Our fathers rightly thought of a free society as being made up of men economically free. One can only be fully free if he owns the means by which one lives. These owners who made up the bulk of the old society, before Industrial Capitalism and Big Business arrived, were what we call today “small owners.” Suppose that out of ten families in the community seven were farmers tilling their own land. There would be difference in the amount of land each family had and difference in its fertility, in the value of their instruments and livestock and houses. The average would be less than the wealth of the most conspicuous among them. That is why we call an average ownership of this kind “small ownership”; not that it is too small to provide a decent livelihood but that it is small compared with the most conspicuous larger ownerships. Now this small owner, a typical citizen of a fee contented state, is rapidly disappearing under our evil modern conditions and looks like being wiped out altogether. He is being changed from a free man into a man only half free: a proletarian wage-worker. That is the central social misfortune of our time. The small owner is on the way to ruin.
This has come about through the isolation of the small owner; he stands unprotected against forces hostile to his existence. Whether he be the small free owning farmer, or the small free craftsman carpenter, smith or what not, owning his own home and shop and tools, his numbers are rapidly getting less and we are making for his extinction.
Remark, to begin with, that a man is not a free owner if he is encumbered with debt. The man to whom he owes the debt has, to that extent, taken over part of his ownership. If that debt bears interest, as all modern debt does, he is not only the less of an owner by the amount of the debt, but always may be and often is eaten up by the accumulation of these payments.
But even the unencumbered small owner is today the prey of hostile forces which are destroying him; he has to sell the produce of his labor in a market of which he knows hardly anything compared with what is known by the large operator; he has therefore, on occasion, to sell suddenly at a ruinous loss. He has only a few kinds of things to sell and often only one kind of thing to sell, so he cannot “spread over” his gains and losses. For the transport of his produce to the consumer he is dependent upon great organizations over which he has no control and with whom whatever contract he makes is one heavily weighted against him. He has only small reserves, if any, to fall back upon. He is more and more dependent for his power to carry on at all upon credit extended to him by money lenders, that is, by the banking system. But even where credit would save him he has far less opportunity to get it than has the big man and he gets it on far less favorable terms. In every form of competition the small owner carries a heavy handicap, as things are today.
Another force hostile to his survival is that the cost of novel and more efficient instruments of production sometimes the actual instrument of production, the machine to be used is a much larger unit than the old-fashioned one; it costs more than a small owner can afford. This is notably the case in all metal craft and wood-work, as it is also in building. Very often, careful individual work is in competition with mass-production which can only be done cheaply if it is done on a very large-scale, altogether beyond the powers of the small man; boot and shoe making are a conspicuous example of this. Sometimes the new and more efficient instrument is neither larger nor more expensive than the old-fashioned instrument, but even then the small man has to stand the burden of scrapping the old instrument and buying the new one, and that burden is far heavier for him than for the big man.
In all these ways is the small owner being attacked and the attack is far stronger than the defense. Vast manufactories for the production of metal-ware have ousted the smith. Mass production of furniture has ousted the independent free cabinet-maker. Combinations of steam craft, whole fleets of them, are ousting the individual free fisherman, the owner of his own boat. In England this last tragedy has been worked out within my own lifetime and before my own eyes. Small transport has been killed by the larger steamer, and of course, on land, still more effectively by the universal development of railways.
It was hoped that perhaps electricity, and later the motor car and the internal combustion engine, would restore the small man; and they could have done so, but great combinations of capital were strong for him.
He is certainly in peril of death. Is he then doomed, as nearly all men take it now for granted that he is?
I do not think so. I think he can be saved and restored, or at any rate that his economic freedom can be.
But of that later. We must next talk of the fellow to the small owner, the small distributor, the small storekeeper who is in an equally bad way; and is thought, by most people around us, to be doomed even more certainly than his brother, the small owner.
There are those who think they can save the small owner; but hardly anyone thinks we can save the small store keeper.
Let us see.