The Principles of Political Economy

Henry Sidgwick

Book III

Chapter IV

Section 13

§13. From considering the principles of governmental interference with land in an early stage of a country's development, let us pass to examine briefly the economic reasons for continuing such interference when this stage has been passed, and the country has been fully occupied. We may conveniently divide this question into two parts; asking first under what limitations land should be allowed to pass into private ownership, and secondly why and how far, after this transition has taken place, Government should still exercise a special control over this particular kind of property. As regards the first question, it is obvious that such portions of land as are manifestly more useful to the community when thrown freely open to common use should be retained in public ownership, and under governmental management: e.g. roads, navigable rivers and inland lakes, natural harbours, public parks, commons, &e. So, again, there are strong reasons, discussed in the earlier part of this chapter, why the land required for railroads or other similar monopolies should not be allowed to pass, except temporarily, out of public ownership: and a general right should be reserved of taking back from private owners any land that may be needed for public uses, paying for it its market-value as determined independently of such need, together with a certain `compensation for disturbance' in consideration of the special utility that it may be fairly assumed to have for its owner. This right has been extensively exercised in recent times in the construction of railways, and is now generally recognised in the most advanced communities. Further it is quite possible to allow the surface of the soil to pass completely into private hands, while reserving to the community the rights of property in certain of the minerals contained in it: and in fact some reservations of this kind are found in the codes of some of the most advanced communities. The chief argument for such reservations, from the point of view of production, is that the owner of the land, whether engaged in the business of agriculture or not, may very likely not be the person best qualified either to ascertain the presence of minerals hidden some way below the surface, or to decide whether their extraction will be remunerative; so that production will gain if the right of discovering and working them---with due compensation to the owner for the loss of the land thus rendered useless for agriculture,---be allowed to members of the community generally. In special cases, however, governmental management of mines maybe expedient either to avoid the drawbacks of monopoly in private hands---in the case of very rare minerals---or to watch over the interests of posterity, just as in the case before discussed of forests. Turning again to the surface of the land, we may say that, generally speaking, there is no reason for keeping ordinary agricultural land under governmental management,---since the general arguments in favour of private management are at least as applicable to agriculture as to any branch of production---unless, perhaps, as some small portions might advantageously be retained for purposes of scientific experiment or technical instruction. An exception, however, has to be made in the case of land on which timber is grown: where there appear to be the following special arguments in favour of Government management; first, the economic advantages of conducting this business on a very large scale, as it gains much by highly skilled and carefully trained labour which, at the same time, requires a very large area for its most economical application: secondly (what was before noticed), the interest which, in certain countries at least, a community is believed to have in preserving a due proportion of trees to the soil that it inhabits, owing to their beneficial effect on climate; while, thirdly, it is thought that even the marketable utilities of trees---especially their utility, where coals are scarce, for fuel---are in danger of not being adequately or most economically provided for distant generations, if the provision is left to private enterprise, considering the slow growth of trees and the general unattractiveness of remote returns to the private undertaker.

With the exception, however, of timber, it is generally admitted that the ordinary products of agriculture, whether animal or vegetable, are likely to be most economically supplied by private undertakers. But it is a different question whether it would not be expedient to retain land in public ownership, while leasing it to private persons; so that the increase in its value which the increase of population tends to cause may be continually secured to the community. This measure, however, is more usually advocated from the point of view of Distribution, in which aspect we shall consider it in a subsequent chapter (ch. VII.). Actually the whole rent of land has never been retained by any Government; but in many cases a considerable portion of it has been reserved, either under the name of rent, or under the rather misleading name of a land-tax.

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