CHAPTER VI

LIMITATIONS ON THE LANDOWNER'S RIGHT TO RENT

The chapters immediately preceding have led to the conclusion that

private ownership is the best system of land tenure, and that the

individual has a natural right to participate in its advantages.

Although this system confers upon the individual owner the power to

take the rent of the land, we are not logically debarred from raising

the question whether this power is a necessary part of the moral

rights of landownership. Does the right to own a piece of land

necessarily include the right to take its rent? By what ethical

principle of distribution is the landowner justified in appropriating

a revenue in return for which he has performed no labour, nor made any

sacrifice? This is unquestionably what happens when a man hires out

his land to another. And in conditions of perfect competition, those

owners who operate their own land are fully remunerated for their

labour in the form of profits. Over and above this sum they receive

rent, the payment that they could get from the land if they were to

let its use to tenants. In the normal situation, therefore, rent is a

workless income. On what moral ground may it be taken by the

landowner?[47]

The fact that we have rejected the Single Tax and the confiscation of

rent by the community, does not of itself commit us to the conclusion

that the private owner has a moral right to receive rent. We have

condemned the State appropriation of rent on the assumption that it

would take place without a similar confiscation of interest. Such

discrimination would be grossly unfair; for it would cause land values

to sink to zero, while leaving the value of capital substantially

undisturbed. To carry out such a programme would be to treat property

owners unequally, to penalise one set of beneficiaries of "workless"

incomes, while leaving another set untouched. Consequently, the State

is not justified in confiscating rent unless it is justified in

confiscating or prohibiting interest; and the landowner is as fully

justified in taking rent as the capital owner is in taking interest.

The contention of the Single Taxer that ownership of the former kind

is morally wrong, while ownership of capital is morally legitimate,

has already received sufficient discussion. The specific question

remains, therefore,--whether the landowner and the capitalist are

justified in receiving and retaining their "workless" incomes.

Inasmuch as the principles and pertinent facts involved in this

question can be more effectively and more conveniently discussed in

relation to interest than in relation to rent, the solution will be

deferred to the chapters on interest. Assuming provisionally that the

outcome of the discussion will be favourable to the claims of the

landowner, let us inquire whether he always has a moral right to _all_

the rent. The parallel question regarding the capitalist will be

considered in connection with the right of the labourer to a living

wage.

_The Tenant's Right to a Decent Livelihood_

The actual payments made by tenants to landowners sometimes leave the

former without the means of decent living. Such had been the condition

of a large part of the Irish tenant farmers before 1881, when the Land

Courts were established. In the course of twenty-five years these

courts reduced the rents by twenty per cent. on the average in upwards

of half a million cases. While a part of the reductions was intended

to free the tenants from the unjust burden of paying rent on their own

improvements, another part was undoubtedly ordered on the theory that

the tenants were entitled to retain a larger share of the product for

their own support. Yet the latter portion of the reduction apparently

represented true economic rent; for it was included in the difference

between the product and the current cost of production; it was

included in the amount that men in Ireland were willing to pay for the

use of land. It was a part of the surplus that they had left after

defraying their expenditures for capital and labour. To be sure, the

tenants in some other countries, say, the United States, would not

have been satisfied with such a small remuneration, and would not have

handed over so much to the landlord; but if the concept of economic

rent is to have any serviceable meaning it must be determined by the

actual returns to capital and labour in each locality, and not by the

standards of some other place which are assumed to be normal. In any

case, the Irish Land Courts did reduce the rents below the level fixed

by competition, by the unregulated forces of supply and demand.

Was this treating the landlords justly? May a tenant ever retain a

part of the rent which the free course of competition would yield to

the landowner? Here we must distinguish between the tenant who is and

the tenant who is not in possession of a holding sufficiently large to

require all the time and labour of a cultivator possessing average

efficiency. The tenant who controls and cultivates less than this

amount of land ought not to expect to get all his livelihood

therefrom. Failure to do so would not necessarily mean that he was

paying exorbitant rent. Holdings of this sort are rightly called

"uneconomic"; that is, they are too small to permit a profitable and

reasonable application of labour and capital. On such holdings the

fair rent would be that amount per acre which would be regarded as

fair for the use of the same land held in farms of "economic" size.

The proper recourse for the occupiers of uneconomic holdings is to get

control of more land, which is exactly what has been happening in

Ireland through the action of the Congested Districts Board.

This brings us to the case of the man who cannot pay the competitive

rent on a holding of normal size, and have sufficient left to provide

himself and family with a decent livelihood. The fundamental reason why

the rent is so high is to be found in the economic weakness of the

great mass of the tenants, who can neither emigrate to another country

nor get a better living as wage earners in their own. Their predicament

is exactly the same as that of the helpless and unskilled labourers who

are compelled by the force of competition to accept less than living

wages. In these circumstances it seems clear that a government

commission would be justified in reducing the rents to such a level as

would leave the tenants of average efficiency on normal holdings the

means of maintaining a decent standard of living. In such cases, then,

the landowner has not a right to the full economic or competitive rent.

