owners of the product--that is, the rich--have to look elsewhere for
customers, and so comes the hunt for “foreign markets.” Understand
me, I do not object to our going abroad for the things we can’t raise
at home; to exchange automobiles and moving pictures for bananas and
coffee--that is normal business. What I am talking about is a glut of
goods that we can’t sell at home, but must sell abroad, under penalty
of seeing our workers turned off to starve. We don’t take goods in
exchange--oh no, that would break down our home industries, and we
protect them by a high tariff wall. What we take are paper promises to
pay us at some future date; we go on continually selling more than we
buy, and filling our bank vaults with these paper promises, and that is
called a “favorable balance of trade.”
But all the highly developed nations, Britain and France and Germany
and Italy and Japan, are in exactly the same plight as ourselves; they
also have more goods than their half-starved workers can purchase; they
also are looking for foreign markets, to save their business system
from collapse. Each finds its chance of salvation in selling to the
backward nations, which cannot yet do their own manufacturing. So we
run upon this curious situation:
_The existence of American industry depends upon our selling
cotton shirts to Chinamen, who are so poor they can’t afford but
one shirt at a time._
And now, see the next step! Trying to save our own business system, we
threaten ruin to the business system of some other country, say Japan.
Naturally, the business men of Japan don’t like that; so we have trade
rivalry, and out of that we have war. The cause of modern war may be
put into one sentence--and I beg you to realize that it’s no joke, but
the grimmest of grim realities:
_If we don’t go to war with other nations, they will take away
from us the chance to sell to Chinamen those cotton shirts of
which our workers have produced so many that they have to go in
rags._
I could go on like that indefinitely, making funny sentences about
this funny system. I could tell the hilarious story of how Britain
and Germany went to war to take away from each other the chance to
sell shirts to Chinamen--and to Hindoos and Persians and Arabs and
Turks, of course. When they had destroyed 30,000,000 human lives
and $300,000,000,000 worth of goods you might think they would have
cured their “over-production” for quite a while; but they had made a
miscalculation, and fought too long, and borrowed too much money from
us, and so their governments are burdened with enormous fixed charges,
and there is chronic unemployment in both Britain and Germany, and
almost a collapse in France.
And how about us? We have that “favorable balance of trade,” so
ardently desired by the prosperity boosters; indeed, we have got such
a bellyful of it that for the first time we are forced to realize that
it’s nothing but wind. Europe owes us, in one form or another, some
$19,000,000,000, and can’t even pay the interest; they made no pretense
of trying--until they had to borrow some more! Italy came, bowing low
and grinning behind its cap, agreeing to pay several billions in the
course of 65 years--on condition that we lend another $200,000,000
right off! Germany did the same thing, and France will be doing it,
probably before these words see the light of day. Our great financiers
accept these paper pledges, for the reason that they are stuck with
$19,000,000,000 of them already, and can’t contemplate what will happen
when the whole thing turns out to be wind. We go on adding about a
billion a year, because the only way we can keep our factories going is
to ship our surplus goods abroad--and take nothing back, because that
would stop the factories!
We promised our people “prosperity,” you remember, if only they would
vote for Coolidge; and they did so, good, patient souls; so now we
have to deliver it. The way of “prosperity” is to keep them working
to feed and clothe Frenchmen and Germans and Italians and Chinamen
and Guatemalans and Haytians--anybody who will send us a beautiful
engraved sheet of paper promising to pay us 65 years from now! To be
exact, Judd, they don’t even have to engrave the paper; we do that in
Wall Street, and they send us a “mission” of white or yellow or black
gentlemen in frock coats, to sign opposite the red seal. So here, Judd,
you have this wonderful jazz system in its final, delirium stage--our
whole people starving themselves on half wages, and sending the surplus
abroad, so that our rich men may fill their vaults with pieces of paper
which they dare not permit to be redeemed! We already have more than
half the gold in the world, and far from taking any more, we have to
ship some abroad now and then, to keep some debtor nation from going
bankrupt!
