WealthAndWant.com: Gems From Henry George

Fred Harrison's FOREWORD (1980)

THIS book contains the distilled wisdom of Henry George. The selection of extracts from George's books was compiled and arranged by the Rev. Arthur Compton Auchmuty, who until his death in 1917 was one of a small group of British country clergymen preaching the cause of radical land reform.

Why, a century after George's main writings were published — and, to judge by the wide sales, popularly received — should we still be interested in them? Why, when the popularity acquired by many philosophers is eclipsed by new fashions, are the works of this writer still published and carefully scrutinized?* The short answer is that the philosophy Henry George sought to promote is close to the hearts of most people: a philosophy which has at its heart the ideas of freedom, justice and truth.

*The American Economic Association, the professional and scientific organization of North American economists, devoted a session of its annual meeting at Atlanta, Georgia, on Dec. 30, 1979, to celebrate the centenary of the publication of Progress and Poverty, Henry George's most influential book.

These concepts, of course, are used to defend a wide range of ideologies, and the passages in this book will introduce the reader to the merits of Henry George's philosophy and his practical proposals for social and economic change.

Henry George did not enjoy a formal education above the rudimentary level. But he acquired multi-disciplinary skills, which he deployed ruthlessly to expose the deficiencies of industrial society. The single crucial structural defect, he discovered, was the monopolization of nature by a minority of citizens. He argued that social conflicts and economic instability were nurtured by this crippling defect that was present in a system which was technically capable of providing everybody with a rising standard of living.

Combining the skills of the economist, the politician and the journalist he documented the problems and defined the elements necessary for a program of corrective reforms. No area of knowledge was neglected. Using history and anthropology, he compared the lot of working men in modern society with the generally happier condition of people in pre-industrial societies.

His answers were based largely on theoretical reasoning. The vast accumulation of empirical knowledge on which today's social scientists can draw was not available to Henry George, yet he singlemindedly explored those contradictions which did not disturb most of the complacent thinkers of his time. Thus, his perceptions are rich with analogies, sharpened by satire and meticulously recorded by paying due respect to the meaning of words (a method of advancing knowledge which is today associated with the Oxford school of linguistic philosophy).

For the student, the books of Henry George provide a wide range of hypotheses with which to grapple. Few of these insights into the working of society and its economy would fail to stand up to empirical testing. But this is not to say that his views are uncontroversial: one mark of a successful commentator and reformer is that he is able to challenge conventional wisdom. An example, which illuminates the contemporary relevance of George's writings, concerns the population question.

Henry George adopted an optimistic and anti-Malthusian position. If he were alive today he would seriously question the orthodox view that a principal way to cure poverty in the Third World was to increase the distribution of intrauterine devices and the pill. In his view, people were hungry not for procreative reasons (he saw each pair of hands as an exciting opportunity, not something to be feared for the burden allegedly placed on the carrying capacity of earth). The real problem, he argued, was that people were actively prevented from gaining access to the natural resources with which to provide themselves with their daily bread. Today, he would contend that, if we paid greater attention to appropriate land reforms, the characteristics which are identified as part of a demographic problem, such as malnutrition, would be solved.

History is on George's side. Apart from those periods of famine caused by drought, men in the past were able to order their cultural patterns to conform neatly with their ecological environment. Today, however, with all the developments of technology and science, poverty and hunger not only remain, but are frequently aggravated by these very developments.

The problems of contemporary society are multiplying in number and magnifying in scale to an extent which seems almost incomprehensible to the human mind. Yet solutions have to be found if we are to avoid ecological chaos and survive territorial conflicts. That is why the critique offered by Henry George is crucial. The power of his logic and his prose penetrate our complacency, compel us to confront uncomfortable facts.

But how do we re-synthesize culture to produce the results which we all, in our rare moments of altruism, concede as desirable? How do we protect natural rights, such as individual liberty and free speech, while establishing a well-functioning political order? How do we achieve a distribution of income which reflects both equal opportunity and the individual contributions of men and women of varying talents and industry?

This volume provokes these questions. The book's primary purpose is to encourage readers to turn to the full texts. There, they will find the answers with which we must, sooner or later, come to terms if we are to begin the process of reconstructing society into a state which might be accorded the status of "civilization."

Editor, FRED HARRISON
Land & Liberty March 1980

Progress and Poverty (1879)
The (Irish) Land Question (1881)
Social Problems (1883)
The Reduction to Iniquity (a reply to the Duke of Argyll), The Nineteenth Century, July, 1884
Protection or Free Trade (1885)
The Condition of Labor, an Open Letter to Pope Leo XIII (1891)
A Perplexed Philosopher (1892)
The Science of Political Economy, edited by Henry George, Jr. (1898), after Henry George's death
Speeches and Addresses, at various dates

It is true that wealth has been greatly increased, and that the average of comfort, leisure, and refinement has. been raised; but these gains are not general. In them the lowest class do not share. I do not mean that the condition of the lowest class has nowhere nor in anything been improved; but that there is nowhere any improvement which can be credited to increased productive power. I mean that the tendency of what we call material progress is in nowise to improve the condition of the lowest class in the essentials of healthy, happy human life. Nay, more, that it is to still further depress the condition of the lowest class. The new forces, elevating in their nature though they be, do not act upon the social fabric from underneath, as was for a long time hoped and believed, but strike it at a point intermediate between top and bottom. It is as though an immense wedge were being forced, not underneath society, but through society. Those who are above the point of separation are elevated, but those who are below are crushed down. — Progress & Poverty — Introductory: The Problem

THREE thousand years of advance, and still the moan goes up, "They have made our lives bitter with hard bondage, in mortar and in brick, and in all manner of service!" Three thousand years of advance! and the piteous voices of little children are in the moan. We progress and we progress; we girdle continents with iron roads and knit cities together with the mesh of telegraph wires; each day brings some new invention; each year marks a fresh advance — the power of production increased, and the avenues of exchange cleared and broadened. Yet the complaint of "hard times" is louder and louder; everywhere are men harassed by care, and haunted by the fear of want. With swift, steady strides and prodigious leaps, the power of human hands to satisfy human wants advances and advances, is multiplied and multiplied. Yet the struggle for mere existence is more and more intense, and human labor is becoming the cheapest of commodities. Beside glutted warehouses human beings grow faint with hunger and shiver with cold; under the shadow of churches festers the vice that is born of wants. — Speech: Moses

IF it were possible to express in figures the direct pecuniary loss which society suffers from the social mal-adjustments which condemn large classes to poverty and vice, the estimate would be appalling. England maintains over a million paupers on official charity; the city of New York alone spends over seven million dollars a year in a similar way. But what is spent from public funds, what is spent by charitable societies, and what is spent in individual charity, would, if aggregated, be but the first and smallest item in the account. The potential earnings of the labor thus going to waste, the cost of the reckless, improvident and idle habits thus generated, the pecuniary loss (to consider nothing more) suggested by the appalling statistics of mortality, and especially infant mortality, among the poorer classes; the waste indicated by the gin palaces or low groggeries which increase as poverty deepens; the damage done by the vermin of society that are bred of poverty and destitution — the thieves, prostitutes, beggars, and tramps; the cost of guarding society against them, are all items in the sum which the present unjust and unequal distribution of wealth takes from the aggregate which, with present means of production, society might enjoy. — Progress & Poverty — Book IX, Chapter 2: Effects of the Remedy, upon distribution and thence on production

FIVE centuries ago the wealth-producing power of England, man for man, was small indeed compared with what it is now. Not merely were all the great inventions and discoveries which since the Introduction of steam have revolutionized mechanical industry then undreamed of, but even agriculture was far ruder and less productive. Artificial grasses had not been discovered. The potato, the carrot, the turnip, the beet, and many other plants and vegetables which the farmer now finds most prolific, had not been introduced. The advantages which ensue from rotation of crops were unknown. Agricultural implements consisted of the spade, the sickle, the flail, the rude plow and the harrow. Cattle had not been bred to more than one-half the size they average now, and sheep did not yield half the fleece. Roads, where there were roads, were extremely bad, wheel vehicles scarce and rude, and places a hundred miles from each other were, in difficulties of transportation, practically as far apart as London and Hong Kong, or San Francisco and New York, are now.

