Freeland

T >> Theodor Hertzka >> Freeland

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ERNST WOLMUT (_belonging to no party_) opened the debate: I do not think it
necessary to lay stress upon the fact that the discussion of the subject
now before us cannot and ought not materially to influence our convictions.
Whether it be everywhere possible or not to protect vested interests will
hinder no one from adopting the principle of economic justice, and that at
once and with all possible energy. We are not likely to be prevented from
according a full share of justice to the immense majority of our working
fellow-men by a fear lest the exploiting classes should suffer, any more
than the promoters of the railroads were stayed in their work by the
knowledge that carriers or the innkeepers on the old highways would suffer.
It is, however, both necessary and useful to state the case clearly, and as
speedily as possible to show to those who are threatened with inevitable
loss what will be the extent of the sacrifice they will have to make. For I
take it to be a matter of course that such a sacrifice is inevitable. No
one suffered anything through the establishment of the Freeland
commonwealth; but this was because there were here no inherited rights or
vested interests to be interfered with. There were no landlords, no
capitalists, no employers to be reckoned with. It is different with us in
the Old World. What is to be done with our wealthy classes, and how shall
we settle all the questions concerning the land, the capital, and the
labour over which the wealthy now have complete control? Will it not be
humane, and therefore also prudent, to make some compensation to those who
will be deprived of their possessions? Will not the new order work better
if this small sacrifice is made, and embittered foes are thereby converted
into grateful friends?

ALONSO CAMPEADOR (_Extreme Left_): I would earnestly warn you against such
pusillanimous sentimentality, which would not win over the foes of the new
order, but would only supply them with the means of attacking it, or shall
we say allow them to retain those means. If we would exercise justice
towards them, we should give to them, as to all other men, an opportunity
of making a profitable use of their powers. They cannot or will not labour.
They are accustomed to take their ease while others labour for them. Does
this constitute a just claim to exceptional treatment? But it will be
objected that they ask for only what belongs to them, nay, only a part of
what belongs to them. Very well. But what right have they to this so-called
property? Have they cultivated the ground to which they lay claim? Is the
capital which they use the fruit of _their_ labour? Does the human
labour-force which carries on their undertakings belong to them? No; no one
has a natural right to more than the produce of his own labour; and since
in the new order of things this principle deprives no one of anything, but,
on the contrary, leads to the greatest possible degree of productiveness,
no one has any ground for complaint--that is to say, no one who is content
with what is his own and does not covet what rightly belongs to some one
else. To acknowledge the claims of those who covet what is not theirs would
be like acknowledging the claims of the robber or thief to the property he
has stolen.

It will be said that owners possess what they have _bona fide_; their claim
is based upon laws hitherto universally respected. Right. Therefore we do
not _punish_ these _bona fide_ possessors; we simply take from them what
they can no longer possess _bona fide_. But the owners have paid the full
value for what they must now give up: why should they lose their
purchase-money, seeing that the purchase was authorised by the law then in
force? Is the new law to have a retrospective force? These are among the
questions we hear. But no one need be staggered by these questions unless
he pleases. For the purchase-money rightly belonged to the possessor of it
as little as the thing purchased; he who buys stolen goods with stolen
money has no claim for compensation. If he acts in good faith he is not
obnoxious to punishment--but entitled to compensation?

