The Natural Law of Rent

John Harrington

[Reprinted from Land and Freedom, March-April 1938]

Land is sometimes classified into marginal, super-marginal and submarginal. These terms are self defining when it is understood that marginal land is used as will produce common wages; that is, a common average living, and nothing more, to the occupant, upon the application of the average amount of labor and capital Ricardo's Law of Rent may be stated thus: Rent is the excess value or product of any land above the poorest grade of land in common use, or marginal land. It may be illustrated as follows:

If marginal land will produce 25 bushels of corn per acre with the average application of labor and capital, its product constitutes common wages only. It has no rental value.

If other land will produce 50 bushels of corn per acre with the same application of labor and capital, the excess 25 bushels, constitutes ground rent, and is attributable to the quality or location of the land itself, rather than to the labor and capital employed. The excess is a gift of nature. It belongs equally to all men ; and since it cannot be apportioned, it belongs to society.

As between landlord and tenant, this excess, or ground rent, is taken by the landlord, since the tenant is entitled only to common or average wages.

Super-marginal land will yield not only wages (and interest) on the labor and capital applied, but ground rent in addition, which is the share taken by the landlord and for which he makes no return. It is a monopoly income; and gives such land commercial value.

It is this that makes land so desirable an investment for those who want an income without effort. The income is at the expense of the public.

Ricardo's Law of Rent is a natural law. It cannot be outmoded, as some say, nor repealed. As well try repeal the law of gravitation.

Ground rent cannot be added to the price of corn, for the excess corn is itself the ground rent, and has cost nothing. The price of corn is fixed by the cost of producing it on marginal land.