Professor Sumner is gone, but he has left behind him an army of pupils,

and I will protect myself against them by phrasing my statement with

extreme care. I do not mean to say that man first secures himself

completely against his enemies, and then goes out to hunt for a meal. Of

course he has to eat while he is countering the moves of his enemies; he

has to eat while he is on the march to battle, or in flight from it. But

ask yourself this question: which would you choose, if you had to

choose--to go a couple of days with nothing to eat, or to have your

throat cut by bandits and your wife and children carried away into

slavery? Certainly you would do your fighting first, and meantime you

would scratch together any food you could. While you were devoting your

energies to putting down civil war, or to making a treaty with other

tribes, or to preparing for a military campaign, you would continue to

get food in the way your ancestors had got it; in other words, your

economic evolution would wait, while your political evolution proceeded.

But when you had succeeded in putting down your enemies, and had a long

period of peace before you, then you would plant some fields, and

domesticate some animals, or perhaps discover some new way of weaving

cloth--and so your industrial life would make progress.

It is easy to see why Professor Sumner wished to confuse this issue. He

could not deny political evolution, because it had happened. He despised

and feared political democracy, but it was here, and he had to speak

politely to it, as to a tiger that had got into his house. But

industrial democracy was a thing that had not yet happened in the

world; it was only a hope and a prophecy, and therefore a prize old Tory

was free to ridicule it. I remember reading somewhere his statement--the

notion that democracy had anything to do with industry, or could in any

way be applied to industry, was a piece of silliness. So, of course, he

sought to demolish my idea that there was a process of evolution in

economic affairs, paralleling the process of political evolution which

had already culminated in democracy.

Let us consider the process of political evolution, briefly and in its

broad outlines. Take any savage tribe; you find it composed of

individuals who are very much alike. Some are a little stronger than

others, a little more clever, more powerful in battle; but the

difference is slight, and when the tribe chooses someone to lead them,

they might as well choose one man as another. They all have a say in the

tribe councils, both men and women; their "rights" in the tribe are the

same. They are, of course, slaves to ignorance, to degrading

superstition and absurd taboos; but these things apply to everyone

alike, there is no privileged caste, no hereditary inequality.

But little by little, as the tribe grows in numbers, and in power and

intelligence, as it comes to capture slaves in battle, and to unite with

other tribes, there comes to be an hereditary chieftain and a group of

his leading supporters, his courtiers and henchmen. When the society has

evolved into the stage which we call barbarism, there is a permanent

superior caste; there are hereditary priests, who have in their keeping

the favor of the gods; and there is a subject population of slaves.

The society moves on into the feudal stage, in which the various grades

and classes are precisely marked off, each with its different functions,

its different privileges and rights and duties. The feudal

principalities and duchies war and struggle among themselves; they are

united by marriage or by conquest, and presently some stronger ruler

brings a great territory under his power, and we have what is called a

kingdom; a society still larger, still more complex in its organization,

and still more rigid in its class distinctions. Take France, under the

ancient regime, and compare a courtier or noble gentleman with a serf;

they are not only different before the law, they are different in the

language they use, in the clothes they wear, in the ideas they hold;

they are different even in their bodies, so that the gentleman regards

the serf as an inferior species of creature.

The kings warred among themselves and emperors arose. The ultimate ideal

in Europe was a political society which should include the whole

continent, and this ideal was several times almost attained. But it is

the rule of history that wherever a large society is built upon the

basis of privilege and enslavement, the ruling classes prove morally and

intellectually unequal to the burden put upon them; they become

corrupted, and their rule becomes intolerable. This happened in Europe,

and there came political revolutions--first in England, which

accomplished it by gradual stages, and then in the French monarchy, and

quite recently in a dozen monarchies and empires, large and small.

What precisely is this political revolution? Let us consider the case of

France, where the change was sudden, and the issues precisely drawn.

King Louis XIV had said, "I am the state." To a person of our time that

might seem like boasting, but it was merely an assertion of the existing

political fact. King Louis was the state by universal consent, and by

divine authority, as all men believed. The army was his army, the navy

was his navy, and wars, when he made them, were his wars. Everyone in

the state was his subject, and all the property of the state was his

personal, private property, to dispose of as he pleased. The government

officials carried out his will, and members of the nobility held the

land and ruled in his name.

But now suddenly the people of France overthrew the king, and put him to

death, and drove the nobles into exile; they seized the power of the

French state, and proclaimed themselves equal citizens in the state,

with equal voices in its government and equal rights before the law. So

we call France a republic, and describe this form of society as

political democracy. It is the completion of the process of political

evolution, and you will see that it moves in a sort of spiral; having

completed a circle and got back where it was before, but upon a higher

plane. The citizens of a modern republic are equal before the law, just

as were the members of the savage tribe; but the political organization

is vastly larger, and infinitely more complicated, and every individual

lives his life upon a higher level, because he shares in the benefits of

this more highly organized and more powerful state.

CHAPTER LIII

INDUSTRIAL EVOLUTION

(Examines the process of evolution in industry and the stage which

it has so far reached.)

And now let us consider the process of industrial evolution. We shall

find it to be exactly the same thing, reproducing the changes in another

field of activity. You may picture two gigantic waves sweeping over the

ocean. In some places the waves are far apart, and in other places they

are closer together; for a time they may mingle, and perhaps their bases

always mingle. It would be easy for a critic to point out how political

affairs play a leading part in industrial evolution, and vice versa; it

would be easy to argue that property rules the political state, or

again, that the main function of the political state is to protect

property. As I have said, man has to fight his enemies, and he has to

seek food, and often he has to do the two things at the same time; but

nevertheless, broadly speaking, we observe two great waves, sweeping

over human society, and most of the time these waves are clearly

separated and easily distinguished.

Industry in a savage tribe is, like government, simple and uniform; all

the members of the tribe get their living in the same way. One may be a

little more expert as a fisherman, another as a gatherer of cocoanuts,

but the fisherman gathers cocoanuts and the cocoanut-gatherer fishes. In

the days of primitive communism there is little economic strife and

little change; but as slavery comes in, and the private property system,

there begins industrial war--the members of the tribe trade with one

another, and argue over prices, and gradually some get the better of

others, they accumulate slaves and goods, and later on they appropriate

the land to their private use. Of course, the men who do this are often

the rulers of the tribe, and so politics and industry are mixed; but

even assuming that the state never interfered, assuming that the

government allowed business affairs to work themselves out in their own

way, the tendency of competition is always to end in monopoly. The big

fish eat the little fish, the strong gain advantage over the weak, the

rich grow richer, and the poor grow relatively poorer. As the amount of

trading increases, and men specialize in the arts of bargaining, we see

again and again how money concentrates in the hands of a few. It does

this, even when the political state tries to prevent it; as, for

example, when the princes and dukes of the Middle Ages would torture the

Jewish money-lenders and take away their treasure, but the Jews never

failed to grow rich again.

It is when political evolution has completed itself, and a republic has

been set up, that a free field is given to economic forces to work

themselves out to their logical end. We have seen this in the United

States, where we all started pretty much on the same economic level, and

where political tyranny has had little hold. Our civilization is a

civilization of the trader--the business man, as we call him; and we see

how big business absorbs little business, and grows constantly larger

and more powerful. We are familiar with what we call "graft," the use by

business men of the powers of government to get trade advantage for

themselves, and we have a school of old-time thinkers, calling

themselves "Jeffersonian Democrats," who insist that if only there had

never been any government favors, economic equality and democracy would

have endured forever in our country. But it is my opinion that

government has done far more to prevent monopoly and special privilege

in business than to favor it; and nevertheless, monopoly has grown.

In other words, the tendency toward concentration in business, the

absorption of the small business by the big business, is an irresistible

natural process, which neither can be nor should be hindered. The

condition of competition, whether in politics or in industry, is never a

permanent one, and can never be made permanent; it is a struggle which

automatically brings itself to an end. Large-scale production and

distribution is more economical than small-scale, and big business has

irresistible advantages of credit and permanence over little business.

As we shall presently show, the blind and indiscriminate production of

goods under the competitive system leads to the glutting of markets and

to industrial crises. At such times the weaker concerns are weeded out

and the strong ones take their trade; and as a result, we have the

modern great corporation, the most powerful machine of production yet

devised by man, and which corresponds in every aspect to the monarchy in

political society.

We are accustomed to speak of our "captains of industry," our "coal

kings," and "beef barons" and "lords of steel," and we think we are

using metaphors; but the universality of these metaphors points to a

fundamental truth in them. As a matter of fact, our modern captain of

industry fills in the economic world exactly the same functions as were

filled in ancient days by the head of a feudal state. He has won his

power in a similar struggle, and he holds it by similar methods. He

rules over an organization of human beings, arranged, economically

speaking, in grades and classes, with their authorities and privileges

and duties precisely determined, as under the "ancient regime." And just

as King Louis said, "I am the state," so Mr. Armour considers that he is

Armour & Co., and Mr. Morgan considers that he is the house of Morgan,

and that the business exists for him and is controlled by him under

divine authority.

If I am correct in my analysis of the situation, this process of

industrial evolution is destined to complete itself, as in the case of

the political state. The subject populations of industry are becoming

more and more discontented with their servitude, more and more resentful

of that authority which compels them to labor while others reap the

benefit. They are organizing themselves, and preparing for a social

transformation which will parallel in every detail the revolution by

which our ancestors overthrew the authority of King George III over the

American colonies, and made inhabitants of those colonies no longer

subjects of a king, but free and equal citizens of a republic. I expect

to see a change throughout the world, which will take the great

instruments of production which we call corporations and trusts, out of

the hands of their present private owners, and make them the property,

either of the entire community, or of those who do the work in them.

This change is the "social revolution," and when it has completed

itself, we shall have in that society an Industrial Republic, a form of

business management which constitutes economic democracy.

The history of the world's political revolutions has been written almost

exclusively by aristocratic or bourgeois historians; that is to say, by

men who, whatever their attitude toward political democracy, have no

conception of industrial democracy, and believe that industrial strife

and enslavement are the normal conditions of life. If, however, you will

read Kropotkin's "Great French Revolution," you will be interested to

discover how important a part was played in this revolution by economic

forces. Underneath the political discontent of the merchants and middle

classes lay a vast mass of social discontent of the peasants and

workers. It was the masses of the people who made the revolution, but it

was the middle classes who seized it and turned it to their own ends,

putting down attempts toward economic equality, and confining the

changes, so far as possible, to the political field.

And everywhere throughout history, if you study revolutions, you find

that same thing happening. You find, for example, Martin Luther fighting

for the right to preach the word of God without consulting the Pope; but

when the peasants of Germany rose and sought to set themselves free from

feudal landlords, Luther turned against them, and called upon the

princes to shoot them down. "The ass needs to be beaten, and the

populace needs to be controlled with a strong hand." The landlords and

propertied classes of England were willing to restrict the power of the

king, and to give the vote to the educated and well-to-do; but from the

time of Jack Cade to our own they shoot down the poor.

But meantime, the industrial process continues; the modern factory

system brings the workers together in larger and larger groups, and

teaches them the lesson of class consciousness. So the time of the

workers draws near. The first attempt in modern times to accomplish the

social revolution and set up industrial democracy was in the Paris

Commune. When the French empire collapsed, after the war with Germany in

1871, the workers of Paris seized control. They were massacred, some

50,000 of them, and the propertied classes of France established the

present bourgeois republic, which has now become the bulwark of reaction

throughout the Continent of Europe.

Next came the Russian revolution of 1905, and this was an interesting

illustration of the relation between the two waves of social progress.

Russia was a backward country industrially, and according to theory not

at all prepared for the social revolution. But nowadays the thoughts of

men circulate all over the world, and the exiles from Russia had

absorbed Marxian ideas, and were not prepared to accept a purely

political freedom. So in 1905, after the Japanese war, when the people

rose and forced the Czar to grant a parliament, the extremists made an

effort to accomplish the social revolution at the same time. The

peasants began to demand the land, and the workers the factories;

whereupon the capitalists and middle classes, who wanted a parliament,

but did not want Socialism, went over to the side of reaction, and both

the political and social revolutions were crushed.

But then came the great war, for which Russia with her incompetent

government and her undeveloped industry was unprepared. The strain of it

broke her down long before the other Allies, and in the universal

suffering and ruin the Russian people were again forced to rise. The

political revolution was accomplished, the Czar was imprisoned, and the

Douma reigned supreme. Middle class liberalism throughout the world gave

its blessings to this revolution, and hastened to welcome a new

political democracy to the society of nations. But then occurred what to

orthodox democratic opinion has been the most terrifying spectacle in

human history. The Russian people had been driven too far towards

starvation and despair; the masses had been too embittered, and they

rose again, overthrowing not only their Czar and their grand dukes, but

their capitalists and land-owners. For the first time in history the

social revolution established itself, and the workers were in control of

a great state. Ever since then we have seen exactly what we saw in

Europe from 1789 onward, when the first political republic was

established, and all the monarchies and empires of the world banded

themselves together to stamp it out. We have witnessed a campaign of

war, blockade, intrigue and propaganda against the Soviet government of

Russia, all pretending to be carried on in the name of the Russian

people, and for the purpose of saving them from suffering--but all

obviously based upon one consideration and one alone, the fear that an

effort at industrial self-government might possibly prove to be a

success.

Whether or not the Soviets will prove permanent, no one can say. But

this much is certain; just as the French revolution sent a thrill around

the world, and planted in the hearts of the common people the wonderful

dream of freedom from kings and ruling classes, just so the Russian

revolution has brought to the working masses the dream of freedom from

masters and landlords. Everywhere in capitalist society this ferment is

working, and in one country after another we see the first pangs of the

new birth. Also we see capitalists and landlords, who once found

"democracy," "free speech" and "equality before the law" useful formulas

to break down the power of kings and aristocrats, now repudiating their

old-time beliefs, and going back to the frankest reaction. We see, in

our own "land of the free," the government refusing to reprint the

Declaration of Independence during the war, and arresting men for

quoting from it and circulating it; we even see the Department of

Justice refusing to allow people to reprint the Sermon on the Mount!

CHAPTER LIV

THE CLASS STRUGGLE

(Discusses history as a battle-ground between ruling and subject

classes, and the method and outcome of this struggle.)

There is a theory of social development, sometimes called the

materialistic interpretation of history, and sometimes the economic

interpretation of history. It is one of the contributions to our thought

which we owe to Karl Marx, and like all the rest of Marxian theory, it

is a subject of embittered controversy, not merely between Socialists

and orthodox economists, but between various schools of revolutionary

doctrine. For my part, I have never been a great hand for doctrine,

whether ancient or modern; I am not much more concerned with what Marx

taught than I am with what St. Paul taught, or what Martin Luther

taught. My advice is to look at life with your own eyes, and to state in

simple language the conclusions of your own thinking.

Man is an eating animal; he has also been described as a tool-making

animal, and might be described as an ideal-making animal. There is a

tendency on the part of those who specialize in the making of ideals to

repudiate the eating and the tool-making sides of man; which accounts

for the quarrel between the Marxians and the moralists. All through

history you find new efforts of man to develop his emotional and

spiritual nature, and to escape from the humiliating limitations of the

flesh. These efforts have many of them been animated by desperate

sincerity, but none of them have changed the fundamental fact that man

is an eating animal, an animal insufficiently provided by nature against

cold, and with an intense repugnance to having streams of cold water run

down back of his neck. The religious teachers go out with empty purse,

and "take no thought for the morrow"; but the forces of nature press

insistently upon them, and little by little they make compromises, they

take to shelter while they are preaching, they consent to live in

houses, and even to own houses, and to keep a bank account. So they make

terms with the powers of this world, and the powers of this world,

which are subtle, and awake to their own interests, find ways to twist

the new doctrine to their ends.

So the new religion becomes simply another form of the old hypocrisy;

and it comes to us as a breath of fresh air in a room full of corruption

when some one says, "Let us have done with aged shams and false

idealisms. Let us face the facts of life, and admit that man is a

physical animal, and cannot do any sane and constructive thinking until

he has food and shelter provided. Let us look at history with unblinking

eyes, and realize that food and shelter, the material means of life, are

what men have been seeking all through history, and will continue to

seek, until we put production and distribution upon a basis of justice,

instead of a basis of force."

Such is, as simply as I can phrase it, the materialistic interpretation

of history. Put into its dress of scientific language it reads: the

dominant method of production and exchange in any society determines the

institutions and forms of that society. I do not think I exaggerate in

saying that this formula, applied with judgment and discrimination, is a

key to the understanding of human societies.

Wherever man has moved into the stage of slavery and private property

there has been some group which has held power and sought to maintain

and increase it. This group has set the standards of behavior and belief

for the community, and if you wish to understand the government and

religion, the manners and morals, the philosophy and literature and art

of that community, the first thing you have to do is to understand the

dominant group and its methods of keeping itself on top. This statement

applies, not merely to those cultural forms which are established and

ordained by the ruling class; it applies equally well to the

revolutionary forms, the behavior and beliefs of those who oppose the

ruling class. For men do not revolt in a vacuum, they revolt against

certain conditions, and the form of their revolt is determined by the

conditions. Take, for example, primitive Christianity, which was

certainly an effort to be unworldly, if ever such an effort was made by

man. But you cannot understand anything about primitive Christianity

unless you see it as a new form of slave revolt against Roman

imperialism and capitalism.

The theory of the class struggle is the master key to the bewilderments

and confusions of history. Always there is a dominant class, holding

the power of the state, and always there are subject classes; and sooner

or later the subject classes begin protesting and struggling for wider

rights. When they think they are strong enough, they attempt a revolt,

and sometimes they succeed. If they do, they write the histories of the

revolt, and their leaders become heroes and statesmen. If they fail, the

histories are written by their oppressors, and the rebels are portrayed

as criminals.

One of the commonest of popular assumptions is that if the rebels have

justice on their side, they are bound to succeed in the long run; but

this is merely the sentimental nonsense that is made out of history. It

is perfectly possible for a just revolt to be crushed, and to be crushed

again and again; just as it is possible for a child which is ready to be

born to fail to be born, and to perish miserably. The fact that the

Huguenots had most of the virtue and industry and intelligence of France

did not keep them from being slaughtered by Catholic bigots, and

reaction riveted upon the French people for a couple of hundred years.

The fact that the Moors had most of the industry of Spain did not keep

them from being driven into exile by the Inquisition, and the

intellectual life of the Spanish people strangled for three hundred or

four hundred years.

Some eight hundred years ago our ancestors in England brought a cruel

and despotic king to battle, and conquered him, and on the field of

Runnymede forced him to sign a grant of rights to Englishmen. That

document is known as Magna Carta, or the Great Charter, and everyone who

writes political history today recognizes it as one of the greatest of

man's achievements, the beginning of a process which we hope will bring

freedom and equality before the law to every human being on earth.

And now we have come to the stage in our industrial affairs, when the

organized workers seek to bring the monarchs of industry into the

council chamber, and force them to sign a similar Great Charter, which

will grant freedom and self-government to the workers. Just as King John

was forced to admit that the power to tax and spend the public revenue

belonged to the people of England, and not to the ruler; just so the

workers will establish the principle that the finances of industry are a

public concern, that the books are to be opened, and prices fixed and

wages paid by the democratic vote of the citizens of industry. If that

change is accomplished, the historian of the future will recognize it

as another momentous step in progress; and he will heed the protests of

the lords of industry, that they are being deprived of their freedom to

do business, and of their sacred legal rights to their profits, as

little as he heeded the protests of King John against the "treason" and

"usurpation" and infringement of "divine right" by the rebellious

barons.

CHAPTER LV

THE CAPITALIST SYSTEM

(Shows how wealth is produced in modern society, and the effect of

this system upon the minds of the workers.)

In the beginning man got his living by hunting and fishing. Then he took

to keeping flocks and herds, and later by slow stages he settled down to

agriculture. With the introduction of slavery and the ownership of the

land by ruling classes, there came to be a subject class of workers, who

toiled on the land from dawn to dark, year in and year out, and got, if

they were fortunate, an existence for themselves and their families.

Whether these workers were called slaves or serfs or peasants, whether

their product was taken from them in the form of taxes by the king, or

of rent by the landlord, made no difference; the workers were bound to

the soil, like the beasts with which they lived in intimate contact.

They were drafted into armies, and made to fight for their lords and

masters; they suffered pestilence and famine, fire and slaughter; but

with infinite patience they would rebuild their huts, and dig and plant

again, whether for the old master or for a new one.

In the early days these workers made their own crude tools and weapons;

but very early there must have been some who specialized in such arts,

and with the growth of towns and communications came a new kind of

labor, based upon a new system. Some enterprising man would buy slaves,

or hire labor, and obtain a supply of raw material, and manufacture

goods to be bartered or sold. He would pay his workers enough to draw

them from the land, and would sell the product for what he could get,

and the difference would be his profit. That was capitalism, and at

first it was a thing of no importance, and the men who engaged in it had

no social standing. But princes and lords needed weapons and supplies

for their armies, and the men who could furnish these things became more

and more necessary, and the states which encouraged them were the ones

which rose to power. Merchants and sea-traders became the intimates of

kings, and by the time of the Roman empire, capitalism was a great

world power, dominating the state, using the armies of the state for its

purposes. It went down with the rest of Roman civilization, but in the

Middle Ages it began once more to revive, and by the end of the

eighteenth century the merchants and money lenders of France, with their

retainers, the lawyers and journalists, were powerful enough to take the

control of society.

Then, in the beginning of the nineteenth century, came the invention of

machinery and of the power process. Capitalism began to grow like a

young giant among pygmies. In the course of a century it has ousted all

other methods of production, and all other forms of social activity. A

hundred years ago the British House of Commons was a parliament of

landlords; today it is a Merchants' and Manufacturers' Association. Out

of the 707 members of the British House of Commons, 361 are members of

the "Federation of British Industries," the labor-smashing organization

of British "big business." And the same is true of every other

parliament and congress in the modern capitalist state. Practically all

the wealth of the world today is produced by the capitalist method, and

distributed under capitalist supervision, and therefore capitalist ideas

prevail in our society, to the practical exclusion of all other ideas. I

have shown in "The Profits of Religion" how these ideas dominate the

modern church, and in "The Brass Check" how they dominate the modern

press. I plan to write two books, to show how they dominate education

and literature.

A hundred years ago an industry consisted of a half a dozen or a dozen

men, working under the personal supervision of an owner, and using crude

hand tools. Today it consists of a gigantic trust, owning and managing

scores and perhaps hundreds of mills and factories, each employing

thousands of workers. A corporation like the Steel Trust owns enough of

the sources of its raw material to give it practical monopoly; it owns a

fleet of vessels especially designed for ore-carrying; it owns its

private railroads, to deliver the ore to the mills. Through its system

of dummy directorates it has practical control of the main railroads

over which it distributes its products; also of banks and trust

companies and insurance companies, to gather the money of the public to

finance its undertakings. It owns huge office buildings, and vast

tracts of land upon which the homes of its workers are built. It has a

private army for the defense of its property--a complete army of

cavalry, infantry and artillery, including a large and highly efficient

secret service department, with a host of informers and spies. It has

newspapers for the purpose of propaganda, and it controls the government

of every village, town and city in which it has important interests. If

you will take the trouble to visit a "steel town," and make inquiries

among public officials, newspaper men, and others who are "on the

inside," you will discover that those in authority consider it necessary

and proper that "steel" should control, and are unable to conceive any

other condition of affairs. If you go to other parts of the country,

where other great industries are located, you find it taken for granted

that "copper" should control, or "lumber," or "coal," or "oil," or

whatever it may be.

Under the system of large scale capitalism, labor is a commodity, bought

and sold in the market like any other commodity. Some years ago Congress

was requested to pass a law contradicting this fundamental fact of world

capitalism. Congress passed a law, very carefully worded so that no one

could be sure what it meant, and a few years later the Supreme Court

nullified the law. But all through this political and legal controversy

the status of labor remained exactly the same; there was a "labor

market," consisting of those members of the community who, in the

formula of Marx, had nothing but their labor power to sell. These

competed for recognition at the factory gates, and highly skilled

foremen selected those who offered the largest quantity of labor power

for the stated wage.

So entirely impersonal is this process that there are great industries

in America in which ninety per cent of the common labor force is hired

and fired all over again in the course of a year. These men are put to

work in gangs, under a system which enables one picked man to set the

pace, and compel all the others to keep up with him, under penalty of

being discharged. This process is known as "speeding up," and its

purpose is to obtain from each worker the greatest quantity of energy in

exchange for his daily wage. In the steel industry men work twelve hours

a day for six days in the week, and then finish with a twenty-four-hour

day. If they do not work so long in other industries, it is because

experience has proven that the greatest quantity of energy can be

obtained from them in a shorter time. There are very few men who can

stand this pace for long. Those who are not crippled or killed in

accidents are broken down at forty, and all the great corporations

recognize this fact. Their foremen pick out the younger men, and

practically all concerns have an age rule, and never hire men above

forty or forty-five.

I shall not in this book go into details concerning the fate of the

worker under the profit system. I have written two novels, "The Jungle"

and "King Coal," in which the facts are portrayed in detail, and it

seems the part of common sense to refer the reader to these text-books.

It will suffice here to set forth the main outlines of the situation. In

every capitalist country of the world the masses of the people are

herded into industries, in whose profits they have no share, and in

whose welfare they have no interest. They do not know the people for

whom they work; they have no human relationship, either with their work

or with their employers. They see the surplus of their product drawn off

to maintain a class of idlers, whose activities they know only through

the scandals of the divorce courts and the luxury-love of the moving

picture screen. They compete with one another for jobs, and bid down one

another's wages; and if they attempt to organize and end this

competition, their efforts are broken by newspaper propaganda and

policemen's clubs. At the same time they know that monopoly, open or

secret, prevails in the fixing of prices, and so they find the struggle

to "get ahead" a losing one. In America it used to be possible for the

young and energetic to "go West"; but now the wave of capitalism has

reached the Pacific coast and been thrown back, and there is no more

frontier.

The man who works on the land has been through all the ages a solitary

man. He is better friends with his horse and his cow than with his

fellow humans. He is brutalized by incessant toil, he lives amid dirt

and the filth of animals, he is, in the words of Edwin Markham:

"A thing that grieves not and that never hopes,

Stunted and stunned, a brother to the ox."

He is a victim of natural forces which he does not understand, and

inevitably therefore he is superstitious. Being alone, he is helpless

against his masters, and only utter desperation drives him to revolt.

But consider the capitalist system--how different the conditions of its

workers! Here they are gathered into city slums, and their wits are

sharpened by continual contact with their fellows. The printing press

makes cheap the spread of information, and the soap-box makes it even

cheaper. Any man with a grievance can shout aloud, and be sure of an

audience to listen, and he can get a great deal said before the company

watchman or the policeman can throttle him. Moreover, the modern worker

is not struggling with drought and tempest and hail; he does not see his

labors wiped out by volcanic eruption or lightning stroke; he is dealing

with machinery, something that he himself has made, and that he fully

understands. If a machine gets out of order, he does not fall down upon

his knees and pray to God to fix it. All the training of his life

teaches him the relationship of cause and effect, the adjustment of

means to ends. So the modern worker, as a necessary consequence of his

daily work, is practical, skeptical, and unsentimental in his

psychology. And what is more, he is making all the rest of society of

the same temperament. He is building roads out into the country, and

building machines to roll over them; he is running telephone lines and

sending newspapers and magazines and moving picture shows to the peasant

and the farmer; so the young peasants and farmers hunger for the city,

and they learn to fix machinery instead of praying to God.

Such is the psychology of the modern working class; and the supreme

achievement of their sharpened wits is an understanding of the

capitalist process. As a matter of fact they did not make this discovery

for themselves; it was made for them by middle-class men, lawyers and

teachers and writers--Fourier, Owen, Marx, Lassalle. The modern doctrine

is called by various names: Socialism, Communism, Anarchism, Bolshevism,

Syndicalism, Collectivism. Later on I shall define these various terms,

and point out the distinctions between them. For the moment I emphasize

the factor they all have in common, and which is fundamental: they wish

to break the power of class ownership and control of the instruments and

means of production; they wish to replace private capitalism by some

system under which the instruments and means of production are

collectively owned and operated; and they look to the non-owning class,

the proletarian, as the motive power by which this change is to be

compelled. I shall in future refer to this as the "social revolutionary"

doctrine; taking pains to explain that the word "revolutionary" is to be

divested of its popular meaning of physical violence. It is perfectly

conceivable that the change may be brought about peaceably, and I shall

try to show before long that in modern capitalist states the decision as

to whether it is brought about peaceably or by violence rests with the

present masters of industry.

CHAPTER LVI

THE CAPITALIST PROCESS

(How profits are made under the present industrial system and what

becomes of them.)

We have next to examine the structure of the capitalist order, basing

our argument on facts which are admitted by everyone, including the most

ardent defenders of the present system.

All men have to have certain material things which we describe as goods.

As these goods do not produce themselves, it is necessary that some

should work. The workers must have tools; also they must have access to

the land and the sources of raw materials. These means of production are

owned by some individuals in the community, and this ownership gives

them power to direct the work of the rest. Those who own the land and

the natural sources of wealth we call capitalists, or business men, and

those who do not own these things, or whose share in them is

insignificant, are the proletariat, or working class.

If you state to the average American that there is a capitalist class

and a proletariat in this country, he will point out that many who are

now members of the capitalist class were originally members of the

proletariat; they have worked hard and saved, and accumulated property.

But this is merely confusing the issue. The fact that some proletarians

turn into capitalists and some capitalists into proletarians is

important to the individuals concerned, but it does not alter the fact

that there are two classes, capitalist and proletarian. Consider, by way

of illustrating, a field with trees growing on it; we have earth, and we

have trees, and the distinction between them is unmistakable. The roots

of the trees go down into the earth, and take up portions of the earth

and turn it into tree. The leaves and the dead branches fall, and in the

course of time are turned once more to earth. There are all sorts of

stages between earth and tree, and between tree and earth; but you would

not therefore say that the word "earth" and the word "tree" are

misnomers.

The working men go to the business man and apply for work. The business

man gives them work, and takes their product, and offers it in the

market at a price which allows him a profit above cost. If he can sell

at a profit, he repeats the process, and the worker has a job. If he

cannot sell at a profit, the worker is out of a job. Here and there may

be a benevolent business man who, rather than turn his workers out of a

job, will sell his goods at cost, or even for a short time at a loss;

but if he keeps the factory going simply for the benefit of his workers,

and with no expectation of ever making a profit, that is a form of

charity, and not the common system under which our business is now

carried on.

So it appears that the worker is dependent for his wages upon the

ability of the business man to make a profit. The worker's life is

inextricably bound up with the profit of the capitalist--no profit for

the capitalist, no life for the worker. The capitalist, going out to

look for markets for his goods, is seeking, not merely profit for

himself, but life for his workers.

Now, the business man pays a certain percentage of his total receipts

for labor, another percentage for raw materials, another percentage for

his overhead charges, and the rest is profit in various forms, rent to

the landlord, interest to the bondholder, dividends to the stockholder.

All this total sum goes to human individuals, and each has thus a

certain amount of money to spend. They pay it over to other individuals

for goods or services, and so the money keeps circulating, and business

keeps going. That is as deep as the average mind probes into the

process.

But let us probe a little deeper. It is evident that, in the course of

all this exchanging of goods, some individuals get a larger share than

other individuals. Our government collects an income tax, and thus we

have statistics representing what people are willing to admit about the

share they get. In 1917 it appeared that, speaking roughly, one family

out of six had an income of over $1,000 a year, and one family out of

twelve had an income of over $2,000. But there were 19,000 families

which admitted incomes of over $50,000 a year, and 300 with over

$1,000,000 a year.

Now the families that get less than a thousand dollars a year obviously

have to spend the greater part of their income upon their immediate

living expenses. But the families that get $50,000 a year do not need

to spend everything, and most of them take the greater part of their

income and reinvest it--that is, they spend it upon the creating of new

machinery of production, railroads, mills, factories, office buildings,

the whole elaborate structure of capitalist industry.

Exactly what proportion of the total product of industry is thus taken

and reinvested no one can say; but this we know, our cities are growing

at an enormous rate, our manufacturing power is increasing by leaps and

bounds, we are perfecting processes which enable one man to do the work

of a hundred men, which increase the product of one man's labor a

hundredfold. All this goes on blindly, automatically; a Niagara of goods

of all sorts is poured out, and we call it "prosperity."

But then suddenly a strange and bewildering thing happens. All at once,

and without warning, orders fall off, values begin to drop, business

collapses, factories are shut down, and millions of men are thrown out

of jobs. Merchants look at one another with blanched faces; each one has

been counting on paying his bills with the profits he was going to make,

and now his profits are gone, and he can't pay. The newspapers and

magazines keep insisting that it can't be true, that business is going

to revive next week, that prosperity is just ahead. But the factories

stay shut, and the millions of men stay idle.

This is the condition in which we find ourselves as I write this book.

It has been happening regularly in our history every ten years or so,

ever since America started; we have had a hundred years to reflect upon

it and to probe into the causes of it, and such is business intelligence

in the most enlightened country in the world, you may search the pages

of our newspapers from the first column of millionaire divorce suits to

the last column of "situations wanted," and nowhere can you find one

word to explain this mysterious calamity of "hard times"--how it comes

to happen to our social system, or what could be done to prevent it! To

supply this deficiency in present day thinking is our next task.

CHAPTER LVII

HARD TIMES

(Explains why capitalist prosperity is a spasmodic thing, and why

abundant production brings distress instead of plenty.)

Let us picture a small island inhabited by six men. One of these men

fishes, another hunts, another gathers cocoanuts, another raises goats

for clothing, and so on. The six men among them produce by their labor

all the necessities of their lives, and they exchange their products

with one another. The island is productive, and each of the men is free,

and makes his exchanges on equal terms; on that basis the industry of

the island can continue indefinitely, and there will never be any

trouble. There may sometimes be over-production, but it will not cause

anyone to starve. If the fisherman is unusually lucky one day, he will

be able to take a vacation for a few days, living on his fish and the

products he exchanges for his fish. For the sake of convenience in

future reference, I will describe this happy island as a "free" society;

meaning that each of the members of this society has access on equal

terms to the sources of wealth, and each owns the product of his own

labor, without paying tribute to any one else for the right to labor, or

to exchange his products.

But now let us suppose that one of the men on the island is strong and

aggressive; he takes a club and knocks down the other five men, and

compels them to sign a piece of paper agreeing that hereafter he is the

president of the land development company of the island, the chief

stockholder in the goat-raising company, and owner of the fishing

concession and the cocoanut grove; also, that hereafter goods shall not

be bartered in kind, but shall be exchanged for money, and that he is

the banker, and also the government, with the right to issue money. In

this society you will find that the real work, the actually productive

work, is done by five men, instead of by six, and these five do not get

the full value of their labor. The fisherman will fish, but his product

will no longer belong to himself; he will get part of it as wages, while

the "business man" takes charge of the balance. So when there is a

lucky day, there will be prosperity in the fishing industry, but this

prosperity will not benefit the fisherman; he will have only his wage,

and when he has caught too many fish, he will not have a few days'

vacation, but will be out of a job.

And exactly the same thing will happen to the goat-herd. He will

probably have work all the year round, because goats have to be tended,

but he will get barely enough to keep him alive, and the surplus skins

and milk will go to the owner of the no-longer-happy island. Perhaps it

will occur to the owner that the man who raises cocoanuts might also

keep an eye on the goats, and so the goat-herd will be permanently out

of a job, and will turn into what is called a tramp, or vagrant.

Inasmuch as everything to eat on the island belongs to the owner, the

ex-goat-herd will be tempted to become a criminal, and so it will be

necessary for the owner to arm the cocoanut man with a club and make him

into a policeman; or perhaps he will organize the fisherman and the

hunter into a militia for the preservation of law and order. They will

be glad to serve him, because, owing to the extreme productivity of the

island, they will be out of jobs a great part of the time, and but for

the generosity of the business man, would have no way of earning a

living.

But suppose that the cocoanut man should invent a machine for gathering

a year's supply of nuts in a week; suppose the fisherman should devise a

scheme to fill his boat with fish in a few minutes; and suppose that as

a result of these inventions the business man got so rich that he moved

to Paris, and no longer saw his workers, or even knew their names. Under

these conditions you can see that overproduction and unemployment might

increase on the island; and also the business man might seem less human

and lovable to his wage slaves, and might need a larger police force. It

might even happen that he would discover the need of a propaganda

department, in order to keep his police force loyal, and a secret

service to make sure that agitators did not get into the schools.

The five islanders, having filled all the barns and storehouses, would

be turned out to starve; and when they asked the reason, they would be

told it was because they had produced a surplus of food. This may sound

grotesque, but it is what is being said to 5,000,000 men in America as I

write. There are clothing-workers who are going about in rags, and they

are told it is because they have produced too much clothing. There are

shoe-workers whose shoes are falling off their feet, and they are told

it is because they have produced too many shoes. There are carpenters

who have no homes, and they are told that a great many homes are needed,

but unfortunately it doesn't pay the builders to go ahead just now. This

may sound like a caricature, but it happens to be the most prominent

single fact in the consciousness of 5,000,000 Americans at the close of

the year 1921. No wonder they are discontented with the present order.

The solution of the mystery is so simple that the 5,000,000 unemployed

cannot be kept permanently from understanding it. The reason the five

men on the island are starving is because one man owns the island and

the others own nothing. If the island were community property, the five

men would each own a share of the contents of the barns and storehouses,

and would not be starving. If the 100,000,000 people of America owned

the productive machinery of America, then instantly the unemployment

crisis would pass like an evil dream. The farm-workers who need shoes

would exchange their food with the starving shoe-workers, and the

starving shoe-workers would have jobs. They would want clothing, and so

the clothing-makers would start to work; and so on all the way down the

line. There is only one thing necessary to make this possible, and that

is the thing which we have agreed to call the social revolution.

CHAPTER LVIII

THE IRON RING

(Analyzes further the profit system, which strangles production,

and makes true prosperity impossible.)

We have seen that in an exploiting society there is a surplus which is

taken by the exploiter; and that under the modern system this surplus

must be sold at a profit before production can continue. The vital fact

in such a society is that the worker has not the money to buy back all

that he produces; therefore it is inevitable that a surplus product

should accumulate. When this happens, production must be cut down, and

during that period the worker is without a job, and without means of

living. The fact that he needs the product does not help him; the point

is that he has not the money to buy it. In such a society the productive

machinery is never used to the full. The machinery is controlled by a

profit-seeking interest, seeking an opportunity to make sales, and

restricting production according to the prospect of sales. So the actual

product bears no relationship to the possible product, and people who

live in an exploiting society can form no conception of true prosperity.

For, you see, the market is limited by the competitive wage system. We

have seen that in our own rich, prosperous country only one family out

of six has more than $1,000 a year income; only one family out of twelve

has $2,000 a year. It does not make any difference that the warehouses

are bursting with goods; a family constitutes a market of so many

dollars a year, and then, so far as the profit system is concerned, that

family is non-existent; that family stops consuming, and the productive

machinery is halted to that extent.

I have been accustomed to portray the profit system under the simile of

an iron ring riveted about the body of a baby. That ring would cause the

baby some discomfort at the beginning, but it would not be serious, and

the baby would get used to it. But as the baby grew the trouble caused

by the ring would increase, and finally there would come a time when

the baby would be suffering from a whole complication of troubles, and

for each of these troubles there would be but one remedy--break the

ring. Does the baby cry all the time? Break the ring! Is its digestion

defective? Break the ring! Is it threatened with convulsions or with

blood poisoning? Break the ring!

Here is our industrial society, growing at a rate never equalled by any

human baby; and here is this iron ring riveted about its middle. Here is

poverty, here is unemployment, here is graft, here is crime, here is war

and plague and famine; and for all these evils there is but one cause,

and but one remedy. Break the ring! Set production free from the

strangulation of the profit system.

I will admit that there may have been a time in the history of the

social infant when this ring was necessary. I admit that if the great

industrial machine was to be constructed, it was necessary that the mass

of the people should consume only part of what they produced, and should

allow the balance to be reinvested as capital. But now it has been done,

and the process is complete. We have a machine capable of producing many

times more than we can consume; shall we still go on building that

machine? Shall we go on starving ourselves, to save the money, to

multiply over and over again the products, in order that we may be

thrown out of work, and be starved even more completely?

A few generations ago we had in colonial America a society that in part

at least was "free." In that society everybody got the necessities of

life. They did not have the modern Sunday supplement and the moving

picture show, but they had bread and meat and good substantial clothing,

and furniture so well made that we still preserve it. The children in

those days grew up to be strong and sturdy men and women, who would have

seen nothing to envy in the bodies or minds of the slum population of

New York and Chicago. In short, they had all the true necessities of

life; and yet their work was done by hand, the power process was unknown

and undreamed of.

Now comes modern machinery, and multiplies the productive power of the

hand laborer by five, by ten, sometimes by a hundred. Here, for example,

is the "Appeal to Reason" selling millions of cheap books for ten cents

apiece, and making a profit on it; installing a gigantic press which

takes paper, sheet after sheet, prints 128 pages of a book at one

impression, and folds and stitches and binds the books, all in one

process, and turns them out complete at the rate of 10,000 copies per

hour. Here is a factory which turns out 100,000 automobiles a month.

Here is a mill which turns out many millions of yards of cloth a month.

If our colonial ancestors had been told about these marvels, they would

have said instantly: "Then, of course, everybody in that society will

have all the books they want, and all the clothing they want, and all

the automobiles. Everybody in that society will have five or ten or one

hundred times as much goods as we have."

Imagine the bewilderment of our colonial ancestor if he had been told:

"The majority of the people in that society will not have so much of the

real necessities of life as you have. They will have a few cheap

trinkets, designed to tickle their senses; they will have cheap

newspapers, carefully contrived to keep their minds vacant and to keep

them contented with their lot; they will have moving picture shows

constructed for the same purpose; but all their material things will be

flimsy, put together for show and not for permanence; their food will be

adulterated, their clothing will be shoddy, everything they have will be

made, not for their service, but for the profit of some one who lives by

selling to them. The average wage earned by those who do the work of

this new machine civilization will be less than half the amount

necessary to purchase the necessities of a decent life, and one-tenth of

the total population will be living in such poverty that they are unable

to maintain physical fitness, or to rear their children into full sized

men and women."

CHAPTER LIX

FOREIGN MARKETS

(Considers the efforts of capitalism to save itself by marketing

its surplus products abroad, and what results from these efforts.)

If our analysis of present-day society is correct, we have the enormous

populations of the modern industrial countries, living always on the

verge of starvation, their chance for survival depending at all times

upon the ability of their employers to find a profitable market for a

surplus of goods. At first the employer seeks that market at home; but

when the home markets are glutted, he goes abroad; and so develops the

phenomenon of foreign trade and rivalry for foreign trade, as the basic

fact of capitalism, and the fundamental cause of modern war.

Let us get clear a simple distinction concerning foreign trade. There is

a kind of trade which is normal, and would thrive in a "free" society.

In the United States we can produce nearly all the necessities of life,

but there are a few which we cannot produce--rubber, for example, and

bananas, and good music. These things we wish to import. We buy them

from other countries, and incur a debt, which we pay with products which

the other countries need from us; wheat, for example, and copper, and

moving pictures with cowboys in them. This is equal exchange, and a

natural phenomenon. A "free" society would produce such surplus goods as

were necessary to procure the foreign products that it desired. When it

had produced that much, the workers would stop and take a vacation until

they wanted more foreign products.

But under capitalism we have an entirely different condition--we produce

a surplus of goods which we _have_ to sell in order to keep our

factories running, and to keep our working population from starving. And

note that it does not help us to get back an equal quantity of foreign

goods in exchange. We must have what we call "a favorable balance"; that

is, we must have other people going into debt to us, so that we can be

continually shipping out more goods than we take back; continually

piling up credits which we can "negotiate," or turn into cash, so that

we can go on and repeat the process of making more goods, selling them

for more profits, and putting the surplus into the form of more

machinery, to make still more goods and still more profits.

And then, after a while, we come upon this embarrassing phenomenon;

nations which buy and do not sell must either do it by sending us gold,

or by our giving them credit. The sending of gold cannot go on

indefinitely, because then we should have all the gold, and if other

nations had none that would destroy their credit. On the other hand,

business cannot be done by credit indefinitely; for the very essence of

credit is a promise to pay, and payment can only be made in goods, and

how can we take the goods without ruining our own industry?

Fifteen years ago I pointed this out in a book. The argument was

irrefutable, and the conclusion inescapable, but the few critics who

noted it repeated their usual formula about "dreamers and theorists."

Now, however, the business mills have ground on, and what was theory has

become fact before our eyes. We have trusted the nations of Europe for

some $10,000,000,000 worth of goods, and they are powerless to pay, and

if they did pay, they would bankrupt American industry. France wishes to

collect an enormous indemnity from Germany, but nobody can figure out

how this indemnity can be paid without ruining French industry. The

French have demanded coal from Germany, and have got more than they can

use, and are "dumping" it in Belgium and Holland, with the result that

the British coal industry is ruined. The French clamor that the Germans

must pay for the destruction they wrought in Northern France, and the

Germans offer to send German workmen to rebuild the ruined towns; but

the French denounce this as an insult--it would deprive French

workingmen of their jobs! So I might continue for pages, pointing out

the manifold absurdities which result from a system of industry for the

profit of a few, instead of for the use of all.

Ever since I first began to read the newspapers, some twenty-five or

thirty years ago, all our political life has been nothing but the

convulsions of a social body tortured by the constricting ring of the

profit system. Everywhere one group struggling for advantage over

another group, and politicians engaged in playing one interest against

another interest! My boyhood recollections of public life consist of

campaign slogans having to do with the tariff: "production and

prosperity," "reciprocity," "the full dinner pail," "the foreigner pays

the tax," etc.

The workingman, under the profit system, is like a man pounding away at

a pump. He can get a thin trickle of water from the spout of the pump if

he works hard enough, but in order to get it he has to supply ten times

as much to some one who has tapped the pipe. But the tapping has been

done underground, where the workingman cannot see it. All the workingman

knows is that there is no job for him if the products of "cheap foreign

labor" are allowed to be "dumped" on the American market. That is

obvious, and so he votes for a tax on foreign imports, high enough to

enable his own employer to market at a profit. He does not realize that

he is thus raising the price of everything that he buys, and so leaving

himself worse off than he was before.

All governments are delighted with this tariff device, because they are

thus enabled to get money from the public without the public's knowing

it. "The foreigner pays the tax," we are told, and as a result of this

arrangement the steel trust just before the war was selling its product

at a high price to the American people, and taking its surplus abroad

and selling it to the foreigner at half the domestic price. And we see

this same thing in every line of manufacture, and all over the world. We

see one nation after another withdrawing itself as a market for

manufactured products, and entering the lists as a marketer. One more

nation now able to fill all its own needs, and going out hungrily to

look for foreign customers, adding to the glut of the world's

manufactured products and the ferocity of international competition!

At the close of the Civil War the total exports of the United States

averaged approximately $300,000,000, and the total imports were about

the same. In 1892 the exports first touched $1,000,000,000, while the

imports were about nine-tenths of that sum. In the year 1913 the exports

were nearly $2,500,000,000, while the imports were $600,000,000 less;

and in the year 1920 our exports were over $8,000,000,000 and our

imports a little over $5,000,000,000! So we have a "favorable balance"

of almost $3,000,000,000 a year--and as a result we are on the verge of

ruin!

This "iron ring" of overproduction and lack of market exercises upon our

industrial body a steady pressure, a slow strangling. But because the

body is in convulsions, struggling to break the ring, the pressure of

the ring is worse at some times than at others. We have periods of what

we call "prosperity," followed by periods of panic and hard times. You

must understand that only a small part of our business is done by means

of cash payments, whether in gold or silver or paper money. Close to 99%

of our business is done by means of credit, and this introduces into the

process a psychological factor. The business man expects certain

profits, and he capitalizes these expectations. Business booms, because

everybody believes everybody else's promises; credit expands like a huge

balloon, with the breath of everybody's enthusiasm. But meantime real

business, the real market, remains just what it was before; it cannot

increase, because of the iron ring which restricts the buying power of

the mass of the people by the competitive wage. So presently the time

comes when somebody realizes that he has over-capitalized his hopes; he

curtails his orders, he calls in his money, and the impulse thus started

precipitates a crash in the whole business world. We had such a crash in

1907, and I remember a Wall Street man explaining it in a magazine

article entitled, "Somebody Asked for a Dollar."

We learned one lesson by that panic; at least, the big financial men

learned it, and had Congress pass what is called the "Federal Reserve

Act," a provision whereby in time of need the government issues

practically unlimited credit to banks. This, of course, is fine for the

banks; it puts the credit of everybody else behind them, and all they

have to do is to stop lending money--except to the big insiders--and sit

back and wait, while the little men go to the wall, and the mass of us

live on our savings or starve. We saw this happen in the year 1920, and

for the first time we had "hard times" without having a financial panic.

But instead we see prices staying high--because the banks have issued so

much paper money and bank credits.

CHAPTER LX

CAPITALIST WAR

(Shows how the competition for foreign markets leads nations

automatically into war.)

In a discussion of the world's economic situation, published in 1906,

the writer portrayed the ruling class of Germany as sitting in front of

a thermometer, watching the mercury rising, and knowing that when it

reached the top, the thermometer would break. This thermometer was the

German class system of government, and the mercury was the Socialist

vote. In 1870 the vote was 30,000, in 1884 it was 549,000, in 1893 it

was 1,876,000, in 1903 it was 3,008,000, in 1907 it was 3,250,000, in

1911 it was 4,250,000. Writing between 1906 and 1913, I again and again

pointed out that this increase was the symptom of social discontent in

Germany, caused by the overproduction of invested capital throughout the

world, and the intensification of the competition for world markets. I

pointed out that a slight increase in the vote would be sufficient to

transfer to the working class of Germany the political power of the

German state; and I said that the ruling class of Germany would never

permit that to happen--when it was ready to happen Germany would go to

war, to seize the trade privileges of some other nation.

There was a time when wars were caused by national and racial hatreds.

There are still enough of these venerable prejudices left in the world,

but no student of the subject would deny that the main source of modern

wars is commercial rivalry. In 1917 we sent Eugene V. Debs to prison for

declaring that the late world war was a war of capitalist greed. But two

years later President Wilson, who had waged the war, declared in a

public speech that everybody knew it had been a war of commercial

rivalries.

The aims of modern war-makers are two. First, capitalism must have raw

materials, including coal and oil, the sources of power, and gold and

silver, the bases of credit. Parts of the world which are so unfortunate

as to be rich in these substances become the bone of contention between

rival financial groups, organized as nations. Some sarcastic writer has

defined a "backward" nation as one which has gold mines and no navy. We

are horrified to read of the wars of the French monarchs, caused by the

jealous quarrels of mistresses; but in 1905 we saw Russia and Japan go

to war and waste a million lives because certain Russian grand dukes had

bribed certain Chinese mandarins and obtained concessions of timber on

the Yalu River. We now observe France and Germany vowed to undying hate

because of iron mines in Lorraine, and the efforts of France to take the

coal mines of Silesia from Germany, and give them to Poland, which is

another name for French capitalism.

The other end sought by the war-makers is markets for manufactured

products, and control of trade routes, coaling stations and cables

necessary to the building up of foreign trade. England has been

"mistress of the seas" for some 300 years, which meant that her traders

had obtained most of these advantages. But then came Germany, with her

newly developed commercialism, shoving her rival out of the way. The

Englishman was easy-going; he liked to play cricket, and stop and drink

tea every afternoon. But the German worked all day and part of the

night; he trained himself as a specialist, he studied the needs of his

customers--all of which to the Englishman was "unfair" competition. But

here were the populations of the crowded slums, dependent for their

weekly wage and their daily bread upon the ability of the factories to

go on turning out products! Here was the ever-blackening shadow of

unemployment, the mutterings of social discontent, the agitators on the

soap-boxes, the workers listening to them with more and more eager

attention, and the journalists and politicians and bankers watching this

phenomenon with a ghastly fear.

So came the great war. Social discontent was forgotten over night, and

England and France plunged in to down their hated rival, once and for

all time. Now they have succeeded: Germany's ships have been taken from

her, and likewise her cables and coaling stations; the Berlin-Bagdad

Railroad is a forgotten dream; the British sit in Constantinople, and

the traffic goes by sea. American capitalism wakes up, and rubs its eyes

after a debauch of Presbyterian idealism, and discovers that it has paid

out some $20,000,000,000, in order to confer all these privileges and

advantages upon its rivals!

Ever since I can remember the world, there have been peace societies; I

look back in history and discover that ever since there have been wars,

there have been prophets declaiming against them in the name of

humanity and God. As I write, there is a great world conference on

disarmament in session in Washington, and all good Americans hope that

war is to be ended and permanent peace made safe. All that I can do at

this juncture is to point out the fundamental and all-controlling fact

of present-day economics: that for the ruling class of any country to

agree to disarmament and the abolition of war, is for that class to sign

its own death warrant and cut its own throat. American capitalism can

survive on this earth only by strangling and destroying Japanese

capitalism and British capitalism, and doing it before long. The

far-sighted capitalists on both sides know that, and are making their

preparations accordingly.

What the members of the peace societies and the diplomats of the

disarmament conferences do is to cut off the branches of the tree of

war. They leave the roots untouched, and then, when the tree continues

to thrive, they are astounded. I conclude this chapter with a concrete

illustration, cut from my morning newspaper. We went to war against

German militarism, and to make the world safe for democracy--meaning

thereby capitalist commercialism. We commanded the German people to

"beat their swords into plough-shares"; that is, to set their Krupp

factories to making tools of peace; and they did so. We saddled them

with an enormous indemnity, making them our serfs for a generation or

two, and compelling them to hasten out into the world markets, to sell

their goods and raise gold to pay us. And now, how does their behavior

strike us? Do we praise their industry, and fidelity to their

obligations? Here are the headlines of a news despatch, published by the

Los Angeles Times on December 10, 1921, at the top of the front page,

right hand column, the most conspicuous position in the paper. Read it,

and understand the sources of modern war!

_NEW ATTACK BY BERLIN_

* * * * *

DUMPING GOODS BY WHOLESALE

* * * * *

Cheap German Trash Puts Thousands of Americans Out of Employment

* * * * *

Glove Plants Shut Down and Potash Industry Killed

by Teuton Intrigue

CHAPTER LXI

THE POSSIBILITIES OF PRODUCTION

(Shows how much wealth we could produce if we tried, and how we

proved it when we had to.)

One of the commonest arguments in defense of the present business system

runs as follows: The amount of money which is paid to labor is greatly

in excess of the amount which is paid to capital. Suppose that tomorrow

you were to abolish all dividends and profits, and divide the money up

among the wage workers, how much would each one get? The sum is figured

for some big industry, and it is shown that each worker would get one or

two hundred dollars additional per year. Obviously, this would not bring

the millennium; it would hardly be worth while to take the risk of

reducing production in order to gain so small a result.

But now we are in position to realize the fallacy of such an argument.

The tax which capital levies upon labor is not the amount which capital

takes for itself, but the amount which it prevents labor from producing.

The real injury of the profit system is not that it pays so large a

reward to a ruling class; it is the "iron ring" which it fastens about

industry, barring the workers from access to the machinery of production

except when the product can be sold for a profit. Labor pays an enormous

reward to the business man for his management of industry, but it would

pay labor to reward the business man even more highly, if only he would

take his goods in kind, and would permit labor, after this tax is paid,

to go on making those things which labor itself so desperately needs.

But, you see, the business man does not take his goods in kind. The

owner of a great automobile factory may make for himself one automobile

or a score of automobiles, but he quickly comes to a limit where he has

no use for any more, and what he wants is to sell automobiles and "make

money." He does not permit his workers to make automobiles for

themselves, or for any one else. He reserves the product of the factory

for himself, and when he can no longer sell automobiles at a profit, he

shuts the workers out and automobile-making comes to an end in that

community. Thus it appears that the "iron ring" which strangles the

income of labor, strangles equally the income of capital. It paralyzes

the whole social body, and so limits production that we can form no

conception of what prosperity might and ought to be.

Consider the situation before the war. We were all of us at work under

the competitive system, and with the exception of a few parasites,

everybody was occupied pretty close to the limit of his energy. If any

one had said that it would be possible for our community to pitch in and

double or treble our output, you would have laughed at him. But suddenly

we found ourselves at war, and in need of a great increase in output,

and we resolved one and all to achieve this end. We did not waste any

time in theoretical discussions about the rights of private capital, or

the dangers of bureaucracy and the destruction of initiative. Our

government stepped in and took control; it took the railroads and

systematized them, it took the big factories and told them exactly what

to make, it took the raw materials and allotted them, where they were

needed, it fixed the prices of labor, and ordered millions of men to

this or that place, to this or that occupation. It even seized the

foodstuffs and directed what people should eat. In a thousand ways it

suppressed competition and replaced it by order and system. And what was

the result?

We took five million of our young men, the very cream of our industrial

force, and withdrew them from all productive activities; we put them

into uniforms, and put them through a training which meant that they

were eating more food and wearing more clothing and consuming more goods

than nine-tenths of them had ever done in their lives before. We built

camps for them, and supplied them with all kinds of costly products of

labor, such as guns and cartridges, automobiles and airplanes. We

treated two million of them to an expensive trip to Europe, and there we

set them to work burning up and destroying the products of industry, to

the value of many billions of dollars. And not only did we supply our

own armies, we supplied the armies of all our allies. We built millions

of dollars worth of ships, and we sent over to Europe, whether by

private business or by government loans, some $10,000,000,000 worth of

goods--more than ten years of our exports before the war.

All the labor necessary to produce all this wealth had to be withdrawn

from industry, so far as concerned our domestic uses and needs. It would

not be too much to say that from domestic industry we withdrew a total

of ten million of our most capable labor force. I think it would be

reasonable to say that two-thirds of our productive energies went to war

purposes, and only one-third was available for home use. And yet, we did

it without a particle of real suffering. Many of us worked hard, but few

of us worked harder than usual. Most of us got along with less wheat and

sugar, but nobody starved, nobody really suffered ill health, and our

poor made higher wages and had better food than ever in their lives

before. If this argument is sound, it proves that our productive

machinery is capable, when properly organized and directed, of producing

three times the common necessities of our population. Assuming that our

average working day is nine hours, we could produce what we at present

consume by three hours of intelligently directed work per day.

Let us look at the matter from another angle. Just at present the hero

of the American business man is Herbert Hoover; and Mr. Hoover recently

appointed a committee, not of Socialists and "Utopians," but of

engineering experts, to make a study of American productive methods. The

report showed that American industry was only thirty-five or forty per

cent efficient. Incidentally, this "Committee on Waste" assessed, in the

case of the building industry, sixty-five per cent of the blame against

management and only twenty-one per cent against labor; in six

fundamental industries it assessed fifty per cent of the blame against

management and less than twenty-five per cent against labor. Fifteen

years ago a professor of engineering, Sidney A. Reeve by name, made an

elaborate study of the wastes involved in our haphazard and planless

industrial methods, and embodied his findings in a book, "The Cost of

Competition." His conclusion was that of the total amount of energy

expended in America, more than seventy per cent was wasted. We were

doing one hundred per cent of work and getting thirty per cent of

results. If we would get one hundred per cent of results, we should

produce three and one-third times as much wealth, and the income of our

workers would be increased one or two thousand dollars a year.

Robert Blatchford in his book, "Merrie England," has a saying to the

effect that it makes all the difference, when half a dozen men go out to

catch a horse, whether they spend their time catching the horse or

keeping one another from catching the horse. Our next task will be to

point out a few of the ways in which good, honest American business men

and workingmen, laboring as intelligently and conscientiously as they

know how, waste their energies in keeping one another from producing

goods.

CHAPTER LXII

THE COST OF COMPETITION

(Discusses the losses of friction in our productive machine, those

which are obvious and those which are hidden.)

The United States government is by far the largest single business

enterprise in the United States; and a study of congressional

appropriations in 1920, made by the United States Bureau of Standards,

reveals the fact that ninety-three per cent of the total income of the

government went to paying for past wars or preparing for future wars. We

have shown that modern war is a product of the profit system, and if

civilized nations would put their industry upon a co-operative basis,

they could forget the very idea of war, and we should then receive

fourteen times as much benefit from our government as we receive at

present; we should have fourteen times as good roads, fourteen times as

many schools, fourteen times as prompt a postoffice and fourteen times

as efficient a Congress. What it would mean to industry to abolish war

is something wholly beyond the power of our imagination to conceive; for

along with ninety-three per cent of our government money there goes into

military preparation the vast bulk of our intellectual energy and

inventive genius, our moral and emotional equipment.

Next, strikes and the losses incidental to strikes, and the costs of

preparing against strikes. This includes, not merely the actual loss of

working time, it includes police and militia, private armies of gunmen,

and great secret service agencies, whose total income runs up into

hundreds of millions of dollars per year. Industrial warfare is simply

the method by which capitalists and workers determine the division of

the product of industry; as if two men should co-operate in raising

poultry, and then fall to quarrelling over the ownership of the eggs,

and settle the matter by throwing the eggs at each other's heads.

Next, bankruptcy. Statistics show that regularly some ten per cent of

our business enterprises fail every year. Take any block occupied by

little business men, grocers and haberdashers and "notions," and you

will see that they are always changing. Each change represents a human

tragedy, and the total is a frightful waste of human energy; it happens

because we can think of no better way to distribute goods than to go

through the work of setting up a business, and then discover that it

cannot succeed because the neighborhood is already overstocked with that

kind of goods.

Next, fires which are a result of bankruptcy. You may laugh, perhaps,

thinking that I am making a joke; but every little man who fails in

business knows that he has a choice of going down in the social scale,

or of setting fire to his stock some night, and having a big insurance

company set him on his feet again. The result is that a certain

percentage of bankrupts do regularly set fire to their stores. Some

fifteen years ago there was published in "Collier's Weekly" a study of

the costs to society of incendiary fires. The Fire Underwriters'

Association estimated the amount as a quarter of a billion dollars a

year; and all this cost, you understand, is paid out of the pockets of

those who insure their homes and their stores, and do not burn them

down.

From this follows the costs of insurance, and the whole insurance

industry, which is inevitable under the profit system, but is entire

waste so far as true production is concerned. Big enterprises like the

Steel Trust do not carry insurance, and neither does the United States

Postoffice. They are wealthy enough to stand their own losses. A

national co-operative enterprise would be in the same position, and the

whole business of collecting money for insurance and keeping records and

carrying on lawsuits would be forgotten.

Next, advertising. It would be no exaggeration to say that seventy per

cent of the material published in American newspapers and magazines

today is pure waste; and therefore seventy per cent of the labor of all

the people who cut down forests and manufacture and transport paper and

set up type and print and distribute publications is wasted. There is,

of course, a small percentage of advertising that is useful, but most of

it is boasting and falsehood, and even where it tells the truth it

simply represents the effort of a merchant to persuade you to buy in his

store instead of in a rival store--an achievement which is profitable to

the merchant, but utterly useless to society as a whole.

This same statement applies to all traveling salesmen, and to a great

percentage of middlemen. It applies also to a great part of delivery

service. If you live in a crowded part of any city, you see a dozen milk

wagons pass your door every morning, doing the work which could be done

exactly as well by one. That is only one case out of a thousand I might

name.

Next, crime. I have already discussed the crime of arson, and I might

discuss the crimes of pocket-picking, burglary, forgery, and a hundred

others in the same way. I am aware of the fact that there may be a few

born criminals; there may be a few congenital cheats, whom we should

have to put in hospitals. But we have only to consult the crime records,

during the war and after the war, in order to see that when jobs are

hunting men there are few criminals, and when men are hunting jobs there

are many criminals. I have no figures as to the cost of administering

justice in the United States--policemen, courts and jails--but it must

be hundreds of millions of dollars every year.

I have discussed at great length the suppression of the productive power

of society. I should not fail to mention the suppression of the

inventive power of society, a factor less obvious, but probably in the

long run even greater. Every one familiar with the inside of a big

industry knows that hundreds and even thousands of useful processes are

entirely suppressed, because it would not pay one particular concern to

stand the expense of the changes involved. You know how, during the war,

our government brought all the makers of engines together and perfected

in triumph a "Liberty motor." But now we have gone back to private

interest and competition, and each concern is jealously engaged in

guarding its own secrets, and depriving industry as a whole of the

benefit of everything that it learns. Each is spying upon the others,

stealing the secrets of the others, stealing likewise from those who

invent new ideas--and thus discouraging them from inventing any more.

I use this word "discourage," and I might write a chapter upon it. What

human imagination can conceive the amount of social energy that is lost

because of the factor of discouragement, directly caused by the

competitive method? Who can figure what it means to human society that a

great percentage of the people in it should be haunted by fear of one

sort or another--the poor in fear of unemployment, sickness and

starvation, the little business man in fear of bankruptcy and suicide,

the big business man in fear of hard times and treachery of his

competitors, the idle rich in fear of robbery and blackmail, and the

whole community in fear of foreign war and domestic tumult!

Anyone might go on and elaborate these factors that I have named, and

think of scores of others. Anyone familiar with business life or with

industrial processes would be able to put his finger on this or that

enormous saving which he would be able to make if he and all his rivals

could combine and come to an agreement. This has been proven over and

over again in large-scale industry; it is the fact which has made of

large-scale industry an overwhelming power, sucking all the profits to

itself, reaching out and taking in new fields of human activity, and

setting at naught all popular clamor and even legal terrors. How can

anyone, seeing these facts, bring himself to deny that if we did

systematize production and make it one enterprise, precisely adapted to

one end, we should enormously increase the results of human labor, and

the benefit to all who do the world's work?

A good deal of this waste we can stop when we get ready, and other parts

of it our bountiful mother nature will replace. When in a world war we

kill some ten or twenty millions of the flower of our young manhood, we

have only to wait several generations, and our race will be as good as

ever. But, on the other hand, there is some waste that can never be

repaired, and this is the thing truly frightful to contemplate. When we

dig the iron ore out of the bowels of the earth and rust it away in

wars, we are doing something our race can never undo. And the same is

true of many of our precious substances: phosphorus, sulphur, potash.

When we cut down the forests from our mountain slopes, and lay bare the

earth, we not merely cause floods and washouts, and silt up our harbors,

we take away from the surface of our land the precious life-giving soil,

and make a habitable land into a desert, which no irrigating and

reforesting can ever completely restore. The Chinese have done that for

many centuries, and we are following in their footsteps; more than six

hundred million wagon-loads of our best soil are washed down to the sea

every year! If you wish to know about these matters, I send you to a

book, "On Board the Good Ship Earth," by Herbert Quick. It is one of the

most heart-breaking books you ever read, yet it is merely a quiet

statement of the facts about our present commercial anarchy.

CHAPTER LXIII

SOCIALISM AND SYNDICALISM

(Discusses the idea of the management of industry by the state, and

the idea of its management by the trade unions.)

Let us now assume that we desire to abolish the wastes of the

competitive method, and to put our industry on a basis of co-operation.

How should we effect the change, and how should we run our industry

after it was done?

Let us take the United States Steel Corporation. What change would be

necessary to the socializing of this concern? United States Steel is

owned by a group of stockholders, and governed by a board of directors

elected by them. The owners are now to be bought out with government

bonds, and the board of directors retired. It may also be necessary to

replace a certain number of the higher executive officials, who are

imbued entirely with the point of view of this board, and have to do

with finance, rather than with production. Of course, some other

governing authority would have to be put in control. What would this

authority be? There are several plans before the world, several

different schools of thought, which we shall consider one by one.

First, the Socialist program. The Socialist says, "Consider the

postoffice, how that is run. It is run by the President, who appoints a

Postmaster-General as his executive. Let us therefore turn the steel

industry over to the government, and let the President appoint another

member of his cabinet, a Director of Steel; or let there be a

commission, similar to the Interstate Commerce Commission, or the

various war industry boards." Any form of management of the steel

industry which provides for its control and operation by our United

States government is Socialism of one sort or another.

There has been, of late, a great deal of dissatisfaction with

government, on the part of the general public, and also of labor. The

postoffice clerks, for example, complain that they are inadequately paid

and autocratically managed, deprived of their rights not merely as

workers but as citizens. The steel workers complain that when they go on

strike against their masters, the government sends in troops and

crushes their strike, regardless of the rights or wrongs of it. In order

to meet such tactics, labor goes into politics, and elects here and

there its own representatives; but these representatives become

mysteriously affected by the bureaucratic point of view, and even where

they try hard, they do not accomplish much for labor. Therefore, labor

becomes disgusted with the political process, and labor men do not

welcome the prospect of being managed by government.

If you ask such men, they will say: "No; the politicians don't know

anything about industry, and can't learn. The people who know about

industry are those who work in it. The true way to run an industry is

through an organization of the workers, both of hand and brain. The true

way to run the Steel Trust is for all the workers in it, men and women,

high and low, to be recognized by law as citizens of that industry; each

shop must elect its own delegates to run that shop, and elect a delegate

to a central parliament of the industry, and this industry in turn must

elect delegates to a great parliament or convention of all the delegates

of all the industries. In such a central gathering every one would be

represented, because every person would be a producer of some sort, and

whether he was a steel worker or a street sweeper or a newsboy, he would

have a vote at the place where he earns his living, and would have a say

in the management of his job. The great central parliament would elect

an executive committee and a president, and so we should have a

government of the workers, by the workers, for the workers." This idea

is known as Syndicalism, derived from the French word "syndicat,"

meaning a labor union. Since the Russian revolution it has come to be

known as soviet government, "soviet" being the Russian word for trade

council.

Now, taking these two ideas of Socialism and Syndicalism, it is evident

that they may be combined in various ways, and applied in varying

degrees. It is perfectly conceivable, for example, that the people of

the United States might elect a president pledged to call a parliament

of industry, and to delegate the control of industry to this parliament.

He might delegate the control to a certain extent, and provide for its

extension, step by step; so our society might move into Syndicalism by

the way of Socialism. You have only to put your mind on the

possibilities of the situation to realize that one method shades into

the other with a great variety of stages.

Consider next the stages between capitalism and Socialism. We have in

the United States some industries which are purely capitalistic; for

example, the Steel Trust, which is privately owned, and has been

powerful enough, not merely to suppress every effort of its workers to

organize, but every effort of the government to regulate it. On the

other hand, the United States Postoffice represents State Socialism;

although the workers have been forbidden to organize, and the management

of the industry is so arbitrary that I have always preferred to call it

State Capitalism. Likewise the United States army and navy represent

State Socialism. When we had the job of putting the Kaiser out of

business, we did not hire Mr. Rockefeller to do it; it never once

occurred to our advocates of "individualism," of "capitalist enterprise

and initiative," to suggest that we should hire out our army and navy,

or employ the Steel Trust or the Powder Trust to organize its own army

and navy to do the fighting for us. Likewise, for the most part, we run

the job of educating our children by the method of municipal Socialism.

We run our libraries in the same way, and likewise our job of fire

protection.

It is interesting to note how in every country the line between

capitalism and Socialism is drawn in a different place. In America we

run practically all our libraries for ourselves, but it would seem to us

preposterous to think of running our theatres. In Europe, however, they

have state-owned theatres, which set a far higher standard of art than

anything we know at home. Also, they have state-owned orchestras and

opera-houses, something we Americans leave to the subscriptions of

millionaires. In Europe it seems perfectly natural to the people that

the state should handle their telegrams in connection with the

postoffice; but if you urge government ownership of the telegraphs in

the United States, they tell you that the proposition is "socialistic,"

and that saves the need of thinking about it. We take it for granted

that our cities could run the libraries--even though we were glad when

Carnegie came along and saved us the need of appropriating money for

buildings. Just why a city should be able to run a library, and should

not be able to run an opera-house, or a newspaper, is something which

has never been made clear to me.

Let us next examine the stages between capitalism and Syndicalism. A

great many large corporations are making experiments in what they call

"shop management," allowing the workers membership in the boards of

directors and a voice in the conditions of their labor. This is

Syndicalism so far as it goes. Likewise it is Syndicalism when the

clothing workers and the clothing manufacturers meet together and agree

to the setting up of a permanent committee to work out a set of rules

for the conduct of the industry, and to fix wages from time to time.

Obviously, these things are capable of indefinite extension, and in

Europe they are being developed far more rapidly. For example, in Italy

the agricultural workers are organized, and are gradually taking

possession of the great estates, which are owned by absentee landlords.

They wage war upon these estates by means of sabotage and strikes, and

then they buy up the estates at bargain prices and develop them by

co-operative labor. This has been going on in Italy for ten years, and

has become the most significant movement in the country. It is a triumph

of pure Syndicalism; and such is the power of pure capitalism in the

United States that the American people have not been allowed to know

anything about this change.

Next, what are the stages between Socialism and Syndicalism? These also

are infinite in number and variety. As a matter of fact, there are very

few Socialists who advocate State Socialism without any admixture of

Syndicalism. The regular formula of the Socialist party is "the social

ownership and democratic control of the instruments and means of

production;" and what the phrase "democratic control" means is simply

that you introduce into your Socialist mixture a certain flavoring of

Syndicalism, greater or less, according to your temperament. In the same

way there are many Syndicalists who are inclined toward Socialism. In

every convention of radical trade unionists, such as, for example, the

I. W. W., you find some who favor political action, and these will have

the same point of view as the more radical members of the Socialist

party, who urge a program of industrial as well as political action.

CHAPTER LXIV

COMMUNISM AND ANARCHISM

(Considers the idea of goods owned in common, and the idea of a

society without compulsion, and how these ideas have fared in

Russia.)

The Russian revolution has familiarized us with the word Communism. In

the beginning of the revolutionary movement Communism denoted what we

now call Socialism; for example, the Communist Manifesto of Marx and

Engels became the platform of the Social-democratic parties. But because

most of these parties supported their governments during the war, the

more radical elements have now rejected the word Socialism, and taken up

the old word Communism. In the Russian revolution the Communists went so

far as to seize all the property of the rich, and so the word Communism

has come to bear something of its early Christian significance.

It is obvious that here, too, it is a question of degree, and Socialism

will shade into Communism by an infinite variety of stages, depending

upon what forms of property it is decided to socialize. The Socialist

formula commonly accepted is that "goods socially used shall be socially

owned, and goods privately used shall be privately owned." If you own a

factory, it will be taken by the state, or by the workers, and made

social property like the postoffice; but no Socialist wants to socialize

your clothing, or your books, any more than he wants to socialize your

toothbrush.

But when you come to apply this formula, you run quickly into

difficulties. Suppose you are a millionaire, and own a palace with one

or two hundred rooms, and a hundred servants. Do you use that socially,

or do you use it privately? And suppose there is a scarcity of houses,

and thousands of children are dying of tuberculosis in crowded tenement

rooms? You own a dozen automobiles, and do you use them all privately? I

point out to you that in time of emergency the capitalist state does not

hesitate over such a problem; it seizes your palace and turns it into a

hospital, it takes all your cars and uses them to carry troops. It

should be obvious that a proletarian state would be tempted by this

precedent.

The Communists also have a formula, which reads: "From each according to

his ability, to each according to his necessity." I do not see how any

sensitive person can deny that this is an extremely fine statement of an

ideal in social life. We take it quite for granted in family life; if

you knew a family in which that rule did not apply, you would consider

it an unloving and uncivilized family. I believe that when once industry

has been socialized, and we have a chance to see what production can

become, we shall find ourselves quickly adopting that family custom as

our law, for all except a few congenital criminals and cheats. We shall

find that we can produce so much wealth that it is not worth while

keeping count of unimportant items. If today you meet someone on the

street and ask him for a match or a pin, you do not think of offering to

pay him. This is an automatic consequence of the cheapness of matches

and pins. Once upon a time you were stopped on the road every few miles

and made to pay a few cents toll. I remember seeing toll-gates when I

was a boy, but I don't think I have seen one for twenty years.

In exactly the same way, under socialized industry, we shall probably

make street-car traffic free, and then railroad traffic; we shall

abolish water meters and gas meters and electric light meters, also

telephone charges, except perhaps for long distances, and telegraph

tolls for personal messages. Then, presently, we shall find ourselves

with such a large wheat crop that we shall make bread free; and then

music and theatres and clothing and books. At present we use furniture

and clothing as a means of manifesting our economic superiority to our

fellowmen. One of the most charming books in our language is Veblen's

"Theory of the Leisure Class," in which these processes are studied. We

shall, of course, have to raise up a new generation, unaccustomed to the

idea of class and of class distinction, before we could undertake to

supply people with all the clothing they wanted free of charge.

The Russian theorists made haste to carry out these ideas all at once;

they tried to leap several centuries in the evolution of Russian

society. They ordained complete Communism in land; but the peasants

would have nothing to do with such notions--each wanted his own land,

and what he produced on it. The Soviets have now been forced to give

way, not merely to the peasants, but to the traders; and so we see once

again that it is better to take one step forward than to take several

steps forward and then several steps backward. The Russian revolution

is not yet completed, so no one can say how many steps backward it will

be forced to take.

This revolution was an interesting combination of the ideas of Socialism

and Syndicalism. The trade unionists seized the factories, and made an

effort at democratic control of industry. At the same time the state was

overthrown by a political party, the Bolsheviks, who set up a

dictatorship of the proletariat. Because of civil war and outside

invasion, the democratic elements in the experiment have been more and

more driven into the background, and the authority of the state has

correspondingly increased. This causes us to think of the Soviet system

as necessarily opposed to democracy, but this is not in any way a

necessary thing. There is no inevitable connection between industrial

control by the workers and a dictatorship over the state. In Germany the

state is proceeding to organize a national parliament of industry, and

to provide for management of the factories by the labor unions. The

Italian government has promised to do the same thing. These, of course,

are capitalist governments, and they will keep their promises only as

they are made to; but it is a perfectly possible thing that in either of

these countries a vote of the people might change the government, and

put in authority men who would really proceed to turn industry over to

the control of the workers. That would be the Soviet or Syndicalist

system, brought about by democratic means, without dictatorship or civil

war.

Another group of revolutionary thinkers whose theories must be mentioned

are the Anarchists. The word Anarchy is commonly used as a synonym for

chaos and disorder, which it does not mean at all. It means the absence

of authority; and it is characteristic of people's view of life that

they are unable to conceive of there being such a thing as order, unless

it is maintained by force. The theory of the Anarchist is that order is

a necessity of the human spirit, and that people would conform to the

requirements of a just order by their own free will and without external

compulsion. The Anarchist believes that the state is an instrument of

class oppression, and has no other reason for being. He wishes the

industries to be organized by free associations of the people who work

in them.

Some of the greatest of the world's moral teachers have been Anarchists:

Jesus, for example, and Shelley and Thoreau and Tolstoi, and in our time

Kropotkin. These men voiced the highest aspirations of the human

spirit, and the form of society which they dreamed is the one we set

before us as our final goal. But the world does not leap into perfection

all at once, and meantime here we have the capitalist system and the

capitalist state, and what attitude shall we take to them? There are

impassioned idealists who refuse to make any terms with injustice, or to

submit to compulsion, and these preach the immediate destruction of

capitalist government, and capitalist government responds with prison

and torture, and so we have some Anarchists who throw bombs.

There are those who call themselves "philosophic" Anarchists, wishing to

indicate thereby that they preach this doctrine, but do not attempt to

carry it into action as yet. Some among these verge toward the Communist

point of view, and call themselves Communist-anarchists; such was

Kropotkin, whose theories of social organization you will find in his

book "The Conquest of Bread." There are others who call themselves

Syndicalist-anarchists, finding their centers of free association in the

radical labor unions.

After the Russian revolution, the Anarchists found themselves in a

dilemma, and their groups were torn apart like every other party and

class in Russia. Here was a new form of state set up in society, a

workers' state, and what attitude should the Anarchists take toward

that? Many of them stood out for their principles, and resisted the

Bolshevik state, and put the Bolsheviks under the embarrassing necessity

of throwing them into jail. We good orthodox Americans, who are

accustomed to dump Socialists and Communists and Syndicalists and

Anarchists all together into one common kettle, took Emma Goldman and

Alexander Berkman and shipped them over to Russia, where we thought they

belonged. Now our capitalist newspapers find it strange that these

Anarchists do not like the Russian government any better than they like

the American government!

On the other hand, a great many Anarchists have suddenly found

themselves compelled by the Russian situation to face the facts of life.

They have decided that a government is not such a bad thing after

all--when it is your own government! Robert Minor, for example, has

recanted his Anarchist position, and joined the Communists in advocating

the dropping of all differences among the workers, all theories as to

the future, and concentrating upon the immediate task of overthrowing

capitalist government and keeping it overthrown. In every civilized

nation the Russian revolution has had this effect upon the extreme

revolutionists. It has given them a definite aim and a definite program

upon which they can unite; it has presented to capitalist government the

answer of force to force; it has shown the masters of industry in

precise and definite form what they have to face--unless they set

themselves immediately and in good faith to the task of establishing

real democracy in industry.

CHAPTER LXV

SOCIAL REVOLUTION

(How the great change is coming in different industries, and how we

may prepare to meet it.)

From a study of the world's political revolutions we observe that a

variety of governmental forms develop, and that different circumstances

in each country produce different institutions. Suppose that back in the

days of the French monarchy some one asked you how France was going to

be governed as a political republic; how would elections be held, what

would be the powers of the deputies, who would choose the premier, who

would choose the president, what would be the duties of each? Who can

explain why in France and England the executive is responsible to the

parliament and must answer its questions, while in the United States the

executive is an autocrat, responsible to no one for four years? Who

could have foreseen that in England, supposed to remain a monarchy, the

constitution would be fluid; while in America, supposed to be a

democracy, the constitution would be rigid, and the supreme power of

rejecting changes in the laws would be vested in a group of reactionary

lawyers appointed for life? There will be similar surprises in the

social revolution, and similar differences between what things pretend

to be and what they are.

I used to compare the social revolution to the hatching of an egg. You

examine it, and apparently it is all egg; but then suddenly something

begins to happen, and in a few minutes it is all chicken. If, however,

you investigate, you discover that the chicken had been forming inside

the egg for some time. I know that there is a chicken now forming inside

our social egg; but having realized the complexity of social phenomena,

I no longer venture to predict the exact time of the hatching, or the

size and color of the chicken.

Perhaps it is more useful to compare the social revolution to a

child-birth. A good surgeon knows what is due to happen, but he knows

also that there are a thousand uncertainties, a thousand dangerous

possibilities, and all he can do is to watch the process and be prepared

to meet each emergency as it arises. The birth process consists of one

pang after another, but no one can say which pang will complete the

birth, or whether it will be completed at all. Karl Marx is author of

the saying that "force is the midwife of progress," so you may see that

I am not the inventor of this simile of child-birth.

