So far then of Mr. George's views on population and the wages fund, for which much value, as well as originality, has been claimed. The chapters in which he states them are certainly among the most impressive and characteristic in his book. Nowhere else does he display more strikingly his remarkable acuteness, fertility, and literary power, and nowhere else are these high qualities employed more fruitlessly from sheer want of grasp of the elements of the problems he discusses. These chapters are after all, however, something of a digression from the main business of the book, and they have perhaps detained us too long from Mr. George's own explanation of the supposed growth of poverty.
His explanation is this: "The reason why, in spite of the increase of productive power, wages constantly tend to a minimum which will give but a bare living is that with increase in productive power, rent tends to even greater increase" (p. 199). "Rent swallows up the whole gain, and pauperism accompanies progress" (p. 158). "The magic of property," it seems, has an unsuspected malignancy; but, in the present case, its spell is really exercised only over Mr. George's own vision. For who, with his eyes open, would believe for a moment what Mr. George so gravely asserts, that of the whole gain won by our multiplied productive power, none whatever has gone to the great bankers, and brewers, and cotton spinners, and ironmasters, and corn factors, and shipbuilders, and stockbrokers, and railway contractors; that our Rothschilds, and Brasseys, and Barings, and Bairds, the great plutocrats of the time, the possessors of the largest fortunes in the country, the very men and classes who have been most conspicuously enriched through the material progress of the nation, have all the while been conducting a hard struggle against a fatal tendency in their incomes to sink to a bare living, and had to feed, exactly like the manual labourers, from the crumbs that fall from the landowners' table. The assertion is too violent and preposterous to merit serious refutation. Everybody knows that the greatest part of the wealth of modern society is not concentrated in the hands of the landlords at all, that it has not accrued from rent and that it would not be a farthing the less though private property in land were abolished to-morrow.
But violent and preposterous as Mr. George's conclusion is, it has not been arrived at without the exercise of much perverse ingenuity. Having been brought by his examination of the wages fund and population theories to the conviction that the key to his riddle was not to be discovered in the conditions that regulated production, he concludes that it must, therefore, be sought in the conditions that regulate distribution. His problem is thus one in the distribution of wealth, and it must be explained, if it is to be explained at all, by the laws of distribution. To investigate these laws, therefore, becomes now his object, and the first step he takes is a truly amazing one. At the very outset he throws the most important class of participators in the distribution—the class that appropriates the largest share—out of court altogether, and he proceeds to settle the whole question as if they never got a penny, and as if the entire spoil were divided among their neighbours. People who live on profits, it seems, have no locus standi in a question of distribution, and the case must be considered as if the parties exclusively concerned were the people who live on wages, the people who live on interest, and the people who live on rent. "With profits," he says, "this inquiry has manifestly nothing to do. We want to find what it is that determines the division of their joint produce between land, labour, and capital, and profits is not a term that refers exclusively to any one of these three divisions. Of the three parts into which profits are divided by political economists, namely compensation for risk, wages of superintendence, and returns for the use of capital, the latter falls under the term interest, which includes all the returns for the use of capital and excludes everything else; wages of superintendence falls under the term wages, which includes all returns for human exertions and excludes everything else; and compensation for risk has no place whatever, as risk is eliminated when all the transactions of a community are taken together" (pp. 113-4).
Now we have to do here with no mere difference of terminology. Profits may be employers' wages, if you like to call them so; but it is a fatal confusion to suppose that, because you have called them employers' wages, you are therefore entitled to treat them as if they were governed by the same laws and conditions as labourers' wages. The truth is that they are governed by opposite conditions, and that the pith of the labour question is just the conflict between these two kinds of wages for the better share in the distribution. The battle of labour is not against the employer receiving fair interest on his capital in proportion to its quantity, but against the amount of additional profit which the employer claims as wages of superintendence, and which he also rates in proportion to capital invested instead of rating it in proportion to his own trouble or efficiency. One of the chief hopes of the workman resides in the possibility of breaking down this erroneous criterion of fair remuneration for superintendence, and so getting the employers to content themselves with smaller profits than they have been in the habit of considering indispensable. Profits and wages have thus opposite and conflicting interests in the distribution, but Mr. George, having once disguised the one in the garb of the other, is imposed on by the disguise himself, and treats them in his subsequent speculations as if they were the same thing, or at any rate—what in the present connection is equally pernicious in its effects—as if their respective shares in the distribution were determined by precisely the same conditions. The result is, as might be expected, a series of singular contretemps springing from mistaken identity, like those we are familiar with on the comic stage. The manufacturing millionaire appears before us as the victim of the same harsh destiny as the penniless crossing-sweeper, and the banker of Lombard Street is overshadowed by the same blighting poverty as the lumper of Wapping. Proudhon, in a powerful passage, describes pauperism as invading modern society at both extremes; it invaded the poor in the positive form of natural hunger; it invaded the rich in the unnatural but more devouring form of insatiable voracity. The burden of Mr. George's prophetic vision contains no such refinements. He sees a huge wedge driven through the middle of society; and on the underside of that enchanted wedge he sees the merchant princes of the world eating the bread of poverty with their lowest dependents. Mr. George's classification of profits under wages therefore involves much more than a mere change of nomenclature, for it has led him to pass off this absurd vision as a literal description of things as they are. By that classification he has really put out of his own sight the most important factor in the settlement of the question he is discussing, and so he begins playing Hamlet by leaving the part of Hamlet out.
