from that of the pre-industrial age, and which turns against it the
very reasoning by which formerly it was supported, is that in modern
economic conditions ownership is not active, but passive, that to most
of those who own property to-day it is not a means of work but an
instrument for the acquisition of gain or the exercise of power, and
that there is no guarantee that gain bears any relation to service, or
power to responsibility. For property which can be regarded as a
condition of the performance of function, like the tools of the
craftsman, or the holding of the peasant, or the personal possessions
which contribute to a life of health and efficiency, forms an
insignificant proportion, as far as its value is concerned, of the
property rights existing at present. In modern industrial societies
the great mass of property consists, as the annual review of wealth
passing at death reveals, neither of personal acquisitions such as
household furniture, nor of the owner's stock-in-trade, but of rights
of various kinds, such as royalties, ground-rents, and, above all, of
course shares in industrial undertakings which yield an income
irrespective of any personal service rendered by their owners.
Ownership and use are normally divorced. The greater part of modern
property has been attenuated to a pecuniary lien or bond on the product
of industry which carries with it a right to payment, but which is
normally valued precisely because it relieves the owner from any
obligation to perform a positive or constructive function.
Such property may be called passive property, or property for
acquisition, for exploitation, or for power, {63} to distinguish it
from the property which is actively used by its owner for the conduct
of his profession or the upkeep of his household. To the lawyer the
first is, of course, as fully property as the second. It is
questionable, however, whether economists shall call it "Property" at
all, and not rather, as Mr. Hobson has suggested, "Improperty," since
it is not identical with the rights which secure the owner the produce
of his toil, but is opposite of them. A classification of proprietary
rights based upon this difference would be instructive. If they were
arranged according to the closeness with which they approximate to one
or other of these two extremes, it would be found that they were spread
along a line stretching from property which is obviously the payment
for, and condition of, personal services, to property which is merely a
right to payment from the services rendered by others, in fact a
private tax. The rough order which would emerge, if all details and
qualification were omitted, might be something as follows:--
1. Property in payments made for personal services.
2. Property in personal possessions necessary to health and comfort.
3. Property in land and tools used by their owners.
4. Property in copyright and patent rights owned by authors and
inventors.
5. Property in pure interest, including much agricultural rent.
6. Property in profits of luck and good fortune: "quasi-rents."
7. Property in monopoly profits.
{64}
8. Property in urban ground rents.
9. Property in royalties.
The first four kinds of property obviously accompany, and in some sense
condition, the performance of work. The last four obviously do not.
Pure interest has some affinities with both. It represents a necessary
economic cost, the equivalent of which must be born, whatever the legal
arrangements under which property is held, and is thus unlike the
property represented by profits (other than the equivalent of salaries
and payment for necessary risk), urban ground-rents and royalties. It
relieves the recipient from personal services, and thus resembles them.
The crucial question for any society is, under which each of these two
broad groups of categories the greater part (measured in value) of the
proprietary rights which it maintains are at any given moment to be
found. If they fall in the first group creative work will be
encouraged and idleness will be depressed; if they fall in the second,
the result will be the reverse. The facts vary widely from age to age
and from country to country. Nor have they ever been fully revealed;
for the lords of the jungle do not hunt by daylight. It is probable,
at least, that in the England of 1550 to 1750, a larger proportion of
the existing property consisted of land and tools used by their owners
than either in contemporary France, where feudal dues absorbed a
considerable proportion of the peasants' income, or than in the England
of 1800 to 1850, where the new capitalist manufacturers made hundreds
per cent. while manual workers were goaded by starvation into
ineffectual {65} revolt. It is probable that in the nineteenth
century, thanks to the Revolution, France and England changed places,
and that in this respect not only Ireland but the British Dominions
resemble the former rather than the latter. The transformation can be
studied best of all in the United States, in parts of which the
population of peasant proprietors and small masters of the early
nineteenth century were replaced in three generations by a propertyless
proletariat and a capitalist plutocracy. The abolition of the economic
privileges of agrarian feudalism, which, under the name of equality,
was the driving force of the French Revolution, and which has taken
place, in one form or another, in all countries touched by its
influence, has been largely counter-balanced since 1800 by the growth
of the inequalities springing from Industrialism.
