The Link Between the land question
and Population Growth

Edward J. Dodson

[A letter written to World Watch, September 2004]

World Watch is to be commended for devoting the September/October issue to the complex cultural and scientific issues associated with population. Thomas Prugh and Ed Ayres appropriately acknowledge that space limitations prevent a full presentation of all that is important. What follows, then, is a brief exposition on a systemic issue not addressed by the writers contributing to this issue: land monopoly as the primary cause of poverty and an integral cause of problems we associated with overpopulation.

Readers are reminded by Virginia Abernethy that one of the earliest efforts to examine the link between poverty and population growth came from the Reverend Thomas Malthus. In Britain (and throughout the Old World) of his day, consolidated control over land had come to the titled nobility who emerged victorious over rival factions in wars fought to determine both territorial and religious dominance. Church-controlled lands were confiscated and distributed to feudal lords as their reward for loyalty. The introduction of coinage and 'global trade' fueled the displacement of subsistence farming (and Feudal obligations) by commercial agriculture. Cattle and sheep displayed people; and, by the practice of "enclosures" peasants were denied access even to the commons. By the time Malthus wrote, in almost every Old World society land monopoly by a privileged aristocratic class was the rule.

Some readers will remember historian Cecil Woodham-Smith's detailed history of the enclosures that forced Ireland's tenant farmers off the land, often with nowhere to go. English, Scot and Welsh tenant farmers were also forced from the land but had a few more options. They made their way to the seaports and helped to develop Britain's mercantilistic system of trade between colonies and the mother country. Or, they were pulled into the military as Britain embarked on its century of empire-building conquests. There were still many parts of the New World thinly populated and ready to serve as a safety valve for those in the Old World who could escape or were encouraged to migrate. Britain's large fleet of merchant ships carried thousands and thousands of people to the far corners of the globe to establish colonies and replicas of British socio-political institutions. One reason Britain escaped the same degree of turmoil that plagued the European Continent and, eventually, Czarist Russia, was its practice of allowing the discontented to depart.

The second half of the eighteenth century was a time of remarkable intellectual awakening and social upheaval. Even before the American war for independence erupted, important thinkers were questioning traditional institutions and privileges enjoyed by a titled and landed aristocracy.

Throughout this critical period, political economists such as Adam Smith achieved the height of their influence. Malthus was aroused by Smith and by Smith's French counterparts, the Physiocratic writers, to defend the status quo against calls for reform. Historians give only passing reference to the influence of Physiocratic thought on American ideals; yet, Benjamin Franklin declared Physiocratic principles as his own, Thomas Paine took certain Physiocratic reforms even further in The Rights of Man and in Agrarian Justice, and an 'American' industrial empire was established by a Physiocratic émigré - Pierre Samuel du Pont de Nemeurs.

A central concern of the Physiocrats was how the land of a society came to have exchange value (i.e., yield a ground rent) and whether this value rightfully belonged to all members of a society equally. Malthus argued that the Physiocrats were poor scientists, that their reasoning was inherently flawed. On the nature of ground rent, he wrote:

"Some of the views which the Economists have taken of the nature of rent appear to me, in like manner, to be quite just; but they have mixed them with so much error, and have drawn such preposterous and contradictory conclusions from them, that what is true in their doctrines, has been obscured and lost in the mass of superincumbent error, and has in consequence produced little effect. Their great practical conclusion, namely, the propriety of taxing exclusively the net rents of the landlords, evidently depends upon their considering these rents as completely disposable, like that excess of price above the cost of production which distinguishes a common monopoly." (From: An Inquiry into the Nature and Progress of Rent, and the Principles by which it is regulated, 1815)

What Malthus could not acknowledge without challenging fundamental arrangements in Britain was that the control over land is a static activity. Whatever an owner charges others for access must come out of what the user produces. When land is monopolized and other options minimal, the landless are forced to pay whatever ground rent the landlord demands. And, as history and our contemporary experience reveals, landlords will charge whatever 'the market' will bear. Thus, wages for those least skilled and least able to migrate or prevented by government from collective bargaining are forced to subsistence. Monopolists reap enormous financial rewards - with almost no risk -- so long as there are more people looking for jobs than jobs looking for people. All of the risk - short of the risk of violent revolution - is passed on to those who labor and who invest in goods production. Adam Smith, on the other hand, offered a degree of support to his Physiocratic teachers:

"Both ground-rent and the ordinary rent of land are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Though a part of this revenue should be taken from him in order to defray the expenses of the state, no discouragement will thereby be given to any sort of industry. The annual produce of the land and labour of the society, the real wealth and revenue of the great body of the people, might be the same after such a tax as before. Ground-rents, and the ordinary rent of land, are, therefore, perhaps, the species of revenue which can best bear a peculiar tax imposed upon them." (From: The Wealth of Nations, 1776. Book V, Chapter II, Article I)

Yet, Smith did not campaign for this change in how governments secure revenue. Nor did he attempt to make any connection in his published works* between reproductive behavior and economic well-being. Others after Smith would make these connections. And, none more powerfully than the American writer Henry George. In Progress and Poverty (1879), George went after Malthus and pulled no punches:

"What gave Malthus his popularity among the ruling classes - what caused his illogical book to be received as a new revelation, induced sovereigns to send him decorations, and the meanest rich man in England to propose to give him a living, was the fact that he furnished a plausible reason for the assumption that some have a better right to existence than others."

