CHAPTER IV

"STATE SOCIALISM" AND LABOR

State Capitalism has a very definite principle and program of labor

reform. It capitalizes labor, views it as the principal resource and

asset of each community (or of the class that controls the community),

and undertakes every measure that is not too costly for its

conservation, utilization, and development--_i.e._ its development to

fill those positions ordinarily known as _labor_, but not such

development as might enable the laborers or their children to compete

for higher social functions on equal terms with the children of the

upper classes.

On the one hand is the tendency, not very advanced, but unmistakable and

almost universal, to invest larger and larger sums for the scientific

development of industrial efficiency--healthy surroundings in childhood,

good food and healthy living conditions, industrial education, model

factories, reasonable hours, time and opportunity for recreation and

rest, and on the other a rapidly increasing difficulty for either the

laborer or his children to advance to other social positions and

functions--and a restriction of the liberty of laborers and of labor

organizations, lest they should attempt to establish equality of

opportunity or to take the first step in that direction by assuming

control over industry and government. From the moment it approaches the

labor question the "Socialist" part of "State Socialism" completely

falls away, and nothing but the purest collectivist capitalism remains.

Even the plausible contention that it will result in the maximum

efficiency and give the maximum product breaks down. For no matter how

much the condition of the laborers is improved, or what political rights

they are allowed to exercise, if they are deprived of all initiative and

power in their employments, and of the equal opportunity to develop

their capacities to fill other social positions for which they may prove

to be more fit than the present occupants, then the human resources of

the community are not only left underdeveloped, but are prevented from

development.

In the following chapters I shall deal successively with the plans of

the "State Socialists" to develop the productive powers of the laboring

people and their children--_as laborers_, together with the accompanying

tendencies towards compulsory labor, and formation of a class society.

"Our Home policy," says a manifesto of the Fabian Society (edited by

Bernard Shaw), "must include a labor policy, _whether the laborer wants

it or not_, directed to securing _for him, what, for the nation's sake

even the poorest_ of its subjects should have." (Italics mine.)[46]

Here is the basis of the attitude of the "State Socialist" towards

labor. Labor is to be given more and more attention and consideration.

But the governing is to be done by other classes, and the foundation of

the new policy is to be the welfare of society as these other classes

conceive it,--and not the welfare of the masses of the people as

conceived by the masses themselves.

Indeed, a government official has recently pleaded with capital in the

name of labor that the time has come when it pays to treat labor as well

as valuable horses and cattle. George H. Webb, Commissioner of Labor of

Rhode Island, begins his report on Welfare Work by assuring the

manufacturers that it is profitable. He says: "Mankind, at least that

portion of it that has to do with horseflesh, discovered ages ago that a

horse does the best service when it is well fed, well stabled, and well

groomed. The same principle applies to the other brands of farm stock.

They one and all yield the best results when their health and comforts

are best looked after. It is strange, though these truths have been a

matter of general knowledge for centuries, that it is only quite

recently that it has been discovered that the same rule is applicable to

the human race. We are just beginning to learn that the employer who

gives steady employment, pays fair wages, and pays close attention to

the physical health and comfort of his employees gets the best results

from their labor."[47]

Mr. George W. Perkins, recently retired from the firm of J. P. Morgan

and Company, who has managed the introduction of pensions, profit

sharing, and other investments in labor for the International Harvester

Company, has also expressed the view that these measures were profitable

"from a pecuniary standpoint." A good illustration is the calculation of

the Dayton Cash Register Company, which has led in this "welfare work,"

that "the luncheons given each girl costs three cents, and that the

woman does five cents more of work each day." Some such calculation will

apply to the whole colossal system of governmental labor reforms now

favored so widely by far-sighted employers.[48]

In order that the private policy of the more enlightened of the large

corporations should become the policy of governments, which employers as

a class know they can control, only two conditions need to be filled.

Since all employers must to some degree share the burdens of the new

taxes needed for such governmental investments in the improvement of

labor, there must be some assurance, first, that all capitalists shall

share in the opportunity to employ this more efficient and more

profitable labor; and second, that the supply of cheap labor, which has

cost almost nothing to produce, is either exhausted or, on account of

its inefficiency, is less adapted to the new industry than it was to the

old. The impending reorganization of governments to protect the smaller

capitalists from the large (through better control over the banks,

railroads, trusts, tariffs, and natural resources) will furnish the

first condition, the natural exhaustion or artificial restriction of

immigration now imminent together with the introduction of "scientific

management," the second. From a purely business standpoint the greatest

asset of the capitalists' government, its chief natural resource, the

most fruitful field for conservation, and the most profitable place for

the investment of capital will then undoubtedly be in the labor supply.

In presenting the British Budget of 1910 to Parliament, Mr. Lloyd George

argued that the higher incomes and fortunes ought to bear a greater than

proportionate share of the taxes, because present governmental

expenditures were largely on their behalf, and because the new labor

reforms were equally to their benefit.

