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Economic Insights

Henry George
Americans are again confronted, both
domestically and internationally, with the
clash of protectionist and free trade sentiment. A deeply divided U.S. House just
barely passed the Central American Free
Trade Agreement. Politicians who a few years
back supported the North American Free
Trade Agreement now adamantly oppose
CAFTA. Americans are torn between enjoying
the benefits of globalization, with its
increased consumer choices and lower
prices, and worrying about the costs to the
nation that some claim come with global free
There is nothing new about this clash of
ideas, as this latest Economic Insights points
out; they have been vigorously debated
before, most notably during the late 19th
century. In the center of that debate was one
of this nation’s most famous economists—
Henry George. Today, few Americans recognize his name, yet his Progress and Poverty is
the best-selling economics book ever written
and outsold all English-language books save
the Bible in the late 1890s. He touched off a
worldwide movement for major tax reform,
and societies and institutions still bear his
name and span the globe. Who was George?
Why was he so influential? And what did he
have to say about protectionism that we
might profit from today? We offer this short
biographical piece to answer these questions.
— Richard W. Fisher
Federal Reserve Bank of Dallas

Today’s policy discussions are often
argued as if the issue under consideration is unique to our time. Because we
often forget—or never knew—the relevant history, we can fail to see that
almost every policy argument has historical precedent. This is certainly true
of the hot-button issues of globalization
and protectionism. Although many believe them unique to our day, antiglobalization—with its concomitant protectionist sentiments—salts human history.
Mercantilist doctrine, which is protectionist, dates to mid-17th century
Europe. As international trade grew, so,
too, did the demand for government
intervention to protect domestic manufactures by discouraging imports and
subsidizing exports. Even nations committed to obtaining the benefits of free
trade have not been immune to mercantile doctrine. For over a century, the
American government raised the majority of its tax revenue through the imposition of import tariffs. But protectionist
economic policy has always had critics,
one of the most thoroughgoing of whom
was Henry George.
George was born in 1839 in Philadelphia.1 His was a varied and fascinating life, shaped by economic hardship.
At 16, he shipped out on the Hindoo as
a deckhand, voyaging from New York
to Australia and India. After more than
a year at sea, he returned to his family
and entered the printing business. When
that didn’t work out, he decided to
emigrate to California and to get there,
signed aboard another ship as storekeeper. George docked in San Francisco
at age 19, another fortune seeker arriv-

Science, Industry & Business Library, The New York Library,
Astor, Lenox and Tilden Foundations

Antiprotectionist Giant of American Economics

Henry George
ing in California a decade after the
state’s famous gold discovery.
San Francisco offering little in the
way of employment, George accompanied a cousin to British Columbia to help
him open a store for gold miners at the
northern tip of the Fraser River. The
work was hard, and after an argument
with his cousin, George left the store’s
employ. He was on the verge of taking
up mining, but the discouraging stories
of those returning from the fields sent
him back to San Francisco instead in
late 1858. Once there, he landed a typesetting job that enabled him to live more
comfortably than he had in Canada.
The new job didn’t last, though, and
George soon became a rice weigher in
a local warehouse, studying and reading by night, a man with no friends and
no money to go out, socialize and find

The Single Tax on Land
After studying the classical political economists’ writings—including work by the French
physiocrats, Adam Smith, David Ricardo, Thomas Robert Malthus and John Stuart Mill—George
concluded that economic rent was an unproductive and unfair residual value that served only to
enrich landowners while contributing nothing to the productive process itself. The amount of rent
was determined solely by the collective demand for land. George’s basic idea, which he did not
claim was original, was to tax away all land rent and abolish all other taxes. He did not advocate
confiscation of the land, arguing that it would be both unfair to current owners and unnecessary
for his system to work. The whole community, whose demand for land caused rent, would reap
the benefit of those rents. Labor and capital—so often burdened by the patchwork of taxes on
labor, savings and entrepreneurs— would be unleashed because none of these would be taxed,
nor would improvements to raw land, such as factories and other buildings.
Many taxes of the sort George advocated exist today, including any property tax that distinguishes between raw land value and site improvements. A tax on land, a fixed-supply input, does
not have the same supply-side disincentive effect as a tax on labor or capital. No one denies this
basic contention of classical economics. Other objections, however, are valid, especially the observation that as total government expenditures rise, no tax on land alone can finance that spending.
For his part, George believed that land tax revenues were the upper bound on appropriate, moral
taxation. Because of his views on taxes, his ideas have influenced many competing political movements—from Fabian socialism to development economic theory and even modern libertarianism.
George’s influence can also be seen in modern environmentalism, which views nature as a common gift to all, as well as in urban planning theory. (Gaffney 1987)
Progress and Poverty was a big best-seller; it outsold all books in the English language save
the Bible as the world entered the 20th century. In some ways, the focus on the single-tax proposal has prevented a general appreciation of the totality of George’s work. His was a clear and
powerful voice for free international trade, and he convinced even labor union members and many
socialists of his day of free trade’s superiority. How much has changed!
Because George believed that the only just tax was one applied to land rent, he opposed tariffs on goods traded across international borders. But there is little doubt when reading his work
that it wasn’t mere logical consistency that motivated him to endorse open trade; he endorsed it
because free trade was an economic principle in which he strongly believed. His position arose
from a careful theoretical examination of the entire issue, and he shared his views in speeches
around the world and in his very popular Protection or Free Trade, published in 1886. ■

