Frederic Clemson Howe.

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hunger, and his place may be filled at any mioment
by an advertisement in the newspaper.

It must be evident that from now on wages will
tend to the margin of subsistence. What does it
cost to feed, clothe, and keep the average worker
from starvation? That is the measure of his cost
to the employer. His price is fixed, just as is the
price of competitive commodities, by the cost of
production. The struggle of increasing popula-
tion against diminishing opportunity, of increasing
consumption against decreasing supply, will reduce
wages to the margin of subsistence, just as the in-
come of the cottier tenant in Ireland was reduced to
a potato diet by the hunger of others, eager to offer
all that they could produce for the mere privilege
of having a place upon the earth whereon to work.

We can see this process already at work wher-
ever land monopoly is most complete. It is evi-
dent in the tenement districts of our cities, where
the struggles of surplus labor, of rack-renting, and
of periodic evictions form the saddest sights of the
slums. It is manifest in the anthracite and bi-
tuminous coal regions, where the miner is reduced
to a bare subsistence wage, and is kept in such a
state of dependence by the operators that he can-
not even protest against the death-traps wherein
he must either labor or starve.

We can see the reduction of labor to a subsist-
ence wage in every great city. There every material


advance expresses itself. There men and women
work with greatest intensity, while labor-saving
machinery is most highly developed. There labor
is most minutely divided. In the cities wealth is
produced with the minimum of manual labor.
And here the per capita production is greatest.
There, then, we should expect civilization to flower
into universal well-being. There want should be
confined to those whom illness or idleness has con-
demned to it. Yet, in every one of our large cities,
at least one-quarter of the people are hovering
upon the border-line of want or are actually en-
gulfed in poverty. Another quarter are struggling to
maintain an existence that varies from that of com-
fort to one that is far from enviable, while a small
group are enjoying incomes far in excess of all hu-
man needs.

Wherever the monopoly of the land is most com-
plete, there the fiercest wars of labor and capital
have taken place. Labor does not organize in a
newly discovered mining region, for every worker is
a prospector. He works for himself. It is only
when monopoly has laid its hand upon the region
and enclosed the opportunity for independent min-
ing, that the wages system comes into existence.
In the early days of California, wages were fixed
by the returns of the independent prospector. No
one would work for another for less than he could
produce from his own claim. The same was true


in the early days of the Alaskan gold-fields and the
Tonemah and Goldfield districts in Nevada. The
great labor wars of these districts followed close
upon the monopoly of the regions. So long as op-
portunity was free there was no conflict, for the
worker could change his hand at will.

The history of all mining regions is the same.
There were no serious strikes in the anthracite coal-
fields so long as competition prevailed. ''Before
the Civil War amicable relations prevailed between
the co-operative forces. Then in the majority of
collieries employer and employes lived side by
side, and could peaceably adjust their differences. " ^
But where formerly there was peace, now there is
recurrent industrial warfare. Not only warfare,
but the most complete subjection of the worker.
Three-quarters of a million people are dependent
upon the will of a half-dozen men who determine
over a luncheon whether there shall be work or
idleness, as to what those who labor shall receive
in wages, and when their labor is over, what they
shall pay to the mine-owners for the necessities of

Organized labor is correct in its diagnosis. It is
correct in speaking of the servitude of labor. But
servitude is not confined to those who work at the
bench or in the mill, in the mine or in the factory.
Servitude is a condition into which all classes are

• The Anthracite Coal Indxistry, Roberts, p. 104.


born, in every nation and under every flag, where
the right to use the earth is dependent upon the will
of another. And the servitude has been the same,
whatever the form of the tribute, from the age of
serfdom down to the present day. And it rests
upon all alike, whether they work with their hands
or their brains, whether they be skilled or unskilled,
whether they be artisans, artists, professional men,
or capitalists. It is the servitude of those who
labor to those who labor not at all.

