_How the Product of Land is to be distinguished from
the Product of Human Exertion._
The question before us will be most easily understood if we begin
with once again waiving any consideration of Capital, and if we deal
only with what Mill, in the passage just quoted, calls “Nature and
Labour”—or, in other words, with Land and Human Exertion. We will
also, for simplicity’s sake, confine ourselves to one use of land—its
primary and most important use, namely its use in agriculture or
food-production.
[Sidenote ◆1 Rent is the proportion of the produce produced not by
Human Exertion, but by the Land itself;]
◆¹ Now a British tenant-farmer who lives solely by his farming
obviously derives his whole income from the produce of the soil he
occupies; but the whole of this produce does not go to himself. Part is
paid away in the form of rent to his landlord, and part in the form
of wages to his labourers. We may however suppose, without altering
the situation, that he has no labourers under him—that he is his own
labourer as well as his own manager, and that the whole of the produce
that is not set aside as rent goes to himself as the wages of his own
exertion. The point on which I am going to insist is this—that whilst
the exertion has produced the product that is taken as wages, the
soil—or to speak more accurately—a certain quality in the soil has just
as truly produced the produce that goes in rent—in fact that “Nature
and Labour, though equally necessary for producing the effect at all,”
each produce respectively a certain definite part of it.
[Sidenote ◆1 As will be shown in this chapter by reference to the
universally accepted theory of Rent.]
◆¹ In order to prove this it will be enough to make really clear to
the reader the explanation of rent which is given by all economists—an
explanation in which men of the most opposite schools agree—men like
Ricardo, and men like Mr. Henry George; and of which Mill himself
is one of the most illustrious exponents. I shall myself attempt to
add nothing new to it, except a greater simplicity of statement and
illustration, and a special stress on a certain part of its meaning,
the importance of which has been hitherto disregarded.
Now, as we are going to take the industry of agriculture for our
example, we shall mean by rent a portion of the agricultural products
derived from Human Exertion applied to a given tract of soil. Of such
products let us take corn, and use it, for simplicity’s sake, as
representing all the rest; and that being settled, let us go yet a
step further; and, for simplicity’s sake also, let us represent corn
by bread; and imagine that loaves develop themselves in the soil like
potatoes, and, when the ground is properly tilled, are dug up ready
for consumption. We shall figure rent therefore as a certain number
of loaves that are dug up from a given tract of soil. Now everybody
knows that all soils are not equally good. That there is good land and
that there is poor land is a fact quite familiar even to people who
have never spent a single day in the country. And this means, if we
continue the above supposition, that different fields of precisely the
same size, cultivated by similar men and with the same expenditure of
exertion, will yield to their respective cultivators different numbers
of loaves.
[Sidenote ◆1 We will illustrate this by the case of three men of
equal power tilling three fields of unequal fertility.]
◆¹ Let us take an example. Tom, Dick, and Harry, we will say, are three
brothers, who have each inherited a field of twelve acres. They are all
equally strong, and equally industrious: we may suppose, in fact, that
they all came into the world together, and are as like one another as
three Enfield rifles. Each works in his field for the same time every
day, digs up as many loaves as he can, and every evening brings them
home in a basket. But when they come to compare the number that has
been dug up by each, Tom always finds that he has fifteen loaves, Dick
that he has twelve, and Harry that he has only nine; the reason being
that in the field owned by Harry fewer loaves develop themselves than
in the fields owned by Tom and Dick. Harry digs up fewer, because there
are fewer to dig up. Let us consider Harry’s case first.
[Sidenote ◆1 Labour must be held to produce so much as is
absolutely necessary for its own support.]
◆¹ Each of the loaves is, we will say, worth fourpence; therefore
Harry, with his nine loaves, makes three shillings a day, or eighteen
shillings a week. This is just enough to support him, according to the
ideas and habits of his class. If his field were such that it yielded
him fewer loaves, or if he had to give even one of the loaves away,
the field would be useless; it would not be cultivated at all, either
by him, or by anybody, nor could it be; for the entire produce, which
would then go to the cultivator, would not be enough to induce, or
perhaps even to make him able, to cultivate it. But, as matters stand,
so long as the entire produce does go to him, and to no one else, we
must take it for granted that his exertion and his field between them
yield him a livelihood which, according to his habits, is sufficient;
for otherwise, as I have said, this field neither would nor could be
cultivated. And it will be well here to make the general observation
that whenever we find a class of men cultivating the utmost area of
land which their strength permits, and taking for themselves the entire
produce, their condition offers the highest standard of living that
can possibly be general amongst peasant cultivators: from which it
follows that, unless no land is cultivated except the best, the general
standard of living must necessarily require less than the entire
produce which the best land will yield. We assume then that Harry,
with his nine loaves a day, represents the highest standard of living
that is, or that can be, general amongst his class.
