L. L. Price

“ But not only has farm produce to be raised—it has also to be placed on the market. The term 'production' is sometimes so interpreted as to cover the production of any utility, and to embrace the effort of labour and expenditure of capital undertaken by retail distributors. But, in any event, it comprises the effort and expenditure needed to place commodities on wholesale markets. The expenses of production, then, in the case of farm produce, include its carriage to the market as well as the cultivation of the land from which it is raised. ”

“ But it does seem to be legitimate to argue from these and similar considerations to the improbability of an abrupt distinction as we pass from rent in the 'strict sense' to rent popularly so called, and to infer from the more apparent difficulty of distinguishing between what is earned and what is unearned in the case of these other differential advantages to a likelihood, at least, of difficulty in the case of land. ”

“ The conditions, indeed, of mobility of capital and labour, which are necessary to justify the assumption of a correspondence between the effort and expenditure of different employments and their rewards, require to be carefully interpreted; and it is not necessary that every individual labourer and employer, and every particular portion of capital, should exhibit the capacity to move from the less to the more advantageous occupation. ”

“ But for the purposes of theoretical inquiry we may separate what are sometimes conjoined in fact; and one of the most important of recent advances in economic theory has been due to the distinction established between the functions of the employer and those of the capitalist, although these functions are, sometimes indeed, and to some extent usually, exercised by different persons, but are also, often entirely, and generally in some degree, combined in the same individual. ”

“ The assumption of competition implies that landlords and tenants are independent, intelligent agents, able to carry their services and commodities to the best market. It implies, therefore, that farmers are able and willing to move to any county or trade where they will secure more favourable conditions, that they know, and can compare, the different advantages of different soils and districts and trades. But it is not always the case that tenants are thus independent, intelligent agents; and, even if they are, they may yet be unable to take their wares and services to the best market. ”

“ Rent is sometimes described as the 'leavings' of profits and wages, but in such cases it may rather be what is left when the necessities of a bare subsistence have been met. The cultivator, having no alternative occupation, may conceivably be forced by competition to offer such a rent as will only permit him to live, and he may offer it with a full knowledge of the conditions of his present position and of the future consequences of his act. ”

“ In a broad sense, then, rent is a payment for differential advantages, which may thus proceed from different sources. It is only by taking all sources of advantage into account that it can be determined whether one piece of land or another is a more productive instrument of wealth ”

“ The popular conception of an 'unearned increment' is avowedly based on Ricardo's theory. Rent is considered to be a payment, which is constantly increasing, made to a class which has not earned it. That Ricardo entertained the idea of a continuous growth of rent as a characteristic feature of progressive civilisation cannot be questioned, and he generalised from the conspicuous circumstances of his times. The law of diminishing returns seemed to be rigorously applying to English agriculture, and the margin of cultivation to be extending to poorer and yet poorer soils. ”

“ Ricardo himself defined rent as 'that portion of the produce of the earth which is paid to the landlord for the use of the original and indestructible powers of the soil;' and he drew a distinction between this 'strict sense' of the term and the 'popular sense,' which confounded the 'interest and profit of capital' with it, by applying the name to 'whatever is annually paid by a farmer to his landlord.' The unearned character of a payment for the 'original and indestructible powers of the soil' can hardly be denied ”

“ Just as the more comprehensive form of socialism, which aims at the 'nationalisation' of capital, purports to be based on Ricardo's theory of value, so the proposal for the 'nationalisation of land' is avowedly put forward as a practical deduction from Ricardo's theory of rent. ”

“ Land, in England at least, is a species of property, which is considered to be more subject than manufacturing or mercantile wealth to obligations of a customary and non-competitive character, and to the influence of kindly, personal considerations. And hence it is generally admitted that, taking a broad view of agricultural land, English rents have not reached an extreme competitive limit. But these considerations, however instructive, are not perhaps of such importance in the relations of the theory to practice as others which are more easily overlooked. ”

“ It is assumed that, if wages or profits fell below the points, which, on a comparison of the advantages and drawbacks, pecuniary and other, of farming and other occupations, are considered to be normal in the farming industry, some labourers and farmers would seek some more advantageous employment, and that, if they rose above, some fresh competitors would enter the ranks of agriculture. It is assumed that landlord and tenant are actuated by competitive considerations alone, the one trying to obtain the highest and the other the lowest rent. ”

“ Again, a soil, which is suitable for one crop, may be more or less suited for another, and the differential advantages of different soils, as respects their fertility, may conceivably vary in opposite directions or different degrees in the case of different crops, while their advantages as respects their situation, and the cost of conveying their produce to the market, may be subject to variations of a similar character, if one crop is more bulky or perishable than another, and more likely to be injured by delay or rough handling in transit. ”

“ In the first place, the real incidence of the burden is determined in the long run only. The tenant of agricultural land may indeed enter into a lease like the tenant of urban land; and, like him, he may be unable to modify the terms of his lease so as to throw on the landlord the weight of any fresh burden, which may, contrary to his reasonable expectations, be levied. ”

