| Chapter 22
| 0 | |
| We had made an appointment to meet the ladies at the
dining-hall for dinner, after which, having some engagement,
they left us sitting at table there, discussing our wine and cigars
with a multitude of other matters.
| 1 | |
| "Doctor," said I, in the course of our talk, "morally speaking,
your social system is one which I should be insensate not to
admire in comparison with any previously in vogue in the world,
and especially with that of my own most unhappy century. If I
were to fall into a mesmeric sleep tonight as lasting as that other
and meanwhile the course of time were to take a turn backward
instead of forward, and I were to wake up again in the nineteenth
century, when I had told my friends what I had seen,
they would every one admit that your world was a paradise of
order, equity, and felicity. But they were a very practical people,
my contemporaries, and after expressing their admiration for the
moral beauty and material splendor of the system, they would
presently begin to cipher and ask how you got the money to
make everybody so happy; for certainly, to support the whole
nation at a rate of comfort, and even luxury, such as I see around
me, must involve vastly greater wealth than the nation produced
in my day. Now, while I could explain to them pretty nearly
everything else of the main features of your system, I should
quite fail to answer this question, and failing there, they would
tell me, for they were very close cipherers, that I had been
dreaming; nor would they ever believe anything else. In my day,
I know that the total annual product of the nation, although it
might have been divided with absolute equality, would not have
come to more than three or four hundred dollars per head, not
very much more than enough to supply the necessities of life
with few or any of its comforts. How is it that you have so much
more?"
| 2 | |
| "That is a very pertinent question, Mr. West," replied Dr.
Leete, "and I should not blame your friends, in the case you
supposed, if they declared your story all moonshine, failing a
satisfactory reply to it. It is a question which I cannot answer
exhaustively at any one sitting, and as for the exact statistics to
bear out my general statements, I shall have to refer you for them
to books in my library, but it would certainly be a pity to leave
you to be put to confusion by your old acquaintances, in case of
the contingency you speak of, for lack of a few suggestions.
| 3 | |
| "Let us begin with a number of small items wherein we
economize wealth as compared with you. We have no national,
state, county, or municipal debts, or payments on their account.
We have no sort of military or naval expenditures for men or
materials, no army, navy, or militia. We have no revenue service,
no swarm of tax assessors and collectors. As regards our judiciary,
police, sheriffs, and jailers, the force which Massachusetts alone
kept on foot in your day far more than suffices for the nation
now. We have no criminal class preying upon the wealth of
society as you had. The number of persons, more or less
absolutely lost to the working force through physical disability,
of the lame, sick, and debilitated, which constituted such a
burden on the able-bodied in your day, now that all live under
conditions of health and comfort, has shrunk to scarcely perceptible
proportions, and with every generation is becoming more
completely eliminated.
| 4 | |
| "Another item wherein we save is the disuse of money and the
thousand occupations connected with financial operations of all
sorts, whereby an army of men was formerly taken away from
useful employments. Also consider that the waste of the very
rich in your day on inordinate personal luxury has ceased,
though, indeed, this item might easily be over-estimated. Again,
consider that there are no idlers now, rich or poor--no drones.
| 5 | |
| "A very important cause of former poverty was the vast waste
of labor and materials which resulted from domestic washing
and cooking, and the performing separately of innumerable
other tasks to which we apply the cooperative plan.
| 6 | |
| "A larger economy than any of these--yes, of all together--is
effected by the organization of our distributing system, by which
the work done once by the merchants, traders, storekeepers, with
their various grades of jobbers, wholesalers, retailers, agents,
commercial travelers, and middlemen of all sorts, with an
excessive waste of energy in needless transportation and
interminable handlings, is performed by one tenth the number of
hands and an unnecessary turn of not one wheel. Something of
what our distributing system is like you know. Our statisticians
calculate that one eightieth part of our workers suffices for all
the processes of distribution which in your day required one
eighth of the population, so much being withdrawn from the
force engaged in productive labor."
| 7 | |
| "I begin to see," I said, "where you get your greater wealth."
| 8 | |
| "I beg your pardon," replied Dr. Leete, "but you scarcely do as
yet. The economies I have mentioned thus far, in the aggregate,
considering the labor they would save directly and indirectly
through saving of material, might possibly be equivalent to the
addition to your annual production of wealth of one half its
former total. These items are, however, scarcely worth mentioning
in comparison with other prodigious wastes, now saved,
which resulted inevitably from leaving the industries of the
nation to private enterprise. However great the economies your
contemporaries might have devised in the consumption of
products, and however marvelous the progress of mechanical
invention, they could never have raised themselves out of the
slough of poverty so long as they held to that system.