Yet patient students of those times tell us that the condition of the English laborer was not only relatively, but absolutely better in those rude times than it is in England today, after five centuries of advance in the productive arts. They tell us that the workingman did not work so hard as he does now, and lived better; that he was exempt from the harassing dread of being forced by loss of employment to want and beggary, or of leaving a family that must apply to charity to avoid I starvation. Pauperism as it prevails in the rich England of the nineteenth century was in the far poorer England of the fourteenth century absolutely unknown. Medicine was empirical and superstitious, sanitary regulations and precautions were all but unknown. There were frequently plague and occasionally famine, for, owing to the difficulties of transportation, the scarcity of one district could not "be relieved by the plenty of another. But men did not as they do now, starve in the midst of abundance; and what is perhaps the most significant fact of all is that not only were women and children not worked as they are today, but the eight-hour system, which even the working classes of the United States, with all the profusion of labor-saving machinery and appliances have not yet attained, was then the common system! — Protection or Free Trade — Chapter 22: The Real Weakness of Free Trade. abridged • econlib

The Savage and the Modern Workman

THE aggregate produce of the labor of a savage tribe is small, but each member is capable of an independent life. He can build his own habitation, hew out or stitch together his own canoe, make his own clothing, manufacture his own weapons, snares, tools and ornaments. He has all the knowledge of nature possessed by his tribe — knows what vegetable productions are fit for food, and where they maybe found; knows the habits and resorts of beasts, birds, fishes and insects; can pilot himself by the sun or the stars, by the turning of blossoms or the mosses on the trees; is, in short, capable of supplying all his wants. He may be cut off from his fellows and still live; and thus possesses an independent power which makes him a free contracting party in his relations to the community of which he is a member.

Compare with this savage the laborer in the lowest ranks of civilized society, whose life is spent in producing but one thing, or oftener but the infinitesimal part of one thing, out of the multiplicity of things that constitute the wealth of society and go to supply even the most primitive wants; who not only cannot make even the tools required for his work, but often works with tools that he does not own, and can never hope to own. Compelled to even closer and more continuous labor than the savage, and gaining by it no more than the savage gets — the mere necessaries of life — he loses the independence of the savage. He is not only unable to apply his own powers to the direct satisfaction of his own wants, but, without the concurrence of many others, he is unable to apply them indirectly to the satisfaction of his wants. He is a mere link in an enormous chain of producers and consumers, helpless to separate himself, and helpless to move, except as they move. The worse his position in society, the more dependent is he on society; the more utterly unable does he become to do anything for himself. The very power of exerting his labor for the satisfaction of his wants passes from his own control, and may be taken away or restored by the actions of others, or by general causes over which he has no more influence than he has over the motions of the solar system. The primeval curse comes to be looked upon as a boon, and men think, and talk, and clamor, and legislate as though monotonous manual labor in itself were a good and not an evil, an end and not a means. Under such circumstances, the man loses the essential quality of manhood — the godlike power of modifying and controlling conditions. He becomes a slave, a machine, a commodity — a thing, in some respects, lower than the animal.

I am no sentimental admirer of the savage state. I do not get my ideas of the untutored children of nature from Rousseau, or Chateaubriand, or Cooper. I am conscious of its material and mental poverty, and its low and narrow range. I believe that civilization is not only the natural destiny of man, but the enfranchisement, elevation, and refinement of all his powers, and think that it is only in such moods as may lead him to envy the cud-chewing cattle, that a man who is free to the advantages of civilization could look with regret upon the savage state. But, nevertheless, I think no one who will open his eyes to the facts, can resist the conclusion that there are in the heart of our civilization large classes with whom the veriest savage could not afford to exchange. It is my deliberate opinion that if, standing on the threshold of being, one were given the choice of entering life as a Terra del Fuegan, a black fellow of Australia, an Esquimaux in the Arctic Circle, or among the lowest classes in such a highly civilized country as Great Britain, he would make infinitely the better choice in selecting the lot of the savage. For those classes who in the midst of wealth are condemned to want, suffer all the privations of the savage, without his sense of personal freedom; they are condemned to more than his narrowness and littleness, without opportunity for the growth of his rude virtues; if their horizon is wider, it is but to reveal blessings that they cannot enjoy. — Progress & Poverty — Book V, Chapter 2: The Problem Solved: The Persistence of Poverty Amid Advancing Wealth

Poverty Unnatural

OR let him go to Edinburgh, the "modern Athens," of which Scotsmen speak with pride, and in buildings from whose roofs a bowman might strike the spires of twenty churches he will find human beings living as he would not keep his meanest dog. Let him toil up the stairs of one of those monstrous buildings, let him enter one of those "dark houses," let him close the door, and in the blackness think what life must be in such a place. Then let him try the reduction to iniquity. And if he go to that good charity (but, alas! how futile is Charity without Justice!) where little children are kept while their mothers are at work, and children are fed who would otherwise go hungry, he may see infants whose limbs are shrunken from want of nourishment. Perhaps they may tell him, as they told me, of that little girl, barefooted, ragged, and hungry, who, when they gave her bread, raised her eyes and clasped her hands, and thanked our Father in Heaven for His bounty to her. They who told me that never dreamed, I think, of its terrible meaning. But I ask the Duke of Argyll, did that little child, thankful for that poor dole, get what our Father provided for her? Is He so niggard? If not, what is it, who is it, that stands, between such children and our Father's bounty? If it be an institution, is it not our duty to God and to our neighbor to rest not till we destroy it? If it be a man, were it not better for him that a millstone were hanged about his neck and he were cast into the depths of the sea? — The Reduction to Iniquity (a reply to the Duke of Argyll), The Nineteenth Century, July, 1884

WE are so accustomed to poverty that even in the most advanced countries we regard it as the natural lot of the great masses of the people; that we take it as a matter of course that even in our highest civilization large classes should want the necessaries of healthful life, and the vast majority should only get a poor and pinched living by the hardest toil. There are professors of political economy who teach that this condition of things is the result of social laws of which it is idle to complain! There are ministers of religion who preach that this is the condition which an all-wise, all-powerful Creator intended for His children! If an architect were to build a theater so that not more than one-tenth of the audience could see and hear, we should call him a bungler and a botcher. If a man were to give a feast and provide so little food that nine-tenths of his guests must go away hungry, we should call him a fool, or worse. Yet so accustomed are we to poverty, that even the preachers of what passes for Christianity tell us that the great Architect of the Universe, to whose infinite skill all nature testifies, has made such a botch job of this world that the vast majority of the human creatures whom He has called into it are condemned by the conditions he has imposed to want, suffering, and brutalizing toil that gives no opportunity for the development of mental powers — must pass their lives in a hard struggle to merely live! — Social Problems — Chapter 8: That We All Might Be Rich

Nature Inexhaustible

THAT man cannot exhaust or lessen the powers of nature follows from the indestructibility of matter and the persistence of force. Production and consumption are only relative terms. Speaking absolutely, man neither produces nor consumes. The whole human race, were they to labor to infinity, could not make this rolling sphere one atom heavier or one atom lighter, could not add to or diminish by one iota the sum of the forces whose everlasting circling produces all motion and sustains all life. As the water that we take from the ocean must again return to the ocean, so the food we take from the reservoirs of nature is, from the moment we take it, on its way back to those reservoirs. What we draw from a limited extent of land may temporarily reduce the productiveness of that land, because the return may be to other land, or may be divided between that land and other land, or perhaps, all land; but this possibility lessens with increasing area, and ceases when the whole globe is considered. — Progress & Poverty — Book II, Chapter 3: Population and Subsistence: Inferences from Analogy

LIFE does not use up the forces that maintain life. We come into the material universe bringing nothing; we take nothing away when we depart. The human being, physically considered, is but a transient form of matter, a changing mode of motion. The matter remains and the force persists. Nothing is lessened, nothing is weakened. And from this it follows that the limit to the population of the globe can only be the limit of space. — Progress & Poverty — Book II, Chapter 3: Population and Subsistence: Inferences from Analogy

More Men, More Yield

DOES not the fact that all of the things which furnish man's subsistence have the power to multiply many fold — some of them many thousand fold, and some of them many million or even billion fold — while he is only doubling his numbers, show that, let human beings increase to the full extent of their reproductive power, the increase of population can never exceed subsistence? This is clear when it is remembered that though in the vegetable and animal kingdoms each species, by virtue of its reproductive power, naturally and necessarily presses against the conditions which limit its further increase, yet these conditions are nowhere fixed and final. No species reaches the ultimate limit of soil, water, air, and sunshine; but the actual limit of each is in the existence of other species, its rivals, its enemies, or its food. Thus the conditions which limit the existence of such of these species as afford him subsistence man can extend (in some cases his mere appearance will extend them), and thus the reproductive forces of the species which supply his wants, instead of wasting themselves against their former limit, start forward in his service at a pace which his powers of increase cannot rival. If he but shoot hawks, food-birds will increase: if he but trap foxes the wild rabbits will multiply; the bumble bee moves with the pioneer, and on the organic matter with which man's presence fills the rivers, fishes feed. — Progress & Poverty — Book II, Chapter 3: Population and Subsistence: Inferences from Analogy

