Ground rent

“ Here the nominal ground rent is only part of the total rent which is really paid; the ultimate transference of the buildings representing often the more important part. There is, in fact, a great variety of systems of land tenure, some of which are highly complex, the respective merits of which vary greatly, and which constitute a most important problem for statesmen and legislators. ”

“ But whatever raises the lowest ground-rents, raises all others, since each exceeds the lowest by the market value of its peculiar advantages. If, therefore, the tax on ground-rents were a fixed sum per square foot, the more valuable situations paying no more than those least in request, this fixed payment would ultimately fall on the occupier. Suppose the lowest ground-rent to be 10l. ”

“ The land would be worthless without roads, and the occupier has to construct, widen, and repair them. It could not be inhabited without proper drainage, and the occupier is constrained to construct and pay for the works which give an initial value to the ground rent, and, after the outlay, enhance it. It could not be occupied without a proper supply of water, and the cost of this supply is levied on the occupier also. In return for this enormous expenditure, he has his rent raised on his improvements, and his taxes increased by them."—Rogers, "Six Centuries of Work and Wages." ”

“ Those who have hitherto paid but little, will not suddenly be persuaded to pay much, though they can afford it. As ground is gradually improved, and the value of money decreases, the rent may be raised without any diminution of the farmer’s profits: yet it is necessary in these countries, where the ejection of a tenant is a greater evil, than in more populous places, to consider not merely what the land will produce, but with what ability the inhabitant can cultivate it. ”

“ 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. ”

“ If I buy land for a small price and hold it until I can sell it for a large price, I have become rich, not by wages for my labour or by interest upon my capital, but by the increase of rent. Rent, in short, is the share in the wealth produced which the exclusive right to the use of natural resources gives to the owner. Wherever any land has an exchange value there is rent in the economic meaning of the term. Wherever land having a value is used, either by owner or hirer, there is rent actual; wherever it is not used, but still has a value, there is rent potential. ”

“ Under the name of rent, many payments are commonly included, which are not a remuneration for the original powers of the land itself, but for capital expended on it. The additional rent which land yields in consequence of this outlay of capital, should, in the opinion of some writers, be regarded as profit, not rent. But before this can be admitted, a distinction must be made. The annual payment by a tenant almost always includes a consideration for the use of the buildings on the farm; not only barns, stables, and other outhouses, but a house to live in, not to speak of fences and the like. ”

“ Over and above the capital of the farmer and all its profits, they regularly occasion the reproduction of the rent of the landlord. This rent may be considered as the produce of those powers of nature, the use of which the landlord lends to the farmer. It is greater or smaller according to the supposed extent of those powers, or in other words, according to the supposed natural or improved fertility of the land. It is the work of nature which remains, after deducting or compensating every thing which can be regarded as the work of man. ”

“ A farmer, in making his present contract for rent, does not concern himself with the past history of the causes of the fertility or situation of the land, but with its present advantages, and he makes no attempt to draw the distinction between the earned and the unearned. And, in the future, he and his landlord may allow the nominal rent to remain unaltered in spite of increased prosperity or intensified depression in agriculture, in consideration simply of lessened expenditure or added liberality in the matter of improvements. ”

“ Then, in that case, the rent must be reduced, not 30, but 90 per cent; for upon this condition alone can the agricultural labourer and the tenant-farmer be left uninjured. We defy Sir James Graham, or any Free-trade philosopher, to escape from this conclusion. The existing case may be illustrated in another way. Land at 40s. per acre should produce three rents, while inferior land, at 20s. per acre, as every competent judge will allow, should produce four rents. A farm of 200 acres, at 40s., gives a rent of L.400, and should produce a gross revenue of L.1200. ”

“ Taught by past experience, no landlord is now willing, without the assurance of an adequate rent, to alienate his property for any considerable length of time; and without lease of acre endurance, no tenant is disposed to embark his capital and skill in the adventure of cultivation. In Grain, as a measure of value, a medium has, at length, been found, which, while it preserves the just rights of the one, secures a return for the honest industry of the other. ”

“ Higher rents may conceivably be offered than would arise from a single regard to the productive powers of the land and the income accruing from the sale of its produce. The second occupation may be of primary importance; and, even if it is subsidiary, as in the case of the crofters, a sudden failure or unexpected disaster in their fishing ventures may render them not merely unwilling, but unable, to pay a rent, which was fixed with the prospect of securing some part of their income from this subsidiary source. ”

“ As most of the symptoms of a higher civilization become apparent earliest, and in the most striking manner, in large cities, so also a rise in rents is first felt in them. The building of houses may be considered as the most intensive of all cultivation of land and that which is most firmly fixed to the soil. [156-5] Rent has nowhere an unsurpassable maximum any more than a necessary minimum. ”

“ But when this other land is appropriated and the best land to be had for nothing is inferior, either in fertility, situation or other quality, my land will begin to have a value and yield rent. And though the productiveness of my land may decrease, yet if the productiveness of the land to be had without charge decreases in greater proportion, the rent I can get, and consequently the value of my land, will steadily increase.
If one man owned all the land accessible to any community, he could of course demand any price or condition for its use that he saw fit ”

