This is the problem for which revolutionary theory has yet to find the right solution, if there is one. The difficulty is that the economic interests of the two classes are antagonistic. If you raise agricultural prices to increase the farmer’s income the wage earner has to pay more for food. If you raise wages to increase the wage earner’s income the farmer has to pay more for everything he buys. And if you raise farm prices and wages both it is again as it was before. Nevertheless, to win the adherence which is indispensable you have to promise to increase the income of the farmer without hurting the wage earner and to increase the wage earner’s income without hurting the farmer. The only solution so far has been one of acrobatics. The revolutionary party must somehow ride the see-saw.
In Russia it was the one most troublesome problem.
The peasants understood at first that there was to be a free distribution of land among them. When the Bolshevik regime put forth its decrees to abolish private property and nationalize the land the peasants went on taking the big estates, dividing the land and treating it as their own; and for a while the government had to let them alone. To have stopped them at once would have hurt the revolution. And when at length the government did come to deal with the peasants as if they were its tenants, whose part was to produce food not for profit but for the good of the whole, the revolution all but died of hunger.
The American farmer was a powerful individualist, with a long habit of aggressive political activity. His complaint was that his relative share of the national income had shrunk and was in all reason too little. This was from various causes, notably, (1) the world-wide depression of agriculture, (2) the low level of farm prices in a market where competition acted freely, and (3) the relative stability of industrial prices in a market that enjoyed tariff protection against world competition. Everything the farmer sold was too cheap; everything he bought was too dear. What he complained of really, though he did not always put it that way, was the economic advantage of the industrial wage earner.
The New Deal was going to redistribute the national income according to ideals of social and economic justice. That was the avowed intention. And once it had got control of money, banking, and credit it could in fact redistribute the national income almost as by a slide rule. The trouble was that if it gave the farmer a large share and left the wage earner’s share as it was it would lose the support of labor. And if it used its power to raise all prices in a horizontal manner, according to the thesis of reflation, the economic injustice complained of by the farmer would not be cured.
The solution was a resort to subsidies. If the prices the farmer received were not enough to give him that share of the national income which he enjoyed before the world-wide depression of agriculture, the difference would be made up to him in the form of cash subsidy payments out of the public treasury. The farmer on his part obliged himself to curtail production under the government’s direction; it would tell him what to plant and how much. The penalty for not conforming was to be cut off from the stream of beautiful checks issuing from the United States Treasury. The procedure was said to be democratic. It is true that a majority of farmers did vote for it when polled by the Federal county agents. The subsidies were irresistible.
More income for less work and no responsibility other than to plant and reap as the government said. Nevertheless, it led at once to compulsion, as in cotton, and it led everywhere to coercion of minorities.
The total subsidy payments to farmers ran very high, amounting in one year to more than eight hundred million dollars. And beside these direct subsidy payments, the government conferred upon the farmer the benefit of access to public credit at very low rates of interest with which to refund its mortgages.
Actually, the farmer’s income was increased. That was statistically apparent. Whether his relative share of the national income was increased, beyond what it would have been, is another matter. On the whole, probably not. For when the New Deal had done this for the farmer it had to do the equivalent or more for labor, and anything it did to increase labor’s share would tend to raise the cost of everything the farmer bought. There was the see-saw again.
What the New Deal did for labor was to pass a series of laws the purpose of which was to give organized labor the advantage in its bargaining with the employer. As these laws were construed and enforced they did principally three things. They delivered to organized labor a legal monopoly of the labor supply; they caused unionism to become in fact compulsory, and they made it possible for unions to practice intimidation, coercion, and violence with complete immunity, provided only it was all in the way of anything that might be called a labor dispute. The underlying idea was that with this power added to it, together with a minimum wage and hour act that made overtime a way of fattening the pay envelope, organized labor could very well by its own exertions increase its share
of the national income enough to equal or to overcome the farmer’s new advantage. And this organized labor proceeded forthwith to do.
But there was at the same time an indirect subsidy to organized labor much greater than the direct subsidy paid to the farmer. Federal expenditures for work relief, amounting in the average to more than two billions a year, must be regarded as a subsidy to organized labor. The effect was to keep eight or ten million men off the labor market, where their competition for jobs would have been bound to break the wage structure. Thus union labor’s monopoly of the labor supply was protected.
Both the subsidies to agriculture and those to labor came out of the United States Treasury, and since the money had to be borrowed by the government and added to the public debt, you would hardly say the solution was either perfect or permanent. But from the point of view of revolutionary technic that did not matter provided certain other and more important ends were gained. What would those other ends be? One would be the precedent of making the Federal government divider of the national income; another would be to make both the farmer and the union wage earner dependent upon the government—the farmer for his income and union labor for its power. Neither the farmer who takes income from the government nor the union wage earner who accepts from the government a grant of power is thereafter free.
PROBLEM FOUR: TO RECONCILE AND ATTACH TO THE REVOLUTION THE TWO GREAT CLASSES WHOSE ADHERENCE IS INDISPENSABLE, NAMELY, THE INDUSTRIAL WAGE EARNER AND THE FARMER, CALLED IN EUROPE WORKERS AND PEASANTS