Don’t you wish, Judd, that you could find some benevolent storekeeper
to do business with you on this ultra-modern jazz basis? Never, never
can he be persuaded to take your money, but takes only checks, and does
not cash them for 65 years; and if at any time you need money, you
threaten to go broke, and immediately he gives you cash and takes some
more checks; and if ever you try to send him a truckload of goods, to
pay off at least part of the debt, he holds up his hands in a fit of
high-tariff horror and says he couldn’t think of taking goods, it would
ruin the people inside his store who have the jobs of making that same
thing! “For God’s sake, take away your truck,” he exclaims. “Just mail
me another paper promise, and anything in the place is yours!”
I conclude with one more sentence for you to learn, Judd:
_Our present system of “high finance” is a soap-bubble, which
differs from other soap-bubbles in just one respect--it is as big
as the world._
LETTER XIII
MY DEAR JUDD:
The essence of our industrial system is the private ownership of the
means of production; with profit for the private owner as the motive
power of industry. The capitalist produces the goods we need, and in
order to get them we pay him everything above the bare means of keeping
us alive and enabling us to raise the next generation. If this system
should break down, it is obvious that we must change to some form of
social ownership of the means of production; instead of having the
capitalist produce for us, we must do it for ourselves, and the motive
power will be, not the desire of the capitalist for profit, but our own
desire for the goods.
What difference will that make in the industrial system? At first you
might see no difference at all. The worker will go to the factory,
where he will find foremen and superintendents in charge, and a
time-clock keeping tab on him. On Saturday night he will get his pay
envelope, and will take the money and spend it at the stores. The goods
produced in the factory will be shipped to all parts of the world,
to people who pay for them by checks, which go through banks and a
clearing-house--you might follow the whole process, and fail to realize
there had been any change. At only one place would the difference
appear--inside the pay envelopes. There being no longer any absentee
owners, drawing off rent, interest and profits, those who do the work,
whether of hand or brain, will now be the only people to draw anything
out; and consequently there will be considerably more in each pay
envelope.
Wall Street propagandists are fond of figuring how much goes to labor
and how much to capital, and proving that to wipe out the capitalist
would add only a small percentage, say ten per cent, to the share of
each worker. This is a trick, for the reason that a great part of the
capitalist’s share appears, not as profits, but as various forms of
“fixed charges” against the industry: the interest on bonds, the rent
of land, the royalties to owners of various privileges. To give just
one illustration, the New York Central Railroad crosses a bridge near
Albany, and a private concern owns that bridge, and the railroad pays
one cent for every passenger, a small fortune every year. Our whole
industrial system is a tangle of grafts such as that; the railroads
are plundered by right-of-way companies, sleeping-car companies,
refrigerator-car companies; industrial concerns are plundered by
private railway lines, owned by “insiders,” or by companies having a
“cinch” on repairs or materials or accessories. Just the bookkeeping on
such rights is a vast industry, and the adjusting of them supplies a
living for thousands of lawyers and their clerks. To wipe all that out
will be to dump a mountain’s weight off the back of production.
But even suppose it was as the Wall Street propagandists argue--that
capital got only ten per cent--would that be the only gain for labor?
No, Judd, it would not; and here is the most important point that I
have to get across to you in these letters. The proposition may seem
difficult, but I beg you to put your mind on it and get it straight,
for it is not too much to say that all freedom and happiness for the
workingman in our time depend upon his understanding these matters, so
that the clever hired writers of privilege cannot befuddle his mind.
