PRIVATE OWNERSHIP THE BEST SYSTEM OF LAND TENURE
The defence of private landownership set forth in the last chapter has
been conditional. It has tended to show that the institution is
morally lawful so long as no better system is available. As soon as a
better system has been discovered, the State and the citizens are
undoubtedly under some degree of moral obligation to put it into
practice. Hence the important present question is whether this
condition or contingency has become a reality. The only proposed and
the only possible alternative systems are Socialism and the Single
Tax. All other forms of tenure are properly classed as modifications
of private ownership, rather than as distinct systems. Consequently
the worth, and efficiency, and morality of private ownership can be
adequately determined by comparison with the two just mentioned.
_The Socialist Proposals Impracticable_
As now existing and as commonly understood, private landownership
comprises four elements which are not found together in either
Socialism or the Single Tax. They are: security of possession combined
with the power to transfer and transmit; the use of land combined with
the power to let the use to others; the receipt of revenue from
improvements in or upon the land; and the receipt of economic rent,
the revenue due to the land itself, apart from improvements. In its
extreme form, and as formerly understood by the majority of its
authoritative exponents, Socialism would take from the individual all
of these elements or powers. The State, or the Collectivity, would own
and manage all productive land and land-capital, and would receive and
distribute the product. Consequently the cultivators of the land would
be deprived of even that limited degree of control which is now
possessed by the tenant on a rented farm; for the latter, though not a
landowner, is the owner of a farming business, and of agricultural
instruments of production. Under Socialism the users of the land would
not receive the revenue either from improvements or from the land
itself. They would be substantially employés of the community,
receiving a share of the product according to some plan of
distribution established by public authority. Land occupied by
dwellings would likewise be owned and managed by the State, although
its product, the benefit of its use, would necessarily go in the first
instance to the occupier. In return for this benefit he would
undoubtedly be required to pay some kind of rent to the State.
Now the majority of persons believe that this system of land tenure
would be inferior to private ownership, both as regards individual
welfare and social welfare. The reasons for this belief will be given
in detail in the chapter on "The Socialist Scheme of Industry." For
the present it will be sufficient to point out in a summary way that
Socialism would be unable to organise and carry on efficiently all
agricultural and extractive industries, either under one central
direction or under many provincial authorities; that it could not
adjust wages and salaries satisfactorily, nor give the individual
worker an incentive as effective as the self interest that goes with
private ownership; that it would deprive the worker of a great part of
the freedom that he now enjoys in the matters of occupation and
residence; that it would leave to the consumer less choice in the
demand for the products of land; that it would place all the people in
a position of dependence upon a single agency for all these products;
and that it would make all land users, whether as workers or as
residents, tenants-at-will on the property of the State.
From the nature of the case, none of the foregoing propositions can be
demonstrated mathematically. Nevertheless they are as nearly evident
as any other practical conclusions which are based upon our general
experience of human nature, its tendencies, and its limitations. At
any rate, the burden of proof is upon the advocates of the new system.
Until they have assumed and satisfactorily disposed of this burden, we
are justified in rejecting their prophecies, and in maintaining the
superiority of private ownership.[27]
To-day, however, many Socialists, possibly the majority of them in
some countries, would reject the extreme form of land socialisation
discussed in the preceding paragraphs. "The nearest approach which
Socialists have made to a _volte face_ since Marx, has been in
relation to Agrarianism.... Marx thought that the advantage of
concentrating capital would be felt in agriculture as in other
industries; but, in spite of a temporary confirmation of this view by
the mammoth farms which sprang up in North America, it now appears
very doubtful.... Recognition of this has led reformists to substitute
a policy of actively assisting the peasants for the orthodox policy of
leaving them to succumb to capitalism. Their formula is: 'Collectivise
credit, transport, exchange, and all subsidiary manufacture, but
individualise culture.'"[28] The Belgian Socialist leader,
Vandervelde, seems to prefer State ownership and management of the
great agricultural industries which require large masses of capital
for their efficient operation, such as dairying, distilling, and sugar
making, together with State ownership of the land thus used. Other
lands he would have owned by the State, but cultivated by individuals
according to a system of leasing and rent-paying.[29] By a referendum
vote the members of the Socialist party in the United States recently
amended their platform on land, to read as follows: "The Socialist
party strives to prevent land from being used for the purpose of
exploitation and speculation. It demands the collective possession,
control or management of land to whatever extent may be necessary to
attain that end. It is not opposed to the occupation and possession of
land by those using it in a useful and bona fide manner without
exploitation."[30] As to land occupied by dwellings, perhaps the
majority of Socialists would now agree with Spargo in the statement
that, "so far as the central principle of Socialism is concerned,
there is no more reason for denying the right of a man to own his own
home than there is to deny him the right to own his hat."[31]
In so far as the foregoing modifications of Socialist proposals would
allow the individual to own the land that he cultivates or occupies,
they do not call for further discussion here. In so far as they
combine State ownership of land with individual management of
cultivation, they are subject to at least all the limitations of the
Single Tax. To the latter system we now turn our attention.
