[BOOK IV.]

to an increase in the natural powers of land; but that it brings out a superior power in labour, which is localised on land-which attaches not to labour generally, but only to labour exerted on particular land; and which thus inheres in the land as much as any qualities of soil, climate, mineral deposit, or natural situation, and passes, as they do, with the possession of the land.

An improvement in the method of cultivation which, with the same outlay, will give two crops a year in place of one, or an improvement in tools and machinery which will double the result of labour, will manifestly, on a particular piece of ground, have the same effect on the produce as a doubling of the fertility of the land. But the difference is in this respectthe improvement in method or in tools can be utilised on any land; but the improvements in fertility can only be utilised on the particular land to which it applies. Now, in large part, the increased productiveness of labour which arises from increased population, can only be utilised on particular land, and on particular land in greatly varying degrees.

As to

Here, let us imagine, is an unbounded savannah, stretching off in unbroken sameness of grass and flower, tree and rill, till the traveller tires of the monotony. Along comes the wagon of the first immigrant. Where to settle he cannot tell-every acre seems as good as every other acre. wood, as to water, as to fertility, as to situation, there is absolutely no choice, and he is perplexed by the embarrassment of richness. Tired out with the search for one place that is better than another, he stops-somewhere, anywhere—and starts to make himself a home. The soil is virgin and rich, game is abundant, the streams flash with the finest trout. Nature is at her very best. He has what, were he in a populous district, would make him rich; but he is very poor. To say nothing of the mental craving, which would lead him to welcome the sorriest stranger, he labours under all the material disadvantages of solitude. He can get no temporary assistance for any work that requires a greater union of strength than that afforded by his own family, or by such help as he can permanently keep. Though he has cattle, he cannot often have fresh meat, for to get a beefsteak he must kill a bullock. He must be his own blacksmith, waggonmaker, carpenter, and cobbler-in short a "jack of all trades and master of none.' He cannot have his children schooled, for, to do so, he must himself pay and maintain a teacher. Such things as he cannot produce him. self, he must buy in quantities and keep on hand, or else go without, for he cannot be constantly leaving his work and making a long journey to the verge of civilisation: and when forced to do so, the getting of a vial of medicine or the replacement of a broken auger may cost him the labour of himself and horses for days. Under such circumstances, though nature is prolific, the man is poor. It is an easy matter for him to get enough to eat; but beyond this, his labour will only suffice to satisfy the simplest wants in the rudest way.

Soon there comes another immigrant. Although every quarter section of the boundless plain is as good as every other quarter section, he is not beset by any embarrassment as to where to settle. Though the land is the same, there is one place that is clearly better for him than any other place, and that is where there is already a settler and he may have a neighbour. He settles by the side of the first comer, whose condition is at once greatly improved, and to whom many things are now possible that were before impossible, for two men may help each other to do things that one man could never do.

Another immigrant comes, and, guided by the same attraction, settles where Another, and another, until around our first comer there are already two. there are a score of neighbours. Labour has now an effectiveness which, in the solitary state, it could not approach. If heavy work is to be done, the settlers have a log-rolling, and together accomplish in a day what singly would require years. When one kills a bullock, the others take part of it, returning Together they when they kill, and thus they have fresh meat all the time. hire a schoolmaster, and the children of each are taught for a fractional part It becomes a comof what similar teaching would have cost the first settler. paratively easy matter to send to the nearest town, for some one is always going. But there is less need for such journeys. A blacksmith and a wheelwright soon set up shops, and our settler can have his tools repaired for a smal part of the labour they formerly cost him. A store is opened and he can get what he wants as he wants it; a post-office, soon added, gives him regular communication with the rest of the world. Then comes a cobbler, a carpenter, Satisfactions bea harnessmaker, a doctor; and a little church soon arises. come possible that in the solitary state were impossible. There are gratifications for the social and the intellectual nature-for that part of the man that rises above the animal. The power of sympathy, the sense of companionship, the emulation of comparison and contrast, open a wider, and fuller, and more varied life. In rejoicing, there are others to rejoice; in sorrow, the mourners do not mourn alone. There are husking bees, and apple parings, and quilting parties. Though the ballroom be unplastered and the orchestra but a fiddle, the notes of the magician are yet in the strain, and Cupid dances with the dancers. At the wedding, there are others to admire and enjoy; in the house of death, there are watchers; by the open grave, stands human sympathy to sustain the mourners. Occasionally, comes a straggling lecturer to open up glimpses of the world of science, of literature, or of art; in election times, come stump speakers, and the citizen rises to a sense of dignity and power, as

