To-day, the outstanding method of classi_The Next Step: A Plan for Economic World Federation

to take them in relation to their political affiliations. The new

grouping would arrange all of the peoples in accordance with their

economic activities. A simple form of classification would include:

agriculture, the extractive industries, manufacturing, transport,

trade, housekeeping, and general (miscellaneous) trades. The

classification might be made far more elaborate, but for clarity of

discussion a simple classification is of great assistance. Every person

in the world who performed a useful service would belong to one of these

great industrial or occupational groups, and the aggregate of the

membership of the groups would equal the aggregate of all the producers

of the world.

Under this plan, therefore, each individual would have a series of

economic affiliations. He might, for example, be a docker on the French

Line at Le Havre (local affiliation); a dock worker in the Le Havre

district (district affiliation); a transport worker of North Europe

(divisional affiliation); a worker in the transport industries of the

world (industrial affiliation).

Since each of the producers in the world would have this series of

relations, all of the producers would be grouped together in local, in

district, in divisional and in world industrial groups, so that the

economic life of the world would present the picture of a completed

economic structure very similar to the political structure that has been

evolving for many centuries, and which has reached its highest forms of

development in such new countries as Australia and the United States,

where each person is a citizen in a borough, city or town, in a county,

in a state and in the whole nation or federation of states.

While political life has been thus organized about the administration of

certain public affairs, economic life has remained disorganized, or has

been organized largely with an eye to owners' profits. The producers

society will be organized in economic terms very much as the present

society is organized in political terms. Each producer will be a

participant in the life of economic units, graduated from the local

economic unit to the world industry.

9. _The Ideal and the Real_

This is, of course, an idealized picture, subject to an infinitude of

modifications, just as an architect's plan for "a bungalow in the woods"

or a city planner's scheme for a model town is idealized and subject to

modifications. It is not a working drawing, but a general design which

is intended to place the whole subject of economic reorganization on a

plane where it can be discussed as a matter of practical social science.

The plan presented here is simplified as far as possible in order that

attention may be concentrated on the essential issues that the world

faces. Too much time and energy have already gone into contentions over

details, when there was no general plan in view. Let no man deceive

himself with the delusion that the solution of the world's economic

problem is a simple matter, but at the same time, each one who is

striving toward a better world may rest with the assurance that there

are certain simple and fundamental principles that underlie world

economic organization.

Society is structural, and as a structure it must function; the economic

world is built up of working units that are compelled, by the nature of

modern industry to work co-operatively, but the very nature of the

political structure of modern society hampers this co-operative work in

many essential directions; federation seems to be the logical answer to

the enigma of effective social organization, and it only remains to

organize a workable series of economic units and to build them into a

world structure--a world structure in terms of production rather than of

politics.

The world is sadly muddled. Millions pay for this muddling with their

lives; tens of millions pay with bitter suffering. The owners have had

their day. The opportunity for the producers has well-nigh come.

The men and women who are responsible for the work that is involved in

the economic reorganization of the world must see the whole plan as

well as the multiplicity of detail, and must work with the whole plan

vividly before their eyes if they are not to be blinded and led astray

by the multitude of will-o'-the-wisps that flit across the path.

IV. ECONOMIC SELF-GOVERNMENT

1. _Maximum Advantage_

Economic society consists of unit groups or organs which are established

for the performance of certain functions. Mines and other extractive

units take nature's stores from their age-old resting place and prepare

them for the railroad, the factory or the home; the transport units

convey goods and people; the merchandising units bring together many

varieties of goods, and act as a distributing agency for those who will

consume the products of mine and factory. The existence of a unit of

economic organization is therefore a proof of the presence of some

economic function. The whole structure of economic society has developed

in response to the economic needs and in accordance with the economic

activities of the community in which it exists.

When a part of the economic structure is built, it is expected to

function. Mines, when opened, must produce coal; railroads, when

completed, must provide transportation. Side by side with the problems

involved in the kind of groupings that make up economic society, there

is the question of the handling and direction of these groups. No

economic institution is of value unless it will perform some useful

service by turning out an economic good or by affording a benefit that

corresponds to some human need.

Each rational person, and every self-directing social group seeks to get

the largest possible return in the form of satisfaction for the time and

the energy invested in any given enterprise. This law of maximum

advantage--which applies with double force to social enterprises,

underlies all intelligently directed effort.

Unintelligent effort concerns itself with the principle of minimum

outlay--seeking to ascertain the least possible expenditure of energy

that will yield a subsistence. This is one of the essential distinctions

between the present day society and most of those that have proceeded

it. Likewise it is the difference between the more and the less highly

civilized portions of the earth at the present time. The individual or

the group--operating on a very narrow margin, or on a deficit that

involves constant misery and that may at any time spell disaster, tends

to slip by with the least possible misery or suffering, or, to put it

more technically, tends to expend the least possible amount of energy

that is required for survival. The moment the tables are turned, and the

individual or the group operates on a surplus which permits the

enjoyment of more than the bare necessaries, the law of minimum outlay

is supplanted by the law of maximum returns.

The truth of this principle is strikingly illustrated in Canada,

Australia, Argentina, and other relatively new societies where resources

are abundant and surplus is large. The same men and women who, under

European conditions of narrow marginal living, were satisfied to survive

with the least possible expenditure of effort, are transformed into

creatures operating on another economic plane. In these new and fertile

countries, where the individual, and indeed, the entire group is able to

live above the line of bare subsistence, and where surplus is so easily

accumulated, the individual devotes himself untiringly to the economic

struggle. It is not because they are poor, but because they have a

chance to get rich that these people are willing to expend unusual

effort.

Just as the individual, working on a basis of economic surplus, directs

his energies to the task of insuring and of increasing the surplus, so

the group, which has a similar economic advantage, devotes itself to the

task of building up a surplus as soon as it realizes the possibility of

increasing its returns through an increase in the energy and

intelligence devoted to group purposes.

The personal comfort and the industrial prosperity of temperate zone

civilizations depend, at the present moment, in great measure upon the

supply of coal which is available. Certain parts of the earth, such as

Wales, the Saar Basin and Newfoundland contain coal deposits upon which

the entire industrial society is dependent for its survival. It is,

then, a matter of the gravest importance to secure a maximum coal

output, at least to the point of satisfying the minimum demands of the

community. Whatever men and machinery are required to produce the ration

of coal upon which industrial efficiency depends must be directed toward

that goal. At the same time, waste, inefficiency and dis-employment,

whether of men or of machines must be reduced to a minimum.

What volume of production constitutes a maximum of return under a given

set of circumstances, experiment alone will decide, but the individual

and the social effort to secure this return must be unremitting.

Such maximum returns will be obtained by society when each productive

unit is operating at maximum efficiency. The efficiency of the human

body depends upon the efficient operation of the digestive system, the

respiratory system, the circulatory system, and so on. The stomach, the

lungs, the heart must all function smoothly to maintain bodily health.

The body cannot function as a body. It functions through the aggregate

activities of its various organs. The same thing is true of a society.

It is impossible for the economic system to secure its maximum returns

as a system. It will work only through the co-operative functioning of

its various constituent elements. If the efficiency (health) of the

economic system is to be preserved, it will be accomplished through the

effective working of the mines and other extractive units; the mills,

and the other fabricating units; the railroads and other transport

units. Each one of these constituent elements of the whole economic

society must be self-efficient, in order that there may be a high

standard of efficiency in the entire economic system.

The units of which the economic system is composed must therefore be

self-motivating and self-acting. They must be "alive." If one part of

the economic body is dead, the whole will eventually disintegrate and

decay.

2. _The Essentials for Maximum Returns_

The efficiency of the economic unit--the mine, the factory, the railroad

division--depends upon the attitude of the individual human beings of

which the unit is composed. Just as the entire economic system is made

up of an aggregate of functioning units, so each unit is made up of

functioning individuals. What would a coal mine be without its pick

miners, road men, drivers, door-men, dumpers? The efficiency of the

economic unit cannot be maintained unless the individuals who compose it

are self-acting, intelligent beings, who know what they want and why

they want it; who know the ends they desire to attain and how to reach

them. Without this beginning there can be no lasting efficiency in a

society that is dependent for its success upon the self-generated

activity of autonomous groups.

In order that society may enjoy a maximum of return for its outlay of

labor and machinery, therefore:

1. _The human values present in each economic unit must be maintained

at a high level through an appeal to the finest qualities of the

individual human being._

That appeal must be strong enough and constant enough, when coupled with

the economic appeal, to provide a reason or incentive for continued

activity.

2. _The integrity and permanence of the unit must be preserved._

The economic unit is one of the tools with which society does its work,

and is the means relied upon for the production of livelihood. Like the

axe of the woodsman or the lathe of the mechanic, the social tools and

machinery must be kept in effective working order if society is to

receive a return for its outlay of labor and materials. Three items

enter into the maintenance of this efficiency: (a) current repairs, (b)

periodic rebuilding, and (c) ultimate replacement. This is as true of

any part of the social structure as it is of mechanical devices. The

more complicated the structure the more necessary are rebuilding and

replacement.

3. _The productivity of the unit must be kept up to a high level of

efficiency._

This is the purpose for which the unit exists. Efficiency is the product

of the individual activity of the group members, and of the working

effectiveness of the mechanism with which they accomplish their tasks.

Thus both are essential to efficiency in production.

4. _Self-motivation and co-operation are the two fundamentally

important requirements in the working of all economic units._

The former is the best guarantee of the continuous functioning of the

unit. The latter links together the different units, making them working

parts of the whole economic system.

