Georgism: Part Two

I’m reading Henry George’s Progress and Poverty.  His first task is to address what he sees as major flaws in Malthusian theory–that is, the notion that population tends to expand exponentially with food supply failing to keep pace. He (and I) find this theory to be not only wrong-headed, but also dangerous.

George’s main point is that laborers do not limit or reduce wealth. They increase it. Take, for example, a strawberry farmer who needs laborers to harvest an expanding crop. A typical laborer might be able to pick ten baskets of strawberries per hour–strawberries that could be sold at a roadside stand for $3.00 per basket. Thus, when the farmer pays the laborer $10 for that hour of labor, the farmer pockets $20 profit from the sale of those ten baskets. Even after subtracting the other costs required to make that sale–having to buy the baskets, pay a sales clerk, etc.–it is clear that the laborer has added value to our economy.

I happen to be a great admirer of California’s current governor, Gerry Brown; but I can recall his oft-repeated claim during the presidential election campaign of 1976 that we were entering an “Age of Limits.” In essence, he was parroting the concerns of Malthus, citing concerns that the world’s population growth would outstrip its ability to provide energy, food, clothing, and shelter. Although he never (to my knowledge) proposed a ban on procreation, other nations–notably China–adopted policies aimed at limiting family size.

Now, back to Henry George. His carefully-reasoned point on this subject is that the true cause of food and other supply shortages has nothing to do with population. (In fact, he demonstrates that an increasing population tends to produce surplus food at a greater rate than the population increase, as my strawberry example illustrates.) Instead, these shortages result from the oppression of laborers by tyrannical rulers. Thus, while the masses in India were starving under British occupation, India continued to export luxury goods to British consumers. It was the tyranny of the occupation that caused the poverty, not the number of mouths to feed.

In my view, modern Japan and Russia stand as better examples of the falsity of Malthusian theory. Both are suffering from a decline in population, and there are growing concerns that there will soon be too few young laborers to pay for the pensions required to cover retiring workers. Japan is looking for ways to increase immigration. Russia is looking for ways to conquer neighbors. Neither nation is getting richer as a result of having capped their population.

Meanwhile both China (with its one-child policy, which is about to go away) and India (without any population limitation) are expanding their economies. And right here in the United States our burgeoning economy has not only supported increased immigration, both legal and illegal, but, I would argue, it has thrived as a result of that population growth. These laborers have not only picked our strawberries. They have patronized our local stores.