[24]Industrial Commission Report, Vol. I, p. 794.
[24]Industrial Commission Report, Vol. I, p. 794.
[25]Ibid., p. 101.
[25]Ibid., p. 101.
[26]Ibid., p. 982.The results of the work of this Commission are well summed up in Ind. Com. Rep., Vol. I, Pt. I, p. 39, by Professor Jenks; and the waste eliminated by trusts still more compendiously treated in "Government," Vol. II, p. 543, by the author.
[26]Ibid., p. 982.
The results of the work of this Commission are well summed up in Ind. Com. Rep., Vol. I, Pt. I, p. 39, by Professor Jenks; and the waste eliminated by trusts still more compendiously treated in "Government," Vol. II, p. 543, by the author.
[27]See N.Y.Tribune, Jan. 1, 1905, p. 2, column 2. Ibid., Jan. 2, 1905, p. 11, column 1.
[27]See N.Y.Tribune, Jan. 1, 1905, p. 2, column 2. Ibid., Jan. 2, 1905, p. 11, column 1.
[28]"Socialism and Social Reform," by R.T. Ely, p. 134.
[28]"Socialism and Social Reform," by R.T. Ely, p. 134.
[29]See N.Y.Tribune, Jan. 1, 1905, p. 2, column 2. Ibid., Jan. 2, 1905, p. 11, column 1.
[29]See N.Y.Tribune, Jan. 1, 1905, p. 2, column 2. Ibid., Jan. 2, 1905, p. 11, column 1.
[30]Report of the Industrial Commission, 1900. Vol. I, p. 199.
[30]Report of the Industrial Commission, 1900. Vol. I, p. 199.
[31]Report of the Industrial Commission, Vol. I, 1900, p. 121.
[31]Report of the Industrial Commission, Vol. I, 1900, p. 121.
[32]Monde Economique, Feb. 20, 1897.
[32]Monde Economique, Feb. 20, 1897.
[33]July 19, 1909.
[33]July 19, 1909.
[34]"Unemployment: A Problem of Industry," by W.H. Beveridge and others. (Longmans.)
[34]"Unemployment: A Problem of Industry," by W.H. Beveridge and others. (Longmans.)
[35]Ibid., p. 61.
[35]Ibid., p. 61.
[36]"Unemployment: A Problem of Industry," by W.H. Beveridge and others.
[36]"Unemployment: A Problem of Industry," by W.H. Beveridge and others.
[37]Ibid., p. 63.
[37]Ibid., p. 63.
[38]N.Y.Times, Oct. 2, 1908.
[38]N.Y.Times, Oct. 2, 1908.
[39]"Unemployment." W.H. Beveridge, p. 87.
[39]"Unemployment." W.H. Beveridge, p. 87.
[40]Ibid., p. 91.
[40]Ibid., p. 91.
[41]"Unemployment." W.H. Beveridge, p. 87.
[41]"Unemployment." W.H. Beveridge, p. 87.
[42]Ibid., p. 98. See also "Problems of Unemployment in the London Building Trades." N.B. Dearles (1908, J.M. Dent). Cf. pp. 87-8.
[42]Ibid., p. 98. See also "Problems of Unemployment in the London Building Trades." N.B. Dearles (1908, J.M. Dent). Cf. pp. 87-8.
[43]Book II, Chapter I.
[43]Book II, Chapter I.
[44]Mr. Beveridge denies this in one place, p. 21; but himself produces proof of it later, p. 35.
[44]Mr. Beveridge denies this in one place, p. 21; but himself produces proof of it later, p. 35.
[45]Financial Chronicle, Sept. 26, 1908.
[45]Financial Chronicle, Sept. 26, 1908.
[46]August, 1908.
[46]August, 1908.
[47]Beveridge, "Unemployment," p. 21.
[47]Beveridge, "Unemployment," p. 21.
[48]Ibid., p. 35.
[48]Ibid., p. 35.
[49]Beveridge, "Unemployment," p. 65.
[49]Beveridge, "Unemployment," p. 65.
