The "natural" capabilities of land are thus increased, and, indeed, even called into existence, by the mere development of society. But, further, every foot of agricultural and mining land in England has been improved as an instrument of production by the exercise of human labor.

First, of human labor not on that land itself; by the improvement of the general climate, through clearing of forest and draining of marsh; by the making of canals, roads, railways, rendering every part of the country accessible; by the growth of villages and towns; by the improvement of agricultural science; and still more by the development of manufactures and foreign commerce. Of all this human labor, no man can say which part has made the value of his land, and none can prove his title to monopolize the value it has made. Secondly, all our land has been improved by labor bestowed especially upon it. Indeed, the land itself, as an instrument of production, may be quite as truly said to be the work of man as the gift of Nature. Every farm or garden, every mine or quarry, is saturated with the effects of human labor. Capital is everywhere infused into and intermixed with land. Who distinguishes from the mine the plant by which it exists? Who distinguishes from the farm the lanes, the hedges, the gates, the drains, the buildings, the farm-house? Certainly not the English man of business, be he landlord, farmer, auctioneer, or income tax commissioner. Only the bold bad economist attempts it, and, we must add, some few amongst our allies, the Land Nationalizers. It may be worth while to digress for a while in the company of these latter.

A Word to "Land Nationalizers."

The arguments revived in our generation by John Stuart Mill and Henry George, and the activity of the various societies that have taken in hand the work of diffusing them, have now converted an immense body of public opinion to the Socialist view of the justice of, and urgent necessity for, Nationalization of the Land; or, at least, the absorption, by the State or Municipality, of ground rents, mining royalties, and similar unearned profits from the soil. Land Nationalizers go, generally, so far with Socialists that (in the words of the Fabian "Basis") they "work for the extinction of private property in land, and of the consequent individual appropriation, in the form of rent, of the price paid for permission to use the earth, as well as for the advantages of superior soils and sites."

But some, who are thus far Land Nationalizers, still shrink from any interference with the legal powers enjoyed by the holders of capital. Hence a most unfortunate separation exists between them and the Socialists, whose design of nationalizing the industrial capital with the land appears to them unjustifiable and unessential.

Capitalist and Landlord in One Boat.

They use the argument that capital, unlike land, is created by labor, and is therefore a proper subject of private ownership, while land is not. Socialists do not overlook the facts on which this

argument rests, but they deny, on the grounds already partly stated, that any distinction can be founded on them sufficiently clear and important to justify the conclusion drawn. But, supposing we assume it true that land is not the product of labor, and that capital is; it is not by any means true that the rent of land is not the product of labor, and that the interest on capital is. Nor is it true, as Land Nationalizers frequently seem to assume, that capital necessarily becomes the property of those whose labor produces it; whereas land is undeniably in many cases owned by persons who have got it in exchange for capital, which may, according to our premisses, have been produced by their own labor. Now since private ownership, whether of land or capital, simply means the right to draw and dispose of a revenue from the property, why should the landowner be forbidden to do that which is allowed to the capitalist, in a society in which land and capital are commercially equivalent? Virgin soil, without labor upon or about it, can yield no revenue, and all capital has been produced by labor working on land. The landlord receives the revenue which labor produces on his land in the form of food, clothing, books, pictures, yachts, racehorses, and command of industrial capital, in whatever proportions he thinks best. The ownership of land enables the landlord to take capital for nothing from the laborers as fast as their labor creates it, exactly as it enables him to squander idly other portions of its product in the manner that so scandalizes the Land Nationalizers. When his tenants improve their holdings by their own labor, the landlord, on the expiration of the lease, remorselessly appropriates the capital so created, by raising the rent. In the case of poor tenants holding farms from year to year in Ireland, the incessant stealing of capital by this method so outraged the moral sense of the community, that the legislature interfered to prevent it long before land nationalization was commonly talked of in this country. Yet Land Nationalizers seem to be prepared to treat as sacred the landlords' claim to private property in capital acquired by thefts of this kind, although they will not hear of their claim to property in land. Capital serves as an instrument for robbing in a precisely identical manner. In England industrial capital is mainly created by wage workers-who get nothing for it but permission to create in addition enough subsistence to keep each other alive in a poor way. Its immediate appropriation by idle proprietors and shareholders, whose economic relation to the workers is exactly the same in principle as that of the landlords, goes on every day under our eyes. The landlord compels the worker to convert his land into a railway, his fen into a drained level, his barren sea-side waste into a fashionable watering place, his mountain into a tunnel, his manor park into a suburb full of houses let on repairing leases; and lo! he has escaped the Land Nationalizers: his land is now become capital, and is sacred.

The position is so glaringly absurd, and the proposed attempt to discriminate between the capital value and the land value of estates

* See, for instance, the Irish Land Acts of 1870 and 1881.

is so futile, that it seems almost certain that the Land Nationalizers will go as far as the Socialists, as soon as they understand that the Socialists admit that labor has contributed to capital, and that labor gives some claim to ownership. The Socialists, however, must contend that only an insignificant part of our capital is now in the hands of those by whom the labor has been performed, or even of their descendants. How it was taken from them, none should know better than the Land Nationalizers.

