Pauperizing the rich

Front matter

it* o

PAUPERIZING THE RICH

AN INQUIRY INTO THE VALUE AND SIGNIFICANCE OF

Preface

The initial task attempted in the following pages is to present a new, or at least a neglected, point of view.

The current discussion of social problems is, it seems to me, seriously befogged by a mere confusion in terms. Things which are in essence the same are given different names, and the disguise so conferred seems to be for all practical purposes complete. I have therefore felt moved to apply to the consideration of these questions the somewhat revolutionary measure of calling similar things by the same name. This constitutes my point of view.

The satisfactory presentation of a point of view, however, necessarily involves the more or less complete exposition of the field of view. This is my warrant for assuming to rewrite certain chapters of political economy. Little as I covet the task it is yet evident that the outlook I am seeking to introduce demands a considerable recasting of current economic theory. I have therefore tried to indicate, though necessarily in the merest outline, the theoretical basis upon which my thesis must rest for economic justification.

In undertaking this I do not in the least claim to have met the requirements of a formal treatise, viiii PREFACE.

although I am convinced that the principles on which I build would richly repay adequate formal statement. I have simply taken the various branches of inquiry at the level of popular discussion, and attempted to range them around my main position into a fairly coherent system. If in so doing I have freely used the ideas of other men without due acknowledgment, they are, in most cases, those which are so well known as to make formal credit superfluous.

The point of view herein advocated is primarily critical in its outlook upon society. All fair criticism of existing society, however, is necessarily a mere prelude to an attempt at constructive work; and I have not allowed the plentiful supply of reform measures in the field to withhold me from formulating mine.

The scheme as a whole may very well strike the reader as highly incongruous. It assuredly is incongruous, judged by accepted models; but it is so advisedly and of set purpose. It is an attempt to make peace between the extreme left and the extreme right. It aims to be as conservative as the Liberty and Property Defense League and as radical as the Socialists. It accepts, at least in spirit, the aspirations of the most visionary reformers, and attempts to reach their substantial fulfilment by a measure which yet respects the great underlying principles of the existing

PREFACE. ix.

social system, and which will stand the closest scrutiny of the practical intellect.

That the making of peace between these apparent incongruities is the condition of achieving real progress toward solving the social problem, is my firm belief. All thoughtful men nowadays have, and are deeply influenced by, more or less definite visions of a regenerated society. But a large part, if not the bulk, of such men are evidently, like myself, limited in their conceptions by the facts of their experience ; and, perhaps by reason of the long immersion of their faculties in practical affairs, are absolutely unable to accept as real the hope embodied in the current measures of the root-and-branch reformers.

One point which the following pages may have failed to make clear I wish to emphasize beyond the possibility of misapprehension. The underlying philosophy of this book contains no strain of pessimism. I do not believe the world is growing worse; on the contrary, in spite of the manifest abundance of reactionary movements and tendencies, I firmly believe it is steadily growing better. Our social evils are growing imen durable not because they are growing worse, but because their persistence shows a great waste of ameliorative power. But one of the most hopeful signs of the present time is the waxing public sense of the gravity of these evils, and the rapid x. PREFACE.

growth of a strong desire and intelligent determination to abate them. It is the existence of these important allies that encourages me to bring forward as a strictly practical measure a proposal for the utilization of this wasted power, — a proposal which is cither utterly visionary or hopelessly reactionary according to the standpoint whence it is viewed, and which I therefore venture to believe is the golden

mean.

A. J. F.

Philadelphia, February, 1899.

SYNOPSIS.

Preface, Contents, vn.

xxi.

Book II. The World's Charitable List

17 , — The Minor Charities of Condescension. — Pauperizing by Withholding, 35

VI.— The Minor Charities of Equality. — Preparation for Pauperizing, 46

VII.— The Medium Charities. — The Gift of Seed- Grain, 55

VIII.— The Major Charities. —Pauperizing by Excess, 66

IX.— Keview.— What we Seek ; What we have Seen, 91

X. — Whence Cometh Help? 107

CONTENTS.