IF bears instead of men had been shipped from Europe to the North American continent, there would now be no more bears than in the time of Columbus, and possibly fewer, for bear food would not have been increased nor the conditions of bear life extended, by the bear immigration, but probably the reverse. But within the limits of the United States alone, there are now forty-five millions of men where then there were only a few hundred thousand, and yet there is now within that territory much more food per capita for the forty-five millions than there was then for the few hundred thousand. It is not the increase of food that has caused this increase of men; but the increase of men that has brought about the increase of food. There is more food, simply because there are more Man. — Progress & Poverty — Book II, Chapter 3: Population and Subsistence: Inferences from Analogy

TWENTY men working together will, where nature is niggardly, produce more than twenty times the wealth that one man can produce where nature is most bountiful. The denser the population the more minute becomes the subdivision of labor, the greater the economies of production and distribution, and, hence, the very reverse of the Malthusian doctrine is true; and, within the limits in which we have any reason to suppose increase would still go on, in any given state of civilization a greater number of people can produce a larger proportionate amount of wealth and more fully supply their wants, than can a smaller number. — Progress & Poverty — Book II, Chapter 4: Population and Subsistence: Disproof of the Malthusian Theory

Social Study

I BELIEVE that in a really Christian community, in a society that honored, not with the lips but with the act, the doctrines of Jesus, no one would have occasion to worry about physical needs any more than do the lilies of the field. There is enough and to spare. The trouble is that, in this mad struggle, we trample in the mire what has been provided in sufficiency for us all; trample it in the mire while we tear and rend each other. — The Crime of Poverty

WHOSE fault is it that social conditions are such that men have to make that terrible choice between what conscience tells them is right, and the necessity of earning a living? I hold that it is the fault of society; that it is the fault of us all. Pestilence is a curse. The man who would bring cholera to this country, or the man who, having the power to prevent its coming here, would make no effort to do so, would be guilty of a crime. Poverty is worse than cholera; poverty kills more people than pestilence, even in the best of times. Look at the death statistics of our cities; see where the deaths come quickest; see where it is that the little children die like flies — it is in the poorer quarters. And the man who looks with careless eyes upon the ravages of this pestilence; the man who does not set himself to stay and eradicate it, he, I say, is guilty of a crime. — The Crime of Poverty

SOCIAL progress makes the well-being of all more and more the business of each; it binds all closer and closer together in bonds from which none can escape. He who observes the law and the proprieties, and cares for his family, yet takes no interest in the general weal, and gives no thought to those who are trodden underfoot, save now and then to bestow alms, is not a true Christian. Nor is he a good citizen. — Social Problems — Chapter 1, the Increasing Importance of Social Questions

WE cannot safely leave politics to politicians, or political economy to college professors. The people themselves must think, because the people alone can act. — Social Problems — Chapter 1, the Increasing Importance of Social Questions

"Wise" and "Babes"

IT is as bad for a man to think that he can know nothing as to think he knows all. There are things which it is given to all possessing reason to know, if they will but use that reason. And some things it may be there are, that — as was said by one whom the learning of the time sneered at, and the high priests persecuted, and polite society, speaking through the voice of those who knew not what they did, crucified — are hidden from the wise and prudent and revealed unto babes. — A Perplexed Philosopher (Conclusion)

THAT thought on social questions is so confused and perplexed, that the aspirations of great bodies of men, deeply though vaguely conscious of injustice, are in all civilized countries being diverted to futile and dangerous remedies, is largely due to the fact that those who assume and are credited with superior knowledge of social and economic laws have devoted their powers, not to showing where the injustice lies but to hiding it; not to clearing common thought but to confusing it. — A Perplexed Philosopher (Conclusion)

POLITICAL economy is the simplest of the sciences. It is but the intellectual recognition, as related to social life, of laws which in their moral aspect men instinctively recognize, and which are embodied in the simple teachings of him whom the common people heard gladly. But, like Christianity, political economy has been warped by institutions which, denying the equality and brotherhood of man, have enlisted authority, silenced objection, and ingrained themselves in custom and habit of thought. — Protection or Free Trade, Chapter 1 econlib

Power of Thought

THE power of a special interest, though inimical to the general interest, so to influence common thought as to make fallacies pass as truths, is a great fact, without which neither the political history of our own time and people, nor that of other times and peoples, can be understood. A comparatively small number of individuals brought into virtual though not necessarily formal agreement of thought and action by something that makes them individually wealthy without adding to the general wealth, may exert an influence out of all proportion to their numbers. A special interest of this kind is, to the general interests of society, as a standing army is to an unorganized mob. It gains intensity and energy in its specialization, and in the wealth it takes from the general stock finds power to mold opinion. Leisure and culture and the circumstances and conditions that command respect accompany wealth, and intellectual ability is attracted by it. On the other hand, those who suffer from the injustice that takes from the many to enrich the few, are in that very thing deprived of the leisure to think, and the opportunities, education, and graces necessary to give their thought acceptable expression. They are necessarily the "unlettered," the "ignorant," the "vulgar," prone in their consciousness of weakness to look up for leadership and guidance to those who have the advantages that the possession of wealth can give. — The Science of Political Economy — Book II, Chapter 2, The Nature of Wealth: Causes of Confusion as to the Meaning of Wealth unabridged • abridged

WE may be wise to distrust our knowledge; and, unless we have tested them, to distrust what we may call our reasonings; but never to distrust reason itself. . . . That the powers with which the human reason must work are limited and are subject to faults and failures, our reason itself teaches us as soon as it begins to examine what we find around us and to endeavor to look in upon our own consciousness. But human reason is the only reason that men can have, and to assume that in so far as it can see clearly it does not see truly, is in the man who does it not only to assume the possession of a superior to human reason, but it is to deny the validity of all thought and to reduce the mental world to chaos. — The Science of Political Economy — Book III, Chapter 5, The Production of Wealth: Of Space and Time (unabridged)

SOCIAL reform is not to be secured by noise and shouting; by complaints and denunciation; by the formation of parties, or the making of revolutions; but by the awakening of thought and the progress of ideas. Until there be correct thought, there cannot be right action; and when there is correct thought, right action will follow. Power is always in the hands of the masses of men. What oppresses the masses is their own ignorance, their own short-sighted selfishness. — Social Problems — Chapter 22: Conclusion

LET no one imagine that he has no influence. Whoever he may be, and wherever he may be placed, the man who thinks becomes a light and a power. — Social Problems — Chapter 22: Conclusion

— of Women as of Men

I AM convinced that we make a great mistake in depriving one sex of voice in public matters, and that we could in no way so increase the attention, the intelligence and the devotion which may be brought to the solution of social problems as by enfranchising our women. Even if in a ruder state of society the intelligence of one sex suffices for the management of common interests, the vastly more intricate, more delicate and more important questions which the progress of civilization makes of public moment, require the intelligence of women as of men, and that we never can obtain until we interest them in public affairs. And I have come to believe that very much of the inattention, the flippancy, the want of conscience, which we see manifested in regard to public matters of the greatest moment, arises from the fact that we debar our women from taking their proper part in these matters. Nothing will fully interest men unless it also interests women. There are those who say that women are less intelligent than men; but who will say that they are less influential? — Social Problems — Chapter 22: Conclusion

THE power to reason correctly on general subjects is not to be learned in schools, nor does it come with special knowledge. It results from care in separating, from caution in combining, from the habit of asking ourselves the meaning of the words we use and making sure of one step before building another on it — and above all, from loyalty to truth. — A Perplexed Philosopher (Introduction: The Reason for this Examination)

Economic Terms: Land

THE term Land in political economy means the natural or passive element in production, and includes the whole external world accessible to man, with all its powers, qualities, and products, except perhaps those portions of it which are for the time included in man's body or in his products, and which therefore temporarily belong to the categories, man and wealth, passing again in their reabsorption by nature into the category, land. — The Science of Political Economy — unabridged: Book III, Chapter 14: The Production of Wealth, Order of the Three Factors of Production • abridged: Part III, Chapter 10: Order of the Three Factors of Production

THAT land is only a passive factor in production must be carefully kept in mind. . . . Land cannot act, it can only be acted upon. . . . Nor is this principle changed or avoided when we use the word land as expressive of the people who own land. . . .

That the persons whom we call landowners may contribute their labor or their capital to production is of course true, but that they should contribute to production as landowners, and by virtue of that ownership, is as ridiculously impossible as that the belief of a lunatic in his ownership of the moon should be the cause of her brilliancy. — The Science of Political Economy unabridged: Book III, Chapter 15, The Production of Wealth: The First Factor of Production — Land • abridged: Part III, Chapter 10: Order of the Three Factors of Production

I AM writing these pages on the shore of Long Island, where the Bay of New York contracts to what is called the Narrows, nearly opposite the point where our legalized robbers, the Custom-House officers, board incoming steamers to ask strangers to take their first American swear, and where, if false oaths really colored the atmosphere the air would be bluer than is the sky on this gracious day. I turn from my writing-machine to the window, and drink in, with a pleasure that never seems to pall, the glorious panorama.