And now let us turn from Harry’s case to the case of Tom and Dick. They
have been accustomed to precisely the same standard of living as he has
been; and they require for their support precisely the same amount of
produce. But each day, after they have all of them fared alike, each
taking the same quantity from his own particular basket, the baskets
of Tom and Dick present a different appearance to that of Harry. There
is in each of the two first a something which is not to be found in
his. There is a surplus. In Dick’s basket there are three extra loaves
remaining; and in Tom’s basket there are six. To what then is the
production of these extra loaves due? Is it due to land, or is it due
to the exertions of Tom and Dick? Mill, as we have seen, would tell us
that this was an unmeaning question; but we shall soon see that it is
not so.
[Sidenote ◆1 But whatever is beyond this is the product not of
Labour, but of Land;]
It is perfectly true that it would be an unmeaning question if we
had to do with one of the brothers only—say with Harry, and only
with Harry’s field. Then, no doubt, it would be impossible to say
which produced most—Harry or the furrows tilled by him,—whether Harry
produced two loaves and the furrows seven, or Harry seven and the
furrows two. And as to Harry’s case more must be said than this. Such
a calculation with regard to it would be not only impossible, but
useless; for even if we convinced ourselves that the land produced
seven loaves, and Harry’s exertion only two, all the loaves would
still of necessity go to Harry. In a case like this, therefore, it is
quite sufficient to take account of Human Exertion only. Agricultural
labour, in fact, must be held to produce whatever product is necessary
for the customary maintenance of the labourer. ◆¹ But if this is the
entire product obtained from the worst soil cultivated, it cannot be
the entire product obtained from the best soil; and the moment we have
to deal with a second field,—a field which is of a different quality,
and which, although it is of exactly the same size, and is cultivated
every day with precisely similar labour, yields to that labour a
larger number of loaves,—twelve loaves, or fifteen loaves, instead of
nine,—then our position altogether changes. We are not only able, but
obliged to consider Land as well as Labour, and to discriminate between
their respective products. A calculation which was before as unmeaning
as Mill declares it to be, not only becomes intelligible, but is forced
on us.
[Sidenote ◆1 As we shall see by comparing the case of the man
tilling the best field with that of the man tilling the
worst.]
◆¹ For if we start with the generalisation derived from Harry’s case,
or any other case in which the land is of a similar quality that one
man’s labour produces nine loaves daily, and then find that Tom and
Dick, for the same amount of labour, are rewarded respectively by
fifteen loaves or by twelve, we have six extra loaves in one case,
and three in the other, which cannot have been produced by Labour,
and which yet must have been produced by something. They cannot have
been produced by Labour; for the very assumption with which we start
is that the Labour is the same in the last two cases as in the first;
and according to all common-sense and all logical reasoning, the same
cause cannot produce two different results. When results differ, the
cause of the difference must be sought in some cause that varies, not
a cause that remains the same; and the only cause that here varies
is the Land. Accordingly, just as in Harry’s case we are neither able
nor concerned to credit the Land with any special part, or indeed any
part, of the product, but say that all the nine loaves are produced by
Harry’s Labour, so too in the case of Tom and Dick we credit Labour
with a precisely similar number; but all loaves beyond that number
we credit not to their Labour, but to their Land—or, to speak more
accurately, to certain qualities which their Land possesses, and which
are not possessed by Harry’s. In Dick’s case these superior qualities
produce three loaves; in Harry’s case, they produce six.
[Sidenote ◆1 The men themselves would be the first to understand
this.]
If any one doubts that such is the case, let him imagine our three
brothers beginning to quarrel amongst themselves, and Tom and Dick
boasting that they were better men than Harry, on the ground that they
always brought home more loaves than he. Every one can see what Harry’s
retort would be, and see also that it is unanswerable. ◆¹ Of course he
would say, “I am as good a man as either of you, and my labour produces
quite as much as yours. Let us only change fields, and you will see
that soon enough. Let Tom take mine, and let me take his, and I then
will bring home fifteen loaves; and he, work as he may, will only
bring home nine. It is your b——y land that produces more than mine,
not you that produce more than I; and if you deny it, stand out you
——s and I’ll fight you.” We may also appeal to one of the commonest
of our common phrases, in which Harry’s supposed contention is every
day reiterated. If a farmer is transferred from a bad farm to a good
one, and the product of his farming is thereby increased, as it will
be, everybody will say, “The good farm _makes_ all the difference.”
This is merely another way of saying, the superior qualities in the
soil _produce_ all the increase, or—to continue our illustration—the
increased number of loaves.
And all the world is not only asserting this truth every day, but is
also acting on it; for these extra loaves, produced by the qualities
peculiar to superior soils, are neither more nor less than Rent. Rent
is the amount of produce which a given amount of exertion obtains
from rich land, beyond what it obtains from poor land. Such is the
account of rent in which all economists agree; indeed, when once it is
understood, the truth of it is self-evident. Mr. Henry George’s entire
doctrines are built on it; whilst Mill calls it the _pons asinorum_ of
economics. I have added nothing in the above statement of it to what is
stated by all economists, except weight and emphasis to a truth which
they do not so much state as imply, and whose importance they seem to
have overlooked. This truth is like a note on a piano, which they have
all of them sounded lightly amongst other notes. I have sounded it
by itself, and have emphasised it with the loud pedal—the truth that
rent is for all practical purposes not the product of Land and Human
Exertion combined, but the product of Land solely, as separate from
Human Exertion and distinct from it.
