Effect of Material Progress Upon the Distribution of Wealth:

The term wealth means anything of value produced by human effort. Thus, land (the earth and its locatioos) is not wealth, even though some locations are enormously valuable, because humans did not produce the earth.

Wealth in all its forms is the product of labor applied to land or the products of land. The earth is not a product of labor. Thus while the earth is the source of all wealth, it is not, of itself, "wealth." Therefore any increase in the power of labor, along with unsatisfied demands for wealth, generates increased demand for land, from which, alone, more wealth can and must be produced.

There are absolutely no limits to the progress of invention. Nor can we assign any limits to the increase of land rent, short of the whole produced. For, if labor-saving inventions proliferated until perfection was obtained, and the need for labor in wealth production was entirely done away with, everything the earth could yield could be obtained without labor. And no matter how small the population might be, if anybody but the landowners continued to exist, it would be at the whim or by the mercy of landowners' bounty. This point, of the absolute perfection of laborsaving inventions, may seem far fetched, but it is the point to which the march of invention is directed every day.

The improvements which increase land rent include the improvements which directly increase productive power. Improvements in government, manners and morals indirectly increase land rent. Considered as material forces, the effect of all these is to increase productive arts. Their benefits are ultimately monopolized by the possessor of the land. If the corrupt governments of the great cities of the U.S. were made models of integrity and economic efficiency, the effect would simply be to increase the value of land, not to raise either wages or interest.

The Problem Solved

There is a reason, in spite of the increase of productive power, wages constantly tend to a minimum which will give a bare living. With any increase in productive power, rents tend to even greater increase, thus producing a constant tendency to lowering wages. Thus, the laborer has no incentive to produce more, or more efficiently, as all his or her increased production ultimately winds up in the landowners pockets.

The simple theory outlined here explains this conjunction of poverty with wealth and of low wages with high productive power. It explains why interest and wages are relatively higher in developing communities, though the average, as well as the total, production in well developed communities is greater. It explains why improvements which increase the total wealth, do not improve the rewards to labor or interest. It explains what is commonly called the conflict between labor and capital, yet demonstrates there is actually harmony of interest between labor and capital.

Is it not a notorious fact, known to the most ignorant, that developing communities, where the total wealth is small, but where land is cheap, are always better communities for laborers than rich communities, where land is expensive? Wherever one finds land values relatively low, will one not find wages relatively high? Wherever land value is high, will one not find wages low? As land increases in value, poverty deepens and pauperism appears. Where land is cheap, you will find no beggars, and the inequalities of condition are very slight. In the great cities, where land is so valuable that it is measured and sold by the square foot, you will find the extremes of poverty and of luxury. And this disparity in condition between the two extremes of the social scale may always be measured by the price of land. Land in and near the great cities is valuable, yet there you will see such great squalor, destitution and misery that you will stand aghast.

For land is for the habitation of people, the storehouse from which they must draw for all their needs. Material progress cannot rid us of our dependence upon land; it can but add to the power of producing wealth from land; and hence, when land is monopolized, material progress might go on to infinity without increasing wages or improving the condition of those who have but their labor. It can but add to the value of land and the power which its possession gives. Everywhere, in all times, among all peoples, the possession of land is the base of aristocracy, the foundation of great fortunes, the source of power.

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