Equality Part 22

"And do I understand, then, that this stationary condition, after which no increase in the rate of wealth production could be looked for, was setting in while yet the primary needs of the ma.s.ses remained unprovided for?"

"Certainly. The satisfaction of the needs of the ma.s.ses, as we have abundantly seen, was in no way recognized as a motive for production under the profit system. As production approached the stationary point the misery of the people would, in fact, increase as a direct result of the compet.i.tion among capitalists to invest their glut of capital in business. In order to do so, as has already been shown, they sought to reduce the prices of products, and that meant the reduction of wages to wage-earners and prices to first producers to the lowest possible point before any reduction in the profits of the capitalist was considered.

What the old economists called the stationary condition of production meant, therefore, the perpetuation indefinitely of the maximum degree of hards.h.i.+p endurable by the people at large."

"That will do, Charles; you have said enough to relieve any apprehension that possibly we were doing injustice to the profit system. Evidently that could not be done to a system of which its own champions foretold such an outcome as you have described. What, indeed, could be added to the description they give of it in these predictions of the stationary condition as a programme of industry confessing itself at the end of its resources in the midst of a naked and starving race? This was the good time coming, with the hope of which the nineteenth-century economists cheered the cold and hungry world of toilers--a time when, being worse off than ever, they must abandon forever even the hope of improvement. No wonder our forefathers described their so-called political economy as a dismal science, for never was there a pessimism blacker, a hopelessness more hopeless than it preached. Ill indeed had it been for humanity if it had been truly a science.

ESTHER COUNTS THE COST OF THE PROFIT SYSTEM.

"Now, Esther," the teacher pursued, "I am going to ask you to do a little estimating as to about how much the privilege of retaining the profit system cost our forefathers. Emily has given us an idea of the magnitude of the two great wastes of profits--the waste of compet.i.tion and the waste of luxury. Now, did the capital wasted in these two ways represent all that the profit system cost the people?"

"It did not give a faint idea of it, much less represent it," replied the girl Esther. "The aggregate wealth wasted respectively in compet.i.tion and luxury, could it have been distributed equally for consumption among the people, would undoubtedly have considerably raised the general level of comfort. In the cost of the profit system to a community, the wealth wasted by the capitalists was, however, an insignificant item. The bulk of that cost consisted in the effect of the profit system to prevent wealth from being produced, in holding back and tying down the almost boundless wealth-producing power of man. Imagine the ma.s.s of the population, instead of being sunk in poverty and a large part of them in bitter want, to have received sufficient to satisfy all their needs and give them ample, comfortable lives, and estimate the amount of additional wealth which it would have been necessary to produce to meet this standard of consumption. That will give you a basis for calculating the amount of wealth which the American people or any people of those days might and would have produced but for the profit system. You may estimate that this would have meant a fivefold, sevenfold, or tenfold increase of production, as you please to guess.

"But tell us this: Would it have been possible for the people of America, say, in the last quarter of the nineteenth century, to have multiplied their production at such a rate if consumption had demanded it?"

"Nothing is more certain than that they could easily have done so. The progress of invention had been so great in the nineteenth century as to multiply from twentyfold to many hundredfold the productive power of industry. There was no time during the last quarter of the century in America or in any of the advanced countries when the existing productive plants could not have produced enough in six months to have supplied the total annual consumption as it actually was. And those plants could have been multiplied indefinitely. In like manner the agricultural product of the country was always kept far within its possibility, for a plentiful crop under the profit system meant ruinous prices to the farmers. As has been said, it was an admitted proposition of the old economists that there was no visible limit to production if only sufficient demand for consumption could be secured."

"Can you recall any instance in history in which it can be argued that a people paid so large a price in delayed and prevented development for the privilege of retaining any other tyranny as they did for keeping the profit system?"

"I am sure there never was such another instance, and I will tell you why I think so. Human progress has been delayed at various stages by oppressive inst.i.tutions, and the world has leaped forward at their overthrow. But there was never before a time when the conditions had been so long ready and waiting for so great and so instantaneous a forward movement all along the line of social improvement as in the period preceding the Revolution. The mechanical and industrial forces, held in check by the profit system, only required to be unleashed to transform the economic condition of the race as by magic. So much for the material cost of the profit system to our forefathers; but, vast as that was, it is not worth considering for a moment in comparison with its cost in human happiness. I mean the moral cost in wrong and tears and black negations and stifled moral possibilities which the world paid for every day's retention of private capitalism: there are no words adequate to express the sum of that."

NO POLITICAL ECONOMY BEFORE THE REVOLUTION.

