Why Should Agriculture Be So Unprofitable?
An Explanation of the Fundamental Causes That Are Driving Labor
and Capital out of Agriculture and Devastating the Rural Life of
Americca -- The Remedy
R. F. Beasley
[An address delivered before the state meeting of the
North Carolina Farmers' Union, at Durham, 17 November 1915. At the
time R. F. Beasley was Editor of the Monroe Journal Reprinted
from the Single Tax Review, 1915]
In the final analysis every meeting like this one in which farmers
come together for consultation, is a signal of distress. Men do not go
out of their way to seek redress when no redress is needed. We have
all heard of the man who was dead and didn't know it. Perhaps it was
because his nominal friends had misled him by saying he looked as if
he were enjoying the bloom of health. Agricultural labor in this
country is dying and doesn't understand the nature of its disease. It
is not dying for want of doctors, many of whom even tell it that it is
not even sick, but is in the bloom of health.
You have invited me to contribute to the literature of agricultural
theraputics. Your worthy president, who is a medical doctor as well as
an agricultural doctor, even warned me that if I made a diagnosis I
should offer a prescription. So, like Mark Anthony, I come neither to
praise nor to bury Caesar - I come to tell you what the disease is
that is killing the agricultural laborer and to propose a remedy which
will remove the cause of the disease and let the patient get well
himself.
THE TESTIMONY OF AUTHORITY
And, lest I be considered an alarmist, I will first introduce the
testimony of authority. After the present secretary of agriculture,
Dr. D. F. Houston, received his portfolio, he sat down and remained
silent in all the known languages for a long time, and refused even to
speak in the unknown tongues. Besought by diligent newspaper men to
say what his policy would be, he replied that he had to take time to
study the conditions before he could decide. After months of
investigation, he made his first announcement. In that address he
said:
"The story that comes from every section is
substantially the same; it is a story of increasing tenancy and
absentee ownership; of soils depleted and exploited; of inadequate
business methods; of chaotic marketing and distribution; of inferior
roads; of lack of supervision of public health and sanitation; of
isolated and ill organized social activities, and of inferior
intellectual provision."
This is a doleful recital of conditions, but as true as heaven. Now,
most potent, grave and worthy seigniors, I ask you why should this be
true of the most basic of industries on a virgin continent, one of
whose States alone is capable of supporting in comfort the entire
population? Until you can find a doctor who can give you a logical
answer to that question I suggest that you examine the proposed
remedies with a view to finding a blue sky proposition.
In his first survey of conditions, Secretary Houston said that of the
935,000,000 acres of arable land within the United States, less than
half of it was included in farms, and of that so included less than
forty per cent. is reasonably well cultivated, while less than twelve
per cent, of it is yielding maximum returns. In connection with this
fact, remember that investigation has found that fifty per cent. of
the urban population have no continuous guarantee of tomorrow's
dinner, and that the rising cost of living is daily lengthening the
bread line.
WHY DO LABOR AND CAPITAL RUN?
Now, since the mainspring of human action is the desire to gratify
human wants with the least possible exertion, why is that men do not
rush into agriculture as the easiest and quickest way of making a
living? And why is it that capital, whose first law is to seek
investment where the returns are the greatest, does not also flow to
the farms? We are frantically calling upon people to stay upon the
farms, yet they leave. And capital is so reluctant to seek agriculture
that we are imploring the government to provide arbitrary means to
drive it there. Eminent quacks who set themselves up as authority on
economics will conjure large figures to show that agriculture is the
most profitable business of the country, but they ignore the plain
fact that some of the great agricultural States have declined in rural
population, and in none of them is the increase in rural population
keeping up the increase in the urban.
Since urban population is increasing much more rapidly than rural,
why is it that the farmer who feeds an ever increasing population
should not be getting a larger net return for his labor than he was
when he was feeding a less population? If he were getting a return
commensurate with the increased production that he is offering, can
any living man explain why human nature reverses itself and capital
ignores the first principle of its existence when both tend to flow
away from instead of toward agriculture? Until you can get your
compass in line with the fundamental facts you can never hope to find
a light house to guide you out of the sea of agricultural disaster.
You may strike a phosphorescent glint, but you will never reach the
shore.
Now and then we hear of a man making money farming, but the case is
so rare that it is cited as a fearful example of what might be done.
But despite all such isolated cases, the fact remains incontrovertible
that if agriculture were profitable, labor and capital would flow
towards, not away from it. The solemn truth is that under present
conditions agriculture does not offer any reward commensurate with its
exactions for either labor or capital.
