Page:The Economic Journal Volume 1.djvu/144

124 of rent there can be no question. Just as the more comprehensive form of socialism, which aims at the 'nationalisation' of capital, purports to be based on Ricardo's theory of value, so the proposal for the 'nationalisation of land' is avowedly put forward as a practical deduction from Ricardo's theory of rent. In the one case, as in the other, the theory may be unduly strained or perversely misinterpreted, and the details of the practical schemes founded upon it may differ in particular cases. But these different schemes are characterised by the common element of the conception of an 'unearned increment' attaching to the ownership of land, and that conception is regarded as a corollary of the theory of rent.

Perhaps, however, the chief form of landed property, against which the criticisms and proposals of writers and speakers have been more recently directed, is that found in urban districts. Although, by a coincidence, which might be quoted as a fresh illustration of the 'irony of fate,' the popularity of Mr. George's book has been simultaneous with the occurrence of a serious and prolonged depression in the agriculture of the old world, which has rendered the landed classes, generally so-called, a specially distressed rather than a prosperous section of the community, yet the increasing tendency of the inhabitants of old and new countries alike to gather together in towns has resulted in a marked rise of urban rent. Such questions as 'leasehold enfranchisement,' the 'taxation of ground rents,' and the application of the principle of 'betterment,' show that the attention of the Legislature, like the criticisms of socialistic and other writers, may be directed more persistently in the future to the consideration of urban than agricultural land.

But, while the action of legislators and the proposals of reformers have been thus busy on matters connected with the theory of rent, economic students have been actively engaged in the examination of that theory, and it has certainly participated as largely as any other theory in recent extensions and improvements of economic knowledge. It will be the aim of the present article to consider some aspects of the relations borne by this theoretical criticism to discussions on matters of practice, without venturing further than may prove to be inevitable on controversial ground.

The economic theory of rent is generally known as the Ricardian theory. It is true that Ricardo himself stated in the preface to his Principles of Political Economy and Taxation that the theory might be found in the pages of other writers. 'In 1815,' he wrote, 'Mr. Malthus in his Inquiry into the Nature and