Land Price as a Cause of Poverty
Winston S. Churchill
[A speech in the House of Commons, 4 May, 1909,
in response to Mr. A. J. Balfour, Leader of the Opposition]
The immemorial custom of nearly every modern State, the mature
conclusions of many of the greatest thinkers, have placed the tenure,
transfer, and obligations of land in a wholly different category from
other classes of property. The mere obvious physical distinction
between land, which is a vital necessity of every human being and
which at the same time is strictly limited in extent, and other
property is in itself sufficient to justify a clear differentiation in
its treatment, and in the view taken by the State of the conditions
which should govern the tenure of land from that which should regulate
traffic in other forms of property.
Unearned Increment
When the Leader of the Opposition seeks by comparisons to show that
the same reasoning which has been applied to land ought also in logic
and by every argument of symmetry to be applied to the unearned
increment derived from other processes which are at work in our modern
civilisation, he only shows by each example he takes how different are
the conditions which attach to the possession of land and speculation
in the value of land from those which attach to other forms of
business speculation.
"If," he inquires, "you tax the unearned increment on
land, why don't you tax the unearned increment from a large block of
stock? I buy a piece of land; the value rises. I buy stocks; their
value rises." But the operations are entirely dissimilar. In the
first speculation the unearned increment derived from land arises from
a wholly sterile process, from the mere withholding of a commodity
which is needed by the community. In the second case, the investor in
a block of shares does not withhold from the community what the
community needs. The one operation is in restraint of trade and in
conflict with the general interest, and the other is part of a natural
and healthy process, by which the economic plant of the world is
nourished and from year to year successfully and notably increased.
Landowner and Railway Co.
Then the right hon. gentleman instanced the case of a new railway and
a country district enriched by that railway. The railway, he
explained, is built to open up a new district; and the farmers and
landowners in that district are endowed with unearned increment in
consequence of the building of the railway. But if after a while their
business aptitude and industry create a large carrying trade, then the
railway, he contends, gets its unearned increment in its turn.
But the right hon. gentleman cannot call the increment unearned which
the railway acquires through the regular service of carrying goods,
rendering a service on each occasion in proportion to the tonnage of
goods it carries, making a profit by an active extension of the scale
of its useful business - he cannot surely compare that process with
the process of getting rich merely by sitting still? It is clear that
the analogy is not true.
The Glasgow Example
I do not think the Leader of the Opposition could have chosen a more
unfortunate example than Glasgow. He said that the demand of that
great community for land was for not more than forty acres a year. Is
that the only demand of the people of Glasgow for land? Does that
really represent the complete economic and natural demand for the
amount of land a population of that size requires to live on? I will
admit that at present prices it may be all that they can afford to
purchase in the course of a year. But there are one hundred and twenty
thousand persons in Glasgow who are living in one-room tenements; and
we are told that the utmost land those people can absorb economically
and naturally is forty acres a year.
What is the explanation? Because the population is congested in the
city the price of land is high upon the suburbs, and because the price
of land is high upon the suburbs the population must remain congested
within the city. That is the position which we are complacently
assured is in accordance with the principles which have hitherto
dominated civilised society.
The "Poor Widow" Bogey
But when we seek to rectify this system, to break down this unnatural
and vicious circle, to interrupt this sequence of unsatisfactory
reactions, what happens? We are not confronted with any great argument
on behalf of the owner. Something else is put forward, and it is
always put forward in these cases to shield the actual landowner or
the actual capitalist from the logic of the argument or from the force
of a Parliamentary movement.
Sometimes it is the widow. But that personality has been used to
exhaustion. It would be sweating in the cruellest sense of the word,
overtime of the grossest description, to bring the widow out again so
soon. She must have a rest for a bit; so instead of the widow we have
the market-gardener - the market-gardener liable to be disturbed on
the outskirts of great cities, if the population of those cities
expands, if the area which they require for their health and daily
life should become larger than it is at present.
What is the position disclosed by the argument? On the one hand, we
have one hundred and twenty thousand persons in Glasgow occupying
one-room tenements; on the other, the land of Scotland. Between the
two stands the market-gardener, and we are solemnly invited, for the
sake of the market-gardener, to keep that great population congested
within limits that are unnatural and restricted to an annual supply of
land which can bear no relation whatever to their physical, social,
and economic needs - and all for the sake of the market-gardener, who
can perfectly well move farther out as the city spreads and who would
not really be in the least injured.
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