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“Progress and Poverty” – Investigates the paradox of increasing inequality and poverty amid economic and technological progress by Henry George 1879

No Lies Radio News – Wikipedia Staff – Feb 07, 2018

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Henry George (September 2, 1839 – October 29, 1897) was an American political economist and journalist. His writing was immensely popular in the 19th century, and sparked several reform movements of the Progressive Era. His writings also inspired the economic philosophy known as Georgism, based on the belief that people should own the value they produce themselves, but that the economic value derived from land (including natural resources) should belong equally to all members of society.

His most famous work, Progress and Poverty (1879), sold millions of copies worldwide, probably more than any other American book before that time. The treatise investigates the paradox of increasing inequality and poverty amid economic and technological progress, the cyclic nature of industrialized economies, and the use of rent capture such as land value tax and other anti-monopoly reforms as a remedy for these and other social problems.

Early life

George was born in Philadelphia, Pennsylvania, to a lower-middle-class family, the second of ten children of Richard S. H. George and Catharine Pratt George (née Vallance). His father was a publisher of religious texts and a devout Episcopalian, and sent George to the Episcopal Academy in Philadelphia. George chafed at his religious upbringing and left the academy without graduating.[10][11] Instead he convinced his father to hire a tutor and supplemented this with avid reading and attending lectures at the Franklin institute.[12] His formal education ended at age 14 and he went to sea as a foremast boy at age 15 in April 1855 on the Hindoo, bound for Melbourne and Calcutta. He ended up in the American West in 1858 and briefly considered prospecting for gold but instead started work the same year in San Francisco as a type setter.[12]

In California, George fell in love with Annie Corsina Fox, an eighteen-year-old girl from Sydney who had been orphaned and was living with an uncle. The uncle, a prosperous, strong-minded man, was opposed to his niece’s impoverished suitor. But the couple, defying him, eloped and married in late 1861, with Henry dressed in a borrowed suit and Annie bringing only a packet of books. The marriage was a happy one and four children were born to them. Fox’s mother was Irish Catholic, and while George remained an Evangelical Protestant, the children were raised Catholic. On November 3, 1862 Annie gave birth to future United States Representative from New York, Henry George, Jr. (1862–1916). Early on, even with the birth of future sculptor, Richard F. George (1865 – September 28, 1912),[13][14][15] the family was near starvation.

Career in journalism

After deciding against gold mining in British Columbia, George was hired as a printer for the newly created San Francisco Times,[16] and was able to immediately submit editorials for publication, including the popular What the Railroads Will Bring Us., which remained required reading in California schools for decades. George climbed the ranks of the Times, eventually becoming managing editor in the summer of 1867.[17][18] George worked for several papers, including four years (1871–1875) as editor of his own newspaper San Francisco Daily Evening Post and for a time running the Reporter, a Democratic anti-monopoly publication.[19][20][21] The George family struggled but George’s increasing reputation and involvement in the newspaper industry lifted them from poverty.

George’s other two children were both daughters. The first was Jennie George, (c. 1867–1897), later to become Jennie George Atkinson.[22] George’s other daughter was Anna Angela George (b. 1879), who would become mother of both future dancer and choreographer, Agnes de Mille[23] and future actress Peggy George, who was born Margaret George de Mille.[24][25]

Political and economic philosophy

George began as a Lincoln Republican, but then became a Democrat. He was a strong critic of railroad and mining interests, corrupt politicians, land speculators, and labor contractors. He first articulated his views in an 1868 article entitled “What the Railroad Will Bring Us.” George argued that the boom in railroad construction would benefit only the lucky few who owned interests in the railroads and other related enterprises, while throwing the greater part of the population into abject poverty. This had led to him earning the enmity of the Central Pacific Railroad’s executives, who helped defeat his bid for election to the California State Assembly.[21][26][27]

One day in 1871 George went for a horseback ride and stopped to rest while overlooking San Francisco Bay. He later wrote of the revelation that he had:

I asked a passing teamster, for want of something better to say, what land was worth there. He pointed to some cows grazing so far off that they looked like mice, and said, “I don’t know exactly, but there is a man over there who will sell some land for a thousand dollars an acre.” Like a flash it came over me that there was the reason of advancing poverty with advancing wealth. With the growth of population, land grows in value, and the men who work it must pay more for the privilege.[28]

Furthermore, on a visit to New York City, he was struck by the apparent paradox that the poor in that long-established city were much worse off than the poor in less developed California. These observations supplied the theme and title for his 1879 book Progress and Poverty, which was a great success, selling over 3 million copies. In it George made the argument that a sizeable portion of the wealth created by social and technological advances in a free market economy is possessed by land owners and monopolists via economic rents, and that this concentration of unearned wealth is the main cause of poverty. George considered it a great injustice that private profit was being earned from restricting access to natural resources while productive activity was burdened with heavy taxes, and indicated that such a system was equivalent to slavery—a concept somewhat similar to wage slavery. This is also the work in which he made the case for a land value tax in which governments would tax the value of the land itself, thus preventing private interests from profiting upon its mere possession, but allowing the value of all improvements made to that land to remain with investors.[29][30]

George was in a position to discover this pattern, having experienced poverty himself, knowing many different societies from his travels, and living in California at a time of rapid growth. In particular he had noticed that the construction of railroads in California was increasing land values and rents as fast as or faster than wages were rising.[26][31]

Political career

In 1880, now a popular writer and speaker,[32] George moved to New York City, becoming closely allied with the Irish nationalist community despite being of English ancestry. From there he made several speaking journeys abroad to places such as Ireland and Scotland where access to land was (and still is) a major political issue.

