Frontier
Whether we formulate it as an extension of the margin of production, or as
a carrying of the rent line beyond the margin of production, the influence
of speculation in land in increasing rent is a great fact which cannot be ignored
in any complete theory of the distribution of wealth in progressive countries.
It is the force, evolved by material progress, which tends constantly to increase
rent in a greater ratio than progress increases production, and thus constantly
tends, as material progress goes on and productive power increases, to reduce
wages, not merely relatively, but absolutely.
The cause which limits speculation in commodities, the tendency of increasing
price to draw forth additional supplies, cannot limit the speculative advance
in land values, as land is a fixed quantity, which human agency can neither
increase nor diminish; but there is nevertheless a limit to the price of land,
in the minimum required by labor and capital as the condition of engaging in
production. If it were possible continuously to reduce wages until zero were
reached, it would be possible continuously to increase rent until it swallowed
up the whole produce. But as wages cannot be permanently reduced below the
point at which laborers will consent to work and reproduce, nor interest below
the point at which capital will be devoted to production, there is a limit
which restrains the speculative advance of rent. Hence speculation
cannot have the same scope to advance rent in countries where wages and
interest are already
near the minimum, as in countries where they are considerably above it. ... read
the whole chapter
Mason Gaffney: Land as a Distinctive
Factor of Production
The initial distribution of land
- the origin of property in land - is
military, legal, and political, not economic. The prime business of
nations throughout history has been to gain and defend land. What was
won by force has no higher sanction than lex fortioris, and must be
kept and defended by force.
After land is appropriated by a nation the original distribution is
political. The nature of societies, cultures and economies for
centuries afterwards are moulded by that initial distribution,
exemplified by the differences between Costa Rica (equal
partition) and El Salvador with its fabled "Fourteen Families" (Las
Catorce), or between Canada and Argentina.
Political redistribution also occurs within nations, as with the
English enclosures and Scottish "clearances", when one part of the
population in effect conquered the rest by political machinations, and
took over their land, their source of livelihood. Reappropriation and
new appropriation of tenures is not just an ancient or a sometime thing
but an on-going process. This very day, proprietary claims to water
sources, pollution rights, access to rights of way, radio spectrum,
signal relay sites, landing rights, beach access, oil and gas, space on
telephone and power poles(e.g. for cable TV), taxi licences,
etc. are being created under our noses. In developing countries of
unstable government the current strong man often grants concessions to
imperialistic adventurers who can bolster his hold on power by
supplying both cash up front, and help from various US and
UN agencies from the IMF to the United States Marine Corps.
Ordinary economic thinking today would have it that a nation that
distributes land among private parties by "selling to the highest
bidder" is using an economic method of distribution. Such thinking
guides World Bank and IMF economists as they advise nations emerging
from communism on how to privatise land. The neutrality is specious, at
best. Even selling to the highest bidder is a political decision, as
19th century American history makes clear.
The right to sell was won by force, is not universally honoured, and
must be kept by continuous use of force. In practice, selling for cash
up front reserves most land for a few with front-money advantage,
inside information, good contacts, corrupt aids, etc. The history of
disposal of US public domain leaves no doubt about this and it is still
going on with air rights, water, radio, landing rights, fishing
licenses, etc. Choices being made currently are just as tainted as
those of 19th century history.
Selling land in large blocks under frontier conditions is to sell at a
time before it begins yielding much if any rent. It is bid in
by those
few who have large discretionary funds of patient money. Politicians,
meantime, treat the proceeds as current revenues used to hold down
other taxes today, leaving the nation with inadequate revenues in the
future.