And the results which follow from the private
ownership of the land are as immutable as the laws
of nature herself. That rent is the great absorb-
ent, gathering to itself an increasing portion of the
wealth which is produced, is so obvious a fact that
it should be the fundamental postulate of pohtical
economy. That the ultimate consequence of this
phenomenon is the impoverishment of capital as
well as labor, may be seen on every hand. That it
leads to an ignorant and impoverished peasantry
on the one hand, and an idle and irresponsible
aristocracy on the other, is the experience of all
nations. And we cannot hope to escape the con-
sequences of these laws in America through any
declaration of political freedom any more than
the superstitious savage can ward off disease by
incantation and sacrifice.


The production of wealth enlists the co-operation
of all learning. It engages the best thought of sci-
ence. It is promoted by every agency of govern-
ment. We know to a fraction the cost of every
commodity and the annual value of our output.
The increase in the production of wealth is heralded
to the world, as is every invention which stimu-
lates the efficiency of labor. Yet we know prac-
tically nothing of the laws which govern the dis-
tribution of wealth. The university is silent on
the subject. It remains almost unexplored by the
political economist. The splendid foundations for
the promotion of scientific research neglect this,
the most important concern of man, for the study
of the earthworm and the oyster.

We have sadly inverted the importance of things.
It is of comparatively little advantage to society
that one man can produce a hundred pairs of shoes
where but a single pair was produced a generation
ago, if his labor still gives him but a single pair of
shoes. It is of small profit to humanity that the
annual production of wealth now amounts to
$1,170.20 per family, if an increasing percentage



of the population still receive but the barest neces-
sities of life. The many aids of the government
are an empty service to the farmer, no less than
to the consumer, if the improvements in agricult-
ure are all absorbed by the railways, the ware-
houses, and packing establishments, just as it is
an empty service to the wage-earner to be trained
to perfection in technical schools, if the result of
his training is all appropriated by another.

There must be an answer to the question of why
the few receive more than they can possibly earn,
while the millions receive less than they absolutely
need; why it is possible for an Astor, a Rockefeller,
a Carnegie, or a Morgan to pile up wealth which
runs into the hundreds of millions, while other
men of equal talent and industry produce no more
than a living, while millions never rise above the
fear of sickness, a period of industrial depression,
or some calamity which temporarily disables the
producing member of the family.

The explanation of this mystery has been sug-
gested in the preceding pages. Those who have
followed the tendencies there described have seen
emerging an explanation so obvious and so simple
that it should have become the commonplace of
political economy. We have seen how the Ameri-
can continent has been peopled by successive gen-
erations of pioneers spreading out from the At-
lantic seaboard in concentric circles to the West;


how decade by decade the outer hne of popula-
tion has moved steadily toward the Pacific Ocean,
leaving farms, towns, and industry in its rear. We
have seen how the free land has been all enclosed,
how tenancy has appeared along with land mo-
nopoly, how all of the resources of the nation have
been appropriated, and the highways have been
massed under the control of a constantly narrow-
ing syndicate able at will to fix the terms on which
the industrial life of the nation will circulate.

We have seen, too, how land began to have an
increasing value due to the pressure of population.
It was higher at the seaboard than it was in the
interior. It was more valuable in the towns than
it was in the country. Some of it is more pre-
cious than the silver dollars which will cover its
surface. Some of it may still be had for a song.
It ranges in value from the million-dollar lot in
the centre of a great city to the semi-arid wastes
which scarcely support life. Everywhere, however,
the value of the land reflects the density of popula-
tion, the improvements in the means of production,
and the necessities of the people. Everywhere the
value is social. It is not due to any service rendered
hy the owner.

Some land still has no value. It will produce no
more than a living for him who works upon it.
This land is the ''no rent" land, the land of
"marginal fertility." It produces no surplus, it


yields no rent. But while this land of ''marginal
fertility" has no market value and yields no rent
itself, it fixes the value and rent of all other land.
For everything that other land, whether it he a city
site, a bonanza mine, a market garden, or a country
farm, produces in excess of the return from the land
of ^^ marginal fertility, ^^ the land which will just sup-
port the worker at the prevailing standard of living, is
rent ; it is the annual value of the unearned incre-
ment which society has produced.

