CHAPTER I

THE ECONOMIC ASPECT OF SOCIALISM

Let us begin by considering how large a part of our population is now devoting its entire time to the work of competition, as distinguished from that which is devoting its time to the task of production.

It is obvious that all who are devoting their time to the work of competition would, in a cooperative commonwealth, be free to give their entire time to production; and the time they gave to production would be so much taken away from the time which those now engaged in production have to give to it. For example, the United States to-day keeps alive, according to the census of 1900, over 76,000,000 men, women, and children; of these the working population is estimated at a little over 29,000,000, of which, however, many are not engaged in production or distribution; as for example, actors, clergymen, lawyers, soldiers; and although some others, such as journalists, physicians, and surgeons, are not occupied in production and distribution, they nevertheless are so necessary to every community that they may be regarded as a part of the working population. The percentage excluded, however, by excluding those not engaged in production and distribution, is so small that it is not worth while taking them into account; and for purposes of easy calculation we should, therefore, consider the whole population in round figures--75,000,000, of which 30,000,000 are engaged in production and distribution, the remaining 45,000,000 consisting of the aged, sick, women, and children who cannot work and in fact, all who by wealth or disability are deprived of the necessity of working. Now if, of the 30,000,000 who do the work of production, it is found that 15,000,000, or one-half, are engaged in work that results from the competitive character of our industrial system, it is clear that in a Socialist community in which there is no competition, these 15,000,000 would be applied to the work of production; and therefore every man would have to work only one-half the number of hours he now works in order to keep the community alive.

Let us see if we can form any idea how many are engaged in the wasteful work of competition, and how many, therefore, would in a Socialist society be set free to relieve the labor of those engaged in production.

It is conceded that of every one hundred men who start a new business ninety become insolvent. This means that for every ten fit and able to conduct a new business ninety engage in new business who are unable to earn their bread at it. In a cooperative commonwealth the exact number of men necessary to conduct business in any given place could be mathematically determined; and the ninety unsuccessful men who are now engaged in futile efforts to destroy the business of the ten successful men would be employed in production to their own advantage and to the relief of those already engaged therein.

The wastefulness, however, of the present plan is not confined to the circumstance that many are engaged in attempting to do what can better be done by a few, but is increased by the fact that in the conflict between the successful and the unsuccessful a vast horde of men are employed by competition, who would be thrown out of employment and therefore be serviceable for production in case competition were avoided. Amongst the men so employed are commercial travellers; these men occasion waste to the community, not only because instead of themselves producing they are living on the production of others, but because they constitute a large part of the passenger traffic of the country. The railroads are put to the expense of carrying these travellers all over the United States that they may each have an opportunity in every corner of the United States of decrying the goods of one another. And this throws a side light on the evils of our present plan, for the railroads have an interest in encouraging this work. If they did not have this horde of commercial travellers to carry about the country, many of them might not be able to pay interest on their bonds. The testimony taken by the Industrial Commission furnishes admirable instances of the waste attending competitive production and the corresponding economy that would attend a Socialist system. Mr. Edson Bradley, President of the American Spirits Manufacturing Company, testifies that in the whisky business "somewhere between the distiller and the consumer in this country, $40,000,000 is lost. This goes primarily to the attempt to secure trade."[133] Now the whole capital invested in liquors and beverages is, according to the last census, $660,000,000, whereas the total manufactures amount to about $12,686,000,000. It will be seen, therefore, that the capital invested in liquors and beverages is about one-twentieth of that invested in other manufactures. If, therefore, $40,000,000 are lost in getting the trade in the liquor business, it may be inferred that twenty times this amount--that is to say, $800,000,000--are lost in getting the trade by all the manufactures in the country. This represents only the expense of advertising in manufactures; it does not cover the advertising done by the whole retail trade, the department stores, insurance companies--life insurance, fire insurance, title insurance--real estate agents, quack medicines, and that vast body of population known as middlemen, who raise the price of commodities to the consumer and whose services would be eliminated in a cooperative commonwealth.

This latter class of advertising is very much larger than that of the manufacturer, because it is the peculiar function of the retailer to sell--to get the market--and the burden of advertising falls heavier upon him. If $800,000,000 therefore represents the cost to the manufacturer of getting the market, it is probable that the total cost of getting the market by the whole community does not fall short of twice this sum.

The advertiser practically pays the whole cost of printing and publishing the innumerable newspapers and magazines of this country. The one cent paid for such a paper as the _American_ does not cover the cost of the paper alone; it is the advertisements that pay handsomely for all the rest.

