Freeland: A Social Anticipation

by Theodor Hertzka

It should be mentioned here that, for the first year, the committee reserved to itself the right of deciding the amount and the order of granting the credit given. This, though merely negative, interference with the industrial relations of the associations was not in harmony with the principle of the producers' right of unconditioned self-control; but was so far unavoidable, inasmuch as our commonwealth had not yet actually attained to that high degree of productiveness of labour which is the assumed result of the perfect realisation of all the fundamental principles of that commonwealth. Later, when we were more fully furnished with the best means of production which technical progress placed within our reach, and we were consequently no longer occupied in provisionally completing and improving what already existed, there could never be any question whether the surplus of the current production would suffice to meet the heaviest fresh claims for capital that could arise. It was different at the beginning, when the need for capital was unlimited, and the means of supplying that need as yet undeveloped. The Free Commonwealth could not offer more than it could supply, and it had therefore to reserve to itself a right of selection from among the investments that applied for credit. Thanks to the thorough solidarity of interests created by the free mobility of labour, this could happen without even temporarily affecting the essential material interests of the producers by giving some a dangerous advantage over others. For if, as was scarcely to be avoided, certain productions were helped or hindered by the giving or withholding of credit, this was immediately and naturally followed by such a shifting of labour as at once restored the equilibrium of profits.

But this interference during the first year extended only to the controlling of the amount and order of granting the credit asked, for, and not to the way in which it was used. In this respect, from the very beginning the principle of the producers' responsibility was carried out to the fullest extent. As it was necessary for the producers to be successful in order to repay the capital taken up, so it was their business to see that care was taken to make a profitable use of such capital. It is true that--as has been already stated--the consumers ultimately bear the cost of production; but they do this, of course, only when and in so far as the processes employed in production have been useful and necessary. If an association should procure unnecessary or defective machinery, it would be impossible for it to transfer to the purchasers of its commodities the losses thus occasioned; the association would not have increased, but diminished, its gains by such investments. It can therefore be left to the self-interest of those who are concerned in the associations to guard against such a waste of capital.

We now come to the question how it is possible to guarantee the equal right of everyone to equally fertile land. This problem also is solvable in the simplest manner by the free mobility of labour involved in the principle of free association. As everywhere else in the world, there was in Freeland richer and poorer land; but as more workers were attracted to the better land than to the worse, and as, according to a well-known economic law, a greater expenditure of labour upon an equal extent of land is followed by relatively diminishing returns, so the individual worker obtained no higher net profit per hour of labour on the best land than upon the worst land which could be cultivated at all.

On the Dana plateau, for example, by the expenditure of 32 hours of labour 48 cwt. of wheat could be produced per acre; in Eden Vale the same expenditure of labour would produce merely 36 cwt. Therefore, as the cwt. of wheat was worth 3s. 1-1/2d., and 1-1/2d. was sufficient to cover all expenses, the land association in the Dana plateau had at the end of the year a return of 4s. 6d. for every hour of work, and, after deduction of tax and repayment of capital, 2s. 9d. for division among the members. The members of the Eden Vale association, on the other hand, had only 2s. per hour of labour to divide among the members; and as careful investigation proved that this difference was due neither to accidental uncongeniality of the weather nor to a less amount of labour, but to the character of the soil, the consequence was that in the next year the newly arrived agriculturists preferred the better land of the Dana plateau. There was now an average expenditure of 42 hours of labour to the acre in the Dana plateau, but in Eden Vale only 24; yet in the former place the additional 10 hours of labour did not yield the 1-1/2 cwt. per hour, as was the case when the expenditure of labour was only 32 hours, but merely a scant 3 qrs.; that is, the returns did not rise from 48 cwt. to 63 cwt., but merely to 55 cwt.--sank therefore to 1.34 cwt. per hour of labour. The consequence was that the returns, notwithstanding the considerable increase in the price of grain due to the improved means of communication, rose merely to 5s., of which 3s. per hour of labour was available for division among the members. In Eden Vale, on the other hand, the gross returns were lessened merely 3 cwt. by the withdrawal of eight hours of labour per acre; the produce therefore now was 33 cwt. for 24 hours of labour, or 1.37 cwt. per hour of labour. The Eden Vale association therefore numbered a trifle more than that of Dana; and as Eden Vale was a more desirable place of residence, and had more conveniences than the Dana plateau, the stream of agriculturists flowed back to Eden Vale until, after two other harvests, there remained a difference of profit of about five per cent. in favour of the Dana plateau, and this advantage, with slight variations, continued permanently.

