Preface to Fourth Edition

The views herein set forth were in the main briefly stated in a pamphlet entitled “Our Land and Land Policy,” published in San Francisco in 1871. I then intended, as soon as I could, to present them more fully, but the opportunity did not for a long time occur. In the meanwhile I became even more firmly convinced of their truth, and saw more completely and clearly their relations; and I also saw how many false ideas and erroneous habits of thought stood in the way of their recognition, and how necessary it was to go over the whole ground.

I stated the views set forth here, briefly and in the main, in a pamphlet called “Our Land and Land Policy,” published in San Francisco in 1871. I meant to present them more fully as soon as I could, but the chance did not come for a long time. Meanwhile I became even more firmly convinced of their truth and saw their relations more completely and clearly. I also saw how many false ideas and mistaken habits of thought stood in the way of their recognition, and how necessary it was to go over the whole ground.

This I have here tried to do, as thoroughly as space would permit. It has been necessary for me to clear away before I could build up, and to write at once for those who have made no previous study of such subjects, and for those who are familiar with economic reasonings; and, so great is the scope of the argument that it has been impossible to treat with the fullness they deserve many of the questions raised. What I have most endeavored to do is to establish general principles, trusting to my readers to carry further their applications where this is needed.

I have tried to do that here, as thoroughly as space allowed. I had to clear away before I could build up. I had to write at once for readers who have never studied such subjects and for those familiar with economic reasoning. The argument is so broad that I could not treat many of the questions it raises as fully as they deserve. What I have most tried to do is establish general principles, trusting my readers to carry their applications further where needed.

In certain respects this book will be best appreciated by those who have some knowledge of economic literature; but no previous reading is necessary to the understanding of the argument or the passing of judgment upon its conclusions. The facts upon which I have relied are not facts which can be verified only by a search through libraries. They are facts of common observation and common knowledge, which every reader can verify for himself, just as he can decide whether the reasoning from them is or is not valid.

In some respects those with some knowledge of economic literature will appreciate this book best. But no previous reading is needed to understand the argument or to judge its conclusions. The facts I rely on cannot be verified only by a search through libraries. They are facts of common observation and common knowledge. Every reader can verify them for himself, just as he can decide whether the reasoning from them is valid.

Beginning with a brief statement of facts which suggest this inquiry, I proceed to examine the explanation currently given in the name of political economy of the reason why, in spite of the increase of productive power, wages tend to the minimum of a bare living. This examination shows that the current doctrine of wages is founded upon a misconception; that, in truth, wages are produced by the labor for which they are paid, and should, other things being equal, increase with the number of laborers. Here the inquiry meets aviii doctrine which is the foundation and center of most important economic theories, and which has powerfully influenced thought in all directions—the Malthusian doctrine, that population tends to increase faster than subsistence. Examination, however, shows that this doctrine has no real support either in fact or in analogy, and that when brought to a decisive test it is utterly disproved.

I begin with a brief statement of the facts that suggest this inquiry. I then examine the explanation economics currently gives for why wages tend to a bare living despite the increase in productive power. This examination shows that the current doctrine of wages rests on a misconception. In truth, wages are produced by the labor for which they are paid, and other things being equal they should increase with the number of laborers. Here the inquiry meets aviii doctrine that is the foundation and center of most important economic theories and has powerfully influenced thought in every direction. It is the Malthusian doctrine that population tends to increase faster than subsistence. Examination shows that it has no real support in fact or analogy, and that a decisive test utterly disproves it.

Thus far the results of the inquiry, though extremely important, are mainly negative. They show that current theories do not satisfactorily explain the connection of poverty with material progress, but throw no light upon the problem itself, beyond showing that its solution must be sought in the laws which govern the distribution of wealth. It therefore becomes necessary to carry the inquiry into this field. A preliminary review shows that the three laws of distribution must necessarily correlate with each other, which as laid down by the current political economy they fail to do, and an examination of the terminology in use reveals the confusion of thought by which this discrepancy has been slurred over. Proceeding then to work out the laws of distribution, I first take up the law of rent. This, it is readily seen, is correctly apprehended by the current political economy. But it is also seen that the full scope of this law has not been appreciated, and that it involves as corollaries the laws of wages and interest—the cause which determines what part of the produce shall go to the land owner necessarily determining what part shall be left for labor and capital. Without resting here, I proceed to an independent deduction of the laws of interest and wages. I have stopped to determine the real cause and justification of interest, and to point out a source of much misconception—the confounding of what are really the profits of monopoly with the legitimate earnings of capital. Then returning to the main inquiry, investigation shows that interest must rise and fall with wages, and depends ultimately upon the same thing as rent—the margin of cultivation or point in production where rent begins. A similar but independent investigation of the law of wages yields similar harmonious results. Thus the three laws of distribution are brought into mutual support and harmony, and the fact that with material progress rent everywhere advances is seen to explain the fact that wages and interest do not advance.

