Wages Tending Toward a Minimum
Henry George: The Condition
of Labor — An
Open Letter to Pope Leo XIII in response to Rerum Novarum (1891)
Since man can live only on land and from land, since land is the reservoir
of matter and force from which man’s body itself is taken, and on which
he must draw for all that he can produce, does it not irresistibly follow
that to give the land in ownership to some men and to deny to others all
right to it is to divide mankind into the rich and the poor, the privileged
and the helpless? Does it not follow that those who have no rights to the
use of land can live only by selling their power to labor to those who own
the land? Does it not follow that what the socialists call “the iron
law of wages,” what the political economists term “the tendency
of wages to a minimum,” must take from the landless masses — the
mere laborers, who of themselves have no power to use their labor — all
the benefits of any possible advance or improvement that does not alter this
unjust division of land? For having no power to employ themselves, they must,
either as labor-sellers or as land-renters, compete with one another for
permission to labor. This competition with one another of men shut out from
God’s inexhaustible storehouse has no limit but starvation, and must
ultimately force wages to their lowest point, the point at which life can
just be maintained and reproduction carried on.
This is not to say that all wages must fall to this point,
but that the wages of that necessarily largest stratum of
laborers who
have only ordinary
knowledge, skill and aptitude must so fall.
The wages
of special classes, who are fenced off from the pressure
of competition by peculiar
knowledge,
skill or other causes, may remain above that
ordinary level.
Thus, where the ability to read and write is rare
its possession enables a
man to
obtain higher wages than the ordinary laborer.
But as the diffusion of education
makes the ability to read and write general
this advantage is lost. So when a vocation requires special training
or skill,
or is
made difficult
of access
by artificial restrictions, the checking of
competition
tends to keep
wages in it at a higher level. But as the progress
of invention dispenses with
peculiar skill, or artificial restrictions
are broken down, these higher wages sink to the ordinary level.
And so,
it is only
so long
as they
are special that such qualities as industry,
prudence
and thrift can enable the
ordinary laborer to maintain a condition above
that which gives a mere living. Where they become general,
the law
of competition
must
reduce
the
earnings
or savings of such qualities to the general
level — which,
land being monopolized and labor helpless,
can be only that at which the next
lowest
point is the cessation of life. ... read the whole letter
Louis Post: Outlines of Louis F. Post's
Lectures,
with Illustrative Notes and Charts (1894)
b. Normal Effect of Social Progress upon Wages and Rent
In the foregoing charts the effect of social growth is ignored, it being
assumed that the given expenditure of labor force does not become more productive.93
Let us now try to illustrate that effect, upon the supposition that social
growth increases the productive power of the given expenditure of labor force
as applied to the first closed space, to 100; as applied to the second, to
50; as applied to the third, to 10; as applied to the fourth, to 3, and as
applied to the open space, to 1. 94 If there were no increased demand for
land the chart would then be like this: [chart]
93. "The effect of increasing population upon the
distribution of wealth is to increase rent .. . in two ways: First, By
lowering the margin of cultivation. Second, 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 given by political economists, is really
the more important." — Progress and Poverty, book iv, ch.
iii.
"When we have inquired what it is that marks off
land from those material things which we regard as products of the land,
we shall find that the fundamental attribute of land is its extension.
The right to use a piece of land gives command over a certain space — a
certain part of the earth's surface. The area of the earth is fixed;
the geometric relations in which any particular part of it stands to
other parts are fixed. Man has no control over them; they are wholly
unaffected by demand; they have no cost of production; there is no supply
price at which they can be produced.
"The use of a certain area of the earth's surface
is a primary condition of anything that man can do; it gives him room
for his own actions, with the enjoyment of the heat and the light, the
air and the rain which nature assigns to that area; and it determines
his distance from, and in great measure his relations to, other things
and other persons. We shall find that it is this property of land, which,
though as yet insufficient prominence has been given to it, is the ultimate
cause of the distinction which all writers are compelled to make between
land and other things." — Marshall's Prin., book iv, ch. ii,
sec. i.
