Socialism and the New Party

Henry George

[Reprinted from The Standard, Vol.II, No.5, 6 August, 1887]

It is necessary that the platform to be adopted by the united labor party convention which is to meet at Syracuse on the 17th should firmly and clearly define the position of the party with relation to socialism. This is rendered necessary by the organized endeavor of the State or German socialists to impress their peculiar views upon the party - an endeavor that has become so notorious that any disposition to evade the issue whether or not the united labor party indorses these views, would give its enemies a specious pretext to make the charge that it does.

Stimulated, perhaps, by the irritation produced by what in socialistic parlance might be called the attempt of the socialists to "exploit" the united labor party, there is a strong disposition to rule out of the convention three prominent socialists who have been elected as delegates, but who are not voters of New York - one, Mr. Schevitsch, having his legal residence in New Jersey, and the other two, Messrs. Gronlund and Vrooman, having been in the state only a few months.

But though such a proceeding might be in conformity with the usage requiring that the members of a state convention should be voters of the state, the fact that these gentlemen are prominent socialists, and elected for that reason. furnishes an argument for the most liberal recognition of the right of the district to send such representatives as will best express the opinions of its members. Since the relations of the united labor party with Socialism have been brought into such prominence and will enter into the most important part of the proceedings of the convention, it is all the better that socialism should be represented there by its ablest exponents, and it would be a pity to rule out of the convention on technical grounds three such men as Messrs. Schevitsch, Gronlund and Voorman - the first a well-known socialistic editor, the second a well-known socialistic writer, and the third an accredited missionary and orator of the socialistic labor party. The question between State or German socialism and the ideas of that great party of equal rights and individual freedom which is now beginning to rise all over the land, may as well, since the socialists have raised it, be settled now as at any other time, and ought to be settled frankly and openly, and on its merits, and with the best representation of socialistic ideas that the members of the party who hold to these ideas can select.

There are a large number of us who are Not socialists, do not propose to become socialists, and are not willing to be used as a stalking horse for socialism; and if the. socialists of the German school, who have hitherto acted with the united labor party, propose to use the socialistic organization as a party within a party, and making up in discipline what they lack in numbers, to insist upon any indorsement, expressed or implied, of their peculiar theories as a condition of continuing to act with the party, then the quicker the two bodies separate, each to go its own way, the better it will be.

And this not merely as a matter of principle but as a matter of policy - if any distinction can be made between the two things in the minds of men who have no policy except to advance principle. For any disadvantage that might result from being called socialists we care nothing. But to permit the simple and obviously just principles of securing equal rights in natural opportunities by taking land values for public uses and of bringing businesses in their nature monopolies under the control or management of the state, to be confounded with schemes for abolishing industrial liberty and making the state the sole landholder as well as the sole landowner, the sole capitalist, the sole employer and the sole director of production and exchange, would be to greatly retard the work we have in hand. Such confused theories and wild schemes as those of the doctrinaires of the German socialistic school can never stand the test of intelligent discussion or make headway among a. people with whom the instinct of individual freedom is so strong as with ours.

German socialism is so confused and confusing in its terminology, so illogical in its methods; it contains such a mixture of important truths with superficial generalizations and unwarranted assumptions, that it is difficult - at least for people of English speech - to readily understand its real meaning and purpose. Let me endeavor to give such a brief account of it as will at least serve to show the differences between it and the theories advanced in THE STANDARD and held by the great bulk of the men who are now united in the formation of a new party.

In the theories of Marxian or German socialism - or socialism as we might as well call it to avoid repetition - the central point is the employer or capitalist. In that form of production which the socialistic writers denominate the capitalistic, and which they assume to be that of all production in the grade of civilization to which the most advanced modern nations have already attained, or, at least, in that to which they are advancing, this employer provides site, building, tools and materials, and buys labor, paying for it wages. He does not, however, pay in wages the whole value which the labor he buys adds to his material, but only a part of it, which the socialistic writers put at from one-quarter to one-half. The rest he keeps for himself. He, in short , buys labor as he buys commodities, and the price that he must pay and that labor can demand is, in the socialistic theory, fixed by the same law that governs the price of other commodities; that is to say, the minimum on which, in the existing state of society, laborers will consent to maintain themselves and reproduce. The tendency of competition for employment among laborers to reduce wages to this minimum and keep them there is assumed, in the socialistic theory, to be the general law, and is styled by them the "iron law of wages." That part of the value created by the laborers, which the employer does not return to them in wages, but keeps for himself, and which is generally assumed by socialistic writers to be from three-quarters to one-half of the whole produce, they style "surplus value." Gronlund, however, in his book, "The Cooperative Commonwealth," which is probably the best popular rendering into English of the socialistic theory, gives to this "surplus value" of Marx the much more intelligible name of "fleecings."' It is from this "surplus value," or "fleecings." that profits, rent, and interest are assumed to come, and from it the employers or capitalists maintain and augment their capital. This, in fact, the socialistic writers generally speak of as, and even more commonly assume to be, the source of capital, and from this idea is derived the assertion they frequently make that capital consists of unpaid labor.