The ability to bid high does not necessarily come from legitimate
savings. The early wealth of Liverpool came from the slave trade. High
bidders for many properties today are middle eastern potentates
who neither produced nor saved the wealth they control. Other high
bidders are criminals, who find the "sanctity of property" a splendid
route for laundering their gains, and a permanent shelter against
further prosecution. Read
the whole article
Henry George: The
Land Question (1881)
The truth is that the Irish land
system is simply the general
system of modern civilization. In no essential feature does it differ
from the system that obtains here – in what we are accustomed to
consider the freest country under the sun. Entails and primogeniture
and family settlements may be in themselves bad things, and may
sometimes interfere with putting the land to its best use, but their
effects upon the relations of landlord and tenant are not worth
talking about. As for rack-rent,
which is simply a rent fixed at
short intervals by competition, that is in the United States even a
more common way of letting land than in Ireland. In our cities the
majority of our people live in houses rented from month to month or
year to year for the highest price the landlord thinks he can get.
The usual term, in the newer States,
at least, for the letting of
agricultural land is from season to season. And that the rent of land
in the United States comes, on the whole, more closely to the
standard of rack, or full competition rent, there can be, I think,
little doubt. That the land of Ireland is, as the apologists
for
landlordism say, largely under-rented (that is, not rented for the
full amount the landlord might get with free competition) is probably
true. Miss C. G. O'Brien, in a recent
article in the Nineteenth
Century, states that the tenant-farmers generally get for such
patches as they sub-let to their laborers twice the rent they pay the
landlords. And we hear incidentally of many "good landlords,"
i.e.,
landlords not in the habit of pushing their tenants for as much as
they might get by rigorously demanding all that any one would
give. ... read the whole article
Dan Sullivan: Are you a Real
Libertarian, or a ROYAL Libertarian?
John Locke is often
misrepresented by royal libertarians, who
quote him very selectively. For example, Locke did say that:
Whatsoever then he
removes out of the state that nature
hath provided, and left it in, he hath mixed his labour with, and
joined to it something that is his own, and thereby makes it his
property.
But Locke condemned anyone who
took more than he needed as a
"spoiler of the commons":
...if the fruits
rotted, or the venison putrified,
before he could spend it, he offended against the common law of nature,
and was liable to be punished; he invaded his neighbour's share, for he
had no right, farther than his use called for any of them, and they
might serve to afford him conveniences of life.
The same measures governed the possession of land too:
whatsoever he tilled and reaped, laid up and made use of, before it
spoiled, that was his peculiar right; whatsoever he enclosed, and could
feed, and make use of, the cattle and product was also his. But if
either the grass of his enclosure rotted on the ground, or the fruit of
his planting perished without gathering, and laying up, this part of
the earth, notwithstanding his enclosure, was still to be looked on as
waste, and might be the possession of any other.
Locke also restricted
appropriation of land by the proviso,
ignored by royal libertarians, that there must be still enough, and
as good left; and more than the yet unprovided could use. So that, in
effect, there was never the less left for others because of his
enclosure for himself: for he that leaves as much as another can make
use of, does as good as take nothing at all.
Now if the situation is that there
is enough free land, and as
good, left after you take and cultivate your land, than your land has
no market value, for who would pay you for land that is not better
than land that can be had for free? So, besides the fact that Locke's
justification of privatizing land is far more limited than royal
libertarians portray it to be, it is irrelevant to the question of
land value tax, as it applies only to land that has no value.
Furthermore,
Locke based his scenario on pre-monetary societies,
where a landholder would find that "it was useless, as well as
dishonest, to carve himself too much, or take more than he needed."
With the introduction of money, Locke noted, all land quickly became
appropriated. Why? Because with money, those who can take more land
than they have personal use for suddenly have reason to do so, as
between them they will have taken all the land, and others will
have to pay rent to them. So, with the introduction of money, the
Lockean rationale for landed property falls apart, even according to
Locke.
