Freeland: A Social Anticipation Part 14

The reason you have not seen the cannons is that the exercise-ground lies some distance outside of the town--a necessary arrangement, as some of the guns used are monsters of 200 tons, whose thunder would ill accord with the idyllic peace of our Eden Vale. The young men are so familiar with this kind of toy, and many of them have, after profound ballistic studies, brought their skill to such perfection, that in my opinion they would show themselves as superior to their European antagonists in artillery as they would in rifle-practice. The same holds good of our hors.e.m.e.n. In brief, we have no army; but our men and youths handle all the weapons which an army needs infinitely better than the soldiers of any army whatever. And as, moreover, for the purposes of our great prize-contests there exists an organisation by means of which, out of the 2,500,000 men and youths whom Freeland now possesses capable of bearing arms, the best two or three hundred thousand are always available, we think it would he a very easy thing to ward off the greatest invading army--a danger, indeed, which we do not seriously antic.i.p.ate, as we doubt if there is a European people that would attack us. Rifles and cannons collected for use against us would very soon--without our doing anything--be directed against those who wished us ill.'

To this I a.s.sented. We then discussed several other topics connected with the education of the young; and I took occasion to ask how it was that the before-mentioned voluntary insurance against old age and death in Freeland was effected on behalf of only the insurer himself and his wife, and not of his children. According to all I had seen and heard, indifference towards the fate of the children could not be the reason. I therefore asked David to tell me why, whilst we in Europe saved chiefly for the children, here in Freeland nothing was laid by for them.

'The reason,' explained David, 'lies here; the children are already sufficiently provided for--as sufficiently as are those who are unable to work, and the widows. And this is necessarily involved in the principle of economic justice; for if the children were thrown upon the voluntary thrift of their parents--as they are with you--they would be made dependent upon conduct upon which they in truth could exercise no influence. If I accustom myself to requirements which my maintenance-allowance could not enable me to satisfy, it lies in my own power permanently to secure what I need by means of an insurance-premium. If I neglect to do this, it is my own fault, and I have no right to complain when I afterwards have to endure unpleasant privations. The case is the same with my wife, for she exercises the same influence over the management of the household as I do. My children, on the other hand, would suffer innocently if they were thrown upon our personal forethought for what they would need in the future. They must, therefore, be protected from any privation whatever, independently of anything that I may do. And that is the case. What we bequeath to our children, and bequeath it in all cases, is the immense treasure of the powers and wealth of the commonwealth delivered into their care and disposition. Just think.

The public capital of Freeland already amounts to as much as 6,000 for every working inhabitant; and last year this property yielded to everyone who was moderately industrious a net income of 600, and the ratio of income is, moreover, constantly growing year by year.'

'But,' I interposed, 'suppose a child is or becomes incapable of work?'

'If he is so from childhood, then the forty per cent. of the maintenance-unit, to which in such a case he has a right, is abundantly sufficient to meet all his requirements, for he neither can nor should have an independent household. If he _becomes_ incapable of work, after he has set up a household and perhaps has children of his own, it would be his own, not his parents' fault, if he had neglected to provide for this emergency--a.s.suming, of course, that he considered it necessary to make such provision.'

'Very well; I perfectly understand that. But how is it with those who are orphaned in infancy? Is no provision made for such? It cannot possibly accord with the sentiments of Freeland parents who live in luxury to hand over their children to public orphanages?'

'As to orphanages, it is the same as with hospitals,' answered David. 'If by orphanages you mean those barracks of civilised Europe or America, in which the waifs of poverty are without love, and after a mechanical pattern educated into the poor of the future, there are certainly none such among us. But if you mean the inst.i.tutions in which the Freeland orphans are brought up, I can a.s.sure you that the most sensitive parents can commit their children to them with the most perfect confidence. Of course, nothing can take the place of parental love; but otherwise the children are cared for and brought up exactly as if they were in their parents' house. The s.e.xes dwell apart by tens in houses which differ in nothing from other Freeland private houses; and they are under the care of pedagogically trained guardians, whose duty it is not to teach them, but to watch over them and attend to all their domestic wants. Food, clothing, play,--in short, the whole routine of life is in every respect similar to that of the rest of Freeland. They are taught in the public schools; and after they have pa.s.sed through the intermediate schools, the young people themselves decide whether they will go to a technical school or to a university. Until their majority they remain in the adoptive home selected for them by the authorities, and then, if they are not yet able to maintain themselves, they enjoy the general right of maintenance-allowance. What more could the most affectionate care of parents do for them? Not even the most intangible reproach can attach to training in such a public orphanage, for the children are not the children of poverty, but simply orphans.'

'But I imagine that orphans from better houses are adopted by relatives or acquaintances, particularly if the parents make full provision for their support,' I answered.

'In case there are such houses to which the children can go, the parents need make no provision for their maintenance, but merely a testamentary declaration, and the children will then be transferred to such houses without becoming any pecuniary burden to their adoptive parents. For in such a case the commonwealth pays to the household in question an equivalent to what would have been the cost of maintenance at the orphanage; and as, besides the ordinary expenses of living in every Freeland house, the fee for personal superintendence must be paid out of this equivalent, the allowance will not be much more than the child will cost its foster-parents. Thus no parental provision is needed to save the orphans from being dependent upon the liberality or goodwill of strangers.

