The Menace of Privilege
The Land of Inequality
Henry George Jr.
NOTHING can be more surprising to the thoughtful observer than the
social inequality existing in the United States--a country which Mr.
Bryce says Europeans early in the nineteenth century deemed to be
preëminently the land of equality; which inspired De
Tocqueville's descriptions and speculations; and which provoked
Americans themselves to constant boastings.
Except for the slaves and Indians, there was at the beginning of
the Republic full political and approximate social equality. The
country was new and unappropriated. Beyond the narrow rim of
settlement along the Atlantic seaboard lay the free, virgin and
seemingly illimitable West. All who would might come; and coming,
could find opportunity to make for themselves and their families an
independent, if rugged, living. The American Commonwealth was then
in the pioneer stage. Few material privileges existed. Nature, being
for the most part unappropriated, offered her milk and honey freely
and bountifully to all.
Work was the rule. It was the common means of subsistence, the
badge of responsibility and respectability. The printer, Benjamin
Franklin, the surveyor, George Washington, the lawyer, Thomas
Jefferson, the sailor, John Paul Jones, the merchant, John Hancock,
were American types of manhood and practical citizenship. "In
America people do not ask, 'What is he?' but 'What can he do?'"
wrote Franklin in 1782, while representing the Republic in Europe. "In
short," he continued, "land being cheap in that country,
from the vast forests still void of inhabitants, and not likely to
be occupied in an age to come, in so much that the property of a
hundred acres of fertile soil full of wood may he obtained near the
frontiers (in many places, for eight or ten guineas) hearty young
laboring men who understand the husbandry of corn and cattle, which
is nearly the same in that country as in Europe, may easily
establish themselves there. A little money saved of the good wages
they receive there while they work for others enables them to buy
the land and begin the plantation, in which they are assisted by the
good will of their neighbors and some credit. Multitudes of poor
people from England, Ireland, Scotland and Germany have by this
means in a few years become [relatively] wealthy farmers, who, in
their own countries, where all the lands were fully occupied and the
wages of labor low, could never have emerged from the poor condition
wherein they were born." ("Information to those who would
remove to America," Franklin's Writings, Bigelow Edition, Vol.
VIII, pp. 175-176.)
The precepts of industry, honesty and thrift of Franklin's "Poor
Richard's Almanac" pointed to the almost certain road to
competence and respite from toil in old age. And even though this
meant living in the pioneer state for many, it did not mean want and
suffering. "In every part of North America," wrote
Franklin in 1788, while President of the Supreme Council, virtually
Governor, of Pennsylvania, "necessaries of life are cheaper
than in England. Scarcity is unknown there. . . . The price of labor
in money being higher than in England, and provisions cheaper, the
actual wages, that is, the amount of necessary articles which the
day laborer can buy, is so much the greater." ("Reflections
on the Augmentation of Wages which will be occasioned in Europe by
the American Revolution," Franklin's Writings, Bigelow Edition,
Vol. X, p. 53.)
And thus, while the mass of men by their labor could obtain a
living that afforded all the necessaries and many of the comforts of
life, with independence and self-respect, there were no private
fortunes as we speak of private fortunes to-day. "The truth
is," said Franklin, "that though there are in that country
few people so miserable as the poor of Europe, there are also very
few that in Europe would be called very rich; it is rather a happy
mediocrity that prevails. There are few great proprietors of the
soil and few tenants. Most people cultivate their own lands, or
follow some handicraft or merchandise, and few are rich enough to
live idly upon their rents and incomes." (Franklin's Writings,
Bigelow Edition, Vol. VIII, p. 172.)
John Adams, writing to a friend in Massachusetts at the time of
Washington's election as commander-in-chief in 1775, described the
latter as "a gentleman of one of the finest fortunes upon the
continent." Washington's Virginia plantations, his homestead at
Mount Vernon, his slaves, and his lots in the future city of
Washington were the chief parts of his possessions, and were worth
perhaps half a million dollars. He had, moreover, various tracts of
land in other parts of Virginia, and also in Pennsylvania, New York,
Kentucky and the Northwest Territory. It is probable that, all told,
his estate was at the time of his death worth about three-quarters
of a million -- a considerable fortune in those days of general
equality, but comparatively no fortune at all in these days.
