Wealth and Want
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What We Must Do

Chapter 18 of Social Problems, by Henry George (1883)

[01] AT the risk of repetition let me recapitulate:

[02] The main source of the difficulties that menace us is the growing inequality in the distribution of wealth. To this all modern inventions seem to contribute, and the movement is hastened by political corruption, and by special monopolies established by abuse of legislative power. But the primary cause lies evidently in fundamental social adjustments — in the relations which we have established between labor and the natural material and means of labor — between man and the planet which is his dwelling-place, workshop and storehouse. As the earth must be the foundation of every material structure, so institutions which regulate the use of land constitute the foundation of every social organization, and must affect the whole character and development of that organization. In a society where the equality of natural rights is recognized, it is manifest that there can be no great disparity in fortunes. None except the physically incapacitated will be dependent on others; none will be forced to sell their labor to others. There will be differences in wealth, for there are differences among men as to energy, skill, prudence, foresight and industry; but there can be no very rich class, and no very poor class; and, as each generation becomes possessed of equal natural opportunities, whatever differences in fortune grow up in one generation will not tend to perpetuate themselves. In such a community, whatever may be its form, the political organization must be essentially democratic.

[03] But, in a community where the soil is treated as the property of but a portion of the people, some of these people from the very day of their birth must be at a disadvantage, and some will have an enormous advantage. Those who have no rights in the land will be forced to sell their labor to the landholders for what they can get; and, in fact, cannot live without the landlords' permission. Such a community must inevitably develop a class of masters and a class of serfs — a class possessing great wealth, and a class having nothing; and its political organization, no matter what its form, must become a virtual despotism.

[04] Our fundamental mistake is in treating land as private property. On this false basis modern civilization everywhere rests, and hence, as material progress goes on, is everywhere developing such monstrous inequalities in condition as must ultimately destroy it. As without land man cannot exist; as his very physical substance, and all that he can acquire or make, must be drawn from the land, the ownership of the land of a country is necessarily the ownership of the people of that country — involving their industrial, social and political subjection. Here is the great reason why the labor-saving inventions, of which our century has been so strikingly prolific, have signally failed to improve the condition of laborers. Labor-saving inventions primarily increase the power of labor, and should, therefore, increase wages and improve the condition of the laboring-classes. But this only where land is free to labor; for labor cannot exert itself without land. No labor-saving inventions can enable us to make something out of nothing, or in any wise lessen our dependence upon land. They can merely add to the efficiency of labor in working up the raw materials drawn from land. Therefore, wherever land has been subjected to private ownership, the ultimate effect of labor-saving inventions, and of all improved processes and discoveries, is to enable landowners to demand, and labor to pay, more for the use of land. Land becomes more valuable, but the wages of labor do not increase; on the contrary, if there is any margin for possible reductions, they may be absolutely reduced.

[05] This we already see, and that in spite of the fact that a very important part of the effect of modern invention has been, by the improvement of transportation, to open up new land. What will be the effect of continued improvement in industrial processes when the land of this continent is all "fenced in" as in a few more years it will be, we may imagine if we consider what would have been the effect of labor-saving inventions upon Europe had no New World been opened.

[06] But it may be said that, in asserting that where land is private property the benefit of industrial improvements goes ultimately to landowners, I ignore facts, and attribute to one principle more importance than is its due, since it is clear that a great deal of the increased wealth arising from modern improvements has not gone to the owners of land, but to capitalists, manufacturers, speculators, railroad-owners, and the holders of other monopolies than that of land. It may be pointed out that the richest family in Europe are the Rothschilds, who are more loan-jobbers and bankers than landowners; that the richest in America are the Vanderbilts, and not the Astors; that Jay Gould got his money, not by securing land, but by bulling and bearing the stock-market, by robbing people with hired lawyers and purchased judges and corrupted legislatures, I may be asked if I attach no importance to the jobbery and robbery of the tariff, under pretense of "protecting American labor;" to the jugglery with the monetary system, from the wildcat State banks and national banking system down to the trade-dollar swindle?

[07] In previous chapters I have given answers to all such objections; but to repeat in concise form, my reply is, that I do not ignore any of these things, but that they in no wise invalidate the self-evident principle that land being private property, the ultimate benefit of all improvements in production must go to the landowners. To say that if a man continues to play at rondo the table will ultimately get his money, is not to say that in the meantime he may not have his pocket picked. Let me illustrate:

[08] Suppose an island, the soil of which is conceded to be the property of a few of the inhabitants. The rest of the inhabitants of this island must either hire land of these landowners, paying rent for it, or sell their labor to them, receiving wages. As population increases, the competition between the non-landowners for employment or the means of employment must increase rent and decrease wages until the non-landowners get merely a bare living, and the landholders get all the rest of the produce of the island. Now, suppose any improvement or invention made which will increase the efficiency of labor, it is manifest that, as soon as it becomes general, the competition between the non-landholders must give to the landholders all the benefit. No matter how great the improvement be, it can have but this ultimate result. If the improvements are so great that all the wealth the island can produce or that the landowners care for can be obtained with one-half the labor, they can let the other half of the laborers starve or evict them into the sea; or if they are pious people of the conventional sort, who believe that God Almighty intended these laborers to live, though he did not provide any land for them to live on, they may support them as paupers or ship them off to some other country as the English government is shipping the "surplus" Irishmen. But whether they let them die or keep them alive, they would have no use for them, and, if improvement still went on they would have use for less and less of them.