Here are four indispensable requirements--the maintenance of human

values, the preservation of group integrity and permanence, productive

efficiency and self-generated activity--for the building and successful

continuance of economically sound unit groups. If society is to secure

maximum returns, if the economic mechanism is to yield its largest quota

of goods and services to mankind, the units out of which society is

built must meet these requirements which constitute four of the

essential pre-requisites to the success of any economic experiment.

3. _Centralized Authority_

Granted the desirability of efficiency in economic organization, the

question at once arises as to how this efficiency is to be guaranteed.

Up to this point the means adopted to secure such an end have consisted

in concentrating economic authority in the hands of a small owning and

managing class, and in leaving with the members of this class the

determination of policy and of methods of procedure.

The concentration of administrative authority at one point has proved

impracticable, first because of the great amount of red tape involved in

the handling of the endless detail, and second because of the resulting

destruction of initiative and enterprise. Such a centralization of

social function would be just as cumbersome as a like centralization of

all bodily functions in the higher brain centres. If men were compelled

to reason about and to direct each step, each movement of eyes or hands,

each breath, each heart-beat, the attention would never pass beyond the

boundaries of such pressing and never-ending routine. Many bodily

organs, like the stomach, function involuntarily. Walking becomes

habitual. It is only when the stomach and the legs fail to work properly

that they become the objects of attention. The same thing should be true

of a well-directed economic system. Each local unit should function

locally and autonomously, and the problems of local function should

never come to the attention of a more central authority until there is

some failure to work on the part of the local unit.

Those who despair of the future of society, and who feel that effective

co-operation between social groups is impossible, should remember that

the organs of the human body have been gaming experience in co-operative

and harmonious function for hundreds of thousands or for millions of

years, while the organization of society is an art that is still in its

extreme infancy. The astonishing thing about the various social groups

is not that they work so badly together, but that they work so well.

As the centralization of authority increases, the amount of red-tape

piles up until more social energy is consumed in overcoming social

inertia and the friction that is the result of social function, than is

produced by the function in question. When this point is reached, the

social machinery operates at a constant loss, and it is only a question

of time when it will cease to operate altogether, and the social

machinery will begin to disintegrate into its constituent elements. The

greater the degree, therefore, of localization, provided the mechanism

can be held together and kept in working order, the less the loss in

social energy.

4. _An Ideal Economic Unit_

The social group thus faces two problems: One is the development of

sufficient energy to keep the social machinery going. This problem is

tied up with the stimulation of human wants, as it is only from the

aroused energies of men and women that the social energy is derived. The

other is the reduction of social friction and other forms of social

waste to a minimum, in order that the largest possible amount of social

energy may be devoted to the work of driving society.

The present social order relies, in part, for its driving power on man's

desire for personal economic advantage. Where the rewards have been

considerable, large amounts of energy and ingenuity have been developed

as the result of this stimulus. The worker, the manager, the whole

producing unit strove to excel, both because failure carried with it the

penalty of destruction (bankruptcy or unemployment) and because success

carried with it the probability of large economic rewards (profits). The

result was an outpouring of social energy in the various independent

local groups.

The real difficulty inherent in the earlier stages of the present order

was not its failure to secure abundant human exertion, but its failure

to provide any means of co-operation between individuals and between

groups. The same set of social principles which decreed local rewards

and local punishments for initiative and enterprise, or for the lack of

them, was built upon the theory that "competition is the life of trade."

Thus, while the present economic system, in its earlier stages tended to

stimulate initiative, its form made co-operation difficult or

impossible.

The ideal economic unit would be one capable of generating its own

driving power, and given a legitimate exchange of commodities and

services with other units, one that could maintain its own energy and

efficiency. A society composed of such units would have great vitality

because its energy would be generated in a large number of more or less

independent localities. A study of the agricultural village of Central

Europe or of the Mexican Indians shows how workable and how stable such

a form of society really is.

The only practicable method of maintaining efficiency and of reducing

the friction incident to social function is to erect a form of local

self-government that will make possible both the stimulation of

initiative and effective co-operation between groups.

5. _Rewarding Energy_

The issue of economic self-government resolves itself into two

questions, which the average human being will sooner or later ask:

1. What do I get out of it?

2. Who is to be the boss?

The intelligent man or woman cannot be expected to exert himself freely

for the building of a palace at Versailles, on whose grounds he can

never set foot, or for the maintenance of a Palm Beach that he sees only

on the screen. The economic necessities are too immediate and the

economic urge is too strong.

Before the individual will expend his maximum energy upon the economic

process, he must see tangible results such as bread, shoes, schools, and

holidays. One of the strongest arguments that the present economic

system advances in favor of its continuance is the showing of large

tangible returns in the form of economic goods. To be sure these results

have not been secured by everyone, but there is neighbor Pitt who

started as a stable boy, and who now owns the largest garage in the

city; there is neighbor Wallace who began life as a grocery clerk and

to-day is master of many acres of coal and timber. Besides, yonder store

is filled with the good things of life, ready for anyone who has the

money to buy them. Many persons, under the present system, make enough

to buy all of them and others beside. So the argument runs, and those

who advance it can give a wealth of instances to prove the point.

The huge rewards of the present system even though they have gone to the

very few, have been turned over to those who could survive in the

struggle. Everyone knows that the winners in a lottery are few and the

losers many, yet each buys a ticket because he hopes and expects to be

one of the winners.

Society, as reconstructed, must be less of a gambling venture and more

of an established certainty, with the material rewards going to those

who are responsible for producing them. And each person who thus shares

in the economic rewards of society must see the connection between the

energy expended and the share received. Only while such a connection

apparently exists will economic effort be expended by the normal

individual.

6. _The Ownership of the Economic Machinery_

The individual cannot be expected to exert himself where there is no

apparent connection between the effort expended and the return for his

effort. Neither can he be expected to exert himself in the interest of

economic machinery that belongs to someone else. His interest can be

maintained only by the hope of a return for the effort that he expends,

and by a sense of control over the job on which he works. Among the

various experiments that society has tried, in an effort to attain these

ends, none has been more successful than self-government.

The application of the principle of self-government to the economic

world involves the control of economic machinery and economic policy in

each unit by those who compose the unit. The members of each economic

group must be supreme in their own field, except in so far as their

decisions affect the welfare of other units. In such cases the decision

must rest with that larger economic group to which the involved economic

units belong. Thus the aim of economic self-government is to keep the

responsibility centered upon those who would normally be the most

concerned in getting results.

All matters of policy will therefore be decided by those individuals or

groups that are directly involved. Where possible such decisions should

be reached in open meetings corresponding to the tribal council or the

town meeting. Such meetings may always be held in local economic units,

such as collieries, departments of factories and the like. Where it

proves impossible to get the members of an economic group all into one

meeting place, their affairs must necessarily be transacted by

representatives, chosen as directly as possible.

7. _Economic Leadership_

The decisions having been made with regard to matters of policy, the

next and equally important question arises: "Who shall be entrusted with

the duty of seeing that policies once decided upon are carried out? Who

shall be entrusted with leadership in economic affairs?"

Those who are entrusted with the carrying out of economic policy in a

producers' society may be divided, roughly, into two classes: the

executive and the expert. The executive is the director of general

policy. The expert is the specialist, selected to do a particular piece

of work. For example, the representatives of District 2, United Mine

Workers of America decide that, as a matter of general policy, they will

advocate the nationalization of the coal mines, and they instruct their

president and their executive board accordingly. The executives of

District 2 are therefore charged with the duty of organizing a

propaganda, which, to be effective, must consist of a well-ordered

summary of facts about the coal mining industry, put in a form that can

be easily understood by the average man, and distributed in such a

manner that it will reach the people responsible for coal mine

nationalization. Here, then, are three distinct tasks: (1) an

investigation of the facts; (2) a plan for nationalization; and (3) an

advertising campaign. The first two of these tasks, to be well done,

must be placed in the hands of engineers, statisticians and mine

experts. The third will fall to the lot of an advertising or publicity

man. The president of District 2 is an executive, charged with the duty

of seeing that a program of mine nationalization is carried forward. The

engineers, statisticians and advertising men that he secures to do the

work in their respective fields are experts. These distinctions have

been well established in the world of government and of business, and

they are rapidly finding their way into the world of labor.

There can be no great difference of opinion about the expert. He is a

technically trained man, and as a chemist, an electrician, or as an

auditor of accounts he has a special field in which he is supposed to be

a master craftsman. The selection of such an expert, therefore, is a

question of finding men with the knowledge and experience necessary for

the doing of a certain piece of work.

8. _The Selection of Leaders_

The situation is far more complicated when it comes to the selection, of

the executive. He is the keystone of the social arch--the binding force

that holds the various parts of the group apart and together. Upon his

decisions may depend the success or the failure of an entire enterprise,

because, tie him with red tape as you will, he still has a margin of

free choice in which he registers his success or failure as an

executive.

The executive is put in office to do the will of a constituency and to

carry out a certain policy. But what is the will of the constituency,

and which one of a half dozen lines of action will most completely and

effectively carry out the policy in question? The executive must find an

answer to those questions, and he must find it hour after hour and day

after day.

Society has striven for ages to devise a successful method of picking

executives, and of keeping a watchful eye on them after they assume the

reins of government. There are three general ways in which the selection

may be made:

1. Through heredity--the leadership descending from one generation to

the next in the line of blood relationship.

This is the method practiced in all countries that have kings,

aristocrats, plutocrats or others who automatically inherit power from

their ancestors.

2. Through self-selection--the leadership being assumed by those who

are the quickest to seize it.