94. Of course social growth does not go on in this regular
way; the charts are merely illustrative. They are intended to illustrate
the universal fact that as any land becomes a center of trade or other
social relationship its value rises.
Though Rent is now increased, so are Wages. Both benefit by social growth.
But if we consider the fact that increase in the productive power of labor
increases demand for land we shall see that the tendency of Wages (as a proportion
of product if not as an absolute quantity) is downward, while that of Rent
is upward. 95 And this conclusion is confirmed by observation. 96
95. "Perhaps it may be well to remind the reader,
before closing this chapter, of what has been before stated — that
I am using the word wages not in the sense of a quantity, but in the
sense of a proportion. When I say that wages fall as rent rises, I do
not mean that the quantity of wealth obtained by laborers as wages is
necessarily less, but that the proportion which it bears to the whole
produce is necessarily less. The proportion may diminish while the quantity
remains the same or increases." — Progress and Poverty, book
iii, ch. vi.
96. The condition illustrated in the last chart would
be the result of social growth if all land but that which was in full
use were common land. The discovery of mines, the development of cities
and towns, and the construction of railroads, the irrigation of and places,
improvements in government, all the infinite conveniences and laborsaving
devices that civilization generates, would tend to abolish poverty by
increasing the compensation of labor, and making it impossible for any
man to be in involuntary idleness, or underpaid, so long as mankind was
in want. If demand for land increased, Wages would tend to fall as the
demand brought lower grades of land into use; but they would at the same
time tend to rise as social growth added new capabilities to the lower
grades. And it is altogether probable that, while progress would lower
Wages as a proportion of total product, it would increase them as an
absolute quantity.
c. Significance of the Upward Tendency of Rent.
Now, what is the meaning of this tendency of Rent to rise with social progress,
while Wages tend to fall? Is it not a plain promise that if Rent be treated
as common property, advances in productive power shall be steps in the direction
of realizing through orderly and natural growth those grand conceptions of
both the socialist and the individualist, which in the present condition
of society are justly ranked as Utopian? Is it not likewise a plain warning
that if Rent be treated as private property, advances in productive power
will be steps in the direction of making slaves of the many laborers, and
masters of a few land-owners? Does it not mean that common ownership of Rent
is in harmony with natural law, and that its private appropriation is disorderly
and degrading? When the cause of Rent and the tendency illustrated in the
preceding chart are considered in connection with the self-evident truth
that God made the earth for common use and not for private monopoly, how
can a contrary inference hold? Caused and increased by social growth, 97
the benefits of which should be common, and attaching to land, the just right
to which is equal, Rent must be the natural fund for public expenses. 98
97. Here, far away from civilization, is a solitary settler.
Getting no benefits from government, he needs no public revenues, and
none of the land about him has any value. Another settler comes, and
another, until a village appears. Some public revenue is then required.
Not much, but some. And the land has a little value, only a little; perhaps
just enough to equal the need for public revenue. The village becomes
a town. More revenues are needed, and land values are higher. It becomes
a city. The public revenues required are enormous, and so are the land
values.
98. Society, and society alone, causes Rent. Rising with
the rise, advancing with the growth, and receding with the decline of
society, it measures the earning power of society as a whole as distinguished
from that of the individuals. Wages, on the other hand, measure the earning
power of the individuals as distinguished from that of society as a whole.
We have distinguished the parts into which Wealth is distributed as Wages
and Rent; but it would be correct, indeed it is the same thing, to regard
all wealth as earnings, and to distinguish the two kinds as Communal
Earnings and Individual Earnings. How, then, can there be any question
as to the fund from which society should be supported? How can it be
justly supported in any other way than out of its own earnings?
