The Power In The Land. Fred Harrison

²⁹ Adam Smith thus established an intellectual tradition of opposition to the special taxation of rent that can be traced through the 19th century classical economists beginning with David Ricardo³⁰ and on to Herbert Spencer.³¹ They all had a crystal-clear appreciation of the theory of economic rent, and they understood the macro-economic impact of land monopoly, but they were ultimately unwilling to advocate a fully-fledged fiscal policy designed to destroy the greatest of the monopolies that undermined the operations of the capitalist system.

This tradition was embodied in the British institutions which were subsequently replicated in the colonies right around the world. While the land monopolists could employ anti-social strikes with impunity, withholding land from those who needed to use it, the story was different for the men and women who worked in the factories. When they went on strike, they were severely attacked by the might of the State. A Manchester magistrate condemned ‘This species of restraint or coercion’, for it might ‘be ultimately a great evil as nothing can be more clear than that commerce in every respect should be allowed to be entirely unshakled and free’.³² Free men in a fair society would have no reason to go on strike, which is an act of desperation; they would have no reason to shackle commerce, for in doing so they cause themselves hardship. But strikes were the name of the game: the rules were originally established by the land monopolists — didn’t they withdraw their acres from production when it suited them ? These rules had been sanctified by Adam Smith. So working people were forced to use the system of withdrawing their labour as the only counter to the unequal power of the landowner and the capitalist. Thus was born a system grounded on the principles of deprivation and conflict.

      Notes

1 Smith offered us ‘a theoretical perfect machine — the mechanical operation of an economic stabilizer’, according to A. L. MacFie, The Individual in Society, London: George Allen & Unwin, 1967, p. 104.

2 C. P. Kindleberger, ‘The Historical Background: Adam Smith and the Industrial Revolution’, in The Market and the State, eds.: T. Wilson and A. S. Skinner, Oxford: Clarendon Press, 1976; and R. Koebner, ‘Adam Smith and the Industrial Revolution’, Econ. Hist. Rev., 2nd Series, Vol. XI, 1959.

3 A. Smith, The Theory of Moral Sentiments, 1759; page references are to the edition published by Liberty Classics, Indianapolis, 1969.

4 Ibid., p. 304.

5 Ibid., italics added.

6 Ibid., pp. 304-305.

7 Ibid., p.297.

8 Page references are to the Edwin Cannan edition published by The University of Chicago Press, Chicago, 1976.

9 Ibid., p.275.

10 Ibid. Smith appears to contradict himself on this point on p. 335; but this later reference contains no supporting argument, whereas his earlier conclusion — which we accept as the correct one — is fully elaborated. John Stuart Mill arrived at the same conclusion on the distribution of national income in favour of the landlords: see his Principles of Political Economy, Bk V, Ch. 2, sec. 5.

11 A. W. Coats, ‘Changing attitudes to labour in the mid-eighteenth century’, Econ. Hist. Rev., Vol. XI, 1958/9.

12 See The Theory of Moral Sentiments, and T. Wilson, ‘Sympathy and Self-Interest’, in Wilson and Skinner, op. cit.

13 The Theory of Moral Sentiments, op. cit., p. 162.

14 E. H. Phelps Brown, ‘The Labour Market’, in Wilson and Skinner, op. cit.

15 The Wealth of Nations, op. cit., pp. 162, 370.

16 Ibid., pp.276-277.

17 Ibid., p. 56. Our emphases.

18 Ibid., pp. 74-75.

19 There is one partial exception to this. Where people have borrowed money to speculate in land, the cost of servicing loans during a recession causes some of them to sell at a loss. But the overall effect is the same, for the new owners, buying at attractive prices, then proceed to sit on the land until they reap the speculative profits which were being sought by the previous owners.

20 Op. cit., pp. 370-371.

21 Ibid., p.370.

22 Ibid., p.372.

23 A survey in Liverpool in 1773 revealed that 412 of the 6,340 houses were empty, which could not have been the result of a surplus stock : there were 8,000 families resident in the city, which meant that about 2,000 families had to share their homes with others. Rents were calculated to be high — ‘very few can be supposed to let under £5’, according to J. Aiken, A Description of the Country from Thirty to Forty Miles round Manchester, London, 1795, pp. 343, 374.

24 Op. cit., p. 350.

25 ‘The landlord will allow nobody else to work them without paying some rent, and nobody can afford to pay any.’ Ibid., p. 184.

26 Ibid., p.252.

27 Ibid., p.253.

28 Ibid., p.73.

29 Mingay comments on this period: ‘Prudence was the counsel that prevailed... in fiscal matters. The protection of property was the overriding consideration, and no-one knew where economical reform