An essay on the distribution of livelihood

Contents

Page

CHAPTER I. Introductory . . . 11

Current principles of production do not admit of distributive equity, except as the latter rests upon those principles.

The distributive reform now recommended, i. e., the restriction of laboring population, inefficacious because of the proclivity of production to require fewer workers proportionately.

The base upon which current principles are applied contains an inequitable feature in the unconditioned tenure of land, which permits the latter to be withheld from production, though it would otherwise naturally be productively occupied.

A certain method of economic analysis should begin at the soil, instead of from an accumulation of capital as at present.

CHAPTER II. ...... 17 The first principle of production is necessity

The second is the reservation of sufficient of the product of the soil to generate its succession.

The third is that it must follow the channel of consumption.

These three principles surround the base of production, and the first principle of its expansion seems to rest in the efficiency of labor.

Expanding production appears to rest, secondarily, in the operation of the foregoing principles and populative increase.

All of these principles converge into natural conditions.

Under the principle of labor division population divides into two. orders: those engaged directly on the land and those employed in artisan, commercial

4 CONTENTS

and professional occupations; and as the second is the outflow of the first, the distributive relation of population to production can best be studied from this aspect.

Population divides into these two orders according to the conditions of production.

The second can only arise by reason of the augmenting efficiency of labor.

This, on the soil, expresses itself in an increased yield and an increased pro rata area; and off the soil, in similar conditions.

The result is that population must overflow onto new land.

The foregoing principles reconsidered in their bearing to the general modification of natural conditions, i. e., the sixth principle of production.

The increase of population and the increase of labor efficiency similar in their distributive effect, in that the second, like the first, eventually produces a condition of seeming over-population.

Not only, accordingly, must population be regulated to the capacity of the productive organism, but the effect of expanding labor efficiency must be neutralized.

The operation of demand considered.

Chapter III 34

The principles of production examined for their distributive bearing, which is found to rest in the valuation of labor.

Labor must begin its application upon the soil, so that it is land that constitutionally governs its value.

But under the division of labor, it applies itself off the land, so that the latter must exercise its influence by a comparative process.

Moreover as, under the course of events, labor comes to be applied beyond the scope of either process of valuation, its value is determined by com-

CONTENTS 5

petition wholly unmodified by the principle of constitutional valuation.

The difference between this last value and that conferred by the comparative influence of land, is Interest.

That between this comparative valuation and the direct value conferred by land, is Rent.

Labor thus has three gradations of value, the last of which, under the conditions of labor application, is a common distributive value of all three.

To bring this distributive value to a level with the actual value of labor, the comparative ratio of the third species of labor application, which is altogether constituted of hired labor, must be raised.

This can only be done by restricting its daily application.

But this value cannot be raised above the lowest land under production, so that rent, as it exists above such, cannot be eliminated in this manner. Taxation must therefore be resorted to.

With the distributive value of labor at its highest point, if livelihood is not above the standard of comfort, population is at its full expansion, and must be held in check.

Chapter IV 47

Objection will be made that if the hours of labor are restricted, and wages raised as a result, the incentive to save will be weakened, and production accordingly languish.

The principle of saving has but a subordinate operation, is compelled to that extent by necessity, and cannot possibly exceed it.

The saving is made by those directly interested, and cannot be made by anyone else except under extraordinary conditions.

The accumulation of money does not represent

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this saving, and its only effect is to augment productive competition.

The operation of money considered.

The regulation of population considered.

Chapter V 67

Recapitulation, having in view the adjustment of population to the productive organism.

Conditions surrounding the overflow of population onto new soil.

Its necessity manifested by the presence of inequitable livelihood, barring rent, which is a natural circumstance of unequal soil fertility.

But, though its necessity is indicated by interest, the absence of interest does not necessarily show the necessity removed.

The origin and estimation of interest considered. This may seem to support the current idea of unproductive consumption, to the detriment of productive consumption.

But unproductive consumption can only take place in commodities that have passed through the productive organism and which are wholly impossible of reproduction, being in their final state, and cannot, accordingly, in any way affect the volume of production.

The effect of the elimination of rent and interest. No definite conclusion can be drawn by investigating the productive organism from the surface; nor, with rent and interest removed and livelihood consequently on an equitable basis, can it be preestimated whether its conditions would be satisfactory or otherwise. This must be judged from direct observation.

Chapter VI 89

Summarizing, rent and interest should be eliminated from the productive organism.

