CHAPTER IIToC

Commodity.Quantity.Time Cost.Unit.Time Cost in Minutes.Hrs.Min.Barley30 bush.242.81 bush.5.427Wheat40 "617.41 "9.435Hay2 tons1530.51 ton465.25Oats40 bush.75.81 bush.10.645Rice60 "172.51 "17.042Rye25 "25101 "60.40Corn80 "4238.11 "31.97Potatoes220 "38—1 "10.364Tobacco2,750 lbs.6065.11 lb.13.22Cotton1,000 "78421 "4.72Bit. Coal200 tons379361 ton113.88

Having the time cost per unit of each of these commodities, let us now ascertain the time cost of the total crops of these produced in the United States. This is exhibited in the table on the next page, which is derived from the figures given in the Year Book of the Department of Agriculture, 1907, p. 668. These, too, are assumed to be accurate.

We see from this table that the total time cost of these principal crops, if produced with modern machinery on a large scale, would be 185,759,513,000 minutes, and that the money value of these commodities, sold at farm or mine, is $3,214,510,707.

If, then, it would require 185,759,513,000 minutes' labor to produce $3,214,510,707 worth of commodities, how much labor would be required to produce $800 worth of these commodities? This is a problem in simple proportion:

$800: $3,214,510,707::xminutes: 185,759,513,000 minutes. Working this out we find thatxequals 46,230 minutes or 770 hours and 30 minutes. Estimating 300 working days to the year, this would seem to indicate that a social work-day of 2-½ hours should be sufficient to procure the necessaries of existence, valuing these at $800.

Commodity.Average Annual Production 1898-1907.Average Total Value on Farm Dec. 1, 1898-1907.Time Cost in Minutes.Unit.Total Time Cost in Thousand Minutes.MillionsBarley117 bush.$53,872,8965.4271 bush.633,959Wheat642444,206,2219.4351 "6,057,270Hay59 tons524,124,456465.251 ton27,449,750Oats841 bush.265,595,63910.6451 bush.8,952,445Rice18 "14,594,91317.0421 "305,756Rye29 "16,527,09960.401 "1,751,600Corn2,309 "953,158,11431.9771 "73,834,893Potatoes255 "134,236,56310.3641 "2,642,820Tobacco743 lbs.59,548,88113.221 lb.9,822,460Cotton5,233 "457,787,4424.721 "24,699,760Bit. Coal260 tons290,858,483113.881 ton29,608,800$3,214,510,707185,759,513

Before accepting the above conclusion, however, it will be necessary to make proper allowances for some important factors. First, the figures quoted from the Report do not include time spent on bookkeeping, upkeep, and repair of machinery, the time cost of the raw material, of the machinery, etc. All these items are certainly important, but we may safely assume that, taken together, they would probably not increase the total by fifty per cent. If, then, we allow an additional 1-¼ hours for these items, thus making the work-day 3-¾ hours, we shall be well within reason.

Second, it is to be inferred that the ten crops for which the 13th Annual Report furnishes the time value were produced under unusually favorable conditions, if not actually on "bonanza" farms. It is true that the introduction (p. 12) affirms, in a blanket clause, "that the effort was made to ascertain, not the quantity of work that could be done under the most favorable conditions, but what was being accomplished steadily in everyday work"; nevertheless, in the absence of more specific information as to the actual conditions under which the units under discussion were farmed, we cannot ignore the doubt that arises in our minds. We may, however, offset this by two other factors which were quite conservative in our estimate: (1) In adopting the sum of $800 as a measure of the necessaries of existence, we have, as already shown, allowed nearly a third over and above the sum ($617.80) actually ascertained to be requisite in the years 1900-1901. (2) The figures in the 13th Annual Report are based upon investigations made from fifteen to twenty years ago, between 1890-95. The steady improvement in agricultural machinery which has been made since then would undoubtedly reduce the present time cost of these commodities very materially. It is not unreasonable, then, to urge that these factors counterbalance each other; but in order to be on the safe side let us add another quarter of an hour, thus making the probable work-day consist of a round four hours.

We seem, then, to have warrant for believing that if agricultural production were socialized to-day a 1200-hour work-year would suffice to produce the necessaries, and an 1800-hour year, many of the luxuries, of existence for the community. This, arranged to suit the exigencies of agricultural production, might mean a twelve-hour workday for four or six summer months, as the case may be.

Does this seem Utopian? Granted: all speculations of this sort must seem Utopian. And yet, if we look back a few centuries, we shall find, according to no less an authority than Thorold Rogers ("Six Centuries of Work and Wages"), that the English workman, during the fifteenth century and the first part of the sixteenth, lived, and lived well, on the product of an eight-hour-day. Is it, then, so fantastic to suppose that modern machinery, under a socialized system of production, could cut this day in two?

The objection may be raised that this estimate is one-sided because it is based on figures for agricultural production only, whereas industrial production is really the more important half of the modern economic process; and that therefore the generalization could not apply to the whole economic process in a coöperative commonwealth.

It is true, as already pointed out, that we do not have comprehensive data for all, or nearly all, the industrial products in actual use in the average household. But we have posited, hypothetically, a socialized agricultural community producing a quantity of goods which it can sell at the farm for an average $800 per family; this $800 sufficing, when brought to the village store or forwarded to the city, to buy the necessaries of existence for the familyat retail. Now it is well known that under present conditions the retail price of any manufactured article comprises about one-third for actual cost of production, one-third for manufacturer's profits and accounting costs, and one-third for selling costs. In other words, every such article, when it reaches the ultimate consumer, is weighted down with a load of barnacles of trade-profits of innumerable middlemen, rents, dividends, cost of advertising, and other trade-getting devices, etc., etc.Part of this cost of distribution is undoubtedly legitimate and could not be dispensed with under any organization of society, no matter how scientific. The man engaged in producing the necessaries of life will always have to support the man engaged in transporting and distributing them, and the man engaged in manufacturing and repairing the machinery and other instruments of production necessary thereto. But it is impossible to believe that this auxiliary corps will ever, in a rational system of production, consume two-thirds of the ultimate retail value of most goods, as it does to-day.

