Senator Call. In your opinion, what are the economic reasons why business tends to become concentrated and why all industries have a tendency to aggregation in the hands of a few?
Henry George. I think that is the universal tendency of all progress. It is because larger and larger capitals are required and because labor becomes more and more divided.
For instance, when boots and shoes are made by hand the only capital required is a lap-ston e and a little kit of tools, and any man who has learned the trade and can get a piece of leather can sit down and make a pair of shoes. He can do it in his own house and can finish his product there and sell it. But when a machine is invented to be used in that business, the shoemaker requires capital enough to purchase that machine, and, as more and more machines are invented, more and more capital is needed, while the skill required becomes less and less. I believe you have it in testimony here that in the process of shoemaking now there are sixty-four different branches, thereby requiring that number of costly machines and differentiating the trade into that number of subdivisions...
Machinery, m my opinion, ought to be an advantage to labor. Its primary effect is simply to increase the product of labor, to add to the power of labor, and enable it to produce more. One would suppose, and in fact it was supposed at the beginning of the era of modern inventions, that the effect of the introduction of machiucry would be to very greatly improve the condition of the laboring classes and largely to raise wages. I think it quite certain that its effect has not been that; that, while very many articles have been greatly cheapened iu cost and in price, wherever there has been an increase in the wages of labor it can he traced to something else; generally to the efforts of the laborers themselves, by the formation of trades unions and organizations which have wrested from their employers a higher rate of wages, or to improvements in government, or improvements in intelligence, or improvement in morals. I think that whoever will thoroughly examine the facts will come to the conclusion that John Stuart Mill is right when he says that "all the labor-saving machinery that has hitherto be en invented has not lessened the toil of a single human being."
While, on the other hand, by permitting and requiring this great subdivision of labor and dispensing to a great extent with skill on the part of the laborer, it has reduced him to a far more dependent condition than that which he occupied before. That is illustrated by the case we were speaking of a while ago. The old-fashioned shoemaker, having learned his trade and purchased his kit of tools, was his own master. If he did not find work in one place he could find it in another place. He had the means of earning a livelihood wherever he could find people who wanted shoes. But now the shoemaker must find a great factory and an employer with a large amount of capital. Without sueh an employer he is utterly helpless: he cannot make a shoe; he can only make one tenth or one sixty-fourth part of a shoe, or whatever the proportion may be. It is the same way with all other trades into which machinery has largely entered. The effect of the introduction of machinery in any trade is to dispense with skill and to make the laborer more helpless. I think you all understand that effect of machinery.
Senator Call. Your idea is that the introduction of machinery in the trades tends to prevent a man from mastering the whole of his trade -- that he learns a part of the trade instead of the whole trade?
Henry George. Yes. That in itself might not be a disadvantage: but it is a disadvantage under present conditions; those conditions being that the laborers are driven by competition with each other to seek employment on any terms. They must find it; they cannot wait. Ultimately, I believe the whok trouble to come from the fact that the natural field of employment, the primary source of wealth, the land, has been monopolized and labor is shut off from it.
Wages in all occupations have a certain relation to each other: fixed by various circumstances. such as the desirability of the employment; the continuity of the work: the ease or difficulty of learning it; the scarcity of the peculiar powers reqirired, and so on; but in a large sense they must all depend upon the wages in the widest occupation. That occupation in this country is agriculture, and everywhere throughout the world the largest occupations are those which concern themselves directly and primarily with the soil. Where there is free access to the soil, wages in any employment cannot sink lower than that which, upon an average, a man can make by applying himself to the soil -- to those natural opportunities of labor which it affords. When the soil is monopolized and free access to it ceases, then wages may be driven to the lowest point on which the laborer can live.
The fact that in new countries wages, generally speaking, are higher than they are in old countries, is simply because in those new countries. as we call them. the soil has not yet passed fully into private hands. As access to the land is closed, the competition between laborers for employment from a master becomes more intense, and wages arc steadily forced down to the lowest amount on which the laborer can live.
In a state of freedom the introduction of machinery could but add to wages. It would increase the productive power of labor, and the competition with each other of those having such machinery and desiring to employ labor would suffice to give the laborer his full share of the improvemeut. Where natural opportunities are closed up, however, the advantages resulting from the use of machinery, minus that part retained by monopolies arising from its use, must ultimately go to the owners of land, either in higher rents or higher prices. You can see that very readily if you consider a community in which one person or a small number of persons had full possession of the land. In such a case no one could work upon the land or live upon it save upon their terms. Those who had no land, having no means of employment. would have to compete witth each other for the privilege of working for those who had the land. and wages would, of course, steadily sink to the point at which a man could barely live.
Now, if you imagine a labor-saving invention introduced there, no matter how much it might add to the productiveness of labor, the landlord could necessarily claim the whole advantage, just as he could claim any advantage arising from increared fertility of the soil. lf invention were carried to the farthest imaginable point, so that labor could be entirely dispensed with in the production of wealth, the raw material must still be obtained from the land, and therefore the landowners would have all the wealth that could be produced, and would be absolutely independent of labor. There would be no use for anybody else, save as their servants or as pensioners on their bounty. This point is of course unattainable, but towards it labor-saving inventions tend, and their general effect is to raise the price of land. This is illustrated in the effect of railroads. Railroads very much reduce the cost of transportation, but that does not add anywhere to the wages of labor, nor yet, generally, to the profits of capital. It simply adds to the value of land. Where a railroad comes wages do not increase; interest does not rise; but land goes up in value.
All human production in the last analysis is the union of labor with land; the combination, trausportation. or modification of materials furnished by nature so as to adapt them for the use of man. Therefore where land is monopolized labor becomes helpless. Where one man owns the land he must necessarily be the master of all the other men that live upon it. Where one class own the land they must necessarily be the ruling class. Those who have not land must work for those who have it. In a ruder state of society, such as that which existed in Poland and in many other countries of the world, the system of serfdom resulted simply from the ownership of the land. The laborer was a serf because be must get his living out of the land which another man owned. In a state of society like ours, where the land is very largely divided up, you do not see this so clearly; but you can see it, on one side, in the large sums which the owners of land are enabled to obtain without doing anything themselves, and on the other, in the conditions which exist among the lowest class of laborers.