of the whole body of laborers is increased at the expense of the independence of the constituents.” (P. 255.)

At the beginning of his second chapter, (Book V, p. 254,) Mr. George gives it as his opinion, that the “great problem is fully solved”—that is, the problem of “Progress and Poverty,” or the “persistence of poverty amid advancing wealth.” To Mr. George this is, or was, a problem. It had to be that, or there would have been no excuse for his book. And he restates it here at the head of this chapter, as if it involved a flagrant inconsistency, and denoted a most unnatural state of affairs. With his eyes fixed upon the gorgon Rent, their sense seems to be shut to a plain, salient fact, palpable to every sight but his. A single thoughtful glance at the very terms of his text, in the light of his two fundamental principles, is the end of the agony over the “great problem.” Are they not relative terms? Do not the words “wealth” and “poverty” imply and explain each other, as much as heat and cold, light and darkness, good and evil? Is it not of the very essence of the matter, that advancing wealth should leave poverty more and more behind widening and deepening the gulf—always sharpening the contrast, even while ameliorating the evil?

What is wealth but the fruit of the labor of those men who plant and save, and save and plant? Are not these diligent, industrious, frugal, “superior men” the creators (producers) of the wealth of the world? And who, according to Mr. George, but the men who save, plough, plant, work and reap while others drone and doze, or dig and eat, are to “possess and control ” this wealth “as against all the world, to enjoy or to destroy, to use, to exchange, or to give”? If there were no property in the world, the question as to “who owns the things” would not puzzle even Mr. George. Nor, since there is property, and since, under the “re-cast” Political Economy, the maker of the things is the rightful owner of the things, can we see why Mr. George need run off after Rent to get an answer to the question, why it is that the man who has the things is “rich” while the man who has them not is “poor,” “as this world goes.” Or why it is that, while he continues to make and save, the more his wealth advances, and while the other continues not to make and save, the more his poverty persists? But nothing short of saddling the whole matter upon Rent will serve the purpose of Mr. George. And as this is the particular thing which he has to make good in order to give value to the rest of his industry, it is worth while to see how he does it.

The main purpose of this chapter on the Persistence of Poverty is to show that increase of productive power, whether in the form of men or machinery, increases rent, and that the inevitable tendency of increase of rent is to force down wages. This is Mr. Georges solution of the problem of Progress and Poverty—of the abundance at one pole of the social magnet and the destitution at the other. If the validity of the conclusion depend upon the soundness of the argument, there can be no hesitancy in pronouncing it lame and impotent. But it is due to the merits of the question to say, that it does not so depend. There is a large measure of truth in the general proposition that increase of rent tends to diminish wages—a truth that stands out clear from the wordy rubbish of fallacy which Mr. George has heaped about it. Whatever there is that is true about it is not new. Whatever there is that is new about it is not true. Mr. Georges chief mistake consists in taking a secondary for a primary truth. At bottom, rent is neither the sole nor chief cause of depression of wages. Increase of rent is itself the effect of a cause at which Mr. George has discharged all his heaviest artillery, and, if his boast avails, utterly demolished. And yet it is a cause which he is obliged to resurrect, re-habilitate and re-affirm in his very pronunciamento of victory over it. The Malthusian goblin of “over-population” is no sooner laid, as such, than it is conjured up again in the new name of “Productive Power.” Increase of productive power increases rent. Increase of population is increase of productive power. So increase of population increases rent and lowers wages;—raising rent by increasing demand for produce, and thus lowering wages, indirectly; (only so far as simple increase of rent tends that way;) and lowering wages directly by competitory division of the wages fund. (P. 255.) So, the labor-saving machine is increase of productive power. The machine (as before stated) that does the work of ten men is equivalent to the addition of ten men to the population, in its effect upon wages—though not upon rent, except as the machine itself has to be fed from the soil, and so increases the demand for produce—excepting also as it may tend to “lower the margin of cultivation.” (P. 221.) In whatever shape the increased productive power comes—? whether as man or machine—the tendency is the same—to reduce wages. Not alone through the channel of increased rent, but directly and chiefly by its divisory action on the wages fund. Hence, it appears, that the antagonism is not, as Mr. George would have us think, between wages and rent alone. No—wages stand alone on the one hand, pitted against “the discoveries of science, the march of invention, the spread of education,” (p. 255,) “improvements, government, manners and morals,” (p. 229,) and “civilization” on the other. If whatever tends to lower wages be a curse to the poor man—the laborer—whatever tends to raise them ought to be a blessing—even the Black Death of the fourteenth century. (P. 261.) While such a thing as rent (from private ownership of land) abides among men, according to Mr. George, no good thing can come to pass in the laborer’s behoof. Every blessing flies to the positive pole of the social magnet, intensifying the curse of poverty driven to the negative extreme.

