Spencer Heath Archive

Item 1968

Extensive pencil writing, part of a larger piece on the subject of why valuable land lies idle but it’s not clear where it fits in.

1941?

     A portion of this general wealth (fixed by the market as ground rent) constitutes the demand for the public services of land owners in making socially available (by the peaceable and equitable processes of the market) such general advantages, natural and artificial, of the community as its population can utilize. Where the restrictions on employment and production (by taxation or any other violations of ownership, taking wealth out of the course of exchange) are few and small, then (among people of the temperate regions) the production of wealth is profitable and high, /and/ the need and the ability to pay and hence the demand and reward for the merchandising of security in the use of community resources is correspondingly high. The converse is equally true. Where restrictions are high production is low and ground rent is small.

     Seldom, if ever, does production over any large area rise high enough to bring all of its resources into use or demand. This is why rent (present, not prospective, land value) arises only upon portions of a community, leaving the remainder idle and out of use. Land can be used and rent can arise and appear only in proportion as wealth is permitted to be produced and exchanged, and the value of land (meaning capitalization of rent) can appertain only to the portions thus brought into demand and into use.

     Under any existing burden of political restriction only a limited amount of business can be done and wealth produced, and this can engage without further loss only a limited portion of the land and resources of a community. If by any compulsion, or by any artifice short of lifting political penalties and restrictions, more land could be “forced into use,” any such policy would compel the existing limited utilization of resources to be spread out over a larger area and thus actually diminish (as coercion always does) the production of wealth. And any attempt to force more land into use by further taxation seizing still more out of current production would make idle land cheaper to buy without making it any more profitable to use. A limited amount of business can generate only a limited amount of rent. To spread the limited business and production over a wider territory would also spread the limited rent; but since the limited business activity would be less productive when so spread (extensively) over additional areas, so also would there be a decline in the total of rent.

     The great need of business and industry is to be liberated, not to be spread out over wider areas where it could only become less productive than it now is. Under the present volume of business very few if any of the locations or resources in use are being used to their full or highest productivity, and that which is physically produced largely fails to come into value because of the anti-social political obstacles to its distribution under the natural law of exchange. This is most observable in the extractive industries where production is by seasons or long-term commitments and supply cannot be adjusted almost daily to its exchangeableness or effective demand as in the case of retailers’ supplies at the last point of exchange (highest value) before becoming actually consumers’ goods. But what is called overproduction in the gross industries is fully matched by over-capacity in almost every line. As the Brookings and other studies show, even the existing physical plant capacity is never fully employed, and the administrative and managerial services, even of those who are constantly engaged in such services, are almost always limited by the insufficient volume of business available and are seldom put forth to anywhere near their full normal capacity, to say nothing of the millions who have only part-time employment or no employment at all. The anti-social restrictions on production and trade make it unprofitable and impossible to utilize adequately either the land with its natural and community resources that is already in use or even the existing physical facilities (capital) that are now being engaged with it and its products. It is not only labor of all kinds and capital but also the very land itself with all its natural and community resources that is being kept out of use and employment by the prevention of goods and services from being distributed profitably under the natural equities of free and voluntary exchange. Even as the owners of capital have as much of it and more than they can profitably use or let out to others to use, so do the owners of land have more natural and community facilities than they can use or find others to use, and the average land owner is probably as hard pressed as is the average owner of any of the other unused or only partly used facilities of production and exchange. As a land lord he is, in general, as much or more out of a job and kept disemployed than is the average owner of any other kind of property who is not able to merchandise its possession and use.

     The thought may still linger and persist that because even unused land often changes hands at a price which its former owner could not command, the present owner is a recipient of an increment of value that he has not created or earned. This does not happen universally but only in those times and places where production and exchange are increasing; elsewhere quite the reverse occurs. But profit on the sale of land is no social detriment. The capital represented by the purchase price has merely changed ownership. The seller, who was in position to administer (merchandise the use of) land comes into the position of administering private capital and the buyer, who was in the position of administering the capital he then owned has come into the position of administering the land. It is well that these transactions take place; there is no social loss but, rather, a gain; for capital always tends to flow towards those who can most productively administer it. And at the same time, pending its coming into demand for use, there is built up an owning interest in the land that, in a market that is open on equal terms to all, guarantees its final occupancy or use by the most productive tenant. Even the owner, considered as occupier and user, must pay rent like anyone else, by the amount of interest on his investment in the idle land. In this way does private property in land preclude the monopolization of its use either by ordinary force or by special interests supported by the force of political authority.

    Political government, despotic or popular, military or civil, is always the foe of liberty. Its revenues all rest on force and not on individual consent. Only as they are free and independent land owners, or as they have the services, the security and immunities, vouchsafed and merchandised to them by land lords, can men be free from oppression. Where there can be no land-lords there can be no free-men; under war-lords they are enslaved.