YOUR OWN PAY ENVELOPE
My dear Smith,
Having seen that the Marxian theories of value are not the sanely
“scientific” laws that Socialists declare them to be, but are utter
absurdities that run counter to all laws of logic and even contradict
human experience, we shall now get down to your own individual pay
envelope, for that is the thing which most interests you. But, please
don’t imagine that, because we have stopped talking about Marx’s
theories for the moment, we have reached the end of our list of
Socialist fallacies. To tell the truth, we have just begun to enumerate
them. Silly as these ideas are in theory, they do not begin to attain
the full limit of their absurdity until we attempt to apply them to the
practical affairs of life.
Last night I stood at the street corner and heard the soap-box orator
“educate” the crowd. He told them that the average earnings of every
worker in America was $2,500 a year--a trifle more than $48 a week--and
he asked the men if they had found any such sum of money in their
pay-envelope recently.
You can imagine the answer he received to this question, John. Yet,
the soap-boxer still asserted that this was the amount each worker had
earned, and insisted that the difference between $48 and the sum he had
received represented the amount of which his employer was “robbing”
him. From the look on the faces of some of the men, I felt that the
agitator had made an impression upon them. He reeled off his statistics
so glibly that you really couldn’t blame them for believing him.
Of course, he also told them that, under Socialism, nothing of this
kind could happen--that they would get their $2,500 a year, and more,
too, and that they would have to work only half as long a time each day
in order to earn this amount of money. “We must change the ‘system,’”
he cried. “We must stop the making of goods for profit! Then, and
then only, will you put an end to the exploitation that is the cause
of all your poverty and misery. It is the only way you can throw the
parasite-capitalist off your back. You are being robbed of four-fifths
of your wages, and you’re not allowed to keep even the little you get,
because capitalism, after robbing you by taking four-fifths of the
money you earn, puts the prices of everything you buy higher and higher
until there isn’t a penny of your earnings left for yourself, and you
don’t get a chance to live decently, at that.”
You have heard this kind of talk. You may have thought that there was
some truth in it. You--like all the rest of us--are confronted with the
problem of the cost of living, and--like most of us--you wish that you
could earn more money. “Is it possible,” you ask, “that I am earning
four times as much as I get, and that I am being ‘robbed’ of the
greater part of it?”
If you listen to the Socialists you will come to believe that this is
just what is happening. A Socialist paper published in Kansas has spent
a lot of money to advertise the fact that, when Socialism triumphs and
you get what you actually earn, you will be paid $2,000 a year for six
hours a day.
This is a very conservative estimate--for a Socialist. As you may have
learned by this time, the writers and speakers who undertake to tell
the worker what is to happen to him under Socialism do not agree about
the amount of money he will get and the length of time he will have to
work in the Co-operative Commonwealth, any more than they do when they
try to estimate the extent of the “robbery” from which he is suffering.
Usually, the rate of payment is fixed at $2,500 for four hours’ work a
day. A writer in a popular magazine fixes the sum the worker will be
paid at $5,000. Suthers, the English Socialist, promises the equivalent
of $10,000 a year, and there is a band of “comrades” on the Pacific
Coast who can demonstrate “scientifically” that a 3-hour day affords
sufficient time in which to earn a decent living and even the luxuries
of life.
Well, do you believe any of these statements? I hope you are not such
a simpleton as to be fooled by the bald assertion of any speaker or
writer when you have, within your reach, the facts from which you can
learn the truth for yourself.
Let us pursue this more rational method. Certainly, the Socialists
cannot object if we check off their calculations and find out if they
have made any mistakes in their figuring.
According to the last United States Census report--and that ought to
be good enough authority for anybody--the total value of all the goods
manufactured in this country during the year 1909 was $20,672,052,000
and the number of persons employed in making these goods was 7,405,513.
If we divide one by the other, we find an earning capacity of more
than $2,700 per man; but, unfortunately, that is not the way things
work out. There are certain expenses of manufacture that have to be
deducted from the “gross value” before we can even begin to calculate
the earning capacity of the worker. One little item we mustn’t forget
is called “Cost of Materials.” Another item is known as “Miscellaneous
Expenses.” After you have received your wages, you are perfectly
willing that your employer shall deduct these “expenses” before
figuring his own profits, are you not?
In 1909, the “cost of materials” alone represented the tremendous
sum of $12,141,291,000 and the “cost of miscellaneous expenses” was
$1,945,676,000. When we subtract these two charges from the “gross
value,” we have $6,585,085,000 left, and if we divide this sum by the
number of workers, we find that the average product of the worker was
but $889.23.
What did the worker actually get? The “cost of labor and salaries,”
in 1909, was $4,365,613,000, and, if we divide this by the number of
workers, we learn that the average is $589.52.
This is quite different from the story the Socialists tell us. Had
all the industries in America been owned and operated collectively,
in 1909, the worker, at the best, could have received but $299.71
more than he did, for, as you must admit, such factors as “cost of
materials” and “miscellaneous expenses” must needs be considered, even
under the collective system of industry. Certainly, the worker in the
textile mills could not produce the cotton and wool and silk, and the
shoe-worker could not raise the animals and prepare the leather, even
were Socialism to bring about all the marvelous changes it has promised.
Yet, this is precisely what the Socialists do when they commence to
quote “facts.” It is useless for them to deny the charge, for there is
no other method by which they can figure an average earning capacity
of $2,500 for each worker. To do this it would be necessary for the
employer to get his cotton for nothing, his leather for nothing, and
everything he uses in making his product, for nothing. Moreover, it
presupposes that he can procure free fuel, free light, and, what is
still more improbable, that he has to pay nothing for new machinery
or for repairing the old. Do you think that the Socialist is showing
himself the “friend” of the worker when he fills his mind with such
“dope” as this?
