Frederic Clemson Howe.

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call upon the farmer and the miner for the raw ma-
terials. With increasing wages there would be in-
creasing demand for goods. This would ordinarily
increase prices. But the abolition of rent and the
opening up of all nature to production, as well as
the abolition of all taxes upon labor and industry,
would reduce prices to their labor cost.

Thus the taxation of land values is a social \
philosophy — a philosophy as adequate as socialism
itself. It would destroy monopoly and exalt the
claims of humanity above the claims of privilege.



286 PRIVILEGE AND DEMOCRACY

It would return the land to the community and
retain it for the community for all time. Then dis-
tribution would give to each according to his labor,
and society would take from each according to the
privilege which he enjoyed. Then there would arise
an era of freedom in every walk of life.



CHAPTER XXIV
THE OPEN DOOR AND THE OPEN HIGHWAY

Thus the taxation of land values is a social
philosophy, a philosophy of freedom, of industrial
liberty in all the relations of life. The single tax
involves the abolition of the protective tariff and
the vexatious interference with trade and industry
which now strangles the production and exchange
of wealth. It is not a natural system of taxation
alone, it is a natural system of industrial and social
relations.

We have seen that the abolition of the system of
indirect taxes would save the consumers about
$600,000,000 a year in taxes, which are all paid by
labor, in some form or other. It would also save
them from the indirect costs of the system, which
amount to from one and a half to two billion dollars
a year more. America would then become the
cheapest place in the world in which to live. It is
now one of the most expensive, possibly the most
expensive. The bottom would be knocked out of the
great monopolies which are mothered by the tariff.

But the gain would not end here. Not only
would the people have that much more to spend

287



288 PRIVILEGE AND DEMOCRACY

for the things they desire; not only would two
billion dollars be added to the purchasing power of
the country; not only would the wheels of industry
be set in motion to satisfy these increased wants;
but trade and industry would be awakened in a
thousand unknown fields by the freedom of trade
which would follow. We have no means of telling
what industries are rendered impossible by the
tariff, or the new industries which would spring up
by reason of its abolition. But the coming of lib-
erty has always been followed by a great industrial
awakening. For commerce hates barriers. It in-
stinctively follows the lines of least resistance. For
every industry that is helped by the tariff, probably
two are rendered impossible by it. The freedom of
trade between the states of the American Union
proves this. So does the awakening which followed
the abolition of the corn laws in Great Britain in
1846. Industries which had been languishing for
years awakened into life. The commerce of Eng-
land assumed command of the seas. Her iron, steel,
wool, and cotton factories took the world by storm.
Were the trade of America free to follow its natural
channels, our exports would command the markets
of the world. America is the cheapest of producers.
This is true in almost every line of industry. We
have the most abundant raw materials, the most
highly skilled labor, the highest per capita invest-
ment of capital. Were the barriers of trade removed



THE OPEN DOOR 289

the commerce of the world would be ours in a few
years' time.

These are the by-products of the single tax.
Freedom of trade is but part of freedom in every
relation of life. And freedom is no less the natural
than the scientific law of progress.

There is yet another corollary to the taxation of
land values. And that is the free, open highway.
There are certain services so fundamental to our life
that they cannot with safety be left in private
hands. We do not question this as to the activities
already assumed by the state. No one thinks of
turning back the schools, libraries, parks, and post-
office to private hands. Even the most reactionary
is in favor of the free, open public highway. Yet
the highways were in private hands up to very
recently. The private toll road is still to be found
in some parts of the country. But it has very gen-
erally disappeared before the necessities of modern
life. And the railway is but a highway, a highway
really far more important than the streets of our
cities. Through it the life of the nation circulates.
All industry is dependent upon its proper adminis-
tration. It not only fixes the wages of ten per cent,
of our workers, it vitally affects all industry and the
well-being of all people. Upon its favors and dis-
eriminations, discriminations that the ingenuity of
the government and the skill of the secret-service
agent cannot trace, many of the most menacing



290 PRIVILEGE AND DEMOCRACY

monopolies are reared. The price which is paid for
beef on the hoof, for sheep on the range, for the farm
products of the West is determined by the railways,
the packers, the elevators, and the warehousemen,
whose alliance with the railways is no longer a mat-
ter of doubt. Eggs, butter, and dairy products,
as well as the fruits of California and Florida, are
under the control of these agencies, which fix the
price the farmer receives as well as the price which
the consumer pays. The cost of living of the entire
nation is in a large measure controlled by those who
own these agencies.