Having simplified matters by throwing profits out of the cast, Mr. George's next step is to assign the leading rôle to rent. In the whole drama of the modern distribution of wealth, no part is more striking or more often misunderstood than the part played by rent. Wages never cease to cost much and to be worth little, but rent seems to have the property of going on growing while the landlords themselves sleep or play. This fact has impressed Mr. George so profoundly that, losing sight of things in their true connection and proportions, he declares that the growth of rent is the key to the whole situation, and that neither wages nor any other kind of income, not derived from land, can ever draw any advantage from the increase of prosperity, because rent always steps in before them and runs off with the spoil. He professes to found this conclusion on Ricardo's theory of rent, which he accepts, not only as being absolutely true, but as being too self-evident to need discussion. Indeed, he seems disposed, like some others, to have his fling at Mill for calling it the pons asinorum of political economy; but we shall presently discover various grounds for suspecting that he has not crossed the bridge successfully himself, and that here, as elsewhere, he has been led seriously astray by looking at things through the mist of doctrines he has only imperfectly mastered. Anyhow, he offers his theory as a deduction from Ricardo's law of rent, and this deduction claims particular attention because it is the corner-stone of his speculations, and constitutes what he would consider his most original and important contribution to economic science. He says that the law of rent itself "has ever since the time of Ricardo ... been clearly apprehended and fully recognised. But not so its corollaries. Plain as they are, the accepted doctrine of wages ... has hitherto prevented their recognition. Yet, is it not as plain as the simplest geometrical demonstration that the corollary of the law of rent is the law of wages, when the division of the produce is simply between rent and wages; or the law of wages and interest together, when the division is into rent, wages, and interest" (p. 120). It is really plainer. It is a mere truism. In any simple division, if you know how much one of the factors gets, you know how much is left for the others, and if you like to dignify your conclusion by the name of corollary, you are free to do so. But the real point is this, whether the share obtained by rent is fixed irrespectively of the share obtained by wages and interest, or whether, on the contrary, it does not presuppose the previous determination of the latter. There is no doubt, at any rate, as to how Ricardo—Mr. George's own authority—regarded the matter. According to his celebrated theory, wages and interest are satisfied first, and then rent is just what is over. Rent is simply surplus profit. In hiring land, the farmer hires a productive machine, and under the influence of competition gives, for the use of that productive machine for a year, the whole amount of its annual produce which remains as a surplus after paying the wages of his labourers, and allowing interest on his capital, and what he considers a fair profit for his own work of superintendence. A certain current rate of wages and a certain current rate of profit are presupposed, and after these demands are met, then if the land has yielded anything more, that surplus is what is paid as rent. Ricardo always presumes that land that cannot produce enough to meet these demands will not be cultivated at all, and that the poorest land actually under cultivation is land that meets them and does no more; in other words, that leaves nothing over for rent. Let us take Ricardo's law as it is stated by Mr. George himself (p. 118): "The rent of land is determined by the excess of its produce over that which the same application can secure from the least productive land in use." The standard by which, according to this law, the amount of rent is supposed to be determined, is the produce of the least productive land in use. Now, what is the least productive land in use? It is land that produces just enough to pay the wages the labourers upon it are content to work for, and the profits the farmer of it is content to farm for. How that rate of wages and that rate of profits are fixed is no matter here; but one thing is clear—and it is enough for our present purpose—that they cannot be determined, as Mr. George represents them as being, by a law of rent which presumes and is conditioned by their operation. Ricardo's law virtually explains rent in terms of wages and profits, and it would therefore be the height of absurdity to re-explain wages and profits in terms of rent. And if that is so, the circumstance which excites Mr. George's surprise, that economists have always so clearly apprehended the law of rent itself, and yet failed so completely to recognise the corollaries which he plumes himself on being the first to deduce from it, admits of a very simple explanation: the economists understood the law they expounded, and were better reasoners than to employ it as a demonstration of its own postulates.
This will become still plainer, if we look more closely at the fact which has struck Mr. George so much—the constant rise of rent in modern society. He attributes that rise to many causes; in fact, there are few things that will not, in his opinion, raise rent. Progress of population will do so; but if population is stationary, it will be done all the same by progress in the arts; the spread of education will do it; retrenchment of public expenditure will do it; extending the margin of cultivation will do it; and so will artificial contraction of that margin by speculation. In short, he is so haunted by the idea, that he seems to believe that so long as rent is suffered to survive at all, whatever we do will only conduce to its increase. Every step of progress we take extends its evil reign, and if progress were to reach perfection, rent would drive wages and interest completely off the field and appropriate "the whole produce" (p. 179). These fears are not sober, but they could never have risen had Mr. George first mastered the theory of rent he founds them on. For rent, being the price paid by producers for the use of a productive machine, cannot rise unless the price of the product rises first (or its quantity, if so be that it does not increase so much as to reduce its price), for unless the price of agricultural produce rises, the farmer cannot afford to pay a higher rent for the land than he paid before. No part of Ricardo's theory is more elementary or more unchallenged than this, that the rent of land constitutes no part of the price of bread, and that high rent is not the cause of dear bread, but dear bread the cause of high rent. Rent cannot rise further or faster than the price of bread (or meat, of course) will allow it, and the price of bread is beyond the landowner's control. He cannot raise it, but once it rises, he can easily raise rent in a corresponding degree. If a rise of rent depends on a rise in the price of bread, what does a rise in the price of bread depend on? On two things which Mr. George ignores or misunderstands—the progress of population and the diminishing return in agricultural production. The growth of population increases the demand for food so much as to raise its price, and renders it profitable to resort to more difficult soils or more expensive methods for additional supplies. The price will then remain at the figure fixed by the cost of the costliest portion that is brought to market.
