This sociological principle pervades the whole of Socialist economics.

It appears in every economic definition, practically, and the

terminology of the orthodox political economists is thereby often given

a new meaning, radically different from that originally given to it and

commonly understood. The student of Socialism who fails to appreciate

this fact will most frequently land in a morass of confusion and

difficulty, but the careful student who fully understands it will find

it of great assistance. Take, as an illustration, the phrase "the

abolition of capital" which frequently occurs in Socialist literature.

The reader who thinks of capital as consisting of _things_, such as

machinery, materials of production, money, and so on, finds the phrase

bewildering. He wonders how it is conceivable that production should go

on if these things were done away with. But the student who fully

understands the sociological principle outlined above comprehends at

once that it is not proposed to do away with the _things_, but with

_certain social relations expressed through them_. He understands that

the "abolition of capital" no more involves the destruction of the

physical things than the abolition of slavery involved the destruction

of the slave himself. What is aimed at is the social relation which is

established through the medium of the things commonly called capital.

II

In common with all the great economists, Socialists hold that wealth is

produced by human labor applied to appropriate natural objects. This, as

we have seen, does not mean that labor is the sole source of wealth.

Still less does it mean that the mere expenditure of labor upon natural

objects must inevitably result in the production of wealth. If a man

spends his time digging holes in the ground and filling them up again,

or dipping water from the ocean in a bucket and pouring it back again,

the labor so expended upon natural objects would not produce wealth of

any kind. Nor is the productivity of mental labor denied. In the term

"labor" is implied the totality of human energies expended in

production, regardless of whether those energies be physical or mental.

In modern society wealth consists of social use-values, commodities.

We must, therefore, begin our analysis of capitalist society with an

analysis of a commodity. "A commodity," says Marx, "is, in the first

place, an object outside us, a thing that by its properties satisfies

human wants of some sort or another. The nature of such wants, whether,

for instance, they spring from the stomach or from fancy, makes no

difference. Neither are we here concerned to know how the object

satisfies these wants, whether directly as means of subsistence, or

indirectly as means of production."[164] But a commodity must be

something more than an object satisfying human wants. Such objects are

simple use-values, but commodities are something else in addition to

simple use-values. The manna upon which the pilgrim exiles of the Bible

story were fed, for instance, was not a commodity, though it fulfilled

the conditions of this first part of our definition by satisfying human

wants. We must carry our definition further, therefore. In addition to

use-value, then, a commodity must possess exchange-value. In other

words, it must have a social use-value, a use-value to others, and not

merely to the producer.

Thus, things may have the quality of satisfying human wants without

being commodities. To state the matter in the language of the

economists, use-values may, and often do, exist without economic value,

value, that is to say, in exchange. Air, for example, is absolutely

indispensable to life, yet it is not--except in special, abnormal

conditions--subject to sale or exchange. With a use-value that is beyond

computation, it has no exchange-value. Similarly, water is ordinarily

plentiful and has no economic value; it is not a commodity. A seeming

contradiction exists in the case of the water supply of cities where

water for domestic use is commercially supplied, but a moment's

reflection will show that it is not the water, but the social service of

bringing it to a desired location for the consumer's convenience that

represents economic value. Over and above that there is, however, the

element of monopoly-price which enters into the matter. With that we

have not, at this point, anything to do. Under ordinary circumstances,

water, like light, is plentiful; its utility to man is not due to man's

labor, and it has, therefore, no economic value. But in exceptional

circumstances, as in an arid desert or in a besieged fortress, a

millionaire might be willing to give all his wealth for a little water,

thus making the value of what is ordinarily valueless almost infinite.

What may be called natural use-values have no economic value. And even

use-values that are the result of human labor may be equally without

economic value. If I make something to satisfy some want of my own, it

will have no economic value unless it will satisfy the want of some one

else. So, unless a use-value is social, unless the object produced is of

use to some other person than the producer, it will have no value in the

economic sense: it will not be _exchangeable_.

A commodity must therefore possess two fundamental qualities. It must

have a use-value, must satisfy some human want or desire; it must also

have an exchange-value arising from the fact that the use-value

contained in it is social in its nature and exchangeable for other

exchange-values. With the unit of wealth thus defined, the subsequent

study of economics is immensely simplified.[165]

The trade of capitalist societies is the exchange of commodities against

each other, through the medium of money. Commodities utterly unlike each

other in all apparent physical properties, such as color, weight, size,

shape, substance, and so on, and utterly unlike each other in respect to

the purposes for which intended and the nature of the wants they

satisfy, are exchanged for one another, sometimes equally, sometimes in

unequal ratio. The question immediately arises: what is it that

determines the relative value of commodities so exchanged? A dress suit

and a kitchen stove, for example, are very different commodities,

possessing no outward semblance to each other, and satisfying very

different human wants, yet they may, and actually do, exchange upon an

equality in the market. To understand the reason for this similarity of

value of dissimilar commodities, and the principle which governs the

exchange of commodities in general, is to understand an important part

of the mechanism of modern capitalist society.

This is the problem of value which all the great economists have tried

to solve. Sir William Petty, Adam Smith, David Ricardo, John Stuart

Mill, and Karl Marx developed what is known as the labor-value theory as

the solution of the problem. This theory, as developed by Marx, not in

its cruder forms, is one of the cardinal principles in Socialist

economic theory. The Ricardian statement of the theory is that the

relative value of commodities to one another is determined by the

relative amounts of human labor embodied in them; that the quantity of

labor embodied in them is the determinant of the value of all

commodities. When all their differences have been carefully noted, all

commodities have at least one quality in common. The dress suit and the

kitchen range, toothpicks and snowshoes, pink parasols and

sewing-machines, are unlike each other in every other particular save

one--they are all products of human labor, crystallizations of human

labor-power. Here, then, say the Socialists, as did the great classical

economists, we have a hint of the secret of the mechanism of exchange in

capitalist society. The amount of labor-power embodied in their

production is in some way connected with the measure of the exchangeable

value of the commodities.

Stated in the simple, crude form, that the quantity of human labor

crystallized in them is the basis and measure of the value of

commodities when exchanged against one another, the labor theory of

value is beautifully simple. At least, the formula is simplicity itself.

At the same time, it is open to certain very obvious criticisms. It

would be absurd to contend that the day's labor of a coolie laborer is

equal in productivity to the day's labor of a highly skilled mechanic,

or that the day's labor of an incompetent workman is of equal value to

that of the most proficient. To refute such a theory is as beautifully

simple as the theory itself. In all seriousness, arguments such as these

are constantly used against the Marxian theory of value, notwithstanding

that they do not possess the slightest relation to it. Marxism is very

frequently "refuted" by those who do not trouble themselves to

understand it.

The idea that the quantity of labor embodied in them is the determinant

of the value of commodities was held by practically all the great

economists. Sir William Petty, for example, in a celebrated passage,

says of the exchange-value of corn: "If a man can bring to London an

ounce of silver out of the earth in Peru in the same time that he can

produce a bushel of corn, then one is the natural price of the other;

now, if by reason of new and more easy mines a man can get two ounces of

silver as easily as formerly he did one, then the corn will be as cheap

at ten shillings a bushel as it was before at five shillings a bushel,

_caeteris paribus_."[166]

Adam Smith, following Petty's lead, says: "The real price of everything,

what everything really costs to the man who wants to acquire it, is the

toil and trouble of acquiring it. What everything is really worth to the

man who has acquired it, and who wants to dispose of it or exchange it

for something else, is the toil and labor which it can save to himself,

and which it can impose on other people.... Labor was the first price,

the original purchase money, that was paid for all things.... If among a

nation of hunters, for example, it usually costs twice the labor to kill

a beaver which it does to kill a deer, one beaver would naturally be

worth or exchange for two deer. It is natural that what is usually the

produce of two days' or two hours' labor, should be worth double of what

is usually the produce of one day's or one hour's labor."[167]

Benjamin Franklin, whose merit as an economist Marx recognized, takes

the same view and regards trade as being "nothing but the exchange of

labor for labor, the value of all things being most justly measured by

labor."[168] From the writings of almost every one of the great

classical economists of England it would be easy to compile a formidable

and convincing volume of similar quotations, showing that they all took

the same view that the quantity of human labor embodied in commodities

determines their value. One further quotation, from Ricardo, must,

however, suffice. He says:--

"To convince ourselves that this (quantity of labor) is the real

foundation of exchangeable value, let us suppose any improvement to be

made in the means of abridging labor in any one of the various processes

through which the raw cotton must pass before the manufactured stockings

come to the market to be exchanged for other things; and observe the

effects which will follow. If fewer men were required to cultivate the

raw cotton, or if fewer sailors were employed in navigating, or

shipwrights in constructing, the ship in which it was conveyed to us; if

fewer hands were employed in raising the buildings and machinery, or if

these, when raised, were rendered more efficient; the stockings would

inevitably fall in value, and command less of other things. They would

fall because a less quantity of labor was necessary to their production,

and would therefore exchange for a smaller quantity of those things in

which no such abridgment of labor had been made."[169]

It is evident from the foregoing quotations that these great writers

regarded the quantity of human labor crystallized in them as the basis

of all commodity values, and their real measure. The great merit of

Ricardo lies in his development of the idea of social labor as against

the simple concept of the labor of particular individuals, or sets of

individuals. In the passage cited, he includes in the term "quantity of

human labor" not merely the total labor of those immediately concerned

in the making of stockings, from the cultivation of the raw cotton to

the actual making of stockings in the factory, but all the labor

indirectly expended, even in the making and navigating of ships, and the

building of the factories. One does, indeed, find hints of the social

labor concept in Adam Smith, but it is Ricardo who first clearly

develops it. Marx further developed this principle, and all criticisms

of the labor-value theory in Marxian economic theory which are based

upon the assumption that quantity of labor means the simple, direct

labor embodied in commodities fall of their own weight.

Thus, if we take any commodity, we shall find that it is possible to

ascertain with tolerable certainty the amount of direct labor embodied

in it, but that it is equally as impossible to ascertain the amount of

the indirect expenditure of labor power which entered into its making.

In the case of a table, for example, it may be possible to trace with

some approximation to accuracy the labor involved in felling the tree

and preparing the lumber out of which the table was made; the labor

directly spent in bringing the lumber to the factory, and the direct

labor expended in making out of the lumber a finished table; allowance

may also be made for the labor embodied in the nails, glue, stain, and

other articles used in making the table. So we have a fairly accurate

statement of the direct labor embodied in the table. But what of the

labor used to make the tools of the men who felled the trees and

prepared the lumber? What of the coal miner and the iron miner and the

tool maker? And what of the numerous and incalculable expenditures of

labor to make the railroads, the railway engines, and to provide these

with steam-power? What, also, of the machinery in the factory, and of

the factory buildings themselves, and, back of them, again, the tool

makers and the providers of raw materials? It is obvious that no human

intellect could ever unravel the tangled skein of human labor, and that

in actual exchange there can be no calculation of the respective labor

content of commodities. If the law of value holds good, it must operate

mechanically, automatically. And this it does, through the incidence of

bargaining and the law of supply and demand.