It would seem, therefore, that if the industrial community organized itself in the same fashion as our hypothetical agricultural community, the exchange value of its products, whether stated in terms of social labor, time, or money, or any other standard of value, would actually be lower than our estimate assumes. By how much our four-hour work-day would be reduced we have no means of determining, but it could hardly be increased.

Probably, therefore, four hours will constitute the average daily labor in a coöperative commonwealth, and these ought to be sufficient to give to every citizen not only the necessaries and comforts now enjoyed by the middle class, but some of the luxuries enjoyed only by the millionaire.

[133]Report of the Industrial Commission, Vol. I, p. 829.

[134]Christian Socialist.

[135]Report of the Industrial Commission, Vol. I, Part I, p. 222.

[136]"Socialism and Social Reform," p. 121.

[137]"Socialism and Social Reform," p. 120.

[138]It is stated that the retailing of milk in New York is practically confined to six companies. But the price of milk has not been reduced accordingly. The economies resulting from this combination have swelled the profits of these companies. The consumers gain nothing from it. And this is what is taking place with all trust articles.

[139]Book III, Chapter III.

[140]This is more true of railroads in the United States than in England, probably because competing roads have not been tolerated in England to the same extent as in our country.

[141]The Thaw case furnishes an unfortunate illustration of this tendency.

[142]Ely, "Socialism and Social Reform," p. 134.

[143]Ely, "Socialism and Social Reform," p. 134.

[144]Book II, Chapter I. This subject has been discussed in detail in "Government or Human Evolution," Book II, Chapter II, p. 273,et seq., by the author.

[145]"Economy of Manufacture." Babbage (London, 1832), p. 246.

[146]M. DeLesseps has stated that it cost England £100,000,000 to change its shipping so as to fit it for passage through the Suez Canal, and this expense applies more or less to change of machinery due to invention in every factory.

[147]Book III, Chapter II.

[148]"Capital," Part IV, Chapter XV.

[149]Issued by the Government Printing Office in 1904, entitled, "Cost of Living and Retail Prices of Food."

[150]"Cost of Living and Retail Prices of Food," pp. 18, 90-102, 516-93.

[151]"The Standard of Living Among Workingmen's Families in New York City," by Robert Coit Chapin, Ph.B., Charities Publication Committee, 1909, p. 178,et seq.

Few things deterred me from a study of Socialism more than the prevailing error that it necessarily would subject us all to the tyranny of a state which would, because it owned all the sources of production, be able to dictate to every one of us the kind of work we should do and the hours during which we should do it. It must be admitted that this is the Socialism described by many authorities, amongst them Schäffle, in a book still widely read, entitled the "Quintessence of Socialism." But this book loses some of its authority when we remember that Schäffle followed it with another, entitled "Why Socialism is Impossible"; and assuredly the state Socialism described by Schäffle is extremely unattractive to the bourgeois mind.

It is not so unattractive to the workingman, because he now has these things determined for him by his employer without having any security of employment. State Socialism, therefore, has no terrors for him. On the contrary, as the workingman expects that the Socialist society will be controlled by workingmen, he expects to that extent to be his own master; that is, he will control the society that controls him.

State Socialism, therefore, is the form probably most in vogue amongst workingmen. They have not beforetheir minds the history of previous revolutions which have for the most part only substituted one set of masters for another. They cannot be expected, therefore, to appreciate the profound change that comes over men when put into positions of power, the temptations to which they are exposed, and the errors which even the best intentioned are likely to commit.

I do not mean to condemn state Socialism; for state Socialism veritably controlled by the people would probably furnish better government than that which we are now given at the hands of capitalists. But I shall not attempt to describe the economic structure that would prevail under state Socialism, because it has been already described; whereas I do not think that there has been any effort made to describe a coöperative commonwealth in which the state would have very little more power than that enjoyed by the government in England or Germany to-day.

The difficulty of assigning tasks and of determining wages which makes Socialism impracticable to the bourgeois mind is a pure fiction, encouraged, I admit, by many Socialist writers who imagine that Socialism can only come by a sudden and violent transfer of political power from the capitalist to the proletariat, called revolution. As will more fully appear in the next chapter, the Political Aspect of Socialism, such a revolution is by no means necessary; for the coöperative commonwealth, as I understand it, need not be introduced by any sudden transfer of political power whatever.

In one sense, indeed, Socialism has in part come. Thelaissez faireschool had barely announced their doctrine and proceeded to legislate in accordance therewith, before the abominable consequences of thelaissez fairedoctrine became so obvious that steps had at once to be taken toput an end to it. So the idea that a man could do what he liked with his own, which resulted in working women in mines to an extent which reduced them to the condition of the lower animals, the use of children in factories to a degree imperilling the future of the race, the reduction of men to starvation wages, the pollution of rivers by factory products, the spread of cholera by unwholesome dwellings—all gave rise to a series of legislative acts which limited the right of a man to exploit women and children, compelled landlords to maintain sanitary dwellings, and prevented the pollution of waters by factory products altogether. All this legislation was an unconscious tribute to that solidarity of the human race which is at the root of Socialism.

