THE NEW CAPITALISM
President Taft says that if we cannot restore competition, "we must
proceed to State Socialism and vest the government with power to control
every business." As competition cannot be revived in industries that
have been reorganized on a monopolistic basis, this is an admission
that, in such industries, there is no alternative to "State Socialism."
The smaller capitalists and business interests have not yet reconciled
themselves, any more than President Taft, to what the Supreme Court, in
the Standard Oil Case, called "the inevitable operation of economic
forces," and are just beginning to see that the only way to protect the
industries that remain on the competitive basis is to have the
government take charge of those that have already been monopolized. But
the situation in Panama and Alaska and the growing control over
railroads and banks show that the United States is being swept along in
the world-wide tide towards collectivism, and innumerable symptoms of
change in public opinion indicate that within a few years the smaller
capitalists of the United States, like those of Germany and Great
Britain, will be working with the economic forces instead of trying to
work against them. Monopolies, they are beginning to see, cannot be
destroyed by private competition, even when it is encouraged by the
legislation and the courts, and must be controlled by the government.
But government regulation is no lasting condition. If investors and
consumers are to be protected, wage earners will most certainly be
protected also--as Mr. Roosevelt advocates. And from government control
of wages, prices, and securities it is not a long step to government
ownership.
The actual disappearance of competition and the growing harmony of all
the business interests among themselves are removing every motive for
continued opposition to some form of State control,--and even the more
far-sighted of the "Captains of Industry," like Judge Gary of the Steel
Corporation and many others, are beginning to see how the new policy
and their own plans can be made to harmonize. The "Interests" have only
recently become sufficiently united, however, to make a common political
effort, and it is only after mature deliberation that the more
statesmanlike of the capitalists are beginning to feel confident that
they have found a political plan that will succeed. As long as the
business world was itself fundamentally divided, small capitalists
against large, one industry against the other, and even one
establishment against another in the same industry, it was impossible
for the capitalists to secure any united control over the government.
The lack of organization, the presence of competition at every point,
made it impossible that they should agree upon anything but a negative
political policy.
But now that business is gradually becoming politically as well as
economically unified, government ownership and the other projects of
"State Socialism" are no longer opposed on the ground that they must
necessarily prove unprofitable to capital. If their introduction is
delayed, it is at the bottom because they will require an enormous
investment, and other employments of capital are still more immediately
profitable. Machinery, land, and other material factors still demand
enormous outlays and give _immediate_ returns, while investments in
reforestation or in the improvement of laborers, for example, only bring
their maximum returns after a full generation. But the semi-monopolistic
capitalism of to-day is far richer than was its competitive predecessor.
It can now afford to date a part of its expected returns many years
ahead. Already railroads have done this in building some of their
extensions. Nations have often done it, as in building a Panama Canal.
And as capitalism becomes further organized and gives more attention to
government, and the State takes up such functions as the capitalists
direct, they will double and multiply many fold their long-term
governmental investments--in the form of expenditures for industrial
activities and social reforms.
Already leading capitalists in this country as well as elsewhere welcome
the extension of government into the business field. The control of the
railroads by a special court over which the railroads have a large
influence proves to be just what the railroads have wanted, while there
is a growing belief among them, to which their directors and officers
occasionally give expression, that the day may come, perhaps with the
competition of the Panama Canal, when it will be profitable to sell out
to the government--at a good, round figure, of course, such as was
recently paid for railroads in France and Italy. Similarly the new
wireless systems are leading to a capitalistic demand for government
purchase of the old telegraph systems.
Mr. George W. Perkins, recently partner of Mr. J. P. Morgan, foreshadows
the new policy in another form when he advocates a Supreme Court of
Business (as a preventive of Socialism):--
"Federal legislation is feasible, and if we unite the work for it
now we may be able to secure it; whereas, if we continue to fight
against it much longer, the incoming time may sweep the question
along either to government ownership or to Socialism [Mr. Perkins
recognizes that they are two different things].