We have seen how the land of America is now
appropriated. It is constantly increasing in value.
And this value never recedes. The present popu-
lation, the number of children that are born, the
number of immigrants admitted to our shores,
this it is that determines the price which shall be
paid for the privilege of being upon the earth.
This measures the demand. It is daily and hourly,
by night as well as by day, increasing in intensity.
The supply of land, however, is constant. It is
fixed irrevocably. No effort of man can enlarge
it. The only element that is variable is the de-
mand. And the demand is indicated by the census

Rent is the resultant of the struggle. It may
be paid in personal services, in the shares of the
farm tenant, or in cash. It may be paid in mining
royalties or dividends, in the charges of the rail-
ways or franchise corporations. In a thousand


unseen forms rent is collected. It is a toll upon
every act of our lives. And rent, like land value,
is a social product. It is a common treasure.
Political economists have obscured the nature of
rent by phraseology. Ricardo defines rent as 'Hhat
portion of the produce of the earth which is paid
to the landlord for the use of the original and
indestructible powers of the soil."* John Stuart
Mill says: ''The rent, therefore, which any land will
yield, is the excess of its produce, beyond what would
be returned to the same capital if employed on the
worst land in cultivation." ^

All of the economists agree in this: rent has
nothing to do with the character, thrift, or intelli-
gence of the owner of the land. There is no service
rendered by him in return. The owner may live in
some distant corner of the earth, as do some members
of the Astor family. Rent is paid for the mere
privilege of living upon the earth, for the right of
using one's labor upon God's common heritage.

Some economists have seen further than this.
They have seen that rent is not a constant charge.
In all progressive communities it continually rises
in amount. In time men offer all that the land
will yield in excess of a mere living for the privi-
lege of its use. Necessity then fixes the tribute.
The love of life holds the scales in determining its

' Principles of Political Economy ami Taxation, chap. 2, p. 34.
"^Principles of Political Economy, book II, chap. 3.


amount. This is what happened in Ireland. This
is what is taking place in Great Britain to-day.
This is the ultimate and the inevitable result of
the private ownership of the land.

This tendency was recognized by Ricardo, who
said: 'The whole surplus product of the soil, after
deducting from it only such moderate profits as are
sufficient to encourage accumulation, must finally
rest with the landlord. " ^

This fact was later emphasized by Professor
Cairnes, who wrote: "A given exertion of capital
and labor will now produce in a great many direc-
tions five, ten, or twenty times — in some instances,
perhaps, a hundred times — the result which an
equal exertion would have produced an hundred
years ago; yet the rate of wages has certainly not
advanced in anything like a corresponding degree,
whilst it may be doubted if the rate of profit has
advanced at all. Some one, no doubt, has bene-
fited by the enlarged power of man over material
nature; the world is, without question, the richer
for it. The large addition to the wealth of the coun-
try has gone neither to profit nor to wages nor yet to
the public at large, hut to swell a fund ever growing,
even while its proprietors sleep — the rent-rolls of the
owners of the soil.^' ^ John Stuart Mill expressed the

• Principles of Political Economy, chap. 24, p. 202.
^Some Leading Questions of Political Economy Newly Expounded,
pp. 275-279.


same thought. "The ordinary progress of a so-
ciety," he says, ''which increases in wealth is, at
all times, tending to augment the incomes of land-
lords; to give them both a greater amount and a
greater proportion of the wealth of a community,
independently of any trouble or outlay incurred by
themselves. They grow richer, as it were, in their
sleep, without working, risking, or economizing.
What claim have they on the general principle of
social justice to this accession of riches?" ^