[50]The managers of Trusts have pointed out that in order to keep their highly skilled men, they have to sell often at a loss; and they give this as the reason for what is called "dumping" their goods into foreign markets. In other words, in order not to lower prices in America during periods of depression due to overproduction, they sell their goods at a loss abroad.—Industrial Commission, Vol. I, p. 282,
[50]The managers of Trusts have pointed out that in order to keep their highly skilled men, they have to sell often at a loss; and they give this as the reason for what is called "dumping" their goods into foreign markets. In other words, in order not to lower prices in America during periods of depression due to overproduction, they sell their goods at a loss abroad.—Industrial Commission, Vol. I, p. 282,
[51]Beveridge, "Unemployment," p. 182.
[51]Beveridge, "Unemployment," p. 182.
[52]Mr. Roosevelt in theOutlook, 1909, p. 622.
[52]Mr. Roosevelt in theOutlook, 1909, p. 622.
[53]P. 24.
[53]P. 24.
[54]Americana, Vol. I, Subj. Adulteration.
[54]Americana, Vol. I, Subj. Adulteration.
[55]Encyclopædia Britannica, Vol. I, p. 51.
[55]Encyclopædia Britannica, Vol. I, p. 51.
[56]An act to amend the laws of adulteration of food, drinks, and drugs, 1872.
[56]An act to amend the laws of adulteration of food, drinks, and drugs, 1872.
[57]"Mass and Class," by W.J. Ghent, p. 180-200.
[57]"Mass and Class," by W.J. Ghent, p. 180-200.
[58]"The Health Department." A pamphlet published by the City Club (1903), p. 23.
[58]"The Health Department." A pamphlet published by the City Club (1903), p. 23.
[59]Eighteenth Annual Report of the Ohio Dairy and Food Commission (1903), p. 8.
[59]Eighteenth Annual Report of the Ohio Dairy and Food Commission (1903), p. 8.
[60]Address of Dr. W.C. Mitchell of the Colorado State Board of Health, before the Portland Pure Food Convention (1902). Journal of Proceedings of the Sixth Annual Convention of the National Association of State Dairy and Food Departments, held at Portland, Ore., pp. 378-383.
[60]Address of Dr. W.C. Mitchell of the Colorado State Board of Health, before the Portland Pure Food Convention (1902). Journal of Proceedings of the Sixth Annual Convention of the National Association of State Dairy and Food Departments, held at Portland, Ore., pp. 378-383.
[61]"Portland Proceedings," p. 469.
[61]"Portland Proceedings," p. 469.
[62]Ohio Report (1898), p. 10.
[62]Ohio Report (1898), p. 10.
[63]"The Study of Textiles," by Miss Nellie Crooks, Teachers College, Columbia University, 1908.
[63]"The Study of Textiles," by Miss Nellie Crooks, Teachers College, Columbia University, 1908.
[64]Encyclopædia Britannica, Vol. I, Subj. Adulteration.
[64]Encyclopædia Britannica, Vol. I, Subj. Adulteration.
Under the system of free competition in the beginning and middle of the last century, every investor who saw a profit in refining oil or sugar, or making steel, put up a refinery or factory. The aim of every factory was to manufacture the largest amount possible and sell it at the highest price possible; and this is what Herbert Spencer[65]and the Manchester School regard as the ideal system of production. Now let us see just what happens as a result of this system of unlimited competition.
Every manufacturer and refiner has to find purchasers for his product. This effort to find purchasers is called in the trade, "getting the market."
The expression "getting the market" covers all the expenses attending the bringing of goods to the attention of the public, and they may be roughly divided into two principal categories—advertising and commercial travellers. The public little appreciates the enormous cost which attends the work of finding a purchaser. Mr. Bradley, after a careful calculation, estimates that "somewhere between the distiller and the consumer in this country forty millions of dollars are lost; this goes primarily to the attempt to secure trade."[66]Mr. Dowe[67]the President of the Commercial Travellers' National League, testifies that 35,000 salesmen have been thrown out of employment by the organization of trusts, and 25,000 reduced to two-thirds of their previous salaries. This would represent a loss of $60,000,000 in salaries on a basis of $1200 each. He cites, as instances of trusts that have dismissed salesmen, the baking powder, bicycle, chair, paper-bag, rubber, tin-plate, steel and rod, sugar, coffee, thread and type-founders' combinations. Not only do trusts dismiss salesmen, they substitute for salesmen who, prior to the organization of the trust had been earning $4000 to $5000 a year, cheaper salesmen who receive $18 a week. He also estimates that the dismissal of commercial travellers means a loss to railways of about $250 per day, 240 days in the year; in all, $25,000,000. The loss to hotels is about as much, and"many hotels are likely to become bankrupt if any more travellers are taken off."