"What is it," he said, "that enabled the fortunate possessors of

these incomes and these fortunes to amass the wealth they enjoy or

bequeath? The security insured for property by the agency of the

State, the guaranteed immunity from the risks and destruction of

war, insured by our natural advantages and our defensive forces.

This is an essential element even now in the credit of the country;

and, in the past, it means that we were accumulating great wealth

in this land, when the industrial enterprises of less fortunately

situated countries were not merely at a standstill, but their

resources were being ravaged and destroyed by the havoc of war.

"What, further, is accountable for this growth of wealth? The

spread of intelligence amongst the masses of the people, the

improvements in sanitation and in the general condition of the

people. These have all contributed towards the efficiency of the

people, _even as wealth-producing machines_. Take, for instance,

such legislation as the Educational Acts and the Public Health

Acts; they have cost much money, but they have made infinitely

more. That is true of all legislation which improves the conditions

of life for the people. An educated, well-fed, well-clothed,

well-housed people _invariably leads to the growth of a numerous

well-to-do class_. If _property_ were to grudge a substantial

contribution towards proposals which insure the security which is

one of the essential conditions of its existence or toward keeping

from poverty and privation the old people whose lives of industry

and toil have either created that wealth or made it productive,

then _property_ would be not only shabby, but shortsighted."

(Italics mine.)[49]

The property interests should be far-sighted enough to support the

present economic and labor reforms, not because there is any fear in

Great Britain either from a revolutionary Socialist movement or from an

organized political or labor union upheaval, for Mr. Lloyd George

ridicules both these bogeys, but because such reforms _contribute

towards the efficiency of the people, even as wealth-producing

machines_--and increase the incomes of the wealthy and the well-to-do.

Mr. Lloyd George continued:--

"We have, more especially during the last 60 years, in this country

accumulated wealth to an extent which is almost unparalleled in the

history of the world, but we have done it at _an appalling waste of

human material_. We have drawn upon the robust vitality of the

rural areas of Great Britain, and especially Ireland, and spent its

energies recklessly in the devitalizing atmosphere of urban

factories and workshops as if the supply were inexhaustible. We are

now beginning to realize that we have been spending _our capital_,

at a disastrous rate, and it is time we should take a real,

concerted, national effort to replenish it. I put forward this

proposal, not a very extravagant one, _as a beginning_." (My

italics.)[50]

In order to do away with the economic waste of profitable "human

material" and the still more serious exhaustion of the supply, the

propertyless wage earner or salaried man for the first time obtains a

definite status in the official political economy; he becomes the

property of the nation viewed "as a business firm," a part of "our"

capital. His position was much like a peasant or a laborer during the

formation of the feudal system. To obtain any status at all, to become

half free he had to become somebody's "man." Now he is the "man," the

industrial asset, of the government. This paternal attitude towards the

individual, however, is not at all similar to the paternalist attitude

towards capital. While the individual capitalist often does not object

to having his capital reckoned as a part of the resources of a

government which capitalists as a class control,--roughly speaking in

proportion to their wealth,--we can picture his protests if either _his_

personal activity or ability or _his_ private income were similarly

viewed as dependent for their free use and development on the benevolent

patronage of the State. However, for the _workers_ to become an asset of

the State, even while the latter is still viewed primarily as a

commercial institution and remains in the hands of the business class,

is undoubtedly a revolutionary advance.

Mr. Winston Churchill also gives, as the basis for the whole program,

the need of putting an end to that "waste of earning power" and of "the

stamina, the virtue, safety, and honor of the British race," that is due

to existing poverty and economic maladjustment.[51] Mr. John A. Hobson,

a prominent economist and radical, shows that the purpose of the "New

Liberalism" is the full development of "the productive resources of our

land and labor,"[52] and denies that this broad purpose has anything to

do with Socialist collectivism.

Professor Simon Patten of the University of Pennsylvania writes very

truly about the proposed labor reforms, that "they can cause poverty to

disappear and can give a secure income to every family," without

requiring any sacrifice on the part of the possessing classes. No one

has shown more clearly or in fewer words how intimately connected are

the advance of the worker and the further increase of profits. "Social

improvement," Professor Patten says, "takes him [the workman] from

places where poverty and diseases oppress, and introduce him to the full

advantage of a better position.... It gives to the city workman the air,

light, and water that the country workman has, but without his

inefficiency and isolation. It gives more working years and more working

days in each year, with more zeal and vitality in each working day;

health makes work pleasant, and pleasant work becomes efficiency when

the environment stimulates men's powers to the full.... The unskilled

workman must be transformed into an efficient citizen; children must be

kept from work, and women must have shorter hours and better

conditions."[53]

Professor Patten has even drawn up a complete scientific program of

social reforms which lead _necessarily_ to the economic advantage of

_all_ elements in a community without any decrease of the existing

inequalities of wealth. "The incomes and personal efforts of those

favorably situated," says Professor Patten, "can reduce the evils of

poverty without the destruction of that _upon which their wealth and the

progress of society depend_." (Italics mine.)