[09] This is the general principle.

[10] But in addition to this population of landowners and their tenants and laborers, let us suppose there are on the island a storekeeper, an inventor, a gambler and a pirate. To make our supposition conform to modern fashion, we will suppose a highly respectable gambler — one of the kind who endows colleges and subscribes to the conversion of the heathen — and a very gentlemanly pirate, who flies on his swift cruiser the ensign of a yacht club instead of the old rawhead and bloody-bones, but who, even more regularly and efficiently than the old-fashioned pirate, levies his toll.

[11] Let us suppose the storekeeper, the gambler and the pirate well established in business and making money. Along comes the inventor, and says: "I have an invention which will greatly add to the efficiency of labor and enable you greatly to increase the produce of this island, so that there will be very much more to divide among you all; but, as a condition for telling you of it, I want you to agree that I shall have a royalty upon its use." This is agreed to, the invention is adopted, and does greatly increase the production of wealth. But it does not benefit the laborers. The competition between them still forces them to pay such high rent or take such low wages that they are no better off than before. They still barely live. But the whole benefit of the invention does not in this case go to the landowners. The inventor's royalty gives him a great income, while the storekeeper, the gambler and the pirate all find their incomes much increased. The incomes of each one of these four, we may readily suppose, are larger than any single one of the landowners, and their gains offer the most striking contrast to the poverty of the laborers, who are bitterly disappointed at not getting any share of the increased wealth that followed the improvement. Something they feel is wrong, and some among them even begin to murmur that the Creator of the island surely did not make it for the benefit of only a few of its inhabitants, and that, as the common creatures of the Creator, they, too, have some rights to the use of the soil of the island.

[12] Suppose then some one to arise and say: "What is the use of discussing such abstractions as the land question, that cannot come into practical politics for many a day, and that can only excite dissension and general unpleasantness, and that, moreover, savor of communism, which as you laborers, who have nothing but your few rags, very well know is a highly wicked and dangerous thing, meaning the robbery of widow women and orphans, and being opposed to religion! Let us be practical. You laborers are poor and can scarcely get a living, because you are swindled by the storekeeper, taxed by the inventor, gouged by the gambler and robbed by the pirate. Landholders and non-landholders, our interests are in common as against these vampires. Let us unite to stop their exactions. The storekeeper makes a profit of from ten to fifty per cent. on all that he sells. Let us form a cooperative society, which will sell everything at cost and enable laborers to get rich by saving the storekeeper's profit on all that they use. As for the inventor, he has been already well enough paid. Let us stop his royalty, and there will be so much more to divide between the landowners and the non-landowners. As for the gambler and the pirate, let us put a summary end to their proceedings and drive them off the island!"

[13] Let us imagine a roar of applause, and these propositions carried out. What then? Then the landowners would become so much the richer. The laborers would gain nothing, unless it might be in a clearer apprehension of the ultimate cause of their poverty. For although, by getting rid of the storekeeper, the laborers might be able to live cheaper, the competition between them would soon force them to give up this advantage to the landowners by taking lower wages or giving higher rents. And so the elimination of the inventor's royalty, and of the pickings and stealings of the gambler and pirate, would only make land more valuable and increase the incomes of the landholders. The saving made by getting rid of the storekeeper, inventor, gambler and pirate would accrue to their benefit, as did the increase in production from the application of the invention.

[14] That all this is true we may see, as I have shown. The growth of the railroad system has, for instance, resulted in putting almost the whole transportation business of the country in the hands of giant monopolies, who, for the most part, charge "what the traffic will bear," and who frequently discriminate in the most outrageous way against localities. The effect where this is done, as is alleged in the complaints that are made, is to reduce the price of land. And all this might be remedied, without raising wages or improving the condition of labor. It would only make land more valuable — that is to say, in consideration of the saving effected in transportation, labor would have to pay a higher premium for land.

[15] So with all monopolies, and their name is legion. If all monopolies, save the monopoly of land, were abolished; if, even, by means of co¦perative societies, or other devices, the profits of exchange were saved, and goods passed from producer to consumer at the minimum of cost; if government were reformed to the point of absolute purity and economy, nothing whatever would be done toward equalization in the distribution of wealth. The competition between laborers, who, having no rights in the land, cannot work without some one else's permission, would increase the value of land, and force wages to the point of bare subsistence.

[16] Let me not be misunderstood. I do not say that in the recognition of the equal and unalienable right of each human being to the natural elements from which life must be supported and wants satisfied, lies the solution of all social problems. I fully recognize the fact that even after we do this, much will remain to do. We might recognize the equal right to land, and yet tyranny and spoliation be continued. But whatever else we do, so long as we fail to recognize the equal right to the elements of nature, nothing will avail to remedy that unnatural inequality in the distribution of wealth which is fraught with so much evil and danger. Reform as we may, until we make this fundamental reform our material progress can but tend to differentiate our people into the monstrously rich and the frightfully poor. Whatever be the increase of wealth, the masses will still be ground toward the point of bare subsistence — we must still have our great criminal classes, our paupers and our tramps, men and women driven to degradation and desperation from inability to make an honest living.

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Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper