Page:The Economic Journal Volume 1.djvu/163

 Rh employers and workmen. The very conception of value, as Sir Louis Mallet points out, and as Karl Marx was compelled to recognise, implies the action and influence of society.

The distinction between what is earned and what is unearned would, indeed, seem on theoretical grounds to be more easily established in the case of land than of other forms of wealth, and in the case of urban rather than agricultural land. But even here the evidence given by surveyors before the Town Holdings Committee on the possibility of distinguishing between the value of a house and of the land on which it is built was conflicting, and even here landlords may have developed and improved building sites by expenditure and efforts of their own. Even here fashion may shift the abode of the rich and alter the demand for land; and one quarter of a town may grow at the expense of another, or an entire town decay owing to the removal of an industry to another. As a whole, no doubt, urban rent tends to increase in civilised countries, and sometimes by rapid strides; and municipal owners of building property benefit by this growth. But the increment may in particular cases become a decrement, and the difficulty of determining how much of this increase is earned by the municipality as an improving landlord, and how much is due to it as a social factor, still remains. Where, indeed, a public authority executes a definite improvement, which seems certain to result in definite benefit to definite property, the argument for charging a proportion of the cost on the owners of such property is very strong, and the reason lies in the possibility of defining, with tolerable precision, the 'unearned' increment which will accrue. There may be practical difficulties in determining the exact extent of the property which will be benefited and the precise degree of benefit. But there are important theoretical respects in which these proposals for applying the principle of 'betterment' differ from the case of the unearned increment generally. There is ex hypothesi no question as to an increment and not a decrement resulting. The improvement is an improvement which must add to the value of property. It may injure other property by diverting traffic or in some other way, and it might seem as if compensation were thus due for an unearned decrement. But, if the alternative lies between charging a proportion of the cost on the 'bettered' property, and meeting it entirely from the general rates, the former course is manifestly for the interest of the 'worsened' property, and to this extent it receives compensation. The definiteness of the improvement is so far ascertainable that the cost