Yet--and this is the last triumph of the faint-hearted--the purchase-money,
that is, the capital sunk in land or in any business, can be legally the
property of the possessor even in our sense of the term. The possessor may
have produced it by his own labour and saved it: is he not in that case
entitled to compensation? Yes, certainly; in this case, to refuse
compensation for such capital would be robbery; but is not the
establishment of economic justice, which gives a right to the produce of
any kind of future labour, a fully adequate compensation for that capital
which has really been produced by the possessor's own labour? Consider how
poorly a man's own labour was remunerated under the exploiting system of
industry, what capital could be saved out of what was really one's own
labour, and you will not then say that a real worker who possessed any such
savings will not find a sufficient compensation in the ten-fold or
hundred-fold increase of the produce of his labour. But perhaps a
difficulty is found in the possibility that this small capitalist might no
longer be capable of work? Granted; and provision is made for this in the
new order of things. The honest worker receives his maintenance allowance
when his strength has left him; even he will have no occasion to sigh for
what he had saved in the exploiting times of the past. To these maintenance
allowances I refer also those other exploiters whose habits have robbed
them of both desire and ability to work. The free community of the future
will be magnanimous enough not to let them suffer want; even they have, as
our fellow-men, this claim upon the new order; but any right beyond this I
deny.

STANISLAUS LLOWSKI (_Freeland_): We in Freeland take a different
standpoint. The exploiting world could, without being false to itself,
forcibly override acquired rights in order to carry out what might be the
order of the day; it could--and has almost always done so--carry into force
any new law based upon the sword, without troubling itself about the claims
of the vanquished; it could do all this because force and oppression were
its proper foundation. Its motto was, 'Mine is what I can take and keep';
therefore he who took what another no longer had the power to keep acted in
perfect accordance with his right, whether he could base his claim upon the
fortune of war or upon a parliamentary majority. If we recognised this
ancient right, matters would be very simple: we have become the stronger
and can take what we please. The hypocrisy of the modern so-called
international law, which has a horror of brutal confiscations, need not
stand in our way any more than it has ever stood in the way of anyone who
had power. Conquerors no longer deprived the conquered of their land, they
no longer plundered or made men their slaves; but in truth, it was only in
appearance that these practices had ceased: it was only the form, not the
essence of the thing, that had changed. The victor retained his right of
legislating for the vanquished; and the earnings of the vanquished were
more effectually than ever transferred to the pockets of the victors in the
forms of all kinds of taxes, of restrictions, and rights of sovereignty.
'Property' was 'sacred,' not even that of the subjugated was touched;
merely the fruits of property were taken by the strong. This we, too, could
do. Take the property from its owners? How brutal; what a mockery of the
sacred rights of property! But to raise the taxes until they swallowed up
the whole of the property--who in the exploiting world would be able to say
_that_ was contrary to justice? Yet we declare it to be so, for we
recognise no right to treat the minority of possessors differently from the
minority of workers; and as in our eyes property is sacred, we must respect
it when it belongs to the wealthy classes as much as when it belongs to
ourselves.

But--objects the member on the Left--the victorious majority make no claim
of right of private property in the land and in the productive capital.
Certainly; but they do not possess anything which they will have to
renounce in the future, while the minority does; hence to dispossess the
possessors in favour of those who did not possess, in order that equality
of right might prevail in future, would not be to treat both alike.

But--and this is the weightiest argument in the eyes of our friend--the
minority is said to have at present no valid title to their property; they
owe it to exploitation, and we do not recognise this as a just title;
exploitation is robbery, and he who has stolen, though he did it in good
faith, possesses no claim to compensation. This reasoning is also false.
Exploitation is robbery only in an economic, not in a juridical, sense; it
was not merely _considered_ to be permissible--it _was_ so. The exploiter
did not act illegally though in good faith; rather he acted legally when in
his day he exploited; and acted legally not merely on the formal ground
that the law, as it then existed, allowed him thus to act, but because he
could not act otherwise. This appropriation of other men's earnings, which,
in an economic sense, we are compelled, and rightly so, to call robbery,
was--let us not forget that--the necessary condition of any really
productive highly organised labour whatever, so long as the workers were
not able to freely organise and discipline themselves. Economic robbery,
the relation of master held by the few towards the many, constituted an
effective economic service that had the strongest right to claim the profit
of other men's labour, which was in fact rendered profitable by it.
Subsequently to confiscate the thus acquired compensation for the services
rendered, because such services had become superfluous or indeed
detrimental, would in truth be robbery, not merely in an economic sense,
but in a legal sense--an offence against the principles of economic
justice.