And, even, the figures we have worked out are not fair--to the
employer. He does not make a profit of more than $299 upon the labor
of each of his workers--not by any means! Out of the $299 must come
the cost of selling and transportation, bad debts, taxes, interest,
etc., so that, when we have deducted all these charges, we can scarcely
question Willey’s justification for the assertion (“Laborer and the
Capitalist,” p. 22) that capital actually receives no more than 6
per cent net profits on its product. Moreover, as _The American
Federationist_ points out (July, 1905), the census figures fall short
of giving us the actual cost of manufactures, as the original “gross
value” upon which our calculations are based is itself “arrived at by
a constant duplication of value, owing to the fact that the finished
products of one plant become the material of some other factory, in
which they are changed into some higher form and again included in the
value of products.”
I will admit that it is practically impossible to compile statistics
that will take such facts as these into consideration, and the
Socialists do not act fairly when they lead us to assume that all these
conditions have been considered in their figures. How many times do you
suppose the value of the same piece of leather is computed from the
time it becomes a hide until it is turned out, a finished product, from
the shoe factory. Yet, as we have seen, every time the value of this
material is included in the value of products it gives the manufacturer
credit for a sum of money that never reached him.
Let us suppose that we were running all our industries under just such
a collective form of government as the Socialists propose to establish,
and that, as a result, we were bound to see that every worker got the
$5,000 a year he has been promised. Do you see what that would mean?
Figure it out for yourself--multiply the 7,405,513 workers in the
industrial plants by the $5,000 that each would have to be paid, and
then remember that the seven millions of workers represent only a small
proportion of the workers to whom this sum of money must be given by
the Co-operative Commonwealth. Even counting the seven millions alone,
we have a total of $37,027,505,000--almost twice as much as the “gross
value” of all manufactured products in this country to-day.
It is true that we do not know just how many men, women and children
of working age there are who would have to be given a place in the
collective pay-roll. In view of the total population of the United
States, I do not think that any Socialist will accuse me of overstating
the case if I assert that there would be 30,000,000 people to be
provided for.
What would this mean? Merely an annual pay-roll of
$150,000,000,000--that’s all.
Easy, isn’t it! At present, we manufacture less than $21,000,000,000
worth of goods--the consumable wealth produced in the United States
is estimated by Socialists to be but $30,000,000,000 (_Appeal to
Reason_, October 5, 1912); yet they ask us to get busy and undertake
to meet a pay-roll that is at least fully five times greater than the
total product to-day. And, if you want to be as conservative as the
most conservative Socialist statistician who is dreaming these dreams,
and allow that labor under Socialism will be rewarded with a meagre
$2,000 a year, you will still have a pay-roll of $60,000,000,000 to
provide for, or twice as much as we make. How are you going to meet
it? As a practical man, John, I ask you: _How?_ Certainly not from the
$21,000,000,000 produced each year in manufactures. If we add to this
the total wealth represented by the agricultural, mining and fishing
interests of this country, we shall still fall far short of the sum we
require. How is it to be done?
Absurd as all these promises are, we have not yet reached the
limit--far from it! For example, we are told that in the Co-operative
Commonwealth we shall have to work only half as long as we do now.
In other words, the man who works eight hours a day now, will get
along swimmingly by working four hours, and still receive the income
promised--from $2,000 to $5,000 a year--for his effort.
Are we to understand from this that, though the worker, with the best
machinery and the most scientific management now possible, succeeds
only in turning out less than $900 worth of goods in a year, he will be
able, under collective management, to turn out from two and one-half to
five times as great a product, while working just half as many hours?
You know that this couldn’t be done. You know that, if you worked
half as many hours as you do now, some other man would have to put
in the other half of the day or only about half the usual product
would be manufactured. If, therefore, we entirely disregard the fact
that Socialists are promising to pay the individual worker more money
every year than several workers are now able to produce, we are still
confronted by a problem that defies solution. A certain amount of work
must be done to keep the needs of Society supplied. To do this work, a
certain amount of effort must be exerted, and, to exert this effort, a
certain amount of time is necessary. Yet, the Socialists want us to
assume that all of these appeals to common sense are absurd--that once
the making of goods for profit has ceased, there will be no difficulty
in meeting the industrial pay-roll, no matter how enormously its
proportions may have increased.
And this leads up to still another very interesting phase of the
situation. We are told by the Socialists that the making of goods for
profit is to end, and that, in the Co-operative Commonwealth, such
problems as the high cost of living will trouble us no longer. Once let
the Socialists get control of our industries and we shall be compelled
to pay no more than a commodity is actually worth.
Do you see into what a maze of absurdities the Socialists have led
you? They tell us that we are to get anywhere from $2,000 to $5,000 a
year. An English Socialist promises the workers $10,000 a year, for
what does a few paltry thousands matter when a great army of voters
are to be fooled into casting their ballots for the Socialist ticket!
In addition, you are assured that your work-day is to be cut in half,
and you are further informed that, with the culmination of the profit
system, you will be able to purchase everything you want at materially
lower prices than are charged for such commodities to-day.
Will you tell me, John, where the Socialists are going to get the
money to meet this enormous pay-roll, if they stop making goods for
profit? Wages are to be increased out of all proportion to the present
schedule; hours of labor are to be reduced to a minimum, and yet,
despite all this, the prices of all commodities are to be cheapened,
too.
You don’t see how they are going to do it? No more do I! Suppose you
ask that wise little man on the street-corner. Maybe he can tell you!