John Hancock was reputed to be the richest man in Massachusetts at
the Revolutionary period. His uncle, Thomas Hancock, with whom John
was in partnership in a mercantile business, died in 1764, leaving
to John, immediately and collaterally, property and enterprises
judged to be worth not less than $350,000, one of the largest
fortunes acquired in Boston up to that date. John Hancock was then
twenty-seven. Like his uncle, he was a money-maker, but against his
gains lie suffered heavy losses preceding and during the Revolution.
It is probable that at his death, in 1793, at the age of fifty-six,
he was not much richer than his uncle's' will had made him; say,
something more than $350,000.
Thus we have two instances of the richest men in the early days of
the Republic: George Washington in the South, worth three-quarters
of a million; John Hancock in the North, worth a third of a million.
Although we should not think of classing them among the wealthy men
of our day, there were then but few comparable with them. The
standard of what constituted riches was low.
On the other hand, real poverty was casual and nowhere deep or
chronic. The reason of this was plain. The easy access to land made
it a comparatively simple matter for all men to get subsistence.
Because of this accessibleness to good land, wages were high -- much
higher than in Europe, as Adam Smith in the "Wealth of Nations"
points out (Book 1, Chap. VIII). Whenever any were dissatisfied with
the wages obtained by following trades or in working in any way for
others, they could, as Thomas Jefferson said, quit such vocations,
take up some land, and "go to laboring the earth" for
themselves. (Letter to J. Lithgow. Jefferson's Writings, Ford
Edition, Vol. III, p. 269, note.)
Benjamin Franklin bears the same testimony. In a brief essay
written before the Revolution he asserted that, notwithstanding the
rapid increase of population both by births and immigration, "so
vast is the territory of North America, that it will require many
ages to settle it fully, and, till it is fully settled, labor will
never be cheap here, where no man continues long a laborer for
others, but gets a plantation of his own; no man continues long a
journeyman to a trade, but goes among those new settlers and sets up
for himself, etc. Hence labor is not cheaper now in Pennsylvania
than it was thirty years ago, though so many thousand laboring men
have been imported." ("Observations concerning the
Increase of Mankind and the Peopling of Countries," Franklin's
Writings, Bigelow Edition, vol. IV, p. 225.)
This "importing" of labor, to which Franklin refers,
arose from the very high wages demanded for continuous service.
Laborers were brought from Europe under indentures binding them to
their employers for terms of from one to five years. The exchange of
American for European conditions was most advantageous. (M. Meusnier
submitted to Thomas Jefferson proof-sheets of an article on the
United States which be proposed to publish in the "Encyclopédie
PoIitique." On the proofs Jefferson wrote some notes, among
which he said, June 22, 1786: "Indented servants formed a
considerable supply. These were poor Europeans who went to America
to settle themselves. . . . So desirous are the poor of Europe to
get to America, where they may better their conditions, that, being
unable to pay their passage, they will agree to serve two or three
years on their arrival there, rather than not go. During the time of
that service they are better fed, better clothed, and have lighter
labor than while in Europe. Continuing to work fur hire for a few
years longer, they buy a farm, marry, and enjoy alI the sweets of a
domestic society of their own." Jefferson's Writings, Ford
Edition, Vol. IV, p. 159.)
This practice continued for many years. On the ground of economy
and certainty, Washington in 1792 advised the use of this expedient
in engaging laborers to work upon the public buildings, grounds and
streets of the Federal capital city on the Potomac River which
Congress had ordered to be built and to bear his name. (Letter to
the Commissioners of the Federal District, Ford's "The Writings
of George Washington," Vol. XII, p. 215.) Not only were wages
and the standard of living among laborers higher in America than in
Europe, but there was little poverty and little crime. Such poor as
existed were taken care of. "From Savannah [Georgia] to
Portsmouth [New Hampshire]," said Jefferson, "you will
seldom meet a beggar. In the large towns, indeed, they sometimes
present themselves. They are usually foreigners who have never
obtained a settlement in any parish, I never yet saw a native
American begging in the streets and highways."("Notes on
Virginia," Jeffersoft's Writings, Ford Edition, Vol. III, p.