In England the general effect of recent economic development has been
to swell proprietary rights which entitle the owners to payment without
work, and to diminish those which can properly be described as
functional. The expansion of the former, and the process by which the
simpler forms of property have been merged in them, are movements the
significance of which it is hardly possible to over-estimate. There
is, of course, a considerable body of property which is still of the
older type. But though working landlords, and capitalists who manage
their own businesses, are still in the aggregate a numerous body, the
organization for which they stand is not that which is most
representative of the modern economic world. The general tendency for
the ownership and administration of {66} property to be separated, the
general refinement of property into a claim on goods produced by an
unknown worker, is as unmistakable as the growth of capitalist industry
and urban civilization themselves. Villages are turned into towns and
property in land changes from the holding worked by a farmer or the
estate administered by a landlord into "rents," which are advertised
and bought and sold like any other investment. Mines are opened and
the rights of the landowner are converted into a tribute for every ton
of coal which is brought to the surface. As joint-stock companies take
the place of the individual enterprise which was typical of the earlier
years of the factory system, organization passes from the employer who
both owns and manages his business, into the hands of salaried
officials, and again the mass of property-owners is swollen by the
multiplication of _rentiers_ who put their wealth at the disposal of
industry, but who have no other connection with it. The change is
taking place in our day most conspicuously, perhaps, through the
displacement in retail trade of the small shopkeeper by the multiple
store, and the substitution in manufacturing industry of combines and
amalgamations for separate businesses conducted by competing employers.
And, of course, it is not only by economic development that such claims
are created. "Out of the eater came forth meat, and out of the strong
came forth sweetness." It is probable that war, which in barbarous
ages used to be blamed as destructive of property, has recently created
more titles to property than almost all other causes put together.
Infinitely diverse as are these proprietary rights, they {67} have the
common characteristic of being so entirely separated from the actual
objects over which they are exercised, so rarified and generalized, as
to be analogous almost to a form of currency rather than to the
property which is so closely united to its owner as to seem a part of
him. Their isolation from the rough environment of economic life,
where the material objects of which they are the symbol are shaped and
handled, is their charm. It is also their danger. The hold which a
class has upon the future depends on the function which it performs.
What nature demands is work: few working aristocracies, however
tyrannical, have fallen; few functionless aristocracies have survived.
In society, as in the world of organic life, atrophy is but one stage
removed from death. In proportion as the landowner becomes a mere
_rentier_ and industry is conducted, not by the rude energy of the
competing employers who dominated its infancy, but by the salaried
servants of shareholders, the argument for private property which
reposes on the impossibility of finding any organization to supersede
them loses its application, for they are already superseded.
Whatever may be the justification of these types of property, it cannot
be that which was given for the property of the peasant or the
craftsman. It cannot be that they are necessary in order to secure to
each man the fruits of his own labor. For if a legal right which gives
$200,000 a year to a mineral owner in the North of England and to a
ground landlord in London "secures the fruits of labor" at all, the
fruits are the proprietor's and the labor that of some one else.
Property {68} has no more insidious enemies than those well-meaning
anarchists who, by defending all forms of it as equally valid, involve
the institution in the discredit attaching to its extravagances. In
reality, whatever conclusion may be drawn from the fact, the greater
part of modern property, whether, like mineral rights and urban
ground-rents, it is merely a form of private taxation which the law
allows certain persons to levy on the industry of others, or whether,
like property in capital, it consists of rights to payment for
instruments which the capitalist cannot himself use but puts at the
disposal of those who can, has as its essential feature that it confers
upon its owners income unaccompanied by personal service. In this
respect the ownership of land and the ownership of capital are normally
similar, though from other points of view their differences are
important. To the economist rent and interest are distinguished by the
fact that the latter, though it is often accompanied by surplus
elements which are merged with it in dividends, is the price of an
instrument of production which would not be forthcoming for industry if
the price were not paid, while the former is a differential surplus
which does not affect the supply. To the business community and the
solicitor land and capital are equally investments, between which,
since they possess the common characteristic of yielding income without
labor, it is inequitable to discriminate; and though their significance
as economic categories may be different, their effect as social
institutions is the same. It is to separate property from creative
ability, and to divide society into two classes, of which one has its
{69} primary interest in passive ownership, while the other is mainly
dependent upon active work.
Hence the real analogy to many kinds of modern property is not the
simple property of the small land-owner or the craftsman, still less
the household goods and dear domestic amenities, which is what the word
suggests to the guileless minds of clerks and shopkeepers, and which
stampede them into displaying the ferocity of terrified sheep when the
cry is raised that "Property" is threatened. It is the feudal dues
which robbed the French peasant of part of his produce till the
Revolution abolished them. How do royalties differ from _quintaines_
and _lods et ventes_? They are similar in their origin and similar in
being a tax levied on each increment of wealth which labor produces.
