This section is from the "The Science Of Wealth" book, by Amasa Walker.
Location. — This grows out of the social condition of man, to which we have alluded. If men lived as isolate beings, and there were land enough for all, and the whole equally fertile, there would be no rent; but, once gathered into villages and communities, rent would make its appearance, although there were as much land as all desired, and each part equally productive.
This point we shall endeavor to make plain by an illustration.* A colony of thirteen families settles along the shore, where all the land is unclaimed, and immigrants have only to choose where and how much they will occupy. We will suppose the land all equally fertile, agreeable, and accessible. In point of fact, there shall be no natural difference between one lot of one hundred and sixty acres (what each family desires) and-another; absolutely no choice arising from any thing appertaining to the land. They accordingly lay out thirteen lots half a mile square. This allotment and location upon the shore we represent as follows: —
* This illustration was given by the author in the "Merchant's Magazine," in 1860, vol. xlii. p. 306.
In this arrangement, it will be seen, the lots commencing on the left are numbered 1 to 13. No. 7 is, of course, the middle lot.
Now, all being equally eligible, the land equally accessible and good, and there being as many lots as settlers, and each as large as any one desires, will there be any value to them? Yes: because all will prefer No. 7, for they perceive that it is most desirable, inasmuch as it is central; and, if public buildings are erected for the accommodation of all (schoolhouse, church, &c), they must be placed on that lot. If a landing-place is made, or a warehouse put up, for the commerce of the settlement, it must be on No. 7; for the obvious reason that it is the point at which the whole population can most readily assemble, and it thus forms the natural centre of business.
All this is so apparent, that each man prefers No. 7; but only one can have it. What follows? It must be sold to the man who will give the most for it. Some one will give one hundred bushels of wheat, or its equivalent, — six bushels rent per annum. All this does actually happen in every case of new settlement; not, indeed, in a manner always so distinct and striking as in the case we have supposed, but in principle as certain and absolute.
If this is so, we have established the fact, that, though all land were equally fertile, and there were enough for all, and all equally desirable in every other particular, yet that rent would arise from the social wants of man, which make mere location a circumstance affecting its value, and create a rental independent of all other considerations.