But give a boy a forked stick, a rood of soil, and a bag of seed, and he will raise a crop for you.
If he is a smart boy, and has the run of the woods and streams, he will also contrive to find food to live on till the crop is ready.
We find, then, that all wealth is produced from the land by labour, and that capital is only a part of wealth, that it has been produced by labour, stored by labour, and is finally used by labour in the production of more wealth.
Our third question asks, "What becomes of the wealth?"
This is not easy to answer. But we may say that the wealth is divided into three parts—not equal parts—called Rent, Interest, and Wages.
Rent is wealth paid to the landlords for the use of the land. Interest is wealth paid to the capitalists (the owners of tools and stores) for the use of the "capital."
Wages is wealth paid to the workers for their labour in producing all the wealth.
There are but a few landlords, but they take a large share of the wealth.
There are but a few capitalists, but they take a large share of the wealth.
There are very many workers, but they do not get much more than a third share of the wealth they produce.
The landlord produces nothing. He takes part of the wealth for allowing the workers to use the land.
The capitalist produces nothing. He takes part of the wealth for allowing the workers to use the capital.
The workers produce all the wealth, and are obliged to give a great deal of it to the landlords and capitalists who produce nothing.
Socialists claim that the landlord is useless under any form of society, that the capitalist is not needed in a properly ordered society, and that the people should become their own landlords and their own capitalists.
If the people were their own landlords and capitalists, all the wealth would belong to the workers by whom it is all produced.
Now, a word of caution. We say that all wealth is produced by labour. What is labour?
Labour is work. Work is said to be of two kinds: hand work and brain work. But really work is of one kind—the labour of hand and brain together; for there is hardly any head work wherein the hand has no share, and there is no hand work wherein the head has no share.
The hand is really a part of the brain, and can do nothing without the brain's direction.
So when we say that all wealth is produced by labour, we mean by the labour of hand and brain.
I want to make this quite plain, because you will find, if you come to deal with the economists, that attempts have been made to use the word labour as meaning chiefly hand labour.
When we say labour produces all wealth, we do not mean that all wealth is produced by farm labourers, mechanics, and navvies, but that it is all produced by workers—that is, by thinkers as well as doers; by inventors and directors as well as by the man with the hammer, the file, or the spade.
CHAPTER III HOW THE FEW GET RICH AND KEEP THE MANY POOR
We have already seen that most of the wealth produced by labour goes into the pockets of a few rich men: we have now to find out how it gets there.
By what means do the landlords and the capitalists get the meat and leave the workers the bones?
Let us deal first with the land, and next with the capital.
A landlord is one who owns land.
Rent is a price paid to the landlord for permission to use or occupy land.
Here is a diagram of a square piece of land—
In the centre stands the landlord (L), outside stands a labourer (W).
The landlord owns the land, the labourer owns no land. The labourer cannot get food except from the land. The landlord will not allow him to use the land unless he pays rent. The labourer has no money. How can he pay rent?
He must first raise a crop from the land, and then give a part of the crop to the landlord as rent; or he may sell the crop and give to the landlord, as rent, part of the money for which the crop is sold.
We find, then, that the labourer cannot get food without working, and cannot work without land, and that, as he has no land, he must pay rent for the use of land owned by some other person—a landlord.
We find that the labourer produces the whole of the crop, and that the landlord produces nothing; and we find that, when the crop is produced, some of it has to be given to the landlord.
Thus it is clear that where one man owns land, and another man owns no land, the landless man is dependent upon the landed man for permission to work and to live, while the landed man is able to live without working.
Let us go into this more fully.
Here (Fig. 2) are two squares of land—
Each piece of land is owned and worked by two men. The field a is divided into two equal parts, each part owned and worked by one man. The field b is owned and worked by two men jointly.
In the case of field a each man has what he produces, and all he produces. In the case of field b each man takes half of all that both produce.
These men in both cases are their own landlords. They own the land they use.
But now suppose that field b does not belong to two men, but to one man. The same piece of land will be there, but only one man will be working on it. The other does not work: he lives by charging rent.
Therefore if the remaining labourer, now a tenant, is to live as well as he did when he was part owner, and pay the rent, he must work twice as hard as he did before.
Take the field a (Fig. 2). It is divided into two equal parts, and one man tills each half. Remove one man and compel the other to pay half the produce in rent, and you will find that the man who has become landlord now gets as much without working as he got when he tilled half the field, and that the man left as tenant now has to till the whole field for the same amount of produce as he got formerly for tilling half of it.
We see, then, that the landlord is a useless and idle burden upon the worker, and that he takes a part of what the worker alone produces, and calls it rent.
The defence set up for the landlord is (1) that he has a right to the land, and (2) that he spends his wealth for the public advantage.
I shall show you in later chapters that both these statements are untrue.
Let us now turn to the capitalist. What is a capitalist? He is really a money-lender. He lends money, or machinery, and he charges interest on it.
Suppose Brown wants to dig, but has no spade. He borrows a spade of Jones, who charges him a price for the use of the spade. Then Jones is a capitalist: he takes part of the wealth Brown produces, and calls it interest.
Suppose Jones owns a factory and machinery, and suppose Brown is a spinner, who owns nothing but his strength and skill.
In that case Brown the spinner stands in the same relation to Jones the capitalist as the landless labourer stands in to the landlord. That is to say, the spinner cannot get food without money, and he can only get money by working as a spinner for the man who owns the factory.
Therefore Brown the spinner goes to Jones the capitalist, who engages him as a spinner, and pays him wages.