CONTENTS 7

The former, as it exists in materialized form, may be unhesitatingly absorbed, but beyond this care should be exercised not to burden soil production, as this is the source of all production.

The regulation of population will be denounced, but the conditions of human existence require it.

A prerequisite the international unity of society.

A SUGGESTION ON EDUCATION . . 119 THE NEGRO ........ 123

AUTHOR'S NOTE

This essay is issued as a preliminary outline of several economic principles that so far as I am aware are wholly novel. It is my intention to elaborate these principles when opportunity permits, but as there is no immediate prospect of my being able to do this, I have considered it advisable to give them publicity in their present form, in the hope that they may strike root in the mind of someone with leisure to establish their correctness, and also to secure them from possible oblivion in the event of my unexpected decease.

The Distribution of Livelihood

An Essay on the Distribution of Livelihood

CHAPTER I. Introductory

The interactionary principles that are now assumed to underlie production preclude the possibility of a distributive equity except as governed by these principles. That is to say, an accumulation of capital is premised as the prerequisite of production, and the volume of this accumulation is assumed to rest mainly on the revenue that it will return, this furnishing the principal incentive to make the saving. Consequently it is impossible to accord to the complaining class of the distributive orders a 11 larger share in the total volume of production than falls to it naturally, for the reason that this would reduce the revenue that acts as the main incentive to accumulation, and therefore by tending to decrease this, tend likewise to decrease the volume of production itself. Accordingly there is but one recommendation that the economist can give to the complaining order, namely, that it should restrict its numbers in order to increase the pro rata distribution to its members.

This recommendation is inefficacious upon two counts. In the first place, the steady tendency of production to effect its purpose with the utilization of a proportionately fewer number of workers operates to neutralize the effect that might otherwise be produced by a reduction of the number of the latter. In the second place, the number of workers cannot be altered without affecting the rate of revenue and therefore the dimensions of the fund of capital out of which it is assumed they are being maintained. This revenue is the difference between the volume produced minus rent, and the share of the workers, and this share is determined by the competitive ratio of the latter to the volume of capital which forms, in its productive destination, their fund of maintenance. Now if, by reducing the number of workers, this competitive ratio is advanced, the rate of revenue will be correspondingly lowered, thereby decreasing the accumulation of capital, and therefore the volume of production that furnishes the fund of laborer subsistence, and bringing things back to their former level.

These simple but, I believe, wholly irrefragable criticisms of the distributive reform now recommended by the standard conclusions of political economy indicate the impotency of the recommendation noted to effect the distributive reform demanded by society, in the light of current principles of production.

A still more unsatisfactory condition is presented when the principles of production are examined for their own sake. For here is found an inequitable element at their very inception, in that land held under unconditioned tenure requires a greater incentive to bring it under production than when held under what surely everyone must concede is a proper and necessary condition, namely, that it shall be brought under production by the owner, or be otherwise free to the productive occupancy of any who will bring it under production. Surely no one will maintain that there can possibly exist the right to hold land idle while there are those who suffer because of its non-productive occupancy; and if this is admitted, then it is at once clear that the whole fabric of current economics is permeated by an inequitable premise.

For Mr. Smith did not presume to interfere with the productive structure. Premising an accumulated stock, he argued that this would be applied reproductively for a revenue, or be consumed unproductively. Now, under a state of unconditioned land tenure, it is plain that a considerably greater revenue must be forthcoming to extend production upon unoccupied land than would be the case where the soil is free to productive occupancy. For, in the first case the landlord will always require a profit or rent over and above the return to the producer, whereas, in the second, the latter would be content with such return. Land, accordingly, held under unconditioned tenure, will always require a greater return to bring it under production than where its tenure is in accord with equity.

It is clear, therefore, that production, as at present considered, requires a greater incentive than would be the case if land were held under a just system of tenure, namely, that it either be engaged in production by the holder, or relinquished to those who will engage it in production; and that current principles of production, and the distributive principles deduced from them, are consequently vitiated to a greater or lesser degree.

Another and still more important criticism may be made of the method of analysis now adopted, namely, that it starts from an advanced stage of production, that is, after an accumulation of stock has been made, rather than at the initial application of labor to the earth's surface, where, surely, a certain and comprehensive investigation must begin.

I shall endeavor, in the following chapters, to annunciate the principles of production as they appear to exist under a perfectly natural and just occupancy of the soil, and thereafter to deduce and give practical application to the principles of distribution as they may appear therefrom.

