We had made an appointment to meet the ladies at the dining-hall for
dinner, after which, having some engagement, they left us sitting at
table there, discussing our wine and cigars with a multitude of other
matters.
"Doctor," said I, in the course of our talk, "morally speaking, your
social system is one which I should be insensate not to admire in
comparison with any previously in vogue in the world, and especially
with that of my own most unhappy century. If I were to fall into a
mesmeric sleep tonight as lasting as that other and meanwhile the
course of time were to take a turn backward instead of forward, and I
were to wake up again in the nineteenth century, when I had told my
friends what I had seen, they would every one admit that your world was
a paradise of order, equity, and felicity. But they were a very
practical people, my contemporaries, and after expressing their
admiration for the moral beauty and material splendor of the system,
they would presently begin to cipher and ask how you got the money to
make everybody so happy; for certainly, to support the whole nation at
a rate of comfort, and even luxury, such as I see around me, must
involve vastly greater wealth than the nation produced in my day. Now,
while I could explain to them pretty nearly everything else of the main
features of your system, I should quite fail to answer this question,
and failing there, they would tell me, for they were very close
cipherers, that I had been dreaming; nor would they ever believe
anything else. In my day, I know that the total annual product of the
nation, although it might have been divided with absolute equality,
would not have come to more than three or four hundred dollars per
head, not very much more than enough to supply the necessities of life
with few or any of its comforts. How is it that you have so much more?"
"That is a very pertinent question, Mr. West," replied Dr. Leete, "and
I should not blame your friends, in the case you supposed, if they
declared your story all moonshine, failing a satisfactory reply to it.
It is a question which I cannot answer exhaustively at any one sitting,
and as for the exact statistics to bear out my general statements, I
shall have to refer you for them to books in my library, but it would
certainly be a pity to leave you to be put to confusion by your old
acquaintances, in case of the contingency you speak of, for lack of a
few suggestions.
"Let us begin with a number of small items wherein we economize wealth
as compared with you. We have no national, state, county, or municipal
debts, or payments on their account. We have no sort of military or
naval expenditures for men or materials, no army, navy, or militia. We
have no revenue service, no swarm of tax assessors and collectors. As
regards our judiciary, police, sheriffs, and jailers, the force which
Massachusetts alone kept on foot in your day far more than suffices for
the nation now. We have no criminal class preying upon the wealth of
society as you had. The number of persons, more or less absolutely lost
to the working force through physical disability, of the lame, sick,
and debilitated, which constituted such a burden on the able-bodied in
your day, now that all live under conditions of health and comfort, has
shrunk to scarcely perceptible proportions, and with every generation
is becoming more completely eliminated.
"Another item wherein we save is the disuse of money and the thousand
occupations connected with financial operations of all sorts, whereby
an army of men was formerly taken away from useful employments. Also
consider that the waste of the very rich in your day on inordinate
personal luxury has ceased, though, indeed, this item might easily be
over-estimated. Again, consider that there are no idlers now, rich or
poor--no drones.
"A very important cause of former poverty was the vast waste of labor
and materials which resulted from domestic washing and cooking, and the
performing separately of innumerable other tasks to which we apply the
cooperative plan.
"A larger economy than any of these--yes, of all together--is effected
by the organization of our distributing system, by which the work done
once by the merchants, traders, storekeepers, with their various grades
of jobbers, wholesalers, retailers, agents, commercial travelers, and
middlemen of all sorts, with an excessive waste of energy in needless
transportation and interminable handlings, is performed by one tenth
the number of hands and an unnecessary turn of not one wheel. Something
of what our distributing system is like you know. Our statisticians
calculate that one eightieth part of our workers suffices for all the
processes of distribution which in your day required one eighth of the
population, so much being withdrawn from the force engaged in
productive labor."
"I begin to see," I said, "where you get your greater wealth."
"I beg your pardon," replied Dr. Leete, "but you scarcely do as yet.
The economies I have mentioned thus far, in the aggregate, considering
the labor they would save directly and indirectly through saving of
material, might possibly be equivalent to the addition to your annual
production of wealth of one half its former total. These items are,
however, scarcely worth mentioning in comparison with other prodigious
wastes, now saved, which resulted inevitably from leaving the
industries of the nation to private enterprise. However great the
economies your contemporaries might have devised in the consumption of
products, and however marvelous the progress of mechanical invention,
they could never have raised themselves out of the slough of poverty so
long as they held to that system.
