Note 1 — WHAT IS RENT?

What then is rent? The true answer to this very natural question, obvious and easy though it may seem to be, has been grasped by few only. Let the question be put to a mixed company, and the incapacity to explain the real nature of rent will be found most surprising. One's first impulse is to appeal to Political Economy for an answer, for indisputably rent belongs to its domain; but unhappily Political Economists, for the most part, instead of enlightening have obscured this inquiry for the public mind. Some few amongst them have perceived the true character of rent; but most other economical writers have been led astray into a wrong path by Ricardo. Ricardo's theory of rent was accepted as the orthodox doctrine; but it was a theory from which the common world, landlords and farmers alike, turned away as unworkable. Ricardo was dominated by the passion of giving to Political Economy a strictly scientific treatment, and the explanation of rent he hailed as an excellent instrument for accomplishing his purpose. He built the amount of rent payable by different lands, on the varying fertilities of the soil. Land A paid no rent; its productive powers were unequal to such an effort; it must content itself with rewarding the cultivator alone. Land B presented itself as something better; a feeble rent it could supply. C, D, and E continued the ascending scale; the rents they yielded assumed grander dimensions, till the maximum of fertility and remunerating power was reached. The array wore a splendidly scientific air; it almost rivalled the great law of the inverse square of the distances. But, alas, as Ricardo himself dimly saw, rent bowed to other forces besides mere fertility. Varying distances from manures and markets, dissimilar demands for horsepower for the attainment of the same crops, unequal pressure of rates and taxes, and other like causes compelled rent to sway upwards and downwards in contradiction of the law of fertility; and that was not scientific. But it was true in fact, and Ricardo, under the pressure of necessity, summed up these disturbing causes under the general word situation. Like Mill, he had to recognise that Political Economy, as he and Mill posed it, was "an hypothetical science," and that the stern world of material realities was under the dominion of influences which were not hypothetical nor scientific.1