Nothing could better show the incoherence of socialism than its failure to give any definite meaning to the term which it most frequently uses and lays the most stress upon. Capital, the socialists tell us, consists of "unpaid labor" or "surplus value," the "fleecings" of what has been produced by labor. Capital, they again tell us, is "that part of wealth employed productively with a view of profit by the sale of the produce." Yet they not only class land as capital (thus confounding the essential distinction between primary and secondary factors of production), but when pressed for an explanation of what they mean when they talk of nationalizing capital they exclude from the definition such articles of wealth as the individual can employ productively with a view to profit, such as the ax of the woodsman, the sewing machine of the seamstress and the boat of the fisherman. The fact is that it is impossible to get in the socialistic literature any clear and consistent definition of capital. What they evidently have in mind in talking of capital is such capital as is used in the factory system, though they do not hesitate to include land with it and to speak of the landlord pure and simple as a capitalist.

The same indefiniteness and confusion of terminology, the same failure to subject to analysis the things and phenomena of which it treats, run through the whole socialistic theory. For instance, in the "Socialistic Catechism" of Dr. J . L. Joynes , which is circulated by the state socialists both in England and this country, the question is asked, "What is wealth?" The answer given is, "Everything that supplies the wants of man and ministers in any way to his comfort and enjoyment." Under this definition land, water, air and sunshine, to say nothing of intangible things, are clearly included as wealth, yet the very next question is, "Whence is Wealth derived?" to which the answer is given, "From labor usefully employed upon natural objects." Yet the notion that labor usefully employed upon natural objects produces land is not more unintelligible than the notion that "surplus values" or "fleecings" produces capital. As to the latter, it might as well be said that robbing orchards produces apples, and in fact considering that land is by Socialists included in capital, it might as well be said that robbing orchards produces apples and apple trees too.

This indisposition or inability to analyze, to trace things to their root, and distinguish between the primary and the secondary, the essential and the accidental, is the vice of the whole socialistic theory. The socialist sees that under the conditions that exist to-day in civilized societies, the laborer does not get the fair reward of his labor, and that the tendency of the competition between laborers is, despite the augmentation of productive power, to force wages to the minimum of a bare livelihood. But, instead of going further and asking the reason of this, he assumes it to be inherent in the "wage system," and the natural result of free competition. As the only remedy for these evils, he would put an end to the "wage system," and abolish competition by having the ownership of all capital (including land) assumed by the state; having all production and exchange directed by the state, and making all employed in production, or, at least, all employed in production for exchange, employes of the state, whose business it will then be to see that they do get a fair return for their labor. In the "co-operative commonwealth," as pictured by the socialistic writers, ownership and possession of all means of production, including both land and capital, would be held by the state. The various classes of producers would be organized in associations or guilds in the nature of government departments , whose members would settle their hours of work, the part each should assume, and the relative value of their labor, while the collectivity or general government would, in the words of' Gronlund, "only have three functions, of being general manager , general statistician and general arbitrator. As statistician it will determine how much is to be produced; as manager distribute the work and see to it that it is properly performed; and as arbitrator it will see justice done between association and association and between each association and its members."

Only this, ought certainly to be enough even for a collectivity as big as the United States; but in thus minimizing the functions of the collectivity, Mr. Gronlund is evidently thinking merely of its relation with the various producing departments or associations. A still larger job would be that of exchanging things and parts of things after they had been produced by the various associations. To this end the socialistic scheme is that all produce for exchange is to be turned over to the general government , which is to give the producers, or rather the producing association, money or orders in the form of labor notes, upon its general stock of wealth, according to the amount of labor which has entered into the productions. The general government, in its capacity of general statistician, or general bureau of statistics, is not only to decide how much of each particular article is to be produced, but at what rates it is to be exchanged and how much of it is to be exported when it is deemed expedient to export . Even newspapers and books are to be produced and circulated in this fashion. If it is possible for anyone seriously to imagine such a scheme in actual operation in a country like the United States, it might be instructive for him to go on and speculate how long it would take it to break up in anarchy or pass into worse than the despotism of ancient Egypt.