“If the corrupt governments of our great American cities were to be made models of purity and economy, the effect would simply be to increase the value of real estate, not to raise either wages or interest.” (P. 229.)

Such is the potency of this law (of rent) that it makes, so far as the laborer is concerned, the highest advantages of civilization “persistent evils,” tending “to reduce the free laborer to the helpless and degraded condition of the slave.” (P. 255.) Recurrence to the savage state is preferable to this. For civilization has reduced classes of men to conditions worse than that of the savage. (Pp. 255, 256, 257.) And all through rent! And the only remedy is abolition or “confiscation of rent”! The only obstacle to the advent of the millennium, for lo! these many years, has been, and still is, “private ownership in land!”—Thus Mr. George.

“Increased power of production has everywhere added to the value of land; nowhere has it added to the value of labor; for though actual wages may in some places have somewhat risen, the rise is clearly attributed to other causes.” (P. 261.)

If there be “other causes” which can raise wages in spite of the increased power of production and the doubling-up of land values, why not bring them to the front, foster them and give them full play and re-inforce them with all possible accessories and auxiliaries—excepting only the “Black Death” of the fourteenth century, and kindred agencies.

Mr. George seems to think (p. 273) that it is a mistake for people “who can trace better circumstances” to their “superior industry, frugality and intelligence,” to imagine that those who remain poor do so simply from lack of these qualities.

“There is,” to appropriate some of George’s word—”there is, and always has been a wide-spread belief among “athletes and sporting classes generally, that the prize that is won by the superior speed of the victor was from the lack of that quality in the 1oser. “But,” still appropriating, “whoever has grasped the laws of the distribution of wealth [as George has grasped them and] as in previous chapters they have been traced out, will see the mistake in this notion.”

It would be worth while to read any book to get a sight of such a fallacy as that: though it is so thin, fleeting and evanescent that even Mr. George soon loses sight of it; for on the very next page (p. 274) he tells us that “if one man work harder, or with superior skill or intelligence than ordinary, he will get ahead”—though, of course, we are not to suppose that those who are left behind are so left “from the lack of those qualities;” or, according to Mr. Georges way of “grasping” things, some men may be superior to others without the others being inferior, and one leg may be longer than the other without one leg being shorter than the other. Hear him:

“The fallacy is similar to that which would be involved in the assertion that every one of a number of competitors might win a race. That any one might is true; that every one might is impossible.”

Still, those who lost did not lose from the lack of those qualities which enabled the winner to win! However, the mistake, the “fallacy,” by Mr. George’s own statement, (p. 273,) lies in the supposition that he who does win the race wins it by virtue of qualities which are lacking in the losers.—The fallacy of which “is similar to that which would be involved in the assertion” of the fool in Shakspeare: “An two ride a horse, one must ride behind.”

Such scintillations as the above force us to think, that a little tincture of Mill’s “Logic” would have been a wholesome preparation for Mr. Georges assault upon Mill’s “Political Economy.”

However, this profound conception of the poorer runner not missing the prize, for lack of winning qualities, is not entirely original with Mr. George. We can trace it back to some doggerel lines seen in our boyhood:

“The race is not always to him

Who the swiftest runs;

Nor the battell to the peopell

Who shoots the longest guns.”

“When to read and write were rare accomplishments a clerk commanded high respect and large wages, but now the ability to read and write has become so nearly universal as to give no advantage.” (P. 277.)

Which is as much as to say, where there is no inferiority there is no superiority. In which profound deliverance we agree with Mr. George, without any especial pride of intellect.

“Compel a man to drudgery for the necessities of animal existence, and he will lose the incentive to industry—the progenitor of skill—and will do only what he is forced to do.” (P. 275.)

“Increased wages … will ultimately bring increased industry, skill, intelligence and thrift.” (P. 278.)

But when the “skill, industry and thrift” are equally shared by all, or become “nearly universal,” they “give no advantage;” (p. 277;) and if they give no advantage, they offer no incentive to industry—the progenitor of skill—(p. 278) or to the accumulation of wealth, “one of the strong forces of industrial progress; ” (p. 288; ) and stagnation or retrogression into anarchy, and perhaps barbarism, would be the result. (P. 288.) And where these things—industry, skill and thrift—are not equally shared there is no equality in the ability to get, hold or enjoy the things of this world. This is the outcome of Mr. George’s attempt to show that failure does not result from lack of the qualities which achieve success.