But I should tell you that this interposition of friendly or even related families on behalf of orphans is exceptional. Unless circ.u.mstances are very much in favour of such an arrangement, Freeland parents prefer to leave their children to the care of the public orphanages. And this is very intelligible to all who have had opportunities of observing the touching tenderness of the guardian angels who rule in these houses, and of the intimate relations which quickly develop between the children and their attendants. Our Board of Maintenance, supported by our Board of Education, lays great weight upon this part of its duty. Only the most approved masters and mistresses--and the latter must also be experienced nurses--are appointed as guardians of the orphans; and to have been successfully occupied in this work for a number of years is a high distinction zealously striven after, particularly by the flower of our young women.'

'I can quite understand that,' I said. 'May I, in this connection, ask how you deal with the right of inheritance in general, and of inheritance of real property in particular? For here, in property in houses there seems to me to be a rock upon which your general principles as to property in land might be wrecked. It is one of the fundamental principles of your organisation that no one can have a right of property in land; but houses--if I have been rightly informed--are private property. How do you reconcile these things?'

'Everyone,' answered David, 'can dispose freely of his own property, at death as in life. The right of bequest is free and unqualified; but it must be noted that between husband and wife there is an absolute community of goods, whence it follows that only the survivor can definitively dispose of the common property. The right of property in the house, however, cannot be divided; and it is not allowable to build more than one dwelling-house upon a house-and-garden plot. Finally, the dwelling-house must be used by the owner, and cannot be let to another. If the house-plot be used for any other purpose than as the site of the owner's home, the breach of the law involves no punishment, and no force will be brought to bear upon the owner, but the owner at once loses his exclusive right as usufructuary of the plot. The plot becomes at once, _ipso facto_, ground to which no one has a special right, and to which everyone has an equal claim. For, according to our views, there is no right of property in land, and therefore not in the building-site of the house; and the right to appropriate such ground to one's own house is simply a right of usufruct for a special purpose. Just as, for example, the traveller by rail has a claim to the seat which he occupies, but only for the purpose of sitting there, and not for the purpose of unpacking his goods or of letting it to another, so I have the right to reserve for myself, merely for occupation, the spot of ground upon which I wish to fix my home; and no one has any more right to settle upon my building-site than he has to occupy my cus.h.i.+on in the railway, even if it should be possible to crowd two persons into the one seat. But neither am I at liberty to make room for a friend upon my seat; for my fellow-travellers are not likely to approve of the inconvenience thereby occasioned, and they may protest that the legs and elbows of the sharer of my seat crowd them too much, and that the air-s.p.a.ce calculated for one pair of lungs is by my arbitrary action shared by two pair. Just so my house-neighbours are not likely to approve of having my walls and roof too near to theirs, and will resent the arbitrary act by which I fill the air-s.p.a.ce of the town with more persons than the commonwealth allows.

'Now, in the exercise of my right of usufruct of a definite plot of ground, I have inseparably connected with this plot something over which I have not merely the right of usufruct, but also the right of property--namely, a house. Consequently my right of usufruct pa.s.ses over to the person to whom--whether gratuitously or not--I transfer my right of property in the house. Therefore I can sell, or bequeath, or give away my house without being prevented from doing so by the fact that I have no right of property in the building-site.

'But if, through any circ.u.mstances independent of my labour or of the building cost, the site on which my house stands acquires a value above that of other building-sites, this increased value belongs not to me, but to those who have given rise to it, and that is, without exception, the community. Let us suppose that building-ground in Eden Vale has acquired such an exceptional value, while there are still sites available throughout Freeland for milliards of persons: this local increase of value can be attributed merely to the fact that the excellent streets, public grounds, splendid monuments, theatres, libraries--in short, the public inst.i.tutions of Eden Vale--have made living in this town more desirable than in any other place in the country. But these public inst.i.tutions are not my work--they are the work of the community; and I have no right to put into my pocket the increased ground-value derived from the common enjoyment of these inst.i.tutions. All that I myself have expended upon the house and garden belongs to me, and on a change of owners.h.i.+p must be either made good to me or put to my credit; but the ground-price--and, indeed, the whole of it--belongs to the commonwealth; for building-sites which offer no advantages over any others are, in view of the still existing surplus of unoccupied ground, valueless. The commonwealth, therefore, has, strictly speaking, a right at any time to claim this value or an equivalent; and if the question were an important one, it would be advisable actually to exercise this right--that is, from time to time, or at least on a change of owners.h.i.+p, to a.s.sess the value of the sites of houses and gardens, and to appropriate the surplus of the sale-price to the public treasury.

'In reality, in view of our other arrangements, this question of the value of building-sites in Freeland is of no importance whatever. It must not be forgotten that our private houses are not lodging-houses, but merely family dwellings. As I have already said, every contract to let renders absolutely void the occupier's right of exclusive usufruct of the house-site. He who lets his house has, by the very act of doing so, made his plot masterless.