Another waste attending the competitive system results from "cross freights," the double freight a refiner sometimes pays for hauling oil from the well, or sugar from the nearest seaboard and back over exactly the same ground, when refined, to the customer. So also the steel manufacturer sometimes pays freight for hauling ore to the coal mine or coal to the ore, and back, after smelting, to the customer.
This waste resulting from cross freights is only a small part of a similar waste that results from competition in the task of distribution—or retail trade.
We are all familiar with the amazing results obtained by the national enterprise known as the Post Office, and how, for the insignificant sum of two cents, a letter written in New York can be delivered in an incredibly short space of time in San Francisco, and even perhaps more incredibly in the heart of the Rocky Mountains.
Let us consider for a moment the cost of doing this were letters distributed throughout the country in the same way as our other commodities, as for example, milk, coal, or bread. It would be interesting to calculate how many hundred dealers in milk there are in New York[68]or London, equipped with their own horses, wagons, and men, each engaged in delivering milk all over the city; add to these the thousands distributing in like manner bread, and the thousands distributing coal, and so onwith butter, eggs, meat, fish, vegetables, and all other things that enter into our daily consumption.
Every block of houses is served with milk by this large number of milk dealers instead of by one, as would be the case if the distribution of milk were in the hands of one agency; so every block is furnished with butter, eggs, meat, fish, and vegetables by this large number of dealers in butter, eggs, meat, fish, and vegetables, instead of by one, and so on, through every article that enters into our daily use.
Compare with this the economy of time, labor, and expense effected by the Government Post Office through sorting letters beforehand according to streets, and confining the distribution in any one street to a single carrier who distributes the letters with the greatest economy of time and labor, from door to door.
No practical business man would be guilty of the stupidity of putting a hundred men to do the work that could be done just as well by a single man; and yet, this is exactly the stupidity of which the competitive system is guilty. Let us consider the unnecessary number of butcher shops in the city of New York.[69]
Before methods of communication had attained their present development, it was necessary that there should be butcher shops in every block to satisfy the needs of the people in the block. But to-day, the telephone service permits of ordering meat at a great distance, and the automobile permits of this meat being rapidly delivered to the consumer. The best housekeepers residing downtown to-day go for their meat to a butcher who lives in Harlem. Now there is no reason why thisHarlem butcher should not furnish all the meat to the island of Manhattan, or indeed to all in Greater New York. But there is a reason why under our competitive system this should not take place, and this is the stupidity of butchers in particular and the stupidity of the community at large. Most butchers believe that they can make most money by cheating their customers; and the public at large believe all butchers equally dishonest and therefore deal with the butcher nearest them. This stupidity is to a great extent justified. The art of the butcher consists in finding out to which customers he can sell third-class meat at first-class prices;[70]and as a rule, he is so successful in doing this that no butcher is ever known to fail. On the contrary, they all grow rich. This being the rule, the public is justified in giving up the expectation of being honestly served, so that it is only the most intelligent housewives who discover that there are butchers who do not have dishonest methods. Thus the stupidity of butchers and public tends to encourage the multiplicity of shops and keeps in the butcher business an enormously larger number than is necessary. If now we take into consideration that what is true of butchers is true of almost every dealer in the articles of food we consume, we shall appreciate how much waste of human effort there is in this business of distribution. But all this waste, encouraging stupidity in the customer and dishonesty in the retailer, is endorsed because it "makes character!"
Last but not least is the loss of by-products that inevitably results from manufacturing upon anything less than a gigantic scale.
The managers of the Standard Oil Trust testify that among the waste products capable of being utilized in sufficiently large refineries are gasoline, paraffine, lubricating oil, vaseline, naphtha, aniline dyes, and no less than two hundred drugs; and that the total value of these waste products is actually as great as that of the oil itself.[71]
Is or is not the contention with which this chapter started, justified? It was charged that the competitive system is stupid because wasteful and disorderly, and that it was unnecessarily immoral, unjust, and cruel. The testimony of men recognized as the highest authorities has been produced to demonstrate its wastefulness:
Waste of capital owing to bankruptcy, to working at irregular efficiency, to frequent change of dimension, to cost of "getting the market," to cross freights, to anarchy of distribution, to loss of by-products;
Waste of human energy in the work of competition; and above all in unemployment leading to vagrancy and pauperism.