"I have long believed that we should have at Washington a business
court, to which our great problems would go for final adjustment
when they could not be settled otherwise. We now have at Washington
a Supreme Court, composed, of course, of lawyers only, and it is
the dream of every young man who enters law that he may some day be
called to the Supreme Court bench. Why not have a similar goal for
our business men? Why not have a court for business questions, on
which no man could sit who has not had a business training with an
honorable record? _The supervision_ of business by such a body of
men, _who had_ reached such a court in such a way, would
unquestionably _be fair and equitable to business_, fair and
equitable to the public." (Italics mine.)
Mr. Roosevelt and Senator Root are similarly inspired by the
quasi-partnership that exists between the government and business in
those countries where prices and wages in certain monopolized industries
are regulated for the general good of the business interests. In the
words of Mr. Root:--
"Germany, to a considerable extent, requires combination of her
manufacturers, producers, and commercial concerns. Japan also
practically does this. But in the United States it cannot be done
under government leadership, because the people do not conceive it
to be the government's function. It seems to be rather that the
government is largely taken up with breaking up organizations, and
that reduces the industrial efficiency of the country."
As the great interests become "integrated," _i.e._ more and more
interrelated and interdependent, the good of one becomes the good of
all, and the policy of utilizing and controlling, instead of opposing
the new industrial activities of the government, is bound to become
general. The enlightened element among the capitalists, composed of
those who desire a partnership rather than warfare with the government,
will soon represent the larger part of the business world.
Mr. Lincoln Steffens reflects the views of many, however, when he denies
that the financial magnates are as yet guided by this "enlightened
selfishness," and says that they are only just becoming
"class-conscious," and it is true that they have not yet worked out any
elaborate policy of social reform or government ownership. None but the
most powerful are yet able, even in their minds, to make the necessary
sacrifices of the capitalism of the present for that of the future. The
majority (as he says) still "undermine the law" instead of more firmly
intrenching themselves in the government, and "corrupt the State"
instead of installing friendly reform administrations; they still
"employ little children, and so exhaust them that they are poor
producers when they grow up," instead of making them strong and healthy
and teaching them skill at their trades; they still "don't want all the
money they make, don't care for things they buy, and don't all
appreciate the power they possess and bestow." But all these are passing
characteristics. If it took less than twenty years to build up the
corporations until the present community of interests almost forms a
trust of trusts, how long, we may ask, will it take the new magnates to
learn to "appreciate" their power? How long will it take them to learn
to enter into partnership with the government instead of corrupting it
from without, and to see that, if they don't want to increase the wages
and buying power of the workers, "who, as consumers, are the market,"
the evident and easy alternative is to learn new ways of spending their
own surplus? The example of the Astors and the Vanderbilts on the one
hand, and Mr. Rockefeller's Benevolent Trust, on the other, show that
these ways are infinitely varied and easily learned. Will it take the
capitalists longer to learn to use the government for their purposes
rather than to abuse it?
It is neither necessary nor desirable, from the standpoint of an
enlightened capitalism, that the control of government should rest
entirely in the hands of "Big Business," or the "Interests." On the
contrary, it is to the interest of capital that all capitalists, and all
business interests of any permanence, should be given consideration, no
matter how small they may be. The smaller interests have often acted
with "Big Business,"--under its leadership, but as industrial activities
and destinies are more and more transferred to the political field, the
smaller capitalist becomes rather a junior partner than a mere follower.
Consolidation and industrial panics have taught him his lesson, and he
is at last beginning to organize and to demand his share of profits at
the only point where he has a chance to get it, _i.e._ through the new
"State Socialism." Moreover, he is going to have a large measure of
success, as the political situation in this country and the actual
experience of other countries show. And in proportion as the relations
between large and small business become more cordial and better
organized, they may launch this government, within a few years, into the
capitalist undertakings so far-reaching and many-sided that the half
billion expended on the Panama Canal will be forgotten as the small
beginning of the new movement.
It is true that for the moment the stupendous wealth and power of the
"Large Interests," already more or less consolidated, threaten to
overwhelm the rest. Mr. Steffens does not overstate when he says:--
"To state correctly in billions of dollars the actual value of all
the property represented in this community of interests, might
startle the imagination to some sense of the magnitude of the
wealth of these men. But money is no true measure of power. The
total capitalization of all they own would not bring home to us the
influence of Morgan and his associates, direct and indirect, honest
and corrupt, over presidents and Congresses; governors and
legislators; in both political parties and over our political
powers. And no figures would remind us of their standing at the bar
and in the courts; with the press, the pulpit, the colleges,
schools, and in society. And even if all their property and all
their power could be stated in exact terms, it would not show their
_relative_ wealth and strength. We must not ask how much they have.
