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.
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, mustagree 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 foolishenough to believe it—for there are lots ofveryfoolish 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."
"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, arefrequently 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."
"Such combinations, [i.e., to lower wages] however, arefrequently 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.
This process of eliminating competition has gone on with remarkable swiftness, so that we have now the great Trust Problem. Everyone recognizes to-day that the trusts practically control the life of the nation. It is the supreme issue in our politics and a challenge to the heart and brain of the nation.
Fifty years ago Karl Marx, the great Socialist economist, made the remarkable prophecy that this condition would arise. He lived in the heyday of competition, when it seemed utter folly to talk about the end of competition. He analyzed the situation, pointed to the process of big capitalists crushing out the little capitalists, the union of big capitalists, and the inevitable drift toward monopoly. He predicted that the process would continue until the whole industry, the main agencies of production and distribution at any rate, would be centralized in a few great monopolies, controlled by a verysmall handful of men. He showed with wonderful clearness that capitalism, the Great Idea of buy cheap and sell dear, carried within itself the germs of its own destruction.
And, of course, the wiseacres laughed. The learned ignorance of the wiseacre always compels him to laugh at the man with an idea that is new. Didn't the wiseacres imprison Galileo? Haven't they persecuted the pioneers in all ages? But Time has a habit of vindicating the pioneers while consigning the scoffing wiseacres to oblivion. Fifty years is a short time in human evolution but it has sufficed to establish the right of Marx to an honored place among the pioneers.
More than twenty-five years after Marx made his great prediction, there came to this country on a visit Mr. H.M. Hyndman, an English economist who is also known as one of the foremost living exponents of Socialism. The intensity of the competitive struggle was most marked, but he looked below the surface and saw a subtle current, a drift toward monopoly, which had gone unnoticed. He predicted the coming of the era of great trusts and combines. Again the wiseacres in their learned ignorance laughed and derided. The amiable gentleman who plays the part of flunkey at the Court of St. James, in London, wearing plush knee breeches, silver-buckled shoes and powdered wig, a marionette in the tinseled show of King Edward's court, was one of the wiseacres. He was then editor of theNew York Tribune, and he declared that Mr. Hyndman was a "fool traveler" for making such a prediction. But in the very next year the Standard Oil Company was formed!
So we have the trust problem with us. Out of the bitter competitive struggle there has come a new condition, a new form of industrial ownership and enterprise.From the cradle to the grave we are encompassed by the trust.
Now, friend Jonathan, I need not tell you that the trusts have got the nation by the throat. You know it. But there is a passage, a question, in the letter you wrote me the other day from which I gather that you have not given the matter very close attention. You ask "How will the Socialists destroy the trusts which are hurting the people?"
I suppose that comes from your old associations with the Democratic Party. You think that it is possible to destroy the trusts, to undo the chain of social evolution, to go back twenty or fifty years to competitive conditions. You would restore competition. I have purposely gone into the historical development of the trust in order to show you how useless it would be to destroy the trusts and introduce competition again, even if that were possible. Now that you have mentally traced the origin of monopoly to its causes in competition, don't you see that if we could destroy the monopoly to-morrow and start fresh upon a basis of competition, the process of "big fish eat little fish" would begin again at once—for that is competition? And if the big ones eat the little ones up, then fight among themselves, won't the result be as before—that either one will crush the other, leaving a monopoly, or the competitors will join hands and agree not to fight, leaving monopoly again?
And, Jonathan, if there should be a return to the old-fashioned, free-for-all scramble for markets, would it be any better for the workers? Would there not be the same old struggle between the capitalists and the workers? Would not the workers still have to give much for little; to wear their lives away grinding out profits for the masters of their bread, of their very lives?Would there not be gluts as before, with panics, misery, unemployed armies sullenly parading the streets; idlers in mansions and toilers in hovels? You know very well that there would be all these, my friend, and I know that you are too sensible a fellow to think any longer about destroying the trusts. It cannot be done, Jonathan, and it would not be a good thing if it could be done.
I think, my friend, that you will see upon reflection that there are many excellent features about the trust which it would be criminal and foolish to destroy had we the power. Competition means waste, foolish and unnecessary waste. Trusts have been organized expressly to do away with the waste of men and natural resources. They represent economical production. When Mr. Perkins, of the New York Life Insurance Company, was testifying before the insurance investigating committee he gave expression to the philosophy of the trust movement by saying that, in the modern view, competition is the law of death and that co-operation and organization represent life and progress.
While the wage-workers are probably in many respects better off as a result of the trustification of industry, it would be idle to deny that there are many evils connected with it. No one who views the situation calmly can deny that the trusts exert an enormous power over the government of the country, that they are, in fact, the real government of the country, exercising far more control over the lives of the common people than the regularly constituted, constitutional government of the country does. It is also true that they can arbitrarily fix prices in many instances, so that the natural law of value is set aside and the workers are exploited as consumers, as purchasers of the things necessary to life, just as they are exploited as producers.