We have noted elsewhere the variations in human capacity and

productiveness. Superficial critics still frequently charge Marx with

having overlooked this very obvious fact, whereas it has not only been

fully treated by him, but was actually covered by Smith and Ricardo

before Marx! With these writers and their followers it is the law of

averages which solves the difficulties arising from variations in

individual capacity and productivity. It is the _average_ amount of

labor expended in killing the beaver which counts, not the actual

individual labor in a specified case. Nor did these writers overlook the

important differentiation between simple, unskilled labor and labor that

is highly skilled. If A in ten hours' labor produces exactly double the

amount of exchange-value which B produces in the same time devoted to

labor of another kind, it is obvious that the labor of B is not equal in

value to that of A. Quantity of labor cannot, therefore, be measured, in

individual cases, by time units. Despite a hundred passages which,

detached from their context, seem to imply the contrary, Adam Smith

recognized this very clearly, and attempted to solve the riddle by a

differentiation of skilled and unskilled labor in which he likens

skilled labor to a machine; and insists that the labor and time spent in

acquiring the skill which distinguishes skilled labor must be

reckoned.[170]

Another frequent criticism of the Marxian theory has not only been

answered by Marx himself--is, in fact, ruled out by the terms of the

theory itself--but was amply replied to by Ricardo.[171] The criticism

in question consists in the selection of what may be called "unique

values," or scarcity values, articles which cannot be reproduced by

labor, and whose value is wholly independent of the quantity of labor

originally necessary to produce them. Such articles are unique specimens

of coins and postage stamps, autograph letters, rare manuscripts,

Stradivarius violins, Raphael pictures, Caxton books, articles

associated with great personages--such as Napoleon's snuffbox--great

auks' eggs, and so on _ad infinitum_. No possible amount of human labor

could reproduce these articles, reproduce, that is to say, the exact

utilities in them. Napoleon's snuffbox might be exactly duplicated so

far as its physical properties are concerned, but the association with

Napoleon's fingers, the sentimental quality which gives it its special

utility, is not reproducible. But the trade of capitalist society does

not consist in the manufacture and sale of these things, which, after

all, form a very insignificant part of the exchange-values of the world.

III

Marx saw the soul of truth in the labor-value theory, as propounded by

his predecessors, especially Ricardo, and devoted himself to its

development and systematization. He has been accused of plagiarizing his

theory from the Ricardians, but it is surely not plagiarism when a

thinker sees the germ of truth in a theory, and, separating it from the

mass of confusion and error which envelops it, restates it in scientific

fashion with all its necessary qualifications. This is precisely what

Marx did. He developed the idea of social labor which Ricardo had

propounded, disregarding entirely individual labor. He recognized the

absurdity of the contention that the value of commodities is determined

by the amount of labor, either individual or social, _actually embodied

in them_. If two workers are producing precisely similar commodities,

say coats, and one of them expends twice as much labor as the other and

uses tools and methods representing twice the social labor, it is

clearly foolish to suppose that the exchange-value of his coat will be

twice as great as that of the other worker, regardless of the fact that

their utility is equal. Labor, Marx pointed out, has two sides, the

qualitative and the quantitative. The qualitative side, the difference

in quality between specially skilled and simply unskilled labor, is

easily recognized, though the relative value of the one compared with

the other may be somewhat obscured. The secret of that obscurity lies

hidden in the quantitative side of labor. Here we must enter upon an

abstract inquiry, that part of the Marxian theory which is most

difficult to comprehend. Yet, it is not so very difficult, after all, to

understand that the years devoted to learning his trade, by a mechanical

engineer, for instance, during all of which years he must be provided

with the necessities of life, must be reckoned somewhere and somehow;

and that when they are so reckoned, his day's labor may be found to

contain, concentrated, so to speak, an amount of labor time equivalent

to two or even many days' simple unskilled labor time. It may be, and in

fact is, quite impossible to set forth mathematically the relation of

the two, for the reason that the process of developing skilled labor is

too complex to be unraveled. Of the fact, however, there can be no

doubt.

The real law of value, then, according to Marx, is as follows: Under

capitalism, _in free competition_, the value of all commodities, other

than those unique things which cannot be reproduced by human labor, is

determined by the amount of _abstract_ labor embodied in them; or,

better, by the amount of social human labor power necessary, on the

average, for their production. We may conveniently illustrate this

theory by a concrete example. Let us, therefore, return to our

coat-makers. Now, always assuming their equal utility, no one will be

willing to pay twice as much for the coat produced by the slow worker

with poor tools as for the other. If the more economical methods of

production employed by the man who makes his coats in half the time

taken by the other man are the methods usually employed in the

manufacture of coats, and the time he takes represents the average time

taken to produce a coat, then the average value of coats will be

determined thereby, and coats produced by the slower, less economical

process will command only the same price in the market, the fact that

they may embody twice the amount of actual labor counting for nothing.

If we reverse the order of this proposition, and suppose the slower,

less economical methods to be those generally prevailing in the

manufacture of coats, and the quicker, more economical methods to be

exceptional, then, all other things being equal, the exchange-value, of

coats will be determined by the amount of labor commonly consumed, and

the fortunate producer who adopts the exceptional, economical methods

will, for a time, reap a golden harvest. Only for a time, however. As

the new methods prevail, competition being the impelling force, they

become less and less exceptional, and, finally, the regular, normal

methods of production and the standard of value.

It is this very important qualification, fundamental to the Marxian

theory, which is most often lost sight of by the critics. They persist

in applying to individual commodities the test of comparing the amounts

of labor-power actually consumed in their production, and so confound

the Marxian theory with its crude progenitors. In refuting this crude

theory, they are quite oblivious of the fact that Marx himself

accomplished that by no means difficult feat. To state the Marxian

theory accurately, we must qualify the bald statement that the

exchange-value of commodities is determined by the amount of labor

embodied in them, and state it in the following manner: _The

exchange-value of commodities is determined by the amount of average

labor at the time socially necessary for their production._ This is

determined, not absolutely in individual cases, but approximately in

general, by the bargaining and higgling of the market, to adopt Adam

Smith's well-known phrase.

Now, this theory applies to those things, exclusive of the category of

"unique values," which cannot be made by labor and are commonly supposed

to owe their value to their rarity. For example, we may take diamonds. A

man walking along the great wastes of the African _karoo_ comes across a

little stream. As he stoops to drink, he sees in the water a number of

glittering diamonds. To pick them out is the work of a few minutes only,

but the diamonds are worth many thousands of dollars. The law of value

above outlined applies just as much to them as to any other commodity.

The value of diamonds is determined by the amount of labor expenditure

necessary _on an average_ to procure them. If the normal method of

obtaining diamonds were simply to go to the nearest stream and pick them

out, their value would fall, possibly to zero:--

"When we have nothing else to wear

But cloth of gold and satins rare,

For cloth of gold we cease to care--

Up goes the price of shoddy."

IV

Most writers do not distinguish between price and value with sufficient

clearness, using the terms as if they were synonymous and

interchangeable. Where utilities are exchanged directly one for

another, as in the barter of primitive society, there is no need of a

price-form to express value. In highly developed societies, however,

where the very magnitude of production and exchange makes direct barter

impossible, and where the objects to be exchanged are not commonly the

product of individual labor, a medium of exchange becomes necessary; a

something which is generally recognized as a safe and stable commodity

which can be used to express in terms of its own weight, size, shape, or

color, the value of other commodities to be exchanged. This is the

function of money. In various times and places wheat, shells, skins of

animals, beads, powder, tobacco, and a multitude of other things, have

served as money, but for various reasons, more or less obvious, the

precious metals, gold and silver, have been most favored.

In all commercial countries to-day, one or other of these metals, or

both of them, serves as the recognized medium of exchange. They are

commodities also, and when we say that the value of a commodity is a

certain amount of gold, we equally express the value of that amount of

gold in terms of the commodity in question. As commodities, the precious

metals are subject to the same laws as other commodities. If gold should

be discovered in such abundance that it became as plentiful and easy to

obtain as coal, its value would be no greater than that of coal. It

might, conceivably, still be used as the medium of exchange, but it

would--unless protected by legislation or otherwise from the operation

of economic law, and so given a monopoly-price--have an exchange-value

equal to that of coal, a ton of the one being equal to a ton of the

other--provided, of course, that its utility remained. Since the

scarcity of gold is an important element in its utility valuation,

creating and fostering the desire for its possession, that utility-value

might largely disappear if gold became as plentiful as coal, in which

case it would not have the same value as coal, and might cease to be a

commodity at all.

Price, then, is the expression of value in terms of some other

commodity, which, generally used for that purpose of expressing the

value of other commodities, we call money. It is only an approximation

of value, and subject to a much greater fluctuation than value itself.

It may, for a time, fall far below or rise above value, but in a free

market--the only condition in which the operation of the law may be

judged--sooner or later the equilibrium will be regained. Where monopoly

exists, the free market condition being non-existent, price may be

constantly elevated above value. Monopoly-price is an artificial

elevation of price above value, and must be considered separately as the

abrogation of the law of value.

Failure to discriminate between value and its price-expression, or

symbol, has led to endless difficulty. It lies at the bottom of the

naive theory that value depends upon the relation of supply and demand.

Lord Lauderdale's famous theory has found much support among later

economists, though it is now rather unpopular when stated in its old,

simple form. Disguised in the so-called Austrian theory of final

utility, it has attained considerable vogue.[172] The theory is

plausible and convincing to the ordinary mind. Every day we see

illustrations of its working: prices are depressed when there is an

oversupply, and elevated when the demand of would-be consumers exceeds

the supply of the commodities they desire to buy. It is not so easy to

see that these effects are temporary, and that there is an automatic

adjustment going on. Increased demand raises prices for a while, but it

also calls forth an increase in supply which tends to restore the old

price level, or may even force prices below it. In the latter case, the

supply falls off and prices find their real level. The relation of

supply to demand causes an oscillation of prices, but it is not the

determinant of value. When prices rise above a certain level, demand

slackens or ceases, and prices are inevitably lowered. Prices may and do

fall with a decreased demand, but it is clear that unless the producers

can get a price approximately equal to the value of their commodities,

they will cease to produce them, and the supply will diminish or cease

altogether. Ultimately, therefore, the fluctuations of price through the

lack of equilibrium between supply and demand adjust themselves, and

prices must tend constantly to approximate values.

