Henry George Foundation Information

The Ethical

Nature of Society

Text of a talk on Friday 25th November 2011 by

Joseph Milne

At the beginning of Progress and Poverty Henry George quotes Marcus Aurelius. Part of that quotation says:

For nothing is so productive of elevation of mind as to be able to examine methodically and truly every object which is presented to thee in life, and always to look at things so as to see at the same time what kind of universe this is, and what kind of use everything performs in it, and what value everything has with reference to the whole, and what with reference to man, who is a citizen of the highest city, of which all other cities are like families.

Henry George quotes this passage from Marcus Aurelius to call the reader's full intelligence to the task of examining of the nature and laws of economics, and to see how human society is part of the greater order of the universe as a whole. This is not only a very apt quotation with which to begin Progress and Poverty, it is also highly significant that George should invoke the great Stoic philosopher and exponent of Natural Law. In the Meditations of Marcus Aurelius we have the only record that has come down to us of practical Stoic exercises. In the quotation George gives us we are given a description of the Stoic exercise called judgement, which is to see things as they are in themselves and in relation to the whole universe, so that any action taken may be in accord with the truth of things, with the proper purpose of things, and for the good of mankind. For the Stoic philosopher, the final test of any action is whether it is for the good of mankind and therefore in accord with universal providence. Only such actions are truly virtuous, free and lead to human happiness.

Progress and Poverty may been seen as a similar intellectual exercise, enabling the mind to move from right perception to right judgement, and from right judgement to action for the common good or justice, and from justice to the fulfilment of human nature and happiness. This sequence involves right perception, right judgement, and right action, and we might call it a "virtuous circle" since it moves from truth to goodness, or from the intellectual to the ethical. Put very simply, it is perception, thought and action ruled by justice, where we understand justice as action in accordance with the truth of things.

It is evident that this "virtuous circle" from perception to justice is for Henry George the most natural thing, the proper use of our human faculties, and in conformity with the proper end of life. In speaking of the law of human progress he writes:

The law of human progress, what is it but the moral law? just as social adjustments produce justice, just as they acknowledge the equality of right between man and man, just as they insure to each the perfect liberty which is bounded only by the equal liberty of every other, must civilisation advance. (Progress and Poverty, p. 526)

To assert that the law of human progress is a moral law is the same as to say that only the just society can flourish or, more radically, that only the just society is genuinely a society and may properly be called a society. This clearly suggests that ethics, or "the moral law" as George calls it, lies at the heart of society and civilisation, and that human society is firstly and essentially an ethical body.

This is the view that 1 wish to explore in this talk, and 1 shall be calling upon the ancient philosophers such as Plato and Aristotle to elaborate it. Before 1 launch into this properly 1 think it would be well to remind ourselves that this view is not the current view, especially when it comes to the understanding of economics. The prevailing way of understanding economics through mathematical models and as mere mechanism wholly precludes any account of the ethical meaning of the production and exchange of wealth. Indeed, many economists assert that the workings of the market are morally neutral or amoral, and the modern way in which the working of the economy is analysed supports this view. With the current crisis there appears to be an inevitable conflict between so called market forces and ethics, almost as if the market worked entirely by itself without any human participation.

This disconnection between the economy and the ethical sphere is a feature of the mode of thinking of our times, but its roots go back to the rationalists of the 17` century who attempted to view the world and human society merely as unconscious mechanisms. The consequence of this was to relegate ethics to the private sphere of the individual, despite the claims of universal human rights and human equality. This in turn has led to the prevailing culture of moral relativism. For relativism all "values" are held to be culturally conditioned and without any grounding in truth or reality, while truth itself is also only relative or conditional or provisional. These views are defended in the name of freedom, on the grounds that nobody or no institution has the right to impose its values on the morally self determining individual.1 But what use is the claim of universal moral freedom in a world where all moral values cancel each other out as merely relative or private?