Nor was this all. The state and city could so obviously perform certain functions better and cheaper than private corporations that enterprise after enterprise was slowly taken from individuals and assumed by the state. The postoffice was the foremost of these. The municipalization of gas, water, and trams, the nationalization of railroads, telegraphs, and telephones, have been pursued as purely economic measures rendered necessary by considerations of social welfare.

Indeed, England has been rushing towards Socialism with such rapidity that increasing rates gave the capitalists an excuse for frightening the public with threats of bankruptcy, and occasioned the reaction in municipal progress through which the country is now passing. But the forces behind Socialism are so overwhelming that they convert its very enemies into its unconscious prophets, priests, and promoters.

Mr. Roosevelt, who has so lately entered the lists against Socialism, is with the exception perhaps of Pierpont Morgan and Rockefeller, the greatest practicalSocialist in America. When Mr. Roosevelt called together the Governors of the States to consider what steps, if any, could be taken to prevent the shameful waste of our national resources by capitalistic enterprise, and when Mr. J.J. Hill in a remarkable summary counted up the awful loss to humanity involved in this waste, neither appears to have been aware that they were demonstrating to the world not only that Socialism was good, but that it was indispensable. When Rockefeller brought together the distillers of oil into a single deliberately planned body, eliminating the waste of individual competition, he does not seem to have been aware that he was demonstrating the amazing advantage of eliminating competition and slowly preparing an industry for nationalization. When Mr. Morgan did the same thing for the Steel Trust, and the Coal Trust, and when he tried to do the same thing for the railroads until checked by a blundering government,[152]he, too, was unaware that he was demonstrating the failure of the very capitalistic system for which he stands. So the idol they themselves set up for worship they are engaged in smashing all to pieces; and they none of them see the humor of it.

When a horse refuses to return to his stable and balks when brought to its door, a simple device overcomes his resistance: His head is turned away from the door and he allows himself to be shoved without opposition hind end foremost into the stable which he declines to enter in the more usual way.

Roosevelt, Rockefeller, and Pierpont Morgan are just like this balky horse. They loudly proclaim that under no consideration whatever will they proceed front side forward, and yet in the middle of these protestations they are going hind side forward faster than perhaps is prudent.The difference between Socialists and Messrs. Roosevelt, Rockefeller, and Pierpont Morgan is that Socialists consider it more dignified to move front side forward; more intelligent to see plainly where they are going, and proceed deliberately of their own motion instead of being pushed there backward by forces they pretend to ignore.

The many theories proposed as to how Socialism may come, can be generally classified into two: that it will come by revolution and that it will come by successive reforms.

The so-called Marxian school calls itself revolutionary, and undoubtedly many members of this school are revolutionary, and have the idea that Socialism will come by revolution—by violence—while among the more thoughtful, this word is used to mean that Socialism will constitute revolution because it will transfer power from the exploiting class to the exploited class.[153]Others have confused ideas of the meaning of the word revolution in which the element of violence and that of the transfer of political power are more or less mixed. Socialism, of course, involves a transfer of political power, and since such a transfer is revolutionary, Socialism may be properly called revolutionary, though its coming may not be attended by violence. Many authors believe that Socialism will come by the use of extra political methods—not by successive reforms introduced by parliamentary methods, but by a general strike, or the conversion of the army, or adroit use of the conditions produced by war (as in Russia after the Japanese War).

Some, again, believe that Socialism may come by thedevelopment of a secret society which will secure the support of a sufficient number of those in the possession of our military stores and military places to permit of a conquest of political power by force. To those it may be suggested that the days for the success of secret societies are over. Capitalistic society possesses machinery in the shape of the press and the secret service which would make the success of a secret society impossible. The slightest indiscretion of one of its members under feminine influence or that of drink would be sufficient to break up the entire plan.

The capitalists are in possession of the army, the navy, the police, the militia, and above all, the weapons with which to arm all these. Recourse to bullets seems unnecessary and dangerous when our enemy has the bullets and we have not, all the more when the work can be equally well done with infinitely less disorder and agony if we only have recourse to the ballots which we have and they have not.

When a sufficient number of men are persuaded that Socialism is the best solution of our present economic evils, they can get what they want the day they choose to use the ballot for that purpose; whereas recourse to violence would lead not only to immediate disaster, but to an indefinite postponing of the desired result. For a very large part of our population which would, then, as now, be in doubt as to the wisdom of adopting Socialism, would certainly be driven by violence into the capitalistic fold and a period of capitalistic reaction would result. This has been observed in so many revolutions in the past that it is unnecessary to insist upon it here.

This must not be interpreted, however, as intending to eliminate violence as a possible factor in the coming of Socialism. Had Haywood been convicted it would havecreated an indignation so profound that a very widespread and dangerous uprising might have taken place, and although it would have been quelled, still, it is probable that such an uprising might have led to Socialistic legislation. It is as impossible to state beforehand how large a part violence will play in the coming of Socialism as to state how much contributed to remedial legislation in Ireland—the violence of 1798 and the 60's, or how much the parliamentary tactics of Parnell.

Socialistic legislation is of two very different kinds, and these must be carefully distinguished. Bismarck inaugurated Socialistic legislation such as national insurance, intended, by taking away part of the grievance of the workingmen, to diminish their discontent and their reason for espousing Socialism.

