world without owning any private property. That came into existence
when men saw that one man could produce more out of the soil than he
needed to eat himself. Then, when they went out to war with other
tribes, the members of a tribe instead of trying to kill their
enemies, made them captives and used them as slaves. They did not
cease killing their foes from humane motives, because they had grown
better men, but because it was more profitable.
From our point of view, slavery is a bad thing, but when it first
came into existence it was a step upward and onward. If we take the
history of slave societies and nations we shall soon find that their
laws, their customs and their institutions were based upon the mode of
producing wealth through the labor of slaves. There were two classes
into which society was divided, a class of masters and a class of
slaves.
When slavery broke down and gave way to feudalism there were new ways
of producing wealth. The laws of feudal societies, their customs and
institutions, changed to meet the needs brought about through the new
methods of making things. Under slavery, the slaves made wealth for
their masters and were doled out food enough to keep them alive. The
slave had no rights. Under feudalism, the serfs produced wealth for
the lords parts of the time, working for themselves the rest of the
time. They had some rights. The bounds of freedom were widened. Under
neither of these systems was there a regular system of paying wages in
money, such as we have to-day. The slave gave up all his product and
took what the master was pleased to give him in the way of food,
clothing and shelter. The serf divided his time between producing for
the owner of the soil and producing for his family. The slave produced
what his owner wanted; the serf produced what either he himself or his
lord wanted.
There came a time, about three hundred years ago, when the feudal
system broke down before the beginnings of capitalism, the system
which we are living under to-day, and which we Socialists think is
breaking down as all other social systems have broken down before it.
Under this system men have worked for wages and not because they
wanted the things they were producing, nor because the men who
employed them wanted the things, _but simply because the things could
be sold and a profit made in the sale_.
You will remember, Jonathan, that in a former letter I dealt with the
nature of wealth. We saw then that wealth in our modern society
consists of an abundance of things which can be sold. At bottom, we do
not make things because it is well that they should be made, because
the makers need them, but simply because the capitalists see
possibilities of selling the things at a profit.
I want you to consider just a moment how this works out: Here is a
workingman in Springfield, Massachusetts, making deadly weapons with
which other workingmen in other lands are to be killed. We go up to
him as he works and inquire where the rifles are to be sent, and he
very politely tells us that they are for some foreign government, say
the Japanese, to be used in all probability against Russian soldiers.
Suppose we ask him next what interest he has in helping the Japanese
government to kill the Russian troops, how he comes to have an active
hatred of the Russian soldiers. He will reply at once that he has no
such feelings against the Russians; that he is not interested in
having the Japanese slaughter them. Why, then, is he making the guns?
He answers at once that he is only interested in getting his wages;
that it is all the same to him whether he makes guns for Christians or
Infidels, for Russians or Japs or Turks. His only interest is to get
his wages. He would as soon be making coffins as guns, or shoes as
coffins, so long as he got his wages.
Perhaps, then, the company for which he is employed has an interest in
helping Japan defeat the troops of Russia. Possibly the shareholders
in the company are Japanese or sympathizers with Japan. Otherwise,
why should they be bothering themselves getting workpeople to make
guns for Japanese soldiers to kill Russian soldiers with? So we go to
the manager and ask him to explain the matter. He very politely tells
us that, like the man at the bench, he has no interest in the matter
at all, and that the shareholders are in the same position of being
quite indifferent to the quarrel of the two nations. "Why, we are also
making guns for Russia in our factory," he says, and when we ask him
to explain why he tells us that "There is profit to be made and the
firm cares for nothing else."
All our system revolves around that central sun of profit-making,
Jonathan. Here is a factory in which a great many people are making
shoddy clothing. You can tell at a glance that it is shoddy and quite
unfit for wearing. But why are the people making shoddy goods--why
don't they make decent clothing, since they can do it quite as well?
Why, because there is a profit for somebody in making shoddy. Here a
group of men are building a house. They are making it of the poorest
materials, making dingy little rooms; the building is badly
constructed and it can never be other than a barracks. Why this
"jerry-building?" There is no reason under the sun why poor houses
should be built except that somebody hopes to make profit out of them.
Goods are adulterated and debased, even the food of the nation is
poisoned, for profit. Legislatures are corrupted and courts of justice
are polluted by the presence of the bribe-giver and the bribe-taker
for profit. Nations are embroiled in quarrels and armies slaughter
armies over questions which are, always, ultimately questions of
profit. Here are children toiling in sweatshops, factories and mines
while men are idle and seeking work. Why? Do we need the labor of the
little ones in order to produce enough to maintain the life of the
nation? No. But there are some people who are going to make a profit
out of the labors which sap the strength of those little ones. Here
are thousands of people hungry, clamoring for food and perishing for
lack of it. They are willing to work, there are resources for them to
work upon; they could easily maintain themselves in comfort and
gladness if they set to work. Then why don't they set to work? Oh,
Jonathan, the torment of this monotonous answer is unbearable--because
no one can make a profit out of their labor they must be idle and
starve, or drag out a miserable existence aided by the crumbs of cold
charity!
