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Rent as Payment for Service

W.R.B. Willcox


[An editorial article, reprinted from Land and Freedom, May-June 1942]



In a letter to a newspaper editor by one who I assume would regard himself as a "single taxer," the latter speaks of the "Rent of land"; and supports the justice of its public collection with the familiar axioms: "The earth had no cost of production," and "To the producer belongs the product."

If it be true that the earth had no cost of production, the land, it would seem, should be the cheapest thing there is. In that case, how can the payment of the rent mentioned be the rent of land? If it be true that to the producer belongs the product, how can that which is called the rent of land belong to mankind, individually or collectively? If this particular kind of rent really belongs to mankind, must it not, according to these very axioms, be the rent, not of land, but of things of which men are the producers, things which are the product of their labor?

How convince people that this particular kind of rent belongs to mankind unless they be given proof that, actually, it is payment for the use of things of which men are the producers -- among which, as they will be obliged to admit, land is not? Since land (the earth) is a condition precedent to all life, existing at alt times and in all circumstances-at no cost of human labor, a challenge to find logical support for >the assumption that the rent referred to as the "Rent of land" constitutes a financial factor in the problem of establishing an intelligent social order, might help in that direction.

On the other hand, to promulgate the idea that land (which was "all done and paid for" before men appeared on earth) is a financial factor affecting the relations of the human producer and his product would seem to confuse the issue; to confuse it with an idea which has no relation to the problem of the citizen's financial (and moral) responsibility to his government -- namely, the idea that this rent is paid for the use of land.

Would "it not be more effective to face these editors, and people holding similar views, with facts it would be exceedingly difficult to disprove, facts such as the following? -- That this particular land of rent is payment made by individuals wherever they may live or work (which must be oh the earth somewhere!) for benefits to be derived only from social and governmental aids to living and working among their fellows; benefits such as the security of their lives, the protection of the product of their labor (to the producer belongs the product!), and all other services rendered and made available only by government? Certainly, if the premises quoted are true axioms, this particular kind of rent cannot be payment for the use of things of which men are not the producers.

Misrepresentation of this particular kind of rent as being the "Rent of land" will encourage many .people to insist that it is payment for the use of land which they will claim belongs to them because they hold title to it; although security of title, and of occupancy of the land itself, is at the expense of the government, and although its holder did not, as he will have to admit, produce the land.

It seems futile to argue, as was argued with this editor, that rent is an "unearned increment," since to get something for nothing seems to be the height of some people's ambition; who therefore are quick to ridicule this obvious contradiction in the hope of defeating anything like a "single tax that is not a tax" as an obstacle to their chance of getting some of this rent for themselves. Had it not been for such arguments, perhaps people would not so clearly have seen that, in certain circumstances and for a small part of the population, rent might become an unearned increment to their fortunes.

Show to these editors -- prove to them! -- and through them possibly to other people that this rent is payment for services rendered and made available only by government and for nothing else, and the wisdom and justice of its payment in full to the government might soon cease to be questioned.

MAYBE LAND DOES COUNT


H.A. Jackson, Los Angeles, California


I have read with interest the letter of W. R. B. Willcox in your May-June issue, in which he seeks to prove that rent is not paid for the use of land, but for what men produce on it. According to him, land is only of secondary importance to wealth produced on it. Well, let's examine his reasoning.

The economic value of anything (that is the exchange value) is what it will bring in an open market; this includes the value of land. Henry George says that wealth is produced by labor applied to nature (land). All land doesn't have the same productiveness as some land and thus more wealth will be exchanged for productive land, than land of little productivity. This establishes the fact that land does have real value in exchange but such value represents the value of an opportunity to produce efficiently. This value attaches to particular sites of land, having as their primary advantage natural, strategic, potential possibilities. Men will not pay more for one site than for another site on which they may produce for themselves the same amount of wealth. No amount of labor on a useless site will produce value of any kind, even though Mr. Willcox does say that all value attaches to labor, and not to land. The socialists say that land is not a factor in the production of wealth: "it was at one time, but we have outgrown that period." Evidently Mr. Willcox agrees with them as his letter indicates.

Mr. Willcox says on page 63 of his book Taxation Turmoil: "Thus the problem of social and economic welfare becomes essentially a rent problem, and not a land problem." Even if the values concerned were all of labor, how would he collect, or even create them without land? How much labor would he have to furnish to make coal, iron, petroleum, water power, etc., etc.? Apparently it is also convenient to have a little land around, too.