"No mode more wasteful for utilizing human energy could be devised, and
for the credit of the human intellect it should be remembered that the
system never was devised, but was merely a survival from the rude ages
when the lack of social organization made any sort of cooperation
impossible."
"I will readily admit," I said, "that our industrial system was
ethically very bad, but as a mere wealth-making machine, apart from
moral aspects, it seemed to us admirable."
"As I said," responded the doctor, "the subject is too large to discuss
at length now, but if you are really interested to know the main
criticisms which we moderns make on your industrial system as compared
with our own, I can touch briefly on some of them.
"The wastes which resulted from leaving the conduct of industry to
irresponsible individuals, wholly without mutual understanding or
concert, were mainly four: first, the waste by mistaken undertakings;
second, the waste from the competition and mutual hostility of those
engaged in industry; third, the waste by periodical gluts and crises,
with the consequent interruptions of industry; fourth, the waste from
idle capital and labor, at all times. Any one of these four great
leaks, were all the others stopped, would suffice to make the
difference between wealth and poverty on the part of a nation.
"Take the waste by mistaken undertakings, to begin with. In your day
the production and distribution of commodities being without concert or
organization, there was no means of knowing just what demand there was
for any class of products, or what was the rate of supply. Therefore,
any enterprise by a private capitalist was always a doubtful
experiment. The projector having no general view of the field of
industry and consumption, such as our government has, could never be
sure either what the people wanted, or what arrangements other
capitalists were making to supply them. In view of this, we are not
surprised to learn that the chances were considered several to one in
favor of the failure of any given business enterprise, and that it was
common for persons who at last succeeded in making a hit to have failed
repeatedly. If a shoemaker, for every pair of shoes he succeeded in
completing, spoiled the leather of four or five pair, besides losing
the time spent on them, he would stand about the same chance of getting
rich as your contemporaries did with their system of private
enterprise, and its average of four or five failures to one success.
"The next of the great wastes was that from competition. The field of
industry was a battlefield as wide as the world, in which the workers
wasted, in assailing one another, energies which, if expended in
concerted effort, as to-day, would have enriched all. As for mercy or
quarter in this warfare, there was absolutely no suggestion of it. To
deliberately enter a field of business and destroy the enterprises of
those who had occupied it previously, in order to plant one's own
enterprise on their ruins, was an achievement which never failed to
command popular admiration. Nor is there any stretch of fancy in
comparing this sort of struggle with actual warfare, so far as concerns
the mental agony and physical suffering which attended the struggle,
and the misery which overwhelmed the defeated and those dependent on
them. Now nothing about your age is, at first sight, more astounding to
a man of modern times than the fact that men engaged in the same
industry, instead of fraternizing as comrades and co-laborers to a
common end, should have regarded each other as rivals and enemies to be
throttled and overthrown. This certainly seems like sheer madness, a
scene from bedlam. But more closely regarded, it is seen to be no such
thing. Your contemporaries, with their mutual throat-cutting, knew very
well what they were at. The producers of the nineteenth century were
not, like ours, working together for the maintenance of the community,
but each solely for his own maintenance at the expense of the
community. If, in working to this end, he at the same time increased
the aggregate wealth, that was merely incidental. It was just as
feasible and as common to increase one's private hoard by practices
injurious to the general welfare. One's worst enemies were necessarily
those of his own trade, for, under your plan of making private profit
the motive of production, a scarcity of the article he produced was
what each particular producer desired. It was for his interest that no
more of it should be produced than he himself could produce. To secure
this consummation as far as circumstances permitted, by killing off and
discouraging those engaged in his line of industry, was his constant
effort. When he had killed off all he could, his policy was to combine
with those he could not kill, and convert their mutual warfare into a
warfare upon the public at large by cornering the market, as I believe
you used to call it, and putting up prices to the highest point people
would stand before going without the goods. The day dream of the
nineteenth century producer was to gain absolute control of the supply
of some necessity of life, so that he might keep the public at the
verge of starvation, and always command famine prices for what he
supplied. This, Mr. West, is what was called in the nineteenth century
a system of production. I will leave it to you if it does not seem, in
some of its aspects, a great deal more like a system for preventing
production. Some time when we have plenty of leisure I am going to ask
you to sit down with me and try to make me comprehend, as I never yet
could, though I have studied the matter a great deal how such shrewd
fellows as your contemporaries appear to have been in many respects
ever came to entrust the business of providing for the community to a
class whose interest it was to starve it. I assure you that the wonder
with us is, not that the world did not get rich under such a system,
but that it did not perish outright from want. This wonder increases as
we go on to consider some of the other prodigious wastes that
characterized it.
