Georgism, Part Four: How Immigration Makes Us Wealthier

As indicated in my previous posts, I’ve been reading Henry George’s classic: Progress and Poverty. In this post, I plan to focus on his observation that our per capita income tends to increase, rather than decrease, as population increases.

Sounds backwards, right? Doesn’t the birth of each child add one more mouth to feed? Doesn’t immigration–especially illegal immigration–make us all poorer by taking an unfair slice of OUR pie?

That was not how Henry George saw things. Keep in mind, Progress and Poverty was first published in 1879, about twenty years after the height of the Know-Nothing Party, which had been founded on fears that Irish Catholic immigrants were bringing dangerous “Romanist” influences to the United States, and right around the time our Congress began debating the Chinese Exclusion Act of 1882. In other words, Henry George was well aware of the fact that certain demagogues were opposed to the inclusion of any group coming from a part of the world with which they were unfamiliar.

His work, however, referred not so much to immigration per se, but rather to a society’s tendency to gain wealth–per capita–as the overall population increased, regardless of how that increase happened.

Here’s a simple explanation, and I believe Henry George would forgive me for transforming his illustrations into some I think most modern readers would understand.

Let’s suppose you take your new $50,000 truck and load it with your most valuable household items, including your large-screen TV, your state-of-the-art computer, your lawn maintenance equipment, refrigerator, and other kitchen appliances. Having inherited 100 acres of land in rural Alaska, you proceed to drive the entire distance to your property, which includes an old mansion.

Some would look at all your assets and conclude that you were extremely rich. But if I tell you that your inherited property is 100 miles from the nearest services, we would conclude, I think, that you might actually be extremely poor, despite the fact (or perhaps because of the fact) that you brought all your worldly possessions. Without a gas station in the vicinity, your $50,000 truck might now be worthless. Likewise, your large-screen TV and computer will be of little use without electricity, cable, or the ability to connect to the internet. Your mansion will slowly decay, unless you are skilled in roofing, chimney sweeping, and other required services. According to George, the “wealth” inherent in your entire inventory of assets will depend on your proximity to civilization–i. e., other people.

When I looked up the wealthiest counties in the United States, I discovered that all of them are either suburban or urban, not rural. They tend to be clustered along the densely populated region that runs from Washington, D.C. to Boston, Mass., the corridor near Chicago along Lake Michigan, and the major metropolitan areas of California and Texas. The richest counties in Georgia are those closest to Atlanta, not those where you would expect to find the greatest abundance of natural resources.

George explains that as population increases, specialized goods tend to develop. For example, in early America, a village became richer when someone new–perhaps an immigrant–arrived to open a grist mill, a blacksmith shop, or a tannery. Then someone started a newspaper and the first school teacher came to town. At each step, the new arrival added wealth not just to themselves, but to every current resident in the village.

What about the arrival of those in poverty? I would argue that the strawberry workers who came to California during the 1960s made lots of farm owners rich. They also allowed me to find strawberries in my local grocery store. (I don’t recall so many strawberries when I was growing up.)

How strange that a phenomenon–immigration–which so clearly increases our personal wealth, could be characterized by certain powerful people–from Know-Nothings to modern-day reactionaries–as a creator of economic distress!