What Is the Matter With the World?

James R. Brown

[Reprinted from Land and Freedom, March-April, 1931]

In view of the hard times now upon us, the vast amount of suffering that the people are enduring, the question must come to serious-minded people, What is the matter? What has broken down? Has nature failed us? Have her processes gone askew? Must something be realigned, or an entirely new order established to avoid, in the future, tragic days like these?

Production is a very simple matter, nothing complex or intricate about it, and distribution is just as simple. What are the factors of production? Are they not land, labor and capital, and are not the avenues of distribution rent, wages and interest?

There seems to be plenty of land, for look whichever way you will there is no shrinkage in the size of Mother Earth, and the forces of nature work as they have always worked, with marvelous regularity and surety. When you study the land situation a little, you are amazed at the amount of land provided for the maintenance of land animals, namely men. We could put the whole population of the earth in the State of Texas and there would be not ten to the acre.

In view of the plenitude of land and the scarcity of human beings, it seems as though the cheapest thing on earth should be land, there is so much of it and so few of us. If there were as many idle Packard cars as there are idle lots in New York City, the tramps on the Bowery would be able to drive a limousine to breakfast.

There is plenty of labor, goodness knows, for the streets are filled with idle men, the roads with tramps, and everywhere the cry of unemployment rises to high heaven.

There certainly is no dearth of capital, the rate of interest is going down, and owners of capital are just as busy looking for employment for their capital as laborers are looking for employment for their hands.

As there is plenty of capital, plenty of labor and apparently plenty of land, and all wealth is produced by these factors, what is the matter? Why has production ceased to the alarming extent that it has of late?

The cause of the trouble is that while there is naturally plenty of land, there is an artificial scarcity of land, wherever you go the selling price is so high that even in Arizona if you want to buy enough land to bury a snake you pay a king's ransom. On this Manhattan Island of ours there is land that can be sold for $40,000,000 an acre and an acre is not a great estate, it is only a little plot of ground about 200 x 204, and remember there is no production cost in it. Today, however, it has a selling price that is simply staggering, for this selling price of $40,000,000 means that labor and capital would have to pay, interest of 5 per cent, money market such as ours is, at least $2,000,000 a year for the privilege of using this bit of material that nature made and for which nature makes no charge.

Now we are trampling right on the heels of the cause hard times, the frightfully high price that labor and capital must pay for the use of that material without which there is no production of wealth, for notwithstanding the great increase in the productivity of labor and capital in this day, there is a limit to what labor and capital can pay for the privilege of using a piece of the earth.

Combined with the very high price of land, another evil overwhelms production, and that is the heavy burden of taxes borne by industry in a hundred different ways. All taxes upon industry increase the cost of production and limit the amount of labor and capital that can be used in production.

Taxes that fall upon production increase the cost of living and they have been so burdensome of late that they tremendously limit the purchasing power of the people's dollar.

Between the upper and the nether millstones, the high price of land and the high cost of labor products, production is brought to a standstill, not through any fault of nature but through lack of wisdom on the part of men. This lack of wisdom is shown in our stupid way of handling the taxing power. We could adjust taxation in such a way that it would keep the selling price of land down, keep the gate of opportunity open and lower the cost of everything made by man, thus creating a natural relationship between the value of the opportunity to produce wealth and the value of the things that labor and capital produce.

The only and scientific way of doing this is to collect for public use the values that society creates and leave untaxed, unburdened and unhampered all those values that represent the things that men make.