If there be at all such a thing as design in the universe — and who
can doubt it? — then has it been designed that Rent, the earnings of
the community, shall be retained for the support of the community, and that
Wages, the earnings of the individual, shall be left to the individual in
proportion to the value of his service. This is the divine law, whether we
trace it through complex moral and economic relations, or find it in the
eighth commandment.
d. Effect of Confiscating Rent to Private Use.
By giving Rent to individuals society ignores this most just law, 99 thereby
creating social disorder and inviting social disease. Upon society alone,
therefore, and not upon divine Providence which has provided bountifully,
nor upon the disinherited poor, rests the responsibility for poverty and
fear of poverty.
99. "Whatever dispute arouses the passions of men,
the conflict is sure to rage, not so much as to the question 'Is it wise?'
as to the question 'Is it right?'
"This tendency of popular discussions to take an
ethical form has a cause. It springs from a law of the human mind; it
rests upon a vague and instinctive recognition of what is probably the
deepest truth we can grasp. That alone is wise which is just; that alone
is enduring which is right. In the narrow scale of individual actions
and individual life this truth may be often obscured, but in the wider
field of national life it everywhere stands out.
"I bow to this arbitrament, and accept this test." — Progress
and Poverty, book vii, ch. i.
The reader who has been deceived into believing that Mr.
George's proposition is in any respect unjust, will find profit in a
perusal of the entire chapter from which the foregoing extract is taken.
Let us try to trace the connection by means of a chart, beginning with the
white spaces on page 68. As before, the first-comers take possession of the
best land. But instead of leaving for others what they do not themselves
need for use, as in the previous illustrations, they appropriate the whole
space, using only part, but claiming ownership of the rest. We may distinguish
the used part with red color, and that which is appropriated without use
with blue. Thus: [chart]
But what motive is there for appropriating more of the space than is used?
Simply that the appropriators may secure the pecuniary benefit of future
social growth. What will enable them to secure that? Our system of confiscating
Rent from the community that earns it, and giving it to land-owners who,
as such, earn nothing.100
100. It is reported from Iowa that a few years ago a workman
in that State saw a meteorite fall, and. securing possession of it after
much digging, he was offered $105 by a college for his "find." But
the owner of the land on which the meteorite fell claimed the money,
and the two went to law about it. After an appeal to the highest court
of the State, it was finally decided that neither by right of discovery,
nor by right of labor, could the workman have the money, because the
title to the meteorite was in the man who owned the land upon which it
fell.
Observe the effect now upon Rent and Wages. When other men come, instead
of finding half of the best land still common and free, as in the corresponding
chart on page 68, they find all of it owned, and are obliged either to go
upon poorer land or to buy or rent from owners of the best. How much will
they pay for the best? Not more than 1, if they want it for use and not to
hold for a higher price in the future, for that represents the full difference
between its productiveness and the productiveness of the next best. But if
the first-comers, reasoning that the next best land will soon be scarce and
theirs will then rise in value, refuse to sell or to rent at that valuation,
the newcomers must resort to land of the second grade, though the best be
as yet only partly used. Consequently land of the first grade commands Rent
before it otherwise would.
As the sellers' price, under these circumstances, is arbitrary it cannot
be stated in the chart; but the buyers' price is limited by the superiority
of the best land over that which can be had for nothing, and the chart may
be made to show it: [chart]
And now, owing to the success of the appropriators of the best land in securing
more than their fellows for the same expenditure of labor force, a rush is
made for unappropriated land. It is not to use it that it is wanted, but
to enable its appropriators to put Rent into their own pockets as soon as
growing demand for land makes it valuable.101 We may, for illustration, suppose
that all the remainder of the second space and the whole of the third are
thus appropriated, and note the effect: [chart]
At this point Rent does not increase nor Wages fall, because there is no
increased demand for land for use. The holding of inferior land for higher
prices, when demand for use is at a standstill, is like owning lots in the
moon — entertaining, perhaps, but not profitable. But let more land
be needed for use, and matters promptly assume a different appearance. The
new labor must either go to the space that yields but 1, or buy or rent from
owners of better grades, or hire out. The effect would be the same in any
case. Nobody for the given expenditure of labor force would get more than
1; the surplus of products would go to landowners as Rent, either directly
in rent payments, or indirectly through lower Wages. Thus: [chart]
101. The text speaks of Rent only as a periodical or continuous
payment — what would be called "ground rent." But actual
or potential Rent may always be, and frequently is, capitalized for the
purpose of selling the right to enjoy it, and it is to selling value
that we usually refer when dealing in land.