Primitive, disorganized or unorganized societies or associations pick

their leaders in this way. The strongest, the most courageous, the most

cunning, press to the front in an emergency, and their leadership is

accepted as a matter of course by those who are less strong or

courageous or cunning. The leaders of a miscellaneous mob are apt to be

thus self-selected. The leaders of new activities, like the organized

business of the United States and Canada, have been, for the most part,

self-selected. Seeing opportunities for economic advantage, they have

grasped them before their fellows realized what was happening. The great

accumulations of economic power that were made in this way during the

past generation are now being passed from father to son, and the

leadership in American economic life is therefore tending to fall into

an hereditary caste or class. There is still, however, a considerable

margin of self-selection of American economic leadership.

3. Through social selection--the right and duty of leadership being

assigned by the group, after some form of deliberation to a

designated individual.

This is the method common to all highly organized and self-conscious

societies that are not dominated by a system of hereditary caste rule.

Public officials in most of the countries of the world, officials of

trade unions and other voluntary associations are usually selected in

this manner.

The selection of executive leadership in any organized society must be

through heredity or through group choice. Self-selection is necessarily

confined to new or temporary or loosely organized groups.

9. _The Details of Organization_

These general principles of economic self-government may be applied to

local, district, divisional and to world economic groupings. To be sure

the application, in each instance, will be varied in accordance with the

peculiar needs in question, but a general scheme of procedure may be

suggested somewhat as follows:

1. SUGGESTIONS FOR THE ORGANIZATION OF A LOCAL ECONOMIC UNIT IN A

GIVEN INDUSTRY--A MINE, FACTORY, STORE--

a. The entire working force would meet at regular intervals, in a

shop meeting, or colliery meeting, or store meeting, to transact

general business.

b. At such a meeting a shop committee selected by those present,

would be charged with the responsibility of directing affairs in the

shop that had selected it. The shop committee would consist of a

small group, varying in size with the size of shop, under the

chairmanship of a person selected by the workers at the same time

they elected the committee.

c. This chairman of the shop committee would be called the shop

chairman. His duties would correspond roughly with those of the

present-day foreman, or with those of the shop-steward or shop

chairman in some of the more advanced of the British industries. In

reality this shop chairman would be the shop executive, holding

office while he could retain the good will of his shop-mates, and

while he could give a satisfactory account of his shop in the way of

production and discipline.

d. Where there were a number of departments in a large factory, store

or other establishment, there would be a plant committee made up of

the chairmen of all shop committees in the plant.

e. Where plant committees were organized, it would be their duty to

designate one of their members as chairman. This plant committee

chairman would therefore be what, under present conditions, is the

general manager of the plant, with his fellow committeemen as his

executive committee or board of managers.

f. Each economic unit, whether shop or plant, would have its

engineers or experts, picked, like other workers, by the shop

committee or the plant committee, and responsible to that committee

for the particular tasks assigned to them.

All participation in the activities of this basic economic unit--hiring

and firing as it is called--would be determined by the shop committees

and by the plant committee, each with final local jurisdiction,

subject, of course, to a referendum of the workers in the department or

the plant concerned. By this means, the members of each basic economic

group would be made the sole judges as to those with whom they should

work. Each group would therefore have an opportunity to set its own

group standards and to build up its own group spirit.

The individual worker, in order to secure a job, or work place, must

therefore subject himself to the scrutiny of his prospective shop-mates,

perhaps even to work for a time on probation, and this to prove his

fitness to join the group and thus to participate in its activities.

Such a plan would provide a self-governing and self-directing economic

unit, capable of adaptation to the various phases of economic life, and

at the same time capable of generating its own social steam, and thus

driving itself forward on the path of its own activities.

Farming, hand-craft industries, and other occupations in which the

worker owns his own tools, and is worker, manager and business-man

combined, would be forced to organize a local unit more nearly

approximating the medieval guild or some of the modern organizations for

producers' co-operation. The general principles of organization would be

the same in the one case as in the other, power and control being held

locally by self-directing, autonomous groups.

This plan for the organization of a local self-governing economic unit

represents an attempt to apply the best principles of economic and

political science to the working out of an intelligently directed

society.

2. SUGGESTIONS FOR THE ORGANIZATION OF AN ECONOMIC DISTRICT IN A

GIVEN INDUSTRY.

a. The district would consist of a number of economic units in the

same or in an immediately related field of industry. For example, it

might be formed of steel mills alone, or of machine shops and steel

mills, or of machine shops, steel mills, and foundries. The decision

on the matter of membership in the district would rest, first with

the local economic units that united to form the district, and

second, with the industries immediately concerned. The purpose of the

organization would be to link together those economic units that were

most dependent upon one another, and that therefore had the most

interests in common.

b. When formed, the organization would apply for recognition to the

divisional organization of its particular industry. If the district

comprised manufacturing industries, it would apply to the divisional

organization of the manufacturing industries; if the district

comprised coal mines, it would apply to the divisional organization

of the extractive industries. It would be to the interest of the

divisional organization to recognize only such district organizations

as did not involve the divisional organization in jurisdictional

disputes.

c. After securing recognition from the divisional organization, the

district organization would be the judge of its own membership, and

would be in a position to add such local economic units as were to

its advantage in pursuit of its general policy.

d. The control over the affairs of the district would be in the hands

of a district committee, elected directly by the workers of the

district, each group of workers voting by ballot in its own shop.

A. When the elections for membership of the district committee were

held, the members of the plant committees, or of the shop committees

where there were no plant committees, would be the candidates. By

this means, only those of recognized standing in a local group could

become candidates for the higher offices. At the same time, the local

group, when it elected to local office would be nominating for higher

office.

B. When a plant committeeman was elected to the district committee,

his position in the plant committee would be filled by special

election.

e. The district committee would be a large body, consisting of at

least one representative from each of the plants or shops in the

district.

f. The routine work of the district committee would be handled by the

district executive committee, picked by the district committee from

its own membership, and responsible to it as a board of managers.

g. Each district would have its staff of engineers, experts or

inspectors, whose duty it would be to check up on the technical side

of the activities in the district, very much as a county agricultural

agent or a district sales manager checks up on the work of those who

come within his jurisdiction. These experts would be selected by the

district executive committee, subject to the approval of the district

committee.

h. Where possible, important issues confronting the district would be

brought to the attention of the workers in the district through one

or a series of mass meetings. Where this proved to be impossible,

newspapers, leaflets, and other forms of printed information must

suffice.

i. The district would therefore be a self-governing group of economic

units, engaged in activities that fell within one of the main

divisions of industry. It would be the judge of its own economic

affairs and would be autonomous in all matters affecting only the

district.

3. SUGGESTIONS FOR THE ORGANIZATION OF A GEOGRAPHIC DIVISION WITHIN A

GIVEN INDUSTRIAL OR OCCUPATIONAL GROUP.

a. The division would consist of a convenient geographic area, in so

far as possible contiguous and closely bound together by transport

facilities, related economic interests, etc. North America, South

America, South Africa, and Mediterranean Basin, Northern Europe,

Northern Asia, Eastern Asia, Southern Asia, and Australia might be

agreed upon as such divisions.

b. The organization of the division is, in the main, a replica of the

organization of the district, with two exceptions:

A. The scope of the organization is limited geographically to the

division in question, and covers all of this division, whereas the

district organization includes a group of local economic units, which

are not necessarily contiguous, and are in no particular geographic

relation to one another. While the district organization is strictly

industrial, the divisional organization is industrial and geographic.

B. The organization is definitely limited to the major occupational

groups, each of the groups covering the whole of the division. Hence

there would be, in each division, a division organization of

transport workers, a division organization of agricultural workers, a

division organization of those engaged in manufacturing and so on,

making a divisional organization for each of the major industrial

groups. A district might comprise only one branch of an industry such

as textile manufacturing or electric transport. All of these

districts would be included, however, in the particular divisional

organization with which they would logically affiliate. Thus there

might be a district organization for the textile workers of Lyons and

vicinity, and another district organization for the metal workers of

St. Etienne and vicinity. Both districts would be included in the

divisional organization of the manufacturing industries of the

Mediterranean Basin.

c. The control of each industry within a division would be vested in

a divisional congress, elected directly by all of the workers in the

division who were engaged in that industry.

A. The members of this congress would be elected by districts, with

a minimum of at least one member from each district, and an additional

member from each district for each additional quota of workers over

a specified minimum. The details would necessarily vary with the

division, but if there were 100 districts in a division, with a

million workers in all of the districts, each district might be

allowed a minimum of two members in the divisional congress, with

one additional member for each 5,000 workers in excess of 10,000.

Under such an arrangement, a district with 25,000 workers would

have five representatives in the congress, and so on.

B. The members of the district committees are the candidates for

election to the divisional congresses.

d. The divisional congress meets at least once in each year, and

within thirty days of its election.

e. The divisional congress picks from its own membership a divisional

executive committee, which meets at intervals through the year, and

is responsible for the affairs of the division when the divisional

congress is not in session.

f. The divisional congress selects from its membership a divisional

executive board which sits constantly. Its members are members of the

division executive committee, and it is responsible to the division

executive committee when the division congress is not in session.

g. Each divisional executive board picks a staff of experts or

engineers, who are approved by the divisional executive committee,

and who constitute the technical general staff of the division.