the cause of empires is tried before him in the struggle of John Doe and Richard Roe for his support and vote. And, by and by, comes the circus, talked of months before, and opening to children, whose horizon has been the prairie, all the realms of the imagination-princes and princesses of fairy tale, mail-clad crusaders and turbaned Moors, Cinderella's fairy coach, and the giants of nursery lore; lions such as crouched before Daniel, or in circling Roman amphitheatre tore the saints of God; ostriches who recall the sandy deserts; camels such as stood around when the wicked brethren raised Joseph from the well and sold him into bondage; elephants such as crossed the Alps with Hannibal, or felt the sword of the Maccabees; and glorious music that thrills and builds in the chambers of the mind as rose the sunny dome of Kubla Khan.

manure.

Go to our settler now, and say to him: "You have so many fruit trees which you planted; so much fencing, such a well, a barn, a house-in short, is not quite so good. You have been cropping it, and by and by it will need you have by your labour added so much value to this farm. Your land itself I will give you the full value of all your improvements if you will give it to me, and go again with your family beyond the verge of settlement." He would laugh at you. His land yields no more wheat or potatoes than before, but it does yield far more of all the necessaries and comforts of life. His labour upon it will bring no heavier crops, and, we will suppose, no more valuable crops, but it will bring far more of all the other things for which men work. The presence of other settlers-the increase of populationhas added to the productiveness, in these things, of labour bestowed upon it, and this added productiveness gives it a superiority over land of equal natural quality where there are as yet no settlers. If no land remains to be taken up, except such as is as far removed from population as was our settler's land when he first went upon it, the value or rent of this land will be measured by the whole of this added capability. If, however, as we have supposed, there is a continuous stretch of equal land, over which population is now spreading, it will not be necessary for the new settler to go into the wilderness, as did the first. He will settle just beyond the other settlers, and will get the advantage of proximity to them. The value or rent of our settler's land will thus depend on the advantage which it has, from being at the centre of population, over that on the verge. In the one case, the margin of production will remain as before; in the other, the margin of production will be raised.

Population still continues to increase, and as it increases so do the economies which its increase permits, and which in effect add to the proOur first settler's land, being the centre of ductiveness of the land. population, the store, the blacksmith's forge, the wheelwright's shop, are set up on it, or on its margin, where soon arises a village, which rapidly district. With no greater agricultural productiveness than it had at first, grows into a town, the centre of exchanges for the people of the whole this land now begins to develop a productiveness of a higher kind. To labour expended in raising corn, or wheat, or potatoes, it will yield no more of those things than at first; but to labour expended in the subdivided branches of production which require proximity to other producers, and, especially, to labour expended in that final part of production which consists in distribution, it will yield much larger returns. The wheatgrower may go further on, and find land on which his labour will produce as much wheat, and nearly as much wealth; but the artisan, the manufacturer, the storekeeper, the professional man, find that their labour exif expended even at a little distance away from it; and this excess of propended here, at the centre of exchanges, will yield them much more than ductiveness for such purposes the landowner can claim, just as he could an excess in its wheat-producing power. And so our settler is able to sell in building lots a few of his acres for prices which it would not bring for wheat-growing if its fertility had been multiplied many times. With the proceeds, he builds himself a fine house, and furnishes it handsomely. That is to say, to reduce the transaction to its lowest terms, the people who wish to use the land build and furnish the house for him, on condition that he will let them avail themselves of the superior productiveness which the increase of population has given the land.