Indeed, since the beginning of the nineteenth century legislation more or less Socialistic has been enacted in every civilized country in the world, partly owing to thebona fidedesire on the part of legislators to put an end to evils that shocked their moral sense, but perhaps far more by legislators who thought to satisfy Cerberus with a sop. Socialistic legislation, therefore, enacted by capitalistic legislators for the purpose of appeasing popular discontent, does little towards promoting Socialism. Some Socialist writers claim that it does nothing to this end, but this view is extreme and I think incorrect. For example, it would be impossible for Socialism to come without violence had not the nations of the world been slowly conferring the franchise upon the class in whose interests and through whom Socialism will come. Socialistic legislation of a character to put the political weapon in the hands of the people, through which they can secure the transfer of political power from those who now enjoy it to themselves, is of the utmost value. Indeed,it is of so much value that those Marxian Socialists who protest against all compromise with capitalistic parties must have forgotten that it is through the capitalistic parties, and through compromises of Socialists with capitalistic parties, that these measures of political reform have been enacted. In Belgium to-day the Socialists are combining with the Radicals to wrest universal franchise from the Catholics.

Again, Socialistic legislation which improves the condition of the working class, though it takes away a part of their grievance and does, to that extent, diminish the incentive to Socialism, nevertheless strengthens the workingmen, raises their standard of living and of thought, and gives them the very education and equipment they need in order to become Socialists.

Nevertheless Socialistic legislation obtained from capitalistic legislators can never effect the final transfer of political power from the exploiting to the exploited class without which no Socialist commonwealth can be secured. Here, therefore, we see the elements which confuse this question of revolution and reform. The Marxian Socialists in Germany have seen Socialistic legislation enacted year after year and have seen it, by diminishing evils, tend to diminish enthusiasm for revolution. Moreover, revolutionary German Socialists, conscious that they have to destroy the existing political machinery represented by the Emperor, the nobles and the church; conscious too, that the farmer class is essentially capitalistic in its temper and thought, and despairing therefore of getting a parliamentary majority, naturally look to extra political methods as the only ones at their disposal.

There is great and regrettable confusion as regards the words reform and revolution. The Socialist party calls itself revolutionary, and as revolution is connected in the minds of most people with violence, the popular impression is that the Socialist party stands for violence. This is a profound mistake. The whole subject has been well treated by Kautsky, an authoritative leader of the Socialist party; and he distinctly disavows violence. Revolution to him is a "transfer of political power from one class to another." The French Revolution transferred political power from the king, the noble, and the church to the bourgeois. The Socialist revolution is to transfer political power from the bourgeois to the proletariat.

Here a word of caution must be said: Socialist literature is written for the most part by the proletariat for the proletariat; and it is natural that it should abound in just such phrases as these. Not that the phrase is wrong or incorrect; rather is it incomplete. To-day, in France the Republic is largely supported by the nobles of yesterday; so also will the proletarian government of the Socialist revolution be largely supported by the bourgeois of to-day.

The word revolution, therefore, is used here not to convey the idea of violence, but rather in the sense of the revolution of the planets, or of the seasons. It is as it were the closing of one cycle and the beginning of another. There is, of course, a great difference of opinion as to how this revolution is to be effected—whether by parliamentary methods or extra-parliamentary methods such as strikes. Into this subject, however, this book,being addressed to non-Socialists rather than to Socialists, will not enter. It is purely a question of tactics and may be said to have been solved in America for the present by the very existence of a Socialist party which puts up candidates at every election wherever feasible in order to do what can be done in the direction of Socialism by constitutional methods.

There is, however, another use of the word revolution concerning which it is of the utmost importance to be clear. Socialists often say that "Socialism must come by revolution and not by reform." What is exactly the meaning of this sentence? What is the difference between reform and revolution?

Reformers proceed upon the assumption that the competitive system is good and that capitalists can be entrusted with the task of reforming it so to eliminate its admitted evils. The revolutionary Socialist on the contrary says that the competitive system is bad and that the capitalist cannot be entrusted with the task of putting an end to it. So he decries mere reform and insists upon nothing less than revolution, the transfer of political power from the capitalist to the people at large. There is thus between the reformer and the revolutionary Socialist a difference of principle; the one upholding the competitive system and the other denouncing it.

But there is also another difference of hardly less importance between the reformer and the revolutionary Socialist—a difference of method. A bourgeois reformer has no preconceived plan of reform. He hits at every evil like an Irishman at a fair—as he sees it. Governor Hughes, who belongs to this class, thought in 1908 that race track gambling was the greatest evil of existing conditions and devoted the entire session of the legislature to an anti-race track gambling bill which he triumphantlypassed, only to see it nullified at the first opportunity by the courts. In 1909 he thought that a primary election bill was the most important reform; but this primary election bill failed to pass. The legislature, very much under his guidance, spent two years in passing a useless anti-race track gambling bill and refusing to pass a primary bill, although during these two years at least 200,000 men have been seeking employment and not finding it, and a population therefore of about a million[154]in New York State alone has been on the verge of starvation in consequence.

The most striking feature of the bourgeois reformer is his lack of sense of proportion; but there is a reason for it. Unemployment is not a popular subject with the class to which Governor Hughes belongs. As an evil it is too merciless; as a resource it is too unavowable.[155]So it is impossible to get any legislature in any State in this Union effectively to consider the subject of unemployment.

The Socialist, on the contrary, has a definite preconceived plan of legislative enactment. While the reformer, however well-intentioned and intelligent, is hacking away at random at the jungle of evils in which the competitive system encompasses him, and hardly ever attaining any substantial progress, the Socialist has his course directed for him by the polar star. He regards such bills as anti-race track gambling as a waste of time. Race-track gambling is a necessary and poisonous fruit of the competitive system. It is useless to attack the fruit and leave the tree standing. The only legislation, therefore, that interests the Socialist looks towards putting an endor a check to the competitive system that results in the exploitation of the Many by the Few. And of all the evils the one that has stood out most startling and appalling during the last two years is the evil of unemployment.

