Why do People Pay Rent for the Use of Land?

Walter R.B. Willcox

[Reprinted from Land and Freedom, March-April 1941]

One must accept with the grace he may, evidence that the purport of his argument has been missed. So with "A Challenge To Pessimism"! The latter was written to suggest that the gloom occasioned by regarding Rent as an attribute of land might be dispelled did unprejudiced inquiry reveal it to be an attribute only of social organization; that instead of being due to "the relative productivity of nature," it was found to be "the measure of the worth only of social and governmental advantages."

From the belief that Rent is an attribute of land follows naturally the ideas that Rent is paid for the use of the land, and that it belongs to those who, holding titles to land, mistakenly are called "landowners." On the other hand, the belief that Rent is an attribute only of social organization leads as naturally, and directly, to the ideas that Rent is paid only for artificial advantages, and that it belongs to society, whose activities provide these advantages solely that provisions of nature may be enjoyed.

Anticipating beneficial results from such an inquiry, it was asked if Georgeists agreed that those who hold titles to areas of land really were "owners of the earth owners of climates, views, mines, forests, rivers, harbors, soils?" If Rent really was paid "because the earth with all of its natural elements and forces exists?" If people really pay Rent for the use of the land?"

Mr. Sanford J. Benjamin replied to this article in your last issue, and said: "Whoever collects the economic Rent is the landowner, whether it is the community or an individual." I am sure I fail to grasp the intended significance of this statement, since (if Henry George's intuition that Rent belongs to society is sound) it would appear to be analogous to saying that one who embezzles, thereby becomes owner of that which does not belong to him, which I cannot believe the statement was intended to imply.

But I dissent wholly from the view that by any act can human beings become "owners" of land. I believe, as presumably do most Georgists, that no man, nor any community of men however organized, can "own" the earth or any part of it. But supposing men could own land, what would that have to do with Rent if Rent is not paid for the use of land, but only for the services of governments in protecting users of land in possession of the fruits of their toil and in the enjoyment of all other social advantages? What would it have to do with "landowners" (if such there be) who neither provide the land, nor the conditions which make people want to use the land or willing to pay Rent merely title-holders, the very security of whose possession of land, and the guarantee of the validity of whose titles to land, are services of governments?

While he who obtains title to land properly may be called a "landlord," possession of title does not constitute him a "landowner," since purchase of title is not an "investment in land." Rent received from an "investment in land" is not comparable, either in cause or effect, to interest received from a true investment. Invested funds properly are used to finance the enterprise in which they are invested. But funds involved in an "investment in land" are not used to finance the land, they are not used to improve its quality or terrain, to increase its area, its accessibility of usefulness to the user of land or to the community; nor do they finance the social conditions which make people want to use land, or to offer (as indeed they do) to pay Rent. In fact, such disposition of these funds is a detriment to the user of land.

Thus, the idea that Rent is paid for the use only of that which is not land, in contradistinction to the idea that Rent is paid for the use of that which is land, has deeper significance than merely an interest in a "method of achievement" of governmental collection of the total Rent and the total abolition of taxation. But even as a "method of achievement," does it not afford the means to the unification of the aims and endeavors of all who strive towards the goal which none would deny to have been the goal of Henry George? No incitement to strife over land or cause for wars would exist, were payment of Rent to governments recognized as an obligation of every inhabitant in proportion to the benefits which each receives at the hands of governments ; instead of as "interest" to "landowners" on pseudo "investments in land." By this method appeal can be made to every inhabitant on a basis of business principles of the highest sanction and of universal application. Unifying, not divisive, its pursuit could not so much as simulate the nature, spirit or aspect, of an "ism" of any sort.

In contrast, can the single tax program have within itself the power of universality to disarm opposition? The "land value tax" has the appearance of a discriminatory tax, since it is a tax ostensibly imposed upon only, one half of the population that half (or less) which holds titles to areas of land in this country. It arrays the latter against the other half of the population which holds titles to none of the land of this country; one faction voting or acting in opposition to the other faction, each seemingly in its own interest, a condition promotive of antagonism and strife rather than of harmony and peace. For these among other reasons was it asked: "Were these truths understood and recognized by all what man or group of men would have the face or unwisdom to precipitate a war to preserve to themselves the privilege of ignoring their obligations to society, that is, the payment of Rent in full to the government?"