Population still keeps on increasing, giving greater and greater utility to the land, and more and more wealth to its owner. The town has grown Production is here carried on upon a great scale, with the best machinery into a city-a St. Louis, a Chicago or a San Francisco-and still it grows. and the most favourable facilities; the division of labour becomes exvolume and rapidity that they are made with the minimum of friction tremely minute, wonderfully multiplying efficiency; exchanges are of such and loss. Here is the heart, the brain, of the vast social organism that has grown up from the germ of the first settlement; here has developed one of the great ganglions of the human world. Hither run all roads, hither set all currents, through all the vast regions round about. Here, if you have largest and the choicest stock. Here intellectual activity is gathered into anything to sell, is the market; here, if you have anything to buy, is the a focus, and here springs that stimulus which is born of the collision of Here are the great libraries, the storehouses and mind with mind. granaries of knowledge, the learned professors, the famous specialists. Here are museums and art galleries, collections of philosophical apparatus, Here come great and all things rare, and valuable, and best of their kind.

actors, and orators, and singers, from all over the world. Here, in short, is a material progress to lower wages and depress the condition of the lowest class, centre of human life, in all its varied manifestations. without recourse to the theory of increasing pressure against the means of subsistence.

So enormous are the advantages which this land now offers for the application of labour, that instead of one man with a span of horses scratching over acres, you may count in places thousands of workers to the acre, working tier on tier, on floors raised one above the other, five, six, seven and eight stories from the ground, while underneath the surface of the earth, engines are throbbing with pulsations that exert the force of thousands of horses.

All these advantages adhere to the land; it is on this land and no other that they can be utilised, for here is the centre of population—the focus of exchanges, the market place and workshop of the highest forms of industry. The productive powers which density of population has attached to this land are equivalent to the multiplication of its original fertility by the hundred fold and the thousand fold. And rent, which measures the difference between this added productiveness and that of the least productive land in use, has increased accordingly. Our settler, or whoever has succeeded to his right to the land, is now a millionaire. Like another Rip Van Winkle, he may have lain down and slept; still he is rich-not from anything he has done, but from the increase of population. There are lots from which for every foot of frontage the owner may draw more than an average mechanic can earn ; there are lots that will sell for more than would suffice to pave them with gold coin. In the principal streets are towering buildings, of granite, marble, iron, and plate glass, finished in the most expensive style, replete with every convenience. Yet they are not worth as much as the land upon which they rest-the same land, in nothing changed, which when our first settler came upon it had no value at all.

That this is the way in which the increase of population powerfully acts in increasing rent, whoever, in a progressive country, will look around him, may see for himself. The process is going on under his eyes. The increasing difference in the productiveness of the land in use, which causes an increasing rise in rent, results not so much from the necessities of increased population compelling the resort to inferior land as from the increased productiveness which increased population gives to the lands already in use. The most valuable lands on the globe, the lands which yield the highest rent, are not lands of surpassing natural fertility, but lands to which a surpassing utility has been given by the increase of population.

The increase of productiveness or utility which increase of population gives to certain lands, in the way to which I have been calling attention, at- | taches, as it were, to the mere quality of extension. The valuable quality of land, which has become a centre of population, is its superficial capacity-it makes no difference whether it is fertile alluvial soil like that of Philadelphia, rich bottom land like that of New Orleans, a filled-in marsh like that of St. Petersburg, or a sandy waste like the greater part of San Francisco.

And where value seems to arise from superior natural qualities, such as deep water and good anchorage, rich deposits of coal and iron, or heavy timber, observation also shows that these superior qualities are brought out, rendered tangible, by population. The coal and iron fields of Pennsylvania, that to-day are worth enormous sums, were fifty years ago valueless. What is the efficient cause of the difference? Simply the difference in population. The coal and iron beds of Wyoming and Montana, which to-day are valueless, will, in fifty years from now, be worth millions on millions, simply because, in the meantime, population will have greatly increased.

It is a well-provisioned ship, this on which we sail through space. If the bread and beef above decks seem to grow scarce, we but open a hatch, and there is a new supply, of which before we never dreamed. And very great command over the services of others comes to those who as the hatches are opened are permitted to say, "This is mine!"

To recapitulate: The effect of increasing population upon the distribution of wealth is to increase rent (and consequently to diminish the proportion of the produce which goes to capital and labour), in two ways: First, By lowering the margin of cultivation. Second, By bringing out in land special capabilities otherwise latent, and by attaching special capabilities to particular lands.

I am disposed to think that the latter mode, to which little attention has been given by political economists, is really the more important. But this, in our inquiry, is not a matter of moment.

CHAPTER III.