The reform program begins with childhood and extends over every period

of the worker's life. Ex-President Eliot of Harvard and President Hadley

of Yale and other leading educators propose that its principles be

applied to the nation's children. Dr. Eliot insists that greater

emphasis should be laid on vocational and physical training and the

teaching of hygiene and the preservation of the health, which will

secure the approval of every "State Socialist." Anything that can be

done to elevate the health of the nation, and to increase its industrial

efficiency by the teaching of trades, will pay the nation, considered as

a going concern, a business undertaking of all its capitalists. It might

not improve the opportunity of the wage earners to rise to better-paid

positions, because it would augment competition among skilled laborers;

while it would probably improve wages somewhat, it might not advance

them proportionately to the general increase of wealth; it might leave

the unequal distribution of wealth, political power, and opportunity

even more unequal than they are to-day, but as long as the nation as a

whole is richer and the masses of the people better off, "State

Socialists" will apparently be satisfied.

President Hadley is even more definite than Dr. Eliot. The new

educational policy so thoroughly in accord with the interests of the

business and capitalist classes demands "for the people" every

opportunity in education that will make the individual a better

_worker_, while it allows his development as a _man_ and a _citizen_ to

take care of itself. President Hadley urges that we follow along German

lines in public education. What he feels we still lack, and ought to

take from Germany, are the "industrial training and the military

training of the people": the children are forced to go to the elementary

schools for a time, and during that part of their education they are

kept out of the shops and the factories. They, however, receive

instructions in the rudiments of shop and factory work."[54] In other

words, the children are kept out of the factory, but the shop and the

factory are permitted to enter the school. Doubtless an improvement, but

not yet the sort of education any business or professional man would

desire for his own children at twelve, fourteen, or sixteen years of

age.[55]

"State Socialism" looks at the individual, and especially the

workingman, almost wholly from the standpoint of what the community, as

_at present organized_, the capitalists being the chief shareholders, is

able to make out of him. Each newborn child represents so much cost to

the community for his education. If he dies, the community loses so and

so much. If he lives, he brings during his life such and such a sum to

the community, and it is worth while to spend a considerable amount both

to prevent his early death or disablement and to increase his industrial

efficiency while he lives. According to this view, Professor Irving

Fisher of Yale has calculated that the annual child crop in the United

States is worth about seven billion dollars per annum, a sum almost

equal to the annual value of our agricultural crops. In both cases great

economies are possible. Professor Fisher has estimated that 47 per cent

of the children who die in America less than five years old could be

saved at an average cost of $20 per child, which means an annual loss to

the nation of $576,000,000, according to Professor Fisher's calculation

of what would have been the future value of all the children now lost

(above their cost of maintenance).

"We have counted it our good fortune," says Professor Fisher, "to

dwell in a land where nature has been so prodigal that we have not

needed to fear want. We are only beginning to realize that this

very prodigality of nature has produced a spirit of prodigality in

men.

"It is the purpose of the conservation movement to rebuke and

correct this national trait, and the resources of science are now

concentrated in this mighty effort in that direction.

"The conservation of human life will, I believe, constitute the

grandest movement of the twentieth century.

"Not only do human beings constitute by far the greatest part of

our natural resources, but the waste of human life and strength is

by far the greatest of all wastes. In the report of President

Roosevelt's conservation commission, although his commission was

primarily appointed to conserve our natural rather than our vital

resources, it was pointed out that _human beings, considered as

capitalized working power, are worth three to five times all our

other capital_, and that, even on a very moderate estimate, the

total waste and unnecessary loss of our national vitality amounts

to _one and one half billions of dollars per year_."[56]

When the "State Socialist" policy has taken possession of the world,

which may be in the very near future, or, more correctly speaking, when

the world's business and politics are so organized as to give this

policy a chance for a full and free application, is it not evident that

every advanced nation will consider it as being to its business interest

to put an end to this vast, unnecessary loss of life? And if half a

billion a year is lost through unnecessary deaths of very young

children, is it not probable that an equal sum is lost through death

later in childhood or early youth, another similar sum through

underfeeding in later life, or through lack of sufficient exercise,

rest, recreation, and outdoor life, and a far larger amount through lack

of industrial training? Is it not certain that unnecessary industrial

accidents, sickness due to overwork and early old age due to overstrain,

are responsible for another enormous loss? And, finally, is not

unemployment costing a billion a year to the "nation, considered as a

business firm"? This last-named loss has been calculated, for the United

States alone, as 1,300,000 years of labor time annually. If a round

million of these years are saved--if we estimate their value in profits

at the low figure of $1000 each,--we have another billion (even

allowing for 300,000 unemployable).[57]

Is it not clear that nearly every element in the community will soon

combine to do all that is humanly possible to put an end to such costly

abuses and neglect; and that conscientious and wholesale efforts to

preserve the public health and to secure industrial efficiency cannot be

a matter of the distant future, when movements in that direction have

already been initiated in Great Britain, Australia, Germany, and some

other countries? Sir Joseph Ward, Premier of New Zealand, says that the

people of that country have already calculated the value of each

child--and, on this basis, made it the subject of certain governmental

investments. He says:--

"To return to the annuity fund, apart from the assistance it gives

to the wife and children if the father is sick, it also contributes

the services of a medical man for a woman at childbirth, and the

State pays $30 for that purpose. If all of this is not needed to

pay the physician, the rest may be used for carrying on the home.