Of course, friend Jonathan, wages must meet the cost of living. If prices rise considerably, wages must sooner or later follow, and if prices fall wages likewise will fall sooner or later. But it is important to remember that when prices fall wages arequickto follow, while when prices soar higher and higher wages are veryslowto follow. That is why it wouldn't do us any good to have a law regulating prices, supposing that a law forcing down prices could be enacted and enforced. Wages would follow prices downward with wonderful swiftness. And that is why, also, we do need to become the masters of the wealth we produce. For wages climb upward with leaden feet, my friend, when prices soar with eagle wings. It is always the workers who are at a disadvantage in a system where one class controls the means of producing and distributing wealth.
But, friend Jonathan, that is due to the fact that the advantages of the trust form of industry are not used as well as they might be. They are all grasped by the master class. The trouble with the trust is simply this: the people as a whole do not share the benefits. We continue the same old wage system under the new forms of industry: we have not changed our mode of distributing the wealth produced so as to conform to the new modes of producing it. The heart of the economic conflict is right there.
We must find a remedy for this, Jonathan. Labor unionism is a good thing, but it is no remedy for this condition. It is a valuable weapon with, which to fight for better wages and shorter hours, and every workingman ought to belong to the union of his trade or calling. But unionism does not and cannot do away with the profit system; it cannot break the power of the trusts to extort monopoly prices from the people. To do thesethings we must bring into play the forces of government: we must vote a new status for the trust. The union is for the economic struggle of groups of workers day by day against the master class so long as the present class division exists. But that is not a solution of the problem. What we need to do is to vote the class divisions out of existence.We need to own the trusts, Jonathan!
This is the Socialist position. What is needed now is the harmonizing of our social relations with the new forms of production. When private property came into the primitive world in the form of slavery, social relations were changed and from a rude communism society passed into a system of individualism and class rule. When, later on, slave labor gave way before serf labor, the social relations were again modified to correspond. When capitalism came, with wage-paid labor as its basis, all the laws and institutions which stood in the way of the free development of the new principle were swept away; new social relations were established, new laws and institutions introduced to meet its needs.
To-day, in America, we are suffering because our social relations are not in harmony with the changed methods of producing wealth. We have got the laws and institutions which were designed to meet the needs of competitive industry. They suited those old conditions fairly well, but they do not suit the new.
In a former letter, you will remember, I likened our present suffering to a case of appendicitis, that society suffers from the trouble set up within by an organ which has lost its function and needs to be cut out. Perhaps I might better liken society to a woman in the travail of childbirth, suffering the pangs of labor incidental to the deliverance of the new life within her womb. The trustmarks the highest development of capitalist society: it can go no further.
The Old Order changeth, yielding place to new.
And the new order, waiting now for deliverance from the womb of the old, is Socialism, the fraternal state. Whether the birth of the new order is to be peaceful or violent and painful, whether it will be ushered in with glad shouts of triumphant men and women, or with the noise of civil strife, depends, my good friend, upon the manner in which you and all other workers discharge your responsibilities as citizens. That is why I am so anxious to set the claims of Socialism clearly before you: I want you to work for the peaceful revolution of society, Jonathan.
For the present, I am only going to ask you to read a little five cent pamphlet, by Gaylord Wilshire, calledThe Significance of the Trust, and a little book by Frederick Engels, calledSocialism, Utopian and Scientific. Later on, when I have had a chance to explain Socialism in a general way, and must then leave you to your own resources, I intend to make for you a list of books, which I hope you will be able to read.
You see, Jonathan, I remember always that you wrote me: "Whether Socialism is good or bad, wise or foolish,I want to know." The best way to know is to study the question for yourself.
Socialism is industrial democracy. It would put an end to the irresponsible control of economic interests, and substitute popular self-government in the industrial as in the political world.—Charles H. Vail.Socialism says that man, machinery and land must be brought together; that the toll gates of capitalism must be torn down, and that every human being's opportunity to produce the means with which to sustain life shall be considered as sacred as his right to live.—Allan L. Benson.Socialism means that all those things upon which the people in common depend shall by the people in common be owned and administered. It means that the tools of employment shall belong to their creators and users; that all production shall be for the direct use of the producers; that the making of goods for profit shall come to an end; that we shall all be workers together; and that all opportunities shall be open and equal to all men.—National Platform of the Socialist Party, 1904.Socialism does not consist in violently seizing upon the property of the rich and sharing it out amongst the poor.Socialism is not a wild dream of a happy land where the apples will drop off the trees into our open mouths, the fish come out of the rivers and fry themselves for dinner, and the looms turn out ready-made suits of velvet with golden buttons without the trouble of coaling the engine. Neither is it a dream of a nation of stained-glass angels, who never say damn, who always love their neighbors better than themselves, and who never need to work unless they wish to.—Robert Blatchford.
Socialism is industrial democracy. It would put an end to the irresponsible control of economic interests, and substitute popular self-government in the industrial as in the political world.—Charles H. Vail.
Socialism says that man, machinery and land must be brought together; that the toll gates of capitalism must be torn down, and that every human being's opportunity to produce the means with which to sustain life shall be considered as sacred as his right to live.—Allan L. Benson.
