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Title: Social Wealth Author: Joshua K. Ingalls Date: 1885 Language: en Topics: economics, wealth, property, land, Henry George, monopoly Source: Retrieved on July 2, 2022 from https://archive.org/details/socialwealthsole01inga Notes: New York: The Truth Seeker Company, 33 Clinton Place.
In proceeding toward any given point, there is always one line which is
shortest — The Straight; so, in the conduct of Human Affairs, there is
always one course which is best —The Just.
The purpose for which these pages are offered to the public is simply to
direct inquiry to questions intimately related to all human life and
employment, so that no useful member of society need remain indifferent
to them. We are living under a system of capitalistic aggrandizement, or
commercial monarchism, which has no parallel in the history of the race.
Our teachers in Economics do not disavow, if they do not expressly put
forth, the claim that this impoverishment of the many to enrich the few
is in accordance with the orderly evolution of society, and in harmony
with the natural laws of trade.
Our political savants offer us nothing but what is most delusive and
contradictory, while servilely bowing to the demands of a dominant
plutocracy. On the other hand, we have importations of the thought of
European Radicals, Communists, Nihilists, with suggestions of
revolution, and of measures of reform ranging from Anarchism on the one
hand, to the entire control of all social industry by the state on the
other.
In this conflict of thought and nescience, it has seemed to me there
must be some Natural Relation between the worker and the soil from which
all must subsist; that there is a principle of law which will give an
equitable share of the products of industry to each who shares the
labor, and a just principle of agreement and consent in regard to such
production and division.
I am persuaded there is also a development of these laws subject to
“arrest,” to “retardation and acceleration,” and that to discover and
record their growth, is the only true province of the Legislator, not
the manufacture of statutory enactments. My aim has been to direct the
attention of all, rich or poor, learned or unlearned, to this line of
thought. If in any degree I have succeeded, my labor will not have been
in vain.
There are doubtless great social wrongs to be righted, great injustices
to be corrected; but when with reasoning minds we read the great lessons
of history, we discover that Science, or exact and systemized knowledge,
has been the great means of progress in every field and in every age,
and are assured that through intelligent industry Nature has provided
for the satisfaction of all rational human wants. Industrial Freedom,
and that only, can change the conditions which afflict the toiling poor,
or give to justly acquired competence its required security and
conservation.
Glenora, N. Y., July 21, 1885.
No systematic attempt has ever been made to reduce to a science the
phenomena which are presented in social industry and the allotment of
social wealth, which embodies the normal relations of the active agent,
man, to nature and to the opportunities and potencies which the earth
yields to his control. Only fragmentary parts of any history of industry
are known to us, and nothing but the general features of its early
development can now be ascertained. Society itself is but an outgrowth
of an industry which has really determined the character of social
progress from stage to stage. The subjection of labor has meant, in
every period, the debasement and destruction of the people. Through
outrage and fraud industrial growth has been checked, and its power to
elevate mankind thwarted and destroyed. The grossest ignorance and
narrowest private self-seeking have alone sought to escape work and its
duties, and the most brutal ambition was required to degrade and enslave
it.
Busied with the records of glorified conquest, the pomp of kings, and
the displays of martial triumphs, the general historian has had but
little to say of that industrial life of the people which has sustained
while it has had to suffer all the calamities of war. From the glimpses
he has afforded us, however, we see clearly the subjected and enslaved
condition which it has ever occupied; a condition attempted to be
justified by the casuistry of each apologist for tyranny, and even by
political economists—that men will not work unless compelled to (by the
lash or fear of starvation); thus making the unworthy desire for the
product of another’s labor the excuse for enslaving him, and the
degradation resulting therefrom the justification for its own
perpetuation. Through every form of barbarism, feudalism, and civilism,
industry has been mostly enslaved—much of the time in a gross material
form; always through force, fraud, and fictions of law and positive
class-legislation. The savage, who at the same time sought excitement
and sustenance in the chase, with feeble mentality left those inclined
to work at liberty to perfect some product, since, whenever through lust
or envy he desired, he could capture and appropriate it by taking the
life of the producer. Under barbarism, compulsory servitude became
well-nigh universal, and remains now, as ever, the distinguishing trait
of that stage of development. Here industry begins to assume some form
of organization, and is directed with some order and system. Functions
and powers were absorbed, and dominion assumed by the strong and
cunning, and various castes were established to perpetuate the
independence of a few and the subjugation of the industrious many. Under
civilism, industry, as it became freed from the peculiar institution of
slavery, evinces a greater tendency to organization, and under a system
of bets or bribes, commonly called wages, effects “division of labor,”
and a power of production unknown to the earlier forms. But without any
intelligent or equitable system of division of products, its results are
scarcely, if at all, more beneficent, often resulting in what political
economists call over-production, as well as in the production of things
which are non-wealth, or destructive to social well-being. The earlier
and barbaric forms of slavery extend to our own time, and up to a quite
recent date have existed in the most advanced nations. Slavery, the
slave trade, and privateering, or warfare for plunder, were known as
late as our fathers’ time, and were the foundation of most of the large
fortunes which are more than a half-century old.
Civilism, thus far, has hardly done more than to refine and render more
subtle the subjection of labor to lordly will. From conquests with
bludgeons, swords and spears, as in the earlier ages, it has inaugurated
a war of cunning and fraud, whose weapons are technical terms, shrewd
devices, class legislation, and forms of law recognizing no rights as
supreme but those of property and “the law of the market.” But an era of
science has at length dawned, and industry stands revealed, though not
yet popularly acknowledged, as the prime agent of all growth, and of
every element in social refinement and progress. And in the absence of
any system of economics which even recognizes the relations between
human work and the complementary material agents, there arises a demand
for an analysis of the elements of industry, which science shows to be
the basis of all social economy and ethics. Careful investigation into
all the motives to human action, the relation of man to the earth, the
principle of conservation, by which accumulation is determined, as well
as division, must have a place. There is required in this scientific age
a systematic and thorough adjustment of the subject of industrial
evolution. We have social, political, and ethical systems as perfect as
they can be, while our disintegrated and wholly empirical system of
industry remains. We have no comprehensive, nor indeed comprehensible,
explanation of the industrial phenomena by which the conscientious man
can even guess when he has done his duty, or the moralist determine the
simplest question thereunder. As little can the politician or civilian,
however inclined, honestly decide whether certain measures will result
in more good than evil, more happiness than misery, to mankind; for the
simple reason that religion, morality, and civilization are not the
sources of human progress, but are the blossoms and fruitage of the
social growth itself, which has its root in human industry.[1]
The industrial problem is therefore the fundamental one. That the wealth
of society is most unequally distributed is a fact so patent and
universally admitted that it is only necessary to call attention to it.
That the work which creates it is rewarded in no just proportion, but
rather by an inverse ratio to its importance and utility, as well as to
its severity and repulsiveness, is equally undenied and undeniable. The
most arduous labor under our mixed economics[2] is usually the poorest
paid, while often the light and trivial, and even the hurtful, is
frequently rewarded with a fabulous income.[3]
The only qualification ever associated with the universal admission of
these statements is, that all have equal opportunity, and that since
some work up from poverty to wealth, and take the great prizes in the
business lottery or race, all can do so, and if any fail, it is their
own fault! Economists do not attempt to deny the inequalities of present
division. They merely explain in a superficial way how the inequality
comes about, without reference to the fundamental cause, or even
suggesting any change in the system which produces it, unless it be to
apply a little more of the same thing—special legislation and class
rule.
But even the science of economics starts upon the ground that the real
laws of trade tend constantly to equilibrium, or to a mean ratio, i. e.,
to the elimination of profit and the exchanging of commodities at cost
of production. “Free competition,” it is claimed, can alone secure, and
will constantly tend to secure, equitable exchanges. "Why, then, should
indispensable labor more and more be compelled to exchange itself for
what itself has created, at a greater and greater disadvantage? This is
a question it makes no effort to explain, and, so far as the prominent
writers are concerned, seems to be deemed unworthy of attention. Of
course no process of exchanging equivalents could have produced the
disparities we notice. No fair trade could have placed the values which
each of two parties contributed wholly in the hands of one. No answer is
furnished by the current commonplace, that it is accounted for by the
superior industry and frugality of the one, and the idleness,
extravagance, and dissipation of the other, for the successful are not
more industrious, as a class, than the unfortunate poor, and by far are
more given to extravagance and dissipation. But there is no equality of
opportunity under existing laws and customs. In the race for wealth,
which the economist seems as unable to define as to guide, the toiler is
most heavily handicapped in the very start. It is quite true that one in
a thousand or so, who has unusual strength or cunning, distances his
competitors and gets to take place with those more favored; the
disadvantages lessening as he works to the front. But why should the
weak be handicapped, while the strong carry no extra weight, but are
helped on? The only reply vouchsafed is that “it has always been so, and
always will be.” That men are found willing to do the most repulsive
work, and even that which is deleterious to health and tends greatly to
shorten human life, for wages less than that which is paid a superfluous
clerk for services of trifling utility, proves that free competition has
little or nothing to do with the adjustment of labor to place in the
working world, and that forced competitorship is only fully realized at
the very bottom of the industrial scale.
It is overlooked that a large proportion of the exchanges which take
place in the world are in nowise affected by the rule of the market,
that each one shall get the most he can for what he parts with, while
giving the least possible for what he requires. Indeed but a small
proportion of the transfers in social life are subject to competitive
offers at all; and besides, in those transfers which are so subject, one
party must yield to the other in each transaction all the profit which
is realized by the other; otherwise the exchange would be reciprocal, no
matter what the nominal profit, and the benefit being mutual, no
inequality could result. All services in the family, amounting to quite
one-half of all labor, are non-competitive. In retail trade most prices
will be found customary rather than competitive, and whenever
combination exists among dealers for reserved prices, competition ceases
to operate altogether.
Prof. Henry Dunning Macleod has written a book —“Elements of
Economics”—mainly to prove that value is wholly caused by “demand and
supply,” and that labor is “but one of the accidents of value and of
wealth.” From the standpoint of the trader this is very true, but from
no other. It is by no means my intention to enter upon a fruitless
discussion here of the origin of value, or of its true definitions, for
the word has a score or more.[4] He suggests that a man might find a
diamond worth a million dollars some lucky day, with very little labor;
though he must have known that the amount of labor, or product of labor,
which some one is willing to give for it after it is found is what alone
makes it valuable; and that if responsible parties would undertake to
produce diamonds of equal intrinsic merit for the price of a day’s
labor, this diamond would bring no more. It is not the day’s labor of
the lucky finder which determines the price of this particular gem, but
the unsuccessful thousands of days’ search which are required before
another like it can be found. To show that irregularity of demand and
supply are the immediate and inciting cause of the fluctuation in prices
proves little, since the supply which furnishes the market, and the
means which alone make the demand effective, are both supplied by labor;
and a certain ratio would exist between the two things exchanged
corresponding to the amount of labor required to reproduce them if sold
at a customary price to which there was no fluctuation. So that if
“supply and demand” are the “sole cause of value,” labor is the sole
source both of the supply and of the means which makes the demand
effective, or even possible.
The triumph which Macleod claims over Adam Smith is not over his
apothegm that “labor was the original price paid for all things,” but
over Smith’s omission to show how it occurred, if his premises were
true, that all social wealth came into the possession of those who do no
labor. It is easy to see how this became so under a system of chattel
slavery, because the laborers were owned by the capitalists, and all
that was produced over and above the cost of the slaves’ maintenance
went to the slavelord by the custom and statutes of the times. Labor,
which in this respect scarcely differed from the services of horses and
oxen, in its economic aspect, was still the essential thing in all
production and in all exchanges Mr. Macleod is careful to point out that
production “means placing any commodity in the market” at the time and
place where the demand exists.
The spirit of trade, or “law of the market,” does not look further than
this, and even contests the right of the true owner to reclaim goods
when they have been once sold in open market by parties who had no title
to them. But nothing can be more certain than that commodities cannot be
produced in market unless they have been transported and stored by
labor, nor unless such other labor has been applied to them as will
render them desirable and fitted for consumption. While fully admitting
that under our system of land-tenure and of commercial custom the
distinctions he makes are logical if not profound, it is difficult to
see the sequence of his deductions, or how they in any way affect the
general proposition that “work is the parent of wealth;” for although
“incorporeal wealth,” the “debts created by bankers with which to buy
money and other debts,” and the formation of knowledge, which he deems
“the creation of wealth out of nothing,” may be exchangeable and have
price, it is only because that in the last analysis they can command
labor, as a title to a slave, or of a superior cunning which can obtain
labor without reward, carries with it the price of so much labor as it
commands. He has elaborated his thought that wealth is constituted of a
great number of things which have no connection with labor, “and that no
change of labor or cost of production has any influence on value, unless
they produce a change in the relation of supply and demand.” The italics
are mine. Now, since this is precisely what labor always does; that
“intensity of demand,” when effective, is wholly due to over-production
of the thing or things offered in purchase of commodities; and since the
limitation of supply is caused by the under-production of that which is
desired, he has established his “compound ratio,” but which, however
important to a technical understanding of the fluctuations of prices,
has no bearing whatever upon the more fundamental question as to the
natural sequence of work and wealth.
This author is equally exact and equally superficial in his statement
that “wealth consists exclusively of exchangeable rights;” drawing no
distinction between natural rights and legal rights, nor between
individual and social wealth. He says, “Property is not a thing, but a
right; it includes all kinds of rights which can be exercised over
anything, and is equivalent to absolute ownership.” It is hence
legitimate to infer that he recognizes no rights but those of property;
and since he says, in the same connection (see book ii., §61) that
“jurisprudence is the science of rights,” we are justified in concluding
that neither in economics nor jurisprudence is there any place for the
rights of man, or equities other than those connected with the control
of property. Now, his main assumptions throughout can have no logical
basis except upon the theory that all legislation and all governmental
interference, as well as all customs, in whatever country, clime, or
period, are scientific exponents of rights.
The former slave-holding oligarchy asserted that “that was property or
rights which the law made so.” But that these “elements of economics”
work with the same facility with chattel slavery, and under every form
of despotism, shows its value (not market) as a factor in political and
social science. But we must not forget that this “science of dicker,” as
an able exponent once denominated it in my hearing, is only applicable
to the “trade” side of commerce— that which is effected by competitive
processes. As we have already seen, however, only a certain portion of
exchanges are effected by that. For where combination exists, as in the
family or community, or among trade guilds, syndicates, or corporations,
it does not operate. The highest salaried offices are often awarded as
favors, and among most institutions sinecures are abundant. Opportunity
and place are accorded out of friendship, family relation, personal
influence, etc., so that competition is the exception rather than the
rule in nearly all human affairs, except in the employment of the most
dependent and depressed labor, and in the practice of rack-rent. Even in
trade a friend will give a friend the advantage over a stranger, and a
dealer in stocks, or a gambler in securities or produce, will often give
a personal favorite “points” that will enable him to evade the law of
the market. There are “deadheads” in every train, in every conveyance,
or place of social gathering. Its operation, even where most complete,
among unskilled laborers, is by no means universal, and by no honest
employment of language can be called free competition, as applied to
them, since in selling his labor, the laborer, as we shall see
hereafter, is compelled to sell that which, on its passive side, is in
the possession already of the party or class to whom he sells.
As explained by Macleod, and even by Adam Smith, Ricardo, Mill, etc.,
economics embraces but a section or branch of social economy. It is as
if a naturalist should treat of a tree, but make a thorough study of but
a single branch or limb. This would give us a very good idea of the
branch, but would not necessarily give us any knowledge of the character
of the trunk, or of the root, or of their relation to the soil, from
whose resources the branches had been grown and sustained through the
root and trunk. It would be difficult to proceed without some reference
to these, however, and so the economists of the earlier school admit, in
a general way, that labor produces all wealth, but omit to follow the
thought to its legitimate conclusion, and suggest a number of ways in
which values arise and wealth accumulates, in which labor is but an
unimportant factor, if indeed a factor at all.
It is upon the law of supply and demand that the whole science is now
pivoted. This law, doubtless, would operate as contended, provided the
conditions existed and were all which existed or effected exchange of
services, commodities, or wealth. But the truth is that directly
opposite conditions always exist, and that the assumed conditions could
not possibly exist, except under circumstances which, it may be said,
never or very rarely occur. As Mr. Thornton has elaborately shown, in
his work on “Labor,” the only circumstance under which supply and demand
could have the claimed operation would be where all merchantable
commodities were offered daily for what they would bring at public
vendue, and where there was no reserve price. He has shown, moreover,
that the great proportion of nearly every form of wealth is always held
in reserve, only the most perishable products being freely offered, and
they are very often thrown into the river to remove a glut, but that
labor itself is sold under wholly different conditions; that for the
laborer the law of supply and demand has a significance which it has and
can have for no other dealer, inasmuch as while the ordinary dealer who
may not be able to sell his stock to-day will be able to sell it
to-morrow, often for more than he would have been willing to sell it for
to-day, the laborer must sell his labor to-day, or it is wholly lost.[5]
From a different premise, but by a similar course of reasoning, Karl
Marx arrived at a similar conclusion. He showed that, lacking
opportunity, land, or capital to exert his force upon, the laborer could
not compete, because his labor could not be freely applied, and that the
competition to which he is subjected with others situated unfavorably as
himself is not a free but a forced competition.
This is also quite true, but the exact position is this: Labor, although
the active factor in production, without land and opportunity, is
abstract only, and as such can neither be bought nor sold. In working
for an employer, it is not the labor which the worker sells, but the
thing in which the labor has become concreted by its application to the
land or to something grown or taken from the land. Bastiat is right in
saying “services only are exchanged.” In the abstract this is true, but
the services which have no tangible or visible vehicle fail of any
material appreciation. And, however nearly abstract any service may be,
place and opportunity, and the presence of a party needing and willing
to pay for such service, are necessary factors in the exchange.
Now, private property in land, not required by the owner for his use
excludes labor from place and opportunity. There is no aim or logic for
its existence, indeed, but to effect this very purpose. Its commercial
value depends wholly on its power to prevent work. It could not
otherwise create a forced competition between laborers. Certainly supply
and demand can have no legitimate operation between two parties, one of
which has full dominion over the land and the opportunity which both
must improve. The one has his labor in such relation to external nature
as that it can readily be wrapped up in everything desired; the other
has no place to bestow it, and it must lie sterile. His labor, until
applied, has no purchasing power. It is as impossible for these two to
compete as to exchange, for the thing to be acted upon and turned into a
commodity is in the hands of the owner of the land and the opportunity,
not of the worker.
But suppose the landless man should hire or buy land of a third party
and pay rent or interest to the amount say of one-half of what he could
produce, how then could he compete with the other, who has no rent or
interest to pay? It will doubtless be answered that this rent or
interest is what the owner of the land or money would obtain if he did
no work at all, but merely let to others, and that consequently, as to
the work he actually does, he stands on an equal ground with the other.
This is, logically, much the same as the basis of Ricardo’s theory of
rent. How inadequate it is to the solution of any problem of industrial
production seems not to have troubled the minds of any of the
economists.
It is true that the balance over that which the land-holder might have
obtained as rent without labor determines the amount which,
commercially, his labor realizes him; but the utter fallacy of this
assumption is seen the moment we reflect that when the laborer can get
no employment, or opportunity to work whatever, and starves, the man who
has access to the soil can live in comfort, although he gets no more
with his persistent labor than if he had rented his land and taken the
rent it yielded. According to this theory, reduced to a naked absurdity
in this instance, he would have obtained nothing for his work; it would
have been unproductive. Such induction from such premises, it seems to
me, can have little interest except for those who are seeking
justification for existing inequalities. Why the one should be protected
by law in the ownership of thousands of acres, while the other is denied
access to any, has no answer, economically, but that it is the law of
trade! The inability of political economy to grasp the problem of social
industry and division of products now fully appears.
It is assumed then that existing conditions and inequalities obtain from
the operation of the laws of trade. Nothing could be further from the
fact. They are the results of barbaric custom, of class domination and
legislation, and are upheld by no natural law of trade or natural law of
any kind yet discovered; and the wrongs of which the landless laborer so
justly complains are wrongs inflicted and sustained by statutes
regarding the tenure of land which have no basis in reason, and will be
found to be as destitute of any foundation in the science of law as they
are of any justification in the science of morals. It is worthy of note
that Ricardo bases his theory of rent, and Malthus his theory of
over-population, upon the same general ground, and under the shadow of a
land monopoly, which keeps one-half of the soil of the British Isles
uncultivated, assumes that the whole movement of society, trade, and
population, in condition as in numbers, is under the reign of natural
law. Now, science can take no cognizance of statute law unless it be by
comparing it with, and condemning it where it differs from, natural law.
Yet our pseudo-economists treat all phenomena, under whatever arbitrary
enactment or despotic administration, as of the same scientific value.
It has, therefore, been my aim to trace historically the processes by
which these inequalities have arisen, been perpetuated, and are at
present sustained and made to appear rational. Science makes no claim to
dominate and govern society, but it is under obligation to define and
classify phenomena of all kinds. It may not prescribe laws for the
possession of the land, but it is bound to show what the natural
relation is between MAN and the SOIL, the prime elements in social
industry and social progress.
In the development of industrial production, which is older than any
written history, there have been three great epochs, interlapping each
other in time, place, and circumstance, but still sufficiently distinct
from each other to admit of general analysis and classification. Not to
speak of the cruder form of production in which the individual or
primitive family engaged, or was directly interested, we begin with the
communistic form, when the family extended to the tribe. This is
undoubtedly the earliest form which has any social or historic
significance. In its proper place we shall see that this was the
fundamental form by which occupancy of the land was regulated and
determined. Under such form of necessity the production must have been
communal, and was shared, more or less equitably, according to the
degree of progress the tribe had made in intelligence and social
advancement. Such progress, however, was subject to great diversity of
checks, and in many cases violently turned backward by tribal wars and
conquests of warlike chieftains. And where the longest peaceful periods
were enjoyed, there was the liability of an arrest of the natural
development of social law through the attachment to custom and tradition
which shows itself so often in primitive communities and among subject
races. As the boundaries of tribes extended they came in contact with
other tribes, upon whom they made war or who made war upon them. Mutual
destruction and the possession of the domain and goods was doubtless the
purpose of these conflicts. The more warlike destroyed the weaker or
less warlike, and appropriated their wealth, as formerly our farmers
destroyed the bees to obtain their accumulated honey; but, like them,
the warlike tribes soon learned a better way. We have seen, now, what we
may class as the primitive form, both of “production and division by
usurpation.” Under this most discouraging state of affairs, however,
production still went on, evincing the aptitude of mankind even in a
savage or semi-savage state, for productive industry, notwithstanding
the word of our teachers of economics and apologists for existing
usurpations; that unless the capitalist and landlord be assured of the
lion's share in distribution they would not co-operate, and industry
must cease.
This form was superseded by another form, in which the lives of the
conquered were saved, upon the condition that they would become the
bond-slaves of the victors—they, and their children, and their
children’s children. This form may be termed chattelism. Under it
production and division were quite simplistic problems. Its effect upon
the increase of wealth was, no doubt 3 considerable in comparison with
the barbarity which it superseded, and which killed the worker to obtain
possession of his product. It was in some respects more considerate to
the vanquished, and much more convenient for the predatory class ; but
it was less favorable to production than might have been expected, for
the worker before had the normal incentive to industry, the prospective
possession of its fruit, and till the last the hope that he might escape
the threatened doom. But as a productive worker, the slave soon sank to
the lowest level known to industrial activity —so low that the lash
became the resort to stimulate his flagging purpose. To this enslavement
and usurpation there was this justification, and this only. The victor
could plead that he had saved the life of the vanquished, which was
forfeited by the laws of barbaric war, and in consideration of which the
victim gave his long-life service and also that of his posterity.
This vestige of primitive “contract” appears as late even as the forming
of our own Constitution, which contains the phrase “persons held to
service,” and under which slavery was perpetuated in our republic for
nearly a century, and would doubtless have been in existence to-day but
for the rebellion of the slave-power itself against the government which
had so long shielded the system from the progress of modern thought and
the logic of events. This is a circumstance which we should not fail to
emphasize in our estimation of the forces which must inevitably disrupt
or destroy our present system of capitalism unless the existing
usurpations are allowed to control wholly our government and laws, or
are in time wisely and peacefully abolished.
To the slave system of production succeeded the feudal system.
Successful chieftains had increased the extent of their sway by
conquest, and kingdoms and empires were formed. The influence of the
primitive community became weakened and modified. Slavery became
unwieldy, and the operation of Roman civilization became checked and
hastened to dissolution, through its profligate prostitution of the
civil law and of public trusts, to promote private advancement and
personal dominion. With the absorption of the lands by a class, it
became an empire of slaves, citizenship retained no meaning, and only a
debauched aristocracy remained.
Under feudalism the slave became a serf, and was bound to the land and
the landlord to him. He was recognized as entitled to protection under
the law of the realm, and under the doctrine of the divine right of
kings vassalage and villienage became the condition of nearly all those
who followed industrial pursuits. This was the feudal system of
production. Under this form certain kinds of industry flourished; but
other than a rude agriculture, they were those relating to war, or to
the requirements of the church. This system gradually and silently
disappeared with not so much as a notice from any historian till the
time of Macaulay. To it succeeded the “competitive system,” as we may
call it for the want of a better name. Fourier denominates it industrial
or commercial feudalism. Karl Marx calls it “capitalistic production.”
It is unimportant what we call it, if we analyze the thing itself and
properly classify it.
As the feudal system retained many of the elements of slavery, modified
by the traditions, customs, and practices of the primitive communities,
so capitalism retained the essential usurpations of feudalism, though
professing to guard personal freedom, and to observe equity between the
owner and the occupier of the land, the employer and the employed. Like
slavery and serfdom, however, it relies wholly upon the “law of
contract.” This law we shall be under the necessity of analyzing, after
we have inquired into the principle of law which underlies the
apportionment, occupancy, and use of the land. It is well here to call
attention merely to the significant fact, that although slaves were held
under contract they were incapacitated from making any contract
whatever, not even marriage; and that the serf was virtually in the same
condition, being allowed to marry only within certain limitations and
with the sanction of his feudal lord. We shall see, by and by, that a
slave, serf, nor even the landless wage-worker, has any status which can
enable him to make any contract which will be binding with respect to
the division of the products of an industry in which he is mutually
engaged with others.
Though we have spoken of the several systems of industrial production,
as they were dominated by the simple law of the strongest—as under
slavery, as under hereditary rule in feudalism, and in our present
system of capitalism, or rule of the market—there is and has been, in
reality, but one principle about production under all of them—that of
the employment of human labor upon the soil, and the spontaneous
offerings of nature. And in the creation of all social wealth this has
been co-operative. It is the method of division which has varied, but
varied less than appears upon an ordinary presentation of the subject.
For the proportion which goes to the worker has a remarkable similarity
under these, to appearance, widely different systems. Nearly the same,
and only the same, proportion goes to the wage-worker now as went
formerly to the serf or to the slave. We have no reliable data, it is
true, as to what portion of the slave's production was usually required
for his support, but we have the authority of Hallam that the laborer of
his generation was “much inferior in ability to support a family to his
ancestors three or four centuries ago” (Middle Ages, p. 500). And he
quotes Sir John Cullum as saying: “In the fourteenth century a harvest
man had 4d. a day, which enabled him in a week to buy a comb of wheat;
but to buy a comb of wheat now (1784) a man must work ten or twelve
days.” He further says: “So under Henry VII., if meat was a farthing and
a half, which I suppose was about the truth, a laborer earning 3d. a
day, or 18d. in the week, could buy a bushel of wheat at 9d., and 24
lbs. of meat for his family. A laborer at present (1817) earning 12s. a
week can only buy a half bushel of wheat at 10s., and 12 lbs. of meat at
7d.” He points out that in consequence of the improvements in
manufactures certain commodities had become proportionally cheaper, but
on the whole concludes as above quoted.
But while it is true that great progress has been made in improvements
in machinery, in the processes of various industries, and the production
of wealth, it is also too true that poverty has extended its borders in
equal, if not increased, ratio. It may be said that “the craftsman now
lodges and fares better than the feudal lord ten centuries ago, or the
barbaric king of an earlier period;” yet still the proportion he shares
of what his labor creates is less than that which the Saxon Gurth
enjoyed; and what is worse, is denied at times the opportunity to work
at all. The wealth which the lord of land or of capital now acquires
from the productions of labor is proportionately greater than that which
success ever gave to the military chieftain, to the slave-holder, or to
the feudal baron. That political economy, as defined by the latest
school, applies equally well to each of these systems of production and
division should show us how inadequate it is to even treat, much less to
solve, the industrial problems which are now pressing for elucidation.
One of the first, if not the very first, of economists who were
prominent in the public life of our nation fifty years ago—John C.
Calhoun—was a slave-holder who religiously believed slavery to be not
only right, but the only safe relation between “capital and labor.” He
foresaw, and correctly foretold, that the abolition of slavery would
lead directly to the conflict between labor and capital which now
confronts us.[6] We must look to a broader sphere of thought than that
of political economy, which is constantly narrowing, before we shall
find any satisfactory reason or explanation for the gigantic
accumulations of wealth in the few hands, and the growing pauperism
among the people wherever the tenure of land and the law of the market
coincide to multiply accumulations of wealth by a “duplicate geometrical
ratio,” while labor can only increase production by “equal differences.”
That the tendencies which conspire to create the inequalities of
condition, and utter subjection of labor to the power of capital, are
traceable ultimately to private property in land, as at present
interpreted by law and custom, there can now remain no rational doubt.
Mr. George, in his “Progress and Poverty,” has shown it in his masterful
way, though he does not see that it is now a tool of capitalism merely.
His work has become so widely known, and so generally read, that I may
be saved the necessity of making any argument upon that head. Mr.
Wallace and Mr. Clark have also directed attention to the same question,
in a manner to leave the matter in no doubt, and I will not take the
labor of proving at length what is so generally acknowledged to be true.
To the perhaps less obvious truths respecting the modes of obtaining
wealth without service, the nature of the productive factors, and the
ratios involved in procuring and apportioning social wealth, we need to
apply the most careful attention and bring the utmost candor. For upon
these qualities of mind everything in the investigation of social
questions depends.
Growth.
As a science, or branch of science, political economy is little more
than a century old. The term is said to have been first used by Quesnay,
a French philosopher, who published a volume in 1758, no copies of
which, however, are now extant. Previous to that a doctrine known as
“the balance of trade” had obtained among the savants of Europe, and
exerted a wide and powerful influence over the government and fortunes
of nations for nearly two hundred years. Spain and Poland especially
favored it, and by cruel laws and frequent wars sought to retain within
their dominions the money of commerce—the precious metals. More than one
-fourth of the whole time is said to have been spent in destructive
wars, which are noticed in superficial history as dynastic and religious
wars, but which were in the supposed interest of that control of
commerce which would bring the money from many countries into one.
The doctrine was briefly that “such commerce only was valuable which
brought money into a country,” and that in exchange one side necessarily
gained and the other lost. During its prevalence, however, Spain sunk
from the first to a fourth or fifth rank among the nations, and Poland
lost its national existence.
Quesnay was the first writer who combated this doctrine by anything like
a systematic method. He laid it down as a maxim that “nations are
interested in the prosperity, and not in the destruction, of their
neighbors.” A school of philosophers was immediately formed who adopted
in the main his teachings, and, according to Macleod, “reflecting upon
the intolerable misery they saw around them, struck out with the idea
that there must be some great natural science, some principles of
eternal truth founded in nature itself, with regard to the social
relations of mankind, the violations of which were the causes of that
hideous misery they saw in their native land. The name they gave this
science was Natural Eights, and their object was to discover and lay
down an abstract science of the rights of men in all their social
relations . . . toward government, toward each other, and toward
property” (Elements of Economics, p. 54).
To what extent the promulgation of their views operated to change the
attitude of the French people toward their government would prove an
interesting inquiry, but it is not proposed here. Freedom was their
ruling maxim—freedom of person, of opinion, and of trade between
individuals and nations. It seems that Turgot, who was for a time the
controller-general of Louis XVI., and an eminent disciple of his school,
would have been able to turn back the threatened revolution, if his king
had enabled him to carry out his plans for reforming the civil and
financial systems he found enthroned in France more securely than
monarchy itself. He was allowed to hold his position only about a year
and a half, when he was abandoned by the king, who at the same time
expressed the opinion that the only persons who sought the welfare of
the people were Turgot and himself.
A writer of note says, in regard to this: “If the nobility and
privileged classes had possessed enough of foresight and patriotism to
submit to his plans of reforming France, she might have been spared the
horrors and excesses of the revolution. But his projects for the public
good were defeated by the confederacy formed against him by the nobles,
the courtiers, farmers of the public revenue, and the financiers.”
This first school of economists recognized that man’s physical and
social wants lead him to live in society of equals in a state of “peace
and good will,” and to recognize that others, with the same wants as
himself, cannot have less rights than himself, and that he is therefore
bound to respect those rights, so that he may have the same observed
toward himself. They held that wealth was derived wholly from the
produce of the land, and consisted of that which was in excess of the
cost of production, or that which was consumed by the labor producing
it. Labor employed in obtaining products from the land they considered
the only productive labor, and held that the wages of all others were
paid from this source. In exchange they held that neither side gains,
and they excluded labor and credit from their definition of capital,
although at the time chattel slavery was common among the nations. This
school was established upon a half truth. They recognized the land as
the basic element in economics, but failed to see that only when joined
to labor it was a factor in the production of wealth.
But there soon sprang up a second school of economists, holding, like
the first school, to freedom of commerce, but denying that mechanic arts
and trade do not contribute to enrich a nation. They contended, also,
that there is a gain to both sides in commerce. Adam Smith, the leader
of this second school, made labor the basis of all wealth, as the first
school had made the land, and therefore complemented their main theory.
This school took up the theory of value, and developed the general idea
of supply and demand in its operation to promote or regulate the
fluctuations and adjustments of prices. Adopting also their idea of
wealth as arising from the mutual wants of people, and as consisting of
the exchangeability of things, Smith laid it down as an axiom, that “the
real price of everything—what every thing really costs to the man who
wants to acquire it—is the toil and trouble of acquiring it. What
everything is really worth to the man who has acquired it, and who wants
to dispose of it, or exchange it for something else, is the toil and
trouble which it can save to himself, and which it can impose upon other
people. What is bought with money or goods is purchased by labor as much
as what we acquire by the toil of our own body, . . . and its value to
those who possess it, and want to exchange it for some new production,
is precisely equal to the quantity of labor which it can enable them to
purchase or command.”
But neither school clearly grasped the whole truth —that it is the union
of these two agents or factors which produces all material goods. The
system, of which Smith gave the substantial rudiments, was widely
departed from, in certain particulars, by Ricardo, Malthus, Mill, and
others, without, however, in any way inquiring into the natural relation
between the land and the occupier, or into any equitable system of
division of the products of industry. If they did not assume that wages,
rent, and profits were a just and equitable system of division, they
ignored their obvious inequality and monstrous injustice; and if they
did not assume that the unrestricted dominion of the land as established
by civil law, was true and in accordance with the natural relation, they
virtually treated it as such, and were wholly silent as to any other
theory of land ownership than the capitalistic or feudalistic.
From this remark must be excepted, however, the later Mill, Prof. J. E,
Cairnes, and some later writers of less note. And the truth is that the
strict trade economists found no practical method of evading longer this
manifest tendency to the investigation of more fundamental questions;
but by narrowing the scope of the science to the single matter of
exchange. Professor Perry, our own countryman, Macleod of England, and
M. Rouher of France, are representative men of this later school of
economists. Macleod says: “This view has now become general among the
most recent and advanced economists in Europe, who are too numerous to
name—that pure economics is nothing but the science of exchanges.”
It is useless now to object to this limitation of a science so broad in
its inception, and which embraced isonomics, or law of equal privilege,
as well as economy. But what is open to objection and severe
reprehension is that when so limited it should treat all phenomena in
regard to property and trade as natural, however determined by arbitrary
domination, or by the operation of barbaric custom and unequal laws.
Because, if we follow the teachings of this later or third school, in
accepting the theory that supply and demand is the cause of value
(although really but an incident in the fluctuations of the market
price) there arises all the greater necessity for dealing in an
independent way with those things which the reformed science excludes,
viz.: The work and the worker, and their relation to each other and to
the earth, as well as to the system of division of the products of
social industry. For these exist back of all trade, and of the “varying
relation of economic quantities” to each other, which, according to this
school, “defines and limits the inquiry.” Surely if so narrow a
specialty requires the appropriation of an entire science for its
elucidation, the relation of the man to the elements upon which his life
and labor depend, as well as the undisturbed enjoyment of the products
of his activity, demands an inquiry and the forming of a science of
social industry applicable in every social arrangement. And certainly it
will not be permitted to a science of such special scope as economics
has thus become, to determine and conclude any controversy beyond the
sphere of trade, especially not to decide the claims of labor adversely
by simply ignoring them, or by assuming them already determined by the
crude institutions derived from a wholly unscientific and barbarous age.
It is also plain, from what has been quoted from a “Pure Economist,”
that the view of the originators of the science, the first school, was
far more broad and humanitary, and aimed at nothing less than “to
discover and lay down an abstract science of the natural rights of men
in all their social relations.” Now, since “Economics” has abandoned
that field altogether, and confined itself to the treatment of a single
branch of the subject, the question of value, by what logic can it
assume to prejudge those broader and weightier questions which itself
has positively excluded?
I should notice in this connection the existence of a partially
retrograde school of economists, which is mainly represented by the
works of Henry C. Carey. It was in some respects a protest against the
studied neglect, by the writers of the second school, of the industrial
question and of the rights of labor. To a certain extent he
rehabilitated the old doctrine of the “Balance of Trade,” and with good
reason in view of the abandonment of the whole industrial side of the
equation by the other schools. Whether both parties to an exchange
gained, or whether neither gained, or whether the one gained and the
other lost, between nations or individuals, would depend mainly upon the
equity of the exchange, rather than upon any relation of supply and
demand. Not the “balance of trade,” but the “balance of profits,” would
determine the ratio in which the one would succeed to affluence and the
other be reduced to poverty, and to which abundance of supply and
intensity of demand would give no solution or even intimation.
Protection against such result was not only a just aim, but an imperious
necessity to save industry from a constant despoliation of which neither
school so much as acknowledges the existence.
We can only deplore the wholly impotent remedies offered by Carey for
the disease he so clearly understood. His elementary principles are
greatly clouded by the delusive mirage which befogged his mind in regard
to foreign trade, and the workings of a tariff upon the productions of
other lands. The necessity of a more thorough and comprehensive system
of investigation than any of these schools affords must be now apparent
to the most careless reader.
The progress of the human race is effected by the operation of two
forces which correspond in most respects to what in physics are often
called, for want of better terms, the centripetal and centrifugal
forces. These are the forces of convergence and divergence, the one
tending to concentration of powers and properties, and the other to
their separateness or the independence of parts. Socialism and
Individualism are to appearance conflicting, though in reality
complemental, in their relations to the societary movement.
Capitalism has its rise in the early and erratic stage of these
movements and grows out of the irregular action of these forces. By
itself, Individualism seeks the private good to the neglect of society,
and, uncomplemented, to its ultimate disruption. By itself, Socialism
seeks the collective good, to the neglect and ultimate subjection of the
individual. Between these two forces, and while their play is
inharmonic, the capitalistic tendency becomes developed, employing the
license of the individual to sequester the social wealth, and convert
the social forces into means for the subjection of other individual
workers. Under the usages and regulations of aggressive war it seizes
the laborer and reduces him to the condition of a slave. By more gradual
means it assumes dominion of the land by steady approaches. Anon it
courts the individual and leans toward personal freedom, and, as it
acquires exclusive control of the counter-element, the land, relaxes its
hold of the person of the laborer. It now gathers to itself the social
and civil powers, and, to make its dominion of the land absolute, lauds
at the same time the personal freedom of the individual and the divine
origin of the state. Thus unlimited freedom to extend and absorb earthly
possessions, inviolability of contract, however formed or assumed,
became the great watchwords and signs by which it conquered.
And thus it has played the social force against the individual, and
again the individual right against the social claim, whenever the state
has attempted to limit or regulate its rapacity. It now approaches the
seat of civil power, in order to enlarge its privilege, and converts
public trusts to private ends. In modern states it purchases the courts
and legislatures, and where it cannot directly accomplish this purpose,
pleads for protection and exemption from the law of competition which it
prescribes for the worker. While obtaining high tariffs and princely
subsidies, it takes occasion to warn the government that nothing is
required to benefit the condition of labor, but to enable capital to
give employment; that having freedom to choose his calling and power to
have enforced his contracts, the laborer should be satisfied. In the
testimony before the Senatorial Committee on Education and Labor, noted
capitalists,[7] in giving their life experience intimated that all
workers have the “chance” to become millionaires, and perhaps this would
be true if subsidies and the winnings of gamblers could have universal
application. But it is for private advantage and plunder of the public
that subsidies are sought or gambling is inaugurated.
Capitalism continues true to its origin and name. It seeks to bring all
things to or under one head and to monopolize the sources of production.
In politics it is monarchy, not such as the effete institutions now
support, but as it appears in an Alexander or a Napoleon. It employs all
the military powers of the state and all civil and diplomatic trickery
to reduce all men and all nations to its sway. It does not tolerate
equality or the existence of equals. “The universe cannot retain two
suns.” No sooner have Octavius and Anthony put down the conspirators
than they try issues with each other. This may be said to be the sum of
military careers, the establishment of unlimited power in the hands of
one. It is the same with capitalistic careers.
In trade the instruments and maxims only are changed. The spirit is the
same, and the purpose to reduce the world to the payment of tribute is
scarcely changed in form. Our millionaires, with less personal courage,
have found a safer method of subjection and pursue it with as little
scruple as did the ancient chieftains.
Trade, as we have it in bargain-making, is the direct successor of
violence in warfare. To illustrate this I cannot do better than quote
from Henry Sumner Maine:
“In order to understand what a market originally was you must try to
picture to yourselves a territory occupied by village communities,
self-acting and as yet autonomous, each cultivating its arable land in
the middle of its waste, and each, I fear I must add, at perpetual war
with its neighbor. But at several points, probably where the domains of
two or three villages converged, there appear to have been spaces of
what we should call neutral ground. These were the markets. They were
probably the only places at which the members of the different groups
met for any purpose except warfare, and the persons who first came to
them were doubtless, at first, persons specially empowered to exchange
the produce and manufactures of one little village community for those
of another. Sir John Lubbock, in his recent volume on the ‘Origin of
Civilization,’ has some interesting remarks on the very ancient
association between Markets and Neutrality (p. 205); nor can I help
observing that there is a historical connection of the utmost importance
to the moderns between the two, since the jus gentium of the Roman
praetor, which was in part originally a market law, is the undoubted
parent of our international law. But, besides the notion of neutrality,
another idea was associated with markets. This was the idea of sharp
practice and hard bargaining. The three ideas seem all blended in the
attributes of the god Hermes, or Mercury—at once the god of boundaries,
the prince of messengers or embassadors, and the patron of trade, of
cheating, and of thieves” (Village Communities, pp. 192, 193).
From the fact that in their domestic relations the primitive groups give
feeble play to the principles of trade, he says: “Competition, that
prodigious social force of which the action is measured by political
economy, is of relatively modern origin. Just as the conceptions of
human brotherhood and (in a less degree) of human equality appear to
have passed beyond the limits of the primitive communities and to have
spread themselves in a highly diluted form over the mass of mankind, so,
on the other hand, competition in exchange seems to be the universal
belligerency of the ancient world which has penetrated into the interior
of the ancient groups of blood relatives. It is the regulated private
war of ancient society gradually broken up into indistinguishable atoms.
So far as property in land is concerned, unrestricted competition in
purchase and exchange has afar more limited action even at this moment
than an Englishman or American would suppose. The view of land as
merchantable property, exchangeable like a horse or an ox, seems to be
not only modern, but even now distinctively Western” (Y. C., 227, 228).
Where the older forms of usurpation exist and the ruder despotism
prevails there is less necessity for complete capitalistic control of
the land, but with the dying out of those forms, and as they yield to
the progress of modern thought, privilege, with the instinct of
self-preservation clutches at the dominion of the land, and through the
reduction of that element to the status of a commodity and the
competitive struggle for its possession, renews its waning strength and
extends its endangered power. In the United States this principle is
wholly unrestricted and its dicta are universally accepted in all
business circles. In England an effort is being made to form into
general law the rule of the market so as to do away with the obstacles
to “free trade in the land.” In continental Europe, with the exception
of France, it has not yet taken on distinctive form, and is less and
less defined as we approach the countries governed by absolute power and
the traditions of earlier times.
To reduce land to the state of a commodity, so as to profit by its
relation to production, and to force a competitive struggle for its use,
the spirit of capitalism has contrived to win victory from defeat. And
thus the market has brought the occupancy of the land under its rule,
and developed what under no other rule could have been effected, a
competitive rent, forced by the necessities of the cultivator to obtain
the privilege which naturally is his.
“The right to take the highest obtainable rent for the land is, as a
matter of fact and as a matter of morality, a right derived from a rule
of the market. Both the explanation and the justification of the
exercise of the right in England and Scotland is that in these countries
there really is a market for land. Yet it is notorious that in England,
at all events, land is not universally rack-rented. But where is it that
the theoretical right is not exercised? It is substantially true that
where the manorial groups, substituted for the old village groups,
survive, there are no rack-rents. What is sometimes called the feudal
feeling has much in common with the old feeling of brotherhood which
forbade hard bargains” (Y. C., 199.)
That rack-rent and the taking advantage of the necessities of others to
drive unequal bargains was transmitted from the early times, and
originated in the common antipathy to strangers or outsiders, and so
inconsistent with the fraternal feelings which obtained in more
primitive communities, there remains no doubt. In the Ancient Laws of
Ireland, as quoted by this author, “the three rents are rack-rent from a
person of a strange tribe—a fair rent from one of the tribe—and the
stipulated rent, which is paid equally by the tribe and the strange
tribe.” Competition rents could only arise by regarding the letting and
hiring of land as a purchase or sale for a period of time, with the
price spread over that period. He proceeds to add that “if the writer
[of treatises on political economy] had always recollected that a
competition rent is, after all, nothing but price payable by
instalments, much unnecessarily mysterious language might have been
spared, and some doubtful theories as to the origin of rent might have
been avoided.”
