Economic essays

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Monograph

Identifikator:: 1753623200

URN:: urn:nbn:de:zbw-retromon-136107

Document type:: Monograph

Title:: Economic essays

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1927

Scope:: viii, 368 S.; Ill., graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: The farmers' indemnity / Alvin S. Johnson

Collection:: Economics Books

223 determining factor in cost must have just this result of progressive inflation. But why should we assume that an advance in prices would automatically produce a rise in land values? Why might not the farmers take the higher prices and enjoy their benefits while leaving land values undisturbed? Because a semispeculative attitude toward land ownership is deeply ingrained in the farmer’s mind, especially in the corn and wheat belts, where discontent is now most rife. That land will rise has long been an article of faith with him. It has been so ever since the first settlement. What lured the pioneers was not merely cheap land, but cheap land that would become dear in time. The actual product of pioneer farming was never an adequate reward for the pioneer’s labor and hardships. He relied on the unearned increment to supplement his current rewards. When he sold his farm, the price he received was not as a rule too high, if he merited fair compensation. But it was too high from the buyer’s point of view, unless he could count on a further rise. And so of the price paid by the next buyer, and the next, down to present time. Our western agriculture has in effect been subsidized by unearned increment. Without this subsidy agricultural develop- ment, would have proceeded at a much slower pace. We should not have flooded the industrial cities and Europe with cheap food. Perhaps a slower development would have been sounder. But we cannot go back and revise the facts of history. When we find that land in Iowa, Nebraska, Minnesota, Kansas and the Dakotas is held at a price that represents a capitaliza- tion of its earnings at three per cent or less, we may be sure that the belief that land will go on rising is still vivid in the com- munity mind. An artificial raising of prices of farm products would result in the validation of this belief. Land would rise and in the consequent boom immense areas would change hands. The volume of mortgages would increase, and the willing fields would have to reconcile themselves to steadily increasing indem- nity charges. THE FARMERS’ INDEMNITY Some readers will instantly conclude that the one and all sufficient remedy for this deep seated malady is the Single Tax.

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