Science and technology have made fantastic strides in every area of human endeavor. The sophisticated, interdependent processes of modern production make it possible for people to satisfy desires, indulge curiosities and explore possibilities undreamed-of even in the recent past. The sky would almost seem to be the limit -- until we recall the weight of poverty, pollution and war that still drags on us. Poverty in today's world deepens. At least one billion of the world's people today do not have access to a safe supply of drinking water. Diseases long-since conquered and forgotten in the wealthy North continue to kill children across the impoverished South. As breakthroughs in drug therapy allow millions in the US and Europe to live with the AIDS virus, the high cost of these new drugs, and the lack of adequate basic medical care, consign a whole generation of Africans to painful deaths.
Even in the most developed and powerful economy in the world today, chronic problems remain. Unemployment persists even in the best economic times. Cities seem unable to keep their downtown areas from rotting out with urban blight while their suburbs sprawl uncontrollably across the countryside. Education is trumpeted as the key to everyone's fair share of the "American Dream", yet schools can never seem to come up with sufficient funding. And, even as scientists around the world warn of the possible devastating effects of global warming, caused mainly by excessive burning of fossil fuels, the control of the ability to keep burning those fuels has nations at each others' throats.
All of these problems -- and many more -- are economic problems, or, at least, pose huge challenges for economic policy. Most economics textbooks, after they have walked us through all the principles, defined the terms and explored the relationships, tend to close with a philosophical note about how well we have been doing, socially, at muddling through. They tend to affirm, in other words, our first impression of economics as "the dismal science". The problem of scarcity, they remind us, will be with us always.
We should, perhaps, take such statements with a grain of salt. It is true, certainly, that human desires are unlimited; we will always think of other things to want; there will always be trade-offs. However, some of the things that are presented to us as inevitable trade-offs might not -- when we soberly examine them -- actually be.
One example is that "trade-off" between inflation and unemployment. Conventional wisdom holds that if we put too many people to work, demand for goods will increase past the present full capacity for output -- causing an self-reinforcing increase in the prices of land, labor and capital, and goods and services, back and forth in an inflationary spiral.
However, we saw -- in Henry George's interpretation of booms and busts -- a way out of that vicious cycle. According to Georgists, the straw that break's the economy's back is not the greedy demands of labor and capital, but the ever-increasing speculative value of land. If land values were not left in the hands of private landowners but taken by the community for public revenue, then land speculation would cease, and much greater increases in demand could be met without overheating prices.
Another such example might be seen in the apparent trade-off between economic growth and the ill effects of air pollution. Is it necessary, after all, that we look at the air as nothing more than a place for our noxious fumes to drift away? It would make more sense to think of the atmosphere as limited, common resource -- as land, in other words. As such, it belongs to everyone in the world, and everyone in the world has an equal right to clean, breathable air that does not wreck the global climate. There is no reason why the costs of air pollution could not be assessed, and charged to the polluters as fees for using the atmosphere as a waste dump. Such charges would even create a new market for high-tech, inexpensive ways to lower pollution.
The fact that human desires are unlimited is no excuse for our overwhelming failure, as a human community, to live up to our potential for economic justice and progress. In all of the frightening problem areas listed above -- and many more besides -- we can do a great deal better than we have done. One powerful tool for realizing that potential is the understanding -- the undeniable truth, in fact -- that human beings own themselves, and what they make with their own labor. Therefore, they must have the right to use their own labor freely. That is the great insight of the free market, laissez-faire approach to economic policy. But, individuals (and groups) must not get rich from the ownership and control of what they did not produce. That sort of expropriation, by the "robber barons" of capitalism, provided the impetus for revolutions, and policies of redistribution, governmental direction and socialism. The other side of human freedom is recognizing the entire community's equal right to the gifts and opportunities of nature. People are not free if they are compelled to pay other people for the land they need in order to live. When those fundamental relationships are widely understood, economics may finally outgrow its nickname of "the dismal science".
Background Questions