The Essential Reform:
Land Value Taxation
In Theory and Practice
C. H. Chomley and R. L. Outhwaite
[Part 10 of 15]
So far the effect of the land values tax in stimulating the
production of wealth has been considered, and it is now appropriate to
deal with its effect upon wages, which is a matter of the distribution
of wealth. With the production of wealth at a maximum and labour
receiving its due share, economic justice and social well-being would
be achieved. At the outset it is necessary to decide upon what is the
just wage, upon what is the standard rate we wish to see established.
There is only one rate of wage, which is in accord with the principles
of justice.
The just wage is that which represents the full value of the wealth
which the labour of the worker has created. The just weekly wage of
the boot-maker is the money equivalent of the value that he has added
to material during a week by giving a certain form. And similarly this
is the just wage through every sphere of production, and also through
every grade of those taking part in production, from manager to
apprentice. Present economic conditions give no assurance that this
standard will be attained by force of circumstances; for wages not now
fixed by measure of value produced, but, so far as economic forces
prevail, by the competition amongst workers for employment. Men come
into what is termed the labour market and sell their labour, under
pressure of the knowledge that those who fail to effect a sale of what
brain and muscle is in them will starve. In this dread competition the
wage of those who get employment is not fixed by the standard of
resultant production but by the standard of what is the lowest wage
which will enable life to be maintained -- that is to say, wages tend
to fall to the margin of subsistence. That they are not at this level
over the whole sphere of employment is not because this tendency does
not everywhere operate, but because trades unionism has in some
instances succeeded in establishing a higher minimum. But even in the
trades so affected the downward tendency is always there, and when, in
times of industrial depression and limitation of production,
competition for employment in the skilled trades becomes keener, wages
fall despite trades unionism. In occupations not affected by trades
unionism, in what are termed the unskilled trades, the tendency of
wages to fall to the margin of subsistence operates almost to the
full. It is clear, then, that a just wage system is not to be created
by any endeavours which may temporarily, and to a limited extent, be
effective in certain circumscribed spheres of employment. It is
impossible to maintain the wage in one direction above the general
level, for to do so is to cause a rush of workers in that direction,
whose competition to get within the benefited sphere will at once
bring down wages within it to the general level. This is why giving a
privilege to certain industries under tariff has in the long run the
opposite effect to raising wages in those industries over the general
level.
When the workers in the State of Victoria voted for duties ranging
beyond 50 per cent. on imported boots, clothing and furniture, it was
because they supposed that the employers, being able to make greater
profits in those industries by raising ices, higher wages would
consequently result. But naturally the workers flocked to those
privileged industries, parents apprenticed their children to them, and
after twenty-five years of Protection such abhorrent conditions of
sweating were thus created that public sympathy was aroused. At a
great demonstration in the Melbourne Town Hall, convened by the
Anti-Sweating League, Mr. Bishop, President of the Trades Hall
Council, the executive of the labour organisations, made the following
statement: --
"Ardent Protectionist as he was, he was sorry to
admit that in this instance Protection had failed as far as the
workers were concerned. Workmen united to support Protectionist
candidates for Parliament, and were told that when that system was
established their wages would be secure, but the result had been
that the employer was protected while the workmen were starving.
There were three trades that suffered more than others by sweating
-- the boot trade, the furniture trade, the clothing trade. He was
bound to admit that Protection had failed in this respect. It was
granted on the understanding that employers would maintain the
standard rate of wage. They had not done so, and the workmen were
ground down."
It is because Protection can only affect industries which in any
country do not employ more than ten workers in every hundred, that it
cannot raise wages even in those industries, and succeeds in driving
workers as a whole to a lower scale of existence by raising prices and
consequently checking production by curtailing consumption. The wage
rate can be raised in one way over the whole sphere of employment, and
that is by enabling men to employ themselves in producing wealth at
its source, the land. This accomplished, no man will be attracted into
wage market except terms be offered representative of a greater value
than that which he can produce by applying his labour to land. The
more land made free of access to all would-be users and the more their
labour is made profitable, the higher be the inducement that must be
offered to them to become workers for a wage. A natural minimum wage
rate in consequence becomes established, and no longer will men
compete to sell their labour and accept a subsistence rate rather than
starve, whilst others who are superfluous are left to this fate. Let
us, for example, suppose that land were made available to all desirous
of applying labour to it, and that a labourer were put in the position
to produce wealth of the value of £100 per annum. It is obvious
that he would not then consent to work for a less wage than £2
per week, and would be master of the situation, as we have the Kaffir
to be, through having free access to the soil, and as have been the
workers in all new countries before the land was monopolised. And,
having enabled men to employ themselves, the result would be that
wages, instead of tending to fall to the margin of subsistence, would
tend to rise to the just standard of the full value of the work done.
In illustrating how this result would follow, it will be convenient
to take into consideration actual conditions of employment maintaining
in the United Kingdom. We have seen that the tendency of wages to fall
to the margin of subsistence is due to competition of men seeking for
employment where employment does not exist for all. This competition
is the result of the influx into the towns of men who are eager to
work upon the soil but who are denied the opportunity of so doing.
When this influx is checked, when this overflow from the labour
reservoir which submerges the cities is dammed back, a new competition
will be set up in industrial centres, that of employers for workers.
As the competition amongst workers for work, when enough is not
offering for all, causes the tendency ,for wages to fall to the margin
of subsistence, conversely will the competition of employers for
workers, when the labour market is under-supplied, result in a
tendency for wages to rise. Then trades unionism will achieve maximum
results and a just wage status be achieved.
The problem of withholding sufficient workers to attain this result
presents no overwhelming difficulty. In the year 1898, before the Boer
War, the percentage of unemployment in the skilled trades furnishing
returns was about 2 per cent. Taking an average of 5 per cent. the
absorption of this percentage should be easy of attainment. Freeing
the land would so stimulate demand for manufactured commodities that
all skilled unemployed men would find work in their own trades. It is
by enabling men who want to till the soil to obtain access to it that
the problem of unemployment in skilled trades is to be solved
beneficially, and not by drafting men from the towns into labour
colonies to undertake uncongenial and uneconomical work.
So far we have seen that making land available will create a tendency
for wages to rise, and, once they are above the subsistence level the
just rate representative of full value is within attainment of
organised labour; for then the workers will be able not only to live,
but also to save, and each having capital at his command, in
conjunction they will be able to provide all the capital needed to
acquire factories and machines to undertake production in
co-operation. Then no man will work for a less wage than the
equivalent of the value he could create by applying his labour to raw
materials in co-operation with his fellows; and if the wage system
continued, it would only be upon this basis -- that is to say, the
just wage standard would be achieved. So the emancipation of labour in
the great primary industries connected with the land, by enabling
workers to employ themselves, would lead to the emancipation of labour
in the secondary industries by there also enabling workers to employ
themselves. The land question and the wage question are one; and the
taxation of land values, because it will free the land from monopoly
control by associating all in its ownership, and because it will
compel competition for workmen, is, owing to the solidarity of the
interests of labour, a measure of supreme importance to all who toil
or who are craving for the opportunity.
The status of every man who produces wealth in factory or workshop,
or who renders service to his fellow-man in shop or counting-house, is
dependent on that of the man with the hoe. To free him is to free all;
to give him opportunity to prosper is to prosper all, and make the
nation great in the contentment of its citizens founded on justice and
natural law.
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