Now Mr. George laughs at the idea of increase of population causing any difficulty about the supply of food—population, which he is never tired of telling us, is the very thing most wanted to multiply that supply, and possesses a power of multiplying it in even a progressive ratio to its numbers. "The labour of 100 men," he says, "other things being equal, will produce much more than one hundred times as much as the labour of one man" (p. 163). And he laughs in the same way at the idea of a diminishing return in agriculture, as if, says he, matter were not eternal, and as if an increasing population did not of itself increase the productive capacity of the land through increasing the productive capacity of the labour upon it. These two misunderstandings lie at the bottom of all Mr. George's vagaries about rent, and they are perhaps natural to a speculator, resident in a rich new colony, which, as he describes it himself, "with greater natural resources than France, has not yet a million people." No doubt in a country at that particular stage of its historical development, increase of population may involve an increase, and even a more than proportional increase, of food as well as of other commodities; but that particular stage is a temporary and fleeting one, and the world in general is very differently situated from the State of California thirty years ago. Where there is plenty of good land, the increase of population occasions no increase in the cost of producing food, because there is no need to resort to poorer land for the purpose; and while food is got as cheaply as before, other things are got much more easily and abundantly in consequence of the economies of labour and the many mutual services which result from the increased numbers of the community. But that state of matters only continues so long as there remains no occasion to resort to poorer soils for the production of food, and that time is long past in most countries of the world. Mr. George no doubt contends that in all countries it is just the same as in California, because even though it may have become more difficult in some places to produce food, it has become everywhere much easier to produce other commodities, and (so he argues) the production of any kind of commodity is practically equivalent to the production of food, for it can always be exchanged for food. So it can, if food is there to exchange for it; but the very question is whether food is there, or is there in the same relative quantity. If I say it is more difficult to get food, it is no answer to tell me that it is much easier to get other things. And because other things may be multiplied indefinitely at the same cost, that is no reason for denying that food can only be multiplied indefinitely at increasing cost. Yet Mr. George reasons as if it were. This confusion is repeated again and again in the course of his book, and has evidently had much influence on his whole speculations. He describes the advantages which the colonist derives from the arrival of other settlers. "His land yields no more wheat or potatoes than before, but it does yield far more of all the necessaries and comforts of life. His labour upon it will bring no heavier crops, and we will suppose no more valuable crops, but it will bring far more of all the other things for which men work" (p. 168). That is true, but it is not to the purpose. The new settler required a market, and population brought it; but although population up to a certain point is beneficial, you cannot for that reason declare that beyond that point it cannot possibly become embarrassing; for on Mr. George's own hypothesis the ground yields no more wheat and potatoes than before, and the limit to convenient population is prescribed by the amount of food the ground yields, and not by the quantity of other commodities which skilled labour can produce. If population were to exceed what that stock of food would adequately serve, then new-comers would find little comfort in Mr. George's rhetorical commonplace that they had two hands and only one mouth. His simple confidence, that they never can be at a loss, because they can get food by exchange as well as by direct production, is a mere dream, because he forgets that the people they are to exchange with are in the same case as themselves. They can only give food in exchange for other things so long as they raise more food than serves their own numbers, and when their numbers increase beyond that point, they will have no food to sell. The limit to subsistence is not the productive capacity of labour, but the productive capacity of land.
Mr. George's argument rests on another very curious fallacy. He builds his whole theory of distribution on the fact of the extension of the margin of cultivation from better to worse soils, but in the same breath he denies the existence of the very conditions that alone make that fact possible. Nobody would resort to worse land unless the better were unable to furnish indefinite supplies at the old cost, i.e., unless the principle of diminishing return prevailed in agriculture. Nor would any one resort to worse land until it paid him to do so, i.e., until the produce of this worse land became, through a rise in its price or through improvements in the art of agriculture, equal in net value to the produce previously yielded by the worst land then in cultivation. Mr. George denies the principle of diminishing return. He denies "that the recourse to lower points of production involves a smaller aggregate of produce in proportion to the labour expended." He denies this, "even where there is no advance in the arts and the recourse to lower points of production is clearly the result of the increased demand of an increased population. For," says he, "increased population of itself, and without any advance of the arts, implies an increase in the productive power of labour" (p. 163). But the question is, does it imply any increase in the productive power of the soil? Mr. George contends that it does, but only on the superior soils, not on the inferior. Increasing population, in his opinion, renders all labour so much more effective that "the gain in the superior qualities of land will more than compensate for the diminished production on the land last brought in" (p. 165). Now to all this there is one simple answer: why then resort to inferior soils at all? If crowding on the superior soils can make those soils indefinitely productive, why go farther and fare worse? There can be no reason for having recourse to worse land, but that the better has ceased to yield enough at the old cost. Organization and economy of labour are excellent things, but they cannot press from the udder more milk than it contains, or rear on the meadow more sheep than it will carry, or grow on a limited area available for cultivation more than a definite store of food.
But while Mr. George denies that there is anything to force people to poorer soils, he supposes at the same time that they go freely in order to get a less profit. He holds the amount of return obtained from cultivating the least productive land in use to be the lowest rate of return for which anybody will invest his capital, and therefore to serve in some sense as a standard rate of remuneration for all applications of capital and labour. Nobody, he declares, will work for less than he can make on land that pays no rent. But will any one work such land for less than he can make in other industries? That is what Mr. George supposes to be done every day, although he laughs at the idea of there being any necessity for doing it. It need not be said that men are not such lunatics. They are really forced to go to worse soils because the better cannot increase their yield indefinitely at the same cost, and they never go till they possess a reasonable expectation of making as much out of the worse land as they did before out of the better.
From all these remarkable misconceptions of the working of rent, and of the theory of Ricardo on the subject, which he professes to follow, he draws his first law of distribution, which is nevertheless, so far as it goes, undoubtedly correct: "Rent depends on the margin of cultivation, rising as it falls and falling as it rises" (p. 155).
To find the law of rent, he has told us, is to find at the same time its correlatives, the laws of wages and interest, and these laws accordingly he states thus: "Wages depend on the margin of cultivation, falling as it falls and rising as it rises. Interest (its ratio with wages being fixed by the net power of increase which attaches to capital) depends on the margin of cultivation, falling as it falls and rising as it rises" (p. 156). He is not content, however, with merely inferring these two laws as corollaries from the law of rent, but thinks it necessary to construct for wages and interest a certain independent connection with the movement of the margin of cultivation. To do so, he first reduces interest, as he had already reduced profits, to a form of wages; he then erects all the different forms of wages (i.e., every form of income except rent) into a single hierarchical system, in which there are many different rates of remuneration, occasioned by the necessity of compensating different risks and exertions, but all moving up and down concurrently with a certain general rate of wages at the bottom of the scale; and he finally connects this general or standard rate of wages with the margin of cultivation, by saying that no one would work at anything else for less than he can make on land open to him free of rent, and that therefore the income made by cultivating such land must be the lowest going.
