To illustrate this effect of labor-saving machinery and improvements, let us suppose a country where, as in all the countries of the civilized world, the land is in the possession of but a portion of the people. Let us suppose a permanent barrier fixed to further increase of population, either by the enactment and strict enforcement of an Herodian law, or from such a change in manners and morals as might result from an extensive circulation of Annie Besant’s pamphlets. Let the margin of cultivation, or production, be represented by 20. Thus land or other natural opportunities which, from the application of labor and capital, will yield a return of 20, will just give the ordinary rate of wages and interest, without yielding any rent; while all lands yielding to equal applications of labor and capital more than 20 will yield the excess as rent. Population remaining fixed, let there be made inventions and improvements which will reduce by one-tenth the expenditure of labor and capital necessary to produce the same amount of wealth. Now, either one-tenth of the labor and capital may be freed, and production remain the same as before; or the same amount of labor and capital may be employed, and production be correspondingly increased. But the industrial organization, as in all civilized countries, is such that labor and capital, and especially labor, must press for employment on any terms—the industrial organization is such that mere laborers are not in a position to demand their fair share in the new adjustment, and that any reduction in the application of labor to production will, at first, at least, take the form, not of giving each laborer the same amount of produce for less work, but of throwing some of the laborers out of work and giving them none of the produce. Now, owing to the increased efficiency of labor secured by the new improvements, as great a return can be secured at the point of natural productiveness represented by 18, as before at 20. Thus, the unsatisfied desire for wealth, the competition of labor and capital for employment, would insure the extension of the margin of production, we will say to 18, and thus rent would be increased by the difference between 18 and 20, while wages and interest, in quantity, would be no more than before, and, in proportion to the whole produce, would be less. There would be a greater production of wealth, but land owners would get the whole benefit, subject to temporary deductions, which will be hereafter stated.
If invention and improvement still go on, the efficiency of labor will be still further increased, and the amount of labor and capital necessary to produce a given result further diminished. The same causes will lead to the utilization of this new gain in productive power for the production of more wealth; the margin of cultivation will be again extended, and rent will increase, both in proportion and amount, without any increase in wages and interest. And, so, as invention and improvement go on, constantly adding to the efficiency of labor, the margin of production will be pushed lower and lower, and rent constantly increased, though population should remain stationary.
I do not mean to say that the lowering of the margin of production would always exactly correspond with the increase in productive power, any more than I mean to say that the process would be one of clearly defined steps. Whether, in any particular case, the lowering of the margin of production lags behind or exceeds the increase in productive power, will depend, I conceive, upon what may be called the area of productiveness that can be utilized before cultivation is forced to the next lowest point. For instance, if the margin of cultivation be at 20, improvements which enable the same produce to be obtained with one-tenth less capital and labor will not carry the margin to 18, if the area having a productiveness of 19 is sufficient to employ all the labor and capital displaced from the cultivation of the superior lands. In this case, the margin of cultivation would rest at 19, and rents would be increased by the difference between 19 and 20, and wages and interest by the difference between 18 and 19. But if, with the same increase in productive power the area of productiveness between 20 and 18 should not be sufficient to employ all the displaced labor and capital, the margin of cultivation must, if the same amount of labor and capital press for employment, be carried lower than 18. In this case, rent would gain more than the increase in the product, and wages and interest would be less than before the improvements which increased productive power.
Nor is it precisely true that the labor set free by each improvement will all be driven to seek employment in the production of more wealth. The increased power of satisfaction, which each fresh improvement gives to a certain portion of the community, will be utilized in demanding leisure or services, as well as in demanding wealth. Some laborers will, therefore, become idlers and some will pass from the ranks of productive to those of unproductive laborers—the proportion of which, as observation shows, tends to increase with the progress of society.
But, as I shall presently refer to a cause, as yet unconsidered, which constantly tends to lower the margin of cultivation, to steady the advance of rent, and even carry it beyond the proportion that would be fixed by the actual margin of cultivation, it is not worth while to take into account these perturbations in the downward movement of the margin of cultivation and the upward movement of rent. All I wish to make clear is that, without any increase in population, the progress of invention constantly tends to give a larger proportion of the produce to the owners of land, and a smaller and smaller proportion to labor and capital.
And, as we can assign no limits to the progress of invention, neither can we assign any limits to the increase of rent, short of the whole produce. For, if labor-saving inventions went on until perfection was attained, and the necessity of labor in the production of wealth was entirely done away with, then everything that the earth could yield could be obtained without labor, and the margin of cultivation would be extended to zero. Wages would be nothing, and interest would be nothing, while rent would take everything. For the owners of the land, being enabled without labor to obtain all the wealth that could be procured from nature, there would be no use for either labor or capital, and no possible way in which either could compel any share of the wealth produced. And no matter how small population might be, if anybody but the land owners continued to exist, it would be at the whim or by the mercy of the land owners—they would be maintained either for the amusement of the land owners, or, as paupers, by their bounty.
This point, of the absolute perfection of labor-saving inventions, may seem very remote, if not impossible of attainment; but it is a point toward which the march of invention is every day more strongly tending. And in the thinning out of population in the agricultural districts of Great Britain, where small farms are being converted into larger ones, and in the great machine-worked wheat-fields of California and Dakota, where one may ride for miles and miles through waving grain without seeing a human habitation, there are already suggestions of the final goal toward which the whole civilized world is hastening. The steam plow and the reaping machine are creating in the modern world latifundia of the same kind that the influx of slaves from foreign wars created in ancient Italy. And to many a poor fellow as he is shoved out of his accustomed place and forced to move on—as the Roman farmers were forced to join the proletariat of the great city, or sell their blood for bread in the ranks of the legions—it seems as though these labor-saving inventions were in themselves a curse, and we hear men talking of work, as though the wearying strain of the muscles were, in itself, a thing to be desired.
In what has preceded, I have, of course, spoken of inventions and improvements when generally diffused. It is hardly necessary to say that as long as an invention or an improvement is used by so few that they derive a special advantage from it, it does not, to the extent of this special advantage, affect the general distribution of wealth. So, in regard to the limited monopolies created by patent laws, or by the causes which give the same character to railroad and telegraph lines, etc. Although generally mistaken for profits of capital, the special profits thus arising are really the returns of monopoly, as has been explained in a previous chapter, and, to the extent that they subtract from the benefits of an improvement, do not primarily affect general distribution. For instance, the benefits of a railroad or similar improvement in cheapening transportation are diffused or monopolized, as its charges are reduced to a rate which will yield ordinary interest on the capital invested, or kept up to a point which will yield an extraordinary return, or cover the stealing of the constructors or directors. And, as is well known, the rise in rent or land values corresponds with the reduction in the charges.
As has before been said, in the improvements which advance rent, are not only to be included the improvements which directly increase productive power, but also such improvements in government, manners, and morals as indirectly increase it. Considered as material forces, the effect of all these is to increase productive power, and, like improvements in the productive arts, their benefit is ultimately monopolized by the possessors of the land. A notable instance of this is to be found in the abolition of protection by England. Free trade has enormously increased the wealth of Great Britain, without lessening pauperism. It has simply increased rent. And if the corrupt governments of our great American cities were to be made models of purity and economy, the effect would simply be to increase the value of land, not to raise either wages or interest.