rel="nofollow" href="#ulink_a392812d-20a5-5c43-b68e-707444daa60c">14 Annual Reports Awards Committee, 1981 Report, Bromley: The Society of Investment Analysts, Nov. 1981, pp. 40-42.
15 C. Walls, ‘Property and the Operation of the Financial Markets’, speech on July 1, 1982, to a conference of The Department of Land Economy, Cambridge University, and The Cambridge University Land Society, London: Simon & Coates, July 1982, p.5.
16 Ibid., p.4.
17 There is an exception to this rule, but it has been a transitory phenomenon. Landlords who let out accommodation in the housing market were a target of socialist rent control policy. These controls did cause financial hardship. But the majority of the original owners have long since vanished, and they have been replaced by speculators who paid low prices for rent-controlled properties. They speculate on the death of occupants (and in some notorious cases, they have used illegal bully-boy tactics to rid themselves of their tenants); their intention is to cash-in by selling their properties at de-controlled prices. Rent controls have reduced the rented sector and thus imposed the hardships on tenants, who have not been able to find the accommodation that they need, and on the economy (the shortage of houses to let has been a critical factor in the immobility of labour).
18 J. S. Nicholson, History of the English Corn Laws, London: Swan Sonnenschein, 1904, p. 52.
19 W. Cunningham, The Growth of English Industry and Commerce in Modern Times, Cambridge: Cambridge University Press, 1903, Part II, p.841.
20 H. Hoyt, ‘The Urban Real Estate Cycle — Performances and Prospects’, Urban Land Institute Technical Bulletin No. 38, p. 15.
21 Britain's Industrial Future, the Report of the Liberal Industrial Inquiry (1928), 2nd edn., 1977, London: Ernest Benn, p.295.
22 Fora description of such activity in Britain in the 1950s, see G. Bull and A. Vice, Bid for Power, 1958. Jim Slater was one of the most successful asset strippers of the 1960s. For an account of one operation, in which his company, Slater Walker, made a profit of over £7m. by buying Forestal and selling its lands in Africa, South America and Britain, see A. Vice, The Strategy of Takeovers, Maidenhead: McGraw Hill, 1971, Ch. 1.
23 An interesting example of inadequate valuation and monitoring procedures is provided by the Crown Estate, the Commissioners of which administer 250,000 rural acres and a vast portfolio of urban property and mineral rights to finance the Queen of England’s household. In 1982, just 2% of the Estate’s properties were valued. In this case, the Commissioners were not seeking to hide anything. Nonetheless, the result—in terms of an inability to monitor commercial performance properly — was the same. They were criticised by a House of Commons committee because ‘we do not consider that the Commissioners can account satisfactorily for their stewardship without presenting a balance sheet which shows the capital assets entrusted to their management’. Crown Estate Abstract Accounts 1980-81, House of Commons Committee of Public Accounts, London: HMSO, 1982, p.viii, para. ii.
24 K. Marx, Capital, London: Lawrence & Wishart, 1962, Vol. III, p.623.
25 F. Harrison, ‘Gronlund and Other Marxists’, in R. V. Andelson, editor, Critics of Henry George, Rutherford: Fairleigh Dickinson University Press, 1979.
4 The Power Loom Puzzle
The Industrial Revolution was heralded by a flood of inventions and the accumulation of capital which, in new forms, constituted enormous power with which to produce wealth. Innovation was in the air. People were searching for new ways of producing goods at cheaper cost. The conveyor belt was born. Mass production based on the division of labour and the use of mechanical power could have raised the living standards of everybody. Sadly, for the workers, this was not to be:
... without the increase in productive power that is due to industrialization the rise in real wages could not possibly have occurred. The important question is why it was so long delayed. There is no doubt at all that it was delayed; whether there was a small rise, or an actual fall, in the general level of real wages in England between (say) 1780 and 1840 leaves that issue untouched. It is the lag of wages behind industrialization which is the thing that has to be explained.1
Explanations for this have been partial and none have taken into account the regressive effect of land monopoly. The Marxist critique has conditioned us to believe that capital and the motives of its owners constitute the problematic area. The acquisitive greed of the capitalists is held to be responsible for large- scale poverty and deprivation.
From the outset the modern factory system has been blamed. Men had been severed from a tranquil, pastoral history and the machine was nominated as Enemy No. 1. Yet this was ironical, for the machine was as much a victim of the early years of industrial society as were the men.
The land monopolists’ ability to periodically exact speculative rents — demanding a portion of tomorrow’s higher level of output today — deterred new capital formation. If this hypothesis is correct, it should solve a curious mystery: why the cotton kings of Lancashire were strangely reluctant to expand their businesses by enthusiastically adopting the power loom during the first long-run trade cycle in industrial history. By untangling the webb which shrouds this phenomenon we expect to reveal the inner processes at work in the imperfectly-free market which shackled the machine and postponed the prospect of prosperity for the men who owned or worked with them.
It was over tea with some friends in a hostelry in Matlock, Derbyshire, in 1784, that the Rev. Edmund Cartwright, a country parson and Fellow of Magdalene College, Cambridge, resolved to invent a power loom which would take the backache out of weaving cotton. Hitherto, weaving had been by hand in little cellars and country cottages. But with the invention of the spinning jenny, the manufacturers from Manchester to Glasgow were producing yarn at an unprecedented rate. Output was threatening to race ahead of the capacity to turn it into cloth. This was a problem for new technology to solve, and when he returned to his home in Nottingham, Cartwright set to work on a lathe. He soon produced the first mechanical device for weaving cotton, a major technical breakthrough which promised astonishing results for the leading industry in Britain. Yet it was to be four decades before the manufacturers took up mechanical weaving on a serious scale. Why? Although more efficient than hand-weaving the apparent lack of interest in the invention was attributed by observers at that time to the competition from low-wage hand-weavers. Mr Brougham addressed his fellow Members of the House of Commons in 1817 in these terms:
It is now found, for the first time in the history of mankind, so low are wages fallen, so great is the pressure of distress, that manual labour is making reprisals on machinery, standing a successful competition with it, beating it out of the market, and precluding the use of an engine, far from costly in itself, which saves three labourers in four. The further introduction of the power loom is actually stopped by the low rate of weavers’ wages.2
This