The motive in exacting a competitive price for rent, or any exchangeable
thing, is the reverse of a fraternal or friendly impulse. It is always
attempted to be justified by specious reasonings and baseless
assumptions. It is antagonism, not mutualism. Between the advantage
taken of another’s necessities to drive a sharp bargain, there is only
one step to an act which shall reduce that other to a dire necessity, in
order to increase the advantage to be realized. This step is taken
whenever, under the false assumption that land is a commodity,
proprietorship of it is claimed either by direct usurpation, or under
the pretense of purchase, to the exclusion of those who need to occupy
it. It is this step which constitutes capitalism. Free competition,
indifferently employed, may embrace, possibly, the obtaining a better
price from another’s distress. Capitalism is the systematic reduction of
the many to want, that advantage may be taken of their needs.
But such result springs, as we have seen, from the erratic play of the
primal forces. With the harmonic and complemental action of the
individual and social aims, there could be no place for capitalism, and
with the advent of mutual co-operation, and reciprocal exchange, and the
disappearance of artificial capital, wealth would be more generally
distributed and greatly increased. With the broadest liberty to the
individual, society would exist to guard the equal rights of all, and
thus secure its own stability and progress by promoting the well-being
and normal development of each member.
The sources of unearned increase or income may properly be divided into
three categories from the especial sources from which they are derived:
First. Profits—derived mainly in process of the exchange of commodities.
Second. Interest—derived from the loan of money, or of forms of
capitalized wealth other than land.
Third. Rent—derived from the privilege to use the land, or to occupy
dwellings and other improvements upon the land.
Profits arise mainly in the process of exchange. When two attempt to
effect a transfer of two commodities with each other, there is quite
sure to arise a question as to how much of one shall be exchanged for a
certain amount of the other; and exactness as to values, even if both
were desirous of dealing fairly, would be difficult to determine. But
their agreement is supposed to fix the ratio with some approach to
equity. And the accidental advantage which either might attain is very
likely to be reversed in the next transaction, and consequently could
hardly be classed with profit. When, however, a third party enters into
the transaction, and becomes a go-between for two or more parties with
commodities to dispose of for other commodities, the matter of profit
first presents itself in a distinct form. The merchant is the
representative man of profits, as the banker is of interest and the
landlord of rent.
Let us take it up and analyze it carefully. We will take a most simple
instance, that no confusion may arise from the introduction of lateral
questions.
A farmer raises potatoes and a shoemaker makes shoes. It is convenient
for each to store them with the merchant of their village, who will be
in a certain way the one to determine how many potatoes the farmer who
wants the shoes shall give for them to the shoemaker who wants the
potatoes. Even if money is used in each of the transactions, the
operation is the same. Taking it for granted that, as between the farmer
and shoemaker the exchange is a tolerably fair one, what rule determines
the compensation of the merchant? The economist will answer that he has
done to both a service, and the compensation is to be determined by
competition, as is the price of the potatoes and of the shoes. And while
all stand on an equal footing, there seems no objection to this
determination. By this rule the farmer is paid for his labor in raising
and bringing the product to market ; the shoemaker, for his labor and
material in the shoes, and the merchant for his service in the exchange.
But under free competition he would not be likely to receive more for
his services than each of them in proportion to the time employed, for
certainly the work is not more laborious or repulsive than theirs. But
even if he did, it would still be his wages, and not a profit—for that
means something beyond the payment for services rendered. But would it
be right that he be paid no interest on his money employed in business,
and on the rent of the premises he requires for business? But if he
parts with a portion of this compensation for interest on borrowed
money, and as rent for a hired store, he still has made no profit ; and
it may happen a part of even his fair wages for the service he has
rendered goes the same way. Besides, the others also employ means in
their business. There is evidently, then, no room for profits here.
Besides, there is more or less risk in all mercantile enterprises, and
still another portion of his earnings may have gone justly for
assurance.
However liberally the merchant under such circumstances might sometimes
be paid, it is very evident that no great disparity could long exist in
the compensation of these several callings, did not some other factor
enter into the calculation. Under free competition the pay of each would
certainly tend to equality. Besides, the merchant is placed in a
position to know better than either of the others the marketable value
of the articles, and of his own services, and more intelligence in these
respects is rightly expected of him. Now, whatever his decision in the
matter of the compensation may be, he must decide his share to be either
wages or profits, or else both as wages and profits. That he cannot
charge it wholly as profits, is seen from the fact that he would
relinquish, then, all claim for services, and would be guilty of taking
“something for nothing,” and playing falsely with matters entrusted to
his decision. But if he is paid for his service, by what pretense does
he also charge up profits against his customers? or how, under a system
of natural competition, would he be able to do so and yet succeed in
being employed?
In the prosecution of a business other than mere trading, where labor is
employed and material worked up into new forms and new utilities result,
there is a greater complexity of transactions and interests, but they
all are. reducible to the same terms. These are the services which the
operator performs for the producer of the material, the laborer, who has
his labor only to sell, the machine or tool maker, etc. In the parlance
of the economists, he purchases all these and sells them in the
commodities thus produced and sold. Now, in all this he either performs
a service to those from whom he purchases and to whom he sells, or he
does not. If not, he can make no just claim to compensation whatever,
and in any truly competitive struggle would be unable to receive any. If
recompensed for his services, any claim for profits must be fraudulent
and unjust, for no one can be paid twice for the same work and be
innocent. If he has employed hired money, factories, or lands, and paid
interest and rent for them, so may those with whom he has dealt, and the
moneys he has absorbed from his business to meet these obligations are
not profits; and however he may be leagued with the banker and landlord,
it is not as an operator or merchant that the profit is taken, but as a
banker or landlord, or as a conspirator with one or both of them.
It is easy to anticipate the protest which will be raised against
bringing morals into economics, and such is not my intention, farther
than they are involved in civil law and social economy; but it may be
well to remind critics thus captious, that the highest moral quality,
Truth, is essential to any scientific investigation whatsoever. If we
may not know the truth of any transaction we are in no position to
decide any question in regard to it. It is evident that profits which
depend upon falsehood, deception, suppression of facts,
misrepresentation or adulteration, or upon false claims and pretenses,
can have no place in any scientific inquiry. With these elements
eliminated from business transactions, it is quite plain that nothing
would remain to the trader but payment for his services. Exchange is a
social, not a private affair, and in the transfer and distribution of
commodities, the entire process is the result of attempts at mutual and
reciprocal interchange. It may be to the private interest of the trader
to obstruct, as trade is now conducted, forestall and corner the
concurrent tendencies to exchange. It certainly is the interest of the
whole people that such private interests shall be thwarted as far, at
least, as a promulgation of the truth will have that effect, and here,
really, the province of the scientist ends. It may be well to refer, in
this connection, to the fact that this fear of moral sentiment, by
writers on political economy and civil law, is wholly too one-sided to
be treated with the least respect; for while it deprecates the
interference, in any way, of ethics against the “law of the market,” and
the right to obtain all one can of advantage in a trade, it whines like
a whipped school-boy about the “sacred rights of property,” and “the
inviolability of contract,” whenever its assumed prerogatives are
questioned. It is significant that our courts will cite with deepest
unction the Golden Rule, when rights of property are involved, but
wholly ignore it when the fulfilment of a contract is at issue, however
unjust or oppressive it may have become in operation.
If a man is bound, as the judge charges in a case where another allows
my property to be injured, through carelessness or negligence, by the
rule that he should do by me as he would have me do by him, why is he
not bound by the same law when a contract works to my injury and loss,
and which was obtained by him for the purpose not to do right by me, but
to do me wrong, such as he would not willingly have me do to him? Or
when the property of the people is in the hands of the merchant, and in
a degree he has the power to fix the price, not only of his own
services, but of those of his customers, why is he not bound to do to
others as he does by himself? I may as well follow here these
sophistries to their just conclusion. It will be urged that
advantage-taking should be justified in order that people may learn to
beware of making unequal or one-sided contracts; but this reason is also
unilateral, so to speak, since it is not applied to the other side,
where a question of property is concerned, and where the example would
have been equally salutary to the property holder, by teaching him to
beware of trusting his property in careless hands. Besides, contracts of
the nature we are treating are made under duress and in the interest of
capitalism always.
From what we have seen, profits, distinct and in addition to payment of
services, can have no honest existence where two parties to a
transaction are equitably related to each other and duly informed. No
one who knows and can avoid it will pay a profit. And no one knowingly
will deal at a loss when he can deal without. If both parties can gain
in a transaction, then the benefit is mutual, and there is no profit as
of one over the other, which is the sole characteristic of capitalistic
increase.
Before passing to the consideration of interest as a means of increase,
we may notice the identity in character between the three forms. The
definitions are interchangeable. For example:
INTEREST is the profit which the money lender or capitalist derives from
the employment of his capital. Again,
PROFIT is the interest which the operator or merchant realizes from his
money invested in his business.
RENT is the interest which the landholder receives from the sum of money
invested in land, or for that sum of money for which said land would
sell. Still again,
PROFIT is the rent of the land which had been sold to obtain the capital
employed, or for wThich such capital would exchange; and,
INTEREST is the rent of so much land as was sold to raise the principal,
or for which the principal would exchange.
We can but consider, then, that these three forms of increase are
essentially one, and rest ultimately upon the sole, logical base, the
ability of the land to produce spontaneously.
But we have elsewhere fully demonstrated that spontaneous productions
have no price or exchangeable ratio, except in the degree that dominion
over the land gives dominion over man; for without the two there is, and
can be, no increase of social wealth. Not only nothing else produces
anywhere any increase of wealth, but neither man nor the soil separately
produces anything. It is only by their union that productive phenomena
occur. When these two factors are united, increase of wealth results
legitimately; but when they are divorced, no increase or even production
at all is possible. To introduce another claimant in the division is
fraudulent. Production means more than placing a thing in the market.
That is but one phase of it, though an important one. It begins with the
first application of the human energy to the raw material, and ends only
where consumption begins—in the purchase for use. The whole process or
circle of transportation, storage, and exchange is effected through the
application of labor, and not otherwise. The merchant, by the service he
renders, becomes a joint owner with the others, and is bound to account
faithfully to the other co-workers. It does not change his social and
industrial relation, because he has bought out the shares of the others;
unless he has dealt equitably with them, their interest is not
cancelled, and the extra increase he has gained for himself is the wages
of deceit and fraud, which are in no way lessened because he has
conspired with the landlord and usurer to share the profit with them.
If we found no tenable ground for profits, still less shall we find any
rational justification for interest. The man who puts his accumulated
earnings into some industrial or commercial enterprise, and accompanies
it with his personal service in useful oversight, renders service and
assumes risks and responsibilities which justly entitle him to a liberal
share in the resulting production. If his compensation is unusually
large in one venture, it begets competition and is liable to become
unusually small in another; but with the money-lender it is wholly
different. The secured creditor does nothing of this kind, and is no
more entitled to a share of the resultant production than if he had
placed his gold with a safe-deposit company, for which he would have to
pay storage instead of receiving a premium. In industrial crises, which
follow interest-taking periodically, by an inexorable mathematical law,
it is the means employed in business, or which has been trusted out
without security, on which the whole burden of bankruptcies falls. The
secured loan does not suffer, but is relatively increased in value by
the ruin wrought to all other interests. Dr. Adam Smith truly describes
such a capitalist as the “person who has a capital from which he wishes
to derive a revenue without taking the trouble to employ it himself.” In
other words, one who wishes to obtain the services of others without
rendering himself any service in return, and without risk.
The increased facilities for production afforded by loans to labor is
regarded by many as a sufficient reason why it should share in division.
But to arrive at such a conclusion, it is necessary to leave out two
essential elements of the problem.
1st. That labor is now unjustly deprived of its natural right of access
to “the raw material of the earth,” and opportunity to employ itself.
And,
2d. That all forms of accumulated wealth are subject to inevitable decay
and decrease of value ; the surplus product of agricultural labor,
especially; that all this value has constantly to be reproduced and kept
good by labor, and that the capitalist has no other mode possible for
the conservation of his wealth but to employ it productively. When,
therefore, he makes terms with labor, which requires more than return of
service for service, and of labor for labor, he is imposing upon the
ignorance or taking advantage of the unfortunate condition of the
laborer. But this, however, he would be unable to do but for the
enjoyment of monopolies through municipal laws, which place the laborer
at such disadvantage that his necessities compel him to accept terms
which the capitalist finds no necessity to make equal.
Under the operation of natural law, the person having means to conserve
would find a necessity to recombine it with labor in order to prolong
its existence, equally as great as the person who labored would find for
means to render his labor productive. But when society grants privilege
to a class to control the earth and raw material, it is plain that labor
must accept the conditions of capital, or starve, and that the capital
is not only able to throw the entire onus upon the laborer of
maintaining his decaying property intact, but to lay all labor under an
additional tribute, which shall still farther isolate wealth and beget
increasing dependence of the industrial class upon its accumulations.
A false element is introduced into the question of awards, which bestows
the greater share of labor’s product upon those who do not labor.
Whoever will think can see how impossible it is for such a system to
operate, without subverting all just principles of division, and
subjecting labor to the grossest injustice. It will be seen that if one
man starts with an amount of capital equal to what another can earn or
produce in a period required to double the capital at compound interest,
he will have absorbed just as much as the labor of one man has produced.
At the end of the second period he will have quadrupled his investment,
and at the end of the twelfth period he will have multiplied it 4,096
times, having accumulated, within the last period alone, 2,048 times the
original sum invested, or the amount which the laborer can have produced
in that period. If by invention, discoveries, or other favoring
circumstances, production has increased, it has at most been able only
to change the difference. If in a generation it should add one to what
it had previously been, it would only give production two in the twelfth
period to balance the 2,048 of the capitalist. Necessarily, by the
operation of the absorptive series, labor never gets more than a moiety
of what it produces. The operation cannot absorb more than labor
produces. But this does not prove that the accumulations do not proceed
as the illustration shows, or are any the less oppressive to labor.
The least per centage to the capitalist, not the pay for service
rendered, involves accumulation by equal ratios, in periods of greater
or lesser length. To this no production of industry is equal which the
world ever has or can know. Such exaction is therefore wholly without
any logical foundation, and is as unscientific as it is oppressive and
unjust. Its presence in our industrial system must therefore be referred
to causes flowing from unequal conditions, usurpation and
misapprehension of economic law, and not from any necessity in the
development of the laws of industry and reciprocal exchange.
Taken in connection with our system of land tenure —without which its
existence would hardly be possible—this system acquires a power so
fearful that no friend of his race can contemplate it without
detestation and horror. The accelerated velocity with which it enables
the avaricious and unprincipled to achieve the complete monopoly of the
earth, is far more dangerous and destructive of human rights than any
“divine right” of kings, or any mere law of entail or right of
primogeniture can possibly be.
It is to be understood that when I speak of the operation of this method
of accumulation, I suppose the capitalist to have the ability to supply
his own wants by his own efforts. If his income from usance merely
supplies what he consumes, extravagantly or otherwise, then he is a
sinecurist, quartered by this system upon society, whose industry is
rendered tributary to the support of a person wholly useless to it.
To show with greater distinctness the operation of the principle on
which interest operates, let us suppose that the land should be loaned;
and that, instead of the annual percentage being paid in money, it was
stipulated to be paid in kind; that, as interest on money is paid in
money, so the rent or interest on land should be paid in land. Now, a
man borrowing land on such conditions would, in a dozen years or so, pay
back as interest all he had borrowed, and must of necessity repudiate
the principal—become bankrupt in land. For it is evident that in the
period in which the payments of interest would amount to a sum equal to
the principal, an amount of land equal to itself, would be required to
be returned to the owner for its own use; and, as the amount of land in
any town, state, nation, or the world, is a fixed and definite one, the
operation of any such stipulation would be impossible, and besides
producing untold embarrassment and suffering, must end at last in
repudiation. A system of contracts like the above would be held in all
courts as invalid, because they involved conditions well known to be
impossible.
But the operation of our credit system, and payment of interest on
capital to those who take no care in its employment, virtually involves
the same consequences. By the accumulations of interest upon a given
sum, the possessor can purchase a given amount of land in every period,
corresponding to the amount of the principal invested. This enables the
capitalistic class, as distinguished from the industrial or commercial
class, to control the ownership of the land just as effectually as the
titled nobility of any country ever did.
Having discussed the general question of increase, the principal purpose
here has been to show how intimately the interest question is involved
with the monopoly of land. It is plain, moreover, from this showing,
that there is no such difference in the rate of rent and of interest as
has been contended by Mr. George and others. As the capitalized wealth
of any community or nation increases, the nominal rate of interest goes
down with wages, but its share in the annual production remains the same
if it does not increase. Let the rent of land be paid in land as rent of
money is paid in money, and the rent rate will be seen to decrease in
the same ratio as interest or wages. It could not possibly be otherwise.
In a new country where land is plenty, money and labor scarce, wages
will be high, interest will be high, and rent low. The farm renting for
two hundred dollars will at most only be worth two thousand, and the
rent will buy the owner another farm in ten years. But as the population
increases, and the wages and interest decrease, it will be possible to
increase the amount of rent, but the price of land will also have risen
and in a still more rapid manner, so that, although the rate of rent per
acre may have increased, the rate per cent, will have decreased the same
as the rate per cent, of money. And it will take twelve, fifteen,
twenty, or thirty years for the rent of one farm to enable the owner to
purchase another, the same as it will take one capital to beget another.
So that while the wages of labor are constantly decreasing with the
growth of capitalism, both the landlord and the money lord are enabled
to double their capital of money or of land in equal periods
corresponding to each other in every essential feature. When interest
rules at 7 per cent, it is possible to double the capital in about ten
years. When 6 per cent., in twelve years; 5 per cent., in fourteen
years; 4 per cent, in seventeen years, and at 3 per cent, in less than
twenty-one years. At 7 per cent, rent, the farm, without any labor or
contribution of his own, will have “earned” the owner in forty years
fourteen other farms of equal value. At 6 per cent., nine farms; at 5
per cent., six farms; at 4 per cent., five other farms, and at 3 per
cent, nearly four other farms. A money-lender will have increased his
capital in the same or even more rapid ratio, the rate being usually a
little higher for money than for land, as the latter is considered safer
as an investment or for security, and cautious holders are willing to
sacrifice the higher rate to the greater security against loss of
principal.
It is worthy of remark, how much has been made of the “progression of
numbers” by Malthus and those economists who have availed themselves of
his subtleties to show that destitution is referable to the laws of
nature and the arithmetic of the case, and not to unequal laws. It is
shown that population increases by “equal ratio,” while the production
of food, at most, can only be increased by “equal differences.” Thus, it
is said, while production of food in several periods may proceed with a
difference of two, it cannot possibly be more than 2, 4, 6, 8, 10, 12,
14, 16; while in the same periods the increase in population will be 2,
4, 8, 16, 32, 64, 128, 256. It is a little strange that Malthus, nor the
economists who follow him, take any notice of the same law as applied to
production and taking of interest.
Production by labor proceeds by equal differences, interest and rent by
equal ratios, and at higher ratios than the difference in production
ever obtains. Yet this power of increase, which takes from the producer
and gives to the idler, is not a law of nature but a law of the state or
municipality. Probably for this reason its application here has not been
alluded to, although to it can be referred mainly all the famines and
pauperisms which have been ascribed to over-population. Usury and rent
have been the great levers by which the homes of millions of millions
have been alienated and gone to widen the domain to the sway of avarice
and to the love of lordly domination.
The insanity of interest is shown by considering the sources from which
it is derived:
(1) From the principal loaned, resulting in bankruptcy to the borrower,
and perhaps loss to the lender.
(2) From the stock of the borrower, resulting in his complete
impoverishment, if continued, since the principal borrowed must be
returned intact.
(3) From the wages, or equitable compensation of the borrower, or from
the natural wages of his employees, or from the profits he has been able
to realize through unjust and irrational trade from the public with whom
he has dealt.
There is no other source from which he could have derived the interest
paid, unless the exploded notion be accepted that the land can produce
wealth without labor, or that goods in process of exchange, without
labor, increase in quantity or value.
To attach increased value to things which are being operated upon by the
reproductive forces of nature, aside from the obvious injustice of
exacting the labor product of another for their operation, and of
attempting to exchange the work of nature for the work of a
fellow-being, is conspicuous when we consider that the conservation of
our perishable product into a durable one, is a quite sufficient
inducement to all salutary work. Ditching for irrigation, planting
trees, indeed all the things cited as proving the right of taking
increase, would be done, is done, without any such motive on the part of
those who do the work. The men who have built our canals, our railroads,
our aqueducts, and made our numerous public improvements have not been
paid, besides the wages for their labor, an annuity from the use of
these works, for all time to come. The capitalist alone receives such
tribute, and this, not because he would not otherwise have lent his
money to promote the work, for it is proverbial that he is more ready to
let money when the rate is low than when it is high. Indeed, with good
security, he would always prefer to have it stored for him than to take
the risk of keeping it by him, were it not that through the assistance
of our laws, he is enabled to exact tribute in this form from the labor
of the people, by charging for the “flight of time,” and the action of
“natural forces.” It is also evident that the “reproductive forces of
nature,” and “the utilization of the variations in the powers of nature
and of man, which is effected by exchange,” are present in every form of
production and exchange whatever, as well as in those instanced by Mr.
George; for unless these forces work with the labor of man, he produces
nothing and exchanges nothing. The advantage of exchange, whatever it
may be, is mutual, or no equitable exchange is made.
Mr. George, when he pays his washerwoman, pays her for her muscular
exertion, and the exercise of skill in her profession. If she were, in
addition to that, to charge him for the use of the sun and air which dry
them, and without whose aid her labor would be of no service to him, he
would justly complain. The boatman who sets him across a stream does not
charge him for the buoyancy which floats his boat or the wind which
wafts the sail. It was left to capitalism to devise the magic wand which
turns everything it touches into gold, and thereby tax labor for every
foot of land it occupies, and every field it seeks to cultivate, with
every force of nature it attempts to utilize, because the grasp it has
secured upon the land gives it control over all natural, including the
human forces. This author makes a special plea for interest or increase,
which I will let him state in his own words. He supposes an instance
where “in one place a given amount of labor will secure 200 in vegetable
or 100 in animal food. In another place these conditions are reversed,
and the same amount of labor will produce 100 in vegetable food or 200
in animal.” But by devoting labor in one place to the procurement of
vegetable food, and in the other to the procurement of animal food, and
exchanging the quantity required, the people of each place will be able,
by the given amount of labor, to procure 200 of both, less the expenses
of exchange; so that in each place the produce which is taken from use
and devoted to exchange, brings back an increase” (Progress and Poverty,
163).
And yet he admits that labor is required to effect exchange; but thinks
“there is a distinguishable force co-operating with that of labor which
makes it impossible to measure the result solely by the labor expended;
but renders the amount of capital, and the time it is in use, integral
parts in the sum of forces.” Now, since the capital of trade is only
that part of the product of labor seeking to be conserved, the time it
is employed is chargeable, if at all, to the other side of the equation,
since its owner, in permitting its incorporation with another
enterprise, or productive circle, elects to treat it as present labor.
Besides, what other capital is there in the transaction he has
instanced? Only “the given amount of labor,” in the procurement of the
200 of animal and the 200 of vegetable food, and the service of
transportation and exchange. There is a surplus of 50 of vegetable and
50 of animal food which has to be awarded somewhere. It is possible that
the exchange and transportation may not absorb all this; but there must
be no protective tariff or monopolized line of transportation, which
takes “all the traffic will bear” between the two places. I am unable to
see any increase which goes not to the labor as natural wages for the
procurement, transportation, and exchange of these two kinds of food. It
is difficult to understand how more capital is required tea produce the
single line of food than for each to produce both kinds. Under freedom,
neither of the producers would change his habit of producing both kinds
till satisfied that the advantage of change was a mutual one, and not an
advantage to one side alone, or to neither, but to be reaped by an
intermediate or parasite.
It is thought that as “the seed in the ground germinates and grows,
while the farmer sleeps or ploughs new fields,” there is a good reason
why a tax should be put upon the growth of food by the landlord or
usurer. But if nature works thus with man, she nevertheless awards him
compensation according to what he does. When the season’s yield is
large, in proportion to labor bestowed, the farmer may get no more,
except in kind, as a reduction in exchangeable value will bring it to an
average with shorter crops. Nature, everywhere, repudiates the crudity,
born of capitalistic assumption, that anything can be obtained for
nothing. Only at the expense of labor can this be realized. None knows
better than the fruit grower and cattle raiser that constant attention
and careful labor are requisite to success. Nature rewards no idler. If
Shylock makes his “ducats breed as well as ewes and rams,” it is not
because either multiplies without human toil, but for reasons wholly
outside of the laws of industrial production or of equitable exchange.
The nature of rent we have already referred to as one with profits and
interest, indeed, as the foundation of both. Its incompatibility with
the principles of equity and economy are most apparent. But for what is
called the “rent theory,” it would claim but a passing attention. To me
it is quite evident that Ricardo, who first propounded this theory,
became aware of the impossibility of reconciling rent with any rational
theory of the production and distribution of wealth, yet felt the
necessity of accounting for the phenomena in a manner which would divert
attention from its wholly unjustifiable nature. The “pure economists,”
since they have dispensed with all questions but the one of trade, find
themselves under no obligation to champion the theory, and virtually
ignore it, placing land in the category of things “which can be
exchanged for money,” and so, consistently, make no distinction between
rent and other forms of increase. Macleod defines rent to be “the mere
right to demand compensation for use,” and the “purchase of a use for a
limited period.” It could, therefore, be summarily dismissed, but that
Mr. George, after designating it as the main “buttress of the Malthusian
theory,” and after demolishing that theory, has seen fit to build up a
system upon the dismantled buttress, which he thinks still remaining.
Instead of analyzing rent, he seems to regard it as a mysterious power
which creates value independent of labor, and as something which he can
tax to any degree without taking from the natural wages of labor;
whereas, it is wholly due to exclusive land ownership, as he himself
frequently asserts.
According to Ricardo, rent is not an arbitrary tribute levied upon
industry by usurped rights, but merely the excess of product, of the
best land over the poorest, as the latter shall come into cultivation or
other use under the exigencies of increasing population. As two prices
cannot prevail in the same market at the same time, so he thinks the
cost of producing grain on the poorest land will determine the price of
grain raised upon the best land, and thus the excess will determine the
rent which will be paid for its use. There seems to me little necessity
for misapprehension in regard to this theory. While land is under
exclusive dominion it may serve in a certain way to explain how the rent
rate is determined as between particular lands. But this is by no means
the limit of its use by the followers of Ricardo, among whom Mr. George
must be included. The inference is always sought to be carried that it
also reveals an economic law under which only rent is developed. It
assumes that rent does not arise until increase of population forces the
use of less productive soils. In fact, the operation is directly the
reverse of this. It is rent which forces the use of less productive
soils, and thus creates the necessity, the previous existence of which
is represented to be the cause and justification. If the land I till
will yield 40, and I have to pay 10 rent, it is evident that this will
force the use of a quality which will yield only 30.
But let us test this assumed cause, and see if in the absence of it
altogether the same phenomena will not occur. An island of uniform
surface and fertility is divided equally among a certain number of
people. And to make the illustration plain, let us suppose that all
support themselves mainly by raising grain. It seems quite certain no
rent would be paid, though a number of incidents might be conceived
under which it were possible, even while the soil in every portion
remained of the same fertility. One circumstance, however, would
certainly and permanently establish rent, and that not a varying
productiveness of the land, but the presence of laborers who were
debarred access to the soil. As soon as there arose an increase in the
population requiring land, which it was in the power of holders to deny,
land would have a price, rent would be offered and taken, or the
laborers would offer their services at a price below “the whole product
of their labor;” and the rise of rents and decrease of wages would
inevitably follow every increase of such laborers, just the same as if
extremes existed in the productive capability of the land. As population
increased, land-holders would decrease, under a system of land-holding
like ours, and a divergency of conditions would proceed till a landed
aristocracy arose at one extreme, and a dependent, wretched proletariat
at the other. And this would result, not at all on account of the
unequal fertility of different soils, but wholly because “the increase
of ownerships had not kept pace with the increase of population.”
The theory also assumes that poor land below the margin of cultivation
can be had without rent. I am certain only exceptional cases can be
found where land can be had at all without rent, and these will occur as
often on the best as on the poorest lands. Often within the limits of
our cities fertile patches are occupied without rent, while the settler
taking up free land on the prairie often pays rent to his earlier
neighbor for a corn or garden patch.
Under monopoly, often as now in Ireland, the poorest is rented, while
the best lies idle, in deerparks or sheep-farms, the tiller accepting
that which he is compelled to. Labor here has to deal with privilege to
which no economic principle applies, and where demand and supply have no
operation, and in which one party to any transaction has the power to
determine the compensation of both, and if any, a forced exchange takes
place. Between “the whole product of labor” and the “wages bordering on
starvation,” there is a wide margin from which the landlord can draw
fabulous wages without regard to any ethical or economic law. To attempt
to reduce such stupendous larcenies to a system compatible with the
crudest form of equity, will forever, as it has heretofore, prove the
despair of science.
In connection with this theory, it must be remembered that land is
required for other purposes than raising wheat. Indeed, the best wheat
land may prove the poorest for pulse, garden truck, or small fruits, and
land which will not answer for either may be all the better for
storehouses, factories, and dwellings. The requirement for land is as
various as human industry. Mr. George himself (Progress and Poverty, p.
149) recognizes that “rent, in short, is the price of monopoly, arising
from the reduction to individual ownership of natural elements, which
human exertion can neither produce nor increase.” How he can abolish the
monopoly and have the price remain is a dilemma from which I do not feel
bound to extricate him. On page 219 we find this passage: “The effect of
increasing population upon the distribution of wealth is to increase
rent ... in two ways—1st. By lowering the margin oi cultivation
(Ricardo’s theory); and, 2d, by bringing out in land special
capabilities, otherwise latent, and by attaching special capabilities to
particular lands. I am disposed to think that the latter mode, to which
little attention has been called by political economists, is really the
more important.”
Now, since this latter mode not only differs from the former, but is the
opposite of it, and equivalent to a raising of the margin of
cultivation, they cannot both support the same theory. But the above is
by no means the only subject connected with this question to which the
economists have called little attention. No account is made of the fact
that the natural capacity of land has very little to do with its actual
productiveness, which depends mainly on the supply of manures and
fertilizers, rotation of crops, and skilful dressing and keeping. Little
attention has been given to the great drain that has been made upon our
most fertile lands by the consumption of our large cities, whose sewers
are choked with the principles of fertility taken from the soil, the
rent of which still rises.
But the only practical test to which the theory of Ricardo was ever
subjected proved it wholly valueless. On the agitation for the repeal of
the British corn laws, it was urged that repeal would destroy the landed
interest by greatly reducing rents. But on their repeal in 1846, opening
the markets of England to the products of all the cultivable land upon
the globe accessible to British commerce, rents not did decline, but
rapidly advanced; and for more than a generation no perceptible effect
has been discovered, attributable to the change.[8] The point of
greatest importance, as viewed by the Ricardo school, is that " rent
must exist, and cannot be got rid of. Whoever has land at his command
better than the worst that is cultivated, holds rent. It is in vain,
therefore, to think of destroying the monopoly of land owners. It
revives as naturally by an economic, as water finds its level by a
physical law.” It is for this reason that Mr. George concludes that the
only way to establish equity is to confiscate or tax away the rent, and
thus secure to each member of a state his just share of the unearned
increase. It is urged that if the land were to be divided equally
to-day, it would immediately begin to accumulate again in the hands of
the industrious and frugal, and so become at length absorbed in a few
hands, as now, and of course yield again the same rent.
But such result could not be effected if land were treated, not as
exchangeable goods, but as a complement to labor, as it is in nature.
The distinction between it and the increase of goods, relied on to
establish this theory, viz., That while the increase from them “arises
out of the acts of the holders, the rent of land is a fund that exists
through external causes, over which the holder exercises no control,”
proves that it cannot be equitably exchangeable with that which requires
activity in its production, since there can be no equation between two
things, one of which costs labor and the other does not. One might as
well pay for any service by giving the privilege of breathing the air as
of using the land. The theory itself is therefore incapable of
statement, except in terms which preclude it from exchange, and hence
from the realm of economics.
The inequality which Mr. George thinks he sees in any attempt to abolish
landlordism, which, does not confiscate “economic rent,” is mainly
chimerical, and could hardly form a serious difficulty were occupancy
made the sole title to land. With wider acreage of an inferior quality,
with more varied crops, and perchance more careful tillage, these
inequalities would be greatly reduced, if they did not wholly disappear.
There are many compensations not apparent at first glance. The man with
land of easier tillage, or more productive soil, will be able,
doubtless, to obtain the same price for his grain or fruits as the man
with poorer soil and shorter crops. Having more to exchange, he will
purchase more luxuries. This will stimulate other industries, but will
not increase the cost of actual necessaries to his poorer neighbor.
Under “occupying ownership,” moreover, the principle of first serving
the first comer must obtain. Only as population increased, and progress
in production advanced, would the less desirable places come into
request. The older and feebler would thus be usually in possession of
the more productive, and the younger and stronger be left to attack the
less favored situation.
The theory absurdly proceeds, moreover, upon the hypothesis that the
best land will continue to produce bountifully from generation to
generation. Land, however fertile, when first taken up, will, unless
continually manured, soon work down to a point where it will yield no
more than the same quantity of manure will produce upon land of ordinary
quality. It is the opinion of the best writers upon the subject of
agriculture that it is the culture, not the soil, which determines the
great disparities in agricultural production. Generally, then,
productiveness of the land depends upon the labor applied, and upon the
return to it of the elements of fertility. The original disparity in
regard to soils would soon disappear under natural apportionment and
intelligent use.
In dealing with the subject of rent, as with interest and profits, it is
important to distinguish between that which is actual rent and that
which goes under the name, but is not rent proper. As to profits are
usually added services in exchange, and to interest the assurance
against risk, etc., so to rent there is usually added insurance,
taxation, repairs, and the general expense of keeping up the property ;
actual rent, as actual interest and actual profits, are payments for
that which represents no service or commodity parted with by the
claimant, and hence is not an exchange but a tribute. This distinction
is so readily drawn that it only requires to be referred to here.
Every person who completes a truly rounded life passes through two
stages where his powers of production do not equal his necessary
consumption, and a single, but usually longer period, where they
considerably exceed it. Infancy and childhood have to be sustained by
the product of the labor of others. And the early education is generally
a gratuity to the youth. Again, in old age, and in the decay of the
physical and mental energies, support must come from other than one's
own exertions at that period/ The period embracing early and mature
manhood, on the other hand, is usually accompanied by strength of brain
and brawn, to enable the man to produce more than he is under any
necessity of steadily consuming. Taken in connection with the fact that
all forms of wealth constantly decay, though some with much greater
rapidity than others, there arises an inflexible necessity that some
method of conservation should be found which would enable the producer
to store up in a durable form the values which he has created, but which
will soon disappear, unless so conserved. In consequence of the nearly
indestructible nature of gems and the precious metals, and because they
possess attractions for the barbaric mind as ornaments and charms,
these, at an early period, became the great agents of conservation.
Flocks and herds, from their power to grow and multiply, also became
sought for to this end, as well as for their power, in connection with
dominion of the land, to yield a ready increase.
The only way in which the man usually can repay the cost of his early
support and education is by providing for the support and education of
his own offspring, though often he makes direct return in the care and
support of parents. But this requires accumulation and conservation,
which means accumulation in a form to retain its value undiminished as
nearly as may be. There is, therefore, abundant motive to accumulation
in active life, if all thoughts of increase without labor were
eliminated. And when is added the desire to provide our old age with
comfort and ample support, there arises a demand for such forms of value
as will give guaranties of unvarying stability. The agriculturist will
find, in the planting of fruit-trees, a sure means of storing and
conserving the products of his manhood's labors ; in such form, too, as
can be readily combined with the lighter subsequent labor required to
care for them and gather the fruit. A great variety of forms might be
given in illustration, but this must suffice. The laws of equitable
division or exchange will thus repay the abstinence of the frugal, not
with increase, but with compensation for the labors performed, but not
before completely satisfied.
Of all pretexts for the justification of increase without labor, that of
time is the most flimsy and groundless, and if it were not associated
with the idea that capital is, in some sense, labor or the product of
labor, it could not be made to assume the least plausibility. But we
shall see how little investigation it will bear. The man who has labored
and received the natural wages of his toil, finding them subject to
perish more or less rapidly, turns them into some form less perishable;
the main and normal motive being to save their value from its ordinary
tendency to decrease. That they are converted to this use, and so
conserved, instead of being consumed productively, is proof that the
holder is unable or unwilling thus to consume them, and prefers a stable
value to a changing one. Without intending to introduce any discussion
here as to the nature and functions of money, I may say that it is a
medium provided by society, one of the uses, if not purposes, of which
is the conservation of wealth to the producer. And this it effects well
or ill, according to the wisdom displayed in its creation and the
regulations which determine its character. But whatever else may be
claimed as the powers of money, it will not be pretended that it has any
power of increase. In placing his wealth in this form (when done for
conservation, and not for convenience of exchange), the owner
indubitably elects to put his property into to that from which no
increase to it can be added but by joining it to other labor. He elects
to treat his property, while in this form, as though it were the, wages
of labor just completed. It will make little difference, indeed, what
the particular form of wealth in which the value of his labor is stored.
The utmost that the social comity can secure to him is the undiminished
value of production. Unless most wisely converted by him, and most
intelligently as well as equitably guarded by society, it cannot keep
whole the value of the labor he bestowed. Only when the production be
converted into cash, or some more durable form, or has been consumed
productively, can society return to him “measure for measure,” without
suffering loss. His labor, then wrapped up in the new production, must
have been but a trifle in time antecedent with the later labor, which
rehabilitated it in a new commodity. But the labor doing this should
share the entire result minus the amount of labor concreted in the
things consumed, and no more could be returned than had been received,
without robbing the later worker of a part of his natural wages.
If it be asked whether accepting the contribution of the holder of past
labor-pledges or tokens, and performing a certain number of days’ work,
the outcome of this work may not yield an increase over the values of
the labor taken as a whole, the reply is, that under a system of
monopoly and tax to capital such a thing might well happen, but even
then the increase awarded to the employed capital is usually taken from
the wages of the employed labor, and not because the union of the past
with present labor has made the present labor more productive. That
union of labor, as well as division of labor (which, in the sphere of a
healthy exchange, are branches of the same thing—co-operation), aids
production, is not denied. That by the use of conserved wealth we can
co-operate with past labor, may be admitted, but to return to that past
labor more than value for value involves the self-contradictory
assumption that the past labor is more valuable than present labor,
although at the same time admitting that we use it only as present labor
when we join it to present labor. But to make the thing more plain, let
us suppose our unit of value to be a day’s work. It will be asked, if
two parties contribute the same number of days’ work of the same degree
of efficiency, why should they not receive the same compensation?
Undoubtedly they should. Then it would seem to follow that the owner of
the hundred days' labor, contributed by the holder or conservator of
labor, should share equally with the present worker, who immediately
contributed his hundred days’ labor in producing the new material. The
total production is now the wages of the two hundred days’ labor, of
which each will be entitled to an equal share. Before any deduction can
be drawn from this to favor the claim of increase, however, it must be
shown that the result is more than the wages of two hundred days’ labor,
which is an absurdity. It is vastly easy to conceive of circumstances
which would make the joint product considerably more or considerably
less than the usual product, or the product which the present worker
would be able to produce by his individual labor continued for two
hundred days; but to admit the principle of increase anywhere is to
abandon the fundamental proposition that the whole product cf labor is
the natural wages of labor, and admit that society may not only
guarantee the conserved values of wealth, but an increase upon them,
although all forms of wealth constantly decrease, and require constant
care and risk in their conservation. The only question which can arise
in equity, it seems to me, would be whether the past or the present
labor should pay the cost of the guaranty, or whether it should be borne
between them; and if so, in what proportion. If any question of risk or
hazard arises, it is doubtless right that the one taking the risk of
loss should take the surplus product, if there should prove to be one;
and if both shared the risk, both should share the advantage. The whole
question of increase is narrowed down, then, to these dimensions, but
really it originates in a wholly different way, and rests upon a wholly
different basis. The natural issue between the demand for conserved
labor to combine with and aid present labor in production, and the
demand for present labor to conserve and transmit to the future the
present values of past labor products, has never been allowed any fair
play by the laws and customs engendered in ignorance and greed, and
never can be while fraudulent titles are sustained by public law, or
while the land and all means and opportunities of production remain
under the dominion of monopoly. In the absence of usurped rights, which
are exercised under the laws and customs upholding capitalism, it can
hardly be doubted that these mutual demands would tend to equilibrium,
or complete reciprocation.
If rent, interest, or profit has any rational or economic excuse for
being, it must rest on a ground wholly different from that assigned by
any writer on economics, viz., upon the necessity, real or imaginary, of
some to borrow of others—lands or products. But the necessity to borrow
land is wholly due to the unequal and exclusive ownership of the land,
and any rent, interest, or profits (different names merely for increase)
is clearly the fruit of usurpation, and not of any economic law. That
such, exclusive ownership also creates the only real necessity for
borrowing goods, seems too plain to require argument. But that question
may safely be deferred to the time when commercial monopoly of land
shall be abolished, and the normal economics and industrial laws be
allowed to assert themselves, uninterfered with by municipal enactments.
If the right of unearned increase is truly an economic principle, and it
is made the sole one by the later economists, then in the absence of
fostering legislation it will be all the more likely to make its claim
good, and an opportunity will be had to obtain exact data as to its
operation. What is so manifestly unscientific, as well as unfair, is to
treat that as a normal result of economic law which is due mainly to the
direct interference of the civil law, and could not exist without it.
Notwithstanding the general admission that labor alone creates wealth,
it is thought that it may be greatly assisted by the use of new and
improved implements and methods. It is quite evident that the savage
could do little in felling trees and working them into forms of use,
with the stone ax, once used. A man with a fine steel ax could,
doubtless, do more in one day well than the savage could do in a hundred
days very imperfectly. Is not the ax, therefore, productive, and as such
become a factor ? and should not the owner of the ax, if he permit his
less fortunate neighbor to use it, be entitled to a share of the
increased production? It is best to consider what does result, and the
cause of it, rather than what ought to be.
Now, in the case supposed, if the man who possessed the new ax had a
patent right on it by which the use of any but stone axes was prohibited
to all others, he would, doubtless, be able to derive an income from
selling the use of his ax, and others like it he might get manufactured.
But a patent to the land on which the trees grew that were to be cut
with the ax, would be just as effectual. To arrive at any exact
conception, however, of the nature of improvements as entering into
industrial production, both of these patent rights, having no foundation
in nature, but only the sanction of class legislation and the crude and
outgrown customs of unscientific periods, must be eliminated. Under
equal opportunity and reciprocal interchange of service, the benefit of
improvements could not fail of being generally enjoyed. Inventions do
not spring up without cause and impose themselves upon mankind. The
whole procession of improvements is a growth, called forth by the social
and industrial life of a people, and not by the creative act of a single
mind. The ax itself, in its present effective form, has grown from the
stone ax, or something still more rude, by minute degrees.
The inventor of a new machine merely introduces a new manufacture. As
soon as its utility is discovered, a separate industry will grow up, and
their production will be governed by supply and demand, the same as of
all other productions, so that the workman, as now with the ax, will
only have to give a day's labor for one, and thereafter will be able to
compete with the best. The owner of the new ax does not compete with the
owner of the stone ax, but with one who has or may have one every way as
good as his own. It is thus seen that all benefits arising from
improvements are social benefits even as they are the result of the
social growth. No sooner does a new useful machine appear than workers
are ready to work at its production at same compensation as they obtain
in other employments. Only the monopoly of conferred privilege, which
denies the rights of others to do, enables one to realize a fortune
without labor by a royalty tax on the public.
I am not now arguing against a method of compensation for the time and
sacrifice employed by an inventor; but only against the unequal method
by which it is now attempted through patent laws. Usually, a party will
find sufficient inducement and compensation, in introducing a new thing
to the public, by the start he will have of competitors, and by the
extended reputation it will give to his business. But it is not my
purpose to enter into the discussion of the propriety of patent laws,
except so far as they confer a power to prevent competition and
interfere with the natural law of supply and demand. But for the state
of society and of industry, which makes his invention available, it
would be of no use to him, and without the presence of workers, whom his
monopoly does not remove from the influence of competition, he would be
unable to supply any considerable demand for it. Of the millions that
are paid to patent monopolies by the public the producers of the
patented articles get nothing, as it is well known that such employers
seldom pay higher than the market rate of wages. It is this trick of
capitalism, of subjecting labor to competition, while lifted wholly
above it by class law itself, that is objectionable. That the public are
willing to compensate the inventor is shown by their submission to such
unequal laws; but, as a rule, the inventor is merely the stool-pigeon of
capitalism, who is sacrificed or apotheosized, accordingly as either can
serve its purpose of making unearned gains and extending the base of its
profit-bearing stock.
The idea of a natural exclusive right in invention or in the publishing
of books is absurd. If there is one, why our patent and copyright laws?
Why not defend the right at common law or by general consent? Because a
man utters a new word, or coins a new phrase, is that his property which
no one may repeat? If we may not be prevented from reiterating it, why
from rewriting it or reprinting it? Because a man builds a house to
shelter himself and family, shall all mankind be compelled to dwell in
caves to the end of time? or pay him and his descendants a royalty or
kingly tribute? Doubtless, society will feel under obligation to one who
has invented a useful thing or written an instructive or entertaining
book. And the man who has conceived or perfected either of these has the
power of property over it, while he keeps it private or secret, and will
usually find means to secure an advantage from it before making it
public property, as Daguerre did with his beautiful invention. Society,
too, may take lawful methods of awarding services of that kind; but to
create a monopoly is not one of them. For books and inventions a premium
might be allowed for a given time; but not to interfere with the freedom
of manufacture and sale by all who would respect the right.
