Progress and Poverty:
75 Years After
Glenn E. Hoover
[Reprinted from the Henry George News,
At the time of this address, Dr. Glenn E.
Hoover was Professor of Economics Emeritus at Mills College, and
a Councilman in his home city of Oakland. He was a guest speaker
at the banquet in San Francisco during the Tenth Annual
Conference of the Henry George School of Social Science. He
reviewed Progress and Poverty on its 75th anniversary In
straightforward terms, pointing out that "no problem is
ever really settled until it is settled right." [Edward J.
Dodson -- September, 2001]
While stating unequivocally that he had "no doubts or mental
reservations whatsoever" about the desirability of the program,
he questioned some of the emphasis. Dr. Hoover seems to have
encountered resistance to George's program from other economics
professors, not on economic but on ethical, grounds. This involves the
matter (not touched on here) of compensation for land holdings which
may represent a lifetime of saving. This address and those on the
following pages are all condensed in an attempt to present as complete
a report as possible in one conference issue.
The Henry George School of Social Science has operated in the United
States and Canada for many years. If there are any who believe these
schools are being conducted by fanatics they are in error. By inviting
here tonight one who has frequently disagreed with some of George's
opinions you have given further proof that you are not uncritical
champions of orthodoxy -- not even of Georgean orthodoxy. When so many
of our frightened contemporaries are insisting on ideological
conformity you have shown a tolerance for dissent, and tolerance is
the trait that chiefly distinguishes a free society from an
In devoting yourselves to education rather than to indoctrination you
are conducting yourselves, I am sure, in a way that Henry George would
approve. Although he was, in his fashion, a deeply religious man, his
beliefs were not based on Sacred Writings and he never at any time
made any pretense to infallibility. He asked only that his works be
read and pondered -- not that they be venerated and enshrined. On this
point it has always seemed to me that we would do well to respect his
History of Progress and Poverty
The appearance of this book, its impact on the world during the
lifetime of its author and the rapid decline in its prestige after his
death, when taken together, constitute a really incredible story.
Miracles have long been Out of fashion, but if you will permit me to
use words loosely I will comment briefly on certain miracles
Progress and Poverty.
Let us turn back the years. It is September 18, 1877. A man has just
written in his diary "Commenced Progress and Poverty."
Who is this fellow? An undersized redhead, thirty-eight years old,
with a wife and family, always hovering on the verge of actual want.
An unschooled, indigent printer printer with some experience as
reporter and editor on short-lived little newspapers, which were as
impecunious as George himself. At the time bf entry in his diary he
was barely keeping himself and his family alive by serving as State
Inspector of Gas Meters -- a high sounding title for a position which
carried no salary. He received only fees and there were few meters in
California at that time. As his duties -- and earnings -- decreased he
had more time to study, write and talk to all who would listen. What
man of common sense would have dreamed that such a ne'er-do-well would
write the most famous book on economics that was ever produced on this
side of the Atlantic, and that we here should be celebrating the
seventy-fifth anniversary of its appearance?
The rise and the subsequent fall of Progress and Poverty --
can best be discussed together. History affords many instances of
books which become famous long after the death of their authors.
However it is clear that the interest and the enthusiasm aroused was
in large measure the work of the living George and could not survive
In the subtitle for his book George described its contents as
"An inquiry into the cause of industrial
depressions and of increase of want with increase of wealth."
George made it clear in this subtitle that his book and the thinking
that led to it were products of the serious business depression which
lasted from 1873 to 1879. This was the longest depression our country
experienced from 1855 to 1929. We may conclude, I believe, that the
impact of this depression on George and his contemporaries influenced
the content and the style of Progress and Poverty and
accounted in part for its popularity in that depression conscious age.
There are however some disadvantages in writing a book about
depressions at the end of a long depression period. The one in
question lasted for about five and a half years and it is therefore
not surprising to find that George and his contemporaries had come to
look upon the depression as the inevitable and even normal development
of our economic system. This probably explains why George began his
book by asking the following question:
"Why, in spite of increase in
productive power, do wages tend to a minimum which will give but a
If George had spent his creative years in a period of prosperity
during which he had observed a steady improvement in the condition of
all workers -- including himself -- it is doubtful if he would have
asked that question. In any event the modern worker, in his calmer
moods, sees no tendency for wages to fall to a minimum which will give
him but a bare living. He is therefore a little suspicious of a hook
which purports to explain why wages tend to fall to the minimum
existence level, when at least in the Western World, they obviously do
nothing of the kind.
George next proceeds to attack the notion too little capital out of
which the wages of too many workers must be paid. He argues
convincingly that workers are paid out of the product of their labor.
