Responding to C.H. Nightingale on Interest --
What Henry George Wrote

L.D. Beckwith

[Reprinted from Land and Freedom, May-June 1940]

In your March-April issue, Mr. C. H. Nightingale has a letter in which he complains that I am "never done attacking people." I have long enjoyed the sport of backing down such criticisms by opening the files of my papers to my critics and challenging them to find a single case in which I have departed from my rule to confine my criticism to principles and never to attack people.

In his letter, Mr. Nightingale undertakes to prove that, in the period following the death of Henry George, the movement did make an advance in the statement of economic truth, by repudiating George's teachings on interest. To make his point, however, he was obliged to misinterpret George by a misuse of a quotation from Book III, Chapter 3, Paragraph 16, of Progress and Poverty. That it is a misuse will be seen from a reading of Paragraph 19, in the same chapter. George drew no such distinction as Nightingale alleges between interest on the "dead" capital and interest on "live" capital. What George did assert is that because of the interchangeability of the two forms of capital, the fact that Nature pays interest on "live" capital compels the market to pay interest on "dead" capital.

Mr. Nightingale thinks he has "floored" me, with "Euclidian precision," in the round on land value. We who embrace the concept of rent "out of the West" (as it has been termed in the columns of LAND AND FREEDOM) contend that "land value" is a myth, since land has no value; that the value of land (so-called) is the value of the services available at the site; that the "investment value of land" is not the value of land, but of the government's license to collect rent at that point.

Here is the "Euclidian precision" with which Mr. Nightingale imagines he has disposed of this "Western" concept:

Brown goes to an island and makes a good living using a portion of the land. Jones follows and finds he can make only a poor living by using the other land available to him. The difference between these two standards of living is RENT. Yet there is no social service rendered at these locations.

Note that it is expressly stipulated that there is no social service on the island. (Of course, with only two men there, no government exists and hence, no governmental service.) Thus, Mr. Nightingale has stipulated that there is no mail service, no police service, no telephone or telegraph service, no freight service to and from the island, no streets, no roads, no markets, no social dealings of any kind. These are ruled out, because there is no social service there. This means that these two men have no dealing with each other. This means that no more of the product of the island is used than these men can personally consume all the rest goes to waste.

Since Brown cannot possibly use all the produce of his part of the island, he has no way to prevent Jones from sharing the productivity of that better part, except to personally stand watch for that purpose, since there is no police force. As Brown must sleep part of the time, he cannot keep Jones off, even if he wishes to do so.

How, then, can Brown have a higher standard of living than Jones? How could he have anything that Jones could not also have? The only way would be for him to work better to be a better hunter, a better farmer, a better tailor, a better craftsman. In that case, the difference of their standards of living would be wages or both wages and interest and not rent.