"What do you see?" If in ordinary talk I were asked this, I should of course say, "I see land and water and sky, ships and houses, and light clouds, and the sun drawing to its setting over the low green hills of Staten Island and illuminating all."

But if the question refer to the terms of political economy, I should say, "I see land and wealth." Land, which is the natural factor of production; and wealth, which is the natural factor so changed by the exertion of the human factor, labor, as to fit it for the satisfaction of human desires. For water and clouds, sky and sun, and the stars that will appear when the sun is sunk, are, in the terminology of political economy, as much land as is the dry surface of the earth to which we narrow the meaning of the word in ordinary talk. And the window through which I look; the flowers in the garden; the planted trees of the orchard; the cow that is browsing beneath them; the Shore Road under the window; the vessels that lie at anchor near the bank, and the little pier that juts out from it; the trans-Atlantic liner steaming through the channel; the crowded pleasure-steamers passing by; the puffing tug with its line of mud-scows; the fort and dwellings on the opposite side of the Narrows; the lighthouse that will soon begin to cast its far-gleaming eye from Sandy Hook; the big wooden elephant of Coney Island; and the graceful sweep of the Brooklyn Bridge, that may be discovered from a little higher up; all alike fall into the economic term wealth — land modified by labor so as to afford satisfaction to human desires. All in this panorama that was before man came here, and would remain were he to go, belongs to the economic category land; while all that has been produced by labor belongs to the economic category wealth, so long as it retains its quality of ministering to human desire.

But on the hither shore, in view from the window, is a little rectangular piece of dry surface, evidently reclaimed from the line of water by filling in with rocks and earth. What is that? In ordinary speech it is land, as distinguished from water, and I should intelligibly indicate its origin by speaking of it as "made land." But in the categories of political economy there is no place for such a term as "made land." For the term land refers only and exclusively to productive powers derived wholly from nature and not at all from industry, and whatever is, and in so far as it is, derived from land by the exertion of labor, is wealth. This bit of dry surface raised above the level of the water by filling in stones and soil, is, in the economic category, not land but wealth. It has land below it and around it, and the material of which it is composed has been drawn from land; but in itself it is, in the proper speech of political economy, wealth; just as truly as the ships I behold are not land but wealth, though they too have land below them and around them and are composed of material drawn from land. — The Science of Political Economy unabridged: Book IV, Chapter 6, The Distribution of Wealth: Cause of Confusion as to Property • abridged

Labor

THE term Labor includes all human exertion in the production of wealth, whatever its mode. In common parlance we often speak of brain labor and hand labor as though they were entirely distinct kinds of exertion, and labor is often spoken of as though it involved only muscular exertion. But in reality any form of labor, that is to say, any form of human exertion in the production of wealth above that which cattle may be applied to doing, requires the human brain as truly as the human hand, and would be impossible without the exercise of mental faculties on the part of the laborer. Labor in fact is only physical in external form. In its origin it is mental or on strict analysis spiritual. — The Science of Political Economy unabridged: Book III, Chapter 16: The Production of Wealth, The Second Factor of Production — Labor • abridged: Part III, Chapter 10: Order of the Three Factors of Production

IT seems to us that your Holiness misses its real significance in intimating that Christ in becoming the son of a carpenter and Himself working as a carpenter showed merely that "there is nothing to be ashamed of in seeking one's bread by labor." To say that is almost like saying that by not robbing people He showed that there is nothing to be ashamed of in honesty. If you will consider how true in any large view is the classification of all men into working-men, beggar-men and thieves, you will see that it was morally impossible that Christ during His stay on earth should have been anything else than a working-man, since He who came to fulfill the law must by deed as well as word obey God's law of labor.

See how fully and how beautifully Christ's life on earth illustrated this law. Entering our earthly life in the weakness of infancy, as it is appointed that all should enter it, He lovingly took what in the natural order is lovingly rendered, the sustenance, secured by labor, that one generation owes to its immediate successors. Arrived at maturity, He earned His own subsistence by that common labor in which the majority of men must and do earn it. Then passing to a higher — to the very highest-sphere of labor. He earned His subsistence by the teaching of moral and spiritual truths, receiving its material wages in the love offerings of grateful hearers, and not refusing the costly spikenard with which Mary anointed his feet. So, when He chose His disciples, He did not go to land-owners or other monopolists who live on the labor of others but to common laboring men. And when He called them to a higher sphere of labor and sent them out to teach moral and spiritual truths He told them to take, without condescension on the one hand, or sense of degradation on the other, the loving return for such labor, saying to them that the "laborer is worthy of his hire," thus showing, what we hold, that all labor does not consist in what is called manual labor, but that whoever helps to add to the material, intellectual, moral, or spiritual fulness of life is also a laborer. - The Condition of Labor

NOR should it be forgotten that the investigator, the philosopher, the teacher, the artist, the poet, the priest, though not engaged in the production of wealth, are not only engaged in the production of utilities and satisfactions to which the production of wealth is only a means, but by acquiring and diffusing knowledge, stimulating mental powers and elevating the moral sense, may greatly increase the ability to produce wealth. For man does not live by bread alone. He is not an engine, in which so much fuel gives so much power. On a capstan bar or a topsail halyard a good song tells like muscle, and a "Marseillaise" or a "Battle Hymn of the Republic" counts for bayonets. A hearty laugh, a noble thought, a perception of harmony, may add to the power of dealing even with material things.

He who by any exertion of mind or body adds to the aggregate of enjoyable wealth, increases the sum of human knowledge or gives to human life higher elevation or greater fulness — he is, in the large meaning of the words, a "producer," a "working-man," a "laborer," and is honestly earning honest wages. But he who without doing aught to make mankind richer, wiser, better, happier, lives on the toil of others — he, no matter by what name of honor he may be I called, or how lustily the priests of Mammon may swing their censers before him, is in the last analysis but a beggarman or a thief. — Protection or Free Trade, Chapter 7 econlib

"Capital"

CAPITAL, which is not in itself a distinguishable element, but which it must always be kept in mind consists of wealth applied to the aid of labor in further production, is not a primary factor. There can be production without it, and there must have been production without it, or it could not in the first place have appeared. It is a secondary and compound factor, coming after and resulting from the union of labor and land in the production of wealth. It is in essence labor raised by a second union with land to a third or higher power. But it is to civilized life so necessary and important as to be rightfully accorded in political economy the place of a third factor in production. — The Science of Political Economy unabridged: Book III, Chapter 17, The Production of Wealth: The Third Factor of Production — Capital • abridged: Part III, Chapter 10: Order of the Three Factors of Production

IT is to be observed that capital of itself can do nothing. It is always a subsidiary, never an initiatory, factor. The initiatory factor is always labor. That is to say, in the production of wealth labor always uses capital, is never used by capital. This is not merely literally true, when by the term capital we mean the thing capital. It is also true when we personify the term and mean by it not the thing capital, but the men who are possessed of capital. The capitalist pure and simple, the man who merely controls capital, has in his hands the power of assisting labor to produce. But purely as capitalist he cannot exercise that power. It can be exercised only by labor. To utilize it he must himself exercise at least some of the functions of labor, or he must put his capital, on some terms, at the use of those who do. — The Science of Political Economy unabridged: Book III, Chapter 17, The Production of Wealth: The Third Factor of Production — Capital • abridged: Part III, Chapter 10: Order of the Three Factors of Production

THUS we must exclude from the category of capital everything that may be included either as land or labor. Doing so, there remain only things which are neither land nor labor, but which have resulted from the union of these two original factors of production. Nothing can be properly capital that does not consist of these — that is to say, nothing can be capital that is not wealth. — Progress & Poverty — Book I, Chapter 2: Wages and Capital: The Meaning of the Terms

THUS, a government bond is not capital, nor yet is it the representative of capital. The capital that was once received for it by the government has been consumed unproductively — blown away from the mouths of cannon, used up in war ships, expended in keeping men marching and drilling, killing and destroying. The bond cannot represent capital that has been destroyed. It does not represent capital at all. It is simply a solemn declaration that the government will, some time or other, take by taxation from the then existing stock of the people, so much wealth, which it will turn over to the holder of the bond; and that, in the meanwhile, it will, from time to time, take, in the same way, enough to make up to the holder the increase which so much capital as it some day promises to give him would yield him were it actually in his possession. The immense sums which are thus taken from the produce of every modern country to pay interest on public debts are not the earnings or increase of capital — are not really interest in the strict sense of the term, but are taxes levied on the produce of labor and capital, leaving so much less for wages and so much less for real interest. — Progress & Poverty — Book III, Chapter 4: The Laws of Distribution: Of Spurious Capital and of Profits Often Mistaken For Interest

CAPITAL, as we have seen, consists of wealth used for the procurement of more wealth, as distinguished from wealth used for the direct satisfaction of desire; or, as I think it may be defined, of wealth in the course of exchange.