Mr. George's view of the nature of interest is peculiar. He considers it to be the natural increase of capital, the fruit of inherent reproductive powers, like the increase of a calf into a cow, or of a hen into a hen and chickens; and because interest comes in this way freely from nature, he believes the private appropriation of it to be thoroughly just, although he presently gives precisely the same reason for declaring rent to be theft. It is unnecessary to discuss either the truth or the consistency of this doctrine here, and I refer to it now merely to explain that although Mr. George thus justifies interest as being the price of a natural force, he introduces it into his theory of the origin of poverty, as the price of human labour. "The primary division of wealth," he says, "is dual, not tripartite. Capital is but a form of labour, and its distinction from labour is in reality but a subdivision, just as the division of labour into skilled and unskilled would be. In our examination we have reached the same point as would have been attained had we simply treated capital as a form of labour, and sought the law which divides the produce between rent and wages; that is to say between the possessors of the two factors, natural substance and powers and human exertion—which two factors, by their union, produce all wealth" (p. 144). The difference between interest and wages is but as the difference between the wages of skilled labour and the wages of unskilled; the wages of skilled labour is only the wages of unskilled, plus some consideration for the skill, or for the time spent in training, or for drawbacks of various kinds; and the wages of unskilled labour is fixed by the amount that can be made on land that pays no rent. Profits, salaries, stipends, fees are, in the same way as interest, declared to be modes of wages. The £50,000 a year of the merchant prince, it seems, is just the £50 of the day-labourer, with £49,950 added to compensate him for the additional perils or drawbacks or discomforts of his life. All incomes, except the landowner's, row in the same boat, and the day-labourer's sets the stroke. When the margin of cultivation descends, he is the first to suffer, and then all the rest suffer with him. If he loses £10 a year, they successively lose £10 too; the doctor or bank-agent will have £490, instead of £500; the railway chairman, £4,990, instead of £5,000; the merchant prince, £49,990, instead of £50,000; and their loss is the landlord's gain. Here then we see the whole mystery of iniquity as Mr. George professes to unravel it. "The wealth produced in every community is divided into two parts by what may be termed the rent line, which is fixed by the margin of cultivation, or the return which labour and capital could obtain from such natural opportunities as are free to them without payment of rent. From the part of produce below this line, wages and interest must be paid. All that is above goes to the owners of land" (p. 121).
Mr. George here confounds the margin of cultivation with the margin of appropriation. When economists speak of an extension of the margin of cultivation, they mean a resort to less productive land, and that is always accompanied by a rise of rent; but an extension of the margin of appropriation may be a resort to more productive land, and may occasion a fall of rent, as has been done in Europe to-day through appropriation in America. But what in reality he builds his argument on is neither the movement of the margin of cultivation, nor the movement of the margin of appropriation, but simply the existence of abundance of unappropriated land. Where that exists, rent will, of course, be low, and wages will be high, for nobody will give much for land when he can get plenty for nothing at a little distance off, and nobody will work at anything else for less than he can make on land that he may have for nothing. For such land supplies labourers with an alternative. It is not the best of alternatives, for it needs capital before one can make use of it, and it takes time before any return is made from it. A diversity of national industries, for example, is better, and raises wages more effectively. Agricultural wages are higher in the manufacturing counties of England than in the purely agricultural; and they are higher in the manufacturing Eastern States of Mr. George's own country than in the purely agricultural States of the West, which possess the largest amount of unappropriated land. The reason of this is twofold: other industries increase the competition for labour generally, and create, at the same time, a better market for farm produce. Unoccupied land would act—though less effectually—in the same way as an alternative; but few countries are fortunate enough to possess much of it, and as Mr. George does not propose to interfere with the occupation of land, but only to tax the occupiers, he has no scheme for showing how countries that have it not are to get it. It is easy, of course, to call it from the vasty deep. "Put to any one capable of thought," says Mr. George, "this question: 'Suppose there should arise from the English Channel or the German Ocean a Noman's land on which common labour to an unlimited amount should be able to make ten shillings a day, and which would remain unappropriated and of free access like the commons which once comprised so large a part of English soil. What would be the effect upon wages in England?' He would at once tell you that common wages throughout England must soon increase to ten shillings a day" (p. 207). Perhaps so; but a little more thought would teach him that "a Noman's land on which common labour to an unlimited amount should be able to make ten shillings a day" must be itself unlimited in extent, and could not be accommodated in the English Channel. Apart from preternatural conditions, it could not afford remunerative employment to more than a definite number of occupants and cultivators, and when it came to be entirely occupied, England would stand exactly as it does at present. If the millennium of the working class is to depend on the discovery of a Noman's land of infinite expansibility, it must be indefinitely postponed.
But supposing such an alternative existed and did influence the amount employers pay their workmen, how is it to influence in the same direction the amount they reserve to themselves? It is true, as a matter of fact, that wages and interest generally rise and fall together, for the simple reason that they are generally subject to the same influences. When capital is busily employed, so is necessarily labour, and then both wages and interest are high; when capital is largely unemployed, so is naturally labour also, and then both wages and interest are low. But an influence like that which is now adduced by Mr. George does not act on labourer and employer alike. It supplies the labourer with an alternative which strengthens his hands in his battle for wages with employers. Does it then at the same time strengthen the employer in his battle with the labourer? Does it first raise wages at the expense of profits, and then raise profits at the expense of wages? It clearly cannot. To argue as if the existence of alternative work which benefits the labourer, must benefit the employer in the same degree, and as if the want of it must injure the employer because it injures the labourer, is simply to misunderstand the very elements of the case. One might as well argue that because the heights of Alma were a decided strategical advantage to the Russians, who were posted on them, they were therefore an equal advantage to the Allies, who had to scale them.