A secret letting is prevented by our general const.i.tution, and particularly by the central bank, which we will visit next. Thus the increased value which may be acquired by a building-plot cannot become a question of importance, and we are able to refrain altogether from interfering with free trade in houses. We buy, sell, bequeath, and give away our dwelling-houses, and no one troubles himself about it. I may remark, in pa.s.sing, that up to the present there has been no noticeable increase in the prices of sites. A man pays for his house what the house itself is held to be worth, the trifling differences being due to the greater or less taste exhibited in the structure, the greater or less beauty of the garden, &c., &c. But that the Eden Vale plots, for example, as such, have a special value cannot be a.s.serted, as there are still many thousands freely available to anyone, but which are not taken. The conveniences of life are pretty evenly distributed throughout Freeland, and no town can boast of attractions which are not balanced by attractions of other kinds in other towns. Eden Vale, for instance, possesses the most splendid buildings, and is distinguished by incomparable natural beauty; hence it is less adapted to industries, and has no agricultural colony in its neighbourhood. Dana City, on the other hand, which is specially suitable for industry, and is in the midst of agricultural land, is unattractive to many on account of its ceaseless and noisy business activity. And, in general, we Freelanders are not fond of large towns; we love to have woods and meadows as near us as possible, and those who are able to live in the country do it in preference to living in towns. Of course, there is not likely to be any lack of rural building-sites; hence there can never be any ground-price proper among us. If, however, building-ground should acquire a price, we are in any case protected by our way and manner of building and living from such prices as would give rise to any material derangement of our property relations. Whether a family residence has a higher or a lower value is, therefore, after all, only a question of subordinate interest, and it is not worth the trouble, in order to equalise the differences in value which arise, to bring into play an apparatus which, under the circ.u.mstances, might lead to chicanery.'

I agreed with him. Wis.h.i.+ng, however, to understand this important matter in all its relations, I supposed a case in which the opportunity of gaining an extraordinarily high profit was connected with a certain definite locality, and asked what would happen then. 'Let us imagine that in a small valley surrounded by uninhabitable rocks or marshes, a mine of incalculable value is discovered, the exploitation of which would give twice or thrice as much profit as the average profit in Freeland at that time. Naturally everyone will labour at this mine until the influx of workers produces an equilibrium in the profits. If there were sufficient s.p.a.ce round the mine for dwelling-houses, nothing would stand in the way of this equalisation of profits; but as, in the supposed case, the s.p.a.ce is limited, only the first comers will be able to work at the mine; all later comers--unless they camp out--will be as effectually excluded from competing as if an insuperable barrier had been raised round the mine. The fortunate usufructuaries of the few building-sites will, therefore, be in the pleasant situation of permanently pocketing twice or thrice the average proceeds of labour--let us say, for example, 1,600 a year, whilst 600 is the average.

Consequently their early occupation of the ground will be worth 1,000 a year to them, exactly the same as to a London house-owner the lucky circ.u.mstance that his ancestors set up their huts on that particular spot on the banks of the Thames is worth his 1,000 or more a year. That this is the rule and is the princ.i.p.al source of wealth, not only in London, but everywhere outside of Freeland, whilst in this country it would require an extraordinary concurrence of circ.u.mstances to produce similar phenomena, makes no difference in the fact itself that it can occur everywhere, and that, if you know of no means to prevent it, the ground-rent you have fortunately got rid of might revive among you. Nay, in this--I will admit extreme--case the Freeland inst.i.tutions would prove themselves a hindrance to the national exploitation of such a highly profitable opportunity for labour, the most intense utilisation of which would evidently be to the general interest. If such a case occurred in Europe or America, the fortunate owners would surround the mines with large lodging-barracks, from which certainly they would without any trouble derive enormous profits, but which at the same time would make it possible to extract the rich treasures from the earth. Your Freeland house-right, on the contrary, would in such a case prevent the exploitation of the treasure of the earth, merely in order that an exceptional increase of the wealth of individuals should be avoided. And yet it is characteristic of your inst.i.tutions as a whole to render labour more productive than is possible under an exploiting system of industry. A correct principle, however, must be correct under all circ.u.mstances.'

'That is also my view,' answered David; 'but in such cases even your Western law affords a means of help--namely, expropriation. Let it be a.s.sumed that we could by no means whatever make the neighbourhood of the mine accommodate a greater number of dwelling-houses; then, in the public interest, we would redeem the houses already existing at the mine, and in their place we would erect large lodging-houses after the pattern of our hotels. If that would not suffice to accommodate as many workers as were required in order to bring the profit of labour at the mine into equilibrium with the average profit of the country, we would proceed to the last resource and expropriate the mine for the benefit of the commonwealth.

By no means would even such a very improbable contingency present any serious difficulties to the carrying out of our principles. For you will certainly admit that the undertaking of a really monopolist production by the commonwealth is not contrary to our principles. If you would deny it, you must go farther, and a.s.sert that in working the railways, the telegraphs, the post, nay, even in a.s.suming the ultimate control of the community, there is to be found a violation of the principle of individual freedom.'

'You are only too right,' I answered, 'and I cannot defend myself from the charge of harbouring a doubt which would have been seen to be superfluous if I had only been unreservedly willing to admit that the people of Freeland, whatever might happen, would probably make the wisest and not the stupidest provision against such a contingency as I imagined. The ground of that inconceivable stubbornness with which we adherents of the old are apt to resist every new idea is, that we imagine difficulties, which exist only in our fancy, and most unnecessarily suppose that there is no other way of surmounting those imaginary difficulties than the stupidest imaginable. We then triumphantly believe we have reduced the new ideas _ad absurdum_; whilst we should have done better to have been ashamed of our own absurdities.'

With this fierce self-accusation I will close my letter to-day; but not without telling you in confidence that in making it I was thinking less of myself than of--others.

CHAPTER XVIII

Eden Vale: Aug. 6, ----

Yesterday, accompanied by the two English agents, we inspected the Freeland Central Bank. The comprehensive and--as a necessary consequence-- exceedingly simple clearing system excited the highest admiration of the two experienced gentlemen. The remarkably small amount of cash required to adjust the accounts of the whole of the gigantic business transactions drew from Lord E---- the inquiry why Freeland retained gold as a measure of value. He thought that, as the Freelanders already made the value of a unit of labour-time the standard of calculation in their most important affairs, the simplest plan would be to universalise this method--that is, to declare the labour-hour to be the measure of value, the money-unit.