THE EFFECT OF IMPROVEMENTS IN THE ARTS UPON THE DISTRIBUTION
OF WEALTH.

ELIMINATING improvements in the arts, we have seen the effects of increase of
population upon the distribution of wealth. Eliminating increase of population,
let us now see what effect improvements in the arts of production have upon
distribution.

We have seen that increase of population increases rent, rather by increasing the productiveness of labour than by decreasing it. If it can now be shown that, irrespective of the increase of population, the effect of improvements in methods of production and exchange is to increase rent, the disproof of the Malthusian theory-and of all the doctrines derived from or related to it. will be final and complete, for we shall have accounted for the tendency of

That this is the case will, I think, appear on the slightest consideration. The effect of inventions and improvements in the productive arts is to save labour-that is, to enable the same result to be secured with less labour, or, a greater result with the same labour.

Now, in a state of society in which the existing power of labour served to satisfy all material desires, and there was no possibility of new desires being called forth by the opportunity of gratifying them, the effect of labour-saving improvements would be simply to reduce the amount of labour expended. But such a state of society, if it can anywhere be found (which I do not believe), exists only where the human most nearly approaches the animal. In the state of society called civilised, and which in this inquiry we are concerned with, the very reverse is the case. Demand is not a fixed quantity, that increases only as population increases. In each individual it rises with his power of getting the things demanded. Man is not an ox, who, when he has eaten his fill, lies down to chew the cud; he is the daughter of the horse leech, who constantly asks for more. When I get some money."

said Erasmus, "I will buy me some Greek books and afterwards some clothes." The amount of wealth produced is nowhere commensurate with the desire for wealth, and desire mounts with every additional opportunity for gratification.

This being the case, the effect of labour-saving improvements will be to increase the production of wealth. Now, for the production of wealth, two things are required-labour and land. Therefore, the effect of laboursaving improvements will be to extend the demand for land, and wherever the limit of the quality of land in use is reached, to bring into cultivation lands of less natural productiveness, or to extend cultivation on the same lands to a point of lower natural productiveness. And thus, while the primary effect of labour-saving improvements is to increase the power of labour, the secondary effect is to extend cultivation, and, where this lowers the margin of cultivation, to increase rent. Thus, where land is entirely appropriated, as in England, or where it is either appropriated or is capable of appropriation as rapidly as it is needed for use, as in the United States, the ultimate effect of labour-saving machinery or improvements is to increase rent without increasing wages or interest.

It is important that this be fully understood, for it shows that effects attributed by current theories to increase of population are really due to the progress of invention, and explains the otherwise perplexing fact that labour-saving machinery everywhere fails to benefit labourers.

Yet, to fully grasp this truth, it is necessary to keep in mind what I have already more than once adverted to-the interchangeability of wealth. I allude to this again, only because it is so persistently forgotten or ignored by writers who speak of agricultural production as though it were to be distinguished from production in general, and of food or subsistence as though it were not included in the term wealth.

Let me ask the reader to bear in mind, what has already been sufficiently illustrated, that the possession or production of any form of wealth is virtually the possession or production of any other form of wealth for which it will exchange-in order that he may clearly see that it is not merely improvements which effect a saving in labour directly applied to land that tend to increase rent, but all improvements that in any way save labour.

That the labour of any individual is applied exclusively to the production of one form of wealth is solely the result of the division of labour. The object of labour on the part of any individual is not the obtainment of wealth in one particular form, but the obtainment of wealth in all the forms that consort with his desires. And, hence, an improvement which effects a saving in the labour required to produce one of the things desired is, in effect, an increase in the power of producing all the other things. If it take half a man's labour to keep him in food, and the other half to provide him clothing and shelter, an improvement which would increase his power of producing food would also increase his power of providing clothing and shelter. If his desire for more or better food, and for more or better clothing and shelter, were equal, an improvement in one department of labour would be precisely equivalent to a like improvement in the other. If the improvement consisted in a doubling of the power of his labour in producing food, he would give one-third less labour to the production of food, and one-third more to the providing of clothing and shelter. If the improvement doubled his power to provide clothing and shelter, he would give one-third less labour to the production of these things, and one-third more to the production of food. In either case, the result would be the same-he would be enabled with the same labour to get one-third more in quantity or quality of all the things he desired.