One could wish that some of his energies had gone into examining the
effect on production caused by a change in the money supply and the
resulting decline in the price level. But monetary theory was not
It is of course no criticism of George that he did not pioneer in the
field of business cycle theory, even though his explanation of
depressions now seems a bit naive. He wrote:
"That land speculation is the
true cause of industrial depression is, in the United States clearly
evident." (Book V, Ch. 1)
The Great Depression and the inflations which have accompanied two
world wars have taught us much about the impact of monetary changes on
our economy. If this evidence had been available to George I doubt if
he would have been so certain -- and as I see it so wrong --about land
speculation as a cause of industrial depressions.
George vs. Malthus
Almost one-ninth of
Progress and Poverty consists of a stimulating but rather
prolix criticism of the Malthusian theory. Some of this criticism was
directed not against the theory itself, but rather at the
reprehensible use that had been made of it. Many who were indifferent
to the sufferings of others sought to justify their indifference by
pretending that the teachings of Malthus showed how impossible it was
to improve the lot of the masses.
It would seem that the differences between George and Malthus on the
population problem were accentuated by the difference in stage of
development of the countries in which they lived. Malthus was reared
in a small island and his Essay on Population was published at
the end of the Eighteenth Century. In the last thirty years of that
century the population of England had increased by almost one-third.
Many Englishmen were -- or believed themselves to be -- the victims of
population pressure and were seeking to migrate overseas.
On the other hand George grew to manhood in California, then one of
the most underpopulated states in an admittedly underpopulated
country. He was acutely aware of the advantage which a frontier
community would derive from an increase in its population. He was
aware too that there were other portions of our globe that were thinly
populated, and that in some of these areas the population had declined
much below that of former times. However, much of his material on this
point was logically irrelevant, for all Malthusians admit that an area
may suffer from underpopulation. But they insist too that a region may
suffer from overpopulation -- a conclusion which George would not
He did however admit that as population increased in any area, the
demand for food would force into use some of the poorer grades of land
and that such use would result in the payment of rent for the
privileges of using the better land, on which labor was more
productive. This indeed was the basis for the Ricardian Law of Rent to
which George subscribed. However, George believed that the decline in
the per capita production of farm crops which resuIted from the use of
the poorer lands was more than offset by the advantages in industrial
production which an increased population made possible. This
possibility must of course be considered in attempting to determine
when a population has reached its optimum number.
George, however, refused to accept the notion that there could be an "optimum"
number of people in any area, for to do so would imply that if the
number increased still further, that area would suffer from the evils
of over-population. His honesty and common sense however led him to
admit that "there may be small islands, such as Pitcairn's
Island, cut off from communication etc." in which poverty might
fairly be attributed to the pressure of increasing population.
This was logically a serious admission for if Pitcairn's Island might
become overcrowded then it would seem that an island twice as large
with a population twice as large might be equally overcrowded. But is
not a continent only a larger island? And from a cosmic point of view
what indeed is our little planet but another Pitcairn's Island -- and
a miniature one at that?
The Core of the Doctrine
As one who believes that George's attack on the Malthusian Theory was
a stimulating but rather fruitless diversion, it is a pleasure to turn
to his central thesis. It was, quite simply, that each of us had an
equal claim to the earth on which we live. Whether we believe that our
little planet is the product of an impersonal Nature or of a personal
God, we can all agree that it is not the work of man. It follows that
the citizens of every country have equal claim to the earth, air and
water within their country's frontiers.
How can these claims be realized? The illiterate, landless peasants
of Asia, Africa and Latin America may believe that their claims can be
met by continuously dividing the land into parcels of equal
desirability. Sometimes they are encouraged in this belief by more
sophisticated Communists. However, after a communist regime is firmly
established the peasants generally find themselves working on a
bureaucratically administered state farm, or a cooperative farm almost
equally subject to the control of a bureaucratic state.
Without approving the fake remedies which may be offered these
landless peasants we should rejoice that they are becoming
increasingly aware of their equal claim to that portion of the earth
which Nature and History have alloted them.
In more industrialized and more literate countries such as our own it
is obvious that land cannot be continuously divided into parcels of
equal desirability. Nor do most of us harbor any illusions about the
efficiency of government managed businesses, whether they be farms or
industrial enterprises. However, we can satisfy the claims of justice
if we take the annual value of land and use it for the common good. In
other words the value of the land can be equally divided by taxing it
into the public treasury and using it for public purposes.
Whether the public revenue this acquired would enable us to support
all levels of government in modern times may be doubted, but in any
case the possible size of such a fund is not relevant to the main
issue. All advocates of land value taxation can agree that we should
first take the socially created value of land for public purposes, and
stretch it as far as it will go before levying taxes which burden
productive labor and productive capital.
We usually think of George's program as falling within the field of
economics, but the more we consider it, the more evident it becomes
that it is essentially ethical in nature. If he had argued only that
his program would simplify our tax structure, add to our productivity
and raise the real income of both workers and productive capitalists,
he would have been arguing as an economist. But the unique
contribution of George was that he raised the "land question"
from the level of economics to the level of ethics, where questions
can be answered in terms of right and wrong. It was thus that he
transformed into a crusade what would otherwise have been a more sober
movement for an economic reform.