Laws of distribution, which are founded on a series of such arbitrary absurdities as those which I have successively exposed, are manifestly incapable of throwing any rational light on the causes of poverty, or giving any practical guidance to its amelioration. But, absurd as they may be, they are at least propounded with considerable parade, and we are therefore quite unprepared for the strange turn Mr. George next chooses to take. It will be remembered that the only reason why he undertook to search for these laws at all was, that by means of them he might explain why wages tended to sink to a minimum that would give but a bare living; but now that he has discovered those laws, he declines to apply them to the solution of this problem. He will not draw the very conclusion he has laid down all his apparatus to establish. He will not solve the problem he has promised us to solve; in fact, he tells us he never meant to solve it; he never thought or said wages tended to sink to a minimum that would give a bare living; he never said they tended to sink at all; all he meant to assert was that if they increased, they did not increase so fast as the national wealth generally. He used "the word wages not in the sense of a quantity, but in the sense of a proportion" (p. 154). He will not therefore, after all, show us why the poor are getting poorer; but he will read for us, if we like, another riddle, why they are not growing rich so fast as some of their neighbours. In the name of the patient reader, I may be permitted to lodge a humble but firm protest against this eccentric and sudden change of front. Mr. George ought really to have decided what problem he was to write about before he began to write at all, and we may therefore for the present dismiss both his problem and his explanation till he makes up his mind.
III. Mr. George's Remedy.
After our experience of his problem and his explanation, we cannot indulge expectations of finding any serious or genuine worth in the practical remedy Mr. George has to prescribe; and we hear, without a thought of incongruity, the lofty terms in which, like other medicines we know of, it is advertised to the world by its inventor as a panacea for every disease society is heir to. "What I propose," he says, "as the simple yet sovereign remedy which will raise wages, increase the earnings of capital, extirpate pauperism, abolish poverty, give remunerative employment to whoever wishes it, afford free scope to human powers, lessen crimes, elevate morals and taste and intelligence, purify government, and carry civilization to yet nobler heights, is—to appropriate rent by taxation" (p. 288). And the direction for applying the remedy is equally simple: it is to "abolish all taxation save that upon land values" (ibid.). This remedy is currently described as the nationalization of land; but nationalization of land is a phrase which stands for several very different and even conflicting ideas. With the usual fatality of revolutionary parties, the English land nationalizers are already broken into three separate organizations, and represent at least three mutually incompatible schemes of opinion. There is first the socialist idea of abolishing both individual ownership and individual occupation of land, and cultivating the soil of the country by means of productive associations or rural communes. Then there is the exactly opposite principle of Mr. A. R. Wallace and his friends, who are so much in love with both individual ownership and individual occupation that their whole aim is to compel us all by law to become occupying owners of land, whether we have any mind to be so or no. And, finally, we have the scheme of Mr. George, which must be carefully distinguished from the others, because he would destroy individual ownership but leave individual occupation perfectly intact. His non-interference with individual occupation is remarkable, because, as we have seen, he declares the cause of poverty to be the exclusion of unemployed labour from the opportunity of cultivating land, and because that exclusion is chiefly due to the prior occupation of the land by earlier settlers. Mr. George, however, thinks he can provide a plentiful supply of unoccupied land, at a nominal price, for an indefinite number of new-comers without disturbing any prior occupant. He would do it by merely abolishing the private owner and asking the occupant to pay his rent to the State instead of to a landlord, and he explains to us how it is that this simple expedient is to effect the purpose he desires. "The selling price of land would fall; land speculation would receive its death-blow; land monopolization would no longer pay. Millions and millions of acres, from which settlers are now shut out by high prices, would be abandoned by their present owners, or sold to settlers upon nominal terms. And this not merely on the frontiers, but within what are now considered profitable districts.... And even in densely populated England would such a policy throw open to cultivation many hundreds of thousands of acres now held as private parks, deer preserves, and shooting grounds. For this simple device of placing all taxes on the value of land would be in effect putting up the land at auction to whoever would pay the highest rent to the State. The demand for land fixes its value, and hence if taxes were placed so as to very nearly consume that value, the man who wished to hold land without using it would have to pay very nearly what it would be worth to any one who wanted to use it." (p. 309).
Putting up land to auction will not secure cheap or nominally rented farms to an indefinite number of new-comers, unless there is an indefinite supply of land to divide into farms, but in the present world that is not so; and when the existing stock of agricultural land is exhausted, and every man has his farm, but there is no more for any new-comer, what is Mr. George's remedy then? Abolition of property in land will of course abolish all trading in such property; but trading in landed property does not restrict its occupation. The land speculator, while he holds the land, of course keeps out another competitor from the ownership, but he keeps nobody from its occupation and cultivation. He is surely as ready as anybody else to make money, if money is to be made, by letting it, even by putting it up to auction, if Mr. George prefers that mode of letting. The transfer of the power of letting to the State will not secure a tenant any faster. And as to the private parks, deer forests and shootings of England, Mr. George forgets that they are, most of them, at present rented, and not, as he seems to fancy, owned by their occupants, and that it would not make a straw of difference to them whether they paid their rents to the Crown factor or to the landlord's agent. Since Mr. George does not prohibit the making of fortunes, he cannot prevent commercial kings from America or great brewers from England hiring forests in the Scotch Highlands. And since, in spite of his celebrated declaration, that "to the landed estates of the Duke of Westminster the poorest child that is born in London to-day has as much right as has his eldest son," he would still leave the Duke a princely income from the rents of the buildings upon his estates, and would suffer him to enjoy it without paying a single tax or rate on it all (p. 320), why should the Duke give up his forest in Assynt, merely because the Crown is to draw the rent instead of the Duke of Sutherland? Mr. George accordingly proposes a remedy that would remedy nothing, but leave things just as they are. Deer forests and the like may not be the best use of the land, but the particular change Mr. George suggests would not suppress them or even in the slightest degree check their spread, and would not throw the ground now occupied by them into the ordinary market for cultivation. And, besides, even if it did, the land so provided for new-comers would necessarily soon come to an end, and with it Mr. George's "simple and sovereign remedy," at least in its specific operation.
