It appears, therefore, that his conditions of life should throw the American farmer in with the common man who has substantially nothing to lose, beyond what the vested interests of business can always take over at their own discretion and in their own good time. In point of material fact he has ceased to be a self-directing agent; and self-help has for him come substantially to be a make-believe; although, of course, in point of legal formality he still continues to enjoy all the ancient rights and immunities of secure ownership and self-help. Yet it is no less patent a fact of current history that the American farmer continues, on the whole, to stand fast by those principles of self-help and free bargaining which enable the vested interests to play fast and loose with him and all his works. Such is the force of habit and tradition.
The reason, or at least the preconception, by force of which the American farmers have been led, in effect, to side with the vested interests rather than with the common man, comes of the fact that the farmers are not only farmers but also owners of speculative real estate. And it is as speculators in land-values that they find themselves on the side of unearned income. As land-owners they aim and confidently hope to get something for nothing in the unearned increase of land-values. But all the while they overlook the fact that the future increase of land-values, on which they pin their hopes, is already discounted in the present price of the land,- except for exceptional and fortuitous cases. As is known to all persons who are at all informed on this topic, farmland holdings in the typical American farming regions are over-capitalised, in the sense that the current market value of these farm-lands is considerably greater than the capitalised value of the income to be derived from their current use as farmlands. This excess value of the farmlands is a speculative value due to discounting the future increased value which these lands are expected to gain with the further growth of population and with increasing facilities for marketing the farm products of the locality. It is therefore as a land speculator holding his land for a rise, not as a husbandman cultivating the soil for a livelihood, that the prairie farmer, e.g., comes in for an excess value and an over-capitalisation of his holdings.
All of which has much in common with the intangible assets of the vested interests, and all of which persuades the prairie farmer that he is of a class apart from the common man who has nothing to lose.
But he can come in for this unearned gain only by the eventual sale of his holdings, not in their cur rent use as a means of production in farming. As a business man doing a speculative business in farmlands the American farmer, in a small way, runs true to form and so is entitled to a modest place among that class of substantial citizens who, get something for nothing by cornering the supply and "sitting tight." And all the while the massive interests that move obscurely in the background of the market are increasingly in a position, in their own good time, to disallow the farmer just so much of this still-born gain as they may dispassionately consider to be convenient for their own ends. And so the farmer-speculator of the prairie continues to stand fast by the principles of equity which entitle these vested interests to play fast and loose with him and all his works.
The facts of the case stand somewhat different as regards the American farmer's gains from his work as a husbandman, or from the use which he makes of his land and stock in farming. His returns from his work are notably scant. So much so that it is still an open question whether, taken one with another, the American farmer's assets in land and other equipment enable him, one year with another, to earn more than what would count as ordinary wages for the labor which these assets enable him to put into his product. But it is beyond question that the common run of those American farmers who "work their own land" get at the best a very modest return for the use of their land and stock, --
so scant, indeed, that if usage admitted such an expression, it would be fair to say that the farmer, considered as a going concern, should be credited with an appreciable item of "negative intangible assets," such as habitually to reduce the net average return on his total active assets appreciably below the ordinary rate of discount. His case, in other words, is the reverse of the typical business concern of the larger sort, which comes in for a net excess over ordinary rates of discount on its tangible assets, and which is thereby enabled to write into its accounts a certain amount of intangible assets, and so come into line as a vested interest. The farmer, too, is caught in the net of the new order; but his occupation does not belong to that new order of business enterprise in which earning-capacity habitually outruns the capitalised value of the underlying physical property.
Evidently the cleavage due to be brought on by the new order in business and industry, between the vested interests and the common man, has not vet fallen into clear lines, at least not in America. The common man does not know himself as such, at least not yet, and the sections of the population which go to make up the common lot as contrasted with the vested interests have not yet learned to make common cause. The American tradition stands in the way. This tradition says that the people of the republic are made up of ungraded masterless men who enjoy all the rights and immunities of self-direction, self-help, free bargaining, and equal opportunity, quite after the fashion that was sketched into the great constituent documents of the eighteenth century.
