Franklin Henry Giddings.

Democracy and empire; with studies of their psychological, economic, and moral foundations online

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inhabitants. By the graduated system of suffrage established
in Germany by the Electoral Law of 1849, one rich man ex-
ercised the same right of voting as seventeen who had no
property.

The suffrage having been narrowly restricted, the capi-
talist class next imitated the oppressions of the mediaeval
landed class in throwing the main burden of taxation upon
the poor. This was accomplished through the device of in-
direct taxation. While suffrage and representation were
based on direct taxation, great care and ingenuity were ex-
ercised to raise the greater part of the revenues of the state
by taxes on articles of family consumption, of which men with
no property but with large families must be the chief pur-
chasers. Again, the capitalist class imitated the landlord class,
by visiting social dishonour upon those whose sole maintenance
was labour. But as the trader of the Middle Ages could be-
come somebody by buying land, so the rag-picker could find
welcome into the highest social circles if he became a million-
naire. Finally, the capitalist class carried out its dominion
by supervising public education in its own interest, and
especially by similarly controlling the press.

But this period of history also, Lassalle declares, is virtu-
ally closed, little as outward appearances seem to show it.
The dawn of the new period began on February 24, 1848,
when a workingman was called into the provisional govern-
ment of France, which declared that the object of the state
was the improvement of the lot of the working classes, and



INDUSTRIAL DEMOCEACT 103

proclaimed the right of universal manhood suffrage. Power
has descended at last to the fourth estate, which is coexten-
sive with mankind. The fourth estate contains in its heart
no germ of a new privilege and " its interest is in truth the
interest of the whole of humanity."

Lassalle's historical survey is incomplete : many details
necessary to a perfect understanding of European social evo-
lution are omitted or ignored ; and his assumption that the
fourth estate contains in its heart no germ of a new privi-
lege, is an absurd untruth to which we must again refer.
However, it is certain that, in substantially the way which
he has described, power — a great deal of power — has de-
scended to the fourth estate. Consequently the working-
man's programme is of general interest.

As formulated by Lassalle, the programme demands, first,
universal suffrage. This is no magic wand; but it is the
only means which, in the long run, of itself corrects the
mistakes to which its momentary wrong use may lead. Sec-
ond, the workingman's programme calls for the reconcilia-
tion of class interests, through the equal distribution of
power, and the consequent moral regeneration of society.
Power coupled with privilege necessarily creates selfishness
and wickedness. Power exercised apart from privilege and
by all humanity must be for all humanity ; and the very con-
templation of thi§ idea is purifying and ennobling. Third,
the workingman's programme contemplates the expansion of
the state and its people, enabling them to acquire an amount
of education, power, and freedom that would have been un-
attainable by them as individuals.

Such was the workingman's programme, as conceived and
• presented by a brilliant and courageous socialist in 1862. If
now we compare with it the actual accomplishments and
present tendencies of the workingman's movement in the
United States, where political liberty affords the widest scope
for peaceful revolution, two deeply significant conclusions
emerge. We have gone a long way toward the realization
of the programme ; but the results have not been altogether



104 DBMOCEACT AND EMPIRE

what Lassalle anticipated, and some unlooked-for results have
followed, that are in direct contradiction to his predictions.

We will first observe the extent to which the programme
has been realized. Familiar with these historical facts, we
may next venture to consider some of the criticisms that
have been offered, or that may be offered, upon the use that
workingmen have made of their political power. This done,
it will be worth while to examine some of the non-political
methods whereby workingmen, largely in consequence of the
political movement, now share in industrial control. And,
finally, we must notice certain expectations that have radically
failed of realization.