Monopoly-price is, as already observed, an artificial price in the sense

that the laws of free market exchange do not apply to it. The "unique

utilities," things not reproducible by human labor, command what might

be termed natural monopoly-prices. There are many other commodities,

however, the price of which is not regulated by the quantity of social

human labor necessary to produce them, but simply by the desire of the

purchasers and the means they have of gratifying it and the power of the

sellers to control the market and exclude effective competition. Since

Karl Marx wrote, the exceptions to his law of value have become more

numerous, as a result of the changes in industrial and commercial

conditions. The development of great monopolies and near-monopolies has

greatly increased the number of commodities which, for considerable

periods, are placed outside the sphere of the labor-value theory, their

price depending upon their marginal utility, irrespective of the labor

actually embodied in them or necessary to their reproduction. It may, in

the opinion of the present writer, be said in criticism of the followers

of Marx that they have not carried on his work, but largely contented

themselves with repeating generalizations which, true when made, no

longer fit all the facts. But that is not a criticism of Marx, or of his

work. What he professed to make was an analysis of the methods of

production and exchange in competitive capitalist society. His followers

have largely failed to allow for the enormous changes which have taken

place, and go on repeating, unchanged, his phrases.

Professor Seligman has pointed out that Ricardo's contention that value

is determined by the cost of production, and the contention of Jevons

that value is determined by marginal utility, are not mutually

exclusive, but, on the contrary, complementary to each other.[173] The

present writer has long contended that the marginal utility theory and

the Marxian labor-value theory are likewise not antagonistic but

complementary.[174] This is not the place to enter into the elaborate

discussion which this contention involves. Only a brief indication of

the argument for the claim is here and now possible. First, as we have

seen, Marx is very careful to insist that utility is essential to value,

and that the utility must be a social utility. But social utility does

not come of itself, from the skies or elsewhere. It is, so far as the

vast majority of commodities is concerned, the product of labor. It is

true that the value of a thing is never independent of its social

utility; it is likewise true that this is determined by the social labor

necessary to the reproduction of that utility. To regard the two

theories as antagonistic, it seems to be necessary to say either (1)

that the quantity of social labor necessary to produce certain

commodities determines their value, utterly regardless of the amount of

their social utility, or (2) that we estimate the social utility of

commodities, estimate what we are willing to pay for them, utterly

regardless of the labor necessary, on an average, for their

reproduction. The latter contention would be absurd, and the former

would involve the abandonment of the initial premises of the Marxian

theory, contained in his definition of a commodity. In so far as the

basis of social utility is the social labor necessary for its

production, the labor-value theory of Marx may be said, I think, to

include the marginal utility law, as one of the forms in which it

operates.

V

Labor, the source and determinant of value, has, _per se_, no value.

Only when it is embodied in certain forms has it any value. If a man

labors hard digging holes and refilling them, his labor has no value.

What the capitalist buys is not labor, but labor-power. Wages in general

is a form of payment for a given amount of labor-power, measured by

duration and skill. The laborer sells brain and muscle power, which is

thus placed at the temporary disposal of the capitalist to be used up

like any other commodity that he buys. The philosopher Hobbes, in his

"Leviathan," clearly anticipated Marx in thus distinguishing between

labor and laboring power in the saying, "_The value or worth of a man is

... so much as would be given for the Use of his Power_." The power to

labor assumes the commodity form, being at once a use-value and an

exchange-value. At first sight it appears that piecework is an exception

to the general rule that the capitalist buys labor-power and not labor

itself. It seems that when piece-wages are paid it is not the machine,

the living labor-power, but the product of the machine, labor actually

performed, that is bought. Superficially, this is so, of course, but it

does not affect the principle laid down, because, as a matter of fact,

the piecework system is only one of the means used to secure a maximum

of labor-power. The average output of pieceworkers in a trade always

tends to become the standard output for the time-workers, and, on the

other hand, the average wage of pieceworkers tends to keep very near the

standard of time-wages.

Now, as a commodity, labor-power is subject to the same laws as all

other commodities. Its price, wages, fluctuates just as the price of all

other commodities does, and bears the same relation to its value. It may

be temporarily affected by the preponderance of supply over demand, or

of demand over supply; it may be made the subject of monopoly in certain

cases. There is, therefore, no such thing as an "iron law" of wages, any

more than there is an "iron law" of prices for other commodities.

Lassalle took the Ricardian law of wages and, by means of his

characteristic exaggeration, distorted it out of all semblance to truth.

Says Ricardo: "The natural price of labor, therefore, depends on the

price of the food, necessaries, and conveniences required for the

support of the laborer and his family. With a rise in the price of food

and necessaries, the natural price of labor will rise; with the fall in

their price, the natural price of labor will fall."[175] This Lassalle

made the basis of his famous "iron law," according to which 96 per cent

of the wage-workers were precluded from improving their economic

position. Lassalle's chief fault lay in that he made no allowance

whatever for either state interference, or the organized influence of

the workers themselves. He also attaches too little importance to what

Marx calls the traditional standards of living.[176] It is nevertheless

true that the price of labor-power, wages, tends to approximate its

value, just as the price of all other commodities tends, under normal

conditions, to approximate their value.

And just as the value of other commodities is determined by the amount

of social labor necessary on an average for their reproduction, so the

value of labor-power is likewise determined. Wages tend to a point at

which they will cover the average cost of the necessary means of

subsistence for the workers and their families, in any given time and

place, under the conditions and according to the standards of living

generally prevailing. Trade union action, for example, may force wages

above that point, or undue stress in the competitive labor market may

force wages below it. While, however, a trade union may bring about what

is virtually a monopoly-price for the labor-power of its members, there

is always a counter tendency in the other direction, sometimes even to

the lowering of the standard of subsistence itself to the minimum of

things required for physical existence.

To class human labor-power with pig iron as a commodity, subject to the

same laws, may at first seem fantastic to the reader, but a careful

survey of the facts will fully justify the classification. The capacity

of the worker to labor depends upon his securing certain things; his

labor-power has to be reproduced from day to day, for which a certain

supply of food, clothing, and other necessities of life is essential.

Even with these supplied constantly, the worker sooner or later wears

out and dies. If the race is not to be extinguished, a certain supply of

the necessities of life must be provided for the children during the

years of their development to the point where their labor-power becomes

marketable. The average cost of production in the case of labor-power

includes, therefore, the necessities for a wife and family as well as

for the individual worker. Far from being the iron law Lassalle

imagined, this law of wages is one of considerable elasticity. The

standard of living itself, far from being a fixed thing, determined only

by the necessities of physical existence, varies according to

occupational groups; to localities sometimes, as a result of historical

development; to nationality and race, as a result of tradition; to the

general standard of intelligence, and the degree in which the workers

are organized for the promotion of their economic interests. The advance

in the culture of the people as a whole, expressing itself in

legislation for compulsory education, the abolition of child labor,

improvement of housing and general sanitary conditions, and so on,

tends to raise the standard of living. Finally, the fluctuations in the

price of labor-power due to the operation of the law of supply and

demand are much more important than Lassalle imagined.

This living commodity, labor-power, differs in one remarkable way from

all other commodities, in that when it is used up in the process of the

production of other commodities in which it is embodied, it creates new

value in the process of being used up, and embodies that new value in

the commodity it assists to produce. In the case of raw materials and

machinery this is not so. In the manufacture of tables, for example, the

wood used up is transformed into tables, embodied in them, but the wood

has added nothing to its own value. The same is true of machinery. But

with human labor-power it is otherwise. The capitalist buys from the

laborer his labor-power at its full value as a commodity. But the

laborer, in embodying that labor-power in some concrete form, creates

more value than his wages represents. For the commodity he sells, his

_power_ to labor, he has been paid its full value, namely, the social

labor-cost of its production; but that power may be capable of producing

the equivalent of twice its own cost of production. This is the central

idea of the famous and much-misunderstood Marxian theory of

surplus-value, by which the method of capitalism, the exploitation of

the wage-workers, and the resulting class antagonisms of the system are

explained. This theory becomes the groundwork of all the social theories

and movements protesting against and seeking to end the exploitation of

the laboring masses. To understand it is, therefore, of paramount

importance.

VI

As we have seen in an earlier chapter, Marx was not the first to

recognize that the secret of capitalism, the object of capitalist

industry, is the extraction of surplus-value from the labor-power of the

worker. Nor was he the first to use the term. By no means a happy term,

since it adds to the difficulty of comprehending the meaning and nature

of _value_, Marx took it from the current economic discussion of his

time as a term already fairly well understood. What we owe to the genius

of Marx is an explanation of the manner in which surplus-value is

extracted by the capitalist from the labor-power of the worker, and the

part it plays in capitalist society.

The essence of the theory can be very briefly stated, but its

demonstration involves, naturally, a more extensive study. Under normal

conditions, the worker will produce a value equivalent to his means of

subsistence, or to the wages actually paid to him, in a very small

number of hours. If he owned and controlled the means of

production,--land, machinery, raw materials, and so on,--he would,

therefore, need to work only so many hours as the production of the

necessities of life for himself and his family required. But the laborer

in capitalist society does not own the means of production, that

condition being quite incompatible with machine production upon a large

scale. A separation of the worker from the ownership of the means of

production has taken place as one of the inevitable results of

industrial evolution. So the laborer must sell the only commodity he has

to sell, namely, his labor-power. He sells the utility of that commodity

to the capitalist for its exchange-value, or market price. Like any

other commodity, the utility of labor-power, its use-value, belongs to

the purchaser, the capitalist. It is his to use as he sees fit. He has

it used to produce other commodities which he in turn hopes to sell--has

the labor-power used up in the manufacture of other commodities, just as

he has the raw materials used up. He buys, for example, the labor-power

of the workers for a day of ten hours. In five hours, say, the worker

creates value equivalent to his wages, but he does not cease at that

point. He goes on working for another five hours, thus producing in a

day double the amount of his wages, the exchange-value of the

labor-power he sold the capitalist. Thus the capitalist, having paid

wages equivalent to the product of five hours, receives the product of

ten hours. This balance represents the surplus-value (_Mehrwerth_).

This takes place all through industry. If the capitalist employs a

thousand workers under these conditions, each day he receives the

product of five thousand hours over and above the product actually paid

for. This constitutes his income. If the capitalist owned the land,

machinery, and raw materials, absolutely, without incumbrances of any

kind, the whole of that surplus-value would, naturally, belong to him.

But as a general rule this is not the case. He rents the land and must

pay rent to the landlord, or he works upon borrowed capital and must pay

interest upon loans, so that the surplus-value extracted from the

laborer must be divided into rent, interest, and profit. But how the

surplus-value is divided among landlords, moneylenders, creditors,

speculators, and actual employers is a matter of absolutely no moment to

the workers as a class. That is why such movements as that represented

by the followers of Henry George fail to vitally interest the working

class.[177] The division of the surplus-value wrung from the toil of the

workers gives rise to much quarrel and strife within the ranks of the

exploiting class, but the working class recognizes, and vaguely and

instinctively feels where it does not clearly recognize, that it has no

interest in these quarrels. All that interests it vitally is how to

lessen the extent of the exploitation to which it is subjected, and how

ultimately to end that exploitation altogether. That is the objective of

the movement for the socialization of the means of life.