"Apart from the waste of labor and capital by misdirected industry, and
that from the constant bloodletting of your industrial warfare, your
system was liable to periodical convulsions, overwhelming alike the
wise and unwise, the successful cut-throat as well as his victim. I
refer to the business crises at intervals of five to ten years, which
wrecked the industries of the nation, prostrating all weak enterprises
and crippling the strongest, and were followed by long periods, often
of many years, of so-called dull times, during which the capitalists
slowly regathered their dissipated strength while the laboring classes
starved and rioted. Then would ensue another brief season of
prosperity, followed in turn by another crisis and the ensuing years of
exhaustion. As commerce developed, making the nations mutually
dependent, these crises became world-wide, while the obstinacy of the
ensuing state of collapse increased with the area affected by the
convulsions, and the consequent lack of rallying centres. In proportion
as the industries of the world multiplied and became complex, and the
volume of capital involved was increased, these business cataclysms
became more frequent, till, in the latter part of the nineteenth
century, there were two years of bad times to one of good, and the
system of industry, never before so extended or so imposing, seemed in
danger of collapsing by its own weight. After endless discussions, your
economists appear by that time to have settled down to the despairing
conclusion that there was no more possibility of preventing or
controlling these crises than if they had been drouths or hurricanes.
It only remained to endure them as necessary evils, and when they had
passed over to build up again the shattered structure of industry, as
dwellers in an earthquake country keep on rebuilding their cities on
the same site.
"So far as considering the causes of the trouble inherent in their
industrial system, your contemporaries were certainly correct. They
were in its very basis, and must needs become more and more maleficent
as the business fabric grew in size and complexity. One of these causes
was the lack of any common control of the different industries, and the
consequent impossibility of their orderly and coordinate development.
It inevitably resulted from this lack that they were continually
getting out of step with one another and out of relation with the
demand.
"Of the latter there was no criterion such as organized distribution
gives us, and the first notice that it had been exceeded in any group
of industries was a crash of prices, bankruptcy of producers, stoppage
of production, reduction of wages, or discharge of workmen. This
process was constantly going on in many industries, even in what were
called good times, but a crisis took place only when the industries
affected were extensive. The markets then were glutted with goods, of
which nobody wanted beyond a sufficiency at any price. The wages and
profits of those making the glutted classes of goods being reduced or
wholly stopped, their purchasing power as consumers of other classes of
goods, of which there were no natural glut, was taken away, and, as a
consequence, goods of which there was no natural glut became
artificially glutted, till their prices also were broken down, and
their makers thrown out of work and deprived of income. The crisis was
by this time fairly under way, and nothing could check it till a
nation's ransom had been wasted.
"A cause, also inherent in your system, which often produced and always
terribly aggravated crises, was the machinery of money and credit.
Money was essential when production was in many private hands, and
buying and selling was necessary to secure what one wanted. It was,
however, open to the obvious objection of substituting for food,
clothing, and other things a merely conventional representative of
them. The confusion of mind which this favored, between goods and their
representative, led the way to the credit system and its prodigious
illusions. Already accustomed to accept money for commodities, the
people next accepted promises for money, and ceased to look at all
behind the representative for the thing represented. Money was a sign
of real commodities, but credit was but the sign of a sign. There was a
natural limit to gold and silver, that is, money proper, but none to
credit, and the result was that the volume of credit, that is, the
promises of money, ceased to bear any ascertainable proportion to the
money, still less to the commodities, actually in existence. Under such
a system, frequent and periodical crises were necessitated by a law as
absolute as that which brings to the ground a structure overhanging its
centre of gravity. It was one of your fictions that the government and
the banks authorized by it alone issued money; but everybody who gave a
dollar's credit issued money to that extent, which was as good as any
to swell the circulation till the next crises. The great extension of
the credit system was a characteristic of the latter part of the
nineteenth century, and accounts largely for the almost incessant
business crises which marked that period. Perilous as credit was, you
could not dispense with its use, for, lacking any national or other
public organization of the capital of the country, it was the only
means you had for concentrating and directing it upon industrial
enterprises. It was in this way a most potent means for exaggerating
the chief peril of the private enterprise system of industry by
enabling particular industries to absorb disproportionate amounts of
the disposable capital of the country, and thus prepare disaster.
