Henry George and the Single Tax 

The Single Tax Primer

After writing many articles and pamphlets on the connection between society's progress and the poverty it simultaneously created, George decided to put all of his theories into one book. He called the book Progress and Poverty, and published it in 1879. In it, George defined eight basic economic terms, in the classical manner. They are:

Land, labor, and capital are the means of producing wealth. Land yields rent, while labor produces wages, and capital receives interest. The wealth of any society is measured as the total of rent, wages, and interest. Taxation is government collection of a percentage of the accumulated wealth. How much the government collects, and how it is spent, constitutes the economic system under which that government operates.

For example, if a government collects 25% of the wealth in order to operate, it might be a democracy, with a free capitalist economic system. (See Table 1.) A government that collects 50% of the wealth in order to operate, might be a socialist democracy, with a free capitalist economic system. (See Table 2.) Or a government that collects 75% of the wealth might be a communist (Marxist) system with a dictatorship of the working class and a centrally planned economy. (See Table 3.)

Table 1	Table 2

In Progress and Poverty, George stated that the consequences of dire economic policies were moral issues rather than purely economic issues. So he posed moral questions: "Why should a man benefit merely from the act of ownership, when he may render no services to the community in exchange?" and "What gives the wealthy the right to become rich - not for service rendered to the community, but from the good fortune to have advantageously situated land?" He believed that economic problems stemmed from the unavailability of land for those who needed access to it. The injustices of rent robbed the working man of his wages and wild speculation in land led to poverty. He therefore suggested a single tax on land, to absorb all rents, with no tax whatsoever on wages or interest. (See Table 4.) A single tax would eventually lead to the ownership of land as common property, rather than as individual property. He believed that the single tax would raise wages, increase earnings of capital, abolish poverty, give employment, and relieve the other economic ills, through a massive redistribution of wealth. He also proposed that businesses which were in their nature monopolies, such as transportation (the railroads) and communications (the telegraph), be government owned and regulated, for the benefit of all.

Table 3	Table 4

Progress and Poverty became a best seller. It was "the book of this half century", wrote the San Francisco Chronicle. It was highly successful and remains the best selling book on economics of all time. After its publication, George promoted his ideas by traveling and speaking around the world. He first went to England to lecture, and found that his ideas were well received. A trip to Ireland was the inspiration for another book, The Land Question, which addressed the Irish poverty problem with the same single tax solution.