monopoly in the world, the value of all its included interests being
estimated, according to the evidence submitted, at £29,600,000. In the
report it is described as “one of the most active and possibly the
most formidable monied power on this continent. Its influence reaches
into every State, and is felt in remote villages; and the products of
its refineries seek a market in almost every seaport on the globe.”
The germ of this huge monopoly was a small petroleum refinery near
Cleveland, bought by one Rockefeller, a book-keeper in a store, and a
friend of his, a porter, with borrowed money. Rockefeller formed an
acquaintance with a rich whiskey distiller, who advanced money and
put his son-in-law Flagler into the business. This person’s doctrines
are thus described: “He says that there is no damned sentiment about
business; that he knows no friendship in trade; and that if he gets
his business rival in a hole he means to keep him there.” Such a man
is eminently fitted to be the founder of a monopoly: he is a hero of
self-help; for he helps himself to anything he can lay his hands on.
A second refinery was established in Ohio, and a warehouse opened in
New York. The concern grew, and was incorporated as the Standard Oil
Company. It is charged with having secured special legislation by
judicious expenditure in the lobbies of the Ohio and Pennsylvania
Legislatures. By entering into arrangements with the trunk railway
lines, it secured special rates for transit. New refineries were
established and new oil lands in Pennsylvania acquired; the capital
was increased; and an enormous yearly business was done. After a time
the company controlled every avenue of transportation; managed all
the largest refineries in the land; and was able to shut off every
competitor from either receiving supplies or shipping its products.
New companies, nominally distinct, but all under the control of the
same men, were incorporated in New Jersey, Ohio, West Virginia and
other States. The monopoly elected one of its chief stockholders
into the United States Senate, it is said, through bribery in the
Ohio Legislature over which body it certainly acquired strong hold.
These tactics were known as “coal oil politics.” All the dirty work
was, of course, done through agents, the directors pretending perfect
innocence. In 1882 the Standard Oil Companies were consolidated in the
Standard Oil Trust.[61] The stockholders surrendered their stock to the
trustees, nine in number, created under the agreement, and received
certificates in the place thereof, the representatives of the trust
and the stockholders in the refineries making a joint valuation of the
refineries, and the certificates being issued to that amount. Thus the
separate concerns were merged in one gigantic business, controlled by
nine men (owning a majority of the stock), having a monopoly of nearly
all the oil lands in America, controlling legislative votes, forming a
solid alliance with the railway and shipping interests, and determining
to a gallon how much oil shall be produced and refined, and to a
fraction of a cent what shall be its price. In 1887 there was a cash
dividend of 10 per cent. declared, besides a stock dividend of 20 per
cent. on the certificates of four years’ aggregation. In addition to
the enormous stock they hold, the trustees receive an annual salary of
£5,000. What are the economic results of this combination? It has not
raised prices, as the trusts were charged by the committee with doing.
On the contrary there has been a steady decrease in price during the
decade 1877-1887. The consumption of oil has also enormously increased.
The working and producing expenses have been greatly lowered by the
dismissal of needless labor and vast improvements in machinery; the
pipe lines controlled by the trust having displaced 5,700 teams of
horses and 11,400 men in handling the oil. Thus of this trust we may
say that though the means used to establish it were morally doubtful or
even bad, the political results disastrous, the economic results have
been beneficial, except in the matter of helping to form an unemployed
class through the dismissal of needless labor consequent on the
development of machinery.
The Cotton-seed Oil Trust was organized two or three years ago in the
State of Arkansas.[62] Upwards of seventy different companies had been
competing with each other and consequently suffering heavy losses.
Their mills being comparatively small and equipped with imperfect
machinery, they were glad to combine; and those that did not were
forced to close. The seventy corporations, the vast majority of the
members of which had agreed to the combination, surrendered their stock
to a body of trustees and received in return $100 certificates. The
various mills send a monthly report to the trust; and if the officers
in a given mill do not sell at the terms imposed, they are dismissed
by the trust.[63] The object of the trust was declared by a witness
to be to prevent bankruptcy, to improve methods, to find markets, to
develop the enterprise and to make money. The economic result has been
displacement of labor by the machinery and great economy in production.
