RENT.

Manawatu Herald, Volume XLII, Issue 2191, 19 October 1920, Page 1

RENT.

At the weekly meeting of the W.E.A. held on the evening of fho 7ih instant, the lecturer, Mr Ayrton, after expressing regret for the loss sustained to the district throng the destruction of (be Council buildings, proceeded to discuss the subject for the evening. Rent in economies, he said, means the price paid for the use of land and other natural agents. The popular idea is that this is the same thing as rent of buildings, but the celebrated economist, David Ricardo, showed the distinction between a payment made for the use of the original and indestructible powers of the soil and a payment for the use of buildings or other improvements made upon it or for capital generally.

CAUSES OF RENT

There is a difference in the fertility of soils, and it is necessary to keep tiiis in view to understand the meaning of rent. In every country there arc many thousands of acres which are too poor to bring any price at all in the way of rent. The cultivation of such and only produces sullicient. to pay the labour or capital invested in it, leaving nothing over for rent. It is the diitercnce between the poorest land and boiler grades of land that determines rent. Climate is another factor determining rent. A temperate climate and the absence of storms

Other elements helping towards to productiveness, and • therefore to the payment of rent. Thus sunshine and rain, which should laitlie common gift of all, are beneficial to those having proprietory rights in land.

Ollier elements helping 'towards the payment of rent are fertilisers, skill in analysing soil, and skill in mechanism. These things contribute not only lo the payment of rent, hut add to the amount payable. Another element is situation, which shows the meaning of Ricanl's reference lo the natural and indestructible elements of the soil. Rent is a payment not for the land itself, but for the elements embodied in it, and different lands have different site-values, such as lauds in a main street and in a hack street, lands near a tramway or railway and those far removed from means of communication, and so

Considering rent from the point of view of extensive eiiltivnliun, so Ion”' ns (here is more hind wailing' for cultivation that muddies the amount of rent for land already under cullivat ion. Another point of view is intensive cultivation. A\ hen no more laud is available, for cultivation, the increasing needs of the community Compel the attention of scientists and agriculturists to increased production I rom tin* iann oi ready in use, and so where .-dx or eight bushels were formerly produced the land is now made to yield .‘id, <id or SO bushels per acre. History shows that improved methods of cultivation have always kept pace with the needs of the population. There is no limit to the ingenuity that man is capable of, even though there is a lixed limit to thu amount of land on the earth. Another element in determining the amount of rent is the average well being. A higher wage rate and standard of life enable people to spend more in living in good bouses and localities. Fashion also enters into it. If EXT IN RELATION TO PRODUCE. Poor land on the margin of euL tivation will pay little or no rent, but only allows for wages ami interest. Prom iirst-elass land economic rent is paid. Prices arc fixed bv the expenses of production. The price of any commodity is determined by the average cost of producing it. The price of land also is determined by what it will produce, and sometimes by anticipation of Avhat may take place, such as the building of a railway in the neighbourhood. In any industry profits may be made by anticipation; though sometimes this is risky, as in anticipating fashions in drapery. The greatest contribution Ricardo made to the understanding of rent was his demonstration that rent is determined by prices, not prices by rent.

UNEARNED INCREMENT. The distinctive feature of agriculture as against other occupations are: (1) All human requirements come from the land: (2) land is limited in quantity. You cannot add to the amount of i! in the world; (3) land lasts for ever. Buildings and improvements may decay or be destroyed, but never the land on which they stand. Human beings are social, and live in herds or communities, and this builds up towns and .cities, railways and waterways, organisation, industry and skill. This, growth is the principal cause of increase of rent. Thus increase of rent and land values is the result

oJ! the combined industry of tko whole of tlit-s community. The position in regard to land is unique. It is not the product of labour. It cannot be made. It existed before lab-, our, and will continue when labour has ceased. Yet only labour gives it any value. There is a close union between it and labour. Private property in land is Very hard to defend in abstract justice.

DEFINITIONS OF RENT

The orthodox economists defended rent on the ground of public utility. They said it gave an incentive to the tenant to work. Without rent there would be no spur to urge you to produce in order to get the means of paying rent. Under a broad definition the amount

of rent is determined by the extent to which the use of the land or

natural agent surpasses in produc-, liveness the poorest natural agent of the same sort. It should never bo' lost sight of that rent is not a payment for land, but only for the use of laud.

During the questions ami discussion following’ the lecture, Mr Ayrton explained that the chief danger to democracy is group action on the part of various industries. The present lendency is for particular sections to endeavour hy organisation to secure special privileges for its own group, regardless of the welfare of the rest of the community. Control of a community hy one or more sections of the community is not democracy, and the genera! we ft; re can he promoted only when every section respects the genera! good of the community as well as its own.