J. Boyd Kinnear.
WHAT IS RENT?
T HE public mind of the country is at the present hour largely occupied with thinking about rent. The severe agricultural depression has generated painful effects on the feelings and the fortunes of the people of England. The various classes who are connected with the cultivation of land are visited with much suffering, and we cannot be surprised if they are found discussing whether their relations towards each other, as well as the system of agriculture prevailing in these islands, are precisely what they ought to be. The various methods of dealing with the land and the population that devote themselves to its tillage, have been the subjects of keen debate for ages: failing harvests, low prices, and heavy losses, are well suited to impart energy and even violence to such discussions. In some portions of the kingdom, even agricultural revolution has made its appearance on the scene. The law itself is openly and avowedly defied. The debtor, it is decreed, shall determine at his own pleasure how much he shall pay of the debt to which he is pledged. If the owner of the property let on hire repels such an adjudication of his rights, he is plainly warned that they shall be swept away altogether, and the insolvent debtor be made the owner of what he borrowed. The very structure of society itself is imperilled. "To refuse to pay debt violently," it has been well said, "is to steal, and to permit stealing, is not only to dissolve, but to demoralize society: accumulation of property, and civilization itself would become impossible."
Amidst such agitated passions it was inevitable that rent should speedily come to the front. Those who had contracted to pay rent, in the expectation that the produce of their labour would enable them to redeem their pledge, had been plunged into losses, more or less severe, by the badness of the seasons; their means were reduced; to pay was inconvenient; and it was a simpler method to take the matter into their own hands, and rather than appeal to the feelings of their landlords for a considerate diminution of their rents, to call rent itself into judgment, and to suppress it altogether. When, then, matters have reached the pass that an anti-rent agitation, based on the confiscation of property and the repudiation of contracts, has sprung up, and is swiftly spreading among an excitable people, it becomes important, in the highest degree, that the true nature of rent should be clearly understood by the whole country. Whatever may be ultimately decided about rent, let every man first know accurately what it is. To advocate a system of agriculture which shall abolish the possession of land by a class who are owners and not cultivators of the soil, and thus extinguish the charge for the loan of it to farmers, is perfectly legitimate. Let the merits and demerits of such a tenure be freely investigated; let peasant-proprietorship be counter-examined over against it; but let the conviction be brought home to every mind that no just or intelligent conclusion can be reached, unless every element of the problem has been fully and honestly weighed. A reduction of rents may very possibly be called for by necessity and by reason; but to place the position itself of landlord in an invidious light, as that of a man who exacts from the labour of others that for which he has neither toiled nor spun, is a most unwarrantable process of argumentation, and can lead to no trustworthy result in a matter of such transcendant importance to the nation.
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]
If Ricardo and Mill had contented themselves with laying down what the amount of rent was, governed by the quality of the soil's fertility and by the forces which they feebly recognised by the word situation, no harm would have been done. They would have given a tolerably fair description of the causes on which the magnitude of rent depends. It would not indeed have explained what rent is, but it would have expressed truths with which the common agricultural mind was familiar, and they might have retained the command of agricultural ears. But scientific ambition would not be satisfied with so simple and unpretending a statement. It was resolved that the explanation of rent should take the shape of a scientific doctrine; and with this object it invented an addition to it of whose scientific character there could be no doubt. "It converted the land," in the words of Mr. Mill, "which yields least return to the labour and capital employed on it, and gives only the ordinary profit of capital, without leaving anything for rent, into a standard for estimating the amount of rent which will be yielded by all other land. Any land yields as much more than the ordinary profits of stock, as it yields more than what is returned by the worst land in cultivation." This worst land, which had no rent to give, was erected into a standard which should measure rents as accurately as a yard measures distances, and a pound avoirdupois weights. Most useful indeed is the yard which tells us how far it is to Dover, and the lb. weight which informs us how heavy the load of coals is which has reached our door; and delightful truly, would be an instrument which should tell a disputing landlord and tenants, with unerring precision, how much rent exactly each farm was bound to pay. But this "margin of calculation," this land which pays no rent—what landlord or what farmer has ever inquired for it in the calculation of their rents? Has it ever occurred to the thoughts, or passed the lips, of a single practical agriculturist, in these days of excitement, and anger, and unceasing declamations in the press and tribune on rent? And if it had been found, what possible help could it have brought to a single agriculturist? Such land could be no measure to measure by. A measure must either be a given portion of the thing measured, as a yard of length, or else be an effect of a given force, as the height of the barometer of the pressure of the atmosphere. A piece of land which yields no rent cannot measure one that does, because the non-payment of rent is not the effect of a single force but of many diverse ones. A particular farm may pay no rent because it is isolated by want of roads, or is in a lonely spot, or is far off from manures, or is burdened with excess of taxation, as a whole parish in Buckinghamshire which was said to have gone out of cultivation because no man would face the burden of its poor-rates. What facility for calculation could such a parish furnish to a farmer in Middlesex or Lancashire? The selection of such a standard was a purely illogical process; it confounded effect with cause. The forces which determine rent decree that such a farm cannot pay rent, that is an effect; but its paying no rent could be no cause, by the mere fact alone that it did not yield sufficient net profit, why other lands should pay no rent. The margin of calculation was framed at a particular locality, under its own circumstances, but it could say nothing about the circumstances of another farm and their effects.
The moral to be derived from the examination of Ricardo and Mill's theories of rent is clear. The sooner that their margin of cultivation, their standard of the amount of rent, disappears, the better will it be for the interests of society and of Political Economy. It has driven away all agricultural audience from the talk of Political Economy about rent; it is felt to lie altogether outside of the practical world. Let the land which is cultivated without being able to pay rent be inquired into by all means, whenever there is a call for so doing. Let the impeding causes and all their circumstances be explored, but let the inquiry and its results be kept apart from all rent-paying land. The forces which determine that one farm can pay rent and another none are the same for both, either by their presence or their absence; but the two farms have no connection with each other, except as suffering effects from common causes. When this great truth is seen and acknowledged, and when Political Economy has ceased to talk of the non rent-paying land regulating the amount of all rent, the world which it addresses, and for whom it exists, will be won over to listen to its teaching on rent and to think it real.
And now let us face the question, simply, What is rent? It is necessary to distinguish here between two different meanings of the word rent. It is a legal word, connected with the hire of land or forms of real property connected with land, as houses, rooms, and the like. Agricultural rent is different in nature from the rent of rooms. The rents paid for a house or rooms in a large building such as Gresham House have no relation to any particular business carried on in them, much less do they depend on the success of that business. Agricultural rent, on the contrary, is given for the very purpose of engaging in a distinct business, agriculture; and the profits of that business enter largely, in the settlement of rent, into the calculations of the lender and the hirer of the land. It is of agricultural rent exclusively that we are speaking on the present occasion.