"That will do, Esther.--Now, George, I want you to tell us just a little about a particular body among the learned cla.s.s of the nineteenth century, which, according to the professions of its members, ought to have known and to have taught the people all that we have so easily perceived as to the suicidal character of the profit system and the economic perdition it meant for mankind so long as it should be tolerated. I refer to the political economists."

"There were no political economists before the Revolution," replied the lad.

"But there certainly was a large cla.s.s of learned men who called themselves political economists."

"Oh, yes; but they labeled themselves wrongly."

"How do you make that out?"

"Because there was not, until the Revolution--except, of course, among those who sought to bring it to pa.s.s--any conception whatever of what political economy is."

"What is it?"

"Economy," replied the lad, "means the wise husbandry of wealth in production and distribution. Individual economy is the science of this husbandry when conducted in the interest of the individual without regard to any others. Family economy is this husbandry carried on for the advantage of a family group without regard to other groups. Political economy, however, can only mean the husbandry of wealth for the greatest advantage of the political or social body, the whole number of the citizens const.i.tuting the political organization. This sort of husbandry necessarily implies a public or political regulation of economic affairs for the general interest. But before the Revolution there was no conception of such an economy, nor any organization to carry it out. All systems and doctrines of economy previous to that time were distinctly and exclusively private and individual in their whole theory and practice. While in other respects our forefathers did in various ways and degrees recognize a social solidarity and a political unity with proportionate rights and duties, their theory and practice as to all matters touching the getting and sharing of wealth were aggressively and brutally individualistic, antisocial, and unpolitical."

"Have you ever looked over any of the treatises which our forefathers called political economies, at the Historical Library?"

"I confess," the boy answered, "that the t.i.tle of the leading work under that head was enough for me. It was called The Wealth of Nations. That would be an admirable t.i.tle for a political economy nowadays, when the production and distribution of wealth are conducted altogether by and for the people collectively; but what meaning could it conceivably have had as applied to a book written nearly a hundred years before such a thing as a national economic organization was thought of, with the sole view of instructing capitalists how to get rich at the cost of, or at least in total disregard of, the welfare of their fellow-citizens? I noticed too that quite a common subt.i.tle used for these so-called works on political economy was the phrase 'The Science of Wealth.' Now what could an apologist of private capitalism and the profit system possibly have to say about the science of wealth? The A B C of any science of wealth production is the necessity of co-ordination and concert of effort; whereas compet.i.tion, conflict, and endless cross-purposes were the sum and substance of the economic methods set forth by these writers."

"And yet," said the teacher, "the only real fault of these so-called books on Political Economy consists in the absurdity of the t.i.tle.

Correct that, and their value as doc.u.ments of the times at once becomes evident. For example, we might call them 'Examinations into the Economic and Social Consequences of trying to get along without any Political Economy.' A t.i.tle scarcely less fit would perhaps be 'Studies into the Natural Course of Economic Affairs when left to Anarchy by the Lack of any Regulation in the General Interest.' It is, when regarded in this light, as painstaking and conclusive expositions of the ruinous effects of private capitalism upon the welfare of communities, that we perceive the true use and value of these works. Taking up in detail the various phenomena of the industrial and commercial world of that day, with their reactions upon the social status, their authors show how the results could not have been other than they were, owing to the laws of private capitalism, and that it was nothing but weak sentimentalism to suppose that while those laws continued in operation any different results could be obtained, however good men's intentions. Although somewhat heavy in style for popular reading, I have often thought that during the revolutionary period no doc.u.ments could have been better calculated to convince rational men who could be induced to read them, that it was absolutely necessary to put an end to private capitalism if humanity were ever to get forward.

"The fatal and quite incomprehensible mistake of their authors was that they did not themselves see this, conclusion and preach it. Instead of that they committed the incredible blunder of accepting a set of conditions that were manifestly mere barbaric survivals as the basis of a social science when they ought easily to have seen that the very idea of a scientific social order suggested the abolition of those conditions as the first step toward its realization.

"Meanwhile, as to the present lesson, there are two or three points to clear up before leaving it. We have been talking altogether of profit taking, but this was only one of the three main methods by which the capitalists collected the tribute from the toiling world by which their power was acquired and maintained. What were the other two?"

"Rent and interest."

"What was rent?"

