There is no difference in principle between the distribution of the total products of the economic means among the separate classes of a constitutional state, the so-called “capitalistic distribution,” from that prevailing in the feudal state.
All the more important economic schools coincide in finding the cause in this, that the supply of “free” laborers (i. e., according to Karl Marx politically free and economically without capital) perpetually exceeds the demand, and that hence there exists “the social relation of capital.” There “are constantly two laborers running after one master for work, and lowering, for one another, the wages”; and therefore the “surplus value” remains with the capitalist class, while the laborer never gets a chance to form capital for himself and to become an employer.
Whence comes this surplus supply of free laborers?
The explanation of the “bourgeois” theory, according to which this surplus supply is caused by the overproduction of children by proletarian parents, is based on a logical fallacy, and is contradicted by all known facts?[144]
The explanation of the proletarian theory according to which the capitalistic process of production itself produces the “free laborers,” by setting up again and again new labor-saving machines, is also based on a logical fallacy and is likewise contradicted by all known facts.[145]
The evidence of all facts shows rather, and the conclusion may be deduced without fear of contradiction, that the oversupply of “free laborers” is descended from the right of holding landed property in large estates; and that emigration into towns and oversea from these landed properties are the causes of the capitalistic distribution.
Doubtless there is a growing tendency in economic development whereby the ruin of vast landed estates will be accomplished. The system is their bleeding to death, without hope of salvation, caused by the freedom of the former serfs—the necessary consequence of the development of the cities. As soon as the peasants had obtained the right of moving about without their landlords’ passport (German Freizuegigkeit), there developed the chance of escape from the countries which formerly oppressed them. The system of emigration created “the competition from oversea,” together with the fall, on the Continent, of prices for farm products, and made necessary perpetually rising wages. By these two factors ground rent is reduced from two sides, and must gradually sink to the zero point, since here too no counterforce is to be recognized whereby the process might be diverted.[146] Thus the system of vast territorial estates falls apart. When, however, it has disappeared, there can be no oversupply of “free laborers.” On the contrary “two masters will run after one laborer and must raise the price on themselves.” There will be no “surplus value” for the capitalist class, because the laborer himself can form capital and himself become an employer. By this the last remaining vestige of the political means will have been destroyed, and economic means alone will exercise sway. The content of such a society is the “pure economics”[147] of the equivalent exchange of commodities against commodities, or of labor force against commodities, and the political form of this society will be the “freemen’s citizenship.”
This theoretical deduction is moreover confirmed by the experience of history. Wherever there existed a society in which vast estates did not exist to draw an increasing rental, there “pure economics” existed, and society approximated the form of the state to that of the “freemen’s citizenship.”
Such a community was found in the Germany of the four centuries[148] from about A. D. 1000, when the primitive system of vast estates was developed into the socially harmless dominion over vast territories, until about the year 1400, when the newly arisen great properties, created by the political means, the robber wars in the countries formerly Slavic, shut the settlers from the westward out of lands eastward of the Elbe.[149] Such a community was the Mormon state of Utah, which has not been greatly changed in this respect, where a wise land legislation permitted only small and moderate sized farm holdings.[150] Such a community was to be found in the city and county of Vineland, Iowa, U. S. A.,[151] as long as every settler could obtain land, without increment of rent. Such a commonwealth is, beyond all others, New Zealand, whose government favors with all its power the possession of small and middle-sized holdings of land, while at the same time it narrows and dissolves, by all means at its command the great landed properties, which by the way, owing to lack of surplus laborers, are almost incapable of producing rentals.[152]