Land Is Not Capital
Joseph Thompson
[Reprinted from an undated pamphlet, Simple Talks
on Taxation, published by the author]
... Some of your fellers say that
land isn't capital.
… They're
right and they're wrong.
… How the hell can that be?
… They're
right if they begin by saying "in justice," and
they're wrong if they don't continue by saying "under
present conditions."
… How about repeating that
with the full sentence?
… All
right. They should say: In justice, land is not capital, but
under present conditions, land is capital.
… How do you work it out?
… Well,
in justice, no one would have to pay out any capital for land.
… You mean, he'd get it free?
… Hell
no! He'd pay the rental value to its creators.
… Who'd they be?
… You
and me and the rest of the people. But there'd be no capital
outlay.
… No capital outlay!!!
… No.
You see, land's value is measured in the rent it would bring.
… Well, you've got to buy it.
… You've
got to now, yes. But if the people who create the rent value
also collected it, there'd be nothing to sell - -
… How do you mean,
nothing to sell?
… I
mean, if the public collected all the land rent, which is the
only basis of land value, there'd be no value left to sell.
… So what would happen?
… Well,
take someone who has been using a piece of land. He doesn't need
it any more. It's a good location so the land tent is high. So
he gets out.
… Couldn't he sell the title?
… What
would he be selling? A title is only a permit to collect land
rent If all the rent was already governmentally collected, what
good would the permit be?
… What would he do then?
… He'd
move out, and someone who had use for the land, would move in.
… And no money would
change hands?
… If I
finished with a metered parking place and you followed me into
it, would any money change hands between us?
… You mean, it's the same
thing?
… Sure.
The whole world is one great parking place. The right to
exclusive ownership or occupation, should only last as long as
the owner pays the public for that right; that is, in all
justice.
… I was going to ask you
about your "in justice," "injustice" you've
been saying. What do you mean by "in justice"?
… I'll
answer you by asking you: Is it just for a few favored people to
collect what you-and I and the rest of the people create? And is
it just, after we let them reap our harvest, for us to
arbitrarily take away part of everyone's earnings? And a "cut"
on everything he buys? And a big chunk out of what he has saved,
when he dies?
… The way you describe it, it
seems like the answer is: No.
… All
right, then. All profit and income from land is unjust. That's
why I speak of "in justice." And that's why I say
that, in justice, land is not capital.
… You put up a good argument.
… Yes,
and there's another reason why land is not capital: Of land, the
yield (which is rent) creates the value. Of capital, the value
creates the yield (which is interest and profit).
… I never thought of it that
way.
… And
one more thing to ponder over. Capital creates more capital.
Land never creates more land!
… Gee! I'll miss the Sports
Newscast if I stay here any longer!
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