Capital, therefore, increases the power of labor to produce wealth: (1) By enabling labor to apply itself in more effective ways, as by digging up clams with a spade instead of the hand, or moving a vessel by shoveling coal into a furnace, instead of tugging at an oar. (2) By enabling labor to avail itself of the reproductive forces of nature, as to obtain corn by sowing it, or animals by breeding them. (3) By permitting the division of labor, and thus, on the one hand, increasing the efficiency of the human factor of wealth, by the utilization of special capabilities, the acquisition of skill, and the reduction of waste; and, on the other, calling in the powers of the natural factor at their highest, by taking advantage of the diversities of soil, climate and situation, so as to obtain each particular species of wealth where nature is most favorable to its production.

Capital does not supply the materials which labor works up into wealth, as is erroneously taught; the materials of wealth are supplied by nature. But such materials partially worked up and in the course of exchange are capital. — Progress & Poverty — Book I, Chapter 5: Wages and Capital: The Real Functions of Capital

"Value"

THE phenomena of value are at bottom illustrations of one principle. The value of everything produced by labor, from a pound of chalk or a paper of pins to the elaborate structure and appurtenances of a first-class ocean steamer, is resolvable on analysis into an equivalent of the labor required to reproduce such a thing in form and place; while the value of things not produced by labor, but nevertheless susceptible of ownership, is, in the same way, resolvable into an equivalent of the labor which the ownership of such a thing enables the owner to obtain or save. — A Perplexed Philosopher (Mr. Spencer's Confusion As To Value)

"Wealth"

WHEN we speak of a community increasing in wealth we do not mean to say that there is more land, or that the natural powers of the land are greater, or that there are more people (for when we wish to express that idea we speak of increase of population) or that the debts or dues owing by some of these people to others of their number have increased; but we mean that there is an increase of certain tangible things, having an actual and not merely a relative value — such as buildings, cattle, tools, machinery, agricultural and mineral products, manufactured goods, ships, wagons, furniture and the like. . . . The common character of these things is that they consist of natural substances or products which have been adapted by human labor to human use or gratification, their value depending on the amount of labor which upon the average would be required to produce things of like kind.— Progress & Poverty — Book I, Chapter 2: Wages and Capital: The Meaning of the Terms

WEALTH is not the sole object of labor, for labor is also expended in ministering directly to desire; but it is the object and result of what we call productive labor — that is, labor which gives value to material things. Nothing which nature supplies to man without his labor is wealth, nor yet does the expenditure of labor result in wealth unless there is a tangible product which has and retains the power of ministering to desire. — Progress & Poverty — Book I, Chapter 2: Wages and Capital: The Meaning of the Terms

IT will be well for a moment to consider this idea of accumulated wealth. The truth is, that wealth can be accumulated but to a slight degree, and that communities really live, as the vast majority of individuals live, from hand to mouth. Wealth will not bear much accumulation; except in a few unimportant forms it will not keep. The matter of the universe, which, when worked up by labor into desirable forms, constitutes wealth, is constantly tending back to its original state. Some forms of wealth will last for a few hours, some for a few days, some for a few months, some for a few years; and there are very few forms of wealth that can be passed from one generation to another. Take wealth in some of its most useful and permanent forms — ships, houses, railways, machinery. Unless labor is constantly exerted in preserving and renewing them, they will almost immediately become useless. Stop labor in any community, and wealth would vanish almost as the jet of a fountain vanishes when the flow of water is shut off. Let labor again exert itself, and wealth will almost as immediately reappear. Accumulated wealth seems to play just about such a part in relation to the social organism as accumulated nutriment does to the physical organism. Some accumulated wealth is necessary, and to a certain extent it may be drawn upon in exigencies; but the wealth produced by past generations can no more account for the consumption of the present than the dinners he ate last year can supply a man with present strength. — Progress & Poverty — Book II, Chapter 4: Population and Subsistence: Disproof of the Malthusian Theory

"Wages"

THE term labor includes all human exertion in the production of wealth, and wages, being that part of the produce which goes to labor, includes all reward for such exertion. There is, therefore, in the politico-economic sense of the term wages no distinction as to the kind of labor, or as to whether its reward is received through an employer or not, but wages means the return received for the exertion of labor, as distinguished from the return received for the use of capital, and the return received by the landholder for the use of land. — Progress & Poverty — Book I, Chapter 2: Wages and Capital: The Meaning of the Terms

I AM aware that the theorem that wages are drawn from capital is one of the most fundamental and apparently best settled of current political economy, and that it has been accepted as axiomatic by all the great thinkers who have devoted their powers to the elucidation of the science. Nevertheless, I think it can be demonstrated to be a fundamental error — the fruitful parent of a long series of errors, which vitiate most important practical conclusions. — Progress & Poverty — Book I, Chapter 3: Wages and Capital: Wages not drawn from capital, but produced by the labor

THE fundamental truth, that in all economic reasoning must be firmly grasped and never let go, is that society in its most highly developed form is but an elaboration of society in its rudest beginnings, and that principles obvious in the simpler relations of men are merely disguised and not abrogated or reversed by the more intricate relations that result from the division of labor and the use of complex tools and methods. . . . And so, if we reduce to their lowest terms all the complex operations of modern production, we see that each individual who takes part in this infinitely subdivided and intricate network of production and exchange is really doing what the primeval man did when he climbed the trees for fruit or followed the receding tide for shellfish — endeavoring to obtain from nature by the exertion of his powers the satisfaction of his desires. If we keep this firmly in mind, if we look upon production as a whole — as the co-operation of all embraced in any of its great groups to satisfy the various desires of each, we plainly see that the reward each obtains for his exertions comes as truly and as directly from nature as the result of that exertion, as did that of the first man.

To illustrate: In the simplest state of which we can conceive, each man digs his own bait and catches his own fish. The advantage of the division of labor soon becomes apparent, and one digs bait while the others fish. Yet evidently the one who digs bait is in reality doing as much toward the catching of fish as any of those who actually take the fish. So when the advantages of canoes are discovered, and instead of all going a-fishing, one stays behind and makes and repairs canoes, the canoe-maker is in reality devoting his labor to the taking of fish as much as the actual fishermen, and the fish which he eats at night when the fishermen come home, are as truly the product of his labor as of theirs. And thus when the division of labor is fairly inaugurated, and instead of each attempting to satisfy all of his wants by direct resort to nature, one fishes, another hunts, a third picks berries, a fourth gathers fruit, a fifth makes tools, a sixth builds huts, and a seventh prepares clothing — each one is, to the extent he exchanges the direct product of his own labor for the direct product of the labor of others, really applying his own labor to the production of the things he uses — is in effect satisfying his particular desires by the exertion of his particular powers; that is to say, what he receives he in reality produces. — Progress & Poverty — Book I, Chapter 1: Wages and Capital: The Current Doctrine of Wages — Its Insufficiency

How the Worker Creates His Wages

THE laborer who receives his wages in money (coined or printed, it may be, before his labor commenced) really receives in return for the addition his labor has made to the general stock of wealth, a draft upon that general stock, which he may utilize in any particular form of wealth that will best satisfy his desires; and neither the money, which is but the draft, nor the particular form of wealth which he uses it to call for, represents advances of capital for his maintenance, but on the contrary represents the wealth, or a portion of the wealth, his labor has already added to the general stock. — Progress & Poverty — Book I, Chapter 1: Wages and Capital: The Current Doctrine of Wages — Its Insufficiency

THE miner who, two thousand feet underground in the heart of the Comstock, is digging out silver ore, is in effect; by virtue of a thousand exchanges, harvesting crops in valleys five thousand feet nearer the earth's center; chasing the whale through Arctic icefields; plucking tobacco leaves in Virginia; picking coffee berries in Honduras; cutting sugar cane on the Hawaiian Islands; gathering cotton in Georgia or weaving it in Manchester or Lowell; making quaint wooden toys for his children in the Hartz Mountains; or plucking amid the green and gold of Los Angeles orchards the oranges which, when his shift is relieved, he will take home to his sick wife. The wages which he receives on Saturday night at the mouth of the shaft, what are they but the certificate to all the world that he has done these things — the primary exchange in the long series which transmutes his labor into the things he has really been laboring for? — Progress & Poverty — Book I, Chapter 1: Wages and Capital: The Current Doctrine of Wages — Its Insufficiency

