The impending crisis; or, Prosperity analyzed

Contents

CHAPTER PAGE

Introduction 7

I. What Must Happen n

Introduction

The new century has begun and the American people find themselves first among the family of nations— a land flowing with milk and honey, a people born to genius and renown, a system of government theoretically established upon the brotherhood and equality of all men. With these attributes of greatness the student of history could, with no show of vanity or boasting, predict a future even more glorious than any period the past has ever disclosed.

No period of the world's history can stand comparison with the present. In material production, in the arts, in science, literature and invention we have outrun the most extravagant predictions. With the increased inventions which annihilate time and space, the world m a certain sense has become smaller and smaller. What was new yesterday is old today. Ideas and traditions which had held for centuries have been seen to vanish before the spirit o L investigation and discovery. The torch of rea-

5 INTRODUCTION

son has spread a light wherever it has appeared, and yet it has scarcely begun to do its work. In both the inorganic and organic sciences wonders have been performed, and these, too, in the face of ignorance and superstition.

We turn for a moment from the picture — from a picture where science is steadily advancing to a picture where government still wears the ancient garb of privilege, slightly altered, to the modern style of expediency. We have seen what has been done ; let us learn what is yet to be done.

The political horizon looks dark and lowering, charged with the electricity of coming events. Much has been done in the halls of legislation for monopoly and privilege, but little for humanity. Beggars walk our streets, tramps throng our highways and prisons and almshouses are filled to overflowing. Already there loom up in the distance the signs of another social and industrial paralysis. The efforts of politicians to give us a true system of political philosophy have been futile, while their slavish submission to organized wrong is but hastening the day when the last straw shall have been put upon the camel's back and patience shall have ceased to endure.

The feeling of unrest which pervades all classes of society is a potent suggestion that something is wrong — something is lacking in

INTRODUCTION 9

our national organization to make us a happy, harmonious unit. Political freedom has generally been admitted, but those political somnambulists who think that this is the end and aim of government have yet to learn that there can be no permanent political rights until the rights of man to his natural inheritance — the earth — has been established.

If history teaches us anything, it teaches that the concentration of wealth in the hands of the few has invariably been the great cause of the destruction of free government. We trace the history of the great nations of the earth — of Egypt, Babylon, Greece, Rome — their origin existing only in fable and story. Communities form, governments are instituted, they flourish for a while, do their work, decay and die. The story of one is the story of all. The thoughtful man asks himself the question : Is this all there is of life? Are we similarly to play our part in the world's great drama?

Behold in France, a century ago, that awful tragedy, the natural consequence of ignorance, oppression and wrong, when the pent-up indignation of hundreds of years broke forth and spread such awful havoc as the modern world had never seen. See in our own country, a little more than a generation ago, the inevitable result of one man attempting to own another; when one million lives were sacrificed to abolish

IO INTRODUCTION

that cursed institution — chattel slavery. But slavery is not abolished. The form of our serfdom has merely undergone a change. Industrial slavery is still here in all its horror, wrecking the lives of thousands every day, enslaving woman, robbing childhood of its joys, and making beasts and liars of honest men.

This book is a protest against existing conditions, and is written with the hope that it may arouse the people from their lethargy and awaken them to a knowledge of what awaits them if something is not done soon. It will offer them a prosperity which is easily within their power to obtain, the author firmly believing that no prosperity is genuine unless it is enjoyed by all.

OR

PROSPERITY ANALYZED

Chapter I

i

WHAT MUST HAPPEN

A crisis is inevitable. The human mind is so constituted that it remains in a state of lethargy until it is nerved to action by force of circumstances — by events. Men of ordinary mental capacity do very little reasoning. Their minds are swayed by events. It has never yet been given to any man to exactly foretell the future, yet we may know, if we can know anything, that punishment is sure to follow every violation of Nature's laws.