Socialism means that all those things upon which the people in common depend shall by the people in common be owned and administered. It means that the tools of employment shall belong to their creators and users; that all production shall be for the direct use of the producers; that the making of goods for profit shall come to an end; that we shall all be workers together; and that all opportunities shall be open and equal to all men.—National Platform of the Socialist Party, 1904.
Socialism does not consist in violently seizing upon the property of the rich and sharing it out amongst the poor.
Socialism is not a wild dream of a happy land where the apples will drop off the trees into our open mouths, the fish come out of the rivers and fry themselves for dinner, and the looms turn out ready-made suits of velvet with golden buttons without the trouble of coaling the engine. Neither is it a dream of a nation of stained-glass angels, who never say damn, who always love their neighbors better than themselves, and who never need to work unless they wish to.—Robert Blatchford.
By this time, friend Jonathan, you have, I hope, got rid of the notion that Socialism is a ready-made schemeof society which a few wise men have planned, and which their followers are trying to get adopted. I have spent some time and effort trying to make it perfectly plain to you that great social changes are not brought about in that fashion.
Socialism then, is a philosophy of human progress, a theory of social evolution, the main outlines of which I have already sketched for you. Because the subject is treated at much greater length in some of the books I have asked you to read, it is not necessary for me to elaborate the theory. It will be sufficient, probably, for me to restate, in a very few words, the main principles of that theory:
The present social system throughout the civilized world is not the result of deliberately copying some plan devised by wise men. It is the result of long centuries of growth and development. From our present position we look back over the blood-blotted pages of history, back to the ages before men began to write their history and their thoughts, through the centuries of which there is only faint tradition; we go even further back, to the very beginning of human existence, to the men-apes and the ape-men whose existence science has made clear to us, and we see the race engaged in a long struggle to
Move upward, working out the beastAnd let the ape and tiger die.
Move upward, working out the beastAnd let the ape and tiger die.
We look for the means whereby the progress of man has been made, and find that his tools have been, so to say, the ladder upon which he has risen in the age-long climb from bondage toward brotherhood, from being a brute armed with a club to the sovereign of the universe, controlling tides, harnessing winds, gathering the lightning in his hands and reaching to the farthest star.
We find in every epoch of that long evolution the means of producing wealth as the center of all, transforming government, laws, institutions and moral codes to meet their limitations and their needs. Nothing has ever been strong enough to restrain the economic forces in social evolution. When laws and customs have stood in the way of the economic forces they have been burst asunder as by some mighty leaven, or hurled aside in the cyclonic sweep of revolutions.
Have you ever gone into the country, Jonathan, and noticed an immense rock split and shattered by the roots of a tree, or perhaps by the might of an insignificant looking fungus? I have, many times, and I never see such a rock without thinking of its aptness as an illustration of this Socialist philosophy. A tiny acorn tossed by the wind finds lodgment in some small crevice of a rock which has stood for thousands of years, a rock so big and strong that men choose it as an emblem of the Everlasting. Soon the warm caresses of the sun and the rain wake the latent life in the acorn; the shell breaks and a frail little shoot of vegetable life appears, so small that an infant could crush it. Yet that weak and puny thing grows on unobserved, striking its rootlets farther into the crevice of the rock. And when there is no more room for it to grow,it does not die, but makes room for itself by shattering the rock.
Economic forces are like that, my friend, theymustexpand and grow. Nothing can long restrain them. A new method of producing wealth broke up the primitive communism of prehistoric man; another change in the methods of production hurled the feudal barons from power and forced the establishment of a new social system. And now, we are on the eve of another great change—nay, we are in the very midst of the change.Capitalism is doomed! Not because men think it is wicked, but because the development of the great industrial trusts compels a new political and social system to meet the needs of the new mode of production.
Something has got to give way to the irresistible growing force! A change is inevitable. And the change must be to Socialism. That is the belief of the Socialists, Jonathan, which I am trying to make you understand. Mind, I do not say that the coming change will be thelastchange in human evolution, that there will be no further development after Socialism. I do not know what lies beyond, nor to what heights humanity may attain in future years. It may be that thousands or millions of years from now the race will have attained to such a state of growth and power that the poorest and weakest man then alive will be so much superior to the greatest men alive to-day, our best scholars, poets, artists, inventors and statesmen, as these are superior to the cave-man. It may be. I do not know. Only a fool would seek to set mete and bound to man's possibilities.
We are concerned only with the change that is imminent, the change that is now going on before our eyes. We say that the outcome of society's struggle with the trust problem must be the control of the trust by society. That the outcome of the struggle between the master class and the slave class, between thewealth makersand thewealth takers, must be the victory of the makers.
Throughout all history, ever since the first appearance of private property—of slavery and land ownership—there have been class struggles. Slave and slave-owner, serf and baron, wage-slave and capitalist—so the classes have struggled. And what has been the issue, thus far? Chattel slavery gave way to serfdom, in which theoppression was lighter and the oppressed gained some measure of human recognition. Serfdom, in its turn, gave way to the wages system, in which, despite many evils, the oppressed class lives upon a far higher plane than the slave and serf classes from whence it sprang. Now, with the capitalists unable to hold and manage the great machinery of production which has been developed, with the workers awakened to their power, armed with knowledge, with education, and, above all, with the power to make the laws, the government, what they will, can anybody doubt what the outcome will be?
