The Question of the Rates

Akin with the rest of the fiscal dodges which the workers are led to take as vital issues, is the present outcry about the rising rates of the Metropolis. And whilst property owners are vehemently condemning municipal extravagance and high rates, we have “gas and water” Socialists coming to their aid by urging the extension of municipal trading, that the rates may be lowered with the profits.

The general question of taxation and the working-class has, it is true, been dealt with in No. 2 of THE SOCIALIST STANDARD, but in view of the fact that there are many under the impression that the workers are interested in keeping rates low, it cannot fail to be useful to treat specially of the rates from a proletarian standpoint.

Now it is often urged that a rise in rates always means a rise in rent. If, however, we look a little closer at this matter we shall soon see how superficial is such a line of reasoning, and that, in reality, the question of the rates does not concern the working-class. In the first place, the idea that the landlord can always compensate himself for a rise in rates or taxes by an increase in rent, rests upon the fallacy that landlords can charge whatever they please. Yet it should be evident that landlords in general always demand as much rent as they can get. That is to say, they demand the full market price of their accommodation. The price land will fetch in any district does not depend upon the will of the landlord, but upon factors outside his control. Now what determines this so-called value of building land ? It may be stated in brief as being regulated by the supply and demand for accommodation. This is in turn determined by the advantages possessed by any plot over land in inconvenient places on which it scarcely pays to build. Once considered, this is self-evident, for if one district has advantages over others, there will be keenest competition for house-room in the favoured district, while the fact that demand exceeds supply will permit the land and house owners to increase the rents until the special advantages of the district are neutralized by the greater cost of accommodation.

To the average person it is of little consequence whether he lives in one district or another ; for although one place may possess advantages, yet the property owners therein, owing to the consequent greater demand for house-room, are enabled to extort proportionately more rent. Thus the landlords get the full benefit of local advantages. If they are asking more than this they are warned by the increase of unoccupied houses : if they are getting less the increasing demand gives them the hint that accommodation can command a greater price, and up goes the rent. If one may make such a comparison, the landlords no more choose their rent than the workers choose their wages. Both get as much as they can, and that limit is determined by conditions outside of their control. The former get the equivalent of the advantages of their sites, regulated by the demand for accommodation, whilst the latter get their cost of subsistence, modified by supply and demand for labour-power.

Where, then, do rates come in? Clearly, higher rates, as such, do not add to the advantages of a district, neither do they increase the demand for accommodation. It is therefore evident that rates do not increase rent. “But,” it is urged, “rent often rises when rates do.” Granted, my friends, but notice that rent more often rises when rates do not. In fact as has already been pointed out in these columns, rent has in several instances declined while rates have risen. But why does rent sometimes rise at the same time that rates go up ? A moment’s reflection will show why. Owing to the continual increase in population and size of towns, the circle of building land is continually extending. This means that as the demand for accommodation grows, less and less convenient, or more distant, sites are built upon. Obviously, then, the land in central and favoured districts is rendered comparatively more valuable by reason of this. Thus there is an increase in the advantages of the favoured districts that is gradual while to meet this rent is raised by little jumps. A change of tenants, an increase in Income Tax or in rates, is seized upon as an excuse for raising the rent. And be it noted that the rise in rent is usually out of all proportion to the pretended reason for the increase. More often, however, rent is raised without any excuse being given other than the fact that the accommodation will fetch more.

The man who farms an entire house is practically in the same position as the lodgers who form so large a percentage of the people. If during the term of his agreement rates rise, the tenant of the house is the immediate sufferer, it is true, but he is only temporarily affected, as we shall see, and in the long run the same facts may be observed if the period of observation be somewhat extended. The property owner in letting his house, gets on the average the full market price for it; and every time he makes a fresh agreement he raises or lowers the rent to meet the demand, or lack of demand, for accommodation. Many householders are in miserable circumstances, in perpetual fear of quarter-day; mere touts for the real landlord, saving him the expenses of rent collecting, house management, etc. When the additional risk, responsibility, work and worry are taken into consideration, many a householder is seen to be in a worse position than his lodgers. It is quite obvious that if rates were abolished in a district, by municipal trading for instance, the people in that district would not thereby be enabled to pay less. The landlords would at the earliest opportunity raise the rent proportionately, and would be able to do this because of the increased demand for houses that would follow such a reduction of the rates.

The question of the rates, then, is of vital concern to the property owners alone. The middle-class cry of saving the rates, or aiding them out of municipal profits, is a dodge to put money into property owners’ pockets. Every effort is being made to lead the workers to believe that they will be better off by reducing the rates, and by this means the workers are hoodwinked into increasing the profits of sections of the capitalist-class. If an improvement follows some municipal expenditure, or a new means of transit is opened, the property near by becomes more valuable, and the capitalist gets the whole benefit by the increased rent or profit he is enabled to obtain. This is observed again and again, and it shows that the term, “value of land” really means that the owner is enabled to extort so much value from others, much the same as a highwayman’s position and arms enable him to rob all who must pass his way.

If in a few cases rising rates are quoted as a reason for raising rent, the excuse is seen to be the merest twaddle from the fact that if there are many apartments to let in a district and rates rise, rents will not go up since there would then be still less chance of obtaining tenants; whilst if the houses let well, and there is competition for house-room, rent will surely go up, whether rates do or not. Workers are misled by narrowness of view and superficial observation, and fail to realize the deeper lying general factors which are of supreme importance. In formulating a general law it is not the exceptional but the representative facts which must be taken into consideration if the law is to be a truth.

The great truth the workers have to heed, amidst the shouting of the rate-saving hucksters, is that so long as the workers must, to get a living, sell their labour-force on the market, as potatoes are sold on the potato market, so long will whatever lowers the cost of production of labour-force inevitably lower its price, aided by the increasing competition on the labour market. Thus the propertied class reaps the benefit ol every improvement while capitalism endures. The working-class has, therefore, one great enemy—capitalism, and but one hope—the abolition of wage slavery,—and that is Socialism


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