The immediate demands of the Socialist party published at the end of the Socialist platform,[156]indicate the character of measures which the Socialists urge. In one sense these are reforms, many of which Governor Hughes favors, but they all tend towards one definite end—the limitation and ultimate suppression of the competitive system with the exploitation of the Many by the Few. In one sense, therefore, Socialists are reformers, but revolutionary reformers; all their reforms look towards the transfer of political power from the Few who exploit political power for their individual benefit, to the Many who will utilize political power for the benefit of all.

Having indicated the difference between reform and revolution, let us consider how far the Socialist is justified in saying that the competitive system is so bad that it cannot be improved—that it must be replaced altogether.

When a wagon is thoroughly worn out, it is useless to repair it; for if one part is strengthened it throws the strain upon a neighboring part which breaks down; and if that part is strengthened it throws the strain upon another which again breaks down. It is possible by intelligently renewing various parts of the wagon upon a preconceived plan, eventually to replace the broken-down wagon by an entirely new one; but the difficulty of doing this is extreme, and the wagon when so reconstructed, being composed of parts of different ages, must again give way at its most worn part. So experience indicates that it is better to throw a fairly used-up wagon on the junk heap and build a new one in its place.

Reform measures such as we have had under former administrations resemble an effort to patch up a worn-out wagon; for a reform measure directed at one evil is found to produce other evils very apt to be as great, if not greater than those that the measure is trying to suppress. Not many years ago a society for the suppression of vice made a crusade in New York upon vicious resorts. Such resorts are abominable; they should not exist in an orderly community. But attacking these resorts, without attacking the conditions that created them, only distributed the evil all over the city, involving a pernicious contact with unperverted youth.

Again, the difficulty of reconciling Sunday closing of barrooms with furnishingbona fidetravellers at hotels with refreshments was solved in New York by the Raines law, which defined a hotel by establishing a minimum of bedrooms. The result was that to almost every barroom there is attached this minimum of bedrooms to permit of the sale of liquor on Sunday; and this effort to secure Sunday closing has resulted in converting the barroom into a house of prostitution.

Again, legislation for putting an end to the awful congestion and filth of the New York city tenements has by imposing upon the landlord expensive repairs, raised rents, so that, although the tenement dweller is little benefited because of evasion of the law, his rent has been uniformly raised.

In the chapters on the Scientific and Ethical Aspects of Socialism, an effort will be made to show why the competitive system is essentially bad and must remain bad so long as acquisitiveness is deliberately made the dominating motive of human activity; and how by modifying economic conditions we can secure all thebenefits of a tempered acquisitiveness without the appalling results of an acquisitiveness that knows no bounds. This argument belongs, however, to the constructive argument for Socialism, and we have not yet completed the destructive argument against existing conditions. For there are two further illustrations furnished by recent efforts to curb competition which not only tend to demonstrate the hopelessness of the task, but throw light upon existing conditions and impending dangers. I refer to the rate law and legislation tending to control monopolies—to the inevitable tyrannies of the trust and the trade unions and the irreconcilable conflict between the two.

I shall describe the coöperative commonwealth on the theory that it is to come gradually, not because I consider this the only way for Socialism to come, but one of the possible ways and the one most intelligible to the bourgeois mind.

Morris Hillquit and John Spargo have given good sketches of the Socialist state.[157]I shall adhere closely to their views, emphasizing and detailing them; and I am the more glad to adopt this plan because both are members of the National Executive Committee of the Socialist party and will not be accused of taking the bourgeois view of Socialism; whereas because I have been a bourgeois, I am likely to be accused of this.

Mr. Spargo begins by repudiating the idea of the Socialist state as a "great bureaucracy" and declaresthe Socialist ideal to be a "form of social organization in which every individual will enjoy the greatest possible amount of freedom for self-development and expression; and in which social authority will be reduced to the minimum necessary for the preservation and insurance of that right to all individuals."

The rights of the individual Mr. Spargo summarizes as follows:

"There must be perfect freedom of movement, including the right to withdraw from the domain of the government, to migrate at will to other territories; immunity from arrest, except for infringing others' rights, with compensation for improper arrest; respect of the privacy of domicile and correspondence; full liberty of dress, subject to decency; freedom of utterance, whether by speech or publication, subject only to the protection of others from insult, injury, or interference with their equal liberties. Absolute freedom of the individual in all that pertains to art, science, philosophy, and religion, and their teaching, or propaganda, is essential. The state can rightly have nothing to do with these matters; they belong to the personal life alone. Art, science, philosophy, and religion cannot be protected by any authority, nor is such protection needed."

On the other hand, he summarizes the functions of the state as follows:

"The state has the right and the power toorganizeandcontrolthe economic system, comprehending in that term the production and distribution of all social wealth wherever private enterprise is dangerous to the social well-being, or is inefficient; the defence of the community from invasion, from fire, flood, famine, or disease; the relations with other states, such as trade agreements, boundary treaties, and the like; the maintenance oforder, including the judicial and police systems in all their branches; and public education in all its departments."

The state, according to Mr. Spargo, is not toownall sources of production (this is state Socialism); but is to have the right and power toorganizeandcontrolthe economic system. There is between these two statements all that distinguishes the crude Socialism of the nineteenth century from the practical Socialism of to-day. This is emphasized by Mr. Spargo when he states that "Socialism by no means involves the suppression of all private property and industry"; and the further recognition that the "Socialist state will not be static"; that is to say, it will not once for all decide that certain industries must be socialized and certain other industries be left to individual initiative.

