The Menace of Privilege
The Cause of Inequality
Henry George Jr.
WHAT causes the unequal distribution of wealth by which one class
is made superabundantly rich, while another, vastly greater, has a
hard struggle to get a living?
The will of Heaven, some say. President George F. Baer of the
Anthracite Coal Trust was credited by the newspapers of the country,
in the summer of 1902, during the second great hard-coal strike in
Pennsylvania, with writing to a correspondent: "The rights and
interests of. the laboring man will be protected by the Christian
men to whom God in His infinite wisdom has given the property
interests of the country." Whether or not President Baer said
this, it represents the thought, or at least the utterance, of a
certain class of privileged people.
Others assign a scientific, rather than a religious cause. Mr.
Carnegie, for instance, says in his book, "The Gospel of
Wealth," that we should "accept and welcome" the
condition which "inevitably gives wealth to the few . . . as
being not only beneficial, but essential to the future progress of
the race," since the keen competition that such concentration
involves insures "the survival of the fittest."
Now, of course, if "God in His infinite wisdom" gave
the major part of the wealth of the country to certain men , it
would be sacrilege to question their possessions. Or if the
operation of natural law "inevitably gives wealth to the few,"
then that few would be justified in using any means whatever in
defense of it.
But who really accepts either of these contentions? Certainly not
Americans, as a people. Their great charter of liberties set out
with the declaration that "all men are created equal."
Their national existence started on the principle that one man is
entitled to as good a chance in the world as another, and no better.
As a people, they simply asked for a fair field and no favor. And
because it was possible for each to demonstrate that nature was open
to him, -- that he could take up and use for himself without let or
hindrance of any some of its soil, its forests, its rocks, its
watercourses, and so by his own exertions win direct from the
natural elements his own and his family's subsistence, -- the early
American was a bold, hardy, rugged, generous, independent man.
All he asked was to be let alone. He sought no one's favor.
Indeed, few had favors to grant, except such as pass between equals.
Wealth, even learning, was not the measure of stature; it was
manhood, truth, self-respect, self-reliance. The core of his
religion was not that "God in His infinite wisdom" had
given this world to some men. It was that God had made the world
large enough for all men to enjoy in peace and plenty. And the
science that most interested him was not the one relating to the
survival of the fittest, but the one relative to a square show,
which he believed our free political conditions and a vast, new,
virgin, unappropriated continent guaranteed.
Writing to his father, De Tocqueville said of the Americans: "I
am at present full of two ideas: first, that this people is one of
the happiest in the world; second, that its immense prosperity is
due not so much to peculiar virtues or to its form of government, as
to the peculiar conditions in which it is placed. . . . Amongst the
novel objects that attracted my attention during my stay in the
United States, nothing struck me more forcibly than the general
equality of conditions among the people."
But when nature later became appropriated, -- when all the
accessible soil of the United States of America had become the
private property of some to the exclusion of all others, -- a
privileged class appeared. Those who owned a share of nature
possessed a material advantage over those who owned nothing of it.
Now the word "privilege" means not a natural, but an
artificial condition. Even its derivation shows that. It comes from
the Latin privilegium, meaning an ordinance in favor of a
person; and privilegium comes from privus, private,
and lex or legem, a law. Hence, in its essence, the
word "privilege" means a private law, a special ordinance
or a usage equivalent to a grant or an immunity in favor of a
This word privilege, or private advantage, had application to
land monopoly which destroyed Rome. In Rome's early, hardy,
virtuous, independent, republican days the principle of equal rights
to the soil was recognized in a way suited to a primitive
agricultural community. Each citizen had his little plot for living
on and working, and besides, each had access to the "public
domain" for fuel and grazing. The committee from the Senate
waiting upon Cincinnatus to call him to the dictatorship found him
plowing his two-acre farm. After a time new laws were passed
governing the public lands. But of these laws only comparatively few
could avail themselves. Enacted nominally in the interest of all,
they resulted really in the benefit of a few. They were in their
practical workings private laws. They were general in form and
language. On their face all had equal opportunity under them. But
they really created and protected land monopoly. They were as
distinctly to the advantage of particular persons as if private acts
had been passed by the Roman Senate and sanctioned by the Tribunes.
