Henry George, answered from the texts and cited to the page.
Yes, it is rent, and the proof lies in the laws of distribution themselves. Wages and interest do not advance with material progress because rent does advance, and the one fact explains the other.1 Once you see that the three laws of distribution support one another, you no longer need to blame capital or the number of mouths. Take the numbers of men first.
Increase of population does more than push cultivation down to poorer soils; it localizes the economies and powers that come with numbers, and so raises the share of the produce taken in rent while lowering what goes as wages and interest.1 But strike out population altogether and the result stands. Improvement in the methods of production tends the same way, and with land held as private property it would produce, in a stationary population, every effect the Malthusian attributes to pressure of numbers.1
A labor-saving invention sets labor free; if the land that lies between the old margin and the new cannot employ all of it, the margin is carried lower still, and rent gains more than the whole increase in product, so that wages and interest are actually less than before the improvement.2 Nor can any limit be set to this short of the whole produce.
Carry invention to perfection, so that nature yields everything without labor, and the margin runs out to zero: wages nothing, interest nothing, rent everything, and every man not a landowner living by the bounty or the whim of those who are.2 There is a further cause, and it is the one that makes poverty a disease of progress and not merely a lag behind it.
In a rapidly advancing community the steady rise of rent breeds the confident expectation of more, and that expectation leads men to hold land for a higher price than it would then bring.3 It works as a combination among landholders would, withholding land from use and forcing the margin of cultivation farther down than the necessities of production require.3
Suppose the power of production grows so that the same result can be had with a tenth less labor; if holders demand higher terms on the better land and sit on it until they are met, the margin falls to 17 or lower, and labor, though more efficient, gets less than before, while rent increases in a greater ratio than the productive power.4 This is the force that brings to new countries, long before their time, the social diseases of old ones, producing tramps on virgin acres and paupers on half-tilled soil.4
Speculation is also the cause of the depressions. Land values, carried by anticipation beyond the point at which labor and capital would receive their accustomed returns, check production at some points, and the stoppage passes through the interlacings of industry and commerce until the whole network is partly disjointed.5 Labor and capital resist the crowding down of wages and interest, and they must, for there is a minimum below which labor cannot live nor capital be maintained.5
The depression runs until the speculative advance in rent has been lost, or until growth in the efficiency of labor lets the normal rent line overtake the speculative one, or until labor and capital grow reconciled to smaller returns; most likely all three work together. Then production resumes, rent begins to climb again, speculation follows, and the round is gone over once more.5
The conclusion is that, land being private property, the necessary result of material progress is to force laborers to wages that give but a bare living, no matter how much population increases.1 Having traced the cause, I asked whether any milder remedy might serve, and examined every measure then advocated for the laboring masses. The inquiry confirmed the first: nothing short of making land common property can permanently relieve poverty.1
Wages are not drawn from a fund of capital; they are produced by the labor for which they are paid. Population does not outrun subsistence; more men produce more. The laws of distribution explain the enigma: rent is set by the margin of production, and every advance, of numbers or of the arts, raises rent, so that wages and interest gain nothing however productive labor becomes.67
The expectation of rising land values holds land out of use, and when speculation outruns production, industry stops: that is the cause of the depressions. Progress and poverty are bound together by the private ownership of rent.8
the fact that with material progress rent everywhere advances is seen to explain the fact that wages and interest do not advance.Progress and Poverty, Memorial ed
without any increase in population, the progress of invention constantly tends to give a larger proportion of the produce to the owners of land, and a smaller and smaller proportion to labor and capital.Progress and Poverty, Memorial ed
the confident expectation of future enhancement of land values... leads to speculation, or the holding of land for a higher price than it would then otherwise bring.Progress and Poverty, Memorial ed
It is the force, evolved by material progress, which tends constantly to increase rent in a greater ratio than progress increases production... produces 'tramps' on virgin acres, and breeds paupers on half-tilled soil.Progress and Poverty, Memorial ed
from the fact of speculation in land, we may infer all the phenomena which mark these recurring seasons of industrial depression.Progress and Poverty, Memorial ed
A similar but independent investigation of the law of wages yields similar harmonious results. Thus the three laws of distribution are brought into mutual support and harmony, and the fact that with material progress rent everywhere advances is seen to explain the fact that wages and interest do not advance.Progress and Poverty, Memorial ed
Now, it is not only natural that labor and capital should resist the crowding down of wages and interest by the speculative advance of rent, but they are driven to this in self-defense, inasmuch as there is a minimum of return below which labor cannot exist nor capital be maintained.Progress and Poverty, Memorial ed
Here the inquiry meets a doctrine which is the foundation and center of most important economic theories, and which has powerfully influenced thought in all directions—the Malthusian doctrine, that population tends to increase faster than subsistence. Examination, however, shows that this doctrine has no real support either in fact or in analogy, and that when brought to a decisive test it is utterly disproved.Progress and Poverty, Memorial ed
The economic core of Progress and Poverty, rejected in large part by the professional economists who rose after it and defended in part by its modern heirs.