LABOR always precedes wages. This is as universally true of wages received by the laborer from an employer as it is of wages taken directly by the laborer who is his own employee. In the one class of cases as in the other, reward is conditioned upon exertion. Paid sometimes by the day, oftener by the week or month, occasionally by the year, and in many branches of production by the piece, the payment of wages by an employer to an employee always implies the previous rendering of labor by the employee for the benefit of the employer, for the few cases in which advance payments are made for personal services are evidently referable either to charity or to guarantee and purchase. — Progress & Poverty — Book I, Chapter 3: Wages and Capital: Wages not drawn from capital, but produced by the labor

THE payment of wages always implies the previous rendering of labor. Now, what does the rendering of labor in production imply? Evidently the production of wealth, which, if it is to be exchanged or used in production, is capital. Therefore, the payment of capital in wages pre-supposes a production of capital by the labor for which the wages are paid. And as the employer generally makes a profit, the payment of wages is, so far as he is concerned, but the return to the laborer of a portion of the capital he has received from the labor. So far as the employee is concerned, it is but the receipt of a portion of the capital his labor has previously produced. As the value paid in the wages is thus exchanged for a value brought into being by the labor, how can it be said that wages are drawn from capital or advanced by capital? As in the exchange of labor for wages the employer always gets the capital created by the labor before he pays out capital in the wages, at what point is his capital lessened even temporarily? — Progress & Poverty — Book I, Chapter 3: Wages and Capital: Wages not drawn from capital, but produced by the labor

To recapitulate: The man who works for himself gets his wages in the things he produces, as he produces them, and exchanges this value into another form whenever he sells the produce. The man who works for another for stipulated wages in money, works under a contract of exchange. He also creates his wages as he renders his labor, but he does not get them except at stated times, in stated amounts and in a different form. In performing the labor he is advancing in exchange; when he gets his wages the exchange is completed. During the time he is earning the wages he is advancing capital to his employer, but at no time, unless wages are paid before work is done, is the employer advancing capital to him. Whether the employer who receives this produce in exchange for the wages, immediately re-exchanges it, or keeps it for awhile, no more alters the character of the transaction than does the final disposition of the product made by the ultimate receiver, who may, perhaps, be in another quarter of the globe and at the end of a series of exchanges numbering hundreds. — Progress & Poverty — Book I, Chapter 3: Wages and Capital: Wages not drawn from capital, but produced by the labor

Rate of Wages — How Determined

THE fundamental principle of human action — the law that is to political economy what the law of gravitation is to physics — is that men seek to gratify their desires with the least exertion. . . . Now, under this principle, what, in conditions of freedom, will be the terms at which one man can hire others to work for him? Evidently, they will be fixed by what the men could make if laboring for themselves. The principle which will prevent him from having to give anything above this except what is necessary to induce the change, will also prevent them from taking less. Did they demand more, the competition of others would prevent them from getting employment. Did he offer less, none would accept the terms, as they could obtain greater results by working for themselves. Thus, although the employer wishes to pay as little as possible, and the employee to receive as much as possible, wages will be fixed by the value or produce of such labor to the laborers themselves. If wages are temporarily carried either above or below this line, a tendency to carry them back at once arises. — Progress & Poverty Book III, Chapter 6 — The Laws of Distribution: Wages and the Law of Wages

THE effect of all the circumstances which give rise to the differences between wages in different occupations may be included as supply and demand, and it is perfectly correct to say that the wages in different occupations will vary relatively according to differences in the supply and demand of labor — meaning by demand the call which the community as a whole makes for services of the particular kind, and by supply the relative amount of labor which, under the existing conditions, can be determined to the performance of those particular services. But though this is true as to the relative differences of wages, when it is said, as is commonly said, that the general rate of wages is determined by supply and demand, the words are meaningless. For supply and demand are but relative terms. The supply of labor can only mean labor offered in exchange for labor, or the produce of labor, and the demand for labor can only mean labor or the produce of labor offered in exchange for labor. Supply is thus demand, and demand supply, and in the whole community, one must be coextensive with the other. — Progress & Poverty Book III, Chapter 6 — The Laws of Distribution: Wages and the Law of Wages

THUS, although they may from time to time alter in relation to each other, as the circumstances which determine relative levels change, yet it is evident that wages in all strata must ultimately depend upon wages in the lowest and widest stratum — the general rate of wages rising or falling as these rise or fall.

Now, the primary and fundamental occupations, upon which, so to speak, all others are built up, are evidently those which procure wealth directly from nature; hence the law of wages in them must be the general law of wages. And, as wages in such occupations clearly depend upon what labor can produce at the lowest point of natural productiveness to which it is habitually applied; therefore, wages generally depend upon the margin of cultivation, or, to put it more exactly, upon the highest point of natural productiveness to which labor is free to apply itself without the payment of rent. — Progress & Poverty Book III, Chapter 6 — The Laws of Distribution: Wages and the Law of Wages

"Rent"

WHEREVER land has an exchange value there is rent in the economic meaning of the term. Wherever land having a value is used, either by owner or hirer, there is rent actual; wherever it is not used, but still has a value, there is rent potential. It is this capacity of yielding rent which gives value to land. . . . No matter what are its capabilities, land can yield no rent and have no value until some one is willing to give labor or the results of labor for the privilege of using it; and what anyone will thus give, depends not upon the capacity of the land, but upon its capacity as compared with that of land that can be had for nothing. — Progress & Poverty Book III, Chapter 2 — The Laws of Distribution: Rent and the Law of Rent

STATED reversely, the law of rent is necessarily the law of wages and interest taken together, for it is the assertion, that no matter what be the production which results from the application of labor and capital, these two factors will only receive in wages and interest such part of the produce as they could have produced on land free to them without the payment of rent — that is the least productive land or point in use. — Progress & Poverty Book III, Chapter 2 — The Laws of Distribution: Rent and the Law of Rent

Origin of Rent ... How Society Creates Its Rent

HERE, let us imagine, is an unbounded savannah, stretching off in unbroken sameness of grass and flower, tree and rill, till the traveler tires of the monotony. Along comes the wagon of the first immigrant. Where to settle he cannot tell — every acre seems as good as every other acre. As to wood, as to water, as to fertility, as to situation, there is absolutely no choice, and he is perplexed by the embarrassment of richness. Tired out with the search for one place that is better than another, he stops — somewhere, anywhere — and starts to make himself a home. The soil is virgin and rich, game is abundant, the streams flash with the finest trout. Nature is at her very best. He has what, were he in a populous district, would make him rich; but he is very poor. To say nothing of the mental craving, which would lead him to welcome the sorriest stranger, he labors under all the material disadvantages of solitude. He can get no temporary assistance for any work that requires a greater union of strength than that afforded by his own family, or by such help as he can permanently keep. Though he has cattle, he cannot often have fresh meat, for to get a beefsteak he must kill a bullock. He must be his own blacksmith, wagonmaker, carpenter, and cobbler — in short a "jack of all trades and master of none." He cannot have his children schooled, for, to do so, he must himself pay and maintain a teacher. Such things as he cannot produce himself, he must buy in quantities and keep on hand, or else go without, for he cannot be constantly leaving his work and making a long journey to the verge of civilization; and when forced to do so, the getting of a vial of medicine or the replacement of a broken auger may cost him the labor of himself and horses for days. Under such circumstances, though nature is prolific, the man is poor. It is an easy matter for him to get enough to eat; but beyond this, his labor will only suffice to satisfy the simplest wants in the rudest way.

Soon there comes another immigrant. Although every quarter section of the boundless plain is as good as every other quarter section, he is not beset by any embarrassment as to where to settle. Though the land is the same, there is one place that is clearly better for him than any other place, and that is where there is already a settler and he may have a neighbor. He settles by the side of the first comer, whose condition is at once greatly improved, and to whom many things are now possible that were before impossible, for two men may help each other to do things that one man could never do.