As it is with the individual, so it is with the nation. We cannot on the one hand be telling men that they are equal before the law, and then deny them the equal opportunity to make an honest living. It would seem just if one should propose that the workingman should be the rich man, and yet in this great republic of ours we have the sorry spectacle of the workingman being the poor man. Surely there must be something wrong. By the term "workingman" is meant every one who by brain or brawn gains his living by honest labor, either in the producing of wealth or rendering service for service. It may be contended that the American workmen retain more of the fruits of their labor than do those of any other nation. Even if this were so, they will not be content, and justice will not be done until they retain all the fruits of their labor. As each year passes by the worker finds that more and more is being taken from him to meet the exactions of class legislation, and that it will be but a matter of a few more generations before he will be in as sad a plight as the toilers of Europe. He is not only burdened with the support of an aristocracy at home, but he must support one in Europe. It has been estimated that fully two hundred millions of dollars are paid each year to foreign landlords by American citizens merely for the privileges of living and working in their own country, and this does not include dividends and interest on watered stocks held by European capitalists.

WHAT MUST HAPPEN 13

But in a republic why should there be an aristocracy ? This word was at one time hateful to every American, but during the last twenty-five years, by our close relations with Europe and by the marriage of the daughters of our millionaires to titled foreign fops, we have come to regard the word with indifference, even with respect. In a true republic there should be no aristocracy but a working aristocracy. All other aristocracies have their basis in some special privilege, such as the possession of the land, and the consequent appropriation of ground rent. What does the landlord, as landlord, do for the happiness of mankind, for the furtherance of civilization? Nothing whatever. He does not render service for service. He creates no wealth. In every instance he is an obstacle to progress and to the production of wealth. He is an earthly god, forming the habits and environments of his fellow creatures. A system which allows one man to levy tribute upon another man for the privilege of living on God's earth is a system born of evil. There is no good in it and we can never have a science of government until we get rid of this land monster.

There are those who, because they themselves are enjoying a little prosperity, imagine that every one else is doing the same. They seem to think that because they have a full stomach no one else ever feels the pangs of hunger. They are generally of the "upper ten" — the "upper crust" — and do not see the writhing mass of humanity beneath, a great part of whom scarcely know where the next meal is coming from. There are girls and young women in our large cities whose wages amount to but forty or fifty cents per day. It should be a cause of wonder that women can maintain their honor upon such wages. Truly our wage system is not very conducive or encouraging to morality. If we could count the thousands that are born into this world to lead a life of vice and crime we would stand aghast in horror. If we could feel the anguish and despair which are the constant companions of these poor souls, our hearts would melt with pity. And yet what is pity without a remedy ? Our social system is the manufactory of crime. We must know that poverty is the greatest of all the generators of crime. Involuntary poverty, enforced idleness — these are the harbingers of evil. We cannot hope to reform the world by building jails, prisons and almshouses ; by establishing soup kitchens and charitable institutions. We cannot continue to run the world on charity. Mankind wants no gifts. It is not fair that we should insult him with an offer of alms. Mankind wants justice. Man wants an opportunity to employ himself freely

WHAT MUST HAPPEN 15 in those bounties of nature which our Heavenly Father has so abundantly bestowed upon him. In our Bible we say, "The earth hath He given to the children of men;" but in actual practice we say, "The earth hath He given to some of the children of men." There is room enough for all, and there would be happiness for all were it not that we, through foolish pride, through lust for gain and self-aggrandizement, cut each other's throats to gain a stepping-stone to an ephemeral greatness. There is room enough in these United States for the entire population of the earth, and yet with the population we have, hard times and starvation are no strangers here. If the forces of nature were not forestalled and monopolized by a few, if the land were not held out of use by paper titles, wealth would be created in abundance and there would be no idle hands, no starving mouths.

The cry has been raised by some, that there are too many people in the world. Just think of the blasphemy of the idea that God sends more mouths into the world than He can feed ! The earth may be likened to a ship, upon which we are all travelers and sojourners. Would any sensible captain put to sea without thoroughly provisioning his vessel for the voyage? This would be mere human wisdom. And yet we are ever ready to accuse some one else, and so, to ease our own shoulders, do not hesitate to accuse and blaspheme the Almighty. Can anysane man suppose that an all-wise Father has placed us on this globe and set us adrift through infinite space without providing for all of his children ? It is not God's inhumanity to man ; it is man's inhumanity to man. It is our own niggardliness, not the niggardliness of nature. It is our own injustice to each other, and because we persist in violation of God's law that these evils are upon us. A prophet of old has summed up the whole matter by saying, "Cease to do evil, learn to do good."