If our social economy were such that we produced things for use,
because they were useful and beautiful, we should go on producing with
a good will until everybody had a plentiful supply. If we found
ourselves producing too rapidly, faster than we could consume the
things, we could easily slacken our pace. We could spend more time
beautifying our cities and our homes, more time cultivating our minds
and hearts by social intercourse and in the companionship of the great
spirits of all ages, through the masterpieces of literature, music,
painting and sculpture. But instead, we produce for sale and profit.
When the workers have produced more than the master class can use and
they themselves buy back out of their meagre wages, there is a glut in
the markets of the world, unless a new market can be opened up by
making war upon some defenseless, undeveloped nation.
When there is a glut in the market, Jonathan, you know what happens.
Shops and factories are shut down, the number of workers employed is
reduced, the army of the unemployed grows and there is a rise in the
tide of poverty and misery. Yet why should it be so? Why, simply
because there is a superabundance of wealth, should people be made
poorer? Why should little children go without shoes just because there
are loads of shoes stacked away in stores and warehouses? Why should
people go without clothing simply because the warehouses are bursting
with clothes? The answer is that these things must be so because we
produce for profit instead of for use. All these stores of wealth
belong to the class of profit-takers, the capitalist class, and they
must sell and make profit.
So you see, friend Jonathan, so long as this system lasts, _people
must have too little because they have produced too much_. So long as
this system lasts, there must be periods when we say that society
_cannot afford to have men and women work to maintain themselves
decently_! But under any sane system it will surely be considered the
maddest kind of folly to keep men in idleness while saying that it
does not pay to keep them working. Is there any more expensive way of
keeping either an ass or a man than in idleness?
The root of evil, the taproot from which the evils of modern society
develop, is the profit idea. Life is subordinated to the making of
profit. If it were only possible to embody that idea in human shape,
what a monster ogre it would be! And how we should arraign it at the
bar of human reason! Should we not call up images of the million of
babes who have been needlessly and wantonly slaughtered by the Monster
Idea; the images of all the maimed and wounded and killed in the wars
for markets; the millions of others who have been bruised and broken
in the industrial arena to secure somebody's profit, because it was
too expensive to guard life and limb; the numberless victims of
adulterated food and drink, of cheap tenements and shoddy clothes?
Should we not call up the wretched women of our streets; the bribers
and the vendors of privilege? We should surely parade in pitiable
procession the dwarfed and stunted bodies of the millions born to
hardship and suffering, but we could not, alas! parade the dwarfed and
stunted souls, the sordid spirits for which the Monster Idea is
responsible.
I ask you, Jonathan Edwards, what you really think of this "buy cheap
and sell dear" idea, which is the heart and soul of our capitalistic
system. Are you satisfied that it should continue?
Yet, my friend, bad as it is in its full development, and terrible as
are its fruits, this idea once stood for progress. The system was a
step in the liberation of man. It was an advance upon feudalism which
bound the laborer to the soil. Capitalism has not been all bad; it has
another, brighter side. Capitalism had to have laborers who were free
to move from one place to another, even to other lands, and that need
broke down the last vestiges of the old physical slavery. That was a
step gained. Capitalism had to have intelligent workers and many
educated ones. That put into the hands of the common people the key to
the sealed treasuries of knowledge. It had to have a legal system to
meet its requirements and that has resulted in the development of
representative government, of something approaching political
democracy; even where kings nominally rule to-day, their power is but
a shadow of what it once was. Every step taken by the capitalist class
for the advancement of its own interests has become in its turn a
stepping-stone upon which the working-class has raised itself.
Karl Marx once said that the capitalist system provides its own
gravediggers. I have cited two or three things which will illustrate
his meaning. Later on, I must try and explain to you how the great
"trusts" about which you complain so loudly, and which seem to be the
very perfection of the capitalist ideal, lead toward Socialism at a
pace which nothing can very seriously hinder, though it may be
quickened by wise action on the part of the workers.
For the present I shall be satisfied, friend Jonathan, if you get it
thoroughly into your mind that the source of terrible social evils, of
the poverty and squalor, of the helpless misery of the great mass of
the people, of most of the crime and vice and much of the disease, is
the "buy cheap and sell dear" idea. The fact that we produce things
for sale for the profit of a few, instead of for use and the enjoyment
of all.