Advertising would be unnecessary in a cooperative system, where practically everything would be furnished by a single industry. As the Reverend E. Ellis Carr says,[134] the United States Government does not find it necessary to advertise postage stamps. The Standard Oil no longer advertises oil. Those of us who are old enough remember how, prior to the organization of the oil trust, our fences were placarded by the rival claims of a dozen different oils: Pratt's Astral oil, etc., in letters of huge and ungainly size.

The only advertising necessary would be that of private enterprises started in such industries as did not give satisfaction to the public, and these, it is to be hoped, would be relatively small.

Mr. Dowe, President of the Commercial Travellers' National League, testified[135] that "35,000 salesmen had been thrown out of employment by the organization of trusts and 25,000 reduced to two-thirds of their previous salaries.... The Baking Powder Trust has replaced men at $4000 to $5000 a year by others at $18 a week.... The displacement of travelling men represents also large loss to railways, amounting, on the estimate that each traveller spends $2.50 a day for 240 days, to $27,000,000, while the loss to hotels would be at least as much as to railways." Adding up these losses, we reach the following result:

35,000 salesmen at an average compensation (including commissions) of $3000 each a year $105,000,000 Loss in railroad travelling 27,000,000 Loss in hotel expenses 27,000,000 ------------ Together $159,000,000

In the few industries, therefore, in which competition has been diminished by the trust system, an economy of $159,000,000 was estimated to have been already effected in the employment of salesmen alone. And this was ten years ago. These figures enable us to appreciate the enormous economy that would result from an elimination of competition from our industries. An economy that constitutes a loss to commercial travellers, railroads, and hotels under the competitive system would constitute a pure gain to a Socialist community; for it would mean so much more labor for production. Our present system then encourages useless expenditure, whereas Socialism would eliminate it.

Another important economy would be made in the running of public enterprises, through the absence of the necessity of collecting revenue therefrom. In municipal tramways, for example, one-half the force could be dispensed with, for the functions of the conductor are practically confined to collecting fares. A similar economy would be practised on railroads; in telegrams; no stamps would be required for postage; no costly corps of clerks for bookkeeping.

Under our system gas is furnished to our cities by gas companies, each one of which tears up the streets at great detriment to public convenience and health, to lay its mains for the mere purpose of competing with existing companies, with the result of forcing a consolidation which tends to make gas dearer instead of cheaper to the consumer. Professor Ely estimates[136] that the consolidation of gas companies in Baltimore has cost eighteen millions, of which ten millions represent pure loss.

Much the same thing is true of railroads. Professor Ely quotes a railroad manager who states that if the railways of the United States were managed as a unit instead of by competing companies, such management would effect an economy of two hundred million dollars a year; he cites, as an instance of useless paralleling of roads, the numerous railroads which connect New York with Chicago. He estimates that these lines cost two hundred million dollars, and that the maintenance of the useless lines involves perpetual loss. To-day, when railroads have doubled in length and traffic, the possible economy may well be estimated at twice this amount. He is obliged, however, to admit that the paralleling of railroads results in considerable accommodation, when parallel lines pass through different places and occasion some advantage in the time-table. With many lines in the United States this, however, is not the case. The Colorado Midland parallels the Denver and Rio Grande, passing through virtually the same places, and as both are subjected to the necessity of connecting and forwarding passengers to lines at their extremities, both are obliged to run trains at the same hours. There is in this case no advantage either to the time-table or to new places.

Nor does the competition of parallel roads always furnish better accommodation to the public. Between Chicago and Denver one line is able easily to run trains from place to place in twenty-four hours; but for the purpose of avoiding a freight war with competing lines, it has entered into an arrangement with them under which it agrees not to run passenger trains in less than thirty-six hours. The public, therefore, instead of gaining, loses an advantage of twelve hours, thereby learning at no small inconvenience that competition does not always compete.

What is true of the railroads and gas companies is also true of telegraph business. The Western Union was capitalized at one hundred million dollars. It is estimated that the cost of laying the lines actually used by the Western Union was not more than twenty millions; eighty million dollars, therefore, have been wasted by the existing system, which encourages private companies to construct lines with the result of compelling other companies to buy them up. Professor Ely adds that "it cost England nearly as much to make the telegraph a part of the postoffice as it did all the other countries of Europe put together, because in these the telegraph has been from the beginning a part of the postoffice, and the wastes of competition had been avoided."[137]

Another most wasteful feature attending our present system is the expense of distributing goods; for example, the articles which enter most into our daily life, milk, bread, butter, eggs, meat, fish, and vegetables. Compare the method of distributing these things with that for distributing letters adopted by the postoffice. The fact that the government is the only instrumentality through which letters are distributed permits it to effect economy in time, labor, and expense by sorting the letters beforehand according to streets and confining the distribution in any one street to a single carrier, who distributes the letters door by door.