_Inferiority of the Single Tax System_
Of the four leading elements of private ownership enumerated above,
the Single Tax scheme would comprise all but one. In the words of
Henry George himself: "Let the individuals who now hold it still
retain, if they want to, possession of what they are pleased to call
_their_ land. Let them continue to call it _their_ land. Let them buy
and sell, and bequeath and devise it. We may safely leave them the
shell, if we take the kernel. _It is not necessary to confiscate
land; it is only necessary to confiscate rent...._ In this way the
State may become the universal landlord without calling herself so,
and without assuming a single new function. In form, the ownership of
land would remain just as now. No owner of land need be dispossessed,
and no restriction need be placed upon the amount of land that any one
could hold."[32]
Individuals would, therefore, still enjoy security of possession, the
managerial use of land, and the revenue due to improvements. The
income arising from the land itself, the economic rent, they would be
obliged to hand over as a free gift to the State. As we have seen in a
preceding chapter, this confiscation of rent by the State would be
pure and simple robbery of the private owner. Suppose, however, that
the State were willing to compensate individual proprietors with a sum
equal to the present value, or the capitalised rent, of their land. In
that case the only difference made to the individual would be that he
could no longer invest his money in land nor profit by the increases
in land values. While this would deprive some persons of advantages
that they now enjoy, it would be beneficial to the majority, and to
the community. Since no man would find it profitable to retain control
of more land than he could use himself, the number of actual land
users would be increased. The land speculator would disappear,
together with the opportunity of making and losing fortunes by
gambling on the changes in land values. Owing to the removal of
taxation from the necessaries of life and from industry, consumers
would get goods cheaper, and some stimulus would be given to
production and employment. Those monopolies which derive their
strength from land would become weaker and tend to disappear. Sooner
or later there would probably be a considerable increase in the amount
of money available for public improvements and socially beneficial
institutions.
On the other hand, there would be certain and serious disadvantages. A
considerable number of land users might permit their holdings to
deteriorate through careless cultivation. To be sure, they would not
find this a profitable course if they intended to remain on the land
permanently; but they might prefer to exhaust the best qualities of a
farm in a few years, and then retire, or go into some other business,
or repeat the wearing-out process on other lands. Thus the community
would suffer through the lowered productiveness of its land, and
because of the lower rent that it would receive from all subsequent
users of the deteriorated tracts. In the second place, the
administrative machinery required to levy and collect the rent, and to
apportion the different holdings among competitive bidders, would
inevitably involve a vast amount of error, inequality, favouritism,
and corruption. For the land tax to be levied and collected would not
be, as now, a fraction of the rental value, but the full amount of the
annual rent. In the third place, cultivators would not have the
inducement to make improvements which arises from the hope of selling
both the improvements and the land at a profit, owing to the increased
demand for the land. Perhaps the greatest disadvantage of the system
would be the instability of tenure, with regard to both productive and
residential lands. Owing to misfortunes of various kinds, for example,
one or two bad crops, many cultivators would be temporarily unable to
pay the full amount of the land tax or rent. It is scarcely
conceivable that the State would remit the deficiency, or refuse to
turn the land over to other persons on terms more advantageous to
itself. Inasmuch as the value and rent of land would be continuously
adjusted by competition, the more efficient and more wealthy would
frequently supplant the less efficient and the less wealthy, even
though the latter had occupied their holdings or their dwellings for a
great number of years. Legal security of tenure, though theoretically
the same as that enjoyed by the private owner to-day, would be much
less effective practically. In this respect land users would be in
almost as bad a case as renters are at present.[33]
Our conclusion, then, is that private landownership is certainly
better than extreme Socialism, or any form of Socialism which does not
concede to the land user all the control that he would have under the
Single Tax system, and that it is very probably superior to the
latter. In making this comparison and drawing this conclusion, we have
in mind private ownership, not at its worst nor as it exists or has
existed in any particular country, but private ownership in its
essential elements, and with its capacity for modification and
improvement. If we were to examine carefully the results of private
ownership as it obtained in Ireland for several centuries before the
enactment of the recent Land Purchase Act, we should probably be
tempted to declare that the most extreme form of agrarian Socialism
could scarcely have been productive of more individual and social
injury. Certain other countries present almost equally unfavourable
conditions of comparison. Failure to note this distinction between the
historical and the potential aspects of private landownership has
vitiated many otherwise excellent defences of the institution. It has
provoked the retort that almost any plausible change would be an
improvement upon private ownership as it has existed in this or that
country. But these are not the real alternatives. The practical choice
is between private ownership as shown by experience and reason to be
capable of improvement, and some untried system which is subject to
grave defects, and which at its best would be probably inferior to
modified private ownership. An attempt to describe some of these
modifications and improvements will be made in a subsequent chapter.
In the meantime we content ourselves with the statement that private
land ownership is capable of becoming better than Socialism
certainly, and probably better than the Single Tax system.
Consequently it is justified not merely so long as neither of these
schemes is introduced, but as an institution which the State would do
well to maintain, protect, and improve.
FOOTNOTES:
[27] Cf. Chapter xi.
[28] Ensor, "Modern Socialism," p. xxxi, N. Y., 1904.
[29] Idem, pp. 213-216.
[30] Cited by Spargo, "The Substance of Socialism," p. 88, N. Y.,
1909.
[31] Idem, p. 90.
[32] "Progress and Poverty," book viii, ch. ii.
[33] Cf. Walker, "Land and Its Rent"; and Seligman, "Essays in
Taxation."