Chapter II

If we inquire what are the principles that underlie the production of livelihood, we shall find that the first is necessity. It was necessity that compelled the gathering of even those spontaneous products that must have furnished the first subsistence of man, and so it was the same motive that, when these spontaneous products were exhausted, compelled him to begin the cultivation of the soil and the domestication of animals. The scope of this principle must be the satisfaction of his wants.

But as, to begin such cultivation, he must have reserved out of his accumulation of such spontaneous products sufficient for seed, so he must likewise reserve out of the yield of the latter sufficient for the succeeding planting. This seems to be the second principle of production, that a sufficient portion of the product of the soil must be reserved from consumption to generate its succession.

The third principle of production appears to be that it must follow the channel of con- 17 sumption. It was the demand for food that in the first instance directed its procuration rather than iron ore, for example, and so it must be demand that directs the comparative production, as conditions permit, of all the remaining commodities of livelihood.

These seem to be the conditions that surround the beginning of production, and if we now seek the principles that regulate its growth or expansion we shall find the first to rest in the efficiency of labor. For were the efficiency of labor not greater than the requirements of food production, production could never by any possibility have extended beyond this basic necessity of subsistence. Not even the rudest huts could have been built, nor clothing made. But as the yield of food increases to the labor applied, more labor can be spared for growing or gathering other products of the soil and working them up into supplemental subsistence. And so, accordingly, as the efficiency of labor augments, the conveniences and eventually the luxuries of livelihood are enabled.

The growth of production appears to rest, secondarily, in the operation of the foregoing principles and the increase of population. For, in the satisfaction of his desires man will tend to intensify his labor upon any certain area and expand his labor over a broader area, and an increasing population must, other things remaining equal, force production over a widerarea.

All of these principles converge, naturally, into the conditions of climate and soil amid which production is environed, and are subject, to a greater or lesser extent, according to the circumstances of the case, to them. No more food can be produced than the capacity, extent and character of the soil will permit, and so with all the commodities of livelihood. Likewise, as the demand for food increases, some other form of production must, all things remaining unchanged, give place to it, and so on. Climate not only influences to a considerable degree the application of labor and the desires of mankind, but it regulates very largely the character of the product of the soil and the volume and rapidity of its yield.

If, following the general course above indicated, we observe the progress of production, we shall, beginning at that state of livelihood procuration which consists in merely gathering the spontaneous products of nature, note the small needs of such a condition of life. But with the commencement of tillage there is required a more stable mode of life, bringing the need for substantial habitations, household utensils, implements of tillage, enclosures for domesticated animals, all of which, facilitated by the more abundant and regular supply of food which must have resulted from tillage over the irregular methods theretofore prevailing, must have given a strong impetus to that proclivity to labor division to which the greatest efficiency of labor is due, and which, in its turn, by well-known processes, reacts upon the capacity of labor in the various channels of its extending application. With this growing ease of procurement must have gradually grown up, under the progress of events, those manifold wants which constitute modern livelihood, and for which the necessary industry is willingly given.

Thus briefly, for the moment, observing the operation of the first and fourth principles annunciated, and under which the second proceeds necessarily and the third voluntarily, we shall note, as we take up the fifth, that population may very greatly increase, under the augmenting efficiency of labor, without widening the area of production. Under the operation of labor division, population tends to rise above the soil, so to speak, in the refinement of its raw products, in the exchange of both raw and manufactured products, and in professional occupations. Thus the soil maintains two layers of population, if I may so express it, the first occupying the land in direct production and the second engaged in the refinement and exchange of such production; and as the second, which congregates and forms our villages, towns and cities, naturally arises according to the circumstances of the productive organism, production, in its distributive relation to population can, probably., be best studied from this aspect.

It is probable, as I have just observed, that population divides into these two orders according to the conditions of production. In the beginning all must have belonged to the first, but as the division of labor develops the second gradually arises. Thus as, at the start, the principle of labor division probably exhibits itself in arrow and spear makers, and hut builders perhaps, and is augmented, when tillage commences, by makers of agricultural implements, house builders, furniture and clothing manufacturers, its development, by bringing a class who furnish these with the materials of their labor, thereby wholly separating them from direct connection with the soil, places them in a separate order according to the distinction I have noted.

This second order can only arise by reason of the augumenting efficiency of the labor of the first; for, that a separate class of arrow or spear makers can exist, the food producing capacity of the hunters must be not only great enough to subsist themselves, but the arrow and spear makers as well. That, moreover, there may be a separate class of hut builders, food must be produced by the hunters in sufficient quantity to subsist them also; and that both weapon makers and hut builders may separate themselves altogether from the soil, food must be afforded by the hunters for still another class of wood and material producers, or, what amounts to the same thing, the hunters must spare the time to gather or produce these themselves.

