Bernard Shaw's Remarkable Religion: A Faith That Fits the Facts

162 Bernard Shaw’s Remarkable Religion
which the two curves cross represents a given level of production and supply
that is unstable. Price exceeds cost of production, so more (presumably
less productive) land is cultivated. At these new sites, costs are higher, but
because more goods are produced, the price goes down. When costs and
price begin to meet, new production ceases. One never moves to the right
of the crossing point as costs would exceed price and new producers would
be operating at a loss.
Of course, not all farmers have poor land, but the Law of Indifference
ensures that they all get the same price. Let us say that grain is selling for
a dollar a bushel. That bushel costs Farmer A (the first to arrive) twenty
cents to produce; it costs Farmer Z (the last to arrive) ninety-five cents.
Farmer A makes seventy-five cents a bushel more than Farmer Z. He
works no harder, is no more virtuous or talented, but he makes more all the
same. In fact, he need not work at all. If the population is increasing, the
newcomers will be occupying even less productive land, so he can make
them an offer they will not refuse: “Work my land,” he will say, “and I will
give you six cents a bushel for all you produce.” That is slightly more than
he could make on his own, marginally productive land. So whether Farmer
A farms his own land or gets someone else to do it for him, the difference
between the cost of his production (including subsistence for whoever does
the work) and the price determined by the margin of production (at
Farmer Z’s place) is called Rent. It is essentially something for nothing:
unearned income.
Please observe what happens next. Farmer A can not only live better
than Z, he can afford to “invest.” Anticipating an increase in population
and a consequent demand for land, he buys up as much of that land no one
now wants as he can. When the predicted population boost happens, not
only does the demand for grain increase, but so does demand for land. Thus
is the saying of the Gospels fulfilled: “For he that hath, to him shall be
given: and he that hath not, from him shall be taken even that which he
hath.” Limited resources are a boon to those who own them, whether land
or capital, and the hungrier the propertyless are, the richer the fortunate
become. So wealth tends to gravitate to the already wealthy. Perhaps it is
clear now why the capitalists always claim to believe that there are no
limits to growth—even of population. As people become hungrier, wages
go down and rents go up. To the rentiers and their apologists, that is the
definition of Paradise.
Rent, in short, is the economic advantage that accrues to an individual
merely by virtue of owning valuable resources. That applies to talent as