This has all been done with the view to helping the birth rate and

bringing into the world children under the most healthy conditions

possible, so that they may have a free chance of attaining man's or

woman's estate.

"We assess the value of an adult in our country as $1500. So, _from

a business standpoint and on national grounds_, we regard the

expenditure of a sum up to $30 as judicious, when the value of the

infant to the country may be fifty times that sum. Thus the small

wage earner's wife and children are provided for, and his fear

about being able to provide for a large family is decreased."

(Italics mine.)[58]

"I am of the opinion," declares Mr. Churchill, "that the State should

increasingly assume the position of the reserve employer of labor," and

that "the State must increasingly and earnestly concern itself with the

care of the sick and aged, and, above all, of the children." He looks

forward "to the universal establishment of the _minimum standards_ of

life and labor, and their progressive elevation as the increasing

energies of production may permit."[59]

Mr. Churchill rejects the supposition that the government intends to

stop with the extension of the eight-hour law to miners. "I welcome and

support this measure, not only for its own sake," he said, "but more

because it is, I believe, simply the precursor of the general movement

which is in progress, all over the world, and in other industries

besides this, towards reconciling the conditions of labor with the

well-ascertained laws of science and health."[60]

It might be supposed that this measure would prove costly to employers,

but this is only a short-sighted view. In the first place, working for

less hours, the miners will produce somewhat more per hour, but an even

more important ultimate benefit comes from the fact that the most

experienced miners, those who are most profitable, being subject to less

overstrain, will have a longer working life.

Another measure already enacted towards establishing "a national

minimum" applies to the wages in ready-made tailoring and some less

important industries, to which shirt-waist making is soon to be added.

These are known as the "sweated" trades, "where the feebleness and

ignorance of the workers and their isolation from each other render them

an easy prey to the tyranny of bad masters and middlemen one step above

them upon the lowest rungs of the ladder, and themselves held in the

grip of the same relentless forces,"--where "you have a condition not of

progress but of progressive degeneration." Mr. Churchill asked

Parliament to regard these industries as "sick and diseased," and "to

deal with them in exactly the same mood and temper as we should deal

with sick people," and accordingly boards were established for the

purpose of setting up a minimum wage.[61]

But if employers are forced to pay higher wages, it may be thought that

they will lose from the law. This Mr. Churchill effectively denies.

"In most instances," he says, "the best employers in the trade are

already paying wages equal or superior to the probable minimum

which the Trade Board will establish. The inquiries I have set on

foot in the various trades scheduled have brought to me most

satisfactory assurances from nearly all the employers to whom my

investigations have addressed themselves.... But most of all I have

put my faith in the practical effect of a powerful band of

employers, perhaps a majority, who, whether from high motives or

self-interest, or from a combination of the two--they are not

necessarily incompatible ideas--will form a vigilant and instructed

police, knowing every turn and twist of the trade, and who will

labor constantly to protect themselves from being undercut by the

illegal competition of unscrupulous rivals."

Mr. Churchill claims that employers who are trying to pursue such

trades with modern machinery and modern methods are more seriously

hampered by the competition of the "sweaters" than they are by that of

foreign employers. "I cannot believe," he concludes, "that the process

of raising the degenerate and parasitical portion of these trades up to

the level of the most efficient branches of the trade, if it is

conducted by those conversant with the conditions of the trade and

interested in it, will necessarily result in an increase in the price of

the ultimate product. It may even sensibly diminish it through better

methods."[62] Mr. Churchill is able to point out, as with most of the

other reforms, that in one country or another they are already being put

into effect, the legislation against "sweating" being already in force

in Bavaria and Baden, as well as in Australia, under a somewhat

different form.

But the most striking of the British labor reforms has yet to be

mentioned. Not only were the present old age pensions established by the

common consent of all the political parties, but a law has now been

enacted--also with the approval of all parties (and only twenty-one

negative votes in Parliament)--to apply the same methods of state

insurance of workingmen to sickness, accidents, and even to

unemployment. The old age pensions were already more radical than those

of Prussia in that the workingmen do not have to contribute under the

British law, while the National Insurance Bill as now enacted surpasses

both the former British measure and the German precedent in everything,

except that it demands a lesser total sum from the government. In the

insurance against accidents, sickness, and unemployment the government,

instead of contributing the whole amount, gives from two ninths to one

third, one third to one half being assessed against employers and one

sixth to four ninths against employees. At first this reform, it is

expected, will cost only about $12,500,000, and it will be several years

before the maximum expenditure of $25,000,000 is reached. But the

measure is radical in several particulars: it applies to clerks,

domestic servants, and many other classes usually not reached by

measures of the kind,--a total of some 14,000,000 persons; it provides

$5,000,000 a year for the maintenance of sanatoria for tuberculosis and

creates new health boards to improve sanitation and educate the people

in hygiene; and it furnishes physicians and medicines for the insured,

thus organizing practically the whole medical force and drug supply as

far as the masses are concerned.