In the same way our institution of private land ownership,
derived from the later Roman usage and clothed with legal status and
social sanction, as it is, has nominally been for the good of all,
but really it has worked for the advantage of some, since it has
stimulated land speculation and fostered land monopoly. While
ostensibly for general benefit, it has been in effect a privilege or
private law -- an institution for the gain of chance individuals and
to the general loss.
It was against this state of things as much as against anything
else that Thomas Jefferson's famous utterance, "equal rights
for all, special privileges to none," was directed. For
earlier, in a letter written from France to Rev. James Madison
(dated Fontainebleau, October 28, 1785), he wrote: --
- Whenever there are in any country
uncultivated lands and unemployed poor, it is clear that the laws
of property have been so far extended as to violate natural right.
The earth is given as a common stock for men to labor and live on.
If, for the encouragement of industry, we allow it to be
appropriated, we must take care that other employment be provided
for those excluded from the appropriation. If we do not, the
fundamental right to labor the earth returns to the unemployed.
(Jefferson's Writings, Ford Edition, Vol. VII, p. 36.)
This was not a stray, undigested remark of Jefferson's. He was not
given to haphazard utterances. He here stated a bedrock truth, which
four years later he extended in a letter to his most intimate
friend, James Madison, son of the foregoing Madison (Paris,
September 6, 1789). "I set out on this ground," said he, "which
I suppose to be self-evident, that the earth belongs in usufruct to
the living; that the dead have neither powers nor rights over it. .
. . This principle that the earth belongs to the living and not to
the dead is of very extensive application and consequences in every
country . . . and it renders the question of reimbursement a
question of generosity and not of right.'' (Ibid., Vol. V, pp.
Jefferson saw no need of announcing the principle of equal rights
to land more prominently, -- in the Declaration of Independence, for
instance, -- for he never dreamed of the astounding, wholesale
appropriation which has occurred. He thought that for "ages to
come" there would be enough and plenty for all who wanted good,
accessible land. But the then generally adopted principle of private
property in land, taken with the later special enactments to get
owners for the public domain, has resulted precisely as if
particular laws had been passed for the advantage of such
individuals as chanced to be first and to the disadvantage of all
When we examine the matter in the light of simple reason we may
see that of all privileges land ownership is the greatest, -- that,
indeed, it is the chief cause of the unequal distribution of wealth.
For consider: In the beginning God made nature and man. He did not
endow man with the power to produce something from nothing, but
required him to apply his powers -- that is, his labor -- to nature
so as to draw forth the things necessary to satisfy human desire.
The part of nature to which man was to apply his labor was land.
Now a man has an inherent right to himself, and, consequently, to
the fruits of his labor. By the same reasoning, he has no right to
another or to the fruits of that other's labor. If this be so, it
follows that land cannot in justice be made private property, for to
be private property it must be owned by some to the exclusion of
others, which would reduce to more or less dependence those others
who must use it. Legally, however, in many parts of the world men
have been, and in some parts of the world yet are, enslaved and are
called "property." Similarly, in most of the civilized
world land is owned by a part of the inhabitants and is called "property."
Such "property" has the legal as well as what the
moralists call the "social sanction." But this reckless
use of the word destroys its real and legitimate use. Property
refers to something that may be owned without infringing the rights
of another. It cannot mean a human being, nor the thing tn which a
human being must apply his labor to satisfy his wants and desires.
It can mean only that which his efforts may produce from nature. To
that he can give title as producer. So that only such things as are
derived from labor can be property. This is its sole source and
Ownership in a man would give the right to his exertions. Not a
right to the slave's body, but a right to his labor was the
contention of some of the American pro-slavery advocates. "`The
traffic of human souls,"' contended one, "which figures so
largely in the speeches of the divines and demagogues, and which so
fiercely stirs up the most unhallowed passions of their hearers, is
merely the transfer of a right to labor. . . . When we say that
slaves are property, we merely mean that their masters have a right
to their service or labor." ("An Essay on Liberty and
Slavery," by Albert Taylor Bledsoe, LL.D., Professor of
Mathematics in the University of Virginia, published by J.B.