There are many other spinners in the same position. They work for Jones, who pays them wages. They spin yarn, and Jones sells it. Does Jones spin any of the yarn? Not a thread: the spinners spin it all. Do the spinners get all the money the yarn is sold for? No. How is the money divided? It is divided in this way—
A quantity of yarn is sold for twenty shillings, but of that twenty shillings the factory owner pays the cost of the raw material, the wages of the spinners, the cost of rent, repairs to machinery, fuel and oil, and the salaries and commissions of clerks, travellers, and managers. What remains of the twenty shillings he takes for himself as profit.
This "profit," then, is the difference between the cost price of the yarn and the sale price. If a certain weight of yarn costs nineteen shillings to produce, and sells for twenty shillings, there is a profit of one shilling. If yarn which cost £9000 to produce is sold for £10,000, the profit is £1000.
This profit the factory owner, Jones the capitalist, claims as interest on his capital. It is then a kind of rent charged by him for the use of his money, his factory, and his machinery.
Now we must be careful here not to confuse the landlord with the farmer, nor the capitalist with the manager. I am, so far, dealing only with those who own and let land or capital, and not with those who manage them.
A capitalist is one who lends capital. A capitalist may use capital, but in so far as he uses capital he is a worker.
So a landlord may farm land, but in so far as he farms land he is a farmer, and therefore a worker.
The man who finds the capital for a factory, and manages the business himself, is a capitalist, for he lends his factory and machines to the men who work for him. But he is also a worker, since he conducts the manufacture and the sale of goods. As a capitalist he claims interest, as a worker he claims salary. And he is as much a worker as a general is a soldier or an admiral a sailor.
Well, the idle landlord and the idle capitalist charge rent or interest for the use of their land or capital.
The landlord justifies himself by saying that the land is his, and that he has a right to charge for it the highest rent he can get.
The capitalist justifies himself by saying that the capital is his, and that he has a right to charge for it the highest rate of interest he can get.
Both claim that it is better for the nation that the land and the capital should remain in their hands; both tell us that the nation will go headlong to ruin if we try to dispense with their valuable services.
I am not going to denounce either landlord or capitalist as a tyrant, a usurer, or a robber. Landlords and capitalists may be, and very often are, upright and well-meaning men. As such let us respect them.
Neither shall I enter into a long argument as to whether it is right or wrong to charge interest on money lent or capital let, or as to whether it is right or wrong to "buy in the cheapest market and sell in the dearest."
The non-Socialist will claim that as the capital belongs to the capitalist he has a right to ask what interest he pleases for its use, and that he has also a perfect right to get as much for the goods he sells as the buyer will give, and to pay as little wages as the workers will accept.
Let us concede all that, and save talk.
But those claims being granted to the capitalist, the counter-claims of the worker and the buyer—the producer and the consumer—must be recognised as equally valid.
If the capitalist is justified in paying the lowest wages the worker will take, the worker is justified in paying the lowest interest the capitalist will take.
If the seller is justified in asking the highest price for goods, the buyer is justified in offering the lowest.
If a capitalist manager is justified in demanding a big salary for his services of management, the worker and the consumer are justified in getting another capitalist or another manager at a lower price, if they can.
Surely that is just and reasonable. And that is what Socialists advise.
A capitalist owns a large factory and manages it. He pays his spinners fifteen shillings a week; he sells his goods to the public at the best price he can get; and he makes an income of £10,000 a year. He makes his money fairly and lawfully.
But if the workers and the users of yarn can find their own capital, build their own factory, and spin their own yarn, they have a perfect right to set up on their own account.
And if by so doing they can pay the workers better wages, sell the yarn to the public at a lower price, and have a profit left to build other factories with, no one can accuse them of doing wrong, nor can anyone deny that the workers and the users have proved that they, the producers and consumers, have done better without the capitalist (or middleman) than with him.
But there is another kind of capitalist—the shareholder. A company is formed to manufacture mouse-traps. The capital is £100,000. There are ten shareholders, each holding £10,000 worth of shares. The company makes a profit of 10 per cent. The dividend at 10 per cent. paid to each shareholder will be £1000 a year.
The shareholders do no more than find the capital. They do not manage the business, nor get the orders, nor conduct the sales, nor make the mouse-traps. The business is managed by a paid manager, the sales are conducted by paid travellers, and the mouse-traps are made by paid workmen.
Let us now see how it fares with any one of these shareholders. He lends to the company £10,000. He receives from the company 10 per cent. dividend, or £1000 a year. In ten years he gets back the whole of his £10,000, but he still owns the shares, and he still draws a dividend of £1000 a year. If the company go on working and making 10 per cent. for a hundred years they will still be paying £1000 a year for the loan of the £10,000. It will be quite evident, then, that in twenty years this shareholder will have received his money twice over; that is to say, his £10,000 will have become £20,000 without his having done a stroke of work or even knowing anything about the business.
On the other hand, the manager, the salesman, and the workman, who have done all the work and earned all the profits, will receive no dividend at all. They are paid their weekly wages, and no more. A man who starts at a pound a week will at the end of twenty years be still working for a pound a week.
The non-Socialist will claim that this is quite right; that the shareholder is as much entitled to rent on his money as the worker is entitled to wages for his work. We need not contradict him. Let us keep to simple facts.
Suppose the mouse-trap makers started a factory of their own. Suppose they fixed the wages of the workers at the usual rate. Suppose they borrowed the capital to carry on the business. Suppose they borrowed £100,000. They would not have to pay 10 per cent. for the loan, they would not have to pay 5 per cent. for the loan. But fix it at 5 per cent. interest, and suppose that, as in the case of the company, the mouse-trap makers made a profit of 10 per cent. That would give them a profit of £10,000 a year. In twenty years they would have made a profit of £200,000. The interest on the loan at 5 per cent. for twenty years would be £100,000. The amount of the loan is £100,000. Therefore after working twenty years they would have paid off the whole of the money borrowed, and the business, factory, and machinery would be their own.