I am also tiring of that controversy over whether there is any such thing as "land value tax." Taxation is a human and legal device by which revenue is secured by the state (justly or unjustly). While there is no doubt in my mind that the rent of land properly and justly belongs to the community, still the process by which it is secured is "taxation" and nothing else. If there is any other method by which rent may be taken by the state, than taxation, I haven't heard of it to date. It is unfortunate that purported Georgeists should consider it necessary to entirely revise the dictionary in order to make a complete job of confusing themselves.

MR. WILLCOX ELABORATES HIS VIEWS



The following are reflections stirred by a reading of Miss Caroline G. Nations' article, "The Common Wealth," in your last issue.

Nature, the land, does nothing for man. Its forces act and its processes operate wholly independent of man, or of consideration for him. With knowledge of these forces and processes, all man can do forces and processes in his own interest. When these forces have acted and these processes have reached a certain stage, the consequences of which are suitable to man's needs and uses, then man must labor to obtain any benefit from them.

If, due to lack of knowledge, he labors too soon in connection with them, or if he delays his labor until these processes have gone too far, his labor will not yield its full possible return to him. In the latter case, if too long deferred, his labor will go for naught; and the forces and processes of nature will return nature's materials, whatever the form these may have assumed, again to their elements. Also, if man has insufficient, or inefficient, tools with which to manipulate these forces and processes of nature, or their results, his labor will be increased to his detriment, yielding less for the same exertion. Labor, not land, yields everything with which man can become possessed; without labor, man can have nothing.

The tools man uses to increase the yield of his labor (to "save" him labor) are also the product of man's labor in connection with these same forces and processes; without labor directed by his knowledge and skill these tools would not exist. Thus appears the advantage to man of knowledge of these forces and processes and the skill to manipulate them -- the sufficient reason for man's seeking enlightenment, his true education.

Since man's situation and condition is wholly dependent upon his labor, and without labor nature yields man nothing, problems connected with his situation and condition are labor problems; problems which are to be solved only by, and in proportion to, his recognition that it is his labor, modified by the use he makes of his knowledge and skill, which yields him anything. It is therefore desirable, by study and insight, that man discover the laws of nature which determine his instinctive reaction to labor and, as a corollary, to the products of labor.

There is an axiom with respect to human nature that man always takes the easiest road, within his knowledge and skill, to the satisfaction of his desires. In many cases, perhaps most, he does not know that road, but so far as he can discern it he will take it. Hence, for any labor he expends directly in his own interest, he will accept whatever results his labor yields as his compensation. For any labor expended in the interest of others, at their instigation, he will expect and demand compensation for his share of labor in producing the results desired. He will not assent to another's receiving "pay," as is said, for his efforts; for another's receiving pay for the labor which he himself has expended for services or instruments of production which his labor have provided.

This is so fundamental a reaction of man with respect to his labor that recognition of it is universally accepted as the only honest and legitimate basis of all business transactions involving an exchange of labor or the products of labor, wherever the factors in these transactions are clearly defined and recognized. So instinctive is this reaction in man that the child perceives its justice. Whoever, and to whatever extent, a man expends his labor in the interest of another, the latter, by the same token, expects and is in duty bound to pay for this labor, and to pay him who expended it, not another.

There remains only to note the few categories of human relationships in which the obligation to make compensation exists. These relationships comprise those between man and man; and between the individual and any group (such as partnerships or corporations) serving him in any capacity. Among these groups are those social organizations known as cities, counties, states, the nation, etc. For the convenience and use of all services provided and made available by any division of government of which the individual avails himself -- for the labor involved in providing or performing these as he would any other creditor, which by its services makes the road to the satisfaction of his personal desires easier.

It is the worth to him of these aids to his progress along that road for which he willingly pays Rent; not for the existence of the forces and processes of nature, the land, which has no value to man, though it comprises all natural utilities essential to man's labor. The idea that the difference in Rent between one place and another is due to the relative productivity of the land arises from the failure to note that, in seeking the easiest road to the satisfaction of his desires, not only, but naturally, will man seek the best land to be found for his special purpose; but that in order to make such land useful to him in the highest possible degree, he will there provide and make available helpful services of all sorts. If wise, he will not expend labor to provide services out of proportion to the productivity of his labor at places where the forces and processes of nature, the natural utilities of the land, are poorly adapted to his uses. Hence, it is not the relative natural utility of the land for which Rent is paid, but for the services provided and made available for utilizing the forces and processes of nature at that place; and the Rent will be in proportion to the worth of the labor expended in producing these services, or saved by their use.

It is for these services provided at the cost of labor for which Rent is paid. No man owes, nor rightfully can exact 'payment of another (and in fact, he never does) for the use of the land. That he thinks he pays Rent for the use of the land is a result of that "mind set" of long standing referred to, which, unfortunately, has blocked progress toward the goal of Henry George, the public collection of the Rent as a governmental revenue policy.