any. When the warehouse closed,
George set off on foot for the gold
fields. But broke and hungry, he returned to San Francisco without making
it there. He landed work setting type, but
found himself unemployed shortly thereafter when the job market dried up. It
was then that he finally had a piece of
good luck—meeting his future wife,
Annie Corsina Fox. Their courtship and
marriage coincided with the nation’s
plunge into civil war and the young
groom’s unpromising employment
prospects. But unlike his other fortunes, which always gyrated wildly, the
marriage was a wonderfully successful
rock on which he and his wife built the
remainder of their lives.
The war years were a time of bitter
privation for the couple. They moved

to Sacramento so Henry could set type,
but that opportunity soon collapsed
with the firm’s demise, and they returned to San Francisco to find work
scarce there as well. When their second
child was born and they were penniless, George was reduced to begging.
Happily, he was able to get some money
just by asking a stranger for it. Otherwise, he wrote in his journal, he would
probably have killed the man to secure
funds to feed his children. Hitting bottom, he outlined the steps he planned
to take to improve himself and, he
hoped, his family’s lot. The man who
would write Progress and Poverty —the
best-selling economics book in history—was no stranger to either.
George finally landed steady printing work and began writing pieces for

area newspapers, his first foray into the
public arena of ideas and policy debate.
His formal education was limited, but
that didn’t stop him from becoming selfeducated in political economy. Having
been a protectionist before (he wrote
in his journal) engaging in “logical
thought on the matter,” he quickly converted to the free trade position. In a
debate in Sacramento (probably in 1868),
he stated his position clearly through a
telling rejoinder to the evening’s protectionist speaker. If the speaker were
correct, George challenged, the
remotest places on earth ought to be
the best places to live since they would
be the most prosperous. It was a simple yet thought-provoking reply that
demonstrated the silliness of protectionist dogma. George further announced
that at the beginning of the evening he
had been a protectionist, but after listening to the speaker’s arguments, he
was leaving the meeting a free trader
because “protection was defensible only
upon the theory that the separation of
mankind into nations implied their
industrial and commercial antagonism.”2
Over the next 10 years, George
edited two small newspapers and ran
unsuccessfully for political office. He was
appointed state inspector of gas meters
in 1876, and dutifully worked to improve the safety of California’s natural
gas infrastructure, often over the objections of gas-related business interests.
His ideas concerning the relationship between land rents and poverty
began to crystallize, and he often wrote
pamphlets and editorials arguing his
views. His ideas attracted a growing
number of followers. On Sept. 18, 1877,
in Sausalito—just north of San Francisco and his new home— George
began writing a potential magazine
article that would eventually become
Progress and Poverty.
At that time, the nation was suffering a severe industrial depression, and
anarchy and disorder reigned. The situation cost many lives, and vandalism by
mobs of the newly unemployed caused
millions in property damage. George’s
friends convinced him to expand the

