The Correct versus the Swope Plan
for "The Stabilization of Industry"

Oscar H. Geiger

[Reprinted from Land and Freedom, January-February, 1932]

In the article "Gerard Swope's ' Stabilization of Industry' Not So Stable," in Land and Freedom for November-December, 1931, criticism was levelled at the proposals of Mr. Swope's plan, and the charge made that the plan did not offer nor in any way attempt to offer, much less secure, work for the men that, as Mr. Swope said in the opening paragraph of his address to the National Electrical Manufacturers' Association at the Hotel Commodore, New York City, on September 16, 1931, "are able to work, are competent workers" and "who above all things desire to work" but "cannot find work to do."

The article referred to points to the fact that the problem Mr. Swope poses in the opening paragraph of his address as above quoted is an economic, not an industrial one, and to the further fact that the proposals in the plan, namely, "A Workmen's Compensation Act," "Life and Disability Insurance," "Pensions" and "Unemployment Insurance, " all to be provided by industry, not by government (the worker paying one-half the cost, the consumer the other half), are industrial remedies or attempts at remedies and therefore impotent, indeed not even really intended, to obtain the relief that Mr. Swope's opening paragraph points to as imperative.

Is it not time that industry and labor both awoke to the act that the problems that confront them are basically economic, not industrial? Is it not time that they, industry and labor, both realize that their substance, their product, heir wealth, their thrift, their every effort and invention s being drained from them by the alchemy of land ownership and absorbed by the rent of land?

Less than ten per cent of the population absorbs more than sixty per cent of all wealth and production in the country, leaving less than forty per cent of production to be divided among more than ninety per cent of the population.

Less than ten per cent of the population owns all the land and natural resources in the country, and finally gets ill the rent royalties, special dividends and interest that such ownership commands. Does it require a mathematician to figure what the process of wealth abstraction is?

The power to collect rent for the use of land and for the natural resources of the earth, privately exercised, is the power to milk Industry and Labor of their product; it is the power to hold land and natural resources out of use until such payments as it deems sufficient are paid or an obligation to pay them is assumed.

Is it any wonder that land is idle? Is it any wonder that Business is stagnant? Is it any wonder that industry suffers? Is it any wonder that there is unemployment?

Idle land means idle men; idle men means less consumption, less demand for commodities, less business, further decrease in the demand for labor, still greater unemployment.

Thus the vicious circle starts with idle land and idle natural resources, all of which are absolutely owned and controlled by less than ten per cent of the population, who through their ownership of all land squeeze out of ninety per cent of the population over sixty per cent of all their product. What help are Workmen's Compensation Acts, Life and Disability Insurance, Pensions and Unemployment Insurance to the man that is out of work now and cannot find it? About as much as a customer without money or credit is to the idle merchant!

Tax the value of land and natural resources and see how fast these will be put into use; how fast and to what great extent they will employ labor and capital, and how fast unemployment and idle capital will disappear, and with them low wages, low interest, poor business, hard times and industrial depression.

A tax on land and natural resources has the opposite effect of a tax on wealth, industry, production, buildings or labor products. A tax on the latter tends to make them go into hiding or to disappear altogether; at best it is a burden to the individual taxed and to the community. A tax on land value and on the value of natural resources forces these into use, creates employment, enhances business and establishes prosperity.

Land-value taxes being sufficient to defray all the legitimate requirements of government, it will then, too, become possible to reduce and eventually abolish altogether all the burdensome taxation on industry, building enterprises and incomes, all tariffs, tolls and taxes that now hamper and hamstring human effort and thrift.

If Mr. Swope really is disturbed at the aspect that "men who are able to work, who are competent workers, who above all things desire to work, cannot find work to do," and really means ultimately to eliminate that "disturbing aspect," there is the remedy the remedy that will achieve the desired result and that will permanently maintain it!

Nor is it the worker merely, the man out of employment, that is to be ultimately considered. Industry itself is stagnated; business men, manufacturers, storekeepers, merchants, all are similarly situated, comparatively, as is the man out of employment. Capital is idle and no one seems to know how to put it to work; interest is not collectible; wealth is not secure.

Mr. Swope no doubt wants the evil that is producing the entire business depression "first ameliorated" and "ultimately eliminated." But how? His scheme is not even intended to do either. It would pay Mr. Swope and Industry to pause and heed.

Society, civilization, are on trial. Shall the structure that has taken thousands of years to build, our heritage of ages of effort, of striving, of suffering for ideals that have become sacred, all be sacrificed now to shortsightedness and to greed? Shall individualism, liberty, freedom of thought and of action, the home, morality, culture, all be cast into the discard?

Is democracy to make way for untried and unproved schemes that have only unreasoned might and unscrupulous power behind them?

Yes. Mr. Swope, "it surely will be done," as you predict in your address. But what?