It is impossible to believe that we shall continue to leave the things upon which all depend in the hands of a few members of society. Now that production has been so organized that it can be readily controlled and directed from a few centers, it is possible for the first time in the history of civilization for men to live together in peace and plenty, owning in common the things which must be used in common, which are needed in common; leaving to private ownership the things which can be privately owned without injury to society.And that is Socialism.
I have explained the philosophy of social evolution upon which modern Socialism is based as clearly as I could do in the space at my disposal. I want you to think it out for yourself, Jonathan. I want you to get the enthusiasm and the inspiration which come from a realization of the fact that progress is the law of Nature; that mankind is ever marching upward and onward; that Socialism is the certain inheritor of all the ages of struggle, suffering and accumulation.
And above all, I want you to realize the position of your class, my friend, and your duty to stand with yourclass, not only as a union man, but as a voter and a citizen.
As a system of political economy I need say little of Socialism, beyond recounting some of the things we have already considered. A great many learned ignorant men, like Mr. Mallock, for instance, are fond of telling the workers that the economic teachings of Socialism are unsound; that Karl Marx was really a very superficial thinker whose ideas have been entirely discredited.
Now, Karl Marx has been dead twenty-five years, Jonathan. His great work was done a generation ago. Being just a human being, like the rest of us, it is not to be supposed that he was infallible. There are some things in his writings which cannot be accepted without modification. But what does that matter, so long as the essential principles are sound and true? When we think of a great man like Lincoln we do not trouble about the little things—the trivial mistakes he made; we consider only the big things, the noble things, the true things, he said and did.
But there are lots of little-minded, little-souled people in the world who have eyes only for the little flaws and none at all for the big, strong and enduring things in a man's work. I never think of these critics of Marx without calling to mind an incident I witnessed two or three years ago at an art exhibition in New York. There was placed on exhibition a famous Greek marble, a statue of Aphrodite. Many people went to see it and on several occasions when I saw it I observed that some people had been enough stirred to place little bunches of flowers at the feet of the statue as a tender tribute to its beauty. But one day I was greatly annoyed by the presence of a critical woman who had discovered a little flawin the statue, where a bit had been broken off. She chattered about it like an excited magpie. Poor soul, she had no eyes for the beauty of the thing, the mystery which shrouded its past stirred no emotions in her breast.She was only just big enough in mind and soul to see the flaw.I pitied her, Jonathan, as I pity many of the critics who write learned books to prove that the economic principles of Socialism are wrong. I cannot read such a book but a vision rises before my mind's eye of that woman and the statue.
I believe that the great fundamental principles laid down by Karl Marx cannot be refuted, because they are true. But it is just as well to bear in mind that Socialism does not depend upon Karl Marx. If all his works could be destroyed and his name forgotten there would still be a Socialist movement to contend with. The question is: Are the economic principles of Socialism as it is taught to-day true or false?
The first principle is that wealth in modern society consists in an abundance of things which can be sold for profit.
So far as I know, there is no economist of note who makes any objection to that statement. I know that sometimes political economists confuse their readers and themselves by a loose use of the term wealth, including in it many things which have nothing at all to do with economics. Good health and cheerful spirits, for example, are often spoken of as wealth and there is a certain primal sense in which that word is rightly applied to them. You remember the poem by Charles Mackay—
Cleon hath a million acres, ne'er a one have I;Cleon dwelleth in a palace, in a cottage I;Cleon hath a dozen fortunes, not a penny I;Yet the poorer of the twain is Cleon, and not I.
Cleon hath a million acres, ne'er a one have I;Cleon dwelleth in a palace, in a cottage I;Cleon hath a dozen fortunes, not a penny I;Yet the poorer of the twain is Cleon, and not I.
In a great moral sense that is all true, Jonathan, but from the point of view of political economy, Cleon of the million acres, the palace and the dozen fortunes must be regarded as the richer of the two.
The second principle is that wealth is produced by labor applied to natural resources.
The only objections to this, the only attempts ever made to deny its truth, have been based upon a misunderstanding of the meaning of the word "labor." If a man came to you in the mill one day, and said: "See that great machine with all its levers and springs and wheels working in such beautiful harmony. It was made entirely by manual workers, such as moulders, blacksmiths and machinists; no brain workers had anything to do with it," you would suspect that man of being a fool, Jonathan. You know, even though you are no economist, that the labor of the inventor and of the men who drew the plans of the various parts was just as necessary as the labor of the manual workers. I have already shown you, when discussing the case of Mr. Mallock, that Socialists have never claimed that wealth was produced by manual labor alone, and that brain labor is always unproductive. All the great political economists have included both mental and manual labor in their use of the term, that being, indeed, the only sensible use of the word known to our language.