His right thereto is morally inferior to the tenant's right to a decent

livelihood, just as the capitalist-employer's right to the prevailing

rate of interest is morally inferior to the labourer's right to a

living wage. Neither in the one case nor in the other is mere

competition the final determinant and measure of justice. It has no

moral validity when it comes into conflict with man's natural right to

get a reasonable livelihood on reasonable conditions from the bounty of

the earth. These fundamental questions will be discussed at length in

the chapters on wages.

To the possible objection that the concept of a "normal" holding is

vague, the sufficient reply is that in practice it can be estimated

with as much definiteness as the concept of the "average" labourer. As

we see from the history of the Irish Land Courts and their "Judicial

Rents," it can be defined with sufficient accuracy to serve the ends

of practical justice. More than this is not attained in any department

of human relations, particularly, economic relations.

_The Labourer's Claim Upon the Rent_

Should any part of the rent go to the labourer? Let us take first the

case of the labourer who is employed by a tenant, and who is not

occupied in personal service but in some productive task connected

with the land. Like all other wage earners he has a right to a

sufficient share of the product to afford him a decent livelihood.

Since the tenant is the employer, the director of the business, and

the owner of the product, he rather than the landowner is the person

who is primarily charged with the obligation of providing the labourer

with a living wage. As noted above, his own claim to a decent

livelihood is morally superior to the landlord's claim to rent; but

if, having taken this amount from the product, he finds himself unable

to pay living wages to all his employees unless he deducts something

either from the normal interest-return on his own capital or from the

rent that would ordinarily go to the landowner, he is morally bound to

choose the former course. He, not the landowner, is the wage payer.

That he is obliged to provide living wages to his labour force even

at the cost of interest on his own investment in the business, is a

proposition that will receive ample discussion and defence in a later

chapter.[48]

Suppose, however, that the tenant has not the means of paying full

living wages after turning into the wage fund all the money that he

had hoped to retain as interest on his capital. May he withhold from

the landowner a sufficient portion of the rent to cover the deficit in

wages? Were this action practicable it would be undoubtedly

justifiable; for the landowner's claim to rent is no stronger than the

tenant-capitalist's claim to interest. As claims upon the product,

both are morally weaker than the labourer's right to a living wage.

Nevertheless, the tenant who should attempt to carry out this course

would probably be prosecuted for non-fulfilment of his contract with

the landowner, or would be evicted from the holding. Nor is the

landowner obliged in such cases to give up the rent in order that a

living wage may be paid to the tenant's labour force. He cannot be

certain that the failure of the latter to receive full living wages

has not been due to inefficiency or fraudulent conduct on the part of

the tenant. Moreover, the landowner would be justified in seeking to

protect himself against the recurrence of such situations by putting

his land in charge of a more capable tenant, or by selling it and

investing or lending the money elsewhere. However clear may be the

abstract proposition that the claim to a living wage possessed by the

employee of the tenant is superior to the claim to rent possessed by

the landowner, the difficulty of realising this right in practice is

sufficient to relieve even conscientious proprietors from the

obligation of giving up the rent for this purpose.

When the landowner is operating or cultivating his land himself, he is

evidently obliged to pay a living wage to all his employees at the

expense of rent, just as he is obliged to do so at the cost of

interest on his artificial capital. To be sure, the first charge upon

the product should be a decent livelihood for himself; but, when he

has obtained this, the right of his employees to a living wage is

morally superior to his right to either rent or interest.

At present the State takes a part of the rent through taxation. May it

take a larger share without violating justice? This question will be

considered in the second chapter following. In the meantime, we shall

examine the principal defects of the existing system of land tenure

with a view to the suggestion of appropriate remedies, whether through

taxation or otherwise.

FOOTNOTES:

[47] The assumption that perfect competition is even roughly

approximated in relation to men who operate their own land, and that

they generally obtain an adequate return for their labour in addition

to the sum that they might have obtained through hiring out their

land, may appear rather violent in view of the estimate that the

average farmer in the United States gets only $402 annually in payment

for the labour of himself and family. See article on "The Farmer's

Income" in the _American Economic Review_, March, 1916. However, this

income is mostly in the form of food, fuel, and shelter, which would

cost very much more in the city; consequently it is probably

equivalent to an urban income of $600. Its value is still further

enhanced by the farmer's independent position, and by his expectation

of profiting by the future increase of land values. Hence it would

seem that the rent and interest allowance of $322 might fairly be

regarded as a surplus in excess of the necessary payment for labour.

[48] Chapter xxii.

Distributive Justice: The Right and Wrong of Our Present Distribution of Wealth · 第 6 / 13 章