I defy any man in this hall to take five or ten thousand dollars in
his pocket and walk out and find one place in North Carolina where he
can invest it in pure agriculture and make it earn six per cent. I
defy any other man in this hall to walk out and borrow that sum of
money and so use it in agriculture that after paying six per cent. for
the vise of it and the necessary expense of his operations, he will
have anything left in the shape of adequate wages for himself. He may
buy land or he may rent land as he chooses, but he cannot make money
in either case except in the rarest and most isolated occasions.
Hence, neither capital nor labor will seek such an outlet. A great
deal of capital does flow to land ownership as a speculative venture,
but thus used, it merely retards and in no way helps agriculture. The
so-called development schemes with which the South has been infested
and the profits of which superficial thinkers and writers call
agricultural profits, represent no investment in agriculture whatever,
but only increase the amount of watered stock which the worker must
pay for when he finally gets to producing. The skeleton, then, in the
agricultural closet, is the basic fact that agriculture is not an
industry sufficiently profitable to attract and hold labor and
capital.
THE MAN WITH THE HOE
Did you ever notice, my friends, that the figure which inspired the
French artist to paint that heartrending picture, The Man With the
Hoe, and which in turn inspired our own American poet to translate its
passion and appeal into verse, was literally a man with a hoe, the
agricultural worker in his last extremity? You may think that you are
interested in the welfare of the worker, but until the tragedy of that
figure is painted upon your own soul you can never dedicate your
fullest powers to the work in hand.
Why is it there is reward for neither labor nor capital, and since
somebody must do the labor and since the rewards of that labor are not
increasing with the exactions put upon it, how long will it be before
the men and women who do the actual labor upon farms will be economic
slaves, as firmly bound as ever chattel slave was bound?
Every ten years the census record tells the same story of decreasing
home owners. We are traveling the road which leads to the house of the
man With The Hoe. How long before we reach it?
THE STUPENDOUS FACT
The stupendous fact which stares us in the face is that agricultural
labor, which is always the last in a new country to fall, is now
surrendering to the tragic fate to which all other labor has succumbed
in the losing fight with labor saving machinery, the advancement of
arts and sciences and the consequent increase in production.
And what is the condition of the other workers? Again I quote
authority, that of the late investigation of the United States
Commission on Industrial Relations:
Half of the wage earning fathers get but five hundred
dollars per year. Half of the women workers get less than $6. per
week. Thirty-seven per cent. of the wives and mothers of workers are
forced to work out to help the family income. In basic industries
workers are unemployed one fifth of the time. Three or more persons
occupy every sleeping room in 37 per cent. of the workers homes.
That is the official picture. If the agricultural laborer is not
destined to that end, what shall keep him from it?
FALLACIES OF PROPOSED REMEDIES
In speaking of the rewards of agricultural labor I am now referring
to both the tenant and the worker who, though he may own his own farm,
works, himself and family, upon it. The man who happens still to own
his farm is of course much better off, but the inexorable law to which
I shall later refer is cutting the ground from beneath his feet also,
and the census reports show how fast he is falling. Such a man can, it
is true, by working well, both himself and family, and practicing
rigid economy, make a living, but the fact that he is constantly
educating his children away from the farm shows that he considers it
has no future for them.
A great many remedies are proposed for making agriculture profitable,
and most of them contradict each other. Take the United States
Department of Agriculture. Don't forget now that I have quoted the
very words of the secretary himself as to the universal condition of
agriculture in the country. What remedy does he offer? Analyze every
one of them and you will find that they advise either an increase in
production or a mere facilitation of some of the means of production.
And yet, after honeycombing the South with demonstrators telling the
farmer how to make cotton, the department in the next breath warns him
not to produce too much. Last week the department issued a paper
telling the farmers of the South to be sure not to make cotton next
year until they had made all they could of other crops. Manifestly, if
the southern farmer makes more feed crops the western farmers will
find their markets curtailed to that extent. It is good advice to the
Southern farmer to make his own food crops instead of buying them from
his Western brothers, but what advice will the department give the
Western farmers, since it cannot advise them to invade the province of
the cotton farmer?
There are men in this hall who have blindly felt for years that
increased production cannot bring a greater average return to the
actual workers of the farm. It can and does help the particular
individual so long as the increase is not general and widespread
enough to affect prices. But that it cannot help upon the whole is
demonstrated by every crop of cotton that is grown. It is demonstrated
equally as well in the wheat, the meat and the corn crops. If the help
is to come from increased production will some one please tell me what
cotton would bring next fall if the crop should happen to run to
twenty-five million bales, or what it would be worth next, or the next
year, so long as such production were kept up?
Now, if the size of the crop fixes the price, all the plans which
have for their purpose better marketing, storing or other facilities
for production, can result only in greater production, and the
benefits will go, as they go now, when too much is made, to others
than the worker of the fields. And if this is true, and it is
absolutely so, can you tell me what will happen when the traction plow
and the machine cotton picker become universal? I can tell you. We
will have the Man With the Hoe in full flower.