BOOK III. THE PEOPLE'S HERrrAGE

XL — The People's Property in Ideas, 121

XII. — The Present Beneficiaries, 137

XIII. —The Defrauded Heirs, 158

XIV. — The Redistribution of the Income, 181

XV. — A New Charity of Equality, 201

XVI. — Pitfalls, Real and Imaginary, . 227

XVII. — "That New World which is the Old," . . 263

Book IV. The Working Of The Leaven

XVIII. — The New Aspect of Progress, 297

XIX.— Competition and Cooperation, 305

XX. — Crises. — Overproduction. — The Unemployed, 326

XXI. — The Conflict of Capital and Labor, .... 348

XXII. — " Progress and Poverty " Reviewed, .... 384

XXIII. — The Hunger for Dead Sea Fruit, 397

XXIV. — Conclusion. — Fine Clay and Common Clay, . . 406

The great problem which the next century will have seriously

to take in haud and finally solve is this : Are rich men likely to

prove of any real social use, or will it be better to abolish the

institution?

— Frederic Harrison.

PART T.-THE DIAGNOSIS.

INTRODUCTORY

CHAPTEK I.

INTRODUCTORY. CHARITY AND CHARITY.

Our friend Mrs. B. has a large and interesting " charitable list." Of course it is made up wholly of the deserving. Mrs. B. does not believe in the haphazard bestowal of charity, and each recipient of her bounty has undergone a rigid investigation.

Judge therefore, if you can, of the shock which Mrs. B. experienced when she discovered that a favorite protege, a man who had a family of nine children to support on " odd jobs," had almost entirely ceased working, and found life so far supportable on his pension from her that he could hardly be brought to accept an occasional " odd job," even when it came without his seeking it.

" To think of it ! " she exclaimed. " The wretch had come to count on my allowance regularly, just as if it belonged to him, and wouldn't lift his finger to help himself. He had become completely pauperized."

The trouble which Mrs. B. experienced in her attempts to do good with her money is of a kind which perplexes charitable workers everywhere. Every person who has had large experience in attempting to help the poor has learned to beware of pauperizing them as he would beware of communicating the plague.

Help which saps a person's ability and determinao INTRODUCTORY.

tion to help himself,— which pauperizes him,— is not merely not help: — it is deadliest hindrance. Pauperizing is simply killing, in an economic sense. The pauperized man has no ambition, energy, foresight, solicitude for the future, — only inertia. He is, economically considered, a corpse.

On the other hand, help which increases one's ability and fortifies his determination to help himself is not merely real help; — it is double help, or help multiplying itself.

These conclusions are almost axiomatic. We know of no denial of them; in fact any weighty denial of them is hardly conceivable. They are the consensus of all enlightened charity. Inexperienced enthusiasts often ignore them; men and women of ripe knowledge never, we believe, either ignore or deny them.

These principles we may safely accept as established truth: upon them we may lean when confused by the complexity of these difficult problems.

The purpose of this book is to investigate the World's Charitable List.

For as surely as Mrs. B. maketh her periodical rounds does our World have a vast charitable list. Though constantly protesting that her income is not sufficient to pay decent wages to her workers, she yet contrives to bestow a surprisingly large part of it upon those who toil not nor spin, and another very large part upon those who toil but lightly yet are rewarded lavishly.

It is these favored ones that constitute the World's Charitable List. They are most various in degree

Chap. i. CHARITY AND CHARITY. 3

and kind, of all ranks of society, all colors, all grades of intelligence. The names of Mrs. B.'s proteges are found on this list, mingling familiarly with those of royal dukes ; those of the tramp and pauper touch elbows with the Bugle's list of Great American Heiresses. One bond alone unites them ; all can truthfully say, " Others have labored, and we are entered into their labors."

