The Road To Freedom,
And What Lies Beyond
CHAPTER 8
Josiah and Ethel Wedgwood
[Published in London by C.W. Daniel, Ltd., 1913]
MARGINAL LAND AND ECONOMIC RENT
… Free Land necessary to
economic freedom.
… The existence of free land
somewhere is the fundamental postulate of any economic freedom for
individuals; and such free land would naturally be land which is the
least valuable in use, for which there is no competitive demand --
that is to say, which is on the margin of cultivation. If no land is
available, except by favour or by payment of rent, then, however well
paid the worker, he must always be at the mercy of combinations and
exactions by the givers of work.
… Under free conditions, rent would
not be -- as is commonly supposed -- a payment for the use of all
land, but only for the use of superior lands, and strictly according
to their superiority, whether in natural fertility or in position. The
least productive land at any time in use (i.e. land on the margin of
cultivation), would be rent-free; for, in a country not
over-populated, there would be no competition for the use of such
land. Rent under free conditions can only appear when more than one
man desires to use the same piece of land.
… The existence of marginal
land [Marginal land -- i.e. land on or below the margin of
cultivation].
… This marginal land must exist,
because if it did not, there would be too many people in the world.
If, when all land was fully used, there existed anywhere a site which
would support only one human life, and two people were competing for
its occupancy -- then one of those two must starve.
… It obviously does exist even
under present conditions, because the small amount of land actually in
use in the United Kingdom supports all the inhabitants -- and even
keeps some of them in great luxury. It does not, it is true, support
them directly with food, but it supports them by the products of
industries on land of high site value, exchanged for food imported
from foreign soil.
… It will continue to exist (and
even to increase in quantity), because the wealth to be got out of the
soil is practically inexhaustible.
… Unlimited "productivity
of land.
… Not only are there to be
reclaimed great quantities of land never yet cultivated, or fallen out
of cultivation, but every day teaches the application of new methods
which increase the amount producible from both agricultural and
industrial land already in use. Materials previously wasted are turned
to account to enrich the soil and improve mechanical efficiency, or to
be fabricated into some fresh article of utility: and each new human
being is not merely a consumer, but to a certain extent adds to the
proportional productivity of the soil. Moreover, so far, we have only
touched the surface of the globe, except for a few materials such as
stone, coal and iron. Great depths lie beneath our feet, only waiting
proper treatment to turn them to account. Ultimately, indeed, it is
conceivable that even the most unpromising inorganic matter could by
chemical methods be converted into organic matter capable of feeding
an almost limitless population.
… Definition of Marginal Land.
… Marshall describes Land on the
Margin of Cultivation as land "that is cultivated but only just
pays its expenses, and so gives no surplus for rent."
… This definition is not a
scientific one, because it would not satisfy all possible cases. br>
… Suppose a country having 100
square miles of fertile land in good climate, and having, say, twenty
inhabitants. There would obviously be in such a country plenty of
unused land for which there was no competition, which would yield such
a profit to labour as could amply provide both subsistence to its user
and also tribute (in the shape of a rent) to the legal owner of the
territory. Such land, being presumably less advantageous than the
sites cultivated, or otherwise used, by the twenty citizens, would
certainly be land "on the margin of cultivation." Actual
examples are still to be found in a few places, such, for instance, as
British East Africa.
… Similarly, if the whole surface
of the earth were available, and the world's population free and able
to spread out over it, there would certainly be fertile land on the
margin of cultivation yielding more than a bare subsistence in return
to labour.
… Whether land on the margin of
cultivation is such that it can pay rent, or no, evidently depends on
the ratio of population to available territory.
… Private ownership of land drives
down the margin of cultivation by monopoly rents, and also by
artificial shortage.
… In ordinary civilised countries,
where land is privately owned, land that could be obtained freely
would be cultivated, although it only afforded a bare subsistence in
return. Such land therefore, if and where it exists, might be said to
be "on the margin of cultivation."
… In so far, Marshall's definition
holds good; but only because the land is held in private ownership. It
would be falsified, were land monopoly overthrown. The terrible thing
is, that private property in land is so assumed as a natural
phenomenon by almost all writers on economics that they do not even
realise, when they frame their definitions and theories, that it is an
accidental condition. If, owing to private or bureaucratic ownership
of the whole land of the country, land, for which under free
conditions there would be no competition, can only be had by paying
rent (a monopoly rent, since it has no economic rent) then the return
which the worker secures to himself on such land is bound to be driven
down towards the level of the lowest standard of subsistence -- all
above that going of necessity to the land-proprietor. The rent also of
all superior land will be enhanced in proportion to the monopoly rent
of this marginal land. The worker, therefore, being in no case able to
get for his labour (directly, or in wages) more than a poor
subsistence (the standard of comfort being kept down by the payment,
not of economic, but of monopoly rent), will take under cultivation,
if he can get it, land which would be below competition if his
standard of life were not so low. In this way, a low standard of wage
and life may bring under cultivation land which would otherwise be
neglected.
… But the margin of cultivation is
actually forced down in another way. For the artificial shortage in
land, which is the outcome of exclusive private ownership, makes the
world actually smaller in size for the purposes of use. Thus, owing to
the direct withholding of some land, the partial and inefficient use
of other land, and the degeneration of much agricultural land is
through disuse, there is competition now for all available land,
except for such as under existing conditions of tenancy, rent,
insecurity, lack of capital, etc., cannot yield profit enough for
decent maintenance, while the only land obtainable at no rent (or at a
nominal rent) will be -- if any be obtainable at all -- land which
will afford in return to labour the barest subsistence; and which is
really below the true margin of cultivation.
