Profits in agriculture.—The profits in agriculture are subject to the same laws. Many influences operate in both directions. The limitation of land fit for agricultural purposes has a tendency in itself to increase the profits of land-holders, under the principle of monopoly, though its chief effect is on land values. The increasing wealth of the world, and the greatly increased wants of the civilized community, multiplying manufactures, limit competitors more and more. The relative number of farmers in our country is gradually diminishing, while the demand for food is actually increasing beyond the increase in population. Men are predicting every year a scarcity price for wheat,—unwisely, probably,—through the limited range of possibilities in wheat raising. The introduction of labor-saving machinery enables enterprising farmers to greatly increase their product for the same number of acres, and still further to increase the range of management so as to make larger farms a possibility. The rapid advance of means of transportation has so widened the range of competition as to make the farmer in one part of the world compete with the farmers of every other part. The staple products, especially wheat, being so easily adapted to new countries, are constantly liable to over-production. At the same time the effects of a bad season in any particular region, while reducing the crop, are not [pg 255] likely to advance the price to the same extent as formerly. The opening of vast regions once considered deserts to a rapid settlement by farmers for the sake of the profits in land speculation has again and again wrought changes in the entire business of agriculture. Similar effects may be expected still with the development of South America, South Africa and Siberia.
All these facts tend now to make the profits in agriculture decline, and the fact that farm life has certain attractions in establishing permanent homes for families and life-time associations, contributes to this tendency by holding people to their place as farmers for at least a generation. The possibility of independent enterprise, even with small profit, and the freedom of family life from interference of neighbors make large numbers of farmers willing to continue their business in spite of the reduced earnings.
Fluctuation in profits.—It is proper to call attention to the rapid effects of any change in market upon the profits of any enterprise. Wages are in large measure an anticipation of profits, and so far as they are affected by changes in market prices, it is largely through estimates upon averages. Custom has much to do with wages demanded and paid, but profits are fluctuating constantly with the fluctuation of prices, with every change of methods affecting competition, with every introduction of improved machinery and with every accident of fortune.
No better illustration of this fact can be given than is familiar to every farmer in comparison of results from the work of different seasons. With the same outgo for [pg 256] labor he may find the profits of two successive years wide apart. One year has granted the fortune of good crops with fair prices, while the other has yielded him a half crop when the prices of his product in the world are low. Possibly the improved machinery in wheat raising, applicable to the great farms of Minnesota, Dakota and California, has caused him to bring a costly product into close competition with a cheap one. Possibly, too, he has been tempted to excessive use of labor-saving machinery himself at too great cost for the transition, and it is more than probable that, stimulated by the high price of oats last year, he, with thousands of his neighbors, has made an extra crop of oats this year, to the actual destruction of the market. In all these cases the farmer himself suffers directly, while his hired hand is affected only indirectly by the unwillingness of farmers in some seasons to employ as much labor.
Profits offset by losses.—The actual profits in any enterprise are often overestimated by our failing to notice that all the waste of unthrifty undertakings comes practically out of the profits of the more thrifty. Wage-earners as a class are protected against losses by frequent settlements and by public sentiment. The losses of the unthrifty managers come out of the accumulations of previous thrift, or else are borne by the thrifty men who have trusted them. The bulk of bad debts in failure of any enterprise is for materials, machinery, etc., furnished by other producers. In great financial depression, the profit-makers bear the evil directly, while the wage-earners feel the effects in the lessened competition for their service.
Chapter XIX. Conflict Between Wage-Earners And Profit-Makers.
The nature of the conflict.—The mutual interest of all whose energies are used in production, that the total product of wealth should be as great as possible, is often disturbed by doubt as to the fair division of what is produced. Under the modern factory system, the multitude sustain the relation of employés to a comparatively few employers. Antipathies are liable at any time to arise between these two classes of workers. Those who officially control wealth in great enterprises are subject to suspicion of unfair treatment of their less independent employés. Ignorance among the mass of laborers of the intricacies of business life contributes to such suspicion. In fact, the so-called conflict of capital and labor is a struggle for and against profits. Interest and rent are only indirectly involved in the question. The manager's profits may be assumed by both manager and wage-earners to arise from reduction of wages. The necessary reticence of business managers and the frequent arbitrary decisions as to wages help the wage-earner to feel that his interests conflict with those of his employer.
It is well for all to realize that this conflict, when [pg 258] there is one, is not so much between the rich and the poor as between the struggler for profits and the struggler for wages. In many instances the true solution lies in the same direction, if both could see the facts alike. It is an acknowledged fact that generous wages make enlightened, energetic laborers, and that greater profits come in the long series of undertakings from the most intelligent service. A farm-hand at $20 a month is sometimes worth more than two at $15. On the other hand, if markets are low and profits decline, permanence of employment will depend upon a readiness of wage-earners to accept a new adjustment of wages to conditions. Everything which fosters a better understanding between profit-makers and wage-earners contributes to the welfare of both. Everything which hinders such understanding injures the welfare of both. The cost of such friction is borne by both parties. But in the long run, the wage-earners are liable to carry the larger part. Even the destruction of property by rust, decay, or even violence, comes back upon the wage-earners who might have been employed in its use, quite as truly as upon the manager whose profits and accumulations are wasted.