Land which has the power of yielding Rent to its owner
will have a selling value, whether it be used or not, and whether Rent
is actually derived from it or not. This selling value will be the capitalization
of its present or prospective power of producing Rent. In fact, much
the larger proportion of laud that has a selling value is wholly or partly
unused, producing no Rent at all, or less than it would if fully used.
This condition is expressed in the chart by the blue color.
"The capitalized value of land is the actuarial 'discounted'
value of all the net incomes which it is likely to afford, allowance
being made on the one hand for all incidental expenses, including those
of collecting the rents, and on the other for its mineral wealth, its
capabilities of development for any kind of business, and its advantages,
material, social, and aesthetic, for the purposes of residence." — Marshall's
Prin., book vi, ch. ix, sec. 9.
"The value of land is commonly expressed as a certain
number of times the current money rental, or in other words, a certain
'number of years' purchase' of that rental; and other things being equal,
it will be the higher the more important these direct gratifications
are, as well as the greater the chance that they and the money income
afforded by the land will rise." — Id., note.
"Value . . . means not utility, not any quality inhering
in the thing itself, but a quality which gives to the possession of a
thing the power of obtaining other things, in return for it or for its
use. . . Value in this sense — the usual sense — is purely
relative. It exists from and is measured by the power of obtaining things
for things by exchanging them. . . Utility is necessary to value, for
nothing can be valuable unless it has the quality of gratifying some
physical or mental desire of man, though it be but a fancy or whim. But
utility of itself does not give value. . . If we ask ourselves the reason
of . . . variations in . . . value . . . we see that things having some
form of utility or desirability, are valuable or not valuable, as they
are hard or easy to get. And if we ask further, we may see that with
most of the things that have value this difficulty or ease of getting
them, which determines value, depends on the amount of labor which must
be expended in producing them ; i.e., bringing them into the place, form
and condition in which they are desired. . . Value is simply an expression
of the labor required for the production of such a thing. But there are
some things as to which this is not so clear. Land is not produced by
labor, yet land, irrespective of any improvements that labor has made
on it, often has value. . . Yet a little examination will show that such
facts are but exemplifications of the general principle, just as the
rise of a balloon and the fall of a stone both exemplify the universal
law of gravitation. . . The value of everything produced by labor, from
a pound of chalk or a paper of pins to the elaborate structure and appurtenances
of a first-class ocean steamer, is resolvable on analysis into an equivalent
of the labor required to produce such a thing in form and place; while
the value of things not produced by labor, but nevertheless susceptible
of ownership, is in the same way resolvable into an equivalent of the
labor which the ownership of such a thing enables the owner to obtain
or save." — Perplexed Philosopher, ch. v.
The figure 1 in parenthesis, as an item of Rent, indicates potential Rent.
Labor would give that much for the privilege of using the space, but the
owners hold out for better terms; therefore neither Rent nor Wages is actually
produced, though but for this both might be.
In this chart, notwithstanding that but little space is used, indicated
with red, Wages are reduced to the same low point by the mere appropriation
of space, indicated with blue, that they would reach if all the space above
the poorest were fully used. It thereby appears that under a system which
confiscates Rent to private uses, the demand for land for speculative purposes
becomes so great that Wages fall to a minimum long before they would if land
were appropriated only for use.