… It is, therefore, true, that in
England and other 14 old "countries land on the margin of
cultivation is only such land as will afford a bare subsistence. It is
unfortunately true to-day of the "new" countries also. They
started with a large free margin, but owing to their unquestioning
adoption of the theory of exclusive ownership, land monopoly there too
has forced the margin down to land which can only yield a poor
subsistence either because of its inferior fertility, or of its remote
situation. In Canada, for instance, the immigrant in seeking farm land
might have to traverse miles of virgin prairie land held up by the
Canadian Pacific Railway, the Hudson Bay Company, or other
monopolising syndicates and individuals, in order to get to land where
he may farm rent free, but which, owing to its distance from supplies,
will afford him only a bare living. This land, Professor Marshall
would designate as land on the margin; so it is -- but it is an
artificial margin. If these more accessible lands, that are now
withheld, were available to labour, there would be no competition for
the greater part of them, and the marginal line would lie along land
which would afford much more than a bare subsistence. It is this
legalised restriction of use which has driven down the standard of
life in Canada almost as low as in this country.
… Marshall's definition of marginal
land is therefore correct for civilised countries in this present
state of society; and the object of those who would increase the
profits of labour must be, to make his definition incorrect, by
overthrowing the system which depresses the free margin and with it
the wages of labour in all employments.
… It is a truism, that with more
capable workers, more accessible capital and more reasonable terms of
tenure, and, above all, with wider and more intelligent application of
science, even such poor land as is now on the margin could produce per
head of workers manifold what it produces to-day. But under existing
conditions, such increased possibilities do not go to the permanent
benefit of the workers, but to increase the tribute exacted in the
form of monopoly rent by the landowners.
… It must be remembered that
monopoly rent is the tribute paid for permission to live and to work,
and is not identical with economic rent, which represents the superior
advantages of any given site. The rent at present paid to landowners
is a compound of both monopoly and economic rent. Under a free system
it would, of course, be the economic rent which would be payable to
the community.
… Monopoly rent due to artificial
restrictions cannot in justice be exacted either by the State or
individuals and would, as a matter of fact, disappear of itself so
soon as the artificial barriers were removed. It is only when there is
a margin of free land, able to support life in comfort, that the
rent-paying tenants will be able permanently to secure any addition of
produce to themselves, and will be able to keep down the rent of
superior land to what will leave the worker on it a profit equal to
the profits got on the free marginal land.
… The quality of the marginal land
depends on the whole of the superior lands being in use, and used to
their full capacity. This is one of the most important factors in
determining the position of the marginal line.
… Improvements in the crafts
raise the margin.
… Moreover, under this condition of
free marginal land, improvements in industrial crafts and in
agricultural methods, which enable men to get more wealth from the
same area of land, must raise the margin of cultivation, and set free
land of a higher grade, and consequently increase the direct return to
labour and cause a corresponding rise in wages, wherever there is also
wage labour.
… Suppose the unit area to be as
much land on the margin of cultivation as will support one man, then
the site-value of the unit area of such land is unit site-value. Then
equal areas on better sites will be represented in site-value by 2, or
10, or 100, or 1000 units respectively. Suppose then that under free
conditions some land of a quality of 60 units of site- value -- that
is to say, which on unit area can support, either by industry or
agriculture, 60 people -- became capable, through a new invention, of
producing food or manufactured articles equivalent to the support of
90 persons. This improvement in a special industry would not, of
course, affect the whole land of one grade in the world, or country;
but it would probably affect land of different grades, so that some
land of 40 units would rise to 60 units, and that of, perhaps, 100 to
150. This would mean that the actual number of site-value units would
be increased, not, of course, 50 per cent., since the improvement
presumably would only be applicable to certain trades, but so that
perhaps the whole population could be provided for on, say, 95 per
cent, of the total area formerly needed by them. It is exactly as
though the actual territory had been extended in space while the
population had remained constant (which, as we have shown before,
means a higher marginal line). The whole population, then, would, as
it were, shift upwards 5 per cent, to occupy grades of land better
than those they previously occupied; and what was before land on the
margin would be discarded for the better now available. So the
marginal line rises and the marginal unit -- or, to put it otherwise,
the standard of comfort -- rises 5 per cent.
… As example of such scientific
improvements as would raise, under free conditions, the margin of
cultivation, but which to-day have merely increased monopoly rent, one
might cite the use of basic slag for artificial manures, the
application of steam and electricity to transport, the manufacturing
of soil for French gardening, etc.
… Assuming continued improvements
in the crafts and applied sciences, then, either the standard of
comfort would continue to rise; or, as seems more probable, when it
reached a certain point, free men would lessen their activities in the
production of tangible wealth, and a rise in the margin of cultivation
would mean, not increased output, but a shortening in the hours of
productive labour.
… Of course it is not necessary
that the marginal line of cultivation should actually shift
geographically from land of one quality to land of a superior quality.
"The raising of the margin" might only mean that the unit
site-value became a higher one.
… The whole subject bristles with
difficulties, especially as the possibility of free marginal land is
seldom considered together with its effects on wages, economic rent,
and so forth. The above remarks are only an attempt to disentangle
some of the problems which offer themselves, in considering the part
which marginal land must play in an endeavour to regain economic
freedom.
CONTENTS
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