I admit that it is impossible to demonstrate that
the wealth of the world is being appropriated by
those who own the land. Neither can the land
question be visualized as can the capitalistic sys-
tem. But a common knowledge is conclusive that
only the landed classes are conspicuously rich.
This is true in every country. An enumeration of
the millionaires in any city finds no retail and only
rarely a wholesale dealer among them. There are
comparatively few merchant princes. Here and
there a wealthy manufacturer may be found, but
his fortune is usually traceable to some patent
right, or the identity of his business with some
landed interest, tariff privilege, or railway rebate.
Competitive business produces few millionaires in
this or any other country. And they suffer con-
stant reverses. Their fortunes rarely outlive the
generation which inherits them. The conspicuous

> Principles of Political Economy, book V, chap. 1.


wealth of America is landed. It springs from city
sites, from mines, railways, transportation, and
franchise holdings. It is social in its origin, not
competitive. It is permanent and increases more
rapidly than the powers of spendthrift children to
dissipate it. Take the long list of millionaires of the
blue-book of Wall Street or of any great city; almost
without exception their fortunes are the creation
of society. They are identified with some landed
privilege. They represent no labor of their owners.
And they are all identified with the land. From
out the coal and the oil, the natural-gas and the
copper, the gold and the silver mines scores of
other fortunes have been created, fortunes which are
increasing in value with each passing year through
the necessities of humanity.

Great Britain is a conspicuous example of the
same fact. Her aristocracy is a landed one. Trade
and commerce have enriched the country, but there,
as here, the increase in wealth has largely passed
to those, who own the land.

And in that country the process of social pro-
duction and private appropriation has reached its
logical conclusion. The peasant and the artisan
are miserably poor, while industry itself is being
gradually impoverished by the very poverty of the
producing classes. They cannot buy what capital
produces. They are so poor that they cannot con-
sume. Everything above the minimum of exist-


ence is taken in rent. This is what is the matter
with Great Britain. The land is held in vast ma-
norial estates. Millions of acres are kept out of use
for hunting preserves and parks. Even greater
areas are used for grazing and careless agriculture.
And that which is open to occupancy is subjected
to the competition of forty millions of workers, who
produce scarcely enough to ward off eviction. After
the rent is paid there is little left with which to
buy other things. Thus rent starves not only the
workers, it starves capital as well. For industry
must have a market. It can only flourish where
the mass of the people are able to consimie. And
in Great Britain the mass of the people are con-
tinually at the starvation point.

The real struggle over the distribution of wealth
is between the landlord on the one hand, and capi-
tal and labor on the other. Rent fixes interest and
profits just as it fixes wages. All of the wealth
that is produced is divided between the landlord,
the capitalist, and the wage-earner. These are
the only possible claimants among whom it can be
distributed. Disagreement arises as to who re-
ceives the lion's share. We have seen that the
share of the land-owner is constantly increasing by
the growth in the value of the land. We have
further seen that the great fortunes of America, as
well as of England, are landed fortunes. It is not
the capitalist who is the offender. The returns of


capital in the form of profits and interest tend
always to an equality. They are automatically
governed by the average returns in the community,
and that return is somewhere in the neighborhood
of six per cent. If the profits of a given industry
rise above the average, new capital flows into the
industry until competition reduces returns to that
level. A conspicuous example of that fact is af-
forded by the manufacture of automobiles. The
industry is scarcely ten years old. There are few
privileges connected with the business. It requires
an imjnense outlay of capital. Yet it is doubtful
if the returns on the industry taken as a whole have
equalled the current return on mortgages. In the
long-run profits and interest are fixed by this proc-
ess. The returns of capital are kept at a com-
petitive minimum by the operation of the law of
supply and demand.

There would be no dispute about this tendency
were it not for the fact that capital is so often con-
fused with some form of land monopoly. This is
true of mining, it is true of the railways and trans-
portation business, it is true of the franchise cor-
porations which occupy our streets. It is also true
of many other industries which are so identified
with the land, with railway rebates, with the tar-
iff, with patent rights, as to be free from the com-
petition of capital with capital. But if wc exclude
such industries we shall see that the capitalist is not


the offending party in the distribution of wealth.
He suffers along with the worker.