Lippincott & Co., Philadelphia, 1856. See pp. 91 and 326.)
Similarly, ownership of land gives a power to exact part of the
fruits which labor upon it shall bring forth. This ownership is not
a right of property springing from labor. It is a power to
appropriate the fruit of labor. It is not property, but a power to
take, to confiscate, property. American black slaves and Russian
white serfs were in effect still slaves even after emancipation,
owing to the retention by the masters of the land which the former
had to use. The serfs while still in bondage admitted that they
belonged to their masters, but asserted that the land they worked
belonged to themselves. When emancipated, they contended that the
land should have gone with them. But in fact emancipation meant only
the exchange of one kind of servitude for another. The serfs
themselves were freed, but the land from which they had to draw
their subsistence was appropriated. In this way servitude was
continued without involving the responsibilities which serfdom had
imposed upon the masters, among them that of taking care of the
Where practically all available land of a particular kind is
subjected to private ownership, a monopoly of land is created. The
power of this monopoly in the hands of any one -- of an imbecile, if
you please -- might make him rich out of the tribute that would have
to be paid by such as were driven by necessity to use his land.
Even if land were, as private property, originally divided
equally among all the inhabitants of a country, some would soon have
more than their original share, some less. The law of privilege
works toward concentration. Private ownership in land in the end
inevitably makes a few landlords and the mass landless.
We can see this concentrating movement all over our country: in
the East, West, North and South; in the cities and their suburbs; in
towns and villages; in the farming, mineral, timber and grazing
regions. Everywhere there is concentrating ownership. (To be sure
the great western land grants, those of railroads, for instance, are
being cut up and sold off as farms, but that only signifies that
they are entering a new and higher classification -- from non-used
to used lands. Becoming farming lands, the concentration principle
at once reasserts itself. Later, it commences all over again, when
the farms pass into a higher use as urban and suburban lots. This
involves a new subdivision, followed by a new concentrating
movement. With the advance of such land to a higher class, the
number of users to owners is more disproportionate as compared with
that which existed in the class below.)
Or to put this in another form: As population increases,
competition among the many for the use of land increases, which
forces up the value of land. This begets speculation on a future
rise, and the value of land is determined, not by present uses, but
by what it is expected future competition will compel users to pay
for it. Expectancy forestalls the future. Rent -- the payment for
the use of land -- advances with expectancy. It advances even faster
than the increasing power to produce wealth. It tends to absorb all
the advantage arising from multiplying inventions and improvements
in the arts; it tends to appropriate the benefits of social growth
and social improvement; it tends to pile up riches in the hands of
its recipients at the expense of the mass of users, among whom
competition increases as their numbers grow. Under speculation,
rent, or ground value, as it is sometimes called, tends to rise,
until the point is reached beyond which users cannot give more and
at the same time retain enough of their produce to sustain them and
encourage them to continue producing. The late Professor J. E.
Thorold Rogers puts the case most aptly: --
- Every permanent improvement of the soil,
every railway and road, every betterment of the genera] condition
of society, every facility given for production, every stimulus
supplied to consumption, raises rent. The land owner sleeps, but
thrives. He alone, among all the recipients in the distribution of
products, owes everything to the labor of others, contributes
nothing of his own. He inherits part of the fruits of present
industry, and has appropriated the lion's share of accumulated
We have only to look about us to realize that land values, taken
as a whole, have swelled to enormous proportions in the United
States. We have no adequate statistics on the subject, but whoever
will look will observe the rise in villages, towns and cities; in
agricultural regions, taking them at large; and in mineral and
timber regions, taken similarly. A small lot at the corner of
Broadway and Wall Street, New York City, which in 1827 sold for
$18,000, in 1905 sold for $100,000. While the ratio of increase
there may have been more or less than in other places, this case
illustrates the general tendency. Speculation in land sucks and
sucks; and it grows as it sucks. The greater and more lasting the
prosperity of a community, the greater the stimulus to speculation.
