Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth: The Remedy (P&P) is an 1879 book by social theorist and economist Henry George. It is a treatise on the questions of why poverty accompanies economic and technological progress and why economies exhibit a tendency toward cyclical boom and bust. George uses history and deductive logic to argue for a logical solution focusing on the capture of economic rent from natural resources and land titles.
Progress and Poverty, George's first book, sold several million copies, becoming one of the highest selling books of the late 1800s. It helped spark the Progressive Era and a worldwide social reform movement around an ideology now known as Georgism. Jacob Riis, for example, explicitly marks the beginning of the Progressive Era awakening as 1879 because of the date of this publication. The Princeton historian Eric F. Goldman wrote this about the influence of Progress and Poverty: For some years prior to 1952 I was working on a history of American reform and over and over again my research ran into this fact: an enormous number of men and women, strikingly different people, men and women who were to lead 20th century America in a dozen fields of humane activity, wrote or told someone that their whole thinking had been redirected by reading Progress and Poverty in their formative years. In this respect no other book came anywhere near comparable influence.
Progress and Poverty had perhaps even a larger impact around the world, in places such as Denmark, the United Kingdom, Australia, and New Zealand, where George's influence was enormous. Contemporary sources and historians claim that in the United Kingdom, a vast majority of both socialist and classical liberal activists could trace their ideological development to Henry George. George's popularity was more than a passing phase; even by 1906, a survey of British parliamentarians revealed that his writing was more popular than Walter Scott, John Stuart Mill, and William Shakespeare. In 1933, John Dewey estimated that Progress and Poverty "had a wider distribution than almost all other books on political economy put together." Progress and Poverty was criticized by Karl Marx and Silvio Gesell for perceived flaws in its theory of capital and interest.
Context Progress and Poverty seeks to explain why poverty exists notwithstanding widespread advances in technology and even where there is a concentration of great wealth such as in cities. 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:
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.
George saw how technological and social advances (including education and public services) increased the value of land (natural resources, urban locations, etc.) and, thus, the amount of wealth that can be demanded by the owners of land from those who need the use of land. In other words: the better the public services, the higher the rent is (as more people value that land). The tendency of speculators to increase the price of land faster than wealth can be produced to pay has the result of lowering the amount of wealth left over for labor to claim in wages, and finally leads to the collapse of enterprises at the margin, with a ripple effect that becomes a serious business depression entailing widespread unemployment, foreclosures, etc.
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.Charles A. Barker, "Henry George and the California Background of Progress and Poverty," California Historical Society Quartery 24, no. 2 (Jun. 1945), 97–115.
Synopsis The first two parts of the book argue against the Iron law of wages, provide George's definitions for labor, capital, and land, and criticizes Malthusianism in favor of Cornucopianism. George defines land as "all natural materials, forces, and opportunities", as everything "that is freely supplied by nature". The third part of the book draws upon the works of classical economists, including the law of rent and George's theory of wages. George also explains his theory of interest, which is similar to Anne Robert Turgot's theory of fructification, combined with a "reproductive or vital force of nature" for capital that can grow and reproduce.
The fourth and fifth parts of the book examine how population, technology, and land speculation affect the distribution of wealth. George concludes that land speculation is the root cause of recessions and that poverty persists despite increasing wealth since increases to productivity go to rent instead of wages.
George then examines various proposed strategies to prevent business depressions, unemployment and poverty, but finds them unsatisfactory. As an alternative, he proposes his own solution: a single tax on land values. The land value tax would be high enough to end other taxes, especially upon labor and production. Since public investment is reflected in land value, it could also provide limitless beneficial public investment in social services such as transportation and a citizen's dividend.
George argued that a land value tax would give landowners an incentive to use well-located land in a productive way, thereby increasing demand for labor and creating wealth. This shift in the bargaining balance between resource owners and laborers would raise the general level of wages and ensure no one need suffer poverty. A land value tax would, among other things, also end urban sprawl, tenant farming, homelessness, and the cultivation of low value monoculture on high value land. George provided his theory of human progress in the last part of the book.