The universal manhood suffrage that the workingman's
programme calls for, exists in most of our American com-
monwealths. Direct taxation, even in the form of an in-
significant poll-tax, is no longer a prerequisite to voting.
The conception of the state, too, which the programme offers,
has found wide acceptance. Beyond the disciples of Henry
George, and the believers in theoretical anarchism, very few
workingmen now subscribe to the old Jeffersonian notion
that the only legitimate duties of government are to protect
life and property and to enforce contracts. For more than
half a century, the wage-earning classes have been busily
engaged in securing legislation and administrative activity
in their own interests. The modifications of law and gov-
ernment that they have thus brought about have been of
every kind and degree, from the abolition of ancient statutes
curtailing their freedom of movement and of bargaining, to
experiments in positive socialism. It is worth while to ex-
amine some of these products of the political activity of
workingmen, noticing their character, the reasons for and
against them, and their probable consequences.

The wage earners, no less than the political economists,
have long understood that the " labour question " is not the
idle inquiry, " How may we stop the price-making action of
supply and demand?" So long as water finds its level,
abundance will mean cheapness, and scarcity will mean dear-



INDUSTRIAL DEMOCRACY 105

ness, be it a material commodity or a human service that is
offered in the market.

But the law that water will find its level is only approxi-
mately true. The water in the pipe never rises quite so high
as the water in the reservoir: it is retarded by friction and
the pressure of the air. For a similar reason, the equaliza-
tions of supply and demand are never perfect. Economic
movements are retarded by various forms of social friction,
and by that kind of pressure known as coercion. The Penn-
sylvania miner, for example, if his demand were unimpeded,
would buy his groceries of a village store at competitive
prices. But being constrained by a pressure of many times
the atmospheric normal, he buys at the company's " pluck-
me store," where he is systematically defrauded.

The ownership of capital is the best known lubricator of
social friction and, when skilfully used, an energetic coercive
force. The owner of abundant capital is able to save and
make at every turn by buying supplies and labour, and selling
his product, at the most advantageous points within a market
of thousands of miles radius. The .workman who has no
capital save his clothes and tools, and who is dependent upon
the immediate sale of labour for bread, is limited to the market
which lies within walking distance. Within this narrow
market, the relations of supply and demand may be all against
him. Five hundred miles away they may be in his favour;
but of what benefit is that ?

It follows that, when an employing capitalist makes a
bargain with men who have to sell their labour for a living,
it is easy for the former to throw upon the latter the losses
that economic friction and coercion create. Those who have
little may be compelled to pay tribute through every opera-
tion of purchase and sale, toward the further enrichment of
those who already have much.

A certain sort of employers have not been slow to see this;
and for centuries it has been their constant study to increase
the economic friction and restrictive pressure upon wage
labourers. It was for this that an English statute was enacted
in 1348, commanding labourers to work for the wages that



106 DEMOCRACY AND EMPIRE

had been customary before the relations of supply and demand
had been turned in their favour by the " Black Death." It
was for this that the Statute of Labourers forbade a labourer to
seek work beyond the parish in which he was bom. It was for
this that the ancient guilds of artisans were sometimes rudely
destroyed, and workingmen were forbidden to combine under
penalty of indictment as conspirators. But until very recent
years, no law was ever enacted to prevent combinations of
employers. " Masters are always and everywhere in a sort
of tacit but constant and uniform combination, not to raise
the wages of labour above their actual rate. To violate this
combination is everywhere a most unpopular action, and a
sort of reproach to a master among his neighbours and equals.
We seldom, indeed, hear of this combination because it is the
usual and, one may say, the natural state of things which
nobody ever hears of. Masters, too, sometimes enter into
particular combinations to sink the wages of labour even
below this rate. These are always conducted with the ut-
most silence and secrecy until the moment of execution ; and
when the workmen yield, as they sometimes do without
resistance, though severely felt by them, they are never
heard of by other people." So wrote Adam Smith more
than a hundred years ago.