The dominant factor that will determine these things is the public welfare. When private property in a particular thing is found injurious to public welfare, it will be taken over by the state for the purpose of being socialized, as will hereafter be explained. When it is deemed that private property in a public industry is injurious to public welfare, this industry will be socialized. When, on the contrary, it is found that by socializing an industry the advance of that industry tends to be paralyzed, private initiative will be encouraged to enter into that industry. Indeed, the economic structure of the commonwealth will be such that inefficiency in a socialized industry will automatically give rise to the competition of private initiative therein.

I have used the expression "socialized industry." It is above all things important that we should be clear as to what these words mean; for it is the socialization of industry which is the modern substitute for theSocialist state. We cannot understand this better than by taking a concrete example.

Let us assume that the public has become convinced that a few individuals have already too long grown inordinately rich out of the refining and distribution of oil, and that the time has come for this industry to be socialized. The old theory was that the state would expropriate this industry and become the employer of all engaged in it. It is argued in favor of such a system that if the state can be entrusted with the distribution of letters, it can also be entrusted with the distribution of oil; and this is undoubtedly true. But if this same argument is applied to all industries it will expose the state to two great dangers: the state will be overburdened by the multiplicity and vastness of these tasks; and the state will become despotic. And because this task is greater than any one set of men can properly perform; even though the intentions of the members of the government be the best possible, errors of judgment and errors of detail will involve the state in injustice and discontent.

This difficulty can be met by not putting all these functions upon the state, but by so providing that the men shown in the past best able to handle a particular industry should continue to handle it. The socialization of the Standard Oil industry would simply mean the elimination of capitalistic control and exploitation. In taking over the oil industry, the state would doubtless adopt the method already adopted in taking over railroads, etc. A board would be appointed to take expert testimony as to the valuation of the industry, to determine the real value of every share. It would be called upon to value every stockholding with a view to determining to what compensation each stockholder was entitled;because a distinction will have to be made between various classes of stockholders. Some stockholders have purchased their stock out of the economies of an industrious lifetime. They depend upon the dividends from such stock to support their old age. To cut down the income they derive from this stock might not only work an injustice, but work an injury to the commonwealth; for if these stockholders had not sufficient income to support themselves, they would become a burden on the state. Other stockholders would be found to have sufficient wealth to support a considerable reduction in the valuation of their stock without hardship. Others again would have such enormous wealth, that, having much more income than they can possibly spend, the reduction of their income would mean no hardship save that of depriving them ofpowerfor the most part exerted at the present time injuriously to the commonwealth.

Experts, therefore, appointed by the state to make estimates with a view to the transfer of an industry from private to social ownership will have two distinct functions to perform: the function that boards of experts in similar cases perform to-day, to estimate the actual value of the property; and to estimate the wealth of the respective stockholders and classify stockholders according to wealth with the view of effecting the transfer from private to social ownership without injustice to the individual or injury to the commonwealth. It is probable that compensation to stockholders will consist of annuities rather than lump sums. The advantage of compensation by annuity rather than by cash payment is considerable. As the state is taking over industries it will be more difficult for individuals to find investment for lump sums than to-day. As the state is lookingforward to taking over industries to a sufficient extent to eliminate pure capitalism[158]altogether, it is to be hoped that future generations will not feel the need of capital of their own and will be all the more ready to enter into the coöperative scheme of industry if, having no capital, they have to work each in his own industry under the new and prosperous conditions which coöperative production ought by that time to have brought about.

Cases will undoubtedly be found where wealthy parents have worthless or defective children and grandchildren. Again, some parents have so contributed to the development of industry of the nation, as in the case of Mr. John D. Rockefeller and Mr. J. Pierpont Morgan, that it may seem proper that the compensation given in the shape of an annuity to them should not end abruptly at their death; but that a part of it should be continued to their offspring. This question is one of conscience as well as of social welfare; and in view of the enormous importance of it to the wealthy of to-day, it is a pity that they confine themselves to denouncing Socialism, and by so doing, leave the elaboration of the Socialist program to a party of discontented which is likely to deal with them when the day of expropriation arrives, not only without mercy, but without justice.

To judge of the difficulty of determining the questions likely to arise, let us consider for a moment the case of Mr. Rockefeller.

Mr. John D. Rockefeller has testified over and over again that for many years he has had nothing to do with the management of the Standard Oil, and yet he draws from the Standard Oil an income so enormous that, not beingable to spend more than a fraction of it, he has invested the balance in railroad shares and thus become master of a large part of our railroad system. I myself believe after a careful study of the organization and development of the Standard Oil that Mr. Rockefeller has amassed his fortune strictly in conformity with law. He has, it is true, deliberately lied at certain critical periods. But lying is not a crime, and is not actionable except under specified conditions. Mr. Rockefeller then is not a criminal. He simply presents a case where, having rendered an immense service to the community, he has received as a remuneration for that service wealth that surpasses the dreams of avarice.

If Mr. Rockefeller's holdings in the Standard Oil were expropriated by the state without one dollar of remuneration, Mr. Rockefeller would still be in possession of a far larger income derived from his railroad holdings than he and all his family could possibly spend. It is probable, therefore, that in such cases as those of Mr. Rockefeller, J. Pierpont Morgan, and others of their class, the state would make a valuation of all their wealth, leave them what it is proper they should have, and expropriate the rest. Even though there were left to multi-millionaires more income than they could possibly spend, the surplus expropriated by the state out of each of their swollen fortunes would leave to every industry a large fund which could be applied to increasing wages, improving conditions, and reducing prices. If, for example, it turned out that the income Mr. Rockefeller derives from his railroad shares is more than he can spend and that, therefore, there were no reason why he should continue to own any shares in the Standard Oil whatever, the dividends accruing from the shares now held by Mr. Rockefeller in the Standard Oil would be applicable to improvingthe conditions of those who work for the Standard Oil. It is probable that Mr. Rockefeller owns about one-half of the shares in the Standard Oil. All the dividends now paid to Mr. Rockefeller would in such case be applicable to these things. Such a solution would permit of the division of the enormous dividends which are being paid to-day to Mr. Rockefeller amongst the working body of the Standard Oil.