_We must ask how much they haven't got_."[31]
But over against this economic power the small capitalists, farmers,
shopkeepers, landlords, and small business men, have a political power
that is equally overwhelming. Until the "trusts" came into being, no
issue united this enormous mass. Yet they are still capitalists, and
what they want, except the few who still dream of competing with the
"trusts," is not to annihilate the latter's power, but to share it. The
"trusts," on the other hand, are seeing that common action with the
small capitalists, costly as it may be economically, may be made to pay
enormously on the political field by putting into the hands of their
united forces all the powers of governments.
If the principle of economic union and consolidation has made the great
capitalists so strong, what will be the result of this political union
of all capitalists? How much greater will be their power over
government, courts, politics, the press, the pulpit, and the schools and
colleges!
It is not the "trusts" that society has to fear, nor the consolidation
of the "trusts," but the organized action of _all_ "Interests," of "Big
Business" _and_ "Small Business," that is, of _Capitalism_.
A moment's examination will show that there is every reason to expect
this outcome. Broadly considered, there is no such disparity between
large capitalists and small, either in wealth and power, as at first
appears. All the accounts of the tendency towards monopoly have been
written, not in the name of non-capitalists, but in that of small
capitalists. Otherwise we might see that these two forces, interwoven in
interest at nearly every point, are also well matched and likely to
remain so. And we should see also that it is inconceivable that they
will long escape the law of social evolution, stronger than ever to-day,
toward organization, integration, consolidation.
Messrs. Moody and Turner, for example, finished a well-weighed study of
the general tendencies of large capital in this country with the
following conclusion:--
"Through all these channels and hundreds more, the central machine
of capital extends its control over the United States. It is not
definitely organized in any way. But common interest makes it one
great unit--the 'System,' so called.
"It sits in Wall Street, a central power, directing the inevitable
drift of great industry toward monopoly. And as the industries one
after another come into it for control, it divides the wealth
created by them. To the producer, steady conditions of labor; to
the investor, stable securities, sure of paying interest; to the
maker of monopolies and their allies, _the increment of wealth of
the continent, and with it the gathering control of all mechanical
industry_."[32] (My italics.)
Certainly the fundamental social questions in any country at any time
are: Who gets the increment of wealth? Who controls industry? No
objection can be taken to the facts or reasoning of this and some of the
other studies of the "trusts"--_as far as they go_. What vitiates not
only their conclusions, but the whole work, is that written from the
standpoint of the small capitalists, they forget that the "trusts" are
only part of a larger whole.
The increment of wealth that has gone to large capital in this country
in the census period 1900-1910 is certainly less than what has gone to
small capital. Farm lands and buildings have increased in value by
$18,000,000,000, while the increased wealth in farm animals, crops, and
machinery will bring the total far above $20,000,000,000. The increase
in city lands and houses other than owned homes, which has not been less
than that of the country in recent years, must be reckoned at many
billions, and these, like the farm lands, are only to a small degree in
the hands of the "Trusts." Even allowing for the more modest insurance
policies, and savings bank accounts, as belonging in part to
non-capitalists, small capitalists have piled up many new billions
within the same decade, in the form of bank deposits, good-sized
investments in insurance companies, in government, municipal, and
railway bonds, bank stock, and other securities. No doubt the chief
owners of the banks, railways, and "trusts" have increased their wealth
by several billions within the same period, but this is only a fraction
of the increased wealth of the smaller capitalists. It is not true,
then, that "the increment of wealth of the continent" has gone to--"the
makers of monopolies and their allies."
Let us now examine the question of _the control of industry_ from this
broader standpoint. It is admitted that the direct control of the
"Interests" extends only over "mechanical industry"--not over
agriculture. We have seen that it does not extend over the mine of
wealth that lies in city lands, nor over large masses of capital more
and more adequately protected by the government. It might be said that
by their strategic position in industry the large capitalists control
indirectly both agriculture, city growth, savings banks and government.