And we need produce no testimony to prove things so obvious as the immorality, injustice, and cruelty of overemployment and unemployment and the necessary results thereof: drunkenness, disease, pauperism, prostitution, insanity, and crime.
One word only still needs explanation: It has been stated that this immorality, injustice, and cruelty are "unnecessary." It is useless to rail at these things if they are necessary. Nature is often immoral, unjust and cruel. The survival of the few fit and the corresponding sacrifice of the many unfit has no justification in morality. Death, deformity, and disease are often both unjust andcruel. Yet against these last we are in great part helpless. It is not enough to show that the competitive system results in evil; we have to demonstrate that these evils are avoidable; and that our remedy for them will not involve still greater evils. This belongs to the final chapters on Socialism; and is referred to here only to assure the reader that it has not been overlooked.
Sufficient emphasis, however, has not yet been put upon the lack of order that characterizes the competitive system.
[65]"A Plea for Liberty," p. 17:"Under our existing voluntary coöperation with its free contracts and its competition, production and distribution need no official oversight. Demand and supply, and the desire of each man to gain a living by supplying the needs of his fellows, spontaneously evolve that wonderful system whereby a great city has its food daily brought round to all doors or stored at adjacent shops; has clothing for its citizens everywhere at hand in multitudinous varieties; has its houses and furniture and fuel ready made or stocked in each locality; and has mental pabulum from halfpenny papers, hourly hawked round, to weekly shoals of novels, and less abundant books of instruction, furnished without stint for small payments. And throughout the kingdom, production as well as distribution is similarly carried on with the smallest amount of superintendence which proves efficient; while the quantities of the numerous commodities required daily in each locality are adjusted without any other agency than the pursuit of profit."
[65]"A Plea for Liberty," p. 17:
"Under our existing voluntary coöperation with its free contracts and its competition, production and distribution need no official oversight. Demand and supply, and the desire of each man to gain a living by supplying the needs of his fellows, spontaneously evolve that wonderful system whereby a great city has its food daily brought round to all doors or stored at adjacent shops; has clothing for its citizens everywhere at hand in multitudinous varieties; has its houses and furniture and fuel ready made or stocked in each locality; and has mental pabulum from halfpenny papers, hourly hawked round, to weekly shoals of novels, and less abundant books of instruction, furnished without stint for small payments. And throughout the kingdom, production as well as distribution is similarly carried on with the smallest amount of superintendence which proves efficient; while the quantities of the numerous commodities required daily in each locality are adjusted without any other agency than the pursuit of profit."
[66]Report of the Industrial Commission, pp. 829-831, Vol. I, 1900.
[66]Report of the Industrial Commission, pp. 829-831, Vol. I, 1900.
[67]Ibid., pp. 27-36.
[67]Ibid., pp. 27-36.
[68]This work has been in part eliminated by combination. But the economies resulting therefrom have all gone to the combinations. The consumer pays just as much as he did before.
[68]This work has been in part eliminated by combination. But the economies resulting therefrom have all gone to the combinations. The consumer pays just as much as he did before.
[69]Trow's Business Directory of New York city, 1909, lists about 4000 retail butcher shops in Manhattan and The Bronx. There are about 275 postal stations in the same territory.
[69]Trow's Business Directory of New York city, 1909, lists about 4000 retail butcher shops in Manhattan and The Bronx. There are about 275 postal stations in the same territory.
[70]All good housekeepers know this by experience. I know it from the butchers themselves, who explained it in the course of an effort to arrange a combination of butchers in Paris.
[70]All good housekeepers know this by experience. I know it from the butchers themselves, who explained it in the course of an effort to arrange a combination of butchers in Paris.
[71]Testimony of Mr. Archbold (pp. 570-571) in the Report of the Industrial Commission, Vol. I, 1900.
[71]Testimony of Mr. Archbold (pp. 570-571) in the Report of the Industrial Commission, Vol. I, 1900.
