Winston Churchill



Speech made to the House of Commons on May 4, 1909

Speech by Churchill
Having, hopefully, desensitized you to the word "monopoly," you're now ready for Churchill. Although not held in especially high regard by libertarians, he certainly had a healthy appreciation of the free market (see his statements below about doctors, lawyers, and free competition). And, the very first sentence quoted below demonstrates his respect for capitalism and scorn for socialism. In this speech, he gives some of the clearest illustrations of the evils attending the treatment of land as an ordinary commodity. This, alone, qualifies him, in my mind, as a true-blue freedom fighter. It's a veritable tutorial in the dynamics of land economics. Churchill certainly considered himself a liberal in the classic sense (although he began and ended his career in the Conservative Party), and this long quotation is drawn from a speech he gave on July 17, 1909, to a friendly group of fellow Liberal Party politicians in Edinburgh, Scotland. He was then serving in the House of Commons, and his purpose in the speech was to educate his fellow party members on how to defend a rather modest budget proposal to tax one-fifth of the future unearned increment in land values. The descriptions of the audience reaction have been left in to give a livelier sense of the moment. *01

...[Previously] I attempted to draw a fundamental distinction between the principles of Liberalism and of Socialism, and I said Socialism attacks capital, Liberalism attacks monopoly. - (Cheers.) It is from that fundamental distinction that I come directly to the land proposals of the present Budget. - (Cheers.)

It is quite true that land monopoly is not the only monopoly that exists, but it is by far the greatest of monopolies. It is a perpetual monopoly, and it is the mother of all other forms of monopoly. - (Cheers.) Undeserved increments in land are not the only form of unearned or undeserved profit, but they are the principal form of unearned increment, and they are derived from processes which are not merely not beneficial, but positively detrimental to the general public. - (Cheers.)

Land, which is a necessity of human existence, which is the original source of all wealth, which is strictly limited in extent, which is fixed in geographical position - land, I say, differs from all other forms of property in these primary and fundamental conditions.

Nothing is more amusing than to watch the efforts of our monopolist opponents to prove that other forms of property and increment are similar in all respects to land and the unearned increment on land. They talk to us of the increased profits of a doctor or a lawyer from the growth of population in the towns in which they live. - (Laughter.) They tell us of the profits which are derived from the rising stocks and shares and which are sometimes derived from the sale of pictures and works of art - (laughter), - and they ask us as if it were the only complaint, "Ought not all those other forms to be taxed too?"

But see how misleading and false all those analogies are. The windfalls from the sale of a picture - a Vandyke or a Holbein-may here and there be very considerable. But pictures do not get in anybody's way. - (Laughter and cheers.) They do not lay a toll on anybody's labor; they do not touch enterprise and production at any point; they do not affect any of those creative processes upon which the material well-being of millions depends. - (Cheers.)

If a rise in stocks confers profits on the fortunate holders far beyond what they expected or indeed deserved-(laughter), - nevertheless that profit was not reaped by withholding from the community the land which it needs; on the contrary, it was reaped by supplying industry with the capital without which it could not be carried on.... If a doctor or a lawyer enjoys a better practice, it is because the doctor attends more patients, and more exacting patients, and because the lawyer pleads more suits in the courts, and more important suits. At every stage the doctor or the lawyer is giving service in return for his fees, and if the service is too poor or the fees are too high other doctors and other lawyers can come freely into competition. - (Cheers.) There is constant service. There is constant competition. There is no monopoly. There is no injury to the public interest. There is no impediment to the general progress in these.

Fancy comparing these healthy processes with the enrichment which comes to the landlord who happens to own a plot of land on the outskirts of, or at the center of one of our great cities, who watches the busy population around him making the city larger, richer, more convenient, more famous every day, and all the while sits still and does nothing.

Roads are made, streets are made, railway services are improved, electric light turns night into day, electric trams fly swiftly to and fro, water is brought from reservoirs a hundred miles off in the mountains-and all the while the landlord sits still. - (A laugh.) Every one of those improvements is effected by the labor and cost of other people and the ratepayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute. - (Hear, hear.) And yet by every one of them the value of his land is sensibly enhanced. He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing even to the process from which his own enrichment is derived.

The land may be unoccupied, underdeveloped - it may be what is called ripening - (laughter) - ripening at the expense of the whole city, of the whole country, for the unearned increment of its owner. Roads perhaps have to be diverted to avoid this forbidden area. The merchant going to his office, the artisan going to his work has to make a detour or pay a tram fare to avoid it. - (Laughter.) The citizens lose their chance of using the land, the city and state lose the taxes which would have accrued if the natural development had taken place, and all the while the land monopolist has only to sit still and watch complacently his property multiplying in value, sometimes many fold, without any other contribution on his part. And that, ladies and gentlemen, is justice. - (Laughter and cheers.)