This would, he thought, far better harmonise with the general social order of Freeland, in which labour is the source and basis of all value.

The director of the bank (Mr. Clark) replied: 'That is a view which has been repeatedly expressed by strangers; but it is based simply upon confounding the _measure of value_ with the _source of income_. For labour alone is not the source of value, though most Socialists adopt this error of the so-called cla.s.sical economists as the ground of their demands. If all value were derived from labour and from labour alone, then even among you in the old exploiting world everything would be in favour of the workers, for even there the workers have control over their working power.

The misery among you is due to the fact that the workers have no control over the other things which are requisite for the creation of value, namely, the product of previous work--_i.e._ capital, and the forces and materials derived from nature. We in Freeland have guaranteed to labour the whole of what it a.s.sists to produce. But we do not base this right upon the erroneous proposition that labour is the sole source of the value of what it produces, but upon the proposition that the worker has the same claim to the use of those other factors requisite for the creation of value as he has to his working-power. But this is only by the way. Even if labour were the only source of and the only ingredient in value, it would still be in any case the worst conceivable _measure_ of value; for it is of all things that possess value the one the value of which is most liable to variations.

Its value rises with every advance in human dexterity and industry; that is, a labour-day or a labour hour is continuously being transformed into an increasing quant.i.ty of all imaginable other kinds of value. That the value of the product of labour differs as the labour-power is well or badly furnished with tools, well or badly applied, cannot be questioned, and never has been seriously questioned. Now, among us in Freeland _all_ labour-power is as well equipped and applied as possible, because the perfect and unlimited freedom of labour to apply itself at any time to whatever will then create the highest value brings about, if not an absolute, yet a relative equilibrium of values; but, in order that this may be brought about, there must exist an unchangeable and reliable standard by which the value of the things produced by labour can be measured. That the labour expended by us upon shoe goods and upon textile fabrics, upon cereals and turnery goods, possesses the same value is shown by the fact that these various kinds of wares produced in the same period of time possess the same value; but this fact can be shown, not by a comparison between the respective amounts of labour-time, but only by a comparison with something that has a constant value in itself. If we concluded that the things which required an equal time to produce were of equal value because they were produced in an equal time, we might soon find ourselves producing shoes which no one wanted, while we were suffering from a lack of textile fabrics; and we might see with unconcern the superfluity of turnery wares, the production of which was increasing, while perhaps all available hands were required in order to correct a disastrous lack of cereals. To make the labour-day the measure of value--if it were not, for other reasons, impossible--involves Communism, which, instead of leaving the adjustment of the relations between supply and demand to free commerce, fixes those relations by authority; doing this, of course, without asking anyone what he wishes to enjoy, or what he wishes to do, but authoritatively prescribing what everyone shall consume, and what he shall produce.

'But we in Freeland strive after what is the direct opposite of Communism--namely, absolute individual freedom. Consequently we, more imperatively than any other people, need a measure of value as accurate and reliable as possible--that is, one the exchange-power of which, with reference to all other things, is exposed to as little variation as possible. This best possible, most constant, standard the civilised world has. .h.i.therto found rightly in gold. There is no difference in value between two equal quant.i.ties of gold, whilst one labour-day may be very materially more valuable than another; and there is no means of ascertaining with certainty the difference in value of the two labour-days except by comparing them both with one and the same thing which possesses a really constant value. Yet this equality in value of equal quant.i.ties of gold is the least of the advantages possessed by gold over other measures of value.

Two equal quant.i.ties of wheat are of nearly equal value. But the value of gold is exposed to less _variation_ than is the value of any other thing.

Two equal quant.i.ties of wheat are of equal value at the same time; but to-morrow they may both be worth twice as much as to-day, or they may sink to half their present value; while gold can change its value but very little in a short time. If its exchange-relation to any commodity whatever alters suddenly and considerably, it can be at once and with certainty a.s.sumed that it is the value not of the gold, but of the other commodity, which has suddenly and considerably altered. And this is a necessary conclusion from that most unquestionable law of value according to which the price of everything is determined by supply and demand, if we connect with this law the equally unquestionable fact that the supply and demand of no other thing are exposed to so small a relative variation as are those of gold. This fact is not due to any mysterious quality in this metal, but to its peculiar durability, in consequence of which in the course of thousands of years there has been acc.u.mulated, and placed at the service of those who can demand it, a quant.i.ty of gold sufficient to make the greatest temporary variations in its production of no practical moment. Whilst a good or a bad wheat harvest makes an enormous difference in the supply of wheat for the time being, because the old stock of wheat is of very subordinate importance relatively to the results of the new harvest, the amount of gold in the world remains relatively unaltered by the variations, however great they may be, of even several years of gold-production, because the existing stock of gold is enormously greater than the greatest possible gold-production of any single year. If all the gold-mines in the world suddenly ceased to yield any gold, no material influence would be produced upon the quant.i.ty of available gold; whilst a single general failure in the cereal crop would at once and inevitably produce the most terrible corn-famine. This, then, is the reason why gold is the best possible, though by no means an absolutely perfect, measure of value. But labour-time would be the worst conceivable measure of value, for neither are two equal periods of labour necessarily of equal value, nor does labour-time in general possess an unalterable value, but its exchange-power in relation to all other things increases with every step forward in the methods of labour.'