So far the results, though extremely important, are mainly negative. They show that current theories do not satisfactorily explain the connection of poverty with material progress. They shed no light on the problem itself, beyond showing that its solution must be sought in the laws that govern the distribution of wealth. So I carry the inquiry into that field. A preliminary review shows that the three laws of distribution must correlate with each other. As the current economics lays them down, they do not. An examination of the terminology in use reveals the confusion of thought that has slurred over this discrepancy. I then work out the laws of distribution, beginning with the law of rent. The current economics, it is readily seen, understands this law correctly. But it has not appreciated its full scope. The laws of wages and interest follow from it as corollaries. The cause that determines what part of the produce goes to the land owner necessarily determines what part is left for labor and capital. I do not stop there. I deduce the laws of interest and wages independently. I pause to determine the real cause and justification of interest. I also point out a source of much misconception: the confusion of the profits of monopoly with the legitimate earnings of capital. Then, returning to the main inquiry, I show that interest must rise and fall with wages. It depends ultimately on the same thing as rent, the margin of cultivation, the point in production where rent begins. A similar but independent investigation of the law of wages yields similar, harmonious results. So the three laws of distribution support each other and agree. Rent advances everywhere with material progress, and this explains why wages and interest do not.

What causes this advance of rent is the next question that arises, and it necessitates an examination of the effect of material progress upon the distribution of wealth. Separating the factors of material progress into increase of population and improvements in the arts, it is first seen that increase in population tends constantly, not merelyix by reducing the margin of cultivation, but by localizing the economies and powers which come with increased population, to increase the proportion of the aggregate produce which is taken in rent, and to reduce that which goes as wages and interest. Then eliminating increase of population, it is seen that improvement in the methods and powers of production tends in the same direction, and, land being held as private property, would produce in a stationary population all the effects attributed by the Malthusian doctrine to pressure of population. And then a consideration of the effects of the continuous increase in land values which thus spring from material progress reveals in the speculative advance inevitably begotten when land is private property a derivative but most powerful cause of the increase of rent and the crowding down of wages. Deduction shows that this cause must necessarily produce periodical industrial depressions, and induction proves the conclusion; while from the analysis which has thus been made it is seen that the necessary result of material progress, land being private property, is, no matter what the increase in population, to force laborers to wages which give but a bare living.

The next question is what causes this advance of rent. It requires an examination of the effect of material progress on the distribution of wealth. I separate the factors of material progress into increase of population and improvements in the arts. First, increase in population constantly tends to raise the proportion of the total produce taken in rent and to reduce what goes as wages and interest. It does this not merelyix by reducing the margin of cultivation but by localizing the economies and powers that come with greater population. Next I eliminate increase of population. Improvement in the methods and powers of production then tends in the same direction. With land held as private property, it would produce in a stationary population all the effects the Malthusian doctrine attributes to pressure of population. Then I consider the continuous increase in land values that springs from material progress. It reveals a derivative but most powerful cause of the increase of rent and the crowding down of wages: the speculative advance inevitably begotten when land is private property. Deduction shows that this cause must produce periodical industrial depressions, and induction proves the conclusion. The analysis shows the necessary result of material progress, land being private property. No matter what the increase in population, laborers are forced to wages that give but a bare living.

This identification of the cause that associates poverty with progress points to the remedy, but it is to so radical a remedy that I have next deemed it necessary to inquire whether there is any other remedy. Beginning the investigation again from another starting point, I have passed in examination the measures and tendencies currently advocated or trusted in for the improvement of the condition of the laboring masses. The result of this investigation is to prove the preceding one, as it shows that nothing short of making land common property can permanently relieve poverty and check the tendency of wages to the starvation point.

Identifying the cause that associates poverty with progress points to the remedy. But the remedy is so radical that I thought it necessary to ask next whether there is any other. So I began the investigation again from another starting point. I examined the measures and tendencies that are currently advocated, or trusted in, for improving the condition of the laboring masses. The result proves the preceding investigation. It shows that nothing short of making land common property can permanently relieve poverty and check the tendency of wages to the starvation point.

The question of justice now naturally arises, and the inquiry passes into the field of ethics. An investigation of the nature and basis of property shows that there is a fundamental and irreconcilable difference between property in things which are the product of labor and property in land; that the one has a natural basis and sanction while the other has none, and that the recognition of exclusive property in land is necessarily a denial of the right of property in the products of labor. Further investigation shows that private property in land always has, and always must, as development proceeds, lead to the enslavement of the laboring class; that land owners can make no just claim to compensation if society choose to resume its right; that so far from private property in land being in accordance with the natural perceptions of men, the very reversex is true, and that in the United States we are already beginning to feel the effects of having admitted this erroneous and destructive principle.

The question of justice now arises, and the inquiry passes into the field of ethics. An investigation of the nature and basis of property shows a fundamental and irreconcilable difference between property in things that are the product of labor and property in land. The one has a natural basis and sanction, and the other has none. To recognize exclusive property in land is necessarily to deny the right of property in the products of labor. Further investigation shows that private property in land always has led, and as development proceeds always must lead, to the enslavement of the laboring class. Land owners can make no just claim to compensation if society chooses to resume its right. Private property in land is not in accordance with the natural perceptions of men. The very reversex is true. And in the United States we are already beginning to feel the effects of admitting this erroneous and destructive principle.

