Winston Churchill: Land Price as a Cause of Poverty

From: Quirk (quirk_at_syntac.net)
Date: 02/17/05 

Date: 17 Feb 2005 03:52:03 -0800

LAND PRICE AS A CAUSE OF POVERTY

Winston Churchill's Speech in the House of Commons, 4 May 1909,
 in response to Mr AJ Balfour, Leader of the Opposition

The immemorial custom of nearly every modern State, the mature
conclusions of many of the greatest thinkers, have placed the tenure,
transfer, and obligations of land in a wholly different category from
other classes of property. The mere obvious physical distinction
between land, which is a vital necessity of every human being and which
at the same time is strictly limited in extent, and other property is
in itself sufficient to justify a clear differentiation in its
treatment, and in the view taken by the State of the conditions which
should govern the tenure of land from that which should regulate
traffic in other forms of property.

Unearned Increment When the Leader of the Opposition seeks by
comparisons to show that the same reasoning which has been applied to
land ought also in logic and by every argument of symmetry to be
applied to the unearned increment derived from other processes which
are at work in our modern civilisation, he only shows by each example
he takes how different are the conditions which attach to the
possession of land and speculation in the value of land from those
which attach to other forms of business speculation.

"If," he inquires, "you tax the unearned increment on land, why don't
you tax the unearned increment from a large block of stock? I buy a
piece of land; the value rises. I buy stocks; their value rises." But
the operations are entirely dissimilar. In the first speculation the
unearned increment derived from land arises from a wholly sterile
process, from the mere withholding of a commodity which is needed by
the community. In the second case, the investor in a block of shares
does not withhold from the community what the community needs. The one
operation is in restraint of trade and in conflict with the general
interest, and the other is part of a natural and healthy process, by
which the economic plant of the world is nourished and from year to
year successfully and notably increased.

Landowner and Railway Co. Then the right hon. gentleman instanced the
case of a new railway and a country district enriched by that railway.
The railway, he explained, is built to open up a new district; and the
farmers and landowners in that district are endowed with unearned
increment in consequence of the building of the railway. But if after a
while their business aptitude and industry create a large carrying
trade, then the railway, he contends, gets its unearned increment in
its turn.

But the right hon. gentleman cannot call the increment unearned which
the railway acquires through the regular service of carrying goods,
rendering a service on each occasion in proportion to the tonnage of
goods it carries, making a profit by an active extension of the scale
of its useful business - he cannot surely compare that process with the
process of getting rich merely by sitting still? It is clear that the
analogy is not true.

The Glasgow Example I do not think the Leader of the Opposition could
have chosen a more unfortunate example than Glasgow. He said that the
demand of that great community for land was for not more than forty
acres a year. Is that the only demand of the people of Glasgow for
land? Does that really represent the complete economic and natural
demand for the amount of land a population of that size requires to
live on? I will admit that at present prices it may be all that they
can afford to purchase in the course of a year. But there are one
hundred and twenty thousand persons in Glasgow who are living in
one-room tenements; and we are told that the utmost land those people
can absorb economically and naturally is forty acres a year.

What is the explanation? Because the population is congested in the
city the price of land is high upon the suburbs, and because the price
of land is high upon the suburbs the population must remain congested
within the city. That is the position which we are complacently assured
is in accordance with the principles which have hitherto dominated
civilised society.

The "Poor Widow" Bogey But when we seek to rectify this system, to
break down this unnatural and vicious circle, to interrupt this
sequence of unsatisfactory reactions, what happens? We are not
confronted with any great argument on behalf of the owner. Something
else is put forward, and it is always put forward in these cases to
shield the actual landowner or the actual capitalist from the logic of
the argument or from the force of a Parliamentary movement.

Sometimes it is the widow. But that personality has been used to
exhaustion. It would be sweating in the cruellest sense of the word,
overtime of the grossest description, to bring the widow out again so
soon. She must have a rest for a bit; so instead of the widow we have
the market-gardener - the market-gardener liable to be disturbed on the
outskirts of great cities, if the population of those cities expands,
if the area which they require for their health and daily life should
become larger than it is at present.

What is the position disclosed by the argument? On the one hand, we
have one hundred and twenty thousand persons in Glasgow occupying
one-room tenements; on the other, the land of Scotland. Between the two
stands the market-gardener, and we are solemnly invited, for the sake
of the market-gardener, to keep that great population congested within
limits that are unnatural and restricted to an annual supply of land
which can bear no relation whatever to their physical, social, and
economic needs - and all for the sake of the market-gardener, who can
perfectly well move farther out as the city spreads and who would not
really be in the least injured.

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