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--
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Fig. 1
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--
_a_ _b_
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Fig. 2
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 L9000 to produce is sold for
L10,000, the profit is L1000.
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 L10,000 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 L100,000. There are
ten shareholders, each holding L10,000 worth of shares. The company
makes a profit of 10 per cent. The dividend at 10 per cent. paid to each
shareholder will be L1000 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 L10,000. He receives from the company 10 per cent.
dividend, or L1000 a year. In ten years he gets back the whole of his
L10,000, but he still owns the shares, and he still draws a dividend of
L1000 a year. If the company go on working and making 10 per cent. for a
hundred years they will still be paying L1000 a year for the loan of the
L10,000. It will be quite evident, then, that in twenty years this
shareholder will have received his money twice over; that is to say, his
L10,000 will have become L20,000 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
L100,000. 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 L10,000 a year. In twenty years they would have made a profit
of L200,000. The interest on the loan at 5 per cent. for twenty years
would be L100,000. The amount of the loan is L100,000. 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 L10,000 a year over and above their wages.
But, the non-Socialist will object, these working men could not borrow
L100,000, 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 L10,000 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 L10,000 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 L1, 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 L300,000 a year, whose "boss" makes L50,000 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 L80,000,000 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 L5000 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 L1 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 L2 a week to a clerk if he can
get a man as good for L1 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.