rent, and wages and interest remain as before. If the value of land increases in greater ratio than productive power, rent will swallow up even more than the increase; and, while the produce of labor and capital will be much larger, wages and interest will fall. It is only when the value of land fails to increase as rapidly as productive power that wages and interest can increase with the increase in productive power."
The conclusion reached by Mr. George as to the laws which govern the distribution of wealth may now be stated in such form as to show their relation to each other, and to contrast them with the laws as taught by current economics. According to Mr. George—
"Rent depends on the margin of cultivation, rising as it falls, and falling as it rises.
"Wages depend on the margin of cultivation, falling as it falls, and rising as it rises.
"Interest (its ratio with wages being fixed by the net power of increase which attaches to capital) depends on the margin of cultivation, falling as it falls, and rising as it rises."
As taught by the economists, rent is the same.
"Wages depend upon the ratio between the number of laborers and the amount of capital devoted to their employment.
"Interest depends upon the equation between the supply of and demand for capital; or, as is stated of profits, upon wages (or the cost of labor) rising as wages fall, and falling as wages rise." The wide difference between the two sets of laws thus contrasted is evident. In the laws as generally taught there is no mutual relation by which they are all bound in a single whole. As stated by Mr. George, on the contrary, they all correlate with each other, and form a complete whole.
The conclusions embodied in these laws are: That, where land is free, labor when unassisted by capital will take the whole produce; that where it is assisted by capital it will take the whole, less the amount necessary to induce the storing up of labor as capital; where part of the land is appropriated, labor and capital will receive what is left of the produce after the deduction of rent, or what they could have produced on land free to them; when all land is appropriated, the return to labor and capital can be forced to the limit on which these factors will consent to reproduce. This being the relation between the three factors in production, it remains only to see the manner in which increase in population and improvement of the arts affect rent, to understand the full effect of the force that presses so continuously upon industry.
While Mr. George allows the effect that increasing population would have in increasing rent by lowering the margin of cultivation, he yet thinks that this is not the main way in which it affects rent. As population increases in any community, certain land—land at the center of trade and production—acquires new powers, an increased
