3 182201591 5481 OP A CMEGO SCHARRENBfltC NIVERSITY OF CALIFORNIA SAN DIEGO 3 182201591 5481 Central University Library University of California, San Diego Note: This item is subject to recall after two weeks. Date Due MAY 7 1993 0139(1/91) UCSDLib. DISTRIBUTIVE JUSTICE THE MACMILLAN COMPANY NEW YORK BOSTON CHICAGO DALLAS ATLANTA SAN FRANCISCO MACMILLAN & CO., LIMITED LONDON BOMBAY CALCUTTA MELBOURNE THE MACMILLAN CO. OF CANADA, LTD. TORONTO DISTRIBUTIVE JUSTICE The Right and Wrong of Our Present Distribution of Wealth BY JOHN A. RYAN, D.D. Associate Professor of Political Science at the Catholic University of America; Professor of Economics at Trinity College; Author of "A Living Wage,' ' "Alleged Socialism of the Church Fathers," Joint Author with Morris Hillquit of "Socialism: Promise or Menace?" THE MACMILLAN COMPANY 1916 All rights reserved Nihil Obstat. REMIGIUS LAFORT, 8. T. D., Censor. Imprimatur. JOHN CARDINAL FARLEY, Archbishop of New York. COPYRIGHT, 1916, .BY !THE. MACMII^LAN COMPANY , Set i3p'jn(J electrbtyitedl/Pahlished November, 1916. - -< . '///' .'< ' ',-' '-'.": :' -,' . r' 0, .,', ',''. '.' TO ARCHBISHOP IRELAND IN ADMIRATION AND GRATITUDE PREFACE Five of the nine members of the late Federal Commis- sion on Industrial Relations united in the declaration that the first cause of industrial unrest is, " unj.ust distribution of wealth and income." In all probability this judgment is shared by the majority of the American people. Re- garding the precise nature and extent of the injustice, however, there is no such preponderance of opinion. Even the makers of ethical and economic treatises fail to give us anything like uniform or definite pronouncements concerning the moral defects of the present distribution. While the Socialists and the Single Taxers are sufficiently positive in their statements, they form only a small por- tion of the total population, and include only an insignifi- cant fraction of the recognised authorities on either ethics or economics. The volume in hand represents an attempt to discuss systematically and comprehensively the justice of the processes by which the product of industry is distributed. Inasmuch as the product is actually apportioned among landowners, capitalists, business men, and labourers, the moral aspects of the distribution are studied with refer- ence to these four classes. While their rights and obliga- tions form the main subject of the book, the effort is also made to propose reforms that would remove the principal defects of the present system and bring about a larger measure of justice. Many treatises have been written concerning the moral- ity of one or other element or section of the distributive process; for example, wages, interest, monopoly, the land question; but, so far as the author knows, no attempt has PREFACE hitherto been made to discuss the moral aspects of the en- tire process in all its parts. At least, no such task has been undertaken by any one who believes that the exist- ing economic system is not inherently unjust. That the present essay in this field falls far short of adequate achievement the author fully realises, but he is sustained by the hope that it will provoke discussion, and move some more competent person to till the same field in a more thorough and fruitful way. JOHN A. RYAN. The Catholic University of America, Washington, D. C, June 14, 1916. CONTENTS PREFACE vii INTRODUCTORY CHAPTER: THE ELEMENTS AND SCOPE OF THE PROBLEM ....'.... xiii General References xvii SECTION I THE MORALITY OF PRIVATE LANDOWNERSHIP AND RENT CHAPTER PAGE I THE LANDOWNER'S SHARE OF THE NATIONAL PRODUCT 3 Economic Rent Always Goes to the Landowner . . 4 Economic Rent and Commercial Rent 5 The Cause of Economic Rent 6 II LANDOWNERSHIP IN HISTORY 8 No Private Ownership in Pre-Agricultural Conditions 10 How the Change Probably Took Place 12 Limited Character of Primitive Common Ownership 14 Private Ownership General in Historical Times . . 15 Conclusions from History 17 III THE ARGUMENTS AGAINST PRIVATE LANDOWNERSHIP . . 19 Arguments by Socialists 19 Henry George's Attack on the Title of First Occupancy 21 His Defence of the Title of Labour 24 The Right of all Men to the Bounty of the Earth . . 30 The Alleged Right of the Community to Land Values 39 IV PRIVATE OWNERSHIP THE BEST SYSTEM OF LAND TENURE 48 The Socialist Proposals Impracticable 48 Inferiority of the Single Tax System 51 CONTENTS CHAPTER PAGE V PRIVATE LANDOWNERSHIP A NATURAL RIGHT .... 56 Three Principal Kinds of Natural Rights .... 57 Private Landownership Indirectly Necessary for In- dividual Welfare 59 Excessive Interpretations of the Right of Private Landownership 61 The Doctrine of the Fathers and the Theologians . 62 The Teaching of Pope Leo XIII 64 VI LIMITATIONS OF THE LANDOWNER'S RIGHT TO RENT . . 67 The Tenant's Right to a Decent Livelihood ... 69 The Labourer's Claim Upon the Rent 71 VII DEFECTS OF THE EXISTING LAND SYSTEM . . . . .74 Landownership and Monopoly 75 Excessive Gains from Private Landownership ... 80 Exclusion from the Land 90 VIII METHODS OF REFORMING OUR LAND SYSTEM .... 94 The Leasing System 95 Public Agricultural Lands 97 Public Ownership of Urban Land 98 Appropriating Future Increases of Land Value . . . 100 Some Objections to the Increment Tax 102 The Morality of the Proposal 108 The German and British Increment Taxes . . . .114 Transferring Other Taxes to Land 117 The Morality of the Plan 120 Amount of Taxes Practically Transferable .... 122 The Social Benefits of the Plan 127 A Supertax on Large Holdings 130 References on Section I 133 SECTION II THE MORALITY OF PRIVATE CAPITAL AND INTEREST IX THE NATURE AND THE RATE OF INTEREST 137 Meaning of Capital and Capitalist 137 Meaning of Interest 138 The Rate of Interest 141 CONTENTS CHAPTER PAGE X THE ALLEGED RIGHT OF LABOUR TO THE ENTIRE PRODUCT OF INDUSTRY 145 The Labour Theory of Value 146 The Right of Productivity 149 XI THE SOCIALIST SCHEME OF INDUSTRY 152 Socialist Inconsistency 152 Expropriating the Capitalists 154 Inefficient Industrial Leadership 158 Inefficient Labour 162 Attempted Replies to Objections 162 Restricting Individual Liberty 168 XII ALLEGED INTRINSIC JUSTIFICATIONS OF INTEREST . . . 171 Attitude of the Church Toward Interest on Loans . . 172 Interest on Productive Capital 175 The Claims of Productivity . . 177 The Claims of Service 181 The Claims of Abstinence 182 XIII SOCIAL AND PRESUMPTIVE JUSTIFICATIONS OF INTEREST . 187 Limitations of the Sacrifice Principle 187 The Value of Capital in a No-Interest Regime . . . 188 Whether the Present Rate of Interest is Necessary . 191 Whether at Least two Per Cent, is Necessary . . . 193 Whether any Interest is Necessary ...... 196 The State is Justified in Permitting Interest .... 199 Civil Authorisation not Sufficient for Individual Justi- fication 201 How the Interest-Taker is Justified 204 XIV CO-OPERATION A PARTIAL SOLVENT OF CAPITALISM . . . 210 Reducing the Rate of Interest 211 Need for a Wider Distribution of Capital .... 213 The Essence of Co-operative Enterprise .... 214 Co-operative Credit Societies 216 Co-operative Agricultural Societies 217 Co-operative Mercantile Societies 220 Co-operation in Production 222 Advantages and Prospects of Co-operation .... 228 References on Section II 233 CONTENTS SECTION III THE MORAL ASPECT OF PROFITS CHAPTER PAGE XV THE NATURE OF PROFITS 237 The Functions and Rewards of the Business Man . . 237 The Amount of Profits 239 Profits in a Joint-Stock Company 241 XVI THE PRINCIPAL CANONS OF DISTRIBUTIVE JUSTICE . . . 243 The Canon of Equality 243 The Canon of Needs 244 The Canon of Efforts and Sacrifice 246 The Canon of Productivity 247 The Canon of Scarcity 250 The Canon of Human Welfare V 252 XVII JUST PROFITS IN CONDITIONS OF COMPETITION .... 254 The Question of Indefinitely Large Profits .... 255 The Question of Minimum Profits 258 The Question of Superfluous Business Men . . . 260 XVIII THE MORAL ASPECT OF MONOPOLY 262 Surplus and Excessive Profits 263 The Question of Monopolistic Efficiency 265 Discriminative Underselling 267 Exclusive-Sales Contracts 270 Discriminative Transportation Arrangements . . . 272 Natural Monopolies 273 Methods of Preventing Monopolistic Injustice . . . 275 Legalised Price Agreements 277 XIX THE MORAL ASPECTS OF STOCKWATERING 279 Injurious Effects of Stockwatering 281 The Moral Wrong 284 The " Innocent " Investor 286 Magnitude of Overcapitalisation 288 XX THE LEGAL LIMITATION OF FORTUNES 291 The Method of Direct Limitation 292 Limitation Through Progressive Taxation .... 296 CONTENTS :HAPTER PAGE The Proper Rate of Income and Inheritance Taxes . 299 Effectiveness of Such Taxation 300 XXI THE DUTY OF DISTRIBUTING SUPERFLUOUS WEALTH . . 303 The Question of Distributing Some 303 The Question of Distributing All 308 Some Objections 311 A False Conception of Welfare and Superfluous Goods 314 The True Conception of Welfare 316 References on Section III 318 SECTION IV THE MORAL ASPECTS OF WAGES XXII SOME UNACCEPTABLE THEORIES OF WAGE-JUSTICE . . . 