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At the end of the 19th century, economists were arguing that poverty was caused by there being too many people for the surrounding land to support. Evidence for this was that one saw almost no poverty in frontier towns, and plenty of poverty in large cities. Limited resources could only be stretched so thin. Henry George, in his book "Progress and Poverty", called BS on this. Due to specialisation of labour, he argued each additional person meant there'd be *more* to go around, not less. 🧵 7 comments
As the town grows, an individual's access to raw resources diminishes. You have to travel further to chop wood. There's less space to grow vegetables. You compete with others to trap game. But due to specialisation, the total amount of *wealth* produced by the town increases geometrically with each additional person. Woodcutters, ranchers, farmers, bakers, cobblers, blacksmiths, clothiers… together they can produce *much* more collectively than the same number of unspecialised individuals. 🧵 George argued that in almost all circumstances, a growing population meant there was *more* wealth available per person, not less. The cause of poverty wasn't a lack of wealth, it was how that wealth was distributed. In particular, anyone who is able to acquire and rent out *land* is going to gain wealth while producing *nothing* in return. Land speculators are even worse; they prevent the creation of wealth by sitting on land could be used for production. 🧵 George suggests the solution to this is a Land Value Tax (LVT). He points out at length it should only be on the land itself, and *never* the improvements on such land. A Land Value Tax penalises speculation. It encourages the land to be used as productively and improved as much as possible. It lowers land prices considerably, meaning lower rents and more affordable housing. And it's not a tax one can avoid. You can't hide land. You can read more—a lot more—at http://gameofrent.com/ . 🧵 Anyway, here's the most comprehensive and accessible primer I've found for Henry George's ideas, written for a modern audience. It's a long read, but it's very, very good, and much more understandable to the 21st century reader than the original book. FIN/🧵 https://www.gameofrent.com/content/progress-and-poverty-review |
Gregory's Server
In a frontier town, yes, everyone can cut their own wood, mend their own shoes, and gather their own food.
But in a new frontier town, everyone *has* to do these things, because there is no woodcutter, no cobbler, no grocer.
George argued that frontier towns didn't have abject poverty because they *also* didn't support grandiose wealth. The conditions of the frontier were leveling.
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