Progress and Poverty is a book I’ve been meaning to read properly for a long time. It’s been recommended many times, it’s something of lost classic of political economics, and it also feels rather relevant at the moment. We often read that inequality in the US and the UK has reverted to 19th century levels. If we’re in a ‘new Gilded Age’, as some suggest, what can we learn from campaigners in the original Gilded Age?
To give it it’s full title, the book is Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth: The Remedy. At the recommendation of our resident Georgist* I’ve read the condensed edition from the Hogarth Press.
For a book that sold millions of copies around the world in its time, it doesn’t get off to a very exciting start. Indeed, this is why previous readings have stalled, abandoned in the early chapters defining terms and describing the interplay of wages and interest. But it warms to its themes. This is a book that starts in the library and ends on the rooftop, railing like an Old Testament prophet.
George’s central concern is why industrialising countries still have high levels of poverty. Written in 1897, he saw persistent poverty as “the great enigma of our times”, and the book is an attempt to work out why rising wealth from industry doesn’t reach the whole population. His conclusion? There are three factors of production: land, labour and capital. Economics had focused on labour and capital and neglected land, even though “there is no occupation in which labour and capital can engage that does not require the use of land.” Land ownership allows people to gain from the labour and capital of others, and “the great cause of inequality in the distribution of wealth is inequality in the ownership of land.”
In response, George suggests a tax on land values, something I’ve described in detail before. He also discusses and rejects some of the alternatives, such as confiscating or buying out land and holding it in common. He believes ownership itself isn’t the problem, but rent – the right to benefit in perpetuity from something that a person did not create. A land value tax targets rent, not ownership, though many owners who weren’t using their land might want to sell it and let someone else use it.
“A great wrong always dies hard”, George warned, and he was to spend the rest of his life advocating a land value tax to ever bigger audiences. He died of a stroke while running for mayor of New York in 1897, and his ideas were never put to the test on the scale he imagined. Land reform is incomplete in most Western democracies, and his ideas are long overdue a reassessment. In Britain, a land value tax would reduce the centuries-long injustice of land ownership. It would free up land for home-building, and stop land hoarding and speculation. It would regenerate town centres, and improve equality.
Economics needs this perspective too, because it still focuses on capital and labour, and forgets about land. Georgist economics is a missing third leg of the stool, and it’s interesting to consider what economics might look like if land had its rightful place – especially as digital communications blur the role of land even further.
As you would expect from a book of its time, Progress and Poverty feels dated in some of its examples and language. Women are invisible. Some of its generalisations might be hard to support today. But when George hits stride, he writes with striking clarity and moral force. There are many imaginative examples and analogies. And at the heart of it is a big challenge that remains unresolved into the 21st century: political democracy has not been matched by economic democracy. There are further freedoms to fight for, and it’s about time Progress and Poverty got another reading.