4. SUGGESTIONS FOR THE ORGANIZATION OF A GENERAL INDUSTRIAL GROUP ON A

WORLD BASIS.

a. The general industrial group, or general occupational group, would

be a major subdivision of the world's industrial life. All of those

producers who were engaged in like activities would be classed

together, and the number of these world industrial groups would be

determined as a matter of administrative convenience. The producers

of the world might, for example, be divided into the following major

industrial groups: agriculture, the extractive industries,

manufacturing, transport, trade, housekeeping, and general

(miscellaneous) workers. Some such economic grouping of producers

would include all who are employed in producing goods and services

and would provide the basis for an alignment of the world's

population in terms of what the producers did rather than in terms of

where they lived.

b. Thus far, in the detailed statement of local, district and

divisional organization, only the barest outline has been given,

first because it was the intention to discuss the world economic

problem rather than the local problem, and second because the

internal structure of each industry would be determined largely by

that industry, and would, of necessity, vary considerably with the

varying industrial conditions. The organized world industries,

however, are the economic framework of the producers' society, and

their organization becomes a matter of the most supreme concern to

producers everywhere.

c. The control of affairs in each of the major industrial groups

would be vested in a congress of from 500 to 1000 members, meeting at

least as often as once in each January.

A. The members of the divisional congresses, within these same

industrial groups, are the candidates for election to the world

congress. They are voted for directly by the workers in each

division, and if they are elected to the industrial congress, the

places thus made vacant in the divisional congress are filled by

special election.

B. Each division would send a minimum of twenty members to the

industrial congress, and an additional member for each specified

quota of workers.

d. The industrial congress would pick an executive committee from its

own membership. This committee would meet at regular intervals, and

would be responsible for the conduct of the industry when the

industrial congress was not in session.

e. The congress would pick a number of additional committees to deal

with the various problems arising within each industry. These

committees might be called policy committees. In practice, and for

the sake of greater effectiveness, it might be desirable for the

industrial congress to select a chairman, permit him to pick his

committee from the membership of the congress, and then endorse the

whole committee, very much as a minister in a responsible government

picks his cabinet. Since these committees would be concerned with

problems of policy on one side and with problems of administration on

the other, such a method would develop a far more harmonious working

group.

f. The chairmen of these various policy committees together with the

chairman of the executive committee would constitute the board of

managers of the industry, which would be the responsible directing

authority for the world industrial group.

g. Connected with each of these committees, and selected by them,

there would be a board of engineers and experts, responsible for the

technical side of the industry.

A diagram may help to visualize the relations existing between the

various parts of the world organization. (p. 98.)

10. _The Progress of Self-government_

This outline of the organization of one of the major world economic

units is tentative and suggestive rather than arbitrary or final. The

details of the plan would necessarily vary from one industry to another

and from one district and one division to another. All such matters of

detail would be subject to the decisions made by the district

committees, by the divisional congresses and by the world congress of

each industrial group.

The aim of the plan is to build up an economic structure that will be

efficient and at the same time sufficiently elastic to meet the changing

needs of the times. Production is always necessary, but the methods vary

from one age to another. The changes which occur in the economic

activities of a population must find their counterpart in the changing

economic structure of that community, otherwise disorganization and

chaos will inevitably result.

The means best calculated to preserve the efficiency and to guarantee

the mobility of the economic life of the world is self-government. No

other known means of directing and controlling social affairs will

secure permanent results, either of efficiency or of mobility.

PLAN FOR THE WORLD ORGANIZATION OF ONE INDUSTRIAL OR OCCUPATIONAL GROUP

--------------------------------

| |

| Industrial Board of Managers, | Sits

| composed of committee chairmen | Continually

| |

--------------------------------

/|\

/ | \ Each division

/ | \ represented on

/ | \ each committee

/ | \

--------- ---------- ---------

--------- ---------- ---------

\ | /

\|/

-----------------------------------

| Industrial Congress consisting of | Meets in January,

| representatives from each of the | no division less

| world divisions | than twenty members.

-------------------------------------

/|\ \

/ | \ \

---------- ------------- --------- \

---------- ------------- --------- division.

Self-government is present to some degree in every form of society of

which there is a record. Under some circumstances it is confined to one

caste or class. Again it is the right of the whole society. In one place

it is confined to political affairs alone. In others it is present in

all public activities. Everywhere, however, there is self-government of

some kind.

Recent generations have devoted their attention to the fostering of

political self-government, and to the organization of a multitude of

voluntary associations based on the self-governing principle. Generation

by generation the peoples have been prepared to assume an

ever-increasing authority over the complicated mechanism of public

affairs. Self-government in the clan or in the agricultural village was

a simple matter compared with the management of public affairs in a

modern economic society. It is this task, however, that confronts the

present generation. The principle of self-direction, extended into the

complex field of economic relationships, must be relied upon to pull

together the scattering threads of economic activities. That this task

involves an immense amount of propaganda and educational activity, goes

without saying. That it is the only sound basis for social procedure

seems to be the conclusion inevitably arising out of a careful

examination of the premises.

The organization of sound economic groups is a problem in the field of

social engineering. The preparation of the industrial populations for

economic self-government is a problem in the field of education. Both of

these problems lie at the root of any effective reorganization of the

world's economic affairs.

V. A WORLD PRODUCERS' FEDERATION

1. _World Outlook_

An organization of producers into groups corresponding with their

occupations lays the basis for world thinking and world federation. Each

active member of society would then be directly associated with a group

that was world wide in its scope, so that transport workers, miners,

farmers and other producers would be in constant touch with similarly

occupied men and women on every continent.

One of the principal disadvantages of the present organization of

society is the sectionalism arising out of the political divisions

established by national boundary lines. In a world where all of the

producers were organized along lines corresponding with their

occupations, sectionalism would have much less chance to play a role in

the lives of the people. To be sure issues would arise between the

various economic groups, but each individual would be affiliated with a

world organization, and the scope of his interests and of his thinking

would therefore be much broader than it is under the present system of

political divisions. World thoughts and world views on a hitherto

unknown scale would be the logical outcome of world economic

affiliations in producer groups.

The organization of society along the lines of production will therefore

necessarily broaden the outlook of those whose visions are now limited

by the confines of a political state, and the present ties of loyalty

which bind the individual within a geographic area would then attach him

to a world organization and would compel him to think in world terms.

That there are limitations imposed by the affiliation of the individual

with an economic group cannot be denied, but such limitations are far

less drastic than those prescribed by restricted geographic areas.

2. _The Need of Organization_

The organization of society in terms of economic activity, building up

through intimate local units, through district and divisional units to

world organization within the major industrial groups does not provide

any basis for effective co-operation between the individual groups. The

metal workers of the world might produce machinery and the farmers

wheat, but by what means are they to exchange their product and regulate

their output in a way to secure the maximum of advantage on both sides?

There are two outstanding characteristics of present-day economic life.

One is its world scope. The other is the intimate and constant

inter-working of the various parts of the economic machine so well

described by J.A. Hobson in his book on "The Industrial System."

Agriculture, mining, transportation, manufacturing and so on are all

linked into one functioning mechanism. To be sure there are times when

the machine does not work very well--as after a great economic

depression, but the purpose is there, the intermittent working harmony

of the mechanism is unquestioned, the experience in world economic

activity is a permanent part of the heritage of the race, and there

remains only the task of making world economic relations more effective

and more permanent than they have been in the past. The ice has been

broken in the sea of world economic life and the human race has already

taken many a plunge in its waters.

Under any form of society that can be foreseen in the immediate future,

the need of close co-operation between the various parts of the world

economic mechanism will tend to increase rather than to diminish, and it

is therefore of great importance to have at hand a means of maintaining

and facilitating the contacts between the different economic groups.

The present system has given economic life an exceptional opportunity to

grow within the boundaries of single nations, and to co-operate within

those areas that are not sacred to competition. Meanwhile the need for

world co-operative organization has grown steadily with the evolution of

economic life on a world plane, fostered by some of the clearest

visioned among the men who are responsible for the direction of the

economic world.

3. _Present-day Economic Authority_

Under the present system of society the linking together of the various

parts of the economic world is a private matter. Mines, factories and

mills use the railroads as a means of transporting their products. The

intermediary in this as in other transactions between the various

branches of the economic world is the bank. Thus the banker, who

provides the credit, and through whose private institution financial

transactions take place, becomes the arbiter of economic destiny,

rendering decisions upon which the well-being of the masses or producers

depends, yet wholly irresponsible for the results that follow on these

decisions. Using the people's money, possessed of vast authority over

the jobs and the property of the producers, the banker is answerable

only to other financiers who have a similar power and who enjoy a

similar freedom from social restraint. Within the scope of the law

prohibiting fraud and theft, and subject to the limitations of

conscience the bankers and their confreres follow the dictates of their

own inclinations. Quite naturally, under the circumstances, they have

grown rich, and powerful far beyond the extent of their riches, since

their control of the credit--upon which the whole business community

depends--and their easy access to other people's money in the form of

insurance premiums and savings bank deposits, place them in a strategic

position which permits them to dominate and to dictate outside the

boundaries of their ownership.

The power now exercised by the bankers will, in a producers' society, be

under the control of public servants whose business it will be to link

up the various lines of activity within the economic machine.

At one stage in the development of the world's economic life it was

necessary to take out of the hands of private individuals the right to

issue money, and to make of money issue a public function. To-day no one

questions the desirability of having money issued by public authority,

and the right to issue money is recognized as one of the important

attributes of sovereignty.

Meanwhile there has been a change in the character of the medium of

exchange. Credit and not money is employed to adjust most of the

relations between economic groups. In 1920, for example, the total

amount of money in circulation in the United States, including gold,

silver, and all forms of paper money was only 6,088 millions of dollars,

while the bank-clearings--that is, the exchange of checks between

banks--totaled 462,920 millions of dollars. If to these figures are

added the volume of checks drawn and accepted on the same bank, the

amount of commercial paper discounted, etc., some idea may be obtained

of the importance of credit transactions as compared with the use of

cash under the present system. Nevertheless, while the right to issue

money has become a public function, the right to issue credit remains in

the hands of private bankers.

Under a producers' society, the relation between the various groups of

producers will be maintained through a system of book-keeping that will

charge against each economic group what it uses in the form of raw

materials, machinery and the like, and will credit each group with the

value of its product. Such a system is in vogue in any large industrial

plant, where each department keeps its own accounts, charges the other

departments with what they get from it and credits them with what they

receive. The whole is handled through a central book-keeping system.

The principle of social book-keeping is not new, therefore, but is an

essential link in any large and complex economic organization. It merely

remains to apply the principle to producers' groups instead of to the

affairs of a private banker or to the book-keeping system of some great

industrial trust.

How shall a joint control be exercised by all of the producers' groups

over those economic activities, such as the handling of credit, or

social book-keeping, that affect more than one of them? The obvious

answer is that they can be transacted through some organization in which

all of the groups participate on a footing of economic equality.

Common, interests will sooner or later compel common action, or action

through a joint board. The point has been reached in the economic

history of the world where some such common action of the producing

groups is vitally essential to their continued well-being. The logic of

economic development is compelling men to turn from the owners' society

of the present day to a producers' society, organized by the producing

groups and functioning in those cases where the single group of

producers finds effective function impossible.

4. _Federation as a Way Out_

Experience has shown that the best way to secure co-operation among a

number of groups having more or less divergent interests is through a

federated or federal system of organization, under which each of the

constituent groups retains control over those matters which relate

exclusively to the affairs of that group, while all matters affecting

the well-being of two or more groups are handled through the central

organization or federation.

The United States of America is an association of sovereign states, each

of which retains the right to decide those matters which are of

importance to that state alone, while all questions of interstate

concern are automatically referred to the Federal Government. At the

same time, matters of common concern to all of the states such as the

coinage of money, relations with foreign governments, the regulation of

commerce with other nations and between the states, and the like, are

also under exclusively federal jurisdiction. By this means, those

questions which are of local moment may be settled within the state in

which they arise, while all questions affecting the interests of more

than one state, and those having to do with the common interests of all

the states, fall within the jurisdiction of the Federal Government.

The organization of business has followed similar lines of federation.

During the early years of capitalism there was a strong tendency to

concentrate all of the power of a given business at one point, and in

the hands of one man. With the growth of large enterprises, however,

such centralization became unworkable. Instead of a single

generalissimo, business organized the general staff. The corporation

with its board of directors (executive committee) helped to make the

transition, and when the United States Steel Corporation was formed, at

the peak of the period of American trust organization, its constituent

companies were given large scope for individual initiative and activity.

The tendency toward departmental autonomy in large businesses is also

very marked. Bitter experience with "one man" concerns and top-heavy

organizations convinced business men that the road to success lay along

the path of federated autonomous units rather than of highly centralized

bureaucracies.

The labor movement has had the same experience in many of the more

advanced countries of the world. There has been almost a century of

local, independent groups, each one acting on its own initiative. The

failure of such a divide-and-perish course was predicted from the

beginning. Then there have been highly centralized organizations of

considerable extent and power, like the American Knights of Labor,

which flourished for a time and then dried up and blew away. But out of

the hundred years experience, the labor movement, as at present

organized in Germany, Britain, Belgium, the United States, etc., is an

exponent of the social principle that local autonomy must be preserved

in all local matters, while questions of general concern must be

referred to some general body which represents the general interest.

One of the most insuperable difficulties before the world at the present

time is the lack of any central authority to which may be referred those

matters of general and vital concern that affect the peoples of more

than one nation. The peoples feel this lack. They are aware of the fact

that industry, science, commerce, art, literature have all leaped the

national boundary fence. This is particularly true of Western Europe,

whose economic life is closely interwoven, and dependent on certain

centers of coal and iron production, and whose political boundaries were

determined before the present economic system was dreamed of. The

importing of food and of raw materials, the development of markets and

of investment opportunities, the organization of means for the transport

and the exchange of commodities are matters of common concern to all of

the important countries of Western Europe. Before the outbreak of the

world war, Europe was an economic net-work of transport, finance and

trade, and as a matter of course, communication and travel were common

between all of the industrial countries. But while there were so many

matters of common concern to Britain, France, Germany, Russia, Austria,

Belgium, there was no central authority to which these questions could

be referred for decision when the threads of mutual interest became

tangled. Instead, secret and competitive statecraft made the tangle

worse. The mass of conflicting jurisdictions and of petty jealousies

that have grown up among the two score of independent and sovereign

states of Europe made a conflict almost inevitable.

Under a federated system of the European states, civil war would be

possible, but the chances of a conflict would be greatly lessened by the

presence of a central authority before whom questions of divergent

interests could be publicly threshed out. For when issues arise between

organizations of equal and parallel jurisdiction, a conflict can

frequently be avoided if there is some commonly recognized and superior

authority before whom the points in dispute may be laid, and whose

decision will prove binding on both parties.

What is so obviously true of Europe is also true of the remainder of the

Western world, though to a lesser degree. The economic, social and

cultural life of civilization has passed beyond national boundaries.

Until this fact is recognized, and until some organization is created

with a jurisdiction as wide as the problems at issue, misunderstanding,

conflict and catastrophe will continue to occur.

5. _Building a Producers' Federation_

The first step in economic reorganization is the recognition or

establishment of local district, divisional and world groups of

producers affiliated along the lines of their economic activities. This

is a simple acceptance, in social terms, of the economic forms that have

been evolving since the industrial revolution.

The second step in economic reorganization is the recognition or

establishment of local, district, divisional and world federations of

the local, district, divisional and world industrial groups. This second

step must be taken in order that there may be some authority competent

to deal with those problems which are common to two or more of the

groups in question.

There are two general types of problems that the federations of

industrial groups will be called upon to handle:

1. Those problems involving inter-relations between the various

producing groups, such as the factory workers, transport workers,

agricultural workers and the like, that must exchange their products

and receive from one another the materials upon which existence

depends.

2. Those problems which are common to all producing groups simply

because they are common to men and women who are trying to live and

to function together. The water-supply, roads, education, are

questions of this type.

Problems of the second sort, and the issues raised by them, cannot be

entered upon at this point. The same federal authority that is charged

with the control over inter-industrial problems will likewise charge

itself, in each instance, with these common questions not immediately

related to industry.

This is not an attempt to under-estimate the importance of

non-industrial problems, but to confine attention, for the moment, to

matters directly related to production, with the conviction that when a

mechanism is developed capable of handling the industrial problems there

will be less difficulty in taking care of those not so closely related

to industry.

6. _Four Groups of Federations_

The issues arising between industrial groups, and those problems common

to all groups, will best be handled by federations having a

jurisdictional scope parallel to that of the separate groups of which

the federations are composed. If these component groups are local

economic units, the federation will be local in character. If they are

district economic units, the federation will have a district as its

sphere, and so on. By this means, there will be created a series of

federations or joint organizations, beginning with the federation of

local economic units, and ending with a federation of world industries.

Throughout this enlarging series of federations the principle of local

autonomy will be maintained in all of its rigor, and no matter will be

referred to a federation that can be handled by a local group. At the

same time, the principle of federal authority will be asserted, and

those matters that concern the welfare of more than one group of

parallel jurisdiction, will be referred automatically to the federal

authority under whose control the group in question falls.

The most elemental of the federations would be the local producers'

federation, which would correspond, quite accurately, to the town or the

city of the present day, save that its size and character would of

necessity be much better regulated than the character and size of the

present-day town or city. The modern city has been built as a

profiteer's paradise. From the construction of houses to the erection of

office buildings, the one foremost question: "What per cent will it

yield?" has been the guiding principle behind city construction. The

local industrial federation will have, as its chief task, the provision

of a living and working place for people, hence the character of the

industrial community will be determined with a view to the well-being of

the inhabitants rather than to the profit of landlords.

The local federation would be under the control of a local council, the

members of which would be elected by the producing units or groups

composing the local federation, very much as the modern city is managed

by a council elected by wards or aldermanic districts. Except for the

choice of representatives on the council by occupational groups, rather

than by geographic divisions, the local federation would closely

resemble the municipal government of the present day. In addition to its

present functions, however, it would assume the task of dealing with

issues arising between two or more of the local producing groups. That

is, it would have economic as well as political functions, although it

would not necessarily carry on any more productive enterprises (gas,

water, house-construction, abbatoirs) than do municipalities at the

present time.

The local producers' federation would be responsible for two chief

lines of activity. On the one hand, it would seek to maintain working

relations between the various local economic groups by adjudicating

those local questions that affected two or more of the groups. On the

other hand, it would take charge of, and administer, those matters of

common concern, such as the water supply, the local educational

institutions, and so on. This second group of functions would be similar

to those now performed by the city council, the board of health, the

board of education.

There would be a local producers' federation wherever a number of local

industrial units agreed to function together. Counties, cities,

boroughs, and school districts are, at the present time, organized very

much in that way.

The local producers' federation would therefore differ little from the

existing local groups, such as towns and cities, save that its

constituent elements would be occupational groups rather than geographic

divisions, and that it would be functioning in the economic as well as

in the political field.

The second series of federations might be called the producers' district

federations. They would include all district industrial groups within a

given economic field. Such a district federation would correspond,

roughly, to the present state as it exists in Mexico or Australia, or to

the provinces in Canada.