In illustrating the effect of confiscating Rent to private use we have as
yet ignored the element of social growth. Let us now assume as before (page
73), that social growth increases the productive power of the given expenditure
of labor force to 100 when applied to the best land, 50 when applied to the
next best, 10 to the next, 3 to the next, and 1 to the poorest. Labor would
not be benefited now, as it appeared to be when on page 73 we illustrated
the appropriation of land for use only, although much less land is actually
used. The prizes which expectation of future social growth dangles before
men as the rewards of owning land, would raise demand so as to make it more
than ever difficult to get land. All of the fourth grade would be taken up
in expectation of future demand; and "surplus labor" would be crowded
out to the open space that originally yielded nothing, but which in consequence
of increased labor power now yields as much as the poorest closed space originally
yielded, namely, 1 to the given expenditure of labor force.102 Wages would
then be reduced to the present productiveness of the open space. Thus: [chart]
102. The paradise to which the youth of our country have
so long been directed in the advice, "Go West, young man, go West," is
truthfully described in "Progress and Poverty," book iv, ch.
iv, as follows :
"The man who sets out from the eastern seaboard
in search of the margin of cultivation, where he may obtain land without
paying rent, must, like the man who swam the river to get a drink,
pass for long distances through half-titled farms, and traverse vast
areas of virgin soil, before he reaches the point where land can be
had free of rent — i.e., by homestead entry or preemption."
If we assume that 1 for the given expenditure of labor force is the least
that labor can take while exerting the same force, the downward movement
of Wages will be here held in equilibrium. They cannot fall below 1; but
neither can they rise above it, no matter how much productive power may increase,
so long as it pays to hold land for higher values. Some laborers would continually
be pushed back to land which increased productive power would have brought
up in productiveness from 0 to 1, and by perpetual competition for work would
so regulate the labor market that the given expenditure of labor force, however
much it produced, could nowhere secure more than 1 in Wages.103 And this
tendency would persist until some labor was forced upon land which, despite
increase in productive power, would not yield the accustomed living without
increase of labor force. Competition for work would then compel all laborers
to increase their expenditure of labor force, and to do it over and over
again as progress went on and lower and lower grades of land were monopolized,
until human endurance could go no further.104 Either that, or they would
be obliged to adapt themselves to a lower scale of living.105
103. Henry Fawcett, in his work on "Political Economy," book
ii, ch. iii, observes with reference to improvements in agricultural
implements which diminish the expense of cultivation, that they do not
increase the profits of the farmer or the wages of his laborers, but
that "the landlord will receive in addition to the rent already
paid to him, all that is saved in the expense of cultivation." This
is true not alone of improvements in agriculture, but also of improvements
in all other branches of industry.
104. "The cause which limits speculation in commodities,
the tendency of increasing price to draw forth additional supplies, cannot
limit the speculative advance in land values, as land is a fixed quantity,
which human agency can neither increase nor diminish; but there is nevertheless
a limit to the price of land, in the minimum required by labor and capital
as the condition of engaging in production. If it were possible to continuously
reduce wages until zero were reached, it would be possible to continuously
increase rent until it swallowed up the whole produce. But as wages cannot
be permanently reduced below the point at which laborers will consent
to work and reproduce, nor interest below the point at which capital
will be devoted to production, there is a limit which restrains the speculative
advance of rent. Hence, speculation cannot have the same scope to advance
rent in countries where wages and interest are already near the minimum,
as in countries where they are considerably above it. Yet that there
is in all progressive countries a constant tendency in the speculative
advance of rent to overpass the limit where production would cease, is,
I think, shown by recurring seasons of industrial paralysis." — Progress
and Poverty, book iv, ch. iv.
105. As Puck once put it, "the man who makes two
blades of grass to grow where but one grew before, must not be surprised
when ordered to 'keep off the grass.' "
They in fact do both, and the incidental disturbances of general readjustment
are what we call "hard times." 106 These culminate in forcing unused
land into the market, thereby reducing Rent and reviving industry. Thus increase
of labor force, a lowering of the scale of living, and depression of Rent,
co-operate to bring on what we call "good times." But no sooner
do "good times" return than renewed demands for land set in, Rent
rises again, Wages fall again, and "hard times" duly reappear.