This would be true were it not for the fact that as soon as we turn from
the economic to the political field we find that not only in this
country, but also in Europe nearly all the strategical positions are
held by the small capitalists. They outnumber the large capitalists and
their retainers ten to one, and they hold _the political balance of
power_ between these and the propertyless classes. The control of
industry and the control of government being in the long run one and the
same, the only course left to the large capitalists is to compromise
with the small, and the common organization of centralized and
decentralized capital with the aid and protection of government is
assured.
The fact that, for the masses of mankind, capitalism is the enemy, and
not "Big Business," is then obscured by the warfare of the small
capitalists against the large. Perhaps nowhere in the world and at no
time in history has this conflict taken on a more definite or acute form
than it has recently in this country. So intense is the campaign of the
smaller interests, and it is being fought along such broad lines that it
often seems to be directed against capitalism itself. The masses of the
people, even of the working classes, in America and Great Britain have
yet no conception of the real war against capitalism, as carried on by
the Socialists of Continental Europe, and it seems to them that this new
small capitalist radicalism amounts practically to the same thing.
The "Insurgents," it is true, differ fundamentally from the Populists of
ten and twenty years ago, in so far they understand fully that in many
fields competition cannot be restored, that the large corporations
cannot be dissolved into small ones and must be regulated or owned by
the government, because they have deserted the Jeffersonian maxim that
"that government is best that governs least."
"With the growing complexity of our social and business relations," says
_La Follette's Weekly_, "a great extension of governmental functions has
been necessary. The authority of State and nation reaches out in
numberless and hitherto unknown forms affecting and regulating our daily
lives, our occupations, our earning power, and our cost of living. The
need for this intervention, for collective action by the people through
their duly constituted government, to preserve and promote their own
welfare, is a need that is growing more and more important and
imperative to meet the rapidly growing power of commerce, industry and
finance, centralized and organized in the hands of a few men."
This is nothing more nor less than the creed of capitalist collectivism.
The analysis of the present political situation of the Insurgents is not
only collectivist, but, in a sense, revolutionary. After describing how
"Big Business," controls both industry and politics, La Follette says:--
"This thing has gone on and on in city, State, and nation, until
to-day the paramount power in our land is not a Democracy, not a
Republic, but an Autocracy of centralized, systemized, industrial
and financial power. 'Government of the people, by the people, and
for the people' _has_ perished from the earth in the United States
of America."
An editorial in _McClure's Magazine_ (July, 1911) draws a similar
picture and frankly applies the term, "State Socialism," to the great
reforms that are pending:--
"Two great social organizations now confront each other in the
United States--political democracy and the corporation. Both are
yet new,--developments, in their present form, of the past two
hundred years,--and the laws of neither are understood. The entire
social and economic history of the world is now shaping itself
around the struggle for dominance between them....
"The problem presented by this situation is the most difficult that
any modern nation has faced; and the odds, up to the present time,
have all been with the corporations. Property settles by economic
law in strong hands; it has unlimited rewards for service, and the
greatest power in the world--the power of food and drink, life and
death--over mankind. Corporate property in the last twenty years
has been welded into an instrument of almost infinite power,
concentrated in the hands of a very few and very able men.
"Sooner or later the so far unchecked tendency toward monopoly in
the United States must be met squarely by the American people....
"The problem of the relation of the State and the corporation is
now the chief question of the world. In Europe the State is
relatively much stronger; in America, the corporation. In Europe
the movement towards Socialism--collective ownership and operation
of the machinery of industry and transportation--is far on its way;
in America we are moving to control the corporation by political
instruments, such as State Boards and the Interstate Commerce
Commission....
"And if corporate centralization of power continues unchecked, what
is the next great popular agitation to be in this country? For
State Socialism?"