Business enterprises were always vastly in debt for advances of credit,
both to one another and to the banks and capitalists, and the prompt
withdrawal of this credit at the first sign of a crisis was generally
the precipitating cause of it.
"It was the misfortune of your contemporaries that they had to cement
their business fabric with a material which an accident might at any
moment turn into an explosive. They were in the plight of a man
building a house with dynamite for mortar, for credit can be compared
with nothing else.
"If you would see how needless were these convulsions of business which
I have been speaking of, and how entirely they resulted from leaving
industry to private and unorganized management, just consider the
working of our system. Overproduction in special lines, which was the
great hobgoblin of your day, is impossible now, for by the connection
between distribution and production supply is geared to demand like an
engine to the governor which regulates its speed. Even suppose by an
error of judgment an excessive production of some commodity. The
consequent slackening or cessation of production in that line throws
nobody out of employment. The suspended workers are at once found
occupation in some other department of the vast workshop and lose only
the time spent in changing, while, as for the glut, the business of the
nation is large enough to carry any amount of product manufactured in
excess of demand till the latter overtakes it. In such a case of
over-production, as I have supposed, there is not with us, as with you,
any complex machinery to get out of order and magnify a thousand times
the original mistake. Of course, having not even money, we still less
have credit. All estimates deal directly with the real things, the
flour, iron, wood, wool, and labor, of which money and credit were for
you the very misleading representatives. In our calculation of cost
there can be no mistakes. Out of the annual product the amount
necessary for the support of the people is taken, and the requisite
labor to produce the next year's consumption provided for. The residue
of the material and labor represents what can be safely expended in
improvements. If the crops are bad, the surplus for that year is less
than usual, that is all. Except for slight occasional effects of such
natural causes, there are no fluctuations of business; the material
prosperity of the nation flows on uninterruptedly from generation to
generation, like an ever broadening and deepening river.
"Your business crises, Mr. West," continued the doctor, "like either of
the great wastes I mentioned before, were enough, alone, to have kept
your noses to the grindstone forever; but I have still to speak of one
other great cause of your poverty, and that was the idleness of a great
part of your capital and labor. With us it is the business of the
administration to keep in constant employment every ounce of available
capital and labor in the country. In your day there was no general
control of either capital or labor, and a large part of both failed to
find employment. 'Capital,' you used to say, 'is naturally timid,' and
it would certainly have been reckless if it had not been timid in an
epoch when there was a large preponderance of probability that any
particular business venture would end in failure. There was no time
when, if security could have been guaranteed it, the amount of capital
devoted to productive industry could not have been greatly increased.
The proportion of it so employed underwent constant extraordinary
fluctuations, according to the greater or less feeling of uncertainty
as to the stability of the industrial situation, so that the output of
the national industries greatly varied in different years. But for the
same reason that the amount of capital employed at times of special
insecurity was far less than at times of somewhat greater security, a
very large proportion was never employed at all, because the hazard of
business was always very great in the best of times.
"It should be also noted that the great amount of capital always
seeking employment where tolerable safety could be insured terribly
embittered the competition between capitalists when a promising opening
presented itself. The idleness of capital, the result of its timidity,
of course meant the idleness of labor in corresponding degree.
Moreover, every change in the adjustments of business, every slightest
alteration in the condition of commerce or manufactures, not to speak
of the innumerable business failures that took place yearly, even in
the best of times, were constantly throwing a multitude of men out of
employment for periods of weeks or months, or even years. A great
number of these seekers after employment were constantly traversing the
country, becoming in time professional vagabonds, then criminals. 'Give
us work!' was the cry of an army of the unemployed at nearly all
seasons, and in seasons of dullness in business this army swelled to a
host so vast and desperate as to threaten the stability of the
government. Could there conceivably be a more conclusive demonstration
of the imbecility of the system of private enterprise as a method for
enriching a nation than the fact that, in an age of such general
poverty and want of everything, capitalists had to throttle one another
to find a safe chance to invest their capital and workmen rioted and
burned because they could find no work to do?