The end of every period of "hard times" finds Rent higher and Wages
lower than at the end of the previous period.107
106. "That a speculative advance in rent or land
values invariably precedes each of these seasons of industrial depression
is everywhere clear. That they bear to each other the relation of cause
and effect, is obvious to whoever considers the necessary relation between
land and labor." — Progress and Poverty, book v, ch. i.
107. What are called "good times" reach a point
at which an upward land market sets in. From that point there is a downward
tendency of wages (or a rise in the cost of living, which is the same
thing) in all departments of labor and with all grades of laborers. This
tendency continues until the fictitious values of land give way. So long
as the tendency is felt only by that class which is hired for wages,
it is poverty merely; when the same tendency is felt by the class of
labor that is distinguished as "the business interests of the country," it
is "hard times." And "hard times" are periodical
because land values, by falling, allow "good times" to set
it, and by rising with "good times" bring "hard times" on
again. The effect of "hard times" may be overcome, without
much, if any, fall in land values, by sufficient increase in productive
power to overtake the fictitious value of land.
The dishonest and disorderly system under which society confiscates Rent
from common to individual uses, produces this result. That maladjustment
is the fundamental cause of poverty. And progress, so long as the maladjustment
continues, instead of tending to remove poverty as naturally it should, actually
generates and intensifies it. Poverty persists with increase of productive
power because land values, when Rent is privately appropriated, tend to even
greater increase. There can be but one outcome if this continues: for individuals
suffering and degradation, and for society destruction.
Q25. What good would the single tax do to the poor? and how?
A. By constantly keeping the demand for labor above the supply it would enable
them to abolish their poverty.
... read the book
Charles B. Fillebrown: A Catechism
of Natural Taxation, from Principles of
Natural Taxation (1917)
Q30. How would the single tax increase wages?
A. By gradually transferring to wages that portion of the current wealth that
now flows to privilege. In other words, it would widen and deepen the channel
of wages by enlarging opportunities for labor, and by increasing the purchasing
power of nominal wages through reduction of prices. On the other hand it would
narrow the channel of privilege by making the man who has a privilege pay for
it.
Q31. How can this transfer be effected?
A. By the taxation of privilege.
Q32. How much ultimately may wages be thus increased?
A. Fifty percent would be a low estimate.
Q33. What are fair prices and fair wages?
A. Prices unenhanced by privilege, and wages undiminished by taxation. ... read the whole article
Rev. A. C. Auchmuty: Gems from George,
a themed collection of excerpts from the writings of Henry
George (with links to sources)
THE aggregate produce of the labor of a savage tribe is small, but each
member is capable of an independent life. He can build his own habitation,
hew out or stitch together his own canoe, make his own clothing, manufacture
his own weapons, snares, tools and ornaments. He has all the knowledge of
nature possessed by his tribe — knows what vegetable productions are
fit for food, and where they maybe found; knows the habits and resorts of
beasts, birds, fishes and insects; can pilot himself by the sun or the stars,
by the turning of blossoms or the mosses on the trees; is, in short, capable
of supplying all his wants. He may be cut off from his fellows and still
live; and thus possesses an independent power which makes him a free contracting
party in his relations to the community of which he is a member.
Compare with this savage the laborer in the lowest ranks of civilized society,
whose life is spent in producing but one thing, or oftener but the infinitesimal
part of one thing, out of the multiplicity of things that constitute the
wealth of society and go to supply even the most primitive wants; who not
only cannot make even the tools required for his work, but often works with
tools that he does not own, and can never hope to own. Compelled to even
closer and more continuous labor than the savage, and gaining tby it no more
than the savage gets — the mere necessaries of life — he loses
the independence of the savage. He is not only unable to apply his own powers
to the direct satisfaction of his own wants, but, without the concurrence
of many others, he is unable to apply them indirectly to the satisfaction
of his wants. He is a mere link in an enormous chain of producers and consumers,
helpless to separate himself, and helpless to move, except as they move.