Workingmen have not been blind to the ways and means
by which their freedom to profit by an unimpeded movement
of supply and demand has been restricted. For generations
the more intelligent among them have been watching for
opportunities to organize counteracting agencies. Universal
suffrage and, in the community at large, a broadened sense of
justice, which political liberty has fostered, have put them in
control of the law-making power so far as its relations to their
own liberty are concerned. Beginning with the abolition of
ancient statutes that restricted their freedom of residence
and punished as conspiracy all attempts to organize in oppo-
sition to employers, they have secured practically absolute
freedom to go and come, the right to organize trade unions
and other labour associations — on any scale which they find
practicable and advantageous — and, most important of all, the



INDUSTRIAL DEMOCRACY 107

right to organize combined resistance in the form of strikes.
In addition, they have in the United States secured federal
statutes prohibiting the importation of foreign labour under
contracts that often were little better than slave buying; and,
in many commonwealths, they have abolished by law the
truck system of payment, and have restricted the sale of con-
vict labour at prices far below normal wage rates. Thus they
have turned upon the employers precisely that agency which
for centuries was used against themselves. And all these
measures have had in view the one perfectly definite object,
of enabling workingmen to bargain with their employers on
terms of approximate equality.

These measures, however, have been but the beginning of
the legislation through which workingmen, in the enjoyment
of political power, have attempted to better their condition.
Almost as important as the conditions under which the labour
contract is made are the conditions imder which the day's
work is performed.

It is one of the fundamental contentions of industrial
democracy that the wages system, however ameliorated by
labour legislation and by the influence of labour organiza-
tions, remains inherently defective from the standpoint of
democratic principle. It is interesting to find one of the
most vigorous champions of a radical individualism — one to
whom the very name of socialism is an offence — in perfect
accord with radical socialistic teachers on this one point.
Throughout his "Principles of Sociology," Mr. Herbert
Spencer has contended that social evolution has been a
progress from coercion to freedom, from status to contract.
Having shown this progress in the development of domestic,
ecclesiastical, and political institutions, in the concluding
part of his final volume he carries the thought into the
interpretation of industrial arrangements. To some of his
readers the unexpected, and to all of them the most interest-
ing, phase of this interpretation, is Mr. Spencer's contention
that the wages system is not a perfect substitution of con-
tract for status, and that it cannot be regarded as final. He
says, " So long as the worker remains a wage earner, the



108 DEMOCRACY AND EMPIRE

marks of status do not wholly disappear. For so many hours
daily, he makes over his faculties to a master or to a coopera-
tive group for so much money, and is, for a time, owned by
him or it. He is temporarily in the position of a slave ; and
his overlooker stands in the position of a slave-driver."

Nevertheless, inherently defective though it may be, the
wages system is, after all, greatly modified and mitigated
when the wage earners themselves, to a great extent, fix the
conditions under which their labour is performed, instead of
submitting to conditions dictated wholly by employers. And
this, to a very great extent, modem industrial legislation
has accomplished. In all commonwealths, we now find laws
limiting the hours of labour of children and married women,
and, in some instances, those of adult males also ; laws pre-
scribing times and methods of wage payment, extending and
defining the liability of employers for injury by accident, and
strictly prescribing sanitary conditions; and administrative
agencies, such as boards of factory inspectors, to carry such
legislation into effect. Thus, to a very great extent, work-
ingmen have already modified the regime of status which
survives in the wages system, by themselves determining and
enforcing the conditions under which their daily labour is
performed.

If the greater equality in bargaining and the improved
conditions of work which wage earners have secured through
the exercise of their political power were the only results of
their enfranchisement, it would be admitted that an impor-
tant part of the workingman's programme had been carried
into effect. In reality, it is necessary to admit more than
this. In addition to these things, the workingmen have
greatly modified the conditions under which they live.