Another immigrant comes, and, guided by the same attraction, settles where there are already two. Another and another, until around our first comer there are a score of neighbors. Labor has now an effectiveness which, in the solitary state, it could not approach. If heavy work is to be done, the settlers have a log-rolling, and together accomplish in a day what singly would require years. When one kills a bullock the others take part of it, returning when they kill, and thus they have fresh meat all the time. Together they hire a schoolmaster, and the children of each are taught for a fractional part of what similar teaching would have cost the first settler. It becomes a comparatively easy matter to send to the nearest town, for some one is always going. But there is less need for such journeys. A blacksmith and a wheelwright soon set up shops, and our settler can have his tools repaired for a small part of the labor they formerly cost him. A store is opened and he can get what he wants as he wants it; a post-office, soon added, gives him regular communication with the rest of the world. Then comes a cobbler, a carpenter, a harnessmaker, a doctor; and a little church soon arises. Satisfactions become possible that in the solitary state were impossible. There are gratifications for the social and the intellectual nature — for that part of the man that rises above the animal. The power of sympathy, the sense of companionship, the emulation of comparison and contrast, open a wider and fuller and more varied life. In rejoicing, there are others to rejoice; in sorrow, the mourners do not mourn alone. There are husking bees, and apple parings, and quilting parties. Though the ballroom be unplastered and the orchestra but a fiddle, the notes of the magician are yet in the strain, and Cupid dances with the dancers. At the wedding, there are others to admire and enjoy; in the house of death, there are watchers; by the open grave, stands human sympathy to sustain the mourners. Occasionally, comes a straggling lecturer to open up glimpses of the world of science, of literature, or of art; in election times, come stump speakers, and the citizen rises to a sense of dignity and power, as the cause of empires is tried before him in the struggle of John Doe and Richard Roe for his support and vote. And, by and by, comes the circus, talked of months before, and opening to children, whose horizon has been the prairie, all the realms of the imagination — princes and princesses of fairy tale, mail-clad crusaders and turbaned Moors, Cinderella's fairy coach, and the giants of nursery lore; lions such as crouched before Daniel, or in circling Roman amphitheater tore the saints of God; ostriches who recall the sandy deserts; camels such as stood around when the wicked brethren raised Joseph from the well and sold him into bondage; elephants such as crossed the Alps with Hannibal, or felt the sword of the Maccabees; and glorious music that thrills and builds in the chambers of the mind as rose the sunny dome of Kubla Khan.

Go to our settler now, and say to him: "You have so many fruit trees which you planted; so much fencing, such a well, a barn, a house — in short, you have by your labor added so much value to this farm. Your land itself is not quite so good. You have been cropping it, and by and by it will need manure. I will give you the full value of all your improvements if you will give it to me, and go again with your family beyond the verge of settlement." He would laugh at you. His land yields no more wheat or potatoes than before, but it does yield far more of all the necessaries and comforts of life. His labor upon it will bring no heavier crops, and, we will suppose, no more valuable crops, but it will bring far more of all the other things for which men work. The presence of other settlers — the increase of population — has added to the productiveness, in these things, of labor bestowed upon it, and this added productiveness gives it a superiority over land of equal natural quality where there are yet no settlers. If no land remains to be taken up, except such as is as far removed from population as was our settler's land when he first went upon it, the value or rent of this land will be measured by the whole of this added capability. If, however, as we have supposed, there is a continuous stretch of equal land, over which population is now spreading, it will not be necessary for the new settler to go into the wilderness, as did the first. He will settle just beyond the other settlers, and will get the advantage of proximity to them. The value or rent of our settler's land will thus depend on the advantage which it has, from being at the center of population, over that on the verge. In the one case, the margin of production will remain as before; in the other, the margin of production will be raised.

Population still continues to increase, and as it increases so do the economies which its increase permits, and which in effect add to the productiveness of the land. Our first settler's land, being the center of population, the store, the blacksmith's forge, the wheelwright's shop, are set up on it, or on its margin, where soon arises a village, which rapidly grows into a town, the center of exchanges for the people of the whole district. With no greater agricultural productiveness than it had at first, this land now begins to develop a productiveness of a higher kind. To labor expended in raising corn, or wheat, or potatoes, it. will yield no more of those things than at first; but to labor expended in the subdivided branches of production which require proximity to other producers, and, especially, to labor expended in that final part of production, which consists in distribution, it will yield much larger returns. The wheat-grower may go further on, and find land on which his labor will produce as much wheat, and nearly as much wealth; but the artisan, the manufacturer, the storekeeper, the professional man, find that their labor expended here, at the center of exchanges, will yield them much more than if expended even at a little distance away from it; and this excess of productiveness for such purposes the landowner can claim, just as he could an excess in its wheat-producing power. And so our settler is able to sell in building lots a few of his acres for prices which it would not bring for wheat growing if its fertility had been multiplied many times. With the proceeds he builds himself a fine house, and furnishes it handsomely. That is to say, to reduce the transaction to its lowest terms, the people who wish to use the land, build and furnish the house for him, on condition that he will let them avail themselves of the superior productiveness which the increase of population has given the land.

Population still keeps on increasing, giving greater and greater utility to the land, and more and more wealth to its owner. The town has grown into a city — a St. Louis, a Chicago, or a San Francisco — and still it grows. Production is here carried on upon a great scale, with the best machinery and the most favorable facilities; the division of labor becomes extremely minute, wonderfully multiplying efficiency; exchanges are of such volume and rapidity that they are made with the minimum of friction and loss. Here is the heart, the brain, of the vast social organism that has grown up from the germ of the first settlement; here has developed one of the great ganglions of the human world. Hither run all roads, hither set all currents, through all the vast regions round about. Here, if you have anything to sell, is the market; here, if you have anything to buy, is the largest and the choicest stock. Here intellectual activity is gathered into a focus, and here springs that stimulus which is born of the collision of mind with mind. Here are the great libraries, the storehouses and granaries of knowledge, the learned professors, the famous specialists. Here are museums and art galleries, collections of philosophical apparatus, and all things rare and valuable, the best of their kind. Here come great actors, and orators, and singers, from all over the world. Here, in short, is a center of human life, in all its varied manifestations.

So enormous are the advantages which this land now offers for the application of labor, that, instead of one man with a span of horses scratching over acres, you may count in places thousands of workers to the acre, working tier on tier, on floors raised one above the other, five, six, seven, and eight stories from the ground, while underneath the surface of the earth engines are throbbing with pulsations that exert the force of thousands of horses. All these advantages adhere to the land; it is on this land, and no other, that they can be utilized, for here is the center of population — the focus of exchanges, the market-place and workshop of the highest forms of industry. The productive powers which density of population has attached to this land are equivalent to the multiplication of its original fertility by the hundredfold and the thousandfold. And rent, which measures the difference between this added productiveness and that of the least productive land in use, has increased accordingly. Our settler, or whoever has succeeded to his right to the land, is now a millionaire. Like another Rip Van Winkle, he may have lain down and slept; still he is rich — not from anything he has done, but from the increase of population. There are lots from which for every foot of frontage the owner may draw more than an average mechanic can earn; there are lots that will sell for more than would suffice to pave them with gold coin. In the principal streets are towering buildings, of granite, marble, iron, and plate-glass, finished in the most expensive style, replete with every convenience. Yet they are not worth as much as the land upon which they rest — the same land, in nothing changed, which, when our first settler came upon it, had no value at all. That this is the way in which the increase of population powerfully acts in increasing rent, whoever, in a progressive country, will look around him, may see for himself. The process is going on under his eyes. The increasing difference in the productiveness of the land in use, which causes an increasing rise in rent, results not so much from the necessities of increased population compelling the resort to inferior land, as from the increased productiveness which increased population gives to the lands already in use. The most valuable lands on the globe, the lands which yield the highest rent, are not lands of surpassing natural fertility, but lands to which a surpassing utility has been given by the increase of population. — Progress & Poverty — Book IV, Chapter 2: Effect of Material Progress on the Distribution of Wealth: The Effect of Increase of Population upon the Distribution of Wealth

"Sic Nos non Nobis" ["Thus we labour, but not for ourselves" or "thus do we, but not for ourselves"]

"Interest"

WITH profits this inquiry has manifestly nothing to do. We want to find what it is that determines the division of their joint produce between land, labor, and capital, and profits is not a term that refers exclusively to anyone of these three divisions. Of the three parts into which profits are divided by political economists — namely, compensation for risk, wages of superintendence, and return for the use of capital — the latter falls under the term interest, which includes all the returns for the use of capital, and excludes everything else; wages of superintendence falls under the term wages, which includes all returns for human exertion, and excludes everything else; and compensation for risk has no place whatever, as risk is eliminated when all the transactions of a community are taken together. — Progress & Poverty — Book III, Chapter 1: The Laws of Distribution: The Inquiry Narrowed to the Laws of Distribution — The Necessary Relation of these Laws

INTEREST, as an abstract term in the distribution of wealth, differs in meaning from the word as commonly used, in this: That it includes all returns for the use of capital, and not merely those that pass from borrower to lender; and that it excludes compensation for risk, which forms so great a part of what is commonly called interest. Compensation for risk is evidently only an equalization of return between different employments of capital. — Progress & Poverty — Book III, Chapter 3: The Laws of Distribution: Of Interest and the Cause of Interest

The Laws of Social Life

TAKE now some hard-headed businessman, who has no theories, but knows how to make money. Say to him: "Here is a little village; in ten years it will be a great city — in ten years the railroad will have taken the place of the stagecoach, the electric light of the candle; it will abound with all the machinery and improvements that so enormously multiply the effective power of labor. Will, in ten years, interest be any higher?"