Where George's Claims Extravagant?
The impact of
Progress and Poverty on our generation is admittedly much less
than might have been expected in the exuberant years which followed
its publication. One explanation given for its modest success is that
its author's claims were extravagant; that his just and sensible
reform was offered as a panacea - a tactic which attracts the
starry-eyed but repels our more sober citizens.
It is possible that George himself, in his later years, may have
suspected that some of his claims made in Progress and Poverty
smacked of grandiloquence. At the end of Ch. XVIII of his Social
Problems, written some six years later, he said:
"Let me not be misunderstood.
I do not say that in the recognition of the equal and unalienable
right of each human being to the natural elements from which life
must be supported and wants satisfied, lies the solution of all
social problems. I fully recognize the fact that even after we do
that, much will remain to do. We might recognize the equal right to
land, and yet tyranny and spoliation be continued."
Gains and Losses
In the United States we are making less spectacular progress than is
being made abroad, but here too some progress is being made. In most
of our states the value of land is now assessed separately from the
value of the improvements on it and thus the way is cleared for taxing
improvements at lower rates than may be imposed on the site value of
land. As you know this is now being done in Pennsylvania and we may
hope that other states may provide for the reduction of taxes on
improvements, pending the time when they will be exempted altogether.
Nor should we forget that the general property tax, the chief support
of our local governments, already takes for public purposes a
considerable share of the publicly created land values. Our local
governments perform more functions that local governments in most
other countries and it may be a larger share of our land values are
taken by our general property tax than in other countries where local
governments derive all their revenues from taxes levied solely on the
If at times we are somewhat discouraged it is well to recall that no
problem is every really settled until it is settled right. If, as we
believe, there can be no permanent solution of the land problem until
we recognize that we all have equal claims to our common heritage, the
good earth, our ultimate success is inevitable. Some specialists in
eugenics believe that if the scrub human stock continues to breed more
rapidly than the thoroughbreds, our racial intelligence will decline,
and the light that has set us apart from other animals may sputter and
die out. But for so long as that light continues to flicker we can
hope that when all the possible mistakes have been made, the solution
of the land problem set forth in
Progress and Poverty will be adopted.
To make the general property tax less obnoxious we frequently exempt
such property as growing fruit trees, mechanics tools, household goods
and farm machinery. Partial exemptions are sometimes given to family
homesteads. Other states have learned that cash, jewelry, securities
and other forms of movable personal property have the habit of
disappearing on the day fixed for the Great Inquisition. They have
therefore attempted to get this elusive property back on the tax rolls
by taxing it at a lower rate than other forms of property. In 1933 the
State of New York gave the coup de grace to its general property tax
by exempting from taxation all forms of personal property.
The foregoing summary indicates that we are slowly converting the
general property tax into a tax on "real estate," i.e. land
and improvements. When we have reached that goal, we have only to
exempt improvements, and the absurd general property tax will have
been transformed into a "single tax" on land. Whether or not
this would result in taking all of the economic rent of land for
public purposes would depend on the size of the local government
budgets. It is probable that most of the economic rent of land would
be taken if the public were to conclude that it is better for each
community to pay the full cost of its schools, relief, et cetera than
to be subsidized by state governments.
Unfortunately, while we have been eliminating some of the absurdities
of the general property tax, state and local governments have been
relying increasingly on excise taxes, sales taxes, income taxes and
business license taxes of various kinds. Taxes on liquor, tobacco,
horse racing and certain luxuries can perhaps be justified as a means
of discouraging useless and foolish expenditures. Inasmuch as fools
and their money are soon parted, perhaps the sooner the better.
However, a tax on the sale of children's clothes and the tub in which
they are to be washed is no way to reduce the tax burden on the "small
Finally I want to congratulate the Henry George School extensions
represented here. In an age when educators are derided as "egg
heads" you have clung to your faith in education. Hold fast to
that faith, for the world and especially the United States - is
passing through one of its anti-intellectual moods. In the name of
patriotism efforts are made to still the dissenting voice. Let no one
make you afraid.
If ignorant or vicious critics accuse you of being Communists or
Socialists you will be tempted to rebuke them for their ignorance or
their wickedness. Resist that temptation. Instead, suggest that they
go read a book, any standard book On economics, for with their
ignorance they could profit from reading any of them. And don't forget
to offer them Progress and Poverty, the most readable and widely read
book on economics which the New World has yet produced.
Of the desirability of the program set forth in that book I have no
doubts or mental reservations whatsoever. I am therefore grateful for
the opportunity to pay my tribute tonight to Henry George and to the
extensions of the Henry George School in the major cities of this
country and Canada which are carrying forward the magnificent appeal
to reason and to conscience which was embodied in
Progress and Poverty seventy-five years ago.