But let us follow the process a little further. The population of the city grows and grows, the congestion in the poorer quarters becomes acute, rents rise and thousands of families are crowded into one-room tenements. At last the land becomes ripe for sale.-(Laughter.) That means to say that the price is too tempting to be resisted any longer - (laughter),- and then, and not till then, it is sold by the yard only, by the inch - (laughter), - at ten times or 20 times or even 50 times its agricultural value. - (Cheers.)

The greater the population around the land, the greater the injury the public has sustained by its protracted denial, the more inconvenience caused to everybody, the more serious the loss in economic strength and activity, the larger will be the profit of the landlord when the sale is finally accomplished. In fact, you may say that the unearned increment on the land is reaped by the land monopolist in exact proportion, not to the service, but to the disservice done.- (Cheers.) It is monopoly which is the keynote, and where monopoly prevails, the greater the injury to society the greater the reward to the monopolist will be.

See how this evil process strikes at every form of industrial activity. The municipality, wishing for broader streets, better houses, more healthy, decent, scientifically planned towns, is made to pay more to get them in proportion as it has exerted itself to make past improvements. The more it has improved the town, the more it will have to pay for any land it may now wish to acquire for further improvements.

The manufacturer proposing to start a new industry, to erect a great factory offering employment to thousands of hands, is made to pay such a price for his land that the purchase price hangs around the neck of his whole business, clogging him far more than any foreign tariff in his export competition - (cheers), - and the land price strikes down through the profits of the manufacturer on to the wages of the workman.

No matter where you look or what examples you select, you will see that every form of enterprise, every step in material progress, is only undertaken after the land monopolist has skimmed the cream off for himself, and everywhere today the man or the public body that wishes to put land to its highest use is forced to pay a preliminary fine in land values to the man who is putting it to an inferior use, and in some cases to no use at all. - (Hear, hear.) All comes back to the land value, and its owner for the time being is able to levy his toll upon all other forms of wealth and every form of industry.

A portion, in some cases the whole, of every benefit which is laboriously acquired by the community increases the land value and finds its way automatically into the landlord's pocket. If there is a rise in wages, rents are able to move forward, because the workers can afford to pay a little more. If the opening of a new railway or a new tramway, or the institution of an improved service or a lowering of fares, or of a new invention, or any other public convenience affords a benefit to the workers in any particular district, it becomes easier for them to live, and therefore the landlord and the ground landlord, one on top of the other, are able to charge them more for the privilege of living there. - (Laughter.)

Some years ago in London there was a toll bar on a bridge across the Thames, and all the working people who lived on the south side of the river had to pay a daily toll of one penny for going and returning from their work. The spectacle of these poor people thus mulcted of so large a proportion of their earnings appealed to the public conscience, and agitation was set on foot, municipal authorities were roused, and at the cost of the rate payers the bridge was freed and the toll removed. All those people who used the bridge were saved sixpence a week. Within a very short period from that time the rents on the south side of the river were found to have advanced by about sixpence a week - (laughter and cheers), - or the amount of the toll which had been remitted.

A friend of mine was telling me the other day that, in the parish of Southwark, about 350 pound sterling a year was given away in doles of bread by charitable people in connection with one of the churches, and as a consequence of this the competition for small houses and single-room tenements is so great that rents are considerably higher than in the neighboring district. All goes back to the land, and the land owner, who in most cases is a worthy person, utterly unconscious of the character of the methods by which he is enriched, is enabled with resistless strength to absorb to himself a share of almost every public and every private benefit, however important or however pitiful those benefits may be.

I hope you will understand that, when I speak of the land monopolist, I am dealing more with the process than with the individual land owner. I have no wish to hold any class up to public approbation. I do not think that the man who makes money by unearned increment of the land is morally worse than anyone else who gathers his profit in this hard age under the law, and according to common usage. It is not the individual I attack; it is the system. - (Cheers.) It is not the man who is bad; it is the law which is bad. It is not the man who is blameworthy for doing what the law allows and what other men may do; it is the State which would be blameworthy were it not to endeavor to reform the law and correct the practice.

We do not want to punish the landlord.

We want to alter the law.

*01H.Kyriazi - - Libertian Party... - New-York, 2000 - p.51



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