George Curtis - Poverty is not natural

George Curtis 2020

All rights reserved. No part of this book may be reproduced in any form without the written permission of the publisher, Shepheard-Walwyn (Publishers) Ltd

First published in 2020 by

Shepheard-Walwyn (Publishers) Ltd

107 Parkway House, Sheen Lane,

London SW14 8LS

www.shepheard-walwyn.co.uk

www.ethicaleconomics.org.uk

British Library Cataloguing in Publication Data

A catalogue record of this book is available from the British Library

ISBN: 978-0-85683-525-4

Typeset by Alacrity, Chesterfield, Sandford, Somerset

Printed and bound in the United Kingdom

by 4edge Ltd

I WOULD LIKE to express my gratitude to my publisher, Anthony Werner, for his careful editing of the manuscript, and to Kai Dattani for attuning it to the concerns of a younger generation.

I N HIS T RAFALGAR S QUARE SPEECH in 2005 Nelson Mandela offered a challenge, which remains relevant to each one of us today, and a call to action:

Overcoming poverty is not a task of charity, it is an act of justice. Like slavery and apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings. Sometimes it falls on a generation to be great. YOU can be that great generation.

The United Nations lists ending poverty in all its forms everywhere as its first Sustainable Development Goal. This is a noble and desirable aspiration, but it is questionable whether the IMFs neo-classical trickle down theory or a redistributive tax system and an expensive, bureaucratic welfare state are adequate for the task. The evidence shows that inequality is on the increase both in the developed and developing world, regardless of economic policy, suggesting the existence of a common cause which neither is addressing.

This book picks up the gauntlet that Mandela threw down and offers a completely different approach, seeking first to establish the fundamental cause of poverty worldwide. Drawing on the work of the 19th century American economist, Henry George, whose book, Progress and Poverty, probed the question of why it was that, as the Industrial Revolution increased wealth enormously, poverty was not lessened. On the contrary, the richer the society, the greater the inequality. The position remains the same today as it was in the 19th century, again suggesting a common cause, some flaw in the way in which wealth is distributed.

Adam Smith was in no doubt about the cause:

As soon as land becomes private property, the landlord demands a share of almost all the produce which the labourer can either raise, or collect from it. His rent makes the first deduction from the produce of the labour which is employed upon land.

This raises a moral issue: is it right that ownership of land should entitle the owner to take the lions share of the wealth produced when they may have contributed little or nothing to its production? Indeed, if they have contributed, then their entitlement to a share should be based on their labour, just as it would be for their co-workers, not on their ownership of the land.

In fact, is land ownership necessary for the efficient functioning of an economy? Clearly, nobody is going to sow if they cannot reap the benefits of their work, so some form of land tenure is necessary to ensure that producers get the product of their labour, but the present economic arrangements have created a system whereby a class of people, landowners, are entitled to a share of the wealth produced without having to contribute to its production, thereby depriving the producers of their full reward. This is a man-made system and is not sacrosanct. It can be replaced by a fairer system.

Henry George expressed a steadfast belief in the efficacy of natural law, properly understood and respected, to erase social problems problems which, indeed, result from societys denial of natural law. Solving the curse of poverty requires distinguishing what is rightly private property from what is public property, thereby aligning the economy and society with natural law.

This book explores the moral and practical arguments for a major economic reform that would end involuntary poverty by changing the way government is funded. As Nelson Mandela pointed out above: poverty is not natural and can be overcome and eradicated by human beings. He also stressed that overcoming poverty is not a task of charity, it is an act of justice.

Adam Smith, The Wealth of Nations, Bk 1, ch 8.

I believe that there is in true Christianity a power to regenerate the world

Henry George, The Land Question

H ENRY G EORGE is best known for his 1879 classic, Progress and Poverty. This sought to explain why poverty tends to increase and deepen, just as human society becomes more efficient at producing wealth. In his Introduction, he described how it was natural to expect, and it was expected, that labor-saving inventions would lighten the toil and improve the condition of the laborer, and how the enormous increase in the power of producing wealth would make real poverty a thing of the past. Yet, in

Observing that poverty is as much a feature where autocratic government prevails as where political power is in the hands of the people, George inferred that there must be a common cause for this failure. He observed that we find the deepest poverty, the sharpest struggle for existence, and the most enforced idleness, where population is densest, wealth greatest, and the machinery of production and exchange most highly developed.

He acknowledged that wealth had been greatly increased by technological progress and the average standard of living had been raised with labour-saving devices making all manner of everyday tasks less toilsome, but in this the poorest did not share.

I do not mean that the condition of the lowest class has nowhere nor in anything been improved; but that there is nowhere any improvement which can be credited to increased productive power. I mean that the tendency of what we call material progress is in nowise to improve the condition of the lowest class in the essentials of healthy, happy human life.

In illustration of this, George offered an image that has been widely quoted:

The new forces, elevating in their nature though they be, do not act upon the social fabric underneath, as was for a long time hoped and believed, but strike it at a point intermediate between top and bottom. It is as though an immense wedge were being forced, not underneath society, but through society. Those who are above the point of separation are elevated, but those who are below are crushed down.

Unfortunately, Henry Georges explanation of the cause of this phenomenon, and the solution he proposed, have received less attention. By and large, history has looked upon Henry Georges Progress and Poverty more as a stirring call to justice than as a source of rational understanding of social problems, or as a practical means of addressing them. But he warned:

This association of poverty with progress is the great enigma of our times. It is the central fact from which spring industrial, social and political difficulties that perplex the world, and which statesmanship and philanthropy and education grapple in vain. From it comes the clouds that overhang the future of the most progressive and self-reliant nations. It is the riddle which the Sphinx of Fate puts to our civilization and which not to answer is to be destroyed.