In fact, the whole scheme may be looked on not so much as a measure to

aid the sick and wounded of industry financially, as to set at work an

automatic pressure working towards the preservation of the health,

strength, and productive capacity of the people, and incidentally to the

increase of profits. As Mr. Lloyd George said in an interview printed in

the _Daily Mail_: "I want to make the nation more healthy than it is.

The great mass of illness which afflicts us weighs us down and is easily

preventable. It is a better thing to make a man healthy than to pay him

so much a week when he is ill."

Mr. Lloyd George points out that the German employers have found that

the governmental insurance against accidents has proved a good

investment:--

"When Bismarck was strengthening the foundation of the new German

Empire, one of the very first tasks he undertook was the

organization of a scheme which insured the German workmen and their

families against the worst evils arising from these common

accidents of life. And a superb scheme it was. It has saved an

incalculable amount of human misery to hundreds of thousands and

possibly millions of people.

"Wherever I went in Germany, north or south, and whomever I met,

whether it was an _employer_ or a workman, a _Conservative_ or a

Liberal, a Socialist or a Trade-union Leader--men of all ranks,

sections and creeds, with one accord joined in lauding the benefits

which have been conferred upon Germany by this beneficent policy.

Several wanted extensions, but there was not one who wanted to go

back. The employers admitted that at first they did not quite like

the new burdens it cast upon them, _but they now fully realized the

advantages which even they derived from the expenditure_, for it

had raised the standard of the workman throughout Germany." (My

italics.)[63]

It is not only worry and anxiety that were removed, but definite and

irregular sums that workers or their employers had formerly set aside

for insurance against accident, sickness, and old age, were now

calculated and regulated on a business basis more profitable to both

parties to the labor contract. It is true that in Germany the employers

only pay part of the cost, the rest being borne almost entirely by

employees, while in Great Britain--as far as the old age pensions

go--the government pays all, and is likely to pay a considerable part,

perhaps a third, in the other insurance schemes. But the plan by which

the government pays all may prove even less costly to the employing

class, since landlords and inactive capitalists on the one hand and the

working people on the other, pay the larger part of the taxes--so that

state insurance in this thoroughgoing form is perhaps destined to be

even more popular than the German kind.

The most radical provision of the new bill is that which deals with

unemployment. Though applying only to the engineering and building

trades, it reaches 2,400,000 people. It proposes to give a weekly

allowance to every insured person who loses employment through no fault

of his own, though nothing is given in strikes and lockouts. And it is

intended to extend this measure to other employments. This is only the

first installment.

It is probable that Mr. Churchill's project that the State should

undertake to abolish unemployment altogether is the most radical of all

the proposed policies, excepting only that to gradually expropriate all

the future unearned increment of land.

"An industrial disturbance in the manufacturing districts and the

great cities of this country," says Mr. Churchill, "presents itself

to the ordinary artisan in exactly the same way as the failure of

crops in a large province in India presents itself to the Hindoo

cultivator. The means by which he lives are suddenly removed, and

ruin in a form more or less swift and terrible stares him instantly

in the face. That is a contingency which seems to fall within the

most primary and fundamental obligations of any organization of

government. I do not know whether in all countries or in all ages

that responsibility could be maintained, but I do say that here and

now, in this wealthy country and in this _scientific_ age, it does

in my opinion exist, is not discharged, and will have to be

discharged."[64]

Mr. Churchill proposes not only to guard against periods of unemployment

which extend to all industries in the case of industrial crises, but

also to provide more steady employment for those who are unoccupied

during the slack seasons of the year or while passing from one employer

to another. Above all he plans that the youth of the nation shall not

waste their strength entirely in unremunerative employment or in

idleness, but that every boy or girl under eighteen years of age should

be learning a trade as well as making a living. Few will deny that the

program of Mr. Churchill and his associates in this direction marks a

great step towards that "more complete or elaborate social organization"

which he advocates.

One of the most significant of all the measures by which Mr. Churchill

plans to lend the aid of the State to the raising of the level of the

working classes is his "Development" Act. The object of this bill, in

the language of Mr. Churchill, is "to provide a fund for the economic

development of our country, for the encouragement of agriculture, for

afforestation, for the colonization of England (the settlement of

agricultural land), and for the making of roads, harbors, and other

public works." Stated in these terms, the Development Act is a measure

of "State Socialism" for the general industrial advance of the country,

but the main argument in its behalf lies in that clause of the bill

which provides, to quote from Mr. Churchill again: "that the prosecution

of these works shall be regulated, as far as possible, by the conditions

of the labor market, so that in a very bad year of unemployment they can

be expanded, so as to increase the demand for labor at times of

exceptional slackness, and thus correct and counterbalance the cruel

fluctuations of the labor market."[65]

We have seen that Mr. Churchill has justified these measures, not as

increasing the relative share of the working classes, but as adding to

the total product. They are to add to the industrial efficiency of the

nation as a whole, and so incidentally to bring a greater income to

all,--but in much the same proportions as wealth now distributes itself.

