_THAT IT IS NOT WICKED TO BE RICH; NAY, EVEN, THAT IT IS NOT WICKED TO
BE RICHER THAN ONE'S NEIGHBOR_
I have before me a newspaper slip on which a writer expresses the
opinion that no one should be allowed to possess more than one million
dollars' worth of property. Alongside of it is another slip, on which
another writer expresses the opinion that the limit should be five
millions. I do not know what the comparative wealth of the two writers
is, but it is interesting to notice that there is a wide margin between
their ideas of how rich they would allow their fellow-citizens to
become, and of the point at which they ("the State," of course) would
step in to rob a man of his earnings. These two writers only represent
a great deal of crude thinking and declaiming which is in fashion. I
never have known a man of ordinary common-sense who did not urge upon
his sons, from earliest childhood, doctrines of economy and the
practice of accumulation. A good father believes that he does wisely to
encourage enterprise, productive skill, prudent self-denial, and
judicious expenditure on the part of his son. The object is to teach
the boy to accumulate capital. If, however, the boy should read many of
the diatribes against "the rich" which are afloat in our literature; if
he should read or hear some of the current discussion about "capital";
and if, with the ingenuousness of youth, he should take these
productions at their literal sense, instead of discounting them, as his
father does, he would be forced to believe that he was on the path of
infamy when he was earning and saving capital. It is worth while to
consider which we mean or what we mean. Is it wicked to be rich? Is it
mean to be a capitalist? If the question is one of degree only, and it
is right to be rich up to a certain point and wrong to be richer, how
shall we find the point? Certainly, for practical purposes, we ought to
define the point nearer than between one and five millions of dollars.
There is an old ecclesiastical prejudice in favor of the poor and
against the rich. In days when men acted by ecclesiastical rules these
prejudices produced waste of capital, and helped mightily to replunge
Europe into barbarism. The prejudices are not yet dead, but they
survive in our society as ludicrous contradictions and inconsistencies.
One thing must be granted to the rich: they are good-natured. Perhaps
they do not recognize themselves, for a rich man is even harder to
define than a poor one. It is not uncommon to hear a clergyman utter
from the pulpit all the old prejudice in favor of the poor and against
the rich, while asking the rich to do something for the poor; and the
rich comply, without apparently having their feelings hurt at all by
the invidious comparison. We all agree that he is a good member of
society who works his way up from poverty to wealth, but as soon as he
has worked his way up we begin to regard him with suspicion, as a
dangerous member of society. A newspaper starts the silly fallacy that
"the rich are rich because the poor are industrious," and it is copied
from one end of the country to the other as if it were a brilliant
apothegm. "Capital" is denounced by writers and speakers who have never
taken the trouble to find out what capital is, and who use the word in
two or three different senses in as many pages. Labor organizations are
formed, not to employ combined effort for a common object, but to
indulge in declamation and denunciation, and especially to furnish an
easy living to some officers who do not want to work. People who have
rejected dogmatic religion, and retained only a residuum of religious
sentimentalism, find a special field in the discussion of the rights of
the poor and the duties of the rich. We have denunciations of banks,
corporations, and monopolies, which denunciations encourage only
helpless rage and animosity, because they are not controlled by any
definitions or limitations, or by any distinctions between what is
indispensably necessary and what is abuse, between what is established
in the order of nature and what is legislative error. Think, for
instance, of a journal which makes it its special business to denounce
monopolies, yet favors a protective tariff, and has not a word to say
against trades-unions or patents! Think of public teachers who say that
the farmer is ruined by the cost of transportation, when they mean that
he cannot make any profits because his farm is too far from the market,
and who denounce the railroad because it does not correct for the
farmer, at the expense of its stockholders, the disadvantage which lies
in the physical situation of the farm! Think of that construction of
this situation which attributes all the trouble to the greed of
"moneyed corporations!" Think of the piles of rubbish that one has read
about corners, and watering stocks, and selling futures!
Undoubtedly there are, in connection with each of these things, cases
of fraud, swindling, and other financial crimes; that is to say, the
greed and selfishness of men are perpetual. They put on new phases,
they adjust themselves to new forms of business, and constantly devise
new methods of fraud and robbery, just as burglars devise new artifices
to circumvent every new precaution of the lock-makers. The criminal law
needs to be improved to meet new forms of crime, but to denounce
financial devices which are useful and legitimate because use is made
of them for fraud, is ridiculous and unworthy of the age in which we
live. Fifty years ago good old English Tories used to denounce all
joint-stock companies in the same way, and for similar reasons.