Thus, instead of being in the position of the men who had worked twenty years for the mouse-trap company, these men, after receiving the same wages as the others for twenty years, would now be in possession of the business paying them £10,000 a year over and above their wages.
But, the non-Socialist will object, these working men could not borrow £100,000, as they would have no security. That is quite true; but the Corporation of Manchester or Birmingham could borrow the money to start such a work, and could borrow it at 3 per cent. And by making their own mouse-traps, or gas, or bread, instead of buying them from a private maker or a company, and paying the said company or maker £10,000 a year for ever and ever amen, they would, in less than twenty years, become possessors of their own works and machinery, and be in a position to save £10,000 a year on the cost of mouse-traps or gas or bread.
This is what the Socialist means by saying that the capitalist is unnecessary, and is paid too much for the use of his capital.
Against the capitalist or landlord worker or manager the same complaint holds good; the large profits taken by these men as payment for management or direction are out of all proportion to the value of their work. These profits, or salaries, called by economists "the wages of ability," are in excess of any salary that would be paid to a farmer, engineer, or director of any factory either by Government, by the County Council, by a Municipality, or by any capitalist or company engaging such a person at a fixed rate for services. That is to say, the capitalist or landlord director is paid very much above the market value of the "wages of ability."
These facts generally escape the notice of the worker. As a rule his attention is confined to his own wages, and he thinks himself well off or ill off as his wages are what he considers high or low. But there are two sides to the question of wages. It is not only the amount of wages received that matters, but it is also the amount of commodities the wages will buy. The worker has to consider how much he spends as well as how much he gets; and if he can got as much for 15s. as he used to get for £1, he is as much better off as he would be were his wages raised 25 per cent.
Now on every article the workman uses there is one profit or a dozen; one charge or many charges placed upon his food, clothing, house, fuel, light, travelling, and everything he requires by the landlord, the capitalist, or the shareholders.
Take the case of the coal bought by a poor London clerk at 30s. a ton. It pays a royalty to the royalty owner, it pays a profit to the mine owner, it pays a profit to the coal merchant, it pays a profit to the railway company, and these profits are over and above the cost in wages and wear and tear of machinery.
Yet this same London clerk is very likely a Tory, who says many bitter things against Socialism, but never thinks of resenting the heavy taxes levied on his small income by landlords, railway companies, water companies, building companies, ship companies, and all the other companies and private firms who live upon him.
Imagine this poor London clerk, whose house stands on land owned by a peer worth £300,000 a year, whose "boss" makes £50,000 a year out of timber or coals, whose pipe pays four shillings taxes on every shilling's worth of tobacco (while the rich man's cigar pays a tax of five shillings in the pound), whose children go to the board school, while those of the coalowner, the company promoter, the railway director, and the landlord go to the university. Imagine this man, anxious, worried, overworked, poor, and bled by a horde of rich parasites. Imagine him standing in a well-dressed crowd, amongst the diamond shops, fur shops, and costly furniture shops of Regent Street, and asking with a bitter sneer where John Burns got his new suit of clothes.
Is it not marvellous? He does not ask who gets the 4s. on his pound of smoking mixture! Nor why he pays 4s. a thousand for bad gas (as I did in Finchley) while the Manchester clerk gets good gas for 2s. 2d.! Nor does he ask why the Duke of Bedford should put a tax on his wife's apple pudding or his children's bananas! He does not even ask what became of the £80,000,000 which the coal-owners wrung out of the public when he, the poor clerk, was paying 2s. per cwt. for coal for his tiny parlour grate! No. The question he asks is: Where Ben Tillett got his new straw hat!
How the Duke, and the Coalowner, and the Money-lender, and the Jerry-builder must laugh!
Yet so it is. It is not the landlord, the company promoter, the coalowner, the jerry-builder, and all the other useless rich who prey upon his wife and his children whom he mistrusts. His enemies, poor man, are the Socialists; the men and women who work for him, teach him, sacrifice their health, their time, their money, and their prospects to awaken his manhood, to sting his pride, to drive the mists of prejudice from his worried mind and give his common sense a chance. These are the men and women he despises and mistrusts. And he reads the Daily Mail, and shudders at the name of the Clarion; and he votes for Mr. Facing-both-ways and Lord Plausible, and is filled with bitterness because of honest John's summer trousers.
Again I tell you, Mr. Smith, that I do not wish to stir up class hatred. Lady Dedlock, wife of the great ground landlord, is a charming lady, handsome, clever, and very kind to the poor.
But if I were a docker, and if my wife had to go out in leaky boots, or if my delicate child could not get sea air and nourishing food, I should be apt to ask whether his lordship, the great ground landlord, could not do with less rent and his sweet wife with fewer pearls. I should ask that. I should not think myself a man if I did not ask it; nor should I feel happy if I did not strain every nerve to get an answer.
Non-Socialists often reproach Socialists for sentimentality. But surely it is sentimentality to talk as the non-Socialist does about the personal excellences of the aristocracy. What have Lady Dedlock's amiability and beauty to do with the practical questions of gas rates and wages?
I am "setting class against class." Quite right, too, so long as one class oppresses another.
But let us reverse the position. Suppose you go to the Duke of Hebden Bridge and ask for an engagement as clerk in his Grace's colliery at a salary of £5000 a year. Will the duke give it to you because your wife is pretty and your daughter thinks you are a great man? Not at all. His Grace would say, "My dear sir, you are doubtless an excellent citizen, husband, and father; but I can get a better clerk at a pound a week, sir; and I cannot afford to pay more, sir."