| 9 | |
| "No mode more wasteful for utilizing human energy could be
devised, and for the credit of the human intellect it should be
remembered that the system never was devised, but was merely a
survival from the rude ages when the lack of social organization
made any sort of cooperation impossible."
| 10 | |
| "I will readily admit," I said, "that our industrial system was
ethically very bad, but as a mere wealth-making machine, apart
from moral aspects, it seemed to us admirable."
| 11 | |
| "As I said," responded the doctor, "the subject is too large to
discuss at length now, but if you are really interested to know
the main criticisms which we moderns make on your industrial
system as compared with our own, I can touch briefly on some of
them.
| 12 | |
| "The wastes which resulted from leaving the conduct of
industry to irresponsible individuals, wholly without mutual
understanding or concert, were mainly four: first, the waste by
mistaken undertakings; second, the waste from the competition
and mutual hostility of those engaged in industry; third, the
waste by periodical gluts and crises, with the consequent
interruptions of industry; fourth, the waste from idle capital and
labor, at all times. Any one of these four great leaks, were all the
others stopped, would suffice to make the difference between
wealth and poverty on the part of a nation.
| 13 | |
| "Take the waste by mistaken undertakings, to begin with. In
your day the production and distribution of commodities being
without concert or organization, there was no means of knowing
just what demand there was for any class of products, or what
was the rate of supply. Therefore, any enterprise by a private
capitalist was always a doubtful experiment. The projector
having no general view of the field of industry and consumption,
such as our government has, could never be sure either what the
people wanted, or what arrangements other capitalists were
making to supply them. In view of this, we are not surprised to
learn that the chances were considered several to one in favor of
the failure of any given business enterprise, and that it was
common for persons who at last succeeded in making a hit to
have failed repeatedly. If a shoemaker, for every pair of shoes he
succeeded in completing, spoiled the leather of four or five pair,
besides losing the time spent on them, he would stand about the
same chance of getting rich as your contemporaries did with
their system of private enterprise, and its average of four or five
failures to one success.
| 14 | |
| "The next of the great wastes was that from competition. The
field of industry was a battlefield as wide as the world, in which
the workers wasted, in assailing one another, energies which, if
expended in concerted effort, as to-day, would have enriched all.
As for mercy or quarter in this warfare, there was absolutely no
suggestion of it. To deliberately enter a field of business and
destroy the enterprises of those who had occupied it previously,
in order to plant one's own enterprise on their ruins, was an
achievement which never failed to command popular admiration.
Nor is there any stretch of fancy in comparing this sort of
struggle with actual warfare, so far as concerns the mental agony
and physical suffering which attended the struggle, and the
misery which overwhelmed the defeated and those dependent on
them. Now nothing about your age is, at first sight, more
astounding to a man of modern times than the fact that men
engaged in the same industry, instead of fraternizing as comrades
and co-laborers to a common end, should have regarded each
other as rivals and enemies to be throttled and overthrown. This
certainly seems like sheer madness, a scene from bedlam. But
more closely regarded, it is seen to be no such thing. Your
contemporaries, with their mutual throat-cutting, knew very well
what they were at. The producers of the nineteenth century were
not, like ours, working together for the maintenance of the
community, but each solely for his own maintenance at the expense
of the community. If, in working to this end, he at the
same time increased the aggregate wealth, that was merely
incidental. It was just as feasible and as common to increase
one's private hoard by practices injurious to the general welfare.
One's worst enemies were necessarily those of his own trade, for,
under your plan of making private profit the motive of production,
a scarcity of the article he produced was what each
particular producer desired. It was for his interest that no more
of it should be produced than he himself could produce. To
secure this consummation as far as circumstances permitted, by
killing off and discouraging those engaged in his line of industry,
was his constant effort. When he had killed off all he could, his
policy was to combine with those he could not kill, and convert
their mutual warfare into a warfare upon the public at large by
cornering the market, as I believe you used to call it, and putting
up prices to the highest point people would stand before going
without the goods. The day dream of the nineteenth century
producer was to gain absolute control of the supply of some
necessity of life, so that he might keep the public at the verge of
starvation, and always command famine prices for what he
supplied. This, Mr. West, is what was called in the nineteenth
century a system of production. I will leave it to you if it does
not seem, in some of its aspects, a great deal more like a system
for preventing production. Some time when we have plenty of
leisure I am going to ask you to sit down with me and try to
make me comprehend, as I never yet could, though I have
studied the matter a great deal how such shrewd fellows as your
contemporaries appear to have been in many respects ever came
to entrust the business of providing for the community to a class
whose interest it was to starve it. I assure you that the wonder
with us is, not that the world did not get rich under such a
system, but that it did not perish outright from want. This
wonder increases as we go on to consider some of the other
prodigious wastes that characterized it.