323 I The Prevailing-Rate Theory 323 Not in Harmony with Justice 325 II Exchange-Equivalence Theories 326 The Rule of Equal Gains 326 The Rule of Free Contract 328 The Rule of Market Value 330 The Mediaeval Theory 332 A Modern Variation of the Mediaeval Theory . 337 III Productivity Theories 340 Labour's Right to the Whole Product . . . 341 Clark's Theory of Specific Productivity . . 347 Carver's Modified Version of Productivity . . 351 XXIII THE MINIMUM OF JUSTICE; A LIVING WAGE .... 356 The Principle of Needs 356 Three Fundamental Principles 358 The Right to a Decent Livelihood 360 The Claim to a Decent Livelihood from a Present Oc- cupation 362 The Labourer's Right to a Living Wage 363 When the Employer is Unable to Pay a Living Wage 366 An Objection and Some Difficulties 370 The Family Living Wage 373 Other Arguments in Favour of a Living Wage . . . 376 The Money Measure of a Living Wage 378 CONTENTS CHAPTER PAGE XXIV THE PROBLEM OF COMPLETE WAGE JUSTICE 381 Comparative Claims of Different Labour Groups . . 381 Wages Versus Profits 388 Wages Versus Interest 390 Wages Versus Prices 393 Concluding Remarks 398 XXV METHODS OF INCREASING WAGES 400 The Minimum Wage in Operation 400 The Question of Constitutionality 405 The Ethical and Political Aspects 407 The Economic Aspect 408 Opinions of Economists 412 Other Legislative Proposals 416 Labour Unions 417 Organisation Versus Legislation 420 Participation in Capital Ownership 423 References on Section IV 425 XXVI SUMMARY AND CONCLUSION 426 The Landowner and Rent 426 The Capitalist and Interest 427 The Business Man and Profits 428 The Labourer and Wages 430 Concluding Observations . 431 INDEX 453 INTRODUCTORY CHAPTER THE ELEMENTS AND SCOPE OF THE PROBLEM DISTRIBUTIVE justice is primarily a problem of incomes rather than of possessions. It is not immediately con- cerned with John Brown's railway stock, John White's house, or John Smith's automobile. It deals with the morality of such possessions only indirectly and under one aspect ; that is, in so far as they have been acquired through income. Moreover, it deals only with those incomes that are derived from participation in the process of pro- duction. For example; it considers the labourer's wages, but not the subsidies that he may receive through charity or friendship. Its province is not the distribution of all the goods of the country among all the people of the coun- try, but only the distribution of the products of industry among the classes that have taken part in the making of these products. These classes are four, designated as landowners, capi- talists, undertakers or business men, and labourers or wage earners. The individual member of each class is an agent of production, while the instrument or energy that he owns and contributes is a factor of production. Thus, the land- owner is an agent of production because he contributes to the productive process the factor known as land, and the capitalist is an agent of production because he contributes the factor known as capital; while the business man and the labourer are agents not only in the sense that they con- tribute factors to the process, but in the very special sense that their contributions involve the continuous expendi- ture of human energy. Now the product of industry is xiii XIV INTRODUCTORY CHAPTER distributed among these four classes precisely because they are agents of production; that is because they own and put at the disposal of industry the indispensable factors of production. We say that the agents of production " put the factors of production at the disposal of industry," rather than " exercise or operate the factors," because neither the landowner nor the capitalist, as such, expend continuous energy in the productive process. All that is necessary to enforce a claim upon the product is to con- tribute an instrument or factor without which production cannot be carried on. The product distributed in any country during a single year is variously described by economists as the national product, the national income, the national dividend. It consists not merely of material goods, such as houses, food, clothing, and automobiles, but also of those non- material goods known as services. Such are the tasks performed by the domestic servant, the barber, the chauf- feur, the public official, the physician, the teacher; or any other personal service " that is valued, as material com- modities are valued, according to their selling prices." Even the services of the clergyman are included in the national income or product, since they are paid for and form a part of the annual supply of good things produced and distributed within the country. In the language of the economist, anything that satisfies a human want is a utility, and forms part of the national wealth ; hence there can be no sufficient reason for excluding from the national income goods which minister to spiritual or intellectual wants. The services of the clergyman, the actor, the author, the painter, and the physician are quite as much a part of the utilities of life as the services of the cook, the chambermaid, or the barber ; and all are as clearly utilities as bread, hats, houses, or any other material thing. In a general way, therefore, we say that the national product which is available for distribution among the different THE ELEMENTS AND SCOPE OF THE PROBLEM XV productive classes comprises all the utilities, material and non-material, that are produced through human agents and satisfy human desires. In the great majority of instances the product is not distributed in kind. The wheat produced on a given farm is not directly apportioned among the farmers, labourers, and landowners that have co-operated in its production; nor are the shoes turned out by a given factory divided among the co-operating labourers and capitalists ; and it is obvious that personal services cannot be returned to the persons that have rendered them. Cases of partial direct distribution do, indeed, occur; as when the tenant takes two-thirds and the landowner one-third of the crop raised by the former on land belonging to the latter ; or when the miller receives his compensation in a part of the flour that he grinds. To-day, however, such instances are relatively insignificant. By far the greater part of the material product is sold by the undertaker or business man, and the price is then divided between himself and the other agents of production. All personal services are sold, and the price is obtained by the performers thereof. The farmer sells his wheat, the miller his flour, and the barber his services. With the money received for his part in pro- duction each productive agent obtains possession of such kinds and amounts of the national product as his desires dictate and his income will procure. Hence the distribu- tion of the product is effected through the conversion of producers' claims into money, and the exchange of the latter for specific quantities and qualities of the product. While the national product as a whole is divided among the four productive classes, not every portion of it is dis- tributed among actually distinct representatives of these classes. When more than one factor of production is owned by the same person, the product will obviously not go to four different classes of persons. For example; the crop raised by a man on his own unmortgaged land, with XVI INTRODUCTORY CHAPTER his own instruments, and without any hired assistance; and the products of the small shopkeeper, tailor, and barber who are similarly self sufficient and independent, are in each case obtained by one person, and do not undergo any actual distribution. Even in these instances, however, there occurs what may be called virtual distribu- tion, inasmuch as the single agent owns more than one factor, and performs more than one productive function. And the problem of distributive justice in such cases is to determine whether all these productive functions are prop- erly rewarded through the total amount which the indi- vidual has received. Where the factors are owned by distinct persons, or groups of persons, the problem is to determine whether each group is properly remunerated for the single function that it has performed. The problem of the morality of industrial incomes is obviously complex. For example; the income of the farmer is sometimes derived from a product which he must divide with a landowner and with labourers; some- times from a product which he shares with labourers only; and sometimes from a product which he can retain wholly for himself. The labourer's income arises sometimes out of a product which he divides with other agents of pro- duction; sometimes out of a product which he divides with other labourers as well as other agents; and some- times out of a product of which he receives the full money equivalent. The complexity of the forces determining distribution and income indicate a complexity in the forces affecting the morality of income. Moreover, there is the more fundamental ethical question concerning the titles of