But here we are asked with some asperity, " By what warrant do you call this a charitable list ? Its upper portion, at least, is an imposing array of the best families in the land, who never accepted a cent of charity in their lives."

To which we reply that we have a warrant for calling a spade a spade, and none other seems to us necessary. The individuals in question did not earn their money, — that part of it under consideration: it was given to them by persons who wished to help them. If this is not charity, we are unable to frame a definition of the word.*

To be sure the givers did not care to insist that it be called charity; were in fact anxious that it should not be. But this cannot alter the main fact. A spade remains a spade in utter disregard of a social convention that it be called a kingly crown.

Ignoring conventional distinctions, then, the classification of wealth is very simple: — either a man has

* The etymology of the word yields us no assistance here because it throws light only upon its meaning as used in the New Testament. The sense in which it is popularly used is entirely different, and requires no explanation. We have used it in the popular sense.

4 INTRODUCTORY.

earned his wealth or he has received it through charity. The essential question of its being or not being charity is not in the least affected by the fact that it was given to him by a parent or near relative, or by his receivingit after the death of the donor, or by any other similar consideration.

It undoubtedly has an important influence on the effects of charity, however, that it is given, not condescendingly, but as between equals. The charity which usually monopolizes the name gives as to an inferior, and considers that a stigma attaches to the acceptance of its gifts. This charity w r e shall hereafter call the Charity of Condescension when we have need to distinguish it from the other charity of the World's Charitable List, which other charity we shall call, in default of a better name, the Charity of Equality.

But despite this important distinction, and the wealth and social standing of those whose names head its list, the Charity of Equality is in its essence on a par with its humble sister. We freely admit that its list is an imposing one; nevertheless, it is manifestly a charitable list.

But here again we are rather sharply reminded: " If this be a charitable list it certainly cannot be maintained that there is any disgrace in receiving charity."

This we grant without demur. There is no disgrace in receiving charitable help, either from the Charity of Condescension or the Charity of Equality. There is no disgrace in being on Mrs. B.'s charitable list; no more and no less disgrace in being on the W T orld's

Chap. i. CHARITY AND CHARITY. 5

Charitable List. Receiving a gift of two dollars a week does not disgrace one of Mrs. B.'s pensioners; receiving a gift of two million dollars a year does not disgrace the rich man's heir.

In fact there is only one form of disgrace connected with receiving charity, and this lies in receiving it unprofitably. This disgrace applies with equal force to Mrs. B.'s list and the World's list. If Mrs. B.'s protege fail to make a good use of her gifts, — if he be pauperized by his allowance, — it is a disgrace to him, and a charge against Mrs. B.'s wisdom in placing the money in his hands. If the rich man's heir fail to make a good use of his inherited millions, — if he allow them to support him in luxurious and unprofitable idleness, — in short, if he be pauperized by them : — then indeed the charity which he has dishonored is turned into a disgrace to him and a charge against the wisdom of the social arrangements which have placed it in his hands.

It is in the light of these ideas that we wish to investigate the World's Charitable List. It is this form of disgrace and the corresponding form of justification which we wish to consider. We are not concerned with any imaginary stigma belonging to the Charity of Condescension as such. According to our ideas charity disgraces and is disgraced when it is wasted and misapplied ; confers honor and is honored when it is nobly utilized. Similarly, with us the " deserving " are those who are likely to make a good use of charitable gifts bestowed on them; the undeserving those who are likely to waste the charitable gifts they receive.

q ■ INTRODUCTORY.

But is not the World's Charitable List made up wholly of the deserving ?

