Woodrow Wilson Says “General Prosperity Lies Always in the Direction of High Wages and Low Prices”

Likely a unique document, as we’ve never seen another anything like this

The turn of the 20th century was a time in which there was much interest in political economy, and those working in that field were often polled to determine whether a consensus on questions of interest could be had. For example, in 1908 the American Economic Association Quarterly, based in Princeton, N.J., polled political economists, trying to elicit from them a consensus upon certain definitions and statements of principle, touching land, value, and land taxation. The result was published in an article entitled “Agreements in Political Economy”. A similar poll, likely from the same source in Princeton, was taken in 1901, with the political economists receiving a set of questions on which they might agree on a form headed “Possible Agreements”. One of the political economists included in the survey was Woodrow Wilson.

In 1901 Woodrow Wilson was a professor at Princeton, holding that position from 1890-1902, after which he became President of Princeton University. He had written a number of books on politics and government, so was an obvious choice for inclusion in the poll. Among the positions taken by Wilson were that wages are primarily the product of labor; labor produces its own wages; the normal price of a labor product is fixed by cost of production of that portion of the supply whose total necessary cost is greatest; and general prosperity lies always in the direction of high wages and low prices.

Document signed, headed “Possible Agreements”, the questions relating to political economy drafted by the publisher, the responses written out by Wilson, Princeton, December 1901.

1. “Wages,” while apparently drawn from capital and dependent upon capital, are primarily the product of labor; hence it is practically true that labor produces its own wages. Wilson says “Yes.”

2. “Ground rent” is what land is worth for use. Wilson writes, “Yes, though generally in practice less than the use is worth.”

3. Public franchises” are exclusive free privileges granted to one or several persons incorporated, and from which the mass of citizens are excluded. These franchises usually pertain to land, including, as they do, (to use the language of the New York Legislative Ford Bill,) all & rights, authority or permission to construct, maintain or operate, in, under, above, upon or through, any streets, highways, or public places, any mains, pipes, tanks, conduits, or wires, with their appurtenances, Wilson responds, “Yes, though I do not understand the use of the word ‘free’ by way of depiction in the first line.”

4. A tax upon ground rent is a direct tax and cannot be shifted. Wilson says, “Yes.”

5. The selling value of land is, under present conditions in most of the American States, reduced by the capitalized tax that is laid upon it. Willson replies, “Yes, so far as I understand the statement.”

6. Hence the selling value of land is, to the same extent, an untaxed value, so far as any purchaser, subsequent to the imposition of the tax, is concerned. Wilson says, “Yes.”

7. The normal price of a labor product is fixed by cost of production of that portion of the supply whose total necessary cost is greatest. Wilson writes, “Yes.”

8. General prosperity lies always in the direction of high wages and low prices. Wilson answers with a strong “Yes.”

The document is signed “Woodrow Wilson, Princeton, N.J.”

A fascinating insight into Wilson’s opinions on matters of political economy, especially his belief that general prosperity lies in the direction of high wages and low prices. It is also likely unique, as we’ve never seen another document anything like this.