'Now, in the exercise of my right of usufruct of a definite plot of ground, I have inseparably connected with this plot something over which I have not merely the right of usufruct, but also the right of property--namely, a house. Consequently my right of usufruct passes over to the person to whom--whether gratuitously or not--I transfer my right of property in the house. Therefore I can sell, or bequeath, or give away my house without being prevented from doing so by the fact that I have no right of property in the building-site.
'But if, through any circumstances independent of my labour or of the building cost, the site on which my house stands acquires a value above that of other building-sites, this increased value belongs not to me, but to those who have given rise to it, and that is, without exception, the community. Let us suppose that building-ground in Eden Vale has acquired such an exceptional value, while there are still sites available throughout Freeland for milliards of persons: this local increase of value can be attributed merely to the fact that the excellent streets, public grounds, splendid monuments, theatres, libraries--in short, the public institutions of Eden Vale--have made living in this town more desirable than in any other place in the country. But these public institutions are not my work--they are the work of the community; and I have no right to put into my pocket the increased ground-value derived from the common enjoyment of these institutions. All that I myself have expended upon the house and garden belongs to me, and on a change of ownership must be either made good to me or put to my credit; but the ground-price--and, indeed, the whole of it--belongs to the commonwealth; for building-sites which offer no advantages over any others are, in view of the still existing surplus of unoccupied ground, valueless. The commonwealth, therefore, has, strictly speaking, a right at any time to claim this value or an equivalent; and if the question were an important one, it would be advisable actually to exercise this right--that is, from time to time, or at least on a change of ownership, to assess the value of the sites of houses and gardens, and to appropriate the surplus of the sale-price to the public treasury.
'In reality, in view of our other arrangements, this question of the value of building-sites in Freeland is of no importance whatever. It must not be forgotten that our private houses are not lodging-houses, but merely family dwellings. As I have already said, every contract to let renders absolutely void the occupier's right of exclusive usufruct of the house-site. He who lets his house has, by the very act of doing so, made his plot masterless. A secret letting is prevented by our general constitution, and particularly by the central bank, which we will visit next. Thus the increased value which may be acquired by a building-plot cannot become a question of importance, and we are able to refrain altogether from interfering with free trade in houses. We buy, sell, bequeath, and give away our dwelling-houses, and no one troubles himself about it. I may remark, in passing, that up to the present there has been no noticeable increase in the prices of sites. A man pays for his house what the house itself is held to be worth, the trifling differences being due to the greater or less taste exhibited in the structure, the greater or less beauty of the garden, &c., &c. But that the Eden Vale plots, for example, as such, have a special value cannot be asserted, as there are still many thousands freely available to anyone, but which are not taken. The conveniences of life are pretty evenly distributed throughout Freeland, and no town can boast of attractions which are not balanced by attractions of other kinds in other towns. Eden Vale, for instance, possesses the most splendid buildings, and is distinguished by incomparable natural beauty; hence it is less adapted to industries, and has no agricultural colony in its neighbourhood. Dana City, on the other hand, which is specially suitable for industry, and is in the midst of agricultural land, is unattractive to many on account of its ceaseless and noisy business activity. And, in general, we Freelanders are not fond of large towns; we love to have woods and meadows as near us as possible, and those who are able to live in the country do it in preference to living in towns. Of course, there is not likely to be any lack of rural building-sites; hence there can never be any ground-price proper among us. If, however, building-ground should acquire a price, we are in any case protected by our way and manner of building and living from such prices as would give rise to any material derangement of our property relations. Whether a family residence has a higher or a lower value is, therefore, after all, only a question of subordinate interest, and it is not worth the trouble, in order to equalise the differences in value which arise, to bring into play an apparatus which, under the circumstances, might lead to chicanery.'
I agreed with him. Wishing, however, to understand this important matter in all its relations, I supposed a case in which the opportunity of gaining an extraordinarily high profit was connected with a certain definite locality, and asked what would happen then. 'Let us imagine that in a small valley surrounded by uninhabitable rocks or marshes, a mine of incalculable value is discovered, the exploitation of which would give twice or thrice as much profit as the average profit in Freeland at that time. Naturally everyone will labour at this mine until the influx of workers produces an equilibrium in the profits. If there were sufficient space round the mine for dwelling-houses, nothing would stand in the way of this equalisation of profits; but as, in the supposed case, the space is limited, only the first comers will be able to work at the mine; all later comers--unless they camp out--will be as effectually excluded from competing as if an insuperable barrier had been raised round the mine. The fortunate usufructuaries of the few building-sites will, therefore, be in the pleasant situation of permanently pocketing twice or thrice the average proceeds of labour--let us say, for example, £1,600 a year, whilst £600 is the average. Consequently their early occupation of the ground will be worth £1,000 a year to them, exactly the same as to a London house-owner the lucky circumstance that his ancestors set up their huts on that particular spot on the banks of the Thames is worth his £1,000 or more a year. That this is the rule and is the principal source of wealth, not only in London, but everywhere outside of Freeland, whilst in this country it would require an extraordinary concurrence of circumstances to produce similar phenomena, makes no difference in the fact itself that it can occur everywhere, and that, if you know of no means to prevent it, the ground-rent you have fortunately got rid of might revive among you. Nay, in this--I will admit extreme--case the Freeland institutions would prove themselves a hindrance to the national exploitation of such a highly profitable opportunity for labour, the most intense utilisation of which would evidently be to the general interest. If such a case occurred in Europe or America, the fortunate owners would surround the mines with large lodging-barracks, from which certainly they would without any trouble derive enormous profits, but which at the same time would make it possible to extract the rich treasures from the earth. Your Freeland house-right, on the contrary, would in such a case prevent the exploitation of the treasure of the earth, merely in order that an exceptional increase of the wealth of individuals should be avoided. And yet it is characteristic of your institutions as a whole to render labour more productive than is possible under an exploiting system of industry. A correct principle, however, must be correct under all circumstances.'
'That is also my view,' answered David; 'but in such cases even your Western law affords a means of help--namely, expropriation. Let it be assumed that we could by no means whatever make the neighbourhood of the mine accommodate a greater number of dwelling-houses; then, in the public interest, we would redeem the houses already existing at the mine, and in their place we would erect large lodging-houses after the pattern of our hotels. If that would not suffice to accommodate as many workers as were required in order to bring the profit of labour at the mine into equilibrium with the average profit of the country, we would proceed to the last resource and expropriate the mine for the benefit of the commonwealth. By no means would even such a very improbable contingency present any serious difficulties to the carrying out of our principles. For you will certainly admit that the undertaking of a really monopolist production by the commonwealth is not contrary to our principles. If you would deny it, you must go farther, and assert that in working the railways, the telegraphs, the post, nay, even in assuming the ultimate control of the community, there is to be found a violation of the principle of individual freedom.'
'You are only too right,' I answered, 'and I cannot defend myself from the charge of harbouring a doubt which would have been seen to be superfluous if I had only been unreservedly willing to admit that the people of Freeland, whatever might happen, would probably make the wisest and not the stupidest provision against such a contingency as I imagined. The ground of that inconceivable stubbornness with which we adherents of the old are apt to resist every new idea is, that we imagine difficulties, which exist only in our fancy, and most unnecessarily suppose that there is no other way of surmounting those imaginary difficulties than the stupidest imaginable. We then triumphantly believe we have reduced the new ideas ad absurdum; whilst we should have done better to have been ashamed of our own absurdities.'
With this fierce self-accusation I will close my letter to-day; but not without telling you in confidence that in making it I was thinking less of myself than of--others.
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CHAPTER XVIII
Eden Vale: Aug. 6, ----