distribution: whether mere ownership of a factor of production gives a just claim upon the product, as in the case of the landowner and the capitalist; whether such a claim, assuming it to be valid, is as good as that of the labourer and the business man, who expend human energy in the productive process ; whether different kinds of pro- THE ELEMENTS AND SCOPE OF THE PROBLEM XV11 ductive activity should be rewarded at different rates; and if so in what proportion. Why should the capitalist receive six per cent., rather than two per cent., or sixteen per cent.? Why should the locomotive engineer receive more than the trackman ? Why should not all persons be compensated equally? Should all or any of the benefits of industrial improvements go to the consumer? Such are typical questions in the study of distributive justice. They are sufficient to give some idea of the magnitude and difficulty of the problem. Scarcely less formidable is the task of suggesting means to correct the injustices of the present distribution. The difficulties in this part of the field are indicated by the multiplicity of social remedies that have been proposed, and by the fact that none of them has succeeded in winning the adhesion of more than a minority of the population. We shall be obliged not only to pass moral judgment upon the most important of these proposals, but to indicate and advocate a more or less complete and systematic group of such reforms as seem to be at once feasible and righteous. GENERAL REFERENCES TAUSSIG: Principles of Economics. Macmillan; 1911. DEVAS: Political Economy. Longmans; 1901. HOBSON: The Industrial System. Longmans; 1909. CLARK : The Distribution of Wealth. Macmillan ; 1899. SMART: The Distribution of Income. London; 1899. WILLOUGHBY : Social Justice. Macmillan ; 1900. CARVER: Essays in Social Justice. Harvard University Press; 1915. ELY : Property and Contract in Their Relations to the Distribution of Wealth. Macmillan; 1914. NEARING: Income. Macmillan; 1915. STREIGHTOFF: The Distribution of Incomes in the United States. Longmans ; 1912. WAGNER: Grundlegung der Nationaloekonomie. Leipzig; 1892-1894. PESCH : Lehrbuch der Nationaloekonomie. Freiburg; 1905-1913. ANTOINE: Cours d' Economie Sociale. Paris; 1899. XV111 INTRODUCTORY CHAPTER HITZE : Capital et Travail. Louvain ; 1898. HOLLANDER : The Abolition of Poverty. Houghton Mifflin Company ; 1914. ELL WOOD: The Social Problem. Macmillan; 1915. GARRIGUET: The Social Value of the Gospel. Herder; 1911. PARKINSON : A Primer of Social Science. Devin-Adair Co. ; 1913. VERMEERSCH: Quaestiones de Justitia. Bruges; 1901. KING: The Wealth and Income of the People of the United States. Macmillan; 1915. COMMISSION ON INDUSTRIAL RELATIONS. Final Report; 1915. SECTION I THE MORALITY OF PRIVATE LANDOWNER- SHIP AND RENT DISTRIBUTIVE JUSTICE CHAPTER I THE LANDOWNER'S SHARE OF THE NATIONAL PRODUCT THAT part of the national product which represents land, and is attributed specifically to land, goes to the land- owner. It is called economic rent, or simply rent. We say that rent " is attributed specifically to land," rather than " is produced specifically by land," because we do not know what proportion of the joint product of the different factors of production exactly reflects the productive con- tribution of any factor. Economic rent represents the productivity of land in so far as it indicates what men are willing to pay for land-use in the productive process. In any particular case rent comes into existence because the land makes a commercially valuable contribution to the product; and it goes to the landowner because this is one of the powers or rights included in the institution of pri- vate ownership. And the landowner's share is received by him precisely in his capacity as landowner, and not be- cause he may happen to be labourer, farmer, or proprietor of agricultural capital. It is perhaps superfluous to observe that not all land produces rent. While almost all land is useful and pro- ductive, at least potentially, there is in almost every local- ity some land which in present conditions does not war- rant men in paying a price for its use. If the crop raised on very sandy soil is so small as to cover merely the outlay 3 4 DISTRIBUTIVE JUSTICE for labour and capital, men will not pay rent for the use of that soil. Yet the land has contributed something to the product. Herein we have another indication that rent is not an adequate measure of land productivity. It merely represents land value, at a given time, in given circumstances. Economic Rent Always Goes to the Landowner All land that is in use, and for the use of which men are willing to pay a price yields rent, whether it is used by a tenant or by the owner. In the latter case the owner may not call the rent that he receives by that name; he may not distinguish between it and the other portions of the product that he gets from the land; he may call the entire product profits, or wages. Nevertheless the rent exists as a surplus over that part of the product that he can regard as the proper return for his labour, and for the use of his capital-instruments, such as, horses, buildings, and machinery. If a farmer employs the same amount and kind of labour and capital in the cultivation of two pieces of land, one of which he owns, the other being hired from some one else; if his net product is the same in both cases, say, 1,000 dollars; and if he must pay 200 dollars to the owner of the hired land, then, 200 of the 1,000 dollars that he receives from his own land, is likewise to be attributed specifically to his land rather than to his capital or labour. It is rent. While the whole product is due in some degree to the productive power of land, 200 dollars of it represents land value in the process of pro- duction, and goes to him solely in his capacity as land- owner. The rent that arises on land used for building sites is of the same general character, and goes likewise to the owner of the land. The owner of the site upon which a factory is located may hire it to another for a certain sum annually, or he may operate the factory himself. In either case he receives rent, the amount that the land itself THE LANDOWNERS SHARE OF NATIONAL PRODUCT 5 is worth for use, independently of the return that he ob- tains for his expenditure of capital and labour. Even when a person uses his land as a site for a dwelling which he himself occupies, the land still brings him economic rent, since it affords him something for which he would be obliged to pay if his house were located on land of the same kind owned by some one else. Economic Rent and Commercial Rent It will be observed that the landowner's share of the product, or economic rent, is not identical with commer- cial rent. The latter is a payment for land and capital, or land and improvements, combined. When a man pays nine hundred dollars for the use of a house and lot for a year, this sum contains two elements, economic rent for the lot, and interest on the money invested in the house. Assuming that the house is worth ten thousand dollars, and that the usual return on such investments is eight per cent., we see that eight hundred dollars goes to the owner as interest on his capital, and only one hundred dollars as rent for his land. Similarly the price paid by a tenant for the use of an improved farm is partly interest on the value of the improvements, and partly economic rent. In both cases the owner may reckon the land as so much capital value, and the economic rent as interest thereon, just as the commercial rent for the buildings and other improvements is interest on their capital value; but the economist distinguishes between them because he knows that they are determined by different forces, and that the distinction is of importance. He knows, for example, that the supply of land is fixed, while the supply of capital is capable of indefinite increase. In many situations, therefore, rent increases, but interest remains stationary or declines. Sometimes, though more rarely, the reverse occurs. As we shall see later, this and some other specific characteristics of land and rent have important moral 6 DISTRIBUTIVE JUSTICE aspects; consequently the moralist cannot afford to confuse rent with interest. The Cause of Economic Rent The cause of economic rent is the fact that land is limited relatively to the demand for it. If land were as plentiful as air mere ownership of some portion of it would not enable the owner to collect rent. As land- owner he would receive no income. If he cultivated his land himself the return therefrom would not exceed normal compensation for his labour, and normal interest on his capital. Since no one would be compelled to pay for the use of land, competition among the different cultivators would keep the price of their product so low that it would merely reimburse them for their expenditures of capital and labour. In similar conditions no rent would arise on building sites. The cause of the amount of rent may also be stated in terms of