THE CRUX OF THE MATTER
Some of you have heard of the honor due the man who makes two blades
of grass grow where one grew before. Suppose every man who this year
makes a pound of cotton should next year make two in its place, and
every man who makes a bushel of wheat, or corn, or oats or a pound of
meat, this year, should next year make two in its place, how many of
them would get enough from the proceeds to start the following year's
efforts on? Yet the people of the world would still have no more
clothes or food than they needed. But suppose, instead of the present
system of distribution, there were a direct exchange of labor products
whereby the man who made cotton could swap with the man who made meat,
and the men who made meat and cotton could swap with the men who made
clothes and shoes and the other things that were not made upon the
various farms. Manifestly, every worker would have twice as many
things which he wanted and could use as he had before he doubled his
own crop. As it is now all the increase is lost somewhere in the
process of distribution. If you will find the suck hole which takes up
all the increase you will know why the farmers dare not make too much
now. But you must find the whole thing. Merely to discover something
which facilitates the cotton farmer in putting his crop upon the
market will only add to the bonus which he is giving away. The crux of
the whole matter, then, is in the distribution of the product which
labor and capital jointly wring from nature year by year.
THE LAWS OF DISTRIBUTION
By distribution, I do not mean the hauling of a bushel of potatoes to
market, nor the selling of a dozen eggs. I mean the final division of
the wealth which labor produces from the raw materials of the farm and
mines to the highest finished product.
In all wealth production there are three factors and only three. They
are land, labor, and capital. And when the wealth is produced it is
divided among these three factors. That portion which goes to land,
not only farm lands, but all land and natural resources, is called
rent. That which goes to reward capital is called interest. That which
goes to reward human beings for their personal exertions is called
wages. The older a country becomes the more of the joint production
goes to land. In new countries, where land is low, wages and interest
are always high. In such countries the workers are always
comparatively well off. It is only after what we call progress has set
in that men become as dogs begging for the crumbs from the masters'
table. As population increases land rises in value. As land increases
in value poverty deepens and paupers multiply. The enormous increase
in the efficiency of labor is swallowed up in the increase in rent.
Because labor and capital cannot operate at all without land, the more
efficient and anxious they become, the higher goes the price of land.
The unquestioned law of rent is that land will always take all the
excess of its produce over that which the same application can secure
from the least productive land in use. This is why land goes up
immediately it becomes more productive or when the price of the
product from it goes up.
Land began to rise rapidly in the South when the price of cotton went
up and when we began to learn how to farm better. Every improvement of
any kind adds to the price of land, and every time land rises in value
it becomes impossible for so many more people to buy it. That is why
tenancy increases, and it is why the sons of the landowners of today
will be tenants tomorrow.
THE SITUATION IN THE SOUTH
But in a growing country there are two rent lines. One is the line
based upon the actual present production, and the other is the
speculative line which is the capitalization of the rent that people
guess land will return in the future. The speculative value of land is
twenty years ahead of its productive value. That is why neither labor
nor capital can make anything in agriculture today. Land speculation
has discounted twenty years of increased production. When the
speculative value goes so far ahead labor and capital are driven away
from the farms as is being done today, production is halted, and rural
life falls into decay. Land becomes so high that nobody can buy and
use it, and the owners, certain to get their price after recovery sets
in, refuse to sell for less. Hence we have the regular recurring
season of despondency in which labor and capital pull themselves
together and prepare to take less for themselves and give more to
land.
While men are holding land with the hope of selling at a great profit
at some later time, they are willing to let it be scratched and
neglected and run down by tenants too ignorant to pay more rent than
enough to about pay the taxes. This class of tenants, who can find
land somewhere all the time now white population is sparse in the
South, are the prey to the land sharks and time merchants. The
productiveness of the land is run down because the owners know that it
is not productive value but location value which will sooner or later
give them the profit.
Now, in a great country like this, this process could not go on if we
made it unprofitable for the people to hold lands and wait for the
rise. If they knew that the rise would do them no good no one would
buy any more land than he wanted to actually use. Hence there could be
no monopoly of land, and we would not have the astounding condition
that we have in the country today where more than half the land is
unused, and yet tenants are increased like grasshoppers.