| 15 | |
| "Apart from the waste of labor and capital by misdirected
industry, and that from the constant bloodletting of your
industrial warfare, your system was liable to periodical convulsions,
overwhelming alike the wise and unwise, the successful
cut-throat as well as his victim. I refer to the business crises at
intervals of five to ten years, which wrecked the industries of the
nation, prostrating all weak enterprises and crippling the strongest,
and were followed by long periods, often of many years, of
so-called dull times, during which the capitalists slowly regathered
their dissipated strength while the laboring classes starved
and rioted. Then would ensue another brief season of prosperity,
followed in turn by another crisis and the ensuing years of
exhaustion. As commerce developed, making the nations mutually
dependent, these crises became world-wide, while the
obstinacy of the ensuing state of collapse increased with the area
affected by the convulsions, and the consequent lack of rallying
centres. In proportion as the industries of the world multiplied
and became complex, and the volume of capital involved was
increased, these business cataclysms became more frequent, till,
in the latter part of the nineteenth century, there were two years
of bad times to one of good, and the system of industry, never
before so extended or so imposing, seemed in danger of collapsing
by its own weight. After endless discussions, your economists
appear by that time to have settled down to the despairing
conclusion that there was no more possibility of preventing or
controlling these crises than if they had been drouths or hurricanes.
It only remained to endure them as necessary evils, and
when they had passed over to build up again the shattered
structure of industry, as dwellers in an earthquake country keep
on rebuilding their cities on the same site.
| 16 | |
| "So far as considering the causes of the trouble inherent in
their industrial system, your contemporaries were certainly correct.
They were in its very basis, and must needs become more
and more maleficent as the business fabric grew in size and
complexity. One of these causes was the lack of any common
control of the different industries, and the consequent impossibility
of their orderly and coordinate development. It inevitably
resulted from this lack that they were continually getting out of
step with one another and out of relation with the demand.
| 17 | |
| "Of the latter there was no criterion such as organized
distribution gives us, and the first notice that it had been
exceeded in any group of industries was a crash of prices,
bankruptcy of producers, stoppage of production, reduction of
wages, or discharge of workmen. This process was constantly
going on in many industries, even in what were called good
times, but a crisis took place only when the industries affected
were extensive. The markets then were glutted with goods, of
which nobody wanted beyond a sufficiency at any price. The
wages and profits of those making the glutted classes of goods
being reduced or wholly stopped, their purchasing power as
consumers of other classes of goods, of which there were no
natural glut, was taken away, and, as a consequence, goods of
which there was no natural glut became artificially glutted, till
their prices also were broken down, and their makers thrown out
of work and deprived of income. The crisis was by this time
fairly under way, and nothing could check it till a nation's
ransom had been wasted.
| 18 | |
| "A cause, also inherent in your system, which often produced
and always terribly aggravated crises, was the machinery of
money and credit. Money was essential when production was in
many private hands, and buying and selling was necessary to
secure what one wanted. It was, however, open to the obvious
objection of substituting for food, clothing, and other things a
merely conventional representative of them. The confusion of
mind which this favored, between goods and their representative,
led the way to the credit system and its prodigious illusions.
Already accustomed to accept money for commodities, the
people next accepted promises for money, and ceased to look at
all behind the representative for the thing represented. Money
was a sign of real commodities, but credit was but the sign of a
sign. There was a natural limit to gold and silver, that is, money
proper, but none to credit, and the result was that the volume of
credit, that is, the promises of money, ceased to bear any
ascertainable proportion to the money, still less to the commodities,
actually in existence. Under such a system, frequent and
periodical crises were necessitated by a law as absolute as that
which brings to the ground a structure overhanging its centre of
gravity. It was one of your fictions that the government and the
banks authorized by it alone issued money; but everybody who
gave a dollar's credit issued money to that extent, which was as
good as any to swell the circulation till the next crises. The great
extension of the credit system was a characteristic of the latter
part of the nineteenth century, and accounts largely for the
almost incessant business crises which marked that period.