Chapter II Employer And Employed

We hear a great deal about employer and employed, of capital oppressing labor, and much other vague and indefinite stuff. In the actual scientific meaning and in a just and equitable condition of society, we are all employers of each other, and land is the constant and ultimate employer of us all. To say that A employs B is only half the truth, because A is directly or indirectly employed by B, otherwise there could be no equation of exchange. A merchant, for instance, in starting a store employs clerks ; but is not the merchant, in the broader sense of the term, an employee also? Does he not perform a service for the community, and in so doing is he not an employee of the community? To perform an exchange two parties are necessary — two parties must necessarily be employed; but when one is continually giving without receiving and the other continually receiving without giving, it is self-evident that this is not exchange, but simply robbery. Exchange bears a natural relationl8 THE IMPENDING CRISIS

ship to employment. It is the final act of human labor to complete production, and any restriction or interference with the working of this vast piece of living machinery will react on the market of employment so as to depress wages, diminish production, make the rate of interest fluctuate, and have a constant tendency to produce panics and hard times. Instead of obtaining the maximum of production with the least expenditure of human effort, in nature's way — that is, with the union of free capital and free labor — we experience a condition of great injustice, in which capital and labor are both shorn of their productive power.

If capital is not free to be employed by labor, then how can labor be free ?

Every dollar of tax which is put upon capital diminishes the productive power of labor, for the taxes, which are generally supposed to be paid by the capitalist, are shifted to the shoulders of labor and wages are made that much less.

We speak of capital oppressing labor, but in actual fact the statement is entirely erroneous, being based upon a false conception of the elements that constitute political economy. Capital is not a primary element in production, such as land or Tabor. Capital is a creation of man. Now, how is it possible for the creature to oppress its creator ? It is entirely unphilosoph-

EMPLOYER AND EMPLOYED 1 9

ical to suppose that such could be the case. When we speak of capital oppressing labor we are "barking up the wrong tree" and assuming the effect to be the cause. Capital under natural conditions is the hand-maid of labor — the means to an end.

What in common acceptation is the employer is, in the light of reason, the employed — for capital does not employ labor, but on the contrary, it is labor which employs capital. To-day capital is divorced from labor because labor is divorced from the land. The difficulty lies in the inability to distinguish the apparent from the real. The real conflict is not between capital and labor, but between landlordism and labor. Labor accuses capital of wrongs which are the natural result of landlordism, and capital retaliates by accusing labor of wrongs which are also the result of landlordism. We must not forget the fact that labor and capital are both alike oppressed by the land monopolist and that the oppression itself is the natural expression of our vicious land policy.

That policy is private property in land. If the earth, the mother of us all, can justly be private property, then man must be private property. But since man cannot in justice be private property, then the earth cannot in justice be private property.

Between landlord and capitalist there is a vast difference. A man may be a land owner and yet not possess a dollar of capital, or a man may be a capitalist and yet not possess a foot of land.

Every trust formed is in the last analysis a species of land monopoly, and its power to oppress is inherent in that fact alone, for no monopoly can work any severe or lasting injury which does not rest upon the private monopoly of some natural opportunity.

In the strikes against the steel and coal trusts the companies are not the losers, for they reimburse themselves by advancing the prices on what the people must have, and the general public pays the entire bill, the cost of the strike included. The trust system is the natural result of our system of taxing labor, and if the system could be carried to its logical conclusion, one man could own the whole earth and the rest of the inhabitants would be his tenants. Thus the question of employer and employed is reduced by the reason to its farthest possible limits. Every question affecting the employment of labor, every question of tariff, every question of finance or of public revenue in general is in the last analysis a land question.

To-day, amidst all the strife and contention in the industrial world, we see the hideous spectacle on the one hand of landlords combining to

EMPLOYER AND EMPLOYED 21

secure a monopoly of production and on the other hand of trades unions combining to secure a monopoly of employment. Neither system belongs to the grand economy of nature; both are subterfuges invented by man to escape the wrong engendered by his deliberate violation of the laws of the universe. With freedom of opportunity for self -employment, the evils associated with trusts and trades unions would vanish.