Incidentally it came out that much cotton-seed oil was sold to the
French and Italian buyers, who mix it with a little olive oil and
export it back to America and to England, where a confiding public
purchases it as pure Tuscan olive oil--an interesting illustration of
international trade morality.
An examination of the milk and butchers’ trust ought to be a revelation
to those who imagine that trade is “free,” and that competition rules.
On April 29th, 1885, the directors of the Milk Exchange met in New York
and unanimously resolved:
“That on the first day of May next, and until otherwise ordered,
the market price of milk produced from meadow hay and sound cereals
be 2¹⁄₂ cents per quart, and that produced from brewers’ grains and
glucose and corn starch refuse be 2 cents per quart.”[64]
A representative of the Sheep and Lamb Butchers’ Mutual Benefit
Association testified that the members of that body agreed that they
would only buy sheep and calves from the Sheep Brokers’ Association,
a penalty for violation of this rule being imposed at the rate of 15
cents a head per sheep or calf. The absolute despotism, and the system
of espionage involved in such regulation is obvious. Here is a copy of
a document issued by this body:
“New York, January 9, 1888. Permission has been granted by the board
of trustees of this association to Simon Strauss to buy sheep and
lambs in New York markets, providing he buys no sheep and lambs from
outsiders, under penalty of 15 cents per head fine. Richard S. Tobin,
Secretary.”[65]
Occasionally the Association relaxed. On November 5th, 1887, according
to its minutes,
“The application of John Healey, No. 2, to be granted the privilege of
buying a few sheep and lambs without the 15 cents being charged to the
brokers, was favorably acted upon.”
This is not a record of Bagdad under the caliphs, but of the Republican
State of New York! The threatened despotism of Socialism has been often
eloquently dwelt on; but what of the actual despotism of to-day?
Now what does this examination of trusts show? That, granted private
property in the raw material out of which wealth is created on a huge
scale by the new inventions which science has placed in our hands, the
ultimate effect must be the destruction of that very freedom which
the modern democratic State posits as its first principle. Liberty to
trade, liberty to exchange products, liberty to buy where one pleases,
liberty to transport one’s goods at the same rate and on the same terms
enjoyed by others, subjection to no _imperium in imperio_: these surely
are all fundamental democratic principles. Yet by monopolies every one
of them is either limited or denied. Thus capitalism is apparently
inconsistent with democracy as hitherto understood. The development
of capitalism and that of democracy cannot proceed without check on
parallel lines. Rather are they comparable to two trains approaching
each other from different directions on the same line. Collision
between the opposing forces seems inevitable.
But both democracy and the new capitalist combinations which threaten
it are inevitable growths of an evolutionary process. We are therefore
brought to consider the question whether the ring, syndicate, or trust
either can or ought to be destroyed. These combinations can be shown to
be the most economical and efficient methods of organizing production
and exchange. They check waste, encourage machinery, dismiss useless
labor, facilitate transport, steady prices, and raise profits--i.e.,
they best effect the objects of trade from the capitalist’s point
of view. Now, the opponents of Socialism say that without this
enterprising capitalist we cannot live. He “provides employment,” they
say. Well, if we need him, we must obviously pay his price. If he has
a natural monopoly of a function indispensable to social progress,
society must concede the terms he imposes. These terms are briefly
large combinations of capitalist ownership. In this way he can best
organize business; if we do not choose to let him do it in this way,
he will not do it for us at all. From his point of view that is a fair
position to take up; and it places the Individualist opponent of trusts
in an awkward dilemma. For he must either submit to trusts or give up
capitalists, in which latter case he becomes a Socialist. The answer of
Socialism to the capitalist is that society can do without him, just
as society now does without the slave-owner or feudal lord, both of
whom were formerly regarded as necessary to the well-being and even the
very existence of society. In organizing its own business for itself,
society can employ, at whatever rate of remuneration may be needed to
call forth their powers, those capitalists who are skilled organizers
and administrators. But those who are mere dividend-receivers will no
longer be permitted to levy a contribution on labor, but must earn
their living by useful industry as other and better people have to do.