As to compensation, there is considerable disagreement in the Socialist party, and many Socialists would not admit the principle of compensation at all. In France, it is probable that these last constitute, if not a majority, at any rate a very large minority of the party; but in America I think it can be said that the Socialist party stands for compensation. In support of this contention I cannot do better than quote a passage from the article of Mr. Steffens inEverybody's Magazine, Oct., 1908.[159]

This passage is extremely illuminating because we find in it the opinions of two men thoroughly representative of the two wings of the Socialist party: Eugene Debs, who is what Mr. Roosevelt would call "an extreme Socialist"; that is to say, he looks at Socialism from the revolutionary point of view; he regards the issue as between the capitalist on the one side and the proletariat on the other; he is an ardent exponent of the class struggle theory; his sympathies are exclusively marshalled on the side of the poor, and his first impulse, therefore, on being questioned on this subject, is to express an opinion contrary to compensation. And yet his ideas on this subject are not so rooted but that they can at once be corrected when he is reminded by Victor Berger of the evils likely to result from expropriation without compensation.

To those unfamiliar with the personnel of the Socialist party, it is important to say a word regarding Victor Berger. He is the editor of theSocial Democratic Herald, published in Milwaukee; but he is far more than this. He is the recognized leader of the Socialist party in Wisconsin, the only State in which Socialism has succeeded in electing members to the municipal council and to the State legislature. No one who reads his editorials can fail to recognize that he is not only an economist, but a scholar. He is regularly elected to the National Executive Committee of the Socialist party at the head of the poll; and although I must not be understood to imply that there are no other men in the party of as great weight as Mr. Victor Berger, I think it may be stated without fear of contradiction that he to-day has more personal influence in the party than any other one man. The ease with which he brought the Presidential nominee around to his view on the subject of compensation is a measure of his influence. I think that upon the subject of compensation the opinion of Victor Berger is likely to prevail.[160]

The socialization of industry does not mean any change in the personnel of the industry whatever. Every man drawing salary or wages from the Standard Oil will go on drawing salary or wages as before. The industry will be handed over to those who actually maintain and work at it. These men will run the industry in very much the same way as did the guilds in the Middle Ages, subject to the payment of annuities to old stockholders determined by the court.

There would, however, be some notable distinctions, between the medieval guild and the guild under a coöperative commonwealth.

The latter would not constitute a complete monopoly;on the contrary, independent refiners would continue to refine and distribute oil, maintaining a wholesome competition of a character to prevent the oil guild from becoming perfunctory and inefficient. This competition would tend to avert the evils that attended the close monopoly of the medieval guild, practically all of which can be traced to the completeness of their monopoly.

Again the state would notownthe oil industry; it would reserve the right tocontrolit. No direct control need be exercised providing the industry were wisely administered; but if the industry had recourse to devices for crushing out competition to which the trusts to-day habitually resort, the state would exercise this direct control by appointing one or more members to the governing board of the industry. The oil guild would, therefore, be kept upon its good behavior, both by the competition of the independent refineries and by the danger of state intervention.

When the public became convinced that the time had come for the socialization of the steel industry, exactly the same process would be adopted. In this case, the function of those who had to value stockholdings would be facilitated. It has never been revealed how much J. Pierpont Morgan got in common stock for his rôle in the organization of the Steel Trust; but it is known that the amount of stock taken by him on that occasion was enormous. It would be interesting to calculate the number of hours of work he personally spent in promoting this trust and to compare these hours with the amount of stock which he received as a price of this service. Such a method might facilitate the work of those who had to value the stock and determine the amount to which he was entitled for the service he rendered.

The socialization of industry, therefore, will be seen tobe a process in which, once started, the state need have little further to do. It will practically consist of a transfer of the industry from the hands of the capitalist to the hands of those actually engaged therein. It will involve the valuation of every stockholding in such a fashion that the capitalist will during his life receive in some cases all, though in other cases less than he has heretofore received; so that the excessive income now enjoyed by the capitalist will be applicable to improving the conditions of those engaged in the industry; it will also be applicable to the reduction of cost to the consumer. And this process applied to every trusted industry will have for immediate effect gradually to improve the condition of the workingmen. When applied to them all, not only will the workers receive an increased wage, but the wage they receive will have its purchasing power increased by the lowering of prices in all industries. Obviously this system is not going immediately to put the luxuries now enjoyed by the multi-millionaire at the disposal of every workingman; but it will increase them as the annuitants die, so that with the disappearance of the first generation of multi-millionaires, the conditions of labor will be still further improved; and with the disappearance of the second generation, to whom doubtless some annuities will also be given, the workingman will receive all the benefits now given to the capitalist.

Inasmuch as the wage-earners now receive on an average a little less than one-half of the whole profits of the industry, from this socialization of industry alone the laborer's will ultimately have their compensation doubled by increase of wage and decrease of prices.