Now, in the augmenting efficiency of labor two operations take place. In land production, the yield increases to the area, and the area itself extends. Thus if, in a rude state of tillage, a man were able by the use of crude tools to produce a scanty yield from several acres of land, under modern methods of agriculture he is able to not only multiply the proportionate yield, but to handle many times that area of soil. The result is that the order of landless population increases, under the process just noted, in corresponding proportion. This increase is drawn from the soil population, and even the increase of population may be absorbed into the productive organism without necessitating a wider basis of land. But, finally, the increase overtakes the employment capacity of landless occupation, which mainly consists of the refinement and exchange of the materials abstracted from the soil, and its overflow becomes necessary. For, it will be observed, the same process of expanding labor capacity and occupancy which is taking place in land production is also going on in landless production. Thus the same quantity of labor that would have produced a chair, for example, will, under modern methods, produce half a hundred, and will, likewise, consume half a hundred times more material.

This overflow, when land is readily available, is a natural and voluntary process. Man seems to have an inherent desire to occupy unoccupied land, if it is fertile, and a few seeds and tools and enough food and clothing to subsist him until the return from planting comes in is all that is required to begin its occupancy. If such land adjoins that already under occupancy, and is habitable, its occupancy will voluntarily take place. If, on the contrary, it is distant, or presents obstacles to settlement, it would seem to be the duty of the state to provide for the expansion of an increasing population by removing, where possible, extraordinary obstructions to occupancy.

We have now reached the sixth principle of production, namely, conditions of climate and soil, and as these environ and influence those already considered, the latter must be reconsidered as they connect with this general modifier.

If, accordingly, we suppose a warm climate and a fertile soil, we shall see that the needs of livelihood under such conditions are naturally very simple. Food constitutes the chief requisite, for climatic conditions render houses and clothing of secondary importance. This the soil yields abundantly and with great rapidity. The heat inaisposes to arduous industry, which, combined witL the simplicity of livelihood, operates against the development of labor efficiency. But under such easy conditions of subsistence procuration and in such a climate, population rapidly increases. This, moreover, because of the small development of labor division is not able to rise above the soil in any great proportion in what I have termed landless production, but is obliged to spread itself over the land in direct occupancy. The result is that the land available for occupancy is quickly taken up, after which the increase of population distributes itself over that already occupied as best it may.

If we suppose a colder climate and a less fertile soil, we shall see that the needs of existence are here more complex. Not only is a greater quantity of food necessary to sustain life, but substantial habitations and warm clothing arc imperative to withstand the rigors of climate. The soil does not naturally yield its product so readily, nor so rapidly, and more industry is required in its cultivation. Under such conditions the efficiency of labor increases — indeed it is probable that it must have reached a fair state of efficiency before such a section could be occupied — and it is further stimulated by the energy which a temperate climate imparts to industry. Because of the greater difficulties of subsistence population does not tend to increase so rapidly, nor does the increase, because a greater proportion of population is enabled to rise above the soil by reason of the development of production, so quickly appear in the nature of an excess.

Yet, eventually, this takes place; and it is, indeed, ultimately hastened by the identical operation that at first prevented it. For, beyond the increasing efficiency of labor which finds its expression in an increased proportionate yield from the soil, its expression is through the medium of expanding acreage. Now the effect of this is to reduce the capacity of the soil for direct population, a>nd the latter accordingly flows into the landless division of production; but here, also, the increasing efficiency of labor is finding its expression in an expanding pro rata occupancy of the materials and occupations of which it is composed. Accordingly, a corresponding proportion of population finds itself pressed for a field of occupation, just in the same manner as if there had been an increase of citizens to that extent.

In fact, in their ultimate results, the increase of population and the increasing efficiency of labor are exactly identical from a distributive point of view. Thus if we suppose a certain area of land thinly populated but with population increasing, and where the efficiency of labor is at a complete standstill, we shall readily see that when population reaches the occupancy capacity of the land, it cannot increase without subdividing the soil, thereby reducing its pro rata livelihood, or by suboccupying it, with the conditions, to be hereafter considered, resulting from that process. On the other hand, if we suppose the same area with population at a standstill, but the efficiency of labor augumenting, we shall see that the expanding occupancy units of the latter will, as the process is continued, force a corresponding proportion of population out of occupancy and bring about the same conditions as in the first case.