It may be said that society is not yet ripe for this transformation,
nor is it. The forms of the democratic State are not yet perfected, nor
has the economic evolution yet proceeded generally far enough, even in
England, not to speak of the less advanced European countries. Much yet
remains to be done through both the education of the intellect and the
development of a nobler public spirit. But on the other hand we seem
to be rapidly approaching such an _impasse_ that some very large and
definite extension of collective authority must be made. This would
seem to involve on one side general reduction of the hours of labor,
and on the other an attempt to absorb by the community a portion of
those social values which it creates. In reference to ground values it
may be anticipated that local democratic authorities will secure them
for the benefit of the people by any means which may be found expedient.
As regards the great combinations of capital, State action may take
one of three courses. It may prohibit and dissolve them; it may tax
and control them; or it may absorb and administer them. In either
case the Socialist theory is _ipso facto_ admitted, for each is a
confession that it is well to exercise a collective control over
industrial capital. If the first of these courses is taken a distinctly
retrogressive policy is definitely adopted, a policy of alarm at what
Mr. Cleveland called the “communism of capital,” a policy of reversion
to the chaos of “free competition,” and of cession of the undoubted
benefits which combination has secured. Such a policy would signify the
forcible prevention of acquisition of property, the very thing dearest
to the Individualist. If the powers of acquisition, now evidently
dependent on combination, are to be restricted, what becomes of the
“incentive to industry,” the “reward of abstinence,” and all the rest
of the worn out phrases which have so often done duty in the place
of argument? If the syndicate or the trust represents the legitimate
outcome of capitalism--if it is necessary to give order to trade and
to prevent the ruinous waste of unrestricted competition, how absurd
it is for the State to say to the capitalist: “You shall carry your
privileges of acquisition just up to the point where competition is
likely to ruin you; but there you shall stop. Immediately you and
your friends combine to prevent waste, to regulate production and
distribution, to apply new methods of manufacture, we shall absolutely
prevent you or restrain you by vexatious regulations.” To which the
capitalist may be supposed to reply: “I cannot fulfil my function in
society at this serious risk. I shall never know security--never be
even moderately sure of reaping that reward to which I am admittedly
entitled. If you intend to fetter my action in this way after having
proclaimed me free to own the raw material out of which wealth is
made--if you compel me to stop at a purely arbitrary line, I must
inform you that I am not going to undertake business on such terms.”
Would not the capitalist say something like this; and from his point of
view would he not be right?
If it were instantly possible to do so, we should take the capitalist
at his word; appropriate the necessary instruments of production;
and make them common property, the values they create accruing to
the community. But the human race generally contrives to exhaust
every device which stupidity can suggest before the right line of
action is ultimately taken. I think therefore that some probably
inefficient method of taxation and public control over combinations
will, as a matter of fact, be adopted. Such legislation will immensely
restrict individual liberty in certain directions, will produce much
friction, and may possibly hamper production; until by a long series
of experiments men shall discover what is the most reasonable way of
acquiring for the community as a whole the wealth which it produces.
But in any case individualism or anything whatever in the nature of
_laisser faire_ goes by the board.
And now, finally, what is the immediate policy for rational students
of economics and genuine social reformers to adopt? Their motto must
be, _Nulla vestigia retrorsum_. To all quack proposals they must offer
a steady resistance. These proposals will take the form of attempts to
bring back some economic condition out of which society has emerged.
One quack will desire to revive the old British yeomanry; another will
talk nonsense about “Fair Trade;” a third will offer to the rustic
“three acres and a cow”; while a fourth will see salvation in getting
rid of primogeniture and entail and “planting” prosperous laborers
on the soil--as though the laborers grew there like trees. Those who
understand the economic crisis may be ready and eager to support any
reform, however small, which is a genuine step forward: but they cannot
support any effort to call back the past. They may help to build a
new bridge across the gulf that separates us from the Co-operative
Commonwealth; but they can never repair the old broken-down structure
which leads back to Individualism. Instead, therefore, of attempting
to undo the work which capitalists are unconsciously doing for the
people, the real reformer will rather prepare the people, educated
and organized as a true industrial democracy, to take up the threads
when they fall from the weak hands of a useless possessing class. By
this means will the class struggle, with its greed, hate, and waste,
be ended, and the life hinted at by Whitman in his “Song of the
Exposition” be attained:
“Practical, peaceful life, the people’s life, the People themselves,
Lifted, illumined, bathed in peace--elate, secure in peace.”