Even were the railways open to all on equal
terms, even were they to abandon their coal lands,
to dissolve their connection with private industry,
and free themselves from the suspicion which now
attaches to them, they should not be entrusted to
the caprices of private management and control. For
the function which the railways perform is a public
one — they enjoy a part of the sovereignty of the
state. That the railways should be owned by the
people has been recognized by almost every civilized
nation save Great Britain and America. These
nations alone have trusted to private capital. Eng-
lish industry is suffering in consequence, while the
politics of America have been corrupted to the core
and her industry reduced to monopoly in every great
necessity of life.

There is only one rule of private railway manage-



THE OPEN DOOR 291

ment, and that is charging all that the traffic will
bear. This is the solemn duty of those intrusted
with the administration of the property. They are
bound to make as much profit as possible. The
railway president may be the most humane of
men or the most far-seeing of social reformers.
He would be no more justified in adopting any
other rule of management, than the agent of the
Astor estate would be justified in accepting any
other rental than that which the public would
pay.

A railway president cannot serve the public and
his stockholders. Their interests are diverse. It
is his duty to make dividends. To do this, he must
adopt whatever means are necessary to secure the
traffic. And it is not possible for any commission
to trace the subterranean methods which may be
devised in the granting of rebates, discriminations,
or favors. The motive of railway management
should be service, not profits. This is impossible
so long as the railways are in private hands.

There is still another reason for the public owner-
ship of the highways. Railway values, as we have
seen, are land values. Earnings respond to the
same influences as rent. Inflated railway capitali-
zation is an unearned increment. The earnings
of the railways of the country increased from
$1,222,089,773 in 1897 to $2,346,600,000 ten years
later, or an increase of nearly one hundred per cent.



292 PRIVILEGE AND DEMOCRACY

During the same period capitalization grew from
$10,635,008,074 to $16,082,146,683. The develop-
ment of the country, the growth of industry, the
coming of immigration, all these have added to the
tribute which those who own the highways have
been able to extract from the labor and industry of
the country. Every exertion of society adds to
the value of these properties, just as it adds to the
value of a corner lot in a great city.

It is true this social value can be retaken by
taxation just as can land values proper. And
many persons believe that the railway problem can
be solved through this means. But this would not
put an end to corruption. It would not check the
waste which is everywhere apparent in railway
management. It would not remove the antagonism
between the private interest and the public welfare,
which is the greatest evil of the private ownership
of a public function.

The public ownership of railways would do more
to free our life from privilege and corruption than
any other reform. In commonwealth after com-
monwealth politics are in the hands of the feudal-
like interests, which, like the aristocracy of Great
Britain prior to the reform act of 1832, fill the
offices of the state and the nation with their own
retainers. They control primaries and conventions,
they send their attorneys, doctors, and agents to
State assembhes. At their dictation United States



THE OPEN DOOR 293

senators are elected, who, in many instances, are
their paid attorneys and representatives.

The class warfare is bound to continue so long
as a powerful interest controls one-sixth of the
wealth of the nation; an interest which ramifies
into every precinct in the land and which openly
avows that it is necessary to corrupt the govern-
ment in order to protect what it claims as its own.
Nor can industry be free or labor receive the fruits
of its toil, so long as it hes in the hands of what is
in effect an arbitrary tax-gatherer, to intercept so
much of the wealth produced as suits its fancy.