article into a book. He labored for 17
months, with the final result first published for general distribution in New
York in 1880. Sales were slow initially
but soon grew, as did George’s reputation.
He embarked for Europe to help
spread his vision for ending poverty,
which was set out in the book. He proposed a single tax on land to replace
the taxes labor and capital owners
paid, shifting the entire tax burden
onto inelastically supplied land rent.
Two outcomes of such policy would be
a reduction in unearned rental incomes
as land became a public good and an
increase in labor’s disposable income.
(See the box on the previous page.)
After a year in Europe debating
some well-known opponents—among
them, economists such as the great
Alfred Marshall—George returned to
America a famous man. It was time, he
knew, to spread his vision at home.
Low-cost editions of his writings sold
very well, and politicians and political
parties courted him. George had ignited
a large social movement that demanded land reform of the sort he proposed
in Progress and Poverty, the so-called
single tax on land.3
In 1886, George ran for mayor of
New York City. Backed by most unions,
he presented a real threat to the Democratically controlled political machine,
which offered him a Congressional seat
if he would forgo the election. “Wanting to raise hell,” George declined the
offer and accepted the United Labor
Party’s draft to run for mayor. In retaliation, his campaign was subjected to
dirty tricks and his reputation smeared.
George did not win, but he did beat
Theodore Roosevelt, the Republican
candidate, by 8,000 of the 120,000 votes
counted for both men. That tally was, of
course, done by the Democrats and is undoubtedly inaccurate because George’s
party had no poll watchers to help
oversee the ballot count. Considering
that his opponents portrayed him as a
man whose followers were “anarchists,
nihilists, communists and socialists” who
would bring the French Revolution’s

What Is Prevented by Protection?
Protection implies prevention. To protect is to preserve or defend.
What is it that protection by tariff prevents? It is trade. To speak more exactly, it is that part
of trade which consists in bringing in from other countries commodities that might be produced
at home.
But trade, from which “protection” essays to preserve and defend us, is not, like flood, earthquake, or tornado, something that comes without human agency. Trade implies human action.
There can be no need of preserving from or defending against trade, unless there are men who
want to trade and try to trade. Who, then, are the men against whose efforts to trade “protection”
preserves and defends us?
If I had been asked this question before I had come to think over the matter for myself, I
should have said that the men against whom “protection” defends us are foreign producers who
wish to sell their goods in our home markets. This is the assumption that runs through all protectionist arguments—the assumption that foreigners are constantly trying to force their products
upon us, and that a protective tariff is a means for defending ourselves against what they want to do.
Yet a moment’s thought will show that no effort of foreigners to sell us their products could
of itself make a tariff necessary. For the desire of one party, however strong it might be, cannot of
itself bring about trade. To every trade there must be two parties who mutually desire to trade, and
whose actions are reciprocal. No one can buy unless he can find some one willing to sell; and no
one can sell unless there is some other one willing to buy. If Americans did not want to buy foreign goods, foreign goods could not be sold here even if there were no tariff. The efficient cause
of the trade which our tariff aims to prevent is the desire of Americans to buy foreign goods, not
the desire of foreign producers to sell them. Thus protection really prevents what the “protected”
themselves want to do. It is not from foreigners that protection preserves and defends us; it is
from ourselves. ■
— Protection or Free Trade, 45 – 46

True Free Trade
The mere abolition of protection—the mere substitution of a revenue tariff for a protective
tariff—is such a lame and timorous application of the free-trade principle that it is a misnomer to
speak of it as free trade. A revenue tariff is only a somewhat milder restriction on trade than a protective tariff.
Free trade, in its true meaning, requires not merely the abolition of protection but the sweeping away of all tariffs—the abolition of all restrictions…on the bringing of things into a country
or the carrying of things out of a country.
But free trade cannot logically stop with the abolition of custom-houses. It applies as well to
domestic as to foreign trade, and in its true sense requires the abolition of all internal taxes that fall
on buying, selling, transporting or exchanging, on the making of any transaction or the carrying
on of any business, save of course where the motive of the tax is public safety, health or morals.
Thus the adoption of true free trade involves the abolition of all indirect taxation of whatever
kind, and the resort to direct taxation for all public revenues.
But this is not all. Trade, as we have seen, is a mode of production, and the freeing of trade
is beneficial because it is a freeing of production. For the same reason, therefore, that we ought
not to tax any one for adding to the wealth of a country by bringing valuable things into it, we
ought not to tax any one for adding to the wealth of a country by producing within that country
valuable things. Thus the principle of free trade requires that we should not merely abolish all indirect taxes, but that we should abolish as well all direct taxes on things that are the produce of
labor; that we should, in short, give full play to the natural stimulus to production— the possession and enjoyment of the things produced—by imposing no tax whatever upon the production,
accumulation or possession of wealth (i.e., things produced by labor), leaving every one free to
make, exchange, give, spend or bequeath. ■
— Protection or Free Trade, 286 –87