scarcity. At any given time and place, the rent of a piece of land will be determined by the supply of that kind of land relatively to the demand for it. However, the demand itself will be regulated by the fertility or by the location of the land in question. Two pieces of agricultural land equally distant from a city, but of varying fertility, will yield different rents because of this difference in natural productiveness. Two pieces of ground of equal natural adaptability for building sites, but at unequal distances from the centre of a city, will produce different rents on account of their difference of location. The absolute scarcity of land is, of course, fixed by nature ; its relative scarcity is the result of human activities and desires. The definition of rent adopted in these pages, " what men are willing to pay for the use of land," or, " what land is worth for use," is simpler and more concrete, though possibly less scientific, than those ordinarily found in manuals of economics, namely : " that portion of the THE LANDOWNER S SHARE OF NATIONAL PRODUCT 7 product that remains after all the usual expenditures for labour, capital, and directive ability have been deducted ; " or, " the surplus which any piece of land yields over the poorest land devoted to the same use, when the return from the latter is only sufficient to' cover the usual expenses of production." The statement that all rent goes to the landowner sup- poses that, in the case of hired land, the tenant pays the full amount that would result from competitive bidding. Evidently this was not the case under the feudal system, when rents were fixed by custom and remained stationary for centuries. Even to-day, competition is not perfect, and men often obtain the use of land for less than they or others might have been willing to give. But the state- ment in question does describe what tends to happen in a system of competitive rents. Before discussing the morality of the landowner's income, and of rent receiving, we may with profit glance at the history of land tenure. Thus we shall get some idea, first, of the antiquity of the present system, and, second, of its effects upon individual and social welfare. Both these considerations have an important bearing upon the moral problem; for length of existence creates a pre- sumption in favour of the social, and therefore the moral, value of any institution; and past experience is our chief means of determining whether an institution is likely to be socially beneficial, and therefore morally right, in the future. CHAPTER II LANDOWNERSHIP IN HISTORY THIRTY or thirty-five years ago, the majority of economic historians seemed to accept the theory that land was originally owned in common. 1 They held that in the beginning the community, usually a village community, was the landowner; that the community either cultivated the land as a corporation, and distributed the product among the individual members, or periodically divided the land among the social units, and permitted the latter to cultivate their allotments separately. The second of these forms of tenure was the more general. The primitive time to which the theory referred was not the period when men got their living by hunting and fishing, or by rearing herds, but the agricultural stage of economic development, when life had become settled. Of the arguments upon which the theory was based, some consisted of ambiguous statements by ancient writers, such as Plato, Caesar, and Tacitus, and others were merely inferences drawn from the existence of certain agrarian institutions: family ownership of land ; common pasture lands and woodlands ; periodical distribution of land among the cultivators, as in the German Mark, the Russian Mir, the Slavonic Zadruga, and the Javanese Dessa. All these practices 1 The most notable exponents of this view were : Von Maurer, " Einleitung zur Geschichte der Mark," 1854 ; Viollet, " Bibliotheque de 1' ecole des chartres," 1872; Maine, "Village Communities in the East and the West," 1872 ; and De Laveleye, " De la propriete et ses formes primitives," 1874, of which an English translation appeared in 1878 under the title, " Primitive Property." 8 LANDOWNERSHIP IN HISTORY 9 have been interpreted as " survivals " of primitive common ownership. . Only on this hypothesis, it is argued, can they be satisfactorily explained. More recent writers have subjected the various argu- ments for this theory to a searching criticism. 1 To-day the great majority of scholars would undoubtedly accept the conclusion of Fustel de Coulanges, that the arguments and evidence are not sufficient to prove that in the earliest stages of agricultural life land was held in common; and a majority would probably take the more positive ground that common ownership in the sense of communal cultiva- tion and distribution, never existed for any considerable length of time among any agricultural people. The present authoritative opinion on the subject is thus sum- marized by Professor Ashley: " From the earliest historical times, in Gaul and Ger- many, very much land was owned individually, and wealth on one side and slavery on the other were always very important factors in the situation. " Even in Germany, communal ownership of land was never a fundamental or generally pervasive social institu- tion; there was something very much like large private estates, worked by dependents and slaves, from the very earliest days of Teutonic Settlement. " As to England, it is highly probable that we shall not find anything that can fairly be called a general com- munal system of landowning, combined with a substantial equality among the majority of the people, under condi- tions of settled agriculture. To find it in any sense we 1 Chief among these writers are : Fustel de Coulanges in an article in " Revue des Questions Historiques," April, 1889 ; translated by Mar- garet Ashley, and published with an introductory chapter by W. J. Ashley under the title, " The Origin of Property in Land," 1891 ; G. Von Below, " Beilage zur Allgemeine Zeitung : Das kurze Leben einer vielgenannten Theorie," 1903 ; F. Seebohm, " The Village Community," 1883. Cf. Whittaker, " Ownership, Tenure, and Taxation of Land," 1914, ch. ii; Cathrein, "Das Privatgrundeigenthum und seine Gegner," 1909; and Pesch, " Lehrbuch der Nationaloekonomie," I, 183-188. 10 shall have to go back to an earlier and ' tribal ' condition, if, indeed, we shall find it there! " * No Private Ownership in Pre- Agricultural Conditions Whenever and wherever men got their living by hunting and fishing, there was no inducement to own land pri- vately, except possibly those portions upon which they built their huts or houses. " Until they become more or less an agricultural people they are usually hunters or fishermen or both, and possibly also to a limited extent keepers of sheep and cattle. Population is then sparse and unoccupied territory is plentiful, and questions of the ownership of particular tracts of land do not concern them." 2 In any region occupied by a group or tribe, all portions of the land and the water were about equally productive of game and fish ; the amount obtainable by any individual had no relation to labour on any particular piece of soil; and it was much easier for each to range over the whole region in common with his fellows than to mark off a definite section upon which he would not permit others to come, but beyond which he himself would not be permitted to go. In such conditions private ownership of land would have been folly. Tribal or group ownership was, however, in vogue, especially among those groups that were in control of the better grounds or streams. Even this form of proprietorship was comparatively un- stable, since the people were to a considerable degree nomadic, and were willing to abandon present possessions whenever there was a prospect of obtaining better ones elsewhere. Among men who got their living by rearing herds, the inducement to hold land in exclusive private control would be somewhat stronger. The better grazing tracts would be coveted by many different persons, espe- cially in the more populous communities. And there 1 Quoted in Whittaker, op. cit., pp. 27, 28. 2 Idem, p. 29. LANDOWNERSHIP IN HISTORY II would always be the possibility of confusion among the different herds, and contention among their owners. In such circumstances the advantages of exclusive control would sometimes outweigh the benefits of common use and ownership. In the thirteenth chapter of Genesis we are told that, owing to strife between the herdsmen of Abram and Lot, the brothers separated, and agreed to become the exclusive possessors of different territories. Nevertheless, it is probable that tribal ownership was the prevailing form of land tenure so long as people remained mainly in pastoral conditions. It is likewise probable that the same system continued in many cases for some time after men began to cultivate the soil. At least, this would seem to have been the natural arrangement while land was plentiful, and the methods of cultivation crude and soil-exhausting. It would be more profitable to take up new lands than to continue upon the old. Within historical times this system prevailed among the ancient Germans, some of the tribes of New Zealand, and some of the tribes of Western Africa. Where land was not so plentiful it was some- times redistributed among individuals or heads of families, as often as a death occurred or a new member arrived in the community. Some of the tribes and peoples who ob- served this practice were the ancient Irish, the aborigines of Peru, Mexico, and parts of what is now the United States, and Australia, and some of the tribes of Africa, India, and Malaysia. 