The district federation would function in three ways. First, there would

be the issues arising between the industrial organizations that composed

the district federation; second, there would be the issues arising

between local federations within the district, and third, there would be

those common matters, like health, education, highways and so on.

The third series of federations would be the divisional producers

federations, which would correspond, roughly, to such aggregations of

states as the Commonwealth of Australia or the United States of America.

The boundaries of such a federation would follow the boundaries of the

principal land areas and the chief population centers. North America,

South America, South Africa, the Mediterranean Basin, Northern Europe,

Northern Asia, Eastern Asia, Southern Asia and Australia would furnish a

working basis for separating the world into such geographical divisions.

Each of these divisional federations would function along the same

general lines as the local and district groups.

The fourth, in the series of federations, would be the world producers'

federation, which would be an organization composed of all of the major

industrial groups. These groups, each of which would be organized on a

world-wide basis, would unite in the world producers' federation in

order to further those interests that were of consequence to two or more

of them, as well as those common interests that were of concern to all

alike. The world producers' federation would be built on the same

principle as the local producers' federation, but unlike this latter

federation, the world federation has no prototype existing at the

present time.

The world producers' federation would be a world authority, linking up

those interests of world consequence that are now waving about like

cobwebs in the wind.

Throughout its entire course this outline has been designed in such a

way as to separate sharply the producing units and the administrative

groups (federations). The local, district, divisional and world

industrial units are the back-bone of the public machinery in a

producers' society. For the purposes of facilitating the work of

administration, these producers' groups are brought together, at various

points, in local, district, divisional and in a world producers'

federation, all of which federations derive their power directly from

the industrial producers' groups. The world producers' federation

therefore has no direct relations with the local producers' federation,

any more than the government of a county, in a modern state, has with

the central federal authority. The authority of the world producers'

federation, like that of the local, district and divisional producers'

federations, is derived from its constituent industrial member groups,

and is confined to the questions that are of immediate concern to a

number of them, or that are the common concern of all.

This arrangement will make difficult the production of a state of

present type which has drifted far away from some of the most pressing

necessities of the common life, and into the hands of politicians,--a

situation that permits tyranny on the one hand, and that makes any

adequate check on the activities of these political rings difficult or

impossible. This danger would be considerably reduced by delegating

administrative power to the federations, holding each within its

prescribed range, and keeping the real power in the hands of the local,

district, divisional and world industrial groups.

The decision of the world producers' federation would therefore be

binding on the industrial groups, and not upon the local, district and

divisional producers' federations, except in so far as the industrial

groups compelled these federations to follow the policy of the world

producers' federation.

It is probable that an exception would have to be made in the case of

issues arising between two divisional producers' federations. The burden

of settling such an issue should rest, however, on the industrial groups

rather than on the world producers' federation.

This withholding of authority from the federations in general, and from

the world producers' federation in particular may be open to criticism,

but it has several strong points in its favor. Through its control of

resources, transport and the like, the world producers' federation will

wield an immense power. Its constituent members, having aided in its

decisions of policy, may follow a similar course of action in the

divisional and the district producers' federations. Again, the

alternative to the organization of a series of disconnected federations

is a centralized bureaucracy of such magnitude, and holding such vast

power, that it would be both unwieldy and dangerous, beside violating

that very essential rule of local authority in local affairs.

The separation of the federations would compel each of them to

specialize on particular problems of administrative routine. Questions

that were to be carried to wider authorities would be carried by and

through the various constituent industrial groups.

The structural organization of the world producers' federation would be

similar to that of the United States of America or that of the Russian

Federated Soviet Republic. The constituent groups would be economic and

occupational rather than political or geographic, but the principle of

federated autonomous groups would be the same. Each of the major

industrial groups that belonged to the world producers' federation would

have sovereign power over those matters which affected that group alone.

The federation, on the other hand, would have jurisdiction over matters

affecting two or more of the world industrial groups, as well as over

those matters which were of common concern to all of the member groups.

7. _The Form of Organization_

The general lines of organization for the world producers' federation

would be somewhat as follows:

1. The workers in each of the major industrial groups would vote in

June of each year for the members of a world parliament which would

be the central authority in the world producers' federation.

2. The world parliament would consist of from 800 to 1000 delegates,

elected in each of the major industrial groups by the producers in

that group.

a. Each industrial group would be entitled to at least 50 members in

the world parliament, and to one additional member for each 50,000

workers over two and one half millions. But no group would be

entitled to more than 150 members in the world parliament.

b. The members of the world parliament would be elected by popular

vote in each of the major industrial groups, the franchise being

extended to all producers, including those who had been producers and

were rendered incapable of activity through age or infirmity.

c. Each industrial division would be entitled to at least five

members of the parliamentary delegation from that particular

industrial group, but the details of representation from each of the

major industrial groups would be left in the hands of the group.

3. The world parliament would be elected in June and would meet in

July of each year. Since the world congresses of each of the major

industrial groups would meet in the preceding January, they would

have six months to thresh out their individual problems, before they

were called upon to consider the general problems confronting all of

the groups.

4. The world parliament would select, from its own membership, an

executive committee equal in size to ten per cent of the total

membership of the parliament.

a. On this executive committee each of the world industrial groups

would be entitled to at least five members.

b. The executive committee would be the steering committee of the

world parliament, and when the world parliament was not in session,

the executive committee would be the responsible body.

c. The executive committee would meet once in four months, or oftener

at its discretion.

5. The executive committee would select, from its membership, a

number of administrative boards, at the same time naming the chairman

of each board. Each of these administrative boards would be charged

with the responsibility of handling a unit problem, such as the

control of resources, the control of transport, and the like.

6. The chairmen of the various administrative boards would constitute

the executive heads of the world producers' federation. They might be

called the world producers' federation board of managers. This board

of managers would be responsible to the world parliament executive

committee.

a. If, at any time, the board of managers failed to secure a vote of

confidence from the world parliament executive committee, on any

matter involving a question of general policy, the board of managers

would be automatically dissolved, and the executive committee would

proceed at once to select a new board that would replace the old one.

b. If the executive committee failed to select a board of managers

that could secure a vote of confidence, the world parliament would be

automatically summoned to meet one month from the day on which this

failure to elect occurred.

c. As soon as it convened, the world parliament would proceed, as a

first order of business, to the election of an executive committee

which would function.

d. If the parliament failed to elect an executive committee capable

of functioning, the parliament would be automatically dissolved, a

special election would be held within ten days, a new parliament

would be selected, and would assemble thirty days from the date of

this special election.

e. By these means, the whole machinery of the world producers'

federation would be rendered immediately responsive at all times to

the sentiment of its constituency, and the board of managers would be

compelled to function in line with the policy of the executive

committee and of the world parliament, or turn the work over to

another group.

PLAN FOR WORLD ECONOMIC ORGANIZATION

----------------------------------

| | The world

| Board of Managers consists of | executive

| chairman of administrative boards| with one

| | member from

| | each industry.

----------------------------------

/|\

/ | \

--------------- -------------- --------------

--------------- -------------- --------------

\ | / Boards of

\ | / experts and

\ | / specialists with

\ | / chairmen selected by the

\|/ world executive committee.

---------------------------------------

| | Committee meets

| World Executive Committee consists of | quarterly. No

| ten per cent of World Parliament | industry less than

| | five members.

---------------------------------------

----------------------------------------------

| | Meets in July

| World Parliament consists of representatives | July. No

| selected directly by the producers in each of| industry less

| the major industrial groups | than fifty

| | members.

----------------------------------------------

/|\ \

/ | \ \

------------ ---------- ------------ \

------------ ---------- ------------

7. The world parliament would exercise, directly, or by delegated

authority, all legislative, executive and judicial functions that

pertained to its activities. It would therefore create the

departments or subdivisions necessary to the carrying out of these

various functions. The members of the world parliament would be

elected for one year, subject to recall at any time by the

constituency that elected them. The parliament would decide on the

qualifications of its own members.

This proposed plan for the organization of a world producers' federation

will be made clearer by a diagram. (p. 116.)

8. _All Power to the Producers!_

The plan for a world producers' federation is designed with the object

of placing all power in the hands of the producers. The society of the

present day vests power--particularly economic power--in the hands of

the owners of economic resources and machinery. Their public institution

is the capitalist state, and their rule is perpetuated by the

manipulation of its machinery.

Under this order of society, the chief emphasis is placed on owning

rather than on working. The largest material rewards and the greatest

amount of social prestige go to the owners. The present society

sanctifies ownership, and raises the owner to a position of moral

superiority.

The same system which dignifies ownership can scarcely recognize work as

of supreme social consequence. The worker is therefore placed in a

position inferior to that of the owner. His economic rewards are less,

his place on the social ladder is lower, and his children are taught in

the schools the necessity of getting out of his class into the society

of those who are able to live without working.

It is hardly necessary to remark that in a community dependent for its

existence upon labor, the teaching of such a philosophy points the way

to class conflict and ultimately to social disintegration. If the

community is dependent upon production for its existence, there must be

sufficient incentive to continue production, otherwise the community

dies.

The disastrous consequences that must of necessity follow on the

economic order as it is constituted at the present time are already in

evidence,--strikingly so in the case of the European breakdown. The

owning class society is coming to an end--falling of its own weight. The

time has come when the producers must take the control of the world into

their own hands or suffer disaster.

Man's sense of justice tells him that the product should belong to him

who is responsible for creating it, and his experience teaches him that

human beings take a greater interest in that which is theirs than they

take in the property of another. The results of production should go to

the producers; the machinery of production and the materials entering

into production should belong to those responsible for the carrying on

of the productive process. How shall these things be? Only when the

producers themselves decide to make them come true.