many excesses to New York, George’s
showing was surprisingly strong. But
he would never again win as many votes
and was crushed at the polls when he
ran for secretary of state as the United
Labor Party’s candidate in 1887.
George subsequently left politics to
write and speak. He edited The
Standard, a New York-based paper, and
often wrote long pieces supporting his
ideas for publication in its pages. He
traveled widely to rally supporters and
debate opponents. When in other
countries, he always looked for policies
and practices that he thought could
benefit the United States—for example,
Australia’s voting procedures. Even as
he aged, his energy was amazing, for
such travel was not easy then. He wrote
more books, including The Condition
of Labor and The Science of Political
Economy. For a time, it seemed the
entire nation was debating protectionism and free trade after five Democratic
congressmen placed Protection or Free
Trade into the Congressional Record in
George died in 1897 while again
running for mayor of New York, a
political campaign he knew would
probably kill him. He renamed the
Independent Party that had drafted him
the Party of Thomas Jefferson and ran
under that banner. George believed
that Jefferson represented true democracy, while Alexander Hamilton’s Federalists represented the plutocracy.
The public reaction to George’s
death was unlike that generated by the
passing of any other economist. More
than 100,000 people turned out to view
his body and join in the procession to his
burial site. His death was a major international news story, and papers everywhere ran generally supportive or wildly
enthusiastic editorials about his ideas.
Even his political and ideological
opponents expressed admiration for
George’s commitment to his beliefs and
his unflagging, principled approach to
political struggle, which had always been
open and free debate as a process by
which to discover the truth. In this, he
was quintessentially American.

How Is Free Trade Advocated?
Thus it is that free trade, narrowed to a mere fiscal reform, can appeal only to the lower and
weaker motives—to motives that are inadequate to move men in masses. Take the current free trade
literature. Its aim is to show the impolicy of protection, rather than its injustice; its appeal is to the
pocket, not to the sympathies. Yet to begin and maintain great popular movements it is the moral
sense rather than the intellect that must be appealed to, sympathy rather than self-interest. For however it may be with any individual, the sense of justice is with the masses of men keener and truer
than intellectual perception, and unless a question can assume the form of right and wrong it cannot provoke general discussion and excite the many to action. And while material gain or loss
impresses us less vividly the greater the number of those we share it with, the power of sympathy
increases as it spreads from man to man—becomes cumulative and contagious.
But he who follows the principle of free trade to its logical conclusion can strike at the very root
of protection; can answer every question and meet every objection, and appeal to the surest of
instincts and the strongest of motives. He will see in free trade not a mere fiscal reform, but a movement which has for its aim and end nothing less than the abolition of poverty, and of the vice and
crime and degradation that flow from it, by the restoration to the disinherited of their natural rights
and the establishment of society upon the basis of justice. He will catch the inspiration of a cause great
enough to live for and die for, and be moved by an enthusiasm that he can evoke in others. ■
— Protection or Free Trade, 315 – 17

Nobel economist Milton Friedman
once said that of all the ways to tax, “In
my opinion the least bad tax is the
property tax on the unimproved value
of land, the Henry George argument of
many years ago.”4
— Robert L. Formaini
Senior Economist

George, Henry (1891), The Condition of Labor:
An Open Letter to Pope Leo XIII (New
York: John W. Lovell).
––––– (1898), The Science of Political Economy (New York: Doubleday and McClure).
––––– (1935), The Land Question (New York:
Robert Schalkenbach Foundation), orig. pub.





Almost all the biographical details in this
article are from The Life of Henry George, by
Henry George Jr. (Honolulu, Hawaii: University Press of the Pacific), 2004.
The speaker George challenged was
William H. Mills, land agent of the Central
Pacific Railroad.
The single tax remains one of the most
examined, supported and criticized of all
the theoretical ideas ever put forth in
economics. For a small sample of the
(thus far inconclusive) debate, see Critics of
Henry George, edited by Robert V. Andelson
(London: Associated University Press), 1979.
Interview published in Human Events,
Nov. 19, 1979.

Sources and Suggested Reading
Gaffney, Mason (1987), “Henry George,” in
The New Palgrave Dictionary of Economics
(New York: Stockton Press), 514 – 15.

––––– (1939), Progress and Poverty (New
York: Robert Schalkenbach Foundation), orig.
pub. 1879.
––––– (1980), Protection or Free Trade (New
York: Robert Schalkenbach Foundation), orig.
pub. 1886.

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