The more such stimulation, the higher goes the price of land, which
means the more and more that must be paid for its use.
And since the ownership of land is rapidly concentrating, the
speculative advance in the price of land means augmenting payment to
a lessening number of persons by the masses of the people, who are
not land owners, but who have to be land users, for no man can do
without the use of land in some form.
Is it not obvious from this that the forced price of land arising
from monopoly and speculation is an appropriation, a robbery?
Speculation is going on generally. Wherever in the United States men
are settled there is more or less effort to get possession of land,
not so much for what labor can at the time produce from it, as for
what its possessors may get from its "rise" -- from the
anticipation of what labor will after a while, when competition is
keener, be forced to pay to use it.
The matter sums up to this: The power of production is fast
increasing. The shares going to labor and capital, the active and
passive factors in production, might reasonably be expected to
increase accordingly. But they do not. They remain the same, or
lessen. What seem like leeches absorb practically all the increase.
And of these leeches, land speculation is the greatest. Wages and
interest, the returns to labor and capital, remain stationary if,
indeed, they do not fall, because of the increasing rent that must
be paid for the use of land. Rising speculative rent and other
forms of privilege make a colossal robbery from the productive
activity of the country, since they appropriate the advances in
For an indication of the power of monopoly of all kinds of land,
take an instance of one kind. The Chicago Tribune (January 1, 1903),
referring to the fact. Ihat the Steel Trust was buying up competing
steel companies, "not so much to get their plants as to get the
mines they owned," proceeded in explanation: --
- The mere purchase of the steel mills of
independent concerns will not give the steel corporation that
monopo]y of a great industry which the men at the head of it would
like to acquire. There will always be capital available for the
construction of iron furnaces and steel mills, except in the
contingency that a sufficient supply of ore cannot be obtained. If
the steel corporation shall become the owner of the cream of the
ore lands, it will have a natural monopoly and will occupy an
impregnable position. The supply of iron ore is not so limited as
is that of anthracite, but some ore beds are rich and are so near
the surface that they can be cheaply worked. Other deposits are of
inferior quality and are not so easily worked. The independent
company which had to depend on the inferior mines would find
effective competition impossible.
The appropriating power of the private ownership of land can
perhaps be more appreciated in that form embodied in grants to
individuals of public highways -- permits for long or short terms to
transmit, without effective competition, through such highways
intelligence, light, heat, power, water, products or persons. The
rental value of naked "rights of way" possessed by public
franchise corporations through the streets of New York City is
estimated at this time to be not less than $40,000,000 annually.
And out of these various forms of land ownership comes a
superimposed speculation, which, to those who can control it, is
prolific. This is speculation in mining, railroad and "industrial"
stocks. These stocks are issued by companies based upon land
monopoly of some kind. Those controlling the companies can and do "get
in on the ground floor" prices before the first sale to the
public. They also can and do manipulate the stocks to greater or
less degree, "unloading" at inflated prices to the public,
and buying back again when the public has discovered the deception,
and prices have fallen. The scion of one of our distinguished
families, who was disinherited with a paltry million, but who,
threatening long and costly litigation, was instead given seven
millions, has, within a half-dozen years, while living like a prince
and actually entertaining princes at home and abroad, increased his
fortune, it is believed, to $25,000,000. In one year he is thought
to have cleared $10,000,000. In the language of Wall Street, he "hit
the market right." In more precise language, he got in with the
speculators. But for land and other monopoly elements in these stock
market companies, there would have been no such stock speculation,
and this young man would not now be known chiefly as a successful
money getter, but would probably be earning honor, and incidentally
a reasonable income for himself, as an inventor, for which he has,
despite the present handicap of his millions, shown unmistakable
aptitude, some of his locomotive contrivances being used with good
results on large railroad systems of the country.