In 1886, George campaigned for mayor of New York City as the candidate of the United Labor Party, the short-lived political society of the Central Labor Union. He polled second, more than the Republican candidate Theodore Roosevelt. The election was won by Tammany Hall candidate Abram Stevens Hewitt by what many of George’s supporters believed was fraud. In the 1887 New York state elections, George came in a distant third in the election for Secretary of State of New York.[21][33] The United Labor Party was soon weakened by internal divisions: the management was essentially Georgist, but as a party of organized labor it also included some Marxist members who did not want to distinguish between land and capital, many Catholic members who were discouraged by the excommunication of Father Edward McGlynn, and many who disagreed with George’s free trade policy. George had particular trouble with Terrence V. Powderly, president of the Knights of Labor, a key member of the United Labor coalition. While initially friendly with Powderly, George vigorously opposed the tariff policies which Powderly and many other labor leaders thought vital to the protection of American workers. George’s strident criticism of the tariff set him against Powderly and others in the labor movement.[34]

Views and policy proposals

Socialization of land and natural resource rents

Henry George is best known for his argument that the economic rent of land (location) should be shared by society. The clearest statement of this view is found in Progress and Poverty: “We must make land common property.”[44][45] By taxing land values, society could recapture the value of its common inheritance, raise wages, improve land use, and eliminate the need for taxes on productive activity. George believed it would remove existing incentives toward land speculation and encourage development, as landlords would not suffer tax penalties for any industry or edifice constructed on their land and could not profit by holding valuable sites vacant.[46]

Broadly applying this principle is now commonly known as “Georgism.” In George’s time, it was known as the “single-tax” movement and sometimes associated with movements for land nationalization, especially in Ireland.[47][48][49] However, in Progress and Poverty, George did not favor the idea of nationalization.

I do not propose either to purchase or to confiscate private property in land. The first would be unjust; the second, needless. Let the individuals who now hold it still retain, if they want to, possession of what they are pleased to call their land. Let them continue to call it their land. Let them buy and sell, and bequeath and devise it. We may safely leave them the shell, if we take the kernel. It is not necessary to confiscate land; it is only necessary to confiscate rent.[50]

Municipalization of utilities and free public transit

George considered businesses relying on exclusive right-of-way land privilege to be “natural” monopolies. Examples of these services included the transportation of utilities (water, electricity, sewage), information (telecommunications), goods, and travelers. George advocated that these systems of transport along “public ways” should usually be managed as public utilities and provided for free or at marginal cost. In some cases, it might be possible to allow competition between private service providers along public “rights of way,” such as parcel shipping companies that operate on public roads, but wherever competition would be impossible, George supported complete municipalization. George said that these services would be provided for free because investments in beneficial public goods always tend to increase land values by more than the total cost of those investments. George used the example of urban buildings that provide free vertical transit, paid out of some of the increased value that residents derive from the addition of elevators.[51][52]

Intellectual property reform

George was opposed to or suspicious of all intellectual property privilege, because his classical definition of “land” included “all natural forces and opportunities.” Therefore, George proposed to abolish or greatly limit intellectual property privilege. In George’s view, owning a monopoly over specific arrangements and interactions of materials, governed by the forces of nature, allowed title-holders to extract royalty-rents from producers, in a way similar to owners of ordinary land titles. George later supported limited copyright, on the ground that temporary property over a unique arrangement of words or colors did not in any way prevent others from laboring to make other works of art. George apparently ranked patent rents as a less significant form of monopoly than the owners of land title deeds, partly because he viewed the owners of locations as “the robber that takes all that is left.” People could choose not to buy a specific new product, but they cannot choose to lack a place upon which to stand, so benefits gained for labor through lesser reforms would tend to eventually be captured by owners and financers of location monopoly.