When a treaty of peace is made between "Big Business" and the smaller
capitalists under such leadership as La Follette's, we may be certain
that it will not amount merely to a swallowing up of the small fish by
the large. The struggle waged according to La Follette's principles is
not a mere bid for political power and the spoils of office, but a real
political warfare that can only end by recognition of the small
capitalist's claims in business and politics--in so far as they relate,
not to the restoration of competition, but to government ownership or
control. As early as 1905, when governor of Wisconsin, La Follette
said:--
"It must always be borne in mind that the contest between the State and
the corporate powers is a lasting one.... It must always be remembered
that their attitude throughout is one of hostility to this legislation,
and that if their relation to the law after it is enacted is to be
judged by the attitude towards the Interstate Commerce Law, it will be
one of continued effort to destroy its efficiency and nullify its
provision." Events have shown that he was right in his predictions, and
his idea that the war against monopolies must last until they are
deprived of their dominant position in politics is now widely accepted.
The leading demands of the small capitalists, in so far as they are
independently organized in this new movement, are now for protection, as
buyers, sellers, investors, borrowers, and taxpayers against the
"trusts," railways, and banks. Formerly they invariably took up the
cause of the capitalist competitors and would-be competitors of the
"Interests"--and millionaires and corporations of the second magnitude
were lined up politically with the small capitalists, as, for example,
silver mine owners, manufacturers who wanted free raw material, cheaper
food (with lower wages), and foreign markets at any price,--from
pseudo-reciprocity to war,--importing merchants, competitors of the
trusts, tobacco, beer, and liquor interests bent on decreasing their
taxes, etc.
The great novelty of the "Insurgent" movement is that, in dissociating
itself from Free Silver, Free Trade, and the proposal to _destroy_ the
"trusts," it has succeeded in getting rid of nearly all the "Interests"
that have wrecked previous small capitalist movements. At the same time,
it has all but abandoned the old demagogic talk about representing the
citizen as consumer against the citizen as producer. It frankly avows
its intention to protect the ultimate consumer, not against small
capitalist producers (_e.g._ its opposition to Canadian reciprocity and
cheaper food), but solely against the monopolies. Indeed, the protection
of the ultimate consumer against monopolies is clearly made incidental
to the protection of the small capitalist consumer-producer. The wage
earner consumes few products of the Steel Trust, the farmer and small
manufacturers, many. Nor does the new movement propose to destroy the
"trusts" by free trade even in the articles they produce, but merely to
control prices by lower tariffs. With the abandonment of the last of the
"Interests" and at the same time of the "consumers" that they use as a
cloak, the new movement promises for the first time a fairly independent
and lasting political organization of the smaller capitalists.
While Senator La Follette is the leading general of the new movement,
either Ex-President Roosevelt or Governor Woodrow Wilson seems destined
to become its leading diplomatist. While Senator La Follette declares
for a fight to the finish, and shows that he knows how to lead and
organize such a fight, Mr. Roosevelt and Mr. Wilson are giving their
attention largely to peace terms to be demanded of the enemy, and the
diplomatic attitude to be assumed in the negotiations. Perhaps it is too
early for such peaceful thoughts, and premature talk of this kind may
eliminate these leaders as negotiators satisfactory to the small
capitalists. Their interest for my present purpose is that they probably
foreshadow the attitude that will finally be assumed when the large
"Interests" see that they must make terms.
Mr. Wilson's language is at times so conciliatory as to create doubt
whether or not he will stand with Senator La Follette and the Republican
"Insurgents" for the whole of the small capitalist's program, but it
leaves no doubt that, if he lives up to his declared principles, he must
aim at the government regulation, not of "Big Business" merely, but of
all business--as when he says that "business is no longer in any sense a
private matter."
"We are dealing, in our present discussion," he said in an address,
delivered in December, 1910, "with business, and we are dealing
with life as an organic whole, and modern politics is an
accommodation of these two. Suppose we define business as economic
_service of society for private profit_, and suppose we define
politics as the accommodation of all social forces, the forces of
_business, of course, included_, to the common interest." (My
italics.)
It is evident that if the community gains by an extended control over
business, that business gains at least as much by its claim to be
recognized as a _public service_. And this Mr. Wilson makes very
emphatic:--
"Business must be looked upon, not as the exploitation of society,
not as its use for private ends, but as its sober service; and
private profit must be regarded as legitimate only when it is in
fact a reward for what is veritably serviceable,--serviceable to
interests which are not single but common, as far as they go; and
politics must be the discovery of this common interest, in order
that the service may be tested and exacted.