Whatever may be the percentage that goes to capital--whether ten per
cent, as Wall Street claims, or thirty or forty per cent, as I could
prove--nevertheless it is this percentage which causes our industrial
ills today. It is this surplus which, drawn off and re-invested in
more means of production, causes the glut of goods which we know as
“hard times”; it is this surplus which causes speculation and panics,
and turns the worker out to join the ranks of the “unemployed,” and to
beat down the wages of his fellows; it is this surplus which causes the
search for foreign markets, and draws the great industrial nations into
war. Figure to yourself a body having an iron ring riveted about it. At
first this ring makes no difference, but as the body grows it causes
strangulation, and the time comes when for all the agonies of that body
there is but one remedy, to cut the ring.
Cutting the ring is simply this: to take the surplus product away
from capital and give it to labor; so instantly you have remedied the
evil and relieved the pain. How so? Because labor now becomes able to
consume the entire product of industry. Labor can consume it, because
labor has the money to buy it. Before this, as we have seen, labor got
only part of the money, and so could buy only part of the product; the
rest had to be either wasted by the rich, or sold abroad. But give
labor the full value, the actual equivalent in purchasing power of the
amount of goods produced, and so consumption balances production, and
the factories can work merrily, as many hours as we desire, turning out
for each and every one of us as much goods as we care to consume. The
only restriction is the basic law of social justice--that before any
man consumes anything he must render to the community an equivalent
service.
The hired men of the exploiters do all they can to confuse this
argument; I hear them laugh that I have some kind of deluded horror of
a surplus. We ought to save, they insist, and provide against a “rainy
day”! Yes, of course--and not merely against rain, but against famine
and earthquake and tornado. I have no objection whatever to a surplus;
the question is, who is to own that surplus--those who do the work, or
those who live as parasites? That makes all the difference; for when
a workingman has made too much wealth for his master, the workingman
is out of a job; but when the workingman has made too much wealth for
himself, the workingman is on a vacation.
Here is this great rich country of ours, with all its natural
resources, its marvelous machines, its willing and clever workers; and
when we have broken the iron ring we can produce goods for ourselves,
and consume and enjoy them, and stay quietly within our own boundaries.
No longer do we keep our workers on starvation wages, and ship all
our surplus products abroad, to be consumed by Frenchmen and Italians
and Turks and Chinamen and Hindoos, in return for paper promises to
pay money to our capitalists! No longer do we have to go to war, to
seize foreign markets from other capitalists! The workers now own the
factories, and also they own the working capital, and they produce
goods for use, and if we have foreign trade it is because we want
things from abroad, and not because we have to get rid of our surplus
product under penalty of starving. This is what I describe as a Free
Society, Judd; I say that in such a society, with production rationally
planned, and all wastes removed, we should produce wealth in such
quantities, so quickly and so easily--well, you would think I was
joking. But leading engineers have told us that we have, in our machine
power, the constant labor of _three billion slaves_. In thirteen
industries, figured by the capitalist, Mr. Babson, we have _88 times_
the productive power we used to have by hand labor. Just think what
that ought to mean!
Or look at it another way. Twenty years ago Sidney A. Reeve, an
engineering expert, calculated how much we wasted by the competitive
production of goods, and in a big book full of tables and charts, he
worked out the figure of 70 per cent waste. We have seen the Hoover
Committee, considering merely the wastes _inside_ each industry,
giving figures as high as 60 per cent of waste. Mr. Stuart Chase, in
his wonderful book, “The Tragedy of Waste,” figures 50 per cent as the
minimum. Well, let us take the minimum, for a start. What does it
mean? I answer:
_In a free society what we now have will cost us four hours labor
a day._
And more than that, Judd--something absolutely vital to every poor man
in our country:
_In a free society every man may work as many hours as he wants to
work, and get the full value of what he produces._
So now we can make what would have seemed at the beginning a bold claim:
_From a free society involuntary poverty will be banished._
And finally--one sentence more--and I beg you to learn this one:
_The end of involuntary poverty means the end of most prostitution
and crime, and of all war between civilized peoples._
LETTER XIV
MY DEAR JUDD:
It is an interesting thing to study the development of human society
through a long period of history. Men began in small tribes, in which
they were very much alike, and stood on an equal footing. These tribes
fought, and absorbed one another, and grew more complex, with greater
differences among the members; dukedoms and principalities arose, and
then kingdoms, and at last great empires, with rulers and subjects
ranged in classes, and the class lines rigidly drawn.