Nature is both orderly and disorderly. She is orderly, for example, in the general succession of her seasons, in the average rainfall, the average sunshine. She is orderly in the regular drawing of water from the ocean to the hills and the return of water from the hills to the ocean. But Nature is extremely disorderly in her detail. Some years rainfall is deficient and men starve because of drouth. Other years the sunshine is insufficient and men starve because of rain. The beneficent flow of water from the hills to the ocean is attended by disorder which is often calamitous; the river swells to a torrent in one place and spreads out to unwholesome marshes in another.
The power of man to profit by the order of Nature and to adjust its disorder is an attribute that makes man almost divine; for this power exerts as great influence over the soul of man as over the matter of Nature. Man has demonstrated his control over Nature by protecting himself against deficiency of water through reservoirs, and against excess of rain through drainage; he has robbed torrents of their terrors by dykes, and made them his servants by irrigation; he drains the swamp and waters the desert. In one respect only has he failed to exercise as yet sufficient control; namely, the competitive system. The competitive system is applauded by Herbert Spencer because he finds it in Nature. But Naturedoes not proceed only upon the competitive plan. She furnishes us with the beehive and anthill as types of coöperation, from which man can not only learn a lesson, but receive a warning; for the evils that attend the coöperative plan of the beehive are almost as great as those that attend the competitive or predatory system.[72]What man then has to do is not blindly to follow Nature either as respects her competitive system or her coöperative system; but to do in this direction what he has done in others—profit by what is good and orderly in Nature and suppress what is evil and disorderly in it.
The intelligent business man has been at work in suppressing the evils of the competitive system. He has found the waste and disorder attending unlimited competition so abominable that he has suppressed competition to the utmost possible by the organization of trusts. It has been pointed out that the disorder attending our production and distribution gives rise to anarchy in both these departments of industry. As long as every man is free to produce exactly what he chooses—what he thinks will benefit him, there is no rational relation between supply and demand.
This process is going on in every industry. Capital rushes away from business where there is no profit to business where there is profit. The result is that the capitalist generally discovers a demand for an article too late to profit by it, and does not discover that thereis no demand for an article until he is ruined by the discovery. The boasted "fluidity of capital" causes it to pour from one industry to another in obedience to what is called "the market"; and of all the despotisms that the folly of man has subjected him to, none for stupidity and pitilessness approaches the market. So long as there was no large-enough combination of capital to acquire knowledge of the supply and demand that determines market price or to any extent control it, no man, however intelligent, could tell when prices were going to rise and when to fall. And although the older economists loved to dwell upon the fluidity of labor as well as upon the fluidity of capital, they failed to take account of the bankruptcy that attends the one or the appalling conditions that attend the other. For when the supply of labor is large and factories are running at low capacity; when men and women are seeking employment, and the demand for labor is small, the effect of this law is to reduce wages below the rate necessary to support life; the unemployed are then reduced to a choice between the almshouse and starvation.
This evil consequence is a matter over which isolated employers have little or no control; for the very same cause that reduces wages reduces also the price of goods. It is because the demand for goods is small that the manufacturer has to run his factory at a reduced capacity; and the demand being small, the manufacturer cannot get a remunerative price for his goods. Now the thing that reduces prices is competition, and the thing that reduces wages is competition, and the main source of every financial, commercial, and industrial disaster is competition. Employer and employee are alike subjected to the levelling principle. The moment a particular manufacture is found to be profitable, and thereforeable to pay a high rate of wages, new factories are started and wages reduced by the competition of workingmen. The flow to this industry, therefore, of both capital and labor, inevitably reduces not only wages by the direct competition between workingmen, but also the profit out of which high wages were originally paid.
Employer, therefore, and employee are both slaves of the market; the employer cannot get more than the market price for his goods, and out of this he has to pay for his raw material, the cost of running the factory, and the wages of his men. He cannot reduce the price of raw material nor the cost of running the factory—rent, fuel, etc.; these too are determined by the market. The only thing he can reduce is wages: so he is driven to reduce wages or close his factory, for he cannot long run his factory at a loss.
And so anarchy of production and anarchy of distribution lead inevitably, as all anarchy does, to despotism—the despotism of the market.