Yes, certainly; at least, from what the World says, we may legitimately infer that it is. The World does not believe in the haphazard bestowal of charity, and each recipient of her bounty, she explains, has undergone a rigid investigation, and has claims which could not in good faith be ignored. Miss S. may seem to be rather unduly favored, but then her father engineered a most difficult financial operation in the reorganization of the X and Q railroad. The Duke of

W. certainly draws largely on the charitable funds, but we must not forget that his remote ancestress made herself extremely pleasant to the ruling monarch of her day. Mr. Van A. at present hardly renders an equivalent in labor for the large yearly sum the World allows him, but when you come to look into it you find that whole blocks of houses uptown are built upon his ancestral acres. And so on through the whole list: every allowance from this charitable fund is an acknowledgment of services rendered, directly or indirectly. To ignore such claims, the World insists, would be a direct blow at the fundamental maxim upon which our social fabric is based, — that everyone has a right to the fruits of his exertions.

And yet the World herself, like Mrs. B., occasionally receives a severe shock when contemplating the results of her bounty — a shock that makes her wonder if she has the proper idea as to who are the " deserving." She has time and again discovered that many of her favorites have entirely ceased exerting themselves; that they cannot be brought to undertake the most necessarv and honorable work, even when it

Chap. i. CHARITY AND CHARITY. 1

seeks them; that they have come to look upon their allowance from the charitable funds " just as if it belonged to them " absolutely. She has even been heard in moments of extreme perturbation to remark under her breath that this was very much like being pauperized; but her loyal trust in the principles on which her charitable list is based has as yet prevented any hasty and ill-advised attempt to recast it.

And yet it cannot be denied that much of the most serious thinking she has done of recent years has been directed upon this problem. She is not dull-witted, albeit of a conservative temperament; and the spectacle of some of her largest benefactions producing untoward results has not been wasted upon her. Just what definite conclusions she has reached as the fruit of her thinking she has not yet seen fit to disclose; but it is becoming well understood that she is developing a determination to make her charitable list show better results, even if she should have to violate some time-honored traditions.

But if her thinking have as yet borne little fruit in the shape of definite conclusions, it has been highly prolific of questions. " Does unearned wealth really help a person? — does it increase his ability and fortify his determination to help himself? " — " Does his possession of it benefit the community at large? " — " Does it do most good and least harm when received in large or in small quantities? " — " Does it not often sap one's ability and determination to help himself, and so work deadly harm?" — "If large wealth do this, does it not produce real pauperism as truly as small doles? " — these are some of the questions she has lately been asking herself over and over again,

8 INTRODUCTORY.

with great earnestness, and with an apparent determination to reach some definite conclusion.

Of course the agitation of these questions is considered very bad form by many of the beneficiaries of the World's Charitable List, (and by many would-be beneficiaries). These have attempted to stifle the World's thinking on this subject by several neat demonstrations that the whole commotion is merely an attempt of the drones to grasp the share of the workers. But these demonstrations have evidently failed to carry complete conviction; and we may therefore join our thinking powers to those of the World in attacking this problem, assured that it is still a very lively question, and that any good, solid thoughts we may be able to contribute to its consideration are not likely to be wasted.

As a preliminary to the investigation of the World's Charitable List, let us devote a little time to formulating our ideas on the subjects we have taken up for consideration. As to the World's Charitable List let us inquire what relation it bears to the existing competitive system; and as to the general matter of charity let us inquire what elements tend to make charitable giving really beneficial, and what elements tend to pauperizing.

Chapter II. Rewards Of Merit And Rewards By Favor

We have seen that the World — the personified World of our little parable — considers that our social fabric is based upon the maxim that " Everyone has a right to the fruits of his own exertions."

We also can heartily accept this principle as our foundation stone. Wealth that a man honestly and fairly earns is his to use according to his best lights. He may make mistakes in the use of it, — they do not concern us: Nature has placed it in his hands. We shall go far in our investigation of society before we begin to call Nature to account.

Yet upon looking a little more closely into the matter we find the World pleading the sacredness of this principle as her excuse for maintaining her immense charitable list. We must, she says, secure to her favorites the fruits of others' exertions in order that everyone may enjoy the fruits of his own exertions. She makes the maxim read, Everyone has a right to the fruits of his own, and some a right to the fruits of others', exertions.