1 Whether the most primitive agricultural sys- tems of every people were of this nature we have, of course, no means of knowing, but the supposition is ante- cedently probable; for agriculture must have begun very gradually, and been for some time practised in connection with the more primitive methods of obtaining a livelihood. As the land had been held for the most part in common 1 Cf . P. W. Joyce, " A Social History of Ancient Ireland," 1903 ; and Letourneau, " Property : Its Origin and Development," 1896. 12 DISTRIBUTIVE JUSTICE during the hunting and fishing stage and during the pas- toral stage, the same arrangement would probably continue until the people found it necessary to cultivate the same tracts of land year after year, and conceived the desire to retain their holdings in stable possession and to transmit them to their children. Moreover, so long as the members of the clan remained strongly conscious of their kinship, and realised the necessity of acting as a unit against their enemies, there would be a strong incentive to clan owner- ship of the land, and clan allotment of it among the indi- vidual members. In other words, the clan would, in these circumstances, have the same motives for common owner- ship that exist to-day in the family. The oldest historical peoples, the Israelites, Egyptians, Assyrians, Babylonians, and Chinese, had private owner- ship of land at the beginning of their recorded history. Most of them, however, had been cultivating land for a considerable length of time, and had acquired a consider- able degree of civilisation, before the earliest period of their existence of which we have any knowledge. It is quite possible that those among them that had passed through the hunting and fishing or the pastoral stage of existence, had practised tribal or common ownership dur- ing the earlier portion of their agricultural life. How the Change Probably Took Place The change from tribal to private landownership could have occurred in a great variety of ways. For example, the chief, patriarch, or king might have gradually obtained greater authority in making the allotments of land among the members of the tribe or group, and thus acquired a degree of control over the land which in time became prac- tical ownership; he might have seized the holdings of deceased persons, or of those who were unable to pay him the tax or tribute that he demanded, or of those who were for any reason obnoxious to him. Again, the taxes paid LANDOWNERSHIP IN HISTORY 13 to the chief man in a community for his services as ruler might have come in time to be regarded as a payment for the use of the land, and therefore as an acknowledgment that the chief was also the landlord. Even in the Middle Ages the rents received by the feudal lords were in great measure a return for social and political services, just as are the taxes received to-day from private landowners by the State. In primitive times, as well as later on, the chief would naturally do his best to convert this institution of tax paying or tribute paying into rent paying, and to add the position of landowner to his other prerogatives. After all, the transition from tribal ownership, with private cul- tivation and private receipt of the produce of individual allotments, to overlordship and landlordism, would not have been greater than that which actually took place in England between the fifteenth and the nineteenth centuries, when the lords became absolute owners of land that they had previously held with their tenants in a sort of divided or dual ownership. In a word, tribal ownership could have been displaced by landlordism through the same methods that have been used everywhere by the powerful, the ambitious, and the greedy against the weak, the indif- ferent, and the upright. Nor must we forget the influence of conquest. Most of the countries that appear in his- torical times with a system of private ownership had at some previous period been subjugated by an alien people. In many of these the conquerors undoubtedly introduced a considerable degree of individual ownership, the more powerful among them becoming landlords, while their weaker companions and the mass of the conquered popula- tion were established in a condition of tenancy. Where a somewhat widely diffused private ownership succeeded the primitive system, it was probably due to the free action of the cultivators, as soon as they came to realise the inconveniences of ownership in common. " Any enclosed land round their permanent dwellings, and 14 DISTRIBUTIVE JUSTICE any land outside the settlement which was cleared, re- claimed, and cultivated, or occupied with cattle by indi- viduals or families, was recognised as their personal prop- erty. Only those who were industrious, enterprising, and courageous enough would clear, occupy, retain, cultivate, and defend waste land. They would become personal owners of cattle, and would gradually acquire wealth which would enable them to employ others and still fur- ther improve their position. As their power increased, and as population grew, the bravest, wealthiest, and most capable fighting men amongst them would become chiefs or a species of nobles, and the force of circumstances, often no doubt aided by force and fraud, would eventually make them the landowners of the greater part of the district, with the more or less willing acquiescence and consent of the community amongst whom they lived, and to whom they extended their protection." l Limited Character of Primitive Common Ownership A great deal of the opposition to the theory of primitive common ownership of agricultural land, seems to be based upon an exaggerated. conception of the scope of that insti- tution. The average man who thinks or speaks of owner- ship to-day has in mind the Roman concept and practice of private property. This includes the unrestricted right of disposal; that is, the power to hold permanently, to transfer or transmit, to use or to abuse or not to use at all, to retain the product of the owner's use, to rent the prop- erty to any person and for any period that the owner chooses, and to obtain a price in return called rent. Any man who takes the theory of primitive common ownership to imply that the community or tribe exercised all these powers over its land, will have no difficulty in proving that the evidence is overwhelmingly against any such theory. Even among those people that are certainly known to have 1 Whittaker, op. cit., pp. 30, 31. LANDOWNERSHIP IN HISTORY 1 5 practised so-called common ownership of land, there are very few instances of communal cultivation, or communal distribution of the product. Yet these are included in the Roman concept of ownership. The usual method seems to have been periodical allotment by the community of the land among individuals, individual cultivation of the allotted tracts, and individual ownership of the product. Moreover, there was always a chief or patriarch who exer- cised considerable authority in the distribution of the land, frequently collected a rent or tax from the cultivators, and almost invariably exercised something like private ownership of a portion of the land for his direct and special benefit. Sometimes other men of importance in the community possessed land which was not subject to the communal allotment. Primitive ownership of land in common was, therefore, very far from vesting in the com- munity all the powers that inhere in the private proprietor of land according to the Roman law and usage. Private Ownership General in Historical Times So much for land tenure in prehistoric times. During the historical period of the existence of the race, almost all civilised peoples have practised some form of private ownership in the matter of their arable lands. While dif- fering considerably at various times and places, it has always excluded communal allotment of land and com- munal distribution of the product, and has always included private receipt of the product by the owner-user, or private receipt of rent when the owner transferred the use to some one else. But it did not always include the right to determine who should be the user. In the later centuries of the feudal system, for example, the lord could not always expel the tenants from the land, nor prevent them from transmitting the use of it to their children. More- over, the rent that he received was customary and fixed, not competitive and arbitrary, and it was looked upon in 1 6 DISTRIBUTIVE JUSTICE great measure as a return to the lord for social, military, and political services, as well as a payment for the use of land. This system was private ownership, indeed, but if we apply the Roman notion of ownership we shall find it difficult to decide whether the tenant or the lord should more properly be called the owner. At any rate, the right of ownership possessed by the lord was greatly limited by restrictions which favoured the masses of the cultivators. In every community there were common wood lands and pasture lands for the free use of all the inhabitants. Among other restrictions of private ownership and con- trol in favour of the principle of equal access to the land by all persons, we may mention the division of the English villein's holding into several portions, intermingled with those of his neighbours, so that each would have about the same amount of good land; and the ancient Hebrew law whereby alienated land was returned to the descendants of its original owners every fifty years. 