Thus wages and interest do not depend upon the produce of labor and capital, 
but upon what is left after rent is taken out; or, upon the produce which 
they could obtain without paying rent—that is, from the poorest land in use. 
And hence, no matter what be the increase in productive power, if the 
increase in rent keeps pace with it, neither wages nor interest can increase.

The moment this simple relation is recognized, a flood of light streams in 
upon what was before inexplicable, and seemingly discordant facts range 
themselves under an obvious law. The increase of rent which goes on in 
progressive countries is at once seen to be the key which explains why wages 
and interest fail to increase with increase of productive power. For the 
wealth produced in every community is divided into two parts by what may be 
called the rent line, which is fixed by the margin of cultivation, or the 
return which labor and capital could obtain from such natural opportunities 
as are free to them without the payment of rent. From the part of the produce 
below this line wages and interest must be paid. All that is above goes to 
the owners of land. Thus, where the value of land is low, there may be a 
small production of wealth, and yet a high rate of wages and interest, 
as we see in new countries. And, where the value of land is high, there may 
be a very large production of wealth, and yet a low rate of wages and 
interest, as we see in old countries. And, where productive power 
increases, as it is increasing in all progressive countries, wages and 
interest will be affected, not by the increase, but by the manner in which 
rent is affected. If the value of land increases proportionately, all the 
increased production will be swallowed up by rent, and wages and interest 
will remain as before. If the value of land increases in greater ratio than 
productive power, rent will swallow up even more than the increase; and while 
the produce of labor and capital will be much larger, wages and interest 
will fall. It is only when the value of land fails to increase as rapidly 
as productive power, that wages and interest can increase with the increase 
of productive power. All this is exemplified in actual fact.

Henry George, Progress and Poverty, Book III, Chapter 3