Perilous as credit was, you could not dispense with its use, for,
lacking any national or other public organization of the capital
of the country, it was the only means you had for concentrating
and directing it upon industrial enterprises. It was in this way a
most potent means for exaggerating the chief peril of the private
enterprise system of industry by enabling particular industries to
absorb disproportionate amounts of the disposable capital of the
country, and thus prepare disaster. Business enterprises were
always vastly in debt for advances of credit, both to one another
and to the banks and capitalists, and the prompt withdrawal of
this credit at the first sign of a crisis was generally the precipitating
cause of it.
| 19 | |
| "It was the misfortune of your contemporaries that they had
to cement their business fabric with a material which an
accident might at any moment turn into an explosive. They were
in the plight of a man building a house with dynamite for
mortar, for credit can be compared with nothing else.
| 20 | |
| "If you would see how needless were these convulsions of
business which I have been speaking of, and how entirely they
resulted from leaving industry to private and unorganized management,
just consider the working of our system. Overproduction
in special lines, which was the great hobgoblin of your day,
is impossible now, for by the connection between distribution
and production supply is geared to demand like an engine to the
governor which regulates its speed. Even suppose by an error of
judgment an excessive production of some commodity. The
consequent slackening or cessation of production in that line
throws nobody out of employment. The suspended workers are
at once found occupation in some other department of the vast
workshop and lose only the time spent in changing, while, as for
the glut, the business of the nation is large enough to carry any
amount of product manufactured in excess of demand till the
latter overtakes it. In such a case of over-production, as I have
supposed, there is not with us, as with you, any complex
machinery to get out of order and magnify a thousand times the
original mistake. Of course, having not even money, we still less
have credit. All estimates deal directly with the real things, the
flour, iron, wood, wool, and labor, of which money and credit
were for you the very misleading representatives. In our calcula-
tion of cost there can be no mistakes. Out of the annual
product the amount necessary for the support of the people is
taken, and the requisite labor to produce the next year's
consumption provided for. The residue of the material and labor
represents what can be safely expended in improvements. If the
crops are bad, the surplus for that year is less than usual, that is
all. Except for slight occasional effects of such natural causes,
there are no fluctuations of business; the material prosperity of
the nation flows on uninterruptedly from generation to generation,
like an ever broadening and deepening river.
| 21 | |
| "Your business crises, Mr. West," continued the doctor, "like
either of the great wastes I mentioned before, were enough,
alone, to have kept your noses to the grindstone forever; but I
have still to speak of one other great cause of your poverty, and
that was the idleness of a great part of your capital and labor.
With us it is the business of the administration to keep in
constant employment every ounce of available capital and labor
in the country. In your day there was no general control of either
capital or labor, and a large part of both failed to find employment.
`Capital,' you used to say, `is naturally timid,' and it would
certainly have been reckless if it had not been timid in an epoch
when there was a large preponderance of probability that any
particular business venture would end in failure. There was no
time when, if security could have been guaranteed it, the
amount of capital devoted to productive industry could not have
been greatly increased. The proportion of it so employed
underwent constant extraordinary fluctuations, according to the
greater or less feeling of uncertainty as to the stability of the
industrial situation, so that the output of the national industries
greatly varied in different years. But for the same reason that the
amount of capital employed at times of special insecurity was far
less than at times of somewhat greater security, a very large
proportion was never employed at all, because the hazard of
business was always very great in the best of times.
| 22 | |
| "It should be also noted that the great amount of capital
always seeking employment where tolerable safety could be
insured terribly embittered the competition between capitalists
when a promising opening presented itself. The idleness of
capital, the result of its timidity, of course meant the idleness of
labor in corresponding degree. Moreover, every change in the
adjustments of business, every slightest alteration in the
condition of commerce or manufactures, not to speak of the
innumerable business failures that took place yearly, even in the
best of times, were constantly throwing a multitude of men out
of employment for periods of weeks or months, or even years. A
great number of these seekers after employment were constantly
traversing the country, becoming in time professional vagabonds,
then criminals. `Give us work!' was the cry of an army of the
unemployed at nearly all seasons, and in seasons of dullness in
business this army swelled to a host so vast and desperate as to
threaten the stability of the government. Could there conceivably
be a more conclusive demonstration of the imbecility of the
system of private enterprise as a method for enriching a nation
than the fact that, in an age of such general poverty and want of
everything, capitalists had to throttle one another to find a safe
chance to invest their capital and workmen rioted and burned
because they could find no work to do?