The duke would be quite correct. He could get a better clerk for £1 a week. And as for the amiability of your family, or your own personal merits, what have they to do with business?
As a business man the duke will not pay £2 a week to a clerk if he can get a man as good for £1 a week.
Then why should the clerk pay 4s. a thousand for his gas if he can get it for 2s. 2d.? Or why should the docker pay the duke 5s. rent if he can get a house for 2s. 6d.?
Should I be offended with the duke for refusing to pay me more than I am worth? Should I accuse him of class hatred? Not at all. Then why should I be blamed for suggesting that it is folly to pay a duke more than he is worth? Or why should the duke mutter about class hatred if I suggest that we can get a colliery director at a lower salary than his Grace? Talk about sentimentality! Are we to pay a guinea each for dukes if we can get them three a penny? It is not business.
I grudge no man his wealth nor his fortune. I want nothing that is his. I do not hate the rich: I pity the poor. It is of the women and children of the poor I think when I am agitating for Socialism, not of the coffers of the wealthy.
I believe in universal brotherhood; nay, I go even further, for I maintain that the sole difference between the worst man and the best is a difference of opportunity—that is to say, that since heredity and environment make one man amiable and another churlish, one generous and another mean, one faithful and another treacherous, one wise and another foolish, one strong and another weak, one vile and another pure, therefore the bishop and the hooligan, the poet and the boor, the idiot, the philosopher, the thief, the hero, and the brutalised drab in the kennel are all equal in the sight of God and of justice, and that every word of censure uttered by man is a word of error, growing out of ignorance. As the sun shines alike upon the evil and the good, so must we give love and mercy to all our fellow-creatures. "Judgment is mine, saith the Lord."
But that does not prevent me from defending a brother of the East End against a brother of the West End. Truly we should love all men. Let us, then, begin by loving the weakest and the worst, for they have so little love and counsel, while the rich and the good have so much.
We will not, Mr. Smith, accuse the capitalist of base conduct. But we will say that as a money-lender his rate of interest is too high, and that as a manager his salary is too large. And we will say that if by combining we can, as workers, get better wages, and as buyers get cheaper goods, we shall do well and wisely to combine. For it is to our interest in the one case, as it is to the interest of the capitalist in the other case, to "buy in the cheapest market and to sell in the dearest."
So much for the capitalist; but, before we deal with the landlord, we have to consider another very important person, and that is the inventor, or brain-worker.
CHAPTER IV THE BRAIN WORKER, OR INVENTOR
It has, I think, never been denied that much wealth goes to the capitalist, but it has been claimed that the capitalist deserves all he gets because wealth is produced by capital. And although this is as foolish as to say that the tool does the work and not the hand that wields it, yet books have been written to convince the people that it is true.
Some of these books try to deceive us into supposing that capital and ability are interchangeable terms. That is to say, that "capital," which means "stock," is the same thing as "ability," which means cleverness or skill. We might as well believe that a machine is the same thing as the brain that invented it. But there is a trick in it. The trick lies in first declaring that the bulk of the national wealth is produced by "ability," and then confusing the word "ability" with the word "capital."
But it is one thing to say that wealth is due to the man who invented a machine, and it is quite another thing to say that wealth is due to the man who owns the machine.
In his book called Labour and the Popular Welfare, Mr. Mallock assures us that ability produces more wealth than is produced by labour.
He says that two-thirds of the national wealth are due to ability and only one-third to labour. A hundred years ago, Mr. Mallock says, the population of this country was 10,000,000 and the wealth produced yearly; £140,000,000, giving an average of £14 a head.
The recent production is £350,000,000 for every 10,000,000 of the population, or £35 a head.
The argument is that labour is only able to produce as much now as it could produce a hundred years ago, for labour does not vary. Therefore, the increase from £14 a head to £35 a head is not due to labour but to machinery.
Now, we owe this machinery, not to labour, but to invention. Therefore the various inventors have enabled the people to produce more than twice as much as they produced a century back.
Therefore, according to Mr. Mallock, all the extra wealth, amounting to £800,000,000 a year, is earned by the machines, and ought to be paid to the men who own the machines.
Pretty reasoning, isn't it? And Mr. Mallock is one of those who talk about the inaccurate thinking of Socialists.
Let us see what it comes to. John Smith invents a machine which makes three yards of calico where one was made by hand. Tom Jones buys the machine, or the patent, to make calico. Which of these men is the cause of the calico output being multiplied by three? Is it the man who owns the patent, or the man who invented the machine? It is the man who invented the machine. It is the ability of John Smith which caused the increase in the calico output. It is, therefore, the ability of John Smith which earns the extra wealth. Tom Jones, who bought the machines, is no more the producer of that extra wealth than are the spinners and weavers he employs.
To whom, then, should the extra wealth belong? To the man who creates it? or to the man who does not create it? Clearly the wealth should belong to the man who creates it. Therefore, the whole of the extra wealth should go to the inventor, to whose ability it is due, and not to the mere capitalist, who only uses the machine.
"But," you may say, "Jones bought the patent from Smith." He did. And he also buys their labour and skill from the spinners and weavers who work for him, and in all three cases he pays less than the thing he buys is worth.
Mr. Mallock makes a great point of telling us that men are not equally clever, that cleverness produces more wealth than labour produces, and that one man is worth more than another to the nation.
Labour, he says, is common to all men, but ability is the monopoly of the few. The bulk of the wealth is produced by the few, and ought by them to be enjoyed.
