15. How does agriculture illustrate the difficulties confronting socialism in the field of production? 16. Under what circumstances, according to Schaeffle, would socialism possibly be able to increase the productivity of industry? 17. Why did he not believe that such an increase would actually come about? 18. What, in brief, is the objection to socialism as a method of distributing wealth? 19. What is unquestionably the simplest and easiest solution of the problem of distribution under socialism? 20. What is Professor Ely's chief objection to this plan of distribution? 21. What is his conclusion with regard to socialism as a method of distributing wealth? 22. What are the three types of objections to socialism? 23. What does Professor Ely say as to the imperfection of the social organism at the present time? 24. What did Aristotle believe to be the nature of virtue? 25. How does Professor Ely apply Aristotle's concept of virtue to the industrial situation? CHAPTER XVII A DEMOCRATIC PROGRAM OF INDUSTRIAL REFORM 97. The program outlined 1 A number of constructive thinkers have maintained that it is possible to reform our industrial system without resorting to socialism. Many of these students have offered suggestions of a constructive nature, but Professor Carver alone has combined the various elements of industrial and social reform into a definite program which appears not only sound but workable, that is to say, workable if we choose to apply it. The following is Professor Carver's outline of a democratic program of industrial and social reform: How to secure equality of wealth with liberty, without sacrificing anything that we now prize, such as private property, freedom of contract, freedom of initiative, and economic competition. (Parts of the program are arranged in the inverse order of their importance.) I. LEGISLATIVE PROGRAM A. For the redistribution of unearned wealth. 1. Increased taxation of land values. 2. Graduated inheritance tax. 3. Control of monopoly prices. B. For the redistribution of human talent. 1. Increasing the supply of the higher or scarcer forms of talent. business men. (b) Cutting off incomes which support capable men in idle- 2. Decreasing the supply of the lower or more abundant forms of labor power. 1 From Thomas Nixon Carver, Essays in Social Justice. Harvard University Press, Cambridge, Mass., 1915; pp. 264-265. Professor program of industrial and social reform is divided into a legislative and a nonlegislative part. (a) Restriction of immigration. (1) Elimination of defectives. (2) Requirement of minimum standard income. (d) Fixing building standards for dwellings. II. NON-LEGISLATIVE PROGRAM A. Raising the standard of living among the laboring classes. (b) The educator as the rationalizer of standards. (c) Thrift and the standard of living. (d) Industrial coöperation as a means of business and social education. B. Creating sound public opinion and moral standards among the capable, e.g... 1. The ambition of the family builder. 2. The idea (a) That leisure is disgraceful; (b) That the productive life is the religious and moral life; (c) That wealth is a tool rather than a means of gratification; (d) That the possession of wealth confers no license for luxury or leisure; (e) That government is a means not an end. 3. Professional standards among business men. C. The discouraging of vicious and demoralizing developments of public opinion, such as: 1. The cult of incompetence and self-pity. 2. The gospel of covetousness, or the jealousy of success. 3. The emphasizing of rights rather than obligations. 4. The worship of the almighty ballot and the almighty dollar. 5. The idea that a college education should aim to give one a "gentlemanly appreciation" of the ornamental things of life, such as literature, art, golf, and whiskey, rather than to strengthen one for the serious work of life. 6. The idea that the capitalization of verbosity is constructive business. 98. Taxation as a method of attacking unearned wealth 1 From an economic viewpoint, justice consists in giving every individual just what he earns, no more, no less. The first step in the democratic program of industrial reform is to apply the principle of justice to large incomes. This does not mean that large incomes are necessarily objectionable, for large incomes may be as truly earned as small incomes. Democracy will tolerate no legal interference with incomes which are earned, however large. On the other hand, there is a growing feeling that the community ought to 'deprive individuals of wealth which is unearned. In the following selection Professor Seligman calls attention to the growing tendency to use taxation as a means of leveling the inequalities of wealth: Applying the of unearned wealth. taxation. Finally, we notice the tendency in taxation away from individual A recent to social considerations. This is responsible for the idea of progression tendency in or graduation in our income taxes; it is responsible for the differentiation or distinction between earned and unearned incomes, as we find it abroad and shall soon find it here. It is responsible for the exemptions granted for general social reasons. By this we do not refer so much to the exemptions in the income tax as, for instance, to the exemption of mortgages from taxation in our property tax, or the exemption of money and credits.. Professor Seligman on the relation of the single tax to taxation Again, to this cause we must refer the modern movement for a higher tax on land, especially in local finance. I am, indeed, not a single-taxer- far from it for the single-tax philosophy makes two fundamental mistakes. It neglects the distinction . . . between real or specific taxes and personal taxes. When the single-taxer says reform. that land alone should be taxed, he is thinking only of things. But . . . this distinction does not apply at all to the entire class of taxes on persons. The income of an individual may be derived not from things or property but from relations, from salaries, from good will, from copyrights, from all sorts of intangible and invisible circumstances. The distinction between land and other things does not affect in the least the obligation of the person to contribute to the support of government for income derived not from things. In the second place, 1 From Edwin R. A. Seligman, "Presidential Address," delivered before the International Tax Association at Denver, Colo., September, 1914. Higher taxes on land may be socially desirable. the single-taxers either revert to the long outworn idea of benefits, or inordinately exaggerate the element of privilege in the conception of faculty. They erect into a whole what is only a part. While, therefore, I must consider the single-tax philosophy as essentially incomplete, it is none the less true that a higher taxation of land or, rather, if you will — in order to differentiate my idea from that of exempting improvements in the local real estate tax, in which I do not believe it is none the less true that an additional tax on land may be entirely legitimate from the social, rather than from the individual, point of view. And, finally, as I have often pointed out, certain indirect taxes which cannot be upheld at all from the point of view either of benefits or of faculty in taxation become perfectly explicable when we regard them from the social, rather than the individual, point of view, i.e. from the point of view of their consequences on the body economic rather than from that of the relation of one individual to another.. Justice would not necessarily eliminate poverty. Vocational guidance. 1 99. The promise of vocational guidance 1 Applying the principle of justice would reform our industrial system to the extent that it would eliminate or greatly reduce the amount of unearned wealth in existence. But justice, i.e. giving individuals exactly what they earn, would not necessarily improve the condition of all of the poor, since some of these are not able really to earn enough to support themselves and their families properly. From the economic standpoint, a first step toward permanently helping the poor is to make it possible for them really to earn decent wages. Of the numerous measures which aim at the increase of wages without violating economic laws, none is mɔrë important than the movement for training unskilled and poorly paid individuals toward the less crowded and better paid positions. The following extract from a statement of principles adopted by the National Vocational Guidance Association in 1921 illustrates the scope and promise of the vocational guidance movement: 1 From the National Vocational Guidance Association, "Principles Adopted in Convention," Atlantic City, February 25 and 26, 1921. |