It is very easy work, my friend, for a clever juggler of words to erect a straw man, label the dummy "Socialism" and then pull it to pieces. But it is not very useful work, nor is it an honest intellectual occupation. I say to you, friend Jonathan, that when writers like Mr. Mallock contend that "ability," as distinguished from labor, must be considered as a principal factor in production, they must be regarded as being either mentallyweak or deliberate perverters of the truth. You know, and every man of fair sense knows, that ability in the abstract never could produce anything at all.
Take Mr. Edison, for example. He is a man of wonderful ability—one of the greatest men of this or any other age. Suppose Mr. Edison were to say: "I know I have a great deal ofability; I think that I will just sit down with folded hands and depend upon the mere possession of my ability to make a living for me"—what do you think would happen? If Mr. Edison were to go to some lonely spot, without tools or food, making up his mind that he need not work; that he could safely depend upon his ability to produce food for him while he sat idle or slept, he would starve. Ability is like a machine, Jonathan. If you have the finest machine in the world and keep it in a garret it will produce nothing at all. You might as well have a pile of stones there as the machine.
But connect the machine with the motor and place a competent man in charge of it, and the machine at once becomes a means of production. Ability is likewise useless and impotent unless it is expressed in the form of either manual or mental labor. And when it is so embodied in labor, it is quite useless and foolish to talk of ability as separate from the labor in which it is embodied.
The third principle of Socialist economics is that the value of things produced for sale is, under normal conditions, determined by the amount of labor socially necessary, on an average, for their production. This is called the labor theory of value.
Many people have attacked this theory, Jonathan, and it has been "refuted," "upset," "smashed" and "destroyed" by nearly every hack writer on economics living. But, for some reason, the number of people whoaccept it is constantly increasing in spite of the number of times it has been "exposed" and "refuted." It is worth our while to consider it briefly.
You will observe that I have made two important qualifications in the above statement of the theory: first, that the law applies only to things produced for sale, and second, that it is only under normal conditions that it holds true. Many very clever men try to prove this law of value wrong by citing the fact that articles are sometimes sold for enormous prices, out of all proportion to the amount of labor it took to produce them in the first instance. For example, it took Shakespeare only a few minutes to write a letter, we may suppose, but if a genuine letter in the poet's handwriting were offered for sale in one of the auction rooms where such things are sold it would fetch an enormous price; perhaps more than the yearly salary of the President of the United States.
The value of the letter would not be due to the amount of labor Shakespeare devoted to the writing of it, but to itsrarity. It would have what the economists call a "scarcity value." The same is true of a great many other things, such as historical relics, great works of art, and so on. These things are in a class by themselves. But they constitute no important part of the business of modern society. We are not concerned with them, but with the ordinary, every day production of goods for sale. The truth of this law of value is not to be determined by considering these special objects of rarity, but the great mass of things produced in our workshops and factories.
Now, note the second qualification. I say that the value of things produced for saleunder normal conditionsis determined by the amount of laborsociallynecessary, on an average, for their production. Some of the clever, learnedly-ignorant writers on Socialism think that they have completely destroyed this theory of value when they have only misrepresented it and crushed the image of their own creating.
It does not mean that if a quick, efficient workman, with good tools, takes a day to make a coat, while another workman, who is slow, clumsy and inefficient, and has only poor tools, takes six days to make a table that the table will be worth six coats upon the market. That would be a foolish proposition, Jonathan. It would mean that if one workman made a coat in one day, while another workman took two days to make exactly the same kind of coat, that the one made by the slow, inefficient workman would bring twice as much as the other, even though they were so much alike that they could not be distinguished one from the other.
Only an ignoramus could believe that. No Socialist writer ever made such a foolish claim, yet all the attacks upon the economic principles of Socialism are based upon that idea!
Now that I have told you what it doesnotmean, let me try to make plain just what itdoesmean. I shall use a very simple illustration which you can readily apply to the whole of industry for yourself. If it ordinarily takes a day to make a coat, if that is the average time taken, and it also takes on an average a day to make a table, then, also on an average, one coat will be worth just as much as one table. But I must explain that it is not possible to bring the production of coats and tables down to the simple measurement. When the tailor takes the piece of cloth to cut out the coat, he has in that material something that already embodies human labor. Somebody had to weave that cloth upon a loom.Before that somebody had to make the loom. And before that loom could make cloth somebody had to raise sheep and shear them to get the wool. And before the carpenter could make the table, somebody had to go into the forest and fell a tree, after which somebody had to bring that tree, cut up into planks or logs, to the carpenter. And before he could use the lumber somebody had to make the tools with which he worked.
I think you will understand now why I placed emphasis on the words "socially necessary." It is not possible for the individual buyer to ascertain just how much social labor is contained in a coat or a table, but their values are fixed by the competition and higgling which is the law of capitalism. "It jest works out so," as an old negro preacher said to me once.
I have said that competition is the law of capitalism. All political economists recognize that as true. But we have, as I have explained in a former letter, come to a point where capitalism has broken away from competition in many industries. We have a state of affairs under which the economic laws of competitive society do not apply. Monopoly prices have always been regarded as exceptions to economic law.
