Henry George’s central insight is remarkable in the way that other breakthroughs in thought are remarkable, and maybe more so.
His insight? Poverty persists and deepens as civilizations advance in their ability to produce wealth because land then increases in value; where land is allowed to be privately owned and so becomes monopolized, people in general must then pay more for the privilege of using it.
When Galileo realized that the Earth moves around the Sun, when Kepler discovered the laws of planetary motion, they came to understand certain workings of the natural world as no one had done before. George’s central insight is fundamental and sweeping in the way that theirs were. It makes sense of something vast that had seemed chaotic and confounding.
The clarity and flow of ideas in George’s works such as Progress and Poverty and The Science of Political Economy can make us miss just how remarkable his discoveries were. The conventional wisdom of his day (as of ours) is that poverty persists and deepens due to the increase of population, whether because wealth is viewed as being fixed in extent at any given time, in any given society, or because nature is theorized to render labor less and less productive as population grows. In order to reach his central insight, George had to see past these erroneous theories.
Perhaps more remarkable still is the train of thought that led George to his breakthrough. The way in which he formulated what might be called the Poverty Problem is key. In 1869, he had traveled on newspaper business from San Francisco, where he then lived, to New York City. While in New York, then the most developed city in the country and one of the most developed in the world, George was struck by the contrast between the trappings of immense wealth he saw there and, literally side by side with these, scenes of the most abject poverty. This clarified for him the nature of a vital question: why is it that poverty persists and deepens as civilizations advance and thereby get better and better able to produce wealth?
As in science, mathematics or engineering, so in political economy or any other field of thought: ask the right question and you are well on your way to the solution. But it was, as George sensed, a rare gift to have had clarity of mind on this subject.
How rare? Consider: Like countless millions, I have spent some time in New York City and witnessed the contrast George saw there. Even a casual visitor to that city can still see signs of immense wealth — the museums, the skyscrapers — alongside those of grinding poverty — people sleeping on the sidewalks. Beyond being appalled by it, which of us would be likely to respond to that contrast by trying to understand how it could come to be?
When George returned to California, a casual remark about high land values by a stranger in the foothills outside San Francisco caused the penny to drop. George’s central insight was there before him in an instant. It was the formulation of the question that gave rise to the breakthrough.
It’s a bonus that George also had the ability to expand his understanding of political economy based on his central insight, and to write eloquently enough to convey that thinking to the rest of us. I return to his writings again and again, fascinated by the insight they describe, heartened even in these dark days to contemplate the widespread human prosperity that his insights would make possible.