Then are those who have been exploiters to retain undiminished the fruit of
their 'economic robbery'? Yes; but two things must be noted. In all ages it
has been held to be the right of the community to dispossess owners of
certain kinds of property without committing any offence against the
sacredness of property, provided full compensation was offered to the
owners. In the abolition of slavery, of serfdom, of certain burdens on the
land, and the like, no one has ever found anything that was reprehensible,
provided the owner of the slaves or of the land was compensated to the full
value of the property taken from him. In the second place, it is to be
noted that the community is bound to guarantee to the owners their
property, but not the profit which has hitherto been obtained from it.

If you apply these two principles to the acquired rights which the Free
Society found existing, you will find that, while the land is taken from
the landowners, the value of it must be paid; the Society has nothing to do
with movable capital, and the same holds good of the profit which the
employers have hitherto drawn from their relation to the workers. The
Society can also claim the right of obtaining possession of the movable
productive property, so far as it may appear to be to the public interest
to do this. Such an interest does not here come in question, for, apart
from the fact that movable means of production can be created in any
quantity that is required, there is no reason to fear that the owners will
hold back theirs when they find what is both the only and the absolutely
best employment for it in dealing with the associated workers. But, in the
future, capitalists will not receive interest for their property, or, if
they do, it will be only temporarily. There is as little occasion as there
is right to forbid the receiving of interest; but, as every borrower will
be able to get capital without interest, the paying of interest will cease
automatically. Just as little can or need the Free Society forbid the
former employers to hire workers to labour for them for stipulated wages;
such workers will no longer be found.

ALI BEN SAFI (_Right_): Where is the Free Commonwealth to obtain the means
to purchase all the land, and at the same time to furnish the workers with
business capital? It is possible that some rich countries may be able to
accomplish this by straining all their resources; but how could we in
Persia find the 125,000,000L, at which the fixed property was estimated at
the last assessment, to say nothing of the hitherto totally lacking
business capital?

FRANCOIS RENAUD (_Right_): On the contrary, I fear that the--from a legal
standpoint certainly unassailable--justice to the former owners will
occasion the greatest difficulties to just the richest countries. Their
greater means involve the heavier claims upon those means; for in
proportion as those countries are really richer will the value of the land
be higher, and the workers, because more skilful in carrying on highly
developed capitalistic methods of industry, will at once require larger
amounts of business capital, which the community will have to furnish. So
far, then, the greater strength and the heavier burden balance each other.
But to this it must be added that in the more advanced countries the amount
of mobile capital requiring compensation is far greater than that of poor
countries. As interest is to cease, all these numberless invested milliards
then bearing interest will be withdrawn: whence will the means be suddenly
obtained promptly to meet all these calls?

CLARK (_Freeland_): The last two speakers entertain unnecessary fears. The
sums required to get possession of the land, to pay back the circulating
capital, and to furnish the workers with more abundant means for carrying
on business, are certainly enormous--are at any rate larger than the
material advance of any country whatever can even approximately supply
quickly enough to place the country in a position to bear such burdens in
their full extent. Certainly, if the transition to economic justice were
followed immediately by its full results--if, for example, such transition
lifted any country at once to that degree of wealth which we enjoy in
Freeland--comparatively little difficulty would be experienced in
responding to the heavy demands that would be made; but this condition
would not be reached for years; the tasks you must undertake would be more
than you could perform, if you had at once to discharge the whole of your
responsibilities. But you have no reason whatever to fear this. Simply
because interest will cease will neither landowner nor capitalist have any
motive for insisting upon immediate payment, but will be quite content to
accept payment in such instalments as shall suit the convenience of the
community or the private debtors--should there be any such--and which could
be easily accommodated to the interests of those who were entitled to
receive the payment. When it is considered that the latter would be
compelled either to let their capital lie idle or to consume it, it will
appear evident that, if only the slightest advantage were offered them,
they would prefer to receive their property in instalments, so far as they
did not actually want to use it themselves.