“ They may intend to consume part of that produce themselves, and they may then be content to cultivate at a cost, which they would not incur, if they regarded only the realisation of a profit in the market. They are so far uninfluenced by the competition with rival producers, which stimulates to improvement and checks misdirected energy; and often also they are not entirely dependent for their income on the sale of their farm produce. ”

“ It is true that such differences may be an important consideration for the practical legislator, and that he may refuse to concern himself very seriously with similarities of theoretical principle, if, after the most comprehensive survey that he has been able to make of the conditions of the immediate problem before him, he has reached the conviction that the solution he favours satisfies the demands of practical exigency. But his action is generally regarded by himself, or by others, to be founded on the application, or misapplication, of a theory ”

“ Even here fashion may shift the abode of the rich and alter the demand for land; and one quarter of a town may grow at the expense of another, or an entire town decay owing to the removal of an industry to another. As a whole, no doubt, urban rent tends to increase in civilised countries, and sometimes by rapid strides ”

“ If the theories of any one economist were to be selected as an illustration of divergence from fact, the choice of many persons would at once fall on Ricardo, and the opinion of Malthus that the 'main part of his structure would not stand' would be considered as being at least as successful as any prediction in hitting the mark. ”

“ Population was rapidly increasing, and the importation of food from abroad on any large scale appeared to be as far removed from the sphere of practical possibilities as the introduction of any notable improvements in agricultural science or practice. There seemed to be no doubt that the natural tendency of rent was to rise at the expense of wages and profits, as the pressure of population on the resources of land became more urgent. ”

“ But the increment may in particular cases become a decrement, and the difficulty of determining how much of this increase is earned by the municipality as an improving landlord, and how much is due to it as a social factor, still remains. Where, indeed, a public authority executes a definite improvement, which seems certain to result in definite benefit to definite property, the argument for charging a proportion of the cost on the owners of such property is very strong, and the reason lies in the possibility of defining, with tolerable precision, the 'unearned' increment which will accrue. ”

“ George's book has been simultaneous with the occurrence of a serious and prolonged depression in the agriculture of the old world, which has rendered the landed classes, generally so-called, a specially distressed rather than a prosperous section of the community, yet the increasing tendency of the inhabitants of old and new countries alike to gather together in towns has resulted in a marked rise of urban rent. ”

“ Again, changes in transportation may open the resources of more lands than before to certain markets, or bring within the range of certain lands more markets than before. They may alter the relative situation of different soils with reference to the market, and, while producing perhaps a fresh increment of rent in some cases, they may occasion a decrement in others. ”

“ The burden of local rates has, it is contended, been mainly imposed, or largely increased, since the conclusion of many of the contracts. It could not have been anticipated by the tenants when they entered upon their leases; and, while some of the expenditure for which the taxation is levied is devoted to objects of present, and temporary, or general convenience, some of it is incurred for works of permanent improvement, the cost of which will be defrayed before the leases expire, while the benefit will remain to enhance the reversionary value of the interests of the ground landlords. ”

“ Ricardo, again, himself declares that 'there is not a manufacture in which nature does not give assistance to man;' and opportunity and chance and society, with its changing demands and altering organisation, play no inconsiderable part in the determination of professional incomes and the earnings of employers and workmen. ”

“ These crops may of course be less suited to the character and conditions of the land in question; but the balance of probability seems to incline to the conclusion that, with the extension of the number of available markets, and of the area from which the supplies for one particular market are drawn, crops will tend more and more to be raised from the soils which are best fitted to produce them, and to take their place in the most suitable and productive order of rotation. ”

“ It has sometimes been argued that it is difficult to bring the case of peasant proprietors within the comprehension of the theory, because they combine in their own person the functions of landlords, tenants, and labourers. ”

“ Such questions as 'leasehold enfranchisement,' the 'taxation of ground rents,' and the application of the principle of 'betterment,' show that the attention of the Legislature, like the criticisms of socialistic and other writers, may be directed more persistently in the future to the consideration of urban than agricultural land. ”

“ As a consequence of changes in the markets to which the produce of the land is sent, and of fresh demands in those new markets, they may lead to the raising of different crops from those produced before. ”

“ There have been only such other industries as were to be found in a few exceptional districts, and therefore the cultivator of land could not compare his earnings with those to be gained in other employments. ”

“ The landlord is not supposed to be influenced by kindly feeling, traditional claims, long connection, or political obligation. The tenant is not supposed to be affected by a sense of attachment to a peculiar farm. ”

“ The serious fall in English agricultural rents of recent years has, for example, been largely due to the immense improvement in the means, and decrease in the cost, of transporting grain from the rich virgin soils of America and from India. ”

“ But again, even where the possibility of passing from one place or trade to another may not be beyond the limits of conceivable attainment, it may, from the ignorance or incapacity of the cultivators themselves, be outside the bounds of practical realisation. ”

“ But it also becomes more improbable that the characteristic theory of such a writer can with advantage or success be immediately applied to practice. It is even more likely than the theories of other writers to stand in need of limiting qualifications. ”