"In those days," replied George, "the right to a reasonable and equal allotment of land for private uses did not belong as a matter of course to every person as it does now. No one was admitted to have any natural right to land at all. On the other hand, there was no limit to the extent of land, though it were a whole province, which any one might not legally possess if he could get hold of it. By natural consequence of this arrangement the strong and cunning had acquired most of the land, while the majority of the people were left with none at all. Now, the owner of the land had the right to drive any one off his land and have him punished for entering on it. Nevertheless, the people who owned n required to have it and to use it and must needs go to the capitalists for it. Rent was the price charged by capitalists for not driving people off their land."

"Did this rent represent any economic service of any sort rendered to the community by the rent receiver?"

"So far as regards the charge for the use of the land itself apart from improvements it represented no service of any sort, nothing but the waiver for a price of the owner's legal right of ejecting the occupant.

It was not a charge for doing anything, but for not doing something."

"Now tell us about interest; what was that?"

"Interest was the price paid for the use of money. Nowadays the collective administration directs the industrial forces of the nation for the general welfare, but in those days all economic enterprises were for private profit, and their projectors had to hire the labor they needed with money. Naturally, the loan of so indispensable a means as this commanded a high price; that price was interest."

"And did interest represent any economic service to the community on the part of the interest taker in lending his money?"

"None whatever. On the contrary, it was by the very nature of the transaction, a waiver on the part of the lender of the power of action in favor of the borrower. It was a price charged for letting some one else do what the lender might have done but chose not to. It was a tribute levied by inaction upon action."

"If all the landlords and money lenders had died over night, would it have made any difference to the world?"

"None whatever, so long as they left the land and the money behind. Their economic role was a pa.s.sive one, and in strong contrast with that of the profit-seeking capitalists, which, for good or bad, was at least active."

"What was the general effect of rent and interest upon the consumption and consequently the production of wealth by the community?"

"It operated to reduce both."

"How?"

"In the same way that profit taking did. Those who received rent were very few, those who paid it were nearly all. Those who received interest were few, and those who paid it many. Rent and interest meant, therefore, like profits, a constant drawing away of the purchasing power of the community at large and its concentration in the hands of a small part of it."

"What have you to say of these three processes as to their comparative effect in destroying the consuming power of the ma.s.ses, and consequently the demand for production?"

"That differed in different ages and countries according to the stage of their economic development. Private capitalism has been compared to a three-horned bull, the horns being rent, profit, and interest, differing in comparative length and strength according to the age of the animal. In the United States, at the time covered by our lesson, profits were still the longest of the three horns, though the others were growing terribly fast."

"We have seen, George," said his teacher, "that from a period long before the great Revolution it was as true as it is now that the only limit to the production of wealth in society was its consumption. We have seen that what kept the world in poverty under private capitalism was the effect of profits, aided by rent and interest to reduce consumption and thus cripple production, by concentrating the purchasing power of the people in the hands of a few. Now, that was the wrong way of doing things. Before leaving the subject I want you to tell us in a word what is the right way. Seeing that production is limited by consumption, what rule must be followed in distributing the results of production to be consumed in order to develop consumption to the highest possible point, and thereby in turn to create the greatest possible demand for production."

"For that purpose the results of production must be distributed equally among all the members of the producing community."

"Show why that is so."

"It is a self-evident mathematical proposition. The more people a loaf of bread or any given thing is divided among, and the more equally it is divided, the sooner it will be consumed and more bread be called for. To put it in a more formal way, the needs of human beings result from the same natural const.i.tution and are substantially the same. An equal distribution of the things needed by them is therefore that general plan by which the consumption of such things will be at once enlarged to the greatest possible extent and continued on that scale without interruption to the point of complete satisfaction for all. It follows that the equal distribution of products is the rule by which the largest possible consumption can be secured, and thus in turn the largest production be stimulated."

"What, on the other hand, would be the effect on consumption of an unequal division of consumable products?"

"If the division were unequal, the result would be that some would have more than they could consume in a given time, and others would have less than they could have consumed in the same time, the result meaning a reduction of total consumption below what it would have been for that time with an equal division of products. If a million dollars were equally divided among one thousand men, it would presently be wholly expended in the consumption of needed things, creating a demand for the production of as much more; but if concentrated in one man's hands, not a hundredth part of it, however great his luxury, would be likely to be so expended in the same period. The fundamental general law in the science of social wealth is, therefore, that the efficiency of a given amount of purchasing power to promote consumption is in exact proportion to its wide distribution, and is most efficient when equally distributed among the whole body of consumers because that is the widest possible distribution."

"You have not called attention to the fact that the formula of the greatest wealth production--namely, equal sharing of the product among the community--is also that application of the product which will cause the greatest sum of human happiness."

"I spoke strictly of the economic side of the subject."