We were all convinced, but Lord E---- could not refrain from remarking that the Freelanders did nevertheless estimate the value of many things in labour-equivalents. He at once received from my father the pertinent answer that, according to all they had yet heard, this happened only in cases in which an increase of payment had to run parallel with a rise in the value of labour. Salaries and maintenance-allowances _ought_ to rise in proportion as the proceeds of labour and therewith the general consumption rose; and it was only when this relation had to be kept in view that the value of things could be estimated in labour-equivalents.

Mr. Clark now drew our attention to the comprehensive, transparent, and detailed publicity which marked all the pecuniary affairs of Freeland, in consequence of the entry in the bank books of all commercial and industrial relations. No one can deceive either himself or others as to his circ.u.mstances; and one of the most important social consequences of this is that no one has any desire to s.h.i.+ne by extravagant spending. Extravagance is only too often prompted by a desire to make oneself appear in the eyes of the world richer than one really is; such an attempt in this country would only provoke a smile. And if anyone wished to spend in luxuries more than he earned, the bank would naturally refuse him credit for such a purpose; and without this credit the spendthrift would have to appeal to the liberality of his fellow-citizens before he could indulge in his extravagance. The amounts of all incomes and of all outgoings lie open to the day; all the world knows what everybody has and whence he gets it. And as everyone is free to engage in any branch of industry whatever, the difference of income can excite no one's envy.

But Lord E---- here asked whether the degree of authoritative arbitrariness inevitable in fixing salaries of different kinds--_e.g._ of officials--did not present some contradiction to the otherwise operative principle of unconditional freedom of choice of calling, and to the equilibrium in the proceeds of different kinds of labour which resulted from this freedom.

'When the profits of the woollen industry are higher than those of agriculture, fresh labour will be transferred to the former until an equilibrium has been established between the two profits; if a permanent excess of profit shows itself in one of these branches of production, it is evident under your inst.i.tutions that this can be due solely to the fact that the labour in this more profitable industry is less agreeable, more exhausting, or demands a higher or rarer knowledge or skill. No one has the slightest ground to complain of injury; and so far the harmony produced by freedom is worthy of all admiration. But when it comes to appointments and salaries, this absolute freedom must cease. You, as the head of a department of the government, receive 1,400, your neighbour the hand-worker earns merely 600; how do you know that the latter does not feel that he is wronged thereby?'

'My lord,' said Mr. Clark, smiling, 'if you mean, how do I know whether my neighbour does not feel himself wronged _by nature_ because he is not able, like me, to earn 1,400 a year, I must answer that I can speak only from conjecture, and that I really possess no certain knowledge as to his feelings. But if you think that my neighbour, or anyone else in Freeland, could find in my higher salary an advantage conferred on me by an arbitrary exercise of authoritative power, or by the favour of the electors, or for any inadequate reason, I can certainly show that you are mistaken. For my salary is, in the last resort, as much the result of free compet.i.tion as is the labour-profit of my neighbour. Whether I am the right man for my post is a question which is decided by the corporations by whom my election is made, and whose choice is controlled or superseded by no automatically working contrivance; with what salary my office must be endowed, in order that qualified men, or let us say men who are held to be qualified, may be obtained, this is regulated by exactly the same automatic laws as is the labour-profit of a weaver or an agriculturist. And this holds good of the salary of the youngest official up to that of the heads of the departments of the Freeland government. The fixing of the salaries in every case depends upon the free judgment of the presidents or of the electoral colleges; but these presidents or electoral colleges must fix the salaries at such sums as will at any time attract a sufficient number of qualified candidates. Of course, a pound more or less a year would make no difficulty--it is a recognised principle that the salaries should be high enough to attract rather a superfluity than a lack of candidates; but when the number of candidates is greater than a certain ratio, the salaries are reduced, whilst a threatened lack of candidates is met by an increase of salaries. I will add, that it is to be taken as a matter of course that in Freeland the unsuccessful candidates are not breadless aspirants. Success or failure is never therefore a question of a livelihood, but of the gratification of inclination and sometimes of vanity. A man gives up his office when more profitable or more agreeable occupation attracts him elsewhere. The public officials are not paid the same salaries in all the branches of the public service. Specially trying work, or work demanding special knowledge, obtains here higher profits, just as in the various industries. And whilst the labour-earnings of ordinary manual labour are the measure of the salaries of the lower officials, so do the salaries of the various a.s.sociation-managers exercise a regulative influence upon the salaries of the higher public officials. You, also, have often experienced that the attractions of positions connected with public activity have in no small degree brought down the salaries of government officials, professors, &c., below the level of the incomes of those who hold the chief posts in a.s.sociations. As a rule, it is found that with a rise in the general level of intelligence there is a _relative_--by no means an absolute--sinking of the higher salaries. While the directors of several large a.s.sociations receive as much as 5,000 hour-equivalents a year, the highest officials in the Freeland central government at the present time receive only 3,600 more, and that because our persistent a.s.sertion of the relative depreciation of the higher salaries is met by the parliaments with an equally persistent resistance, and the parliaments yield to our importunities only very slowly and very reluctantly. To be just, it should be added that the same game is repeated in the a.s.sociations. The directors would often be satisfied with much lower salaries, for they often really do not know what to do with their incomes, which, in comparison with prices in Freeland, are in some cases exorbitant, and increase with every increase in the value of labour. Particularly during the last decade, since the value of the hour-equivalent has increased so much, proposals from above to reduce salaries have become a standing rule. I repeat, this reduction must be understood to be merely relative--that is, to refer merely to the number of hour-equivalents. The value of a labour-hour has quadrupled within the last twenty years; those of us, therefore--we public officials, for example--who receive twenty-eight per cent. fewer hour-equivalents than we did originally, still have incomes which, when reckoned in money, have been nearly tripled. As a rule, however, the a.s.sociations will not hear of even such a reduction. Though their directors openly avow their willingness to accept lower salaries, the a.s.sociations are afraid of offending some one or other of the competing societies which pay higher salaries; and as a few hundred pounds are not worth considering in view of the enormous sums which a great a.s.sociation annually turns over, the reduction of the salaries goes on but slowly. Nevertheless there is a gradual lessening of the difference between the maximum and the minimum earnings, plainly proving that even in this matter of salaries the law of supply and demand is in full operation.'