And while Locke did not propose a
remedy specifically for to this
problem, he repeatedly stated that all taxes should be on real
estate. ... Read the whole piece
Henry George: The Savannah (excerpt
from Progress & Poverty, Book
IV:
Chapter 2: The Effect of Increase of Population
upon the Distribution of Wealth; also found in Significant
Paragraphs from Progress & Poverty, Chapter 3: Land
Rent Grows as Community
Develops)
Here, let us imagine, is an
unbounded savannah, stretching off in unbroken sameness of grass and
flower, tree and rill, till the traveler tires of the monotony. Along comes
the wagon
of the first immigrant. Where to settle he
cannot tell — every acre seems as good as every other acre. As to wood,
as to water, as to fertility, as to situation, there is absolutely no choice,
and he is perplexed by the embarrassment of richness. Tired out with the search
for one place that is better than
another, he stops — somewhere, anywhere — and starts to make himself
a home. The soil is virgin and rich, game is abundant, the streams flash with
the finest trout. Nature is at her very best. He has what, were he in a populous
district, would make him rich; but he is very poor. To say nothing of the mental
craving, which would lead him to welcome the sorriest stranger, he labors under
all the material disadvantages of solitude. He can get no temporary assistance
for any work that requires a greater union of strength than that afforded by
his own family, or by such help as he can permanently keep. Though he has cattle,
he cannot often have fresh meat, for to get a beefsteak he must kill a bullock.
He must be his
own blacksmith, wagonmaker, carpenter, and cobbler — in short, a "jack
of all trades and master of none." He cannot have his children schooled,
for, to do so, he must himself pay and maintain a teacher. Such things as
he cannot
produce himself, he must buy in quantities and keep on hand, or else go without,
for he cannot be constantly leaving his work and making a long journey to
the verge of civilization; and when forced to do so, the getting of a vial
of medicine
or the replacement of a broken auger may cost him the labor of himself and
horses for days. Under such circumstances, though nature is prolific, the
man is poor.
It is an easy matter for him to get enough to eat; but beyond this, his labor
will suffice to satisfy
only the simplest wants in the rudest way.
Soon there comes another immigrant. Although every quarter section* of the
boundless plain is as good as every other quarter section, he is not beset
by any embarrassment as to where to settle. Though the land is the same, there
is one place that is clearly better for him than any other place, and that
is where there is already a settler and he may have a neighbor. He settles
by the side of the first comer, whose condition is at once greatly improved,
and to whom many things are now possible that were before impossible, for two
men may help each other to do things that one man could never do.
*The public prairie lands of
the United States were surveyed into sections of one mile square, and a quarter
section (160 acres) was the usual government allotment to a settler under
the Homestead Act.
Another immigrant comes, and, guided by the same attraction, settles where
there are already two. Another, and another, until around our first comer there
are
a score of neighbors. Labor has now an effectiveness which, in the solitary
state, it could not approach. If heavy work is to be done, the settlers have
a logrolling,
and together accomplish in a day what singly would require years. When one
kills a bullock, the others take part of it, returning when they kill, and
thus they
have fresh meat all the time. Together they hire a schoolmaster, and the children
of each are taught for a fractional part of what similar teaching would have
cost the first settler. It becomes a comparatively easy matter to send to the
nearest town, for some one is always going. But there is less need for such
journeys. A blacksmith and a wheelwright soon set up shops, and our settler
can have his
tools repaired for a small part of the labor it formerly cost him. A store
is opened and he can get what he wants as he wants it; a postoffice, soon added,
gives him regular communication with the rest of the world. Then come a cobbler,
a carpenter, a harness maker, a doctor; and a little church soon arises. Satisfactions
become possible that in the solitary state were impossible. There are gratifications
for the social and the intellectual nature — for that part of the man that
rises above the animal. The power of sympathy, the sense of companionship, the
emulation of comparison and contrast, open a wider, and fuller, and more varied
life. In rejoicing, there are others to rejoice; in sorrow, the mourners do not
mourn alone. There are husking bees, and apple parings, and quilting parties.
Though the ballroom be unplastered and the orchestra but a fiddle, the notes
of the magician are yet in the strain, and Cupid dances with the dancers. At
the wedding, there are others to admire and enjoy; in the house of death, there
are watchers; by the open grave, stands human sympathy to sustain the mourners.