THE LOCAL LANDLORD
But, you say, if a man owns his own land, why cannot he do well
farming. He can do better than a tenant, but even the land-owning
farmer cannot make interest on his actual investment and a decent
living for himself and family. The reason is plain. It is that this
same operation of land monopoly has reduced the workers of the city to
poverty and thus cut off what should be to the farmer a market always
growing with the growth of city population. The great suction takes up
the wealth, piles it year by year higher and higher in the cities to
be squandered. Mere city population will not help the farmer's market
unless he can exchange his produce for the produce of their factories
and shops. Thirteen families own one-fifth of Manhattan Island. Ten
families own one-half of Chicago, and three families own one-third of
Philadelphia. Into their laps as mere land owners, not as producers
or capitalists, uncounted millions are poured each year. These
millions are squandered in maintaining an army of flunkies and hangers
on, who consume the wealth thus wrung from the people and give nothing
in return. Until the city is free the farms cannot be free. The same
processes work in both. The man who works his own farm must deny
himself along with the tenant, until both wake up to the real
situation.
THE ABSENTEE LANDLORD
Only eleven per cent. of the people of New York City own their own
homes, and one of the Astors who lives in England is the boss absentee
landlord in this country. From him the absentees range all the way
down to the retired farmer who worked his children and himself like
beasts, and when his wife died of deprivation, moved to town, and
rented his land to negroes. Insurance companies, trust companies, and
various other agencies which have sure ways of gathering money, are
coming into the landlord class, not because they want to farm, but
because they know that as population increases land is bound to rise
under the present system. The bare land value rose in North Carolina
in ten years 142 per cent. This rise did not add a penny of wealth and
it helped production in no way. Think of having to carry on a business
whose capitalization doubles automatically without adding anything
whatever to the means of doing business. No wonder the backbone of
agriculture is broken and must remain broken.
Only thirty per cent of the whole people of this country now own
unencumbered homes, and the number gets smaller every year. A change
in our tax system would at once wipe out this blot upon our
civilization, and in a few years we would again be a nation of home
owners. There are now as many white tenants in the South as there were
slaves in I860, and the forces which I have described will inevitably
reduce them to economic slavery little less damnable than chattel
slavery. The historian Hallam says that the European laborer of the
middle ages received more for his labor measured in the produce of his
time than he does today. There is an ancient oriental saying that "To
whomsoever the soil at any time belongs, to him belongs the fruits of
it. White parasols and elephants mad with pride are the flowers of a
grant of land." Our system is giving the land to the few faster
and faster; we see on every hand the modern symbols of the ancient
white parasols and the elephants mad with pride.
MUST RIGHT THE WRONG
Nothing can eventually do the man who labors any good unless he is
first freed. The only way to free him and keep him free is to so
change our system that the absentee landlord in all his various forms
will fade into thin air. The power which the mere ownership of land
has to confiscate the results of labor upon it, is always measured by
the market price. We now tax the products of labor and let the land
itself either escape or bear a light part. We ought to cease taxing
anything that the farmers or other workers make, and put the tax upon
the bare land. This would shift the burden from the shoulders of the
working farmer to the absentee landlord, and the absentee landlord
could in no wise raise the rent, because he is already getting all
that labor can pay. This would make it impossible for land speculation
to go on, and land would not rise in value except for the actual
needs of the population.
The farmers of North Carolina made the greatest mistake in a
generation when they failed to vote for the taxation amendment to the
State constitution. They will simply have to go back and retrieve that
error. This will not be done soon, because nobody will think it
necessary. Farmers and their friends will go on making temporary
makeshifts to help the farmer keep his nose above water, and he will
finally sink, unless he goes back and rights the fundamental wrong.
Unless that is done you men who are present will see poorer farmers
and more tenants ten years hence than now and even a greater
proportion twenty years hence. The farmers already own less than ten
per cent. of the land values of the country, and they should be the
very first to embrace the idea of a change in system. Don't forget
that the monopolization of natural resources is the great suction pump
which carries away all the profits of increased production, of better
farming, of better machinery, of better factories and larger
production, and which, while wealth production increases a thousand
fold, denies labor any more than its bare subsistence. Don't forget
that it has ruined the rural life of every country on earth that
allowed it to exist. And don't forget that there is no makeshift that
can do any good. Lending money to farmers to buy land would not help
the situation in the least, because it would but run up the price of
the land and make it harder for the workers to pay for it. Instead of
inventing ways to secure money to help speculators to cash in, why
will we not embrace the sure, simple and easy way of taxation to knock
the bottom out of speculation and keep it out? Nay, it would do no
good in the long run to give every man a farm who wanted it, for the
same process which has taken the land from them would take it back
again. But if you make it forever unprofitable for any man to own land
without using it, your remedy would stay put and your children and
grandchildren would be safe upon their own acres, while if you let the
present system remain they must eventually fall by the wayside and
take their places in the ranks of economic slavery. This generation is
the guardian of the rights of unborn ones. Will we remain asleep while
our seed is being sold into bondage? The worker of the farm is
indissolubly connected with the worker in other occupations, for the
same force which robs one of the product of his labor robs the other.
They must join hands if this country is to remain a nation of freemen.
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