This may be illogical, but it is true to life. We are constantly hearing our existing competitive system commended on the twin grounds (1) that it is a pure merit system, and (2) that it is a system of pure favoritism. On the first count it is admirable because it is so successful in evoking strenuous effort from the

12 PRELIMINARY STATEMENT OF PRINCIPLES. Book 1.

workers and in securing the survival of the fittest; and on the second, because it enables each victor in the competition to establish for his immediate family a little system of pure favoritism wherein effort is wholly unnecessary, and therein to set at naught the natural process which tends to secure the survival of the fittest.

Thus the World's invitation to enter her competition, if we look closely into its inner meaning, is somewhat like this : " Come all ye strong men, and by your mighty endeavors help me to build high the walls of the great competitive Merit System. To each one of you who is conspicuously successful I will grant the privilege of setting off a great bomb under its loftiest towers."

The popular confusion of ideas on this point is most marked. It may be worth our while to examine it a little more closely.

The Self-Made Man is the hero of our modern competitive system. We are all perfectly familiar with him, both in actual life and in literature. Let us consider the ideas which rule his course.

He is, in general, a strong, self-reliant, self-sufficient character. He started in life with little help from family or friends, with no capital, no advantages, no chance; but he triumphed over all adverse circumstances, turned all obstacles into stepping-stones, grew in strength by the difficulties he conquered. His steadfast purpose to succeed and his resolute grappling with all hindrances begot a toughness of fibre and resourcefulness which rendered success certain. Of

Chap. ii. REWARDS OF MERIT— REWARDS BY FAVOR. 13

course he achieved a magnificent material success, but we have his word for it that he esteems this as nothing compared with the splendid character wrought out in the struggle.

—Thus doth the Self-Made Man build high the walls of our competitive Merit System.

Here is a really heroic figure, a noble ideal of life. To be sure we often find that the heroics have been a little exaggerated in the telling; that a little more kindly help has been enjoyed by the Self-Made Man than is set forth in his recital; that there are a few graces lacking in his ideal of a noble character. Nevertheless, we believe in him, as he belieA^es in himself; we assent to his philosophy of the salutary results of discipline by struggle and adversity; we agree with him that the really fortunate man is he who is forced to depend solely upon his own exertions.

Here, of course, is a lesson for all of us. Let us spurn all ideas of being helped on in our careers; let us depend solely upon our own efforts: we shall be the happier, the wiser, the nobler for it.

But the Self-Made Man rears a family, and in due time he becomes anxious about their establishment, and their welfare in the future. He calls to mind the uncertainty of life, and desires so to fix things that his family will be provided for when he is gone.

Of course he will be mindful of the lessons of his own youth and manhood! — of how the best help is self-help; the discipline of struggle and adversity a priceless benefit; the best provision for the future a determined will and a dauntless heart. He will, of course, leave his children the real and lasting benefit of being purely self-dependent !

But, oh no! — that is quite a different matter. He soon sets us right on this point. " Do you think I intend to leave my family to the tender mercies of a cold world ? What is the use of my working all these years if I can't leave my children well provided for? They have a right to hold up their heads with the best of them. How ridiculous to say that they should learn to support themselves! They won't need to lift a finger to earn money ! "

And we chime in with his declaration ; we wish, oh, so heartily, that we could leave our children as well fixed as his will be. We agree with him that there is no gainsaying the benefits of a good financial provision for the future; that the really fortunate man is he who has had a parent able to ward off the cold world's buffeting.

— And yet it is evident that here the Self-Made Man has exploded his bomb under the highest towers of the Merit System.

Much weighty matter is written and spoken on the tacit assumption that our present frame of society is a pure merit system, — that whoso would alter a jot or tittle of our existing social arrangements is desecrating the Ark of the Covenant, — is trying to set aside the beneficent rule that " everyone has a right to the fruits of his own exertions."