They have done this, in the first place, by the restraints
of law which have been brought to bear upon all corporations
in their relations to the consumer. The past twenty-five
years have been a period of incessant activity by legislatures
and courts, in prescribing the duties and limiting the powers
and privileges of railway and express companies, telegraph
companies, industrial combinations, and trusts. Discrimina-



nroUSTRIAL DEMOCRACY 10&

tions have been forbidden, many forms of combination in
restraint of trade or of competition have been pronounced
unlawful, and even the rates or prices charged havp been
either fixed absolutely or limited to certain maximum figures.
So far, indeed, has this kind of legal activity been carried
that many business enterprises have been brought to ruin,
and the limits beyond which public control of corporate busi-
ness cannot pass without destroying the business itself have
been gradually coming into the view of both courts and
legislative bodies. There is every reason to expect that, as
these limits are more clearly perceived, the rule of live and
let live will be accepted by all parties in interest. The gen-
eral fact, nevertheless, will remain true, that the masses of
the people have discovered their power to control the con-
ditions of corporate business activity; and that, while en-
deavouring to use this power justly and expediently, they will
not permit the power itself to be abridged or forgotten.

In the second place, the working classes have enormously
ameliorated the conditions under which they live, through
the exercise of the taxing power of the state. The evolution
of taxation has not, indeed, been exactly what Lassalle ex-
pected. He would have predicted that one of the first acts
of an enfranchised fourth estate would be the overthrow of
indirect taxation. Yet it is precisely in the United States,
where the fourth estate is a more important political element
than in any other country, that indirect taxation is most
firmly established. Nevertheless, by means of taxation, the
fourth estate has obtained comforts and opportunities that
were hardly within the reach of the boui-geoisie at the begin-
ning of this century. The system of public school education
has everywhere undergone an enormous extension, so that
to-day, in many states of the American Union, a child of the
people may pass, at the public expense, through every grade
of instruction from the kindergarten to the completion of the
university or professional course. Expenditures for parks,
streets, baths, sanitation, and adornment also are everywhere
increasing at so rapid a rate that not only the outward appear-
ance of all large cities is being transformed, but their actual



110 DEMOCRACY AND EMPIRE

■comfort and healthfulness are being materially increased.
In addition to these things, public revenues are being more
and more extensively used to create public property, either
outright or by the purchase of the property of private cor-
porations. Street railways and lighting facilities are in
many places passing under municipal ownership; and no
one can predict to what extent this movement may continue.
No one can say with certainty that a popular demand for
the public ownership of all means of transportation and com-
munication may not ultimately make the state the sole owner
and operator of railroad and telegraph systems. As in the
case of the legal control of corporate business, however, a
limit to the further extension of this mode of activity appears
to be not distant. The increase of municipal and state in-
-debtedness has become a formidable fact of modem public
finance, and it is more than doubtful whether rates of taxa-
tion can be raised much further, without bringing about a
powerful organized resistance, or some radical change of
method. When, as in the city of New York, the rate of the
property tax has risen above two and a half per cent on a
continually rising assessment, and threatens to approach one-
half of the average annual income from investments, it is
apparent that not much further progress can be made along
this particular line of advance.

Such are among the achievements of industrial democracy,
as it has thus far been developed through the exercise of
political power by those large classes in the population
which, until the present century, had no share in the making
of laws or in determining the activities of government. Such
extensions of governmental functions, and such new dispo-
sitions of public revenue, have not been accomplished with-
out provoking earnest protest on the part of classes whose
powers and privileges have been abridged, or without calling
out emphatic warnings from thoughtful men who have seen
in these new developments grave dangers to social order and
human welfare. We need not trouble ourselves to consider
the objections that spring from class interests; but it is



INDUSTRIAL DEMOCRACY 111

desirable to glance at some of the rational arguments that
may be brought against the programme of industrial democ-
racy, and endeavour to discover the principles, if such there
be, which determine to what extent the workingman's pro-
^amme may be* accepted as expedient and right.