I would like to emphasise that this disconnection between economics and ethics derives from confusion within the sphere of ethics itself. This confusion is crippling the attempts of economists and governments to remedy the current financial crisis. It seems almost impossible to think economically and ethically at the same time. This is because economics cannot now be seen as inherently ethical, as primarily ethical. The pursuit of wealth and the pursuit of virtue appear to be at odds with one another.

From this it is clear that Henry George's claim that the law of progress is a moral law cannot be easily grasped at this time, and that even we who study George can easily forget that his primary concern is justice and the perception of justice in the natural order of society. Our modern inability to see the ethical nature of things seems to me to be related to a fundamental law of civilisation. Over that last four years 1 have been tracing the history of the understanding of natural law, from Plato to the present, and through all the variations and changes in thinking one sees over this long period of time, one law that emerges clearly into light is that a society flourishes to the degree that it is able to reflect upon its own real nature. Whenever there is a flowering of culture, as in Classical Greece, or in the 0, 12 h or 15 th centuries in Europe to give obvious examples, this is always accompanied by a rich articulation of the nature of society, of human nature, and the place of these within the cosmos. This capacity to reflect on human nature and its part within the greater whole, or the All as the Stoics called it, inevitably comes accompanied by the consideration of the nature of the Good. For Plato and Aristotle, and also the great Christian theologians, to reflect upon the truth of things ultimately comes to the same thing as reflecting on the Good. The True and the Good cannot understood separately from one another. To illustrate this, here are a few short quotations from Aquinas which he has distilled from the philosophy and theology that has come down to him:

Every creature participates in goodness in the same degree as it participates in being.

Everything that is, and in whatever way it is, is good in so far as it exists.

Being itself is like goodness. Good and Being are convertible ideas.

Good and true and being are one and the same thing in reality, but in the mind they are distinguished from each other.

Good and the inclination to good follow from the very nature of a being; hence, so long as the nature remains, the inclination to good cannot be removed, not even from the damned.

The rational, intellectual nature is related to good and evil in a way that distinguishes it above all other beings. For every other creature is naturally ordered to some particular, partial good. On the other hand, only the intellectual nature apprehends the universal idea of the good itself through its intellectual knowledge, and is moved by the desire of the will to the good in its universality. (The Human Wisdom of St. Thomas, 37  41, 70)

There are a number of important things to notice about what Aquinas says here. First, each observation relates the universal and the particular. Thus, although he speaks of universal being or good or the true, he relates these to particular beings, goods or truths.

Second, that everything that exists is inclined to the good, and this inclination springs from the essence of each being. This inclination towards the good which is manifest in every part of Nature, either through the natural motion of things or instinct, is the inclination towards the perfection of being. That is to say, each thing is inclined to the perfection of its own nature within the overall order of Nature or the universe.

Third, the inclination to the perfection of being or the good manifests at the intellectual or human level as ethical reflection. The human intelligence has a capacity to grasp the universal order of Nature and see how each kind of creature is inclined to its particular good, and how that particular good forms part of the overall inclination towards the perfection of the whole universe. And because human intelligence has this capacity to reflect upon the total scheme of things, it is placed in a unique position in relation to the whole. Because of this unique place of reflection in the total order of Nature, human nature "is moved by the desire of the will to the good in its universality" as Aquinas puts it.

In terms of modern ethics this looks rather strange and abstract. As we noted earlier, the modern relativist view of morality asserts the independent autonomy of the individual over all values, and this evades or cancels out the question of any universal good. Not only that, whole spheres of life are regarded as amoral, for example the market economy, the arts, physics, or even education. But for Aquinas, as for Aristotle and Plato, there are no amoral spheres either in Nature or in human activity. This is because the true, the good, and being cannot be separated from one another. "Good and true and being are one and the same thing in reality, but in the mind they are distinguished from each other", as Aquinas says.