Free trade

George was opposed to tariffs, which were at the time both the major method of protectionist trade policy and an important source of federal revenue, the federal income tax having not yet been introduced. He argued that tariffs kept prices high for consumers, while failing to produce any increase in overall wages. He also believed that tariffs protected monopolistic companies from competition, thus augmenting their power. Later in his life, free trade became a major issue in federal politics and his book Protection or Free Trade was read into the Congressional Record by five Democratic congressmen.[53][54]

In 1997, Spencer MacCallum wrote that Henry George was “undeniably the greatest writer and orator on free trade who ever lived.”[55] In 2009, Tyler Cowen wrote that George’s 1886 book Protection or Free Trade “remains perhaps the best-argued tract on free trade to this day.”[56]

Secret ballot

George was one of the earliest and most prominent advocates for adoption of the secret ballot in the United States.[57] Harvard historian Jill Lepore asserts that Henry George’s advocacy is the reason Americans vote with secret ballots today.[42] George’s first article in support of the secret ballot was entitled “Bribery in Elections” and was published in the Overland Review of December 1871. His second article was “Money in Elections,” published in the North American Review of March 1883. The first secret ballot reform approved by a state legislature was brought about by reformers who said they were influenced by George.[58] The first state to adopt the secret ballot, also called The Australian Ballot, was Massachusetts in 1888 under the leadership of Richard Henry Dana III. By 1891, more than half the states had adopted it too.[59]
Money creation, banking, and national deficit reform

George supported the use of “debt free” (sovereign money) currency, such as the greenback, which governments would spend into circulation to help finance public spending through the capture of seigniorage rents. He opposed the use of metallic currency, such as gold or silver, and fiat money created by private commercial banks.[60]

Citizen’s dividend and universal pension

George proposed to create a pension and disability system, and an unconditional basic income from surplus land rents. It would be distributed to residents “as a right” instead of as charity. Georgists often refer to this policy as a citizen’s dividend in reference to a similar proposal by Thomas Paine.

Bankruptcy protection and an abolition of debtors’ prisons

George noted that most debt, though bearing the appearance of genuine capital interest, was not issued for the purpose of creating true capital, but instead as an obligation against rental flows from existing economic privilege. George therefore reasoned that the state should not provide aid to creditors in the form of sheriffs, constables, courts, and prisons to enforce collection on these illegitimate obligations. George did not provide any data to support this view, but in today’s developed economies, much of the supply of credit is created to purchase claims on future land rents, rather than to finance the creation of true capital. Michael Hudson and Adair Turner estimate that about 80 percent of credit finances real estate purchases, mostly land.[61][62]

George acknowledged that this policy would limit the banking system but believed that would actually be an economic boon, since the financial sector, in its existing form, was mostly augmenting rent extraction, as opposed to productive investment. “The curse of credit,” George wrote, was “. . . that it expands when there is a tendency to speculation, and sharply contracts just when most needed to assure confidence and prevent industrial waste.” George even said that a debt jubilee could remove the accumulation of burdensome obligations without reducing aggregate wealth.[63]

Women’s suffrage

George was an important and vocal advocate for women’s political rights. He argued for extending suffrage to women and even suggested filling one house of Congress entirely with women: “If we must have two houses of Congress, then by all means let us fill one with women and the other with men.”[64]

Death and funeral

George’s first stroke occurred in 1890, after a global speaking tour concerning land rights and the relationship between rent and poverty. This stroke greatly weakened him, and he never truly recovered. Despite this, George tried to remain active in politics. Against the advice of his doctors, George campaigned for New York City mayor again in 1897, this time as an Independent Democrat. The strain of the campaign precipitated a second stroke, leading to his death four days before the election.[35][36][37]

An estimated 100,000 people visited Grand Central Palace during the day to see Henry George’s face, with an estimated equal number[38] crowding outside, unable to enter, and held back by police. After the Palace doors closed, the Reverend Lyman Abbott, Father Edward McGlynn, Rabbi Gustav Gottheil, R. Heber Newton (Episcopalian), and John Sherwin Crosby delivered addresses.[39] Separate memorial services were held elsewhere. In Chicago, five thousand people waited in line to hear memorial addresses by the former governor of Illinois, John Peter Altgeld, and John Lancaster Spalding.[40]

The New York Times reported that later in the evening, an organized funeral procession of about 2,000 people left from the Grand Central Palace and made its way through Manhattan to the Brooklyn Bridge. This procession was “all the way . . . thronged on either side by crowds of silent watchers.”

The procession then went on to Brooklyn, where the crowd at Brooklyn City Hall “was the densest ever seen there.” There were “thousands on thousands” at City Hall who were so far back that they could not see the funeral procession pass. It was impossible to move on any of the nearby streets. The Times wrote, “Rarely has such an enormous crowd turned out in Brooklyn on any occasion,” but that nonetheless, “[t]he slow tolling of the City Hall bell and the regular beating of drums were the only sounds that broke the stillness. . . . Anything more impressive . . . could not be imagined.”[41] At Court Street, the casket was transferred to a hearse and taken to a private funeral at Fort Hamilton. Commentators disagreed on whether it was the largest funeral in New York history or the largest since the death of Abraham Lincoln. The New York Times reported, “Not even Lincoln had a more glorious death.”[42] Even the more conservative New York Sun wrote that “Since the Civil War, few announcements have been more startling than that of the sudden death of Henry George.”[43]

Henry_George_Funeral_EM_McKay
Photo: George’s funeral procession on Madison Avenue.

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PS These are very good solutions for sharing the wealth and has been proposed since 1879!

Posted by Teri Perticone

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