Spencer Heath Archive

Item 190

Pencil by Heath on small notepad paper.

July 10-13, 1941

     War can be practiced only by mutual injury. Peace can be practiced only by exchange of services. There is no zero relationship. Hence neither war nor peace can be abandoned except by practice of the other. War is compulsion. Peace is freedom, through service and consent. Peace consists in the practice of freedom, in the making and performing of contracts. Any other peace is isolation, degeneration and death.

     Every contract is a sale, a quid pro quo. Nothing but services (in some form) can be sold. All wealth is service incarnate. It is services incorporated in land — separate bits of earth material brought into the category of wealth through services being wrought into them. This application of services to land, their incorporation in it, is called production. Production is a physical process — the changing of natural things into artificial.

     There are also services of distribution. These are not physical; they are social. They do not change natural things into artificial. They only change the attitudes and relationships of men towards each other with respect to physical things, either natural or artificial physical things, either land or wealth.

     These services of distribution take the form of contracts or covenants between men with respect to things.

     Covenant and contract gives men the exclusive possession or use of things, natural or artificial, by agreement and consent. The alternative is force, violence and war. Under this societal distribution, by contract and covenant, men can hold and use the things of nature (land) and the things of artifice (wealth) in security and peace. Without this social distribution neither land nor wealth can be productively used or peaceably enjoyed.

     Things made the subject of covenant or contract are said to be owned. Social distribution by contract and consent does not physically move or distribute any things themselves; what it does distribute is the ownership of things. It thus makes men secure from each other in the possession of things — of land and of wealth, and thus enables them to be peaceably and productively used or enjoyed.

     Social distribution by ownership, contract and consent does not physically move either lands or goods. It does distribute their ownership and thus makes possible their peaceable possession and productive use. It is therefore a social service of the highest importance. Every contract is a sale or lease of lands or goods for a price or a rent, or the sale of services for a recompense or wage if gaged by time /?/. In the case of bare land the price or rent is paid for the service of distribution only — there being no service of production to be recompensed. In the case of goods the price or rent is paid in part for the services of physical production (turning land into wealth) and in further part for the services of salesmanship or social distribution. This latter part of the total recompense for goods is often referred to as “cost of selling.” It often exceeds the total cost or recompense paid for the physical production and transportation of the goods.

     There must be a social distribution of land, with security of possession and use, before there can be any conversion of land into goods or wealth. Ground rent is that portion of the wealth produced that the free contracts of the market award as recompense to owners for the service of making a social and contractual distribution of sites and resources. It is an earned recompense, not an “unearned” increment. It is paid for a public service of distribution without which violence and compulsions would so prevail that little or no wealth would be produced or services performed. It rises and falls with the rise and fall of production and services. It pays for a public service by public proprietors that makes general production possible. It is, in fact, that portion of the general production which the general market awards to land owners for those primary services of land distribution peaceably and on equal terms to all upon which the general productivity must be based and without which no general productivity could either begin or proceed.

    Land ownership, as a means for the social and equitable distribution of sites and resources, automatically arbitrates conflicting desires as to the possession and use of sites and resources of nature and thus protects wealth producers against the practice of force and violence upon each other and among themselves. But such distribution does not protect them from the compulsions of government — against destructive taxation and the tribute and tyrannies of regimentation that inhibit and finally cause production to cease and land value thus to disappear. In the day that land owners become conscious of their present and potential functions they will act in concert to protect their territories and their inhabitants against political restraints on the production of wealth. This further and conscious service will release an enormous productivity and thereby an enormous now-suppressed demand for sites and resources. The new incomes and values thus accruing to land will be their natural and proper recompense for performing this new protective service. And this merely protective service will be followed by all the various positive public services that will increase the general productivity and thus bring to the united land owners ample income for maintaining such public services, and recompense for providing them. This will finally bring all public services under the business and contractual administration of the public proprietors. The public business will become solvent and profitable, instead of habitually indebted and insolvent, taxation will become obsolete and unnecessary, the public services will contribute to productivity and prosperity and no longer destroy them, and government as restraint and restriction on productivity will disappear, and government as an enduring instrument and agency of freedom and service will have arrived. Proprietary government creating its own ample revenues by the services it supplies and performs to create them will have every power of service and peace, the highest power of defense and no incitements towards war.