Progress and Poverty, Volumes I and II: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of WealthGeorge, Henry
General
Progress and Poverty, Volumes I and II: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth
George, Henry
Economics; Single tax
This, then, is the law of rent. Although many standard treatises follow
too much the example of Ricardo, who seems to view it merely in its
relation to agriculture, and in several places speaks of manufactures
yielding no rent, when, in truth, manufactures and exchange yield
the highest rents, as is evinced by the greater value of land in
manufacturing and commercial cities, thus hiding the full importance of
the law, yet, ever since the time of Ricardo, the law itself has been
clearly apprehended and fully recognized. But not so its corollaries.
Plain as they are, the accepted doctrine of wages (backed and fortified
not only as has been hitherto explained, but by considerations
whose enormous weight will be seen when the logical conclusion
toward which we are tending is reached) has hitherto prevented their
recognition.[35] Yet, is it not as plain as the simplest geometrical
demonstration, that the corollary of the law of rent is the law of
wages, where the division of the produce is simply between rent and
wages; or the law of wages and interest taken together, where the
division is into rent, wages, and interest? Stated reversely, the law
of rent is necessarily the law of wages and interest taken together,
for it is the assertion, that no matter what be the production which
results from the application of labor and capital, these two factors
will receive in wages and interest only such part of the produce as
they could have produced on land free to them without the payment of
rent—that is, the least productive land or point in use. For, if, of
the produce, all over the amount which labor and capital could secure
from land for which no rent is paid must go to land owners as rent,
then all that can be claimed by labor and capital as wages and interest
is the amount which they could have secured from land yielding no rent.
Or to put it in algebraic form:
As Produce = Rent + Wages + Interest,
Therefore, Produce-Rent = Wages + Interest.
Thus wages and interest do not depend upon the produce of labor and
capital, but upon what is left after rent is taken out; or, upon the
produce which they could obtain without paying rent—that is, from the
poorest land in use. And hence, no matter what be the increase in
productive power, if the increase in rent keeps pace with it, neither
wages nor interest can increase.
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