The postponement of this address, which was to have been delivered two
weeks ago, was a real disappointment to me for I did not then know that
another opportunity would be arranged. As one approaches maturity, it
becomes a joy to talk to a group of young people in the light of whose
pleasant faces one seems to renew his own youth. Youth is the most
precious thing there is--it knows so little it never worries.
It is difficult for me to be here at this hour of the day and it has
been impossible for me to hear those who have preceded me in this
course. What I have to say may therefore have too little relation to
what has been presented from other points of view to be satisfactory
in what seems to have been designed as a debate. Nor have I, in recent
years, read much Socialistic or anti-Socialistic literature of which the
world is full. From my point of view, as will presently be seen, perusal
of this literature would be a waste of time for none of it that I have
seen or heard of discusses what seems to me essential, but in saying
this I must not be understood as disparaging either the sincerity or the
ability of writers on this subject.
When I was more or less familiar with Socialistic controversy the
Socialistic propaganda was devoted in different countries to the
accomplishment of the immediate program which in the respective
countries was considered the essential thing to be done next, very
little being said about the ultimate end which it was hoped to reach in
due time. Thus it happened that in some countries what was called the
Socialistic agitation was directed to the accomplishment of what was
already established by non-Socialists in other countries. That is
doubtless so still. Those discussions do not interest me and I have not
followed them and shall not discuss any of them here. I shall consider
only the ultimate aims of theoretical Socialism and whether if
accomplished they probably would or would not make for the general
welfare and especially for the welfare of the least efficient.
The ultimate aim of Socialism is the nationalization of all land,
industry, transportation, distribution and finance and their collective
administration for the common good as a governmental function and under
a popular government. It involves the abolition of private profit, rent
and interest and especially excludes the possibility of private profit
by increase of values resulting from increase or concentration of
population. The majority of Socialists would reach this end gradually,
by successive steps, and with compensation to existing owners. A violent
minority would reach it per saltum, by bloodshed if necessary, and by
confiscation--"expropriation" they call it. All alike conduct
their propaganda by endeavoring to create or accentuate the class
consciousness of manual workers who constitute the majority of human
beings and whose condition, it is insisted, would be improved under
a Socialistic regime. The violent wing promotes not merely class
consciousness but class hatred.
I have no time to split hairs in this discussion and it may be assumed
that I understand that Socialists do not expect to absolutely control
all personal activity but would leave all persons free to pursue any
vocation which they might desire and to have and hold whatever they may
acquire by personal activity and enterprise so only that they make no
profit on the work of another or absorb for their own use any gift of
Nature. No Socialist that I know of has attempted to draw the exact line
between activities to be wholly absorbed by the State and those which
would be left to private enterprise. No wise Socialist I think--if there
are wise Socialists--would attempt to draw such a line at present. There
is a certain vagueness in the Socialists' presentation of their case.
And before we proceed further let us get rid of the intellectual fog
which envelops and shelters the advocates of Socialism. It is the fog of
humanitarianism. I see and hear no advocacy of Socialism whose burden
is not the uplift of humanity. Now, humanitarianism is perhaps the
most beautiful thing there is. There is no more ennobling and inspiring
sentiment than desire for the uplift of our fellowmen; but it has no
legitimate place in the discussion of Socialism. For an advocate
of Socialism to even refer, in presenting his case, to humanitarian
sentiment is to that extent to beg the question.
For if Socialism would improve the lot of mankind, or of the major
portion of it, that settles the whole matter. The quicker we get to it
the better. Opponents of Socialism insist that it would benefit nobody,
and that as to the least efficient in whose behalf Socialistic doctrines
are especially urged, it would be deadly. As to the strong or the fairly
efficient we need not concern ourselves. They will get on anyhow.
What it is important to consider is the probable condition of the less
efficient, and especially the submerged class, under a Socialist regime.
And consideration will be useful only if it is in cold blood, absolutely
without sentiment, and especially without even sub-conscious assumption
or imagination that the condition of the unfortunate, or less fortunate,
would or would not be improved by Socialism, or whether mankind can or
cannot be made happier by attempts to control economic conditions by
interference with the natural working out of economic results as the
resultant of opposing pressure of individual interests. And do not call
me a brute if I reach the conclusion that human selfishness is the hope
of the race.