But it is noteworthy that in his lectures in this country in 1884, Mr. George made little account of the specific operation of his remedy as a means of furnishing unemployed labourers with a practicable alternative in agricultural production, to which they might continue indefinitely to resort, and that he preferred for the most part drawing his cure for poverty from the public revenue which the confiscation of rent would place at the disposal of the community. Now as to this aspect of his remedy, it is surely one of the oddest of his delusions to dream of curing pauperism by multiplying the recipients of poor relief, and taking away from it, as he claims credit for doing, through the countenance of numbers, that reproach which has hitherto been the strongest preventive against it. Besides, he and his friends greatly exaggerate the amount of the fund the country would derive from the rent of its ground. It would really fall far short of paying the whole of our present taxation, not to speak of leaving anything over for wild schemes of speculative beneficence. The rural rent of the country is only seventy millions, and that sum includes the rent of buildings, which Mr. George does not propose to touch, and which would probably in the aggregate balance the ground rent of towns, which he includes in his confiscation project. Now our local taxation alone comes very near that figure, and certainly the people generally can scarcely be expected to rise from a condition of alleged poverty to one of substantial wealth, or even comfort, through merely having their local rates paid for them.
The result would therefore be poor, even if no compensation were to be made to the present receivers of the rent; but with the compensation price to pay, it would be really too ridiculously small to throw a whole nation into labour and disorder for. Much may be done—much must be done—to make the land of the country more available and more profitable for the wants of the body of the people, but not one jot of what is required would be done by mere nationalization of the ownership, or even done better on such a basis than on that which exists. The things that are requisite and necessary would remain still to be done, though land were nationalized to-morrow, and they can be equally well done without introducing that cumbrous innovation at all. With compensation the scheme is futile; without it, it is repugnant to a healthy moral sense. Mr. George indeed regards confiscation as an article of faith. It is of the essence of the message he keeps on preaching with so much conviction and courage and fervour. Private property in land, he tells us, is robbery, and rent is theft, and the reason he offers for these strong assertions is that nothing can rightly be private property which is not the fruit of human labour, and that land is not the fruit of human labour, but the gift of God. As the gift of God, it was, he believes, intended for all men alike, and therefore its private appropriation seems to him unjust. Under these circumstances he considers it as preposterous to compensate landowners for the loss of their land, as it would be to compensate thieves for the restitution of their spoil. To confiscate land is only to take one's own, Mr. George has no difficulty about the sound of the word, nor is he troubled by any subtleties as to the length it is proper to go in the work. Mr. Mill, whose writings probably put Mr. George first on this track, proposed to intercept for national purposes only the future unearned increase of the rent of land, only that portion of the future increase of rent which should not be due to the expenditure of labour and capital on the soil. Mr. George would appropriate the entire rent, the earned increase as well as the unearned, the past as well as the future; with this exception, that interest on such improvements as are the fruit of human exertion, and are clearly distinguishable from the land itself, would be allowed for a moderate period. He says in one place, "But it will be said: These are improvements which in time become indistinguishable from the land itself! Very well; then the title to the improvements becomes blended with the title to the land; the individual right is lost in the common right. It is the greater that swallows up the less, not the less that swallows up the greater. Nature does not proceed from man, but man from nature, and it is into the bosom of nature that he and all his works must return again" (p. 242). And in another place, speaking of the separation of the value of the land from the value of the improvements, he says: "In the oldest country in the world no difficulty whatever can attend the separation, if all that be attempted is to separate the value of the clearly distinguishable improvements made within a moderate period, from the value of the land, should they be destroyed. This manifestly is all that justice or policy requires. Absolute accuracy is impossible in any system, and to attempt to separate all the human race has done from what nature originally provided would be as absurd as impracticable. A swamp drained, or a hill terraced by the Romans, constitutes now as much a part of the natural advantages of the British Isles as though the work had been done by earthquake or glacier. The fact that after a certain lapse of time the value of such permanent improvements would be considered as having lapsed into that of the land, and would be taxed accordingly, could have no deterrent effect on such improvements, for such works are frequently undertaken upon leases for years" (p. 302). The sum of this teaching seems to be that Mr. George would recognise no separate value in any improvements except buildings, and would be disposed to appropriate even them after such lapse of time as would make it not absolutely unprofitable to erect them.