CHAPTER XXV
THE DEMOCRACY OF TO-MORROW

We are beginning to see that democracy is some-
thing more than the freedom to speak, to write, to
worship as one wills, to be faced with one's accusers,
and to be tried by one's peers; it involves far more
than the absence of absolute government or the
tyranny of an hereditary caste. The right of par-
ticipation in the government, irrespective of birth,
race, and creed, and the substitution of manhood
suffrage and democratic forms for monarchical insti-
tutions, do not of themselves constitute democracy,
immeasurably valuable as these achievements are.

Democracy, too, involves far more than a system
of taxation that is ethically just; it involves far
more than the right to trade where one wills, un-
restrained by tariff laws; it involves far more than
the taking by the community of the wealth that the
community creates or the ownership by the people
of the highways, so essential to the common life.
These fundamental changes in the relation of man-
kind to its environment do not constitute an end
in themselves, any more than does the right of the
ballot or of participation in the government. All

294



THE DEMOCRACY OF TO-MORROW 295

these things are but means to an end, and that end
is industrial freedom, a freedom as full and as free
to the poor as to the rich, to the next generation
and the generations which follow as it was to the
generations which spread themselves out upon an
unappropriated continent. Freedom is an indus-
trial far more than a political condition.

Unfortunately the idea of freedom suggests
license when demanded for all, just as it involves
license when enjoyed by the few. Privilege in-
vokes the beneficence of freedom when it would
stay the hand of the state in any attempt to control
its excesses, just as it invokes the perils of freedom
when it would be protected from its consequences.
Privilege protests in the name of freedom against
regulation of the railways or the franchise corpora-
tions, or the protection by law of children, women
workers, and those engaged in hazardous pursuits.
It attacks the labor union, the closed shop, and the
eight-hour day as subversive of personal liberty,
but invokes another argument for protection from
foreign competition or the right to monopoly com-
binations.

The political economist as well as the socialist
has confounded the evils of the present industrial
system with freedom. Laissez fairs is credited with
the tenement, the sweat-shop, and the excesses of
capitalism. But freedom, even the laissez faire of
Quesnay, Turgot, Dupont de Nemours, and the



296 PRIVILEGE AND DEMOCRACY

brilliant school of thinkers who laid the foundation
for the abolition of the feudal system and the op-
pressive restraints of mercantilism, is a far different
thing from the travesty of industrial liberty which
has masqueraded for nearly a century under that
name. For nowhere has there been freedom, the
freedom of access by humanity to the source of all
life. The land and the resources of nature have
been locked up with title-deeds of private owner-
ship, and mankind has been forced to content itself
with such opportunities as privilege offered. True
freedom, true laissez faire, involves the shattering
of all these chains with which labor is bound, and
the opening up of the earth to the free play of in-
dividual talent. It involves, too, freedom of trade
and the free public highway. This is the philoso-
phy of freedom.

Freedom is the law to which all life responds.
Freedom underlies the philosophy of evolution,
which all science has approved. Through freedom
all animate life has progressed; to its call the cave
man of the stone age has advanced by slow and
tortuous processes up to the civilized type of to-day.
But the appHcation of this principle to human
society has been limited to the formulation of the
law of the struggle for existence, with the medium
of that struggle ignored.

And freedom is the law of conscious as well as of
unconscious evolution, of historic as well as of pre-



THE DEMOCRACY OF TO-MORROW 297

historic ages. From the very beginnings of organ-
ized society the progress of man has been in almost
direct ratio to his hberty. This is written across
the face of history from the time of the Grecian
city-states down to the latest experiment in nation-
building in the distant Pacific. It was economic
freedom that enabled the Roman people to bring
all Italy to their feet. It was the home-owning
soldier who carried Roman arms all over Italy. It
was economic freedom that spread the republic
over the face of Europe and gave to Rome the
supremacy of the world. It was the same economic
liberty which awakened the Renaissance and re-
suscitated commerce in the towns of Italy and
Germany during the Middle Ages. It was freedom
to make and to trade which builded the congeries
of free cities from the Adriatic to the mouth of the
Rhine, and called into life the civilization which
had been buried in the East for centuries. It was
this sort of freedom which gave eminence to Venice,
to Florence, to Genoa, to the Netherlands, an emi-
nence which was later seized by Great Britain when
she broke free from the restraints imposed by the
feudal classes on trade, industry, and commerce.