Get that into your mind above everything else, my friend. And try to
grasp the fact, also, that the system we are now trying to change was
a natural outgrowth of other conditions. It was not a wicked
invention, nor was it a foolish blunder. It was a necessary and a
right step in human evolution. But now it has in turn become
unsuitable to the needs of the people and it must give place to
something else. When a man suffers from such a disease as
appendicitis, he does not talk about the "wickedness" of the vermiform
appendix. He realizes, if he is a sensible man, that long ago, that
was an organ which served a useful purpose in the human system.
Gradually, perhaps in the course of many centuries, it has ceased to
be of any use. It has lost its original functions and become a menace
to the body.
Capitalism, Jonathan, is the vermiform appendix of the social
organism. It has served its purpose. The profit idea has served an
important function in society, but it is now useless and a menace to
the body social. Our troubles are due to a kind of social
appendicitis. And the remedy is to remove the useless and offending
member.
VII
FROM COMPETITION TO MONOPOLY
It may be fairly said, I think, that not merely competition,
but competition that was proving ruinous to many
establishments, was the cause of the combinations.--_Prof.
J.W. Jenks._
The day of the capitalist has come, and he has made full use
of it. To-morrow will be the day of the laborer, provided he
has the strength and the wisdom to use his opportunities.--_H.
De. B. Gibbins._
Monopoly expands, ever expands, till it ends by
bursting.--_P.J. Proudhon._
For this is the close of an era; we have political freedom;
next and right away is to come social
enfranchisement.--_Benjamin Kidd._
I think you realize, friend Jonathan, that the bottom principle of the
present capitalist system is that there must be one class owning the
land, mines, factories, railways, and other agencies of production,
but not using them; and another class, using the land and other means
of production, but not owning them.
Only those things are produced which there is a reasonable hope of
selling at a profit. Upon no other conditions will the owners of the
means of production consent to their being used. The worker who does
not own the things necessary to produce wealth must work upon the
terms imposed by the other fellow in most cases. The coal miner, not
owning the coal mine, must agree to work for wages. So must the
mechanic in the workshop and the mill-worker.
As a practical, sensible workingman, Jonathan, you know very well that
if anybody says the interests of these two classes are the same it is
a foolish and lying statement. You are a workingman, a wage-earner,
and you know that it is to your interest to get as much wages as
possible for the smallest amount of work. If you work by the day and
get, let us say, two dollars for ten hours' work, it would be a great
advantage to you if you could get your wages increased to three
dollars and your hours of labor to eight per day, wouldn't it? And if
you thought that you could get these benefits for the asking you would
ask for them, wouldn't you? Of course you would, being a sensible,
hard-headed American workingman.
Now, if giving these things would be quite as much to the advantage of
the company as to you, the company would be just as glad to give them
as you would be to receive them, wouldn't it? I am assuming, of
course, that the company knows its own interests just as well as you
and your fellow workmen know yours. But if you went to the officials
of the company and asked them to give you a dollar more for the two
hours' less work, they would not give it--unless, of course, you were
strong enough to fight and compel them to accept your terms. But they
would resist and you would have to fight, because your interests
clashed.
That is why trade unions are formed on the one side and employers'
associations upon the other. Society is divided by antagonistic
interests; into exploiters and exploited.
Politicians and preachers may cry out that there are no classes in
America, and they may even be foolish enough to believe it--for there
are lots of _very_ foolish politicians and preachers in the world! You
may even hear a short-sighted labor leader say the same thing, but you
know very well, my friend, that they are wrong. You may not be able to
confute them in debate, not having their skill in wordy warfare; but
your experience, your common sense, convince you that they are wrong.
And all the greatest political economists are on your side. I could
fill a volume with quotations from the writings of the most learned
political economists of all times in support of your position, but I
shall only give one quotation. It is from Adam Smith's great work,
_The Wealth of Nations_, and I quote it partly because no better
statement of the principle has ever been made by any writer, and
partly also because no one can accuse Adam Smith of being a "wicked
Socialist trying to set class against class." He says:
"The workmen desire to get as much, the masters to give as
little as possible. The former are disposed to combine in
order to raise, the latter in order to lower the wages of
labor.... Masters are always and everywhere in a sort of
tacit, but constant and uniform, combination, not to raise the
wages of labor above their actual rate. To violate this
combination is everywhere a most unpopular action, and a sort
of a reproach to a master among his neighbors and equals....
Masters too sometimes enter into particular combinations to
sink the wages of labor.... These are always conducted with
the utmost silence and secrecy, till the moment of execution."
That is very plainly put, Jonathan. Adam Smith was a great thinker and
an honest one. He was not afraid to tell the truth. I am going to
quote a little further what he says about the combinations of
workingmen to increase their wages:
"Such combinations, [i.e., to lower wages] however, are
frequently resisted by a contrary defensive combination of the
workmen; who sometimes too, without any provocation of this
kind, combine of their own accord to raise the price of labor.