If this technical economic discussion seems a little bit difficult, I beg you nevertheless to try and master it, Jonathan. It will do you good to think out these questions. Perhaps I can explain more clearly what is meant by monopoly conditions being exceptional. All through the Middle Ages it was the custom for governments to grant monopolies to favored subjects, or to sell them in order to raise ready money. Queen Elizabeth, for instance, granted and sold many such monopolies.
A man who had a monopoly of something which nearly everybody had to use could fix his own price, the onlylimit being the people's patience or their ability to pay. The same thing is true of patented articles and of monopolies granted to public service corporations. Generally, it is true, in the franchises of these corporations, nowadays, there is a price limit fixed beyond which they must not go, but it is still true that the normal competitive economic law has been set aside by the creation of monopoly.
When a trust is formed, or when there is a price agreement, or what is politely called "an understanding among gentlemen" to that effect, a similar thing happens. We have monopoly prices.
This is an important thing for the working class, though it is sometimes forgotten. How much your wages will secure in the way of necessities is just as important to you as the amount of wages you get. In other words, the amount you can get in comforts and commodities for use is just as important as the amount you can get in dollars and cents. Sometimes money wages increase while real wages decrease. I could fill a book with statistics to show this, but I will only quote one example. Professor Rauschenbusch cites it in his excellent book,Christianity and the Social Crisis, a book I should like you to read, Jonathan. He quotesDun's Review, a standard financial authority, to the effect that what $724 would buy in 1897 it took $1013 to buy in 1901.
I know that I could make your wife see the importance of this, my friend. She would tell you that when from time to time you have announced that your wages were to be increased five or ten per cent. she has made plans for spending the money upon little home improvements, or perhaps for laying it aside for the dreaded "rainy day." Perhaps she thought of getting a new rug, or a new sideboard for the dining-room; or perhaps it was apiano for your daughter, who is musical, she had set her heart on getting. The ten per cent. increase seemed to make it all so easy and certain! But after a little while she found that somehow the ten per cent. did not bring the coveted things; that, although she was just as careful as could be, she couldn't save, nor get the things she hoped to get.
Often you and I have heard the cry of trouble: "I don't know how or why it is, but though I get ten per cent. more wages I am no better off than before."
The Socialist theory of value is all right, my friend, and has not been disturbed by the assaults made upon it by a host of little critics. But Socialists have always known that the laws of competitive society do not apply to monopoly, and that the monopolist has an increased power to exploit and oppress the worker. That is one of the chief reasons why we demand that the great monopolies be transformed into common, or social, property.
The fourth principle of Socialist economics is that the wages of the workers represent only a part of the value of their labor product. The remainder is divided among the non-producers in rent, interest and profit. The fortunes of the rich idlers come from the unpaid-for labor of the working class. This is the great theory of "surplus value," which economists are so fond of attacking.
I am not going to say much about the controversy concerning this theory, Jonathan. In the first place, you are not an economist, and there is a great deal in the discussion which is wholly irrelevant and unprofitable; and, in the second place, you can study the question for yourself. There are excellent chapters upon the subject inVail's Principles of Scientific Socialism, Boudin'sTheTheoretical System of Karl Marx, and Hyndman'sEconomics of Socialism. You will also find a simple exposition of the subject in mySocialism, A Summary and Interpretation of Socialist Principles. It will also be well to readWage-Labor and Capital, a five cent booklet by Karl Marx.
But you do not need to be an economist to understand the essential principles of this theory of surplus value and to judge of its truth. I have never flattered you, Jonathan, as you know; I am in earnest when I say that I am content to leave the matter to your own judgment. I attach more importance to your decision, based upon a plain, matter-of-fact observation of actual life, than to the opinion of many a very learned economist cloistered away from the real world in a musty atmosphere of books and mental abstractions. So think it out for yourself, my friend.
You know that when a man takes a job as a wage-worker, he enters into a contract to give something in return for a certain amount of money. What is it that he thus sells? Not his actual labor, but his power and will to labor. In other words, he undertakes to exert himself in a manner desired by the capitalist who employs him for so much an hour, so much a day, or so much a week as the case may be.
Now, how are the wages fixed? What determines the amount a man gets for his labor? There are several factors. Let us consider them one by one:
First, the man must have enough to keep himself alive and able to work. If he does not get that much he will die, or be unfit to work. Second, in order that the race may be maintained, and that there may be a constant supply of labor, it is necessary that men as a rule should have families. So, as we saw in a quotation from AdamSmith in an earlier letter, the wages must, on an average, be enough to keep, not only the man himself but those dependent upon him. These are the bottom requirements of wages.
Now, the tendency is for wages to keep somewhere near this bottom level. If nothing else interfered they would always tend to that level. First of all, there is no scientific organization of the labor force of the world. Sometimes the demand for labor in a particular trade exceeds the supply, and then wages rise. Sometimes the supply is greater than the demand, and then wages drop toward the bottom level. If the man looking for a job is so fortunate as to know that there are many places open to him, he will not accept low wages; on the other hand, if the employer knows that there are ten men for every job, he will not pay high wages. So, as with the prices of things in general, supply and demand enter into the question of the price of labor in any given time or place.