There are three factors in the social revolution, each of which will

vary in each country, and in different parts of the country, and at

different periods. First, there is the industrial condition of the

country, a complex set of economic factors. The industrial life of

England depends primarily on shipping and coal. In the United States

shipping is of less importance, and railroads take the place. In the

United States the eastern portion lives mainly by manufacture, the

western by agriculture, while the south is held a generation behind by a

race problem. In France the great estates were broken up, and

agriculture fell into the hands of peasant proprietors, who are the main

support of French capitalism. In Prussia the great estates were held

intact, and remained the basis of a feudal aristocracy. In America land

changes hands freely, and therefore one-third of our farms are

mortgaged, and another third are worked by tenants. In Russia there was

practically no middle class, while in the United States there is

practically nothing but middle class; the rich have been rich for such a

short while that they still look middle class and act middle class, in

spite of all their efforts, while the working class hopes to be middle

class and is persuaded that it can become middle class. Such varying

factors produce in each country a different problem, and make inevitable

a different process of change.

The second factor is the condition of organization and education of the

workers. This likewise varies in every country, and in every part of

every country. There is a continual struggle on the part of the workers

to organize and educate themselves, and a continual effort on the part

of the ruling class to prevent this. In some industries in America you

find the workers one hundred per cent organized, and in other industries

you find them not organized at all. It is obvious that in the former

case the social change, when it comes, will be comparatively simple,

involving little bloodshed and waste; in the latter case there will be

social convulsions, rioting and destruction of property, disorganization

of industry and widespread distress.

The third factor is the state of mind of the propertied classes, the

amount of resistance they are willing to make to social change. I have

done a great deal of pleading with the masters of industry in my

country; I have written appeals to Vincent Astor and John D.

Rockefeller, to capitalist newspapers and judges and congressmen and

presidents. I have been told that this is a waste of my time; that these

people cannot learn and will not learn, and that it is foolish to appeal

either to their hearts or their understanding. But I perceive that the

class struggle is like a fraction; it has a numerator and a denominator,

and you can increase the fraction just as well by decreasing the

denominator as by increasing the numerator. To vary the simile, here are

two groups of men engaged in a tug of war, and you can affect the result

just as decisively by persuading one group to pull less hard, as by

persuading the other group to pull harder.

Picture to yourself two factories. In factory number one the owner is a

hard-driving business man, an active spirit in the so-called "open-shop"

campaign. He believes in his divine right to manage industry, and he

believes also in the gospel of "all that the traffic will bear." He

prevents his men from organizing, and employs spies to weed out the

radicals and to sow dissensions. When a strike comes, he calls in the

police and the strike-breaking agencies, and in every possible way he

makes himself hated and feared by his workers. Then some day comes the

unemployment crisis, and a wave of revolt sweeping over the country. The

workers seize that factory and set up a dictatorship of the proletariat

and a "red terror." If the owner resists, they kill him; in any case,

they wipe out his interest in the business, and do everything possible

to destroy his power over it, even to his very name. They run the

business by a shop committee, and you have for that particular factory a

Syndicalist, or even Anarchist form of social reconstruction.

Now for factory number two, whose owner is a humane and enlightened man,

studying social questions and realizing his responsibility, and the

temporary nature of his stewardship. He gives his people the best

possible working conditions, he keeps open books and discusses wages and

profits with them, he educates the young workers, he meets with their

union committees on a basis of free discussion. When the unemployment

crisis comes and the wave of revolt sweeps the country, this man and his

workers understand one another. He says: "I can no longer pay profits,

and so I can no longer keep going under the profit system; but if you

are ready to run the plant, I am ready to help you the best I can."

Manifestly, this man will continue the president of the corporation, and

if he trains his sons wisely, they will keep his place; so, instead of

having in that factory a dictatorship and a terror, you will have a

constitutional monarchy, gradually evolving into a democratic republic.

CHAPTER LXVI

CONFISCATION OR COMPENSATION

(Shall the workers buy out the capitalists? Can they afford to do

it, and what will be the price?)

The problem of whether the social revolution shall be violent or

peaceable depends in great part upon our answer to the question of

confiscation versus compensation. We are now going to consider, first,

the abstract rights and wrongs of the question, and, second, the

practical aspects of it.

There is a story very popular among single taxers and other advocates of

freedom of the land. An English land-owner met a stranger walking on his

estate, and rebuked him for trespassing. Said the stranger, "You own

this land?" Said the other, "I do." "And how did you get it?" "I

inherited it from my father." "And how did your father get it?" "He

inherited it from his father." So on for half a dozen more ancestors,

until at last the Englishman answered, "He fought for it." Whereupon the

stranger took off his coat and rolled up his sleeves and said, "I'll

fight you for it."

This is all there is to say on the subject of the abstract rights of

land titles. There is no title to land which is valid on a historical

basis. Everything rests upon fraud and force, continued through endless

ages of human history. We in the United States took most of our land

from the Indians, and in the process our guiding rule was that the only

good Injun was a dead Injun. We first helped the English kings to take

large sections of our country from the French and Spanish, and then we

took them from the English king by a violent revolution. We purchased

our Southwestern states from Mexico, but not until we had taken the

precaution of killing some thousands of Mexicans in war, which had the

effect of keeping down the purchase price. It would be a simple matter

to show that all public franchises are similarly tainted with fraud.

Proudhon laid down the principle that "property is theft," and from this

principle it is an obvious conclusion that society has the right to

scrap all paper titles to wealth, and to start the world's industries

over again on the basis of share and share alike.

But stop and consider for a moment. "Property is theft," you say. But go

to your corner grocery, and tell the grocer that you deny his title to

the sack of prunes which he exhibits in front of his counter. He will

tell you that he has paid for them; but you answer that the prunes were

raised on stolen land, and shipped to him over a railroad whose

franchise was obtained by bribery. Will that convince the grocer? It

will not. Neither will it convince the policeman or the judge, nor will

it convince the voters of the country. Most people have a deeply rooted

conviction that there are rights to property now definitely established

and made valid by law. If you have paid taxes on land for a certain

period, the land "belongs" to you; and I am sure you might agitate from

now to kingdom come without persuading the American people that New

Mexico ought to be returned to Mexico, or the western prairies to the

Indian tribes.

Such are the facts; now let us apply them to the right of exploitation,

embodied in the ownership of a certain number of bonds or shares of

stock in the United States Steel Corporation. "Pass a law," says the

Socialist, "providing for the taking over of United States Steel by the

government." At once to every owner comes one single thought--are you

going to buy this stock, or are you going to confiscate it? If you

attempt confiscation, the courts will declare the law unconstitutional;

and you either have to defy the courts, which is revolutionary action,

or to amend the constitution. If you adopt the latter course, you have

before you a long period of agitation; you have to carry both houses of

Congress by a two-thirds majority, and the legislatures of three-fourths

of the States. You have to do this in the face of the most bitter and

infuriated opposition of those who are defending what they regard as

their rights. You have to meet the arguments of the entire capitalist

press of the country, and you have the certainty of widespread bribery

of your elected officials.

The prospect of doing all this under the forms of law seems extremely

discouraging; so come the Syndicalists, saying, "Let us seize the

factories, and stop the exploitation at the point of production." So

come the Communists, saying, "Let us overthrow capitalist government,

and break the net of bourgeois legality, and establish a dictatorship of

the proletariat, which will put an end to privilege and class domination

all at once." What are we to say to these different programs?

Suppose we buy out the stockholders of United States Steel, and issue

to them government bonds, what have we accomplished? Nothing, say the

advocates of confiscation; we have changed the form of exploitation, but

the substance of it remains the same. The stockholders get their money

from the United States government, instead of from the United States

Steel Corporation; but they get their money just the same--the product,

not of their labor, but of the labor of the steel workers. Suppose we

carried out the same procedure all along the line; suppose the

government took over all industries, and paid for their securities with

government bonds. Then we should have capitalism administered by a

capitalist government, instead of by our present masters of industry; we

should have a state capitalism, instead of a private capitalism; we

should have the government buying and selling products, and exploiting

labor, and paying over the profits to an hereditary privileged class.

The capitalist system would go on just the same, except that labor would

have one all-powerful tyrant, instead of many lesser tyrants, as at

present.

So argue the advocates of confiscation. And the advocates of purchase

reply that in buying the securities of United States Steel, we should

fix the purchase price at the present market value of the property, and

that price, once fixed, would be permanent; all future unearned

increment of the steel industry would belong to the government instead

of to private owners. Consider, for example, what happened during the

world war. When I was a boy, soon after the Steel Trust was launched,

its stock was down to something like six dollars, and I knew small

investors who lost every dollar they had put in. But during the war,

steel stock soared to a hundred and thirty-six dollars per share; it

paid dividends of some thirty per cent per year, and accumulated

enormous surpluses besides.

The same thing was true of practically all the big corporations.

According to Secretary of the Treasury McAdoo, there were coal companies

which paid as high as eight hundred per cent per year; that is to say,

the profits in one year were eight times the total investment. Assuming

that our government bonds paid five per cent, it appears that the owners

of these coal companies got one hundred and sixty times as much under

our present private property system as they would have got under a

system of state purchase. Even completely dominated by capitalism as our

courts are today, they would not dare require us to pay for industries

more than six per cent on the market value of the investment; and from

what I know of the inside graft of American big business that would be

restricting the private owners to less than one-fourth of what they are

getting at present.

We have already pointed out the economies that can be made by putting

industry under a uniform system. But all these, important as they are,

amount to little in comparison with the one great consideration, which

is that by purchasing large scale industry, we should break the "iron

ring"; we should thenceforth be able to do our manufacturing for use

instead of for profit, and so we should put an end to unemployment. Our

cheerful workers would throng into the factories, to produce for

themselves instead of for masters; and in one year of that we should so

change the face of our country that a return to the system of private

ownership would be unthinkable. In one year we could raise production to

such a point that the interest on the bonds we had issued would be like

the crumbs left over from a feast.

CHAPTER LXVII

EXPROPRIATING THE EXPROPRIATORS

(Discusses the dictatorship of the proletariat, and its chances for

success in the United States.)

I am aware that the suggestion of paying for the industries we socialize

will sound tame and uninspiring to a lot of ardent young radicals of my

acquaintance. They will shake their heads sadly and say that I am

getting middle-aged and tired. We have seen in Russia and Hungary and

other places, so many illustrations of the quick and easy way to

expropriate the expropriators that now there is in every country a

considerable group of radicals who will hear to no program less

picturesque than barricades and councils of action.

In considering this question, I set aside all considerations of abstract

right or wrong, the justification for violence in the overthrow of

capitalist society. I put the question on the basis of cash, pure and

simple. It will cost a certain amount of money to buy out the owners,

and that money will have to be paid, as it is paid at present, out of

the labor of the useful workers. The workers don't want to pay any more

than they have to; the question they must consider is, which way will

they have to pay most. The advocates of the dictatorship of the

proletariat are lured by the delightful prospect of not having to pay

anything; and if that were really possible it would undoubtedly be the

better way. But we have to consider this question: Is the program of not

having to pay anything a reality, or is it only a dream? Suppose it

should turn out that we have to pay anyhow, and that in the case of

violent revolution we pay much more, and in addition run serious risk of

not getting what we pay for?

Here are enormous industries, running at full blast, and it is proposed

that some morning the workers shall rise up and seize them, and turn out

the owners and managers, and run the industries themselves. Will anybody

maintain that this can be done without stopping production in those

factories for a single day? Certainly production must stop during the

time you are fighting for possession; and the cruel experience of

Russia proves that it will stop during the further time you are fighting

to keep possession, and to put down counter-revolutionary conspiracies.

Also, alas, it will stop during the time you are looking for somebody

who knows how to run that industry; it will stop during the time you are

organizing your new administrative staff. You may discover to your

consternation that it stops during the time you are arranging to get

other industries to give you credit, and to ship you raw materials; also

during the time you are finding the workers in other industries who want

your product, and are able to pay for it with something that you can

use, or that you can sell in a badly disorganized market.