"In this acceptation, society is the _senior partner_ in all
business. It first must be considered,--society as a whole, in its
permanent and essential, not merely in its temporary and
superficial, interests. _If private profits are to be
legitimatized, private fortunes made honorable_, these great forces
which play upon the modern field must, both individually and
collectively, be accommodated to a common purpose." (My italics.)
Business is no longer "to be looked upon" as the exploitation of
society, private profits are to be "legitimatized" and private fortunes
"made honorable"--in a word, the whole business world is to be
regenerated and at the same time rehabilitated. This is to be
accomplished, as Mr. Wilson explained, in a later speech (April 13,
1911), not by excluding the large capitalists from government, but by
including the small, and this will undoubtedly be the final outcome. He
said:--
"The men who understand the life of the country are the men _who
are on the make_, and not the men who are made; because the men who
are on the make are in contact with the actual conditions of
struggle, and those are the conditions of life for the nation;
whereas, the man who has achieved, who is at the head of a great
body of capital, has passed the period of struggle. He may
sympathize with the struggling men, but he is not one of them, and
only those who struggle can comprehend what the struggle is. I
would rather take the interpretation of our national life from the
general body of the people than from those who have made
conspicuous successes of their lives."
But the "Interests" are not to be excluded from the new dispensation.
"I know a great many men," Mr. Wilson says further, "whose names
stand as synonyms of the unjust power of wealth and of corporate
privileges in this country, and I want to say to you that if I
understand the character of these men, many of them--most of
them--are just as _honest_ and just as patriotic as I claim to be.
But I do notice this difference between myself and them; I have not
happened to be immersed in the kind of business in which they have
been immersed; I have not been saturated by the prepossessions
which come upon men situated as they are, and I claim to see some
things that they do not yet see; that is the difference. _It is not
a difference of interest_; it is not a difference of capacity; it
is not a difference of patriotism. It is a difference of
perception....
"Now, these men have so buried their minds in these great
undertakings that you cannot expect them to have reasonable and
rational views about the antipodes. They are just as much chained
to a task, as if the task were little instead of big. Their view is
just as much limited as if their business were small instead of
colossal. _But they are awakening._ They are not all of them
asleep, and when they do wake, they are going to lend us the
assistance of truly statesmanlike minds.
"We are not fighting property," Mr. Wilson continues, "but the
wrong conception of property. It seems to me that business on the
great scale upon which it is now conducted is the service of the
community, and the profit is legitimate only in proportion as the
service is genuine. I utterly deny the genuineness of any profit
which is gathered together without regard to the serviceability of
the thing done.... Men have got to learn that in a certain sense,
_when they manage great corporations, they have assumed public
office_, and are responsible to the community for the things they
do. _That is the form of privilege that we are fighting."_ (Italics
mine.)[33]
A second glance at these passages will show that Mr. Wilson speaks in
the name rather of struggling small capitalists, business men "on the
make," than of the nation as a whole. His diplomacy is largely aimed to
move the "honest" large capitalists. These are assured that the only
form of privilege that Mr. Wilson, representing the smaller business
men, those "on the make," is attacking, is their freedom from political
and government control. But the large capitalists need not fear such
control, for they are assured that they themselves will be part of the
new government. And as there is no fundamental "difference of
interests," the new government will have no difficulty in representing
large business as well as small.
No better example could be found of the foreshadowed treaty between the
large interests and the whole body of capitalists, and their coming
consolidation, than the central banking association project now before
Congress. Originated by the "Interests" it was again and again moderated
to avoid the hostility of the smaller capitalists, until progressives
like Mr. Wilson are evidently getting ready to propose still further
modifications that will make it entirely acceptable to the latter class.
Already Mr. Aldrich has consented that the "State" banks, which
represent chiefly the smaller capitalists, should be included in the
Reserve Association, and that the President should appoint its governor
and deputy governor. Doubtless Congress will insist on a still greater
representation of the government on the central board.