How do urban ground-rents differ from the payments which were made to
English sinecurists before the Reform Bill of 1832? They are equally
tribute paid by those who work to those who do not. If the monopoly
profits of the owner of _banalites_, whose tenant must grind corn at
his mill and make wine at his press, were an intolerable oppression,
what is the sanctity attaching to the monopoly profits of the
capitalists, who, as the Report of the Government Committee on trusts
tells us, "in soap, tobacco, wallpaper, salt, cement and in the textile
trades ... are in a position to control output and prices" or, in other
words, can compel the consumer to buy from them, at the figure they
fix, on pain of not buying at all?
All these rights--royalties, ground-rents, monopoly profits--are
"Property." The criticism most fatal to them is not that of
Socialists. It is contained in the {70} arguments by which property is
usually defended. For if the meaning of the institution is to
encourage industry by securing that the worker shall receive the
produce of his toil, then precisely in proportion as it is important to
preserve the property which a man has in the results of his own
efforts, is it important to abolish that which he has in the results of
the efforts of some one else. The considerations which justify
ownership as a function are those which condemn it as a tax. Property
is not theft, but a good deal of theft becomes property. The owner of
royalties who, when asked why he should be paid L50,000 a year from
minerals which he has neither discovered nor developed nor worked but
only owned, replies "But it's Property!" may feel all the awe which his
language suggests. But in reality he is behaving like the snake which
sinks into its background by pretending that it is the dead branch of a
tree, or the lunatic who tried to catch rabbits by sitting behind a
hedge and making a noise like a turnip. He is practising
protective--and sometimes aggressive--mimicry. His sentiments about
property are those of the simple toiler who fears that what he has sown
another may reap. His claim is to be allowed to continue to reap what
another has sown.
It is sometimes suggested that the less attractive characteristics of
our industrial civilization, its combination of luxury and squalor, its
class divisions and class warfare, are accidental maladjustments which
are not rooted in the center of its being, but are excrescences which
economic progress itself may in time be expected to correct. That
agreeable optimism will not survive an {71} examination of the
operation of the institution of private property in land and capital in
industrialized communities. In countries where land is widely
distributed, in France or in Ireland, its effect may be to produce a
general diffusion of wealth among a rural middle class who at once work
and own. In countries where the development of industrial organization
has separated the ownership of property and the performance of work,
the normal effect of private property is to transfer to functionless
owners the surplus arising from the more fertile sites, the better
machinery, the more elaborate organization. No clearer
exemplifications of this "law of rent" has been given than the figures
supplied to the Coal Industry Commission by Sir Arthur Lowes Dickenson,
which showed that in a given quarter the costs per ton of producing
coal varied from $3.12 to $12 per ton, and the profits from nil to
$4.12. The distribution in dividends to shareholders of the surplus
accruing from the working of richer and more accessible seams, from
special opportunities and access to markets, from superior machinery,
management and organization, involves the establishment of Privilege as
a national institution, as much as the most arbitrary exactions of a
feudal _seigneur_. It is the foundation of an inequality which is not
accidental or temporary, but necessary and permanent. And on this
inequality is erected the whole apparatus of class institutions, which
make not only the income, but the housing, education, health and
manners, indeed the very physical appearance of different classes of
Englishmen almost as different from each other as though the minority
were {72} alien settlers established amid the rude civilization of a
race of impoverished aborigines.
So the justification of private property traditional in England, which
saw in it the security that each man would enjoy the fruits of his own
labor, though largely applicable to the age in which it was formulated,
has undergone the fate of most political theories. It has been refuted
not by the doctrines of rival philosophers, but by the prosaic course
of economic development. As far as the mass of mankind are concerned,
the need which private property other than personal possessions does
still often satisfy, though imperfectly and precariously, is the need
for security. To the small investors, who are the majority of
property-owners, though owning only an insignificant fraction of the
property in existence, its meaning is simple. It is not wealth or
power, or even leisure from work. It is safety. They work hard. They
save a little money for old age, or for sickness, or for their
children. They invest it, and the interest stands between them and all
that they dread most. Their savings are of convenience to industry,
the income from them is convenient to themselves. "Why," they ask,
"should we not reap in old age the advantage of energy and thrift in
youth?" And this hunger for security is so imperious that those who
suffer most from the abuses of property, as well as those who, if they
could profit by them, would be least inclined to do so, will tolerate
and even defend them, for fear lest the knife which trims dead matter
should cut into the quick. They have seen too many men drown to be
{73} critical of dry land, though it be an inhospitable rock. They are
haunted by the nightmare of the future, and, if a burglar broke it,
would welcome a burglar.