And, so, where production is carried on by the division of labour between individuals, an increase in the power of producing one of the things sought by production in the aggregate adds to the power of obtaining others, and will increase the production of the others, to an extent determined by the proportion which the saving of labour bears to the total amount of labour expended, and by the relative strength of desires. I am unable to think of any form of wealth the demand for which would not be increased by a saving in the labour required to produce the others.

In what has preceded I have, of course, spoken of inventions and improve ments when generally diffused. It is hardly necessary to say that as long as an invention or an improvement is used by so few that they derive a special advantage from it, it does not, to the extent of this special advantage, affect the general distribution of wealth. So, in regard to the limited monopolies created by patent laws, or by the causes which give the same character to railroad and telegraph lines, etc. Although generally mistaken for profits of capital, the special profits thus arising are really the returns of monopoly, as has been explained in a previous chapter, and, to the extent which they subtract from the benefits of an improvement, do not primarily affect general distribution. For instance, the benefits of a railroad or similar improvement in cheapening transportation are diffused or monopolised, as its charges are reduced to a rate which will yield ordinary interest on the capital invested, or kept up to a point which will yield an extraordinary return, or cover the stealing of the constructors or directors. And, as is well known, the rise in rent or land values corresponds with the reduction in the charges.

As has been before said, in the improvements which advance rent are not only to be included the improvements which directly increase productive power, but also such improvements in government, manners, and morals as indirectly increase it. Considered as material forces, the effect of all these is to increase productive power, and, like improvements in the productive arts, their benefit is ultimately monopolised by the possessors of the land. A notable instance of this is to be found in the abolition of protection by England. Free trade has enormously increased the wealth of Great Britain, without lessening pauperism. It has simply increased rent. And if the corrupt governments of our great American cities were to be made models of purity and economy, the effect would simply be to increase the value of real estate, not to raise either wages or interest.

We have now seen that while advancing population tends to advance rent, so all the causes that in a progressive state of society operate to increase the productive power of labour tend, also, to advance rent, and not to advance wages or interest. The increased production of wealth goes ultimately to the owners of land in increased rent; and, although, as improvement goes on, advantages may accrue to individuals not land holders, which concentrate in their hands considerable portions of the increased produce, yet there is in all this improvement nothing which tends to increase the general return either to labour or to capital.

But there is a cause, not yet adverted to, which must be taken into consideration to fully explain the influence of material progress upon the distribution of wealth.

That cause is the confident expectation of the future enhancement of land values, which arises in all progressive countries from the steady increase of rent, and which leads to speculation, or the holding of land for a higher price than it would then otherwise bring.

We have hitherto assumed, as is generally assumed in elucidations of the theory of rent, that the actual margin of cultivation always coincides with what may be termed the necessary margin of cultivation-that is to say, we have assumed that cultivation extends to less productive points only as it becomes necessary from the fact that natural opportunities are at the more productive points fully utilised.

This, probably, is the case in stationary or very slowly progressing communities, but in rapidly progressing communities, where the swift and ready increase of rent gives confidence to calculations of further increase, it is not the case. In such communities, the confident expectation of increased prices produces, to a greater or less extent, the effects of a combination among land holders, and tends to the withholding of land from use, in expectation of higher prices, thus forcing the margin of cultivation farther than required by the necessities of production.

This cause must operate to some extent in all progressive communities, though in such countries as England, where the tenant system prevails in agri

the margin of cultivation to still less productive, because still more remote points.

The same thing may be seen in every rapidly growing city. If the land of superior quality as to location were always fully used before land of inferior quality were resorted to, no vacant lots would be left as a city extended, nor would we find miserable shanties in the midst of costly buildings. These lots, some of them extremely valuable, are withheld from use, or from the full use to which they might be put, because their owners, not being able or not wishing to improve them, prefer, in expectation of the advance of land values, to hold them for a higher rate than could now be obtained from those willing to improve them. And, in consequence of this land being withheld from use, or from the full use of which it is capable, the margin of the city is pushed away so much farther from the centre.