Such, briefly stated, is the theory. We may illustrate it by the

following example: Let us say the average cost of a day's subsistence is

the product of five hours' social labor, which is represented by a wage

of $1 per day. In a factory there are 1000 workers. Their labor-power

they have sold at its exchange value, $1 per day per man, a total of

$1000. They use up $1000 worth of labor-power, then. They also use up

$1000 worth of raw material and wear out the plant to the extent of $100

in the course of their work. Now, instead of working five hours each,

that being the amount of time necessary to reproduce the value of their

wages, as above described, they all work ten hours. Thus, in place of

the $1000 they received as wages for the labor-_power_ they sold, they

create labor _products_, valued at just twice that sum, $2000. According

to our suppositions, therefore, the gross value of the day's product

will be $3100, the whole of it belonging to the capitalist, for the

simple and sufficient reason that he bought and paid for, at their full

value as commodities, all the elements entering into its production, the

machinery, materials, and labor-power. The capitalist pays,--

For labor-power $1000

For materials 1000

For repairs and replacement of machinery 100

-----

He receives, for the gross product 3100 $2100

The surplus-value is, therefore 1000

and this sum is the fund from which rent, interests, and profits must be

paid.

It will be observed that there is no moral condemnation of the

capitalist involved in this illustration. He simply buys the commodity,

labor-power, at its full market price, as in the case of all other

commodities. No ethical argument enters into it at all. It is very

evident, however, that the interest of the capitalist will be to get as

much surplus-value as possible, by buying labor-power at the lowest

price possible, prolonging the working day, and intensifying the

productivity of the labor-power he buys, while the interest of the

workman will be equally against these things. Here we have the cause of

class antagonism--not in the speeches of agitators, but in the facts of

industrial life.

This is the Marxian theory of surplus-value in a nutshell. Rent,

interest, and profit, the three great divisions of capitalist income

into which this surplus-value is divided, are thus traced to the

exploitation of labor, resting fundamentally upon the ownership by the

exploiting class of the means of production. Other economists, both

before and since Marx, have tried to explain the source of capitalist

income in very different ways. An early theory was that profit

originates in exchange, through "buying cheap and selling dear." That

this is so in the case of individual traders is obvious. If A sells to B

commodities above their value, or buys commodities from him below their

value, it is plain that he gains by it. But it is equally plain that B

loses. If one group of capitalists gains what another group loses, the

gains and losses balance each other; there is no gain to the capitalist

class as a whole. Yet that is precisely what occurs--the capitalist

class as a whole does gain, and gain enormously, despite the losses of

individual members of that class. It is that gain to the great body of

capitalists, that general increase in their wealth, which must be

accounted for, and which exchange cannot explain. Only when we think of

the capitalist class buying labor-power from outside its own ranks,

generally at its natural value, and using it, is the problem solved. The

commodity which the capitalist buys creates a value greater than its own

in being used up.

The theory that profit is the wages of risk is answerable in

substantially the same way. It does not in any way explain the increase

in the aggregate wealth of the capitalist class to say that the

individual capitalist must have a chance to receive interest upon his

money in order to induce him to turn it into capital, to hazard losing

it wholly or in part. While the theory of risk helps to explain some

features of capitalism, the changes in the flow of capital into certain

forms of investment, and, to some small extent, the commercial crises

incidental thereto, it does not explain the vital problem, the source of

capitalist income. The chances of gain, as a premium for the risks

involved, explain satisfactorily enough the action of the gambler when

he enters into a game of roulette or faro. It cannot be said, however,

that the aggregate wealth of the gamblers is increased by playing

roulette or faro. Then, too, the risks of the laborers are vastly more

vital than those of the capitalist. Yet the premium for their risks of

health and life itself does not appear, unless, indeed, it be in their

wages, in which case the most superficial glance at our industrial

statistics will show that wages are by no means highest in those

occupations where the risks are greatest and most numerous. Further, the

wages of the risks for capitalists and laborers alike are drawn from the

same source, the product of the laborers' toil.

To consider, even briefly, all the varied theories of surplus-value

other than these would be a prolonged, dull, and profitless task. The

theory of abstinence, that profit is the just reward of the capitalist

for saving part of his wealth and using it as a means of production, is

answerable by _a priori_ arguments and by a vast volume of facts.

Abstinence obviously produces nothing; it can only save the wealth

already produced by labor, and no automatic increase of that saved-up

wealth is possible. If it is to increase without the labor of its owner,

it can only be through the exploitation of the labor of others, so that

the abstinence theory in no manner controverts the Marxian position. On

the other hand, we see that those whose wealth increases most rapidly

are not given to frugality or abstinence by any means. It may,

certainly, be possible for an individual to save enough by practicing

frugality and abstinence to enable him to invest in some profitable

enterprise, but the source of his profit is not his abstinence. That

must be sought elsewhere. Abstinence may provide him with the means for

taking the profit, but the profit itself must come from the value

created by human labor-power over and above its cost of production.

Still less satisfactory is the idea that surplus-value is nothing more

than the "wages of superintendence," or the "rent of ability." This

theory has been advocated with much specious argument. Essentially it

involves the contention that there is no distinction between wages and

profits, or between capitalists and laborers; that the capitalist is a

worker, and his profits simply wages for his useful and highly important

work of directing industry. It is a bold theory with a very small basis

of fact. Whoever honestly considers it, must, one would think, see that

it is both absurd and untrue. Not only is the larger part of industry

to-day managed by salaried employees who have no part, or only a very

insignificant part, in the ownership of the concerns they manage, but

the profits are distributed among shareholders who, as shareholders,

have never contributed service of any kind to the industries in which

they are shareholders. Whatever services are performed, even by the

figure-head "dummy" directors of companies, are paid for before profits

are considered at all. This is the invincible answer to such criticisms

as that of Mr. Mallock, that Marx and his followers have not recognized

"the functions of the directive ability of the few." When all the

salaries of the directing "few" have been paid, as well as the wages of

the many, and the cost of all materials and maintenance of machinery,

there remains a surplus to be distributed among those who belong neither

to the "laboring many" nor the "directing few." That profit Mr. Mallock

cannot explain away. Marx himself, in "Capital," called attention to the

"directing ability of the few," quite as clearly as Mr. Mallock has

done. He first shows how the "collective power of masses" is really a

new creation; that it involves a special kind of leadership, or

directing authority, just as an orchestra does; then he proceeds to

point out the development of a special class of supervisors and

directors of industry, "a special kind of wage laborer.... The _work of

supervision becomes their established and exclusive function_."[178]

Socialists, contrary to Mr. Mallock, have not overlooked the function

exercised by the directing few, but they have pointed out that when

these have been paid, their salaries being sometimes almost fabulous,

there is still a surplus-value to be distributed among those who have

not shared in the production, either as mental or manual workers. As Mr.

Algernon Lee says:--

"The profits produced in many American mills, factories, mines, and

railway systems go in part to Englishmen or Belgians or Germans who

never set foot in America, and who obviously can have no share in even

the mental labor of direction. A certificate of stock may belong to a

child, to a maniac, to an imbecile, to a prisoner behind the bars, and

it draws profit for its owner just the same. Stocks and bonds may lie

for months or years in a safe-deposit vault, while an estate is being

disputed, before their ownership is determined; but whoever is declared

to be the owner gets the dividends and interest "earned" during all that

time."[179]

It is an easy task to set up imaginary figures labeled "Marxism," and

then to demolish them by learned argument--but the occupation is as

fruitless as it is easy. It remains the one central fact of capitalism,

however, that a surplus-value is created by the working class and taken

by the exploiting class, from which develops the class struggle of our

time.

FOOTNOTES:

[163] _The People's Marx_, by Gabriel Deville, page 288.

[164] _Capital_, Vol. I, Kerr edition, page 41.

[165] Professor J. S. Nicholson, a rather pretentious critic of Marx,

has called sunshine a commodity because of its utility, _Elements of

Political Economy_, page 24. Upon the same ground, the song of the

skylark and the sound of ocean waves might be called commodities. Such

use of language serves for nothing but the obscuring of thought.

[166] William Petty, _A Treatise on Taxes and Constitutions_ (1662),

pages 31-32.

[167] _The Wealth of Nations_, Vol. I, Chapters V-VI.

[168] Benjamin Franklin, _Remarks and Facts Relative to the American

Paper Money_ (1764), page 267.

Marx thus speaks of Franklin as an economist: "The first sensible

analysis of exchange-value as labor-time, made so clear as to seem

almost commonplace, is to be found in the work of a man of the New

World, where the bourgeois relations of production, imported together

with their representatives, sprouted rapidly in a soil which made up its

lack of historical traditions with a surplus of _humus_. That man was

Benjamin Franklin, who formulated the fundamental law of modern

political economy in his first work, which he wrote when a mere youth

(_A Modest Inquiry into the Nature and Necessity of a Paper Currency_),

and published in 1721." _A Contribution to the Critique of Political

Economy_, by Karl Marx, English translation by N. I. Stone, 1894, page

62.

[169] David Ricardo, _Principles of Political Economy and Taxation_,

Chapter I, Sec. III.

[170] _Wealth of Nations_, Book I, Chapter X.

[171] _Principles of Political Economy and Taxation_, Chapter I, Sec. 1,

Sec. 4.

[172] See "The Final Futility of Final Utility," in H. M. Hyndman's

_Economics of Socialism_, for a remarkable criticism of the "final

utility" theory, showing its identity with the doctrine of supply and

demand as the basis of value.

I refer to the theory of final or marginal utility as the "so-called

Austrian theory" for the purpose, mainly, or calling attention to the

fact that, as Professor Seligman has ably and clearly demonstrated, it

was conceived and excellently stated by W. F. Lloyd, Professor of

Political Economy at Oxford, in 1833. (See the paper, _On Some Neglected

British Economists_, in the _Economic Journal_, V, xiii, pages 357-363.)

This was two decades before Gossen and a generation earlier than Menger

and Jevons. In view of this fact, the criticism of Marx for his lack of

originality by members of the "Austrian" school is rather amusing.

[173] _Principles of Economics_, by Edwin R. A. Seligman (1905), page

198.

[174] Cf., for instance, my little volume, in the _Standard Socialist

Series_ (Kerr), entitled _Capitalist and Laborer_; Part II, _Modern

Socialism_, page 112.

[175] _Principles of Political Economy and Taxation_, Chapter V, Sec. 35.

[176] _Value, Price, and Profit_, by Karl Marx, Chapter XIV.

[177] It is worthy of note that the taxation of land values, commonly

associated with the name of Henry George, was advocated as a palliative

in the _Communist Manifesto_ of Marx and Engels.

[178] _Capital_, by Karl Marx, Vol. I, Chapter XIII, of Part IV.

[179] _The Worker_ (New York), February 5, 1905.