Occasionally, comes a straggling lecturer to open up glimpses of the world of
science, of literature, or of art; in election times, come stump speakers, and
the citizen rises to a sense of dignity and power, as the cause of empires is
tried before him in the struggle of John Doe and Richard Roe for his support
and vote. And, by and by, comes the circus, talked of months before, and opening
to children whose horizon has
been the prairie, all the realms of the imagination — princes and princesses
of fairy tale, mailclad crusaders and turbaned Moors, Cinderella's fairy coach,
and the giants of nursery lore; lions such as crouched before Daniel, or in
circling Roman amphitheater tore the saints of God; ostriches who recall the
sandy deserts;
camels such as stood around when the wicked brethren raised Joseph from the
well and sold him into bondage; elephants such as crossed the Alps with Hannibal,
or felt the sword of the Maccabees; and glorious music that thrills and builds
in the chambers of the mind as rose the sunny dome
of Kubla Khan.
Go to our settler now, and say to him: "You have so many fruit trees which
you planted; so much fencing, such a well, a barn, a house — in short,
you have by your labor added so much value to this farm. Your land itself is
not quite so good. You have been cropping it, and by and by it will need manure.
I will give you the full value of all your improvements if you will give it
to me, and go again with your family beyond the verge of settlement." He would
laugh at you. His land yields no more wheat or potatoes than before, but it
does yield far more of all the necessaries and comforts of life. His labor
upon it will bring no heavier crops, and, we will suppose, no more valuable
crops, but it will bring far more of all the other things for which men work.
The presence of other settlers — the increase of population — has
added to the productiveness, in these things, of labor bestowed upon it,
and this added productiveness gives it a superiority over land of equal natural
quality where there are as yet no settlers. If no land remains to be taken
up, except such as is as far removed from population as was our settler's
land
when he first went upon it, the value or rent of this land will be measured
by the whole of this added capability. If, however, as we have supposed,
there is a continuous stretch of equal land, over which population is now
spreading,
it will not be necessary for the new settler to go into the wilderness, as
did the first. He will settle just beyond the other settlers, and will get
the advantage of proximity to them. The value or rent of our settler's land
will thus depend on the advantage which it has, from being at the center
of population, over that on the verge. In the one case, the margin of production
will remain as before; in the other, the margin of production will be raised.
Population still continues to increase, and as it increases so do the economies
which its increase permits, and which in effect add to the productiveness of
the land. Our first settler's land, being the center of population, the store,
the blacksmith's forge, the wheelwright's shop, are set up on it, or on its
margin, where soon arises a village, which rapidly grows into a town, the center
of exchanges for the people of the whole district. With no greater agricultural
productiveness than it had at first, this land now begins to develop a productiveness
of a higher kind. To labor expended in raising corn, or wheat, or potatoes,
it will yield no more of those things than at first; but to labor expended
in the subdivided branches of production which require proximity to other producers,
and, especially, to labor expended in that final part of production, which
consists in distribution, it will yield much larger returns. The wheatgrower
may go further on, and find land on which his labor will produce as much wheat,
and nearly as much wealth; but the artisan, the manufacturer, the storekeeper,
the professional man, find that their labor expended here, at the center of
exchanges, will yield them much more than if expended even at a little distance
away from it; and this excess of productiveness for such purposes the landowner
can claim just as he could an excess in its wheat-producing power. And so our
settler is able to sell in building lots a few of his acres for prices which
it would not bring for wheatgrowing if its fertility had been multiplied many
times. With the proceeds, he builds himself a fine house, and furnishes it
handsomely. That is to say, to reduce the transaction to its lowest terms,
the people who wish to use the land build and furnish the house for him, on
condition that he will let them avail themselves of the superior productiveness
which the increase of population has given the land.