Lord E---- thanked him for this explanation. But now Sir B---- proposed a far weightier question. 'What struck me most,' said he, 'when I was examining the enormous operations of your central bank, and what I am not yet able to understand, is how it is possible, without arbitrary exercise of authority and communistic consequences, to acc.u.mulate the immense capital which you require, and yet neither pay nor reckon any interest.

That interest is the necessary and just reward of the capitalist's self-denial I do not indeed believe; but I hold it to be the tribute which has to be paid to the saver for sparing the community, by his voluntary thrift, the necessity of making thrift compulsory. What I now wish to know is, what were your reasons for forbidding the payment of interest? Or are you in Freeland of opinion that it is unjust to give to the saver a share of the fruits of his saving?'

'We are not of that opinion,' answered the director. 'But first I must a.s.sure you that you have started from an erroneous a.s.sumption. We _forbid_ the payment of interest as little as we "forbid" the undertaker's profit or the landlord's ground-rent. These three items of income do not exist here, simply because no one is under the necessity of paying them. If our workers needed an "undertaker" to organise and discipline them for highly productive activity, no power could prevent them from giving up to him what belonged to him--namely, the profit of the undertaking--and remaining satisfied themselves with a bare subsistence. Nothing in our const.i.tution, and no one among us, would interfere with such an undertaker in the peaceable enjoyment of his share of the produce. If the land needed--'

'Pardon my interruption,' said Sir B----. '"If our workers needed an undertaker to organise and discipline them, no power could prevent them from giving up to him the whole of the produce"--these were your words. In the name of heaven, do not your workers need such a man? Do they need none over them to organise, discipline, guide, and overlook the process of production? And when I hear you so coolly and distinctly a.s.sert that such a man has a right to the produce, and that neither for G.o.d's sake nor in the name of justice need he leave to the worker more than a bare subsistence, I am compelled to ask myself whether you, an authority in Freeland, are pleased to jest, or whether what we have hitherto seen and heard here rests upon a mere delusion?'

'Forgive me for not having expressed myself more plainly,' answered the director to Sir B---- and to the rest of us who, like him, had shown our consternation at the apparent contradiction between the last words of our informant and the spirit of Freeland inst.i.tutions. 'I said, "If our workers needed an _undertaker_": I beg you to lay emphasis upon the word "undertaker." A man or several men to arrange, organise, guide the work, they certainly need; but such a man is not an undertaker. The difference between our workers and others consists in the fact that the former allow themselves to be organised and disciplined by persons who are dependent upon them, instead of being their masters. The conductors of our a.s.sociations are not the masters, but the officials--as well as shareholders--of the working fellows.h.i.+p, and have therefore as little right to the whole produce as their colleagues abroad. The latter are appointed and paid by the "owner" of what is produced; and in this country this owner is the whole body of workers as such. An undertaker in the sense of the old industrial system, on the other hand, is a something whose function consists in nothing but in being master of the process of production; he is by no means the actual organiser and manager, but simply the owner, who, as such, need not trouble himself about the process of production further than to condescend to pocket the profits. That the undertaker at the same time bears the risks attendant upon production has to be taken into account when we consider the individual undertaker, but not when we consider the inst.i.tution as such, for we cannot speak of the risk of the body of undertakers as a whole, I called the undertaker, not a man, but a something, because in truth it need not be a man with flesh and blood. It may just as well be a scheme, a mere idea; if it does but appropriate the profits of production it admirably fulfils its duty as undertaker, for as such it is nothing more than the s.h.i.+bboleth of masters.h.i.+p. Let us not be misled by the fact that frequently--we will say, as a rule--the undertaker is at the same time the actual manager of the work of production; when he is, he unites two economic functions in one person, that of the--mental or physical--labour and that of the undertakers.h.i.+p. Other functions can just as well be a.s.sociated together in him: the undertaker can be also capitalist or landlord; nevertheless, the undertaker, as economic subject, has no other function than that of being master of other men's labour and of appropriating to himself the fruits of the process of production after subtracting the portions due to the other factors in production.

