Free Lunch as the Key to a Free Market: a Reply to Jonathan Church

“Thus, in respect to buildings and services, the landlord is selling his or her labour. Part of the rent he or she charges constitutes wages. So far so good, but what about the land component of real estate?”

A core thesis of today’s mainstream futilitarian economics is that “There is no free lunch.” It is common to neoclassical economics across the spectrum, from free market neo-liberalism to big state Keynesianism and Marxism. It is no surprise, therefore, to see Jonathan Church’s Merion West op-ed entitled “There Is No Free Lunch: Landlords Are Not Leeches.”

In fact, there is a free lunch; Mr Church was sitting on it when he wrote his article, and we should celebrate it, not hide it. Some claim that the free lunch is the key to free market prosperity—that both Labour and Capital can benefit from it together via one common mechanism. This is a win-win notion alien to the futilitarian mindset.

The free lunch is land. Land contains oil and minerals; it grows crops and provides places and materials to build our homes and cities. We are all land users; we are all participants in the land market. Land has value (it is the geography of value), and the market prices that value. The landlord, of course, is part of that market.

So are landlords “stealing” other people’s labor? Is rent, in Church’s words “an honest source of income”? This question, concerning the general nature and legal status of land rent, has a long history. Many well-known thinkers such as John Locke, Adam Smith, J. S. Mill—across fields ranging from political economy to moral philosophy—time and again have come to the same conclusion: that land is a special kind of property requiring separate treatment.