Naturally, to prevent such consequences, population must., after the bounds of reasonably habitable land have been reached — for up to that point, as I have observed, it will automatically overflow and care for its increasebe restricted to the occupancy capacity of the productive organism ; and then, from that point, the productive organism must be adjusted to population by restricting the occupancy limits of labor, not, indeed, by arresting the progress of labor efficiency, which would be absurd, but by reducing the hours of labor application, under which plan a condition of general leisure must spread itself over society.

It was, indeed, the recognition that if the labor of a society could be equally apportioned amongst its citizenship a condition of equitable distribution, based upon the quality of services rendered, must result, barring rent, (for this, as will hereafter appear, would not be affected), that inspired this essay. There is, however, no manner by which labor, in its entirety, can be thus apportioned.. The different characters of soil, intermingling in countless variety, prohibit any uniform division of land, and even were this possible, it would interfere with the progress of labor efficiency, one of the most important features of which is the expanding area of pro rata ^and occupancy. As, moreover, we pass from the land to landless production, that is, the refinement and exchange of land materials, the difficulty is still more pronounced. For here, the whole field of commerce extends itself before every worker and its division is altogether impossible, for a few minutes of daily direction might readily suffice for the master regulation of an enterprise of worldv/ide proportions. It is because of this unlimited scope of application that labor employed in commercial occupations is enabled to secure for itself an extensive return, whereas in land production its scope of application is limited by the area controlled.

Resuming the thread of analysis, I will direct more particular attention to the operation of demand upon the constitution of production as it follows the channel of consumption. Now just as the demand for food increases the soil must be given over, except as its augmenting proportionate yield may equalize the increase, to food production; and just as the soil is thus given over, some other form of production is restricted. Accordingly, as population, which furnishes the demand for food, increases, the demand for food augments, and, finally, as all the land is utilized for food production, all other forms must cease, and livelihood must consist altogether of food, and such products as might be formed of its non-food properties, as the hides and wool of meat-bearing animals ; but if the food were wholly vegetable, not even these would be possible.

The demand for food does not probably ever run to this extreme, for habitations and clothing and fuel are also imperative necessities in most climates, and the demand for these reserves sufficient soil for the materials of their production. The operation of demand is, moreover, doubtless influenced by the circumstances of inequitable distribution Which, by lodging excess demand power in some hands, and withdrawing even necessary demand power from others, overthrows its normal action. Nor, of course, can all soils be adapted to food production.

China probably furnishes the most conspicuous example of an excessive demand for food. Here the soil seems to be given over mostly to food production, with the result that this constitutes the main production of this nation. An augmentation of the low state of labor efficiency existing among this people would produce some remarkable results. For, since the soil seems there to have reached its utmost yield, the expansion of labor capacity would have to take effect in enlarged units of land occupancy. If these were to double, one-half of the land population of that country would be thrown out of occupation. This country is, of course, largely overpopulated from the standpoint of a condition of livelihood extending in any way beyond food and the imperative necessities of subsistence, — that is, it is so if its soil is assumed to be all under production. If its population were but half what it now is, and its labor efficiency doubled, as I suppose it could easily be by the introduction of agricultural machinery, half of the soil could be given over to other forms of production than food, and the pro rata livelihood correspondingly enlarged and diversified; or, if the soil there is especially adapted to food production, half of the food produced could be exchanged for accessory commodities of livelihood from other countries and soils.

The United States presents an example of production under a high state of labor efficiency, but where population is not yet numerous enough to monopolize the soil in the production of the necessities of subsistence solely. Here the capacity of labor enables food in abundance to meet the demand of the native citizenship and even for export, to be produced by a portion of population, from a portion of its land, thus permitting the remainder to utilize the balance of the soil in other forms of production, thereby producing an opulent and diversified livelihood for all its citizens. Here, too, now that its desirable land is taken up, may be seen the tendency of the augmenting capacity of labor to overreach population, as is evidenced by the conditions of non-employment prevailing in its centers of population, and which is a comparatively recent condition. England may be noticed as exhibiting an immense landless citizenship, due to the enormous development in that country of what I have termed the landless division of production. Tropical countries generally illustrate the deductions I have made from the basis of a warm climate, and European countries those deduced from a condition of cold climate.

It will be observed that I have laid no particular stress upon the second principle annunciated at the beginning of this chapter, namely, that a certain proportion of the materials of the soil must be reserved to generate the succeeding yield. This, as I shall endeavor to show in a succeeding chapter, because of its absolute necessity, has an automatic operation that produces no specific conditions.