1 Reckoning the feudal lord, and all other overlords who had the same control over land, as private proprietors, we may say that in historical times the arable land of every country has been owned by a minority of the population. Since the downfall of feudalism, the tendency in most regions of the Western world has been toward an increase in the number of owners, and a decrease in the number of great estates. This tendency has been especially marked during the last one hundred years. It will, however, need to continue for a very long time, or else to increase its pace very rapidly, before land ownership will be diffused in anything like the measure that is necessary if its benefits are to be shared by all the people. Even in the United States, where the distribution is perhaps more general than in any other country, only 38.4 per cent, of the families in towns and cities owned, in 1910, the homes in which they lived, and therefore the land upon which their homes were 1 Leviticus xxv, 23-28. LANDOWNERSHIP IN HISTORY I/ located. In the rural districts the per cent, of home- owning families was only 62.8. Conclusions from History What conclusions does history warrant concerning the social and moral value of private landownership ? Here we are on very uncertain ground ; for different inferences may be drawn from the same group of facts if a different section of them be selected for emphasis. Sir Henry Maine and Henry George both accepted the theory of primitive agrarian communism, but the former saw in this assumed fact a proof that common ownership was suited only to the needs of rude and undeveloped peoples, while the latter regarded it as a sure indication that common ownership was fundamentally natural and in accordance with permanent social welfare. The fact that practically all peoples whose history we know discarded communal for private ownership as soon as they had acquired a moderate degree of proficiency in methods of cultivation and in the arts of civilised life does, indeed, create a presumption that the latter system is the better for civilised, men. To this extent Sir Henry Maine is right. Against this presump- tion Henry George maintained that common ownership was abandoned solely because of the usurpation, fraud, and force employed by the powerful and privileged classes. Undoubtedly this factor played a great part in bringing about the private ownership that has existed and still exists, but it does not account for the institution as a whole and everywhere. If chiefs, kings, and other powerful per- sonages had never usurped control of the land, if no people had ever conquered the territory of another, it is probable that private ownership would have taken place to the same extent, although it would have been much more widely diffused. For the system of periodical repartition of land, to say nothing of communal cultivation and communal dis- tribution of the product, does hinder that attachment to a 1 8 DISTRIBUTIVE JUSTICE particular portion of the soil and that intensive cultivation which are so necessary to the best interests of the culti- vator, the most productive use of the land, and therefore the welfare of society. On the other hand, the limitations on the right of private ownership which have been established in so many places and times in favour of those who were not owners, show that men have very generally looked upon land as in some measure the inheritance of all the people. Hence arises the presumption that this conviction is but the reflection of fundamental and permanent human needs. Summing up the matter, we may say that the history of land tenure points on the whole to the conclusion that pri- vate ownership is socially and individually preferable to agrarian communism, but that it should be somewhat strictly limited in the interest of the non-owners, and of the community as a whole. CHAPTER III THE ARGUMENTS AGAINST PRIVATE LANDOWNERSHIP IF land were not privately owned there would be no receiving of rent by individuals. Therefore, the morality of the landlord's share of the national product is intimately related to, and is usually treated in connection with, the morality of private ownership. Substantially all the opponents of private property in land to-day are either Socialists or disciples of Henry George. In the view of the former, land as well as the other means of production should be owned and managed by the State. Although they are more numerous than the Georgeites, their attack upon private landownership is less conspicuous and less formidable than the propaganda car- ried on by the Henry George men. The Socialists give most of their attention to the artificial instruments of pro- duction, dealing with land only incidentally, implicitly, or occasionally. The followers of Henry George, commonly known as Single Taxers or Single Tax men, defend the private ownership of artificial capital, or capital in the strict economic sense, but desire that the control of the com- munity over the natural means of production should be so far extended as to appropriate for public uses all econo- mic rent. Their criticism of private ownership is not only more prominent than that made by the Socialists, but is based to a much greater extent upon ethical considerations. Arguments by Socialists Indeed, the orthodox or Marxian Socialists are logically debarred by their social philosophy from passing a strictly 19 2O DISTRIBUTIVE JUSTICE moral judgment upon property in land. For their theory of economic determinism, or historical materialism, in- volves the belief that private landownership, like all other social institutions, is a necessary product of economic forces and processes. Hence it is neither morally good nor morally bad. Since neither its existence nor its con- tinuance depends upon the human will, it is entirely devoid of moral quality. It is as unmoral as the succession of the seasons, or the movement of the tides. And it will disappear through the inevitable processes of economic evolution. As expressed by Engels : " The growing per- ception that existing social institutions are unreasonable and unjust, that reason has become unreason, and right wrong, is only proof that in the modes of production and exchange changes have taken place, with which the social order, adapted to earlier economic conditions, is no longer in keeping." 1 Frequently, however, the individual Socialist forgets this materialistic theory, and falls back upon his common sense, and his innate conceptions of right and wrong, of free will and responsibility. Instead of regarding the existing land system as a mere product of blind economic forces, he often denounces it as morally wrong and unjust. His contentions may be reduced to two propositions : The pro- prietor who takes rent from a cultivator robs the producer of a part of his product; and no one has a right to take for his exclusive use that which is the natural heritage and means of support for all the people. Referring to the receipt of 35,000,000 pounds a year in rent by 8,000 British landlords, Hyndman and Morris exclaim : " Yet in the face of all this a certain school still contend that there is no class robbery." 2 Since the claim that the labourer has a right to the full product of his labour applies to capital as well as to land, it can be more conveniently considered when we 1 " Socialism : Utopian and Scientific," p. 45 ; Chicago, 1900. 2 " A summary of the Principles of Socialism," p. 23 ; London, 1899. ARGUMENTS AGAINST PRIVATE LANDOWNERSHIP 21 come to treat of the income of the capitalist. With regard to the second contention, the following statement by Robert Blatchford may be taken as fairly representative of Socialist thought : " The earth belongs to the people. ... So that he who possesses land possesses that to which he has no right, and he who invests his savings in land be- comes the purchaser of stolen property." 