Again, we can trace the seeds of this separation back to William of Ockham and the rise of Nominalism in the 10' century, which asserts that only individual entities have real existence and that universals exist in name only. This is reinforced by the 17 h century rationalism where the universe is reduced to unconscious mechanism and "knowledge" becomes conceived as wholly detached from any type of participation in, or responsibility towards, the things known. Truth itself is reduced to mere measurement and impartial representation of things. Truth is no longer a universal that belongs to things in themselves, but becomes a human construct imposed upon things from outside. Such a conception of knowledge and truth cannot be related to the metaphysical universals of being or the good, and so they appear now as completely separate or independent realities. This unnatural separation has enormous ethical consequences which appear to have no resolution. For example we are confronted with such problems as whether the human genome can be patented or not, or species of plants privately owned, or if life is owned by the individual. The notion that all knowledge is morally neutral creates startling ethical difficulties and injustices.

1 would like to suggest that the way any age conceives the relation between truth and goodness will both reflect and determine its whole culture, its politics, its system of law and its relation to Nature as a whole. So while it may seem impractical to discuss obscure metaphysics while we could be campaigning for change, at the end of the day it will be the kind of answers given to the highest metaphysical questions that will determine the destiny of a society. This is the insight of Plato and Aristotle, who saw man as the being who reflects on the truth of things. Once there is a creature in Nature who reflects on Nature, we have the emergence of the ethical sphere, for the being who can reflect on Nature gains a responsibility to the truth of Nature that no other creature has. The human realm is the ethical realm. This is why at the beginning of his Politics Aristotle calls man the political being, because man has the power of language, and the "citizen" is the being with the gift of foresight and the capacity to make laws. The emergence of man as the reflective ethical sphere of Nature has been very richly shown in the works of Teilhard de Chardin, who writes:

From man onwards, the cosmos is constructed of moral magnitudes. Consequently spiritual action, so despised by science, is now effortlessly placed at the head of material energies, so far the only ones considered by physicists.... We are now correlatively to fuse into a common dimension two apparently opposite characteristics of experience. We are no longer surrounded by a physical realm and a moral realm. There is only the physicomoral. (Teilhard de Chardin, Human Energy, London, 1969, p. 11  22)

Although Teilhard is giving us a new insight in scientific, evolutionary terms, this is an old and essential insight in Platonic and Christian terms. The physical sphere is not seen in its real aspect if separated from the ethical, or in its truth if separated from the good. But the convergence of the physical and the ethical manifests at the human level, where truth, being and the good emerge together in reflective consciousness or thought. This is man's place in Nature, and consequently the human sphere, society, shows itself as the responsible reflection on the truth of things. Once we glimpse how this is the human place in Nature, then all human activity takes on a fuller meaning. Society is no longer closed in upon itself, or serving only itself, but is part of a larger scheme in which the fullness of being is seen to be the orientation of the whole of reality. Thus Teilhard writes in another essay, "The more an individual, as a consequence of his metaphysical convictions, recognizes that he is an element of a universe in which he finds his fulfilment, the more closely he feels that he is bound from within himself to the duty of conforming to the laws of the universe.." (Toward the Future, London, 1975, p. 131  132)

The implication of what Teilhard says here is that human nature cannot realize or fulfil itself if it regards itself as separate from Nature as a whole, and that through conforming itself to the laws of the universe it conforms to its own nature from within itself.

Again, this may sound metaphysically very grand, but curiously it brings us to a moral question at the heart of our modern confusions about morality: the question of human freedom? It is surely true to say that the highest aspiration of modern democracies is the attainment of freedom. It is the quest for freedom that inspired the various charters and declarations of human rights since the 18 h century, and that human rights express the conscience of our age.

There is, however, a serious flaw in the modern conception of freedom which takes us back once again to the rise of Nominalism of the 14 th century. As we noted a moment ago, the Nominalist view holds that only particular entities exist, and that each entity is autonomous and closed in on itself. This conception was applied both to God and to all created things, including the human person, and since the essence of each being now becomes its autonomy, the cc will" becomes the first principle of being, or even precedes being. The consequence of this conception of the essence of things was that "free will" becomes the decisive characteristic of human nature. Free will came to mean the absolute autonomy of will over things, regardless of their nature. That is to say, free will becomes an end in itself, indifferent to reality external to itself. This Nominalist view lingers on in the existentialism which claims existence precedes essence, for example in the famous novel of Camus, The Outsider.