Population still keeps on increasing, giving greater and greater utility
to the land, and more and more wealth to its owner. The town has grown into
a
city — a St. Louis, a Chicago or a San Francisco — and still
it grows. Production is here carried on upon a great scale, with the best
machinery
and the most favorable facilities; the division of labor becomes extremely
minute, wonderfully multiplying efficiency; exchanges are of such volume
and rapidity that they are made with the minimum of friction and loss. Here
is
the heart, the brain, of the vast social organism that has grown up from
the germ of the first settlement; here has developed one of the great ganglia
of
the human world. Hither run all roads, hither set all currents, through all
the vast regions round about. Here, if you have anything to sell, is the
market; here, if you have anything to buy, is the largest and the choicest
stock. Here
intellectual activity is gathered into a focus, and here springs that stimulus
which is born of the collision of mind with mind. Here are the great libraries,
the storehouses and granaries of knowledge, the learned professors, the famous
specialists. Here are museums and art galleries, collections of philosophical
apparatus, and all things rare, and valuable, and best of their kind. Here
come great actors, and orators, and singers, from all over the world. Here,
in short, is a center of human life, in all its varied manifestations.
So enormous are the advantages which this land now offers for the application
of labor, that instead of one man — with a span of horses scratching
over acres, you may count in places thousands of workers to the acre, working
tier
on tier, on floors raised one above the other, five, six, seven and eight
stories from the ground, while underneath the surface of the earth engines
are throbbing
with
pulsations that exert the force of thousands of horses.
All these advantages attach to the land; it is on this land and no other
that they can be utilized, for here is the center of population — the
focus of exchanges, the market place and workshop of the highest forms of
industry. The productive powers which density of population has attached
to this land are equivalent to the multiplication of its original fertility
by the hundredfold and the thousandfold. And rent, which measures the difference
between this added productiveness and that of the least productive land in
use, has increased accordingly. Our settler, or whoever has succeeded to
his right to the land, is now a millionaire. Like another Rip
Van Winkle, he may have lain down and slept; still he is rich — not
from anything he has done, but from the increase of population. There are
lots from which for every foot of frontage the owner may draw more than an
average mechanic can earn; there are lots that will sell for more than would
suffice to pave them with gold coin. In the principal streets are towering
buildings, of granite, marble, iron, and plate glass, finished in the most
expensive style, replete with every convenience. Yet they are not worth as
much as the land upon which they rest — the same land, in nothing
changed, which when our first settler came upon it had no value at all.
That this is the way in which the increase of population powerfully acts in
increasing rent, whoever, in a progressive country, will look around him, may
see for himself. The process is going on under his eyes. The increasing difference
in the productiveness of the land in use, which causes an increasing rise in
rent, results not so much from the necessities of increased population compelling
the resort to inferior land, as from the increased productiveness which increased
population gives to the lands already in use. The most valuable lands on
the globe, the lands which yield the highest rent, are not lands of surpassing
natural fertility, but lands to which a surpassing utility has been given by
the increase of population.
The increase of productiveness or utility which increase of population gives
to certain lands, in the way to which I have been calling attention, attaches,
as it were, to the mere quality of extension. The valuable quality of land
that has become a center of population is its superficial capacity — it
makes no difference whether it is fertile, alluvial soil like that of Philadelphia,
rich bottom land like that of New Orleans; a filled-in marsh like that
of St. Petersburg, or a sandy waste like the greater part of San Francisco.
And where value seems to arise from superior natural qualities, such as
deep water and good anchorage, rich deposits of coal and iron, or heavy timber,
observation also shows that these superior qualities are brought out, rendered
tangible, by population. The coal and iron fields of Pennsylvania, that
today [1879] are worth enormous sums, were fifty years ago valueless. What
is the efficient cause of the difference? Simply the difference in population.
The coal and iron beds of Wyoming and Montana, which today are valueless,
will, in fifty years from now, be worth millions on millions, simply because,
in the meantime, population will have greatly increased.
It is a well-provisioned ship, this on which we sail through space. If the
bread and beef above decks seem to grow scarce, we but open a hatch and there
is a new supply, of which before we never dreamed. And very great command
over the services of others comes to those who as the hatches are opened
are permitted to say, "This is mine!" ... read the whole chapter of Significant
Paragraphs
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