But I don't think any Socialist ever claimed that all men were of equal value to the nation, nor that any one man could produce just as much wealth as any other. We know that one man is stronger than another, that one is cleverer than another, and that an inventor or thinker may design or invent some machine or process which will enable the workers to produce more wealth in one year than they could by their own methods produce in twenty.
Now, before we go into the matter of the inventor, or of the value of genius to the nation, let us test these ideas of Mr. W. H. Mallock's and see what they lead to.
A man invents a machine which does the work of ten handloom weavers. He is therefore worth more, as a weaver, than the ordinary weaver who invents nothing. How much more?
If his machine does the work of ten men, you might think he was worth ten men. But he is worth very much more.
Suppose there are 10,000 weavers, and all of them use his machine. They will produce not 10,000 men's work, but 100,000 men's work. Here, then, our inventor is equal to 90,000 weavers. That is to say, that his thought, his idea, his labour produces as much wealth as could be produced by 100,000 weavers without it.
On no theory of value, and on no grounds of reason that I know, can we claim that this inventor is of no more value, as a producer, than an ordinary, average handloom weaver.
Granting the claim of the non-Socialist, that every man belongs to himself; and granting the claim of Mr. Mallock, that two-thirds of our national wealth are produced by inventors; and granting the demand of exact mathematical justice, that every man shall receive the exact value of the wealth he produces; it would follow that two-thirds of the wealth of this nation would be paid yearly to the inventors, or to their heirs or assigns.
The wealth is not to be paid to labour; that is Mr. Mallock's claim. And it is not to be paid to labour because it has been earned by ability. And Mr. Mallock tells us that labour does not vary nor increase in its productive power. Good.
Neither does the landlord nor the capitalist increase his productive power. Therefore it is not the landlord nor the capitalist who earns—or produces—this extra wealth; it is the inventor.
And since the labourer is not to have the wealth, because he does not produce it, neither should the landlord or capitalist have it, because he does not produce it.
So much for the right of the thing. Mr. Mallock shows that the inventor creates all this extra wealth; he shows that the inventor ought to have it. Good.
Now, how is it that the inventor does not get it, and how is it that the landlord and the capitalist do get it?
Just because the laws, which have been made by landlords and capitalists, enable these men to rob the inventor and the labourer with impunity.
Thus: A man owns a piece of land in a town. As the town increases its business and population, the owner of the land raises the rent. He can get double the rent because the town has doubled its trade, and the land is worth more for business purposes or for houses. Has the landlord increased the value? Not at all. He has done nothing but draw the rent. The increase of value is due to the industry or ability of the people who live and work in the town, chiefly, as Mr. Mallock claims, to different inventors. Do these inventors get the increased rent? No. Do the workers in the town get it? No. The landlord demands this extra rent, and the law empowers him to evict if the rent is not paid.
Next, let us see how the inventor is treated. If a man invents a machine and patents it, the law allows him to charge a royalty for its use for the space of fourteen years.
At the end of that time the patent lapses, and the invention may be worked by anyone.
Observe here the difference of the treatment given to the inventor and the landlord.
The landlord does not make the land, he does not till the land, he does not improve the land; he only draws the rent, and he draws that for ever. His patent never lapses; and the harder the workers work, and the more wealth inventors and workers produce, the more rent he draws—for nothing.
The inventor does make his invention. He is, upon Mr. Mallock's showing, the creator of immense wealth. And, even if he is lucky, he can only draw rent on his ability for fourteen years.
But suppose the inventor is a poor man—and a great many inventors are poor men—his chance of getting paid for his ability is very small. Because, to begin with, he has to pay a good deal to patent his invention, and then, often enough, he needs capital to work the patent, and has none.
What is he to do? He must find a capitalist to work the patent for him, or he must find a man rich enough to buy it from him.
And it very commonly happens, either that the poor man cannot pay the renewal fees for his patent, and so loses it entirely, or that the capitalist buys it out and out for an old song, or that the capitalist obliges him to accept terms which give a huge profit to the capitalist and a small royalty to the inventor.
The patent laws are so constructed as to make the poor inventor an easy prey to the capitalist.
Many inventors die poor, many are robbed by agents or capitalists, many lose their patents because they cannot pay the renewal fees. Even when an inventor is lucky he can only draw rent for fourteen years. We see, then, that the men who make most of the wealth are hindered and robbed by the law, and we know that the law has been made by capitalists and landlords.
Apply the same law to land that is applied to patents, and the whole land of England would be public property in fourteen years.
Apply the same law to patents that is applied to land, and every article we use would be increased in price, and we should still be paying royalties to the descendants, or to their assigns, of James Watt, George Stephenson, and ten thousand other inventors.
And now will some non-Socialist, Mr. Mallock or another, write a nice new book, and explain to us upon what rules of justice or of reason the present unequal treatment of the useless, idle landlord and the valuable and industrious inventor can be defended?
CHAPTER V THE LANDLORD'S RIGHTS AND THE PEOPLE'S RIGHTS
Socialists are often accused of being advocates of violence and plunder. You will be told, no doubt, that Socialists wish to take the land from its present owners, by force, and "share it out" amongst the landless.
Socialists have no more idea of taking the land from its present holders and "sharing it out" amongst the poor than they have of taking the railways from the railway companies and sharing the carriages and engines amongst the passengers.
When the London County Council municipalised the tram service they did not rob the companies, nor did they share out the cars amongst the people.
Socialism does not mean the "sharing out" of property; on the contrary, it means the collective ownership of property.
