Economist Edwin Cannan's Blindness
to the Function of Rent

Joseph Dana Miller

[Reprinted from Land and Freedom, March-April, 1932]

We [now examine the observations of ] Dr. Edwin Cannan, professor emeritus of political economy of London University, a gentleman who boasts a lot of letters behind his name that make serious inroads on the alphabet. It appears in a recent issue of the Scientific Monthly. This is the monthly organ of the American Association for the Advancement of Science which includes economic science!

Dr. Cannan quotes the well-known passage from John Stuart Mill:

"The ordinary progress of a society which increases in wealth is at all times tending to augment the incomes of landlords; to give them both a greater amount and a greater proportion of the wealth of the community, independently of any trouble or outlay incurred by themselves. They grow richer, as it were, in their sleep, without working, risking or economizing."

The learned professor seems to think that this situation has been altered in recent years. He says:

"To grasp the completeness of the change of view which has taken place in the last hundred years, we must notice that Mill and the whole school which he represented were thinking not of the few lucky landlords who have inherited land which has been selected by nature or accident as the site of a city, but of the ordinary rural agricultural landlords. So far have we moved that the land-value taxers of today quite cheerfully propose to exempt all 'purely agricultural value' from the imposition which they advocate."

Why assume that Mill was thinking wholly in terms of agricultural land? The professor needs also to be told that land-value taxers of today do not propose to exempt agricultural land values. He is probably thinking of the Snowden budget, where such exemption was introduced purely for its political effect and without any economic justification.

Professor Cannan continues:

"Envy of the happy owners of such urban land as rises in value more than enough to recoup what they and their predecessors in title paid in road making, sewering and other expenses of 'development' plus loss, if any, in waiting for income, still plays a part in contemporary politics, but the economist foresees that there will be at any rate less of such rise of value when the adult population ceases to increase and the demand for additional houses and gardens consequently disappears. He realizes that if any such rise continues, it will be due to the people being not only able, as they doubtless will be, to occupy a larger area with their houses and gardens, but also desirous of doing so."

We dislike that word "envy," though the people who pay the enormous revenues that go to the owners of city lands more than $800,000,000 a year in New York City might justly be touched with some emotion of the kind. And this is all the population. It is amusing, too, to be told that urban dwellers will be able to occupy larger areas for their houses and gardens as land values rise!

In all that Professor Cannan writes there is no recognition of economic rent and its implications. It is a jumble of fallacies. We admire the smoothness and dexterity with which he evades the tremendous problems that must have cast their shadows on the paper as he wrote. There is smug complacency in the easy swing of the professor English, but it is outdated today, in thought as in manner

In contrast with all this weird reasoning may we not impress upon readers to whom this proposition is a newer one the simplicity of Henry George's proposals? Regardless of all these questions dragged in by the heels by these pseudo economists (talks about this being a machine age) every age was a machine age since man first grasped a spade; whether economic rent is or is not an increasing proportion; whether economic rent is or is not sufficient to pay all costs of government, including war debts; whether or not other monopolies exist and need to be curtailed -- in spite of all, bear in mind that there is a value attaching to land which, because of its nature and because of the dangers resulting in its diversion into private hands, should be taken for all needed revenue in lieu of taxation.

Think only of the justice of it and the results to flow from it, and see how simple it is in contrast to the strange and learned muddlements of minds grown bankrupt of intelligence, confused, helpless, impotent, whose writing seem like the language of the insane, a monstrous babbitment.