There is no doubt that the competitive system is a merit system. But as it actually operates it is a merit system burdened with heavy accretions of favoritism. These accretions constitute the upper and imposing portion of our Charitable List. They are usually referred to airily as a mere incident of the development

Chap. ii. REWARDS OF MERIT— REWARDS BY FAVOR. 15

of the Merit System, — a small tail whicli such a lusty dog as the Merit System can easily wag. But there are some signs that this tail has grown so large as to be able to wag the dog, — that instead of our system being a merit system with a little incidental favoritism, it is a system of favoritism artfully arranged to look like a merit system. A handicap race is doubtless a competition, but a mile race in which handicaps of one mile are distributed is not so much a race as a study in handicapping.

The theoretical statement of the Merit System assumes not only that it is the most efficient, but that it is the best for the individual worker. The Self- Made Man never fails to point out what an inestimable benefit accrued to him from his early struggles; — how much better it was for him to have to work for what he got, than to have rewards dropped into his waiting hands.

The practical working of the upper Charitable List, on the other hand, assumes that it is an excellent thing for a man to get his rewards without the disagreeable necessity of exerting himself. We lack adequate acquaintance with its theory, if such exist, but infer that it consists largely of a shrug of the shoulders.

But, theory or no theory, the building up and cherishing of the Charitable List as practised are directly hostile to the Merit System. They are all the more so from being the practice of its zealous lip-servants. An attack upon the system which permits the present constitution of the Charitable List, therefore, is not an attack upon the real Merit System, but upon its enemies.

The World, however, although much perplexed over

16 PRELIMINARY STATEMENT OF PRINCIPLES. Book 1.

the subject, is afraid nothing can be done to separate the Charitable List from the Merit System. " Why," she exclaims, " you know my whole progress in building up the Merit System depends on my securing the cooperation of these great Self-Made Men, and they absolutely wouldn't work a stroke if I didn't offer them these bombs. Of course, the bombs do some damage, but look what a ceaseless activity in constructive work I secure by using the bombs as bribes."

This, of course, may be true. We are new at the business of building a Merit System, and we may find things are as the World says. Still, we recall to mind the fact that the World usually rewards her self-made men rather handsomely over and above the bombs, and we are moved to wonder if these rewards would not incite them to exertion even were the bomb offer withdrawn.

But at any rate we can keep clearly in mind the fact that the huge benefactions of the Charitable List are not a part of the Merit System, but an excrescence upon it, a disease attacking it. If we can free the Merit System from this diseased excrescence it will be infinitely the stronger for the relief.

In attacking the accretions of favoritism which have grown into a great mass upon the shoulders of the Merit System we may wish we could restore our social system to the rugged grandeur of the Self-Made Man's ideal, — that everyone should depend solely upon his own exertions. But sober second thought might beget a doubt as to the wisdom of this, even were it practicable.

For this is rather too severe an ideal to dwell gently

Chap. ii. REWARDS OF MERIT— REWARDS BY FAVOR, 17

in the popular heart. Even the Self-Made Man has to indulge in the arts of make-up a little to fill this tremendous role. When he has doffed his theatrical armor, and washed the paint from his face, he no doubt feels satisfied not to attempt to force his children to play a part so grand. And the practical result in the end is very likely to be, as we have seen, that he comes to regard his sterner philosophy as good, but not useful, and is content to leave his children to support the tremendous responsibilities of coupon - clippers.

And his practical conclusion is right in one respect, — his full heroic doctrine is too severe for ordinary humanity. Most people do not thrive on continuous trial, hardship, misfortune; are not able to begin the fight of life at the cradle, and draw the breath of battle all their lives; do not feel their spirits rise for the conflict in proportion to the severity of the fighting. Most people need to have their strength carefully conserved and nourished in order that they may creditably play even a little part in life. They need sympathy, help over hard places, support and approbation at need; and acquit themselves far better in the fight if these have been provided. That there are people who have the tough fibre and strenuous courage of our Self -Made Man we cannot doubt; but let us not frame our philosophy for a few heroes — or " freaks."