A Warning and a Promise A Danger Signal to the Jewish Commonwealth
Assistant Secretary of Labor, U. S. Government
This is the third and last of a series of articles by Mr. Post on the Problem of Land Tenure in ihe Jewish Commonwealth. Mr. Post has written these articles for THE MACCABAEAN with the object of elucidating the land tenure principles of the Pittsburgh Program. The first two articles appeared respectively in the July and August numbers of Tue MaccABAaEAn. The entire series unll be renrinted in namnhlet form.
Revival of a Dead Faith
“4 FAITH that was dead revives.” The writer of those A words had been reared where faith in an omniscient, omnipotent and beneficent Creator was confessed and taught. He had accepted that faith without hesitation through boyhood and into early manhood; but a workingman’s life and an inquiring mind prompted him to question and drove him on to doubt. He could not reconcile the grinding inequalities of the world with beneficent intelligence in its creator; and pious promises of postmoriem joys seemed to him irrelevant. The more widely he observed and the more deeply he thought, the more certain he became, for a time, that no intelligence at all rules the universe.
Further consideration, however, revealed to him evidences of some kind of intelligence as a ruling force. But this revelation only made the matter worse; for the Intelligence he thought he recognized was wholly lacking in benevolence. Instead of a beneficent God it seemed a malignant Devil.
Such was Henry George's spiritual outlook when in the middle 70's of the Nineteenth Century he began his inquiry into the cause of increase of want with increase of wealth, into the reason for persistence of poverty among the industrious multitudes in spite of material progress—his momentous inquiry of which "Progress and Poverty" was the published outcome.
In the course of that inquiry he came to see that the force which created and governs the universe is benevolent as well as intelligent. He began to discern a wisely loving Father in place of an insanely satanic practical joker. So his old faith in the Fatherhood of God and the consequent brotherhood of man came back to him, and he made his confession in the concluding chapter of “Progress and Poverty.” “Out of this inquiry,” he wrote, “has come to me something I did not think to find, and a faith that was dead revives.”
The Law of Rent
This revival of Henry George's original faith was caused by his growing comprehension of the familiar phenomena of rent for land, of those varying premiums for the various natural resources of the earth with which exploiting corporations, all dealers in real estate, and most socially intelligent people are familiar.
Rent, let it be understood, is that part of industrial production which flows from producers to owners of natural resources in varying shares. The economic law that measures those shares in the distribution of products is known as the law of economic rent. George described it in these
terms: "The ownership of a natural agent of production will give the power of appropriating so much of the wealth produced by the exertion of labor and capital upon it as exceeds the return which the same application of labor and capital could secure in the least productive occupation in which they freely engage." As no one can engage in any occupation without access to natural resources, this is the same as saying that the rent of any natural resource is determined by the excess of its produce over that which the same application can secure from the least productive natural resource in use. The accuracy of that definition of economic rent, the rent or price of land, the rent or price of all kinds of natural resources, will be apparent to whoever takes the pains to grasp it.
EEE EEE Bis - BE nee In its normal operation the law of rent leaves to producers their entire produce from such natural resources as are so abundant and so freely available that no producer will pay for the privilege of using them. For instances of such extreme availability we must look to sparsely settled countries. Karl Marx notes an impressive Australian instance in the 33rd chapter of his “Capital,” where he tells the true story of an “unhappy Mr. Peel.” But in well settled countries there are spots where rents are low enough to serve as “no rent” locations for all the purposes of understanding and illustrating or exemplifying the law of rent. From a natural resource that is free or commands only a small rental or price, the whole produce or virtually the whole is retained by the producer. No one but the producer can appropriate any of it, because opportunities for free or approximately free production are easily available. The totality of his own product therefore constitutes his own earnings. But for the use of natural resources superior to those that are free or almost free, the producer can retain only so much of his product as equals what he could retain if he had produced from free or nearly free resources. The rest, varying from a small share to an enormously large share according to the inherent richness and convenient location of the natural resource, is rent. It is the price of the privilege of producing. For illustration: If a producer can produce 10 units from natural resources of a grade that is abundant enough to command no rent, and 20 units from better natural resources of a grade that is monopolized, the extra 10 units will be rent for the better natural resources.
Evidently, therefore, while rent varies with the differential usefulness of natural resources, the producer’s own share in production is approximately the same everywhere for the same effort and skill. This is true regardless of whether the producer owns the natural resources he uses, or pays rent to a landlord, or works for stipulated wages. If he is the owner he will probably confuse his rent with his