| 23 | |
| "Now, Mr. West," continued Dr. Leete, "I want you to bear in
mind that these points of which I have been speaking indicate
only negatively the advantages of the national organization of
industry by showing certain fatal defects and prodigious imbecilities
of the systems of private enterprise which are not found in
it. These alone, you must admit, would pretty well explain why
the nation is so much richer than in your day. But the larger half
of our advantage over you, the positive side of it, I have yet
barely spoken of. Supposing the system of private enterprise in
industry were without any of the great leaks I have mentioned;
that there were no waste on account of misdirected effort
growing out of mistakes as to the demand, and inability to
command a general view of the industrial field. Suppose, also,
there were no neutralizing and duplicating of effort from competition.
Suppose, also, there were no waste from business panics
and crises through bankruptcy and long interruptions of industry,
and also none from the idleness of capital and labor.
Supposing these evils, which are essential to the conduct of
industry by capital in private hands, could all be miraculously
prevented, and the system yet retained; even then the superiority
of the results attained by the modern industrial system of
national control would remain overwhelming.
| 24 | |
| "You used to have some pretty large textile manufacturing
establishments, even in your day, although not comparable with
ours. No doubt you have visited these great mills in your time,
covering acres of ground, employing thousands of hands, and
combining under one roof, under one control, the hundred
distinct processes between, say, the cotton bale and the bale of
glossy calicoes. You have admired the vast economy of labor as
of mechanical force resulting from the perfect interworking with
the rest of every wheel and every hand. No doubt you have
reflected how much less the same force of workers employed in
that factory would accomplish if they were scattered, each man
working independently. Would you think it an exaggeration to
say that the utmost product of those workers, working thus
apart, however amicable their relations might be, was increased
not merely by a percentage, but many fold, when their efforts
were organized under one control? Well now, Mr. West, the
organization of the industry of the nation under a single control,
so that all its processes interlock, has multiplied the total
product over the utmost that could be done under the former
system, even leaving out of account the four great wastes
mentioned, in the same proportion that the product of those
millworkers was increased by cooperation. The effectiveness of
the working force of a nation, under the myriad-headed leadership
of private capital, even if the leaders were not mutual
enemies, as compared with that which it attains under a single
head, may be likened to the military efficiency of a mob, or a
horde of barbarians with a thousand petty chiefs, as compared
with that of a disciplined army under one general--such a
fighting machine, for example, as the German army in the time
of Von Moltke."
| 25 | |
| "After what you have told me," I said, "I do not so much
wonder that the nation is richer now than then, but that you are
not all Croesuses."
| 26 | |
| "Well," replied Dr. Leete, "we are pretty well off. The rate at
which we live is as luxurious as we could wish. The rivalry of
ostentation, which in your day led to extravagance in no way
conducive to comfort, finds no place, of course, in a society of
people absolutely equal in resources, and our ambition stops at
the surroundings which minister to the enjoyment of life. We
might, indeed, have much larger incomes, individually, if we
chose so to use the surplus of our product, but we prefer to
expend it upon public works and pleasures in which all share,
upon public halls and buildings, art galleries, bridges, statuary,
means of transit, and the conveniences of our cities, great
musical and theatrical exhibitions, and in providing on a vast
scale for the recreations of the people. You have not begun to
see how we live yet, Mr. West. At home we have comfort, but
the splendor of our life is, on its social side, that which we share
with our fellows. When you know more of it you will see where
the money goes, as you used to say, and I think you will agree
that we do well so to expend it."
| 27 | |
| "I suppose," observed Dr. Leete, as we strolled homeward
from the dining hall, "that no reflection would have cut the men
of your wealth-worshiping century more keenly than the suggestion
that they did not know how to make money. Nevertheless
that is just the verdict history has passed on them. Their system
of unorganized and antagonistic industries was as absurd
economically as it was morally abominable. Selfishness was their
only science, and in industrial production selfishness is suicide.
Competition, which is the instinct of selfishness, is another word
for dissipation of energy, while combination is the secret of
efficient production; and not till the idea of increasing the
individual hoard gives place to the idea of increasing the common
stock can industrial combination be realized, and the
acquisition of wealth really begin. Even if the principle of share
and share alike for all men were not the only humane and
rational basis for a society, we should still enforce it as economically
expedient, seeing that until the disintegrating influence of
self-seeking is suppressed no true concert of industry is possible."
| 28 | |
|