Recently two political thoughts occurred to me. One, I would like to take part in feminist protests picketing Saudi embassies. Two, that the problems of political economy are actually straight forward. This latter thought, a realization actually, was facilitated by my discovery of Henry George, author of Poverty and Progress.
In this work from 1879, George explains an enigma. Why do the improvements in production and industry not eliminate poverty? Why is the poverty deepest in the wealthiest cities? We have our theories but they set us off on the wrong setting, one which George corrects. It’s one of the rare books from that era written in a very lucid way, accessible to a modern analytic mind, without recourse to god or superstition of any kind.
George does indeed outline the situation and nature of the problem. Starting from first principles which are well demonstrated and I may write about later, he shows that our situation follows given the principles we employ in our attempts to manage economy. What he provides is akin to what Copernicus provided over Ptolemy.
At the center of this heliocentric economics is the explanation that the three components of production, now and through the history of humankind, are land, labor, and capital. For example, capital is not “money” alone, not even for Adam Smith, with whom many of George’s definitions are compatible, but is also any wealth used to make more wealth. For example, a carpet cleaning machine is capital to a professional carpet cleaner. If he borrows it, he expect to pay a fee, which would be “interest” to the owner. Land charges rent, labor charges wages, and capital charges interest.
The major political revelation is that among other things, while this repaired economics is social concern, aiming and able to eliminate poverty, yet, there is no “socialism”. Labor at capital are not truly at odds with one another, they are, together, at odds with the private monopoly on land, which is demonstrated in brief in the following way.
When advances in productive capacity come along -— say a machine makes it possible to tend a farm with 20 workers instead of 100, one might see why 80 of these workers will not be needed and lose their job and wages. But why do the wages of the 20 not rise over time as their share, where does it go. Instead even if there is a short boon, it will soon enough level off to bare subsistence again. But this money is not going to the capitalist. He cannot charge 5 times the interest for the machinery he loans the endeavor, any more than labor can deman 5-fold wages.
Where did the money go? It went into the value of the land. The land value raises, and the rent to use the land raises, and labor and capital cut what is left over. It is the private monopolization of land that provides the basic means by which the increased value of progress seems to dissappear. It’s not too many people, to the contrary, concentrations of people itself increases the productive capacity of the land, leading to the rise in land value… for land value always absorbs increases in productive capacity in any locality.
Any gain to capital or labor will at best be temporary while a real-estate owner waits for productive use of land to raise the value of the land, and extract that increased value in rent or sale, which is essentially a type of rent.
The reason land value goes up in New York is the increased capacity and efficiency of proximity to a wide variety of services, private and public. It is not because of the owner of the property, but of those contributing their capital and labor
The land owner owns all the fruits of the land.
About Me: I am pyrrho. I was once www.dailykos.com/…, but I got banned. Long story, no apologies required. I used to podcast with Armando, threw possibly the first DailyKos hangout (at least with Kos) in Berkeley, attended the first Yearly Kos, helped start the dkosopedia (is that still a thing?). They didn’t want to give me that account back but Meteor Blades and McJoan said I was free to post under this account a couple years ago. So while I won’t hold them to it I will take them up on it. The motivation is On Poverty and Progress.