Comments on Rent Theory

Edmund J. Burke

[Reprinted from Land and Freedom, July-August 1940]

I must take issue with my friend John R. Nichols on some points in his article, "Concepts of Rent," appearing in your November-December, 1939 issue.

If Nichols will think the question through, he will discover that the most fertile land, finest pasture or richest mine produce no "rent" unless their "natural advantages" have been made accessible to society "by social and governmental contributions." Upon examination and reflection, W.R.B. Willcox's definition of rent, namely, "payment for the advantages of social and governmental contributions to the utility of provisions of Nature," seems to me to be absolutely perfect in its comprehensiveness and completeness, covering every conceivable type of rental value.

I maintain that all previous definitions of rent were faulty and did not cover the facts as observed, and therefore the definition of rent had to be restated correctly. I maintain that Willcox has given the only definition of rent that has proved satisfactory, complete and true in all circumstances.

Nichols' "land value" has been proved by Willcox to be a fraud and a misnomer, as it is not "land value" at all, but the value of the privilege of privately appropriating a publicly produced rental value. Even those who use the term "land value" admit that when you tax it to the full amount of the rent, the selling value of the land disappears, and you are left up in the air with no "land value" left to tax. This creates endless confusion and has alienated and antagonized industrious and thrifty citizens.

Willcox shows that rent is an entirely social product, and he proposes to collect the whole of it into the public treasury as a private payment for a definite public service. Such a payment is no more a tax than paving a grocer's bill for goods and services rendered to the grocer, not to some one else. This is readily understood by men of various occupations and degrees of education.

Nichols says:

"The proposal to collect rent for public uses leaves in doubt (as land value taxation does not) what is to be done with respect to the vacant taxation lot for which no rent is paid or accrues."

My answer is that the rent or use value of any lot is always well known, and the public, in its own selfish interest, would see to it that the full rent was collected into the public treasury. But under the present, so-called "land value taxation" system, vacant lots are never assessed or taxed at anywhere near their use value, and insofar as they are taxed, their "land value" disappears proportionately.

Nichols and the rest of us have been beating the air for many years and getting nowhere with our confusing nomenclature and terms and unscientific methods. Why not try in the future the cleancut, definite and correct nomenclature, terms and definitions of the Science of Economics, as proposed by our Western friends?