Because selfishness inspires to energetic action which means the largest
possible aggregate production which is the first essential prerequisite
to abundance for all. It is useless to talk about better distribution
until the commodities exist to be distributed. And there is no other
such spur to production as the expectation of personal profit. The
pieceworker with more satisfaction to himself and profit to the world
will produce far more than he would turn out under a daily wage if his
earnings are thereby increased. And there are no others who give so
little for what they receive as those who work for the public.
The first count in the case against Socialism is that by making the
majority of workers public servants without the stimulus of selfishness
it would increase human misery by reducing the aggregate of production
and therefore the possible per capita consumption.
That, however, is on the surface. Let us bore a little deeper toward the
core of the subject. It is a fundamental fallacy of Socialism that
all gain is the result of Labor and that therefore all gain belongs
to Labor--the term "Labor" in practice meaning the great majority of
laborers who are manual workers[1].
Of course Labor is essential to production--so is Capital, which we
shall come to later--and as between two things, both essential, it is
perhaps impossible to conceive of one or the other as superior.
But there is another element, also essential, but in a class so much
above the other two essential elements, that it is not too much to say
that without it there could be no production adequate to sustain for
more than a brief time any great population. And that element is Brains.
It is not to Labor but to the human intellect as developed in the
exceptional man that we owe all that exists, outside of Nature, which we
count valuable, and the ability to so use the resources of Nature as to
enable mankind to live. If products were to be divided among mankind
so that each should receive according to his contribution to the
possibilities of production, after the exceptional men had received
their just dues, there would be very little left for the rest of
us. When European races first discovered this continent it probably
supported less than one million souls, and the number was not
increasing. That it will ultimately support some hundreds of millions
is due to the dealings of the human intellect with Nature. Brains do not
get, do not ask, do not expect and could not use what would rightfully
come to them.
But intellects vary in character and usefulness, and let us try by
differentiation and elimination to isolate and consider those particular
classes of intellect whose activities bear most directly on the
questions raised by Socialistic theory. The chiefs are the devotees of
pure science--the Galileos, the Newtons, the Pasteurs, the Faradays, the
Kelvins, and the innumerable company of those like them, many known but
most unknown, who spend their days and nights in the search for truth.
They deserve and get the greatest of rewards which is the respect and
admiration of their fellowman. As for material things, they desire and
get very little. Following them are the magnates of applied science,
the Watts, the Stephensons, the Bells, the Edisons, and their like,
who apply to beneficial use the discoveries of the great lights of pure
science often with prodigious material profit to themselves. The patent
offices know them all, big and little. They perform a magnificent
service, are highly esteemed in their day and generation and their
material rewards are great. And upon the whole the world does not grudge
them what they get.
But there are others. Next after the magnates of applied science in
public estimation, but of equal economic importance, I would place the
Captains of Industry. Without their grasp of human necessity and desire
and their organizing and directing ability, Labor would grope blindly
in the dark by wasteful methods to the production of insufficient
quantities of undesirable products. The Marxian[2] conception of an
economic surplus wrongfully withheld from Labor which produces it is
the disordered fancy of a fine intellect hopelessly warped by the
contemplation of human misery and humanitarian sympathy with human
distress. All economic discussion is worthless if tainted by human
sympathy. The surplus value in production is trifling and seems large
only because concentrated in comparatively few hands. The surplus of
ages is concentrated in the structures which we see all about us, and
in the commodities ready or partly ready for consumption and which
will disappear in a short time. The annual accretions are small for an
enormous amount of human effort is wastefully directed. That more effort
is not wasted is due to the increasing necessities of an increasing
population stimulating the most competent by the hope of personal gain
to provide new means and new methods whereby those necessities may be
served. No stimulus other than the hope of personal gain has ever
been found effective to inspire this effort, or make it successful.