Excerpts The following excerpt represents the crux of George's argument and view of political economy.
An often-cited passage from Progress and Poverty is "The Unbound Savannah", in which George discusses how the building of a community increases the value of land.
Impact
Soon after its publication, over three million copies of Progress and Poverty were bought, exceeding all other books written in the English language except the Bible during the 1890s. By 1936, it had been translated into thirteen languages and at least six million copies had been sold. It has now been translated into dozens of languages.
The book helped spark the Progressive Era and a worldwide social reform movement around an ideology now known as Georgism. Jacob Riis, for example, explicitly marks the beginning of the Progressive Era awakening as 1879 because of the date of this publication. The Princeton historian Eric F. Goldman wrote this about the influence of Progress and Poverty: For some years prior to 1952 I was working on a history of American reform and over and over again my research ran into this fact: an enormous number of men and women, strikingly different people, men and women who were to lead 20th century America in a dozen fields of humane activity, wrote or told someone that their whole thinking had been redirected by reading Progress and Poverty in their formative years. In this respect no other book came anywhere near comparable influence.
Progress and Poverty had perhaps even a larger impact around the world, in places such as Denmark, the United Kingdom, Australia, and New Zealand, where George's influence was enormous. Contemporary sources and historians claim that in the United Kingdom, a vast majority of both socialist and classical liberal activists could trace their ideological development to Henry George. George's popularity was more than a passing phase; even by 1906, a survey of British parliamentarians revealed that the American author's writing was more popular than Walter Scott, John Stuart Mill, and William Shakespeare. In 1933, John Dewey estimated that Progress and Poverty "had a wider distribution than almost all other books on political economy put together."
Notable recognition After completing Progress and Poverty, George accurately wrote to his father: "It will not be recognized at first—maybe not for some time—but it will ultimately be considered a great book, will be published in both hemispheres, and be translated into different languages. This I know, though neither of us may ever see it here."
Emma Lazarus wrote, "Progress and Poverty is not so much a book as an event. The life and thought of no one capable of understanding it can be quite the same after reading it", and even that reading it would prevent such a person, who also "prized justice or common honesty", from being able to ever again "dine or sleep or read or work in peace". Many famous figures with diverse ideologies, such as George Bernard Shaw, H. G. Wells,H. G. Wells, Experiment in Autobiography and Leo Tolstoy, mark their first encounters with Progress and Poverty as life-changing experiences.
John Haynes Holmes wrote, "My reading of Henry George's immortal masterpiece marked an epoch in my life. All my thought upon the social question and all my work for social reform began with the reading of this book". He knew of "nothing more touching, in all the range of our American literature". Holmes also said that "Progress and Poverty was the most closely knit, fascinating and convincing specimen of argumentation that, I believe, ever sprang from the mind of man."
In 1930, during the Great Depression, George W. Norris entered an abridged version of Progress and Poverty into the Congressional Record and later commented that an excerpt from the book was "one of the most beautiful things" that he "ever read on the preciousness of human liberty".
Some readers have found George's reasoning so compelling that they report being unwillingly forced into agreement. Tom L. Johnson, a streetcar monopolist and future progressive reformer, read and reread Progress and Poverty, finally requesting assistance from his business associates to find flaws in George's reasoning. Johnson took the book to his lawyer and said, "I must get out of the business, or prove that this book is wrong. Here, Russell, is a retainer of five hundred dollars [about $ in ]. I want you to read this book and give me your honest opinion on it, as you would on a legal question. Treat this retainer as you would a fee." Frank Chodorov, a pacifist libertarian of the American 'old right', claims to have read Progress and Poverty many times, and almost constantly for six months straight, before finally accepting George's conclusions. The literary critic Horace Traubel wrote that "George died in the charge of battle. But his book is battle spared. It has been in all battles and has survived all. Antagonism no longer has surprises for it."