FOOTNOTES:
[51] Enc. Brit., art. “Cotton.”
[52] “History of the Eighteenth Century,” i. 202.
[53] See the evidence contained in Vol. I of Mr. Morse Stephen’s
“History of the French Revolution.”
[54] History of the Eighteenth Century, iv, 450.
[55] “Some Leading Principles of Political Economy,” p. 32.
[56] “The American Commonwealth,” iii, note on p. 421.
[57] “Encyclopædia Britannica”: Art., “Political Economy.”
[58] Mulhall: “Dictionary of Statistics.”
[59] “Lords of Industry.” _North American Review_, June, 1884.
[60] Quarterly Journal of Economics, July, 1889.
[61] Report of Senate Committee, p. 419.
[62] Report of Senate Committee, p. 233, _et seq._
[63] Report, p. 244.
[64] Report of Senate Committee, p. 305.
[65] Report of Senate Committee, p. 497.
MORAL.
BY SYDNEY OLIVIER.
The argument of this fourth instalment of Socialist criticism may be
provisionally described as an attempt to justify Socialist ideals
by the appeals to canons of moral judgment accepted generally and
supported by the results of positive ethical science. The previous
essays have made it clear that we are dealing with Socialism in
that restricted sense in which it is defined by Schaeffle,[66] as
having for its aim “the replacement of private capital by collective
capital: that is, by a method of production which, upon the basis of
the collective property of the sum of all the members of the society
in the instruments of production, seeks to carry on a co-operative
organization of national work.” We are not dealing with Socialism as a
religion, nor as concerned with questions of sex or family: we treat it
throughout as primarily a property-form, as the scheme of an industrial
system for the supply of the material requisites of human social
existence.
If it were admitted that the establishment of such a system would
guarantee just this much--that abject poverty should be done away, and
that every man and woman should be ensured the opportunity of obtaining
sufficient food and covering in return for a moderate day’s work, we
might still be far from convincing some people that the realization of
that ideal will be a good thing for the world. There are still a great
many who, though they may not join in the common prophecy that the
chief results of such a system would be an increase in beer-drinking
and other stupid self-indulgence,[67] yet regard starvation and misery
as part of the inevitable order of nature, and as necessary conditions
of progress, conducive to the survival of what they are pleased to
call the “fittest” types of life. Such critics see danger to progress
in any attempt to enrol intelligence and adaptiveness into conscious
combination against starvation and misery, to extinguish by concerted
effort survivals of the accidents of primitive barbarism against
which as individuals we are always struggling. This aim of Socialism,
accordingly, does not wholly commend itself to their moral judgment,
to their opinion of what is _good_ in the widest sense, although
they may willingly admit that the aim possesses a certain element of
shortsighted good intention. Other persons, influenced by religious
conceptions older than that of progress, and regarding morality less
as determined by reference to that end than as a concern of the
individual, a certain state of the soul of each man, are inclined to
view the material evils which Socialists desire to get rid of, as a
necessary schooling and discipline without which individual morality
would decay.
Against these doctrines Socialists would maintain that the ordering
of our national life, and of the relations between individuals and
social groups throughout the world in accordance with the principles
of Socialism, is the effectual and indispensable process for ensuring
to the mass of mankind the advantages of progress already effected and
its continued and orderly development, and for the realisation, in
individuals and the State, of the highest morality as yet imagined by
us.
