Taking From the Few for the Many

IT is easy for the public to destroy the value of private property; it is even easy for the public to take property away from the individual; but it seems extremely difficult for the public to take property, or its value, away from individuals, and at the same time increase the public’s possessions.

One difficulty seems to be that the mere taking away so upsets confidence, or the equilibrium of social organization, that either the value of the thing taken disappears or some new burden or privation arises which quite offsets the value of the takings. It seems, in other words, to change the conditions that produced the value of the property taken, and also the conditions that produce new value for the public.

In very bald confiscation it is seen that often very little value rests in things by themselves. A thing has value only when there are joined with it the persons who are to enjoy and use it, and also the conditions and opportunities that make enjoyment and use possible.

The loot of the mobs in Russia had great value while the old régime was in power, but the value depended principally upon the old social conditions. When the social condition changed, and the looting was a symptom and a result of the change, many of the articles taken immediately lost their value. It was easy to take the objects, but nothing of value was added to the public possessions. Ball-dresses have value where there are balls, but are of little use otherwise. Statuary, pictures, fine furniture and hangings are valuable if there are fine houses, with owners who want such things; but their value disappears with the disappearance of the conditions that make enjoyment and use of such property possible.

Until the rise of Bolshevism and its sympathizers and apologists, it seemed as if only the most elemental minds could imagine that anything was to be gained by the public through such raw confiscation as has happened in Russia; but attempts have been made even in this country to destroy value or take away property by more indirect methods. Often it has been thought that something could be gained for the many by taking away from the few; but the public benefit, seems always to shrink far below the value that is taken from the individual, and usually both lose through the effort.

For a long time, for instance, the public was deluded into thinking that anything that could be taken away from the railroads, street-railroads, lighting companies, and other public-service corporations was pure gain for the public. They succeeded, it is true, in taking enormous value away from the utilities, but the value was not transferred to the public; it was only destroyed. The value that attached to these utilities existed under conditions that induced owners to put new capital into them, extend the use, and maintain the greatest service. When the public attempted to take value away from the owners by loading the properties with burdens and by insisting upon prices that were less than worth and cost, the public did not add to their own profit, but began to lose conveniences they wished to have, and, in some cases, even ran the risk of losing service, or did lose it altogether, to their own great hardship and cost.

It is curious that property of this kind has been conspicuously selected for attack. It represents a large portion of the country’s permanent investment, and the investment has been made to give the public generally the advantages of the great useful agencies that have been the outcome of the last century’s scientific discoveries. It is not property carefully sequestered behind a barbed fence, holding to itself technical knowledge devoted to creating benefits and luxury for a favored class. It is for the very purpose of adding to the national life the most widespread use of advantageous service. Of all forms of private property no other approaches so nearly to the ideal of socialized property. It is devoted to the service of the whole public, regulated by bodies chosen by the public and plainly put at their mercy. It is not like land, which the individual owner may build upon or not, may use or not, as he pleases; it is not like buildings, which are too similar in kind to the property of the majority to meddle with; it is not like manufactories, which may be operated wholly, or in part, or not at all, which may be torn down or built up or changed, which may produce goods to be sold at the price that seems best for the good of the property; it is not like mines or timber tracts, whose owner disposes of them or keeps them, like any personal property; it is not like the thousand and one objects of portable property, still the most sacred kind and the best protected because most people have some of it.

We hear very much of the ‘common good,’and of the Utopian condition when all property will be for the service of all; when the old rights of ownership will be less inviolable; when control of all property will rest with the common people; and yet the first movement that leads away from purely individualistic control and use is met, not with encouragement, but with suspicion and attack. It seems a pity that so much experience and loss is necessary before the public learns the difficulties in the way of taking value to themselves. The heartening fact is that they do learn it.

With the inauguration of the income tax, with its surtaxes, it seemed as if at last a way had been discovered by which something of value could be taken from the individual by the public, wholly to the relief and profit of the public. It seemed such ‘easy money’ for all but the few, that there sprang up great support for a philosophy of taxation which holds not that those who dance shall pay, nor yet that all shall pay in proportion to what they have, but that those who have the most shall pay the fiddler.

As in other cases of confiscation, it has been easy for the many to take from the few, but difficult to do it to the advantage of the many. Too bald a taking creates conditions that are more burdensome than they were before. It looked like a profitable scheme to the public, this ‘let the rich do it’; but there is usually some reason for the existence of all things, and even the possessors of wealth have their function in the life of the people. The possessor, in order to remain a possessor, must perform the rare and difficult feat of refraining from ‘blowing in’ his possessions. The self-control that makes this possible has been useful to society, and it has been worth while to keep it alive by a reward in the form of income return. Society is likely to find that it cannot play hot and cold; that it cannot bestow this reward with one hand and take it away with the other, and still retain the service.

The man with an income of two thousand dollars a year thinks ‘refraining ’ is easy for all those having over two thousand dollars a year. Some economists think it is easy for those having over, say, five thousand dollars a year. They even invent the term ‘costless saving,’ to apply to the excess income that they think it is easy to refrain from spending. Why it should be easy for the individual in dealing with his own money, when it has proved so difficult for all those in positions of trust in institutions and in government, is not clear. The national government, for instance, is now taking a very large proportion of the large incomes from individuals, so that this generation may promptly pay the war cost; but with the most constant efforts by all those seeking to hold down expenditures, there is great difficulty in preventing government undertakings that would require even greater taxes.

It has seemed wholly good to the public to take large proportions of the large incomes, and there has been strenuous objection to anything that looked like taxing the dancers in proportion to their dancing. Experience, however, is gradually bringing to light the disadvantages to the public, even in this case, of taking from the few for the many. Great amounts that the government takes from individuals would otherwise be devoted to productive industry, would go into houses, would be lent to railroads and other public utilities, would serve generally to make capital less difficult to obtain, and would have substantial effect in lowering the capital charges that the consumer has to pay in rent and in the prices of the goods he consumes. All capital charges that enter into costs are gradually being adjusted to prevailing rates. Nothing can prevent it, and there is something like two hundred and fifty billions of wealth on which capital charges must be paid. As time goes on, there will enter into rents, and into the prices of goods that the public buys, a somewhat larger return on two hundred and fifty billions than there formerly was. Whether the return will be larger by one quarter, one half, or one per cent, is difficult to tell. The increased capital charges that consumers will pay may not be six hundred and twenty-five million dollars a year, or two billion and a half, or any amount between; but comparatively small increases in supply have often a curiously exaggerated effect on prices; and it would require a very slight effect on the rate of capital return to raise costs to the general public by more than all that is taken by the government through the surtaxes.

The result of our system of surtaxes seems to be but another illustration of the difficulty of bettering the public by taking from the few. Justice, after all, is not so much an ideal that shines aloft, unaffected by universal law, as it is a practical reality. It always seems finally to be decided that the ‘just’ procedure is not what someone has imagined to be immutable, but what experience proves must be, because of natural laws.