Jack Fitzgerald
Source: Socialist Standard, June 1919.
Transcription: Socialist Party of Great Britain.
HTML Markup: Adam Buick
Public Domain: Marxists Internet Archive (2016). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit "Marxists Internet Archive" as your source.
The Freak Show.
Due, in part at any rate, to the demand of the Miners' Federation for the nationalisation of the mines, there has grown up lately an extension of the old demands for nationalising various properties and industries. The old unsupported assertions are trotted out with all the acclamation attaching to new discoveries, while a new organisation has been added to the list of those advocating these policies.
By far the most favourite subject for nationalisation has been the "land." Prominent among the organisations having the nationalisation of the land for their object are the Land Nationalisation Society, which proposes a form of purchase of the land, and the Society for the taxation of Land values, which advocates the the taxation of Land Values ultimately up to 20s. in the £. Now a new organisation has been formed called "The Commonwealth League," having for its object—
The Foundation of a Commonwealth based on the establishment of the common right to the land by the payment by each landholder of the economic rent, which is the commercial value of the site he holds.
By the Company They Keep.
As there is no practical difference between taxing land values and calling upon the landholders to pay "economic rent" to the State, it is somewhat curious that the two prominent Liberals who are respectively President and Secretary of the new league—Mr. R. C. Lambert and Mr. R. L. Outhwaite—should have formed the new organisation. Moreover, in their paper, The Commonweal, they are full of praise for the Independent Labour Party and the resolution that body's Conference passed at Huddersfield at Easter, that "demands the socialisation of the land as the very foundation of the co-operative commonwealth, and calls upon the Government to make it the permanent and inalienable possession of the community."
An Awkward Question.
The stupidity and ignorance of demanding the "socialisation" of the land while leaving the capitalist system in existence generally is only equalled by the crazy clause calling upon a capitalist government to make the land the possession of the whole community, although, be it said, these things are quite in accord with the confusionist and misleading policy of the I.L.P. Yet if the founders of the Commonwealth League are so strongly in favour of the attitude adopted by the I.L.P. why did they start a new organisation ? Why did they not join the I.L.P. straight away ? Or do they wish to add to the confusion already existing ?
In any case the proposals are worth examining again as many workers believe that the taxation of land values, or the taking of the "economic rent" by the State will benefit their class It sounds very plausible to say that as the land is "the gift of nature it should belong to the community," and many are led to believe that the proposals mentioned would bring about the desired result. Let us examine the matter a little closer.
The Truth Revealed.
Both "economic rent" and "land values" mean the same thing in the proposals of the above-mentioned organisations, though the spokesmen of the Commonwealth League nowhere define their phrase "economic rent." A simple illustration will help one to understand the principle behind this phrase.
When the War Office decided to take over a certain tract of agricultural land at Cippenham, near Slough, for the erection thereon of a motor repair depot, some agricultural experts objected to the action because, they said, the land was the most fertile in the district, while nearer London was land of practically no agricultural value that the War Office could have taken. The decision of the War Office to retain the land at Cippenham is strong evidence that the experts were right, but what was meant by their objection ?
Simply this. That if the same amount of labour-power, machinery, seed, etc., were used upon equal areas of these two pieces of land— say upon an acre of each—the resulting crops the resulting crops would not be equal in quantity or even in quality. If we suppose that under these conditions the land at Cippenham would yield 30 bushels of wheat to the acre, while the other land would only yield 20 bushels, then the Cippenham land would be said to have yielded an "economic rent" of 10 bushels per acre. The same principle applies if the land is required for other purposes—as sites for factories, business offices, or dwelling houses. Thus it is easily seen that a site close to a railway, a river, or a canal will, other things remaining equal, be more suitable and economical for a manufacturer to erect his works upon than a site that would require a large amount of road haulage to and from the works. The saving effected by building the works on the former site would represent the "economic rent" of that site. The "Land Values" that it is proposed to tax are exactly the same portions of wealth covered by the term "economic rent." To put the matter in a phrase, "The economic rent of any piece of land is the difference between the natural properties of that piece, either in fertility or situation, and that of the poorest piece in demand."
How is the amount of this difference arrived at? By competition. To quote the words of one of the Commonwealth League's leaflets
He [the landholder] will pay what another would be willing to pay for the privilege of using the piece of common property he holds. —The Vision and the Realisation.
We are told that this method "will throw the land open for all." Quite true—if we add who are able to pay for it, as it will be the highest bidder who will hold the land, exactly as he does now. When a large estate in the country is up for sale it is not the landless agricultural labourer who bids for it. Nor when a town site is sold, as that of Lord Berkeley, it is not a slum-dwelling worker who buys it, but a Sir Marcus Samuel.
In other words, no one will be allowed access to the land under the Commonwealth League's method unless they can pay the market price for its use, under the name of "economic rent."
This is just the situation that prevails to-day, as there is plenty of land available for those able to pay the market price for it. But, it will be objected, at present this price goes into the pockets of private individuals, whereas under the League's scheme it would go into the "common fund." Yes, but what common fund ? To this the answer is : The fund required to meet the social expenses of the community. But how are these met now ? By the rates and taxes. Thus the final result of the appropriation of "economic rent" or "land values" is to reduce the amount paid for rates and taxes from other sources.
As a class the workers are not concerned with taxation under capitalism. Out of the total wealth, which they produce by applying their labour power to the materials given by nature, they receive on an average about enough to keep them in the working condition that the masters' interests demand. Obviously they have no margin left over out of which to pay either taxes or economic rent. It is thus clear that it is the masters who must pay these expenses in the form of rates and taxes, and it is they who would obtain any benefit that might result from the application of "economic rent" to these expenses.
The method might not please the section of the master class who are solely, or mainly, landholders, but it would undoubtedly be beneficial to the industrial or commercial capitalists, and is really the ideal capitalist form of taxation.
We see, therefore, that the claims of the Commonwealth League with reference to the great benefits and freedoms that will flow to the working class by the taking over by the State of "economic rent" is a sheer figment of the imagination, while the real object lying behind their project—so strongly supported by the I.L.P.—is to shift as much as possible of the burden of taxation on to the shoulders of the landlords, whom the industrial capitalists often look upon as being merely "sleeping partners." So far as the workers are concerned it is another "red herring."
We may deal with other forms of nationalisation in a future article.