"Britain for the British" does not mean one acre and half a cow for each subject; it means that Britain shall be owned intact by the whole people, and shall be governed and worked by the whole people, for the benefit of the whole people.
Just as the Glasgow tram service, the Manchester gas service, and the general postal service are owned, managed, and used by the citizens of Manchester and Glasgow, or by the people of Britain, for the general advantage.
You will be told that the present holders of the land have as much right to the land as you have to your hat or your boots.
Now, as a matter of law and of right, the present holders of the land have no fixed title to the land. But moderation, it has been well said, is the common sense of politics, and if we all got bare justice, "who," as Shakespeare asks, "would 'scape whipping?"
Socialists propose, then, to act moderately and to temper justice with amity. They do not suggest the "confiscation" of the land. They do suggest that the land should be taken over by the nation, at a fair price.
But what is a fair price? The landlord, standing upon his alleged rights, may demand a price out of all reason and beyond all possibility.
Therefore I propose here to examine the nature of those alleged rights, and to compare the claims of the landholders with the practice of law as it is applied to holders of property in brains; that is to say, as it is applied to authors and to inventors.
Private ownership of land rests always on one of three pleas—
1. The right of conquest: the land has been stolen or "won" by the owner or his ancestors.
2. The right of gift: the land has been received as a gift, bequest, or grant.
3. The right of purchase: the land has been bought and paid for.
Let us deal first with the rights of gift and purchase. It is manifest that no man can have a moral right to anything given or sold to him by another person who had no right to the thing given or sold.
He who buys a watch, a horse, a house, or any other article from one who has no right to the horse, or house, or watch, must render up the article to the rightful owner, and lose the price or recover it from the seller.
If a man has no moral right to own land, he can have no moral right to sell or give land.
If a man has no moral right to sell or to give land, then another man can have no moral right to keep land bought or received in gift from him.
So that to test the right of a man to land bought by or given to him, we must trace the land back to its original title.
Now, the original titles of most land rest upon conquest or theft. Either the land was won from the Saxons by William the Conqueror, and by him given in fief to his barons, or it has been stolen from the common right and "enclosed" by some lord of the manor or other brigand.
I am sorry to use the word brigand, but what would you call a man who stole your horse or watch; and it is a far greater crime to steal land.
Now, stolen land carries no title, except one devised by landlords. That is, there is no moral title.
So we come to the land "won" from the Saxons. The title of this land is the title of conquest, and only by that title can it be held, and only with that title can it be sold. What the sword has won the sword must hold. He who has taken land by force has a title to it only so long as he can hold it by force.
This point is neatly expressed in a story told by Henry George—
A nobleman stops a tramp, who is crossing his park, and orders him off his land. The tramp asks him how came the land to be his? The noble replies that he inherited it from his father. "How did he get it?" asks the tramp. "From his father," is the reply; and so the lord is driven back to the proud days of his origin—the Conquest. "And how did your great, great, great, etc., grandfather get it?" asks the tramp. The nobleman draws himself up, and replies, "He fought for it and won it." "Then," says the unabashed vagrant, beginning to remove his coat, "I will fight you for it."
The tramp was quite logical. Land won by the sword may be rewon by the sword, and the right of conquest implies the right of any party strong enough for the task to take the conquered land from its original conqueror.
And yet the very men who claim the land as theirs by right of ancient conquest would be the first to deny the right of conquest to others. They claim the land as theirs because eight hundred years ago their fathers took it from the English people, but they deny the right of the English people to take it back from them. A duke holds lands taken by the Normans under William. He holds them by right of the fact that his ancestor stole them, or, as the duke would say, "won" them. But let a party of revolutionaries propose to-day to win these lands back from him in the same manner, and the duke would cry out, "Thief! thief! thief!" and call for the protection of the law.
It would be "immoral" and "illegal," the duke would say, for the British people to seize his estates.
Should such a proposal be made, the modern duke would not defend himself, as his ancestors did, by force of arms, but would appeal to the law. Who made the law? The law was made by the same gentlemen who appropriated and held the land. As the Right Hon. Joseph Chamberlain said in his speech at Denbigh in 1884—
The House of Lords, that club of Tory landlords, in its gilded chamber, has disposed of the welfare of the people with almost exclusive regard to the interests of a class.
Or, as the same statesman said at Hull in 1885—
The rights of property have been so much extended that the rights of the community have almost altogether disappeared, and it is hardly too much to say that the prosperity and the comfort and the liberties of a great proportion of the population have been laid at the feet of a small number of proprietors, who neither toil nor spin.
Well, then, the duke may defend his right by duke-made law. We do not object to that, for it justifies us in attacking him by Parliament-made law: by new law, made by a Parliament of the people.
Is there any law of equity which says it is unjust to take by force from a robber what the robber took by force from another robber? Or is there any law of equity which says it is unjust that a law made by a Parliament of landlords should not be reversed by another law made by a Parliament of the people?
The landlords will call this an "immoral" proposal. It is based upon the claim that the land is wanted for the use and advantage of the nation. Their lordships may ask for precedent. I will provide them with one.
A landlord does not make the land; he holds it.
But if a man invent a new machine or a new process, or if he write a poem or a book, he may claim to have made the invention or the book, and may justly claim payment for the use of them by other men.
An inventor or an author has, therefore, a better claim to payment for his work than a landlord has to payment for the use of the land he calls his. Now, how does the law act towards these men?
The landlord may call the land his all the days of his life, and at his death may bequeath it to his heirs. For a thousand years the owners of an estate may charge rent for it, and at the end of the thousand years the estate will still be theirs, and the rent will still be running on and growing ever larger and larger. And at any suggestion that the estate should lapse from the possession of the owners and become the property of the people, the said owners will lustily raise the cry of "Confiscation."