All power to the producers!

This sentence carries with it the key to the society of the future.

VI. WORLD ADMINISTRATION

1. _The Basis for World Administration_

When the producers of the world are organized along the lines of their

economic activities, and are federated in local, district and divisional

federations, and in a world producers' federation, the structural side

of the producers society will be complete. Such a structure is built for

use, not for appearance, and its effectiveness depends upon the way in

which it works. The handling or administration of the producers society

is therefore the determining factor in its success. A world producers'

society may fail as miserably as any other form of social organization

unless it is deliberately utilized to attain the ends for which it was

created.

The establishment of a world parliament consisting of representatives

from the major industrial groups would create an authority more powerful

than that of any existing state because, in the first place, it would be

more extensive than any existing state. But even supposing that one of

the great nations--Britain or the United States--was to conquer the

world and attempt to administer it, the world producers' federation

would be far more effective than such a victor, because its rule would

be founded on the will and on the consent of the governed and not on the

imperial foundation of organized might. The world producers' federation

could therefore look for a support from its constituency that no empire

could hope to demand from its conquered subjects.

The centralization involved in maintaining the authority of an imperial

ruling class in a large and complex state is so great that it invariably

results in friction and disaffection. The self-governing state, less

efficiently co-ordinated and centralized, still has a far better chance

for survival. Its energy-generating centres are so much more numerous

and more localized than those of the class governed empire that they

necessarily reach a larger share of the population. The roots of the

self-governing social group may go no deeper than the roots of the group

under a bureaucratic government, but there are more of them, and they go

to more places. The foundations are sounder because they are broader.

In addition to these functional advantages of self-government, it

possesses an immense asset in the sense of proprietorship that leads the

citizens of a self-governing community to stand by the community

organization because they feel that they have built it and that it is

their own. A self-governing community therefore carries within itself

the means of its own perpetuation in the enthusiasm and devotion of its

population to an institution in which they feel a sense of workmanship

and of the pride of possession.

A world parliament, organized on the basis of self-governing industrial

groups, would be unique in two respects. First, in that it was of world

extent, and second in that it was built upon the industrial affiliations

of its citizenship. If such an organization were handled in a way to

hold the allegiance of its constituent members, its decisions on matters

of world importance would carry an immense authority.

2. _The Field of World Administration_

There, in fact, would be the test of world government efficacy--in its

ability to leave the handling of local problems to local groups, and to

concentrate its energies on the administration of those problems which

have assumed a distinctively world scope. Such capacity to understand

the difference between the business of local groups and the business of

the world organization would be the touchstone of world statesmanship,

the criterion by which the master political minds of the age could be

tested. The short-sighted, narrow-visioned leader of world affairs

would seek to gain and to hold power for himself and for his immediate

local interests. The presence of many such men in positions of power

would soon split the world government into a series of factions, each

one seeking to destroy the others and to take away their authority. Such

a competitive stage would represent little advance over the present

nationalism.

A world government has no virtue in itself, and may as easily degenerate

into a scramble for office as may any other phase of group relationship.

Its success would only be possible where its power was strictly limited

to the control of those matters that had reached a plane of world

importance. Even then success would be impossible unless those

responsible for making essential decisions saw the world problems as

wholes rather than as localized and separable problems.

Grave issues hang on the method in which the world problems are

approached and handled. Success is not assured by any means. Still, the

dangers and disadvantages of a plan do not condemn it unless they

outweigh the apparent advantages.

The people of the western world face a number of serious problems that

cannot be solved by the existing nations. Some step must be taken to

cope with the new situation that has followed on the heels of the

industrial revolution, and in so far as the actual practices of life

have evolved to a world plane, and in so far as they concern the workers

in more than one industry, it must be apparent that nothing less than

some world authority will suffice to cope with the issues that they

present.

A number of economic questions, such as the control of resources and of

transport, have already passed beyond the boundary of the individual

nation, and have reached a stage of world importance where they can be

handled only on a world basis. In the normal course of social evolution,

other questions will, in like manner, emerge into a place of world

consequence. As rapidly as such developments occur, the administration

of the world issues must be delegated to the world parliament and to its

appointees and subordinate bodies.

3. _Five World Problems_

There are a number of problems that have passed beyond the control of

any single nation, and that should therefore be made the subject of

world administration. Among them are: (1) the control of resources and

raw materials, (2) transport (3) exchange, credit and investment, (4)

the world economic budget, and (5) adjudication of world disputes. Under

a world producers' federation, the administration of these five problems

would be in the hands of five administrative boards selected by the

executive committee of the world parliament.

Each administrative board would select and organize a staff of experts

and specialists in its own field, and would present the outline of its

proposed activities to the world parliament very much as the department

of a modern government presents its budget to the parliament of its

state. This presentation would take place through the executive

committee of the world parliament, and it would be necessary to secure

the endorsement of that committee before the plan could go before the

parliament.

When the plan was approved, the administrative board would begin to

function as a part of the machinery of the world producers' federation.

Thereafter it would serve as a part of the world administrative

mechanism, the working organization of which would remain intact, even

should there be a change of policy, in exactly the same way that the

department of state or of agriculture, in any modern government, remains

intact through the various changes of party in power.

The specialists and experts who made up the staffs of the administrative

boards would secure their appointments as the result of civil service

examinations, and would continue in their positions until some question

arose as to their efficiency. Each administrative board would be

organized into a series of departments corresponding with the unit

problems coming before the boards, with one specialist or department

head charged with the direction of each of these departments. In the raw

materials and resources board, for example, there might be one

department for each of the more important resources such as coal, iron,

copper, cotton, wool, timber, and the like. In the same way, the work of

the transport board might be divided into departments covering shipping

on the high seas, inland water transport between divisions,

inter-divisional land transport, aerial navigation not wholly within one

division, and so forth. In each instance, the task of providing an

adequate supply of the commodity or an efficient service, would fall to

the department or departments involved, while the administrative board

itself would sit as a court of last resort, and as a board of strategy

for the field in which it was functioning.

The administrative board would thus be a group primarily of experts,

charged with the specific task of handling some problem of world moment,

and responsible to the board of managers of the world producers'

federation for the success of its activities.

4. _Work of the Administrative Boards_

A separate administrative board would be established to handle each of

the important administrative problems confronting the world producers'

federation. At the outset there would be such problems as resources,

transport, credit and exchange, budget, and the adjudication of disputes

affecting more than one division or more than one of the major

industrial groups.

It is neither possible nor desirable to draw up a working program for

any one of these boards. Such details must be met and solved when the

task of administrative work begins. At this point it is only necessary

to suggest some of the more important fields in which the boards would

operate, and to bring forward typical instances of their functioning.

5. _The Resources and Raw Materials Board_

The survival of a modern industrial centre like the Manchester District

of England or the Lille-Roubaix district of France depends upon the

supplies of raw material which it is able to secure from and through

other industrial groups. These supplies are in turn dependent upon the

available deposits of raw materials, the power, and the fertility of the

soil. Raw materials and resources are thus the foundation upon which all

productive enterprise is based, and it would be one of the first duties

of a producers' society to handle this issue successfully.

Some idea of the extent to which a modern industrial community is

dependent for its survival upon imported raw materials may be gained

from an examination of the trade figures for Great Britain. In 1920 the

total value of British imports was 1,936 millions of pounds sterling. Of

this amount, 767 millions (more than a third) were for food, drink and

tobacco, while another third (711 millions) were for raw materials.

Under these two general headings were included such items as grain and

flour 232 millions, meat 142 millions, cotton and cotton waste 257

millions and wool and wool rags 94 millions of pounds sterling. The two

main items of food and raw materials, covered more than three quarters

of all British imports. (Statesman's Year Book.)

But Britain is a relatively small and very much isolated community,

lacking some of the essential resources. It is therefore quite natural

that her trade figures should show such a result. The same thing is of

course true of Japan, Germany, Holland, Belgium, Italy, France, and in

fact most of the important industrial countries. This is taken as a

matter of course. Oddly enough, however, it is likewise true of the

United States, which is as near to industrial self-sufficiency as any of

the leading industrial nations.

Among the 5,278 millions of dollars worth of commodities imported by the

United States in 1920, there were 40 million pounds of aluminum, 143

million pounds of rice, 345 million pounds of cocoa and cacao, 1,297

million pounds of coffee, 510 million pounds of hides, 152 million

pounds of fresh meat, 603 million pounds of India rubber, 260 million

pounds of wool, 510 million pounds of paper stock, 1,460 million pounds

of paper, 8,074 million pounds of sugar, 4,459 million gallons of crude

oil, 130 million skins, and so on. Here are extensive imports of hides,

oil, paper, sugar, coffee, wool and rubber--seven of the most important

items of modern commerce. Well supplied as it is with varieties of

climate and resources, the United States is nevertheless compelled to

import large amounts of some of the most essential raw materials. Like

the nations of Europe, it is forced to depend, for these and other

industrial essentials, upon portions of the economic world that lie

outside the national boundaries.

An examination of these and similar figures tells the story of the

industrial future--a story of limited, localized resources upon which

the expanding industries will be compelled to make ever increasing

demands. Since all of these demands cannot be met there must ensue a

ferocious struggle among the nations to secure and hold the resource key

to economic advantage. The beginnings of that struggle have already been

witnessed in the contest between France and Germany for the coal and

iron deposits of Western Europe. Its next stage will include a struggle

between Great Britain and the United States for the possession of the

world's reserves of oil. Such a struggle, with its appalling toll of

suffering and chaos can be obviated in only one way, by an

apportionment, among the users, of the chief raw materials, through an

agency in whose direction all of those concerned have a share. This

result could be accomplished by the resources and raw materials board of

the world producers' federation.

