Chap 11a: The Rent of Land

1 Rent is naturally the highest which the tenant can afford to pay.

  • The landlord tries to leave the tenant only:
    • the wages needed to maintain his workers, and
    • ordinary profits after maintaining his capital.
  • Ordinary profits is the smallest share which the tenant can have without being a loser.
    • The landlord seldom means to leave him any more.
  • The landlord naturally tries to gain as rent whatever is left over of the price after ordinary profits.
    • Sometimes, the tenant is made to pay less than this rent because of the landlord’s liberality or ignorance.
    • Rarely, the tenant’s ignorance makes him pay more rent.
      • However, this may still be considered as the natural rent of land.
        • The natural rent of land is the rent which land is naturally meant to be rented out for.

2 Rent is frequently seen as the landlord’s reasonable profit or interest for improving the land.

  • In reality, this is only true sometimes.
  • The landlord demands rent even for unimproved land.
  • The supposed interest or profit from the cost of improvement is added to this original rent.
    • Those improvements are sometimes made by the tenant, not the landlord.
    • When the lease is renewed, the landlord commonly demands an increase in rent as if he made the improvements.

3 He sometimes demands rent for things which cannot be improved.

  • When kelp is burnt, it yields an alkaline salt used for making glass, soap, etc.
    • It grows on rocks within the high water mark, which are covered by the sea twice daily.
    • Those rocks could not be improved by human industry.
    • However, the landlord demands rent for kelp shore as much as for his corn fields.

4 The sea around the islands of Shetland is abundant in fish.

  • To profit from this fish, the locals must have a house on the neighbouring land.
    • Their rent is in proportion to what they can make by the land and water.
  • It is partly paid in fish.
    • It is one of very few instances where rent makes a part of the price of fish.

5 The rent of land is naturally a monopoly price.

  • It is not proportioned to what the landlord can afford to take; but to what the farmer can afford to give.

6 The ordinary selling price of the produce of land must include:

  • the price needed to replace the stock used, plus
  • an ordinary profit

Any price above the ordinary selling price will naturally go to rent.

  • If commodity is sold at the ordinary selling price, then no rent is afforded to the landlord.
  • The demand dictates the ordinary selling price.

7 There are some parts of the produce of land for which the demand allows a higher selling price.

  • There are others for which it may or may not be such as to afford this greater price.
  • The higher selling price always affords a rent to the landlord.
  • The ordinary selling price may or may not.

8 Rent makes up the price of commodities in a different way from wages and profit.

  • High or low wages and profit are the causes of high or low selling price.
    • A commodity’s selling price is high or low because high or low wages and profit must be paid.
  • High or low rent is the effect of high or low selling price.
    • A commodity affords a high, low, or zero rent because its selling price is high or low.

9 The following explains:

  1. The kinds of raw produce which always afford some rent
  2. The kinds of raw produce which may not afford rent
  3. The variations which naturally occur in the different periods of improvement which changes the value of those kinds relative to:
    • one another
    • manufactured commodities
PART I. The Raw Produce which always affords Rent

10 Food is always in demand because men, like animals, naturally multiply in proportion to their subsistence.

  • Food can always command labour.
  • The amount of labour food can buy is not always equal to what it could maintain if managed in the most economical manner.
  • But food can always buy as much labour as it can maintain, depending on the kind of labour maintained in the neighbourhood.

11 Land produces more food than required to maintain all the agricultural labour it needs.

  • The surplus food is always more than enough to replace the stock employed, with profits.
  • Therefore, some rent always remains for the landlord.

12 The cattle pastures of Norway and Scotland produce milk and cattle more than sufficient to:

  • maintain all the labour needed
  • pay ordinary profits to the farmer or shepherd
  • afford some rent to the landlord

“The rent increases in proportion to the goodness of the pasture.”

  • The land size maintains more cattle and requires less labour.
  • The landlord gains by the increase of the produce and by the reduction of the labour maintained.

13 The rent of land varies with its fertility and situation.

  • Land in a town gives a greater rent than land in a distant part of the country.
    • The distant land may cost the same labour to cultivate, but it must always cost more to bring its produce to the market.
    • Therefore, more labour must be maintained out of the distant land and its surplus price must be reduced.
  • But in distant parts of the country, the profit rate is generally higher than in a large town.
    • Therefore, a smaller proportion of this reduced surplus must belong to the landlord.

14 Good roads, canals, and navigable rivers reduce transportation costs.

  • They put the remote parts of the country more equal with those of the town.
  • In terms of reducing transportation costs, they are the greatest of all improvements.
    • They encourage the cultivation of the remote parts, which makes up most of the country.
    • They are advantageous to the town by breaking down the monopoly of the nearby countryside.
    • They are advantageous even to that countryside by opening new markets to its produce.
  • Monopoly is a great enemy to good management.
    • Monopoly is caused by free and universal competition.
      • It forces everybody to form monopolies for self-defence.
  • 50 years ago, some people near London petitioned the parliament against the extension of the turnpike roads into the remoter counties.
    • They pretended that those remoter counties which had cheap labour could:
      • sell their grass and corn cheaper in London
      • reduce their rents
      • ruin their cultivation
    • Their rents, however, have risen
    • Their cultivation has improved since then.

Next: Book 1, Chapter 11B Part 1: Produce and Rent

Words: 1,052

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