In this country Mr. Roosevelt has advocated a typical "State Socialist"

program of labor reforms including:--

"A workday of not more than eight hours."

"The abolition of the sweat-shop system."

"Sanitary inspection of factory, workshop, mine, and home."

"Liability of employers for injury to body and loss of life" and

"an automatically fixed compensation."

"The passage and enforcement of rigid anti-child-labor laws which

will cover every portion of this country."

"Laws limiting woman's labor."

All these measures except the first were adopted long ago, in

considerable part at least, by the reactionary government of Prussia and

are being introduced generally in monarchical and aristocratic Europe,

and I have shown that the eight-hour day has been instituted for miners

in Great Britain and that Mr. Winston Churchill proposed to extend it.

Mr. Roosevelt himself concedes that "we are far behind the older and

poorer countries" in such matters. But an examination of the action of

State legislatures during the year just past will show that we are

making rapid progress in the same direction.

"Social" or "industrial" efficiency, promoted by the government, is

already the central idea in American labor reform. Government insurance

against old age, accident, sickness, and unemployment is regarded, not

as the "workingmen's compensation" for injuries done them by society,

but as an automatic means of forcing backward employers to economize the

community's limited supply of labor power--not to wear it out too soon,

not to overstrain it, not to damage it irreparably or lay it up

unnecessarily for repairs, and not to leave it idle. Mr. Louis Brandeis

points out that mutual fire insurance has appealed to certain

manufacturers because in twenty years it has resulted in measures that

have prevented more than two thirds of the expected losses by fire.

Similarly, he says, "if society and industry and the individual were

made to pay from day to day the actual cost of sickness, accident,

invalidity, premature death, or premature old age consequent upon

excessive hours of labor, of unhygienic conditions of work, of

unnecessary risk, and of irregularity in employment, those evils would

be rapidly reduced."[66]

This, as Mr. Brandeis says, is undoubtedly on the "road to social

efficiency" and its practical application will convince employers better

than "mere statements of cost, however clear and forceful." It will

remove a vast sea of human misery, and the process will immensely enrich

society. But like the other State Capitalist reforms (until they are

supplemented by some more radical policy) it will at the same time

automatically bring about an increase of existing inequalities of income

and an intensification of social injustice.

Mr. William Hard in a study of workingmen's compensation for

_Everybody's Magazine_ has reached a similar conclusion to that of Mr.

Brandeis: "Far from attacking the present relationship between employer

and employee, automatic compensation specifically recognizes it. The

backbone of the present so-called 'capitalism'; namely, the hiring of

the unpropertied class by the propertied class to do work for wages, is

not caused by automatic compensation to lose a single vertebra, and

automatic compensation has nothing whatever to do with Socialism except

that it is accomplished under the supervision of the State." If

compulsory insurance against accidents "has nothing whatever to do with

Socialism," neither have compulsory insurance against sickness, against

old age, against certain phases of unemployment.

The social reformers propose a labor policy that is _for_ the people

whether they like it or not; the only "rights" it gives them are "the

right to live" and "the right to work." Its first object is to produce

more efficient and profitable laborers, its second to have the

government take control of organized charity, to which aspect I must now

turn. Most of the labor reforms, enacted to secure for the laborer "what

for the Nation's sake even the poorest of its subjects should have,"

have been urged more strongly by philanthropists and political

economists than by representatives of the workers. In America "the

minimum wage," for example, is being worked up by a special committee

consisting almost exclusively of this class, while workmen's

compensation has been indorsed by the most varied political and social

elements, from the chief organ of American philanthropists, and Theodore

Roosevelt, to the Hearst newspapers.

With "the national efficiency" in view, Mr. Webb asks the British

government to take up the policy of a "national minimum," including not

only a minimum below which wages are not to fall, but also a similar

minimum of leisure, sanitation, and education.[67] Mr. Edward Devine,

editor of the leading philanthropic and reform journal in America, the

_Survey_, outlines an identical policy and also insists like Mr. Webb

that the Socialist can lay no exclusive claim to it.

"The social economist [_i.e._ reformer]," writes Mr. Devine, "is

sometimes confused with the Utopian [_i.e._ Socialist]. They are,

however, very distinct types of reformers. The Utopian dreams of

ideals. The social economist seeks to establish the normal.... The

social worker is primarily concerned, _not_ with the lifting of

humanity to a higher level, but with eradicating the maladjustments

and abnormalities, the needless inequalities, which prevent our

realizing our own reasonable standards."