Wherever restrictive laws have been abolished,
wherever the rock of economic privilege has been
smitten with the touch of liberty, wealth has gushed
forth as it never did before. New processes, new
ideas, new inventions are awakened by the call of



298 PRIVILEGE AND DEMOCRACY

freedom, whether it be the opportunity to produce
as one wills, to trade as one wills, or, far more
important, to make use of the earth free from the
dead hand of speculation.

Two great nations have in different ways and at
different times shaken themselves free from the
chains of privilege. They broke but the obvious
chains which bound them, it is true, but the effect
was electrical on the production and distribution of
wealth. When the States General was convened in
1789, France was entwined with as many laws as
the threads which bound Gulliver. There was no
freedom of thought, no freedom of action, no free-
dom of trade or commerce even within the kingdom.
No one could labor at a trade or calling without
being admitted to a closed corporation. No one
could manufacture anything or plant anything ex-
cept according to rules laid down by the state. The
state regulated everything. The individual could
originate nothing. Even the kind of tools to be
used was prescribed, as were the width and quality
of cloth. Every product which did not conform to
rule was confiscated or burned. Individuals could
not sell or buy, except on permission of the state.
Exports of grain, even to the next province, were
prohibited. Agriculture bore every burden the
seigneurs or their agents could devise. The peas-
ant paid a rack-rent to the lord as well as all the
taxes to the state. He had to work on the estate of



THE DEMOCRACY OF TO-MORROW 299

the lord and keep the roads in repair. His lands
were shot over, and devastated by game. He had to
grind his grain at the mill of the lord and press out his
wine at the lord's press. Most of the taxes were paid
by the poor, while the administration of justice was in
the hands of the privileged class. All life, all nov-
elty, all liberty of thought or action was suppressed.
On the night of August 4, 1789, the National
Assembly entirely destroyed the feudal regime. So-
ciety received a new birth. It was purged, as is
man by disease or a base metal by fire. The face of
France was swept of a thousand abuses, as the face
of the prairie is swept by flame. Man and the land
were left naked of countless privileges. The worker
was free to produce, to buy, to sell, and to exchange.
What his mind and hand produced remained in
great measure his own. There remained neither
nobility nor peerage, nor hereditary distinction, nor
distinctive orders, nor feudal regime, nor any other
superiority except that of public officials in the
exercise of their function. Better than all that,
there remained to no Frenchman any privilege or
exception to the rights which are common to all
Frenchmen. Farming of taxes was later abolished.
The domains of the clergy were assumed by the
state. There was a redistribution of taxes. There
was freedom in production and exchange. The old
regime was destroyed. The foundations of liberty
were laid for all the world.



300 PRIVILEGE AND DEMOCRACY

Within the next few years industry, talent, and
genius sprang into action. From the farm and
the town the armies of France were recruited in
the name of liberty. For the first time in their
history the people were conscious that the nation
meant something to them. The army of France
became invincible. The peasant and the artisan,
enfranchised from the multitude of vexatious inter-
ferences which had controlled every act of their
lives, turned to their work with a new light in
their eyes and a new hope in their heart. It was
the night of August 4, 1789, and ''The Self-Denying
Ordinance" that made the revolution permanent.
It was this that sent its blessings into every corner
of Europe, and brought forth in Germany the reforms
of Stein and Hardenberg.

A half century later England opened her ports
to the commerce of the world. She did not destroy
the abuses of the feudal regime. Very many of
these abuses still remain. But she abolished the
corn laws imposed by the landlords in control of
Parliament for the protection of their rents. The
increase in production which followed surpassed the
expectations of Cobden and Bright. England was
converted into a vast industrial establishment. She
became the clearing-house of the world. Her ex-
ports increased from $288,934,380 in 1846 (the year
of the repeal) to $356,795,920 in 1850. In 1853
they were $494,668,905, and in 1857 $610,000,000.