The patentee of an invention may call the invention his own, and may charge royalties upon its use for a space of fourteen years. At the end of that time his patent lapses and becomes public property, without any talk of compensation or any cry of confiscation. Thus the law holds that an inventor is well paid by fourteen years' rent for a thing he made himself, while the landlord is never paid for the land he did not make.
The author of a book holds the copyright of the book for a period of forty-four years, or for his own life and seven years after, whichever period be the longer. At the expiration of that time the book becomes public property. Thus the law holds that an author is well paid by forty-four years' rent for a book which he has made, but that the landlord is never paid for the land which he did not make.
If the same law that applies to the land applied to books and to inventions, the inheritors of the rights of Caxton and Shakespeare would still be able to charge, the one a royalty on every printing press in use, and the other a royalty on every copy of Shakespeare's poems sold. Then there would be royalties on all the looms, engines, and other machines, and upon all the books, music, engravings, and what not; so that the cost of education, recreation, travel, clothing, and nearly everything else we use would be enhanced enormously. But, thanks to a very wise and fair arrangement an author or an inventor has a good chance to be well paid, and after that the people have a chance to enjoy the benefits of his genius.
Now, if it is right and expedient thus to deprive the inventor or the author of his own production after a time, and to give the use thereof to the public, what sense or justice is there in allowing a landowner to hold land and to draw an ever-swelling rent to the exclusion, inconvenience, and expense of the people for ever? And by what process of reasoning can a landlord charge me, an author, with immorality or confiscation for suggesting that the same law should apply to the land he did not make, that I myself cheerfully allow to be applied to the books I do make?
For the landlord to speak of confiscation in the face of the laws of patent and of copyright seems to me the coolest impudence.
But there is something else to be said of the landlord's title to the land. He claims the right to hold the land, and to exact rent for the land, on the ground that the land is lawfully his.
The land is not his.
There is no such thing, and there never was any such thing, in English law as private ownership of land. In English law the land belongs to the Crown, and can only be held in trust by any subject.
Allow me to give legal warranty for this statement. The great lawyer, Sir William Blackstone, says—
Accurately and strictly speaking, there is no foundation in nature or in natural law why a set of words on parchment should convey the dominion of land. Allodial (absolute) property no subject in England now has; it being a received and now undeniable principle in law, that all lands in England are holden mediately or immediately of the King.
Sir Edward Coke says—
All lands or tenements in England in the hands of subjects, are holden mediately or immediately of the King. For, in the law of England, we have not any subject's land that is not holden.
And Sir Frederick Pollock, in English Land Lords, says—
I explained at first that I do not suggest confiscation. Really the land is the King's, and by him can be claimed; but we will let that pass. Here we will speak only of what is reasonable and fair. Let me give a more definite idea of the hardships imposed upon the nation by the landlords.
We all know how the landlord takes a part of the wealth produced by labour and calls it "rent." But that is only simple rent. There is a worse kind of rent, which I will call "compound rent." It is known to economists as "unearned increment."
I need hardly remind you that rents are higher in large towns than in small villages. Why? Because land is more "valuable." Why is it more valuable? Because there is more trade done.
Thus a plot of land in the city of London will bring in a hundredfold more rent than a plot of the same size in some Scottish valley. For people must have lodgings, and shops, and offices, and works in the places where their business lies. Cases have been known in which land bought for a few shillings an acre has increased within a man's lifetime to a value of many guineas a yard.
This increase in value is not due to any exertion, genius, or enterprise on the part of the landowner. It is entirely due to the energy and intelligence of those who made the trade and industry of the town.
The landowner sits idle while the Edisons, the Stephensons, the Jacquards, Mawdsleys, Bessemers, and the thousands of skilled workers expand a sleepy village into a thriving town; but when the town is built, and the trade is flourishing, he steps in to reap the harvest. He raises the rent.
He raises the rent, and evermore raises the rent, so that the harder the townsfolk work, and the more the town prospers, the greater is the price he charges for the use of his land. This extortionate rent is really a fine inflicted by idleness on industry. It is simple plunder, and is known by the technical name of unearned increment.
It is unearned increment which condemns so many of the workers in our British towns to live in narrow streets, in back-to-back cottages, in hideous tenements. It is unearned increment which forces up the death-rate and fosters all manner of disease and vice. It is unearned increment which keeps vast areas of London, Glasgow, Liverpool, Manchester, and all our large towns ugly, squalid, unhealthy, and vile. And unearned increment is an inevitable outcome and an invariable characteristic of the private ownership of land.
On this subject Professor Thorold Rogers said—
Every permanent improvement of the soil, every railway and road, every bettering of the general condition of society, every facility given for production, every stimulus applied to consumption, raises rent. The landowner sleeps, but thrives.
The volume of this unearned increment is tremendous. Mr. H. B. Haldane, M.P., speaking at Stepney in 1894, declared that the land upon which London stands would be worth, apart from its population and special industries, "at the outside not more than £16,000 a year." Instead of which "the people pay in rent for the land alone £16,000,000, and, with the buildings, £40,000,000 a year." Those £16,000,000 constitute a fine levied upon the workers of London by landlords.
A similar state of affairs exists in the country, where the farms are let chiefly on short leases. Here the tenant having improved his land has often lost his improvements, or, for fear of losing the improvements, has not improved his land nor even farmed it properly. In either case the landlord has been enriched while the tenant or the public has suffered.
A landlord has an estate which no farmer can make pay. A number of labourers take small plots at £5 an acre, and go in for flower culture. They work so hard, and become so skilful, that they get £50 an acre for their produce. And the landlord raises the rent to £40 an acre.
