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 to-night 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 coöperative 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 coöperation
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 billed 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 arises 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 coördinate
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 was 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
calculations 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 coöperation. 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 or 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."