But industry has no patent device for obtaining wealth, and the legal
privilege bestowed on those who usurp dominion of the land or obtain the
right to prohibit work like that which they have been incited to do by
the education and means they have derived from ages of toil and
experience of others, is not in the social interest, but opposed to and
destructive of it. Industry has no secrets which would debar the willing
toiler from following any method or process found to be advantageous. In
agriculture, parties vie with each other in communicating useful
knowledge, and form clubs for the purpose of making known improved
methods. A new comer in any section of our country will have abundance
of good advice tendered him, so that, at times, it may become
embarrassing. Only when knowledge becomes embodied in some art or
handicraft is it in form to be monopolized, and then, even, it often
parts “for a song” with meritorious discoveries or inventions to the
“lying-in-wait” capitalism, which captures it, and from it, perchance,
builds up a fortune. Our progress in science and industry is in no way
due to capitalism or any motive consistent with its sway. On the
contrary, these have flourished most where there was the greatest
freedom. Certain features of the arts may be affected or promoted by
capitalistic patronage and favor, but not so with science. Not the
patent or copyright laws have produced the most useful inventions or
discoveries. The love of science, love of art, love of truth, love of
discovering it in mechanics and in the physical sciences, have done all
that is worthy our consideration. Love of gain has operated to distract
rather than foster useful discovery. In those few instances where merit
has apparently reaped a rich reward under its methods, it has operated
often to exclude other cognate improvements, which would have been made
and put to use but for the exclusive right bestowed upon one perhaps no
more worthy than the others. The most useful inventions are those whose
real discovers are not even known. Indeed they are growths rather than
inventions. And “learning hath gained most by those books by which the
printers have lost,” and which have yielded no royalty to their authors.
Patent right, under monopoly, has led to more pernicious than
serviceable results, and copyright has fostered the growth of ephemeral
rather than useful literature. An invention which has realized the
patentee more than half a million, to my personal knowledge, was never
put into a practical shape by him, yet he had his monopoly continued for
twenty-eight years and then repatented it under another name. Not until
the expiration of his monopoly was any marked improvement made in that
line, and a very inferior product was furnished the public until it was
improved by parties not working under the patent.
The daguerreotype is another case in point. The discoverer was unwilling
that his great invention should be made a monopoly by a few, and thus
shut out improvement. He desired that the world should have the benefit,
though he naturally wished to be paid for his services in completing the
discovery. He found a means to effect both of these desires. The French
government purchased his secret, and shares the glory of having given so
important an invention to the world. But, notwithstanding this, it was
patented in England, and the result is what might have been
expected—English pictures continued far below the standard of excellence
of those taken by the artists of other nations, particularly the
American. Mr. Snelling (Art of Photography, 1850), says: “I have seen
some medium portraits for which a guinea had been paid, and taken, too,
by a celebrated artist, that our poorest daguerreotypists would be
ashamed to show to a second person, much less suffer to leave their
rooms.” He also says: “Calotype is precisely in the same predicament
both in England and the United States,” Mr. Talbot having taken out
patents in both countries. He describes the pictures made under patent
as far inferior to those made at the same time in Germany where no
patent existed.
In the introduction of new varieties of fruits, cereals, or vegetables,
which may be classed with useful inventions, various methods are adopted
to retain a monopoly; but without the interference of the law, it can
have but a short life, and work no great injustice like those protected
by statute. I call to mind, in horticulture, two instances illustrative
of the principle to show that not that service which has been best paid
has proved most serviceable to society, but the reverse: Dr. Grant
introduced the Iona grape, and made a moderate fortune out of it. It
proved wholly worthless as an investment to the purchasers, though it
was a grape of fine quality. The thousands he realized from it may be
said to have been a dead loss to grape growers. Horace Greeley, through
offering a prize of a thousand dollars, brought out the Concord grape,
and, indeed, a number of other varieties, through the emulation it
stimulated, by which every grape grower in the country has been
benefited.
The objection, that without patent or copyright laws no one would engage
in making inventions or publishing books, indicates that as our
legislators act largely in the interest of capitalism, they have little
care for the author or inventor, any farther than as they can be made
subservient to capitalistic enterprise and speculation. And this is
true; our copyright and patent laws are shaped mainly to enable
capitalistic control to manage the affairs of publishing and of the
manufacture and use of patented articles or machines. The interest
manifested in the rights of authorship and of invention is too flimsy a
pretense to deceive any but those who court deception.
There is, however, at the utmost no power in invention or authorship, to
beget wealth to the individual or to society without the constant
co-operation of society and of the individual worker. The author cannot
exchange his literary wares, nor the inventor even obtain the
manufacture of his machine, much less its sale and use, without dealing
with or employing others who have no exclusive rights, but have to
compete with the many unprivileged, and whom the use of the new machine
even, or reading of the new books, does not relieve from competition,
but temporarily, if at all. The prejudice of the workers against the
introduction of machinery deemed so obtuse and irrational by writers on
political economy, is based, doubtless, upon the conviction that
improved machines, tools, etc., are productive, and enable the
controllers of wealth to dispense with so much labor as its increased
productiveness represents. It is the stolidity of their own teachings,
then, which needs to be corrected, not the blind instinct of the
embruted workers, which has taken them at their word. Surely the man
with the stone ax, who by its use barely subsists, is justified in
attempting to exclude the steel ax from the work since it will reduce
the necessity for his labor by a hundred fold, and therefore means a
fiercer competition and struggle for existence, even if he is able in
any way to obtain possession of a steel one. But if he is mistaken, as
it may be admitted, were opportunity not engrossed by monopoly, then is
their, teaching false, and more rapid production does not beget
disproportioned compensation, because the increased production in the
gross is balanced by the reduced ratio in exchange with the products of
other kinds of labor, the same as where cheapness of food is caused by
an unusually productive season, and which often rewards the producer
less than the scanty yield of a less productive one.
If the price of machine-made boots and shoes were to remain the same as
hand-made, then society would have no interest in the question, and
certainly no justification for granting privilege to the introduction of
the machine-made work. Only the owners of the machines would be
benefited or interested. But it is because the machine furnishes them
cheaper than they could be made in the old way that the many become
interested in its success and reconciled to the crowding of labor out of
the old industry, to be reabsorbed into the general industries or to
create new ones.
To make good the popular fallacy that machinery and tools are productive
in the sense that labor is productive, it would be necessary to find
them of such material as never wears out, and of a construction which
would operate without power, involving perpetual motion. Even then,
since labor could construct them, they would be open to its acquisition,
because labor, with access to land, can produce all things, and thus in
time all men could live without work, and production would become so
universal as to be of no value or interest to anyone. Wealth, or that
which we now call so, would be as the waters of the ocean, or the sands
of its shores. Farms would produce without labor ; factories would run
without hands, and materials would convey themselves to the factories to
be manufactured, with motive power of their own.
To say that a man can do more with suitable tools than without, is
merely saying that he can do more work, or produce more goods in six
days than he can in five, for if the consumption of his tools represents
the labor of one day in six, or any definite proportion, it is evident
he must give that proportion of labor in every six employed in the
procurement of goods, to providing himself with tools. That is all. It
is true that under division of labor the particular person may not be
able of himself to make the tools required by him, but under such
division he is able to do some other thing with greater facility than
the man who makes the tools, and consequently, since he procures an
equivalent for them, he really produces them by his labor as much as if
he wrought at that particular trade. If one day’s worth of tools are
consumed in five days’ labor in producing goods, then the goods are the
product not of five, but of six days’ labor, and of no tool or machine,
in any economic sense. To say that the day’s work spent in procuring
tools is of more value than either of the five days’ work in procuring
goods with them, is nonsense, since the procuring of the goods is the
purpose of the one as well as of the other. The same is true of all
preliminary steps in any production. The tools, the procurement of raw
materials, the consumption of other goods required, and every expense
requisite is equally important, and equally the product of labor as well
as the finally resulting product. In tools, machinery, plant, materials,
conveniences, and accessories, there is nothing but labor or its
product. To draw a distinction anywhere, and say this is capital, and
this is labor, is a “distinction without a difference.” It is as
unscientific as the purpose for which it is attempted is iniquitous and
oppressive.
A blacksmith, for instance, called upon to do a job out of his usual
line, and for which he has no appropriate tool, will proceed to make the
necessary tool, and then perform the work. He will of course charge for
his labor and material, both of the tool and of the thing made. If,
however, the tool be one which he may need again, and is likely to prove
serviceable in his business, he will make little or no charge for the
use of it more than its proportionate consumption. That he would not be
able to do it at all without the tool is no reason why he should charge
more than the labor and material employed in its construction, or why
the hardware merchant, if it is a tool he can readily buy, should charge
him more than he charges others, who are under no immediate necessity to
obtain one. For the price of things on sale is governed by the general
demand, not by the private necessity, and if competition were free the
smith could not make a profit out of the use of his tools any more than
the ditcher could make a profit out of the use of his pick and shovel,
because he could do so much more with them in his calling than he could
with his naked hands. He has to compete, not with men with naked hands,
but with men with as good tools as he himself has, which they are able
to furnish themselves with, or have furnished them by those who need
their services.
The same principles apply to the use of horses and cattle. A man can do
vastly more with a horse and plow than he can with a hoe in raising a
crop of vegetables; but he does not compete with the man who has nothing
but a hoe to work with, but with a man whose horse and plow are as good
as his. The man with the hoe alone is also needed to complete what the
plow cannot finish, and to work in places where the plow or horse cannot
be used. Otherwise there would be an over-production of horses and
plows, and their wages would be reduced to a minimum, and of course all
profit in their use would come to an end, and further investment in that
line would prove a loss, not a gain.
Bastiat’s instance of the plane of James borrowed by William, rendered
famous by Ruskin's “position of William.” and by George’s criticisms, is
a very subtle attempt to prove that tools are capital. It is singular
that neither Bastiat nor either of his talented critics thought it
necessary to inquire whether the supposed case had any relation to
custom. With more than a half century's experience in active life, in
which I have wrought in a number of productive fields, I do not remember
of any worker paying for the use of a borrowed tool, though nothing is
more common than such courtesies among laborers, mechanics, artisans,
and agriculturists. The rule is the reverse of this. Among farmers,
tools loaned are not only loaned without usury, but without compensation
for actual wear and tear, and the owners deem themselves fortunate to
have them promptly returned, uninjured but by reasonable deterioration.
So much for the reiterated platitude that “nothing will be loaned, and
no accommodation will be granted without profit” or appeal to a selfish
greed, which only seeks personal gain, never social good.
I remember when the first railroad was built in this country. A serious
apprehension was felt among farmers accustomed to raise horses, that the
disuse of horses in the long lines of stages then required for the
transportation of passengers and freight, would render the horse
valueless. As is well known, however, the introduction of railroads has
increased, rather than diminished, the demand for horses. At one time it
was thought that the sewing machine would ruin the business of the
seamstress; but I am informed that, on the contrary, it has so increased
the demand for elaborate work on ladies’ dresses that more time is
required to make the average dress now than at any time before the
introduction of the machine.
Wages, and the fund applied to that purpose, were subjects of much
consideration by the earlier school of economists. But the later school
attach little, if any, importance to the question, but look at every
subject as a matter of exchange merely. Mr. George, in attacking the
theory of the “wages fund,” therefore, revives a discussion which is
certainly becoming obsolete. There are still those, however, who think
that the theory gives countenance to the popular fallacy that capital
employs labor and therefore is entitled to a share of its earnings. Mr.
W. H. Mallock has attacked, with a great deal of vigor, Mr. George's
exposure of the erroneous teachings of the elder school of writers.
It does not seem to me necessary to discuss the subject farther than to
refer to the controversy between these two gentlemen.
The last named has endeavored to show that wages are not paid from any
fund whatever, but that their amount is usually added to the capital of
the employer before the wages are paid. This is substantially true, and
yet the transaction has the. appearance of proving that the capitalist
has the amount paid as wages outstanding till he is enabled to complete
and sell the production which the labor has assisted to effect. Of this
circumstance Mr. Mallock takes advantage to read Mr. George a severe
lecture, but, as I conceive, greatly overrates his triumph—even if it
were one. For whether wages are drawn from a capitalized fund or
otherwise depends upon no metaphysical deduction, but upon what the
payment of wages proves to be on analysis. Perhaps Mr. George has not
been sufficiently careful in that respect ; but Mr. Mallock has not
analyzed such payment at all, but treats it as an appearance to be
accounted for in the easiest way. What is paid as wages must be either,
1st, an exchange; or 2d, a credit, or 3d, an earnest, in the division of
some co-operative product.
Now, if it is an exchange, as I admit it may be, when the stipulation is
intelligently and equitably entered into, then nothing could be more
stupid and absurd than to say it was paid from capital. Mr. Mallock
might as well say that when two men trade horses without either giving
boot, they do it each from capital of the other. The workman parts with
his labor, or the thing in which it is incorporated, and the employer
parts with his money, or substantially the things which the laborer
requires for consumption. If it is an exchange, it is precisely as Mr.
George asserts—nothing drawn from capital. That could only happen if the
trade was specially unjust or unfortunate to the capitalist. Mr. George
does not contend that capital in that case might not be so reduced by
wages. The payment of wages may also be a credit, but not if it be a
real exchange, unless the wages, indeed, were paid in advance, but such
is not a usual custom; the laborer, on the other hand, is the creditor
advancing the labor for a day, a week, or even a month or more.
The hewing and laying of the keel of a ship, to use Mr. Mallock’s
illustration, is one step, and a very important one. Certainly, the
builder who constructs the ship has the same amount of capital for the
purpose of building ships as he had before he paid the wages of the
shipwright, and the cost of material, etc., for the keel. And the keel
so purchased is. as a keel as truly consumed when it receives the
transom and ribs, as is the ship when it is completed and purchased for
a commercial or other purpose. If not so, than no step is appreciable
till the last day’s requisite work is done, and the workman who performs
that service in that one day's work actually renders to the owner all
the capital put into it, with the profit or loss as the venture may have
realized.
Doubtless, risk attends ship-building and every other industrial
enterprise; but that is not the question at issue, but simply whether
the capitalist, as the operator may be termed, draws upon his fund in
paying wages to a greater amount than he draws upon the capital of the
laborer, his labor. If it was a question of paying advanced wages, then
it might be justly claimed that the employer supported the worker by
supplying the means to purchase food and necessaries while he was at
work. But Mr. Mallock does not make this point, nor would the usual
custom justify any such claim. On the other hand, the means to support
life and enable the man to work a week or a month are owned by himself
and expended before his wages are received, to say nothing of the means
of bringing up and educating the man to do efficient work. Most
certainly, then, viewing it from its simplest economic aspect, the
employer draws not from a fund of his own, but from a fund of the
laborer’s, and that before he pays any wages at all, and the utmost he
does is to return the capital the worker has expended. This argument
proceeds upon the ground of an exchange, which in its very nature
precludes any conclusion other than that in the transaction equivalents
are transferred, and that as much capital passes to one side of the
equation as to the other. The matter of risk is another and wholly
different element with which the nature of wages has nothing to do in
any way. An exchange, in the estimates of the parties, covers all risks
which each may run in parting with a staple or speculative value.
There is another view of wages, however, and which I think will apply
more generally to payment of hireling labor than either that of an
exchange, or a credit. Its nature is that of an earnest of ultimate
co-operative division. In this sense only can Mr. Mallock’s idea that
wages are drawn from a fund have any logical foundation. And then, they
are not drawn from the fund of the operator or capitalist, as he
supposes, but from the fund of the co-operative movement, which every
industry is in which numbers are engaged in any line of production, and
as we have seen, are drawn originally from the capital of the laborer.
We would gladly welcome Mr. Mallock to the industrial side of this great
problem, and to that he must come or abandon the notion that wages are
paid from any capitalized fund whatever.
The only possible circumstance under which I can conceive that a man
draws upon his accumulated means to pay wages, is where he elects to pay
a body-servant, or some favorite, to do things which are of no utility
and have no productive result. But surely any such plea as that thought
suggests cannot have been intended by either of the gentlemen as bearing
upon the points raised.
Another of Mr. Mallock’s criticisms, relied on by him as thoroughly
demolishing the positions of the reformers he attacks, can be properly
alluded to in this connection. He endeavors to show that while Adam
Smith admits that in the primitive stage of society the natural wages
are the entire product of labor, it is only in that primitive state that
such is the case, and that the moment accumulations take place, and a
fund is set aside to pay wages, a change takes place in the position of
the laborer to his work, which reverses his relation to the production,
and that to realize again the condition under which he can have the full
result of his production is to resolve society into its original
elements, relapse into savagism, and again go gathering nuts, picking
berries, dwelling in huts and caves, and dressing in the skins of wild
beasts. The illustration, which he seems to think quite settles the
point, is of Mr. George’s own showing in regard to the year 1877 in the
San Joaquin Valley, where, although there was great scarcity of grain on
account of a failure of the crop, when the rains came and a future
harvest seemed assured those who had hoarded their grain became anxious
to sell, and so the grain thus held supplied the need of the
cultivators, “set free, in effect 'produced, by the work done for the
next crop.”
Now, although Mr. George might deserve castigation for so careless a
slip of the pen, if he used the phrase in the sense Mr. Mallock gives
it, it is certainly very unfair in Mr. Mallock to parade this assumed
misuse of language as conveying the very gist and kernel of Mr. George’s
reasoning. It does nothing of the kind. The sense of his paragraph would
have been just as complete and conclusive of his position if he had left
out the word “produced,” and merely said that the grain was “set free”
by the fact of its being known that plowing and sowing were going on in
the valley with every prospect of an abundant crop.
To assume that he meant that “this year’s plowing produces [in an
industrial sense] last year’s crop,” as Mr. Mallock asserts, is
torturing an opponent's words in a manner wholly without excuse. The
most that Mr. George could have intended was that the grain was from
this cause brought into market, and may be said to be produced in its
technical economic sense, i. e., in the market at the time. My object in
these references is not to defend Mr. George, who is abundantly able to
take care of himself, but to show how utterly Mr. Mallock fails to
prove, what the whole tenor of his book assumes, that landlordism and
capitalism are essential and effective agents in human progress and
enterprise.
His illustration of elates and the “crystal, which is two days’ climb
amongst the mountains,” proves the very reverse of what he offers it to
prove, for the dates are natural productions, and so is the crystal. The
savage has only to gather either. The desire for the possession of the
crystal incites to gather two days’ supply of elates instead of one, and
thus capital begins. But surely the whole result of the labor still
belongs to the gatherer and climber. Only when we supose this two days’
supplies to have been in the hands of another, under free access to the
date-trees and to the mountains, could we intelligently inquire what
would have occurred under sensible and honest dealing between the two,
if they sought to co-operate in the manner supposed. The crystal seeker
would not have given more than the results of one day's search, or half
of his two days' search, for the two days' supply of dates, for he would
say to the holder of the dates: “It will take me one day to gather the
dates, and there is no reason why I should give you. more than that
proportion of what I may obtain.” As the gathering of the crystals is a
comparatively new industry, and requires some moral determination and
persistent purpose, the probabilities are that the crystal hunter,
rather than the date-gatherer, would claim a difference in his favor.
This view, which accords with Mr. Mallock’s idea that the higher forms
of industry dominate and control the division of labor and the increased
production resulting therefrom, through “the directors of labor who
begin exactly where their fathers ended,” while “the laborers begin
exactly where their fathers began,” disproves fully any claim of capital
to limit production even in form. No intelligible definition of labor,
however, can be confined properly to that of men who begin exactly where
their fathers began. The directors of labor are those whose intelligent
and fruitful labor opens new paths to industry and discovers new uses in
the materials coming under their inspection, as well as new devices and
the invention and application of improved machinery.
Instead of proving, as he sets out to do, that capital is a productive
force and “can go on increasing and increasing whilst the quantity of
labor remains stationary,” he simply proves that this is all due, not to
capital at all, which ends where it begins always, but “to machinery and
the direction of labor,” as he himself states. What I have to say about
machinery will be found under another head; but I may remark here that
machinery springs not from capital, but from the labor of the inventor
and mechanic, and both the working of the machine and the direction of
the manual labor are labor both of hand and brain, machinery being only
a department under the organization of labor. It is this higher form of
labor, associated, but only when associated, with the humbler, but
equally important, manual labor, which brings out the hoarded wealth of
the past or “previous labor,” as Mr. Mallock terms it—and which it
is—and sets it in motion, giving it all the value it has. It is inert
material as really as the earth or any substance derived from it, and
has no more to do with productive industry and its results than has the
granite in the quarry to do with chiseling and erecting itself into a
fine Corinthian column. That is done by the designing mind and cunning
hand.
But let us refer again to the man of the dates and crystals. We have
seen how improbable it would be that, in any division of labor in which
the crystal hunter sought the co-operation of the holder of the date
capital necessary to enable him to spend two or more days in the
mountains, he should be willing to give the capitalist any more than an
equal proportion of his crystals. By contract, it is true, they might
make the deal unequal; but the usual arrangement would doubtless be as I
have supposed. I can tell Mr. Mallock, however, just when capital, in
his sense, would appear, and “go on increasing and increasing, while the
quantity of labor remains stationary,” and it need not wait for the
development of higher forms of production and complicated machinery to
be able to limit labor either. Let one of the date-gatherers get a law
passed inclosing the date-trees, and vesting the title in him, or, in a
more primitive way, let him, if stronger physically, or if possessed of
a more cunningly devised war-club, reduce the other to a state where he
becomes willing to enter into an agreement to acknowledge as private
property of the victor all the date-trees within their knowledge, and as
well the mountains where the crystals are found, and though there will
be no greater quantity of labor performed than before, the two gathering
each his day’s supply, yet since the subjected man will yield the
stronger one-half of his gathering, there would soon arise a capitalized
fund which would support a man in hunting crystals not two days but a
week, month, or year. This the capitalist would loan the other on the
certainly liberal condition that the finder should give him one-half
that he found as proprietor of the mountains, and a fourth for the use
of the dates required. Thus a fund of crystals would arise, which would
be more endurable and available for more purposes than the perishable
dates, and become, it might be, a general, if not legal, tender. Thus we
have capital produced and conserved. But what is it? Simply withheld
wages, and which the capitalist is enabled to hold because, and only
because, as a landholder he can keep the other from the date-trees and
from the mountains. And his only purpose in playing landlord as to
either is to be enabled to do that very thing. We may follow up any
industry, of however complex a character, and we shall find no place
where capitalism can come in, except as a usurper. By conspiring with
the directors of labor, the men who organize and distribute it, the
capitalist may make himself necessary to the progress of any line of
production, and so pretend to limit its particular form. But in every
instance it will be found to depend upon his ability to engross
possession of the land, or to avail himself of some class privilege or
property right, which is a creature of special statute or of some state
device, to shield a class from the operations of economic law, and the
competition of those who would otherwise destroy their monopoly and
expose the groundlessness of the assumption of a capitalistic increase.
We can now see how the directors of labor begin where their fathers
ended, while labor has to begin anew.
One of the first observations we make in regard to things that we esteem
is that they are found to be either in the possession of private persons
or are open to the enjoyment of all. Before any question as to whether
certain things may be called capital or otherwise, the question arises
as to the use they perform, and whether such use is particular or
general, private or social. In the classification of the economists,
wealth is generally treated as capital, which is by some made to include
land and labor as well. But capital, as thus defined, becomes clothed
with kingly prerogatives which can only be recognized by industry to its
own enslavement. Only recently “persons” were capital, and its usurped
rights were exercised over them with unlimited force. Even then,
however, labor was acknowledged as the creator of all social wealth, and
as we proceed it will be made to appear more and more clearly that the
false forms of pretended capital, so far from being social wealth, are
but subtle devices clothed with legal forms, for definite purpose to
abstract social wealth to personal uses, and make it private.
By applying a simple test we shall also find what is really wealth and
what is only a counterfeit, but which is made to pass current in trade,
since the parties interested in circulating these false tokens by some
strange infatuation of the people are enabled to have them stamped with
the seal of the state and their claims enforced by the sanctions of
statute law, and the whole power of the government. If we examine into
the forms of what, for the sake of distinction, I will call private
goods and social wealth, it will be discovered, what will appear at
first a little surprising, that everything which commands increase,
independent of work, belongs to the former class, while nothing that
belongs to the latter, if we exclude the land and labor, will be found
to have that quality or capacity in any degree whatever.
Social Wealth consists of all those forms of production, in whatever
hands, which promote the well-being of society; the garnered fruits of
the earth, which serve for food, raiment, and shelter to its
inhabitants, enabling them to subsist, to labor for the production of
more fruits, and in the social and intellectual fields to promote the
progress and richness of the social life. Even economists do not contend
that anything employed in any of these ways is capital, or what they are
pleased to call an “economic quantity.” I should except, perhaps,
education; though, on reflection, it will be seen that this, when it
becomes exclusive, and, therefore, may be said to beget an increase, is
a private rather than a social possession; since, if all had equal
opportunities of education, the advantage in any pursuit which education
would confer would be trifling.
Society has property in whatever adds to the general good. Finely
improved grounds, with a picturesque arrangement of trees, shrubs, and
flowers, are social wealth, although it may also be enjoyed as private
property; because it adds to the prospect open to all, and gives
enjoyment, through the sense of sight, to others, as well as to the
owner. A well-built house, which adds beauty to the landscape, is to
that extent social property. All forms of wealth which are placed within
the circle of exchange are social wealth, since they add to the supply
which members of the society require.
Any of these may be also in private possession at the same time. Private
wealth and social wealth do not necessarily exclude each other in
material things. The land and all its opportunities, and natural
productions, are social wealth; but not exchangeable until they have
been privately appropriated or allotted.
Private Wealth, or goods, consists of all those things which are
privately appropriated and used, of a material character, and of all
those rights over things which society recognizes and enforces, whether
wisely or unwisely.
The latter class embraces those forms of private wealth which yield
income without work. Without labor no income can be had, of course, as
that creates all wealth; but it is from the labor of others that the
capitalist is yielded an increase, and not otherwise.
A distinction between private and social goods is seen in the nature of
their use or service. That which serves the personal use only may be
said to be private. That which serves social use wholly or mainly is
social, while that which serves both a social use and a private use as
well is both social and private. Another distinction important to be
drawn is that the existence of wealth wholly social has an interest for
the private individual; while that which is wholly private need have no
interest for society. For example: If social wealth is destroyed the
whole people suffer each a loss corresponding to his personal interest,
or as a member of the society. On the other hand, the destruction of
purely private property, under capitalistic domination, is often not a
public loss, but a public gain, as we shall see.
Private property, under existing capitalistic institutions, is largely
the creature of law. Some of this law is consistent with natural law;
but a large proportion of it is entirely inconsistent with any natural
principle of law whatever. For instance, that which makes property of
the land dependent on a commercial sale, and registered deed, and not
upon occupation and use; which falsely assumes ownership of what one is
not in possession of, but another. That which enforces, against the
ignorant and incompetent, the fulfilment of contracts they did not
understand, and were unqualified to make. That which enforces payment
for privilege of any kind, whether of tilling the land or of employing
the productive forces of nature in a way to produce wealth.
We have seen that social wealth was not of a kind to yield increase
without labor, unless we embrace the land in that category, which is not
productive without labor in any economic sense; that all forms of wealth
or capital, which yield such increase, are also private property; and we
shall see that these are all of a class whose destruction would not
reduce by one farthing the social wealth of the world. In 1860 there
were some $2,000,000,000 worth of private property in this country, in
the form of rights to “chattels personal,” belonging to a class of
capitalists in the southern states of the Union. For want of manly
statesmanship on either side to treat the issue which then arose in a
rational way, civil war resulted and the institution was abolished as a
war measure. Now, this was, doubtless, a great hardship to a few
individuals, but by the destruction of these two billions of property no
social wealth whatever suffered. There was just as much land, just as
many laborers, and just as much capacity of production, and just as much
food, raiment, and shelter as before. If war reduced property in either
section, that stands to the account of the war, not to the fact that
slavery was abolished. It is now admitted, I think, that the
landholders, with their lands retained, are better off than they were
with both their land and slaves, and by the cultivation of the same land
and the same capital realize better incomes from hired labor than they
ever did from slave labor. As capitalists, however, they had this
complaint to make, that it gave the newcomer an advantage, for, with the
same capital in land, tools, seeds, and improvements, which the former
slaveholder possessed, including slaves, he could work more effectually,
as he would have the amount formerly invested in slaves, to increase the
extent of his plantation, and the effectiveness of his management.
But what is true of the property in slaves is true, also, of property in
land, considered and administered as trading capital. This, like
slavery, depends wholly on municipal law for its existence, and if
abolished by proclamation to-day could not in any way affect the
productiveness of the land or the effectiveness of the labor. The
testimony of all authority, as well as experience, is that the land
which is owned by its cultivator is the most productive. But besides
title deeds, which confer dominion without occupation, we come now to a
large class of private property which is even more shadowy, but which
has the power to lay labor under constant and most onerous contribution.
I refer to mortgages and the numerous evidences of debt, which are made
commercial capital and have no purpose or use except to draw rent or
interest from the annual productions of labor. It would be instructive
to get at the real extent of this form of capital; but unless the people
are prepared to act upon the subject by the knowledge which is involved
in every-day experience, and in nearly all business transactions, and
must be generally familiar, it will be of little service to give an
array of tabulated statistics, showing the actual amount, and which is
constantly increasing. But for failures and bankruptcies, which are
constantly going on, and which are owing mainly to the absorption of
this system, they would soon far exceed the entire social wealth of the
country in nominal value. Macleod estimates the amount in England at
more than $30,000,000,000. And they now quite equal in this country the
value of everything but the value of the land, which is itself a
fictitious value, created by our law of land. In addition to the large
properties which are rented in city and country, a large part of the
farms, workshops, and dwellings not rented are under mortgage. There are
the bonds of the national, state, and municipal governments, a vast sum
which draws interest from labor, which has discharged its public duties,
to pay capitalists for shirking theirs. Our political system enabled the
capitalist to create annuities for themselves out of the disasters of
our civil war, while it took the service of the laborer, artisan, and
clerk, at a bare subsisting stipend, and their lives as a sacrifice to
the integrity of the union. Then there are the bonds of the railroads,
three and a half billions, and their stock, four billions more, much of
which represents no actual wealth, but which is empowered to draw the
customary increase. Then there is the whole bank circulation, which is
let out to business and mere speculative enterprises, upon which the
banks draw interest, at the same time drawing from the government
interest upon the bonds, upon whose security the circulation is based,
as if two men should exchange notes, and the one whose credit and
responsibility alone gave value to either were to pay the other interest
on both.
All the above-mentioned forms of capital, if wealth at all, are private,
not social wealth, and they might be all burned to-morrow without
destroying the least portion of actual wealth, except as to their value
as waste paper. And they will all cease to be property or capital at any
moment when the municipal law shall be annulled which made their
existence possible, or the power of the state to enforce these
artificial rights be withdrawn. It can certainly require no further
argument to show that these forms of wealth which alone yield increase
are the creatures of the municipal law, and have no foundation in the
law of exchanges or of social comity.
That people might be indebted to one another under strictly economic law
may happen. But society has nothing to do with that, except to see that
no wrong is done by it. It cannot guarantee increase, because that can
arise from nothing which society can recognize as wealth. Exchange
refers to the interchange of commodities. An agreement to pay a certain
sum of money at a given time, except it constitute an exchange, is not a
social act, and society cannot be properly asked to enforce it. If there
is an exchange, and property is given for the note, then the note is
payment, as shown conclusively by Macleod, though not “satisfaction.”
The two have made their bargain, and we must presume it is satisfactory
to both sides. If either party has deceived or misrepresented the nature
of the thing he has exchanged, whether the commodity or the promissory
note, then, and then only, it becomes a matter for social arbitration.
If they had “swapped horses” in good faith, and one of the horses should
die shortly after, or turn out valueless, the law would not interfere to
rectify the mistake. No more should it if a note taken in payment turns
out worthless. Only upon the ground that fraud or misrepresentation has
been employed has society any excuse for interference. Already the logic
of this position is recognized by our bankrupt laws, and in our statute
of limitations which refuses to enforce collections after a certain time
has elapsed. But as to enforcing the collection of any interest or
increase, society cannot do it, however solemn and formal the contract,
without becoming the ally of a vice which is destructively unsocial and
antagonistic, as well as economically absurd.
In the distinction between social and private wealth, we have the
natural limit of societary interference in regard to property. Society
is under every obligation to guard the common weal. It has nothing to do
with strictly private goods, or private rights, except to protect its
members, in the enjoyment of them,, or such of them as are clearly
within the realm of natural law. It has nothing to do with the creation
or bestowing of these rights. Any such attempt betrays usurpation or
conspiracy. The utmost it can lawfully do is to define those rights, and
their limitations. It cannot broaden or extend them in any direction
without encroaching upon and subverting the social right. It can only
confer a franchise upon one to assume an exceptional control by
sacrificing the social right, or subjecting other individuals to be
plundered and wronged.
Having shown in what consists social wealth, as distinguished from
private wealth, let us see if we can trace the history of its production
or increase. We have placed land and labor in this category for
convenience in making clear the distinction. Really, as we shall see in
the section on capital, they are the only natural capital. In speaking
of the increase or production of social wealth they are necessarily
excluded, since neither can be said in any economic sense to be produced
or procured. The extent of private production of goods is very narrow.
By himself a man can do little to increase his store. However a Crusoe
might succeed on an uninhabited tropical island, he found the
association of another, even an ignorant savage, a very desirable aid.
In artificial society the individual is still more dependent on social
co-operation. So accustomed are we to reap the benefits of social life
that we seldom reflect upon the advantages we derive from it, even in
the supply of our most constant needs. On reflection, we shall find that
but a few of them are supplied by our own direct, unaided effort. The
simplest productions are the result of a combination of labors. And yet
the individual, particularly if successful in obtaining a large control,
is liable to think that he does it all. How little he does, and how much
depends on the assistance and co-operation of others, is seen in the
simplest exchange. The thing itself he wishes to exchange has been
produced with the assistance of a number of persons. Then the thing he
desires in exchange has been produced in like manner by a number of
conjoint efforts. Again, the services of the dealer, the forwarder, and
the carrier are all requisite to the exchange which he makes. If one of
these fail the exchange fails.
Now, in carrying on an extensive operation of course these combinations
become extremely complicated. The more numerous are the services
required in the production, and still more numerous the services in
providing the things or means to maintain the demand. Hence, it is
mutual needs and mutual services which make any important transaction
possible. Not only, therefore, is all productive industry co-operative,
but all exchange. It may be to the interest of individuals- at any point
in the circle of production or of exchange to ignore the social claim,
and extend the individual right or control, so as to force unequal
division; but it must ever be the social interest to guard the social
control by such limitation of the individual as will make the division,
as well as the production, operate conjointly and equitably.
Herein lies the true, because natural, basis of cooperation. It has ever
been present in the production of the goods of life, and has only failed
in exchange and division of these goods by falses in the treatment of
the productive factors, and by the subjection of the social wealth to
private domination. By the creation of rights, based on false premise
and pretended contract, the division of the results of social production
has become most iniquitous and unequal. Under the pretense that an
enterprise requiring numbers to prosecute it is private, not
cooperative, a system of division has been adopted which for injustice
is simply defiant of all sense or logic[9] The many who do the work are
paid such wages as the market compels; the one or few who do the
planning and furnish the plant take the balance as profits, interest on
stock, or rent of premises. The man who invests his labor and perils
life, as in the mines or manufactories which tend to shorten life, is
paid a certain rate of wages as long as he works, and no longer. The man
who furnishes plant or rents the land or loans the money not only is
paid for whatever service he renders, but becomes entitled, under
pretense of having contributed productive capital, to share in all
future production of the venture, and his children after him to endless
generations.
But surely something is clue to all this plant, and to the service he
has rendered in promoting business and giving employment to labor! That
there is a demand for this particular production is an essential
presupposition, so that he does not give his workmen employ, or even
himself. Social or co-operative industries have alone made this
possible. This is wholly independent of anything on his part, or that of
his co-helpers, except as they may become purchasers and consumers
themselves of the joint product. An entire half of this industry, then,
is wholly independent of the operator, toward which he has contributed
nothing. As regards the supply, let us analyze carefully the steps
taken, and the nature of every element involved. We will suppose it is
the mining of coal, so as not to confuse the mind with too complicated
relations.
In the first place, the land under which this mine is situated is the
social heritage. It may have been devoted to agriculture, and while
cultivated by the proprietor may have been regarded as private property.
But it is now used as a mining property, and as such is a social one,
for one man can do nothing in the business except, perhaps, to dig out a
few coals for his own use. He must have helpers, associates, or
co-operators. This is not a matter of choice, of trade, and agreement,
which he and they can determine by private negotiation. It is only as to
the particular persons who shall join him in the work that there is any
election. He must have others to co-operate with him, or there is no
production. Now, can any such compensation as the capitalists receive be
awarded to the other co-operators or joint producers?
The question of comparative compensation does not arise here. The one is
wholly different in character from the other. The management and
superintendence may be vastly more useful than that of the common labor;
it is labor still. That does not touch the question. The salary might be
a princely one, and yet not involve the inequity under review. This is
not a salary of a person or worker, but of an inert thing, for which the
fraudulent claim is put forth of being a producing means, or factor. The
risks of the venture may be guarded against by insurance, paid from
resulting production, and all consumed material may be replaced, and
yet, under the false system of division, an income to the holder of the
property will be adjudged which will nearly or quite equal the entire
wages of the employees, not for one year, but indefinitely.
Quite recently, a considerable manufacturing concern, under the guise of
a “community,” claimed to have “solved the labor question,” though,
really, they had only ignored it. In their annual report they showed
that they had realized for the community no more than they had paid
their employees; and since the community, men, women, and children, were
about the same in number as the operatives, most of whom had families,
however, they deemed it an instance of fair dealing and equitable
division worthy of public notice and imitation. Following the
suggestion, I instituted inquiry among several manufacturing
establishments, regarded as successful, and was surprised to find that
in nearly every one the account of profits coincided with tolerable
accuracy with the wages account, however large or small the number of
employees.
That such results can be shown may to some minds afford evidence that
the inert capital should receive a share in the division; but we must
remember that, although some industries protected by the state under
patent right or corporate monopoly will show a much greater share to
false capital, often yielding to one thousand dollars annually as much
as to the entire year’s work of a man, a great majority of the
enterprises in business not only yield no return for the use of tools
and plant, other than to keep them whole, failing in many instances, to
do even this, but reward the toil and application of the operators with
a bare subsistence. And hence the struggle for first place, in every
profession or occupation, and for governmental protection against
competition, which would not take place if capitalized goods yielded an
increase. For, in that case, every holder of goods would be in
possession of an income without work or business of any kind, as is a
holder of government bonds or other funded obligations. Such parties
could not fail in business or come into competition with each other.
This plea of the productiveness of wealth is evidently an afterthought
of. capitalism to justify what is rationally and economically
unjustifiable, and to cover the naked deformity of profits, interest,
and rent, which had their origin not in any principle of mutual
reciprocation, but in a forceful domination, in cunning false pretense
of service, and the downright trickery of trade. It could by such means
only divert attention from the plain truth in the matter, which is that
the whole of social production is co-operative toward which the
employees have contributed each a certain number of days’ work, and the
proprietors or operators a certain number of days’ works, or the
products of a certain number of days’ works. And this is conceding that
the tools, plant, and other items contributed under the name of capital
are really the products of their holder’s labor; whereas, it is well
known that they are more commonly the withheld shares justly due to
labor in previous operations. But we need not complicate the present
illustration with that consideration. Now, with the contributions as
above stated, who are the producers and, therefore, owners of the new
and resultant production? Unquestionably the contributors, in proportion
to what they have contributed/which is co-operation. Any other division,
though it may follow co-operation in production, is exploitation of one
class by the other. In a just division, the furnishers of the plant
would receive again, as their share, the plant, at such estimate as will
cover their decrease in value, and the wear and tear of tools,
machinery, etc., which have been converted into goods. Thus to each
day's work contributed a day’s product will be awarded; a day's work
signifying not so many hours’ labor of each, but that proportion which
such labor bears in utility to the whole number of days’ work performed
or contributed.
But, if the capitalist should claim something over and above what he has
contributed, then should the labor of the worker have something over and
above the product of his labor, which is an absurdity. Thus we arrive by
another and independent course of reasoning to the same conclusion, that
for any one to withdraw from any co-operative production more than he
has put into it is irrational as well as unjust, for no reason can be
given why one who has put his labor into the current process should not
receive an annuity from, that as well as the one who has put in the
product of the labor of former years. The impossibility of carrying out
such a plan proves the error of awarding profits to investments of any
kind. The question of inducement to engage in productive enterprises,
and the claims in regard to time and use of the reproductive forces of
nature and of exchange, are sufficiently discussed under the sections in
regard to rent, interest, and profits.
The last resort, in support of these self-contradictory claims, is the
sacred nature of contract, and the fact that the worker, having
contracted with the operator to regard his daily wages as a full
settlement of his claims as a copartner in the co-operative production,
therefore the division is equitable and just. It will be readily seen,
however, that such contract is void for several reasons. In the first
place, it is made by the employee in ignorance of his rights, and not as
a sale of his interest in the business, but as wages. If one partner
were to make certain weekly or daily payments to another partner, that
would not prevent the latter from claiming his share in the ultimate
division; certainly not, unless it was so expressly stipulated. In the
second place, the contract is made under duress. The worker being
evicted from his natural inheritance, the land, is not in a position to
make a binding contract. He has no other opportunity of employment, but
such as he is compelled to accept from him who has usurped the dominion
of the land, his natural inheritance. He has no resource but to sell
himself and labor at such price as the holder of his patrimony offers.
The reasoning which urges the wage contract is nearly akin to that which
placed in our national compact a clause about “persons held to service,”
itself a relic of the barbarism which attempted to justify slavery, on
the civil ground of contract. I do not say that wages, under equitable
conditions, might not be a tolerable method of division of the results
of co-operative industry; as where a man was in possession of sufficient
land to employ his labor, and where the pirinciple of copartnership had
become the ruling one in the line of industry he engaged in. A contract,
under such circumstances, might be intelligently made, but under
monopoly of the land and consequent capitalization of goods and money,
it would give not the remotest intimation of any rule which science or
equity can recognize. It results not only in giving an extremely low or
an extremely high proportion for services of equal utility, but it is
governed by no principle of reciprocation, or even by demand and supply,
though often by the sheerest arbitrary will.
In treating of the production of social wealth we have necessarily
referred to division and exchange, as they are connected with it. If
present division is correct and scientific, then it must be admitted
that production proceeds from capitalization of goods and not from human
co-operation, as I contend. In the natural sequence, production stands
first, then ownership, or the division of the product among the
co-operators. It is not till after the goods have been produced and the
division has taken place that exchanges can take place; because, till
then, no one has anything to exchange. Agreement may be made, it is
true, in regard to things in course of production or in contemplation.
But it is the goods, after production and division has taken place,
which are really exchanged. Exchange, therefore, can have no place in
determining who has produced the goods, or how they should be divided,
since all that is decided before they enter its circle. That the
prospect or opportunity for exchanging may have the effect of
stimulating certain lines of production is true; but it is only when
they are produced and the ownership determined, by whatever system of
division, that they come under the rule of the commercial principle. So
that, however exact and unquestionable the “science of exchanges” may
be, and in proportion as it is exact, will the question of industrial
production and its ownership be beyond and independent of it, and the
more important will become the problem of determining the exact relation
between private goods and social wealth.
The proper distribution and control of the land is the most important
subject of a political or economical nature to which any people can
direct their attention. Upon the accuracy of its solution depends the
degree of civil and social development to which they will attain.
Politics, civil law, and social economics will all be shaped and colored
by the system of land tenure. It is not appropriate to the scope and
limits of this treatise to enter into an investigation of the various
theories of land ownership which have obtained in the world. We can only
give them a passing allusion in our endeavor to ascertain what principle
of law underlies them all, and how this has been gradually developed in
the general history of land tenure.
That originally the right to enter and enjoy the land was the common
birthright of the people of any and all countries is taken for granted,
no one contradicting. Blackstone says, “There is no foundation in nature
why a set of words upon parchment should convey the dominion of land. .
. . While the earth continued not densely populated, it is reasonable to
suppose, that all was in common. Thus the land was in common, and no
part of it was the permanent property of any man in particular; yet
whoever was in possession or occupation of any determined spot of it
acquired for the time a sort of ownership, from which it would have been
unjust and contrary to the law of nature to have driven him away by
force; but when he quitted the use or occupation of it another might
take possession of it without injustice to anyone.”
Says John Locke: “The earth and all that is therein is given men for the
support and comfort of their being, . . . and nobody has originally a
private dominion exclusively of the rest of mankind.”
Say says: “It would seem that lands capable of cultivation ought to be
regarded as natural wealth, since they are not of human creation, but
nature’s gratuitous gifts to man.”
M. Ch. Comte says: “These lands (extended tracts not yet converted into
individual property') which consists mainly of forests, belong to the
whole population, and the government, which receives the revenues, uses,
or ought to use them in the interest of all.”[10]
It is wholly unnecessary to examine the grounds which are given by
economists and writers on civil law as to the basis of private property
in land, for they are so contradictory as to be really self-destructive.
Possession remains possession, and can never become property, in the
sense of absolute dominion, except by positive statute. Labor can only
claim occupancy, and can lay no claim to more than the usufruct. If
labor gave a property title to the land in any such absolute sense, then
it would oust all other proprietorship than its own; because, without
the continuous application of labor, land has no value. The “right of
discovery” is not seriously advanced now, although it was the basis on
which this continent was parceled out. We shall see, moreover, that
private titles to land have arisen in none of the ways which have been
relied on for its justification, but in a manner inconsistent with each
and every one of these hypotheses. Comparatively late investigations
have proved beyond all question that private property in land has been
developed in all modern nations from a collective ownership. Sir Henry
Sumner Maine, in his “Village Communities,” summarizes the results of
his own investigation, as well as that of other recent authors, thus:
“It would seem that light is pouring from many quarters at once on some
of the darkest passages in. the history of law and of society. To those
who knew how strong a presumption already existed that individual
property came into existence after a slow process of change, by which it
disengaged itself from collective holdings by families or larger
assemblages, the evidence of a primitive village system in the Teutonic
and Scandinavian countries had very great interest; this interest
largely increased when England, long supposed to have had since the
Norman Conquest an exceptional system of property in land, was shown to
exhibit almost as many traces of joint ownership and common cultivation
as the countries of the North of the continent; but our interest
culminates, I think, when we find that these primitive European tenures,
and this primitive European tillage, constitute the actual working
system of the Indian village communities. . . . One stage in the
transition from collective to individual property was readied when the
part of the domain under cultivation was allotted among the Teutonic
races to the several families of the townships ; another was gained when
the system of ‘shifting severalties’ came to an end, and each family was
confirmed for a perpetuity in the enjoyment of its several lots of land.