The inquiry then passes to the field of practical statesmanship. It is seen that private property in land, instead of being necessary to its improvement and use, stands in the way of improvement and use, and entails an enormous waste of productive forces; that the recognition of the common right to land involves no shock or dispossession, but is to be reached by the simple and easy method of abolishing all taxation save that upon land values. And this an inquiry into the principles of taxation shows to be, in all respects, the best subject of taxation.

The inquiry then passes to the field of practical statesmanship. Private property in land is not necessary to its improvement and use. It stands in the way of improvement and use, and entails an enormous waste of productive forces. Recognizing the common right to land involves no shock or dispossession. It can be reached by the simple and easy method of abolishing all taxation except that on land values. An inquiry into the principles of taxation shows that land values are in every respect the best subject of taxation.

A consideration of the effects of the change proposed then shows that it would enormously increase production; would secure justice in distribution; would benefit all classes; and would make possible an advance to a higher and nobler civilization.

A consideration of the effects of the proposed change then shows that it would enormously increase production, secure justice in distribution and benefit all classes. It would make possible an advance to a higher and nobler civilization.

The inquiry now rises to a wider field, and recommences from another starting point. For not only do the hopes which have been raised come into collision with the widespread idea that social progress is possible only by slow race improvement, but the conclusions we have arrived at assert certain laws which, if they are really natural laws, must be manifest in universal history. As a final test, it therefore becomes necessary to work out the law of human progress, for certain great facts which force themselves on our attention, as soon as we begin to consider this subject, seem utterly inconsistent with what is now the current theory. This inquiry shows that differences in civilization are not due to differences in individuals, but rather to differences in social organization; that progress, always kindled by association, always passes into retrogression as inequality is developed; and that even now, in modern civilization, the causes which have destroyed all previous civilizations are beginning to manifest themselves, and that mere political democracy is running its course toward anarchy and despotism. But it also identifies the law of social life with the great moral law of justice, and, proving previous conclusions, shows how retrogression may be prevented and a grander advance begun. This ends the inquiry. The final chapter will explain itself.

The inquiry now rises to a wider field and begins again from another starting point. The hopes that have been raised collide with the widespread idea that social progress is possible only by slow race improvement. Our conclusions also assert certain laws which, if they are really natural laws, must be manifest in universal history. As a final test, then, I must work out the law of human progress. As soon as we consider this subject, certain great facts force themselves on our attention that seem utterly inconsistent with the current theory. The inquiry shows that differences in civilization are not due to differences in individuals but to differences in social organization. It shows that progress, always kindled by association, always passes into retrogression as inequality develops. It shows that the causes that destroyed all previous civilizations are beginning to appear even now in modern civilization. Mere political democracy is running its course toward anarchy and despotism. But it also identifies the law of social life with the great moral law of justice. Proving the previous conclusions, it shows how retrogression may be prevented and a grander advance begun. This ends the inquiry. The final chapter will explain itself.

The great importance of this inquiry will be obvious. If it has been carefully and logically pursued, its conclusions completely change the character of political economy, give it the coherence and certitude of a true science, and bring it into full sympathy with the aspirations of the masses of men, from which it has long beenxi estranged. What I have done in this book, if I have correctly solved the great problem I have sought to investigate, is, to unite the truth perceived by the school of Smith and Ricardo to the truth perceived by the schools of Proudhon and Lasalle; to show that laissez faire (in its full true meaning) opens the way to a realization of the noble dreams of socialism; to identify social law with moral law, and to disprove ideas which in the minds of many cloud grand and elevating perceptions.

The great importance of this inquiry will be obvious. If it has been carefully and logically pursued, its conclusions completely change the character of economics. They give it the coherence and certainty of a true science. They bring it into full sympathy with the aspirations of the masses, from which it has long beenxi estranged. If I have correctly solved the great problem I set out to investigate, then in this book I have done several things. I have united the truth seen by the school of Smith and Ricardo, the free-market economists, with the truth seen by the schools of Proudhon and Lasalle, the socialists. I have shown that laissez faire (in its full true meaning) opens the way to a realization of the noble dreams of socialism. I have identified social law with moral law. And I have disproved ideas that in many minds cloud grand and elevating perceptions.

This work was written between August, 1877, and March, 1879, and the plates finished by September of that year. Since that time new illustrations have been given of the correctness of the views herein advanced, and the march of events—and especially that great movement which has begun in Great Britain in the Irish land agitation—shows still more clearly the pressing nature of the problem I have endeavored to solve. But there has been nothing in the criticisms they have received to induce the change or modification of these views—in fact, I have yet to see an objection not answered in advance in the book itself. And except that some verbal errors have been corrected and a preface added, this edition is the same as previous ones.

I wrote this work between August, 1877, and March, 1879, and finished the plates by September of that year. Since then new illustrations have confirmed the views advanced here. The march of events, and especially the great movement that has begun in Great Britain in the Irish land agitation, shows still more clearly how pressing the problem is. But nothing in the criticisms these views have received gives me reason to change or modify them. In fact, I have yet to see an objection the book itself does not answer in advance. Except that some verbal errors have been corrected and a preface added, this edition is the same as previous ones.