You have quite as little reason to fear the demand which will be made for
supplying the workers with the means of carrying on business. If your
exploited masses already possessed the ability to make use of all those
highly developed capitalistic implements of industry which we employ in
Freeland, then certainly the Old World would have to renounce any attempt
even approximately to meet at once the enormous demand for capital which
would be made upon it. In such a case the milliard and a-half of souls who
would pass over to the new order of things would require two billions of
pounds; but the two milliards of men will not require these two billions,
because they would not know what to do with the enormous produce of the
labour called forth by such means of production. To dispose of so much
produce it would be necessary for every family in the five divisions of the
globe to possess the art of consuming a minimum of from 600L to 700L per
year, as our Freeland families do; and, believe us, dear friends, your
masses, just escaped from the servitude of many thousands of years, at
present entirely lack this art. You will not produce more than can be
consumed. You have not been able to do so yet, and will certainly not be
able to do it when the consumption of the workers is able to supply the
only reason for production. The extent and the intensity of production have
been and remain the determinating factors in the extent and kind of the
means of production. You will at any time be able to create what you are
able to make use of; and if here and there the demand grow somewhat more
rapidly than can be conveniently met out of the surplus acquired by the
continually increasing productiveness of labour, you must for a time be
content to suffer inconvenience--that is, you must temporarily forego the
gratification of some of your newly acquired wants in order the more
rapidly to develop your labour in the future.

For the rest, I can only repeat that the Freeland commonwealth will always
be prepared, in its own interests, to place its means at your disposal, so
far as they will go. We calculate that your wealth--that is, looking at the
subject from the standpoint of _our_ material interests, your ability to
purchase those commodities which we have special natural facilities for
producing, and your power of producing those commodities which we can take
in exchange for ours with the greatest advantage to you--will, in the
course of the next two or three years, at least double, and probably treble
and quadruple. From this we promise ourselves a yearly increase of about a
milliard pounds sterling in our Freeland income. We have determined to
apply this increase for a time, not to the extension of our consumption and
of our own investments, but to place it at your disposal, as we have
already done the unemployed surplus of our insurance reserve fund, and to
continue to do this as long as it may seem necessary. [Tremendous
applause.]

The PRESIDENT: I believe I am expressing the wish of the assembly when I
ask William Stuart, the special representative of the American Congress,
who arrived at Eden Vale this morning, to state to us the proposals laid
before the congress of his country by the committee entrusted with the
drawing up of the scheme for adopting the _regime_ of economic equality of
rights.

WILLIAM STUART: In the name of the representatives of the American people,
I ask the kind attention of this distinguished assembly, and particularly
of the representatives of Freeland who are present, to a series of
legislative enactments which it is proposed to make for the purpose of
carrying us--with the energy by which we are characterised, and, at the
same time, without injury to existing interests--out of the economic
conditions that have hitherto existed into those of economic equality of
rights. Our government found themselves obliged to take this step because
our nation is the first outside of Freeland--at least, so far as we are
aware--which has passed the stage of discussion, and is about immediately
to take action and carry out the work. The institutions of economic justice
are no longer novelties; we can follow a well-proved precedent, the example
of Freeland, and we intend to follow that example, with a few unessential
modifications rendered necessary by the special characteristics of the
American country and people. On the other hand, we lack experience; and as,
notwithstanding our well-known 'go-ahead' habits, we would rather have
advice before than after undertaking so important a task, I am sent to ask
your opinion and report it to the American Congress before the
recommendations of the committee have become law.