And several years later, while Minister to France, Jefferson
explained to one of his French friends that in the ten years
of his attendance as student and practitioner at the bar of the
Supreme Court of Virginia there, never was a trial for robbery on
the high road, and that he never heard of one in any of the other
States, except in the cities of New York and Philadelphia
immediately after the departure of the British army, "when some
deserters infested those cities for a time." (Letter to M.
Claviere, Jefferson's Writings, Ford Edition, Vol . IV, p. 402.)
It is to be admitted that Franklin deplored the "emptying out"
of the jails of Europe upon us, for some of the European cities
transported their long-term prisoners to America both before and
after the Revolution. But many of these prisoners had been political
offenders and the large majority of those guilty of other crimes
soon buried their past in the habits of industrious and law-abiding
citizenship. In this land of promise they commenced new and better
Thus the United States, closely preceding and following their
separation from Great Britain, offered freely to all such bounties
of nature as to put its inhabitants on independent footing with the
rest of the world and on terms of equality among thernseIves, Few
were rich and that few not very rich; few were poor in the sense of
being permanently dependent. The country was agricultural, and the
production of wealth, although fuIly abreast of the best processes
and methods of the day, was small compared with productive results
in our time. (Witness the quick adaptation of the best European
methods and the upshooting of invention. Jefferson invented a
ploughshare and Franklin numerous useful tools. It was the fashion
of the public men to introduce from Europe the best grains, shrubs,
fruit trees, and stock.) But, as appears upon every page of
universal history, the happiness and progress of a people do not
depend so much upon the measure of the wealth produced, as upon the
fairness and approximate equality of its distribution.
Such distribution marked the United States for half a century
after the signing of the Declaration of Independence. Mr. Bryce
observes that up to the twenties or thirties "there were no
great fortunes in America, few large fortunes and no poverty"
(The American Commonwealth," Part VI, Capter CV, Vol. II, p.
616). Then, speaking of the inequalities which had come to exist at
the time of his writing, the latter eighties, he says: "Now
there is some poverty, many large fortunes, and a greater number of
gigantic fortunes than in any other country of the world. The most
remarkable phenomenon of the last twenty-five years has been the
appearance not only of those few colossal millionaires who fill the
public eye, but of many millionaires of the second order, men with
fortunes ranging from $5,000,000 to $15,000,000."
Is not this the common observation? Indeed, do we not reach even
stronger conclusions from what is commonly to be seen and realized?
There has not been any lessening relatively in the volume of wealth.
On the contrary, the march of invention and Iabor-saving processes
which have made the nineteenth century a cycle of wonder in the
history of mankind has been most brilliant in the United States.
With us there has been an increase in the volume of production far
outstripping advancing population.
A distribution of this increase comparable in fairness with that
existing in the early days of the Republic would have produced today
fewer great fortunes and practically no involuntary poverty among
men willing and anxious to work; while the mass of population lying
between the extremes would now be enjoying in peace and ease most of
the material comforts of our civilization.
But there is no such approximate distribution. Instead, it is
grossly unequal. Manifestly there is an intense and intensifying
concentration of wealth. Comparing the returns of the United States
Census of 1890 with New York State probate records and Massachusetts
State reports, Dr. Charles B. Spahr concludes that at that time one
per cent of the families of the United States owned more of the
general wealth than did the other ninety-nine per cent. He computes
that one-eighth of the families held seven-eighths of the wealth ("The
Present Distribution of Wealth in the United States," p. 69.
Dr. Spahr offers a classification dividing the aggregate wealth of
the country, $65,000,000,000, between 12,5000,000 families (about
62,500,000 individuals) as follows: 125,000 families, averaging
$264,000, and aggregating $33,000,000,000; 1,375,000 families,
averaging $16,000, aggregating $23,000,000,000; 5,500,000 families,
averaging $1,500, aggregating $8,200,000,000; 5,500,000 families,
averaging $150, aggregating $800,000,000.) A careful review of Dr.
Spahr's data and methods makes his conclusions seem safe.
Unfortunately the data and methods of the twelfth census are
different in essential respects from those preceding (frequent and
serious faults in our census work), so that it is impossible to
institute a comparison. However, the United States Bureau of
Statistics computes that the aggregate wealth of the country in 1900
was $90,000,000,000. Presumably this includes the trust inflations.