'And this master, whose function consists simply of an abstract masters.h.i.+p, is an inexorable necessity so long as the workers are servants who can be disciplined, not by their enlightened self-interest, but only by force. To throw the blame of this exclusively or only mainly upon "capital" was a fatal error, which for a long time prevented the clear perception of the real cause--the servile habits and opinions that had grown stronger and stronger during thousands of years of bondage. Capital is indispensable to a highly developed production, and the working ma.s.ses of the outside world are mostly without capital; but they are without it only because they are powerless servants, and even when in exceptional cases they possess capital they do not know how to do anything with it without the aid of masters. Yet it is frequently the capital of the servants themselves by means of which--through the intervention of the savings-banks--the undertaker carries on the work of production; it none the less follows that he pockets the proceeds and leaves to the servants nothing but a bare subsistence over and above the interest. Or the servants club their savings together for the purpose of engaging in productive work on their own account; but as they are not able to conceive of discipline without servitude, cannot even understand how it is possible to work without a master who must be obeyed, because he can hire and discharge, pay and punish--in brief, because he is master; and as they would be unable to dispose of the produce, or to agree over the division of it, though this might be expected from them as possessors of the living labour-power,--they therefore set themselves in the character of a corporate capitalist as master over themselves in the character of workmen. In these productive a.s.sociations, which the workers carry on with money they have saved by much self-denial or have involved themselves in worry and anxiety by borrowing, they remain as workers under a painful obligation to obey, and the slaves of wages; though certainly in their character of small capitalists they transform themselves into masters who have a right to command and to whom the proceeds of production belong--that is, into undertakers. The example of these productive a.s.sociations shows, more plainly than anything else can, that it was nothing but the incapacity of the working ma.s.ses to produce without masters that made the undertaker a necessity. We in Freeland have for the first time solved the problem of uniting ourselves for purposes of common production, of disciplining and organising ourselves, though the proceeds of production belonged to us in our character of workers and not of capitalists. And as the experiment succeeded, and when undertaken by intelligent men possessing some means must succeed, we have no further need of the undertaker.

'But undertakers.h.i.+p is not forbidden in Freeland. No one would hinder you from opening a factory here and attempting to hire workers to carry it on for wages. But in the first place you would have to offer the workers at least as much as the average earnings of labour in Freeland; and in the second place it is questionable if you would find any who would place themselves under your orders. That, as a matter of fact, no such case has occurred for the past eighteen years--that even our greatest technical reformers, in possession of the most valuable inventions, have without exception preferred to act not as undertakers, but as organisers of free a.s.sociations--this is due simply to the superiority of free over servile labour. It has been found that the same inventors are able to accomplish a great deal more with free workers who are stimulated by self-interest, than with wage-earners who, in spite of constant oversight, can only be induced to give a mechanical attention to their tasks. Moreover, the system of authoritative masters.h.i.+p was as repugnant to the feelings of the masters as to those of the men under them, and both parties found themselves uncomfortable in their unfamiliar _roles_--as uncomfortable as formerly in the _roles_ of absolutely co-equal a.s.sociates in production. So considerable was this mutual feeling of discomfort, and so evident was the inferiority of the servile form of organisation, that all such attempts were quickly given up, though no external obstacle of any kind had been placed in their way. Certainly it must not be overlooked that every undertaker who needs land for his business is in constant danger of having claims made by others upon the joint use of the land occupied by him, for, of course, we do not grant him a privilege in this respect; neither he nor anyone else in Freeland can exclude others from a co-enjoyment of the ground. Nevertheless, as we have plenty of s.p.a.ce, it would have been long before the undertaker would have had to strike his sail on this account.

That the few who in the early years of our history made such attempts quickly transformed themselves into directors of a.s.sociations, was due to the fact that, in spite of any advantages which they might possess, they could not successfully compete with free labour. Three of these undertakers failed utterly; they could fulfil their obligations neither to their creditors nor to their workmen, and must have had to submit to the disgrace of bankruptcy if their workmen, distinctly perceiving the one defect from which the undertakings suffered, had not taken the matter in hand. Since the inventions and improvements for the introduction of which these three undertakers had founded their businesses, were valuable and genuine, and the masters had during their short time of masters.h.i.+p shown themselves to be energetic and--apart from their fancy for masters.h.i.+p--sensible men, the workers stepped into the breach, const.i.tuted themselves in each case an a.s.sociation, took upon themselves all the liabilities, and then, under the superintendence of the very men who had been on the brink of ruin, carried on the businesses so successfully that these three a.s.sociations are now among the largest in Freeland. Four other several individuals--also notable industrial inventors--avoided a threatened catastrophe only by a timely change from the position of undertakers to that of superintendents of a.s.sociations; and they stand at present at the head of works whose workers are numbered by thousands, and have since realised continuously increasing profits, high enough to satisfy all their reasonable expectations. Thus, as I have said, undertakers.h.i.+p is not forbidden in Freeland; but it cannot successfully compete with free a.s.sociation.'

Sir B---- and the others declared themselves perfectly satisfied with this explanation, and begged the bank director to proceed with his account which they had interrupted. 'You were saying,' intimated my father, 'that in Freeland interest was no more forbidden than undertaker's gains and ground-rent. As to undertaker's gains we now understand you; but before you proceed to the main point of your exposition--to interest--I would like to ask for fuller details upon the question of ground-rent. How are we to understand that this is not forbidden in Freeland?'

'How you are to understand that,' was the answer, 'will best be made plain to you if I take up my train of thought where I left off. If, in order to labour productively, we required the undertaker, no power in heaven or earth could save us from giving up to him what was due to him as master of the process of production, while we contented ourselves with a bare subsistence--that is what I said. I would add that we should also be compelled to pay the tribute due to the landlord for the use of the ground, if we could not till the ground without having a landlord. For property in land was always based upon the supposition that unowned land could not be cultivated. Men did not understand how to plough and sow and reap without having the right to prevent others from ploughing and sowing and reaping upon the same land. Whether it was an individual, a community, a district, or a nation, that in this way acquired an exclusive right of owners.h.i.+p of the land, was immaterial: it was necessarily an _exclusive_ right, otherwise no one would put any labour into the land. Hence it happened, in course of time, that the individual owner of land acquired very considerable advantages in production over the many-headed owner; and the result was that common property in land gradually pa.s.sed into individual owners.h.i.+p. But this distinction is not an essential one, and has very little to do with our inst.i.tutions. With us, the land--so far as it is used as a means of production and not as sites for dwelling-houses--is absolutely masterless, free as air; it belongs neither to one nor to many: everyone who wishes to cultivate the soil is at liberty to do so where he pleases, and to appropriate his part of the produce. There is, therefore, no ground-rent, which is nothing else than the owner's interest for the use of the land; but a prohibition of it will be sought for in vain. In the fact that I have no right to prohibit anything to others lies no prohibition. It cannot even be said that I am prohibited from prohibiting anything, for I may do it without hindrance from anyone; but everybody will laugh at me, as much as if I had forbidden people to breathe and had a.s.serted that the atmospheric air was my own property. Where there is no power to enforce such pretensions, it is not necessary to prohibit them; if they are not artificially called forth and upheld, they simply remain non-existent. In Freeland no one possesses this power because here no one need sequestrate the land in order that it may be tilled. But the magic which enables us to cultivate ownerless land without giving rise to disputes is the same that enables us to produce without undertakers--free a.s.sociation.