Given this conception of free will, based on a metaphysical notion of reality composed of separate entities, the philosophers and political economists of the 17` century looked at the framing of society and its laws as essentially protecting the freedom of each individual from either the power of the state or from all other individuals. Thus the conception of the modern liberal society was founded in the notion of the essential competition of each against all, and so laws were made not for the sake of the common good, or for conformation to Nature, but for the protection of the individual against all other individuals and the power of the state. And the power of the state itself, and its laws, were seen as arising from the will of the ruler.

It was from this conception of society that the modern ideals of human rights arose. Human rights were conceived in terms of the good of each private individual, not in terms of the common good, or the good of the whole, or the natural order. Through the agency of human rights the individual asserts his will over all other individuals and institutions.

This conception of human freedom is profoundly different from that of the ancient philosophers, and so it is illuminating to contrast them. For Plato and Aristotle, freedom means the capacity for excellence. That is to say, the capacity for education, for virtue, justice and to fully participate in the universal good.

This conception of freedom arises from an entirely different conception of human nature and the nature of things. It is founded in the understanding that all things are by nature oriented towards the Good, each in its own nature and as a part of the greater whole. For human nature this means that the natural inclinations and instincts are oriented towards the good and perfection. Thus the natural state is a harmony between human nature and Nature generally, and between all human individuals.

Understood in this way, "free will" cannot be the mere assertion of autonomy. On the contrary, free will now becomes the capacity to discern the true and the good and act from that ground. Thus for Aquinas, the free will arises from the act of discerning the true with the intellect, and the good with the will, and free will arises as the decision for excellence. The act of free will is in fact the capacity to make decisions in the light of the good and the true. To put that another way, as we often find in the Stoics, it is the ability to conform to the providential laws of the universe. The classical understanding of free will presupposes a receptivity to, and a participation in, the universal truth and good. It is essentially ethical. It is the capacity to assent to the true and the good through reflection.

By contrast with this, the Nominalist idea of free will as the absolute autonomy of the individual has no ethical basis. It is merely the assertion of absolute autonomy and is as such amoral. It is precisely because of this notion of free will as autonomy that modern theories of ethics are conceived in terms of limiting the scope of free will, as rules, obligations and duties that are imposed on the individual from outside. If human nature is not inherently ethical, then ethics can only be conceived in this way, as imposed from outside. It follows that law can only be conceived in this way too, and so the traditional understanding of Natural Law can have no place.

It is extremely unfortunate that this notion of free will as autonomy, originating with William of Ockham, overcame the earlier understanding of free will as decision for excellence as richly elaborated by Aquinas, and reduced all ethical thinking to the imposition of obligations. It is also unfortunate that this conception of free will serves as the foundation of the modern formulations of human rights.2 These rights, which are said to spring from human nature as such, are actually formulations of claims upon other persons and obligations imposed on them. They are assertions of will, not formulations grounded in the common good or universal justice. They arise from the Nominalist notion of human nature, in which metaphysics and ethics are separated.3 Simone Weil claimed that the declarations of human rights reduce human beings to mere legal entities and are wholly contrary to the Christian understanding of man made in the image of God. She wrote in her essay Human Personality:

The notion of rights is linked with the notion of sharing out, of exchange, of measured quantity. It has a commercial flavour, essentially evocative of legal claims and arguments. Rights are always asserted in a tone of contention; and when this tone is adopted, it must rely upon force in the background, or else it will be laughed at. (Simone Weil, An Anthology, London, 2005, p. 81)

These are radical assertions, as we would expect from Simone Weil,4 but they have the advantage of pushing us to find higher ground for a real foundation for ethics. This higher ground must raise the question of free will to the very highest level. For Aquinas it resides in the understanding of man created in the image of God. The good, true and being have their ultimate ground or origin in God, and the human faculties and their natural inclinations towards the true and good are finally oriented towards mystical union.5 From this high perspective, the desire for mystical union, which is the essence of the free will, not only brings human nature to God, it also brings it wholly to itself and into harmony with the truth of all created things. From the Christian perspective, this transforms the virtue of justice, which epitomises the genuine action of free will, into the virtue of charity  and charity means participation in the divine love God has for all beings. Henry George likewise makes this connection between the moral law of human progress and the spiritual desire of man:

Political economy and social science cannot teach any lessons that are not embraced in the simple truths of that were taught to poor fishermen and Jewish peasants by One who eighteen hundred years ago was crucified  the simple truths which, . . . seem to underlie every religion that has ever striven to formulate the spiritual yearnings of man. (Progress and Poverty, p. 526)

To sum up, it is through ethics that the human being and society are brought into their true and natural relationship with Nature. This is true, however, only so long as ethics is understood to arise from that natural inclinations of human nature, which are oriented towards truth and goodness. The human sphere is the ethical sphere, because human nature has the power to reflect on the nature of things, as well as human nature itself. As the reflective being it surely must follow that all human action is at any time a manifestation of the degree to which the true and the good are understood. So where there is economic injustice or poverty, there is ignorance of the laws of Nature and the proper role of human society within in Nature. Or, to put that more gently, so long as society is not established as first and primarily ethical, it will fail to fulfil its own proper ends. This is especially the case with the understanding of economics, because the creation and exchange of goods can either liberate human nature or enslave it. This, 1 believe, is the central truth that Henry George perceived and which inspired his enquiry into the laws of political economy.

1 The philosopher Isaiah Berlin argued that all moral values are subjective and have no universal ground in truth, and are in perpetual conflict with one another simply as part of the human condition.

2 For a detailed study of the emergence of human rights see Costas Douzinas The End of Human Rights, Hart Publishing, 2000

3 Teilhard de Chardin writes: It follows, then, that moral science and metaphysics must inevitably be seen as, structurally, the two aspects (the intellectual and the practical) of one and the same system. A metaphysics is necessarily backed by a moral science, and vice versa. Every metaphysics entails its own moral science, and every moral science implies its own metaphysics. Essentially the two go together in pairs." (Toward the Future, Can Moral Science Dispense with a Metaphysical Foundation? p. 131)

4 Even if we regard Simone Weil's view as excessive, nevertheless a great deal of modern political rhetoric for military intervention is clothed in the language and claims of human rights.

5 Meister Eckhart says "Wisdom and goodness are one in God. That same thing that is wisdom is also goodness, and that same thing that is mercy is also justice. If in God goodness were one thing and wisdom another, the soul could never find fulfilment in God. The soul is by nature inclined to goodness, and by nature all creatures desire wisdom. If goodness were one thing and wisdom another, the soul, in pouring itself completely into goodness, would have to suffer the pain of leaving wisdom. And if it wanted to pour itself into wisdom, it would have to suffer the loss of goodness." (From Meister Eckhart.. Teacher and Preacher, edited by Bernard McGinn, Paulist Press, 1986, Sermon 84)

A Savannah Story

By Henry George

EFFECTS OF MATERIAL PROGRESS  AND INCREASE OF POPULATION ON THE DISTRIBUTION OF WEALTH

Extract from Progress and Poverty, Book IV. Chapter 2

Here, let us imagine, is an unbounded savannah, stretching off in unbroken sameness of grass and flower, tree and rill, till the traveller 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 labours 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, wagon-maker, 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 labour 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 labour will suffice to satisfy only 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 neighbour. He settles by the side of the first corner, 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 neighbours. Labour has now an effectiveness which, in the solitary state, it could not approach. If heavy work is to be done, the settlers have a logrolling, 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 labour it 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 come a cobbler, a carpenter, a harness maker, 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 un-plastered 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 amphitheatre 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 labour 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 labour bestowed upon it, and this added productiveness gives it a superiority over land of equal natural quality where there are as 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 centre 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 centre 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 centre 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 labour expended in raising corn, or wheat, or potatoes, it will yield no more of those things than at first; but to labour expended in the subdivided branches of production which require proximity to other producers, and, especially, to labour 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 labour will produce as much wheat, and nearly as much wealth; but the artisan, the manufacturer, the storekeeper, the professional man, find that their labour expended here, at the centre 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 favourable facilities; the division of labour 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 ganglia 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, and best of their kind. Here come great actors, and orators, and singers, from all over the world. Here, in short, is a centre of human life, in all its varied manifestations.