But there appears to be no country inhabited by an Aryan race in, which
traces do not remain of the ancient periodical redistribution. It has
continued to our clay in the Russian villages. Among the Hindoo villages
there are widely-extended traditions of the practice, and it was,
doubtlessly, the source of certain usages, to be hereafter described,
which have survived to our day in England and Germany” (V. C, pp. 61,
62, 81, 82.
Law, as it practically affects society, has been developed as the result
of two tendencies which operate to modify, if they do not limit, each
other. The first is the reason derived from experience, which begets
general consent to such certain “rules of conduct” as are discovered to
be necessary for the well-being of the family, village, or other social
aggregation. The other is the desire for dominion, the assertion of the
will on the part of the individual, class, or party, according to the
form of the controlling power.
True law, we need hardly say, is that “rule of action” which conforms to
justice and equity. “No human laws,” says Blackstone, “are of any
validity if contrary to the law of nature; and such of them as are valid
derive all their authority, mediately or immediately, from this
original.” But since the progress of society is one of growth, in which
a knowledge of nature's laws is gradually discovered, and still more
tardily applied, we can expect to find only such principles of law
applied in primitive societies as are readily seen and comprehended.
Under the mere rule of will we may also expect to find often utter
perversion as well as ignorance of these laws.
History does not enable us to trace land ownership to its primitive
source. In the earliest stage known to us, we find the household under
control of the unlimited authority of the owner, including alien slaves,
with power of life and death over all, notwithstanding the equality
which existed between the owner and the numerous proprietors of the
common domain.
The present purpose is to inquire into the nature of this early system
of holding. The ownership of slaves had been effected through ignorance
or very imperfect application of natural laws, and of that complex
social relation of all human kind which at a later day has been
recognized and to a certain extent applied under civil rule. The
testimony is conclusive that the form of land ownership earliest known
to history was that of a common possession. The law relating to this
ownership has come down to us unchanged, materially, through all the
revolutions in systems of civil and political rule, and through all the
mass of enactments and decrees with which legislatures, monarchs, and
courts have encumbered the various systems of jurisprudence. That
private ownership followed closely the recognition of the common right
to land there can be little doubt. At first it may be that a community
of goods existed along with community of the ownership of the land. But
this must have been soon followed by the setting off a mark for the
village, in which each family had a separate home. Over this and the lot
it occupied, it had dominion, as nearly absolute as any right can be.
Then came the arable mark, in which each householder had a lot in each
of three several fields; two for the rotated crops and one for rest, or
the fallow. These lots were used by the householder for his own and
family’s behoof; but was subject to the control of the community, which
required uniformity of crops and of culture. The fallow, and even the
stubble, of these fields were subject to be pastured in common, as well
as the balance of the domain, which was embraced in the common mark.
It would seem that private occupancy of the land, to the extent we have
seen, was nearly coeval with that of private movable property, property
being used not in what economists and jurists term “the highest form of
property,” but rather that which constitutes possession or ownership
merely. That separate holding should follow common ownership was
inevitable. Otherwise society would have become petrified, and all
progress arrested. There is a tendency in the community to develop a
despotic leadership. This, in early times, took on a form of hereditary
rule, even where the elective franchise was retained. R. B. D. Morier
shows[11] that there existed a strong tendency among the Teutonic races
to convert a “public duty to a private right,” and that monarchy and
private dominion grew up from the same root, so nearly related that it
is difficult to say where the one becomes distinct from the other.
From the village community colonies were formed, and occupied
unappropriated lands, the mother village assuming and exercising a
certain control over the daughter villages. This, in connection with
military authority and rights of conquest, resulted in the formation of
the manor; and, finally, in the medieval feudalism from which the
English land system particularly has been derived. In accordance with
the monarchical assumption, a legal fiction was invented to give
validity to usurpation of the dominion of the land, by the custodians of
popular rights, in flagrant betrayal and violation of their trusts, and
all titles were, through this pretense, derived from the crown.
When this country declared its independence of Great Britain, the
proprietorship, as regards the public domain, was assumed to be in the
whole people. We see now that, so far as dominion over the land is
concerned, the political and civil basis is the same. A sovereign
presupposes a domain. Sovereignty and proprietorship of the land are
inseparable. So that, in parting with the proprietorship of the land,
the people have virtually abdicated their sovereignty, or rather our
public servants have betrayed their trusts, and have converted what was
a public into a private right. And our courts, instead of enunciating
and applying the natural laws of the subject, have deferred to the
English common law and the Roman civil law, both of which, through
forced interpretations, as regards the dominion over the land, are but a
perpetuation of the barbaric and brutal usurpations of a semi-savage
age.
Political equality, as well as equality before the law, are practically
impossible unless the common right to the land is recognized and
secured. The conservative instinct which, under popular forms, sought to
confine the elective franchise to real proprietors, was legitimate under
the state of the land system, as it has been allowed to exist. The
mistake consisted in the admission of a system which permits any person
to be deprived of his portion in the ownership of the land who has a
voice in the direction of public affairs. But we wish, now, to look at
the results which followed the application of labor under what appears
to have been the primitive form of ownership, equal rights of occupancy,
even where separate holdings had arisen. In the simple community, each
contributed according to his ability, and received from the common fund
according to his need; but as soon as separate property was recognized
in movables, separate holdings followed as a necessary consequence,
especially in respect to so much land as was necessary to the private
home. The great domain was still common. The arable mark, even, was
subject to the control of the common will, as to the kind and rotation
of crops. Under feudalism and the “divine right” the crown lands still
remained common, and it is only within a century or two, under “the
Enclosure Acts” of Parliament, that in England, even, the common or
crown lands were wholly given up to the dominion of a class to the
complete exclusion of the people.
Under equal ownership of the land, doubtless, “the laborer received the
whole product of his labor.” This is what Adam Smith calls the “Natural
Rate of Wages.” Ricardo, on the contrary, defines the natural rate to be
the minimum necessary to his support, and to enable him to rear
offspring. This latter rate evidently applies to the laborer only, who
has been despoiled of his heritage in the soil, and hence subjected to a
forced competition, since it would be impossible to reduce one to that
condition who held land. His natural wages are now, under this
usurpation, the same as what to his master is the expense of a chattel
slave. The only object of alluding to this question here is to emphasize
what really the position of the laborer becomes thus divorced from his
natural heritage. It is of no importance as to which is right, Smith or
Ricardo, since of the independent worker, upon his own acres, it might
be said that the minimum expense of his living was the natural cost of
his labor, and what he realized over that was profit. But what is of
importance, in any system of division with the least pretension to
accuracy, is that what went to the laborer under a common ownership of
the land was the whole product of his industry. And upon this question
there is and can be no dispute.
Combination in labor and reciprocal exchange of services furnish the key
to all social or human advancement. In the division of the results of
such associated labor, products would be awarded proportionally to labor
performed. This applies to families, which constitute the social unit.
As individuals within the family, it can only apply, of course, to those
who are able to work, the children, to a certain age, being a charge to
their parents, or in a broader community, to the community itself.
Admitting, as we must, that all had originally equal rights of access to
the earth, and that no one possessed any right to dispossess or prevent
another, we are unable to find justification for any law or custom which
attempts to exclude a single member of the human family from a share in
the common domain. Whatever may have been held in barbaric days, as to
the “law of the stronger,” “the rights of the victor,” etc., no such
right of dispossession can be pleaded now. "Whatever may be claimed as
to the surrender by the voluntary act of the individual, though I deem
this right to a place upon the earth inalienable and indefeasible, the
right of the child can, in no manner, be transferred, forfeited, or
imperilled by any act of the father, nor its relation to the land, or to
society, be affected in any way whatever. This tenancy of the whole
people is not only a common tenancy, but to each person it is a life and
only a life tenancy, into which man “enters” at his birth, and “quits”
at his death. To deed away such a right is impossible. Man may abandon a
certain separate holding, and another may properly occupy it, but he
cannot alienate his own " common right," which is but for life, much
less dispose of that of his children and of their children, to all
generations. In neither law nor equity can a parent dispose of the
patrimony of his minor child, certainly not of those who are unborn.
This patrimony is held as a trust for posterity under whatever form of
government, law, or administration, and no betrayal of it by the parent,
executor, or state can hold against the right of the individual. No
acquiescence of a minor or ward can establish a right, or work a
forfeiture; and no defense can be made to this great wrong, that the
people have submitted to it. On the arrival of every minor at majority
he has the undoubted right to recover.
We are able now to judge of the nature of these usurpations, and to
trace their rise and progress, in placing the control of the land into
the hands of a class, and in excluding the mass of mankind from all
interest in the patrimony which nature has provided in abundance for
all. The gradual growth of exclusive ownership of hereditary rights and
settlements are traced with great care by a number of writers, among
whom are Nasse, Yon Maurer, Laveleye, and Maine. They show that in the
feudal system the relation of the serf to the land was recognized,
although a distinction was made between him and the personal chattel or
slave, who, as an alien, had no recognized claim upon the land. In a
number of ways, however, the right, not only of the tenant but of the
agricultural laborer, to a home upon the soil and a share of its
productions, was recognized from the earliest history of agricultural
communities to the disappearance of the feudal system in the modem
capitalism. Feudalism resulted as the natural outgrowth from the village
to the manor, and thence to the state. In its application to the
territory of the Roman empire, it was arbitrarily applied by conquest,
the old land holders accepting their lands back again on the most
favorable terms they could make with the conqueror. But under the system
as it had more gradually developed in Germany, Scandinavia, and Britain,
the rights of the people were more gradually absorbed. To the very last
the landlord holding “land from the crown could not substitute another
person for himself at his own will and pleasure without the consent, not
only of the crown, but of his own vassals.” “A strict military feud was
by its very essence inalienable, but gradually this rigor was relaxed,
and feuds were created alienable.” “In process of time the relation of
lord and vassal in feudal law changed from a bilateral contract, in
which there were rights and duties on both sides to the simple relation
of the modern landlord and tenant, or a unilateral contract, where there
is the simple right on one side to demand rent, and the simple duty, on
the other side, to pay it.” This change from a two-sided to a one-sided
contract was due, as Mr. Macleod shows in the context to the above
quotations, out of respect to the commercial spirit, so that “estates in
land were made freely salable and transferable without the consent of
the tenant " (Elements of Economics, § 38). Morier describes the first
period of the Teutonic community” as the period of land ownership and
equal possession, in which the freeman is a ‘miles’ in virtue of being a
land owner. The second period can be described as the period of land
tenure, and of unequal possession, in which the feudal tenant is not a
‘miles’ in virtue of being a land owner, but a land holder in virtue of
being a ‘miles.’” The change herein indicated marks the progress of the
development of the military spirit and of subjection to its sway of the
relation between the land and the cultivator. The owner of the manor in
each township became the president of the township court, “so that
whosoever owned the manor exercised the office of judge, and whoever
exercises the office owns the manor;” and to this he ascribes “the
origin of manorial rights, which afterwards become the keystone of the
entire land system in feudal times, and to this day affect in an
important manner the agrarian relations of many important countries in
Europe, England included.” This manor, he goes on to show, received dues
and services from the other manors in the township, “even where these
manors are the allodial property of freemen.” He considers feudalism to
have been made up of Teutonic and Roman elements, the Teutonic idea of
the correlation between possession of land and military service, and the
tendency to change public office into private right, to transmit such
rights by inheritance, and to regard honorable personal services
rendered to the sovereign ; and, on the other hand, of the Roman ideas
of law regarding “beneficial uses,” and of dominion in proprietorship of
the land. The later period, marked by the agrarian legislation of
Prussia during the present century, he calls “the return to free
ownership with unequal possession.” I must quote at some length his
description of the process by which the land-holding peasant was
transformed into a serf in Germany:
“As population increased, more and more townships were settled on the
common lands, the proportion between pastoral as compared with
agricultural wealth decreased, and the ordinary freeman was gradually
reduced to a little more than what his lot in the arable mark brought
him in. Simultaneously with this diminution of his means rose the cost
of his equipment for the field, and the strain put upon his resources by
having to maintain himself during the long summer and winter campaigns
which were now the rule. Soldiering under Charlemagne against the
Saracens in Spain, or the Huns on the Danube, was different work from an
autumn raid across the Rhine. Hence partly by his poverty, partly by the
pressure, often amounting to force, brought to bear upon him by the
lords who wished to increase their demesne lands, the free owner was
little by little reduced to the condition of an unfree holder. By
commending himself to a superior lord—that is, by surrendering the
dominium directum of his allodium, and receiving back dominium utile—the
freeman lost his personal rights, but obtained in return protection
against the state, i. e., against the public claims that could be made
upon him in virtue of his being a full member of the political
community. According to the nature of his tenure, he had to render
military service (no longer as a national duty, but as a personal debt)
to his superior, and in return was maintained by his lord when in the
field; or, if his tenure was a purely agricultural one, ... he was
exempt from military service, and only rendered agricultural service.”
“In this way, as generation followed upon generation, the small free
allodial owners disappeared, and were replaced by unfree holders. But
the memory of their first estate long: lived among the traditions of the
German peasantry, and it required centuries before the free communities,
who, out of dire necessity, had by an act of their own surrendered their
liberties into the hands of the lord of the manor, sank to the level of
the servile class, settled upon their demesnes proper by the lords of
the soil.”
“In the peasants’ war, which followed Luther’s Reformation, he made a
desperate attempt to recover his lost liberties; and in the record of
grievances upon the basis which he was ready to treat, he showed how
accurate was his recollection of the past, and how well he knew the
points on which the territorial lords had robbed him of his rights.”
The demands of the peasants were deemed “moderate” even by the
historians of their times; and if in the course of the struggle their
unorganized bodies sometimes committed great excesses, it was generally
in retaliation of the infamous cruelties practiced against them by the
brutal and unprincipled Von Waldburg and less significant leaders of the
aristocracy, who spared no age or sex, and who made treaties with the
purpose of repudiating them and entrapping the too-confiding peasants.
Their demands were substantially: “The free election of their parish
clergy; the appropriation of the tithes of grain, after competent
maintenance of the parish clergy, to the support of the poor and to
purposes of general utility; the abolition of serfdom, and of the
exclusive hunting and fishing rights of the nobles; the restoration to
the community of forests, fields, and meadows, which the secular and
ecclesiastical lords had appropriated to themselves; release from
arbitrary augmentation and multiplication of services, duties, and
rents, and the equal administration of justice.”
But all this moderation was of no avail, and after great sacrifice of
life in the struggle, the lot of the peasant became harder than ever.
“The Thirty Years’ War gave the final blow. “With exceptions here and
there the tillers of the soil became a half-servile caste, and were more
and more estranged from the rest of the community until, with the
humanitarian revival at the close of the last century, they became to
philanthropists objects of “the same kind of interest and inquiry which
negroes have been to the same class of persons in our day.”[12]
This description may serve in a general way to portray the courses by
which man's natural birthright in the soil has been usurped in every
land by a domineering class who, sooner or later, sought the cover of
pretended law to sanction unlawful acts, so that they might enjoy quiet
possession of dominion obtained by violence.
In the Russian system, we have a later development still, corresponding
in its essential features to the earlier feudal form. There the
reduction of agricultural labor to bondage was effected in comparatively
modern times. It is true slaves were held at an earlier date by the Czar
and the nobles of his court; but those slaves, or their progenitors,
were captives taken in war. The noblemen who owned these slaves were
servants of the crown, and not land holders or even vassals owing
allegiance for the tenure of land. Often they were allowed, however, an
allotment of the crown-land to be tilled by their slaves, and their
service to the crown was paid in that way. “Such nobles as did not own
slaves were sometimes paid by the Czar’s abandoning to them the yield of
the taxes due to the Czar by the peasantry of one or more villages. But
such an arrangement did not legally impair, in the slightest degree, the
liberty of these peasants. They remained the free children of the Czar,
entitled legally to break off their household, and to separate from
their village community and to join another whenever they liked.” “The
Russian peasants of those times were nobody's servants- but the Czar's,
like everybody else in the empire.” These quotations are from “The
Russian Agrarian Legislation of 1861,” by Julius Fancher, whose
conclusions I must give in brief. The form of tenure and tillage of the
land was that of joint husbandry of the whole village, that and not the
family being the social unit, and standing under patriarchal rule.
“Movable property alone was individual; immovable, the land, at least,
was common.” Colonization was carried on, village giving birth to other
villages, which in their turn became self-sustaining, and gave birth to
still others.
With this system of organization and extension of villages is to be
considered the savage drama of political life of the Russians, the
influence of a dominant church, and external warfare. Military
government in time having been introduced, and a consequent system of
taxation, the same contests arose between private factions, as to who
should possess the legalized prey, as constitute the political part of
the history of other nations. With the growth of a petty nobility,
during the struggle of Ivan III. and Ivan IV. the Terrible, to establish
the empire, the nobles were rewarded with the yield of taxes of such
villages as had been allotted them. “Villages not being disposed of in
such way seem to have remained free villages till the later years of
Ivan IV., who seems to have commenced the practice largely resorted to
in later times, of turning crown villages into villages belonging to the
Czar, not as sovereign of the country, but as landed proprietor. Such
villages, peopled by prisoners of war and their offspring, the slaves of
the Czar, must have always existed. . . . But there can be little doubt
that Ivan IV., in designating by a legislative act which villages were
henceforward to be considered as state property (Liemschina), and which
as property of the Czar (Opritchina), did so for the purpose of
appropriating what was not his own.”
“The changes effected amounted to this, that a very great number of
villages having been formerly free communities, merely paying taxes to
the state, had been turned into estates of the Czar and of the nobility,
on which the peasantry had to pay rent. The amount payable remaining
unaltered, and the person to whom it was to be paid remaining the same,
the peasantry, perhaps, did not even become aware of the change; they
may have considered their village as a little socialistic and
patriarchal republic, just as the bees in the hive are not aware that
they have other masters besides their queen.” But they were soon made
aware that their ancient liberties had departed. An imperial ukase was
published forbidding the peasants to quit their village without a
passport, and ordaining that every peasant found wandering about the
country without one properly signed should be sent back in irons to his
village, and punished for having left without permission. Though under
pretense of preventing vagrancy, this ukase was to prevent a loss of the
power to raise the rent, which increasing population would give.
“The decisive blow had fallen. It did not at once bring about its final
results—compulsory labor of whatever kind the master demands from his
slave — but it contained it in the germ, and the development was rapid.
The first and most important consequence was that colonization was
checked for a long time. . . . The whole seventeenth century shows the
heart of the Russian peasant still palpitating. The enshrined spirit of
liberty asserts itself in religious sectarian movements, in agrarian
risings, in bold brigandage, under the seductive form of free Cossack
life. It was reserved for the eighteenth century to consummate the work.
The harmless and gentle villagers, who, for the love of wife, child,
brother, sister, and neighbors, had conquered the uncongenial eastern
plain of Europe for civilization, now disappear as working agents from
the historical records of their country; they have become mere tools to
work with, mere matter to be worked upon.”
That in England, as well as among the other nations, private ownership
of land owed its existence to the betrayal of public trusts may be seen
from the lavish manner in which its kings distributed the public or
crown lands.
Macaulay says: “There can be now no doubt that the sovereign was by the
old policy of the realm competent to give or let the domain of the crown
in such manner as seemed good to him. No statute defined the length of
the term which he might grant, or the amount of the rent which he must
reserve.” “For a brace of hawks to be delivered to his falconer, or a
napkin of fine linen, he might part with a forest extending over a
hundred square miles.” He says such acts were common, not only as late
as the time of the Stuarts, but that their example was followed by
William of Orange.
That the idea of common ownership of the land held a prominent place in
the common mind of England is shown by the fact that the early emigrants
to the American colonies, who were composed mostly of the class of
yeomanry, organized themselves into village communities to cultivate the
soil. “The General Court granted a tract of land to a company of
persons,” and it was held in common. The company assigned house lots,
then tracts of meadow land. Pasture and woodland remained in common. In
1660 the General Court enacted a law confining “commonage for wood,
timber, or herbage” to those houses “already in being, or [which] shall
be erected with the consent of the town.” It was this, or similar
restrictions, which gave “the commoners” in New England and New York a
degree of aristocratic power which extended itself far into this
century, and gave color to many titles to land which were destitute of
legal, as well as of moral, validity. The process of usurpation has been
going on with or without statute law, and often in open violation of it.
Our national history in regard to the disposal of our public domain has
been scarcely more than a series of usurpations —grants to railroad
corporations; soldiers' bounty warrants; a device to furnish the market
with a script for gambling in lands; donations to the states for
colleges and educational purposes, etc. But this is but a part of the
system which is leading our nation headlong in the path trod by ancient
Rome two thousand years ago. Like her patricians, the capitalists of our
time are getting control of our domain “legally, if they can” but
getting it.
By the statements furnished by Mr. Secretary Teller to the House
Committee recently, million after million of acres of the public lands
are being fenced in by cattle companies and “ranch companies” to the
exclusion of those who desire to settle them under the Homestead law. We
are told that some of these companies are controlled by foreign
capitalists exclusively, among which are the Arkansas Cattle Company and
the Prairie Cattle Company (Scottish), each of which has fenced in more
than a million of acres. Already from thirty to fifty millions of acres
are said to have been thus seized. It is true that Congress has passed a
law making such things “a misdemeanor;” but such law can hardly have
retroactive effect. It will at utmost be attempted to enforce it only
when parties feeling personally aggrieved shall make complaint, and then
the rich companies can put off action indefinitely by the employment of
learned and influential counsel. In time “possession” will give them
title, and the courts, although they have violated the law, will defend
them in their claims to the lands as vested rights, as they have already
done in cases of the railroads against the poor and uninfluential
settler. It was in ways quite analogous to what is thus going on before
our eyes that the Latifunclia of Rome arose and crushed the Roman
civilization through corrupt perversion of fundamental law.
In a communication to the North American Review, a year or more ago, Mr.
George W. Julian, who had been Chairman of House Committee on Public
Lands, charged the Congress, Federal Court, and Administration with
having pursued a most reckless if not corrupt course in regard to the
disposal of the public lands. Mr. Ex-Secretary Schurz, feeling
personally aggrieved thereby, replied, attempting to show that he was
free from censure, and charging back the fault upon Mr. Julian, and the
Congress of which, at the time, he was a member. But they did not
disagree as to the general tendency of the government to facilitate the
alienation of the lands and to aid and protect the capitalistic monopoly
of the public domain. They only differed on the question as to which of
the two was more culpable, for a state of things both acknowledged to be
scandalous. Yet, under our land system, titles so obtained, or in any
way obtained, are under present rulings and purchased interpretations
destined to give dominion over the land “forever” to the exclusion and
impoverishment of the people in all future time.
The Roman law, in regard to land, has been generally supposed to favor
absolute dominion, unlimited in extent, to the private holder. The
agrarian laws of the kings, and of the consuls and tribunes under the
republic, were supposed to be “associated with the idea of the abolition
of property in land, or at least of a new distribution of it.” This
latter supposition long continued to furnish apparent justification for
the opprobrium which apologists of class domination and even scholars
sought to cast upon that most just and patriotic measure, until Niebuhr
pointed out that the purpose of the agrarian laws was not to interfere
with private property in the land, but to effect an equitable
distribution of the public lands among the citizens of Rome. It was the
use which had been made of those lands by the military or civil rulers,
or by wealthy or influential patricians, through the oversight,
connivance, or neglect of those rulers, that rendered the agrarian laws
so difficult to enforce, and raised up such deadly hostility to their
application. Dr. Thomas Arnold, following Niebuhr, says: “It was the
practice at Borne, and, doubtless, in other states in Italy, to allow
individuals to occupy such lands, and to enjoy all the benefits of them,
on condition of paying to the state the tithe of the produce, as an
acknowledgment that the state was the proprietor of the land, and the
individual merely the occupier. Now, although, the land was undoubtedly
the property of the state, and although the occupiers of it were, in
relation to the state, mere tenants-at-will, yet it is in human nature
that a long, undisturbed possession should give a feeling of ownership;
the more so as while the state's claim lay dormant, the possessor was,
in fact, proprietor, and the land would thus be repeatedly passing by
regular sale from one occupier to another.”
The idea of a citizen and that of a land holder were inseparable, and as
new citizens were admitted, they had to each receive a portion of the
unallotted public domain. This could be done only by dispossessing those
who had taken possession of these lands under the custom, which it seems
was confined to the old burghers or patricians, no other class being
allowed to occupy them. This, with the tendency of the larger
possessions to swallow up the smaller ones, increased the numbers of the
landless, whose destitution and degradation so greatly increased that
some measures were necessary to be taken to prevent anarchy and the
dissolution of the state.
It is said that most of the kings introduced agrarian laws; “the good
king,” Servius Tullius, falling a victim to the hostility of the nobles,
in consequence of his introduction of one Spurius Cassius, a consul,
proposed a law to give the citizen land out of the public domain, and to
enforce the payment of the stipulated rent by the large land holders, or
occupiers; but as soon as his year of consulship had expired, he was
falsely accused of trying to make himself king, condemned, scourged, and
beheaded, and his house razed to the ground. This has been aptly and
justly termed “an atrocious judicial murder.”
The same law was attempted to be put in operation by the Tribunes
Macilius and Metilius, but without success. Later, Marcus Manlius, a
patriotic and noble patrician, made an effort to promote an agrarian
law, and though he had saved the capital during the Gallic siege by his
intrepidity, was hurled from the Tarpeian Rock, on a charge like that
against Spurius Cassius, equally groundless and base. In 367 B.C., after
a violent contest of eleven years, an agrarian law was passed, through
the efforts of Licinius Stolus, but though proving of great value was
soon overborne.
The story of the Gracchi is too familiar to be repeated here. Their
temporary success in preventing the social ruin of the republic hardly
extended beyond the cruel butchery which destroyed them; and reaction,
malversation, corruption, and demoralization paved the way for the
introduction of the empire.
That the pernicious system of landholding which obtained in despite of,
rather than in accordance with, the Roman civil law, was the cause of
the subversion of the Roman republic, and of the ultimate decline and
fall of the Roman empire, there appears now no question among historian
or scholars. Malthus treated the British land system as though it had
been a part of the “laws of nature,” and contends that “though human
institutions appear to be, and, indeed, often are, the obvious and
obtrusive causes of much mischief to society, they are in reality light
and superficial in comparison with these deeper-seated causes of evil
which result from the laws of nature and the passions of mankind.”
Yet even he makes this statement: “When the equality of property which
had formerly prevailed in the Roman territory had been destroyed by
degrees, and the land had fallen into the hands of a few great
proprietors, the citizens, who were by this means successively deprived
of the means of supporting themselves, would naturally have no resource
to prevent them from starving but that of selling their labor to the
rich, as in modern states;” and then adds that they were cut off from
even this resource by the enormous number of slaves which had been
captured in the wars, and who did all the agricultural and mechanical
labor.
Macleod says: “Rome, which had not seen a foreign foe for seven
centuries, was four times sacked by the barbarians in the fifth century.
The free yeomen of the bright days of the republic had perished in the
civil wars. The land was parceled out among a number of gigantic
proprietors, and cultivated exclusively by slaves. Tillage had nearly
ceased, and all the supplies came from the provinces. With the loss of
these the supplies failed, and the population was reduced to the lowest
depths of misery”
That it was the maladministration of the land which resulted in the
enslavement and degradation of the people and the exhaustion and loss of
fertility of the soil is too patent for serious discussion. But it may
be well to notice that what Niebuhr and other late writers regard as a
merit in the “agrarian law” constituted its main defect. It did not
attempt to deal with all the land of the republic; but only with that
portion of which recent private appropriation had been made. If we had a
history of the matter at all clear, it would doubtless appear that all
private dominion of the land had arisen in Rome in the same way as that
which the patricians had more recently obtained, from the sufferance of
the state, over lands admitted to be public—a process similar to that
which has been going on in our own country for a hundred years. A
possible agrarian law was one which should have dealt with all land
alike, and thus have prevented those dangerous accumulations in the
hands of a few which gave power to the strong to defeat any effort
whatsoever to protect the possessions of the weak. The system of landed
property in Rome is shown to have been much the same as that in other
states, and was, doubtless, developed in a similar way. Their
“households,” “clan villages,” and “cantons” corresponded in a general
way with the households, villages, and manors of later times. The
earliest authentic history of Rome gives us three classes: slaves,
clients, and patricians, or householders. The first were property; the
second were persons, but without political rights; the last were “the
people.” The slaves were, doubtless, captives taken in war, or their
descendants; the second class were probably aliens, who had come in as
refugees, etc., but who seldom, under the Roman customs, obtained the
privilege of citizenship. But all the burghers were on a footing of
equality, and as land and political rights were inseparable, the
original condition as between them must have been equal ownership.
Speaking of a still earlier people than the Romans, Henry Sumner Maine
says: “Whenever a corner is lifted up of the veil which hides from us
the primitive condition of mankind, even such parts of it as we know to
have been destined to civilization, there are two positions now very
familiar to us which seem to be signally falsified by all we are
permitted to see: All men are brothers, and all men are equal. The scene
before us is rather that which the animal world presents to the mental
eye of those who have the courage to bring home to themselves the facts
answering to the memorable theory of natural selection. Each fierce
little community is perpetually at war with its neighbor, tribe with
tribe, village with village. The never-ceasing attacks of the strong on
the weak end in the manner expressed by the monotonous formula which so
often occurs in the pages of Thucydicles: ‘They put the men to the
sword, the women and the children they sold into slavery.’ Yet, even
amid this cruelty and carnage, we find the germs of ideas which have
spread over the world. There is still a place and a sense in which men
are brothers and equals. The universal belligerency is the belligerency
of one total group, tribe, or village with another; but in the interior
of the groups the regimen is not one of conflict and confusion, but,
rather, of ultra legality. The men who composed the primitive
communities believed themselves to be kinsmen in the most literal sense
of the word; and surprising as it may seem, there are a multitude of
indications that in one stage of thought they must have regarded
themselves as equals. When those primitive bodies first make their
appearance as landowners, as claiming an exclusive enjoyment in a
definite area of land, not only do their shares of the soil appear to
have been originally equal, but a number of contrivances survive for
preserving the equality, of which the most frequent is the periodical
redistribution of the tribal domain. . . . Gradually, and probably under
the influence of a great variety of causes, the institution familiar to
us, individual property in land, has arisen from the dissolution of the
ancient co-ownership” (V. C, 225-227).
Emile de Laveleye, in his “Primitive Property,” asserts as the
conclusion of his thorough investigation of the subject in all primitive
societies all over the globe that “the soil was the joint property of
the tribes, and was subject to periodical redistribution among all the
families, so that all might live by their labor as nature has ordained.
The comfort of each was thus proportioned to his energy and
intelligence; no one, at any rate, was destitute of the means of
subsistence; and inequality increasing from generation to generation was
provided against . . . freedom, and, as a consequence, the ownership of
an individual share of the common property to which the head of every
family in the clan was equally entitled were in the German village
essential rights.”
The redistribution of the land was provided for in the sacred laws of
the Hebrews, and its periodic return was hailed as a religious, as well
as a social, festival. The land could “not be sold forever,” at the
most, for forty-nine years, as on the fiftieth came the national
jubilee. Thus no Israelite could be wholly deprived of his heritage in
the land, for each year brought him nearer to the restoration, and
reduced, by a definite amount, the sum necessary to redeem his
patrimony, if he should obtain means, before the fiftieth year returned.
In the same relation the laws of Lycurgus and Solon may be regarded,
since, economically, the abolition of debt must be in many respects
equivalent to a redistribution of the land.[13] The aristocracy of Home,
therefore, must have regarded any agrarian law as directly leading to
equal ownership in the soil, and without sufficient patriotism to esteem
the public good above the interest of self or class, they waged against
it a relentless war, which sacrificed, in turn, the republic, the
empire, and the Roman civilization.
Look at the question of private dominion of the land in whatever light
we may, we can find it to originate in usurpation only, whether of the
camp, the court, or the market. Whenever such dominion excludes or
deprives a single human being of his equal opportunity, it is in
violation, not only of the public right, and of the social duty, but of
the very principle of law and morals upon which property itself is
based, which has been stated by John Locke to be this: “For his labor
being the unquestionable property of the laborer, no man but he can have
a right to what that is once joined to, at least where there is enough,
and as good left in common for all others.” A definition which will
apply to the land as well as to mere commodities.
It is clear, from the history of all people who have a history, that
dominion of the land, in any other sense than that of common dominion,
and a limited proprietorship, such as, in accordance with the above
definition, leaves equal opportunity to all others, is incompatible with
all principles of societary development, and could never have been
understandingly sanctioned by any social consent, even did we not have
the fullest testimony that it has been always accomplished by official
betrayal of trusts, or by conversion of public duties into private
rights, when not, as frequently has happened, by direct and forcible
usurpation. To say that society can have established these usurpations,
by positive enactment that they have obtained by prescription, or that
individuals are estopped from pleading their just claim, is saying, in
effect, that society may destroy itself—that it may enact that the
principle of law on which property rests shall be obliterated in the
name and interest of another kind of property, which is not property but
robbery.
From the hasty review we have made, it seems equally apparent that rent
has originated in a wholly different way from that which economists
assert; that it has arisen by converting the public tax formerly levied
upon the land into a private claim or debt due to one who has perverted
the public revenue to his private use, and then claimed dominion of the
land from whence it was derived. Surely Michael Davitt has grounds for
his much-reprehended saying, “Rent is an immoral tax.” The right to tax
is the highest prerogative of sovereignty, and may be logically
questioned as to claim from any functionary of the state, or from the
state itself, except as a voluntary tribute. How, then, can the right of
its enforcement inhere in any private individual? How devoid of any
justification is the employment of the powers of the state to enforce
this usurpation, not in the public interest, but for private emolument!
Private property in land, if such a thing consists with public right at
all, must depend upon precisely the same principle as any other right of
property. As an element in human progress, the right of private
property, in importance, has taken first and almost only place in the
current systems of law and of political economy. While admitting its
great importance, we cannot conceal the fact that the writers on those
subjects have wholly failed to distinguish between its use and its
abuse, or to recognize its rational and equitable limits. The nature of
property, which is defined by economists to be “a bundle of rights,” is
now generally conceded to be “that of the individual to be protected by
society in the quiet possession of that which his labor has produced.”
I quote Mr. Mill to the effect that the logic of property rights is “to
assure to all persons what they have produced by their labor.” This has
been the reason on which all laws relating to property have been
professedly based in all ages, however imperfect or partially executed.
We now inquire how these principles become applied to the land, which,
as all admit, no labor had originally formed or produced. It is an easy
thing to form a theory as to the first assumption of property in, or
dominion over, the land, but the mischief wrought by theories of this
kind is that the originator, instead of using it as a theory to help on
a process of elucidation, immediately assumes it as a fact, and decides
the problem solved, and all existing statutes and customs justified.
Says Gibbon: “The original right of property can only be justified by
the accident or merit of prior occupancy. In the successive states of
society the hunter, the shepherd, the husbandman, may defend their
possessions, by two reasons which forcibly appeal to the feelings of the
human mind; that whatever they enjoy is the fruit of their own industry;
and that every man who envies their felicity may purchase similar
acquisitions by the exercise of similar diligence.” He admits that “the
common rights, the equal inheritance of mankind,” become usurped by the
crafty and bold. “In the progress from primitive equity to final
injustice, the steps are silent, the shades are almost imperceptible,
and the absolute monopoly is guarded by positive laws and artificial
reasons." It is unquestioned that monopoly, as it exists, is directly
the reverse in its origin from that assumed as under the law of trade,
and is derived from a system of ownership of which traces remain in
every civilized country.
Laws to protect and define separate ownership were made in the interests
of equity, and were at first limitations to usurped dominion, rather
than to protect and extend dominion by force, and so far as dictated by
reason, were a restriction upon arbitrary will, and were developed by
the gradual correction of the mistakes and evils flowing from
misdirection and ignorance.
As we have seen, all human exertion is resolvable into motion, or
movement of things. The necessary relation between the mover and the
moved is obviously so close that there can be no room for any broad
extension for either one without the other. There is also a definite
proportion between the two—the power applied and the object effected;
the doer and the thing acted upon. The man, strong or weak, measures his
strength against matter, and nature awards to his control just so much
as he can move, and no more. If he essays to move a pound more than he
is able, the force he does exert fails of all effect whatever.
Now let us recall the generally admitted premise that all have an
original claim to the ownership of the land. Take the individual alone
with nature. How much land can he move in the direction of production—in
other words, cultivate and improve? In his savage state he could roam
over a considerable area, and would require it to support his existence
by capturing wild game and gathering wild fruits. But as game grew
scarce, nature would compel him to limit himself to a smaller area.
Ultimately a very few acres would yield to him the greatest possible
return for his effort, because proportion between the force and the
thing acted upon is one of the prime conditions of effectiveness in all
spheres of production. This, then, is both the normal and the economic
relation between man and the soil, and one which cannot be rightfully
changed by any social compact, custom, or statute law. By combining his
strength with others only can he accomplish more useful results or
control a wider domain.
As division of labor and increased effectiveness are attained through
combination, a still less and less extent of control results
proportionally. So greatly has the division of labor reduced this
proportion that many otherwise intelligent people become unconscious
that they need access to the earth at all. The progress of society in
industry and commerce tends to reduce constantly the necessary margin
to. individual control. The custom or statute, therefore, which
guarantees exclusive possession to a class, so extended that even the
small amount required by each person can only be obtained at a monopoly
price, has no foundation in any reason, or principle of law of equity or
economy. There can be no just extension of control to one person while
another is deprived of all control. Besides, there can be no extension
to the general control. The land of the whole globe is a fixed quantity,
and so is that of every quarter—the domain of every nation, state, or
township. When the whole people have no power to increase their domain,
how can the individual have unlimited power of extension to his domain?
Can society confer a power it does not itself possess? Individual
possession of land requires to be defined and limited as certainly as
are the boundaries of townships or states, and one man can no more
rightly own the land upon which another lives than one state or nation
can have jurisdiction over its sister state or nation.
Ownership of land is sovereignty over the domain, and whoever owns the
land upon which a people live and toil is their sovereign and ruler.
When this dominion is subject to the commercial law, or law of the
market, such sovereignty is merely that of trade, and the tribute or
service becomes a royalty in the form of rent, interest, or dividend.
Traffic in land, therefore, is nothing more and nothing less than a
traffic in a kingly prerogative, and an extension of “the divine right
to rule” the “earth and man” into the domain of trade; and by which the
victim of misrule gains nothing when he changes his nominal ruler from a
“prince of the blood” to a president or governor, who like himself is
subject to the “trade king.”
In the evolution of civil law the right of private property prescribed
limitations to the barbaric “law of the stronger.” Its influence in
civilization has been incalculable. Its own limitations have been slowly
discovered and more tardily applied, until its abuses have become
intolerable, and as obstructive of human progress as was at any time the
law of brute force, which it so largely modified. The dominion of
property over man’s person has but recently been abrogated; its dominion
over his heritage is yet supreme; but when discovered to be what it is,
a bald usurpation, it will naturally or violently disappear, as slavery
and feudalism have done, through the evolution of industrial and social
laws.
The indefensible nature of traffic in the land, and its reduction to a
commodity, subject to increase and engrossment, is tacitly admitted by
the silence of the economists who assume its accordance with nature. The
principal writer who has taken up the pen on the conservative side of
the land question scarcely makes a passable apology for the system. Mr.
W. H. Mallock, in his review of Messrs. George, Hyndman, and Marx,
admits that to do away with rent might benefit the rent payer, as the
release from any other debt might do. He seems to be unable to
comprehend that the question has a wider scope, and that, as often
happens, the immediate rent payer makes a greater profit from a high
rent, since it operates, to a certain extent, to shut out competition,
the same as a license tax often affects a particular business. It is the
social injustice which is to be deplored, and which sometimes travels
far before it falls upon the unfortunate burden-bearer.
He makes no effort to show how an honest debt can be formed by privilege
to use the “common inheritance,” nor at all attempts to justify the mode
in which the toiler has been robbed of his right to the land necessary
to his support. He does not deny that the time may come when the land
laws may require to be modified; but satisfies himself with attacking
what he regards as weak points in the statements and logic of the
parties in review, and parries, as he best can, their arguments and
reasonings. He avoids altogether any discussion of the rise and growth
of the system, or any inquiry whatever into the origin of the titles
under which land is held from the people. He will only entertain the
fact that the present proprietor came to hold from another by purchase,
and, therefore, is to be deemed honestly in possession of his land,
since he paid his money for it. But, if we were to admit to be true what
in large estates is notoriously untrue, even in this country, it could
give no justification to the system, since to trace any title back will
yield us nothing at last but one of forceful and fraudulent taking, even
were land a proper subject of traffic at all. Mr. Mallock deprecates the
agitation against land ownership, and though he acknowledges it may work
evils and require to be modified, thinks a remedy like “nationalization
of the land,” or “limitation of estates in land,” would be like
prohibiting the sale of knives because they were sometimes used
feloniously to take life. But, in fact, the purpose for which dominion
of the land that others need is sought is to reduce labor to vassalage,
ultimately to eject the laborer—murder him; first his manhood, so as to
bar to him all improvement from generation to generation; and then to
destroy him. All this is not the showing of Messrs. George, Hyndman, and
Karl Marx; but of W. H. Mallock in the very pages we are reviewing. In
his arraignment of capitalism, he is almost without an equal. A position
more damaging to it has seldom been taken by Badical or Socialist. He
even exceeds the fact, which is bad enough. He says: “What is
progressive is not the faculties of the hireling laborers, but the
knowledge of the men by whom labor is directed. The laborers begin
exactly where their fathers began. The directors of labor begin exactly
where their fathers ended” (Property and Progress, p. 157).
Now, although this statement is only generally true of farm and factory
laborers, and largely false of mechanical and of nearly all other
workers for wages who are capable of self-employment, it is due,
unquestionably, to the extent that it is true, to the capitalistic
system under which “Property and Progress” are discreted from “labor and
arrested development,” so far as it is possible, by cunning device, to
reverse the natural course of industry.
But when Mr. Mallock comes to indorse the theory of Malthus, he makes
what might have been regarded otherwise as a meek submission to the
logic of events, an evident predetermination to obtain and hold dominion
of the land, not only that the future laborer might be rendered unable
to begin where his father left off, but even to end as his father ended.
It preaches to him a gospel of ejection and extinction, even before
Malthus’s dismal result shall be reached, and acquires and maintains
ownership of the land, that this may be done the more effectually, so
that his taking off may preclude and render unnecessary any unpleasant
struggle he might make in the ultimate competitive selection.
To be sure, he admits that “when the Duke of Westminster shows any
desire to expel all the Belgravians, when the Duke of Bedford proposes
to turn Covent Garden into a game-preserve, and when it comes to be the
ambition of English landlords generally not to get their rents, but to
get rid of their tenantry, then we may be certain that the English land
laws will be altered” (p. 114). But in truth the power to eject, given
by law to the landlord, is not merely a power capable of abuse, as the
possession of a knife may be, but it is a power sought and given for
this purpose alone, and which, no one knows better than Mr. Mallock, is
not only freely exercised, without even the wretched excuse that they
want to get their rents, by English and Irish and Scotch landlords, but
by those of every country where land monopoly prevails. They have the
civil and military power of the nations at their disposal to do the
murder of their bidding, and that without inquiring whether the
landlords want their rent, or to establish a rabbit warren, only they
must not do it in a “general way, you know;” that would not be
tolerated, and so the whole system would tumble! But while the knife is
only used on those who are feeble and ignorant, and could not sustain
the struggle for any length of time, any way, it is all folly to make
such a noise about it. It only anticipates by a trifle of a thousand
years, perhaps, the fulfilment of the prophecy of the “Gospel according
to St. Malthus,” and so, in any event, must be looked upon as the act of
Providence, rather than of the capitalistic landlords and their servile
instruments!
Coupled with the Malthusian theory of population, land monopoly resolves
itself into an institution to predetermine the dismal issue without
awaiting the struggle and actual trial of strength and endurance, so
that the “unfittest,” not the “fittest,” may survive, and the fittest be
destroyed. Because the desire to have the means of subsistence in the
hands of capitalists alone is one to give them an unequal advantage, and
to bring on the issue long before any natural cause for it existed, if
one is possible.
Now, Malthus has made a theory from all the facts in the case, or he has
falsified and ignored facts which, as many contend, show the contrary
theory to be true, or he has built his theory upon partially ascertained
premises, and to the neglect of tendencies and principles which
counteract and render his theory improbable as to any specific
culmination, but only in a general way proving tendencies to exist,
which, if uncomplemented by others, would produce the specific result,
as gravity without centrifugal force could cause the earth to fall
directly to the sun. I think the truth more likely, at least, to be
found in the middle ground than at either extreme. But so far as this
issue of the land is concerned, what essential difference can it make?
If Mr. George’s position on this question is sound, then there can exist
no justification for large control of the land, to be sure. If the
mediate position, or any mediate position, be true, then Mr. Mallock, to
justify landlordism, must prove that form of ownership is best
calculated to delay and render less liable to occur the deplorable
result, by inaugurating intelligent and humanitary checks to population,
and by refining and improving the race so as to render increase less
rapid, and the catastrophe less disastrous, if it cannot be wholly
averted. He, however, does nothing of the kind; but, on the contrary,
admits that the system we have intensifies and increases the tendencies
against which every impulse of manhood is aroused to resist or avert.
But suppose the theory to be entirely faultless, and established as a
matter ol natural science, what then is his position? Why, that a few,
at most a part of mankind, are justified in appropriating, not only the
greater share of the products of the labor of the toilers, but the land
itself, the source of all sustenance and the means to all productive
labor, so as to precipitate the crisis, and deprive the disinherited of
any means or opportunity to struggle for a survival, in which they would
otherwise be sure to succeed against the effeminate and idle who are
unused to toil and privation. Few writers of any school have so
thoroughly unmasked the tendencies and purposes of modern capitalism as
he. His criticisms of the “Statistics of Agitation” are inconclusive
where they do not favor the opposite for which he offers them. If, as he
contends, the condition of the poor is growing better, and the relative,
if not positive, condition of the rich is growing worse, what
probability can there be of a near Malthusian epoch, pray? And if Mr.