“ Rent, in short, merely equalizes the profits of different farming capitals, by enabling the landlord to appropriate all extra gains occasioned by superiority of natural advantages. If all landlords were unanimously to forego their rent, they would but transfer it to the farmers, without benefiting the consumer; for the existing price of corn would still be an indispensable condition of the production of part of the existing supply, and if a part obtained that price the whole would obtain it. ”

“ Some land is situated nearer, and some at a greater distance from, the market where the produce is sold. The farmers of the most distant land, if their produce is needed to meet the demand, must secure such a price as to cover their expenses of production, including the cost of carriage. The farmers of the nearer land, obtaining the same price for what costs less to convey to the market, have a surplus in hand, which competition for the enjoyment of their advantages compels them to transfer to the landlords as rent. ”

“ In the early periods of society, or more remarkably perhaps, when the knowledge and capital of an old society are employed upon fresh and fertile land, this surplus produce, this bountiful gift of providence, shows itself chiefly in extraordinary high profits, and extraordinary high wages, and appears but little in the shape of rent. While fertile land is in abundance, and may be had by whoever asks for it, nobody of course will pay a rent to a landlord. ”

“ 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 ”

“ Countries under a poor system of agriculture with inefficient labor cannot maintain high value of land. Ignorance and thriftlessness in a community of laborers operates in the same way. Thus the habits of the people, as well as their laws, enter into the question of rent. In countries where large estates are parceled out to renters, generation after generation, the customary terms of leases as to time, method of payment, adjustment of improvements, restrictions as to methods of tillage, and requirement of capital, enter largely into the question of rents. ”

“ The demand for labour increased, and the population augmented in proportion. Land rose in value from year to year, and lessees realised large profit rents by subletting, one or more persons being frequently interposed between the owner and the occupier who was ultimately liable for the rent, both to the head landlord and the intermediate tenants. ”

“ The condition of the labourer would not be a whit improved. If landlords were prohibited from asking an increase of rent from their tenants and from ejecting a tenant so long as the fixed rent was paid, the body of the producers would gain nothing. Economic rent would still increase, and would still steadily lessen the proportion of the produce going to labour and capital. ”

“ In technical discussion the term rent is usually confined to the compensation secured from appropriation of space, peculiar location, natural fertility, mineral deposits, water privileges, or any natural advantage to be used in production. In this limited meaning rent is confined to the advantage gained by the owner of wealth in any form so affected by the law of supply and demand as to gain a scarcity value. ”

“ It requires rent to be low, for without that there cannot be a great surplus produce to divide between the two other classes, after satisfying the landlord. You will always make me say that profits depend on the [Pg 205] low price of corn. I never do say so; I contend that they depend on wages, and, although in my opinion wages will be mainly regulated by the facility of obtaining necessaries, they do not entirely depend on such facility. ”

“ In fact, the accepted law of rent depends for its recognition upon a previous, though in many cases it seems to be an unconscious, acceptance of this law of wages. What makes it evident that land of a particular quality will yield as rent the surplus of its produce over that of the least productive land in use, is the apprehension of the fact that the owner of the higher quality of land can procure the labor to work his land by the payment of what that labor could produce if exerted upon land of the poorer quality. ”

“ It would not be difficult to show that they are not in conflict, but rather in harmony, with the theory of rent in making such a provision; for the tenants have sunk capital in the cultivation of land, which they cannot withdraw and offer for sale in the best market.
Again, the theory of rent assumes that tenants cultivate with a single eye to the sale of the produce in the market; for it is only by starting with the conditions determining the selling-price that we arrive at the establishment of differential advantages enjoyed by different producers, and the consequent existence of rent. ”

“ The landlord reserves to himself all minerals, game, shooting, and trout fishing on the estate; and shall be at liberty, at all times, to enter on any holding, to search for and work minerals and quarries, to lay off and make roads, and to alter the marches of any farm in such a manner as he shall see fit. But should such action of his lessen the value of any farm, he will make a proportionate reduction of rent. ”

“ In the first place, he may be induced, by the immediate prospect of an exorbitant rent, offered by farmers bidding against each other, to let his land to a tenant without sufficient capital to cultivate it in the best way, and make the necessary improvements upon it. ”

“ One Difference between Land and Artificial Capital Goods.—In the case of land a particular area is [Pg 179] marginal or no-rent land, and, in a static state, it remains so. Any particular ship, wagon, engine, or other made tool begins its career as a rent payer and ends it as a no-rent instrument. If we watch the whole social stock of instruments of production, we shall see the no-rent points not fixed in location, but shifting from place to place. ”

“ In common speech we speak of rent only when owner and user are distinct persons. But in the economic sense there is also rent where the same person is both owner and user. Where owner and user are thus the same person, whatever part of his income he might obtain by letting the land to another is rent, while the return for his labour and capital is that part of his income which they would yield him did he hire the land instead of working it. ”