It is scarcely necessary to enlarge on or illustrate the obvious truth that, whatever the origin of land and capital, the source of the revenues drawn from them is contemporary labor. The remainder of this Tract may still further impress the impossibility of maintaining any hard and fast lines between them, either as regards their characteristics and importance in developed societies, or the defensibility of their private ownership or the arguments for their nationalization.

"Capital."

To return from our digression. When we consider what is usually called capital, we are as much at a loss to disentangle it from land as we are to find land which does not partake of the attributes of capital.

For though capital is commonly defined as wealth produced by human labor, and destined, not for the immediate satisfaction of human wants, but for transformation into, or production of, the means of such satisfaction in the future; yet railways, docks, canals, mines, etc., which are classed among the instruments of production as capital, are really only somewhat elaborate modifications of land. The buildings and the plant with which they are worked are further removed from the form of land, but we lump the lot as capital. All farming improvements, all industrial buildings, all shops, all machinery, raw material, live and dead stock of every kind, are called capital. And just as there is a purely social element in the value of land, so are there purely social elements in the value of capital; and its value, in all its forms, depends upon its accessibility and fitness here and now, and not on the labor it has cost. The New River Company's Water Shares had their enormous value, not because Sir Hugh Myddelton's venture was costly, but because London had become great. The usefulness of fixed and unchangeable forms of capital increases and decreases through external causes, just as does that of land. If instruments of production must be classified, the best division of them is into immovables and movables, the annual value of buildings, railways, mines, quarries, waterworks, gasworks, durable fixed machinery, and many other forms of so-called capital, manifestly agreeing with that of land in fluctuating according to causes of which the effects are generalized in the "Law of Rent" of abstract economics.

Besides industrial capital, there is a considerable amount of what has been conveniently called "consumers' capital." Dwelling-houses, and all their domestic machinery and conveniences are as necessary for production as land and factories; for though the worker uses them in his character of consumer, they are necessary to maintain

him in efficiency for his work. All private stores of food and clothing, all forms of personal property, may likewise be classed as consumers' capital. It will, however, be evident that, in classing these as capital, the signification of that name is becoming very vague and indefinite.

Finally, we have such purely non-material and social kinds of capital as banking and credit organizations, inventions, and other devices for extending and intensifying our power over Nature; social forces of immense importance for the carrying on of wealth production, largely capable of social ownership, not entirely capable of private monopoly, but at present appropriated by some individuals more than by others.

What is the Estimated Value of our National Stock of the above-named form of Wealth?

In December, 1889, Sir Robert Giffen attempted to compute the capital value of realized property in the United Kingdom as it was in the year 1885.* The following table is reproduced from that furnished by him, the figures being corrected according to the official Returns of Income Tax Assessments for 1905-6.† The estimate of the value of the capital is arrived at by taking what Sir R. Giffen considered a suitable number of years' purchase of the income :

(For notes and explanations as to this table, see next page.)

* See The Growth of Capital, by Robert Giffen (London, Bell and Sons, 1889). Also Essays in Finance, 2 vols., by the same author.

Fiftieth Report of the Commissioners of Inland Revenue [Cd.—3686], price 2s. The amount stated as annual farmers' profits appears to be excessive, as Sir R. Giffen overlooked the fact that the Income Tax Acts assume the net profits of agriculture (in England) to be equal to one-third the rent, not the whole as here given.

"Land" and "Capital" Indistinguishable.

It may be noticed that there is no attempt in this table to distinguish between what Land Nationalizers might think should be classed as land, and what they would admit to be capital. The common sense of the ordinary business man and statistician recognizes that such distinction is impracticable and arbitrary. To the business The number of years' purchase of rural land may also be regarded as too high. On the other hand, that of urban properties is much understated. But these considerations do not materially affect the aggregate total, and Sir R. Giffen's basis has therefore been throughout maintained.

This includes 13,821 income assessed under Schedule D.

Of these totals, which make up the "industrial capital" of the country, amounting to £3.752,541,930, at least £3,290,275,00r is under joint stock management, £2,003,392,001 being the paid-up capital of the 40,995 registered companies carrying on business in April, 1906, and 1,286,883,000 being the paid-up capital of the railways in the United Kingdom at the end of 1906. See the Annual Statistical Abstract, fifty-fourth number, C-3691 (1907); price is. 7d. To this must be added the capital administered by chartered banks and trading companies not registered under the Companies Acts.

These amounts being conjectural only, are reproduced from Sir R. Giffen's estimate in 1885, with small additions, amounting in all to £155,000,000 on the capital value. Owing to a re-arrangement of the Income Tax Returns, the total works out at less than on the method previously in use. It is now probably a considerable understatement. If we compare this total for 1905-6 with those of previous years we find the total estimated by Sir R. Giffen in 1865 was £6,114,063,000; in 1875 £8,548,120,000; and in 1885 10,079,579,000. In a paper read to the British Association in Septem ber, 1903, and published in the Journal of the Royal Statistical Society, Vol. LXVI.,