A landlord is one who owns land.

Rent is a price paid to the landlord for permission to use or occupy land.

Here is a diagram of a square piece of land--

+----------+

*L

W

+----------+ Fig. 1

In the centre stands the landlord (L), outside stands a labourer (W).

The landlord owns the land, the labourer owns no land. The labourer cannot get food except from the land. The landlord will not allow him to use the land unless he pays rent. The labourer has no money. How can he pay rent?

He must first raise a crop from the land, and then give a part of the crop to the landlord as rent; or he may sell the crop and give to the landlord, as rent, part of the money for which the crop is sold.

We find, then, that the labourer cannot get food without working, and cannot work without land, and that, as he has no land, he must pay rent for the use of land owned by some other person--a landlord.

We find that the labourer produces the whole of the crop, and that the landlord produces nothing; and we find that, when the crop is produced, some of it has to be given to the landlord.

Thus it is clear that where one man owns land, and another man owns no land, the landless man is dependent upon the landed man for permission to work and to live, while the landed man is able to live without working.

Let us go into this more fully.

Here (Fig. 2) are two squares of land--

_a_ _b_ +----------+ +----------+

*W

+----------+

* *

W W

*W

+----------+ +----------+ Fig. 2

Each piece of land is owned and worked by two men. The field _a_ is divided into two equal parts, each part owned and worked by one man. The field _b_ is owned and worked by two men jointly.

In the case of field _a_ each man has what he produces, and _all_ he produces. In the case of field _b_ each man takes half of _all_ that _both_ produce.

These men in both cases are their own landlords. They own the land they use.

But now suppose that field _b_ does not belong to two men, but to one man. The same piece of land will be there, but only one man will be working on it. The other does not work: he lives by charging rent.

Therefore if the remaining labourer, now a _tenant_, is to live as well as he did when he was part owner, and pay the rent, he must work twice as hard as he did before.

Take the field _a_ (Fig. 2). It is divided into two equal parts, and one man tills each half. Remove one man and compel the other to pay half the produce in rent, and you will find that the man who has become landlord now gets as much without working as he got when he tilled half the field, and that the man left as tenant now has to till the whole field for the same amount of produce as he got formerly for tilling half of it.

We see, then, that the landlord is a useless and idle burden upon the worker, and that he takes a part of what the worker alone produces, and calls it rent.

The defence set up for the landlord is (1) that he has a right to the land, and (2) that he spends his wealth for the public advantage.

I shall show you in later chapters that both these statements are untrue.

Let us now turn to the capitalist. What is a capitalist? He is really a money-lender. He lends money, or machinery, and he charges interest on it.

Suppose Brown wants to dig, but has no spade. He borrows a spade of Jones, who charges him a price for the use of the spade. Then Jones is a capitalist: he takes part of the wealth Brown produces, and calls it _interest_.

Suppose Jones owns a factory and machinery, and suppose Brown is a spinner, who owns nothing but his strength and skill.

In that case Brown the spinner stands in the same relation to Jones the capitalist as the landless labourer stands in to the landlord. That is to say, the spinner cannot get food without money, and he can only get money by working as a spinner for the man who owns the factory.

Therefore Brown the spinner goes to Jones the capitalist, who engages him as a spinner, and pays him wages.

There are many other spinners in the same position. They work for Jones, who pays them wages. They spin yarn, and Jones sells it. Does Jones spin any of the yarn? Not a thread: the spinners spin it all. Do the spinners get all the money the yarn is sold for? No. How is the money divided? It is divided in this way--

A quant.i.ty of yarn is sold for twenty shillings, but of that twenty shillings the factory owner pays the cost of the raw material, the wages of the spinners, the cost of rent, repairs to machinery, fuel and oil, and the salaries and commissions of clerks, travellers, and managers.

What remains of the twenty shillings he takes for himself as _profit_.

This "profit," then, is the difference between the cost price of the yarn and the sale price. If a certain weight of yarn costs nineteen shillings to produce, and sells for twenty shillings, there is a profit of one shilling. If yarn which cost 9000 to produce is sold for 10,000, the profit is 1000.

This profit the factory owner, Jones the capitalist, claims as interest on his capital. It is then a kind of rent charged by him for the use of his money, his factory, and his machinery.

Now we must be careful here not to confuse the landlord with the farmer, nor the capitalist with the manager. I am, so far, dealing only with those who _own_ and _let_ land or capital, and not with those who manage them.

A capitalist is one who lends capital. A capitalist may use capital, but in so far as he uses capital he is a worker.

So a landlord may farm land, but in so far as he farms land he is a farmer, and therefore a worker.

The man who finds the capital for a factory, and manages the business himself, is a capitalist, for he lends his factory and machines to the men who work for him. But he is also a worker, since he conducts the manufacture and the sale of goods. As a capitalist he claims interest, as a worker he claims salary. And he is as much a worker as a general is a soldier or an admiral a sailor.

Well, the _idle_ landlord and the _idle_ capitalist charge rent or interest for the use of their land or capital.

The landlord justifies himself by saying that the land is _his_, and that he has a right to charge for it the highest rent he can get.

The capitalist justifies himself by saying that the capital is _his_, and that he has a right to charge for it the highest rate of interest he can get.

Both claim that it is better for the nation that the land and the capital should remain in their hands; both tell us that the nation will go headlong to ruin if we try to dispense with their valuable services.

I am not going to denounce either landlord or capitalist as a tyrant, a usurer, or a robber. Landlords and capitalists may be, and very often are, upright and well-meaning men. As such let us respect them.

Neither shall I enter into a long argument as to whether it is right or wrong to charge interest on money lent or capital let, or as to whether it is right or wrong to "buy in the cheapest market and sell in the dearest."

The non-Socialist will claim that as the capital belongs to the capitalist he has a right to ask what interest he pleases for its use, and that he has also a perfect right to get as much for the goods he sells as the buyer will give, and to pay as little wages as the workers will accept.

Let us concede all that, and save talk.

But those claims being granted to the capitalist, the counter-claims of the worker and the buyer--the producer and the consumer--must be recognised as equally valid.

If the capitalist is justified in paying the lowest wages the worker will take, the worker is justified in paying the lowest interest the capitalist will take.

If the seller is justified in asking the highest price for goods, the buyer is justified in offering the lowest.

If a capitalist manager is justified in demanding a big salary for his services of management, the worker and the consumer are justified in getting another capitalist or another manager at a lower price, if they can.