All the denunciations and declamations which have been referred to are
made in the interest of "the poor man." His name never ceases to echo
in the halls of legislation, and he is the excuse and reason for all
the acts which are passed. He is never forgotten in poetry, sermon, or
essay. His interest is invoked to defend every doubtful procedure and
every questionable institution. Yet where is he? Who is he? Who ever
saw him? When did he ever get the benefit of any of the numberless
efforts in his behalf? When, rather, were his name and interest ever
invoked, when, upon examination, it did not plainly appear that
somebody else was to win--somebody who was far too "smart" ever to be
poor, far too lazy ever to be rich by industry and economy?
A great deal is said about the unearned increment from land, especially
with a view to the large gains of landlords in old countries. The
unearned increment from land has indeed made the position of an English
land-owner, for the last two hundred years, the most fortunate that any
class of mortals ever has enjoyed; but the present moment, when the
rent of agricultural land in England is declining under the
competition of American land, is not well chosen for attacking the old
advantage. Furthermore, the unearned increment from land appears in the
United States as a gain to the first comers, who have here laid the
foundations of a new State. Since the land is a monopoly, the unearned
increment lies in the laws of Nature. Then the only question is, Who
shall have it?--the man who has the ownership by prescription, or some
or all others? It is a beneficent incident of the ownership of land
that a pioneer who reduces it to use, and helps to lay the foundations
of a new State, finds a profit in the increasing value of land as the
new State grows up. It would be unjust to take that profit away from
him, or from any successor to whom he has sold it. Moreover, there is
an unearned increment on capital and on labor, due to the presence,
around the capitalist and the laborer, of a great, industrious, and
prosperous society. A tax on land and a succession or probate duty on
capital might be perfectly justified by these facts. Unquestionably
capital accumulates with a rapidity which follows in some high series
the security, good government, peaceful order of the State in which it
is employed; and if the State steps in, on the death of the holder, to
claim a share of the inheritance, such a claim may be fully justified.
The laborer likewise gains by carrying on his labor in a strong,
highly civilized, and well-governed State far more than he could gain
with equal industry on the frontier or in the midst of anarchy. He
gains greater remuneration for his services, and he also shares in the
enjoyment of all that accumulated capital of a wealthy community which
is public or semi-public in its nature.
It is often said that the earth belongs to the race, as if raw land was
a boon, or gift. Raw land is only a _chance_ to prosecute the struggle
for existence, and the man who tries to earn a living by the
subjugation of raw land makes that attempt under the most unfavorable
conditions, for land can be brought into use only by great hardship and
exertion. The boon, or gift, would be to get some land after somebody
else had made it fit for use. Any one in the world today can have raw
land by going to it; but there are millions who would regard it simply
as "transportation for life," if they were forced to go and live on new
land and get their living out of it. Private ownership of land is only
division of labor. If it is true in any sense that we all own the soil
in common, the best use we can make of our undivided interests is to
vest them all gratuitously (just as we now do) in any who will assume
the function of directly treating the soil, while the rest of us take
other shares in the social organization. The reason is, because in
this way we all get more than we would if each one owned some land and
used it directly. Supply and demand now determine the distribution of
population between the direct use of land and other pursuits; and if
the total profits and chances of land-culture were reduced by taking
all the "unearned increment" in taxes, there would simply be a
redistribution of industry until the profits of land-culture, less
taxes and without chances from increasing value, were equal to the
profits of other pursuits under exemption from taxation.
It is remarkable that jealousy of individual property in land often
goes along with very exaggerated doctrines of tribal or national
property in land. We are told that John, James, and William ought not
to possess part of the earth's surface because it belongs to all men;
but it is held that Egyptians, Nicaraguans, or Indians have such right
to the territory which they occupy, that they may bar the avenues of
commerce and civilization if they choose, and that it is wrong to
override their prejudices or expropriate their land. The truth is, that
the notion that the race own the earth has practical meaning only for
the latter class of cases.
