And that economically, raising the economic rents through the advent of these devices is always the final settlement.
I'm not going to tell you that labor-saving devices are inherently a bad thing. I am going to tell you that they're a good thing and that as an individual you should try to maximise the amount of rent you can collect and as a government you should maximise the amount of rent that is available as a common stock for the entire nation and that for both of you that is your first duty economically.
I'm also going to tell you that anyone who does not try to maximise their income stream in rent by taking another pathway such as saving money, investing in stocks, Bitcoin, gold, or any other types of securities, I'm going to tell you anybody who does that is a danger to their own household and new leadership for your house should be found. Likewise, for a government who does the same thing, the people should try to get rid of that government as soon as they possibly can because they will be destroying their economy if they're not maximising the common stock of rent available in that nation as a first duty.
Now let's move on to the topic in question here labor-saving devices and rents and look into how they work and interact with each other. And that all labour saving devices that have ever been introduced successfully always without fail raise the economic rents available to that nation.
So how do these devices do this? How do they actually raise the rents in the end?
First, let's set the scene and I asked you to imagine that any income stream has a beginning and an end. So it's like a river that flows downhill and settles in a pool or lake. At the bottom there is the source which is the labor-saving device and there is the destination which is the common stock of economic rent in between the next stage after a device has been deployed successfully is to increase the productivity of that economy that is for every hour of Labour, employed or dollar of capital employed. Using this new labor-saving device means that much more wealth can be created productively than before without the device. It's labor-saving. One could also say it is capital saving. So that is the first stage.
This is indeed a great situation for the people of that nation because they do less work now for the same outputs in wealth which everybody wants a great thing. And what is the next stage?
A large proportion of this new wealth will be getting created in specific locations where it is easier to produce this greater amount of wealth now. And people intuitively understanding this as actors in the economy will tend toward to move towards those locations where much more wealth can be created because of the new device. So this will create a new demand for those locations to both live there so that you're near your work and to create businesses there to do the actual work.
This new demand for locations also known as location of value or land value has its own income stream called rent. It is the mother of all rents. A generic term we use is economic rent to cover all other rents to which are derivatives of the land rents.
So what actually happens when the demand for something which is in fixed supply that location where the new wealth is being created? What happens when the demand for it increases? Its price rises of course to the extent of the new demand. So the big question now to ask is how much does it rise? Does it rise less than the new production that's taking place? Does it arise by the same amount as the new production or does it rise by a great amount than the new production?
This is the trickiest part to get across to people who are seeing this for the first time because it is very hard to accept is true and happens yet it does.
The cost of rent in these new locations will rise by more than new productivity which is available in that nation or that location. It will rise by a greater amount. But why is this well? It's because when something becomes so valuable for free, that is the thing people will speculate in the most of all and when we speculate in something we are banking on the future price of it rising even more than it has already. It's a sort of gamble and this is why we do it because of the expected expected future price rise. This is always more than the productivity that is being created fresh from the labor-saving device.
So ultimately for every labor-saving device that has ever been created across all of history and has succeeded in being a labor-saving device always ends up in higher rents. Higher land values, higher real estate prices.
So what else apart from raising rents? Do all labor-saving devices do? Nothing! That is all labor-saving devices do in the end. They do not. People make people love each other anymore. They do not make the law work any better. They do not make government a model of purity and thrift and they do nothing else at all to the morals of people in general. All labor-saving devices ever do is raise rents. Saying this is a bad thing I am saying it's a good thing. What I would really like you to do now is to sit it on the table in front of you and observe it without judgement and then tell me if you can see it too.
This observed fact which happens but every time without fail is extraordinarily hard for anyone to accept is true because it seems to come out of nothing yet it happens. So be careful if you understand and concede this is true yourself when you try to tell other people about it. 99% of those people will immediately think you're a conspiracy theorist or a communist or a fascist or anything that gets you to shut down when talking about it. So take great care if you see the light shining on this new piece of forbidden knowledge.