Henry George’s Progress and Poverty (1879) remains one of the most compelling works in economic philosophy. His core proposition — that land value is created by the surrounding community, not the landowner, and therefore should be taxed back by that community — has attracted admirers across the political spectrum for nearly 150 years.
But there is a quiet logical fault running through the foundation of his argument, and it is this: George’s moral claim only runs in one direction.
When a city builds a transit line and your land value rises by $200,000, George says the community is morally entitled to capture that gain — you didn’t earn it, society did. The argument is elegant and, on its face, persuasive.
But what happens when the community fails? When schools deteriorate, crime rises, institutions collapse, and your land loses $200,000 in value through no fault of your own? George’s framework offers you nothing. The community claims the upside as its moral birthright, then silently disappears when the downside arrives.
This is not a minor oversight. It is a fundamental asymmetry that undermines the entire moral architecture of his proposal. Any genuine claim of community ownership over land value must carry liability in both directions. A silent partner who collects profits but absorbs no losses isn’t making a moral claim — they’re simply extracting.
The more defensible justification for property taxation was available all along: you pay taxes because you continuously consume a stream of public services — roads, courts, fire protection, enforceable title — that make your property functional and valuable. That is a flow, not a gain. Tax the consumption of the flow, and the asymmetry vanishes. When services decline, so does your bill.
George saw clearly that community investment shapes land value. He simply drew the wrong conclusion from that insight.
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