The utter impracticability and essential childishness of such a scheme as this is largely disguised to the believers in socialism by a curious pretense of scientific research and generalization, and much reference to the doctrine of evolution. According to the socialistic writers all production up to quite recent times was for use, not for exchange, and they even gravely say that capital has only become an agent in production during the last two hundred years or so! Slavery, according to them, was the first method of organizing labor and securing the increased production that comes from it. From chattel slavery, by way of serfdom, the natural evolution has been into the industrial slavery of the wage system and "capitalistic production," in which modern civilization is now. And from this mankind are to pass by evolution into the socialistic organization of production and distribution in which all industry is to be intelligently ordered by the collective will. This evolution, they hold, will be accomplished anyhow by virtue of the natural forces, whatever they may be, which produce evolution, and the socialists who understand and hold to the Marxian theory do not so much hope to assist in hastening its advent as to put men in readiness to take advantage of the new order when in the fullness of evolution it shall come. Their notion sometimes seems to be that one branch of industry after another will pass under control of the state, until everything has been thus managed and directed. At other times it seems to be that the commercial crises or gluts (which they attribute to a tendency of capitalists to produce as much as possible in order to get the largest profits, while the laborers, not getting their fair share of the produce of their labor, are unable to buy what is thus produced) will finally culminate in a grand break-down of the present system, when all that socialists will have to do will be to step in and organize industry under governmental direction.

The simple truths which are the grams of wheat in all this mountainous chaff of grotesque exaggeration and assumption are that with the progress of civilization and the integration of society the division of labor becomes more minute and the methods of production require larger amounts of capital, and that certain functions are developed, such, for instance, as the maintenance of highways, the supplying of cities with water, etc, which can better be performed by the community or under the control of the community, than by leaving them to individual enterprise, and (when in their nature competition becomes impossible) to individual or corporate monopoly.

Ignoring the essential distinction between land and capital, regarding land as but one of the means of production, of no more importance than steam engines or power looms, and looking to the direction and employment of labor by the state as the only mode of securing an equitable distribution of wealth, socialists do not appreciate the wide and far-reaching consequences which would flow from the simple reform that would put all men upon an equality with regard to natural opportunities, and which by appropriating its natural revenue for the support of the state would make possible the freeing of production from all the imposts and restrictions that now hamper it. The nationalization of land is included in their programme as is the nationalization of machinery, but while they do not attach any more importance to the nationalization of land than they do to that of any other "instrument of production," they also mean by it something essentially different from what is aimed at by the united labor party. Frederick Engels, the coadjutor of Marx in founding this German school of socialism, has recently written a tract on the labor movement in America as a preface to a new edition of his "Condition of the Working Classes in England in 1884." which has been translated from the German by Florence Kelley Wischnewetzky, who is, by the bye, a daughter of Congressman Kelley of Philadelphia, and who doubtless comes the more easily to the idea of full governmental regulation and direction of industry from her familiarity with the idea of the direction and regulation of industry by protective tariffs. In this pamphlet Herr Engels thus states the difference between the socialists of the German school and those who think as I do:

"If Henry George declares land monopolization to be the sole cause of poverty and misery, he naturally finds the remedy in the resumption of land by society at large. Now, the socialists of the school of Marx, too, demand the resumption, by society, of the land, and not only of the land but of all other means of production likewise. But even if we leave these out of the question, there is another difference. What is to be done with the land? Modern socialists, as represented by Marx, demand that it should be held and worked in common and for common account, and the same with all other means of social production - mines, railways, factories, etc.; Henry George would confine himself to letting it out to individuals as at present, merely regulating its distribution and applying the rents for public, instead of, as at present, for private purposes. What the socialists demand implies a total revolution of the whole system of social production; what Henry George demands leaves the present mode of social production untouched, and has, in fact, been anticipated by the extreme section of Ricardian bourgeois economists who, too, demanded the confiscation of the rent of land by the state."