But just as the principle of the solidarity of interests brought about by the mobility of labour placed him who used the actually worse land in the enjoyment of the advantages of the better land, so everyone, whatever branch of production he might be connected with, participated in all the various kinds of advantages of the best land; and, on the other hand, every cultivator of the soil, like every other producer, derived profit from all the increased productiveness of labour, in whatsoever branch of labour in our commonwealth it might arise, just as if he were himself immediately concerned in it. All means of production are common property; the use which any one of us may make of this common property does not depend upon the accident of possession, nor upon the superintending care of an all-controlling communistic authority, but solely upon the capacity and industry of each individual.

CHAPTER IX

As already stated, the fundamental condition of the successful working of the simple organisation described above was the completest publicity of all industrial proceedings. The organisation was in truth merely a mode of removing all those hindrances that stand in the way of the free realisation of the individual will guided by a wise self-interest. So much the more necessary was it to give right direction to this sovereign will, and to offer to self-interest every assistance towards obtaining a correct and speedy grasp of its real advantage.

No business secrets whatever! That was at once the fundamental law of Eden Vale. In the other parts of the world, where the struggle for existence finds its consummation not merely in exploiting and enslaving one another, but over and above this in a mutual industrial annihilation--where, in consequence of the universal over-production due to under-consumption, competition is synonymous with robbing each other of customers--there, in the Old World, to disclose the secrets of trade would be tantamount to sacrificing a position acquired with much trouble and cunning. Where an immense majority of men possess no right to the increasing returns of production, but, not troubling themselves about the productiveness of labour, must be content with 'wages'--that is, with what is necessary for their subsistence--there can be no sufficient demand for the total produce of highly productive labour. The few wealthy cannot possibly consume the constantly growing surplus, and their endeavour to capitalise such surplus--that is, to convert it into instruments of labour--is defeated by the impossibility of employing the means of a production the products of which cannot be consumed. In the exploiting world, therefore, there prevails a constant disproportion between productive power and consumption, between supply and demand; and the natural consequence is that the disposal of the products gives rise to a constant and relentless struggle between the various producers. The principal care of the exploiting producers is not to produce as much and as well as possible, but to acquire a market for as large as possible a quantity of their own commodities; and as, in view of the disproportion above explained, such a market can be acquired and retained only at the expense of other producers. There necessarily exists a permanent and irreconcilable conflict of interest. It is different among us. We can always be sure of a sale, for with us no more can be produced than is used, since the total produce belongs to the worker, and the consumption, the satisfaction of real requirements, is the exclusive motive of labour. Among us, therefore, the disclosure of the sources of trade can rob no one of his customers, since any customers whom he may happen to lose must necessarily be replaced by others.

On the other hand, what reason has the producer in the world outside to communicate his experiences to others? Can those others make any use of the knowledge they would thus acquire, except to do him injury? And can he use any such information when communicated to him, except to the injury of others? Does he allow others to participate in his business when his is the more profitable, or does another let him do so with the business of that other when the case is reversed? If the demand for the commodities of a producer increases, the labour market is open to him, where he can find servants enough ready to work without inquiring about his profits so long as they receive their 'wages.' Thus, elsewhere in the world, not even are the consumers interested in the publication of trade practices, which publication, moreover, as has already been said, would be a matter of impossibility. Quite different is this among us in Freeland. We allow everyone to participate in our trade advantages, and we can therefore participate in the trade advantages of everyone else; and we are compelled to publish these advantages because, in the absence of a market of labourers who have neither will nor interest of their own, this publicity is the only way of attracting labour when the demand for any commodities increases.

And--which is the principal thing--whilst elsewhere no one has an interest in the increase of production by others, among us every one is most intensely interested in seeing everyone produce as easily and as well as possible. For the classical phrase of the solidarity of all economic interests has among us become a truth; but elsewhere it is nothing more than one of those numerous self-deceptions of which the political economy of the exploiting world is composed. Where the old system of industry prevails, universal increase of production of wealth is a chimera. Where consumption by the masses cannot increase, there cannot production and wealth increase, but can be only shifted, can only change place and owner; in proportion as the production of one person increases must that of some one else diminish, unless consumption increases, which, where the masses are excluded from enjoying the increasing returns of labour, can happen only accidentally, and by no means step by step with the increasing power of productiveness of labour. With us in Freeland, on the contrary, where production--in view of the necessary growth of the power of consumption in exactly the same proportion--can and does increase indefinitely so far as our facilities and arts permit, with us it is the supreme and most absolute interest of the community to see that everyone's labour is employed wherever it can earn the highest returns; and there is no one who is not profited when the labour of all is thus employed to the completest extent possible. The individuals or the individual associations which, by virtue of our organisation, are compelled to share an accidentally acquired advantage with another, certainly suffer a loss of gain by this circumstance looked at by itself; but infinitely greater is the general advantage derived from the fact that the same thing occurs everywhere, that productiveness is constantly increasing, and their own advantage therefore compels the occurrence of the same everywhere. To how undreamt-of high a degree this is the case will be abundantly shown by the subsequent history of Freeland.