What Mr. George fails to perceive is that agricultural land is in no sense more a gift of God, and in no sense less an artificial product of human labour, than other commodities—than gold, for example, or cattle, or furniture, in which he owns private property to be indisputably just. Some of the richest land in England lies in the fen country, and that land is as much the product of engineering skill and prolonged labour as Portland Harbour or Menai Bridge. Before the days of Sir Cornelius Vermuyden it was part of the bottom of the sea, and its inhabitants, as they are described by Camden, trode about on stilts, and lived by snaring waterfowl. Some of the best land in Belgium was barren sand-heaps a hundred years ago, and has been made what it is only by the continuous and untiring labour of its small proprietors. "God made the sea, man made the dry land," is a proverb among the Dutch, who have certainly made their own country as much as Mr. George has made his book. In these cases the labour and the results of the labour are obvious, but no cultivated land exists anywhere that is not the product of much labour—certainly much more labour than Mr. George seems to have any idea of. In the evidence taken before the recent Crofters' Commission, Mr. Greig, who conducted the Duke of Sutherland's improvements in the Strath of Kildonan, stated that the cost of reclaiming 1,300 acres of land there, and furnishing them with the requisite buildings for nine variously sized farms, was £46,000. Apart from the buildings, the mere work of reclamation alone is generally estimated to have cost £20 an acre, and in another part of the same estates an equally extensive piece of reclamation is said to have cost £30 an acre. By means of this great expenditure of capital and labour, land that would hardly fetch a rent of a shilling an acre before was worth twenty or thirty shillings an acre after. Not the buildings only, but the land itself has been made what it is by labour. It has been adapted to a useful office by human skill as really as the clay is by the potter, or the timber by the wright. Deduct from the rent of these reclaimed acres the value contributed by human labour, and how much would remain to represent the gift of God? And would it be greater or less than would remain after a like process applied, say, to a sovereign or to a nugget of gold? Mr. George has no scruple about the justice of private property and inheritance in the nugget, and indeed in all kinds of movable wealth. "The pen with which I am writing," he says, for example, "is justly mine. No other human being can rightfully lay claim to it, for in me is the title of the original producers who made it" (p. 236). The original producer of the nugget appropriated what was surely a gift of God as much as the clays or loams of husbandry; and if he, as Mr. George admits, has "a clear and indefeasible title to the exclusive possession and enjoyment" of his nugget, and may transmit that title by bequest or sale unimpaired for an unrestricted period of time, why is the original producer of agricultural land to be held up as more than half a thief, and the present possessor as one entirely? And if a proprietor has spent £20,000 in buildings, and £26,000 in reclamations, in order to convert the surface of the earth into useful arable soil, why is he to be allowed rent on the £20,000, and denied it on the £26,000?
So far as the distinction between gifts of nature and products of labour goes, movable wealth and immovable stand on precisely the same footing. Both are alike gifts of nature, and both are alike products of labour. In thinking otherwise Mr. George is certainly supported by the high authority of Mr. Mill, who has also failed to recognise how far arable land was really an artificial product. He says: "The land is not of man's creation, and for a person to appropriate to himself a mere gift of nature, not made to him in particular, but which belonged to all others until he took possession of it, is prima facie an injustice to all the rest" (Dissert. iv., 289). But what is of man's creation? He finds his materials already created, and he merely appropriates them, and adapts them to his own uses by labour, exactly as he does with the soil that in his hands becomes fruitful fields. Land is as much a creation of man as anything else is, and everything is as much a gift of God as land. That distinction is therefore of no possible help to us. The true ground for observing a difference between the right of property in land and the right of property in other things must be sought for elsewhere. It is not because land is a gift of nature, while other things are products of labour, but because land is at once limited in quantity, and essential to the production of the general necessaries of life. These are the characteristics that make land a unique and exceptional commodity, and require the right of property in it to be subject to different conditions from the right of property in other products of labour. The justification of the restriction of that right in the case of land accordingly rests neither on theological dogma nor on metaphysical distinction, but on a plain practical social necessity. Where land is still abundant, where population is yet scanty as compared with the land it occupies, there is no occasion for interference; the proprietor might enjoy as absolute a title as Mr. George claims over his pen, without any public inconvenience, but, on the contrary, with all the public benefit that belongs to absolute ownership in other things. But as soon as population has increased so much as to compel recourse to inferior soils for its subsistence, it becomes the duty of society to see that the most productive use possible is being made of its land, and to introduce such a mode of tenure as seems most likely effectually to secure that end. Under these circumstances private property in land requires an additional justification, besides that which is sufficient for other things; it must be conducive to the best use of the land. Society has become obliged to husband its resources; if it will do so most efficiently by means of private property, private property will stand; if not, then it must fall. Of course land is not the only kind of property that is subject to this social claim. All property is so held, but in the case of other things the claim seldom comes into open view, because it is only on exceptional occasions that it is necessary to call it into active operation. Provisions are among the things Mr. George considers not gifts of God but products of labour, but in a siege private property in provisions would absolutely cease, and the social right would be all in all. These products of labour would be nationalized at that time because in the circumstances the general interests of the community required them to be so, and the reason why they are not nationalized at other times is at bottom really this, that the general interest of the community is better served by leaving them as they are. In some parts of the world all products of labour actually are nationalized; in Samoa, for example, a man who wants anything has a latent but recognised claim to obtain it from any man who has it; but Dr. Turner explains that the result is most pernicious, because while it has extinguished absolute destitution, it has lowered the level of prosperity and prevented all progress, no man caring to labour when he cannot retain the fruits of his labour. Civilized communities, however, have always perceived the immense public advantage of the institution of private property, and the right to such property, of whatever kind, really rests in the last analysis on a social justification, and is held subject to a social claim, if any reason occurred to exert it. In this respect there is nothing peculiar about land. The only peculiarity about land is that a necessity exists for the practical exercise of the claim, because landed property involves the control of the national food supply, and of other primary and essential needs of the community. The growth of population forces more and more imperatively upon us the necessity of making the most of our land, and consequently raises the question how far private property in such a subject is conducive to that end.