'Just as little do we forbid interest. No one in Freeland will prevent you from asking as high a rate of interest as you please; only you will find no one willing to pay it you, because everyone can get as much capital as he needs without interest. But you will ask whether, in this placing of the savings of the community at the disposal of those who need capital, there does not lie an injustice? Whether it is not Communism? And I will admit that here the question is not so simple as in the cases of the undertaker's gains and of ground-rent. Interest is charged for a real and tangible service essentially different from the service rendered by the undertaker and the landowner. Whilst, namely, the economic service of the two latter consists in nothing but the exercise of a relation of masters.h.i.+p, which becomes superfluous as soon as the working ma.s.ses have transformed themselves from servants working under compulsion into freely a.s.sociated men, the capitalist offers the worker an instrument which gives productiveness to his labour under all circ.u.mstances. And whilst it is evident that, with the establishment of industrial freedom, both undertaker and landowner become, not merely superfluous, but altogether objectless--_ipso facto_ cease to exist--with respect to the capitalist, the possessor of savings, it can even be a.s.serted that society is dependent upon him in an infinitely higher degree when free than when enslaved, because it can and must employ much more capital in the former case than in the latter. Moreover, it is not true that service rendered by capital--the giving wings to production--is compensated for by the mere return of the capital. After a full repayment, there remains to the worker, in proportion as he has used the capital wisely--which is his affair and not the lender's--a profit which in certain circ.u.mstances may be very considerable, the increase of the proceeds of labour obtained by the aid of the capital.

Why should it be considered unreasonable or unjust to hand over a part of this gain to the capitalist--to him, that is, to whose thrift the existence of the capital is due? The saver, so said the earlier Socialists, has no right to demand any return for the service which he has rendered the worker; it costs him nothing, since he receives back his property undiminished when and how he pleases (the premium for risk, which may have been charged as security against the possible bad faith or bankruptcy of the debtor, has nothing to do with the interest proper). Granted; but what right has the borrower, who at any rate derives advantage from the service rendered, to retain all the advantage himself? And what certainty has he of being able to obtain this service, even though it costs the saver nothing to render it, if he (the borrower) does not undertake to render any service in return? It is quite evident that the interest is paid in order to induce the saver to render such a friendly service. How could we, without communistic coercion, transfer capital from the hands of the saver into those of the capital-needing producer? For the community to save and to provide producers with capital from this source is a very simple way out of the difficulty, but the right to do this must be shown. No profound thinker will be satisfied with the communistic a.s.sertion that the capital drawn from the producers in one way is returned to them in another, for by this means there does not appear to be established any equilibrium between the burden and the gain of the individual producers. The tax for the acc.u.mulation of capital must be equally distributed among all the producers; the demand for capital, on the other hand, is a very unequal one. But how could we take the tax paid by persons who perhaps require but little capital, to endow the production of others who may happen to require much capital? What advantage do we offer to the former for their compulsory thrift?

'And yet the answer lies close at hand. _It is true that in the exploiting system of society the creditor does not derive the slightest advantage from the increase in production which the debtor effects by means of the creditor's savings; on the other hand, in the system of society based upon social freedom and justice both creditor and debtor are equally advantaged._ Where, as with us, every increase in production must be equably distributed among all, the problem as to how the saver profits from the employment of his capital solves itself. The machinist or the weaver, whose tax, for example, is applied to the purchase or improvement of agricultural machines, derives, with us, exactly the same advantage from this as does the agriculturist; for, thanks to our inst.i.tutions, the increase of profit effected in any locality is immediately distributed over all localities and all kinds of production.

'If anyone would ask what right a community based upon the free self-control of the individual, and strongly antagonistic to Communism, has to coerce its members to exercise thrift, the answer is that such coercion is in reality not employed. The tax out of which the capitalisation is effected is paid by everyone only in proportion to the work he does. No one is coerced to labour, but in proportion as a man does labour he makes use of capital. What is required of him is merely an amount proportional to what he makes use of. Thus both justice and the right of self-control are satisfied in every point.

'You see, it is exactly the same with interest as with the undertaker's gains and with ground-rent: the guaranteed right of a.s.sociation saves the worker from the necessity of handing over a part of the proceeds of his production to a third person under any plea whatever. Interest disappears of itself, just like profit and rent, for the sole but sufficient reason that the freely a.s.sociated worker is his own capitalist, as well as his own undertaker and landlord. Or, if one will put it so, _interest, profit, and rent remain, but they are not separated from wages, with which they combine to form a single and indivisible return for labour_.'

And with this, good-night for the present.