must ask ourselves searchingly what we can offer. What they desire is freedom to move protected by some definite pledge which will maintain its relative integrity and be immediately honored in time of need. They ask for a pledge of value and we give them a very vague assurance of political discretion subject to impairment by taxation. They have, for a definite time, put forth extra-effort, thus enriching the fixed area of land. To guarantee a just return for this extra-effort, we must take the basic unimpairable factors of potential value into our reckoning, together with the basic cost of making this potential value effective, which we call taxation.
This is a direct corollary of the previous argument, since nothing that is subject to impairment is adequate inducement for that effort upon which democracy depends. We have very recently learned that our present tokens of value are capable of partial repudiation; that the year's surplus effort, which went into the purchase of a solemn community obligation, such as a Liberty bond, will only purchase six months’ similar effort,[1] and that even though this obligation will ultimately be redeemed at its “face value,” the same number of dollars returned may well be worth much less than they were to the lender originally. The vital significance of this debasement is that our so-called tokens of value are not tokens of value at all, since they are not based upon ultimate measurable factors. We have abandoned the support of autocratic power and failed to enlist the support of democratic order.
The Hindu and the Chinaman have learned that the effective value of an ounce of silver or gold in terms of goods or services may go up and down like a sky-rocket; and the gold miner, who was regarded as having his feet squarely set on economic bedrock, has found that his ounce of gold, which he “blocked out” at the cost of fifteen dollars’ worth of labor, land and time, will only yield him twelve dollars measured by
- ↑ See footnote, page 228.