Mr. John Moody estimates ("The Truith About Trusts,"
Introduction) that over "440 industrial franchise,
transportation and miscellaneous" trust combinations have a
total capitalization of more than $20,000,000,000, or two-ninths of
the Statistical Bureau's estimate of the country's total wealth. And
obviously these 440 or more corporations are controlled by
comparatively few persons. It was at one time pointed out that the
twenty-four men then on the Board of Directors of the United States
Steel Corporation (Steel Trust) directly or indirectly represented
one-twelfth of the "total wealth" of the country ("The
World's Work," December 1903. The twenty-four men alluded to
were: J.P. Morgan, John D. Rockefeller, Henry H. Rogers, Charles M.
Schwab, Elbert H. Gary, George C. Perkins, Edmund C. Converse, James
Gayley, Marshall Field, Daniel G. Reid, J.D. Rockefeller, Jr.,
Alfred Clifford, Robert Bacon, Nathaniel Thayer, Abram S. Hewitt
(deceased), Clement A. Griscom, Francis H. Peabody, Charles Steele,
William H. Moore, Norman B. Ream, Peter A.B. Widener, James H. Reed,
Henry C. Frick, and William Edenborn.)
Recognizing this tendency to center in the hands of a small
percentage of the nominal owners the full control and practical
ownership of the mass of wealth, the late brilliant corporation
lawyer and political economist, Mr. Thomas G. Shearman, as early as
1889 declared that "the United States of America is practically
owned by less than 250,000 persons" ("Who Owns the United
States?" in The Forum, November, 1889). Nor did Mr. Shearman
stop there. I-Ic ventured to predict that were the concentrating
movement to continue at the same rate, "within thirty years . .
. the United States of America will be substantially owned by less
than 50,000 persons."
Need we inquire further? Is it not clear that, so far from being
in respect to the distribution of wealth as Mr. Bryce described, "preeminently
the land of equality," this Republic has become palpably a land
of inequality? There has been no lessening in the power of producing
wealth. On the contrary, nowhere has there been so auspicious an era
of invention and labor-saving processes. Production has increased by
leaps and bounds. But there has been something grievously at fault
with its distribution. It has gone in great part for the enrichment
of a few. As if by magic, it has piled up amazing fortunes; as
though some possessed lodestones drawing to them a very large
portion of the wealth and leaving to others only sufficient to
afford subsistence and barely encourage a continuance of production.
The effect of this highly unequal distribution must be manifold
and marked. First of alI it divides the community into two general
classes: the gainers and the losers; into the House of Have and the
House of Want. Next it causes broadly a lowering of public and
Where wealth concentrates, the rich grow intoxicated. They are, as
it were, in a land of wonders, where dollars pair and multiply
without aid of human thought or touch of human hand. Coins that but
a moment before filled a single bag now fill an army of them, such
as greeted the eyes of Ali Baba when the words "Open Sesame"
disclosed the treasure cave. This sudden flood of riches begets a
thirst for more, particularly as their possessors realize that with
these riches goes a power to buy -- to command -- the services of
the multitude struggling for subsistence or something better. And so
desire augments. Those who have a million would have ten; those who
have ten, would have a score, a hundred, millions. They play a game
of chance not only for its excitement, but for its gain -- a game
where winnings come so fast as to supersede the ordinary means of
counting. They play with a money-greed upon them. They play even
when they know the dice are loaded, if indeed they do not load them.
Yet there is something else behind this passion. Riches are
relative. The ten-millionaire would feel poor if reduced to a
million, the hundred-millionaire in danger of want if his fortune
shrank to ten millions. The measure of what the mind regards as
needs is not the same with these men as with the rest of mankind.
The standards of living of the two orders of men are no more alike
than is the standard of the average American mechanic or factory
operative like that of the Chinese coolie or of the East Indian
ryot, who can subsist on a handful of rice a day.