The worse his position in society, the more dependent is he on society; the
more utterly unable does he become to do anything for himself. The very power
of exerting his labor for the satisfaction of his wants passes from his own
control, and may be taken away or restored by the actions of others, or by
general causes over which he has no more influence than he has over the motions
of the solar system. The primeval curse comes to be looked upon as a boon,
and men think, and talk, and clamor, and legislate as though monotonous manual
labor in itself were a good and not an evil, an end and not a means. Under
such circumstances, the man loses the essential quality of manhood — the
godlike power of modifying and controlling conditions. He becomes a slave,
a machine, a commodity — a thing, in some respects, lower than the
animal.
I am no sentimental admirer of the savage state. I do not get my ideas of
the untutored children of nature from Rousseau, or Chateaubriand, or Cooper.
I am conscious of its material and mental poverty, and its low and narrow
range. I believe that civilization is not only the natural destiny of man,
but the enfranchisement, elevation, and refinement of all his powers, and
think that it is only in such moods as may lead him to envy the cud-chewing
cattle, that a man who is free to the advantages of civilization could look
with regret upon the savage state. But, nevertheless, I think no one who
will open his eyes to the facts, can resist the conclusion that there are
in the heart of our civilization large classes with whom the veriest savage
could not afford to exchange. It is my deliberate opinion that if, standing
on the threshold of being, one were given the choice of entering life as
a Terra del Fuegan, a black fellow of Australia, an Esquimaux in the Arctic
Circle, or among the lowest classes in such a highly civilized country as
Great Britain, he would make infinitely the better choice in selecting the
lot of the savage. For those classes who in the midst of wealth are condemned
to want, suffer all the privations of the savage, without his sense of personal
freedom; they are condemned to more than his narrowness and littleness, without
opportunity for the growth of his rude virtues; if their horizon is wider,
it is but to reveal blessings that they cannot enjoy. — Progress & Poverty — Book
V, Chapter 2: The Problem Solved: The Persistence of Poverty Amid Advancing
Wealth
BUT it seems to us the vice of Socialism in all its degrees is its want
of radicalism, of going to the root. . .. It assumes that the tendency of
wages to a minimum is the natural law, and seeks to abolish wages; it assumes
that the natural result of competition is to grind down workers, and seeks
to abolish competition by restrictions, prohibitions, and extensions of governing
power. Thus mistaking effects for causes, and childishly blaming the stone
for hitting it, it wastes strength in striving for remedies that when not
worse are futile. Associated though it is in many places with democratic
aspiration, yet its essence is the same delusion to which the Children of
Israel yielded when, against the protest of their prophet, they insisted
on a king; the delusion that has everywhere corrupted democracies and enthroned
monarchs — that power over the people can be used for the benefit of
the people; that there may be devised machinery that through human agencies
will secure for the management of individual affairs more wisdom and more
virtue than the people themselves possess. — The Condition of Labor,
an Open Letter to Pope Leo XIII
JUMPING to conclusions without effort to discover causes, it fails to see
that oppression does not come from the nature of capital, but from the wrong
that robs labor of capital by divorcing it from land, and that creates a
fictitious capital that is really capitalized monopoly. It fails to see that
it would be impossible for capital to oppress labor were labor free to the
natural material of production; that the wage system in itself springs from
mutual convenience, being a form of co-operation in which one of the parties
prefers a certain to a contingent result; and that what it calls the "iron
law of wages," is not the natural law of wages, but only the law of
wages in that unnatural condition in which men are made helpless by being
deprived of the materials for life and work. It fails to see that what it
mistakes for the evils of competition are really the evils of restricted
competition — are due to a one-sided competition to which men are forced
when deprived of land. While its methods, the organization of men into industrial
armies, the direction and control of all production and exchange by governmental
or semi-governmental bureaus, would, if carried to full expression, mean
Egyptian despotism. —The Condition of Labor, an Open Letter to Pope
Leo XIII
