[Letter] March 4,1890,Smith College [to F.H. Giddings]

March 4, 1890, Smith College.

Dear Friend,
      After half
promising not to bore you
with more letters here I
am at it again. First I
am delighted that you like
the house proposition. We
must have a visit before I
get away. Our plans are
not settled, but the chances
are that my wife and some
or all of the boys will go to
Minnesota. I am glad the
Sociology is progressing
 Just a word about my
land question. It is clear
you look at it as I do. You
also agree in another point
viz. what is true of land is
true of a lot of other things.
The same reasoning, for instance,
as to relation of rent to price
is true of all.
 Now I think we shall
agree a step farther.
The statement "Rent is not
an element in price" can
only mean that the drawing
of an income turned rent out
of the proceeds of an industry
does not affect the price
of the products of that industry.
The price is fixed by the
cost on rentless land at the
margin of tillage. Land owners'
incomes do not burden consumers.
Now how do the orthodox people
prove this? Naively enough
by making a supposition that
does not annihilate rent at all,
but simply transfers it to
farmers. "Let land owners stop
asking for rent," they say, and
farmers will sell no cheaper
than before. "Of course not; but
why not?" Simply because the
case supposed makes it possible
for farmers to get the usufruct
of the land for their own
benefit, and it is for their
interest to do it. They perpetuate
rent and put it into their own
pockets.
 We can make a number
of suppositions that really annihilate
rent. The one I suggested does
it, and other and more practicable
ones would do the same. To make
land yield rent to anybody the
use that labor, acting in its own
interest, would make of it must be
restricted. The farmer whose landlord
forgoes rent puts men enough
on the land to make the result
most advantageous to himself
as controller of the land. Let
him give over all attempt to
make a rent for himself and
he will put a lot of new
men on the land and let
them earn wages.
 Result 1 Product increased
in quantity and cheapened.
2 Returns from
cultivation of marginal land reduced
in value. Margin moved upward to better
land.
3 Prices of products of land
reduced, but not as much as
they would be but for this
moving of the marginal line.
 Rent in the sense of
the income that owners or
controllers of land (a 1000 other
things) desire to get
and do get from the use of it is clearly an
element in price making. The
getting of the increase demands
product restricting and price
raising as compared with the
condition that would obtain if
no one wanted the income from
the land itself.
 What is the truth?
Take into account two things
instead of one - Annihilate
with the rent ( )
land, and then, if marginal
land is plentiful, there will
be no change of prices.
If marginal land were not plentiful there
would in the first case be a rise of prices.
 Annihilate the rent only and
there will be a fall of prices.
The two facts taken together
namely, (1) that a good price of
land adds to the product of
industry, and (2) that the
owner takes the amount
thus added as his own income,
these two facts together are
not an element in price
making. Either one of them
alone is such an element.
I am thus by a side path
coming to the position reached
in the note at end of
monograph. I think you will
mentally follow the path straight
to that position.
 Set a machine to
doing something supremely
well; take what value the
thing creates as your income.
If marginal instruments are
ample in amount you have
not burdened consumers. (If you
push the productiveness of the
machine to a high point you may
introduce an element of variation.)
When the thing is going stop
during the increase from it,
let labor have the fullest use
of it, and you lower prices.
Am I right? At your
convenience we will talk it
over a little.

     Yours Very Truly,
           J. B. Clark