But when we reach the limits of the growing city-the actual margin of building, which corresponds to the margin of cultivation in agriculture—we shall not find the land purchasable at its value for agricultural purposes, as it would be were rent determined simply by present requirements; but we shall find that for a long distance beyond the city, land bears a speculative value, based upon the belief that it will be required in the future for urban purposes, and that to reach the point at which land can be purchased at a price not based upon urban rent, we must go very far beyond the actual margin of urban use.

Or, to take another case of a different kind, instances similar to which may doubtless be found in every locality. There is in Marin County, within easy access of San Francisco, a fine belt of redwood timber. Naturally, this would be first used, before resorting for the supply of the San Francisco market to timber lands at a much greater distance. But it yet remains uncut, and lumber procured many miles beyond is daily hauled past it on the railroad, because its owner prefers to hold for the greater price it will bring in the future. Thus, by the withholding from use of this body of timber, the margin of production of redwood is forced so much farther up and down the Coast Range. That mineral land, when reduced to private ownership, is frequently withheld from use while poorer deposits are worked, is well known, and in new states it is common to find individuals who are called "land poor "-that is, who remain poor, sometimes almost to deprivation, because they insist on holding land, which they themselves cannot use, at prices at which no one else can profitably use it.

20.

To recur now to the illustration we made use of in the preceding chapter: With the margin of cultivation standing at 20, an increase in the power of production takes place, which renders the same result obtainable with one-tenth less labour. For reasons before stated, the margin of production must now be forced down, and if it rests at 18, the return to labour and capital will be the same as before, when the margin stood at Whether it will be forced to 18 or be forced lower depends upon what I have called the area of productiveness which intervenes between 20 and 18. But if the confident expectation of a further increase of rents leads the land owners to demand 3 rent for 20 land, 2 for 19, and 1 for 18 land, and to withhold their land from use until these terms are complied with, the area of productiveness may be so reduced that the margin of cultivation must fall to 17 or even lower; and thus, as the result of the increase in the efficiency of labour, labourers would get less than before, while interest would be proportionately reduced, and rent would increase in greater ratio than the increase in productive power.

Whether we formulate it as an extension of the margin of production, or as a carrying of the rent line beyond the margin of production, the influence of speculation in land in increasing rent is a great fact which cannot be ignored in any complete theory of the distribution of wealth in progressive countries. It is the force, evolved by material progress, which tends constantly to increase rent in a greater ratio than progress increases production, and thus constantly tends, as material progress goes on and productive power increases, to reduce wages, not merely relatively, but absolutely. It is this expansive force which, operating with great power in new countries, brings to them, seemingly long before their time, the social diseases of older countries; produces "tramps" on virgin acres, and breeds paupers on half-tilled soil.

In short, the general and steady advance in land values in a progressive

which is seen in the case of commodities when any general and continuous cause operates to increase their price. As, during the rapid depreciation of currency which marked the latter days of the Southern Confederacy, the fact that whatever was bought one day could be sold for a higher price the next, operated to carry up the prices of commodities even faster than the depreciation of the currency, so does the steady increase of land values which material progress produces operate to still further accelerate the increase. We see this secondary cause operating in full force in those manias of land speculation which mark the growth of new communities; but though these are the abnormal and occasional manifestations, it is undeniable that the cause steadily operates, with greater or less intensity, in all progressive societies.

culture, it may be shown more in the selling price of land than in the agricul community necessarily produces that additional tendency to advance tural margin of cultivation, or actual rent. But in communities like the United States, where the user of land generally prefers, if he can, to own it, and where there is a great extent of land to overrun, it operates with enormous power. The immense area over which the population of the United States is scattered shows this. The man who sets out from the Eastern seaboard in search of the margin of cultivation, where he may obtain land without paying rent, must, like the man who swam the river to get a drink, pass for long distances through half-tilled farms, and traverse vast areas of virgin soil, before he reaches the point where land can be had free of rent-i.e., by homestead entry or preemption. He (and, with him, the margin of cultivation) is forced so much farther than he otherwise need have gone, by the speculation which is holding these unused lands in expectation of increased value in the future. And when he settles, he will, in his turn, take up, if he can, more land than he can use, in the belief that it will soon become valuable; and so those who follow him are again forced farther on than the necessities of production require, carrying

The cause which limits speculation in commodities, the tendency of increasing price to draw forth additional supplies, cannot limit the specu