IN socialism as distinguished from individualism there is an unquestionable
truth — and that a truth to which (especially by those most identified
with free-trade principles) too little attention has been paid. Man is primarily
an individual — a separate entity, differing from his fellows in desires
and powers, and requiring for the exercise of those powers and the gratification
of those desires individual play and freedom. But he is also a social being,
having desires that harmonize with those of his fellows, and powers that
can only be brought out in concerted action. There is thus a domain of individual
action and a domain of social action — some things which can best be
done when each acts for himself, and some things which can best be done when
society acts for all its members. And the natural tendency of advancing civilization
is to make social conditions relatively more important, and more and more
to enlarge the domain of social action. This has not been sufficiently regarded,
and at the present time, evil unquestionably results from leaving to individual
action functions that by reason of the growth of society and the developments
of the arts have passed into the domain of social action; just as, on the
other hand, evil unquestionably results from social interference with what
properly belongs to the individual. Society ought not to leave the telegraph
and the railway to the management and control of individuals; nor yet ought
society to step in and collect individual debts or attempt to direct individual
industry. — Protection or Free Trade, Chapter 28 econlib
NOW, why is it that men, have to work for such low wages? Because, if they
were to demand higher wages, there are plenty of unemployed men ready to
step into their places. It is this mass of unemployed men who compel that
fierce competition that drives wages down to the point of bare subsistence.
Why is it that there are men who cannot get employment? Did you ever think
what a strange thing it is that men cannot find employment? If men cannot
find an employer, why can they not employ themselves? Simply because they
are shut out from the element on which human labor can alone be exerted;
men are compelled to compete with each other for the wages of an employer,
because they have been robbed of the natural opportunities of employing themselves;
because they cannot find a piece of God's world on which to work without
paying some other human creature for the privilege. — The Crime of
Poverty
WE laud as public benefactors those who, as we say, "furnish employment." We
are constantly talking as though this "furnishing of employment," this "giving
of work" were the greatest boon that could be conferred upon society.
To listen to much that is talked and much that is written, one would think
that the cause of poverty is that there is not work enough for so many people,
and that if the Creator had made the rock harder, the soil less fertile,
iron as scarce as gold, and gold as diamonds; or if ships would sink and
cities burn down oftener, there would be less poverty, because there would
be more work to do. — Social Problems, Chapter 8 — That We All
Might Be Rich
YOU assert the right of laborers to employment and their right to receive
from their employers a certain indefinite wage. No such rights exist. No
one has a right to demand employment of another, or to demand higher wages
than the other is willing to give, or in any way to put pressure on another
to make him raise such wages against his will. There can be no better moral
justification for such demands on employers by working-men than there would
be for employers demanding that working-men shall be compelled to work for
them when they do not want to, and to accept wages lower than they are willing
to take. — The Condition of Labor, an Open Letter to Pope Leo XIII
THE natural right which each man has, is not that of demanding employment
or wages from another man, but that of employing himself — that of
applying by his own labor to the inexhaustible storehouse which the Creator
has in the land provided for all men. Were that storehouse open, as by the
single tax we would open it, the natural demand for labor would keep pace
with the supply, the man who sold labor and the man who bought it would become
free exchangers for mutual advantage, and all cause for dispute between workman
and employer would be gone. For then, all being free to employ themselves,
the mere opportunity to labor would cease to seem a boon; and since no one
would work for another for less, all things considered, than he could earn
by working for himself, wages would necessarily rise to their full value,
and the relations of workman and employer be regulated by mutual interest
and convenience. — The Condition of Labor, an Open Letter to Pope Leo
XIII ... go to "Gems from George"
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