Hyndman and Karl Marx have played false with statistics and history to
show that once the condition of the toiler was better than now, he
cannot derive the cold comfort he seeks to draw from that consideration
for the oppressed and disinherited who reclaim a portion of their own,
become more in earnest in obtaining other portions, and are not, as he
imagines, disposed to rest content with what they have obtained, and to
trust to conservative rule to give them more.
In his showing that capital is the greater robber of the two, we think
he has successfully proved that far greater amounts are taken from the
industry of a country by interest and profits than by rent. In this he
has an easy task, for this is Mr. George’s weakest point—indeed, a
blunder fatal to his whole plan to remedy the evil. And still it may be
true, as unquestionably it is, that the making a commodity of the land
constitutes the basis of the capitalism of goods, which enables it to
rear a superstructure overshadowing its own foundation, the monopoly of
the land. The surprising thing is that one should entertain the strange
notion that the destruction of land-monopoly would “increase the
earnings [stealings] of capital,” unless, indeed, the purpose were to
confiscate the possession of one gigantic wrong in the interest of
another, in the vain expectation that it will stand after the foundation
is removed.
The last point I can notice is that which Mr. Mallock takes in regard to
“right to land.” Though he admits it in a general way, in respect to the
whole earth, he denies it in regard to any specific place or portion,
and thinks the time likely to come when a number of citizens more would
be born than could possibly live in a place, and “who not only had no
inalienable right to live in it, but whom their fellow-citizens had an
inalienable right to expel.” He thence infers that some have a better
right to land than others, and that institutions must determine which
have better rights, and which none at all. But all this only leads over
the road we have already surveyed, and betrays the animus of
landlordism, which proposes to have the sure thing when the crisis
arrives, and to not wait its coming, but keep the machine in running
order by expelling and crowding out a few periodically.
Indeed, I think some have a better right to land than others, viz.:
those who render it productive and so remove, or at least postpone, the
pressure of population upon the means of subsistence. But those are
proverbially not the landlords, who, as a class, do the least, and often
nothing, to promote production, unless paying their money to some one
who has no exclusive title to the land, and taking the rent as it
becomes due, is reckoned to their credit.
When a ship’s company, through wreck or circumstance of any kind,
becomes reduced to necessity, every one is put on an “allowance,” or, in
utmost extremity, lots are cast, and thus the struggle for survival is
made an equitable one. A Hannibal or Caesar, in the forced march and
severe privation, shared the lot of the common soldier. Not so with
capitalism and a pseudo-aristocracy. That requires all such unpleasant
episodes to be at the expense of the laborer, who has furnished the
feast at which there are insufficient places, and whom the lordling and
“money-bag” “have an inalienable right to expel,” that they may partake
in peace. Understand the crisis you have to meet, O workers! and ask
yourselves whether such issue to existing laws and customs, made by
their ablest champion, renders them longer worth your submission and
respect.
What is capital, and what the things embraced therein, is a question so
completely mystified by the accredited writers on political economy that
the word would not be employed but that it is generally used to signify
accumulations of wealth or goods. The latest definition of it is “any
economic quantity from which a profit is derived.”
But the distinction of chief importance is this, whether a thing in its
nature is competent to give increase, or has such quality conferred by
powers borrowed from other things, or by conventional customs and
institutions. In its scientific aspect, this distinction is of vital
importance. What has power of increase in nature is readily determined.
All organized things have growth and the power of reproducing
themselves. But no inert matters have airy such power, and it is only
through labor or the exertion of the human powers that they can have
their utility or their exchangeable value increased. Of the organic
things which grow and multiply, none are available to man’s use without
the exercise of his powers in gathering and moving them. The farmer or
horticulturist who cultivates berries in preference to gathering wild
ones from the fields, does it because it requires less labor to procure
them of equal quality that way than to gather the natural fruit. And so
it is with all kinds of production. We would not adopt the artificial if
it did not yield better, or. at least, equal compensation with the mere
pursuit of garnering natural productions. On careful examination, we
shall also find that no thing in nature multiplies or increases without
human care or attention which does not require the same sacrifice of
time and effort to gather or capture as it would to produce kindred
utilities by artificial means.
The natural productions of the land, and the growth of wild animals,
fowls, and other forms of animated nature which man appropriates for
food or to furnish skins or fiber for clothing, are really embraced in
the simple term land, because they have no existence independent of it,
and whoever controls the land appropriates them.
In the earlier conceptions, which regarded capital as the stock or
amount of money put to productive use, there was always a general
acknowledgment that it promoted production, while at the same time it
claimed to be stored labor, or product of labor.
But business operations usually show, not a gain to capitals, out a
steady loss, and a loss which is only made good by constant accessions
from the earnings of current labor. Of all those who go into business,
but a small number come out with their capital unimpaired, after a
reasonable compensation has been allowed for their services for the time
engaged. That a few do more than this, some realizing large fortunes,
gives currency to the conception that stock in trade is productive, and
lends infatuation to the idea that money can be made in it, as a
successful buyer of a lottery ticket thinks that lotteries pay. Of land
and labor only it can be said with any degree of accuracy they yield an
increase. And of them it can be said only when they are united, or the
labor is applied upon the land or upon material derived from the land.
It would seem, then, that land and labor, instead of being excluded from
the classification, should be regarded in economics as they are in
nature, THE ONLY CAPITAL. The man who owns the land to the exclusion of
labor can derive an income from it through the necessity of the excluded
worker, who must obtain access to it by paying rent, or sell his labor
for what the land holder will pay.
It is possible, therefore, by dominion over these prime factors, to
effect false and wholly artificial conditions which shall give increase
to other things and other activities besides those of land and useful
labor. The customs and laws which justify slavery place the laborer in
the category of chattels, and his person among subjects of traffic.
Property, of course, becomes productive then, especially if, as usually,
the slaveholder be also a land holder. As the laborer becomes a
merchantable commodity, and can be bought with money, he will impart to
that money or other commodity for which he will exchange, a reproductive
power. It may be mentioned as a fact, that in slave-countries the rate
of interest, other things .being equal, is always high. The rate in this
country has fallen quite one-half since the abolition of slavery in
scarcely more than a score of years. Other circumstances have
contributed to the same end, doubtless, but that has been one of the
main causes.
If the land be reduced to the condition of a commodity, and made a thing
to be trafficked in, the money or goods for which it will exchange will
have imparted to it the same power of increase which attaches to the
land, and will have conferred upon it the same royalty or power to tax
the production of labor. In nature LAND AND LABOR ARE ALWAYS CAPITAL,
and never commodities; and the products of these are always commodities,
and NEVER CAPITAL, except through subversion of normal relations, and by
the reduction of capital to the category of products, thereby dispersing
a portion of its productive power, to sustain a false factor in its
relation. The truth of this, however, aside from the interest of the
capitalistic advocate to disguise it, is lost sight of from the fact
that most persons, using commodities in the production of other
commodities and in rendering service, as merchants with their goods, and
carriers with their teams or other means of transportation, join with it
their personal and also hired service, and usually calculate these
earnings of labor as profit on their capital.
When the farmer joins his labor to the land he has bought with money,
and employs hireling labor mainly to do the work, he regards the profits
upon the labor and his entire earnings, and perhaps of his family also,
as so much gain, to be credited to the profit on the money paid for the
land, for wages and necessary means to prosecute his business.
The increase which has resulted from the union of land and labor is
shared by the money lord, while the land and the labor receive between
them the moiety their necessities demand. Even the rent goes, not to the
land, but to the landlord AS A CAPITALIST whose money is invested in the
land.
The failure of Mr. George to discover this led him to treat of the
monopoly of land and of capital as two separate things, not merely
distinct from, but as antagonistic to, each other; the one as the
friend, and the other as the enemy of labor. Overlooking the fact that
land is reduced to a commodity and so brought under the reign of
capitalism, and that “private property in land,” is simply one of its
means of subjecting labor, the principal one since chattelism is
abolished, he concludes that there is an inverse tendency between the
operation of landlordism and capitalism, and between the rates of rent
and of interest. Nothing could be farther from the truth. Interest and
rent are not rates, but things to which rate applies. The rate per cent,
of rent and the rate per cent, of interest so nearly correspond that
they may be said to be the same, and from any temporary aberration tend
constantly to return to equilibrium. The “pure economists” find no
difficulty in conceiving land and labor both to be capital. I quote.
“The land itself on which a city is built is wealth; the owners of it
obtain a great revenue by simply allowing other people to build houses
upon it” (Macleod, E. E. 76). “Labor itself is a valuable commodity; it
has value, just as that of a material chattel; it is, therefore, an
exchange” (lb., 128). He goes on to instance copyrights, patents, etc.,
funds, shares, advowson, etc., and triumphantly asks the previous school
“how these are the production, distribution, and consumption of wealth.”
To show the absurdity of treating these last-named things as “elements
of a physical science,” it could be suggested to him that they are
mostly the creatures of statute and prescription. Advowson in particular
is a feature peculiar to the union of church and state, and which would
necessarily disappear with the disestablishment of the church. He could
also have extended his list. A "letter of marque," a license to keep a
liquor saloon, a brothel, a gambling hell, or a “fence” for stolen
goods, might obtain for its owner a large “revenue by simply allowing
other people” to work under them. An appointment or election to public
office, which capitalists or corporations may desire to influence so as
to divert public interests to private use, may obtain for its owner also
an appreciable sum, and it is therefore wealth and a portion of his
capital and a scientific quantity! To such results we are driven the
moment we attempt to place the natural sources of wealth in the same
category with conferred privilege and usurped powers.
That when capitals or properties are created by law and sanctioned by
use, trade economists should treat them as economic quantities cannot
well be avoided, perhaps , but that they should be instanced as
demonstration of scientific principles is too absurd for serious
treatment. We might not prevent the pretended naturalist, who had never
seen horses but with blankets or trappings on them, or terrier dogs but
with docked tails and cropped ears, from classifying them under heads
determined by these distinctions; but we need not allow him to confuse
our minds with the notion that the blanket is a part of the horse, or
that the terrier’s ears and tail are shortened by a “natural
instigation.” As little should we be misled by the constant treatment by
economists of the most artificial and arbitrary relations of industry to
trade as though they were the scientific exponents of natural conditions
under natural law.
The subject of the natural means and factors of production forms the
principal stumbling-block in the reasonings of reformers as well as of
economists. Although nothing is more common among them than the phrase,
“Labor produces all wealth,” yet the Socialist, as well as the
capitalist, will immediately begin to talk about “the means of
production;” the one to show that capital acts a part in production, and
should therefore share in its results, and the other to show that
machinery, tools, etc., as well as the land, should be taken possession
of by the state, and production be carried on for the benefit of all. As
usual, the truth lies between the extremes, certainly not, as here,
where they meet. Land and labor being the natural, unproduced capital,
should have no artificial barriers placed between them. Land, being a
natural, not a produced thing, has no exchangeable quality, and can not
rightfully be held against the demands of the needy. It is the basis of
life and action. With labor it is productive; but it is the only thing
which is productive. The goods of the wealthy, to which their title is
undisputed, is that alone which is the result of labor. Now, if
machinery, tools, general plant, etc., are really means of production in
the sense of contributing of themselves to production, then a very
curious question arises between the capitalist and the Socialist. Either
the capitalist must surrender what his labor has earned, directly by his
individual application, and indirectly by the natural production of the
goods, tools, etc., to the state to be distributed promiscuously, by a
ratio of need, not of deed; or else the Socialist must abandon all hope
and purpose of improving the condition of those who do the labor of the
world. Between these two diametrically antagonistic claims there seems
to me to be but one point where reconciliation is possible. That is by
the elimination of land from the category of things purchasable by
labor, because not producible by labor, and a return to the natural
right of labor to reap the fruits of its own application. If this should
leave the question unsettled as to whether goods and tools produced
goods and tools, it would leave it in a fair way of settlement. At least
it would no longer allow the capitalist to add to the earnings of his
own labor, and of his goods and tools, the natural produce of the land,
and so deprive other labor of its natural opportunity and reward. The
Socialist should consider, also, upon what ground he makes the claim
that capital ought to release its control of machinery and plant in the
interests of society. If they are really productive, why should the
owner be required to surrender their earnings? If they are not
productive, but, on the contrary, require to have their wear and tear
and natural decay constantly replaced by labor, and are only made to
appear productive by their false relation with a really productive
element, the land, then indeed his protest against such capitalistic use
is reasonable and just; but, in that case, it by no means needs that the
state should take the plant from the owners; it only needs that it
should cease to guard the false relation, and by opening to the
enjoyment of labor its only productive complement—the land. In the one
case, he would make a rational demand, which no casuistry can deny; in
the other, the inconsistent requirement that successful workers shall be
deprived of the natural fruits of their labor, and of the peaceful
enjoyment of what is a natural growth of those fruits.
Nor is the dilemma of the capitalist less embarrassing. If he takes the
position that his plant is productive, and that his wealth truly
represents the production of his labor, and the auxiliary earnings of
such production, and that the condition of the poor and improvident is
really the result of natural law, still he cannot deny the right of
society to protect and support the poor, who are destitute of productive
means to help themselves. And thus escaping the Scylla of “social
democracy,” he will fall into the Charybdis of “govermental distribution
of burdens,” the Communism of the state. But when capitalism will yield,
or shall be shorn of its usurped dominion over the land, to which it can
produce no shadow of natural or justifiable title, it may confidently
appeal to the sense of justice in mankind to protect it in the
possession of all those things to which a labor title can be shown.
But the assumption of the capitalist and the Socialist in regard to the
productive power of labor products is without the least foundation in
fact. There is only an accumulation of products; no such thing as
production begetting production. It is true that machinery, plant, and
stock, which are only the production of labor, are consumed in new
productions; but that is only because there is demand for the new
production rather than the old. The consumption of these to produce the
new creates a new demand for the application of labor to their
reproduction, and so the circle is constantly repeating itself. The cost
of tools is always the labor necessary to produce or reproduce them.
Their use in production is only such labor as is saved by it to the
series of productions in which they are employed and consumed. In any
industrial or economic sense, means of production are limited to labor
and the raw material.
The dominating factor in production is human labor. Man, the worker, is
the active and moving force in all social industry or development. He is
so constituted as to require a supply of material food and also constant
activity. The muscle that does not find its appropriate nourishment
withers or wastes away; but so also does the muscle that ceases to be
used. And this is correspondingly true in respect to every physical or
mental power of the man. Nature herein indicates, with a directness not
to be mistaken, that human wants are to be supplied, and by human
activities. No reasoning seems required upon a point so plain; and yet
so fertile is false education and idle ignorance, that whole classes are
taught to believe that all industry is a curse and a disgrace, and that
to be usefully active is to forfeit respectable social position. This is
true to a great extent of the children, especially the daughters, of the
rich, in the fashionable world, no matter how the riches upon which they
pride themselves may have been accumulated by their immediate or remote
ancestors; whether by severe application and intense activity in
laborious and vulgar avocations, or by methods now deemed predatory and
criminal. And thus the mind of the thoughtless becomes inflated with the
idea that to leave one-half of the man, his activity, without use
ennobles and distinguishes him.
To the enlightened mind, on the contrary, to appropriate the goods of
life without serving is the most childish and ignoble of all things. To
desire a condition for self or offspring, such as will relieve from the
necessity of exercising the activities of our nature, is to desire
deterioration and effeminacy. We shall see, at length, that it is only
under misdirection and the usurpation of the elements essential to human
life and happiness, by a few, that slothful ease appears preferable to
that depth of deprivation to which such usurpation dooms the worker,
whose excessive labor dwarfs his mind, while it fails to supply the
required nutriment to sustain his body in health.[14]
Activity is the normal condition of all the human faculties. Man needs
no following with a lash to induce him to work. Labor only becomes
irksome and repulsive when a few by shirking their share can throw
burdensome proportions upon others, or when, excluded from the
laboratory which nature has provided him, the laborer has to beg the
privilege to toil from his fellow, who slanders their common nature by
assuming that it is laziness, and not a sense of injustice and despair,
which makes hireling labor distasteful.
As the very nature of the two factors in industry requires their equal
proportion to each other, so exercise of the functions of production and
assimilation retain a definite ratio to one another. In ignorance of
these laws, the child whose need of food is first felt becomes liable,
through mere habit, to develop his appetite more rapidly than his love
of motion. Such become gluttonous and indolent, or intemperate; but
usually the attraction “to do” is early manifested, and it is often more
difficult to suppress this tendency than any other, or to govern it
without directing it into the channel of some useful industry. The
terrible ennui with which all idle people, however cultured, are
afflicted, is but an earnest remonstrance of our nature against the
departure from her economics. Correlative to this are the results at the
other extreme, where overaction and insufficient or unsuited nutriment
develops the muscular at the expense of the mental forces. Culture,
refinement, and manly intellection are impossible to the many in such
condition; and yet the law of compensation often asserts itself by
retaining in the over-tasked and toil-hardened frame a generous and
cheerful disposition and inflexible integrity, nature thus testifying,
even in extreme subjection, to the nobility of man and the dignity of
work.
The facts so familiar to the commonest observation show that the love of
active life, the zest of beholding things grow under our hand, whether
in the fields of agriculture, with trees and fruits and flowers, or with
the mechanical constructions or artistic forms, furnishes abundant
motive and inducement, without lash or bribe, to prompt the man to
attainment in every aim of life.
A great motive to industry and to the investigation of the law of its
development lies in the love of offspring. This alone is able, with
birds and animals, to secure the most patient and protracted toil. As
related to remoter posterity in man, it becomes identified with the
greatest social problems. It prompts the man to labor, and to conserve
the products of industry. The labors thus induced serve first to supply
his own wants, and then to add to the goods preserved to society, in
order that the circumstances of his children, and his children’s
children, may be improved. Thus also will he serve, under equitable
rule, the future general society, and gratify that higher love for man
which looks beyond the mere ties of relationship or nationality, or even
of time.
That society, of which this working agent is a temporary member, has
progressed through what may be termed Natural Selection, there can be no
doubt. Whatever we may accept or deny as to theories respecting man’s
origin or descent, we cannot ignore the varying characters of men and of
peoples, as well as of species in the animal and vegetable worlds.
But the limit of natural selection seems to be reached as regards man
when the race has sufficiently advanced to admit of a more integral
development, so that the multiplication of the species may be kept
within requisite limits by intelligent selection, if indeed any tendency
to over-population exists, of which there appears a very reasonable
doubt. War and the destruction of the weak by the strong serve, then, no
purpose now, but retard social evolution. Industry need no longer be
enslaved, but by liberation and wise organization may become attractive,
so as no longer to need force or fraud to utilize its activities.
Another consideration indicates the limit of the principle. In the lower
species natural and, indeed, the most careful, intelligent selection
only develops special qualities. Thus, great speed in the horse is
wholly incompatible with great strength for draft. So, by the rule of
force and destructive competition, we may produce a class or warriors
and of slaves, of capitalists and of hirelings, but never a
well-developed man.
To effect this an integral system of education and of industry is
required, and the outworn antagonisms and hazards, which propel ever to
extremes, must be dropped out of our social life and reciprocity take
its place. It is a favorite apothegm of the schools that man is ever the
same, and that since he has always been swayed by love of gain, he
always will be. But nothing is more certain than the progressive change
which constantly, though gradually, takes place in his purposes and
pursuits. The forced labors of the past become the sports of the
present. The wager of battle and forfeit of life and goods is changed to
competitive games and harmless pastimes, and the desperate struggle for
existence is turned to mutual help and reciprocal exchange. If, indeed,
the old barbarity has sheltered itself in the more recent forms of
trade, it has been under disguise until found by experience of its
results to be what it really is, or has had its vail removed by its own
votaries, who can devise no other available defense for it, and hence
urge its antiquity.
A learned professor of one of our most popular universities avers that
we must have “the survival of the fittest or of the unfittest;” and this
would follow as a logical conclusion if we admitted his assumed
premises, that one must destroy the other. But if history has any
meaning, however, the only necessity, if it now exists, is found in the
blind stupidity and brute-like passion which it is the business of
social science to enlighten and of social organization to control, so
that both the fit and the unfit may survive, and each be benefited far
more than either could possibly be by the destruction of the other.
If, however, it should appear in any case that one could improve his own
condition by destroying the other, that is a contingency which calls for
the protection of society, which to save itself must guard its weakest
member. Superior physical strength and business tact are not the only
requisites to social service, and whatever the individual may think or
desire, society cannot afford to deprive itself of the service of a
Homer or a Milton, a Pope or a Byron, because of physical defects, or of
a Goldsmith or a Burns because they could not drive an advantageous
bargain. The rudest social economy must embrace the utilizing of the
less as well as of the more perfect. The agriculturist who should rely
upon natural selection, instead of intelligent selection, would have an
abundant growth of weeds, brush, parasites, insects and vermin, but a
“beggarly account” of fruits, grains, and of domestic fowls and animals.
The great champions of the doctrine of natural selection, Spencer and
Tyndall, have each, if I mistake not, been upheld by the assistance of
others, and of government, in their struggle to place before mankind
great philosophical and scientific truths. Can they give any good reason
wiry the faithful worker in any field should be “let alone” in his
struggle for life, while building for society, any more than themselves?
Not only the institution which boasts the possession of a Sumner among
its faculty, but every institution of its kind in our country is endowed
by public or private beneficence, and could not survive a day if it
should be withdrawn. It cannot fail to be seen how appropriate is the
teaching of “laissez-faire” by the professors and scholars produced by
institutions supported and upheld by the very opposite practice. That
such institutions do not encourage any investigation of the industrial
problem is not to be wondered at. How can they discuss the interest and
rent questions when their very existence depends upon the annual tribute
capitalized funds and lands enable them to lay upon labor? The perpetual
bribe of which they are thus the recipients is too weighty to be
overborne by the wail of suffering toil or the appeal of the honest
thinker. They can scarce desire the promulgation of a truth which would
disestablish their institutions. As little can they desire the survival
of the fittest since they are holding up an institution which would fall
of itself, and are being held up themselves by a system of capitalism
dependent wholly upon laws and customs established and maintained to
thwart equal opportunity and to prevent freedom of competition and of
exchange.
The reception which a patient investigation of the subject is likely to
meet can be readily imagined when we consider that the object sought in
introducing the question of survival into the labor discussion is to
justify a system which denies equal opportunity for the very purpose of
relieving favorites from the operation of the law of competition they
laud. It is capitalism, not industry, which is ever devising sinecures
and exemptions from any struggle whatever. As an instance, a noted
millionaire has lately settled upon his son, who failed, not in a
struggle to live by honest labor, but in a contest as a Wall-street
“gambler,” five thousand dollars a month. Professor Sumner may be right
as regards those who are spared the “struggle for existence” by
annuities and unearned incomes. Doubtless we have in their cases the
survival of the unfittest.
With equal opportunity and access to the natural elements, a healthful
struggle would result, which, if it did not involve the destruction of
some by others, would secure the survival of the industrious and frugal,
and correct the proclivities of the idle and predatory. Our present
system of division is scarcely more than a plan for sustaining luxurious
paupers.
The assumption of a necessity for the ignoble and destructive strife in
industry and trade will not endure the slightest investigation. The
Malthusian theory is the only logical one in regard to it, and that has
been shown to be groundless by Mr. George and others. In truth, as he
has shown, the more society is advanced in numbers, intelligence, and
industry, the farther it is removed from any danger of pressing on the
means of subsistence. It is in sparsely settled and savage countries
that famines occur, or in populous states, as in Ireland and India,
where the people are miserably misgoverned or over-governed. When the
white inhabitants of this continent were numbered by thousands, the
different nationalities were in constant war with the red men and with
each other, and the struggle was deemed essential to the safety and
success of each, as well as to establish the fittest survival. But now,
with nearly a hundred millions, life is better sustained and wars are
few, arising now from lack of statesmanship, or a yielding to narrow
prejudice, rather than from any natural tendency or civil or economic
necessity. The active agent or factor is not one involved in the
problems of over-population, or in the life and death struggle. He is a
member of society, the social unit. The development to extremes begets
dissolution, and the society which does this must perish. Science points
to a development through union, under natural equity and justice, in
which industry and economy shall crown the victor with the laurels which
peace and plenty afford, and encourage, not destroy, the less
successful.
Of one thing, however, we need to take note. The worker is an
ever-changing person. Individual men come and go; the race remains
forever. The relation, therefore, of the worker to the soil or object
wrought upon, is transient and passing. It was said by the great Hebrew
lawgiver, as from the omnipotent Worker: “The land is mine, and ye are
sojourners with me.” “The land shall not be sold forever.” The sojourner
can control no longer than he stays. This dominion over the land ends
with his occupancy. His only ownership is an “occupying ownership.”[15]
The great fountain-head from which the material elements in production
are derived is the land. The matter of the earth is so disposed by
nature, and the elements of fertility so deposited, as to render
cultivation a pleasant and compensating employment. In the passive
factor is embraced all raw material, or that which has not been affected
by human activities. The natural productions are really a part of the
earth, and must be considered as such in any economic discussion. The
earth forms the foundation of all industry of the man, and is the point
where his activity meets and co-operates with the heat, the light, the
air, and the moisture, indispensable to production and to all life. Only
upon the land has he any means of contact with them, and otherwise can
have no stable existence. An allotment of land, then, as separate
property, or as a common right with others, is a first requisite in
reducing industry to any intelligible problem. Not only must the land
exist, but its relation to the worker must be defined ere a single step
can be taken in subjecting industrial production to any system. Science
absolutely refuses to attempt any solution of the industrial question
until this is determined; for otherwise it can assign no sphere to
labor, no field for the exercise of man's activity. There may exist
spontaneous productions of nature, without man and his labor; but
without the earth no industrial production can exist; the labor, and
even the man himself, disappears.
In the very statement of the industrial factors, then, we encounter a
positive institution, which forever bars any system of industry which
can be reduced to scientific terms, because it confounds all terms and
agencies which could help to a solution.
If land and labor are the factors, and the only factors, in production,
it follows necessarily that there must be freedom from any and all
arbitrary control over them, such as may prevent the access of the one
to the other, commensurate with the required action. Any other control
of the soil than that of the cultivating occupant can but fetter and
cripple labor and retard production. The freedom, of man without freedom
of the land can benefit neither. Science can no more accept the system
of exclusive land tenure, and endeavor to reconcile industrial life with
that, and to build a system of economics upon it, than it can accept the
mythologies, theologies, astrologies, and alchemies which have been, or
may now prevail, with which the intellectual minds of the past employed
themselves in the absence of any scientific method of arriving at truth.
Any system established under nescience must submit to the crucial test
of scientific examination. Science cannot become its apologist and
special pleader.
Exclusive dominion of land divorces the natural factors, and as to its
whole extent bars productive industry. An axiom so plain requires no
argument. Its results are seen in extended private domain, poorly and
but partially cultivated even in the most populous districts. The people
dispossessed of their inheritance crowd to the cities, where vast
accumulations of absorbed wealth invite to employment, sometimes useful
but often hurtful to the man, to social well being, and precarious to
the unskilled or improvident. The fertile properties of the soil are
wasted, and so cannot be returned to maintain its productive capacity.
This country has an extensive domain of fertile soil. A considerable
portion of its people live yet in independent homes, but through our
system of unrestricted ownership, and the accumulative power of
capitalism, the land is being absorbed rapidly in few hands, with
results always unfriendly to industry and the well-being of those who
toil. This barrier between the factors prevents labor from finding
employment and the land from being improved. To remove this barrier is
not the business of science, but merely to point out the consequence of
the institution, and the effect of the natural freedom of these agents.
Remedies are not within its province. Only political and legislative
quacks will seek to redress by statutory enactment and positive
institution the wrongs which arise mainly from a deprivation of liberty
such enactments have caused and which only liberty can correct.
It may be proper to notice here what the leader in the modern school of
economics, Mr. Macleod, calls the “third source of wealth,” and, if such
existed, he could be relied upon to find it. He says (E. E., 164):
“Rights are created by the mere fiat of the human will . . . and
extinguished equally by the fiat of the human will. But these rights may
be bought and sold or exchanged; their value may be measured in money;
they form the most colossal commerce in modern times; we have valuable
products created out of the absolute NOTHING by the mere fiat of the
human will and decreated into NOTHING. There is a third source of wealth
besides the earth and the human mind—the human will.” In the above
extract we have the truth fully shown, which we have endeavored to make
plain elsewhere, that these “private rights,” which “form the colossal
fortunes of the times,” are the mere creatures of arbitrary will. As a
consequence they do not create social wealth, but constitute merely a
means of appropriating social wealth to private uses, “out of the
absolute nothing” so far as any return of service to society is
concerned, and “decreated into nothing” when society looks for its
plundered stores.
But while they are in being they can “be bought and sold and their value
measured in money.” And so might human beings or anything whatever which
the law made property. But whoever wants to purchase these rights after
they have been created from nothing, will find that he has at least to
give something in exchange for them which is veritable and which his
will alone will not reproduce without hard labor. And when these values
are decreated into nothing, as in the case of declining shares and bonds
and of periodic bankruptcies, they are usually found in the hands of
those other than favorites of the fiat.
But with the leading thought of the paragraph, the “third source of
wealth,” we have yet to deal. I have sought in vain, through the popular
writers, for any evidence that there was “a third source of wealth,”
besides “the earth and the man,” including all its forces and
opportunities and all his power, mental and physical. But I have found
it at last in what Mr. Macleod calls the “human will.” But since the
human will is but one of the elements of the human mind, “emotion,
intellect, will,” I can just as readily find five as three. To what
ridiculous shifts does this professor of economic prestidigitation
resort to cheat the worker out of his labor-title to the wealth he has
created ! Whether it be through manual or mental toil, the emotion, the
intellect, and the will are all employed in every form of work and are
part of the worker's self. I have yet to find a “third source” or factor
of social wealth.
Mr. George, although repeatedly stating that the factors in production
are “dual, not tripartite,” continually treats capital as a third
factor, though partially disclaiming such purpose by asserting that
“labor and capital are but different forms of the same thing—human
exertion,” and that the “use of capital in production is, therefore, but
a mode of labor.” Undoubtedly there must be, as he says, “a point at,
or, rather, about which the rate of interest” to this particular mode or
labor “must tend to settle, since unless such an equilibrium were
effected, labor would not accept the use of capital, or capital would
not be placed at the disposal of labor.” But he makes no attempt to show
what this point of equilibrium is, nor doss he seem to apprehend that,
under freedom of the soil and opportunity to labor, it would vary from
what capital is now enabled to extort, through its power to monopolize
the land.
The natural point of equilibrium unquestionably is zero, since one side
of an equation minus the other side equals 0. The capital, which is
labor, stored up in matter, as he says, must necessarily balance with
equal amounts of the same thing stored in muscle, and if circumstances
favored one mode at one time, it must vibrate by natural law of supply
and demand as far to the other side, the point of rest being nought.
His confusion of thought upon this point is inexplicable. He says “the
reward of capital and the reward of labor will be equal, that is to say,
will give an equally attractive result for the exertion or sacrifice
involved.” What can he mean? Who makes the exertion or sacrifice—the
capital or the capitalist? -If the capitalist, then for such exertion or
sacrifice his share is in proportion to that which the other, labor, has
contributed of exertion or sacrifice. If he means that the capital has
made the sacrifice or exertion, then he makes it not a passive but an
active agent. No wonder he thinks it impossible to formulate the thing
“as wages are habitually estimated in quantity and interest in a ratio.”
Had he said that this ratio was a duplicate one, while wages were
proportioned by “equal difference,” the utter dishonesty of this
capitalistic formula would have been betrayed. After all his special
plea for capital, he at last, however, falls back upon the ground that
interest is directly connected with “the law of rent,” although
mistakenly holding that “as rent arises, interest will fall as wages
fall.” And yet he concludes (chapter v. Book 3d) by reiterating that
there are only two factors which “by their union produce all
wealth.”[16]
Mr. Clark, in his “Higher Law of Property,” blindly follows George in
his deference to the exploded “rent theory,” and also in his subjection
to the capitalistic superstition. Saying that land, or the “bounty of
nature,” is “the primary source of all wealth,” he continues: “The next
source of wealth is labor. Man applies labor to land—to the bounty of
nature—and procures food, clothing, shelter .... Then after a while he
preserves some of his acquisition to aid him in acquiring others. As
soon as he reaches this point, a third factor enters into
production—capital. The man has wealth in store; he is a capitalist.”
“Land, labor, capital. These three things underlie all wealth and all
exchanges of it.” That is to say, land, labor, and wealth underlie all
wealth and its exchanges,[17] for he uses wealth and capital as
synonymous in the immediate context. Mr. George was too shrewd to be
caught in this logical faux pas, and Mr. Macleod avoids it altogether,
though falling into a still more ridiculous error to maintain the same
point, by taking up one element of the human mind as a thing
distinguishable from the mind itself. But the utter vacuity of common
sense is reached when Mr. Clark, blindly following his economic leader,
intimates that the land owners of the nations “harvest all their own
immediate profits and ultimately the profits of capital and labor
besides.”
We shall be unable to find, search we never so carefully, any reason
given for a third source or factor in production which will bear the
least scrutiny. Macleod wrote for the express purpose of proving that
labor was only one of a great variety of causes which create wealth; Mr.
George to show that both capital and labor were equally wronged by
“private property in land,” and Mr. Clark, to show that capitalism and
even landlordism may be allowed their present sway if his two per cent,
tax be imposed. Surely one of these would have hit upon the “third
source” if such existed, or such notion were capable of an intelligible
statement.
A noticeable feature attending the production of any wealth (I use the
term in its industrial, not its trade sense) is that it is always
social. Whether it proceeds by hireling or slave-labor, or by a more
intelligent co-operation, there is, in acquiring any goods whatever,
necessarily a combination of effort. Now, since labor and the land are
inseparable in any industrial or economic problem, and since “the earth
is the natural inheritance of mankind,” it follows that the joining of
labor to land in all production requiring more than one man is a
partnership. It must also follow that all production under such
combination of effort is the property of the partners so engaged.
“While any particular establishment belongs to the proprietors, yet so
long as labor (present) and capital (past labor) are equally essential,
any particular business considered in the aggregate is as much that of
those who bring to it the labor as of those who furnish the money. If
laborers withdraw from it, it comes to an end as certainly as when the
proprietor closes his doors” (Justice T. M. Cooley in N. A. Review of
Dec, 1884).
Distinctive industries, as well as individuals, are mutually dependent
on each other, and intelligent co-operation or reciprocation is really
the life of society. In most industries, moreover, a large number of
persons must work together in concert. No doubt such co-operation
constitutes in its essential features a partnership. I can enter into no
detailed account of the law of partnership, my purpose being merely to
show that it is a principle of social industry, and was derived from the
early community of interest in the early village society. That it was so
derived, and is really a relic of the primitive organization, is
sufficiently apparent in the simple characteristics the law has
preserved through all the changes in civil and political institutions.
So far as the members of any partnership in the especial business in
which they engage are concerned, it is a community of rights and of
goods, features wherein it may vary from this being the result of
positive enactment or special agreement. These variations affect
partnerships, more especially, which are entered into for mere purposes
of trade or speculation, the widest departure being made in regard to
joint-stock companies, which make membership, if such it can be called,
a matter of bargain and sale in the transfer of shares. This cannot be
done in an ordinary partnership, otherwise the capitalistic privilege
would cease to remain such, change only being allowed by the retirement
of one or more, and the admission of another or others. In this respect
co-operation, as it has been developed in England, and to a smaller
extent in this country, corresponds to the principle of partnership,
since it guards in some degree against stock-jobbing, which has proved
so pernicious in our railroad companies and other joint-stock
corporations. In these latter we have another instance of the exemption
of capitalism from burdens and the triumph of “the market,” which seeks
the deduction of all things to its control, and to make them matters of
sale and purchase. But for this corporate monopolies would by no means
develop the dangerous powers they do. Without it the corporators would
be more amenable to public law and could be held in some degree
responsible for their acts.
Where two or more are engaged in any productive labor, they necessarily
become partners. It would by no means require that anything more should
be agreed to than simply that they work together in the procurement of
some goods. Both in law and equity they would be partners and entitled
to share in division, proportionally to the work done. In the absence of
other contract or special agreement, no other conclusion could be drawn.
Our laws, however, regarding property, and which, under the domination
of capitalism, are made without any direct reference to labor, in
defining partnerships, joint-stock companies, and co-operative
societies, ignore labor as an element in production, or, rather, in the
division, and make each partner's or stockholder’s share of the dividend
to depend upon the amount of money or other value invested. But the
silence of the civil law in regard to labor does not make the claim of
labor any the less valid. It simply throws it back upon the natural law
and equity of the thing. It would probably be claimed that the labor
performed would be recognized as so much stock contributed, or as so
much labor hired or purchased; and doubtless this must be so. And
doubtless, also, it is for this reason that the wages paid the laborer
are assumed as a full settlement of the laborer’s claim.
The necessity of co-operation in any field of industrial enterprise is
too apparent to require proof. The very demand for labor is sufficient.
If a man could do everything by himself, he would seek no helpers. Now,
helpers are necessarily copartners in production, and, therefore, on the
dying out of slavery, which was logically sustained only on the ground
of contract, the wage system was adopted to give a fairer semblance to
the older fiction and device for appropriating the partner’s shares to
individual use by the stronger and dominating member of the industrial
firm or partnership.
The effect of wages was to modify the nature of such partnership in this
way. The laborer was supposed to sell his membership in the firm, from
day to day or month to month, as the captive before had been assumed to
have bartered his for life, and even that of his children and posterity
under slavery. Deprived of land, and therefore of opportunity to employ
himself, he had no alternative but to thus, like Esau, sell his labor
right. It was not even necessary to let him know that he had one to
sell; but since it was there, by this false reasoning it could be
demonstrated to him at any time that he had contracted it away, if ever
his blunted intellect should awaken. There were also some compensations
which appealed to his dislike of intellectual exertion and of incurring
personal responsibility in large undertakings. The wages, also, however
small, were usually paid down or at short intervals, so that he would
not have to wait the slow process of production before he could enjoy
its fruits. This is doubtless one reason why industrial co-operative
enterprises have usually failed of success. The wages system, moreover,
has its attractions, for as long as wages are good and employ constant,
the worker acquiesces in the system till an industrial crisis overtakes
him and he is thrown out of employment or has his wages greatly reduced.
It is then that he becomes the victim of vain regrets and despair at his
hard lot, and harbors thoughts of retaliation against those, perhaps,
who are no more to blame for this condition of things than himself. He
only sees his employer or the company who have had the direct benefit of
his labor, but not the operation of those subtle influences which warp
exchange, finance, and production itself to the aggrandizement of a few
and the robbery of the many.
When it is said that all who engage in production are partners, it is
not intended by any means to apply it alone to those who are engaged in
a special branch or handicraft. Every step from the gathering of the
natural production to the completion of the commodity and offering for
consumption is co-operative; the service of the merchant and the
retailer as well as the cultivator and doer of mechanical services. The
principle of equity applies, therefore, to the rule of division and the
awards to services as well as to the settlement of accounts. It is for
this reason that wages and profits afford no scientific solution, since,
though they may be made matters of contract, they proceed by
incompatible methods and irreconcilable ratios. The one is computed by
rate and time. The other by rate per cent, repeated at intervals, which
produces a progressive ratio. Where this amounts to no more than a
reasonable compensation for service, the injustice of the method does
not develop itself; but when large values are transferred, the profits
become added to the amount and thus multiply constantly. The wage-worker
can only add his daily net earnings when anything remains over expenses.
This does not increase his wages as the increase of the dealer's stock
increases his profits.
Profits, as far as they compensate service, do not, however, like pure
interest and pure rent, stand wholly dislocated from any economic or
social relation. A large majority of those who rely on profits for their
compensation do not receive more than an equitable share of the general
production as compensation for the service they render the society they
serve. It is only the few who, by use of large means and favoring
circumstance, or, perhaps, by legalized monopolies, which enable them to
operate without competition, are able to double their means,
periodically, instead of adding to them, one by one, as at best the
wage-worker is only able to do.
The true merchant apprehends that it is real service for which he is
entitled to remuneration. The false merchant works for profits, and is
not a co-operator in the social industry, but a despoiler and tribute
gatherer. His position to industry and social life is antagonistic. He
appears never as a co-operator and helper. The division he seeks is not
equitable or friendly, but oppressive and dishonest.
It will be objected, I foresee, that the progress of production would be
greatly retarded, even if ultimate success were possible, in making
every worker in an establishment a partner, and to have a voice in the
management of the affairs of the co-partnership. But I am not advocating
any special plan of operation, only stating what are the actual facts in
the case, viz.: that the co-workers are co-partners. Whether our
civilization is sufficiently advanced to make practical the recognition
of this truth is another and quite different question. And whether the
wage-worker himself may not prove the greatest obstacle to an equitable
system of industry and division is also one difficult at this stage to
be determined. It is only when all the facts in any given problem are
known that there becomes a possibility of its proper solution. When it
is once received as a scientific proposition that ownership of the
product of one’s labor inheres in the laborer, whether that labor be
single-handed or whether it be exerted in unison with another, or with a
thousand others, some means of giving it proper recognition will not be
wanting, and there is no need to embarrass a scientific inquiry by the
bugbear of impracticability. It is of the utmost importance to any exact
solution of the problem of labor, and its equitable award, that we
divest ourselves of all those prejudices and superstitions in regard to
property and the sacredness of contracts in which capitalism has
entrenched itself, making itself, and not labor, appear as the giver of
work and the creator of wealth. At this point labor must take its stand
without compromise, or else surrender at discretion. For if by joining
his labor with another, or others, the worker loses his title to his
product, then the operator is under no obligation to give him anything
more than the competition wages, and these realized, he has nothing
further to claim; and when they cease he has no right to complain. If
the factors and the elements belong to the capitalist, of course the
results also belong to him. He has purchased both the labor and raw
material in the market, and turned them into goods, and they are his.
The labor reformer who yields here, acknowledging that capital has
productive power, or that the factors in production, land and labor, are
marketable commodities, kicks the ladder from under him on which he is
attempting to ascend, and makes his position logically absurd. It is
true the worker may exchange his share of the product after the division
is made, or agree beforehand upon the division, and so accept a payment
in the form of wages; but to give such transaction a show of equity, he
must be at liberty to employ himself, because, if he be denied his
natural opportunity to labor, free access to the soil, he contracts
under duress, and the payment of such wages does not conclude him. It is
not a free, but a compulsory exchange. His claim for settlement still
remains good to his share of the product of the partnership work, less
what has been paid him, and it is the difference between such share and
such payment which constitutes the profits and accumulations of
CAPITALISM.
The word which seems to stand readiest in the mouth of the unstudious
and unreflecting well-wisher to the poor and toiling, is co-operation.
This, it is thought, can work in some wonderful way to rectify the
usurpations of power, the weakness of ignorance, and the indolence and
thriftlessness of the improvident. If, however, a little careful thought
is exercised in obtaining an understanding of what cooperation really
is, and what it is not, much needless, not to say extravagant,
speculation would be avoided. The word means simply “working together,”
and is usually, though not necessarily, contrasted with competition.
In its industrial application, it embraces the whole field of the
division of labor and of combination of effort, and has, in this
respect, accomplished all which can be accomplished in the sphere of
production while the great inequalities of division remain. Some
neophytes in social studies imagine they have discovered in it the great
specific for the misfortunes of labor, and think they see in its mighty
productive power the means of righting all wrongs and overwhelming all
injustice. They do not consider that every factory, every bonanza farm,
every enterprise in which numbers are engaged and functions are
specialized, is a truly co-operative proceeding. Even the slave
plantation is such with its thousand slaves. The trouble is that these
are forced, not voluntary, cooperations, and that this co-operation does
not extend to the division of the products of this industry. While this
defect remains, it does not matter how much the association of labor and
capital and the division of labor may increase production; the
disproportionate compensation will continue. Proportionals, added to or
subtracted from each other, remain proportionals still. To increase the
productiveness of labor does not necessarily increase the share which
falls to the laborer, unless equitably divided and exchanged.
The advocates of simple co-operation have generally accepted the
capitalistic claim for profits and dividends to capital, apparently
ignorant that it is in these exactions that the whole burden falling
upon labor has its origin. Such co-operation is a mere change of form,
which may give relief to one class by shifting the burden to another,
already staggering under a too heavy load. To make our large
corporations and industrial enterprises, as they exist today, truly
co-operative, it is only necessary to stop the leakage due to rent,
interest, and profits, and infuse a modicum of honesty into the system
of dividing the products resulting from the labors of the co-operators
by striking an equation between services and compensations. All the
elements are at hand in the account-books of any concern in the land.
And any accountant can make the proper balances if he be allowed to do
so, by throwing out false entries and fraudulent footings.
It is therefore idle to hope for more favorable results from association
simply. Division of labor and combination of effort are already carried
to extremes in our industrial systems. In it specializations of
functions are carried to an extent which makes mere automatons of the
operatives. It dwarfs the body and the mind, and leaves only one faculty
of mind or one set of muscles active. Such reduction of the man to the
exigencies of large production is wholly unnecessary. With any equitable
system of division, which would secure the application of the activities
of all, a few hours’ application to one line of production would suffice
each day to produce the comforts of life for each, and there would be
left to all many hours of each day for healthful recreation and
intellectual improvement.
The relation of this subject to the problems we are considering may at
first sight appear remote, yet we shall see it has very important
bearings upon the question as to whether the worker has forfeited his
right to a living portion of the common earth, or whether he has
surrendered his natural claim of ownership over that which his labor has
created.