Among negative criticisms, the one that undoubtedly has
the greatest strength and has been most forcibly presented,
is founded on the relation which public burdens of every
kind bear to the welfare of the middle class. Doubtless it is
to Professor William G. Sumner that we owe the clearest
■conception of this problem, which he has presented in a great
number of discussions and in a great variety of lights. It is
a matter of no importance. Professor Sumner thinks, that a
society presents extremes of economic condition ; but it is of
great importance that the middle class between the extremes
shall be well developed. No society that consists of the two
extremes only is in a sound condition. In an ideal society,
the great mass of the population would fill the middle range.
Whatever crushes out the middle classes, makes the rich grow
richer and the poor poorer. And Professor Sumner affirms
that all social burdens, such as military service, taxation,
insecurity of life and property, have this tendency, since they
•cannot be distributed in proportion to ability to bear them.

Many historical facts seem to confirm this contention. In
the Roman Empire, the burdens of military service and tax-
ation divided society into the two classes, creditors and
debtors ; and in time the debtors became slaves to the credit-
ors. While one man found himself just well enough estab-
lished to endure the burden without being crushed, another
found that the time demanded, or the wound received, or the
loss sustained from an invasion, forced him into debt and
sealed his fate. The disorder of the Middle Ages enabled the
man who was just strong enough to maintain himself, to
become a lord. The man who was just too weak to sustain
himself became the lord's vassal. A like effect has always
resulted from taxation. The lowest sections of the middle
«lass, consisting of those who are struggling out of wage
service into independent self-employment, with a small capital



112 DEMOCRACY AND EMPIRE

accumulated by saving, are liable to be thrown back by any
increase of their burdens.

From facts like these, Professor Sumner concludes that all
unnecessary action by the state necessarily has the effect of
increasing the evils that social democrats most deplore. It
inevitably makes the rich grow richer and the poor poorer,
since the state has nothing and can give nothing that it does
not take from somebody. Consequently, in his judgment,,
and in the 'judgment of thousands who accept the reasoning
which he follows, we have nothing to hope for from a gov-
ernmental management of means of transportation and com-
munication, from a municipal ownership of the means of
street lighting and street railways, and from an elaboration
of the system of public education. Furthermore, and perhaps
of greater importance, governmental interference in the rela-
tions of employer to employed, such as the limitation of the
hours of labour, the prescription of kinds and modes of pay-
ment, and all interference with individual freedom, must be
condemned on the same general ground. All these things,,
whatever their value, have a certain cost which the public
must bear ; and that cost, unequally distributed, necessarily
falls on the weaker members of the independent middle class,
and always may operate to throw some of them back into-
the condition of wage earners.

In reasoning of this kind, it is important to scrutinize the
minor premise. It always is possible that any particular case
does not properly fall within the class to which it is
assigned.

Whether taxation and the extension of state functions have-
the effect that has been described, depends not at all upon an
absolute increase of a social burden. A burden that is abso-
lutely large may be relatively small, when compared with the
benefits secured. Thus no one would maintain that the taxation
which supports the agencies by which civil order is established
tends on the whole to make the rich grow richer and the poor
poorer. By Professor Sumner's own showing, it has the op-
posite effect. We must admit, then, that quite possibly other
governmental action also may, on the whole, diminish social



INDUSTKIAL DEMOCRACY 113

burdens more than it adds to them. Beyond any doubt the
government post-office does this. Private corporations carry-
ing the mails would discriminate in favour of rich sections and
rich patrons, just as railroad corporations do ; and, to that ex-
tent, they would help the rich to grow richer and the poor
poorer. In and of itself, however, this fact does not prove that
railroads and telegraphs also should be turned over to govern-
ment management. When that question is raised there are
many other considerations to be examined. At the same
time, it is obvious that a governmental function, when criti-
cised with reference to its tendency to increase or to diminish
economic equality, cannot be condemned solely on the ground
that it is a financial burden which will be unequally borne,
until a careful inquiry has been made into the distribution of



Online LibraryFranklin Henry GiddingsDemocracy and empire; with studies of their psychological, economic, and moral foundations → online text (page 9 of 29)