CHAPTER IX

OUTLINES OF THE SOCIALIST STATE

I

Many persons who have thought of Socialism as a scheme, the plan of a

new social edifice, have been disappointed not to find in all the

voluminous writings of Marx any detailed description of such a plan, any

forecast of the future. But when they have grasped the fundamental

principles of the Marxian system of thought, they realize that it would

be absurd to attempt to give detailed specifications of the Socialist

state. As the Socialist movement has outgrown the influence of the early

Utopians, its adherents have abandoned the habit of speculating upon the

practical application of Socialist principles in future society. The

formulation of schemes, more or less detailed, has given place to firm

insistence that Socialism must be regarded as a principle, namely, the

efficient organization of wealth production and distribution to the end

that the exploitation of the wealth producers by a privileged class may

be rendered impossible. Whatever contributes to that end is a

contribution to the fulfillment of the Socialist ideal.

Still, it is natural and inevitable that earnest Socialists and

students of Socialism should seek something more tangible by way of a

description of the future state than the bald statement that it will be

free from the struggle between exploiting and exploited classes. The

question is, can we go further in our attempt to scan the future without

entering the realms of Utopian speculation? If Socialism is, objectively

considered, a state of society which is being developed in the womb of

the present, are there any signs by which its peculiar form and spirit,

as distinguished from the form and spirit of the present, may be

visualized? Within certain limits, an affirmative answer seems possible

to each of these questions. There are certain fundamental principles

which may be said to be essential to the existence of Socialist society.

Without them, the Socialist state cannot exist. Regardless of the fact

that Karl Marx never attempted to describe his ideal, to give such a

description of his concept of the next epoch in evolution as would

enable us to compare it with the present and to measure the difference,

it is probable that every Socialist makes, privately at least, his own

forecast of the manner in which the new society must shape itself.

There is nothing Utopian or fantastic in trying to ascertain the

tendencies of economic development; nothing unscientific in trying to

read out of the pages of social evolution such lessons as may be

contained therein. So long as we bear in mind that our forecasts must

not take the form of plans for the arbitrary shaping of the future,

specifications of the Cooeperative Commonwealth, but that they must, on

the contrary, be based upon the facts of life--not abstract principles

born in the heart's desire--and attempt to discern the tendencies of

social and economic evolution, we are upon safe ground. Such forecasts

may indeed be helpful, not only in so far as they provide us with a more

or less concrete picture of the ideal to be aimed at, but also, and even

more important, in that they at once enable us to gauge from time to

time the progress made by society toward the realization of the ideal,

and to formulate our policies most effectively. Especially as there are

certain fundamental principles essential to the existence of a Socialist

state, we may take these and correlate them, and these principles,

together with our estimate of economic tendencies, drawn from the facts

of the present, may provide us with a suggestive and approximate outline

of the Socialist society of the future. So far we may proceed with full

scientific sanction; beyond are the realms of fancy and dream, the

Elysian Fields of Utopia.[180] We must not set about our task with the

mental attitude so well displayed by the yearning of Omar--

"Ah Love! could you and I with Him conspire

To grasp this sorry Scheme of Things entire,

Would not we shatter it to bits--and then

Remold it nearer to the Heart's Desire!"

From that spirit only vain dreams and fantastic vagaries can ever come.

What we must bear in mind is that the social fabric of to-morrow, like

that of yesterday, whose ruins we contemplate to-day, will not spring

up, complete, in response to our will, but will grow out of social

experience and needs.

II

One of the greatest and most lamentable errors in connection with the

propaganda of modern Socialism has been the assumption of its friends,

in many instances, and its foes, in most instances, that Socialism and

Individualism are entirely antithetical concepts. Infinite confusion has

been caused by setting the two against each other. Society consists of

an aggregation of individuals, but it is something more than that in

just the same sense as a house is something more than an aggregation of

bricks. It is an organism, though as yet an imperfectly developed one.

While the units of which it is composed have distinct and independent

lives within certain limits, they are, outside of those limits,

interdependent and inter-related. Man is governed by two great forces.

On the one hand, he is essentially an egoist, ever striving to attain

individual freedom; on the other hand, he is a social animal, ever

seeking association and avoiding isolation. This duality expresses

itself in the life of society. There is a struggle between its members

motived by the desire for individual expression and gain; and, alongside

of it, a sense of solidarity, a movement to mutual, reciprocal

relations, motived by the gregarian instinct. All social life is

necessarily an oscillation between these two motives. The social problem

in its last analysis is nothing more than the problem of combining and

harmonizing social and individual interests and actions springing

therefrom.

In dealing with this social problem, the problem of how to secure

harmony of social and individual interests and actions, it is necessary

first of all to recognize that both motives are equally important and

necessary agents of human progress. The idea largely prevails that

Socialists ignore the individual motive and consider only the social

motive, just as the ultra-individualists have erred in an opposite

discrimination. The Socialist ideal has been conceived to be a great

bureaucracy. Mr. Anstey gave humorous and vivid expression to this idea

in _Punch_ some years ago, when he represented the citizens of the

Socialist state as being all clothed alike, known only by numbers,

strangers to all the joys of family life, plodding through their

allotted tasks under a race of hated bureaucrats, and having the solace

of chewing gum in their leisure time as a specially paternal provision.

Some such mental picture must have inspired Herbert Spencer's "Coming

Slavery," and it must be confessed that the early forms of Socialism

which consisted mainly of detailed plans of cooeperative commonwealths

afforded some excuse for the idea. Most intelligent Socialists, if

called upon to choose between them, would probably prefer to live in

Thibet under a personal despotism, rather than under the hierarchies of

most of the imaginary commonwealths which Utopian Socialists have

depicted.

Even in the later propaganda of the modern political Socialist movement,

there has been more than enough justification for those who regard

Socialism as impossible except under a great bureaucracy. In numberless

Socialist programmes and addresses Socialism has been defined as meaning

"The social ownership and control of all the means of production,

distribution, and exchange." Critics of Socialism are not to be

seriously blamed if they take such "definitions" at their face value and

interpret them quite literally. It is not difficult to see that in order

to place "all means of production, distribution, and exchange" under

social ownership and control, the creation of such a bureaucracy as the

world has never seen would be necessary. A needle is a means of

production quite as much as an electric power machine in a factory is,

the difference being in their degrees of efficiency. A jackknife is,

likewise, in certain circumstances, a means of production, just as

surely as a powerful planing machine is, the difference being in degrees

of efficiency. So a market basket is a means of distribution quite as

surely as an ocean steamship is; a wheelbarrow quite as much as a

locomotive. They differ in degrees of efficiency, that is all. The idea

that the housewife in the future, when she wants to sew a button upon a

garment, will be obliged to go to some department and "take out" a

needle, having it properly checked in the communal accounts, and being

responsible for its return, is, of course, worthy only of opera bouffe.

So is the notion of the state owning wheelbarrows and market baskets and

making their private ownership illegal. "The socialization of _all_ the

means of production, distribution, and exchange," literally interpreted,

is folly. But none of those using the phrase must be regarded as

seriously contemplating its literal interpretation. For many years the

phrase was included in the statement of its "Object" by the English

Social Democratic Federation, and even now it appears in a slightly

modified form, the word "all" being omitted,[181] perhaps because of its

tautological character. For several years the writer was a member of the

Federation, actively engaged in the propaganda, and how we spent much of

our time explaining to popular audiences in halls and upon street

corners that the socialization of jackknives, needles, sewing machines,

market baskets, beer mugs, frying pans, and toothpicks was not our aim,

is a merry memory.

When this is understood, the nightmare of the bureaucracy of Socialism

vanishes. It is no longer necessary to fret ourselves asking how a

government is to own and manage everything without making slaves of its

citizens. The question propounded by that venerable and distinguished

Canadian scholar, Professor Goldwin Smith,[182] whether a government can

be devised which shall hold all the instruments of production,

distribute to the citizens their tasks, pick out inventors,

philosophers, artists, and laborers, and set them to work, without

destroying personal liberty, loses its force when it is remembered that

Socialism involves no such necessity.

The Socialist ideal may be said to be a form of social organization in

which every individual will enjoy the greatest possible amount of

freedom for self-development and expression; and in which social

authority will be reduced to the minimum necessary for the preservation

and insurance of that right to all individuals. There is an

incontestable right of the individual to full and free self-development

and expression so long as no other individual's right to a like freedom

is infringed upon. No individual right can be an _absolute_ right in a

society, but must be subject to such restrictions as may be necessary to

safeguard the like right of every other individual, and of society as a

whole. _Absolute_ personal liberty is not possible; to grant it to any

one individual would be equivalent to denying it to others. If, in a

certain community, a need is commonly felt for a system of drainage to

protect the citizens against the perils of a possible outbreak of

typhoid or some other epidemic disease, and all the citizens agree upon

a scheme except two or three, who, in the name of personal liberty,

declare that their property must not be touched, what is to be done? If

the citizens, out of solicitude for the personal liberty of the

objecting individuals, abandon or modify their plans, is it not clear

that the liberty of the many has been sacrificed to the liberty of the

few, which is the essence of tyranny? Absolute individual liberty is

incompatible with social liberty. The liberty of each must, in Mill's

phrase, be bounded by the like liberty of all. Absolute personal liberty

is a chimera, a delusion.

Even the Anarchist must come to a realization of the fact that liberty

is not an absolute, but a relative and limited, right. Kropotkin, for

example, realizes that, even under Anarchism, any individual who did

not live up to his obligations, or who persisted in conducting himself

in a manner obnoxious or injurious to the community, would have to be

expelled.[183] This is very like Spencer's practical abandonment of the

doctrine of _laissez faire_ individualism. Says he: "Many facts have

shown us that while the individual man has acquired liberty as a citizen

and greater religious liberty, he has also acquired greater liberty in

respect of his occupations; and here we see that he has simultaneously

acquired greater liberty of combination for industrial purposes. Indeed,

in conformity with the universal law of rhythm, _there has been a change

from excess of restriction to deficiency of restriction_. As is implied

by legislation now pending, the facilities for forming companies and

raising compound capitals have been too great."[184] Here is a very

definite confession of the insufficiency of natural law, the failure of

the _laissez faire_ theory, and a virtual appeal for restrictive and

coercive legislation.

This is inevitable. The dual forces which serve as the motives of

individual and collective action, spring, unquestionably, from the fact

that individuals are at once alike and unlike, equal and unequal. Alike

in our needs of certain fundamental necessities, such as food,

clothing, shelter, cooeperation for producing these necessities, for

protection from foes, human and other, we are unlike in tastes,

appetites, temperaments, character, will, and so on, till our diversity

becomes as great and as general as our likeness. Now, the problem is to

insure equal opportunities of full development to all these diversely

constituted and endowed individuals, and, at the same time, to maintain

the principle of equal obligations to society on the part of every

individual. This is the problem of social justice: to insure to each the

same social opportunities, to secure from each a recognition of the same

obligations toward all. The basic principle of the Socialist state must

be justice; no privileges or favors can be extended to individuals or

groups of individuals.

III

Politically, the organization of the Socialist state must be democratic.

Socialism without democracy is as impossible as a shadow without light.

