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Henry George ( September 2, 1839 - October 29, 1897) was an American political economist, and the most influential proponent of the " Single Tax" on land.1 His Life
Born in Philadelphia, George went to sea at age 16 before eventually settling in California. After a failed attempt at gold mining he started to work his way up through the newspaper industry, starting as a printer and ending up an editor and proprietor.
On a trip to New York George 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. This paradox supplied the theme and title for his 1879 book Progress and Poverty, which was a huge success, selling over 3 million copies. In it George made the argument that nearly all of the wealth created by social and technological advances in a free market economy is captured by land owners and monopolistsAlternate use: Monopoly (game In economics, a monopoly (from the Greek monos one + polein to sell) is defined as a market situation where there is only one provider of a product or service. Monopolies are characterized by a lack of economic competition fo via rents, and that this concentration of unearned wealth is the root cause of povertyPoverty describes a wide range of circumstances associated with need, hardship and lack of resources, as well as the decision by some—e. ascetics, monks, and nuns—to live simply. For some, poverty is a subjective and comparative term; for others, it is mo. George considered it a great injustice to restrict a man from using natural resources, and believed such restrictions were equivalent to slaverySlavery is involuntary servitude, enforced by violence or other, clear forms of coercion. It is sometimes regarded as an expectation associated with other relationships, such as marriage and/or other family relations, military service, or debt relationshi, a concept known as wage slaveryWage slavery is a term expressing disapproval of a condition where a person feels compelled to work in return for payment of a wage. In colloquial terms, this may refer to people that make a cult of work (the extreme case is dying of karoshi), or those wh.
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 pushing up land values and rents as fast or faster than wages were rising.
2 His Economic Theory
George developed some of the crucial features of his own theory of economics in a critique of an illustration used by Bastiat in order to explain the nature of interestIn finance, interest has three general definitions. Interest is a surcharge on the repayment of debt (borrowed money). Interest is the return derived from an investment. Interest is the right to claim in a corporation such as that of an owner or creditor. and profitProfit is what is gained, after costs are accounted for. In accounting, this is usually measured in monetary terms. In economics, profit is most often measured differently, since costs are opportunity costs. Profit is income received by buying low and sel.
Bastiat had asked his readers to consider James and William, both carpenters. James has built himself a plane, and has lent it to William for a year. Would James be satisfied with the return of an equally good plane a year later? Plainly not! he'll expect a board along with it, as interest. The key to a theory of interest is to understand why. Bastiat said that James had given William over that year "the power, inherent in the instrument, to increase the productivity of his labor," and wants compensation for that increased productivity.
George didn't accept this explanation. He wrote, "I am inclined to think that if all wealth consisted of such things as planes, and all production was such as that of carpenters -- that is to say, if wealth consisted but of the inert matter of the universe, and production of working up this inert matter into different shapes, that interest would be but the robbery of industry, and could not long exist." But some wealth is inherently fruitful, like a pair of breeding cattle, or a vat of grape juice soon to ferment into wine, or ... land. Planes and other sorts of inert matter (and the most lent item of all -- money itself) earns interest indirectly, only by being part of the same social "circle of exchange" with fruitful forms of wealth such as those.