We have seen how contract followed the first stages of advancement from
the veriest savage state, where the life of the subjected family or
tribe was forfeited to the victor, in giving the successful warrior the
right to the lifelong service of the victim so spared, and how such
contract or interpretation of it crept into our civil code under the
equivocal words of our national Constitution of “person held to service
or labor,” and “claim of the party to whom such service or labor may be
due.” It is not merely that contracts have their origin in the way
shown, but it is difficult to see how they can exist in respect to debt
on a more humane and fraternal method. For no sooner are the creditor’s
rights acknowledged in any legal sense than it becomes illogical to
offer any modification or limit thereto. To give him the right to exact
the payment of the debt is not of the least consequence, unless it
confers the power to seize the goods of the debtor. And if the debtor
has no goods, or conceals them, the creditor is still powerless to
effect collection, unless he is also empowered to exact the debtor’s
services. Now, he can only obtain control of the debtor’s services by
obtaining possession of his person. To control the person, however,
involves dominion over such person’s life. And in primitive times the
debtor, when a husband and father, involved also his wife, his children,
and his slaves, they following him into slavery and becoming subject to
the absolute disposal of the creditor. The laws of Moses had many
features which ameliorated this condition in some important respects, as
by the return of the seventh year all debts were canceled. The poor
Israelite could only be sold to another Israelite “who had substance.”
And he was to be treated as a hired, not as a bond servant, and was to
be set free at the return of the year of jubilee (Lev. xxv., 37). But
all these constituted no adjustment of rights between the creditor and
debtor; they were logically an invasion or annulment of the rights of
the creditor, which, if they have any logical basis whatever, are not to
be thus limited and set aside.
In Greece and in Rome the creditor had power over the person of the
debtor. The remedy which Solon applied to the desperate state of things
he found in Athens was really the abolition of the creditor’s power. The
struggle between the patricians and plebeians of Rome centered around
the attempt to limit the rights of the creditor. To such extremes was
this right carried that a creditor could not only sell the defaulting
debtor into slavery, with his family, but the letter of the law
permitted, where there were several creditors, that the debtor should be
cut in pieces and shared between them. It is claimed that in this
respect the Romans were found better than their laws. During the period
of feudalism the person was not attachable for debt, but on its decay,
and on the establishment of mercantile communities in Europe, it was
revived, ostensibly in the interest of commerce. As late as 1830 over
seven thousand debtors had been imprisoned in London alone during a
single year. In this country the abolition of imprisonment for debt is a
late thing in most of the older states. In most countries some of its
features still remain. In Turkey the debtor is the virtual slave of the
creditor, and he is held for a gambling debt the same as for any other.
This is also true in Mexico and in other states on this continent and in
Europe. In our own country, to remedy the operation of bankrupt laws and
exemption of the person and property from seizure, there are in most
states certain lien laws which operate to strengthen the power of the
creditor over the debtor. These vary widely in different states,
accordingly as the tendency is to favor the worker or the trader. Those
calculated to favor labor are generally decided to be unconstitutional
by the courts, while those which favor the trader are generally
enforced.
I quote from the testimony of Mr. Atkinson before the Senatorial
committee to investigate the causes of the exodus of labor from the
South a few years ago. He refers that movement to the oppressions the
colored people had experienced from the operation of the “system of
credits granted by shopkeepers under the lien laws of Georgia, South
Carolina, and North Carolina,” similar laws existing in Louisiana and
Mississippi: “This system of liens is for the securing of advances to
the small cultivators, to enable them to plant and raise their crops,
for which advances very heavy rates of interest are charged, and to
compensate for the risk thus taken by the persons making the advances
very exorbitant prices for the supplies furnished are also charged. . .
. Advances used to be made by the land owners to their laborers, but are
now mostly made by what are known as crossroad storekeepers. I was
informed by persons who seemed to have positive knowledge in the matter
that the difference between the cash price of the goods and the price at
which they were advanced under the liens ranged from fifty to one
hundred and twenty-five per cent., and that those who sold at an advance
of from fifty to seventy-five per cent, considered themselves very
honest dealers, and that they were doing favors to those with whom they
were dealing.”
The consequence of such a system of contracts so enforced can be readily
imagined; constantly increasing dependence and poverty on the part of
the workers, and which can hardly benefit the land owners or shopkeepers
themselves. That a few workers may, by extraordinary industry and
saving, or favored by exceptional circumstances, even emerge from this
state of helplessness is possible; but any general improvement or
amelioration under such conditions is simply impossible. If in person
they are not liable to seizure, yet the product of their labor is
subject to a lien, first for rent, and secondly for everything they have
used or consumed in cultivating or managing their allotment of land.
Denied access to the inheritance bestowed on them by nature, they have
no resource but to submit to the terms of the land owner in the first
place, and no means or opportunity to provide themselves with tools,
seeds, manures, etc., except by mortgaging the future crop. Under such
circumstances how can they make a contract which can justly bind them or
which society can properly enforce? As they are excluded from their
rightful patrimony, they can make no valid contract as to their labors
upon that which is of right their own or as to the product such labors
may yield.
The subject itself is such as to preclude a rational contract. That the
man works the land precludes another’s claim to it by the natural law of
use; for, though it might appear in certain cases that if he did not
work the land the pretended owner would or might do so, the reverse is
generally true; rented land is usually what the legal holder does not
and cannot use. As the right to use a thing depends upon its rightful
ownership, and the right of ownership is derived from labor, a man to
obtain the benefit or use of goods or lands must use them in person.
This is the natural law of use. Only partners in creating can rightly be
sharers in using. When the occupier of a house has paid in any form its
full cost, such house in equity belongs to him, not to the person whom
he has paid for it; and when the cultivator of a farm has paid the cost
of the improvements upon it, the farm belongs to him and not to the one
he has paid.[18]
The same principle applies to all forms of wealth as well as to the land
and its improvements. If one does not wish to use his money, food,
clothing, or any goods himself, he can only exchange them for something
else, which he does desire to use, or thinks he may desire more sometime
in the future than the thing he parts with. When the exchange takes
place the right of use is exchanged, and of course is canceled on each
side. To give to one party the use of both things is no exchange. And to
loan or hire out such use is a fraud perpetrated against nature and man.
It is an attempt to exercise the right of use without the performance of
the duty to use. Certainly society cannot justly recognize contracts
which bind the party using anything to give the benefit of such use to
him who declines to use.
But the denial of the right to share the benefits of use to those who do
not use does not prevent any just claim they may have to the thing
itself. That a contract may be binding, it is necessary not only that no
deception be practiced, but that no advantage be taken of one of the
contracting parties, in consequence of his ignorance of some fact in the
knowledge of the other, which would have prevented him from entering
into the contract, if he had known it. Society cannot in equity enforce
any contract tinged with fraud, misrepresentation, or where it has been
entered into by a party under misapprehension of facts within the
knowledge of the other, but withheld. To make a contract valid, so as to
warrant the interference of arbitration in its enforcement, it must be
entered into by those competent to make it. A minor cannot contract,
even under our laws. A person under duress cannot. A contract which is
entered into to regain possession of what is wrongfully withheld from
one cannot be enforced by the one who did the wrong. It has been decided
that the partner cannot deal with a partner for his share of a business
without putting him in possession of all the information which he
himself has with respect to the state of their affairs. Advantage cannot
be taken of the imbecility of a party, or of one who has been induced to
intoxication to forward an agreement.
All contracts which involve the alienation of a man’s natural rights, or
those of his children, are excluded, for reasons obvious to the most
stolid. It is no contract, and, as we have already shown, no exchange.
As to the compensation of the laborer, wages is no settlement of his
claims, and there is not one of the circumstances present which would
justify society in assuming that the wage-contract, whatever it may be,
is a contract which debars the laborer in the industrial partnership
from claiming his equitable share in the joint production. And in
respect to debt contracts, they are not entitled to regard except as
matters of trust, as where one confides the keeping of his goods or
funds to another, or of an incompleted exchange, where the transaction
has been fulfilled upon one side, but not upon the other. If there are
risks run in such attempts at exchange, we may assume, in the absence of
any proof to the contrary, that in the transfer on the one side, and
promised transfer upon the other, this risk has been adjusted at the
expense of the party who is responsible for it. But if it involves a
payment for delaying transfer by the one party, other than the
reasonable risk, it involves a principle of usurance for the loan of the
money necessary to discharge the obligation, and is no more binding than
any other obligation given without consideration. For no consideration
can be shown, unless the circulating medium consisted of “ducats” which
breed, or of notes which themselves bear interest, as some of our “war
measure” money actually did. The wisdom of having society or government
interfere in any way with the exchanges of individuals may well be
questioned. Usually the exchanges are completed. It is a matter of
choice with one who has a commodity to dispose of, whether he will have
cash or barter, or whether he will part with it upon some one's promise
to pay him at a certain time. If he does this voluntarily, what has
society to do with it? But the man may refuse to pay him when the
payment becomes due! True; but this is one of the contingencies of the
transaction. While laws for the collection of debts are in force,
certainly he can invoke their aid, and plead with show of justice that
the fact of their existence on the statute book was one of the
encouragements, if not inducements, to give the credit. But when that
law is repealed, he has no such plea to make and cannot justly throw the
burden of his mistake, in dealing, upon the public. But even while such
laws remain, it is not necessary that society should enforce the payment
of interest. To repeal all such laws prospectively could do no wrong to
anyone. There has been a long and loud clamor against the “usury laws,”
from the days of Jeremy Bentham to the present time, but without a
single intimation from any writer of repute of the logical complement to
their abolition, viz.: the withdrawing of the subject wholly from the
operation of law; letting people make such agreements in regard to it as
they please, and fulfil them as they please, the same as matters of
gaming and other things outside of law. Society can have no interest in
promoting the practice of usury any more than that of gaming. Its
operation is wholly to divert the social wealth and the products of all
industry from the true owners into the hands of private parties, whose
increase is at the expense of the general good. It may, nevertheless, be
a wise action to forego the legislation by which it has tried so
fruitlessly for so many centuries to abate the evil, if, at the same
time, it will wash its hands of the vice by ceasing to enforce it.
We can anticipate, of course, the interest its apologists will express
in the poor land owner, who would not in that case be able to borrow
money or obtain the means to do any business or save himself from want.
I remember the same cry when imprisonment for debt was abolished. All
this is very pathetic, but is only a false scent thrown out to cover
injustice. It is paying interest and getting in debt which has made one
hundred poor for every one it has aided to improve his condition. The
credit which depends upon the power to coerce payment of interest upon
it had better not exist. All necessary and useful exchanges can be made
without such laws or such credit.
It has often been proposed to make the payment of interest apply as
payment of a debt by installments, and to recognize no other contract as
to its payment. In fact, in the absence of statute laws, this would be
the natural disposition of the subject. Lycurgus, Solon, and Julius
Caesar established such laws, and their conduct has been approved by the
thinking minds of all ages. And what is now required is not the
establishment of a law, but the disestablishment of one which is the
remnant of the barbaric law that gave the creditor the power of life and
death over his debtor, and over his wife and children. How much less
barbaric is the law which now allows the creditor to place a lien upon
the husbandman’s crop, or lift the roof from the cot of the Scottish
crofter, and turn him homeless with his family from the domain on which
his forefathers have lived for a thousand years, to make place for a
cattle range, a sheep farm, or deer park? Any enforced collection of an
interest-bearing debt means all this and more. In its broader
application to communities and states, where the power to borrow is
quite certain to be abused, it means the bombardment of cities, the
butchery of citizens, and the imposition of unworthy rulers and
obnoxious forms of government, as illustrated many times in the present
generation, notably in Mexico and Egypt.
Relying upon the law of force and the well-known proclivity of
monarchical rulers to do the bidding of capital, the public
functionaries of a country are tempted or bribed by financial sharpers
to run largely in debt, and when the people rebel against the outrageous
taxes levied to meet the interest, that country is invaded and reduced
to subjection by all the “means available to civilization.” Such is the
logical sequence to the debt and credit contract upheld by force.
The references to these subjects are not intended as specific
investigations, but relative only to the more primal matters of
production and of exchange, to the latter of which they are mere
instruments.
The value inherent in money, as where some valuable commodity is
employed for a medium and standard, is only important as a means of
security in incompleted exchanges or to make good a balance remaining
due to one party to a transaction. Otherwise, anything whatever may be
used as a tally, like notches cut in a stick, or pebbles thrown in a
pile, or figures placed in a book, as agreed upon between the parties. A
current tally must, of course, have behind it a general or “common
consent,” or it would fail to be current. To such public tally or
currency there will be necessarily attached, if not inherent, a
guaranteed value equal, or assumed to be mutually equal, to the things
exchanged, as two values are proved to be equal to each other by
demonstrating their mutual equality to a third. If, however, the
exchange is a complete one, it will make no difference how valuable or
how worthless the currency may be in which it is merely calculated. A
man selling a horse for one hundred dollars and taking two colts at
fifty dollars each in payment, has no concern as to the money it is
calculated in. An exchange, in fact, is never completed until the
commodities exchanged are received on both sides. When a man parts with
his services or the commodity in which his service are enfolded for a
certain amount of currency, he does not part with them for the currency
in itself, but for other commodities which he needs to support life or
promote his enjoyment which that amount of currency is supposed to
command when and as he may desire them. And the same is true whether the
currency has intrinsic value, as in gold and silver, or merely
guaranteed value, as in promises to pay. It is now seen why a stable
value in the currency is requisite to anything like an equitable system
of exchange where delay occurs in the completion. During the civil war
the greenback, the currency supplied to the people, was subject to daily
and hourly fluctuations, sometimes reaching as high as twenty-five per
cent, in a single day, and varying altogether from par to one hundred
and eighty per cent, discount measured by gold, which itself was at one
time at four or five per cent, discount in silver, which again, in its
ability to purchase labor or stable goods, was also subject to a wide
fluctuation.
Of course, exchanges were altogether a matter of hazard under this state
of the currency, and the most careful dealer could not tell when he was
selling a thing at a supposed advance whether next day he would be able
to replace it for the money he had received, and was only assured of his
gain or loss after he had repurchased.
The man who has stored a few silver or paper dollars depends upon the
“common consent” of all with whom he anticipates dealing to receive
them, whether paper or coin, at same value as he received them, and when
this is assured to him it is a matter of indifference whether the
dollars have actual value or only its guaranty. In either case he can
put the currency to no use, unless, indeed, he wishes to put the silver
to some industrial purpose, when he would really buy of himself the
bullion contained in the dollars. The greenbacks would serve no purpose
for food, or clothing, or shelter, unless turned into beef, bread, etc.,
furnished by actual labor. So that no exchange is complete until both
sides to the transaction are “satisfied.” “Money itself is only a higher
order of bill, and though giving money is payment, it is not
satisfaction until the money is exchanged away for something that is
desired. Thus, though a shoemaker is paid when he gets money for his
shoes, yet he has not got a satisfaction until he has got bread, or
meat, or wine, or anything else he desires in exchange for the money. We
have seen that the early economists expressly pointed out that money is
only an intermediary in exchanges: it is only a general bill of
exchange, or right, or title, to be paid in something else. They only
considered the exchange as consomme or completed, when products had been
exchanged against products” (Macleod, E. E., p. 219.)
The great danger from a fluctuating or unsound currency consists in the
character of the credits it engenders, and the facility it gives to
obtain possession of things which have not been earned. Indeed, a credit
money, when not, as in the case of government notes, a forced loan,
cannot be put into circulation without placing so much property or goods
as they represent or command into hands other than the owners or
producers thereof. The problem seems, then, to discover some method of
measuring and compensating the transfer of goods so as to make each
party thereto secure in obtaining an equivalent for that which he parts
with. When a promissory note is given in exchange, whether of the other
party of a corporation or of government matters not, its value consists
wholly in the probability that it will be redeemed at maturity, or, if
on demand, at presentation. For upon the question of its redemption
depends altogether whether the owner will have sold or given away his
goods.
But even assuming that the note is certain of redemption, or, at least,
of enabling the holder to obtain that for which he really sells the
goods, there is still the element of debt in it. The issuer, banker, or
government has consequently obtained so much value for which no
satisfaction has been given, nor does there appear any means other than
this by which a money can be put in circulation, except it be a
commodity money, or a money issued upon a deposit of commodities, as a
gold or silver certificate, or a certificate of some responsible
custodian that commodities, or goods, or services are held subject to
order. In that case, there would not be a credit but an actual exchange,
the purchaser receiving his goods and the seller the order for his, or
for their value, to be had at his pleasure. Such certificates could
effect exchanges with security and facility, if some means of
divisibility were discovered so that larger or smaller purchases could
be made with it.
This description of money would not constitute credit in the purchase.
To make a pure credit it is necessary that one shall be able to buy
commodities or obtain money without exchanging anything for them. A lien
upon the goods themselves would prevent their use or disposal, and so
constitute no proper transfer. A pledge of other commodities or mortgage
might be given, but then their disposal would not be allowed, and would
be equivalent to a mortgage or lien upon the purchase itself.
Therefore, credit money, or an actually pure credit of any kind, is
possible only where one party purchases something from another, to pay
for which he has nothing but the thing purchased. I am not speaking of
transactions between parties well known to each other, in which one may
not have, at the moment, available currency to meet the balance of an
exchange. Selling goods on short time without interest, or keeping
running accounts with periodical settlements, is usual in all lines of
trade, and, though attended with some risk, is followed from its greater
convenience as compared with cash settlements in each separate
transaction. It is not at all from such transactions that interest on
debt arises, but from the borrowing of means to do business with, or to
anticipate one's earnings, or to live in advance of one's income. The
other form of dealing, popularly called credit, equally desired by
purchaser and dealer, doubtless facilitates exchanges and indirectly
hastens production. But it is not because credit is productive, but
because the confidence and mutual trust these parties put in each other
enable them more readily to adjust supply to demand. To say that credit,
per se, is a productive force, is to assume that it creates something
from nothing; since the borrowing of a horse or a plow does not make any
more horses or plows than there were before. And when I have borrowed a
hundred dollars of a friend, it by no means adds a hundred or a single
dollar to the general amount of circulation. Borrowing money or anything
else, in its exact sense, can only be justified in great necessity; and
lending is then enjoined as a moral, not as an economical, action, usury
for which is clearly a moral wrong. Of such necessity, too, the lender
must be the judge. For of the numerous small or large sums one lends
during his lifetime, seldom one turns out to be more than a temporary
relief to the borrower, even when never called upon to repay; and often
proves an injury by encouraging mendicancy. A friend of mine who had
many years ago retired from active business with a small fortune, mostly
ready money, told me that he was adopting my ideas about interest and
thought that he was really doing much good by loaning to poorer people
his money at a lower than the legal rate of interest. The last time I
saw him, however, on inquiry as to his experience, he said he could not
point to one whom his loans had permanently benefited; that most of
those who had given mortgages on their homes had failed to keep up the
payment of the interest, and that he had made up his mind that, however
advantageous credit might be for the unscrupulous who held good
security, it was bad for everybody else, borrower and lender alike.
It is this intimate connection between money and credit, indeed, their
identity, which makes all legislation in regard to it a doubtful and
uncertain element. The whole subject of legal tender turns upon the laws
for the collection of debts. Without their existence no legal tender,
but only a general tender, would be required; because all our experience
in currency shows that a bank note or a treasury note, other than legal
tender, will affect exchanges just as well as gold and silver. Indeed,
the first issue of treasury notes in the late war continued at par,
while the legal tender greenback declined to less than one-half because
the government refused to take it for duties on imports, or to pay
Shylock in what answered well enough for soldiers, and, indeed, for
every branch of industry and healthful business. The history of that
time shows how readily business and industry accommodate themselves to
circumstances, and how little honest work need depend upon the fostering
care of the government. When the government became embarrassed by the
needs of a gigantic war and entered on a career of enormous credits,
gold and silver, and even nickel and copper currency, took themselves
out of the factory and warehouse. The state banks furnished dollars
(paper), but no change. Immediately the postage stamps fell into its
place by general consent, mucilage and all, although they had no legal
power to pay debts. The government, taking the hint from this
circumstance, gave out the postal currency, which served an admirable
purpose till the change crept out of its hiding-places, some years after
the war had closed.
In reviewing that period we see how it was principally the matter of
credit that was affected by those changes in the currency and its
values. To persons who exchanged substantial values on a certain day it
did not matter whether the dollar was twenty-five, fifty, or one
hundred. The ratio between their two commodities remained the same.
Differences only arose where commodities were in process of exchange or
in transitu. It was, however, where debts were due that the great
disparities were seen. Immense amounts of mortgaged property were
redeemed at fifty per cent, and even less, by taking aclvanrage of the
legal tender paper. In 1864 I sold, for a friend residing abroad, gold
at 2.60, and paid off a mortgage which had been given just before the
war when gold was exchangeable at par.
But money borrowed during the war was subjected to the reverse action as
the premium on gold receded. Other commodities, of course, receded with
gold so that the borrower had, by so much, less to pay with. That is, he
had to pay his debt, which was contracted in dollars at seventy-five or
fifty, in dollars at one hundred.[19] Doubtless this contributed largely
to precipitate the panic of 1873; but in reality the same or a similar
thing takes place, independent of any change of the currency, whenever
credits are extended and then shortened. The impulse which credits give
to production, and which at first yields profits, appearing to justify
the claim that credit adds to production, really reduces by so much, the
ratio of that production in the long run, as an abundant crop reduces
the price of grain. But by the time payments are required and credits
drawn in the prices of goods are so reduced that, in addition to being
minus the interest paid, which equals the principle in every ten or
twelve years, the borrower has to pay his debt in money worth one
hundred and twenty-five to one hundred and fifty in its ratio to the
commodities he manufactures or deals in.[20]
The view taken of credit and interest, or usury, is often confined to
the lender and borrower; especially as to the moral aspect of the
question. “We can conceive of circumstances where neither would be
advantaged or wronged by it. A man himself paying interest or rent and
having values due him, or lending means to an importunate friend or
neighbor, would not be benefited; because by paying so much upon his own
indebtedness he could save the payment by himself of so much interest.
The friend, moreover, may, by the aid of the money borrowed, buy a house
or pay off a mortgage and thereby save in rent or interest what he pays
as interest to the lender. So that as between these two there may be
nothing which is morally wrong or economically unjustifiable, because
the interest paid and received by each may balance each other.
But it is as a social question that its true nature appears; because
this payment of interest, how far soever it may be shifted, and all the
more certainly because it can be so shifted, falls at last upon the
labor which produces the social wealth. And it is because credit no more
than other forms of capital, excepting land and labor, can produce
anything, that usance paid for it is immoral and unjustifiable. Credit
under these circumstance becomes pernicious, because it not only helps
to keep up the interest fraud, but becomes itself a means of doubling
and trebling the amounts abstracted from the labor and the land by this
subtle and widely diffused system of robbery.
A man of large means and financial probity can let out all his money on
well secured property and yet have credit for large amounts. This
credit, as shown by the economists, is as really capital as his gold and
silver, By establishing a bank and issuing notes without interest, as
the banks are authorized to do, he can let them out to business men on
good security, and so derive an income from what he owes. The national
banks are contrived for precisely this business. By lending a hundred
thousand to the government, ninety thousand is returned to them to let
to the people, who are also paying to the banker his interest on the
whole hundred, and not unfrequently on their own deposits also. But it
is not necessary to particularize persons or classes. The evil lies in
the vice of seeking control of that which we have not earned, whether on
the part of debtor or creditor. The evil of credit is of wide social
effect, and permeates all fields of industry and commerce.
Did any way appear to retain credit and abolish interest, it might be
unnecessary to antagonize credit. But until an available way to
accomplish this is shown, it must continue, as now, to be the basis on
which usury rests, and is really equivalent to a monopolized control of
the land, since the law cannot interfere to enforce the credit contract
without involving the right to control the person and service of the man
and the result of his labor upon the soil. The intimate relations of
these questions were recognized as early as the time of Solon. To repeal
all laws for the collection of debts would effectually dispose of the
credit question, I think, without doing the least injury to industrial
production or making it any the more difficult for the poor to employ
themselves or to conserve the results of their toil. The only parties it
would unfavorably affect would be the irresponsible business adventurer,
or the would-be spendthrift. Usurers and stock gamblers would have more
difficulty in finding victims to fleece, and be wholly unable to lay
industry under tribute, as now.
But it is a long time before our people, through legislation, are likely
to do anything so sensible as this, and it is even too much to expect
that they will repeal so much of the laws as now enforce the collection
of interest or of any debt, the principal of which has already been paid
by instalments as interest.
The money of commerce would be such as growth, experience, and general
consent made it, if governments would take their hands off, since
commerce, if left to itself, would soon provide its “instruments of
exchange.” Government should at least cease to do what it has for the
last quarter of a century, and indeed, through its whole history, been
doing, play into the hands of the spoilers, and make the currency a
football for the stock gamblers and usurers. The form which money will
ultimately assume will doubtless be a currency based upon labor, so as
to make the labor of any member of society, however humble, a general
tender for all such desirable and useful goods as are in supply; but at
that time commerce will have ceased to be the agent of the pirate and
the freebooter, of a privileged or idle class, and become, what it is
capable of becoming, the hand-maiden of social industry and universal
reciprocation.
According to the later school of economists, “Value is a desire of the
mind,” and signifies the estimation in which a thing is held. But it is
evident that in order to give this desire any logical expression, the
thing must be compared or measured by something which is external and
objective. To say that a man desires, esteems, or values a horse has no
meaning until a comparison is made with something which he is willing to
give for it. And whatever the thing or amount of money, or commodities,
he is willing to part with to obtain it, turns at last upon how much
labor or life-force he is willing to bestow on the possessor of the
horse in order to make it his own. It is this consideration which
moderates the blind desire and reduces it to some regular form where it
can be recognized as a force in social affairs. It is subject also to
another regulating principle which modifies and limits it. A madman may
desire a means to destroy another’s life or his own. An inebriate may
desire liquor though its use brings delirium tremens. But these desires,
and all others which seek unnatural and illicit gratification, cannot
enter into any economy of social life or justify any social transaction.
It is inconceivable how anyone can desire or value that which is not
productive of some useful results, either to self or to others. That
some childish whim or habit may make things desirable to the uninformed
or diseased mind, which injure the individual or society, cannot change
the general fact that why things are desired or valued is because of
their ability to sustain and prolong human life and increase human
happiness. That the individual may think some possession desirable to
him which will wrong or injure another will not prevent society from
acting upon its sense of the “greatest good.” If these estimations
conflict or disagree, it becomes the business of science to reconcile
such contentions. The principle of utility enunciated by Jeremy Bentham,
and supported by Mill, Spencer, and other noteworthy authors of ancient
and modern time, as the great moral motive governing mankind, is
certainly the force controlling all intelligent social and economic
interchange, whatever its exact place in morals. The ignorant and
imbecile, controlled by blind prejudice or feeling, may fail to act from
it ; but this does not discredit the principle, for, even in these
cases, the estimate is based upon what they imagine or believe will be
most useful or serviceable to themselves. So that if value is merely a
desire, it is, at least, a desire for some real or imaginary good to
self or to others. By the definitions of economists, therefore, value is
dependent on utility and service.
“You see that utility, under whatever form it presents itself, is the
source of the value of things” (J. B. Say).
“There are three orders of quantities, and only three, which satisfy the
definition oi wealth, and these may be symbolized by the terms—Money,
Labor, and Credit” (H. D. Macleod).
But since money is but a “work tally,” and since credit is but a promise
to render service or some desirable thing in which services of utility
are incorporated, or, at most, a right to demand them, value is
necessarily derived from its source, the utility of things, through
labor. Really, then, the only means of giving value to anything, or of
rendering available the utilities in natural things, is by useful
service. The term value is, however, too equivocal to be safely employed
without specific definition In trade, to which economists now wholly
confine economic investigation, the word is more often employed to mean
the exactly opposite thing to that which they insist is its meaning, as,
“I am paying you more than the value of these goods,” or, “I am selling
them to you far below their value.” It is said that “commercial bargains
are the delight of the Greeks, and they often manage to part with their
wares to the Turks for twice their value.”
The only proper thing seems to be, then, to distinguish Value in Use,
Yalue in Service, and Yalue in Exchange.
Value in Utility is an invariable proportion.
Value in Service is a stable proportion.
Value in Exchange is a variable proportion.
Preferably to value, however, I use the term ratio. The ratio of utility
is the proportion which one thing bears to another in its ability to
yield sustenance to human life or to supply its varied needs and
desires. This ratio is unvarying. A hundredweight of the same quality of
wheat will at all times and places, other things being equal, sustain
animal life to the same extent, whether it cost ten dollars, or is so
plenty as to be had for gathering, or so cheap as to be used for fuel,
as corn sometimes is in our grain-growing states. The ton of coal, of
same quality, will give out the same proportion of heat, make the same
amount of steam, and raise the same number of foot pounds, whether it
cost five dollars or nothing but the labor of picking up from the
ground, and maintains a constant ratio in that respect with wood, coals
of a different character and grade, peat, oils, and all other substances
used for fuel. A pound of wool will yield the same amount of yarn or
cloth, whether it cost a dollar or a dime, and holds a fixed relation,
as to use, with cotton, flax, silk and other fibers suitable to be
turned into fabrics.
Upon this ratio of use everything which can claim to be exact in
economics depends. But in the differing judgments of men a difference of
estimation occurs, as people will disagree as to whether it is hot or
cold in absence of a physical thermometric standard.
But this ratio, although it may not be clearly apprehended by the many,
is, nevertheless, an invariable proportion, capable of being ascertained
with exactness in every industrial or economic relation. And no commerce
or industry can long endure which ignores it. The ignorance, deceptive
teaching, or trickery which at present renders it obscure in business
operations no more brings it into doubt than does the inability of a
child to compute the product of a certain number of pounds at a certain
rate, in consequence of which he gets cheated by the dishonest merchant,
throw doubt upon the truth of the multiplication table or upon the
exactness of the pound as a unit of weight.
THE RATIO OF SERVICE is a stable ratio, and relates, first, to the human
energy exerted; second, to the time through which it is exerted, and
third, to the utility of the resulting product.
Of these three elements, utility is a certain and unvarying proportion.
Time also is capable of mathematical measurement. And the energy is also
ascertainable with sufficient practical accuracy. A day’s or an hour’s
work, as to what should be its product, is quite generally well known in
every trade, profession, and calling. It is hence apparent that the vast
inequality found to exist in society, in relation to compensation of
service, must be attributed to causes wholly outside of any natural law
of exchange. For the tendency to equal compensation for services of
equal utility is as inevitable as the finding of its level by the water
of the ocean.
The utility of a service naturally determines the ratio of its
compensation. For however hard a man may labor, if he produces no useful
result, the labor to him is void. And by no equity can he exchange the
results of such negative service with the more useful result of
another’s toil. He will only be able to do this by taking advantage of
the childish estimation of others or of crude social and civil
institutions. The services which the speculator, usurer, slaveholder,
landlord, the gambler, burglar, or highwayman perform, are not
compensated by any economic law, but by the law of cunning, fraud, and
usurpation; for wherein the services are without use, they can only
command pay by the exercise of brute force or by the aid of state power
and barbaric custom.
By equal compensation we are not to understand, necessarily, an equal
sum of money for an equal number of day's work; for not only will some
day’s work effect greater utility than others, but some employments are
much more exhaustive or involve greater hazard to life and health than
others. It may serve to silence the objector to the equitable view to
remark, however, that, even should society, by some arrangement, or by
any movement to “establish justice,” arbitrarily make all compensations
equal, the employments which require culture and talent would still be
sought by those best fitted to them. The artist would paint pictures,
model clay, or chisel marble in preference to digging ditches or
breaking stone, although the compensation were no more for the one than
for the other. The clergyman would preach in preference to holding a
plow; the lawyer would plead and counsel clients in preference to sawing
wood; the merchant would serve customers in preference to grooming
animals, and the prima donna would sing at the opera in preference to
croning in the nursery or even to acting the “walking lady” before the
scenes. Exceptions to this rule would merely show that some had adopted
an employment not suited to their tastes and qualifications, because
forced by circumstances or allured by cupidity.
To throw discredit upon the proposition of Adam Smith that labor is the
creator of value, the later economists, after having defined value to be
merely the amount of money a thing will sell for at a given place and
time, attempt to show that the same amounts of labor produce values most
unequal; that, indeed, the great values, as of land, stocks, and other
speculative capitals, are not produced or based upon any labor whatever.
Yet even these are determined and upheld by the amount of interest,
rent, or profit they exploit from labor. Eight to place and opportunity
are in their nature indefeasible, and the laws or customs which sanction
traffic in them are the outgrowths of forceful or fraudulent usurpation.
The income such perversion enables the land or money-lord to exact is
derived wholly from the uncompensated labor, or is a draft upon the
fertility of the soil. In order that a person may procure and enjoy the
uses existing in natural substances or forces, it is necessary that he
put forth the requisite exertion, or makes the effort or sacrifice
necessary to obtain them. The proportion thus realized may be said to be
the
The ratio of service is the proportion of utility a service secures. The
ratio of compensation is the proportion of such use enjoyed by the doer
of the service, whether acted upon in the social life and system of
exchanges or subverted at the will of a despotic individual or class
control. And this seems conclusive with respect to equal compensation
for equal time, since, if one increases in a given time the utility of a
product ten, and another is able to increase it twenty in the same time,
it is clear that the service, and hence the compensation, of the latter
would be double that of the former; for time, though an important
factor, is not the only one in determining the ratio of service and of
compensation. The energy exerted through the time engaged and the
thought employed are also elements in the production and consequent
compensation.
Unlike the ratio of utility, which is a constant quantity, the ratio of
exchange is an ever-varying one, subject to a variety of fluctuations
from a variety of inciting causes—as by the occurrence of plenty or
scarcity, the changing tastes and fashions, by imperfect judgments and
erroneous estimates of people, forestalling and purposed manipulations
of trade, and by bulling and bearing the market, resulting in insane
advances, followed by corresponding declines and actual “panics.”
Disproportionate supply results mainly from unequal application of labor
to desired uses or from unequal products from the same labor, as when a
crop is more than usually abundant or short. The same result follows in
the tendency among a people to engage in new enterprises, or in the
production of a particular commodity or crop, which has come into
popular favor and promises extra remuneration. The effect of fashion to
change prices, especially in matters of dress, must be familiar to all.
Every merchant or manufacturer has experience of the loss sustained by
allowing a stock of goods to remain on hand until they have become
unfashionable.
The result of forestalling and molding the market to raise or lower
prices needs little illustration. The methods are too numerous and
varied to be described here. It is sufficient to point out that, under
monopoly of the raw material, and the forced competition resulting from
that cause, it is easy for those controlling capital to put down the
price in the market below the mean when they seek to purchase for
holding, and to put up the prices above the mean when they wish to sell.
They are thus enabled, not merely to take advantage of the ordinary
variations in supply, but to create artificial supply or scarcity as
suits their purpose, and so think their capital has earned something
when it has merely taken the earnings of labor. It is pointed out by
some economists that such tampering with the market must lead to
disaster to those who attempt it; but it is hardly denied, I think, that
such manipulations occur, for dread of disaster does not prevent
gambling; and that they greatly affect the fluctuations of price is well
known. That is the only question I am discussing now. It will be seen
elsewhere that those who have exclusive control of the land have the
power to and do change wholly the fluctuation in its price from a
variable ratio, vibrating each way from a neutral point to a constantly
advancing ratio, which never recedes.
The fluctuation in the price of things uncontrolled by monopoly must
necessarily rise above the mean as often and as far as it falls below
the mean. The pendulum swings as far to one side of the point of rest as
to the other; the tide rises to the same height above and falls to the
same depth below the general level. Hence the cornering of land places
that outside of the economic law, and proves it not a proper subject of
traffic. There is also a fictitious element in trade, which cannot be
too soon exposed and expurgated. It is the assumption of money
arbitrarily created as a standard of value or MEAN ratio in exchange. It
is absolutely certain that gold or silver, which are made legal tender,
and thus despotically made the mean, are far more fluctuating in their
value than iron, tin, or copper, and that in long periods even more than
the cereals, or any staple product of human labor. The manipulators of
the market have, therefore, not only the advantages I have pointed out
in respect to land and monopolizable commodities, but the power, by
locking up the tenders, to shift the mean or standard by which prices
are determined from time to time.
It now seems only necessary to ascertain the relation which the ratio of
use sustains to the ratio of service and compensation, and through that
to the ratio of exchange, in order to form a basis for the establishment
of a science of industry and social economics as exact as any of the
physical sciences.
The Theorists, if such term is due them by courtesy, who propounded the
“balance of trade” as a government policy, made but little pretense to
exactness, but entrenched themselves behind the narrowest prejudice. The
French economists built upon one economic factor, the produce of the
land, while ignoring labor, except as a dependent adjunct. The English
economists built upon the other factor, “labor,” evading, however, its
relation to the land. The American economists of the Carey school recur
to the “balance of trade” to correct the omissions both of the French
and of the English schools, but fail to apprehend that it is both “land
and labor” which are involved in any and all industrial production, and
that freedom in the union of the two is essential to anything like
freedom of exchange. Now, since no desirable thing can be produced, even
in its trade sense, without labor and its application to the land, it
follows that the ratio of cost is proportionate to the extent of such
application, and since these two factors only are concerned in the
production of any goods whatsoever, these factors only can be considered
in any attempt at a scientific system of division. As between the two,
then, the land and the labor, the economic principle is this: To the
land goes, in the long run and wide range, as much of every element as
has been taken from it. It would be too violent a stretch of the most
elastic of economic principles to make them cover the reduction of the
fertility of the soil and the exhaustion of its power to reproduce. The
utility of any commodity, therefore, consists in that reduction to form
or adaptation of it for use which abstracts nothing from the soil but
what will be returned to it. And as the elements of fertility go back to
the land, so the uses go to the labor. This constitutes what Adam Smith
designates “the natural rate of wages,” “the whole product of labor.”
Without discussing this proposition as scientifically exact, we may say,
with entire exactness, that it constitutes the ratio of utility in the
service, and, therefore, the mean ratio of exchange. All fluctuations or
variations from this mean arise from causes set forth above, or of a
character kindred to them.
It will be assumed that things may have utility which require no labor,
as air and water, which are essential to life and health. But these can
have no relation to exchange until they are privately appropriated, and
hence, in a state of nature, are outside of any problem of exchange. If
it were possible to monopolize the air and water, as it is to
appropriate them to a limited extent, so as to make them exchangeable
commodities, they would then, indeed, command a price, but their ratio
in exchange would still correspond to the amount of labor required to
store them and guard and maintain the monopoly, or upon the service
which they would impose upon those who had no means of escape from the
operation of the usurpation.
The importance of a branch of social science resting upon so flimsy and
kaleidoscopic a base as value when economically defined must be seen
when we reflect that the causes which give rise to the most extreme
fluctuations are not natural but wholly artificial, and are constantly
being affected by partial and class legislation and by crudely unjust
social and civil customs. We can conceive of the indignation the free
trade economists would exhibit should a “protectionist” assert that the
high prices under a prohibitory tariff were nothing but the result of
the natural laws of trade; but their assumption that, under the
commercial monopoly of the land or the ownership of the laborer, we have
an equitable or any natural system of exchange, is far more monstrous
and truth defying. While traffic in land remains, equity in exchange is
impossible under protection or free trade, and the productive laborer of
any country is subject to certain despoliation, which is, at most, a
shade worse or better under one or under the other. Neither theory has
any warrantable interest to which the attention of the wealth-producer
need be turned.
We have seen that even where both land and the laborer are owned and
treated as commodities, the ratio in exchange still depends upon the
amount of labor any commodity or proprietary right enables it to
command. The value of a right to hold a slave must, in the economic
analysis, depend wholly upon the amount of labor or service such right
will enable the holder to exact. So ownership in the land can give such
value only as is measured by the amount of labor which such ownership
empowers the owner to exact from those who cultivate, occupy, or improve
it. It is impossible to conceive of a commercial value in any thing
which is not measured by the amount of labor it has cost to produce it
or will cost to reproduce it, or that it will command.
It is plain that nothing can be considered actual service but that which
has promoted the production of some useful thing or rendered a useful
service to some member of the human race. The natural compensation of
any service consists in the good or goods it has added to the stock of
human well-being. But it by no means follows that, under the rule of
arbitrary social and civil institutions, and of immoral and subverted
relations, these compensations will be equitably distributed, or have
any just division. That is the crowning fallacy of the economists. In
fact, under such rule, they are sure to be unjustly diverted from their
natural tendency. But what I wish particularly to emphasize here is that
however subjected and enslaved labor may be in any place or period, it
is the labor alone which begets the increased utilities, and that such
utilities constitute the compensation with which nature responds to the
application of such labor. Only the man whose power and will subject
another, and who virtually owns his labor, can appropriate that other’s
natural compensation. It can be accomplished only in a general way by
laws or customs enforcing servitude; by engrossing land and opportunity,
and by the social sanction of false estimates and fraudulent accounts in
exchange, or by a deceptive and shifting standard of value. Service or
labor is now seen to be the parent of all created goods and of all
realized utilities. The natural utilities, as of the land and
opportunity, are not exchangeable with service or goods produced by
labor; for the reason that they are nature’s, and must be purchased
first from her, and have and require no labor in their production.
That labor or service is the basis of the ratio of exchange may be seen
from the very nature of the fluctuations of value in commerce, even
under the iniquitous system of prevailing trade. These fluctuations
constantly tend to a mean or equilibrium, which corresponds in every
respect to the ratio of use. The cereals, for instance, tend to that
relative market price which corresponds to their ability to support
human life. Wool, silk, cotton, flax, etc., tend to a price relatively
corresponding to their ability to promote the comfortable and becoming
clothing of mankind. Lumber, bricks, stone, and other building material,
tend to a price relatively proportioned to their usefulness in effecting
shelter and ministering to the comforts and enjoyments of life.
THE RATIO OF SERVICE, as determined by its utility, is, therefore, the
mean ratio of exchange, and towards which it constantly tends as to a
point in equilibrio in all its fluctuations, from above or from below,
caused by whatever disturbing forces. Other things being equal, these
fluctuations rise or fall to the greatest extremes in things where a
single or limited use is served. Articles of mere taste, fancy, or
fashion are subject to great inflation, and to be reduced to a valueless
condition by a change in popular whim. Thus grain is maintained from
extreme depression, even in very abundant years, because it can be
turned to a number of uses, and, by being fed to cattle, sheep, and
swine, can be converted into beef, mutton, and pork, and thus have its
value conserved for other years. If some commodity could be found which
would serve every requirement of human need, it would have an unvarying
rate.
No such commodity being found, it is still conclusive of the principle,
since every additional or extended use to which a thing can be put
reduces, in a positive degree, the extent of the fluctuations in its
ratio or price from the mean. And labor or service, being the parent of
all commodities and exchangeable in its varied forms, becomes the
controlling element in exchange, commands a stable price, and forms the
only stable ratio.
Our laws regarding money tend, in a high degree, to subvert or obscure
this well-established principle. They take one commodity, gold, the
least useful of all the metals, except for ornament, of a scarce and
very irregular production, and whose relative value fluctuates in a
series of years, more than that of any staple commodity, and under our
economic system, which regards all values as constantly variable
quantities, assume that this one value is invariable. With the addition
of silver to the standard, the great injustice to labor is only divided,
not removed, and capitalism is constantly trying to demonetize that.
Now, the only invariable ratio is the ratio of use, and labor, since it
alone is able to supply all useful things not existing in nature, and is
the sole agent in gathering and conveying those naturally existing or
which are spontaneously produced, constitutes the only thing which can
have stability in exchange corresponding in any respect to the ratio of
utility.
It is hardly necessary to point out that, for many generations, gold or
gold and silver has been a mere basis and standard of value in the
commercial world, while the promise to pay these has constituted mainly
the currency and medium of exchange of most nations. It is foreign to
the purpose of this inquiry to show how the method of issuing this
credit money is productive of great evil to the interests of industry.
Our business with it here relates to its assumption of a claim to which
it is not entitled, and to the extension of its usurpation,
indefinitely, by means of multiplying promises to pay, promises which
must be liquidated, if at all, in a commodity subject to every
fluctuation known to trade. It is unnecessary to condemn or justify
credit money, or to intimate as to who should be authorized to issue it,
but simply to point out that if it be used at all it should be made
redeemable in labor or in such commodities as can be most readily
produced by the greatest numbers of the people, and should be expressed
in days’ or hours’ service. We thus see the unstable basis upon which
any system of finance or of exchange must rest which denies the claims
of labor, discrowns it and sets up a golden idol in its stead. The trade
which it seeks to explain and justify is a subject not admitting of any
scientific explanation. It is without reciprocation, a mere contest of
cunning and false pretenses. It is a commercial duel in which the one
party triumphs at the expense of the other. Professor Perry prides
himself upon having discovered that two minds have to meet in
determining price, or. in other words, that “it takes two to make a
bargain,” a proverb, I think, as old as modern English literature, at
least. Some one may yet discover that it takes two to make a bet, to
fight a duel, or to engage in a prize fight. Our science of trade, it
seems to me, under these teachers, approaches as near to true economics
as the results of a bet, duel, or prize fight does to a principle of
jurisprudence, because such contests were sometimes held to settle
differences between indivividuals or communities. To have the minds of
two men meet, though one or both be ignorant and prejudiced, would be a
singular method of deciding some question in astronomy or of proportion
in chemistry, and should not be thought conclusive in economics.
The ratio of exchange equitably relates, not only to service, but also
to the proportion of earth in which such service is incorporated and
conveyed. This applies not only to trade between nations, but also to
that between sections of the same country, and between cities and the
agricultural districts more nearly related. A disregard of this
principle inevitably impoverishes a people parting with a greater
proportion of fertilizing matter from their land than is returned to it.
The best lands are soon wasted in productive power by such a process, no
matter how equitable or advantageous the trade in all other respects may
appear.
The economist must deal with proportions as they exist in nature, and
not as they are ignorantly accepted by the weak and dependent, through
perverse circumstances or under duress; except, indeed, he seeks to
defend and perpetuate such ignorance, dependence, and subjection, or the
abuses which spring from such misestimation.
Our railroad system and great modern facilities for transportion, become
but a vast means to advance the transfer of the crops, freighted with
the fertile portion of the earth from the interior to the seaboard, or
to large manufacturing or commercial centers. They, indeed, take back
articles of use, some of which contain elements which, in their
consumption, will go to increase the fertility of the soil, and also
some commercial fertilizers, but, in the main, the balance is greatly
against the country.
If the “Balance of Trade” theory had embraced the fertilizers instead of
the precious metals, as the basis of exclusion from exchange, it would
have had some scientific importance. And if “Protection” meant an
investigation into the proportional residue of fertilizing properties
after consumption of exchangeable Commodities, and a careful adjustment
of their application to the soils from which the supply is drawn, there
would be some logical justification for the use of that term in
economics; but a high or prohibitory tariff may keep out of a country
the very elements required to restore fertility, or reduce the amount or
proportion received for our products.
