What IS the Problem?

We have witnessed fabulous increases in our capacity to produce wealth. Millions can enjoy an ease and richness of life that was unimaginable a century ago. Yet, poverty has worsened. A third of the world’s people lack access to a safe, dependable water supply. Even in our richest cities, people are hungry and homeless. Why, in spite of tremendous increases in productive power, does poverty persist and deepen?

We’ve seen a curious phenomenon lately: when good news of low unemployment is released, stock markets get jittery. Why? Isn’t it a good thing for more people to be working? But! Ever since the Great Depression of the 1930s, it has been a truism that some level of unemployment must be endured — so we can keep inflation in check. But: recessions come and go, no matter what. The next downturn is always looming.

When people are free to use their skills, make what they’re good at making, and sell their products to willing buyers, society prospers. So why do governments interfere with free markets so much? Most agree that society works better when the community provides things like roads, police protection and basic education. But: is it the government’s job to rescue insolvent banks? To bail out farmers whose crops fail? To pay wages to people who aren’t working? How can society balance its real need for public services with the tendency for government to become bloated and corrupt?

carzzzGlobally, the environmental picture looks bleak. Desertification is accelerating; forests are being cut down at an unbelievable rate. We wring our hands over global climate change, but we don’t change our behavior fast enough to slow it down. And many in developing countries think they have no choice but to accept the polluting industries that rich nations outlaw at home.

waterMost “Econ 101” courses begin with the “problem of scarcity” — the idea that human desires are unlimited, but we have limited means for satisfying them. There’s no arguing with that basic insight: you can’t make something out of nothing. But! does that mean that we have no choice but to accept the dismal tradeoffs described above?

Henry George didn’t think so. In the conclusion of his classic book Progress and Poverty, he wrote:

Political Economy has been called the dismal science, and as currently taught, is hopeless and despairing. But this… is because she has been degraded and shackled; her truths dislocated; her harmonies ignored… her protest against wrong turned into an endorsement of injustice. Freed, as I have tried to free her — in her own proper symmetry, Political Economy is radiant with hope.

The first step toward understanding this “proper symmetry” is to make sure we clearly define the terms we will use. Great confusion can arise when people use the same word to mean different things. This danger is particularly strong in economics — because its basic terms are words commonly used in everyday speech!


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Membership in the Henry George Institute

...has only two requirements: pay your annual dues of $20 (us), and indicate your agreement with our Statement of Purpose. As a member, you get a subscription to the Georgist Journal, and a vote in our annual election for members of the Board of Directors.

STATEMENT OF PURPOSE

In accordance with the philosophy of Henry George, the Henry George Institute holds that all persons have a right to the use of the earth and that all have a right to the fruits of their labor. To implement these rights it is proposed that the rent of land be taken by the community as public revenue, and that all taxes on labor and the fruits of labor be abolished. The Institute believes with George that “liberty means justice and justice is the natural law,” and that the social and economic ills besetting the world today are the result of non-conformance to natural law. The Institute pledges itself to bring this philosophy to the attention of the public by all suitable means.

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Getting Started with Understanding Economics

Our first course, Understanding Economics, is FREE and self-paced. There are no due-dates or deadlines — yet our staff is always available to answer your questions via email.

It's a good idea to check out the first few readings and video supplements to get ready for your first lesson. Make sure to bookmark our "Site Map" page, which has links to the suggested readings for each lesson (and much more).

When you're ready, click below to enroll. You'll pick a username and a password, and be asked for some more basic information (which we will NOT share with anyone else). We'll need your snail-mail address to send you your certificate when you complete the course!

Enroll today for a rewarding, enriching experience!

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Membership in the Henry George Institute

...has only two requirements: pay your annual dues of $20 (us), and indicate your agreement with our Statement of Purpose. As a member, you get a subscription to the Georgist Journal, and a vote in our annual election for members of the Board of Directors.

STATEMENT OF PURPOSE

In accordance with the philosophy of Henry George, the Henry George Institute holds that all persons have a right to the use of the earth and that all have a right to the fruits of their labor. To implement these rights it is proposed that the rent of land be taken by the community as public revenue, and that all taxes on labor and the fruits of labor be abolished. The Institute believes with George that “liberty means justice and justice is the natural law,” and that the social and economic ills besetting the world today are the result of non-conformance to natural law. The Institute pledges itself to bring this philosophy to the attention of the public by all suitable means.

Close this popup

Getting Started with Understanding Economics

Our first course, Understanding Economics, is FREE and self-paced. There are no due-dates or deadlines — yet our staff is always available to answer your questions via email.

It's a good idea to check out the first few readings and video supplements to get ready for your first lesson. Make sure to bookmark our "Site Map" page, which has links to the suggested readings for each lesson (and much more).

When you're ready, click below to enroll. You'll pick a username and a password, and be asked for some more basic information (which we will NOT share with anyone else). We'll need your snail-mail address to send you your certificate when you complete the course!

Enroll today for a rewarding, enriching experience!

Close this popup