By "worker" is not meant what we now call workingmen alone. It includes all engaged in industry through the work of their hands or their heads. It is a commonerror into which Mr. Roosevelt has fallen that Socialism proposes to improve the condition of the one at the expense of the other; that it is a doctrine of Socialists that "all wealth is produced bymanualworkers."[161]No such foolish proposition has ever been propounded by any Socialist however "extreme."[162]Socialists recognize the enormous rôle played by brain in the organization and administration of industry. What Socialism seeks to do is to eliminate the idle stockholder—not the industrious manager. If Mr. Roosevelt would cast his comprehensive eye around the class to which he belongs, he will observe that it is composed in great part of idle stockholders who contribute nothing whatever to the work of the industries which furnish their dividends. And because these stockholders are idle, he will find that they tend also to be "thriftless and vicious," and that he is denouncing his own class when he characterizes as "morally base" the proposition that "the thriftless and the vicious, who could or would put in but little, should be entitled to take out the earnings of the intelligent, the foresighted, and the industrious." He is very hard on them; he says this is living by "theft or by charity" and that this means "in each case degradation, a rapid lowering of self-respect and self-reliance."[163]If a Socialist were to use this language of the idle stockholders, he would be characterized as intemperate. I would not myself go so far as Mr. Roosevelt. There are many idle stockholders who,because they are unconscious of living "by theft or by charity,"have preserved a social conscience that sets them to righting the wrongs of the many. Mr. Roosevelt himself, indeed, belongs to this very class.If he ever takes the trouble to understand Socialism, he will see that it proposes to put an end to the class that is idle and tends to be "thriftless and vicious"; that in other words, in this as in every other point on which Mr. Roosevelt attacks us, Socialism stands for the very opposite of what Mr. Roosevelt thinks. It proposes to take our industries out of the control of the idle and hand them over to the industrious, whether their industry be of the hand or of the head.

The result of such transfer will be to leave every man doing the work which he is already doing; to improve his condition; to keep alive the competition necessary to prevent inefficiency or perfunctoriness and make character; to diminish the stakes of the game, so that the worker shall not lose health and happiness as now, but shall secure more or less of the luxuries of life. And industry will be so organized that no man who wants to work shall be without work; and no one who does not want to work shall be allowed to be idle.

Having explained what is meant by the socialization of industry, and pointed out how small the rôle of the state need be in the socialization of industry at large, we may next proceed to consider certain industries in which the state does, to-day, in other countries and would in a coöperative commonwealth certainly play the dominant rôle. In the first place, the state would own all natural monopolies. By the word "state" must not be understood the Government at Washington alone. Certain monopolies are national monopolies and would therefore be owned by the national Government at Washington; for example, railroads, telegraphs, national forests, national waterways, etc. But it is the local authorities that would take over such local monopolies as tramways, electric works, gas works, and all those things that areessentially municipal in their nature. The wisdom of this transfer of natural monopolies from private to public ownership it is not necessary to discuss. The enormous advantages that have attended this transfer in countries where it has been conscientiously tried leave no room for discussion except by those who have a personal interest in it, and to those this book is not addressed. Moreover, this subject will be treated in the next chapter.

There are, however, certain industries which, because they are intimately connected with public hygiene, it seems indispensable that the municipality should take over. I refer to such industries as packing houses, butcher shops, pharmacies, and the production and distribution of milk, ice, and bread.

The recklessness with which we allow ice companies to distribute ice collected from ponds into which the drainage of a large population filters and from the head waters of such rivers as the Hudson, which receives all the sewage of Albany, Schenectady, and Troy, seems incredible, were we not already familiar with the recklessness which hands over all our industries to a competitive system so fierce in its operation that adulteration is its necessary consequence.

Many of the bakeshops which furnish us with our bread baffle description, and on the poisons which are introduced into our milk I have already dilated. Wherever the temptation to adulterate is considerable and the consequence of adulteration to public health great, the community should not accept the risk that arises from competition except within the narrowest possible limits. For this reason, it will doubtless be wise for a coöperative commonwealth to own and run packing houses, butcher shops, pharmacies, bakeries, and to produce and distribute milk and ice.

As regards ice, it is amazing that the municipal authorities should not have undertaken this task before—especially in view of the raising of the price of ice for the poor by the Ice Trust. Every city has to supply its citizens with water, and as they are in control of pure water, it should be as much the function of the city to furnish pure ice as pure water. They have reservoirs free from pollution from which ice could be cut; and nothing but the political influence of the Ice Trust on the one hand, and the stupid indifference of the consumer on the other, has permitted this business to remain in private hands.[164]

The enormous profits made by the Meat Trust would permit not only of sanitary handling of this industry, but proper compensation to all engaged therein, and a notable reduction in the price of meat.

The fact that the baking industry is not trusted will make the taking over of this industry by the state a more difficult undertaking, but not for that reason an impossible one.

Competition is not necessarily to be eliminated in the taking over of these industries. It is quite possible that the state might not furnish good bread, and it ought, therefore, to be permissible for any individual to enter into this business. The competition will be limited because, inasmuch as the state will charge for its bread very little above cost price, few will be induced to enterinto this business out of the desire for making money. The only motive that will induce citizens to enter into the business will be that of furnishing bread to their taste. Moreover, such industries would have to comply strictly with hygienic conditions, and they would be not so numerous as to make inspection as difficult, ineffectual, or expensive as to-day.

The production and distribution of milk suggests a function of the state to which sufficient importance cannot be attached. I mean the creation of farm colonies. On this single point I am not supported by the authority of the Socialist party. In other words, farm colonies have never been suggested as a part of the Socialist program; but this seems to be due to an oversight, for there does not seem to be in the Socialist party, as far as I can judge of it, any opposition to the idea. And the rôle of the farm colony seems to me of such importance that it is hardly possible to give too much attention to it.

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