Land rent

“ If the land belong to the people, why continue to permit land owners to take the rent, or compensate them in any manner for the loss of rent? Consider what rent is. It does not arise spontaneously from land; it is due to nothing that the land owners have done. It represents a value created by the whole community. Let the land holders have, if you please, all that the possession of the land would give them in the absence of the rest of the community. But rent, the creation of the whole community, necessarily belongs to the whole community. ”

“ 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. ”

“ It remains however to be considered, whether the appropriation of land, and the consequent creation of rent, will occasion any variation in the relative value of commodities, independently of the quantity of labour necessary to production. In order to understand this part of the subject, we must inquire into the nature of rent, and the laws by which its rise or fall is regulated. Rent is 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. ”

“ The distinction between what is earned and what is unearned would, indeed, seem on theoretical grounds to be more easily established in the case of land than of other forms of wealth, and in the case of urban rather than agricultural land. But even here the evidence given by surveyors before the Town Holdings Committee on the possibility of distinguishing between the value of a house and of the land on which it is built was conflicting, and even here landlords may have developed and improved building sites by expenditure and efforts of their own. ”

“ When we reflect, then, that the land rent of the great empty country is £35,000,000, while the land rent of the crowded towns is £57,000,000, we see the latter item in its true light, as enormous in relation to the insignificant area for permission to use which it is paid. ”

“ Moreover, the capital which becomes a part of the land to such an extent that it cannot be separated from it, and perhaps not even distinguished from it at sight, such for instance as has been laid out for purposes of drainage or in the purchase of material intended to modify the nature of the soil, partakes of the character of the land itself, and its yield obeys the laws of rent. How frequently it happens that such improvements made by the farmer without the least assistance from the owner of the land permanently contribute to an increase of the rent. ”

“ 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 buildings are as distinct a thing from the farm as the stock or the timber on it; and what is paid for them can no more be called rent of land than a payment for cattle would be, if it were the custom that the landlord should stock the farm for the tenant. The buildings, like the cattle, are not land, but capital, regularly consumed and reproduced ”

“ It is the capacity of yielding rent that gives value to land. Until its ownership will confer some advantage, land has no value. (In speaking of the value of land I use and shall use the words as referring to the value of the bare land. When I wish to speak of the value of land and improvements I shall use those words.) ”

“ If in any one or two years he produced four quarters per acre on land which had previously grown but three, he might fear that his landlord would say: ‘Your land is more productive than I imagined, and I must therefore raise your rent.’ The interest of the farmers, therefore, would be to underrate, and to furnish low returns. ”

“ The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take, but to what the farmer can afford to give. ”

“ Land is used for other purposes than agriculture, especially for residence; and when so used, yields a rent, determined by principles similar to those already laid down. The ground rent of a building, and the rent of a garden or park attached to it, will not be less than the rent which the same land would afford in agriculture: but may be greater than this to an indefinite amount; the surplus being either in consideration of beauty or of convenience, the convenience often consisting in superior facilities for pecuniary gain. ”

“ Some speak as if the abolition of rent were to be an immediate result of the abolition of interest, apparently taking the ground that rent is a product of the selling price of land and the interest of money. ”

“ The farmers of the least fertile land must secure for the sale of its produce in the market a price sufficient to cover their expenses of production; and the farmers of the more fertile land, obtaining the same price and incurring less expense, have a surplus in hand, which competition for the enjoyment of their position compels them to transfer to the landlords as rent. This surplus will vary according to the extent to which the fertility of their land exceeds in each case that of the least fertile land, the produce of which must be forthcoming to meet the demand. ”

“ And land which can pay more than a profit on this working capital, returns that excess as rent, even if the farmer is also the owner and landlord. The principle which regulates the amount of that excess—which is the essential point—is the principle which determines the amount of economic rent, and it holds true in the United States or Finland, provided only that different grades of land are called into cultivation. ”

“ I may have very rich land, but it will yield no rent and have no value so long as there is other land as good to be had without cost. 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 begin167 to have a value and yield rent. ”

“ There is always, therefore, some land which cannot, in existing circumstances, pay any rent; and no land ever pays rent, unless, in point of fertility or situation, it belongs to those superior kinds which exist in less quantity than the demand which cannot be made to yield all the produce required for the community, unless on terms still less advantageous than the resort to less favoured soils. ”

“ Rent is usually the labor or the fruits of the labor of the occupant. In some cases it is income derived from the labors of others. A broad distinction exists between the rent of land, which is a portion of the fruits or its equivalent in money, and that of improvements and houses, which is an exchange of the labor of the occupant given as payment for that employed in effecting improvements or erecting houses. ”

“ 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. ”

“ 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. ”

“ The purchasers, no longer afraid that improvements resulting from careful treatment of the soil would be taxed by an increased rent, set themselves assiduously to cultivate their holdings to the best advantage. ”

“ 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. ”

“ 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." ”

“ The state would say to the would-be farmer, "You can cultivate this land by paying the rent which neighboring land pays." But can not the farmer get the same land now on the same terms? Show me the owner of unfilled agricultural land who refuses to allow his acres to be cultivated at a fair rental. I can show plenty of such land within one hundred miles of New York, and all over New England, which any cultivator can have the use of, without paying any rent at all, on condition of cultivating it. Surely the state would not offer land on more favorable terms. ”

“ Things went on in this direction until enlightened men thought that small holdings were the ruin of the nation, and enormous farms its wealth. We all came to look on land as something from which a man got rent. We talked about small farming not "paying," meaning that it did not pay rent—as though rent were the sole end of corn. So towns were more and more overcrowded, and villages made emptier and emptier, and landlords restricted the number of houses in villages, because the man with no land of his own to till, and not needed for other men's lands, was an encumbrance. ”

“ 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. ”

“ How rent arises Thus rent or land value does not arise from the productiveness or utility of land. It represents in no wise any help or advantage given to production, but simply the power of securing a part of the results of production. No matter what are its capabilities, land can yield no rent and have no value until someone is willing to give labour or the results of labour for the privilege of using it ”

“ It is true that all tenant farmers, and many other classes of producers, pay rent. But we have now seen, that whoever cultivates land, paying a rent for it, gets in return for his rent an instrument of superior power to other instruments of the same kind for which no rent is paid. ”

“ By means of this great expenditure of capital and labour, land that would hardly fetch a rent of a shilling an acre before was worth twenty or thirty shillings an acre after. Not the buildings only, but the land itself has been made what it is by labour. ”

“ 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. ”

“ This has been the case in many communities; but in the modern form of society, the land, though generally reduced to individual ownership, is in the hands of too many different persons to permit the price which can be obtained for its use to be fixed by mere caprice or desire. ”

“ And in general, in all cases of increasing produce, if the landlord's share of this produce do not diminish in the same proportion, which though it often happens during the currency of leases, rarely or never happens on the renewal of them, the real rents of land must rise. ”

“ The normal rent line and the speculative rent line are being brought together: (1) By the fall in speculative land values, which is very evident in the reduction of rents and shrinkage of real estate values in the principal cities. (2) By the increased efficiency of labor, arising from the growth of population and the utilization of new inventions and discoveries, some of which almost as important as that of the use of steam we seem to be on the verge of grasping. ”