The word "Socialism" applied to schemes of paternalism, and to

government ownership when the vital principle of democracy is lacking,

is a misnomer. As with Peter Bell--

"A primrose by a river's brim,

A yellow primrose was to him"

and nothing more than that, so there are many persons to whom Socialism

signifies nothing more than government ownership. Yet it ought to be

perfectly clear that Russia, with her state-owned railways, and liquor

and other monopolies, is no nearer Socialism than the United States. The

same applies to Germany with her state railways. Externally similar in

one respect to Socialism, they radically differ. In so far as they

prepare the necessary forms for Socialism, all examples of public

ownership may be said to be "socialistic," or making for Socialism. What

they lack is a spiritual quality rather than a mechanical one. They are

not democratic. Socialism is political democracy allied to industrial

democracy.

Justice requires that the legislative power of society rest upon

universal adult suffrage, the political equality of all men and women,

except lunatics and criminals. It is manifestly unjust to exact

obedience to the laws from those who have had no share in making them

and can have no share in altering them. Of course, there are exceptions

to this principle. We except (1) minors, children not yet arrived at the

age of responsibility agreed upon by the citizens; (2) lunatics and

certain classes of criminals; (3) aliens, non-citizens temporarily

resident in the state.

Democracy in the sense of popular self-government, the "government of

the people, by the people, and for the people," of which political

rhetoricians boast, is only approximately attainable in any society.

While all can equally participate in the legislative power, all cannot

participate directly in the administrative power, and it becomes

necessary, therefore, to adopt the principle of delegated authority,

representative government. But care must be taken to preserve a maximum

of power in the hands of the people. In this respect the United States

Constitution is defective. It is not, and was not intended by its

framers to be, a democratic instrument,[185] and we are vainly trying

to-day to make democratic government through an undemocratic medium. The

political democracy of the Socialist state must be real, keeping the

power of government in the hands of the people.

How is this to be done? Direct legislation by the people might be

realized through the adoption of the principles of popular initiative

and referendum. Or, if representative legislative bodies should be

deemed best, these measures, together with proportional representation

and the right of recall, might be adopted. There is no apparent reason

why _all_ legislation, except temporary legislation as in war time,

famine, plague, and such abnormal conditions, could not be directly

initiated and enacted, leaving only the just and proper enforcement of

the law to delegated authority. In practically all the political

programmes of Socialist parties throughout the world, these principles

are included at the present time; not merely as means to secure a

greater degree of political democracy within the existing social state,

but also, and primarily, to prepare the required political framework of

democracy for the industrial commonwealth of the future.

The great problem for such a society, politically speaking, consists in

choosing wisely the trustees of delegated power and authority, and

seeing that they justly and wisely use it for the common good, without

abuse, either for the profit of themselves or their friends, and without

prejudice to any portion of society. Will there be abuses? Will not

political manipulators and bosses betray their trusts? To these

questions, and all other questions of a like nature, the Socialist can

only give one answer, namely, that there is no such a thing as an

"automatic democracy," that eternal vigilance will be the price of

liberty under Socialism as it has ever been. There can be no other

safeguard against the usurpation of power than the popular will and

conscience ever alert upon the watch-towers. With political machinery so

responsive to the popular will when it is asserted and an alert and

vigilant electorate, political democracy attains its maximum

development. Socialism requires that development.

IV

With these general principles prevised, we may consider, briefly, the

respective rights of the individual and of society. The rights of the

individual may be summarized as follows: There must be freedom of

movement, including the right to withdraw from the domain of the

government, to migrate at will to other territories. Freedom of movement

is a fundamental condition of personal liberty, but it is easy to see

that it cannot be made an absolute right. Quarantine laws, for social

protection, for example, may seriously inconvenience the individual, but

be imperatively necessary for all that. There must be immunity from

arrest, except for infringing others' rights, with compensation of some

kind for improper arrest; respect of the privacy of domicile and

correspondence; full liberty of dress, subject to decency; freedom of

utterance, whether by speech or publication, subject only to the

protection of others from insult, injury, or interference with their

equal liberties, the individual being held responsible to society for

the proper use of that right. Freedom of the individual in all that

pertains to art, science, philosophy, and religion, and their teaching,

or propaganda, is essential. The state can have nothing to do with these

matters, they belong to the personal life alone.[186] Art, science,

philosophy, and religion cannot be protected by any authority of the

state, nor is such authority needed.

Subject to the ultimate control of society, certainly, but normally free

from collective authority and control, these may be regarded as

imperative rights of the individual. Doubtless many Socialists, in

common with many Individualists, would considerably extend the list.

Some, for instance, would include the right to possess and bear arms for

the defense of person and property. On the other hand, it might be

objected with good show of reason by other Socialists that such a right

must always be liable to abuses imperiling the peace of society, and

that the same ends would be served more surely if individual armament

were made impossible. Again, some Socialists, like some Individualists,

would include in the category of private acts outside the sphere of law

and social authority the union of the sexes. They would do away with

legal intervention in marriage and make it and the parental relation

exclusively a private concern. On the other hand, probably an

overwhelming majority of Socialists would object. They would insist that

the state must, in the interest of the children, and for its own

self-preservation, assume certain responsibilities for, and exercise a

certain control over, all marriages. They would have the state insist

upon such conditions as mature age, freedom from dangerous diseases and

physical defects. While believing that under Socialism marriage would no

longer be subject to economic motives,--matrimonial markets for titles

and fortunes no longer existing,--and that the maximum of personal

freedom together with the minimum of social authority would be possible

in the union of the sexes, they would still insist upon the necessity of

that minimum of legal control.

The abolition of the legal marriage tie, and the substitution therefor

of voluntary sex union, which so many people believe to be part of the

Socialist programme, is not only not a part of that programme, but is

probably condemned by more than ninety-five per cent of the Socialists

of the world, and favored by no appreciable proportion of Socialists

more than non-Socialists. There is no such thing as a Socialist view of

marriage, any more than there is a Republican or Democratic view of

marriage; or any more than there is a Socialist view of vaccination,

vivisection, vegetarianism, or homeopathy. The same may be said of the

drink evil and tobacco smoking. Some Socialists would prohibit both

smoking and drinking; others would permit smoking, but prohibit the

manufacture of intoxicating liquors; most Socialists recognize the

evils, especially of drunkenness, but believe that it would be foolish

at this time to state in what manner the evils must be dealt with by the

Socialist state.

Our hasty summary by no means exhausts the category of personal

liberties, nor does it rigidly define such liberties. To presume to do

that would be a piece of charlatanry, social quackery of the worst type.

It is not for the Socialist of to-day to determine what the citizens of

a generation hence shall do. The citizens of the future, like the

citizens of to-day, will be living human beings, not mere automatons;

they will not accept places and forms imposed upon them, but make their

own. The object of this phase of our discussion is simply to show that

individual freedom would by no means be crushed out of existence by the

Socialist state. The intolerable bureaucracy of collectivism is wholly

an imaginary evil. There is nothing in the nature of Socialism as it is

understood to-day by its adherents which would prevent a wide extension

of personal liberties in the social regime.

In the same general manner, we may summarize the principal functions of

the state[187] as follows: the state has the right and power to organize

and control the economic system, comprehending in that term the

production and distribution of all social wealth, wherever private

enterprise is dangerous to the social well-being, or is inefficient;

the defense of the community from invasion, from fire, flood, famine, or

disease; the relations with other states, such as trade agreements,

boundary treaties, and the like; the maintenance of order, including the

juridical and police systems in all their branches; and public education

in all its departments. It will be found that these five functions

include all the services which the state may properly undertake, and

that not one of them can safely be intrusted to private enterprise. On

the other hand, it is not at all necessary to assume that the state must

have an _absolute monopoly_ of any one of these groups of functions in

the social organism. It would not be necessary, for example, for the

state to prohibit its citizens from entering into voluntary relations

with the citizens of other countries for the promotion of international

friendship, for trade reciprocity, and so on. Likewise, the juridical

functions being in the hands of the state would not prevent voluntary

arbitration; or the state guardianship of the public health prevent

voluntary associations of citizens from taking measures to advance the

health of their communities. On the contrary, all such efforts would be

advantageous to the state. Our study becomes, therefore, a study of

social physiology.

The principle already postulated, that the state must undertake the

production and distribution of wealth wherever private enterprise is

dangerous, or inefficient, clarifies somewhat the problem of the

industrial organization of the Socialist regime, which is a vastly more

difficult problem than that of its political organization. Socialism by

no means involves the suppression of all private industrial enterprises.

Only when these fail in efficiency or result in injustice and inequality

of opportunities does socialization present itself. There are many

petty, subordinate industries, especially the making of articles of

luxury, which might be well allowed to remain in private hands, subject

only to such general regulation as might be found necessary for the

protection of health and the public order. For example, suppose that the

state undertakes the production of shoes upon a large scale as a result

of the popular conviction that private enterprise in shoemaking is

either inefficient or injurious to society in that the manufacturers

exploit the shoemakers on the one hand, and, through the establishment

of monopoly-prices, the consumers upon the other hand. The state thus

becomes the employer of shoeworkers and the vender of shoes to the

citizens. But A, being a fastidious citizen, does not like the factory

product of the state any more than he formerly did the factory product

of private enterprise. Under the old conditions, he used to employ B, a

shoemaker who does not like factory work, a craftsman who likes to make

the whole shoe. Naturally, B was not willing to work for wages

materially lower than those he could earn in the factory. A willingly

paid enough for his hand-made shoes to insure B as much wages as he

would get in the factory. What reason could the state possibly have for

forbidding the continuance of such an arrangement between two of its

citizens?

Or take the case of a farmer maintaining himself and family upon a

modest acreage, by his own labor. He exploits no one, and the question

of inefficiency does not present itself as a public question, for the

reason that there is plenty of farming land available, and any

inefficiency of the small farmer does not injure the community in any

manner. What object could the state have in taking away that farm and

compelling the farmer to work upon a communal, publicly owned and

managed farm? Of course, the notion is perfectly absurd.[188] On the

other hand, there are things, natural monopolies, which cannot be safely

left to private enterprise. The same is true of large productive and

distributive enterprises upon which great masses of the people depend.

Land ownership[189] and all that depends thereon, such as mining,

transportation, and the like, must be collective.

It will help us to get rid of the difficulty presented by petty

industry and agriculture if we bear in mind that collective ownership is

not, as is commonly supposed, the supreme, fundamental condition of

Socialism. It is proposed only as a means to an end, not as the end

itself. The wealth producers are exploited by a class whose source of

income is the surplus-value extracted from the workers. Instinctively,

the workers struggle against that exploitation, to reduce the amount of

surplus-value taken by the capitalists to a minimum. To do away with

that exploitation social ownership and control is proposed. If the end

could be attained more speedily by other methods, those methods would be

adopted. It follows, therefore, that to make collective property of

things not used as a means of exploiting labor does not necessarily form

part of the Socialist programme. True, some such things might be

socialized in response to an urgent demand for efficiency, but, of

necessity, the struggle will be principally concerned with the

socializing of the means of production which are used as means of

exploitation by a class deriving its income from the surplus-value

produced by another class. It is easy enough to see that, according to

this principle of differentiation, it would be necessary to socialize

the railroad, but not at all necessary to socialize the wheelbarrow;

while it would be necessary to socialize a clothing factory, it would

not be necessary to take away a woman's domestic sewing machine.