1 Inasmuch as this argument is substantially the same as one of the funda- mental contentions in the system of Henry George, it will be discussed in connection with the latter, in the pages immediately following. Henry George's Attack on the Title of First Occupancy Every concrete right, whether to land or to artificial goods, is based upon some contingent fact or ground, called a title. By reason of some title a man is justified in appropri- ating a particular farm, house, or hat. When he becomes the proprietor of a thing that has hitherto been ownerless, his title is said to be original ; when he acquires an article from some previous owner, his title is said to be derived. As an endless series of proprietors is impossible, every derived title must be traceable ultimately to some original title. Among the derived titles the most important are contract, inheritance, and prescription. The original title is either first occupancy or labour. The prevailing view among the defenders of private landownership has always been that the original title is not labour but first occupancy. If this title be not valid every derived title is worthless, and no man has a true right to the land that he calls his own. Henry George's attack upon the title of first occu- pancy is an important link in his argument against private property in land. " Priority of occupation give exclusive and perpetual title to the surface of a globe in which, in the order of nature, countless generations succeed each other! . . . 1 " Socialism : A Reply to the Pope's Encyclical," p. 4; London, 1899. 22 DISTRIBUTIVE JUSTICE Has the first comer at a banquet the right to turn back all the chairs, and claim that none of the other guests shall partake of the food provided, except as they make terms with him ? Does the first man who presents a ticket at the door of a theatre, and passes in, acquire by his priority the right to shut the doors and have the performance go on for him alone? . . . And to this manifest absurdity does the recognition of the individual right to land come when carried to its ultimate that any human being, could he con- centrate in himself the individual rights to the land of any country, could expel therefrom all the rest of the inhab- itants; and could he concentrate the individual rights to the whole surface of the globe, he alone of all the teeming population of the earth would have the right to live." 1 In passing, it may be observed that Henry George was not the first distinguished writer to use the illustration drawn from the theatre. Cicero, St. Basil, and St. Thomas Aquinas all employed it to refute extravagant conceptions of private ownership. In reply to the foregoing argument of Henry George, we point out: first, that the right of ownership created by first occupancy is not unlimited, either extensively or intensively; and, second, that the historical injustices connected with private ownership have been in only a comparatively slight degree due to the first occupa- tion of very large tracts of land. The right of first occu- pancy does not involve the right to take a whole region or continent, compelling all subsequent arrivals to become tenants of the first. There seems to be no good reason to think that the first occupant is justified in claiming as his own more land than he can cultivate by his own labour, or with the assistance of those who prefer to be his employes or his tenants rather than independent proprietors. " He has not the right to reserve for himself alone the whole territory, but only that part of it which is really useful to 1 " Progress and Poverty," book vii, ch. i. ARGUMENTS AGAINST PRIVATE LANDOWNERSHIP 23 him, which he can make fruitful." 1 Nor is the right of private landownership, on whatever title it may rest, un- limited intensively, that is, in its powers or comprehension. Though a man should have become the rightful owner of all the land in a neighbourhood, he would have no moral right to exclude therefrom those persons who could not without extreme inconvenience find a living elsewhere. He would be morally bound to let them cultivate it at a fair rental. The Christian conception of the intensive limitations of private ownership is well exemplified in the action of Pope Clement IV, who permitted strangers to occupy the third part of any estate which the proprietor refused to cultivate himself. 2 Ownership understood as the right to do what one pleases with one's possessions, is due partly to the Roman law, partly to the Code Napoleon, but chiefly to modern theories of individualism. In the second place, the abuses which have accompanied private property in land are very rarely traceable to abuses of the right of first occupancy. The men who have pos- sessed too much land, and the men who have used their land as an instrument of social oppression, have scarcely ever been first occupants or the successors thereof through derived titles. This is especially true of modern abuses, and modern legal titles. In the words of Herbert Spencer : " Violence, fraud, the prerogative of force, the claims of superior cunning, these are the sources to which these titles may be traced. The original deeds were written with the sword, rather than with the pen : not lawyers but sol- diers were the conveyancers: blows were the current coin given in payment; and for seals blood was used in prefer- ence to wax." 3 Not the appropriation of land which 1 " La Propriete Privee," par L. Garriguet, I, 62 ; Paris, 1903. 2 Cf . Ardant, " Papes et Paysans," pp. 41, sq. 8 " Social Statics," chap, ix ; 1850. Spencer's retractation, in a later edition of this work, of his earlier views on the right of property in land does not affect the truth of the description quoted in the passage above. 24 DISTRIBUTIVE JUSTICE nobody owned, but the forcible and fraudulent seizure of land which had already been occupied, has been one of the main causes of the evils attending upon private landowner- ship. Moreover, in England and all other countries that have adopted her legal system, the title of first occupancy could never be utilised by individuals : all unoccupied land was claimed by the Crown or by the State, and transferred thence to private persons or corporations. If some indi- viduals have got possession of too much land through this process, the State, not the title of first occupancy, must bear the blame. This is quite clear in the history of land tenure in the United States and Australasia. Henry George's attack upon private landownership through the title of first occupancy is therefore ineffective ; for he attributes to this qualities that it does not possess, and consequences for which it is not responsible. His Defence of the Title of Labour Thinking that he has shattered the title of first occu- pancy, Henry George undertakes to set up in its place the title of labour. " There can be to the ownership of any- thing no rightful title which is not derived from the title of the producer, and does not rest on the natural right of the man to himself." l The only original title is man's right to the exercise of his own faculties ; from this right follows his right to what he produces ; now man does not produce land; therefore he cannot have rightful property in land. Of these four propositions the first is a pure assumption, the second is untrue, the third is a truism, and the fourth is as unfounded as the first. Dependently upon God, man has, indeed, a right to himself and to the exercise of his own faculties; but this is a right of action, not of property. By the exercise of this right alone man can never produce anything, never become the owner of any- thing. He can produce only by exerting his powers upon 1 " Progress and Poverty," loc. cit. ARGUMENTS AGAINST PRIVATE LANDOWNERSHIP 2$ something outside of himself; that is, upon the goods of external nature. To become the producer and the owner of a product, he must first become the owner of materials. By what title is he to acquire these ? In one passage 1 Henry George seems to think that no title is necessary, and refers to the raw material as an " accident," while the finished product is the " essence," declaring that " the right of private ownership attaches the accident to the essence, and gives the right of ownership to the natural material in which the labour of production is embodied." Now this solution of the difficulty is too simple and arbitrary. Its author would have shrunk from applying it universally; for example, to the case of the shoemaker who produces a pair of shoes out of stolen materials, or the burglar who makes an overcoat more useful (and therefore performs a task of production) by transferring it from a warehouse to his shivering back! Evidently Henry George has in mind only raw material in the strict sense, that which has not yet been separated from the storehouse of nature; for he declares in another place that " the right to the produce of labour cannot be enjoyed without the free use of the opportunities offered by nature." 