Then, also, by combination workingmen can sometimes raise their wages. They can bring about a sort of monopoly-price for their labor-power. It is not an absolute monopoly-price, however, for the reason that, almost invariably, there are men outside of the unions, whose competition has to be withstood. Also, the means of production and the accumulated surplus belong to the capitalists so that they can generally starve the workers into submission, or at least compromise, in any struggle aiming at the establishment of monopoly-prices for labor-power.
But there is one thing the workers can never do, except by destroying capitalism:they cannot get wages equal to the full value of their product. That would destroy the capitalist system, which is based uponprofit-making. All the luxury and wealth of the non-producers is wrung from the labor of the producers. You can see that for yourself, Jonathan, and I need not argue it further.
I do not care very much whether you call the part of the wealth which goes to the non-producers "surplus value," or whether you call it something else. Thenameis not of great importance to us. We care only for the reality. But I do want you to get firm hold of the simple fact that when an idler gets a dollar he has not earned, some worker must get a dollar less than he has earned.
Don't be buncoed by the word-jugglers who tell you that the profits of the capitalists are the "fruits of abstinence," or the "reward of managing ability," sometimes also called the "wages of superintendence."
These and other attempted explanations of capitalists' profits are simply old wives' fables, Jonathan. Let us look for a minute at the first of these absurd attempts to explain away the fact that profit is only another name for unpaid-for labor. You know very well that abstinence never yet produced anything. If I have a dollar in my pocket and I say to myself, "I will not spend this dollar: I will abstain from using it," the dollar does not increase in any way. It remains just a dollar and no more. If I have a loaf of bread or a bottle of wine and say to myself, "I will not use this bread, or this wine, but will keep it in the cup-board," you know very well that I shall not get any increase as a result of my abstinence. I do not get anything more than I actually save.
Now, I am perfectly willing that any man shall have all that he can save out of his own earnings. If no man had more there would be no need of talking about"legislation to limit fortunes," no need of protest against "swollen fortunes."
But now suppose, friend Jonathan, that while I have the dollar, representing my "abstinence," in my pocket, a man who has not a dollar comes to me and says, "I really must have a dollar to get food for my wife and baby, or they will die. Lend me a dollar until next week and I will pay you back two dollars." If I lend him the dollar and next week take his two dollars, that is what is called the reward of my abstinence. But in truth it is something quite different. It is usury. Just because I happen to have something the other fellow has not got, and which he must have, he is compelled to pay me interest. If he also had a dollar in his pocket, I could get no interest from him.
It would be just the same if I had not abstained from anything. If, for example, I had found the dollar which some other careful fellow had lost, I could still get interest upon it. Or if I had inherited money from my father, it might happen that, so far from being abstemious and thrifty, I had been most extravagant, while the fellow who came to borrow had been very thrifty and abstemious, but still unable to provide for his family. Yet I should make him pay me interest.
As a matter of fact, my friend, the rich have not abstained from anything. They have not accumulated riches out of their savings, through abstaining from buying things. On the contrary, they have bought and enjoyed the costliest things. They have lived in fine houses, worn costly clothing, eaten the choicest food, sent their sons and daughters to the most expensive schools and colleges.
From all of these things the workers have abstained, Jonathan. They have abstained from living in fine housesand lived in poor houses; they have abstained from wearing costly clothes and worn the cheapest and poorest clothes; they have abstained from choice food and eaten only food that is coarse and cheap; they have abstained from sending their sons and daughters to expensive schools and colleges and sent them only to the lower grades of the public schools. If abstinence were a source of wealth, the working people of every country would be rich, for they have abstained from nearly everything that is worth while.
There is one thing the rich have abstained from, however, which the poor have indulged in freely—and that iswork. I never heard of a man getting rich through his own labor.
Even the inventor does not get rich by means of his own labor. To begin with, there is no invention which is purely an individual undertaking. I was talking the other day with one of the world's great inventors upon this subject. He was explaining to me how he came to invent a certain machine which has made his name famous. He explained that for many years men had been facing a great difficulty and other inventors had been trying to devise some means of meeting it. He had, therefore, to begin with, the experience of thousands of men during many years to give him a clear idea of what was required. And that was a great thing to start with, Jonathan.
Secondly, he had the experiments of all the numerous other inventors to guide him: he could profit by their failures. Not only did he know what to avoid, because that great fund of others' experience, but he also got many useful ideas from the work of some of the men who were on the right line without knowing it. "I couldnot have invented it if it were not for the men who went before me," he said.
Another point, Jonathan: In the wonderful machine the inventor was discussing there are wheels and levers and springs. Somebody had to invent the wheel, the lever and the spring before there could be a machine at all. Who was it, I wonder! Do you know who made the first wheel, or the first lever? Of course you don't! Nobody does. These things were invented thousands of years ago, when the race still lived in barbarism. Each age has simply extended their usefulness and efficiency. So it is wrong to speak of any invention as the work of one man. Into every great invention go the experience and experiments of countless others.
