Unemployment – Idle Men, Unfulfilled Wants

The relation between land and unemployment in a nutshell

The economic process is in essence extremely simple. Man (Labour) fashions natural resources (Land) in to useful commodities (Wealth). Some Wealth is consumed directly, but some consists of items such as tools and machinery which are returned to the productive process to help create further Wealth. This is called Capital. The three factors of production are thus Land, Labour, and Capital.

Men are idle, earnestly wanting work, eager to provide their labour. Capital too lies idle, deteriorating by the day. Its owners would love to put it to use. If more capital goods were required, the out-of-work would gladly make them.

So far as Labour and Capital are concerned, then, there need be no difficulty over supply. Where, though, is the demand? Demand comes from previous production. A man makes an article and exchanges it for other articles (doubtless using money in the process, as a Wealth token). If people cannot supply, they cannot effectively demand. If people could work, they would create their own demand for others to work. So, what prevents people from working?

Of course the problem is complex in its manifestations, and capable of endless dissection and extrusion. The fact that it exists throughout the globe, and appears in diverse political systems, cultures, and economies, all the way from the primitive rural to the highly developed urban, suggests that there is a fundamental, underlying cause.

Because the problem does not lie with either Labour or Capital, it must lie with Land. That this is so, is clear from the history of the United States, where unemployment was unknown so long as there was free land beyond the frontier (in times when “Go West, Young Man!” meant there was opportunity to settle there and to produce). To-day, by contrast, in those countries where a small number of landowners controls most of the land and almost all of the best land, a large class of landless rural poor lives at starvation level without hope of ameliorating its conditions, whilst in thronged, filthy cities, men survive as beggars or thieves and sell their children into prostitution.

In advanced, industrialised countries, there are beggars, thieves, and prostitutes too, but expensive welfare schemes manage to keep most of the unemployed in discreet discontent. Yet while men’s skills atrophy and machines decay from lack of use and attention, Land stands quite happily unused or under-used, its ability to command Rent impaired not one whit. Landowners, especially in the cities and suburbs, are waiting for the economy to perk up.

In any town can be seen valuable central locations unused, buildings boarded up, office blocks empty. What would happen if site rents had to be paid to the national exchequer through the application of Land Value Taxation? Landowners would be obliged to put their land to use, to generate the income to meet the Land Value Tax. Down would come property prices. Larger businesses would fill the prime sites. Little start-up businesses would then find decent accommodation on the more marginal sites at affordable prices; their overheads would not have to include artificial scarcity value or future “hope” (speculative) value; and their returns on investment and effort would carry substantially less tax as Land Value Tax replaced existing methods of meeting government expenditure.

As soon as men have access to land, the economy will be stimulated and real job opportunities will arise without the need for further intervention.