Their usual pretenses are, sometimes the high price of
provisions; sometimes the great profit which their masters
make by their work. But whether these combinations be
offensive or defensive, they are always abundantly heard of.
In order to bring the point to a speedy decision, they have
always recourse to the loudest clamour, and sometimes to the
most shocking violence and outrage. They are desperate, and
act with the extravagance and folly of desperate men, who must
either starve, or frighten their masters into an immediate
compliance with their demands. The masters upon these
occasions are just as clamorous upon the other side, and never
cease to call aloud for the assistance of the civil
magistrate, and the rigorous execution of those laws which
have been enacted with so much severity against the
combinations of servants, laborers, and journeymen.
"But though in disputes with their workmen, masters must
generally have the advantage, there is however a certain rate,
below which it seems impossible to reduce, for any
considerable time, the ordinary wages even of the lowest
species of labor.
"A man must always live by his work, and his wages must at
least be sufficient to maintain him. They must even upon most
occasions be somewhat more; otherwise it would be impossible
for him to bring up a family, and the race of such workmen
could not last beyond the first generation."
Now, my friend, I know that some of your pretended friends, especially
politicians, will tell you that Adam Smith wrote at the time of the
American Revolution; that his words applied to England in that day,
but not to the United States to-day. I want you to be honest with
yourself, to consider candidly whether in your experience as a workman
you have found conditions to be, on the whole, just as Adam Smith's
words describe them. I trust your own good sense in this and
everything. Don't let the politicians frighten you with a show of
book learning: do your own thinking.
Capitalism began when a class of property owners employed other men to
work for wages. The tendency was for wages to keep at a level just
sufficient to enable the workers to maintain themselves and families.
They had to get enough for families, you see, in order to reproduce
their kind--to keep up the supply of laborers.
Competition was the law of life in the first period of capitalism.
Capitalists competed with each other for markets. They were engaged in
a mad scramble for profits. Foreign countries were attacked and new
markets opened up; new inventions were rapidly introduced. And while
the workers found that in normal conditions the employers were in what
Adam Smith calls "a tacit combination" to keep wages down to the
lowest level, and were obliged to combine into unions, there were
times when, owing to the fierce competition among the employers, and
the demand for labor being greatly in excess of the supply, wages went
up without a struggle owing to the fact that one employer would try to
outbid another. In other words, temporarily, the natural, "tacit
combination" of the employers, to keep down wages, sometimes broke
down.
Competition was called "the life of trade" in those days, and in a
sense it was so. Under its mighty urge, new continents were explored
and developed and brought within the circle of civilization. Sometimes
this was done by means of brutal and bloody wars, for capitalism is
never particular about the methods it adopts. To get profits is its
only concern, and though its shekels "sweat blood and dirt," to adapt
a celebrated phrase of Karl Marx, nobody cares. Under stress of
competition, also, the development of mechanical production went on
at a terrific pace; navigation was developed, so that the ocean became
as a common highway.
In short, Jonathan, it is no wonder that men sang the praises of
competition, that some of the greatest thinkers of the time looked
upon competition as something sacred. Even the workers, seeing that
they got higher wages when the keen and fierce competition created an
excessive demand for labor, joined in the adoration of competition as
a principle--but among themselves, in their struggles for better
conditions, they avoided competition as much as possible and combined.
Their instincts as wage-earners made them keen to see the folly of
division and competition among themselves.
So competition, considered in connection with the evolution of
society, had many good features. The competitive period was just as
"good" as any other period in history and no more "wicked" than any
other period.
But there was another side to the shield. As the competitive struggle
among individual capitalists went on the weakest were crushed to the
wall and fell down into the ranks of the wage workers. There was no
system in production. Word came to the commercial world that there was
a great market for certain manufactures in a foreign land and at once
hundreds and even thousands of factories were worked to their utmost
limit to meet that demand. The result was that in a little while the
thing was overdone: there was a glut in the market, often attended by
panic, stagnation and disaster. Rathbone Greg summed up the evils of
competition in the following words:
"Competition gluts our markets, enables the rich to take advantage of
the necessity of the poor, makes each man snatch the bread out of his
neighbor's mouth, converts a nation of brethren into a mass of
hostile units, and finally involves capitalists and laborers in one
common ruin."
The crises due to this unregulated production, and the costliness of
the struggles, led to the formation of joint-stock companies.
Competition was giving way before a stronger force, the force of
co-operation. There was still competition, but it was more and more
between giants. To adopt a very homely simile, the bigger fish ate up
the little ones so long as there were any, and then turned to a
struggle among themselves.
Another thing that forced the development of industry and commerce
away from competitive methods was the increasing costliness of the
machinery of production. The new inventions, first of steam-power and
later of electricity, involved an immense outlay, so that many persons
had to combine their capitals in one common fund.