Mr. Wilson emphasizes the need of action in this direction in the name
of "economic freedom," which can only mean equal financial facilities
and the indirect loan of the government's credit to all capitalists,
through means of a government under their common control:--
"The great monopoly in this country is the money monopoly. So long
as that exists, our old variety and freedom and individual energy
of development are out of the question. A great industrial nation
is controlled by its system of credit. Our system of credit is
concentrated. _The growth of the nation, therefore, and all our
activities are in the hands of a few men_ who, even if their action
be honest and intended for the public interest, are necessarily
concentrated upon the great undertakings in which their own money
is involved, and who necessarily by every reason of their own
limitations, chill and check and destroy genuine economic freedom.
This is the greatest question of all, and to this statesmen must
address themselves with an earnest determination to serve the long
future and the true liberties of men." (My italics.)
Undoubtedly this is a great question; the establishment of a political
control over credit will mean a political and financial revolution. For
it will establish the power of the government over our whole economic
system and will lead rapidly to a common political and economic
organization of all classes of capitalists for the control of the
government, to a compromise between the group of capitalists that now
rules the business world and that far larger group which is bound to
rule the government. The financial magnates have seen this truth, and,
as Mr. Paul Warburg said to the American Association (New Orleans, Nov.
21, 1911), "Wall Street, like many an absolute ruler in recent years,
finds it more conducive to safety and contentment to forego some of its
prerogatives ... and to turn an oligarchy into a constitutional
democratic federation [_i.e._ a federation composed of capitalists]."
Mr. Roosevelt has announced a policy with regard to monopolies that
foreshadows even more distinctly than anything Mr. Woodrow Wilson has
said the solution of the differences between large and small
capitalists. He urges that a government commission should undertake
"supervision, regulation, and control of these great corporations" even
to the point of controlling "monopoly prices" and that this control
should "indirectly or directly extend to dealing with all questions
connected with their treatment of their employees, including the wages,
the hours of labor, and the like."[34]
This policy is in entire accord with the declarations of Andrew
Carnegie, Daniel Guggenheim, Judge Gary, Samuel Untermeyer,
Attorney-General Wickersham, and others of the large capitalists or
those who stand close to them. It is in equal accord with the
declarations of _La Follette's Weekly_ and the leading "Insurgent"
writers.
It is true that the private monopolies, as Mr. Bryan pointed out (_New
York Times_, Nov. 19, 1911), "will soon be in national politics more
actively than now, for they will feel it necessary to control Colonel
Roosevelt's suggested commission, and to do that they must control the
election of those who appoint the commission."
But the private monopolies will soon be more actively in politics no
matter what remedy is offered, even government ownership. The small
capitalist investors, shippers, and consumers of trust products can only
protect themselves by securing control of the government, or at least
sharing it on equal terms with the large capitalists.
The reason that Mr. Roosevelt's proposal was hailed with equal
enthusiasm by the more far-sighted capitalists, whether radical or
conservative, small or large, was that they have an approximately equal
hope of controlling the government, or sharing in its control. The
unbiased observer can well conclude that they are likely to divide this
control between them--and, indeed, that the complete victory of either
party is economically and politically unthinkable. Already banks,
railways, industrial "trusts," mining and lumber interests, are being
forced to follow a policy satisfactory to small capitalist investors,
borrowers, customers, furnishers of raw material, and taxpayers--while
small capitalist competitors are being forced to abandon their effort to
use the government to restore competition and destroy the "trusts."
In the reorganization of capitalism, the non-capitalists, the wage and
salary earning class are not to be consulted. Taken together with those
among the professional and salaried class who are small investors or
expect to become independent producers, the small capitalists constitute
a majority of the electorate (though not of the population), or at
least hold the political balance of power. It is capitalist interests
alone that really count in present-day politics, and it is for
capitalists alone that government control would be instituted.
Viewed in this light the statements of Mr. Woodrow Wilson that "business
is no longer in any proper sense a private matter," or that "our
program, from which we cannot be turned aside, is, that we are going to
take possession of the control of our own economic life," and the
similar statements of Mr. Roosevelt, are not so Socialistic as they
seem. What their use by the leading "conservative-progressive" statesmen
of both parties means is that a partnership of capital and government is
at hand.
FOOTNOTES:
[31] Lincoln Steffens in _Everybody's Magazine_, beginning September,
1910.
[32] _McClure's Magazine_, 1911.
[33] Governor Woodrow Wilson, Speech of April 13, 1911.
[34] The _Outlook_, Nov. 18, 1911.