THE DEMOCRACY OF TO-MORROW 301

Freedom of trade revolutionized Great Britain.
It was a revolution which benefited chiefly a
limited class. Free trade did not destroy poverty.
It did not relieve the agricultural worker, nor did
it find decent homes for the tenement dweller.
Free trade did benefit the manufacturer and the
trader. It increased the value of the land of the
United Kingdom by calling into existence great
cities and towns wherein four-fifths of the popula-
tion now dwell. It was freedom, the freedom to
buy and sell, unrestrained by artificial barriers
erected by legislation, that explained the immedi-
ate ascendancy of the British people in industry.
Colossal as were these benefits of freedom, they are
inconsequential in comparison with those which
would follow from the freeing of the land as well.

And it was economic freedom that made America
what she is. It was this that lies at the foundation
of our democracy. It was not the Declaration of
Independence, it was not the Federal Constitution,
it was not tHe freedom from an established church
or hereditary privilege, it was not even the ballot;
it was freedom of access to the earth and all its
fulness, it was the free land that explained our
institutions, it was this that gave us industrial
eminence. The things we hold most dear are but
the reflections of the relations of the American
people to the land. And it is the passing of this
freedom, it is the enclosure of the land and the



302 PRIVILEGE AND DEMOCRACY

coming of the tenant, it is the monopoly of that
which is the source of all life, that has brought
down the curse of poverty upon us, just as it did
in Rome, just as it did in France, just as it did in
Ireland, and just as it did in England at a later day.
The remedy herein proposed will restore the
foundations upon which democracy is laid. It will
insure liberty for all time. It will insure equality
of opportunity in every walk of life and will guar-
antee to the worker all that his genius, his talent,
or his labor produces. The open door, the open
highway, and the socialization of the land will
destroy the tribute now exacted by monopoly. It
will usher in a social order in which men will be as
free from the fear of want as they are from want
itself. Then men will look forward not to diminish-
ing, but to increasing opportunities, for freedom will
not only continuously augment the wealth of the
world, it will insure its just distribution to those
who produce it.



APPENDIX I

LAND VALUES IN THE UNITED STATES

In 1900 the census enumerators endeavored to get at
land and improvement values. They secured reports as
to land values in the case of farms and factories. For
the farms of continental United States it appears that the
land and improvement values, exclusive of the buildings,
amounted to 78.6 per cent, of the total, while the land
values of factories was 41.5 per cent, of the total. The
Commissioners of Taxes and Assessments of the city of
New York, where the land and improvements are sepa-
rately valued, place the pure land values at 63.2 per cent,
of the total. The land values of the city of Boston are
60.7 per cent., while Detroit and Milwaukee place the
pure land values at 53.9 per cent, and 55.5 per cent,
respectively. Thomas G. Shearman, a conservative stat-
istician, placed land values at 60 per cent, of the total,
taking the country as a whole, and estimated the pure
land values of the country at i|27,600,000,000 in 1890.
(Natural Taxation, p. 140.) This was nineteen years
ago. During the intervening years land values have
increased far more rapidly than at any previous period
in the history of the country. We have seen that there
was an increase in the value of farm lands alone of
$6,000,000,000 in five years' time. Since 1890, too, the
mineral resources and railways have been monopolized,
and their values have increased enormously.

303



304 APPENDIX I

In New York City the land and special franchise
values averaged $955 per capita in 1909, while in some
of the Western States, where assessments are of any value,
a similar per capita value seems to prevail. For these
reasons it would seem clear that $40,000,000,000 of land
values was a very conservative estimate in 1904. There
is every reason to believe that they amount to $00,000,-
000,000 at the present time. This is the estimate of Mr.
John Moody, the editor of a number of Wall Street pub-
lications, who says:

"I have stated that the estimated wealth of the nation
is to-day about $120,000,000,000. Of this, about one-half
or $60,000,000,000 is what might be called created wealth,
and the balance is spontaneous or unearned wealth —
what is sometimes called the 'unearned increment.' . . .
Let me try to show a little more clearly what I mean by
these different kinds of wealth. Take one of the large


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Online LibraryFrederic Clemson HowePrivilege and democracy in America → online text (page 18 of 19)