Private ownership of land has been treated at much length because
in its direct forms, and in its indirect or public franchise forms,
it constitutes the worst of all privileges, since it commits the
heaviest robberies from the wealth producers. But there are
other important kinds of privilege. One of these is taxation,
when it is made to fall, as is generally the case, only slightly
upon monopoly advantages, which it might be used to kill or to
absorb into the public treasury. Instead of doing this, it is caused
mainly to fall upon industry and the produce of industry. Such
taxation burdens production and kills off competition among
producers. The protective tariff is a shining example of such a law.
It is sought by domestic producers to discourage foreign
competitors. The higher such tax, the less the competition and the
greater the centering of production in a few hands.
Still another is embodied in opportunities and immunities under
the laws and in the courts enjoyed by certain individuals and
combinations of individuals called "corporations," which,
although not very important in themselves, become enormously
powerful when used to exploit other forms of privilege, such as
natural opportunities and franchise grants, as will later be seen.
There are still other subsidiary forms of privilege, but speaking
in a general way, the privileges causing the unequal distribution of
wealth may be named in four divisions, to wit: (1) natural
opportunities privately held under special or general laws; (2)
various kinds of taxation on production and its fruits; (3)
franchise grants; (4) powers of incorporation and various sorts of
immunities in the courts.
These different kinds of privilege empower their holders to
appropriate, without compensation or adequate compensation, a large
or small share of the produce of labor. When the production of
wealth is great, the powers of appropriation enable their possessors
to heap together masses of wealth.
The existence of these various forms of privilege explains, and
nothing else will explain, the sudden rise of private fortunes in
the United States. So long as privileges were few and carried only
weak appropriating powers, the mass of the people of the country had
practically equal access to natural opportunities, and were deprived
of but a small share of the produce of their labor. The country was
then, as observed by Mr. Bryce, practically a land of equality in
respect to the production and distribution of wealth.
But as the monopoly of land and other privileges appeared and
strengthened, great private riches, accompanied by degrading and
imbruting poverty, began to appear.
This is not to set intelligence, energy, honesty, and thrift at
naught. With a fair field and no favor, they should count for
everything. But is there such a thing amongst us as a fair field and
no favor? Surely not with great privileges in existence. Thousands
upon thousands who have the qualities of intelligence, energy,
honesty, and thrift, under present social adjustments find intense
difficulty in getting subsistence. Privilege forestalls them, and
sells to the highest bidders opportunities to get subsistence or
Nor is it to be supposed that because social conditions were more
equitable a century ago than they are now, the men then were
inherently better than they are now. I do not revert to the past as
to an age when men were perfect. Human nature does not change. What
do change are its manifestations, and these vary with environments.
John Hancock vainly tried to make a corner in whale oil. Had he
lived in this period, he might have been a Rogers or a Rockefeller.
Washington was as keen after landed possessions as many of our
Western ranching or lumber kings. Advertisements in Franklin's
paper, The Gazette, give strong suspicion that that
philosopher in the early half of his life engaged in the purchase
and sale of slaves. While Jefferson publicly and privately condemned
slavery, and feared the wrath of a "just God" would be
visited upon his country for permitting the existence of the
institution, he acted as Southern men of his means and station did
-- he kept slaves. Alexander Hamilton was the master spirit in a
franchise grab which, if attempted today in any of our cities, would
make a furious municipal scandal and uproar. I revert to the past
not as to an age when human nature was any better than it is now,
but to a time when there were more equal opportunities.
In those early days of the Republic subsistence was the thing that
all could get, and get it without cringing to any. Now multitudes
are haunted by the wolf of the mind -- the fear of want. And since "all
that a man hath will he give for his life," everything may be
sacrificed in the strife for a living. Even though we enjoy a
republican form of government, and have none of the monarchical
civil distinctions, yet the superabundance heaped up for the
possessors of privileges will outrival that of princes. Republican
citizens will become, in effect, princes in riches. They will, in
fact, become very Princes of Privilege.