We see conclusive evidence of this fact in new
countries where land values have not begun to
appear. Here wages and interest are high, while
rent is low. So long as the wage-earner can turn
his hand to fertile fields of his own, the wages of
all industry will respond to this alternative. The
worker will not labor for another for less than he
can produce himself. It is this and not the tariff
that has determined the rate of wages in America.
Adam Smith recognized the effect of cheap land on
wages. In discussing the ''Causes of the Prosperity
of New Colonies," he says: ''Every colonist gets
more land than he can possibly cultivate. He
has no rent and scarce any taxes to pay. He is
eager, therefore, to collect laborers from all quar-
ters and to reward them with the most liberal wages.
But those liberal wages, joined to the plenty and
cheapness of land, soon make those laborers leave
him in order to become landlords themselves, and
to reward with equal liberality other laborers who
soon leave them for the same reason that they left
their first master. " *

The American West has demonstrated this theory.
Up to but yesterday in Oklahoma, in Dakota, in
the mining regions of Nevada, Colorado, and Alaska,
wages were high, and still the labor market was un-

• Wealth oj Nations, book 4, chap. 7.


satisfied. Interest, too, ranged from eight to twelve
per cent. Workmen could only be had on their
own terms. They could scarcely be obtained at all.
For there were homesteads or mining claims to be
staked out at an insignificant cost. Land was
cheap. It was accessible to all. Everything that
it produced went back to the worker. Here we
find men owning their own homes. They enjoy a
freedom that is not to be found in the East. But
what will be the condition a generation hence? By
that time Eastern conditions will have appeared in
the West. Machines will do the work formerly
done by hand. There will be rapid transportation
and communication. There will be a far greater
production of wealth, it is true. The per capita
wealth will be doubled, possibly quadrupled. There
will be schools and universities, churches and libra-
ries. All of the evidences of culture and refine-
ment will have appeared. But who will have
benefited by the change? Will wages have ad-
vanced? Will interest rates be higher? Not if
the experience of older communities offers any
proof. Instead of every man being a home-owner,
a tenant class will have appeared. In the centre
of every county there will be a jail. There will be
almshouses and asylums. In the cities there will
be a residuum of wreckage, of vagabonds, and the
semi-criminal class, which, by some mysterious
process, has been cast upon the shores of society


by the very advance in civilization which should
have rendered involuntary poverty out of the ques-
tion. The slum will come in with the mansion;
the prison with the priest. Where once there was
equality, now there is inequality; where once there
was freedom, now there is servitude. The pro-
duction of wealth will have increased even more
rapidly than the production of men. In spite of
this, where once there was more than enough for all,
now there is only enough for a few, and hunger
and want and privation for the destitute many.
While the returns on capital have fallen, while
wages have been reduced or at most remained sta-
tionary, one class, and one alone, will have been
benefited by the change. The value of land will
have increased with each passing day. Those who
own the land are better for the change. Their in-
comes will have increased possibly a hundred-fold.
On the other hand all other classes will be the poorer
because of the wealth which they have created.

That rent is constantly rising, that it is higher
to-day than it was yesterday, that it will be higher
to-morrow than it is to-day, all wili agree. But
why, it may be asked, is this inconsistent with an
equally rapid increase in wages ? Why may not the
returns of labor increase even more rapidly than
the returns of the landlord, and the condition of the
wage-earner in reality grow better ? Why, in fine,
does increasing rent preclude increasing well-being ?


The growth of population and the speculative
ownership of the land make this impossible. A
glance into the future proves it to be true. Fifty
years hence there will be two hundred millions of
people in America. They will increase the value

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Online LibraryFrederic Clemson HowePrivilege and democracy in America → online text (page 12 of 19)