Machinery and Rent

Single Taxers seem to take it for granted that every new labor-saving machine tends to increase economic rent. In No. 341 of Liberty Mr. Horr states this proposition as follows: As civilization advances; as the sciences, as the arts, and inventions more fully develop, and ability becomes more general,—so will the value of land increase and more or less keep pace with this advance. Under occupancy and use all these advantages would go to land-owners and land-owners only.

Now it seems to me that this is an entirely erroneous assumption.

By a labor-saving machine is meant one that enables mankind to produce a greater amount of wealth, with the same amount of labor, applied to the same amount of land, than could be produced without it. If the demand for the products of labor is the same,—and we must assume this in order to simplify the case,—less labor is required to supply that demand with the machine than without it. If less labor is required, then less land is necessary to which to apply that labor. The result of a new labor-saving machine is to make two ears of corn grow where one grew before. I think it will tax the powers of even so trained mental acrobats as Single Taxers to prove that a decrease in the demand for land causes an increase of economic rent. The reverse is the opinion of all thinkers upon the subject.

Professor Francis A. Walker shows the effect of chaper rates of transportation upon rent, in Chapter II., part 4, of his Political Economy. It is too long to quote here, but I recommend it to the careful attention of all Single Taxers.

The invention of a new process of irrigation, a new fertilizer, or a more economical method of treating low-grade ores results in making land that was previously valueless capable of yielding wealth. This is practically adding to the supply of land without any corresponding increase in demand. The effect must be a decrease of the rent of all land except that which has just been made useful. It should be noted that such improvements do not result in lowering the margin of cultivation. They cause land which before was incapable of producing as much as the poorest land in use to yield more, and so its productiveness is made more than the productiveness of the land at the margin of cultivation. If the demand remains the same, some of the poorest land in use will be abandoned. This will raise the margin of cultivation, and, consequently, the economic rent of land will be reduced all along the line.

Single Taxers alwaqys point to the increase of rental values in cities, but they forget that this increase is due to other causes than the development of machinery. No one knows better than they that the increase in the value of city property is almost entirely an increase of speculative rent, and is altogether foreign to a discussion of economic rent. They also ignore the fact that the value of farm lands, especially in the older and more thickly-settled districts, is steadily decreasing. I have not been able to obtain statistics of any country save Great Britain. But it is not a little significant to note that, according to Mullhall, the entire rental value of England decreased, from 1880 to 1888, about thirteen per cent., and in Scotland the decrease during the same period was about fourteen per cent.

F. D. Tandy