It was against such a form of society that our ancestors revolted; they
had a new theory of government, and established a new form--a republic,
owned and run by its citizens, all standing on an equal plane. The
process of evolution in the political world is still going on, and some
day we shall see a world-wide federation of republics, in which the
human race will share equal rights.
It is fascinating to realize that this same process is going on in the
world of industry. Here also we see the various enterprises struggling,
and some winning and absorbing the others, until today we have
industrial monarchies and empires. It is not merely a figure of speech
when we talk about coal barons and steel kings and emperors of finance,
for these men occupy the same positions and hold the same kind of power
as the rulers of old days. And just as we saw revolutions in the field
of politics, so we shall see them in industry. In fact, the first of
these great revolutions has taken place before our eyes; the workers
of Russia are now trying to show us that a government of industry by
the citizens of industry is a possible thing and a step in progress.
Our capitalist newspapers are sure that they must fail; but even if
they did, that would not upset the argument, for the first political
revolution in England failed, and the first two in France; but that has
not kept a whole string of other countries from turning into republics.
The way human beings learn is by trying; and we are in the stage of
history where men are getting ready to try democracy in industry.
There will be mistakes, and a great deal of waste and suffering;
nevertheless, we shall press on, and in the end we shall achieve a
higher type of society than anything conceivable under industrial
monarchy, or imperialism such as we have today.
You remember King Louis of France, the “grand monarch,” who said,
“The state, it is I”; well, imagine the scoffing you would have met
with, if you had talked with some haughty marquis of that court, and
tried to tell him how some day in France the common “riff-raff” would
have votes, and choose parliaments, and decide the issues of war and
diplomacy. He would have been quite sure they could never do it; and as
a matter of fact, they don’t, Judd--but they will; yes, even here in
the United States the people will some day decide!
Today our great captains of industry are no less certain that common
workingmen cannot possibly have intelligence enough to run factories,
to say nothing of deciding the broad policies of business. The masters
have won the money fight, and got the power, and they mean to hold on
to it, and train their descendants and found great money-dynasties.
But the same thing happens that we saw two hundred years ago with the
French kings--the new generations become enervated and worthless,
and the wealth of the community flows into the lap of idlers and
parasites, who squander it in dissipation and display; the poor become
discontented and rebellious, and the rumble of the approaching deluge
is heard.
Our capitalist newspapers never get tired of harping upon the failures
of government ownership, the waste and the graft. Private ownership
is the way to efficiency! Well, Judd, there is a lot of present-day
efficiency which I am ready to do without, beginning from this very
hour. For example, efficiency in maiming and killing workers--which
caused one million in our country to be disabled in 1925! Labor today
works under the lash of the slave-driver, and I am willing to see
industry slow down, so that workingmen may be human beings. And then, I
examine the graft under public ownership, and what do I find? Private
owners seeking private profits out of government! Here is a slogan,
Judd:
_The cause of graft is not public ownership of industry, but
private ownership of politicians!_
How can we stop that? We have tried the plan of sending the grafters
to jail, but that doesn’t work, for the reason that the grafters buy
the prosecuting officials and the judges; in the few cases where we get
them into jail, they buy the jailers. So I suggest a new plan--that we
take away the motive to graft, by making it impossible for any man to
exploit the labor of his fellows, or to monopolize those things which
are necessary to the life of all.
Learning industrial democracy is like learning to swim. You stick one
foot into the water, and you see that it sinks, and so you draw it out
in a hurry, and decide, it is impossible for you to stay on top of the
water. And then along comes a man who says: “Yes, you can swim, but not
until you go all the way in.” It seems an absurdity at first, yet it is
the literal truth about government ownership; you can own and run it
all, but you can’t own and run a small part!
