Freeland: A Social Anticipation

by Theodor Hertzka

The business begins with the continuation of the debate upon point 4 of the Agenda.

Ibrahim El Melek (Right): The very instructive reports from America and Russia, heard yesterday, afford strong proof that the transition to the system of economic justice is accomplished not merely the more easily, but also the more pleasantly for the wealthy classes, the more cultured and advanced the working classes are. In view of this, it will cause no wonder that we in Egypt do not expect to effect the change of system without painful convulsions. The nearness of Freeland, with the consequently speedy advent of its commissioners, who were received by the violently excited fellaheen with almost divine honours, has preserved us from scenes of cruel violence such as afflicted Russia for weeks. No murders and very little destruction of property have taken place; but the Egyptian national assembly, called into being by the Freeland Commissioners, shows itself far less inclined than its Russian contemporary to respect the compensation claims of the former owners. In this I see the ruling of fate, against which nothing can be done, and to which we must therefore submit with resignation. But I would exculpate from blame those who have had to suffer so severely. Though no one has expressly said it, yet I have an impression that the majority of the assembly are convinced that those who have composed the ruling classes are now everywhere suffering the lot which they have prepared for themselves. As to this, I would ask whether the landlords, capitalists, and employers of America, Australia, and Western Europe were less reckless in taking advantage of their position than those of Russia or Egypt? That they could not so easily do what they pleased with their working classes as the latter could is due to the greater energy of the American national character and to the greater power of resistance possessed by the masses, and not to the kindly disposition of the masters. Hence I cannot think it just that the Russian boyar or the Egyptian bey should lose his property, whilst the American speculator, the French capitalist, or the English lord should even derive profit from the revolution.

Lionel Spencer (Centre): The previous speaker may be correct in supposing that the wealthy classes of England, like those of America, will come out of the impending revolution without direct loss. There cannot be the slightest doubt that in England, as well as in France and in several other countries in which the government has had a democratic character, nothing will be taken from the wealthy classes for which they will not be fully compensated. But I am not able to see in this the play of blind fate. Observe that the sacrifices involved in the social revolution everywhere stand in an inverse ratio to what has hitherto been the rate of wages, which is the chief factor in determining the average level of popular culture. Where the masses have languished in brutish misery, no one can be surprised that, when they broke their chains, they should hurl themselves upon their oppressors with brutish fury. Again, the rate of wages is everywhere dependent upon the measure of political and social freedom which the wealthy classes grant to the masses. The Russian boyar or the Egyptian bey may be personally as kindly disposed as the American speculator or the English landlord; the essential difference lies in the fact that in America and England the fate of the masses was less dependent upon the personal behaviour of the wealthy classes than in Russia and Egypt. In the former countries, the wealthy classes--even if perhaps less kindly in their personal intercourse--were politically more discreet, more temperate than in the latter countries, and it is the fruit of this political discretion that they are now reaping. It may be that they knew themselves to be simply compelled to exercise this discretion: they exercised it, and what they did, and not their intentions, decided the result. Those that were the ruling classes in the backward countries are now atoning for the excessive exercise of their rights of mastership; they are now paying the difference between the wages they formerly gave and the--meagre enough--general average of wages under the exploiting system.

Tei Fu (Right): The previous speaker overlooks the fact that the rate of wages depends, rot upon the will of the employer, but upon supply and demand. That the receiver of a hunger-wage has been degraded to a beast is unfortunately too true, and the massacres with which the masses of my fatherland, driven to desperation, everywhere introduced the work of emancipation are, like the events in Russia, eloquent proofs of this fact. But how could any political discretion on the part of the ruling classes have prevented this? The labour market in China was over-crowded, the supply of hands was too great for any power on earth to raise the wages.

Alexander Ming-Li (Freeland): My brother, Tei Fu, thinks that wages depend upon supply and demand. This is not an axiom that was thought out in our common fatherland, but one borrowed from the political economy of the West, but which, in a certain sense, is none the less correct on that account. It holds good of every commodity, consequently of human labour so long as that has to be offered for sale. But the price depends also upon two other things--namely, on the cost of production and the utility of the commodity: in fact, it is these two last-named factors that in the long run regulate the price, whilst the fluctuations of supply and demand can produce merely fluctuations within the limits fixed by the cost of production and the utility. In the long run as much must be paid for everything as its production costs; and in the long run no more can be obtained for a thing than its use is worth. All this has long been known, only unfortunately it has never been fully applied to the question of wages. What does the production of labour cost? Plainly, just so much as the means of life cost which will keep up the worker's strength. And what is the utility of human labour? Just as plainly, the value of what is produced by that human labour. What does this mean when applied to the labour market? Nothing else, it seems to me, than that the rate of wages--apart from the fluctuations due to supply and demand--is in the long run determined by the habits of the worker on the one hand, and by the productiveness of his labour on the other. The first affects the demands of the workers, the second the terms granted by the employers.

