The Bad Economics Behind Monopoly

by Chris Calton
Mises.org

In 1868, a young Henry George wrote an editorial on the nearly completed Pacific Railroad that was soon to connect his state of California with the rest of the country. This editorial, “What the Railroad Will Bring Us,” acknowledged the progress that railroads would signify in the industrializing economy of the Gilded Age, but George saw this as a boon only for the privileged few. Like many thinkers of his time, he was concerned with the “labor question,” which he referred to as one of “the riddles of a Sphinx, which not to answer is death.” Why was there poverty in an age of economic expansion?

Henry George believed that he figured out the riddle after a horseback ride in Oakland Hills, California. While stopping to give his horse a drink of water, George engaged in polite conversation with a farmer, casually asking the value of the land around him.

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