Besides, the most dangerous tendencies which require to be guarded
against are also active between sections of the same country where
commerce is unimpeded by state interference, and where every facility
exists for the carrying on of the unequal traffic. So that if a tariff
exerted any influence to prevent the transfer of earthy properties from
one country to another, it could affect little in preventing, but much
in promoting, the impoverishment of the land through such transfer to
the business and manufacturing centers and their wasteful discharge into
the sewers.
But what renders this exhaustive process most destructive of all is the
taking away from the land that portion of its produce which goes to the
payment of rent, of interest on purchase money of the land, or on
borrowed means to carry on the farm, and of profits to the dealer and
speculator. For all these are a dead loss to the land or to the labor.
The only exception is where the landlord, banker, or profit-monger
resides upon the estate or land cultivated, so that the products of
consumption get replaced. In that case the labor suffers all. But even
under the most favorable circumstances, the far greater portion of the
produce which goes to these channels is exchanged by the holder for
goods and manufactures which, in consumption, afford little or no
fertilizing product. A tariff can have no possible power to check these
drafts upon the land and labor of a country. Indeed, under the highest
tariff this country has ever imposed, this exhaustive process has been
going on in a constantly increasing ratio. The interest on our
government, state, and corporation bonds, railroad bonds and interest
paying stocks, held abroad, and rent for our own lands paid to aliens,
has enormously increased during the last twenty-five years, and has
proved wholly an exhaustive tax levied upon our soil and upon the
remuneration of our labor. For all this vast drain on our land and on
the energies and life of our people, we have received absolutely
nothing. It has all been paid for in privilege, in concession of private
rights and other imponderable and intangible forms of incorporeal and
fictitious wealth. Nothing whatever which improves the land, or feeds,
clothes, or shelters labor, has been returned for all the amounts thus
drawn.
Commercial ownership of land or of labor operates to produce very
remarkable transpositions of value, and of the meaning and application
of terms. This has been noticed by the later economists, though they
have failed to give it other attention than to illustrate their theory
that value has no necessary dependence on labor. Macleod remarks that
“so long as the science of economics was limited to the material
products of the earth (and of labor), the phrase ‘production and
consumption’ was perfectly intelligible and unobjectionable. But when
the term wealth and the science of economics were extended to include
labor and rights (dominion over the land particularly—the italics and
parenthesis are mine) great awkwardness arises. For even though it is
carefully explained that production means nothing but offering for sale,
and consumption means nothing but purchase, it is very awkward to speak
of the production and consumption of labor.” It would be equally awkward
to speak of the production and consumption of land. “Who,” he asks,
“would understand the production and consumption of debts, shares, the
funds, copyrights, patent rights, etc.?” It would indeed be awkward, but
it is the awkwardness which always attends the attaching of properties
to things in theoretical assumption, which they do not possess—an
awkwardness which has brought untold misfortune upon the workers of the
world, and perverted the whole business and industry of society, and
which renders the reduction of the science of social wealth to a mere
matter of trade between sharpers. Otherwise the impossibility of
classifying land and labor with commodities would become so apparent
that the most pedantic economist could not fail to observe it.
Coupled with the definition of the land value, that it is the present
value of the “right to the series of future products forever,” we see
what has been demonstrated in regard to rent and interest, that such
value proceeds by a duplicate geometric ratio, while the actual
production of wealth only increases by an arithmetical ratio, thus not
only covering the entire product of the associated industry of the
world, but also the potential ability to gather an infinite series of
productions, which would absorb the universe and dethrone omnipotence.
There is but one method by which an increase can be obtained—for one to
exchange his goods, if possible, for a man or for land. If by brute
force, superior cunning, or the rights of usurpation, enforced by custom
or man-made law, he is enabled to buy a laborer, he could then make his
surplus productive; or under commercial monopoly of the soil he might
buy a certain amount of land, when precisely the same results would
arise.
It will be observed that this absorptive process, whether carried on by
the subjection of labor directly or through capitalistic appropriation
of the land, depends altogether upon the numbers of workers who are
brought under tribute. With one slave the owner could only command an
increase or income which the labor of one could furnish. To realize the
progressive income he must, by the same ratio, reduce increasing numbers
to bondage. And so the landowner must, in the same ratio, multiply his
farms and increase his tenants. And as these basic relations attach
themselves to other businesses, and as the attempts to obtain annunities
from these sources prevail, the subjection of labor must proceed in the
same ratio in every field of industry. So that, indeed, capitalistic
increase has and can have nowhere logical basis or aim, but in the
progressive subjection of the land and of the labor of a people. And one
must be over-credulous to suppose that economists who justify or ignore
these systems of industrial inversion will ever give logical
consideration to the equities of the present system of labor
compensation or of positive reciprocation in exchange.
Now, where one or both of these usurpations exist, and land or labor, or
land alone, is made a marketable commodity and can be bought and sold as
a basis of trade, of course the money or goods which will exchange for
these fictitious rights will necessarily command the same service from
the work of society as the rights themselves, and hence will tax the
earnings of labor in the same degree. To realize this tax by any device
whatever is to recur to one of these forms of usurpations over the man,
or over the land he must cultivate to produce the things so taxed. And
this so clearly appears in comparing the values of commodities with the
values of these assumed rights over land and labor, that only the bare
statement is required.
The value of the laborer, when a chattel, depends wholly on the right to
command his labor, and the amount of labor he can be made to perform. It
consists of the present value of such labors as the slave shall ever
perform, and if hereditary, of the possible labors of children and
children’s children to all time. Here is not only a producing but a
multiplying factor, which, under the Malthusian idea of population,
becomes a progressive series, like capitalistic increase, by a duplicate
ratio. Having by “a mere fiat of the human will produced” a commodity
which contains this power of increase, the value can be readily imparted
to other commodities, exchangeable with it, however inert. Outside of
such a system the value of such goods has a definitely determined
measure, and is exchangeable with commodities of equally determinate and
positive computation. But the value of the slave consists alone in his
capacity to go on producing commodities indefinitely for all time and
multiplying himself in his posterity.
All commodities, proper, have values consumable and specific. These
values begin and determine in use. The value of labor, on the other
hand, under its treatment as a commodity, is not a thing to be consumed,
and, as Mr. Macleod says, it becomes “very awkward” to speak of it in
that connection. It is for what it does that it is valuable, and this
value attaches not ouly to what it will do to-day but for all time. The
value of the land is the same in this respect, that it is accumulative,
yet depending wholly upon the earnings of labor upon it, or the
exhaustion of its productive powers.
It is the characteristic of all incomes without labor that their values
depend wholly upon the increase per cent., which proceeds by equal
ratios, while labor can only produce by equal differences. Thus values
or properties may be multiplied to any extent, by any forceful or
fraudulent device, begetting a rate of profit, rent, or interest upon
it. Watered stock has the same value as original stock, and original
stock becomes valueless when the two no longer yield an income. Here the
distinction between value in use and value in capitalistic investment is
drawn, and appears where increase without work ceases, and where real
and useful' things are sought and mutually exchanged for consumption.
And the same distinction we drew between private and social wealth
applies here also. Those things which are required for consumption by
the individual, which make up the permanent interest in family and
social life, retain a stable value, though they are never employed to
earn income. Those other rights and “incorporeal property” which
infringe social right and absorb the fruits of social industry without
return, are confined wholly to rights over labor direct or through
control of the land, which place values not in their utility to serve
human needs, but in their power to lay the industry of society under a
perpetually multiplying tribute.
When a man buys a coat or a dinner, he regards it as of sufficient value
to pay its fair price, without any consideration as to whether it will
enable him to earn an income without work. And this is true of nearly
everything consumed by individual men and their families, or by the
world generally. It is only the trader, the banker, or landlord who
measures price by the profit, interest, or rent it will exploit. The
laborer, for his day’s work, anticipates the means to furnish food,
shelter, and raiment for himself, his wife and children. So it is with
the mechanic, artisan, or professional.
Profit from the land can only arise from taking the award of nature from
him who tills it, and profit from other property or stocks can only
spring from the earnings of labor, since money or goods put into any
enterprise have no power to increase or multiply themselves.
Thus the worker is required to earn his own and all other incomes
whatever by the devices of “proprietary rights,” labor “contracts,” and
“legal tenders.” In order to make him equal, or give him an equitable
opportunity under deprivation of land, it would be necessary that the
wages for his day's work should be paid in notes bearing compound
interest, or calculating the thing in days’ work, instead of dollars,
for his year’s labor of three hundred days, he should be paid a year and
fifteen or eighteen days’ labor of some one else; and for his second
year’s labor he should be paid three hundred and thirty-seven days’
labor, and thus increase for the third to the tenth in same proportion,
when it would be five hundred for the last three hundred days’ work, and
for the second, third, and fourth decades in the same progressive
proportion.
Now, if the capitalistic formula had any possible equitable relation to
industry and the exchange of services or commodities, it would require
that the three hundred days’ labor in his fortieth year should be paid
in about two thousand days of the equally efficient and serviceable
labor of some one else. To apply any such principle to the award of
labor is seen to be too absurd to be stated. Thus it is seen that the
increase of goods in whatever form without labor is not only logically
but mathematically impossible; and that all those values which are
created by usurious taking are fraudulent, and not entitled to any
social or economic recognition, except in so far as it becomes necessary
to denounce and expose them.
We thus see that the artificial capitalization of the land or of the
labor begets a system of values, which are subject to no classification
with values of utility or service, and are impossible to be exchanged
with them, or to form any equation whatever in any problem in which
labor or its compensation is involved. And it is equally apparent that
the later school of economists perceive this, and hence, by use of the
equivocal term value, seek to reduce values of every kind to the meaning
of its use in speculation and exploitation. But this timely subterfuge
cannot long serve. The very appeal to facts which this school makes
suggests the absurdity of classifying land and labor with the products
resulting only from their union, or of classing incomes without labor
with the earnings of labor, or the wages of the toilers with the wages
of the spoilers. And thus the great learning and trained intellects of
this school are destined to have a short triumph over the credulity of
the people. They evidently comprehend the Niagara toward which the old
school theory was drifting the craft of capitalism, and so attempt to
stem the current by ignoring labor altogether as the creative force, and
by parading superficial truths and effecting a systematization of
phenomena dependent upon the very wrong it is endeavoring to uphold,
show that wealth is a matter only incidentially due to work, but mainly
the product of “rights,” “knowledge,” “credit,” etc.
Taxation is defined as “the exaction of money from the individual for
the service of the state.” And though much has been written to explain
the great “number of its practical difficulties and theoretical
niceties,” I am not aware that any one has given it its true economic
definition. It has been supposed to have “two sets of
considerations—those which affect the justice of a tax, and those which
affect its productiveness.” It is candidly admitted that “taxation,
indeed, has so frequently been the means of perpetrating political
injustice that the term has fallen into bad popular repute. Whenever the
produce of a tax is used otherwise than in the service of those who pay
it, the tax is unjust. In its more oppressive form, it has been levied
on conquered states for the benefit of the conquerors, and in this sense
it has sometimes been called tribute. The direction which all
constitutional struggles to cleanse taxation from injustice have taken,
has been that of self-taxation” (Cham. Enc). But the extent to which
such struggle has yet attained has been merely to couple taxation with
representation. Beyond this it has not as yet reached any well-defined
principle. A majority rule of the whole people cannot make an unjust
thing just, any more than an oligarchy or a czar. I do not wish,
however, to discuss the subject in its political aspect, but simply to
inquire what the tax is in economics. A voluntary contribution for
certain objects of a general or a social nature may, or may not, have an
importance economically, since, if it be a gratuity or donation it may
have no relation to an exchange, but if it refer to a matter in which
the party has a personal interest, or even a desire to see certain
social aims accomplished, it is reasonable to conclude that he considers
the satisfaction experienced equivalent to the contribution. But any
involuntary tax, by whatsoever authority imposed, is in the only sense
in which it can enter into any economical problem a “compulsory
exchange.”
That the taxes assessed under the most popular governments are mostly
used “otherwise than in the service of those who pay it,” is simply
notorious; the only circumstance appearing to the contrary being the
fact that, in direct taxation, capital pays the main proportion
immediately; but it is always sooner or later shifted to productive
labor, which ultimately pays all. The tax is often wholly squandered in
the interest of profit-mongering speculations. Taxes on land are not
taken from the rent, as held by the advocates of “Land Nationalization”
and “Graduated Tax,” but are an additional extortion perpetrated upon
labor, and generally in the interest of an exploiting class or clique.
But really the tax, however scrupulously applied, and to the benefit of
the party paying it, is still a compulsory exchange, for, although such
exchange is usually unjust or unequal, the fact that it is so is not
essential to forced exchange, which is a violation of freedom, even
should the exchange prove more favorable to the party upon whom it is
imposed.
Adam Smith makes it appear that man is the only trading animal. He says,
“No one has ever known dogs to exchange bones.” Doubtless this is true;
but we often see the bone exchange the dogs. This is by a brutal
compulsion, in which one dog takes the bone from a weaker dog; and, like
the taxing power, usually giving or having nothing in exchange. And yet
taxation has no justification in ethics or economics, unless it is in
equation with some service which the taxing power has rendered the taxed
individual. And however equitable such tax might be made to compensate
such service, still, if it be a service not desired by the individual,
but which he would prefer to do without, it would still be compulsory
and hence not compatible with personal freedom or with such an exchange
as is contemplated in economics. The taking of the bone from the “under
dog” would still be the brutal act, although it might chance to put him
in scent of an equally good or even better one. The right of the
individual and the very fundamental principle of economics, which is
“The Science of Exchanges,” requires, not merely that the tax shall be
equitably proportioned to the service which the state or government has
rendered, but that it shall be only for such service as the individual
has voluntarily accepted and made available to his use. The line between
freedom and despotism is drawn just here. The form of government has
essentially nothing to do with it, except as it may give a greater or
lesser facility for disregarding the wishes of the taxpayer. THE POWER
OF TAXATION IS THE VERY ESSENCE OF DESPOTISM.
To the individual who is forced to make the transfer, there can remain
but little in the choice between the despotism of an autocracy, an
aristocracy, or of a democracy. It is a compulsory exchange, and carries
with it all the potencies of all the slaveries. For the power to enforce
taxation is the power to take the earnings of labor and make such return
as it pleases, or none at all; a result which chattelism hardly ever
gave.
Now, it is to such a questionable power which Mr. George and his
particular disciples look to right the wrongs of labor—and of
capital(?). They see no way to cease doing the wrongs or prevent their
recurrence, but have a “sovereign remedy” to apply to the mischiefs
which the wrongs produce. That is found in absolute power of taxation,
amounting to “confiscation” in respect to “natural rents,” and which Mr.
Clark suggests is not merely a natural right of government, but “the
higher law of property,” and which another disciple has discovered to be
the “missing link” between the Georgian theory and the “divine right.”
More metaphysical than his leader, Mr. Clark derives this law from the
“bounty of nature,” at the same time chiding Mr. George for using so
“inexact a cripple as the word ‘land’ to convey so vast a meaning.”
But Mr. Clark’s conclusion, that this “whole material universe outside
of man” should properly apply to matter transmuted by human powers (and
why not to those powers themselves?), as well as to the “raw material
and natural forces,” is unanswerable; and whatever is derived therefrom
should necessarily become subject to taxation or confiscation, as well
as the rent. There is no logical escape for Mr. George from this
dilemma, which seems only half comprehended by his disciple. For the
“natural(?)” profits and interest, as well as the rent, if they exist
outside of the exercise of forceful or fraudulent powers, are “unearned
increase” and a malappropriation of “the bounty of nature” which should
be confiscated or taxed back as the “birthright” of the whole people.
This is plainly the logical conclusion to the major and minor
propositions, and to stop the short of this is to dishonor the theory
altogether.
The truth, however, is that these propositions are merely sentimental
metaphysics and without the least practical importance whatever. If
there is a “bounty of nature,” it is for those who take it. Even Mr.
Clark’s, or rather Mr. Smith’s, apothegm that the “unconscious is the
property of the conscious,” amounts to this and nothing more. The
conscious or knowing appropriate that which is unconscious or unknowing,
and also that which is less conscious or knowing, as men with animals,
and superior with subject races of mankind. There is nothing
inconsistent in one of these syllogisms with any slavery or injustice
which the world has ever known.
With neither Mr. Smith’s nor Mr. George’s generalizations is there
anything incompatible in the taking of rent, interest, or speculative
profits, nor do they so much as allow that any escape is possible from
these acknowledged evils through any “bounty of nature,” or any workings
of the universe, but only through the intervention of some human device
like the confiscation of rent after it has accumulated by natural law,
or of getting in a “death rate tax” upon what nature would otherwise
bestow upon the conscious, letting the unconscious and the less
conscious go unfed and unclothed, and, in fact, devoured. This tax or
confiscation, then, so far from being in accordance with nature, is
corrective or subversive of nature according to the showing of its own
advocates, and is intended not at all to “complete economical science,”
as they claim, but to correct nature’s blunders.[21] What neither of
them seem capable of comprehending is that the civil power to collect
rent make compulsory exchanges and enforce unequal contracts is the evil
to be abated, and not the inability of nature to bestow her bounty as
she desires, or to effect the equality she intends.
Mr. Clark parades the great Peripatetic Philosopher as having given the
name “bounty of Nature” to the indescribable thing he bases his “higher
law of property” upon. I think it was the same philosopher who named
the, to him, mysterious rising of water in a pump, “nature’s horror of a
vacuum.” The one definition is as valuable in hydraulics as the other is
in economics.
The entire school are simply ignorant of, or else affect to ignore, the
“law of use,” or that the doing and enjoying of a use are inseparable in
nature. I find nature bountiful to me in causing the tree to grow which
I have planted and cared for, but it is bountiful to the grub, who,
“conscious” of its “property in the unconscious” tree, proceeds to
appropriate it, not by devouring its entire bulk, nor even “two per
cent.;” but by eating away a little, bark and sap near the ground,
which, however, girdles and destroys a noble fruit-bearing tree to
sustain its insignificant life for a brief season. Truly nature is
bountiful to him! I plant potatoes, squashes, etc., and nature
co-operates to make them grow with mysterious rapidity; but the
conscious Colorado and' the Gourd beetle claim their birthright in “the
bounty of nature,” and, in an inattentive hour, I find my plants
destroyed and hopes of harvest blasted. One is reminded of the answer of
the boy whose pious father was laboring to impress upon his mind the
beneficence of Providence in bestowing the long bill and long and
slender legs upon the crane in order that he might more successfully
prey upon the less conscious piscatory tribes, and thus secure a supply
of food: “Don't you think it rather hard upon the fish?” Natures gives
or parts with nothing. She tenders uses, but exacts return of every iota
of substance she intrusts to our care. Her invariable price for its use
is the labor necessary to avail oneself of its benefits. She exacts nor
permits rent, interest, or taxation, but repudiates them wholly and
throws them back upon labor invariably whenever presented to her for
cancellation.
Mr. George has saved the critic any necessity of applying the reductio
ad absurdum to his scheme, by insinuating that we can tax land, “whether
cultivated or left waste; wealth, whether used productively or
unproductively, and laborers whether they work or play,” although
premising at the beginning of the paragraph that “all taxes must come
from the produce of land and labor, since there is no other source of
wealth than the union of human exertion with the material and forces of
nature.”
Of all methods and schemes for ameliorating the condition of labor, that
of “tinkering taxation” is the most stupid when not criminal. To abolish
taxation altogether would certainly relieve its burdens. if century ago,
taxation was regarded as a very necessary method of sustaining the
church and promoting religion. A tithe of labor’s earnings was
considered no more than a fair compensation for religious instruction of
the people and their guidance in the path which led to future felicity.
It is not necessary to inquire now whether this was an equitable
exchange. We know it was mainly a compulsory one, and that it was this
prerogative to tax the people and enforce this compulsory exchange, and
not any tendency of true religion, which begat the wars and persecutions
generally known as religious. This power, which, for fifteen centuries,
was almost unquestioned in church or state, is now seen to be the most
pernicious thing, not even promoting in the least the purpose for which
it was professed to be employed.
Now, Mr. Clark, to correct nature’s mistakes in conferring her bounties,
proposes to empower the state to impose two tithes upon labor, for his
two per cent, upon all the assets, including land, would amount to about
twenty per cent, of the yearly production. Thus church and state might
both be endowed to look after the material and spiritual interests of
mankind, giving such return in the compulsory exchange as suited the
managers of each. This would give one in ten for our secular and the
same for our religious government. With respect to the church, however,
it is divided into so many sects that there seems no way but to make her
contributions voluntary, and each one pay what he thinks an equivalent
for her services, and so a free if not wholly an equitable exchange.
But might not the state also deal on the voluntary principle? I think
so; and then each one could have the form of government he preferred,
and pay as dearly or as lightly for it as he found to suit his ideas,
the same as he does in matters of religion, and might have free trade,
protection, or prohibition, fiat or metal money, as he individually
preferred. Since taxes can be produced only “by the union of human
exertion with the material and forces of nature,” the man should be left
free to choose the secular guidance and protection he thinks best, and
obtain it for himself at the most reasonable rates, as he now does his
religion.
The graduated tax proposition is much of the same nature as the
“confiscation of rent” or the “death rate” tax. They only vary in
detail. They are simply endeavors to remedy one “compulsory exchange” by
instituting another. For that rent, interest, and profits are the fruits
of enforced exchanges, must be regarded as proven. Through usurped
dominion of the land, class privilege, and private rights created by
arbitrary will, barbaric custom, and chicaneries of trade, rendered
possible of achievement by “fostering legislation” and a purblind
jurisprudence, labor is compelled to part with its natural wages, and
receive in return whatever capitalism and the government vouchsafe it.
This state of things our tax reformers do not at all expect to abolish,
by taking away these arbitrary powers and class privileges, but propose
to equalize things by another compulsory exchange, and so enable the
laborers to get square with those who have plundered and overreached
them. It will not work.
In the treatment of diseases of the human body it is important to know
the real symptoms, and to have an understanding of the disease they
indicate. This is a prerequisite. But a physician may be able to
determine this with a great deal of accuracy, and yet be widely wrong
with regard to treatment. He may be able even to trace these symptoms to
the disease and the disease to its inciting cause, and yet fail utterly
— a thing which he is pretty sure to do if he has more faith in
specifics than he has in establishing sanitary conditions. Now this is
notably the error of labor and economic reformers. They give an
admirable diagnosis of the derangements of the body politic, and trace
them directly, at least, to the immediate cause. But usually they become
infatuated over some specific remedy. This often, if not always, takes
the form of some statutory provision or positive institution which they
feel certain would cure the disease. A prohibitory or restrictive law is
the dream of the reformer who seeks to make the world temperate.
The financial, trade, and labor reformer, each seems to expect that the
enactment of a law will cure the disease which has its source in the
fundamental civil institution, and can only be eradicated by repeal and
not by passing new statutes. There is a singular similarity in the lines
of thought pursued and in the profitless results which have attended the
labors of such men. A few illustrations must suffice. Henry C. Carey
pointed out with great clearness some of the leading fallacies of the
two schools of economics in ignoring industry. In this respect his
treatment of the subject of trade was masterly and convincing, but when
he came to his favorite scheme, the taxation of the products of the
industry of other nations, his logic seemed to have failed him. We now
see how utterly its adoption has failed to relieve the evils it was
instituted to cure after a quarter of a century of high tariffs.
Edward Kellogg wrote a book on “Labor and Other Capital,” setting forth
in a most pithy and logical way the evils of interest-taking; and
putting the “just rate of interest” upon the only logical basis, the
cost of making the representative money and of keeping it in
circulation. But the moment he attempted to give a remedy his logic
ceased to serve him, and he put forth a scheme which, if it could have
been adopted, instead of relieving financial distress, would have made a
more complete monopoly of the money-making power than ever existed
before; would greatly have accelerated the monopoly of the land, and
given the land monopolist a monopoly of the currency also.
Last we mention Henry George, whose work on the monopoly of the land is
scientific as well as scholarly. As far as the diagnosis is concerned it
is conclusive. Yet, afflicted with a “remedy,” he falls into the most
inconsequent deductions and puerile speculations.
We shall give a cursory review to these schemes, but refer to them here
merely to show the tendency of reformers to be led astray by the idea
that some contrivance can remedy ills which are deep-seated, if not
constitutional, and which can only be eradicated by recurrence to first
principles and correction of the fundamental error.
A school of free-traders, represented by the Cobden Club of England,
have given the land question marked attention, and appear to have
considered that the removal of the legal difficulties in the way of easy
transfer of the possession of the land would remedy the evils which they
acknowledge to exist in regard to land monopoly and the abuses of
landlordism. Accustomed to the exclusive dominion of their land by a
hereditary class, and to the difficulty of obtaining land in small
allotments in consequence of the entail of estates, of the complicated
legal forms and expenses of conveyance, it is naturally imagined that
relief from these obstructions would greatly facilitate the
appropriation of the land among those who desire and are best fitted to
improve it.
But experience shows that these facilities will facilitate the
absorption of the land, as well as its general improvement, and thus
give a wider scope to the monopoly it is intended to remedy. No obstacle
in the United States has ever been interposed to the ready transfer of
the land. In the older states, it is true, where land has attained
fabulous prices, as in cities, there are difficulties in transfers, but
only through onerous legal charges in searching titles and in
conveyancing; but, in respect to new lands and in the country generally,
there are no such expenses; and while the government retains possession
of considerable tracts, actual settlers may enter without even paying
for the land more than the customary cost of survey and making of
patents. What the “Cobden Club” seeks for England, therefore, has,
almost from the first, been realized in this country. And yet, with all
our immense acreage of cultivable, timber, and mineral lands, the
results of forced competition are taking us with rapid strides in the
footsteps of the mother country. Have we not already passed her in the
mad race? Our parvenu millionaires equal her titled magnates in wealth.
Our paupers are quite as numerous or promise soon to become so. Our
landlords are as exacting, our rents are as high, and our tenants more
submissive. Our landed estates are as practically entailed as those in
England, and are being constantly increased by purchase, and never
diminished by sale, except by lease on time. The Mosaic law is wholly
defied and set at naught in buying, to which our laws furnish every
facility and sanction. It is scrupulously observed, however, in selling,
and none is “sold forever,” but only for a week, or a month, or a year,
seldom for a term of years. Our cities and country towns are largely in
the possession of such estates, and they are all the while increasing in
size and value more than in numbers. When one is broken up as happens in
exceptional cases, the fragments are soon gathered again by the still
larger and stronger ones. Some of these estates are older than our
government, and many are a century old. One of the largest, if not the
very largest, is regularly entailed, despite the genius of our
institutions, by a tradition in no wise confined to that particular
family, by which the holder, while living, deeds the estate to his
eldest or favorite son, leaving annuities to the other children. By this
means the valuation of the property is avoided, which could not be done
if a will were made or the property should be left by an intestate; it
is thus enabled to escape, in a degree, the burdens of taxation.
So much more favorable to the establishment of large estates are our
wide domain, our facilities for transfer and absolute proprietorship,
that large numbers of capitalists of England and other European
countries are availing themselves of the opportunities to do here what
would be quite impracticable for them now to do at home, build up large
landed estates, and where increasing population and an enterprising
spirit are sure to mass what economists term the unearned increment, but
what is substantially the increment earned by unpaid labor. It is
estimated that one-sixth of the large tracts transferred in our country
for the last fifteen years have been purchased by English capitalists,
and a large proportion by other foreigners. To make trade in land free,
in the sense of leaving it unrestricted as to private ownership, can
have no other tendency than to promote monopoly and ultimately reduce
the citizen to the condition of a serf-like tenant.
And yet this remedy is good, in as far as it repeals laws which restrict
the ready transfers of location and the exchange of the improvements one
may have made upon the land. The error lies in recognizing any title to
land but that of occupancy and labor; for, as we have seen, the land is
not a subject of exchange, as it can form no equation with labor.
Our constitution, then, as interpreted by our courts and legislators,
with its opportunities for enterprise and general growth and
development, still shelters and encourages the growth of a subtler power
than chattelism, which once reclined under its aegis. This power is by
far more dangerous because it pervades every section, overshadows every
interest, invades the home of every toiler, and bars opportunity to
every human effort. To make trade in land free, in the capitalistic
sense, bears the same relation to land monopoly that legalizing the
slave-trade once did to chattel slavery. I quote from Professor J. E.
Cairnes a paragraph pertinent to this issue: “In a contest between vast
bodies of people so circumstanced (destitute of land) and the owners of
the soil, between the purchasers without reserve, constantly increasing
in numbers, of an indispensable commodity, and the monopolist dealers in
that commodity—the negotiation could have but one issue, that of
transferring to the owners of the soil the whole produce, minus what was
sufficient to maintain, in the lowest state of existence, the race of
cultivators. This is what has happened wherever the owners of the soil,
discarding all considerations but those dictated by self-interest, have
really availed themselves of the full strength of their position. It is
what has happened under rapacious governments in Asia; it is what has
happened under rapacious landlords in Ireland; it is what now happens
under the bourgeois proprietors of Flanders; it is, in short, the
inevitable result which cannot but happen in the great majority of all
societies now existing on earth where land is given up to be dealt with
on commercial principles.”
While the advocates of free trade in land admit that it will result in
“unequal ownership,” it is but just to say that they readily acknowledge
a corresponding duty to labor or to the people disinherited by the
process to which they give the title of “distribution of burdens.” The
necessary sequence of such distribution is readily seen; indeed, has
always been acknowledged, and hence our poor rate system, our
almshouses, and “out-door relief.” Our education in common schools,
sustained by a tax on property, our governmental support of charities,
etc., are instances of its application. It is only necessary to say that
so far these distributions, however justified by necessity, are far from
satisfactory, and for this reason: With the unequal ownership resulting
from “unequal opportunity,” the burdens, however attempted to be
distributed by governmental intervention, result in shifting rather than
in distributing them, so that the burdens, as of taxes in every form,
fall ultimately upon labor and the industrial product of the country,
never upon the holder of the land or upon those who are enabled, by
treating land as a commodity, to obtain income without service. For
every item of tax laid upon the land is added to the rent; and profits
and interest increase as burdens or taxes are laid upon property or upon
business of any kind. As the merchant only directly pays the duties on
imported goods, and adds them to the price of his wares, usually with an
additional profit upon the payment, so the landlord adds his tax to his
rent-roll and the banker to his discount charge. Through every stage
this shifting process goes, until it reaches the worker, who has nothing
but his labor to sell, and particularly the agricultural laborer, who,
being last in the chain, finds it impossible to shift it upon nature, as
she repudiates the fraudulent subterfuge by which it is transmitted from
the pretended burden-bearer through every avenue of trade and industry,
to the remotest factor, the laborer. And if the burden has become too
great to bear he is crushed by it, for he cannot shift it farther or
escape it in any way. The land, not being movable, cannot be
transferred; hence only possession or occupancy can be exchanged. Being
no product of labor, it cannot be measured by labor or have a labor
price. A money price is therefore fraudulent.
Land can form no proper subject of sale, for these, among other
reasons: 1. It is not a production of human labor. 2. It is a heritage
of which no one can be rightfully deprived, or even divest himself. 3.
It is limited in amount and cannot respond to demand by increased
supply. 4. It is not subject to removal, and hence cannot be
transferred. 5. Ownership is limited to occupancy, and consequently ends
with the abandonment of the location, or with the decease of the
occupant.
To all which it is answered, that it is true the land cannot be removed,
but that property in land is merely a right to occupy and receive the
fruits of the land, “past, present, and to come,” “forever.” To which
the simple reply is that rights and duties are one and inseparable, that
the right to possess and use can only inhere with the duty of occupation
and use. Eight inheres in person with the duty, not alone; nor can the
duty be done by proxy. The usufruct of the soil is due to and goes with
the labor. It belongs to the living, not to the dead; to the working,
not to the idle. It is, therefore, not burdens which require
distributing but opportunities, and unless these are distributed the
burdens cannot be, and the attempt will ever result in shifting, not
equalizing them.
While, therefore, this school are entitled to much praise for their
treatment of the land question, particularly for the book “Systems of
Land Tenure in Various Countries,” they have, by no means, solved the
land problem. To subject land to the law of the market, or free trade,
can remove no radical evil connected with its monopoly. It would be at
best but a substitute for the feudal law or for the law of the stronger.
It might, by being complemented by a negative proposition, attain to a
salutary result in promoting the object sought—the increased aggregate
production of the land. This would also dispense with the cumbersome
machinery with which the advocates of nationalization propose to
accomplish their aims. I refer to the abolition of all laws enforcing
the collection of rent, and the practical application of the principle
of “Misuser” and “Non-user,” in respect to its occupancy or ownership.
Next to Free Trade in land, we may notice the plan of the English Land
Reformers to make the land national property. This is a proposition much
more radical than the “Cobden Club” has ever proposed, and is yet more
in keeping with the theory of land ownership in England, where the
system of absolute property in land has never been accepted. Under the
feudal system the rule of “free alienability” only applied to personal
property. Unlike the Roman law, under which a man was the absolute
proprietor of everything in his possession, including slaves, children,
and wife, the feudal theory was that absolute property in the soil
vested in the sovereign alone as the representative of the nation. “The
territory belonged to the nation as a body, but the sovereign alone
exercised all rights over it. Absolute property in the soil, either the
dominion of the Roman or the Allod of the German, is impossible to any
private person in England” (Macleod, E. E., p. 335).
To nationalize the land is, therefore, more in accordance with their
national traditions, and is merely for the nation to resume the
management of its estate, and reform its system of leases to
individuals. All ownership of the land there is compatible with such
change. And the only question seems to be as to the method of
redistributing the possession or occupancy. Mr. George is outspoken
against any proposition to remunerate land holders for the surrender of
their claims to exact rent and retain control. His reasonings are cogent
and convincing, but not conclusive of the matter, which will have to be
decided by practical compromise and not by abstract right. As between
the land holder and the tenant, the point is clear, and the natural
right of the cultivator to control his field or farm cannot be logically
questioned; but the relation of the state to the landlord is such that
it may justly consider whether, having so long upheld an outgrown system
and been a party to its abuses, it may not to some extent modify the
effects of summary restitution, and bear a portion of the burden which
may fall upon those who, without fault of their own, have been taught to
depend upon the reception of annual contributions from tenants and the
accustomed incomes from such privilege. To disestablish the system
without compensation or composition, would be to assume that the
landlords only are responsible for the system of tenure, under which
they exercise the rights of property in the soil. But this cannot be
justly done. Society is a growth in which all its members share the
responsibility. Land tenure was not invented and applied by the landlord
class. It arose out of the early assumption of power by military
chieftains and public rulers, and grew according to the state of
intelligence and social development of the people. And although it can
be traced in instances to unscrupulous usurpation, such usurpation
became possible only among rude and barbarous populations, who worshiped
brutal power, and servilely aided the forging of their own chains. Mr.
George draws a parallel between the land holders and the former
slave-holders of this country, and seems to imply that, as the latter
were not reimbursed for the loss of their slaves, neither should the
land holders be reimbursed for the loss of their revenues by the
surrender of their land to governmental control. But the parallel, to be
of any force, would require that the land holders should rebel against
the government which protects them in their property in land, as the
slave-holders did against the government to which their “institution”
owed its privilege to exist all. It was the desire of a number of
antislavery men, among whom was Gerritt Smith, to initiate measures for
the abolition of slavery by purchase, on the ground that the whole
country was responsible for its existence, the North as well as the
South, since the former had profited by the slave trade, in which it had
built up many, at the time, colossal fortunes, and also had largely
shared in the commerce and manufactures of the staple production of
slave labor. He assisted Judge Grimke, of South Carolina, to emancipate
his slaves, and would have largely contributed to effect so noble a
work, but his purpose was frowned upon by Abolitionists generally, and
was met with resentful denunciations by the political agitators who
claimed to represent the South. Had his advice been taken, it would have
saved the destruction of billions of property and a million of lives,
however open to objection it might have been in some respects.
We have another institution valued at say $30,000,000,000, exclusive of
improvements, which the stroke of a pen could render valueless, without
taking a dollar from the wealth of our country. Yet, if by some
compromise which should effectively abolish it, bloodshed and years of
strife and suffering could be avoided, it would be wise to adopt it. I
do not deem it essential to indorse any particular plan to effect the
object, as I think it inexpedient to invoke legislation to do anything
but take itself out of the way of social progress; but I foresee that
many attempts at legislation will be made, in the professed interest of
reform, and I can express a hope that such action will accord with
rational policy as well as with natural right.
For England, then, the nationalization of the land seems the orderly
thing to be done, if the state is to continue and government be saved
from anarchy. The original advocates of this theory favored compensation
of the land holders by the government. Mr. Alfred Russell Wallace, whose
“land nationalization” I deeply regret my inability to justly commend,
or extensively quote as I should desire, advocates the retention of the
incomes by the landlords for their lives, or for two or more lives of
persons now living. If fault can be found with his plan or reasoning, it
is in that he goes too far in the spirit of forbearance and
conciliation. Certainly no objection can be raised that his proposition
is unjust to the landlords, or in any way inconsistent with legal
tradition, or wanting in any practical feature. But when the land has
been assumed by the nation, a most important question arises as by what
method it shall be apportioned or redistributed. Mr. Wallace does not
propose that the government shall become a superintendent of cultivation
and use.
He says that “no state management will be required, with its inevitable
evils of patronage, waste, and favoritism.” He has adopted a phrase, if
not invented it, which expresses to me the true relation of man to the
soil. It is “occupying ownership,” and which I will allow him to define
in his own words: “Ownership of land must not be the same as that of
other property, as, if so, occupying ownership (which alone is
beneficial) would not be universally secured. A person must own land
only so long as he occupies it personally; that is, he must be a
perpetual holder of the land, not its absolute owner ; and this implies
some superior of whom he holds it. We thus come back to that feudal
principle (which in theory still exists) that everyone must hold his
land from the state, subject to whatever general laws and regulations
are made for all land so held” (p. 193).
I can only give place farther to his summary of the “necessary
requirements of a complete solution of the land problem as enunciated in
these pages.”
(1) “Landlordism must be replaced by occupying ownership.”
(2) “Tenure of the holder of the land must be secure and permanent, and
nothing must be permitted to interfere with his free use of the land, or
his certainty of his reaping all the fruits of any labor he may bestow
upon it.”
(3) “Every British subject may secure a portion of land for personal
occupation.”
(4) “All suitable tracts of uninclosed and waste lands must (under
certain limitations) be open to cultivation by occupying owners.”
(5) “The freest sale and transfer of every holder's interest in his land
must be secured.”
(6) “Subletting must be absolutely prohibited, and mortgages strictly
limited” (p. 192).
Mr. Wallace distinguishes between the value of land which is made up of
what he terms “the inherent value,” and the additions to such value made
“by the labor or outlay of the owners or occupiers.” The inherent value,
he thinks, “may conveniently become the property of the state, which may
be remunerated by payment of a perpetual quit rent.”
Greatly as I am disposed to follow up these quotations by other
extracts, it is diverging from the purpose of this essay to do so; for
the reader must have discovered that in his remedy Mr. Wallace has laid
aside the mantle of the patient investigator, which he usually wears,
and assumed the garb of the legislator; and instead of stating what is
in the natural relation of “man and the soil,” dogmatizes of what must
be. This is the more unfortunate since, in most instances, there seems
no need of it. His plan for legislating occupying ownership is wholly
unnecessary, as, in the absence of statutory enactments, that is
necessarily the extent of ownership, and the enunciation of a natural
principle of ownership is far better than any advocacy of a law
regarding it can be.
In this phrase and plan, however, Mr. Wallace has embodied fully the
idea put forth a half a century ago by Spence, Douglas, Evans, Van
Amringe, Hunt, Hine, Duganne, Windt, Masquerier, Devyr, and others,
viz.: Limitation to Property in Land. It is true that they, like Mr.
Wallace and Mr. George, depended on legislation to make good their just
and humanitary conceptions, and it seemed an arbitrary thing to do to
“make a law” restricting one in the extent he should follow his
inclination to “occupy the land.” But in the light of more recent
investigations into the rise and origin of property in land, and its
essential nature, it is seen that it has its natural limitations, and
that it is only necessary for legislation to undo what it has done to
bestow false rights and to subject men and things to unnatural and
therefore unscientific categories to promote distributive justice.
The tendency of advanced thought for many years has been to the
scientific method, and to place less reliance upon the empiricism which
finds its way into political platforms or becomes petrified in legal
form and enactments. The land and labor reformers have, to an extent,
shared in this advancement, and although many still fruitlessly follow
the ignis-fastuu which holds out the hope of legislating justice into
human relations and rectifying wrong by use of the ballot, the more
thoughtful see that only by exact knowledge of the elements of
industrial economy can they even be prepared to ask, much less to
enforce, the simplest equities.
To nationalize the land in the sense of Mr. Wallace would be a very
different thing in its effect upon labor from that advocated by Mr.
George and the other and earlier English reformers. Without the
principle of occupation in ownership, a system of leases from the
government, open to competition, and unlimited in extent, would result
no way different from the present system of deeds allodial or in fee
simple. In fact, it would greatly enhance the power of capitalism to
engross the control of the land, since it would relieve it of the
necessity of applying large amounts in purchasing the land which it
could secure the same control of by lease.
In reviewing land nationalization, the author of “Progress and Poverty”
cannot be overlooked, for we should not be justified in refusing to pay
tribute to his genius and the wonderfully lucid diagnosis of the social
disorder he has given us, however we may question the efficacy of the
specific nostrum he has compounded for a remedy. He has, I think,
indubitably proved that “the ownership of land is the great fundamental
fact which ultimately determines the social, the political, and
consequently the intellectual and moral condition of a people.”
But his remedy is the English idea of nationalization, plus the
confiscation of rent, minus the fixity of tenure, and limitation by
“occupying ownership,” so happily blended in Mr. Wallace's
proposition.[22]
Mankind have no experience which justifies the conclusion that taxing
back land values will reduce them, or work any such result as Mr. George
assumes. The value of land depends wholly upon the power to monopolize
it, and when such monopoly is complete, its value embraces the entire
product of the labor applied to it, minus the necessary amount required
to keep the stock of labor supplied; and until this limit is reached no
taxation can destroy it or seriously weaken the monopoly. It would tend
to discourage rather than promote the general desire to possess land,
while the increased hazard of retaining it would render the success of
the bold and unscruplous more certain. The history of taxation in all
times shows that speculation follows the channels of trade most beset
with obstructions, and avoids those which are most open to free
competition. The very opposite, therefore, of the assumed result, would
most probably take place, and the wealthy and adventurous would continue
to absorb the possession of the land and have all the more exclusive
control from the magnitude of the taxes they paid, and to which the poor
or timid worker could offer no serious competition. The successful
capitalist would then, as now, be able to shift the tax to shoulders of
toil, plus the profits upon the capital necessary to meet his dues to
the government, until the utmost limit of endurance on the part of labor
had been reached.
It would greatly augment and promote the reign of capitalism and
displace the independent worker who now cultivates his own acres, but
who would be then unable to compete with organized capital, employing
machinery and every facility which ready means would yield, and would be
compelled to give up his holding and sink into the ranks of the
proletariat. And yet he might survive long enough to greatly exhaust the
soil, make bare the forests, and reduce the productive power of the
land, driven by his necessities for immediate returns to meet the
competition rent, which the bidding of the well-fixed capitalist would
cause to be steadily raised, and to pay interest on means to prolong the
hopeless struggle.
With us, land holding is but the fulcrum of the capitalistic lever,
which is applied against minor land holders as well as against labor and
every profession and pursuit. Mr. George’s plan is really the one in
vogue to-day, which taxes through government rates and interest to
capital the whole value of the land as he proposes. Thus, if a man have
a house and lot, it is taxed by the state or county, the corporation if
in a city or corporate village, so that if he is owing a considerable
part of its value on bond and mortgage, he will really have about the
same rent to pay as if he hired from the principal landlord of the
place, who generally has things “fixed” with the assessors. And having
no mortgage on his premises, he is satisfied with a moderate interest on
his investment. Thus, in our cities, the small proprietors are
constantly being sold out for taxes and for foreclosures. Sale of land
for taxes is of quite an ordinary occurrence in the most populous
cities, as in the uninhabited districts not occasionally, but constantly
from year to year. In some cities, as notably in Jersey City and
Elizabeth in New Jersey, and in many others all over the country, taxes
have so increased as to leave the holder no recourse but to give up his
land whenever pressed for payment of mortgages of small amounts.
As an illustration of the above points, I refer to a communication in
the Democrat and Chronicle, of Rochester, N. Y., of Feb. 11, 1885. The
owner, who claims to have been a working man and to have laid the basis
for his possessions by hard work, attempts to combat the idea that rents
are too high and that taxes are paid by labor, to prove which he makes
the statement of particulars below:
[]
This is considerably less than two per cent, for money invested and
nothing for time and trouble of owner, and, as he says, he may sometimes
fail to collect a portion of his rent. Now, if on this more than
twenty-eight thousand dollars’ worth of property he had had a mortgage
of ten thousand, which is a moderate average proportion on mortgaged
premises in general, at six per cent, interest, he would be unable to
pay the interest from his rent by more than sixty dollars, and thus
become indebted to the capitalist, whom Mr. George supposes is equally
wronged with the laborer, by private property in land. How is it
possible not to see that property in land is so far from interfering
with the power of capital to lay labor under tribute that it is but its
chief instrument in effecting the spoil of industry?
Although this owner fails to make good his assertion that somebody
besides the laborer pays the taxes, since, if they had not paid his
rent, he would have had to pay the taxes out of his capital, which he
claims he produced by his labor, he justly, as well as naturally,
complains that his property is being confiscated by the “taxing power.”
He avers what is also declared in almost all localities, even by our
legislative reports, that small property holders are assessed much
higher in proportion than large estates, and thinks “if the system of
taxation continues, all small freeholders will be made paupers, since
they will be sold out to pay taxes.” In fact, this process is, and
always has been, going on. At certain times and places it becomes more
conspicuous, as in those to which we have referred, but that is its
normal, not its exceptional, manifestation which steadily extends the
power of taxing labor, both by the government and by the capitalist.
