Henry George

“ We talk about the supply of labour and the demand for labour, but evidently these are only relative terms. The supply of labour is everywhere the same - two hands always come into the world with one mouth; and the demand for labour must always exist as long as men want things which labour alone can procure.
We talk about the "want of work," but evidently it is not work that is short while want continues; the supply of labour cannot be too great, nor the demand for labour too small, when people suffer for the lack of things that labour produces. ”

“ The primary and fundamental occupations, which create a demand for all others, are evidently those that extract wealth from nature; and hence, if from one exchange point to another and from one occupation to another we trace this check to production, which shows itself in decreased purchasing power, we must ultimately find it in some obstacle that checks labour in expending itself on land. And that obstacle, it is clear, is the speculative advance in rent, or the value of land, which produces the same effects as (in fact, it is) a lock-out of labour and capital by landowners. ”

“ When in all trades there is what we call scarcity of employment, when everywhere labour wastes while desire is unsatisfied, must not the obstacle that prevents labour from producing the wealth it needs lie at the foundation of the industrial structure? That foundation is land. Milliners, optical instrument makers, gilders and polishers are not the pioneers of new settlements. Miners did not go to California or Australia because shoemakers, tailors, machinists and printers were there. But those trades followed the miners. It is not the storekeeper who is the cause of the farmer ”

“ But in rapidly progressing communities, where the steady increase of rent gives confidence to calculations of further increase, this is not the case. The confident expectation of increased prices produces, to a greater or less extent, the effects of a combination among landholders and tends to the withholding of land from use in expectation of higher prices, thus, forcing the margin of cultivation farther than required by the necessities of production. ”

“ What the would-be buyers really lack is not money, but commodities which they can turn into money - what is really becoming scarcer is produce of some sort. The diminution of the effective demand of consumers is therefore but a result of the diminution of production. ”

“ Production therefore begins to stop. There is not necessarily, or even probably, an absolute diminution in production; but there is what in a progressive community would be equivalent to an absolute diminution of production in a stationary community - a failure in production to increase proportionately, owing to the failure of new increments of labour and capital to find employment at the accustomed rates. ”

“ Somewhere, it may be at the other end of the world, a check in production has produced a check in the demand for consumption. The lessening of demand without want being satisfied shows that production is somewhere checked.
People want as much as ever the things the manufacturer makes just as the operatives want the things the storekeeper has to sell. ”

“ The social phenomena which all over the civilized world appall the philanthropist and perplex the statesman, which hang with clouds the future of the most advanced races and suggest doubts of the reality and ultimate goal of what we have fondly called progress, are now explained. ”

“ The other school say that the speculation has produced the depression by leading to over-consumption, and point to full warehouses, rusting steamers, closed mills, and idle workmen as evidences of a cessation of effective demand, which, they say, evidently results from the fact that people, made extravagant by a fictitious prosperity, have lived beyond their means and are now obliged to retrench - that is, to consume less wealth. ”

“ This stoppage of production at some points must necessarily show itself at other points of the industrial network in a cessation of demand which would again check production there and thus the paralysis would communicate itself through all the interlacings of industry and commerce producing everywhere a partial disjointing of production and exchange and resulting in the phenomena that see to show over-production or over-consumption, according to the standpoint from which they are viewed. ”

“ Certainly not of speculation in things which are the products of labour - in agricultural or mineral productions or manufactured goods, for the effect of speculation in such things is simply to equalize supply and demand, and to steady the interplay of production and consumption by an action analogous to that of a fly-wheel in a machine. ”

“ Effects of land speculation Given, then, a progressive community in which population is increasing and one improvement succeeds another, land must constantly increase in value. This steady increase naturally leads to speculation in which future increase is anticipated and land values are carried beyond the point at which, under the existing conditions of production, the accustomed returns would be left to labour and capital. ”

“ They point, moreover, to the enormous consumption of wealth by wars, by the building of unremunerative railways, by loans to bankrupt governments, etc., as extravagances which, though not felt at the time, just as the spendthrift does not at the moment feel the impairment of his fortune, must now be made up by a season of reduced consumption. ”

“ The reason why, in spite of the increase of productive power, wages constantly tend to a minimum that will give but a bare living, is that, with increase in productive power, rent tends to even greater increase, thus producing a constant tendency to the forcing down of wages. ”

“ That dealers find their sales declining and manufacturers find orders falling off, while the things which they have to sell, or stand ready to make, are things for which there is yet a widespread desire, simply shows that the supply of other things, which in the course of trade would be given for them, has declined. ”

“ But when we reach the limits of the growing city - the actual margin of building which corresponds to the margin of cultivation in agriculture - we shall not find the land purchasable at its value for agricultural purposes, as it would be were rent determined simply by present requirements ”

“ Political Economy can only deal, and has only need to deal, with general tendencies. The derivative forces are so multiform, the actions and reactions are so various, that the exact character of the phenomena cannot be predicted. ”

“ The real trouble must be that supply is somehow prevented from satisfying demand, that somewhere there is an obstacle which prevents labour from producing the things that labourers want.
Denial of access to land When we speak of labour creating wealth, we speak metaphorically. ”

“ We know that an insult will arouse a feeling of resentment in the human breast, but to say how far and in what way it will manifest itself, would require a synthesis which would build up the entire man and all his surroundings, past and present. ”

“ If the land of superior quality as to location were always fully used before land of inferior quality was resorted to, no vacant lots would be left as the city extended nor would we find miserable shanties in the midst of costly buildings. ”

“ We have hitherto assumed, as is generally assumed in elucidations of the theory of rent, that cultivation extends to less productive points only as opportunities at the more productive points are fully utilized. ”

“ We know that if a tree is cut through it will fall, but precisely in what direction will be determined by the inclination of the trunk, the spread of the branches, the impact of the blows, the quarter and force of the wind ”

“ These lots, some of them extremely valuable, are withheld from use or from the full use to which they might be put, because their owners, not being able or not wishing to develop them, prefer, in expectation of the advance of land values, to hold them for a higher rate than could now be obtained from those willing to develop them. ”

“ Production has somewhere been checked and this reduction in the supply of some things has shown itself in cessation of demand for others, the check propagating itself through the whole framework of industry and exchange.
The real obstacle The industrial pyramid manifestly rests on the land. ”