Men may invent what fiction they please; there is here an exception to the rule asserted that the exchange value of goods is regulated by the amount of human labor incorporated in them. Suppose that a railway generally graduates its tariff, not according to the distances travelled by persons or goods, but, as regards one part of the line in which the working expenses are particularly heavy, arranges that one mile shall count as two, can it be maintained that the length of distances is really the exclusive principle in fixing the railway tariff? Certainly not; by a fiction it is assumed to be so, but in truth the application of that principle is limited by another consideration-the character of the distances." 1

1 Capital and Interest, p. 384.

CHAPTER VI

THE LABOR THEORY AS APPLIED TO PROPERTY IN

LAND

WE turn now to the bearing of the labor theory upon the justice or injustice of private ownership of land. A number of those who have accepted the labor theory have drawn the conclusion that all valuable objects not the result of human labor should be considered as free gifts of nature or of nature's Creator, and, as such, intended, not for the special advantage of any particular individuals, but for the welfare of mankind at large. It is in this category that land has been placed. Land, it has been held, is, by its very nature, sui generis, and, as such, private ownership of it must be justified, if justified at all, by reasons different from those applicable to other forms of property.

Locke's peculiar justification of property in land, under the labor theory, we have already mentioned. The Physiocrats justified land ownership on the ground that it is necessary in order that there may be secured the right of ownership which labor creates. In developing this reason they thus reached what was practically a doctrine of simple expediency. Thus Dupont de Nemours, in his Origine et progrès

d'une science nouvelle, writes: "In employing his person and his movable wealth on the labor and outlay necessary to 'cultivation, man acquires property in the soil on which he has labored. To deprive him of that soil would be to rob him of his labor and the wealth he has laid out on the cultivation; it would be to violate his property in his own person and movables. In acquiring property in the land, he acquires property in the fruits produced by it, and this was the object of all his expenditure, and the object for which he seeks to gain that property in land. Unless [and here the utilitarian argument begins] he had this property in the fruits of the soil, no one would spend wealth or labor on the land; there would be no landlords; and the soil would remain waste, to the great detriment of population, present and future."

This argument tacitly implies that ownership of land should be recognized only where the owner is also an improver and cultivator. As a matter of fact, however, though the Physiocrats often criticised absentee landlordism, they did not declare the invalidity of their titles. The time was not ripe for such an assertion. As Bonar says: "The time had not come for economical discussions to touch the deepest foundations of property. The communism of men like Morelly was an isolated opinion. There was more need in the beginning of the second half of that century for the assertion of liberty in the sense of the removal of obstacles."

1 Quoted by Bonar in his Philosophy and Political Economy, p. 143.

It was in England that the demand, based upon the labor theory, was first put forward that all land should be owned in common; and it is in England that at the present time this demand is most loudly voiced.

In 1796 was published the work of Thomas Spence entitled The Meridian Sun of Liberty; or the Whole Rights of Man displayed and most accurately defined. In this work the spoliation of the laboring classes by the landlords is denounced, and the equal right of all to the land asserted.1 Other writers from time to time have repeated this view. But most conspicuous among all English writers who have substantially advocated land nationalization is John Stuart Mill.

Notwithstanding his assertion, which we have quoted some pages back, that the labor theory of distribution involves the inherent objection that, in its rewards, it makes no distinction between that efficiency that comes from natural qualifications, and that which is the result of applied effort or of slowly and patiently acquired capacity, Mill elsewhere accepts the theory as absolutely valid. In his Political Economy he says: "The institution of property, where limited to its essential elements, consists in the recognition in each person of a right to the exclusive disposal of what he or she have produced by their own exertions, or received either by gift or by agreement, without force or fraud, from those

fair

1 For an account of Spence's views, and his influence, see Menger, The Right to the Whole Produce of Labor, pp. 147-149.

1

who have produced it. The foundation of the whole is the right of the producers to what they themselves have produced." But this qualification for private ownership cannot be pleaded, he goes on to say, in the case of land, for land is not the produce of labor. Thus, by its very nature, as he conceives it, land is marked off from all manufactured goods, and, as he declares, "if the land derived its productive power wholly from nature, and not at all from industry, or if there were any means of discriminating what is derived from each source, it not only would not be necessary, but it would be the height of injustice, to let the gift of nature be engrossed by individuals." "

As thus possessing this character as a gift of nature, and therefore intended by Natural Law for the equal benefit of all, private ownership of land is to be justified, if justified at all, Mill goes on to say, upon special grounds of economic expediency. Thus, in effect, he holds that labor gives such a natural or abstract right to ownership of manufactured goods no economic justification for it is needed; whereas property in land must ever depend upon simple utilitarian considerations. Furthermore, and what seems strangely inconsistent with Mill's general doctrines, utilitarian considerations can never, he declares, create so sacred a right in the landlord as can labor in the owner of other forms of wealth. "When the sacredness of property' is talked about," he says, "it should always be remembered that any such sacredness does not belong in the same degree 1 Book II, Chapter II. 2 Idem, loc. cit.