Are Ground Rents Passed On by Sellers of Goods?

Antonio Bastida

[Reprinted from Land and Freedom, May-June, 1933]

In the controversy as to whether or not rent enters into price it would appear the arguments made pro and con are too inconclusive to be unanimously accepted. To clear the ground and clarify the problem I think it should be noted that Rent always reflects an inherent or adhering USE value, whereas Price, just as invariably, reflects EXCHANGE value. This distinction is vital.

To illustrate let us take a farm above the margin of cultivation and where the rent is paid in kind. Let the crop harvested be 1,000 bushels of wheat and we find, irrespective of the division between Landlord and Tenant and be that harsh or easy on its arrival in the market, the higgling therein, under the dominant law of Supply and Demand, sets an exchange value on the total quantity. This value when apportioned to a measured quantity makes its price, and price is exchange value expressed in the common denominator, money. Let the user of land ship to market a product not demanded there and he will have his labor for his pains, no matter what rent he has paid. So, rent does not enter into price.

Look over the world today. In the West they are burning wheat and corn for fuel; Brazil is throwing millions of bags of coffee into the sea; sugar in Cuba, produced by starving laborers, is selling c.i.f. at three quarters of a cent a pound in New York. Would you raise the rent to increase the price?

I hold no brief for the landlord yet I would like to point out that the landlord cannot levy a toll on the transportation of merchandise, for the charge on that is for carrier's service and is based on so much per ton mile, irrespective of the varying values of the lands passed by in transit. That the landlord may charge the user of land for the advantage of location near roads is certain, but neither the landlord nor tenant can shift that charge over to the carrier.