Note 1203 — Chapter II · : THE THEORY OF RENT AND ITS APPLICATIONS

A résumé of this theory of distribution, whose very simplicity must make it suspect, may be found in Book V, chap. 2: “In every direction, the direct tendency of advancing civilisation is to increase the power of human labour to satisfy human desires—to extirpate poverty and to banish want and the fear of want.… But labour cannot reap the benefits which advancing civilisation thus brings, because they are intercepted. Land being necessary to labour, and being reduced to private ownership, every increase in the productive power of labour but increases rent—the price that labour must pay for the opportunity to utilise its power; and thus all the advantages gained by the march of progress go to the owners of land, and wages do not increase.” George, however, does not claim that real wages have fallen because technical improvements enable production to be carried on where it was formerly impossible. At most this will only enable capital and labour to preserve their old scale of remuneration; it will not give them any share in the progress that has been made, so that, relatively speaking, it is true to say that wages and interest have both fallen in comparison with rent. “When I say that wages fall as rent rises, I do not mean that the quantity of wealth obtained by labourers as wages is necessarily less, but that the proportion which it bears to the whole produce is necessarily less. The proportion may diminish while the quantity remains the same, or even increases.” (Book VI, chap. 6. Cf. also Book IV, chap. 3.) George, like Ricardo and a good many socialists, confuses two different problems, namely, the price of productive services and the proportional distribution of the product between the different agents of production (Book V). He adds, however, that scientific discovery, by pushing the margin of cultivation back to that point where the law of diminishing returns is more than counterbalanced by increased productive efficiency, may even sometimes reduce the worker’s real wages, and so impair his position not only relatively, but also absolutely. (Book IV, chap. 4.)