The difference is, in fact, even greater than Herr Engels represents it. We do not propose any such violent and radical change as would be involved in the formal resumption of land by society at large, and the letting of it out to individuals. We propose to leave land in individual possession as now, merely taking, in the form of a tax, as nearly as may be, the equivalent of that value which attaches to land by reason of the growth and advance of society; - and while thus appropriating for the use of the community a revenue which properly belongs to the community, to do away with the incentive given to the withholding of land from productive use by the individual expectation of profiting by its future increase in value.

This simple yet radical reform would do away with all the injustice which socialists see in the present conditions of society, and would open the way to all the real good that they can picture in their childish scheme of making the state the universal capitalist , employer, merchant , and shopkeeper.

For if the laborer does not now obtain his fair earnings; if, despite the improvements which increase productive power, wages still lend to a minimum that gives but a bare living, it is not because of any inherent injustice in the "wage system," - nor because of any "iron law of wages" which operates because it must . These things are simply the results of the fact that labor, deprived of its right of access to land, the natural and indispensable element of production and existence, and thus rendered helpless, must, as the only means of escaping starvation, sell itself to those who can employ it.

Make land free of access to labor and all else becomes possible. Land is not wealth or capital, but is, on the contrary, that original factor of production from which labor produces wealth and capital. Land is not a means of production, like a tool or a machine. It is the original means of production, without which no other means of production can be used, and from which labor can produce all other means of production. It is not true, as socialists say, that the mere laborer, in the present stage of civilization, could not avail himself of the access to land to get a living. The two essential and primary factors of production - labor and land, even in the absence of secondary factors obtained from their produce, have in their union, to-day, as they had in the beginning, the potentiality of all that man ever has brought, or ever can bring, into being. Nor is it true, as the socialists seem to assume, that the whole class of producers below that of the employing capitalist are so destitute of capital, so incapable of getting it if they have good opportunity to use it, that they could not find the means to make good use of land if the monopoly that now holds so much eligible land vacant were broken up. Here in New York we see the poorest class of laborers building themselves some sort of shanties wherever they are permitted to use convenient land even on sufferance. And if the valuable land in and around New York that is now held vacant at enormous prices were subject to a tax which destroyed the expectation of profiting by the future increase in land values and compelled its owners either to build, to sell, or to give it away, is there not a great body of wage workers who would hasten to build or to get themselves homes? And with agricultural land, mining land, and, in short, all natural opportunities subjected to the same just system, is there not a great body of men now competing with each other in overstocked, unproductive vocations, or selling their labor for wages, who have or could find the needed capital to employ themselves to good advantage? With the glut in the labor market thus relieved, and the increased demand which would come from the relief of production both from the fines of present taxation and the blackmail of land speculation, would not wages rise quickly and high in all branches of industry?

With this liberty of labor to employ itself all the evils of "the wage system" would disappear, and free competition through the interplay of demand and supply would not only fix the returns of the various kinds and qualities of exertion with a justice and celerity to which the best efforts of any administrative bureau would be the clumsiest parody; but would determine the amounts and kinds of the various articles needed to satisfy the wants of society, and the relative values at which they should exchange, with a comprehensiveness, a nicety and a celerity which any general statistician or board of general statisticians, even though he or they possessed all human knowledge and all human virtue, could not hope to approach.

In concentrating effort on the recognition of equal rights to land, the new party is striking at the root of that unjust distribution of wealth which the socialists of the German school blame to the wage system, and of that tyranny which they mistakenly attribute to capital. But we do not propose to stop here. There are other monopolies than that of land, though they are less important , and we propose to break them all up. The kernel of truth in the socialistic demand that the state should manage and regulate all industry is that there are many things that already can be better managed or controlled by the community than by private individuals, and with the advance of society these are constantly increasing. While we aim at simplifying government by substituting a simple and efficient plan of raising revenue for the present costly, cumbrous, unjust and demoralizing method, and by cutting off functions for which there is no need, we propose at the same time to push forward in the direction of extending the co-operative functions of the state.

Let the socialists come with us, and they will go faster and further in this direction than they can go alone; and when we stop they can, if they choose, try to keep on.

But if they must persist in bringing to the front their schemes for making the state everything and the individual nothing, let them maintain their socialistic labor party and leave us to fight our own way.

The cross of the new crusade has been raised. No matter who may be for it or who may be against it, it will be carried on without faltering and without swerving.