Now, in regard to capital invested in trade or manufactures, it has always been justly considered that the private interest of its possessor constitutes the best guarantee for its most productive use, because the trader or manufacturer is animated by the purely commercial motive of gaining the greatest possible increase out of the employment of his capital. But it must be admitted that the private interest of the landlord does not supply us with so sure a guarantee. He desires wealth no doubt as well as the trader, but he is not so purely influenced by that desire in his use of his property. He is apt to sacrifice the most productive use of land—or, in other words, his purely pecuniary interest—to considerations of ease or pleasure, or social importance, or political influence. He may consolidate farms, to the distress of the small tenants and the injury of the country generally, merely because there is less trouble in managing a few large farmers than a number of small; or he may refuse to give his tenants those conditions of tenure that are essential to efficient cultivation of the land, merely to keep them more dependent on himself in political conflicts. Mr. George, however, has a strong conviction that even the purely pecuniary interest of the private owner tends to keep land out of cultivation, but he builds his conclusion on the special experiences of land speculation rather than on the general facts of land-owning. Of course if there were no land-owning, there would be no land speculation; but to abolish land-owning merely to cure the evils of land speculation is, if I may borrow an illustration of his own, tantamount to burning a house to roast a joint. Besides, all that is alleged is that speculation keeps a certain amount of land in America out of the market. In other countries it suffers from a contrary reproach. The evil of the bandes noires of France and the Landmetzger of Germany is their excessive activity in bringing land into the market, by which they have aggravated the pernicious subdivision of estates that exist. In America the effect of speculation may be different, but at any rate keeping land out of the market is one thing, keeping it out of cultivation is another; and it is hard to see how speculation should prevent the extension of cultivation, because cultivation may be as well undertaken by tenant as proprietor, and why should a speculator, who buys land to sell it in a few years at a high profit, object to taking an annual rent in the interval from any one who thought it would pay him to hire the land? It would not be fair to condemn the landlord for the sins of the land speculator, even if the latter were all that Mr. George's curious horror of him represents him to be, and if he exercised any of the irrationally extravagant effects which Mr. George ascribes to his influence over the economy of things; but as a matter of fact a sober judgment can discover no possible reason why the private interest of a land speculator as such should stand in the way of the cultivation of the soil he happens to hold. What concerns us here, however, is not the private interest of the speculator, but the private interest of the landlord, whether a speculative purchaser or not. Now, much land lies waste at present through the operation of the Game Laws, which establish an artificial protection of sport as an alternative industry against agriculture, but then the general institution of private property in land must not be credited with the specific effects of the Game Laws, and need not be suppressed in order to get rid of them. The abolition of these laws would place the culture of wild animals and the culture of domestic animals on more equal terms in the commercial competition, and would probably restore the balance of the landlord's pecuniary advantage in favour of the latter. Besides, it is not a question of ownership but of occupation of land that is really involved. If the land were nationalized to-morrow, the State would have to decide whether it would let as much land as had hitherto been let to sporting tenants; and of course it can decide that, if it chooses, now.
So far as I am able to judge, there is only one respect in which the pecuniary interest of the landlord appears to be unfavourable to an extension of cultivation. There is probably a considerable quantity of land that might be cultivated with advantage to the community generally by labourers who expected nothing from it but the equivalent of ordinary wages, and which is at present suffered to lie waste, because its produce would be insufficient to yield anything more than wages, and would afford nothing to the capitalist farmer as profit or to the landlord as rent. How far this operates I have, of course, no means of knowing; but here again one may deal with waste ground if it were judged requisite to do so, without resorting to any revolutionary schemes of general land nationalization. Of course much land is kept in an inferior condition, or perhaps absolutely waste, through want of capital on the part of its owners, but the same result would happen under the nationalization plan, through want of capital on the part of the tenants. Mr. George does not propose to supply any of the necessary capital out of public funds, but trusts to the enterprise and ability of the tenants themselves to furnish it; so that the occupier would be no better situated under the State than he would be under an embarrassed landlord, if he enjoyed compensation for his improvements. In either case he would improve as far as his own means allowed, and he would improve no further. But if by nationalization of land we get rid of the embarrassed landlord, we lose at the same time the wealthy one, and the tenants of the latter would be decidedly worse off under the State, which only drew rents, but laid out no expenses. The community, too, and the general cultivation of the country would be greatly the losers. Mr. George has probably little conception of the amount of money an improving landlord thinks it necessary to invest in maintaining or increasing the productive capacity of his land. A convenient illustration of it is furnished by the evidence of Sir Arnold Kemball, commissioner of the Duke of Sutherland, before the recent Crofters' Commission. Sir Arnold gave in an abstract of the revenue and expenditure on the Sutherland estates for the thirty years 1853-1882, and it appears that the total revenue for that period was £1,039,748, and the total expenditure (exclusive of the expenses of the ducal establishment in Sutherland) was £1,285,122, or a quarter of a million more than the entire rental. Here, then, is a dilemma for Mr. George: With equally liberal management of the land on the part of the State, how is he to endow widows and pay the taxes of the bourgeoisie out of the rents? And without such liberal management how is he to promote the spread of cultivation better than the present owners?
The production of food, however, is only one of those uses of the land in which the public have a necessary and growing interest. They require sites for houses, for churches, for means of communication, for a thousand purposes, and the landlord often refuses to grant such altogether, or charges an exorbitant price for the privilege. He has refused sites to churches from sectarian reasons; for labourers' cottages in rural districts for fear of increasing the poor-rate; in small towns with a growing trade from purely sentimental objections to their growth; he has refused rights of way to people in search of pure air, for fear they disturbed his game, and he has enclosed ancient paths and commons which had been the enjoyment of all from immemorial time. I do not speak of the ground rent in large cities where owners are numerous, because that, though a question of great magnitude, involves peculiarities that separate it from the allied question of rural ground-rent, and make it more advantageously treated on its own basis. But in country districts where owners are few, and the possession of land therefore confers on one man power of many sorts over the growth and comfort of a whole community, that power ought certainly to be closely controlled by the State. Its tyrannical exercise has probably done more than anything else to excite popular hostility against landlordism, and to lend strength to the present crusade for the total abolition of private property in land. But here again the cure is far too drastic for the disease. What is needed is merely the prevention of abuses in the management of land, and that will be accomplished better by regulations in the interest of the community than by any scheme of complete nationalization. A sound land reform must—in this country at least—set its face in precisely the contrary direction. It must aim at multiplying, instead of extirpating, the private owners of land, and at nursing by all wise and legitimate means the growth of a numerous occupying proprietary. State ownership by itself is no better guarantee than private ownership by itself for the most productive possible use of the land; indeed, if we judge from the experience of countries where it is practised, it is a much worse one; but by universal consent the best and surest of all guarantees for the highest utilization of the land is private ownership, coupled with occupation by the owner.