The basic facts of economics : $b A common-sense primer for advanced studentsPost, Louis F. (Louis Freeland)
General
The basic facts of economics : $b A common-sense primer for advanced students
Post, Louis F. (Louis Freeland)
Economics
Such capitalizations operate as mortgages upon future Production; and
as the capitalizations increase, that kind of mortgage burden grows
in Economic weight. If Production continues advancing, the consequent
increase of Wealth as a whole easily bears the burden, which rests
then upon the naturally increasing Rent allocation rather than upon
Wages. But in consequence of such capitalizations, Rent tends to
become a football for Land speculation. This results in excessive
capitalizations of Rent, which tend in turn to lower the Margin of
Production, the Economic frontier, abnormally. As a consequence,
Rent exactions in the form of speculative Land Prices rise above
capitalizations of Rent at normal levels.
Exemplifications of such Economic phenomena may be observed in any
community where at any time speculative Prices for Land have figured.
In such circumstances, so long as Wealth is sufficiently increased by
Labor--whether from improvement in Labor-power or from progressive
advantages in Land opportunities,--increasing Rent is offset by
increasing Wealth, and Economic prosperity abounds. But when increase
in Wealth-production lags behind Rent, prosperity is checked and a
“slump” in Land-values, Economically perilous, follows.
Other causes of Economic depression than “slumps” in speculative
Land-values there doubtless are. They spring from such superficial
maladjustments in the processes of Trade as are connected with
defective banking, fluctuations in the values of corporate stocks and
variations in Money standards from lack of effective stabilization.
Even as to business depressions apparently so produced it is, however,
exceedingly difficult if not impossible to declare with certainty that
the leading part is not played by speculative Land values. For in our
neo-feudalistic era, Land values are intricately confused with Wealth
values in corporation stocks and bonds. To the extent that Land values
and Wealth values are thus mingled, it is quite impossible to account
for many Economic upheavals without more distinctive inventories of
property in Trade and more accurate Economic classifications than in
business circles or among advanced students of Economics have as yet
been reached.
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