Now trusts are an attempt of capital to escape from the tyranny of the market, to eliminate the waste of competition and bring order in the place of disorder by making supply proportionate to demand. The testimony of John D. Rockefeller before the Industrial Commission is illuminating on this subject. In answer to Question 9, he says that he "ascribes the success of the Standard Oil to its consistent policy to make thevolume of its business large." To Question 10, he says he did this "by coöperation, or what is the same thing, combination." But the necessity of keeping the volume of the business large made it indispensable to extend the market. Hesays "Dependent solely upon local business, we should have failed years ago. We were forced to extend our market and to seek for export trade." "And so," he says, "the Standard Oil spared no expense inforcingits products into the markets of the world."
The despotism of the market extends over the whole world. It is impossible for any one nation to organize its industry, or for the industry of any one nation to organize itself, under a world-wide competitive system, without taking into consideration the conditions of the world market. The Standard Oil could not maintain prices in competition with foreign oil. It had to carry the industrial war into Europe and Asia, and did this by eliminating competition at home; putting an end to anarchy of distribution as well as to anarchy of production; by transforming the whole system through the building of pipe lines, the use of tank cars and tank steamers, through an enormous aggregation of capital, and the use of every ingenious improvement. The Standard Oil succeeded in doing this and "receiving in return from foreign lands nearly $50,000,000 per year."
Mr. Rockefeller is an adroit witness, and carefully refrained from reference to the methods by which competition was crushed as an indispensable preliminary to what he calls the "enlargement of the business." Mr. H.O. Havemeyer, President of the Sugar Trust, was more frank. Here is his testimony on this subject in full:
Q.(By Senator Mallory) "Did I understand you to say—perhaps I may have misunderstood you a while ago—that it was your policy to make as much profit out of the consumer as you possibly could?"—A."Consistent with business methods."
Q."Consistent with business principles. In otherwords, your idea is that your organization, the American Sugar Refining Company, will, if it can, get the maximum profit out of its business from the consumer. Now, I also understood you to imply at least that it is the policy of the American Sugar Refining Company to crush out all competition if possible."—A."But that is not so; there is no such testimony. I understand it has been put in that form by one of the gentlemen here, but it is not the fact. What I said was that it was the policy of the American Sugar Refining Company to maintain and protect its trade,and if it resulted in crushing a competitor it is no concern of the American Company; if he gets in the press, that is his affair, not ours."
Q."And if anyone interferes with the business, profits, or competition of the American Sugar Refining Company, it is its policy to prevent it if possible?"—A."By lowering profits to defy it."
Q."And if it results in crushing him out?"—A.(Interrupting) "That is his affair."
Q."Not the affair of the American Sugar Refining Company?"—A."No."
Q."Now, suppose in the natural course of events the American Sugar Refining Company should suppress—we will not use the words 'crush out'—all competition, all opposition. I understand from your theory—business principles—that you would then seek to get out of the public and consumer the largest amount of profit consistent with your idea of business principles?"—A."Precisely."
Q."Then, if you had the power to charge or impose prices on the public, what would be your idea of the limit that the public could possibly stand?"—A."I think it would stand a quarter of a cent to-day. I think we could do it for twenty cents a hundred. I think the countryis really damaged by having a number of people in the business."
Q."That is not an answer to my question. My question is the limit. What restraint would you put upon yourselves? What would be your restraint?"—A."I call that restraint business consideration."
Q."Would it not be the utmost limit that the consumer would bear?"—A."Until we had competition we should be in that position, but whether or not we would exercise it, is quite another matter."
The very effort of Mr. Havemeyer to disown the "policy of crushing out competition" followed immediately by his admission that a trust is a "press" built for that purpose, is indicative of the capitalist's mind on the subject: At one moment he naïvely admits what a moment before he emphatically denied. The trust, then, is the organization of an industry by one or a few men strong enough to suppress competition and bleed the consumer.
The tyranny of the market has been suppressed only to substitute therefor the tyranny of the trust. And this new tyranny has for effect to enrich the trust magnate at the expense of the whole nation.
The course of industrial events beginning with the creation of guilds to suppress the anarchy of the Middle Ages; the tyranny of the guilds; the revolt against the guild; its suppression; the substitution therefor of so-called freedom of industry, of contract, of trade; the disorder or anarchy that ensued; the despotism of the market; the gradual suppression of all three freedoms in order to escape from the despotism of the market; and this suppression only preparing the way for the tyranny of the trust, is not accidental. It is a cycle through which industry had to pass till mankind found its way of escaping from the whirlpool.
