Saving Communities

Bringing prosperity through freedom, equality, local autonomy and respect for the commons.

The Ethics of Democracy

by Louis F. Post

Part 3, Business Life
Chapter 4, Great Fortunes

NO very great fortune is just. This remark does not refer to tainted fortunes alone. It refers also to those that are morally clean, so far as any act of the possessor is concerned. The allusion is to the character of the fortune, not to the character of its possessor. Specifically it is an allusion to the fact, and fact it is, that no great fortune can be accumulated or perpetuated by any man without his thereby contributing, however unintentionally or unconsciously, to the continuous impoverishment of other men. For great fortunes consist chiefly of the market value of legal powers of extortion.

These fortunes certainly do not consist of money. When men speak of great accumulations of money, they speak in metaphor. Neither do such fortunes consist of existing wealth. By wealth is literally meant things drawn forth from natural sources by labor - that is to say, things of which the substance is natural, the shape or location or both being artificial. Of that class are clothing, buildings, food, ornaments, and all the great variety of objects which human art produces for the satisfaction of human desires. Those things, actually existent, go in only comparatively slight degree to make up great fortunes. When, therefore, men speak of great accumulations of wealth, they also speak in metaphor. What they mean is accumulations, not of existent wealth produced in the past, but of legal power to command possession of wealth as others bring it into existence in the present and future.

Deprive the richest man of all his fortune except his actual tangible wealth, his existing labor products, and by comparison he would have but little left. Nor would he have that little long, if he were wholly divested of his powers of exacting labor from others without expending his own labor in exchange. His accumulated labor products would soon go back to external nature whence they came. Great fortunes consist then for the most part, not of the completed products of past labor, nor of money, but of legal powers to exact tribute from present and future labor.

These powers may, indeed, be entirely honest and just. This is shown in the preceding chapter, but a further word here will be pardoned, even if it seem to be a repetition. If, for example, in exchange for work done by him to-day, a man receives evidence of authority to exact an equivalent in work at any time in the future, his exaction of that equivalent at his own pleasure will be honest and just. Such is the nature of a transaction in which money is paid for work. The money is evidence of just authority to exact future work. It would be the same in principle if for present work a promissory note, or bond, or other personal obligation to do work in the future were given. In all such instances the transaction is at bottom an exchange of present work for future work. If great fortunes could be made up of powers over future labor like these, then great fortunes could be honest and just.

In fact, however, great fortunes consist chiefly of powers of a very different kind over future labor. The London Spectator once furnished an instance when it condemned the process, "well known in America, of 'freezing out.'" It gingerly hinted at still another such power, the primary one of all, when it insisted that it is possible for some people to have more of anything without others having less - "except land." By means of such powers over future labor the wealth-producing persons in human society are forced to part with portions of their wealth, as they produce it, to non-producing persons. They are compelled to give up not merely of what they have produced in the past, but also of what they produce now; and they are forced to look forward to a continuing payment of tribute upon all that they shall produce.

Analyzed to the last, these powers are nothing but powers of taxation for private purposes. Whatever any one gets by foresight, ingenuity, skill, industry, patience, determination, or any other quality so applied as not to add to the aggregate wealth or to increase in some way the aggregate comfort, he gets at the expense of others. It is a private tax. What he gains they must lose. And although he be individually honest, the laws, customs or institutions that enable him to thrive in leisure upon their earnings, are predatory and therefore in morals criminal.

Granted that anybody can get rich if he tries. Granted that nothing is needed but foresight, ingenuity, skill, industry, patience and determination. Granted that everybody possesses or can develop those qualities to the necessary extent. Granted that opportunities are abundant for turning them to account. Granted, in a word, that what he asserts who insists that getting rich is only a matter of the will, is true. Grant it all, and still a question remains which impeaches the righteousness of every great fortune and throws a doubt upon the deservedness of poverty even in extreme cases like those of the tramp. It is the crucial question by which our religion, our morals, our civilization, are to be tried. It is the test question of our social system, and these are its terms: Can anybody get rich, under existing industrial conditions, without thereby helping to make others poor?

There is but one answer and that is, No!

The great fortune that rests chiefly upon powers of taxation for private purposes, cannot be honest or just or fair in any other than a bare legal or conventional sense. The annual unearned income of wealth which it brings to its possessor must necessarily involve a correspondingly unrequited outgo to wealth producers. Since this Croesus does not earn the wealth he annually exacts from current production, but takes it by virtue of legal powers that are in their nature powers of private taxation, his gain can be balanced off only against others' loss. It is absolutely true, therefore, that as he has so much, others must have less. It is even worse. Not only do the others have less in comparison with what he has, but they have less in comparison with what they actually earn.

This is not to say that the possessors of fortunes so founded are themselves dishonest or unjust. If they conform to the conventional moralities of money getting, they cannot be charged with personal dishonesty. The dishonesty in such cases is social, not individual. Against them the indictment that lies is not that they are despoiling their brethren, but that they do not use their influence to put an end to the industrial disorder which does despoil their brethren.

It may be true enough that great millionaires are strictly honest in all their personal transactions. At any rate that may be cheerfully conceded. But upon examination it will be found that their fortunes consist of some great taxing power. Such a fortune has no moral basis, even if acquired by what may be called fair means and what by custom really is fair means. Though the beneficiaries of these unearned incomes be exonerated from moral responsibility for taking them, since there is no individual way of determining the true ownership, they are not excusable for buttressing the system of extortion which creates unearned incomes, nor even for being indifferent to efforts to reform it. Neither can they shelter themselves from moral responsibility by managing their unearned incomes for benevolent purposes, while ignoring the momentous moral fact that the incomes are unearned.

Logically false and morally unsound - certainly as a social theory - is the conclusion that conventionally fair accumulations of fortunes do not involve direct moral responsibility, but that the uses to which such accumulations are put do. Let society recognize the moral necessity of abolishing powers of private taxation, to the end that all fortunes may consist of the possessor's earnings in place of his powers of levying tribute upon current industry, and we need not concern ourselves with the uses to which men put their fortunes, provided they are not criminal uses. This is their business and not ours. In social as in individual ethics, the question of just acquisition precedes all questions of expenditure, benevolent or otherwise.