Great riches bring a high living standard. It is a false and
artificial one. It entails much expense. This expense is not
necessary to the highest mental and moral and even physical
development. It really retards such development. But it is part of
the environment of the very rich. As such, it becomes in their minds
necessary to their comfort. The rich man fears poverty because
poverty to him means sinking below this standard, albeit a standard
preposterously exalted and wholly unnatural and artificial; a
standard made for him, and for him only, by his gross riches; which
riches, rapidly increasing, lead to new requirements on his part and
new fears. He resembles Mademoiselle Louise, daughter of Louis XV.,
who, when she entered the Order of the Carmelites, had to learn how
to walk downstairs by herself. Belonging to the blood royal and
accustomed all her life to descend only the grand staircase at
Versailles, and then always leaning on the arm of her
cavalier-in-waiting, she feared to descend even a small flight of
steps without help. "At first," said she, "it seemed
to me a dreadful precipice, and I was obliged to sit down on the
steps and slide down in that attitude!"
Socially next below lies the middle class, some of whom, driven by
envy, strive to imitate the very rich, while others disdain them and
their ways. But both those who ape and those who scorn dread falling
to the state of those below -- to the state of the "work-people."
They are ever keyed up against reverse. They are ever alert against
what at most times is only a phantom, but which may at any moment
condense into a solid, material monster to devour them.
And below all lie the "mudsills of society," as they
have been contemptuously called. Some of them may be dazzled by the
sudden rise of men from their own rank to huge riches; but the mass
of them are too busy fighting against hunger to be allured by the
will-o'-the-wisp. Their desire is to obtain the standard required of
civilized men. Advancing civilization gives a multiplying power to
production, and these men, who so largely are the producers, should
in justice obtain a fair share of this gain. Hence they should
naturally aspire to and as naturally obtain the means to enjoy a
higher standard of living. But while things of which the laborer of
a century ago did not dream constitute wants of the laborer of
to-day, the struggle to satisfy present wants is relatively far
greater for our laborer than the attainment of the earlier standard
was for his ancestor. Laborers now are closely pursued by and
frequently feel the claws and the fangs of the wolf of poverty
because of an increasing difficulty in attaining the living standard
which advancing civilization establishes and which increasing
productive power should make natural for him to reach.
And so from different points of view practically alI men have come
to fear poverty. Fearing poverty, they abandon the old moral
principles. Common transactions of life are marked by deception, by
downright lying, by stealthy stealing, by organized robbery. Not
only do our courts and prisons swarm with petty thieves and
swindlers, but our great captains in manufactures, in commerce and
in finance resort to alI manner of underhandedness. Our politics
reek with graft, and even men of highest standing turn positions of
public and private trust to personal gain. The citizens of this
Republic, who formerly were, on the whole, so generous, upright and
independent in alI their dealings, now act like men possessed. In
common phrase they are "money-mad."
But what is to be done? We often hear that no change can occur
until the people return to the old moral precepts of public and
private honesty. This means anything or nothing. It is only to say
that the people will again become moral when they become moral.
The essence of the matter is that this Republic will revert to the
moral order when there is a less unequal distribution of the vast
wealth generally produced, when some do not find it possible to pile
up huge, mocking private fortunes, and when the general body of the
citizens find it easier to get a living commensurate with advancing
civilized life. Then the whole population will approach a common
living standard -- a higher, better, healthier standard than the
various standards of today, because it will be commonly enjoyed. All
the members of society will he more nearly social equals. At any
rate, few or none will have to stoop or cringe, since practically
alI will be able independently to obtain an easy living. Where none
are princes, none will be subjects.
And thus it is not true that there is no way open to correct
general morals. What is needed is to correct the thing that corrupts
general morals. That thing is the unequal distribution of wealth.
Correct that and morals will correct themselves. Let it be possible
for all to get the easy living to which the tremendous increase in
productive power entitles them, and morality will govern generally
in the higher as well as in the common affairs of men.
This confronts us with the cardinal question: What causes the
unequal distribution of wealth? Most men today are vaguely asking
themselves that question. Can it be answered? If it can, we shall
see what produces social disparities. We shall go to the root of
individual and national welfare and happiness. We shall go to the
very foundations of civilization.
The great ones of the world have
taken this earth of ours to themselves; they live in the midst
of splendor and superfluity. The smallest nook of the land is
already a possession; none may touch it or meddle with it.
Goethe, Wilhelm Meister