The activities of the resources and raw materials board will include:

1. A survey of all available resources and raw materials.

2. A survey of the present consumption of these raw materials.

3. A survey of the present production and of the possible production

of these materials.

4. A production budget, assigning to each of the producing areas the

amounts of materials that they are responsible for producing.

5. A consumption budget, assigning to the various using areas their

quotas of the materials produced.

6. Provision for the increase in production necessary to meet the

demands of the consumers of raw materials.

7. Final decisions as to which resources should be used, and for what

purposes.

This board would have under its immediate control the destiny of the

whole producing world. It would not own the resources any more than the

postal department of a government owns the post offices and the mail

trucks, but in one case, as in the other, the power to decide on the

service to be rendered would rest with the administrative officers.

The need for some central control over the world's resources, and of

some clearing house for raw materials seems quite obvious. The world

producers' federation faces no more important or pressing issue. In this

field alone, through its elimination of sources of conflict and its

regularizing of raw material supplies, the world producers' federation

could undoubtedly justify its existence.

6. _The Transport and Communication Board_

The transport and communication board would have jurisdiction over all

of those activities involving the transfer of goods, of people and of

messages, not wholly within one division. Such a plan has been worked

out in part in the United States of America, where commerce between the

states (interstate commerce) is under the control of the Federal

Government, while commerce wholly within one state is under the control

of that state. The same principle, applied to a producers' society,

would leave local transport in local hands, while all matters concerning

world transport would be under the control of the world producers'

federation.

The present economic system depends on the shipment of goods from one

point to another. Raw materials are sent from the place of their origin

to the fabricating establishment that consumes them. In some cases,

these distances are small, but when Cuba sends iron ore to the United

States, or when Brazil ships coffee to Europe, or when England sends

coal to Italy, the distances are considerable and the means of efficient

transport are correspondingly important. The same thing holds true of

the marketing of finished products. Many of the goods turned out by the

present-day industry--particularly machinery--are very bulky and heavy.

Each of the manufacturing nations sells its goods, not only within its

own borders, but at the ends of the earth. The transport of goods thus

becomes supremely important.

The transport of goods and of people is only one aspect of the work

coming under the direction of the transport and communication board. In

addition, there would be:

1. The postal system, which is already on a world basis.

2. The express system, which is really only a branch of the postal

system, and which is also on a world basis at the present time.

3. Telephone, telegraph and wireless machinery, which are in their

very nature wider than the boundaries of one nation, and which are

to-day among the chief means of holding the people of the world close

together.

The mechanism of transport constitutes a vast net-work of

inter-relations that have been carried farther toward a world basis than

any other phase of the world's economic life. The nature of ocean

transport, of the postal service, of the express service and of the

telephone and telegraph made this inevitable. The inventions and

discoveries of the past century have worldized transport without the

necessity of any intervention from a producer's society.

While the work of the transport and communication board would be of

vital consequence, it would be relatively simple, in that it would

involve little innovation, but rather the unification and co-ordination

of existing agencies.

7. _The Exchange, Credit and Investment Board_

Many economic writers have characterized the processes of exchange as

"non-productive" activities, nevertheless, under the present economic

order they lie closer to the seat of power than any other single group

of activities. The rise of the banker to his present commanding position

is due, primarily, to his control over money, and to his power to issue

or to withhold credit. A producers' society may lay far less emphasis on

money and its derivatives than does the present system, yet the money

function will remain and the money forces will doubtless play some part

for a very long period in the new economic order.

Money will owe its position of importance, under a producers' society,

to the need for a medium of exchange, and until men discover a means

more effective than money for the facilitating of exchange, money will

continue to play an economic role.

The inhabitant of a modern industrial community buys many things each

day. For the newspaper he spends a penny or two; for the street-car

ride, five or ten cents; for fruit, groceries, and other food products,

a number of small sums. These transactions, in a country of fifty

millions of people, aggregate tens of millions for each day.

There are three possible ways in which such transactions may be carried

on: (1) each party may give the other some commodity or service--a bunch

of carrots for a street-car ride, a sack of flour for a hat, (2) Money

may be employed. (3) A system of book-keeping may be devised, and each

purchaser may use a credit card, or some similar device. Barter is

impossible. Money is the usual means of facilitating exchange.

Bookkeeping, on a scale requisite for all petty transactions would be an

immensely intricate mechanism.

The chances are that at the outset, a producers' society will be

compelled to follow the practices of present-day economic life, and to

distinguish between the two chief uses of money: money as a means of

making change and money as a basis for credit.

This distinction has been pretty well established in all parts of the

world. The business man buys his morning paper and his lunch with the

change that he carries in his pocket. He buys his automobile or his

factory building with a check (credit). Money as a means of making

change will continue under a producers' society until some more

satisfactory means of handling minor transactions is discovered. Money

as a basis for credit will be superseded by a system of social

book-keeping.

The money used at the present time is based on an amount of some

commodity, such as gold. A producers' society will undoubtedly

substitute for this commodity base some unit of productive effort--an

hour's labor or a day's labor in a given industry. Such an idealized

labor production period could be used as a basis for all value

computations.

There are a number of requirements for such a value measure:--(1) It

must be reasonably stable; (2) it must be generally recognized and

accepted; (3) it must be the medium in which all values in all parts of

the economic world are calculated.

With a standardized labor unit of value once determined, there would be

several methods of procedure. One would be to issue a certificate for

each unit of labor performed. The pay-check would then serve as money.

Another method would be for the world parliament to issue metal and

paper money, using the labor unit instead of gold as the basis of value.

In the former case, there would be a labor check, or piece of money in

the community for each unit of labor performed. In the latter case, only

so much money would be issued as was required for the ordinary purposes

of making change. The latter method is the one now in use. The former

would represent a distinct step in advance, in that there would be a

certificate of purchasing power in the community for each unit of goods

and services that was produced. There would be still a third method of

handling the problem, by having the world producers' federation issue

paper currency stamped with the statement "this is a mark" or "this is a

franc," and making it receivable for all legal and public obligations.

If the amount of this "fiat" money were carefully regulated, it would

probably serve all of the purposes for which money is needed. Whatever

its character, it is essential that all money and credit should be

publicly issued and under public control.

The first problem confronting the exchange and credit board would be to

establish some such generally acceptable standard of value. The chaos

now existing in exchange rates is but a foretaste of the difficulties

that confront a world which is attempting to carry on economic

transactions with scores of different moneys and of differing financial

systems.

The exchange and credit board would have three other important fields of

activity:

1. The computation of the values produced by the various industrial

groups.

This result would be accomplished by establishing a clearing house for

reports on production in all industries and in all parts of the world.

2. The financing or exchange of materials between the various

producing groups.

This activity is now carried on by the commercial banker, who handles

trade acceptances, bills of exchange, and the like. It need be no more

than a system of book-keeping, with the balances entered as loans from

the industries that produce a surplus to those that are using more than

they produce. Such a situation would of necessity be temporary, since

the aim of the central authority would be to balance values in such a

way that there would be an equilibrium all around, with no surpluses and

no deficits. Such an ideal condition would never be reached, but it

could be approximated.

3. Transfers of capital, or loans negotiated between various

industrial groups, and covering more than one division.

These loans would take the form of adverse balances in the general

clearing between producing groups, and would cover the advances for

improvements and betterments, that one producing group would make to

another, or that the world producers' federation would make to one of

the producing groups.

The exchange and credit board would, in reality, be the book-keeping

department for the world producers' federation, whose exchange

transactions would be planned and handled through this department.

8. _The Budget Board_

Two principal functions would be performed by the budget board. On the

one hand it would be charged with budgeting or planning the transactions

involved in the world organization of economic life. This function would

include the estimates of the requirements of the major economic groups

during a given year, and the estimate of the sources from which these

requirements were to be met. On the other hand, it would be responsible

for preparing the budget of the world producers' federation, and of

deciding upon the course that must be adopted in order to meet these

necessary outlays. Thus the board would correspond, in a sense, to the

finance committee of a modern parliament or to the department of finance

in a modern cabinet.

9. _The Adjudication of Disputes Board_

The organization of the world producers' federation places before it

certain judicial functions. The federation would be called upon to

adjudicate:

1. Disputes between any of the industrial groups involving more than

one division.

2. Disputes between one of these industrial groups and the world

producers' federation.

3. Disputes between various departments of the world producers'

federation and its subdivisions.

These functions would devolve upon the adjudication of disputes board,

which would constitute a court or committee of review, charged with the

duty of hearing issues in dispute before they went to the board of

managers, the executive committee and the world parliament for final

decision. The adjudication of disputes board would not be, in any sense,

a court of last resort. Rather it would be a court of original

jurisdiction, sifting out the issues as they arose, and presenting its

findings to a higher body. Most of its decisions would, as a matter of

routine, be final, but on any issue of importance, the right of final

decision would rest in the world parliament, unless that right were

assumed by the people through a dissolution of the parliament.

The present governmental system, with its checks and

balances--legislative, executive and judiciary--has proved far from

satisfactory, since it results either in a deadlock between the various

authorities, or else some one of them, as for example, the courts in the

United States, assume the final authority. In neither case is it

possible for the average man to get to the bottom of the difficulty.

To-day, the outstanding method of classifying the people of the world is