The great gains of a great capitalist in a modern state must be put
under the head of wages of superintendence. Anyone who believes that
any great enterprise of an industrial character can be started without
labor must have little experience of life. Let anyone try to get a
railroad built, or to start a factory and win reputation for its
products, or to start a school and win a reputation for it, or to found
a newspaper and make it a success, or to start any other enterprise,
and he will find what obstacles must be overcome, what risks must be
taken, what perseverance and courage are required, what foresight and
sagacity are necessary. Especially in a new country, where many tasks
are waiting, where resources are strained to the utmost all the time,
the judgment, courage, and perseverance required to organize new
enterprizes and carry them to success are sometimes heroic. Persons who
possess the necessary qualifications obtain great rewards. They ought
to do so. It is foolish to rail at them. Then, again, the ability to
organize and conduct industrial, commercial, or financial enterprises
is rare; the great captains of industry are as rare as great generals.
The great weakness of all co-operative enterprises is in the matter of
supervision. Men of routine or men who can do what they are told are
not hard to find; but men who can think and plan and tell the routine
men what to do are very rare. They are paid in proportion to the supply
and demand of them.
If Mr. A.T. Stewart made a great fortune by collecting and bringing
dry-goods to the people of the United States, he did so because he
understood how to do that thing better than any other man of his
generation. He proved it, because he carried the business through
commercial crises and war, and kept increasing its dimensions. If, when
he died, he left no competent successor, the business must break up,
and pass into new organization in the hands of other men. Some have
said that Mr. Stewart made his fortune out of those who worked for him
or with him. But would those persons have been able to come together,
organize themselves, and earn what they did earn without him? Not at
all. They would have been comparatively helpless. He and they together
formed a great system of factories, stores, transportation, under his
guidance and judgment. It was for the benefit of all; but he
contributed to it what no one else was able to contribute--the one
guiding mind which made the whole thing possible. In no sense whatever
does a man who accumulates a fortune by legitimate industry exploit his
employés, or make his capital "out of" anybody else. The wealth which
he wins would not be but for him.
The aggregation of large fortunes is not at all a thing to be
regretted. On the contrary, it is a necessary condition of many forms
of social advance. If we should set a limit to the accumulation of
wealth, we should say to our most valuable producers, "We do not want
you to do us the services which you best understand how to perform,
beyond a certain point." It would be like killing off our generals in
war. A great deal is said, in the cant of a certain school about
"ethical views of wealth," and we are told that some day men will be
found of such public spirit that, after they have accumulated a few
millions, they will be willing to go on and labor simply for the
pleasure of paying the taxes of their fellow-citizens. Possibly this is
true. It is a prophecy. It is as impossible to deny it as it is silly
to affirm it. For if a time ever comes when there are men of this kind,
the men of that age will arrange their affairs accordingly. There are
no such men now, and those of us who live now cannot arrange our
affairs by what men will be a hundred generations hence.
There is every indication that we are to see new developments of the
power of aggregated capital to serve civilization, and that the new
developments will be made right here in America. Joint-stock companies
are yet in their infancy, and incorporated capital, instead of being a
thing which can be overturned, is a thing which is becoming more and
more indispensable. I shall have something to say in another chapter
about the necessary checks and guarantees, in a political point of
view, which must be established. Economically speaking, aggregated
capital will be more and more essential to the performance of our
social tasks. Furthermore, it seems to me certain that all aggregated
capital will fall more and more under personal control. Each great
company will be known as controlled by one master mind. The reason for
this lies in the great superiority of personal management over
management by boards and committees. This tendency is in the public
interest, for it is in the direction of more satisfactory
responsibility. The great hindrance to the development of this
continent has lain in the lack of capital. The capital which we have
had has been wasted by division and dissipation, and by injudicious
applications. The waste of capital, in proportion to the total capital,
in this country between 1800 and 1850, in the attempts which were made
to establish means of communication and transportation, was enormous.
The waste was chiefly due to ignorance and bad management, especially
to State control of public works. We are to see the development of the
country pushed forward at an unprecedented rate by an aggregation of
capital, and a systematic application of it under the direction of
competent men. This development will be for the benefit of all, and it
will enable each one of us, in his measure and way, to increase his
wealth. We may each of us go ahead to do so, and we have every reason
to rejoice in each other's prosperity. There ought to be no laws to
guarantee property against the folly of its possessors. In the absence
of such laws, capital inherited by a spendthrift will be squandered and
re-accumulated in the hands of men who are fit and competent to hold
it. So it should be, and under such a state of things there is no
reason to desire to limit the property which any man may acquire.