At present private ownership is making all the big profits, and so,
of course, it is paying all the big salaries, and getting most of the
competent men. Not content with that, it is undermining the competition
of government, using its huge resources to buy the political parties,
and nominate incompetent men to public office. That is no wild
statement, but a fact of big business policy. Our masters, who control
the political parties, are afraid to have competent men in public
office, for fear they might take up a notion to do something real for
the public welfare. They prefer a man who can’t kick over the traces,
because he is too feeble. That is why at the last nominating convention
they turned down a really competent and loyal servant of theirs, Mr.
Herbert Hoover, and gave us poor, shy, pitiful Mr. Coolidge, who can
never by any possibility do anything, for the reason that he doesn’t
know what to do.
When you and I, Judd, and the rest of the useful workers of America,
get ready to run our own business, we can do it. We shall do it, if
for no other reason, because we have to--because we need food in our
cities, and machinery on our farms. We shall hire the best experts
to run our industries; and many of them will be the very men who are
running them now--they will be just as well content to work for the
American people as for Johnny Coaloil, who is now taking a yachting
trip with a dozen chorus girls on the Riviera, or for Mrs. Silly
Splash, who is setting the new fashion in diamond-embroidered bathing
suits at Palm Beach. Yes, Judd, we shall find ways to run our business
without these elegant idlers; and whatever waste there may be won’t be
so bad as having them corrupt a whole generation of our young people
by their vicious folly. If there is graft, we’ll find ways to stop it,
and if more efficiency is needed, we’ll get it--because it will be our
business, and our loss if we fail.
I’ll go even further, Judd; I’ll assert that the amount of waste
inherent in capitalism is so frightful, that no amount of inefficiency
under a free system can approach it. Remember the “iron ring,” and what
it will mean to us to get into the factories, with the right to run
them for ourselves! Remember our figures on the wastes of competition!
Let us have a “slogan,” for you to paste in your hat and learn, Judd:
_To compare the productive powers of a free system with those of
capitalism, is to compare a normal human being with a vicious
maniac._
Just a sentence or two, Judd, to remind us what this maniac has done:
_Capitalism, between 1914 and 1918, deliberately destroyed
30,000,000 human lives, and $300,000,000,000 worth of property!_
And again, Judd:
_Capitalism in the United States keeps an average of five million
men out of work all the time!_
And again, Judd:
_Capitalism in Europe last summer had nine million men working
hard at learning to destroy the wealth which the rest of the
workers were creating!_
And then paste this sentence in your hat, Judd:
_While our population increased 200 per cent in the past 50 years,
capitalism increased our expenditures for mass-slaughter more than
2400 per cent!_
LETTER XV
MY DEAR JUDD:
We are going to take over the industrial plant of the United States,
and run it as one planned enterprise for the benefit of the whole
people.
Just what do we mean to take? Roughly speaking, all railroads,
telegraphs and telephones, all banks, the mines and large factories,
the large oil fields with pipe-lines and refineries, the large
packing and canning plants, the large warehouses and stores, and what
office buildings are necessary for these enterprises. We do not want
the homes, nor the personal property, nor the automobiles, nor the
livestock; nor, if I have my way, shall we want farms. Some old-time
Socialists will contest this, but the new generation will agree, I
think. The reason is interesting, and it may help to clear up the whole
matter if we begin by considering the problem of the land.
Karl Marx thought that the farms would go the same way as the
factories; that is, they would get bigger and bigger, under capitalist
ownership. He failed to allow for the essential factor--that no
capitalist can work his employes so hard as the small farmer works his
women and children. So the small farmer has stayed on his small farm;
a free man--except that every year he is deeper in debt to the banker,
and in a larger percentage each year he loses the ownership, and is
merely a tenant, supporting an absentee landlord. The modern Socialist,
recognizing that situation, does not propose to walk into the trap, but
seeks a different solution of the land problem.