We find the same cycle in the political world. The anarchy of the horde paving the way to the despotism of the tyrant; the despotism of the tyrant creating a revolt resulting in a new anarchy leading to another despotism as bad as the last, until staggering between anarchy and despotism, men slowly evolved a system of popular government. We shall see later that popular government can never remain popular under a system of industrial anarchy or industrial despotism, and that our industrial organization must adopt a system of popular control, if popular government is ever to become in fact as well as in name, popular.
Suffice it to point out that our industrial development following a law of necessity has so far staggered like a drunken man from anarchy to despotism and from despotism to anarchy—and that we are not likely to attain order from despotism until we recognize that the competitive system, such as we now have, can never attain it; and that it can be attained only by a deliberate substitution of coöperation for competitionto the extent necessary.
Let us now consider another part of the industrial field which seems destined to be the arena of the next great development—the field of labor.
The consumer is not organized as yet; he has not waked up to the extent to which he is fleeced by the trust. But labor is organized, driven to organization by the terrible consequences of the freedom of contract[73]for which he clamored so loud in the Revolutionary period. A workingman alone, ignorant of the profits earned bythe manufacturer, ignorant of the number of workingmen applying for work, himself hungry, and with a hungry family to support, is no match for an employer with sufficient capital at his disposal, a considerable knowledge of the labor market where he can find men to replace such as ask for a higher wage than he is willing to pay, and with practically no reason to fear hunger or even discomfort for himself or for those who are dear to him.
Freedom of contract, therefore, meant for the unorganized workingman at the beginning of the nineteenth century, not freedom, but slavery. It will be later recorded how inevitably the tyranny of the market and the greed of capital combined to reduce workingmen to starvation wages and condemn women and children to degrading labor. One of two things had to happen: The whole laboring class had to be reduced to a condition of permanent slavery, or the laboring class had to combine to put an end to competition between worker and worker that left them at the mercy of the market. That men reduced to the physical condition created by the industrialism of a century ago should have had the intelligence, courage, and self-restraint to combine and act in concert until they were able to some extent to impose rates of wages upon the employers, seems to-day hardly less than miraculous, and ought to serve as a warning to capitalists that they can no longer dispute the coming political power of such workingmen, or remain indifferent to it, or even denounce it withOutlookintemperateness.
Mr. Eliot, President Emeritus of Harvard University, is outraged by what he regards as the tyranny of the trade union. Has he ever thought of the tyranny of the trust, or the tyranny of the market from which both inevitably spring? Has he ever understood that such a competitive system as ours can only put an end to anarchy bydespotism; and can only shake off despotism at the risk of anarchy?
But the subject of trusts and trade unions is too large to be treated as an incident in the discussion of the evils of the competitive system. I shall content myself, therefore, with summing up briefly the course of events through which industrial development has passed, for the light it throws upon the course through which it has still to pass:
Anarchy of industrial conditions during the Middle Ages gave rise to the guild, which for a season substituted order for disorder.
The order introduced by the guild involved regulation; regulation involves power; and wherever power is exercised free from efficient popular control, it must end in tyranny.
The tyranny of the guild aroused a revolt and the cry of freedom of trade, freedom of industry, freedom of contract; these three freedoms under the competitive system reintroduced an era of anarchy—both in production and distribution—both for the employer and the employee, subject only to the despotism of the market.
The employees undertook to put an end to competition between employees by organizing trade unions.
The employers undertook to put an end to competition between employers by organizing trusts.
So the anarchy which, under the competitive system, must result from freedom, has given rise to the tyranny of the market, and the effort to escape the tyranny of the market to two other tyrannies—of the trust and of the trade union. These two tyrannies stand to-day not only arrayed against one another, but in the bitterest conflict—in the courts, in strikes, lockouts, and ultimately on the field of politics.
One thing stands out in singular relief from theforegoing sketch, viz., that it is freedom—of industry, of contract, and of trade—the battle cry both of the bourgeois employer and the proletarian employee—that has led to these two tyrannies.
At the present time I believe that the confusion in the ranks not only of the employer, but of the employee, as regards this so-called freedom—a freedom that both are clamoring for but neither have ever attained—is responsible for the failure of both to understand one another. And the subject of freedom or liberty will therefore be discussed in a chapter to itself.