But now, I beg my honoured fellow-countryman particularly to note what I am about to say. The habits of the masses are not unchangeable. Every human being naturally endeavours to live as comfortably as possible; and though it must be admitted that custom and habit will frequently for a time act restrictively upon this natural tendency to expansion in human wants, yet I can assert with a good conscience that our unhappy brethren in the Flowery Land did not go hungry and half-clad because of an invincible dislike to sufficient food and clothing, but that they would have been very glad to accustom themselves to more comfortable habits if only the paternal wisdom of all the Chinese governments had not always prevented it by most severely punishing all the attempts of the workers to agitate and to unite for the purpose of giving effect to their demands. Workers who united for such purposes were treated as rebels; and the wealthy classes of China--this is their folly and their fault--have always given their approval to this criminal folly of the Chinese government.

I call this both folly and crime, because it not merely grossly offended against justice and humanity, but was also extremely detrimental to the interests of those who thus acted, and of those who approved of the action. As to the government, one would have thought that the insane and suicidal character of its action would long since have been recognised. A blind man could have seen that the government damaged its financial as well as its military strength in proportion as its measures against the lower classes were effective. The consumption by the masses has been in China, as in all other countries, the principal source of the national income, and the physical health of the people the basis of the military strength of the country. But whence could China derive duties and excise if the people were not able to consume anything; and how could its soldiery, recruited from the proletariate, exhibit courage and strength in the face of the enemy? This oppression of the masses was equally injurious to the interests of the wealthy classes. While the Chinese people consumed little they were not able to engage in the more highly productive forms of labour--that is, their labour had a wretchedly small utility because of the wretchedly small cost at which it was produced.

Thus the Chinese employer could pay but little for labour, because the worker was prevented from demanding much in such a way as would influence not merely the individual employer, but the labour market in general. The individual undertaker could have yielded to the demands of his workers to only a limited degree, since he as individual would have lost from his profits what he added to wages. But if wages had risen throughout the whole of China, this would have increased the demand to such a degree that Chinese labour would have become more productive--that is, it would have been furnished with better means of production. The employers would have covered the rise in wages by the increased produce, not out of their profits; in fact, their profits would have grown--their wealth, represented by the capitalistic means of labour in their possession, would have increased. Of course this does not exclude the possibility that some branches of production might have suffered under this general change, for the increase of consumption resulting from better wages does not affect equally all articles in demand. It may be that while the average consumption has increased tenfold, the demand for a single commodity remains almost stationary--in fact, diminishes; but in this case it is certain that the demand for certain other commodities will increase more than ten-fold. The losses of individual employers are balanced by the proportionately larger profits of other employers; and it may be taken as a general rule that the wealth of the wealthy classes increases in exact proportion to the increase of wages which they are obliged to pay. It cannot be otherwise, for this wealth of the wealthy classes consists mainly of nothing else than the means of production which are used in the preparation of the commodities required by the whole nation.

Perhaps my honoured fellow countryman thinks that in the matter of rise of wages we move in a circle, inasmuch as on the one hand the productiveness of labour--that is, the utility of the power expended in labour--certainly cannot increase so long as the nation's consumption--that is, the amount which the labour power itself costs--does not increase, while on the other hand the latter increase is impossible until the former has taken place. If so, I would tell him that this is just the fatal superstition which the wealthy classes and the rulers of so many countries have now so cruelly to suffer for. Since, in the exploiting world, only a part, and as a rule a very small part, of the produce of labour went to wages, the employers--with very rare exceptions--were well able to grant a rise in wages even before the increase of produce had actually been obtained, and had resulted in a universal rise in wages. I would tell him that, especially in China, on the average even three or four times the wages would not have absorbed the whole profits--that is, of course, the old profits uninfluenced by the increase of produce. The employers could pay more, but they would not. From the standpoint of the individual this was quite intelligible; everyone seeks merely his own advantage, and this demands that one retains for one's self as large a part of any utility as possible, and hands over as little as possible to others. In this respect the American speculators, the French capitalists, and the English landlords, were not a grain better than our Chinese mandarins. But as a body the former acted differently from the latter. Notwithstanding the fact that the absurdity that wages cannot be raised was invented in the West and proclaimed from all the professorial chairs, the Western nations have for several generations been compelled by the more correct instinct of the people to act as if the contrary principles had been established. In theory they persisted in the teaching that wages could not be increased; in practice, however, they yielded more and more to the demands of the working masses, with whose undeniable successes the theory had to be accommodated as well as possible. You, my Chinese brethren, on the contrary, have in your policy adhered strictly to the teaching of this theory: you have first driven your toiling masses to desperation by making them feel that the State is their enemy; and you have then immediately taken advantage of every excess of which the despairing people have been guilty to impose 'order' in your sense of the word. Your hand was always lifted against the weaker: do not wonder that when they had become the stronger they avenged themselves by making you feel some small part of the sufferings they had endured.

This does not prevent us in Freeland--as our actions show--from condemning the violence that has been offered to those who formerly were oppressors, and from trying to make amends for it as well as we can. Hence we hold that the people of Russia, Egypt, and China--in short, everybody--would do well to follow the example given by the United States of America. We think thus because this wise generosity is shown to be advantageous not merely for the wealthy classes, but also for the workers. Unfortunately it is not in our power at once to instil into the Russian muzhik, the Egyptian fellah, or the Chinese cooley such views as are natural to the workers of the advanced West. History is the final tribunal which will decree to everyone what he has deserved.