Landlords and politicians are very shrewd in rilling the press with all sorts of plans for reconciling capital and labor, thus fostering the impression that capital and labor really are in conflict. Their real purpose is to divert public attention from the real cause and thus make themselves secure in their present position. Such men profess anxiety that capital and labor shall be on more friendly terms; that strikes and lockouts shall be made impossible. Take the average corporation employee, who in most cases is compelled to live a cramped and undeveloped life. Why is he forced to overwork himself, to ruin his health and shorten his life, and live in such conditions as to make his feelings toward his employers that of hatred rather than of friendship? Why do these pretended peacemakers persist in all this hypocritical talk when they themselves possess the power and opportunity to bring about the conditions for which they profess such an ardent desire? The employee cannot hold in esteem men, who in their relation to him appear as one thing-, and in their relation to the general public appear as something entirely different. Organized hypocrisy is everywhere breeding anarchy and crime. The suggestions and methods of rich men are wholly impotent to cure the corruption of to-day. Their suggestions, summed up, amount to saying: "Yes, I believe that stealing is wrong, but please do not stop me from stealing. I believe in the equality of all men, but please do not make me equal with other men by taking my special privileges from me."

Let us not be deceived into thinking that capital oppresses labor and that labor must wait for capital to employ it. Neither one has more than land monopoly will give it. Remove this great obstacle. Then labor and capital will work in harmony and with renewed force. The frequent dissensions that exist between employees and their employers would cease, and thus in peaceful security we would pave the way for that permanent prosperity, "when they shall sit every man under his vine and under his fig tree and none shall make them afraid."

Chapter III Who Pays The Taxes?

The American people must learn that the price of labor is determined in the same way that the price of any commodity or product of labor is determined, namely, by the law of supply and demand. When the supply is abundant and there is no demand, then the price falls. When the supply is small and the demand is great, then the price is high.

Let us take the case of a clerk in any large corporation, and let us, for illustration, call him John. John is getting a salary of, say $50 per month as bookkeeper, copyist, stenographer, or for some similar work. As he grows older he finds that he has new wants, new needs, and has probably reached a marriageable age, and has begun to think seriously upon the subject. He goes to his employers and asks if he cannot have an increase in his wages, saying that he has been with the company a considerable length of time and has done good work, and winds up by saying that he is deserving of more pay. His employers listen to him respectfully, but at the same time fully realize the disadvantage of John's position in the matter and the advantage of their own position. They may be men who, under certain circumstances and conditions, would be actuated by the noblest instincts. But what are these when we are dealing with dollars and cents. They may be charitable enough even to grant the request of John and add a few dollars to his pay. But they need not do this if they do not choose to do so. They can plainly tell John that they can get plenty of young men who zvould be glad to do this vuork for $30 or even less per month, and that if he is not satisfied with his position he can step down and out. John sees that further argument is wholly unnecessary and walks away thoroughly discouraged. Now, then, is it not clear to you that you cannot hope to demand better wages so long as there is another man waiting to take your place at the same or even less wages than you yourself now receive ? The principle to be deduced from this is that it is the idle man who determines the wages of the man that works. Let us get that idle man employed, and then we will be in a position to demand a just wage. The idle man is the dangerous man to society. But why are there idle men? Why should there be any involuntary idleness ? The answer to the above questions is found in our vicious

WHO PAYS THE TAXES? 25

system of taxation, for by that system we make employment scarce, and with the constant increase of population men are forced to compete with each other at starvation wages.

Let us take another illustration and show how our present system of taxation works, and how it is responsible for the condition that confronted John. We have large manufacturers in this country who say that they are heavy taxpayers. The fact is that they are not at all. They do not pay the tax ; they simply advance it, and the tax which they have paid is added to the cost of producing the article. The next man who handles it adds his profit to the selling price, and so on, each man adding his profit until it reaches the consumer, who foots the bill.

Thus far we see that it is the consumer who pays all the tax and not the manufacturer. But let us carry the analysis still farther, and we shall see that by the same operation the poor man must not only pay the tax, but that his wages, with which he must pay it, are made smaller. When we tax an article we naturally make it dearer; when we make it dearer the demand for it slackens; when the demand slackens the production slackens, and when production slackens, those who were employed in its production are thrown out of work.

It is frequently asserted that only those are taxpayers who own real estate and pay a tax to the assessor. In actual fact every one who buys anything is a taxpayer and an employer of labor. When a person makes a purchase he must be taxed if any portion of the product or any agency in its production has been taxed. This ought to be clear, even to the most untutored. But there is a class of high-flown economists who will not listen to a simple explanation, but would rather insist upon the dogmas and superstitions of an antiquated system of political economy and who would have us believe that the way to raise wages is to impose a protective tariff upon the people. This is not an age of miracles, but an age when men are supposed to use their common sense and their reason. We are taught that when we levy a tax upon imported goods the foreigner pays the tax, when it is very plain that he does not pay the tax, but that we ourselves pay it.