We do not need to look very far to find "scientists" in service to vested interests - individuals with educational and other credentials who offer themselves as paid agents in defense of the status quo. Henry George, on the other hand, followed in Paine's footsteps. As George wrote in the Introduction to Progress and Poverty:

"I propose to beg no question, to shrink from no conclusion, but to follow truth wherever it may lead. Upon us the responsibility of seeking the law, for in the very heart of our civilization to-day women faint and little children moan. But what that law may prove to be is not our affair. If the conclusions that we reach run counter to our prejudices, let us not flinch; if they challenge institutions that have long been deemed wise and natural, let us not turn back."

Herman Daly seems to have taken this principle seriously as well. In 1998 he wrote a statement delivered to the Russian Duma that could very well have come directly from Henry George:

"…Ideally ownership of land and resources should be communal since there is no cost of production to justify individual private ownership.

"Each citizen has as much right to the free gifts of nature as any other citizen. By capturing the necessary payment for public purposes one serves both efficiency and equity. We minimize the need to take away from people by taxation the fruits of their own labor and investment. We minimize the ability of a fortunate few private land and resource owners to reap a part of the fruits of the labor and enterprise of others. Land and resource rents (unearned income) are ideal sources of public revenue. In economic theory rent is defined as payment in excess of necessary supply price. Since the supply price for land is zero, any payment for land is rent -- if we paid no rent the land would not disappear. If the government owns land and resources it can both measure and capture the appropriate rents by auctioning use to those who wish to use it.

"But what if land and resources are already privatized?

"For one thing, they might be repurchased by the government. But if that is not feasible, or if one doubts that the competence and honesty of the government is sufficient to handle the auction system, then one could leave ownership in private hands and try to capture the unearned rents for social purposes by taxation. This is the usual case. Taxes should be shifted away from value added (labor and capital) and on to that to which value is added (natural resources and land). If we tax away rent, land and natural resources will not disappear. But if we tax wages and profits too heavily then the some of the value added to natural resources and land by labor and capital will indeed disappear. The natural resource throughput begins with depletion and, after production and consumption, ends with pollution. Putting the tax at the beginning of the resource flow through the economy (throughput) is better than putting it at the end. A resource tax at the point of depletion induces greater efficiency in production, consumption, and in waste disposal."

The connection between this fundamental shift in the way governments raise revenue may not have an immediate and direct effect on human reproductive behavior. However, removal of injustices will create a far more positive and constructive socio-political environment for people everywhere this change is secured. Prosperity and peace allow time for people to contemplate the consequences of our actions and to break free from the many forms of cultural relativism that are squandering our future and the future of our planet.

Some ground rent is being collected already. There are urban examples in many parts of the world; but these efforts are weak and often counterproductive. The residents of Alaska benefit as recipients of royalties from the oil companies who have been awarded licenses to drill for oil in Alaska. One of the reforms adopted on Taiwan during the reign of Chiang kai-shek was to put a ceiling on the ground rent landlords could charge tenant farmers; the result was a dramatic increase in food output and capital investment by farmers. The dream of Arvid Pardo to harness the natural wealth of the oceans for the benefit of all can be realized by following the course suggested by Herman Daly and long ago by Henry George. And, as Carl Sagan reminded us, the artificial borders that divide the earth into nation-states are not visible from space. The earth is the birth right of all persons equally. "Rent" is that portion of wealth - whether derived from the sea or from land or from the broadcast spectrum or from other forms of economic license -- that must be captured by societies to make possible the "goods"for a decent human existence. Perhaps the definitive refutation of Malthus comes-inadvertently - from the great philosopher Mortimer J. Adler. In the introduction to The Common Sense of Politics, Adler wrote:

"All who are concerned with the improvement of human life on earth, and especially with the improvement of human society, must ultimately choose between two views of the main source of progress in human affairs. One looks to meliorative changes in human nature; the other to meliorative changes in human institutions. Let me declare at once my commitment to the second view, postponing until later my reasons for thinking it the only sound view of the matter. I am asserting, in short, that all the progress that has so far been made in the social life of man has been accomplished by cumulative improvements in man's social institutions, without any improvement -- indeed, without any significant change -- in the nature of man. Those who have lost faith in politics and who brand the past as irrelevant should be able to show that this proposition is factually false if they wish to defend the position that they take on more than emotional grounds."

Securing the full rental value of land and natural resources is, I suggest, the most important meliorative change in human institutions to which we must commit ourselves.

NOTES

* Just prior to his death, Smith had several of his friends destroy all of his unpublished manuscripts and research.