It is proposed to declare all the land in the United States to be
ownerless, but to pay all the present owners the full assessed value. In
order to meet the cases of those who may think they have not received a
sufficient compensation, special commissions of duly qualified persons will
be appointed for the hearing of all appeals, and the public opinion of the
States is prepared to support these commissions in treating all claims with
the utmost consideration. It is proposed to deal with buildings in the same
way, with the proviso that dwelling-houses occupied by the owners may be
excepted at the owners' wish. The purchase-money shall be paid forthwith or
by instalments, according to the wish of the seller, with the proviso that
for every year over which the payment of the instalment shall be extended a
premium of one fifth per cent. shall be given, to be paid to the seller in
the form of an additional instalment after the whole of the original
purchase-money has been paid. The payment is not to extend over more than
fifty years. Suppose a property be valued at ten thousand dollars; then the
owner, if he wishes to have the whole sum at once, receives his ten
thousand, with which he can do what he pleases; but if he prefers, for
example, to receive it in ten yearly instalments of 1,000 dollars, he has a
right to ten premiums of 20 dollars each, which will be paid to him in a
lump sum of 200 dollars as an eleventh instalment. If he wishes the payment
to be in fifty instalments of 200 dollars, then his premiums will amount to
fifty times twenty dollars--that is, to 1,000 dollars--which will be paid
in five further instalments of 200 dollars. The national debt is to be paid
off in the same way.

The existing debit and credit relations of private individuals remain
intact, except that the debtor shall have the right of immediate repayment
of the borrowed capital, whatever may have been the terms originally agreed
upon. As the commonwealth will be prepared to furnish capital for any kind
of production whatever, the private debtor will be in a position to
exercise the right above-mentioned; but, according to the proposal of the
committee, the commonwealth shall, for the present, demand of its debtors
the same premium which it guarantees to its creditors. The object of this
regulation is obvious: it is to prevent the private creditors--in case no
advantage accrues to them--from withdrawing their capital from business and
locking it up. If those who needed capital had their needs at first
supplied without cost, simply upon undertaking gradually to repay the
borrowed capital, they would not be disposed to make any compensatory
arrangement with their former creditors, whilst, should the committee's
proposal be adopted, they would be willing to pay to those creditors the
same premiums as they would have to pay to the commonwealth.

The opinions of the committee were at first divided as to the amount of the
premiums to be guaranteed and demanded. A minority was in favour of fixing
a maximum of one in a thousand for each year of delayed payment: they
thought that would be sufficient to induce most of the capitalists to place
in the hands of the commonwealth or of private producers the property which
otherwise they must at once consume or allow to lie idle. Eventually,
however, the minority came over to the view of the majority, who preferred
to fix the maximum higher than was necessary, rather than by untimely
parsimony expose the commonwealth to the danger of seeing the capital
withdrawn which could be so profitably used in the equipment of production.
The voting was influenced by the consideration that we, as the first,
outside of Freeland, among whom capital would receive no interest, must be
prepared, if only temporarily, to stand against the disturbing influences
of foreign capital. That such disturbing influences have not been felt in
Freeland, though here no premium of any kind has ever been in force, whilst
interest has been paid everywhere else in the world, was an example not
applicable to our case, as we have not to decide--as you in Freeland
have--what to do with capital which we do _not_ need, and which, after all
conceivable demands on capital have been met, still remains disposable;
but, on the other hand, we have to attract and to retain capital of which
we have urgent need. But that the proposed one-fifth per cent. will suffice
for this purpose we are able with certainty to infer from the double
circumstance that, in the first place, the anticipated adoption of this
proposal, which naturally became known at once to our world of capitalists,
has produced a decided tendency homewards of our capital invested abroad.
It is evident, therefore, that capitalists scarcely expect to get elsewhere
more for large amounts of capital than we intend to offer. In the second
place, the capitalistic transactions which have recently been concluded or
are in contemplation show that our home capital is already changing hands
at a rate of interest corresponding to our proposed premium. Anyone in the
United States who to-day seeks for a loan gets readily what he wants at
one-fifth per cent., particularly if he wishes to borrow for a long period.
Such seekers of capital among us at present are, of course, in most cases
companies already formed or in process of formation.