A tax upon imports is virtually a tax upon exports. We will take the case of a farmer who is shipping his wheat to some European port, Liverpool, for instance. We speak of selling our goods when we really mean exchanging our goods. Very little money, comparatively, changes hands. It is an exchange of commodities. The wheat arrives in Liverpool and is exchanged as soon as possible for other goods of Europe. There has been no tax

WHO PAYS THE TAXES? 27

upon the goods leaving America, but the moment their equivalent arrives at the Custom House in New York the farmer discovers that twenty-five per cent of his goods is confiscated. Imagine a robber who meets you on the street and demands one-fourth of your daily wages and the civil law should justify both his demand and the execution of it. Would not that be parallel to the present tariff system which robs a man under the plea of protecting him? Again, it is claimed that high tariff means high wages, and low tariff means low wages. I suppose that if they carried their theory to its conclusion no tariff would mean no wages at all.

Let us see if the notion of the high tariff advocates holds good. Steel can be imported from England for twenty dollars per ton, but the law levies a tax upon it of eight dollars per ton. This shuts out English steel and enables the manufacturers in this country to charge eight dollars more for their goods. Of course our steel manufacturers are all in the business for their health, and are men of such a charitable nature that they immediately convert this extra eight dollars, which the law gives them, into wages for their workmen. To call a fool a Solomon would be irony, but to say that the Steel Trust converts this eight dollars per ton into wages for their employees is as black a lie as was ever propagated by any political party. When the workman goes to demand his share of the increase in the tariff he is told by his employer that there are plenty of men waiting to take his place, and if he doesn't like his present wages he can step down and out. The thought of a wife and little ones at home causes the laborer to reflect.

Who pockets the eight dollars? Who is protected ?

"Protection !" A tariff is an impediment, a hindrance to exchange. That which hinders exchange prevents the production of wealth; that which prevents the production of wealth diminishes the chances for employment and in consequence depresses wages. When wages are depressed the buying capacity of the people is diminished, and the final outcome is "business stagnation." If a tariff is a good thing, then the higher the tariff the better it will be for us, and its ultimate good would not be realized until everything that is exchanged between nations bore a tax to the highest possible limit. If a tariff is a good thing, then we should have a tax upon everything that is taken from one State of the Union into another State. If, on the other hand, a tariff is a bad thing, then the less we have of it the better it will be for us. There is no half-way ground to take, foi it must be either right or wrong. If the

WHO PAYS THE TAXES? 29

hypothesis of protection as a political doctrine be true, then it should be true in its entirety; and if exceptions be found which show a falsity in particular, then it is false in the whole.

The balance of trade is nominally always against Europe, but actually against the United States ; for if the United States sends two hundred million dollars' worth of merchandise to Europe, and Europe sends a hundred million dollars' worth of merchandise to the United States, then Europe is indebted to the United States to the extent of one hundred million dollars. Now, since the United States is not in the habit of giving things away there are only two conditions that could possibly hold — either Europe sends us one hundred million dollars in specie or else that amount is already due her as dividend and interest on investments in this country. As Europe does not send money to us, but on the contrary it is we who are always sending money to Europe, the second condition is the only one that can be true. It is astonishing that the average American will boast of such a condition. There can be no reason for such boasting except ignorance. After a careful survey of the tariff question how pre-eminently absurd does the balance of trade fallacy appear.

The government bond system inaugurated during the Civil War is one of the methods by which millionaires and paupers are made, and a protective tariff is another. Government bonds, bank currency, protective tariffs, special privileges — these are kingly institutions and are incompatible and destructive to a republican form of government. Kings have never lacked arguments to defend the existing order of things, and politicians of to-day are of the same breed and stamp.

Must we close our eyes to the downward tendency which has already begun and which will continue with an accelerated momentum each year? I anticipate that I will be called "pessimist" by those who are ever ready to label others with the badge of their own conceit. Is it pessimism for a physician to affirm the presence of disease in the human organism, and would it be pessimism for a sociologist to affirm the existence of disease in the social organism — society? Is it pessimism honestly to admit the existence of evil and to take steps towards its abolition?