argues that “there is always some agricultural capital which pays no rent,”54 not noticing the
counter-argument that there is a portion of land which pays no interest.55 These imperfections
belong now, it may be hoped, to past history. And yet that the description of rent as not entering into
price is apt to prove misleading may be inferred from the many protests which eminent critics eve
raised against Professor Marshall's use of the time-honoured phrase.56 Their criticisms attest the
correctness of their own views rather than their capacity of appreciating the views of others. What
should we say of critics who should think fit to read Mill a lecture on the errors of the Mercantile
system, because Mill had employed the terms “favourable and unfavourable” exchanges! To have
attributed to Professor Marshall the very error which he by his doctrine of the “Margin-of-building”
has done more than any other economist to obviate would be unpardonable if it were not excused
by the misleading associations of an unfortunate phrase.
To return to the real, from the seeming, import of the phrase, we see that, as the offer of land
is in general attended with no real cost, a tax upon the payment for land does not disturb
production.57 On grounds of distribution, too, a sort of income which increases without any effort
on the part of the recipient is prima facie a suitable object for a specially heavy impost. On these
grounds Mill's proposal to tax away the future unearned increment of rent is defensible, if
accompanied with Mill's proviso, that existing interests should not be disturbed. For, as argued
elsewhere, a special tax on existing incomes from land would violate the two principal conditions
of a good tax: it would both tend to diminish the amount of production, and also to impair the
equality in the distribution of burdens between the owners of incomes derived from land and from
other kinds of property.
The practical importance of Mill's proposal is greatly reduced by the proviso with which it
is accompanied. For, in order that the State may make a good bargain by giving the market price for
a certain class of future goods, the State must be able to look further ahead—must exercise the
telescopic faculty of prospectiveness in a higher degree—than the ordinary capitalist. And it may
well be doubted whether this condition is fulfilled by the politicians who act on behalf of the State.
We hear much of instances, like that of Chicago, where the value of sites is said to have multiplied
54. Political Economy, Book II. chap. xvi. §4.
55 As noticed by Professor J. B. Clark and others mentioned by Professor Fetter in the
Quarterly Journal of Economics, Vol. XV, not to p. 436.
56. See in particular Hobson's Economics of Distribution, chap. iv, Fetter, “The Passing of the Old
Rent Concept,” v and vii, (3), Quarterly Journal of Economics, Vol. XV, (1901); J.B. Clark,
Political Science Quarterly, March, 1891; Wicksteed, Laws of Distribution, p. 47 (the last critic not
referring nominatim to Professor Marshall). For a more sympathetic criticism ofProfessor Marshall's
doctrine see Economic Journal, Vol. V. p. 589.
57. As Professor Carver said lately (at the banquet of the Massachusetts Single Tax League, 1902),
a person who thinks that the repressive effect of a tax on land is at all comparable with the repressive
effect of a tax on the products of industry must have an eye for exceptions like “a certain senator of
whom it was said that he could see a fly on a barn-door without being able to see the barn or the door
either.” The incident in question may be elucidated by representing the “supply curve” of land as a
perpendicular line. Cp. II. 69.