In October, 1959, Abraham Lincoln made his way to Milwaukee, on horse back, and gave a remarkable speech to the Wisconsin Agricultural Society. He went there to respond to charges that northern wage earners were no better off than southern slaves. This was a time when American industrialization was just beginning, when the entire economy was based on small farms. People with land had pretty much what they needed to take care of themselves, but this was beginning to change. Available land was running out.
Something about the southern charges bothered Lincoln. He may have sensed, as perhaps only he could, that something terrible like the Civil War was coming, and the southern charges would need full rebuttal. He likely had read the Communist Manifesto, with its thesis of wage earner slavery, it was published in English in 1850. An industrial worker society was already underway in England. He had been a farmer himself. Was he answering Karl Marx?
He spoke with great prescience. He foresaw the application of scientific knowledge to the problems of farming, and the coming of something like the tractor. He sensed how this would liberate farming from its drudgery and low return and greatly boost its production. But would this be progress? Would farm laborers be victims of their own success? Would they be more and more trapped by the low prices induced by their increased production?
Lincoln rejected what he called the ‘mud sill theory’:
“By some it is assumed that labor is available only in connection with capital – that nobody labors, unless somebody else, owning capital, somehow, by the use of that capital, induces him to do it. Having assumed this, they proceed to consider whether it is best that capital shall hire laborers, and thus induce them to work by their own consent, or buy them, and drive them to it without their consent. Having proceeded so far, they naturally conclude that all laborers are necessarily either hired laborers or slaves. They further assume that whoever is once a hired laborer, is fatally fixed in that condition for life: and thence, again, that his condition is as bad as, or worse than, that of a slave. This is the mud-sill theory”.
Labor creates capital, he reasoned, and in America laborers can own their capital, they can be both laborers and owners. In this way, they can avoid serfdom. In addition to the return from their labor, they can also receive return from their capital, thus avoiding the low wage effects of increased productivity, and maintaining independence from the power of capital.
“Property is the fruit of labor – property is desirable – it is a positive good in the world. That some should be rich, shows that others may become rich, and hence is just encouragement to industry and enterprise. Let not him who is houseless pull down the house of another; but let him labor diligently and build one for himself, thus by example assuring that his own shall be safe from violence when built.” March 21, 1864 Reply to New York Workingman’s Association