[Sidenote ◆1 The above doctrine of Rent is not a landlord’s
doctrine. It would hold true of a Socialistic State as
well as of any other.]
◆¹ And here let me pause for a moment to point out a fact which, though
it illustrates the above truth further, I should not mention here if
it were not for the following reason. Rent forms the subject of so
much social and party prejudice that what I have just been urging may
be received by certain readers with suspicion, and regarded as some
special pleading on behalf of landlords. I wish therefore to point
out clearly that the existence of rent and the payment of rent is
not peculiar to our existing system of landlordism. Rent must arise,
under any social arrangement, from all soils which are better than the
poorest soil cultivated: it must be necessarily paid to somebody; and
that somebody must necessarily be the owner. If a peer or a squire is
the owner, it is paid to the peer or squire; if the cultivator is the
owner, the cultivator pays it to himself; if the land were nationalised
and the State were to become the owner, the cultivator would have to
pay it away to the State.
[Sidenote ◆1 It is easy to see how Rent arises, under any
conditions, from all superior soils.]
◆¹ In order that the reader may fully realise this, let us go back to
our three brothers, of whom the only two who paid rent at all, paid
it, according to our supposition, to themselves; and let us imagine
that Harry—the brother who pays no rent to anybody, because his field
produces none, has a sweetheart who lives close to Tom’s field, or
who sits and sucks blackberries all day in its hedge; and that Harry
is thus anxious to exchange fields with Tom, in order that he may be
cheered at his work by the smiles of the beloved object. Now if Tom
were to assent to Harry’s wishes without making any conditions, he
would be not only humouring the desire of Harry’s heart, but he would
be making him a present of six loaves daily; and this, we may assume,
he certainly would not do; nor would Harry, if he knew anything of
human nature, expect or even ask him to do so. If Tom, however, were on
good terms with his brother, he might quite conceivably be willing to
meet his wishes, could it be but arranged that he should be no loser
by doing so; and this could be accomplished in one way only—namely,
by arranging that, since Harry would gain six loaves each day by
the exchange, and Tom would lose them, Harry should send these six
loaves every day to Tom; and thus, whilst Harry was a gainer from a
sentimental point of view, the material circumstances of both of them
would remain what they were before. Or we may put the arrangement
in more familiar terms. The loaves in question we have supposed to
be worth fourpence each; so we may assume that instead of actually
sending the loaves, Harry sends his brother two shillings a day, or
twelve shillings a week, or thirty pounds a year. Tom’s field, as we
have said, is twelve acres; therefore, Harry pays him a rent of fifty
shillings an acre. And Tom’s case is the case of every landlord, no
matter whether the landlord is a private person or the State—a peer who
lets his land, a peasant like Tom who cultivates it, or a State which
allows the individual to occupy but not to own it. Rent represents an
advantage which is naturally inherent in certain soils; and whoever
owns this advantage—either the State or the private person—must of
necessity either take the rent, or else make a present of it to certain
favoured individuals.
It should further be pointed out that this doctrine of Rent, though
putting so strict a limit on the product that can be assigned to
Labour, interferes with no view that the most ardent Socialist or
Radical may entertain with regard to the moral rights of the labourer.
If any one contends that the men who labour on the land, and who pay
away part of the produce as rent to other persons, ought by rights to
retain the whole produce for themselves, he is perfectly at liberty to
do so, for anything that has been urged here. For the real meaning
of such a contention is, not that the labourers do not already keep
everything that is produced by their labour, but that they ought to
own their land instead of hiring it, and so keep everything that is
produced by the land as well.
[Sidenote ◆1 The doctrine of Rent is the fundamental example of
the reasoning by which to each agent in production a
definite portion of the product is attributed.]
This doctrine of Rent, then, which I have tried to make absolutely
clear, involves no special pleading on behalf either of landlord or
tenant, of rich or poor. It can be used with equal effect by Tory,
Radical, or Socialist, and it would be as true of a Socialistic State
as it is of any other. I have insisted on it here for one reason only.
◆¹ It illustrates, and is the fundamental example of, the following
great principle—that in all cases where Human Exertion is applied to
Land which yields only enough wealth to maintain the man exerting
himself, practical logic compels us to attribute the entire product to
his exertion, and to take the assumption that his exertion produces
this much as our starting-point. But in all other cases—that is to say
in all cases where the same exertion results in an increased product,
we attribute the increase—we attribute the added product—not to Human
Exertion, which is present equally in both cases, but to some cause
which is present in the second case, and was not present in the first:
that is to say, to some superior quality in the soil.
And now let us put this in a more general form. When two or more
causes produce a given amount of wealth, and when the same causes with
some other cause added to them produce a greater amount, the excess
of the last amount over the first is produced by the added cause; or
conversely, the added cause produces precisely that proportion of the
total by which the total would be diminished if the added cause were
withdrawn.
It is on this principle that the whole reasoning in the present book is
based; and having seen how it enables us to discriminate between the
amounts of wealth produced respectively by Human Exertion and Land, let
us go on to see how it will enable us likewise to discriminate what is
produced by Capital.