It may be well at this point to anticipate a challenge to define what
is meant by the word “Morality,” and to briefly explain the position
which will be assumed, and the method which will be followed throughout
the succeeding observations. It must be remembered that the subject
of this essay is “The Moral Aspect of the Basis of Socialism,” and
not “The Socialist View of the Basis of Morals.” We may therefore
conscientiously steer clear of the whirlpool of agelong controversy as
to what that basis is, merely noting as we pass that any metaphysic
of Ethics being necessarily universal, there is in this sense no
special ethic or morality of Socialism. By such cautious procedure we
sacrifice indeed the fascinating ambition to exhibit, by impressive
dialectic pageant of deduction from first principles, the foundation
of formal Socialism in the Idea that informs the universe. But we also
avoid the certainty of losing, at the very outset of our attempted
demonstration, the company of all but that minority who might assent
to our fundamental propositions. A further sacrifice we shall make, in
descending to the unpretentious methods of empiricism; for we thereby
renounce the right of appeal to that theologic habit of mind common
to Socialists with other pious persons. Mr. Henry George, educated
under the American Constitution, may share the familiarity of its
framers with the intentions of the Creator and the natural rights of
Man. He may prove, as did Mr. Herbert Spencer in his generous youth,
that private property in land is incompatible with the fundamental
right of each individual to live and to own the product of his labor.
But positive ethical science knows nothing of natural and fundamental
rights: it knows nothing of individual liberty, nothing of equality,
nothing of underlying unity. Yet here again our loss has some redress;
for a brief survey will assure us that various schools of moral
philosophy, differing in their characteristic first principles, are
converging in the justification of Socialism; and that the practical
judgments of contemporary mankind as to what sort of conduct is
“moral,” and what conditions make for the increase of “common
morality,” are in practice largely coincident. They offer, at least,
a body of provisional opinion, or prejudice, to which we can appeal
in presenting Socialism for criticism of its morality. The tribunal
is by no means infallible: still, the common contemporary sense of
humanity may count for something. But in approaching the criticism of
Socialism from the point of view of ethics, we are bound to go a little
deeper than this. While accepting the phenomena of current opinion on
morality as part of our material, we must follow the explorations of
ethical speculation into the causes and history of the development
of those opinions. By examining the genesis of convictions that this
or that kind of action is good or bad, moral or immoral, we shall be
helped to form a judgment as to which appears likely to persist and
be strengthened, and which to be modified, weakened, or forgotten. If
the claim of Socialism rests on judgments of the latter class, we may
know that it is a moribund bantling; if they preponderate among the
obstacles to its credit, we may prophesy encouragingly of it; if it is
supported by those judgments whose persistence seems essential to the
survival of the individual and of society, we may be assured of its
realisation in the future.
Socialism appears as the offspring of Individualism, as the outcome
of individualist struggle, and as the necessary condition for the
approach to the individualist ideal. The opposition commonly assumed
in contrasting the two is an accident of the now habitual confusion
between personality and personalty, between a man’s life and the
abundance of things that he has. Socialism is merely Individualism
rationalized, organized, clothed, and in its right mind. Socialism is
taking form in advanced societies and the social revolution must be
brought to its formal accomplishment through the conscious action of
innumerable individuals seeking an avenue to rational and pleasant
existence for themselves and for those whose happiness and freedom
they desire as they do their own. All conscious action, all conscious
modification of conditions, is inspired by the desire of such personal
relief, satisfaction, or expression, by the attempt to escape from
some physical or intellectual distress. “Subjective volition, passion
it is,” says Hegel, “that sets men in activity: men will not interest
themselves for anything unless they find their individuality gratified
by its attainment.” This common end, this desire of personal relief
or satisfaction, we see throughout recorded or indicated history
impelling every living creature on the earth; merging itself, as we
trace it backwards, in the mere apparent will to live of organisms
not recognized as conscious, and in the indestructible energy of the
inorganic. The field of activity thus conceived presents a panorama of
somewhat large extent; but a very small division of it is all that we
shall have to do with. For morality, whatever be its nature and basis,
certainly does not become recognizable to us, we cannot attribute the
quality of rightness or wrongness, until the formation of society has
begun, until individuals are in conscious relation with individuals
other than themselves.