He will tell you, "No!"

"Will the wages of common labor be any higher; will it be easier for a man who has nothing but his labor to make an independent living?"

He will tell you, "No; the wages of common labor will not be any higher; on the contrary, all the chances are that they will be lower; it will not be easier for the mere laborer to make an independent living; the chances are that it will be harder."

"What, then, will be higher?" " Rent; the value of land. Go; get yourself a piece of ground, and hold possession."

And if, under such circumstances, you take his advice, you need do nothing more. You may sit down and smoke your pipe; you may lie around like the lazzaroni of Naples or the leperos of Mexico: you may go up in a balloon, or down a hole in the ground; and without doing one stroke of work, without adding one iota to the wealth of the community, in ten years you will be rich! In the new city you may have a luxurious mansion; but among its public buildings will be an almshouse. — Progress & Poverty — Book V, Chapter 2: The Problem Solved: The Persistence of Poverty amid Advancing Wealth

THERE may be disputes as to whether there is yet a science of political economy, that is to say, whether our knowledge of the natural economic laws is as yet so large and well digested as to merit the title of science. But among those who recognize that the world we live in is in all its spheres governed by law, there can be no dispute as to the possibility of such a science. — The Science of Political Economy — unabridged: Book I, Chapter 14, The Meaning of Political Economy: Political Economy as Science and as Art • abridged: Part 1, Chapter 12: Political Economy as Science and Art

THE domain of law is not confined to physical nature. It just as certainly embraces the mental and moral universe, and social growth and social life have their laws as fixed as those of matter and of motion. Would we make social life healthy and happy, we must discover those laws, and seek our ends in accordance with them. — Social Problems — Chapter 22: Conclusion

The Fundamental Law

POLITICAL economy is not a set of dogmas. It is the explanation of a certain set of facts. It is the science which, in the sequence of certain phenomena, seeks to trace mutual relations and to identify cause and effect, just as the physical sciences seek to do in other sets of phenomena. It lays its foundations upon firm ground. The premises from which it makes its deductions are truths which have the highest sanction; axioms which we all recognize; upon which we safely base the reasoning and actions of every-day life, and which may be reduced to the metaphysical expression of the physical law that motion seeks the line of least resistance — viz. that men seek to gratify their desires with the least exertion. Proceeding from a basis thus assured, its processes, which consist simply in identification, and separation, have the same certainty. In this sense it is as exact a science as geometry, which, from similar truths relative to space, obtains its conclusions by similar means, and its conclusions when valid should be as self-apparent. — Progress & Poverty — Book I, Chapter 1, Wages and Capital: The Current Doctrine of Wages — Its Insufficiency

WHETHER it proceed from experience of the irksomeness of labor and the desire to avoid it, or, further back than that, have its source in some innate principle of the human constitution, this disposition of men to seek the satisfaction of their desires with the minimum of exertion is so universal and unfailing, that it constitutes one of those invariable sequences that we denominate laws of nature, and from which we may safely reason. It is this law of nature that is the fundamental law of political economy — the central law from which its deductions and explanations may with certainty be drawn, and, indeed, by which alone they become possible. It holds the same place in the sphere of political economy that the law of gravitation does in physics. Without it there could be no recognition of order, and all would be chaos. . . . It is no more affected by the selfishness or unselfishness of our desires than is the law of gravitation. It is simply a fact. — The Science of Political Economy — unabridged: Book I, Chapter 12, The Meaning of Political Economy: Fundamental Low of Political Economy • abridged: Chapter 10: The Fundamental Law of Political Economy

The "Greater Leviathan"

THE famous treatise in which the English philosopher Hobbes, during the revolt against the tyranny of the Stuarts in the seventeenth century, sought to give the sanction of reason to the doctrine of the absolute authority of kings, is entitled Leviathan. It thus begins: "Nature, the art whereby God hath made and governs the world, is by the art of man, as in many other things, so in this also imitated, that it can make an artificial animal. . . For by art is created that great Leviathan called a commonwealth or state, in Latin civitas, which is but an artificial man; though of greater stature and strength than the natural, for whose protection and defense it was intended. . ."

Without stopping now to comment further on Hobbes's suggestive analogy, there is, it seems to me, in the system or arrangement into which men are brought in social life by the effort to satisfy their material desires — an integration which goes on as civilization advances — something which even more strongly and more clearly suggests the idea of a gigantic man, formed by the union of individual men, than any merely political integration. This Greater Leviathan is to the political structure or conscious commonwealth what the unconscious functions of the body are to the conscious activities. It is not made by pact or covenant, it grows; as the tree grows, as the man himself grows, by virtue of natural laws inherent in human nature and in the constitution of things. . . . It is this natural system or arrangement, this adjustment of means to ends, of the parts to the whole and the whole to the parts, in the satisfaction of the material desires of men living in society, which, in the same sense as that in which we speak of the economy of the solar system, is the economy of human society, or what in English we call political economy. It is as human units, individuals or families, take their place as integers of this higher man, this Greater Leviathan, that what we call civilization begins and advances. . . . The appearance and development of the body politic, the organized state, the Leviathan of Hobbes, is the mark of civilization already in existence. — The Science of Political Economy — unabridged: Book I, Chapter 3, The Meaning of Political Economy: How Man's Powers Are Extended • abridged: Chapter 2: The Greater Leviathan

Civilization, through Trade

LET us try to trace the genesis of civilization. Gifted alone with the power of relating cause and effect, man is among all animals the only producer in the true sense of the term. . . . But the same quality of reason which makes him the producer, also, wherever exchange becomes possible, makes him the exchanger. And it is along this line of exchanging that the body economic is evolved and develops, and that all the advances of civilization are primarily made. . . . With the beginning of exchange or trade among men this body economic begins to form, and in its beginning civilization begins. . . . To find an utterly uncivilized people, we must find a people among whom there is no exchange or trade. Such a people does not exist, and, as far as our knowledge goes, never did. To find a fully civilized people, we must find a people among whom exchange or trade is absolutely free, and has reached the fullest development to which human desires can carry it. There is, as yet, unfortunately, no such people. — The Science of Political Economy — unabridged: Book I, Chapter 5, The Meaning of Political Economy: The Origin and Genesis of Civilization • abridged: Chapter 4, The Origin and Genesis of Civilization

WHEN we, come to analyze production, we find it to fall into three modes, viz::
ADAPTING, or changing natural products either in form or in place so as to fit them for the satisfaction of human desire.
GROWING, or utilizing the vital forces of nature, as by raising vegetables or animals.
EXCHANGING, or utilizing, so as to add to the general sum of wealth, the higher powers of those natural forces which vary with locality, or of those human forces which vary with situation, occupation, or character. — Progress & Poverty — Book III, Chapter 3, The Laws of Distribution: of Interest and the Cause of Interest

THESE modes seem to appear and to assume importance, in the development of human society, much in the order here given. They originate from the increase of the desires of men with the increase of the means of satisfying them, under pressure of the fundamental law of political economy, that men seek to satisfy their desires with the least exertion. In the primitive stage of human life the readiest way of satisfying desires is by adapting to human use what is found in existence. In a later and more settled stage it is discovered that certain desires can be more easily and more fully satisfied by utilizing the principle of growth and reproduction, as by cultivating vegetables and breeding animals. And in a still later period of development, it becomes obvious that certain desires can be better and more easily satisfied by exchange, which brings out the principle of co-operation more fully and powerfully than could obtain among unexchanging economic units. — The Science of Political Economy unabridged: Book III, Chapter 2, The Production of Wealth: The Three Modes of Production • abridged: Part III, Chapter 2, The Production of Wealth: The Three Modes of Production

"Production" and "Distribution"

IN the economic meaning of the term production, the transporter or exchanger, or anyone engaged in any subdivision of those functions, is as truly engaged in production as is the primary extractor or maker. A newspaper-carrier or the keeper of a news-stand would, for instance, in common speech be styled a distributor. But in economic terminology he is not a distributor of wealth, but a producer of wealth. Although his part in the process of producing the newspaper to the final receiver comes last, not first, he is as much a producer as the paper-maker or type-founder, the editor, or compositor, or press-man. For the object of production is the satisfaction of human desires, that is to say, it is consumption; and this object is not made capable of attainment, that is to say, production is not really complete, until wealth is brought to the place where it is to be consumed and put at the disposal of him whose desire it is to satisfy. — The Science of Political Economy unabridged: Book III, Chapter 1, The Production of Wealth: The Meaning of Production • abridged: Part III, Chapter 1, The Production of Wealth: The Meaning of Production

PRODUCTION and distribution are not sep

Wealth and Want
... because democracy alone is not enough to produce widely shared prosperity.
Home	Essential Documents	Themes	All Documents	Authors	Glossary	Links	Contact Us