So enormous are the advantages which this land now offers for the application of labour, 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 attach to the land; it is on this land and no other that they can be utilised, for here is the centre 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.

The increase of productiveness or utility which increase of population gives to certain lands, in the way to which I have been calling attention, attaches, as it were, to the mere quality of extension. The valuable quality of land that has become a centre of population is its superficial capacityit makes no difference whether it is fertile, alluvial soil like that of Philadelphia; rich bottom land like that of New Orleans; a filledin marsh like that of St. Petersburg, or a sandy waste like the greater part of San Francisco.

And where value seems to arise from superior natural qualities, such as deep water and good anchorage, rich deposits of coal and iron, or heavy timber, observation also shows that these superior qualities are brought out, rendered tangible, by population. The coal and iron fields of Pennsylvania, that today are worth enormous sums, were fifty years ago valueless. What is the efficient cause of the difference? Simply the difference in population. The coal and iron beds of Wyoming and Montana, which today are valueless, will, in fifty years from now, be worth millions on millions, simply because, in the meantime, population will have greatly increased.

It is a well provisioned ship, this on which we sail through space. If the bread and beef above decks seem to grow scarce, we but open a hatch and there is a new supply, of which before we never dreamed. And very great command over the services of others comes to those who as the hatches are opened are permitted to say, “This is mine!”

To recapitulate: The effect of increasing population upon the distribution of wealth is to increase rent, and consequently to diminish the proportion of the produce which goes to capital and labour, in two ways: First, by lowering the margin of cultivation. Second, by bringing out in land special capabilities otherwise latent, and by attaching special capabilities to particular lands.

I am disposed to think that the latter mode, to which little attention has been given by political economists, is really the more important. But this, in our inquiry, is not a matter of moment.

THE PRIMARY DIVISION OF WEALTH:

RENT AND EARNINGS

An important lesson that may be drawn from Henry George’s  Savannah Story is how the wealth that is produced within an economic community divides between (a) the rent which people who compete with each other for a location must pay and (b) the earnings (i.e. wages plus interest) which the suppliers of labour and capital receive for their endeavours and enterprise.

In a simple economy Rent is small compared with Earnings whilst in a highly developed community, where there is much specialisation and trade, Rent represents a large share of a much larger amount of total and average wealth produced. Average and total Earnings may be larger but compared with Rent they represent a smaller share.

From this it may be appreciated how Rent is produced by the presence, protections and services provided by the whole community and thus forms a natural source of public revenue in place of taxes on the wealth produced by individuals and groups.

The Economic Wisdom of Henry George

People do not argue with the teachings of Henry George; they simply do not know it . He who becomes acquainted with it cannot but agree.

Count Leo Tolstoy

Men like Henry George are rare, unfortunately. One cannot imagine a more beautiful combination of intellectual keenness, artistic form and fervent love of justice. Every line is written as if for our generation.

Albert Einstein

The economic wisdom of Henry George is rooted in a profound understanding of the relationships that exist between different orders of law that operate within an economic community. He saw how over and above the man-made laws and regulations that societies develop themselves; there are laws of nature that operate by virtue of the individual and social nature of human beings and human societies. He saw that, in the same way that an artisan needs to take into account those laws of nature that operate to limit his artefacts, it is necessary for governments to take certain ‘natural laws’ into account when devising particular socio/economic arrangements.

The Henry George Foundation of Great Britain

Dedicated to promoting principles expounded by Henry George in the conviction that they offer the only true basis of Economic Freedom and Social Justice, and that their application will remove involuntary poverty, promote industrial and international peace, and make all other reforms easier of accomplishment, and generally contribute to the welfare of humanity.