The Story of Utopias

us follow the visitor to Freeland as he makes his first explorations in Edendale, its principal city, and learns how affairs are conducted. If this is an individualist utopia it is not by any means free from the services of a bureaucracy; for first of all the visitor turns to the Central Statistical Office, where records are kept of the occupations that are open and the amount of pay offered by each. “Every inhabitant of Freeland,” our visitor finds, “has the right to become a member of any business he pleases. One has only to present oneself for this purpose; for the managers only decide upon the manner in which the members are to be employed, and not on the membership itself.” In practice, the number of individuals with private businesses and partnerships seems to be limited, for big companies not merely operate factories but provide restaurant service, build houses, and even supply domestic service to private individuals and households.

(The visitor has his boots blacked by one of these associated menials, and his hostess explains how the services of a caterer and a valet may be obtained by calling up a central distributing agency.)

The sole condition upon which a person or company is allowed to engage in business is that the public be kept informed of all business transactions. “The companies are therefore obliged to conduct their bookkeeping openly. The prices at which goods are bought and sold, the net profits and the number of workmen, must be communicated at intervals which are fixed according to the judgment of the central office.”

Observe that Hertzka reckons with the fact that in an industrial society, access to machinery is just as important as access to the land, since, in a manner of speaking, all our modern activities, even agriculture, are parasitic upon machinery. Hence the collection and distribution of capital is managed in the interests of the whole community; the first being taken care of by a yearly tax, which obviates the need⁠—and perhaps the possibility⁠—of individual savings, whilst the capital is distributed without interest to the companies that make application for it. The community pays for the plant through the added charge which is laid on consumers; the credit advanced is cancelled out through production. This arrangement does away with the standing charge for capital which is maintained under present day production for profit even after the original capital has been paid off in dividends; and above all, it does away with the practice of capitalizing increased returns in such a way as to enlarge the amount of the standing charge for capital. The social use of capital to advance production, rather than to provide fixed incomes for a rentier class, is recognized in Freeland.

Since our visitor is an engineer, he turns to a plant devoted to the manufacture of railway equipment; and notes that it is run under the following statutes.

1. Everyone is free to join the first Edendale Engine and Railway Manufacturing Co., even if he also belongs to other companies. Everyone is also permitted to leave the company whenever he chooses. The board of management decides in what branch of the works the members shall be employed.

2. Every member is entitled to an amount of the net proceeds of the company corresponding to the quantity of work which is done.

3. The amount of work is calculated according to the number of hours, to which two percent is added to that of the older members, and ten percent to foremen, and ten percent for night work.

4. The engineers are paid as if working from ten to fifteen hours, according to ability. The value of the manager is estimated in the general assembly.

5. Out of the company’s profits a deduction is first made towards repayment of capital, and after this the tax to the state is deducted. The remainder is divided among members.

6. If the company is dissolved or liquidated, the members are responsible in proportion to the amount of profit which they get from revenues of the company, and this responsibility for the amount which is still pledged is proportionately laid upon new members. When a member leaves the company, his responsibility for debt which has already been contracted is not extinguished. In case of dissolution, liquidation, or sale, this responsibility corresponds to the claim of the responsible member to the means of the company which are in hand, or to his share in what is sold.

7. The principal judicial body of the company is the general assembly in which every member has the same right to speak and exercise the same active and passive right of choice. The general assembly makes its determination by simply counting the majority of votes. A majority of three quarters is necessary for changing the statutes and for a dissolution or liquidation of the company.

8. The general assembly practices its right either directly or by means of chosen officials, who are answerable to it for their actions.

9. The business of the society is managed by a directorate of three members who hold office at the will of the general assembly. The subordinate functionaries are chosen by the managers.

10. The general assembly selects every year a committee of inspection which consists of five members. This body has to control and make a report upon the books and the manner in which the company is conducted.

Now, as a member of the company, our visitor would have the amount he has earned credited to him at a Central Bank, which keeps his accounts and sends him an abstract every week; and through this bank he would make the larger part of his disbursements. The products of the company, moreover, are valued, stored, and sold by a Central Warehouse, in much the same fashion that under the present regime a manufacturer’s whole output may be disposed of through a big department store or a mail order house.

Let us now sum this up. The collection and disposition of capital belongs to the community; and the total capital available for further production each year is based directly upon the