2 In other words, man's title to the materials upon which he is to exercise his facul- ties, and of which he is to become the owner by right of production, is the title of gift conferred by nature, or nature's God. Nevertheless this title is applicable only to those goods that exist in unlimited abundance, not to those parts of the natural bounty that are scarce and possess economic value. A general assumption by producers that they were entitled to take possession of the gifts of nature indiscriminately would mean industrial anarchy and civil war. Hence Henry George tells us that the individual should pay rent to " the community to satisfy the equal rights of all other 1 " Open Letter to Pope Leo XIII," page 25 of Vierth's edition. 2 " Progress and Poverty," loc. cit. 26 DISTRIBUTIVE JUSTICE members of the community." * Inasmuch as the individual must pay this price before he begins to produce, his right to the use of natural opportunities is not " free," nor does his labour alone constitute a title to that part of them that he utilises in production. Consequently labour does not create a right to the concrete product. It merely gives the producer a right to the value that he adds to the raw material. His right to the raw material itself, to the ele- ments that he withdraws from the common store, and fashions into a product, say, wheat, lumber, or steel, does not originate in the title of labour but in the title of con- tract. This is the contract by which in exchange for rent paid to the community he is authorised to utilise these materials. Until he has made this contract he has mani- festly no full right to the product into which natural forces as well as his own labour have entered. According to Henry George's own statements, therefore, the right to the product does not spring from labour alone, but from labour plus compensation to the community. Since the contract by which the prospective user agrees to pay this compensa- tion or rent must precede his application of labour, it in- stead of labour is the original title. Since the contract is made with a particular community for the use of a par- ticular piece of land, the title that it conveys must derive ultimately from the occupation of that land by that com- munity, or some previous community of which the pres- ent one is the legal heir. So far as economically valuable materials are concerned, therefore, the logic of Henry George's principles leads inevitably to the conclusion that the original title of ownership is first occupancy. Even in the case of economically free goods, the original title of ownership is occupancy. Henry George declares that the traveller who has filled his vessels at a free-for-all spring owns the water when he has carried it into a desert, 1 " Progress and Poverty," loc. cit. ARGUMENTS AGAINST PRIVATE LANDOWNERSHIP 27 by the title of labour. 1 Nevertheless, in its original place this water belonged either to the community or to nobody. In the former supposition it can become the property of the traveller only through an explicit or implicit gift from the community ; and it is this contract, not labour, that consti- tutes his title to the water. If we assume that the spring was ownerless, we see that the labour of carrying a portion of it into the desert still lacks the qualifications of a title ; for the abstracted water must have belonged to him before he began the journey. It must have been his from the moment that he separated it from the spring. Otherwise he had no right to take it away. His labour of transport- ing it gave him a right to the utility thus added to the water, but not a right to the water when it first found a local habi- tation in his vessels. Nor was the labour of transferring it from the spring into his vessels the true title ; for labour alone cannot create a right to the material upon which it is exerted, as we see in the case of stolen objects. If it be contended that labour together with the natural right to use the ownerless goods of nature have all the elements of a valid title, the assertion must be rejected as unprecise and inadequate. The right to use ownerless goods is a general and abstract right that requires to become specific and concrete through some title. In the case of water it is a right to water in general, to some water, but not a right to a definite portion of the water in this particular spring. The required and sufficient title here is that of apprehen- sion, occupation, the act of separating a portion from the natural reservoir. Therefore, it is first occupancy as exemplified in mere seizure of an ownerless good, not labour in the sense of productive activity, nor labour in the sense of painful exertion, that constitutes the precise title whereby the man acquires a right to the water that he has put into his cup or barrel. Mere seizure is a sufficient 1 " Open Letter to Pope Leo XIII," loc. cit. 28 DISTRIBUTIVE JUSTICE title in all such cases as that which we are now considering, simply because it is a reasonable method of determining and specifying ownership. There is no need whatever of having recourse to the concept of labour to justify this kind of property right. In the present case, indeed, the acts of apprehension and of productive labour (the labour of dipping the water into a vessel is productive inasmuch as the water is more useful there than in the spring) are the same physically, but they are distinct logically and ethically. One is mere occupation, while the other is production; and ownership of a thing must precede, in morals if not in time, the expenditure upon it of productive labour. " The theory which bases the right of property on labour really depends in the ultimate resort on the right of pos- session and the fact that it is socially expedient, and is therefore upheld by the laws of society. Grotius, dis- cussing this in the old Roman days, pointed out that since nothing can be made except out of pre-existing matter, acquisition by means of labour depends, ultimately, on possession by means of occupation." 1 Since man's right to his faculties does not of itself give him a right to exercise them upon material objects, pro- ductive labour cannot of itself give him a right to the product therefrom created, nor constitute the original title of ownership. Since labour is not the original title to property, it is not the only possible title to property in land. Hence the fact that labour does not produce land, has no bearing on the question of private landownership. In passing it may be observed that Henry George im- plicitly admitted that the argument from the labour title was not of itself sufficient to disprove the right of private property in land. Considering the objection, " if private property in land be not just, then private property in the products of land is not just, as the material of these prod- ucts is taken from the land," he replied that the latter form 1 Whittaker, op. cit, p. 32. ARGUMENTS AGAINST PRIVATE LANDOWNERSHIP 29 of ownership " is in reality a mere right of temporary pos- session," since the raw material in the products sooner or later returns to the " reservoirs provided for all ... and thus the ownership of them by one works no injury to others." 1 But private ownership of land, he continued, shuts out others from the very reservoirs. Here we have a complete abandonment of the principle which underlies the labour argument. Instead of trying to show from the nature of the situation that there is a logical difference between the two kinds of ownership, he shifts his ground to a consideration of consequences. He makes the title of social utility instead of the title of labour the distinguishing and decisive consideration. As we shall see later, he is wrong even on this ground; for the fundamental justifica- tion of private landownership is precisely the fact that it is the system of land tenure most conducive to human welfare. At present we merely call attention to the breakdown in his own hands of the labour argument. To sum up the entire discussion on the original title of ownership: Henry George's attack upon first occupancy is futile because based upon an exaggerated conception of the scope of private landownership, and upon a false assump- tion concerning the responsibility of that title for the his- torical evils of the system. His attempt to substitute labour as the original title is likewise unsuccessful, since labour can give a right only to the utility added to natural materials, not to the materials themselves. Ownership of the latter reaches back finally to occupation. Whence it follows that the title to an artificial thing, such as a hat or coat, water taken from a spring, a fish drawn from the sea, is a joint or twofold title ; namely, occupation and labour. Where the product embodies scarce and economically valu- able raw material, occupation is usually prior to labour in time; in all cases it is prior to labour logically and ethi- cally. Since labour is not the original title, its absence in 1 " Open Letter," loc. cit. 3