That is "unearned increment," or "compound rent." The landlord could not make the estate pay, the farmer could not make it pay. The labourer, by his own skill and industry, does make it pay, and the landlord takes the proceeds.
And these are the men who talk about confiscation and robbery!
Do I blame the landlord? Not very much. But I blame the people for allowing him to deprive their wives and children of the necessaries, the decencies, and the joys of life.
But if you wish to know more about the treatment of tenants by landlords in England, Scotland, and Ireland, get a book called Land Nationalisation, by Dr. Alfred Russell Wallace, published by Swan Sonnenschein, at 1s.
That private landowners should be allowed to take millions out of the pockets of the workers is neither just nor reasonable. There is no argument in favour of landlordism that would not hold good in the case of a private claim to the sea and the air.
Imagine a King or Parliament granting to an individual the exclusive ownership of the Bristol Channel or the air of Cornwall! Such a grant would rouse the ridicule of the whole nation. The attempt to enforce such a grant would cause a revolution.
But in what way is such a grant more iniquitous or absurd than is the claim of a private citizen to the possession of Monsall Dale, or Sherwood Forest, or Covent Garden Market, or the corn lands of Essex, or the iron ore of Cumberland?
The Bristol Channel, the river Thames, all our high roads, and most of our bridges are public property, free for the use of all. No power in the kingdom could wrest a yard of the highway nor an acre of green sea from the possession of the nation. It is right that the road and the river, the sea and the air should be the property of the people; it is expedient that they should be the property of the people. Then by what right or by what reason can it be held that the land—Britain herself—should belong to any man, or by any man be withheld from the people—who are the British nation?
But it may be thought, because I am a Socialist, and neither rich nor influential, that my opinion should be regarded with suspicion. Allow me to offer the authority of more eminent men.
The late Lord Chief-Justice Coleridge said, in 1887—
These (our land laws) might be for the general advantage, and if they could be shown to be so, by all means they should be maintained; but if not, does any man, with what he is pleased to call his mind, deny that a state of law under which such mischief could exist, under which the country itself would exist, not for its people, but for a mere handful of them, ought to be instantly and absolutely set aside?
Two years later, in 1889, the Right Hon. W. E. Gladstone said—
Those persons who possess large portions of the earth's space are not altogether in the same position as possessors of mere personality. Personality does not impose limitations on the action and industry of man and the well-being of the community as possession of land does, and therefore I freely own that compulsory expropriation is a thing which is admissible, and even sound in principle.
Speaking at Hull, in August 1885, the Right Hon. Joseph Chamberlain said—
The soil of every country originally belonged to its inhabitants, and if it has been thought expedient to create private ownership in place of common rights, at least that private ownership must be considered as a trust, and subject to the conditions of a trust.
And again, at Inverness, in September 1885, Mr. Chamberlain said—
When an exorbitant rent is demanded, which takes from a tenant the savings of his life, and turns him out at the end of his lease stripped of all his earnings, when a man is taxed for his own improvements, that is confiscation, and it is none the less reprehensible because it is sanctioned by the law.
These views of the land question are not merely the views of ignorant demagogues, but are fully indorsed by great lawyers, great statesmen, great authors, great divines, and great economists.
What is the principle which these eminent men teach? It is the principle enforced in the patent law, in the income tax, and in the law of copyright, that the privileges and claims, even the rights of the few, must give way to the needs of the many and the welfare of the whole.
What, then, do we propose to do? I think there are very few Socialists who wish to confiscate the land without any kind of compensation. But all Socialists demand that the land shall return to the possession of the people. Britain for the British! What could be more just?
How are the people to get the land? There are many suggestions. Perhaps the fairest would be to allow the landowner the same latitude that is allowed to the inventor, who, as Mr. Mallock claims, is really the creator of two-thirds of our wealth.
We allow the inventor to draw rent on his patent for fourteen years. Why not limit the private possession of land to the same term? Pay the present owners of land the full rent for fourteen or, say, twenty years, or, in a case where land has been bought in good faith, within the past fifty years, allow the owner the full rent for thirty years. This would be more than we grant our inventors, though they add to the national wealth, whereas the landlord simply takes wealth away from the national store.
The method I here advise would require a "Compulsory Purchase Act" to compel landowners to sell their land at a fair price to the nation when and wherever the public convenience required it.
This view is expressed clearly in a speech made by the Right Hon. Joseph Chamberlain at Trowbridge in 1885—
We propose that local authorities shall have power in every case to take land by compulsion at a fair price for every public purpose, and that they should be able to let the land again, with absolute security of tenure, for allotments and for small holdings.
Others, again, recommend a land tax, and with perfect justice. If the City Council improves a street, at the cost of the ratepayer, the landlord raises his rent. What does that mean? It means that the ratepayer has increased the value of the landlord's property at the cost of the rates. It would only be just, then, that the whole increase should be taken back from the landlord by the city.
Therefore, it would be quite just to tax the landlords to the full extent of their "unearned increment."
In Progress and Poverty, and in the book on Land Nationalisation by Dr. Alfred Russell Wallace, you will find these subjects of the taxation and the purchase of land fully and clearly treated.
My object is to show that it is to the interest of the nation that the private ownership of land should cease.
Books to Read on the Land:—
Progress and Poverty. By Henry George, 1s. Kegan Paul, Trench, Trübner, & Co.
Land Nationalisation. By Alfred Russell Wallace, 1s. Swan Sonnenschein.
Five Precursors of Henry George. By J. Morrison Davidson. London, Labour Leader Office, 1s.