Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-03-03

society. Men do not set their own
shares In the social income nor the
shares Of other men. The value OF
their contribution to production sets
the returns of all groups. The only
wage levels in this country deter
mined by men are those set by law or
by monopoly trade unions, and in both
cases they are VIGOROUSLY wrong lev
els, from the unearned salaries of po-
ltical job holders to the building
trades wages that have retarded re-
covery.
There has been no more sinister de-
Velopment In our time than the po-
litically fostered notion that low wages
and low earning power are due to ex-
pl0itation. Employers have no power
to exploit workers and most Of them
would have too much brains to want
to do 1t If they could. Millions of men
are the victims of adversely and even
more millions are the victims of eco
nomic conditions which give them less
than their personal merits might justi-
fly If the conditions were otherwise.
But all groups get roughly what their
productive power earns.
There are grave defects in the sys-
tenn. The owners Of land and capital
receive in general just about what
their property or their services are
worth to society. But this does not
work out fairly in many respects. Land
Is essential to life and extremely lin
tied. 1t automatically increases rapid
ly In value with growth Of population.
The payment for it Is not for services
but merely for ownership. We reach
a stage where very large share Of
the total income Is going to people who
produce nothing They merely hang
on to land and receive an unearned
income from the toll of those who
work.
Profits Shared.
Profits and interest go to those who
provide capital, money, credit and
management. In a rich country like
ours the share going to these groups
is large, though not so large as in
poorer countries. 1t is diffused widely,
going not only to the rich but to the
middle classes and even to the poor.
The actual rate of return to capital is
low. and much of it yields no return.
But the extraordinary expansions Of
finance and industry in this country
under laisSez-faire policy has per-
mitted very serious abuses. Men have
risen to positions Of power in banking.
investment. industry and trade which
have enabled them, with their legal
and political henchmen. to obtain
tremendous returns from manipula-
ton, insiders control, monopoly and
general financial piracy
So much for exploitation. which
does not exist In any serious degree,
and for unearned wealth. which does
exist but is a relatively minor problem.
There remain four very grave evils in
our present system. One Is purely
mechanical. The whole system breaks
distress. A second is individual. In
our competitive system We all live in
the shadow OF insecurity. Failure.
bankruptcy, unemployment. loss of
earning power are grim specters in
nearly all lives. The third is biological.
A very large part of our population
are not able through their own sad
lack of ability or character to earn
decent wage. The fourth is incidental.
There are vast waste, lost motion,
unnecessary failure and reduplication
in the present system.
These four defects, admittedly seri-
Gus, are not the organic troubles Of
our economic system. Believe it or
not, every one of them can be re-
moved, or reduced to small dimen-
sions, without altering the present
system. In fact, in blind and CROP
ing fashion we are on the way to
eliminating them now. But that Is
another story.
Deeper than these four economic
evils there Is a force inside the system
gnawing at its vitals. Free COMPETE
ton is the essence Of our economic
system. It provides the incentive that
keeps the social engine moving. Even
more. 1t automatically regulates all
economic activities with a precision
that is marvellous. Machine prOduc-
ton, which maintains our civilization.
tends to end this competition which
is the motor force and the regulator
of economic activity In machine
ulduHtAy
efficient and business enterprise is
concentrated into ever larger units.
Competition among the industrial
giants is not only wasteful; in any
permanent form 1t Is impossible. Rail-
ways and power plants and telephones
are natural monopolies. But in the
final analysis the enterprises that
make steel and mine coal and produce
-four and shoes tend to become mo-
nopolies, as well as the chain stores
and the milk distributors. This sounds
like Karl Marx or Stuart Chase, but
both of these are right some of the
time.
End of Competition.
Monopoly is the end Of competition
The main incentive to progress is lost.
Even worse, the regulator of produc-
ton and consumption is gone. Only
two courses are open. One is intimate
regulation by government. The other
Is government ownership. Both are