Speaking in the name of American reformers in general, Mr. Devine

demands for the lower levels of society "normal standards" of life,

which are equivalent to Mr. Webb's national minimum, and definitely

denies the applicability of "the question-begging epithet of Socialism

which is hurled at all the reformers engaged in such work."

"Whether it belongs to the Socialist program," Mr. Devine objects, "is a

question so far as we can see of interest only to the Socialists. Our

advocacy of such laws as we enumerate has no Socialist origin." He

claims that the "expenditures legitimately directed towards the removal

of adverse social conditions, are not uneconomic and unproductive," and

that "they do not represent a mere indulgence of altruistic sentiment,"

but are "investments"; of which prison reforms and the expenditures for

the prevention of tuberculosis are examples.[68]

Another phrase for the proposed saving of the national labor resources

and the introduction of minimum standards in its philanthropic aspect is

"the abolition of poverty." When he speaks of this as a definite and by

no means a distant reform, the reformer refers to _that extreme form of

poverty_, so widely prevalent to-day, which results in the physical

deterioration and the industrial inefficiency of a large part of the

population.

This sort of poverty is a burden on industry and the capitalists, and

Mr. Lloyd George was widely applauded when he said that it can and must

be done away with. He has calculated, too, that this abolition can be

accomplished _at half the cost of the annual increase in armaments_.

"This is a War Budget," said Mr. Lloyd George in presenting the

reform program of 1910. "It is for waging implacable war against

poverty and squalidness. I cannot help hoping and believing that

before this generation has passed away we shall have advanced a

great step toward the time when poverty, and the wretchedness and

the human degradation which always follows in its camp, will be as

remote from the people of this country as the wolves which once

infested its forests."

Mr. H. G. Wells, who has been a leading figure in the British reform

world and in the Fabian Society for many years, speaks on this reform

movement not merely as a keen outside observer. As an advocate of more

radical measures, he argues that there is nothing Socialistic about "the

national minimum." This "philanthropic administrative Socialism," as Mr.

Wells calls it, is very remote, he says, from the spirit of his own.[69]

Yet, critical as Mr. Wells is, he also advocates a policy that could be

summed up in the single phrase, "industrial efficiency." "The advent of

a strongly Socialistic government would mean no immediate revolutionary

changes at all," he says. "There would be no doubt an educational

movement to increase the economic value and productivity of the average

citizen of the next generation, and legislation _upon the lines laid

down by the principle of the 'minimum wage'_ to check the waste of our

national resources by destructive employment. Also a shifting of the

burden of taxation of enterprise to rent would begin." (My italics.) The

Liberals who are already setting these reforms on foot disclaim any

connection whatever with Socialism, but Mr. Wells argues that they do

not realize the real nature of their policy.

The establishment of this paternal "State Socialism," whether based on a

philanthropic "national minimum" or a scientific policy of "industrial

efficiency," many other "Socialists" besides those of Great Britain

consider to be the chief task of Socialism itself in our generation.

Among the latter was the late Edmond Kelly, a member of the Socialist

party in this country at the time of his death, who, in his posthumous

work, "Twentieth Century Socialism," has summed up his political faith

in much the same way as the anti-Socialist reformer might have done. He

says that three of the four chief objects of Socialism are the

organization of society, first "to prevent that overwork and

unemployment which lead to drunkenness, pauperism, prostitution, and

crime"; second, "to preserve the resources of the country"; and third,

"to produce with the greatest economy, with the greatest

efficiency."[70] Yet Mr. Carnegie and Mr. Rockefeller, as well as Mr.

Roosevelt, agree to all three of these policies. They are precisely what

the leading Socialists have called "State Socialism."

A part of the working people, also, are disposed to subordinate their

own conceptions of what is just, in spite of their own better judgment,

to an exclusive longing for an immediate trial of this kind of State

benevolence. This is expressed in the widely used phrase, "every man to

have the right to work and live,"--employed editorially, for example, by

Mr. Berger, now Socialist Congressman. What is demanded by this

principle is _not a greater proportion of the national income or an

increasing share of the control over the national government, but the

"State Socialist" remedies, employment, and the minimum wage_. In its

origin this is the begging on the part of the economically lowest

element, a class which Henry George well remarks has been degraded by

poverty until it considers that "the chance to labor is a boon."

Some years ago the municipal platform of the Milwaukee Socialists said

that it must be borne in mind "that the famine-stricken is better

served with a piece of bread than with the most brilliant program of the

future" and that "in view of the hopelessness of an immediate radical

betterment in the position of the working class" it is necessary to

emphasize the importance of attaining "the next best."[71] Here again

was admitted complete dependence on those who own the bread and have the

disposition of "the next best" in political reforms. When capitalism is

a little better organized, the working people will be guaranteed "the

next best": steady work and the food, conditions, and training necessary

to make that work efficient--just as surely as valuable slaves were

given these rights by intelligent masters or as valuable horses even are

given care and kindly treatment to-day.