Independent, self-employment, as in the case of a craftsman working in

his own shop with his own tools, or groups of workers working

cooeperatively, is quite consistent with Socialism.

In the Socialist state, then, certain forms of private industry will be

tolerated, and perhaps even definitely encouraged by the state, but the

great fundamental economic activities will be collectively managed. The

Socialist state will not be static and, consequently, what at first may

be regarded as being properly the subject of private enterprise may

develop to an extent or in directions which necessitate its

transformation to the category of essentially social properties. Hence,

it is not possible to give a list of things which would be socialized

and another list of things which would remain private property, but

perfectly possible to state the principle which must be the chief

determinant of the extent of socialization. With this principle in mind

it is fairly possible to sketch the outlines at least of the economic

development of the collectivist commonwealth; the conditions essential

to that stage of social evolution at which it will be possible and

natural to speak of capitalism as a past and outgrown stage, and of the

present as the era of Socialism.

Socialists, naturally, differ very materially upon this point. Probably,

however, an overwhelming majority of the leaders of Socialist thought in

Europe and this country would agree with the writer that it is fairly

probable that the economic structure of the new society will include at

least the following measures of socialization: (1) Ownership of all

natural resources, such as land, mines, forests, waterways, oil wells,

and so on; (2) operation of all the means of transportation and

communication other than those of purely personal service; (3) operation

of all industrial production involving large compound capitals and

associated labor, except where carried on by voluntary, democratic

cooeperation, with the necessary regulation by the state; (4)

organization of all labor essential to the public service, such as the

building of schools, hospitals, docks, roads, bridges, sewers, and the

like; the construction of all the machinery and plant requisite to the

social production and distribution, and of things necessary for the

maintenance of those engaged in such public services as the national

defense and all who are wards of the state; (5) a monopoly of the

monetary and credit functions, including coinage, banking, mortgaging,

and the extension of credit to private enterprise.

With these economic activities undertaken by the state, a pure democracy

differing vitally from all the class-dominated states of history,

private enterprise would by no means be excluded, but limited to an

extent making the exploitation of labor and public needs and interests

for private gain impossible. Socialism thus becomes the defender of

individual liberty, not its enemy.

V

As owner of the earth and all the major instruments of production and

exchange, society would occupy a position which would enable it to

insure that the physical and mental benefits derived from its wealth,

its natural resources, its collective experience, genius, and labor,

were universalized as befits a democracy. It would be able to guarantee

to all its citizens the right to labor, through preventing private or

class monopolization of the land and instruments of production and

social opportunities in general. It would be in a position to make every

development from competition to monopoly the occasion for further

socialization. Thus there would be no danger to the state in permitting,

or even fostering, private industry within the limits described. As the

organizer of the vast body of labor essential to the operation of the

main productive and distributive functions of society, and to the other

public services, the state would automatically, so to speak, set the

standards of income and leisure which private industry would be

compelled, by competitive force, to observe. The regulation of

production, too, would be possible, and as a result the crises arising

from glutted markets would disappear. Finally, in the control of all the

functions of credit, the state would effectually prevent the

exploitation of the mass of the people through financial agencies, one

of the greatest evils of our present system.

The application of the principles of democracy to the organization and

administration of these great economic services of production, exchange,

and credit is a problem full of alluring invitations to speculation.

"This that they call the Organization of Labor," said Carlyle, "is the

Universal Vital Problem of the World." This description applies not to

what we commonly mean by the "organization of labor," namely, the

organization of the laborers in unions for class conflict, but to the

organization of the brain and muscle of the world to secure the greatest

efficiency. This is the great central problem of the socialization of

industry and the state, before which all other problems pale into

insignificance. It is comparatively easy to picture an ideal political

democracy; and the main structural economic organization of the

Socialist regime, with its private and public functions more or less

clearly defined, is not very difficult of conception. These are

foreshadowed with varying degrees of distinctness in present society,

and the light of experience illumines the pathway before us. It is when

we come to the methods of organization and management, the _spirit_ of

the economic organization of the future state, that the light fails and

we must grope our way into the great unknown with imagination and our

sense of justice for guides.

Most Socialist writers who have attempted to deal with this subject

have simply regarded the state as the greatest employer of labor,

carrying on its business upon lines not materially different from those

adopted by the great corporations of to-day. Boards of experts, chosen

by civil service methods, directing all the economic activities of the

state--such is their general conception of the industrial democracy of

the Socialist regime. They believe, in other words, that the methods now

employed by the capitalist state, and by individual and corporate

employers within the capitalist state, would simply be extended under

the Socialist regime. If this be so, a psychological anomaly in the

Socialist propaganda appears in the practical abandonment of the claim

that, as a result of the class conflict in society, the public ownership

evolved within the capitalist state is essentially different from, and

inferior to, the public ownership of the Socialist ideal. It is

perfectly clear that if the industrial organization under Socialism is

to be such that the workers employed in any industry have no more voice

in its management than the postal employees in this country, for

example, have at the present time, it cannot be otherwise than absurd to

speak of it as an industrial democracy.

Here, in truth, lies the crux of the greatest problem of all. We must

face the fact that, in anything worthy the name of an industrial

democracy, the terms and conditions of employment cannot be wholly

decided without regard to the will of the workers themselves on the one

hand, nor, on the other hand, by the workers alone without reference to

the general body of the citizenry. If the former method fails to satisfy

the requirements of democracy by ignoring the will of the workers in the

organization of their work, the alternate method involves a hierarchical

government, equally incompatible with democracy. Some way must be found

by which the industrial government of society, the organization of

production and distribution, may be securely and fairly based upon the

dual basis of common civic rights and the rights of the workers in their

special relations as such.

And here we are not wholly left to our imaginations, not wholly without

experience to guide us. In actual practice to-day, in those industries

in which the organization of the workers into unions has been most

successful, the workers, through their organizations, do exercise a

certain amount of control over the conditions of their employment. Their

right to share in the determination of the conditions of labor is

conceded. They make trade agreements, for instance, in which such

matters as wages, hours of labor, apprenticeship, output, engagement and

discharge of workers, and numerous other matters, are provided for and

made subject to the joint control of the workers and their employers. Of

course, this share in the control of the industry in which they are

employed is a right enjoyed only as a fruit of conquest, won by war and

maintained by ceaseless vigilance and armed strength. It is not

inconceivable that in the Socialist state there might be a frank

extension of this principle. The workers in the main groups of

industries might form autonomous organizations for the administration of

their special interests, subject only to certain fundamental laws of the

state. Thus the trade unions of to-day would evolve into administrative

politico-economic organizations, after the manner of the mediaeval

guilds, and become constructive agencies in society instead of mere

agencies of class warfare as at present.

The economic organization of the Socialist state would consist, then, of

three distinct divisions, as follows: (1) Private production and

exchange, subject only to such general supervision and control by the

state as the interests of society demand, such as protection against

monopolization, sanitary laws, and the like; (2) voluntary cooeperation,

subject to similar supervision and control; (3) production and

distribution by the state, the administration to be by the autonomous

organizations of the workers in industrial groups, subject to the

fundamental laws and government of society as a whole.[190]

VI

Two other functions of the economic organization of society remain to be

considered, the distribution of labor and its remuneration. In the

organization of industry society will have to achieve a twofold result,

a maximum of general, social efficiency, on the one hand, and of

personal liberty and comfort to the workers on the other. The state

would not only guarantee the right to labor, but, as a corollary, it

would impose the duty of labor upon every competent person. The Pauline

injunction, "If any man will not work, neither shall he eat," would be

applied in the Socialist state to all except the incompetent to labor.

The immature child, the aged, the sick and infirm members of society,

would alone be exempted from labor. The result of this would be that

instead of a large unemployed army, vainly seeking the right to work, on

the one hand, accompanied by the excessive overwork of the great mass of

the workers fortunate enough to be employed, a vast increase in the

number of producers from this one cause alone would make possible much

greater leisure for the whole body of workers. Benjamin Franklin

estimated that in his day four hours' labor from every adult male able

to work would be more than sufficient to provide wealth enough for human

wants; and it is certain that, without resorting to any standards of

Spartan simplicity, Franklin's estimate could be easily realised to-day

with anything approaching a scientific organization of labor.

Not only would the productive forces be enormously increased by the

absorption of those workers who under the present system are unemployed,

and those who do not labor or seek labor; in addition to these, there

would be a tremendous transference of potential productive energy from

occupations rendered obsolete and unnecessary by the socialization of

society. Thus there are to-day tens of thousands of bankers, lawyers,

traders, middlemen, speculators, advertisers, and others, whose

functions, necessary to the capitalist system, would in most cases

disappear. Because of this, they would be compelled to enter the

producing class. The possibilities of the scientific organization of

industry are therefore almost unlimited. Every gain made by the state in

the direction of economy of production would test the private enterprise

existing and urge it onward in the same direction. Likewise, every gain

made by the private producers would test the social production and urge

it onward. Whether socialized production extended its sphere, or

remained confined to its minimum limitations, would depend upon the

comparative success or failure resulting. The state would not be a force

outside of the people, arbitrarily extending its functions regardless of

their will. The decision would rest with the people; they would _be_ the

state, and would, naturally, resort to social effort only where it

demonstrated its ability to serve the community more efficiently than

private enterprise, with greater comfort and liberty to the individual

and to the community.

While in the Socialist regime labor would be compulsory, it is

inconceivable that a free people would tolerate a bureaucratic rule

assigning to each individual his or her proper task, no matter how

ingenious the assignment might be. Even if the bureaucracy were

omniscient, such a condition of life would be intolerable. Just as it is

necessary to insist that all must be secured in their right to labor,

and required to labor, it is necessary also that the choice of one's

occupation should be as far as possible personal and free, subject only

to the laws of supply and demand. The greatest amount of personal

freedom compatible with the requisite efficiency would be secured to the

workers in their chosen occupations through their craft organizations.

But, it will be objected, all occupations are not equally desirable.

There are certain forms of work which, disagreeable in themselves, are

just as essential to the well-being of society as the most artistic and

pleasing. Who will do the dirty work, and the dangerous work, under

Socialism? Will these occupations also be left to choice, and, if so,

will there not be an insurmountable difficulty arising from the natural

reluctance of men to choose such work?

