Progress and Poverty

There is a “radical and simple” solution to the increasing poverty in the industrial age (297). George examines it from the standpoint of cutting government spending, improving worker education and industrial habits, increasing wages, improving cooperation between labor and capital, increasing government regulation, and broadly distributing land.

I. From Greater Economy in Government

It is common to attribute social distress to government spending, for instance, on its military. However, cutting government spending, and thus taxation, would not be “so great an addition as steam and machinery have made” (299). Since industrial progress was unable to alleviate poverty, but increased rent, so would this measure. Thus, government saving is desirable but will not eliminate poverty, as “[N]o reduction in the expenses of government can of itself cure or mitigate the evils that arise from a constant tendency to the unequal distribution of wealth” (301).

II. From the Diffusion of Education and Improved Habits of Industry and Thrift

The socially privileged believe that poverty is the result of a “lack of industry, frugality, and intelligence” (301). This perception is exacerbated in a newer society like the United States, in which some politically equal individuals can misidentify their own work ethic and intellect as being responsible for their social mobility and conclude that those less fortunate lack it. Instead, land monopolization and rent increase are what has been driving down wages. Thus, even working longer hours does not help alleviate this problem. Likewise, education and intelligence can only “raise the wages of the individual only in so far as it renders him superior to others” but not in general (306). The gradual improvement of the overall material conditions of a class would gradually “bring increased industry, skill, intelligence, and thrift” (307).

III. From Combination of Workmen

Laws of distribution show that “combinations of workmen can advance wages” (308). Such wage increase occurs at the expense of rent rather than capital or other workers. At the same time, “while a change in the rate of wages in any particular occupation may include a change in the relative demand for labor, it can produce no change in the aggregate demand” (309). Furthermore, despite the benefits of labor unions and striking, “the good that can be accomplished by them is extremely limited, while there are inherent disadvantages in the process” (310). After all, the nature of land ownership is fixed, which means that landowners can “combine much more easily and efficiently than either laborers or capitalists” (313).

IV. From Co-operation

Despite the common belief, “the efficacy of co-operation as a remedy for social evils” is limited because “it could not raise wages or relieve poverty” (314). There are two types of cooperation: in production, and in supply. Supply cooperation may only decrease exchange costs by eliminating middlemen. In the realm of production, cooperation “is simply a reversion to that form of wages which still prevails in the whaling service”—as a fixed, rather than proportional, wage (315). In turn, cooperation between landowners and producers would lead “to the payment of rent in kind” (316). Terming such arrangements as “cooperation” would not change the character of laws that determine rent.

V. From Governmental Direction and Interference

Government regulation of industries and wealth, in their most extensive form, is called socialist. However, it is better to use freedom rather than coercion in this context. After all, engaging in extensive regulation would increase the state bureaucracy “of officials clothed with inquisitorial powers” (318). In turn, regulating wealth accumulation through taxation may slow down industrial progress by removing the incentive. Overall, socialism is an impressive idea, but one that must develop organically.

VI. From a More General Distribution of Land

Many people are beginning to see that “the tenure of land is in some manner connected with the social distress” even in the most advanced countries (319). However, this sentiment leads to modest propositions such as tenant rights, free trade in the realm of land ownership, and lot size restrictions. There are two tendencies of note: the decreasing share of landowners in relation to the total population and “a strong tendency to the concentration of land ownership in agriculture” (321). The latter show “first, that any measures which merely permit or facilitate the greater subdivision of land would be inoperative; and, second, that any measures which would compel it would have a tendency to check production” (321). Furthermore, restrictions on the amount of land one could own would benefit more people but not everyone. Such limited measures also prevent the introduction of more radical solutions.