The Natural Economic Order/Part I/Chapter 7
The most important freeland, however, and that which is also of greatest significance for the theory of rent and wages is freeland of the third class, which is everywhere available close at hand. The conception of this freeland, however, is not so simple as that of the other two forms and calls for some reflection.
A few examples will serve to make the matter clear to everyone.
Example 1. In Berlin the building regulations do not allow houses to be built more than four storeys high. If the limit were two storeys the city would have to cover twice its present area to lodge the same population. Hence the land saved by the third and fourth storeys is to this day unoccupied building land. If the American manner of building were permitted in Berlin - that is, 40 storeys instead of four - one-tenth of the present building area of Berlin would suffice. The rest would form a surplus and would be offered to any builder at little more than the price of a potato patch. Freeland for building purposes is, therefore, available even in the centre of any large German city, in an unlimited quantity - from the fourth storey upwards towards the clouds.
Example 2. In the republic of "Agraria" the use of chemical fertilisers is prohibited by law, nominally because it is alleged to be injurious to health, in reality in order to limit the output of grain and so to keep up its price. The landowners of Agraria believe that little and dear is better for them than much and cheap. In consequence of this prohibition and the resulting small crops and high prices, and because emigration, also, is prohibited, the people of Agraria have brought all wastes, swamps and moors under cultivation, and so contrived to make the crops meet the needs of the population. But in spite of this the people are discontented and clamour for repeal of the prohibition, it being generally expected that the use of chemical fertilisers would treble the produce of the soil, as it did in Germany.
What would be the result of repeal on rent and wages? Would not the same thing happen in Agraria that happens in the city, when new building regulations allow the number of storeys to be trebled? With the use of chemical fertilisers the soil of the republic would suddenly yield trebled harvests, harvests three times larger than the present population requires. The consequence would be that of every three acres two would be allowed to lie fallow at the disposal of future generations. In a republic where every inch of soil, every swamp is cultivated, the import of chemical fertilisers would suddenly create vast areas of freeland. And this freeland would, for the time being, be used only for hunting and would be leased for this purpose, for a nominal amount.
These examples from the building industry and agriculture show how new land, freeland of the third class, may be created and is being daily created as the result of scientific discovery. The nomad requires 100 acres to provide for his family, the farmer 10, the gardener one or less.
The whole agricultural area of Europe is as yet cultivated so superficially, and population, even in Germany, is still so sparse, that if garden culture were generally adopted, half the area at present under cultivation would have to be left fallow, first because we should lack purchasers for such quantities of foodstuffs, and secondly because we should lack the workers necessary for such an intensive cultivation of the soil.
We may therefore consider the whole of Germany as such freeland of the third class. With regard to the yield of the soil which the farmer working intensively reaps over and above the yield of the hunter, the nomad, and the farmer working extensively, all farm land may be considered as freeland, just as Americans may consider the space above the storeys already in existence, up to the clouds, as free building land.
Let us apply these examples to the theory of rent and wages. Germany, in the limited sense above described, is still freeland, and the farm-labourer may at any time take refuge on this freeland if dissatisfied with his wages. The wages of farm-labourers cannot fall permanently below the proceeds of labour on such freeland of the third class, any more than they can fall below the proceeds of labour on freeland of the first class. Here, then, is an unfailing support for the farm-labourer in his wage negotiations.
And now, how much can the labourer demand as wages? How much the landowner as rent?