In answering the question and affirming the principle of free

choice--for so it must be answered--the Socialist is called upon to show

that the absence of compulsion would not involve the neglect of these

disagreeable, but highly important, social services; that it would be

compatible with social safety to leave them to personal choice. In the

first place, much of this kind of work that is now performed by human

labor could be more efficiently done by mechanical means. Much of the

work done by sweated women and children in our cities is in fact done in

competition with machines. Machinery has been invented, and is now

available, to do thousands of the disagreeable and hurtful things now

done by human beings. Professor Franklin H. Giddings is perfectly right

when he says: "Modern civilization does not require, it does not need,

the drudgery of needle-women or the crushing toil of men in a score of

life-destroying occupations. If these wretched beings should drop out

of existence and no others take their places, the economic activities of

the world would not greatly suffer. A thousand devices latent in

inventive brains would quickly make good any momentary loss."[191]

When, in England, a law was passed forbidding the practice of forcing

little boys through chimneys, to clean them, chimneys did not cease to

be swept. Other, less disagreeable and less dangerous, means were

quickly invented. When the woolen manufacturers were prevented from

employing little boys and girls, they invented the piecing machine.[192]

Thousands of instances might be compiled in support of the contention of

Professor Giddings, equally as pertinent as these. Another important

point is that the amount of such disagreeable and dangerous work to be

done would be very much less than now. That would be an inevitable

result of the scientific organization of industry. It is likely that, if

the subject could be properly investigated, it could be shown that the

amount of such labor involved in wasteful and unnecessary advertising

alone is enormous.

Addressing an audience composed mainly of scientific men upon the

subject of Socialism, the writer was once questioned upon this phase of

the subject. "Gentlemen," was the reply, "it is impossible for me to

say exactly how the intelligence of the people in a more or less remote

future will solve the problem. The Socialist state will be a democracy,

not a dictatorship. But if I were dictator of society to-day and wanted

to solve the problem, I should assign to such men as yourselves all the

most disagreeable and dangerous tasks I could find. This I should do

because I should know that at once your inventive brains would begin to

devise mechanical and other means of doing the work. You would make

sewer cleaning as pleasant as any other occupation in the world." There

was, of course, nothing original in the reply, but the men of science

recognized its force, and it fairly states one important part of the

Socialist answer to the objection we are discussing. Still, with all

possible reduction of the quantity of such work to be done, and with all

the mechanical genius brought to bear upon it, we may freely concede

that, for a long time to come, there must be some work quite dangerous,

altogether disagreeable and repellent, and a great difference in the

degree of attractiveness of some occupations as compared with some

others. But an occupation repellent in itself might be made attractive,

if the hours of labor were relatively few as compared with other

occupations. If six hours be regarded as the normal working day, it is

quite easy to believe that, for sake of the larger leisure, with its

opportunities for the pursuit of special interests, many a man would

gladly accept a disagreeable position for three hours a day.

The same holds true of superior remuneration. Under the Socialist

regime, just as to-day, many a man would gladly exchange his work for

less pleasant work, if the remuneration offered were higher. To the old

Utopian ideas of absolute equality and uniformity of income these

methods would be fatal, but they are not at all incompatible with

modern, scientific Socialism. Nothing could well be sillier, or more

futile, than the Rooseveltian attacks upon the Socialism of to-day as if

it meant equality of possession, or equality of anything except

opportunity.[193] Finally, in connection with this question, we must not

forget that there is a natural inequality of talent, of power. In any

state of society most men will prefer to do the things they are best

fitted for, the things they can do best. The man who feels himself to be

best fitted to be a hewer of wood or a drawer of water will choose that

rather than some loftier task. There is no reason at all to suppose that

leaving the choice of occupation to the individual would involve the

slightest risk to society.

While equality of remuneration, meaning by that uniformity of reward

for labor, is not an essential condition of the Socialist regime, it may

be freely admitted that _approximate equality of income_ is the ideal to

be ultimately aimed at. Otherwise, if there should be the present

inequality of remuneration, represented by the enormous salary of a

manager like Mr. Schwab, to quote a conspicuous example, and the meager

wage of the average laborer, class formations must take place and the

old problems incidental to economic inequality reappear. There is no

need to regard uniformity of reward for all as the only solution of this

problem, however. Given such an industrial democracy as is herein

suggested as the essential condition of Socialism, there is little

reason to doubt that gradually, by the free play of economic law,

approximate equality would be attained. This brings us to the method of

the remuneration of labor.

VII

Socialists are too often judged by their shibboleths, rather than by the

principles which those shibboleths imperfectly express, or seek to

express. Declaiming, rightly, against the wages system as a form of

slave labor,[194] the "abolition of wage slavery," forever inscribed on

their banners, the average man is forced to the conclusion that the

Socialists are working for a system in which the workers will divide

their actual products and then barter the surplus for the surplus

products of other workers. Either that, or the most rigid system of

governmental production and a method of distributing rations and

uniforms similar to that which obtains in the military organization of

present-day governments. It is easily seen, however, that such plans do

not conform to the democratic ideals of the Socialists, on the one hand,

nor would either of them, on the other hand, be compatible with the wide

personal liberty herein put forward as characteristic of the Socialist

state.

The earlier Utopian Socialists did propose to do away with wages; in

fact, they proposed to do away with money altogether, and invented

various forms of "Labor Notes" as a means of giving equality of

remuneration for given quantities of labor, and providing a medium for

the exchange of wealth. But when the Socialists of to-day speak of the

"abolition of wages," or of the wages system, they use the words in the

same sense as they speak of the abolition of capital: _they would

abolish only the social relations implied in the terms_. Just as they do

not mean by the abolition of capital the destruction of the machinery

and implements of production, but the social relation in which they are

used to create profit for the few, so, when they speak of the abolition

of the wages system, they mean only the use of wages to exploit the

producers for the gain of the owners of the means of production and

exchange. Though the name "wages" might not be changed, a money payment

for labor in a democratic arrangement of industry, representing an

approximation to the full value of the labor, minus only its share of

the cost of maintaining the public services, and the weaker, dependent

members of society, would be vastly different from a money payment for

labor by one individual to other individuals, representing an

approximation to their cost of living, bearing no definite relation to

the value of their labor products, and paid in lieu of those products

with a view to the gathering of a rich surplus value by the payer.

Karl Kautsky, perhaps the greatest living exponent of the theories of

modern Socialism, has made this point perfectly clear. He accepts

without reserve the belief that wages, unequal and paid in money, will

be the method of remuneration for labor in the Socialist regime.[195]

When too many laborers rush into certain branches of industry, the

natural way to lessen their number and to increase the number of

laborers in other branches where there is need for them, will be to

reduce wages in the one and to increase them in the other. Socialism,

instead of being defined as an attempt to make men equal, might perhaps

be more justly and accurately defined as a social system based upon the

natural inequalities of mankind. Not human equality, but equality of

opportunity, and the prevention of the creation of artificial

inequalities by privilege, is the essence of Socialism.

What, it may be asked, will society do to prevent the hoarding of wealth

on the one hand, and the exploitation of the spendthrift by the

abstinent upon the other? Here, as throughout this discussion, we must

be careful to refrain from laying down dogmatic rules, giving

categorical replies to questions which the future will settle in its own

way. At best, we can only reason as to what possible answers are

compatible with the fundamental principles of Socialism. Thus we may

safely answer that in the Socialist regime society will not attempt to

dictate to the individual how he shall spend his income. If Jones

prefers _objets d'art_, and Smith prefers fast horses or a steam yacht,

each will be free to follow his inclinations so far as his resources

will permit. If, on the contrary, one should prefer to hoard his wealth,

he would be free to do so. The inheritance of such accumulated property,

other than personal objects, of course, might be denied, the state being

made the only possible inheritor of such accumulated property. Even in

the absence of such a regulation, the inheritance of hoarded wealth

would not be a serious matter and would speedily adjust itself. There

would be no opportunity for its _investment_, so that at most

individuals inheriting such property would be enabled to live idly, or

with extra luxury, until it was spent. The fact of inheriting property

would not give the individual power over the life and labor of others.

By either method, full play for individual liberty would be coupled with

full economic security for society. There would be no danger of the

development of a ruling class as a result of natural inequalities.

With such conditions as these, it is not difficult nor in any sense

romantic to suppose that the tendency to hoard wealth would largely

disappear. In the same way we must regard the possibilities of the

exploitation of man by man developing in the Socialist state, through

the wastefulness and improvidence of the one and the frugality,

abstinence, and cunning of the other, as slight. With the credit

functions entirely in the hands of the state, the improvident man would

be able to obtain credit upon the same securities as from a private

creditor, without extortion. Society would further secure itself against

the weakness and failure of the improvident by insuring all its members

against sickness, accident, and old age.

VIII

The administration of justice is necessarily a social function in a

democratic society. All juridical functions should be socialized in the

strict sense of being maintained at the social expense for the free

service of its citizens. Court fees, advocates' charges, and other

expenses incidental to the administration of justice in present society

are all anti-democratic and subversive of justice.

Finally, education is likewise a social necessity which society itself

must assume responsibility for. We have discovered that for

self-protection society must insist upon a certain minimum of education

for every child able to receive it; that it is too vital a matter to be

left to the option of parents or the desires of the immature child. We

have made a certain minimum of education compulsory and free; the

Socialist state would make a minimum--probably much larger than our

present minimum--compulsory, but it would also make _all_ education

free. From the first stages, in the kindergartens, to the last, in the

universities, education must be wholly free or equality of opportunity

cannot be realized. So long as a single barrier exists to prevent any

child from receiving all the education it is capable of profiting by,

democracy is unattained.

Whether the Socialist state could tolerate the existence of elementary

schools other than its own, such as privately conducted kindergartens,

religious schools, and so on, is by no means agreed upon by Socialists.

It is like the question of marriage, a matter which is wholly beyond the

scope of present knowledge. The future will decide for itself. There are

those who believe that the state would not content itself with refusing

to permit religious doctrines or ideas to be taught in the schools, but

would go further, and, as the protector of the child, guard its

independence of thought in later life as far as possible by forbidding

religious teaching of any kind in schools for children below a certain

age. It would not, of course, attempt to prevent parental instruction in

religious beliefs in the home. Beyond the age prescribed, religious

education, in all other than public institutions of learning, would be

freely admitted. This restriction of religious education to the years of

judgment and discretion implies no hostility to religion on the part of

the state, but complete neutrality. Not the least important of the

rights of the child is the right to be protected from influences which

bias the mind and destroy the possibilities of independent thought in

later life, or make it attainable only as a result of bitter, needless,

tragic experience. This is one view. On the other hand, there are

probably quite as many Socialists who believe that the state would not

attempt to prevent the religious education of children of any age, in

schools voluntarily maintained for that purpose, independent of the

public schools. They believe that the state would content itself with

insisting that these religious schools must be so built and equipped as

not to imperil the lives or the health of the children attending them,

and so conducted as not to interfere with the public schools,--all of

which means simply that, like vaccination, and the form of marriage

contract, the question will be settled by the future in its own way.

There is nothing in the fundamental principles of Socialism, nor any

body of facts in our present experience, from which we can judge the

manner of that settlement.

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