Progress and Poverty by Henry George (most important books of all time txt) ๐
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Progress and Poverty, first published in 1879, was American political economist Henry Georgeโs most popular book. It explores why the economy of the mid-to-late 1800s had seen a simultaneous economic growth and growth in poverty. The bookโs appeal was in its balance of moral and economic arguments, challenging the popular notion that the poor, through uncontrolled population growth, were responsible for their own woes. Inspired by his years living in San Francisco and his own experience with privation, George argues instead that poverty had grown due to the increasing speculation and monopolization of land, as landowners had captured the increases in growth, investment, and productivity through the rising cost of rent.
To solve this, George proposes the complete taxation of the unimproved value of land, thus returning the value of land, created through location, to the community. This solution would incentivize individuals to use the land they own productively and remove the tendency to speculate upon landโs increasing value. Georgeโs argument was profoundly liberal, as individuals retain the right to own land and enjoy the profits generated from production upon it.
Progress and Poverty was hugely popular in the 1890s, being outsold only by the Bible. It inspired the Single Tax Movement, and influenced a wide range of intellectuals and policymakers in the early 1900s including Leo Tolstoy, Albert Einstein, and Winston Churchill.
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- Author: Henry George
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Let us consider these three definitions, which represent the best teachings of current political economy:
To McCullochโs definition of capital as โall those portions of the produce of industry that may be directly employed either to support human existence or to facilitate production,โ there are obvious objections. One may pass along any principal street in a thriving town or city and see stores filled with all sorts of valuable things, which, though they cannot be employed either to support human existence or to facilitate production, undoubtedly constitute part of the capital of the storekeepers and part of the capital of the community. And he can also see products of industry capable of supporting human existence or facilitating production being consumed in ostentation or useless luxury. Surely these, though they might, do not constitute part of capital.
Ricardoโs definition avoids including as capital things which might be but are not employed in production, by covering only such as are employed. But it is open to the first objection made to McCullochโs. If only wealth that may be, or that is, or that is destined to be, used in supporting producers, or assisting production, is capital, then the stocks of jewelers, toy dealers, tobacconists, confectioners, picture dealers, etc.โ โin fact, all stocks that consist of, and all stocks in so far as they consist of articles of luxury, are not capital.
If Mill, by remitting the distinction to the mind of the capitalist, avoids this difficulty (which does not seem to me clear), it is by making the distinction so vague that no power short of omniscience could tell in any given country at any given time what was and what was not capital.
But the great defect which these definitions have in common is that they include what clearly cannot be accounted capital, if any distinction is to be made between laborer and capitalist. For they bring into the category of capital the food, clothing, etc., in the possession of the day laborer, which he will consume whether he works or not, as well as the stock in the hands of the capitalist, with which he proposes to pay the laborer for his work.
Yet, manifestly, this is not the sense in which the term capital is used by these writers when they speak of labor and capital as taking separate parts in the work of production and separate shares in the distribution of its proceeds; when they speak of wages as drawn from capital, or as depending upon the ratio between labor and capital, or in any of the ways in which the term is generally used by them. In all these cases the term capital is used in its commonly understood sense, as that portion of wealth which its owners do not propose to use directly for their own gratification, but for the purpose of obtaining more wealth. In short, by political economists, in everything except their definitions and first principles, as well as by the world at large, โthat part of a manโs stock,โ to use the words of Adam Smith, โwhich he expects to afford him revenue is called his capital.โ This is the only sense in which the term capital expresses any fixed ideaโ โthe only sense in which we can with any clearness separate it from wealth and contrast it with labor. For, if we must consider as capital everything which supplies the laborer with food, clothing, shelter, etc., then to find a laborer who is not a capitalist we shall be forced to hunt up an absolutely naked man, destitute even of a sharpened stick, or of a burrow in the groundโ โa situation in
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