"A Socialist Social Worker" has published anonymously in the _Survey_ a

letter which presents in a few words the whole Socialist position as to

this type of reform. The writer claims that the very fact that he is a

social worker shows that even as a Socialist he welcomes "every addition

to the standard of living that may be wrested or argued from the

Capitalist class," since all Socialists recognize that "no

undernourished class ever won a fight against economic exploitation, but

that the more is given the more will be demanded and secured." But he

does not feel that the material betterments have any closer relation to

Socialism.

"The new feudalism," he says, "will care for and conserve the powers of

the human industrial tool as the lord of the manor looked after the

human agricultural implement...." Here is the essential point: the

efficiency of the human industrial tool is to be improved with or

without his consent.

"Unrestrained Capitalism," says the same writer in explanation of

his prediction, "has hitherto invariably meant the physical

deterioration of the working class and the marginal disintegration

of society--the loosening of social ties and the pushing of

marginal members of society over the brink into poverty, pauperism,

vagrancy, drunkenness, prostitution, wife desertion and crime, _but

this deterioration is not the main indictment against capitalism_,

and will be remedied by the wiser capitalists themselves. The main

indictment of capitalism is that it selfishly and stupidly blocks

the road of orderly and continuous progress for the race."

The proposal of the social reformers, as far as the workers are

concerned aims to put an end to this deterioration, to standardize

industry or to establish a minimum of wages, leisure, health, and

industrial efficiency. The writer says that the Socialists aim at

something more than this.

"The criterion of social justice in every civilized community," he

writes, "is, and always has been, not how large or how intense is

the misery of the social debtor class, but what is done with the

social surplus of industry? It was formerly used to build pyramids,

to create a landed or ecclesiastical or literary aristocracy, to

conduct wars, or to provide the means of a sensuous life for the

majority of a privileged class, and the means of dilettantism for

the minority of it. _The difference between the near Socialist and

the true Socialist is principally that the main attention of the

former is given to the negative side of the social problem--the

condition of the submerged classes, while that of the latter is

given to the positive side of the problem--the wonderful

development, power, and life that would come to that race and the

individual if a wise and social use were to be made of the surplus

of industry._"

FOOTNOTES:

[46] "Fabianism and Empire," p. 62.

[47] Articles by Hyman Strunsky on Welfare Work, _The Coming Nation_,

1910.

[48] do, do.

[49] Lloyd George, _op. cit._, p. 93.

[50] Lloyd George, _op. cit._, p. 81.

[51] Winston Churchill, _op. cit._, p. 101.

[52] John A. Hobson, "The Crisis of Liberalism," p. 3.

[53] Professor Simon Patten, The Annals of the American Academy of

Political and Social Science, July, 1908.

[54] Speech of President Hadley before the Brooklyn Institute of Art and

Sciences (1909).

[55] A more democratic and truthful view of the German educational

system is that of Dr. Abraham Flexner (see the _New York Times_, October

1, 1911). He says that the Germans have to solve the following kind of

an educational problem:--

"What sort of educational program can we devise that will subserve all

the various national policies--that will enable Germany to be a great

scientific nation, that will enable it to carry on an aggressive

colonial and industrial policy, and yet not throw us into the arms of

democracy? Their present educational system is their highly effective

reply.

"Our problem is a very different one," Dr. Flexner remarks. "Our

historic educational problem has been and is quite independent of any

position we might be able to achieve in the world. That problem has

always been: How can we frame conditions in which individuals can

realize the best that is in them?"

Dr. Flexner is then reported to have quoted the following from a

Springfield Republican editorial:--

"Germany could readily train her masses with a view to industrial

efficiency, whereas our industrial efficiency is only one of the

efficiencies we care about; the American wishes to develop in many other

ways, and to have his educational system help him to do it."

[56] _New York Times_, Nov. 12, 1911.

[57] F. H. Streightoff, "The Standard of Living among the Industrial

People of America."

[58] Interview with Sir Joseph Ward, New York, April 15, 1911.

[59] Winston Churchill, _op. cit._, p. 325.

[60] Winston Churchill, _op. cit._, p. 186.

[61] Winston Churchill, _op. cit._, pp. 240, 243.

[62] Winston Churchill, _op. cit._, pp. 250, 252.

[63] Lloyd George, _op. cit._, pp. 68-69.

[64] Winston Churchill, _op. cit._, p. 197.

[65] Winston Churchill, _op. cit._, p. 197.

[66] The _Outlook_, June, 1911.

[67] Sidney Webb, the _Contemporary Review_ (1908) and "Basis and Policy

of Socialism," pp. 83, 84.

[68] The _Survey_ (New York), 1910, pp. 81-82, 466, 731-732.

[69] H. G. Wells, "First and Last Things," p. 133.

[70] Edmond Kelly, "Twentieth-Century Socialism," p. 314.

[71] _Vorwaerts_ (Milwaukee), Feb. 3, 1898.

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