The Challenge of Henry George
Samuel M. Levin
[Reprinted from the Henry George News, April,
Henry George as an economist had two basic concerns: the fact of
poverty in the midst of wealth, and the gross inequality in the
distribution of wealth. He held that economics was an exact science.
As George Geiger stated: "
it traced through, by means of
infallible causal or logical sequences, the workings of indubitable
first principles, 'truths of which we are all conscious and upon which
in everyday life we constantly base our reasoning and action.'"
Furthermore, he emphasized rights derived from natural law. These
natural rights were to him "sacred, eternal, God-given things."
Despite his emphasis, George was himself critical of other economic
principles. He believed, however, in the Ricardian law of rent, and he
looked upon those others* before him who had held similar ideas, as "additional
evidences that we were on the true track."
The Ricardian rent statement with which George concurred states: "Rent
is that portion of the produce of the earth which is paid to the
landlord for the use of the original and indestructible powers of the
soil." It is the produce of the earth, Ricardo says, which is
paid to the landlord, such payment being made not for what the
landlord himself contributes, but for something outside himself --
something which is really a gift of God, a part of nature itself.
The landlord's right, in the sense of this statement, is founded on
legal property ownership. The landlord, therefore, is in a position to
control the situation and to gather his harvest by virtue of property
rights and also because of the pivotal importance of land in the
functioning of the economic system.
This suggests distinctions between land and capital or capital goods.
Land is a part of nature. Capital is the result of the productive
effort of labor applied to natural resources. Land is neither
producible nor reproducible; whereas the supply of a capital good may
be augmented at will. And it is this fixedness of land which has
important bearings on the extraordinary advantages enjoyed by the
landlord, for it means that the price of land will advance not only on
account of increased demand due to an increase of population, but on
account of the operation of other growth factors, derived from
association and from a progressive community life.
Ownership of land brings with it a type of gain or advantage not
enjoyed by the owner of capital, since the holder of land is a
beneficiary of conditions and developments which have nothing to do
with his productivity. Yet it is productivity which constitutes the
determinant of the wage return to labor and the interest return to
Henry George accepts the Ricardian elaboration of the idea of
marginal productivity of land incident to the pressure of population;
and also the fact that basically agricultural rent is a surplus going
to the owner of better grades of land -- a surplus owing to the fact
that a given expenditure of labor and capital on a given tract of
better grade land yields a larger quantity of produce than the same
expenditure of labor and capital on a similar piece of marginal land,
i.e., land which is only equal to the purpose of covering the wages of
labor and the cost of capital.
It is this rent theory which led George to concern himself with the
idea of a tax which offered a means of reacquiring the rent of land
for public use, nullifying the special advantages enjoyed by the
George accepted the subsistence theory of wages presented by Ricardo,
and before him by Turgot, the eminent statesman of pre-revolutionary
France, and others. What this meant was that the wage system was
subject to a tendency to lower levels until a mere subsistence
standard was struck -- though subsistence in the Ricardian sense did
not ignore the role of habits currently called standards of living.
The economic forces that induced this tendency to a subsistence level
flowed, according to George, from the very advantages enjoyed by the
owner of land. In other words, the rising tendency with respect to
rent was at the expense of both the owner of capital and the worker.
Whatever was produced was due to the workers and capitalists and the
growing quantity of produce flowing into the hands of the landlord was
therefore, at the expense of the real producers.
Thus considering the Georgian picture, one may speak of it as the
configuration of a rigged economy. George saw the economy rigged in
favor of recipients of rent. In other words, the seeds of disease were
scattered in the economic organism resulting, on the one hand, in the
victimization of the productive classes, and on the other, in the
enrichment and enhancement of the land owning class which had nothing
of a productive character to show for what it acquired. This situation
constituted an inescapable challenge to Henry George. It gave him the
incentive to apply himself to the problem of mastering the
fundamentals of economic thought, to develop his own plan and order of
ideas to remedy the existing disorder, and to set off on a career of
persistent activity to hasten the fulfillment of his hopes.
In 1871, when he was 32 years old, he knew next to nothing of
economic writings; but his important pamphlet, "Our Land and Land
Policy," appeared in 1871, and Progress and Poverty, his
leading work, in 1879. In 1886 came his book, Protection or Free
Trade, and at the time of his death in 1897 (at the age of 58),
The Science 0f Political Economy -- not quite finished was
published in book form.
Though he had very limited schooling, George was regarded by John
Dewey as one of the world's ten social philosophers who ranked "from
"It is a poor version of his ideas which insists only upon the
material effect of increase of population in producing the material or
monetary increment in the value of land," wrote Dewey. "Henry
George puts even greater stress upon the fact that community life
increases land values because it opens 'a wider, fuller and more
varied life,' so that the desire to share in the higher values which
the community brings with it is a decisive factor in raising the
rental value of land."
One may look upon George as a political leader, a distinguished
writer and ethical teacher, as well as an economist whose ideas won
him a place in the realm of world importance. For he was, as Dewey's
phrase "social philosopher" suggests, much more than an
* Spinoza, John Locke, Thomas Spence, Patrick
Edward Dove, James Mill, Herbert Spencer, Edwin Burgess, et al.
[At the time this essay was published, Samuel Levin was
professor emeritus of Economics, Wayne State University,