Although occupying radical ground in respect to the origin and functions
of government, I nevertheless foresee that in the condition of the
popular mind, uneducated and unthinking as it is on the great vital
questions of social and civil science, it is likely in most civilized
countries to remain without radical change for some time to come. Mere
forms, indeed, may change, but without any essential improvement.
France, under a republic, is scarcely less the victim of a capitalistic
rule than when under the monarchy or empire. In the United States there
are many respects in which human rights and interests are more exposed
to legalized spoliation than in England. Our tenure of land has wrought
as great disparities in a century with all our vast domain, as a
thousand years of feudal and monarchical institutions in thickly
populated Europe. But it will be long ere our people will outgrow the
childish civil and legal superstitions through which the rule of mammon
is sustained and kept dominant.
In pointing out some of the ways and means in which government may aid
the cause of science and of justice, if I have not the hope that it will
be directly effective to the desired end, I do hope that by suggesting
to the people what the government might do, it will call their attention
to what it actually is doing to keep them in ignorant dependence and
want, and have the effect to weaken the bonds by which they are held in
thraldom, and prepare them to dispense with such expensive luxuries as
are the systems which can do nothing for the worker, while providing
every facility to the Shylocks, the gamblers, and public plunderers to
ply their trade.
It may serve the purpose, at any rate, of indicating in a popular way
the course in which industrial reform is likely to be developed, with or
without the aid of ordinary legislation:
First. By repealing all laws in regard to land ownership, leaving
“occupancy and use” as it was originally, the only title to land.[23] To
do this while laws are still in some degree respected, will have a
tendency to assure the common mind in its reliance upon “statutory
provisions;” but it will at the same time greatly encourage
self-reliance and self-help, and tend to the equalization of possessions
and the more exact remuneration of labor. Being a peaceful and civil
reparation, it would doubtless take a compromising or graduated form,
something like that recommended by Mr. Wallace in his scheme of
nationalization; that is, by a prospective application in its
operation—those in present legal possession of land to remain so during
life or for a certain term of years; but no titles created or derived
subsequent to such change to extend beyond strict occupancy and use.
This would work no summary change, only a gradual one, and to which no
reasonable objection could be made, since no one would be dispossessed
of any right he now enjoys, but be only denied the privilege of
acquiring rights hereafter which are detrimental to the enjoyment of the
natural rights of others, and to the public welfare. If anyone would be
justified in complaining, it would be the disinherited worker who,
having all his life been kept out of his inheritance, should have it
returned to him, not only without delay, but with restitution for past
wrong. But the truth is, that he or his class are to a certain extent
responsible for this wrong, for to submit to injustice is wrong as well
as to inflict it. Moreover, if the disinherited class were informed of
their rights, and disposed to enforce them, each disinherited person
could at once have his proper allotment of land, abundant for the
exercise of his labor and the sustenance of himself and family.
But nothing seems more certain than that, if at present a part of the
workers should assert their natural right to “occupy the land,” they
would be evicted, or driven off at the point of the bayonet by the other
part — the landless, homeless hirelings of a government, run in the
interest of the landlord and capitalist. The instances where settlers
upon the public lands, in good faith and in accordance with the
statutory provisions, have been thus evicted at the instance of railroad
corporations or other magnates are too recent and too exasperating to be
detailed with composure; but they show what conditions exist, and how
hopeless is the prospect of any salutary reform being accomplished
except through the enlightenment of the people in respect to the nature
of man’s relation to the sources of wealth, and to the product which his
activity has created. It shows how requisite is the knowledge of what
social duty and honesty require of all, and also how desperate and
fruitless all attempts at summary and violent redress of grievances must
ever prove, until those who are to be benefited comprehend the nature of
their grievances and the intelligent methods of securing their
removal.[24]
It seems necessary to meet some objections from a source which we ought
not to have expected. The advocates of land nationalization, or rather
those who seek through taxation to rectify the injustice of land
impropriation, profess to see a formidable difficulty in the plan of Mr.
Evans for land limitation. They urge (1) that if land is allowed to be
private property at all, it must be absolute, and hence not subject to
limitation; (2) that many do not want land, and therefore an equal
division is impracticable; (3) that if that land could be equally
divided, it would soon fall again into a few hands; (4) and that to
establish “peasant proprietorship” and small allotments would tend to
lessen production and to increase, rather than diminish, the evils of
landlordism, since it has been found that in France, Belgium, etc.,
where subdivision has been carried to an extreme, the practice of rack
or competition rent is more common than in England, or even in Ireland.
Now, each and every one of these objections proves, mainly, that it is
vastly more easy to ignore than to answer a rational proposition, and to
refute a fallacy set up by one's self than to meet the reasoning of an
opponent.
As to the first, nothing is better known to the student of the land
question and its history than that property in land has assumed a great
variety of forms. That which comes nearest to being absolute was the
Roman dominium, to which ours corresponds, although with us the question
of its extent has never been challenged, as it ever was by the spirit of
Roman jurisprudence. For originally it was absolute only to the extent
of the domicillium, and the domain occupied by the family including
slaves; and the agrarian laws were compatible, not in conflict with it.
It was the increase in the slaves, and necessarily in estates to sustain
them, that led to the great possessions of the rich patricians, which
ultimately ruined Rome. It was by their intrigue and usurpation that the
agrarian laws were rendered ineffectual. It is thus seen that the only
absolute form of property in land ever known was consistent with a
“limitation of estates.” The “Laws of Nations” recognize the right of
prohibiting the sale of land to foreigners. The right of a nation itself
over the land is confined to its carefully traced and guarded
boundaries. It is war to seek their extension. But there are many forms
of property in land. It is impossible, under any system of law, to
occupy any portion of land without having property in it. In England,
where the “Allodial” form does not exist, there are “tenants in fee
simple, the uttermost degree of estate in land;” “tenants for life;”
“tenants by copy;” “tenants for a term of years;” “joint tenants in
common,” and “tenants by grand sergeantry,” all of which involve
“property rights,” and even tenants at will have a property in the land,
which may be determined and disposed of.[25]
To say that the state cannot prevent the dispossessing and destroying of
its people, is merely saying it has abdicated to capitalism.
The second objection, that all men do not want land, is false and
therefore fails. Every individual needs a place to live and work in. In
this respect our wants are nearly equal. The artist, teacher, trader,
and follower of any trade or profession not only require place but as
great a proportion of the products of the land as the cultivator
himself, and these he usually obtains without returning to the
cultivator a disproportionate service. It is sheer blindness, then,
which prevents his seeing that it is of equal interest to himself and to
the cultivator that the latter should have perfect freedom to produce
those necessaries from the soil without let or hindrance, and without
exaction or tribute of any kind. And until this fact is made plain to
the workingmen, their agitation is not likely to prove anything but a
disturbing cause, fruitless in any practical or beneficial result.
The third objection is the weakest of all. Even if true, it is no reason
why redistribution should not take place, as, indeed, history shows it
has been done repeatedly, and will continue, peaceably or violently,
until some such principle shall be recognized and applied as that
proposed, so as to render hereafter such reabsorption impossible. The
limit to property in human beings, now placed within the person of the
being himself, renders it impossible for another to own him. So the
limit to property in land being left where nature has placed it in that
extent which the person can touch and move in the direction of
production, places the question of its monopoly or malappropriation
beyond all cavil or controversy.
A word merely is required in respect to the rack-rent propensities of
small proprietors. It is perhaps true, since a man with a few dollars to
lend usually wants a higher rate of interest than the large banker is
willing to take. But this fact proves also that the land even in
Flanders is still largely monopolized and that men cannot obtain it to
cultivate without tribute, or find other labor to perform which will pay
better than cultivating the land at the competition rent. It proves also
that with the greater subdivision of the land there is greater ability
to pay a high rent than where the land is in a few hands, as in Ireland,
because there is a better field for industry and a wider opportunity for
diversified employment.
A writer in the Contemporary Review, referred to by Mr. Wallace,
attempts to prove the absurdity of minute division of the land by
showing that if every man and woman over twenty years of age should
claim their five acres, there would not be agricultural land enough in
England to supply them. Mr. Wallace patiently explains to him that a
great proportion of the people want only enough land for a house and
garden, not five acres, nor one, and that usually one man and one woman
would occupy that; that the majority would usually prefer their house
site on land other than good agricultural land. But the utter absurdity
of the objection consists in assuming, as it logically does, that the
proportion of the people to live upon and be supported from the land
would be changed by the greater subdivision, and that what was adequate
to their wants under a division so extremely unequal and unjust as the
present, should become wholly inadequate under a more equal and just
one.
But it by no means follows, because ownership of the soil should be more
equitably distributed, that therefore industry in its cultivation should
become less social. It would hardly be possible for it to become more
isolated than at present. It is inequality and injustice which isolate
and estrange mankind, so that while people may work in the same field or
factory they have no community of interest, indeed, no interest whatever
in what they do but only in the stipend which they receive.
With an equality of ownership, by which it is not necessary to
understand an arbitrary equality of division, there would be every
inducement to co-operate, and by concert and concentration of effort to
effect purposes which, by isolated labor, it would be impossible to
accomplish. I know of but one thing which could prevent extensively
organized co-operation, and that would be the disposition of a portion
to get the benefits without the sacrifice of the combined labor.
Nothing but this, or apprehension of it, could then, or does now,
prevent people from deriving all the benefits of associated industry and
of mutual and equitable exchange. Honesty is the mean between the
rapacity on the one hand and the blind charity on the other, which
reduces to poverty and then seeks temporarily to relieve it.
The co-operation and organization found to be based upon
well-established principles would be sure to be followed, were the
obstacles to their realization removed. And yet, every freedom to meet
individual preferences, so as to combine or work in isolation as one may
choose, would be retained; and the goods of society would not be
diminished, or social order imperiled thereby, because the individual
industry would be subject to equitable exchange, and the one choosing
the solitary life and labor would do so at his own expense. All things
are subject to the laws of growth, and industrial association will
develop only as the conditions are supplied. Equity and liberty are the
very first essentials to its existence.
In addition to repeal of laws in respect to land tenure, such as we have
suggested, such laws as discriminate against the worker may be repealed,
and the natural ownership of the worker in what he has produced be
allowed to have its operation. Nearly every extensive enterprise in the
country is the creature of statute law. Charters, “acts of
incorporation,” subsidies, especial privileges, are the means by which
some are enabled to thrive and prey upon the public. These all should,
and will in time, be put an end to; but while they are allowed to exist,
it would at least be a measure of justice, though a meager one, to
direct that such corporations should pay labor by an eight-hour
standard; that in addition they should credit each employee with a share
of stock corresponding to the nature of his employment, risk to health
and life, etc., so that he would not only have a title to his wages, but
to a share of the dividends. I am not advocating this as an abstract
principle, but merely suggesting it as one of the means by which an
equitable method may be approximated and gradually attained, if there is
such a disposition on the part of capitalists or of the legislature.
Upon their own grounds, capitalists cannot object to such modifications.
Their claim to compensation for the money or the labor they have
invested would be strengthened, not imperiled, by acknowledging the
investment which the workman has made. They say: “We have put so much
money into this mine; we have furnished the machinery—have paid the
wages. The laborer has wrought, to be sure, but he has received weekly
his wages, upon which he might get rich, if he would be industrious and
frugal as we were when we were laying the foundations of our fortunes.
We have all the risks to run, even to getting back the money we have
paid in wages. The property is ours, and the fruits of it belong to us.”
Let us see. The business has been a profitable one, or you would not
have pursued it. The money you put into it has been taken out of it
several times over, while the worker has only been paid back as much as
he put in, granting his wages to be fair. Has he run no risk? Has he not
every day imperiled his life to look after your property and earn your
income? How often have you had explosions, inundations, caving and
breaking of machinery, etc., by which life has been destroyed or greatly
imperiled? If a profit on your investment is just, how can you deny his
claim? If he is to be deemed paid when the labor he has put into the
work is paid back to him, how can you claim more after what you put in
has been returned to you? If he is entitled to no payment for risk of
loss of life and the stock of capital he put in—his labor—how are you
entitled to payment for risking your capital in the same enterprise? But
you say, “He was not a stockholder, and so not entitled.” But he was
your industrial partner, without which there would have been no
production, and all your investments would have gone to waste. To the
treasure within the mine your title was no better than his—not so good,
if he labored in bringing it to the surface, and you did not. “But lie
agreed for so much wages to do the work for me, and hence by contract
abdicated all claim to ownership in the thing produced or mined.” But
this is just the point at which government has doubly failed in its
duty, if it has one. It has allowed you to assume exclusive ownership of
the mine, which was a usurpation, since it belonged to the people, and
it then protects you in the enforcement of a contract you made with the
worker under such unlawful exclusion, and without informing him what his
natural rights were, either in respect to the mine or to the results of
his labor. The contract is therefore doubly void, and his claim is
unaffected.
Now, it is just as easy to recognize the rights of labor in any
enterprise as to define those of wealth. The principle of partnership in
production by all who join in the labor is so plain that no reason can
be given why it should not be adjudged the controlling law, whenever the
question of division is raised. Especially in all corporations working
under general or special laws, it may be required of them to make
division in accordance therewith. Workers can be permitted to draw
weekly or monthly allowances, which will be charged to them as to
members of a firm, and adjusted at the annual or other periodic
division.
In the absence of any governmental change, in its servile subjection to
capitalism, what shall hinder organizations of industrial and social
movements upon principles of natural right and equity? If, according to
the philosophy of Comte, it is important to “moralize wealth,” in what
more important point can the beginning be made than in “dealing justly?”
How become moral without ceasing “to steal?” If it is to include only
the adoption of means of relief and of charity, and to “distribute the
burdens” which fall with such crushing weight upon the poor, it may be
replied that its morality is already excessive. Behold the infinite
schemes of charity and of benevolent intent? They are only impotent for
good because they are complementary to spoliation and can never enable
the plundered to regain their loss, while encouraging mendicancy on the
part of the shiftless and improvident. Progress by such means is not
only too expensive socially, but becomes at last impossible. Just
measure, and not alms, is what the toiling poor require. To make wealth
moral is to restore it to its rightful owner, not in alms doled out of
withheld wages, but by ceasing to defraud the worker of his earnings.
What, however, the holder of wealth can do to remedy the evil to which
he has contributed—since the diversity of interests from which his
wealth has been derived may render it difficult for him to determine
with precision from whom it has been wrested, and in what proportion-—is
to begin some business or industry which will require employment for a
number of people, joining his own industry with, theirs, if desirable,
and, after making suitable provision for assuring the conservation of
the plant, and the inevitable charges against the enterprise, provide
for the distribution or rather division of the products of their joint
labors as the principle of partnership requires, labor performed being
the only basis of division.
By pursuing this course the management might be kept in the Lands of the
inaugurates until lie was satisfied as to the practicability of sharing
the control with his co-workers; but his legal control of it need not
necessarily prevent his dealing honestly with them.
The great difficulty in realizing any true system of division lies
largely in the habits and prejudices of the workers themselves. The
elevation of others above them as employers, bosses, or foremen has
accustomed them to look up with desire to positions which might give
them power over others and the ability to reap gains from others’ toil.
It seems to me most probable that the exact method of division will not
first appear in a union of workingmen, or of a co-operative organization
of labor and capital, but in the enterprise of some individual who will
be able to carry it forward and choose his partners in the work and in
the division. Such a one may or may not prove a “great captain of
industry,” but he will prove a leader and deliverer of humanity from the
thraldom of its needless bondage. Surely the century which has seen a
Girard, an Owen, a Peabody, a Smith, a Peter Cooper, and others who have
devoted wealth and time to promote human welfare and reverse the
conditions flowing from the iniquities of our civil and economic
systems, ought not to pass away without producing one man of wealth who
would be willing, in the interests of human industry, to apply his means
in demonstrating a social and economic problem, the possibility of men
dealing honestly with each other in production and division.
If I cherish less hope in respect to the immediate realization of some
labor co-operative movement of equal exactness and comprehensiveness, it
is in the discouragement which must accompany the tedious accumulation
of sufficient means by isolated labor to establish a movement of
sufficient magnitude to attract attention. The habit of the wage worker
of depending on the labor of the day for supplying the day’s
necessities, and of consuming in anticipation the fruits of his labor,
is unfavorable to any prolonged self-denial and the patient waiting of
those who would reap the whole result of their toil.
Without having exhausted, or even comprehensively stated, the problem of
social industry and social wealth in all their bearings, I find myself
at the termination of my effort disposed to review the field of labor
and summarize the positions and deductions arrived at in the course of
the investigation. And first, it has been shown that “the land is the
common inheritance of mankind,” and that this “common tenancy” is the
form of ownership to which the land systems of all peoples, at least of
the Aryan race, can be traced. That in detaching the several from the
common right, opportunity was given for the assumption of individual or
governmental control, as where the title was assumed to be in the head
of the state, manor, or even village. That under barbaric war, and the
subjection of the weak to the strong, usurpation, often from violence as
well as from the hoary abuse in the management of public trusts,
developed the power of one man, or of one class, over the common domain,
to the disinheritance of others.
It likewise appears that ownership in severalty was a foregone
conclusion as soon as progress through separate property in movables
began. To the primitive Communist this was no doubt a subject of deep
regret and apprehension. But improvement in social life would have been
impossible without it. What we are just beginning to see is that in
taking this advanced step, and through the ignorance and inexperience of
mankind at that epoch, the monstrous assumptions of dominion over the
land and over the man took their rise and laid the foundation of those
tyrannies and injustices, which only in the nineteenth century we have
begun to apprehend and combat successfully.
We have seen that monopoly of the land has no potency or significance,
except as the grand fulcrum upon which commercial monarchism rests its
lever to move and rule the world, and that it is this only which now
stands opposed to human rights and social progress. We have here no
landlords, and no monopolies of any kind, but what are created and
maintained in the name of commerce and of proprietary rights. This
usurpation is potent for greater evil than ever was feudalism.[26] It
lacks any shadow of justification, and exists only through an ignorant
regard of the people for the flimsiest forms and fictions of
class-imposed legalities. Otherwise there now appears no reason why
separate ownership should interfere or encroach upon the common
ownership of land— common in this still, that while one is allowed his
allotment in severalty he cannot exclude another from equal opportunity
and ownership.
Whether there is abundant, or only scanty, supply of land for all, has
no bearing upon the question, because the same proportion of people to
the land remains, even though the land were all owned by one man, or
divided among all men in proportion to their ability to improve and
occupy it. If there is enough for all, then none but the grossest animal
proclivity could oppose the equal enjoyment of all without let or
hindrance. If, however, according to the Malthusian theory, there is not
at the table which nature spreads sufficient room for all, then let them
take themselves away who have done nothing to furnish the feast, but who
devise measures to hold reserved seats, while those who have toiled to
place the viands upon the board are turned starving away. Nature and
religion teach us that “he that will not work, neither shall he eat.”
And if man has no natural right to anything else in the battle of life,
he has a right to fight for a place to do the battle.
It has been made plain, I think, that there is no great difficulty in
inaugurating a system of land tenure, which, giving opportunity to each,
would work wrong to none, but benefit to all. Such is the system nature
indicates, and to which only blind prejudice, puerile love of control,
and disposition to shirk duties, and to appropriate unearned
gratifications, stand opposed. The laws by which land is held by one to
the exclusion of others are incapable of justification on any moral or
economical grounds. Without the enforcement of such laws by the public
will, the natural order of ownership would take its course, as it
invariably has where the fallacy that natural rights needed to be
guarded by statute law did not prevail. It is substantially that natural
impulse which controls the settlement of new territories, the working of
mines, etc., where the laws are determined by common conscience and
common consent, as in the early settlement of California, and as
illustrated in the common law, grown up where statute law was silent in
regard to the occupation of land under water, in our rivers and
estuaries, where bivalves are planted and grown. Here the planter is
protected in his plant, but under such limitations as not to effect the
exclusion of others. This prevents monopoly of the spaces where oysters
and clams may be grown, and so allows each man an opportunity to employ
himself, or join himself to others in his labors. It prevents, also, a
monopoly of the trade in bivalves, and the public are thus protected
from combinations to obtain exorbitant prices, or to use natural
opportunies to exclusive private aims. It is therefore the tenure of
nature, not of the legislature, that we need. All we should ask of
legislators is to undo the bungling and partial attempts to supplement
nature.
So plain a subject should not need argument; and yet, so infatuated are
men with the idea of reforming things by legislation, and so
superstitious are they in their respect for anything “enacted into law,”
that they give no thought to the study of nature’s laws, and have no
respect for her silent, yet constant, intimations.
Not daring to trust themselves in a discussion of the question of land
ownership, our prominent economists adopt the convenient expedient of
ignoring it, yet still assuming that our laws of tenure are but a
rescript of nature or of the Divine Being, and that all proceedings
thereunder must necessarily conform to the law of supply and demand,
although well knowing that land traffic is a modern innovation. This
seemed to make it necessary to inquire into the origin of wealth, and
into the nature of the factors engaged in its production, also to
inquire into the relation of the active agents in production to each
other.
We have endeavored to show that land and labor are the only factors in
production, and that men engaging in associative enterprises are
co-partners. In doing this, we found it necessary to expose the
fallacies so common in the thoughts of business and even working men,
that goods, tools, animals, seeds, or commodities of any kind, or under
any circumstances, are agents in production, or have any power in
themselves to increase their economic values. Hence I had to consider
the ratios of exchange, service, and utility. And from this it appears
that land and labor can have no exchangeable ratio to their own
products; that labor, divorced from, or disinherited, of the land, is
only an abstraction without productive power, and that land without the
application of labor is unproductive of economic values. We have seen
that the whole device of income without work is fraudulent and without
the least justification in ethics or economics; that it vitiates all
exchanges with which it is connected, since what is produced by labor
cannot be brought into any exchangeable relation whatever with that
which it requires no labor to produce; that all exchanges which involve
pure profit, rent, and interest, to the extent that they involve them
are no economic exchanges whatever, but the fraudulent or hazardous
obtaining of something for nothing. And I do not flatter myself, I
think, in supposing I have made these points tolerably plain.
What alone causes me anxiety is that the world, sunk in its worship of
the power which large fortunes give, and in the unfraternal struggle
which is begotten of the operation of the very injustices exposed, shall
give little consideration to those showings, and little attention to the
facts which must be as apparent to all as to me. But reflections of this
kind have not deterred me from the work which seemed necessary to be
done.
Many questions which appear urgent and of importance to the time, as the
question of the currency, etc., I have barely noticed, not because they
are of little account, or because their solution can safely be deferred,
but because they have their special champions, and have already been
treated at length, if not exhaustively. Even the evils of our land
system I have not dwelt upon, as they have been set forth with much
force by the early reformers, and as well by Mr. George and Mr. Wallace
in a most impressive manner. They are apparent enough everywhere, if
people will think, and their deleterious influence surrounds every city,
town, or hamlet of our land, and presses with fearful weight upon the
child of toil. To sympathy and sentiment I have made no appeal, but to
the cool judgment and clear sense of right which cannot be wholly
wanting among mankind. I have sought to avoid denunciation of persons or
of classes. Mankind are much the same in all relations and conditions,
and if the position of the individual, master, and slave were reversed,
it would not improve the real character of the institution. The wage
worker of yesterday becomes the foreman, boss, or employer of to-day,
and carries the same heavy hand upon those beneath his authority as he
has experienced from those in authority over him. The victim of usury,
or the tenant impoverished by rent, no sooner changes position than he
becomes a usurer or rent-taker, and thinks the system a very good one
which enables him to receive the wages for which another works; and thus
a moral support is given to these customs and institutions which alone
continues them in power.
What requires to be done, then, is not the invention of some patent
scheme or sovereign remedy, but the diffusion of truth upon these
fundamental principles among both rich and poor, the intellectual
professor and the plodding toiler. Our system of education is deeply in
fault. To be educated in respect to one’s life pursuit is one’s first
need, since to provide for the wants of life is the primary duty of
each. Under private control of nature in her fields, forests, and
streams, and the unequal division resulting therefrom, the children of
the poor are kept in drudgery or taught worse than useless lessons,
wholly removed, as they mainly are, from any application to industrial
life. For practically, by example, they are taught to despise and shirk
honest labor, and to think that riches and enjoyment flow from a great
variety of circumstances rather than from patient toil. The quick-witted
child thus early becomes a very “prince of economists.” To get something
for nothing becomes a habit and a cultus, which, as he grows in years,
he tries to reduce to an art. If by shrewd device or subtle pretense he
can wholly escape work, and saddle the expense of life upon others, he
learns that under the teachings of our “exact economy” and “reformed
theology” he will be entitled to social distinction and respect, and to
have his position defended by learned professor and titled dignitary,
both secular and religious.
Thus, while the natural wants of men are few, and could readily be
supplied by a moderate application Of labor, the desire to obtain
artificial gratifications is without end, and the sheerest caprice
dominates the natural appetites where cost of production no longer
serves as a check to inordinate desire; and so unremitting toil is
thrown upon others. “Thus, by the treachery of one part of society in
avoiding their share of the work, by their tyranny in increasing the
burthen of the world, an evil is produced quite unknown in simpler
states of life, and a man of but common capacities, not born to wealth,
in order to secure a subsistence for himself and family, must work with
his hands so large a part of his time that nothing is left for
intellectual, moral, aesthetic, and religious improvement.” — Theodore
Parker.
The first requisite of education is to teach the child practically, as
well as theoretically, that the supply of human wants are supplied never
otherwise than by human toil; that labor is to be honored and followed,
as a means of enjoyment as well as duty, and that to endeavor to shirk
our proper share of it is the most childish and mean thing one can
possibly do, and is the one weakness we should seek to correct in
ourselves, or discourage in others. For even if labor were a curse
instead of the prime source of all intelligent enjoyment, how unmanly
and uncultured is that desire which would seek to escape it and let it
fall on those more feeble and already overburdened! No system of
teaching, it seems to me, has ever been so well calculated to arrest the
development of the child, in its stage of childish imbecility and
selfishness, as the comfortable theory that everything is right in
trade, and that “the law of the market” cancels all moral and humanitary
considerations. It is quite plain to me that popular education is doing
little to remedy the wrongs under which mankind are suffering. Its
text-books are emasculated of all manly thought upon the great question
of work and its awards. No references to the “peculiar institution” in
the days of chattel slavery were more studiously shunned, nor was its
nature more systematically misrepresented, than is now practiced in our
institutions of learning, our pulpits, and public press, upon this
question of labor and man’s right to the land and to the products
begotten of his toil. Exactness and honesty, without which advancement
in any science is impossible, are the main needs in the requisite social
education. Lacking these, there is little hope of attaining personal
security or social development.
Of the criticisms of the paid or truckling advocate I have no fear or
care. Even the toilers whose just claims only I have endeavored to
present are perchance as likely to censure as to praise, and to the
self-seeker there will be found little in these pages to interest or
entertain. Entering on my seventieth year, I have no ambition for place
or public recognition. Neither expectation of gain or popular applause
has stimulated me to this work, but simply a desire to arrive at truth
upon a subject of the highest importance to human well-being which can
engage the scientific mind. That I have been unable “to complete the
science of economics” should not be a matter of surprise, since no true
science is ever completed. Precisely the nature and extent of my
contribution will only be generally seen when that science shall have
become other than the empirical thing it now is, and be pursued for
nobler aims than the buttressing of class prerogatives, or the forming
of a base for partisan supremacy or the application of doubtful
remedies. Let the truth be sought. It only can make free, and liberty is
the very life of human progress.
To enable the ordinary reader to draw ready comparisons between the
latest school of economists and thelsonomic conclusions arrived at in
Social Wealth, I give a summary of each. The first, by Mr. Macleod, from
his “Elements of Economics,” pp. 220, 221, 222; the second, as they are
shown in our present investigation.
ECONOMICS, or the Science of Wealth, is the science which treats of the
laws which govern the relations of Exchangeable Quantities.
WEALTH is anything whatever whose value can be measured in Money;
consists exclusively of Exchangeable Rights.
PROPERTY is not a thing, but a Right—is equivalent to Absolute
Ownership.
JURISPRUDENCE is the Science of Rights.
ECONOMICS is the science of the Exchange of Rights.
ECONOMIC QUANTITIES:
1. Rights to Material Things;
2. Rights to Labor or Service;
3. Rights to things to be acquired at a future time—incorporeal
property.
VALUE.—Any other economic quantity for which a thing will exchange.
MONEY is anything whatever which a debtor can compel a creditor to take
in discharge of a debt ; also called Legal Tender.
CREDIT is a right of action against a person to pay or do something.
DEBT is used indiscriminately to mean the right to compel payment, and
also the Duty to pay or do a thing.
BARTER is the direct exchange of one commodity for another.
SALE, or Circulation, is where commodities are exchanged for Money or
Credit.
TO PRODUCE is to offer any Economic quantity for sale or Exchange.
THE PRODUCER is the seller.
PRODUCTION is the offering any Economic Quantity for sale or Exchange.
TO CONSUME is to purchase any Economic Quantity.
THE CONSUMER is the buyer.
CONSUMPTION is the Purchase of any Economic Quantity.
SUPPLY is the Quantity of anything offered for sale.
DEMAND means the Desire and the Power to purchase anything, and so may
be used to mean the Quantity of anything which is given in exchange for
anything else.
COST OF PRODUCTION is the cost of placing anything in the place where
offered for sale.
PROFIT is the difference between the. cost of Production of anything and
its value, or the Quantity of anything it can purchase.
GAIN.—Excess of Value over cost of Production.
LOSS is the value less than cost of Production.
RATE OF PROFIT is the Amount of profit made in some given time.
PRODUCTIVE LABOR leaves a profit after cost of Production.
UNPRODUCTIVE LABOR leaves no profit after defraying Cost of Production.
CAPITAL is any Economic Quantity used for the purpose of Profit.
Fixed Capital remains in the possession of the Capitalist, and from
which he derives a Revenue by its use.
Floating, or Circulating Capital, is that which he parts with, and whose
value is restored to him in the price of the Product.
RENT means Revenue, or an Annuity.
HIRE means the sum paid for a thing on a single occasion.
PAYMENT.—Whatever is received in exchange for anything else.
DISCHARGE is equivalent to payment.
SATISFACTION is anything which is received as final Discharge and
closing of any transaction.
CAPITAL.—The chief source of Increase. It is divided into natural and
artificial.
Natural Capital.—The land and the labor. There is in Nature no other
source of increase.
Artificial, or Institutional Capital.—Certain private rights created by
custom, statute law, or by the arbitrary will of some conqueror or
ruler, which enable one to force an Exchange or command labor without
equitable return, through usurped dominion of the land, ownership of the
person, or other civil device.
CAPITALISM.—That system of social or industrial institutions by which an
exploiteur is enabled to appropriate to himself the increase resulting
from industry, which belongs, and which would otherwise go, to the
laborer, or be returned to the land. An abnormal relation of labor to
commerce, which subjects labor to the control of an owner of the land,
or of any property or goods for which the land will exchange.
CAPITALIST.—One who becomes clothed with legal rights over the land, or
over the man, which authorize him to take from the laborer or from the
land the fruits of industry, to the production of which he has not
contributed.
COMPETITION.—“A seeking together.” It is free or compulsory, mutual or
antagonistic. It may be said to be free when natural opportunities are
enjoyed, and mutual when abundance of the thing sought is attainable. It
then relates only to the degree of success of each.
CONSERVATION OF WEALTH.—The act by which commodities or goods have their
exchangeable values retained through change of form or other means;
converting them into money or parting with them on credit is a common
means.
CO-OPERATION.—Operating together as co-partners, who stand in equitable
relation to each other. It is contrasted with contest, as of two hostile
armies; but allied armies co-operate with each other; also with
competition in its forced or destructive sense. It is not inconsistent
with emulation or free competition in exchange. One who applies his
labor to a specific industry, whether combined with others or otherwise,
and offers his product in honest exchange, is a co-operator in the best
sense, industrially and economically.
CREDIT ON DEBT. —An incompleted exchange, in which one party has
relinquished, and the other party has obtained, possession of any goods,
while the ownership of the goods or things for which they are, or are to
be, exchanged, remains in the hands of second party. As an act of
conservation, which it usually is, and in which alone it can have any
recognition in exact economics, there is in equity service done the
creditor, not the debtor.
DEMAND AND SUPPLY.—A phrase to indicate a short or excessive production
or use of a thing of commerce at any given time and place. Its operation
under freedom is to render stable the “ratio of exchange.”
ECONOMY.—The science which treats of the production and uses of goods.
It has three divisions:
Personal Economy treats of the prudent use of one’s force in procuring
goods, and the frugal use or consumption of the same.
Social Economy treats of the productive agencies of a society or
community, and of the division and exchange of products.
Political Economy treats of the relation of the government or state to
industry and commerce, and of the methods of raising and expending its
revenues.
INCREASE, natural.—The productions of land and labor in excess of
consumption in a completed period.,
_________, capitalistic.—Accumulations of wealth from arbitrary control
of land or of labor, without equitable compensation or return.
INCREMENT, unearned.—Additions of price to real and other estate, for
which no service has been rendered; but it is not therefore to be
understood that this increase is not taxed back upon labor—one of the
main abutments of the capitalistic theory of production and exchange.
INTEREST.—A fraudulent claim of one party to an exchange, by which a
charge is made for the “flight of time” between the inception and the
completion of an exchange; or it is a charge for having a value
conserved, and for which service compensation is due, not to the
creditor, but to the debtor.
MONEY.—A commodity, or the representative of a commodity, accepted by or
forced upon the " common consent," as an invariable ratio and exchange
tally.
PROFIT.—A false entry in the business ledger, in which a dealer charges
twice for the same thing. Firstly, for the service he has rendered; and,
secondly, for a profit on the goods he has sold his customer. The charge
which compensates all the service rendered is not profit, nor is such
increase of price as may be required to average risks, and guard against
losses unavoidable to the business.
RATIO OF UTILITY. —The relative proportion of services or goods to
effect useful ends in the sustenance of human life, and in the promotion
of human enjoyment. It is constant or invariable.
RATIO OF SERVICE.—The relative proportion in which different services,
as measured by their continuance in time, procure or produce useful
things, or effect useful ends.
RATIO OF EXCHANGE.—The relative proportion in which one service or
commodity will exchange for another service or commodity at a given time
and place. It is an ever-varying ratio, whose mean is the Ratio of
Service.
RENT.—“An immoral tax;” a tribute for privilege to be, to labor, or to
exercise the right and duty of Use. It is similar to profit and
interest, and constitutes the basis on which they both depend.
USURY.—The same as interest. The law which attempts to distinguish
between them has no ethical, economic, or logical basis; one, or one
hundred per cent, being the same in nature, and only differing in
degree.
VALUE.—An estimated ratio which one thing or service bears to another
thing or service. In relation to Money, it is Price.
[1] “Where industry is wanting, there can neither he honesty toward men
nor true worship of the Infinite Worker.”—J. H. Hunt.
[2] While claiming to be “an exact physical science,” it treats “values”
indiscriminately, whether increased or diminished by supply and demand,
or by the interference of unreasoning executive or legislative will; by
scarcity of a season, or the cornering of a market, or by any
speculative conspiracy; by the natural laws of trade, or by the
subjecting to the rule of the market “by act of parliament” and “force
of arms,” things foreign to its sway; and whether relating to the
commodities which may be increased indefinitely, or to the buyer and
seller, the men themselves, or to the land, of which no increased supply
is possible.
[3] “It is inequality in the wages of those who do the work of the world
which calls for the attention both of students and statesmen, and
inequality in what the wages will buy.”— Edward Atkinson.
By the latter he means that the man who gets the lowest wages pays the
highest, the retail price, for what he buys. Attention is called for,
also, to the disproportionate wages of those who do none of “the work of
the world.”
[4] Value, as defined by economists, is the ratio between two or more
exchangeable commodities, and is generally limited to cost of
production, or vibrates to either side by fluctuation of market. The
specific value of a particular thing at a particular time and place is
approximately the cost of reproducing or replacing it in the market,
rather than the actual cost of that identical article, which might have
been exceptionally great or small. I pointed out to Mr. Josiah Warren,
nearly forty years ago, that profits, rent, and interest entered into
“cost of production,” and that while they have a warranty for being in
our laws and customs, the enunciation of his formula “cost the limit of
price,” could have no practical effect except to direct attention to
these strongly intrenched wrongs.
[5] Not only does this assumed law of supply and demand utterly fail in
its salutary effect upon labor denied the Use of the land while exerting
to the full the baneful effects of a forced competition in its
operation, but upon land treated as property or capital it has an
opposite effect. Increased demand not only, as with commodities, begets
a temporary rise of price, but a continuous rise. Demand does not, as
with commodities, beget an increased, or any supply whatever. Thus,
while prices of commodities fluctuate and recede as much or more than
they have appreciated, through a brisk demand which stimulates
production, the price of land goes constantly upward with increased
demand, no production being possible or conceivable, except in regard to
lands transferred from a general to a specific use.
Of all commodities which can be held at a reserve price, land is the
chief. It may be said it is always held so, the exceptions are so few.
The reason is obvious. The land yields natural productions, and while
labor is excluded from possession, it will gladly purchase the privilege
oi gathering these products, or of applying itself to the cultivation of
more desirable products. The land is a more safe investment, and may be
held “for a rise” with. less risk than any commodity. It does not, like
other commodities, deteriorate in quality or shrink in quantity. As a
general thing, land is held everywhere for a rise. Where too much is
attempted to be carried, it is true, parties may have to unload, and
when mortgages are being foreclosed, or in business crises, there may be
a break in value, but it will only last while the lands are passing into
hands able to carry them. There is a considerable class of persons who
often buy but never sell real estate. In every city, town, and village
they are found, and indeed in all the country as well. Political
economists insist on treating both land and labor as both capital and as
commodities, yet the one, as we have seen, h mainly beyond the law of
supply and demand, and the other is subject not to a free but a forced
competition. Could a more valueless science be invoked to solve any
industrial problem?
[6] In 1835, under his teachings, the Charleston Baptist Association, in
its report, said it “did not consider that the holy scriptures had made
the fact of slavery a question of morals at all. The question is one
purely of political economy, viz.: Whether the operatives of a country
shall be bought and sold, and themselves become property as in South
Carolina, or whether they shall be hirelings, and their labor only
become property.”
[7] The testimony of John Roach and Jay Gould, as referred to above,
particularly emphasized the necessity that government should favor and
protect capital, but that labor, under our equal laws, had everything it
could reasonably ask. The latter-named gentleman, in a previous ex
animation before a legislative committee of the state of New York, in
1872, speaking of his action politically, had said: “I do not know how
much I paid in helping friendly men. We had four states to look after
and we had to suit our politics to circumstances. In a Democratic
district I was a Democrat, in a Republican district I was a Republican,
and in a doubtful district I was doubtful; but in every district, and at
all times, I have always been an Erie man.”
[8] I quote from Chambers’s Encyclopedia, Art. “Corn Laws,” published
fifteen years after their repeal. The italics are mine: “The results of
the repeal are well known. Every evil prognostication has been
falsified. Poor lands are as much cultivated as ever, and even more so.
There has been no stoppage of imports by war nor otherwise, nor are
there likely to be. . . . Instead of falling, the rent of land of all
kinds has risen, and tenants and proprietors are. alike satisfied. The
working classes are better, instead of being worse employed.”
[9] The practical consequences arising from the condition of industries
in this and other countries are not such as, for my part, I should find
it easy to reconcile with any standard of right generally accepted among
men.—Prof. J. E. Cairnes.
[10] Proudhon says of this reservation, “It saved the telling of a lie.”
[11] Agrarian Legislation of Prussia.
[12] Systems of Land Tenure in Various Countries, pp. 249, 250.
[13] According to Plutarch, “the first of Solon’s acts was that debts
should be forgiven, and that no man for the future should take the body
of his debtor for security. He valued himself for having liberated the
mortgaged fields and the mortgaged citizens of Athens.” Julius Caesar
enacted what Tacitus calls “a wise and salutary law, compelling
creditors to deduct from the principal of a debt whatever they had been
paid in interest, but which his successors, at the behests of Roman
capitalism, utterly disregarded.”
[14] “Since wherever a mouth and a back are created a pair of hands also
is provided, the inference is unavoidable that the hands are to be used
to supply the needs of the mouth and the back. Now, as there is one
mouth to each pair of hands, and each mouth must be filled, it follows,
quite naturally, that if a single pair of hands refuse to do its work,
then the mouth goes hungry or, what is worse, the work is done by other
hands. In the one case the supply failing, an inconvenience is suffered
and the man dies; in the other case, he eats and wears the earnest of
another man’s work, and so inflicts a wrong” (Thoughts on Labor:
Theodore Parker).
[15] This term is used by Mr. Wallace to signify the method of
landholding under “Land Nationalization.” It expresses, however, the
natural law of ownership more nearly than any term heretofore employed.
[16] Asserting clearly this principle, he yet seeks to tax away the
increase which is due to land and labor alone, and divide it between
capital and labor.
[17] This is as accurate as it would be to say: “The land, foundation,
and houses underlie all houses.”
[18] The right of use is an inseparable adjunct of the duty to use; it
exists in potency only where the power to use exists, as the right to
life exists only in the living; and all the advantages of a given use
belong to the DOER of it. A man may take helps or partners to perform a
use, but cannot farm out or sell any duty or use that God made his.
Neither the moral law nor any man’s duty under it can be changed by
human volitions, or agreements, or mandates.—I. H. Hunt.
[19] The idea of “honest money” as held by the capitalistic mind, is the
same as that which would be entertained by a merchant as to the “honest
balance,” with a movable fulcrum he shifted at will, as he bought or
sold in the same scales.
[20] This principle is well illustrated in the speculative farming which
has been carried on for several years in the West. So flattering had it
become, that many went into it with borrowed capital. This enabled the
special prod action to which it was directed to be largely increased,
resulting in a great decline in the price of wheat, and in the ruin of
many of the wheat-growers who had believed that credit was productive.
Such diversion of goods to speculative production through credit doubly
affects exchange: reducing the price of the product by increasing its
supply, while reducing the demand by withdrawing labor from or ceasing
to employ it in other industries which produce the things for which it
may be exchanged. The past year has been one of great disaster to such
production and a bounteous harvest for the Shylocks, while the small
farmer, who resisted the temptation to use credit, is comparatively
prosperous.
[21] It was said of the elder Beecher, that when spoken to about “The
Conflict of Ages,” written by a son of his, he expressed a regret, since
if “the Almighty God had got himself into a tight place, he did not
think Edward could get him out.”
[22] Although Mr. George has justly placed land ownership at the base of
the social and industrial fabric, he has utterly failed to apprehend its
relative magnitude as compared with the other forms of usurpation which
have grown out of it, and he is wholly mistaken as to its increasing
power of absorption over capitalistic increase, as we have seen in
comparing rent and interest. Their rate is the same, or nearly so. But
the amounts drawn from the wages of labor are constantly increasing on
the side of capitalism. Indeed, all the rent of the land is often taxed
away by the man of money who has a mortgage upon the premises. A
considerable part of the tribute paid ostensibly for the use of the land
is merely for the use of the money to purchase with or to carry on the
farm. In times long gone by the great incomes were nearly all from the
land. Now, and the proportion is constantly increasing, they are more
largely derived from trade, manufactures, and transportation. M. de
Laveleye notes this error, and says: “The value of capital engaged in
industrial enterprises exceeds that of land itself, and its power of
accumulation is far greater than that of ground rents. The immense
fortunes amassed so rapidly in the United States, like those of Mr.
Gould and Mr. Yanderbilt, were the results of railway speculation, and
not of the greater value of land. We see, then, that the increase of
profits and of interest takes a much larger proportion of the total
value of labor, and is a more general and powerful cause of inequality
than the increase of rent.”
And yet the monopoly of the land is the principal basis on which all of
these schemes to derive profits depend. Without a power to monopolize
the coal lands, our coal monopolies could not exist as now. And neither
could the transportation monopolies thrive without private control of
the road-bed and of the termini. The power of the landlord, the
capitalist, and the state to tax and oppress labor coincide in aim, and
generally in measures, and though they may sometimes wrangle with each
other as to the division of the spoils and the responsibility for his
ruin, they are united in regarding the laborer as a just subject to be
deluded and plundered.
[23] It has been said that “possession is nine points of the law.” Now,
if all statute laws in regard to land were abrogated, possession or
occupation would constitute the ten points, and the natural law of
property become the only one. To dispossess or evict one from his home
and the soil he has improved and enriched, would then cease to be a
private right and become a crime, because a forceful assault and
outrage, as well as the fraudulent and wrongful taking which it now is.
[24] The proletariat, in the last analysis, is the only one who really
stands between the worker and his natural right to land, and the just
remuneration of his toil, because the ultimate resort is to physical
force. When “bayonets think,” and the soldier fraternizes with the
people, then comes the end of monarchy and of all arbitrary power. When
the troops, ordered out at the behests of the corporation kings, refuse
to fire upon their own class, disputes between employer and employed
will be submitted to rational arbitration. And when workingmen refuse to
waste their force in voting the kept solicitors of capital into places
of power and profit, there will be more attention paid to their rights
by those who seek office.
[25] “The first thing the student has to do is to get rid of the idea of
absolute ownership. Such an idea is quite unknown to English law. No man
is in law the absolute owner of lands. He can only hold an estate in
them.” — Joshua Williams: “The Law of Real Property.” “So far is the
private ownership of an object from being inconsistent with the use
which the owner makes of it being limited, that it is precisely the
limitation on the use of such objects that make up the substance of more
than half the laws of the world.”— Mallock.
[26] “A proper feud was bestowed without price, without a fixed
stipulation, upon a vassal capable of serving personally in the field.”—
Hallam.
According to Hallam, also, the feudal system was originally “an alliance
of free land holders, arranged in degrees of subordination, according to
their mutual capacities of affording mutual support.”
“It practically, though imperfectly, popularized the doctrine of the
reciprocity of rights and duties—a doctrine alike essential to
individual morality and political freedom. It took mankind, after
Mammonism (under the now defunct Roman empire) had perverted most of
them into brazen prostitutes and rightless vagabonds, and gave to
everyone a fixed social position—a place that he could call his own, and
where his manhood could take root, and thus made it possible for them
again to feel, instead of feigning, respect and love for one
another.”—J. H. Hunt.
“What is sometimes called the feudal feeling has much in common with the
old feeling of brotherhood which forbade hard bargains.” — Henry Sumner
Maine.