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Land, which is a necessity of
human existence, which is the original source of all wealth, which is strictly
limited in extent, which is fixed in geographical position -- land, I say,
differs from all other forms of property, and the immemorial customs of nearly
every modern state have placed the tenure, transfer, and obligations of land
in a wholly different category from other classes of property.
Nothing is more amusing than to watch the efforts
of land monopolists to claim that other forms of property and increment are
similar in all respects to land and the unearned increment on land.
They talk of the increased profits of a doctor
or lawyer from the growth of population in the town in which they live.
They talk of the profits of a railway, from the growing wealth and activity
in the districts through which it runs. They talk of the profits from a
rise in stocks and even the profits derived from the sale of works of art.
But see how misleading and false all those analogies
are. The windfalls from the sale of a picture -- a Van Dyke or a Holbein
-- may be very considerable. But pictures do not get in anybody's way. They
do not lay a toll on anybody's labor; they do not touch enterprise and production;
they do not affect the creative processes on which the material well-being
of millions depends.
If a rise in stocks confers profits on the fortunate
holders far beyond what they expected or indeed deserved, nevertheless that
profit was not reaped by withholding from the community the land which it
needs; on the contrary, it was reaped by supplying industry with the capital
without which it could not be carried on.
If a railway makes greater profits it is usually
because it carries more goods and more passengers.
If a doctor or a lawyer enjoys a better practice,
it is because the doctor attends more patients and more exacting patients,
and because the lawyer pleads more suits in the courts and more important
suits. At every stage the doctor or the lawyer is giving service in return
for his fees.
Fancy comparing these healthy processes with
the enrichment which comes to the landlord who happens to own a plot of
land on the outskirts of a great city, who watches the busy population around
him making the city larger, richer, more convenient, more famous every day,
and all the while sits still and does nothing.
Roads are made, streets are made, services are
improved, electric light turns night into day, water is brought from reservoirs
a hundred miles off in the mountains -- and all the while the landlord sits
still. Every one of those improvements is effected by the labor and cost
of other people and the taxpayers. To not one of those improvements does
the land monopolist, as a land monopolist, contribute, and yet by every one
of them the value of his land is enhanced. He renders no service to the community,
he contributes nothing to the general welfare, he contributes nothing to
the process from which his own enrichment is derived.
While the land is what is called "ripening" for
the unearned increment of its owner, the merchant going to his office and
the artisan going to his work must detour or pay a fare to avoid it. The
people lose their chance of using the land, the city and state lose the taxes
which would have accrued if the natural development had taken place, and all
the while the land monopolist only has to sit still and watch complacently
his property multiplying in value, sometimes many fold, without either effort
or contribution on his part!
But let us follow this process a little further.
The population of the city grows and grows, the congestion in the poorer
quarters becomes acute, rents rise and thousands of families are crowded
into tenements. At last the land becomes ripe for sale -- that means that
the price is too tempting to be resisted any longer. And then, and not until
then, it is sold by the yard or by the inch at 10 times, or 20 times, or
even 50 times its agricultural value.
The greater the population around the land, the
greater the injury the public has sustained by its protracted denial. And,
the more inconvenience caused to everybody; the more serious the loss in
economic strength and activity -- the larger will be the profit of the landlord
when the sale is finally accomplished. In fact, you may say that the unearned
increment on the land is reaped by the land monopolist in exact proportion,
not to the service, but to the disservice done. It is monopoly which is the
keynote, and where monopoly prevails, the greater the injury to society the
greater the reward to the monopolist. This evil process strikes at every form
of industrial activity. The municipality, wishing for broader streets, better
houses, more healthy, decent, scientifically planned towns, is made to pay
more to get them in proportion as is has exerted itself to make past improvements.
The more it has improved the town, the more it will have to pay for any land
it may now wish to acquire for further improvements.
The manufacturer proposing to start a new industry,
proposing to erect a great factory offering employment to thousands of hands,
is made to pay such a price for his land that the purchase price hangs around
the neck of his whole business, hampering his competitive power in every
market, clogging him far more than any foreign tariff in his export competition,
and the land price strikes down through the profits of the manufacturer on
to the wages of the worker.
No matter where you look or what examples you
select, you will see every form of enterprise, every step in material progress,
is only undertaken after the land monopolist has skimmed the cream for himself,
and everywhere today the man or the public body that wishes to put land to
its highest use is forced to pay a preliminary fine in land values to the
man who is putting it to an inferior one, and in some cases to no use at
all. All comes back to land value, and its owner is able to levy toll upon
all other forms of wealth and every form of industry. A portion, in some
cases the whole, of every benefit which is laboriously acquired by the community
increases the land value and finds its way automatically into the landlord's
pocket. If there is a rise in wages, rents are able to move forward, because
the workers can afford to pay a little more. If the opening of a new railway
or new tramway, or the institution of improved services of a lowering of
fares, or of a new invention, or any other public convenience affords a benefit
to workers in any particular district, it becomes easier for them to live,
and therefore the ground landlord is able to charge them more for the privilege
of living there.
Some years ago in London there was a toll bar
on a bridge across the Thames, and all the working people who lived on the
south side of the river had to pay a daily toll of one penny for going and
returning from their work. The spectacle of these poor people thus mulcted
of so large a proportion of their earnings offended the public conscience,
and agitation was set on foot, municipal authorities were roused, and at
the cost of the taxpayers, the bridge was freed and the toll removed. All
those people who used the bridge were saved sixpence a week, but within a
very short time rents on the south side of the river were found to have risen
about sixpence a week, or the amount of the toll which had been remitted!
And a friend of mine was telling me the other
day that, in the parish of Southwark, about 350 pounds a year was given away
in doles of bread by charitable people in connection with one of the churches.
As a consequence of this charity, the competition for small houses and single-room
tenements is so great that rents are considerably higher in the parish!
All goes back to the land, and the land owner
is able to absorb to himself a share of almost every public and every private
benefit, however important or however pitiful those benefits may be.
I hope you will understand that, when I speak
of the land monopolist, I am dealing more with the process than with the
individual land owner who, in most cases, is a worthy person utterly unconscious
of the character of the methods by which he is enriched. I have no wish to
hold any class up to public disapprobation. I do not think that the man who
makes money by unearned increment in land is morally worse than anyone else
who gathers his profit where he finds it in this hard world under the law
and according to common usage. It is not the individual I attack; it is the
system. It is not the man who is bad; it is the law which is bad. It is not
the man who is blameworthy for doing what the law allows and what other men
do; it is the State which would be blameworthy if it were not to endeavor
to reform the law and correct the practice.
We do not want to punish the landlord.
We want to alter the law.
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