This need for security is fundamental, and almost the gravest
indictment of our civilization is that the mass of mankind are without
it. Property is one way of organizing it. It is quite comprehensible
therefore, that the instrument should be confused with the end, and
that any proposal to modify it should create dismay. In the past,
human beings, roads, bridges and ferries, civil, judicial and clerical
offices, and commissions in the army have all been private property.
Whenever it was proposed to abolish the rights exercised over them, it
was protested that their removal would involve the destruction of an
institution in which thrifty men had invested their savings, and on
which they depended for protection amid the chances of life and for
comfort in old age. In fact, however, property is not the only method
of assuring the future, nor, when it is the way selected, is security
dependent upon the maintenance of all the rights which are at present
normally involved in ownership. In so far as its psychological
foundation is the necessity for securing an income which is stable and
certain, which is forthcoming when its recipient cannot work, and which
can be used to provide for those who cannot provide for themselves,
what is really demanded is not the command over the fluctuating
proceeds of some particular undertaking, which accompanies the
ownership of capital, but the security which is offered by an annuity.
Property is the instrument, security is the object, and when some
alternative way is forthcoming {74} of providing the latter, it does
not appear in practice that any loss of confidence, or freedom or
independence is caused by the absence of the former.
Hence not only the manual workers, who since the rise of capitalism,
have rarely in England been able to accumulate property sufficient to
act as a guarantee of income when their period of active earning is
past, but also the middle and professional classes, increasingly seek
security to-day, not in investment, but in insurance against sickness
and death, in the purchase of annuities, or in what is in effect the
same thing, the accumulation of part of their salary towards a pension
which is paid when their salary ceases. The professional man may buy
shares in the hope of making a profit on the transaction. But when
what he desires to buy is security, the form which his investment takes
is usually one kind or another of insurance. The teacher, or nurse, or
government servant looks forward to a pension. Women, who fifty years
ago would have been regarded as dependent almost as completely as if
femininity were an incurable disease with which they had been born, and
whose fathers, unless rich men, would have been tormented with anxiety
for fear lest they should not save sufficient to provide for them, now
receive an education, support themselves in professions, and save in
the same way. It is still only in comparatively few cases that this
type of provision is made; almost all wage-earners outside government
employment, and many in it, as well as large numbers of professional
men, have nothing to fall back upon in sickness or old age. But that
does not alter the fact {75} that, when it is made, it meets the need
for security, which, apart, of course, from personal possessions and
household furniture, is the principal meaning of property to by far the
largest element in the population, and that it meets it more completely
and certainly than property itself.
Nor, indeed, even when property is the instrument used to provide for
the future, is such provision dependent upon the maintenance in its
entirety of the whole body of rights which accompany ownership to-day.
Property is not simple but complex. That of a man who has invested his
savings as an ordinary shareholder comprises at least three rights, the
right to interest, the right to profits, the right to control. In so
far as what is desired is the guarantee for the maintenance of a stable
income, not the acquisition of additional wealth without labor--in so
far as his motive is not gain but security--the need is met by interest
on capital. It has no necessary connection either with the right to
residuary profits or the right to control the management of the
undertaking from which the profits are derived, both of which are
vested to-day in the shareholder. If all that were desired were to use
property as an instrument for purchasing security, the obvious
course--from the point of view of the investor desiring to insure his
future the safest course--would be to assimilate his position as far as
possible to that of a debenture holder or mortgagee, who obtains the
stable income which is his motive for investment, but who neither
incurs the risks nor receives the profits of the speculator. To insist
that the elaborate apparatus of proprietary rights which {76}
distributes dividends of thirty per cent to the shareholders in Coats,
and several thousands a year to the owner of mineral royalties and
ground-rents, and then allows them to transmit the bulk of gains which
they have not earned to descendants who in their turn will thus be
relieved from the necessity of earning, must be maintained for the sake
of the widow and the orphan, the vast majority of whom have neither and
would gladly part with them all for a safe annuity if they had, is, to
say the least of it, extravagantly _mal-a-propos_. It is like pitching
a man into the water because he expresses a wish for a bath, or
presenting a tiger cub to a householder who is plagued with mice, on
the ground that tigers and cats both belong to the genus _felis_. The
tiger hunts for itself not for its masters, and when game is scarce
will hunt them. The classes who own little or no property may
reverence it because it is security. But the classes who own much
prize it for quite different reasons, and laugh in their sleeve at the
innocence which supposes that anything as vulgar as the savings of the
_petite bourgeoisie_ have, except at elections, any interest for them.
They prize it because it is the order which quarters them on the
community and which provides for the maintenance of a leisure class at
the public expense.