"Now, Mr. West," continued Dr. Leete, "I want you to bear in mind that
these points of which I have been speaking indicate only negatively the
advantages of the national organization of industry by showing certain
fatal defects and prodigious imbecilities of the systems of private
enterprise which are not found in it. These alone, you must admit,
would pretty well explain why the nation is so much richer than in your
day. But the larger half of our advantage over you, the positive side
of it, I have yet barely spoken of. Supposing the system of private
enterprise in industry were without any of the great leaks I have
mentioned; that there were no waste on account of misdirected effort
growing out of mistakes as to the demand, and inability to command a
general view of the industrial field. Suppose, also, there were no
neutralizing and duplicating of effort from competition. Suppose, also,
there were no waste from business panics and crises through bankruptcy
and long interruptions of industry, and also none from the idleness of
capital and labor. Supposing these evils, which are essential to the
conduct of industry by capital in private hands, could all be
miraculously prevented, and the system yet retained; even then the
superiority of the results attained by the modern industrial system of
national control would remain overwhelming.
"You used to have some pretty large textile manufacturing
establishments, even in your day, although not comparable with ours. No
doubt you have visited these great mills in your time, covering acres
of ground, employing thousands of hands, and combining under one roof,
under one control, the hundred distinct processes between, say, the
cotton bale and the bale of glossy calicoes. You have admired the vast
economy of labor as of mechanical force resulting from the perfect
interworking with the rest of every wheel and every hand. No doubt you
have reflected how much less the same force of workers employed in that
factory would accomplish if they were scattered, each man working
independently. Would you think it an exaggeration to say that the
utmost product of those workers, working thus apart, however amicable
their relations might be, was increased not merely by a percentage, but
many fold, when their efforts were organized under one control? Well
now, Mr. West, the organization of the industry of the nation under a
single control, so that all its processes interlock, has multiplied the
total product over the utmost that could be done under the former
system, even leaving out of account the four great wastes mentioned, in
the same proportion that the product of those millworkers was increased
by cooperation. The effectiveness of the working force of a nation,
under the myriad-headed leadership of private capital, even if the
leaders were not mutual enemies, as compared with that which it attains
under a single head, may be likened to the military efficiency of a
mob, or a horde of barbarians with a thousand petty chiefs, as compared
with that of a disciplined army under one general--such a fighting
machine, for example, as the German army in the time of Von Moltke."
"After what you have told me," I said, "I do not so much wonder that
the nation is richer now than then, but that you are not all Croesuses."
"Well," replied Dr. Leete, "we are pretty well off. The rate at which
we live is as luxurious as we could wish. The rivalry of ostentation,
which in your day led to extravagance in no way conducive to comfort,
finds no place, of course, in a society of people absolutely equal in
resources, and our ambition stops at the surroundings which minister to
the enjoyment of life. We might, indeed, have much larger incomes,
individually, if we chose so to use the surplus of our product, but we
prefer to expend it upon public works and pleasures in which all share,
upon public halls and buildings, art galleries, bridges, statuary,
means of transit, and the conveniences of our cities, great musical and
theatrical exhibitions, and in providing on a vast scale for the
recreations of the people. You have not begun to see how we live yet,
Mr. West. At home we have comfort, but the splendor of our life is, on
its social side, that which we share with our fellows. When you know
more of it you will see where the money goes, as you used to say, and I
think you will agree that we do well so to expend it."
"I suppose," observed Dr. Leete, as we strolled homeward from the
dining hall, "that no reflection would have cut the men of your
wealth-worshiping century more keenly than the suggestion that they did
not know how to make money. Nevertheless that is just the verdict
history has passed on them. Their system of unorganized and
antagonistic industries was as absurd economically as it was morally
abominable. Selfishness was their only science, and in industrial
production selfishness is suicide. Competition, which is the instinct
of selfishness, is another word for dissipation of energy, while
combination is the secret of efficient production; and not till the
idea of increasing the individual hoard gives place to the idea of
increasing the common stock can industrial combination be realized, and
the acquisition of wealth really begin. Even if the principle of share
and share alike for all men were not the only humane and rational basis
for a society, we should still enforce it as economically expedient,
seeing that until the disintegrating influence of self-seeking is
suppressed no true concert of industry is possible."