So much for that side of the question. Now, let us look at another side of the question which is sometimes lost sight of. A man invents a machine: as I have shown you, it is as much the product of other men's brains as of his own. It is really a social product. He gets a patent upon the machine for a certain number of years, and that patent gives him the right to say to the world "No one can use this machine unless he pays me a royalty." He does not use the machine himself and keep what he can make in competition with others' means of production. If no one chooses to use his machine, then, no matter how good a thing it may be, he gets nothing from his invention. So that even the inventor is no exception to my statement that no man ever gets rich by his own labor.
The inventor is not the real inventor of the machine: he only carries on the work which others began thousands of years ago. He takes the results of other people's inventive genius and adds his quota. But heclaims the whole. And when he has done his work and added his contribution to the age-long development of mechanical modes of production, he must depend again upon society, upon the labor of others.
To return to the question of abstinence: I would not attempt to deny that some men have saved part of their income and by investing it secured the beginnings of great fortunes. I know that is so. But the fortunes came out of the labor of other people. Somebody had to produce the wealth, that is quite evident. And if the person who got it was not that somebody, the producer, it is as clear as noonday that the producer must have produced something he did not get.
No, my friend, the notion that profits are the reward of abstinence and thrift is stupid in the extreme. The people who enjoy the profit-incomes of the world, are, with few exceptions, people who have not been either abstemious or thrifty.
But perhaps you will say that, while this may be true of the people who to-day are getting enormous incomes from rent, interest or profit, we must go further back; that we must go back to the beginning of things when their fathers or their grandfathers began by investing their savings.
To that I have no objection whatever, provided only that you are willing to go back, not merely to the beginning of the individual fortune, but to the beginning of the system. If your grandfather, or great-grandfather, had been what is termed a thrifty and industrious man, working hard, living poor, working his wife and little ones in one long grind, all in order to save money to invest in business, you might now be a rich man; that is, supposing you were heir to their possessions.
That is not at all certain, for it is a fact that most ofthe men who have hoarded their individual savings and then invested them have been ruined and fooled. In the case of our railroads, for example, the great majority of the early investors of savings went bankrupt. They were swallowed up by the bigger fish, Jonathan. But assume it otherwise, assume that the grandfather of some rich man of the present day laid the foundation of the family fortune in the manner described, don't you see that the system of robbing the worker of his product was already established; that you must go back to the beginning of thesystem?
And when you trace capital back to its origin, my friend, you will always come to war or robbery. You can trace it back to the forcible taking of the land away from the people. When the machine came, bringing with it an industrial revolution, it was by the wealthy and the ruthless that the machine was owned, not by the poor toilers. In other words, my friends, there was simply a continuance of the old rule of a class of overlords, under another name.
If the abstinence theory is foolish, even more foolish is the notion that profits are the reward of managing ability, the wages of superintendence. Under primitive capitalism there was some justification for this view.
It was impossible to deny that the owner of a factory did manage it, that he was the superintendent, entitled as such to some reward. It was easy enough to say that he got a disproportionate share, but who was to decide just what his fair share would be?
But when capitalism developed and became impersonal that idea of the nature of profits was killed. When companies were organized they employed salaried managers,whose salaries were paid before profits were reckoned at all. To-day I can own shares in China andAustralia while living all the time in the United States. Even though I have never been to those countries, nor seen the property I am a shareholder in, I shall get my profits just the same. A lunatic may own shares in a thousand companies and, though he is confined in a madhouse, his shares of stock will still bring a profit to his guardians in his name.
When Mr. Rockefeller was summoned to court in Chicago last year, he stated on oath that he could not tell anything about the business of the Standard Oil Company, not having had anything to do with the business for several years past. But he gets his profits just the same, showing how foolish it is to talk of profits as being the reward of managing ability and the wages of superintendence.
Now, Jonathan, I have explained to you pretty fully what Socialism is when considered as a philosophy of social evolution. I have also explained to you what Socialism is when considered as a system of economy. I could sum up both very briefly by saying that Socialism is a philosophy of social evolution which teaches that the great force which has impelled the race onward, determining the rate and direction of social progress, has come from man's tools and the mode of production in general: that we are now living in a period of transition, from capitalism to Socialism, motived by the economic forces of our time. Socialism is a system of economics, also. Its substance may be summed up in a sentence as follows: Labor applied to natural resources is the source of the wealth of capitalistic society, but the greatest part of the wealth produced goes to non-producers, the producers getting only a part, in the form of wages—hence the paradox of wealthy non-producers and penurious producers.
I have explained to you also that Socialism is not a scheme. There remains still to be explained, however, another aspect of Socialism, of more immediate interest and importance and interest. I must try to explain Socialism as an ideal, as a forecast of the future. You want to know, having traced the evolution of society to a point where everything seems to be in transition, where a change seems imminent, just what the nature of that change will be.
I must leave that for another letter, friend Jonathan, for this is over-long already. I shall not try to paint a picture of the future for you, to tell you in detail what that future will be like. I do not know: no man can know. He who pretends to know is either a fool or a knave, my friend. But there are some things which, I believe, we may premise with reasonable certainty These things I want to discuss in my next letter. Meantime, there are lots of things in this letter to think about.
And I want you to think, Jonathan Edwards!