Government administration invents nothing. It copies tardily
and administers wastefully. Direction falls to those who compete
successfully in talk not to those who demonstrate resourcefulness and
masterfulness in forseeing human requirements, utilizing available means
for supplying them, and effectiveness in least wastefully directing
labor in the use of these means. Our Captains of Industry are those
who for the most part starting life with nothing but a sound mind in
a strong body have risen to the direction of great affairs through
unrestricted opportunity to strenuously compete through long hours of
hard labor and the mental and bodily strength to endure it. There is
no reason to suppose that any other method than the same strenuous
and unrestricted competition would produce men equal to such
responsibilities, or that any inspiration but the hope of personal gain
would induce such effort. The contention that the honor of direction and
the applause of the multitude would incite to the necessary competition
is not sound. In the first place long years of inconspicuous service
but with the same eager effort are essential preliminaries to the great
places which but few can reach, and secondly the honor would go as it
does now in public affairs, not to the man efficient in industry, but to
the man efficient in talk. The one stimulus to personal exertion which
Nature supplies, and the only stimulus which operates powerfully, and
universally and continuously is the desire of personal gain coupled with
the instinct for construction and accomplishment. Since the desire is
for the largest possible production it is folly to try to withdraw that
stimulus and substitute an emotion which, however powerful in a few
persons and for uncertain periods, operates most strongly on those
industrially least capable.
For I venture the assertion that there is not now and never has been
among Socialists a single person who has demonstrated the ability to so
direct the Labor of any considerable number of men either in production
or distribution that the aggregate of yearly accomplishment at market
value is as great as the aggregate cost at current wages.
The second count in the indictment of Socialism, therefore, is that
for lack of the sole stimulus which Nature supplies, and the lack of
opportunity under a system of equal tasks, with ideals of leisure,
direction of production and exchange under a Socialistic regime would
be so much less efficient than now that the aggregate waste would be
far greater than that of the parasitism which has always existed in
competitive Society.
A social parasite is a person whose contribution to the social product
is less than the cost of his or her keep. If obviously defective we
shall, at least for the present, let humanity override the economic
instinct which suggests their removal--an instinct which has effectively
operated in some overcrowded communities and take care of them. But
the world has no use for the able-bodied parasite who during his or her
working period of life does not contribute to the social dividend by
personal exertion sufficient to pay for the kind of life which has been
led. In opposing Socialism I am not defending parasitism. That can be
got rid of when it becomes worth while and will be. But to jump out of
parasitism into Socialism would be jumping out of the frying-pan into
the fire. And we should have parasites still.
So much for the Captains of Industry whom we need. But there is still
another class which could not exist in the Socialistic state, and
which a great part of mankind holds in profound disesteem, but which
is essential nevertheless. This is the man with the instinct of
accumulation and whom we stigmatize as the "Capitalist"--the man who
grasps what is within reach and holds it; who often gets the main
profits of the inventions of the inventor; who forsees the future value
of unused gifts of Nature and acquires them while they can be got cheap;
who combines with others like him to control everything controllable and
makes mankind pay roundly when it wants it. He is really the man to whom
mankind is most indebted of all for without his beneficent if execrated
service, in vain would the scientist toil in his laboratory, the
inventor struggle through poverty to perfect his machine, the Captain of
Industry conceive great accomplishment, and the laborer delve and grind
at his daily task. The one supremely useful man is he who accumulates
and holds.
If you say that this is an unlovely person the answer is that sometimes
he is and sometimes he is not. If you say he is selfish the reply is
that we are all selfish--he merely being able to make his selfishness
effective. If you say he accumulates by devious ways and by grinding the
face of the poor the reply is that sometimes he does and sometimes he
does not. In these human aspects he is about like the rest of us. He it
is who makes happiness and helpfulness possible.
But to these and all other assaults upon the character and methods of
the accumulating man there is one general reply and that is that from
the economic standpoint they are of no consequence whatever. It makes no
economic difference what he is or what he does so only that he performs
his accumulating office.
The one essential fact is that he assembles within his grasp the savings
of Society, prevents their dissipation in personal indulgence, applies
them to beneficial use, and enables the laborer to produce under the
direction of the Captain of Industry by means of the devices of the
inventor applied to the formulas of the scientist what is needful for
the welfare of mankind--and to live while he is doing it. It is the
accumulating man impelled by his instinct, or if you please his lust,
for wealth and power who makes it possible for poor men to live in any
great number. If he happens also to be a Captain of Industry, which
usually he is not, it is merely one middleman cut out. His essential
function is that of the money-grabber. It is by his exercise of that
function that most of us exist.
The third count in the indictment of Socialism is that by obliterating
the Capitalist, accumulating by interest, profit, rent, and the
exploitation of Nature for private gain, it would make life impossible
to half the population of the world and not worth living to the fittest
who should manage to survive.