It is curious to note how frequently Mr. George boasts of having supplanted the Malthusian theory with his theory of “the tendency of rent to reduce wages,” (p. 276,) since the whole power of rent to reduce wages is derived from “increase of population” and that which is equivalent to it—machinery: thus verifying and exemplifying the very doctrine he vaunts of having overthrown. It may be, that, without landownership and rent, Malthusianism would go to the wall; but those were not the conditions under which the doctrine was set up.

“All that is necessary to social regeneration … is ‘Land and Liberty.'”

How much land? How much liberty? Indulge us in a little dogmatism. Divide the acres of the world to-day, per capita, so that in the division the scales of justice shall not turn in the estimation of a hair, and give men “liberty” to use it or let it alone, to keep it or give it away—to buy or to sell, “restricting” in nothing that can hinder “the free and natural development of all the parts”—how long would the equality continue? How long would it take to set up all the inequalities that now exist in the world, and reduce the ownership of the land in it to a tithe of the inhabitants thereof?

It is not “land” that will make all men rich. It is not “liberty” that will make all men free. By the inexorable law of social gravitation, the law of least exertion, the light go up and the heavy down. There is nothing so utterly antagonistic to—so utterly destructive of Mr. George’s scheme as the fundamental principles of it—”Land and Liberty” and “the law of least exertion.”

Mr. George tells us that there is everywhere a tendency to concentration in landownership. A few years ago 320 acres was a large farm. (P 290.) Now farms vary all the way from 10,000 to 100,000 acres—the model farm of Dakota reaching the higher figure.

“The reason is obvious. It is the application of machinery to agriculture and the general tendency to production on a large scale. The same tendency which substitutes the factory, with its army of operatives, for many independent hand-loom weavers, is beginning to exhibit itself in agriculture. ” (P. 291.)

But the army of operatives in the factories, or laborers on the 100,000 acres, are not benefited by this application of machinery—this “increase of productive power.” This, subject to the law of rent, is their curse. Their blessing is to come with the reversal of all this—the restoration of “the independent hand-loom weavers” the small-scale farmers, or, possibly, the independent root-diggers and oyster crackers. For if whatever increases productiveness lowers wages, e converso, whatever diminishes productiveness should tend to increase wages. If not, why not?

Speaking of the “Ulster tenant right” he tells us, substantially, (pp. 291, 292,) that to carve out of the estate of a landlord an estate for the tenant would not improve the condition of the laborer.

“The only difference would be that the tenants of the first landlords, who would become landlords in their turn, would profit by the increase.”

But suppose you keep on “carving” until the tenants, and their laborers too, become landlords, then would they all “profit by the increase”? Is there any other way to give them all “land and liberty”? And does that seem feasible or offer a hopeful outlook for the millennium? To say nothing of a thousand years, could such a state of things continue for a thousand hours, with “Liberty” for one-half of the motto?

“The unequal ownership of land necessitates the unequal distribution of wealth.” (P. 294.)

And all, or nearly all, the ills that social flesh is heir to, spring from the unequal distribution of wealth. The first and efficient cause then, of the curse and crime of poverty, is unequal ownership of land. Whence logic points to equal ownership as the only remedy.

“There is but one way to remove an evil—and that is, to remove the cause.” (P. 295.)

The “one way” of removing the evil of unequal ownership is, equal ownership. But that is “impossible,” (p. 294,) unless equal ownership and equal distribution be different things. And if they be different, what is the significance of the motto “Land and Liberty”? But even if an equal distribution were possible, its continuance would not be. If but two men dwelt on the globe, and its land were held in common, or were equally divided between them, the lazier one, in less time than it takes to tell it, would yield his title to the superior vim of the other, or sell his share and board it out. For, there is no evading the “law of least exertion.” So saith Mr. George—that is to say, “up to a certain point.”

“If some men in a community spend all they produce in living, and pleasure, and other men spend a part in plant, those who plant have a higher manhood in this thing, and will gain ground and ought to; for the higher manhood must control. The man who eats his seed corn, starves or serves the man who plants his. But there is a difference in the natural power of men to save and plant. Yet the Republic can live only as it is composed of superior men, [all superior?] and men can be superior in this thing only as the power to save and plant is developed in them by exercise. Hence to bring it about that all our citizens shall be in some degree those superior men of which the republic must be composed, if it is to live, a system of business must be devised and put in operation, which, by its natural working, will cause all to save and plant and tend their planting in every human industry. Of such a system, those who are best able to save and plant, must be put in charge.” (Jesse Jones, International Review, July, 1880.)

Continued: Ownership