This is the economical system for distributing all things in regular use that would be adopted by the Socialist plan. Compare this now with the plan necessitated by the competitive system. Every block is served with milk by a number of milk dealers instead of by one;[138] every block is furnished with bread by a very large number of dealers instead of by one; every block is furnished with meat by a very large number of dealers instead of by one; and so on through every article which enters into our daily use.

Not only is there great waste of labor in the business of producing and distributing the necessaries of life under the competitive system, but the system itself creates a large class of business that absorbs much of the wealth of the community and employs a very large number of its members. For example, under a socialist system there would no longer be any necessity or advantage in insurance, whether against death or fire, or accident, or hail, or defective title, or any other danger. The reason of this is obvious: we insure against pecuniary loss arising out of these accidents because otherwise the whole loss will fall upon ourselves. In a Socialist society some of occasions for loss would not exist at all, and those that did exist would fall upon the entire people and would consequently be inappreciable by any one member of it. For example, a man insures his life so that his children will not be reduced to poverty by his death; but in the Socialist society the widow and the child are provided for, being all of them members and all sharers in its income. Death in such a case would practically not constitute a loss to the state financially, because the number of deaths of the very old and the very young--the unproductive members of the community--is far greater than that of its productive members.

Insurance companies are beginning to understand the importance of keeping their policy holders in good health. The Metropolitan Life Insurance Company is to-day maintaining nurses for this purpose.

Another business that would be eliminated in a Socialist state is the entire business done by brokers; not only Wall Street brokers, but real estate brokers, mining brokers, and brokers of every description, in so far as they are engaged in competition. The abolition of Wall Street would carry with it the abolition of gambling in stocks which is a necessary feature thereof. No law has yet been devised, though the attempt has often been made, that would, so long as the competitive system endures, put a stop to gambling in stocks. A law which would successfully stop gambling in stocks would stop legitimate dealing in stocks also. But the immoral element involved in "puts" and "calls" is only an exaggeration of the immoral element involved in all industrial transactions built upon the principle of private profit. For although business can be conducted in such a way as only to furnish to those engaged in it a fair remuneration, it perpetually furnishes a temptation to contrive so that it shall furnish a large rather than a fair return. In fact, the whole struggle of business consists in endeavoring to secure the largest return of profit for the least expenditure of labor. The man who succeeds in getting the largest return for the least expenditure is the successful business man; and no man does this with more security than the next class to which attention may be called, whose occupation would come to an end in the Socialist state; namely, the bankers.

It would take too long to enter here into an accurate and fair estimate of the service rendered by the banker and the reward he obtains for it. Most writers who favor Socialism undervalue the functions of the banker. They are so impressed by the enormous incomes which bankers make that they do not appreciate the great services they render; and although, in a Socialist state, the banker _qua_ banker would tend to disappear, the man who to-day does the work of a banker would, it is hoped, do the same work for the state. So that although the business of banking would disappear, the best form of government would be that in which individuals who have been discovered to be best fitted for the onerous and difficult duties of finance would be those to whom these duties would be intrusted. Whether the man best fitted to do this difficult work would be intrusted with it under the Socialist plan is a doubt raised as an objection to Socialism which will be considered later.[139]

Another large class of intelligent men, now engaged in carrying on the quarrels which result from the competitive system, would be left without an occupation under the Socialist plan; namely, the lawyers. With them, the hatred and vindictiveness which arise from litigation would in a Socialist society, in great part, disappear also. For lawyers constitute the class whose business it is to conduct these quarrels, and, alas! also to inflame them. When we consider that in New York city alone there are nearly ten thousand practising lawyers, and add to these the clerks, stenographers, bookkeepers, and office-boys employed by each of them, those employed in the courts, the sheriff's office, the county clerk's office, marshals, deputy sheriffs, and others; and take into account that most of these men are engaged in fighting, we cannot but be struck by the enormous advantage to the community of a system which would practically eliminate this class altogether.

I must not be understood to mean, however, that there would be no necessity for courts under the Socialist plan. Even though crimes against property were eliminated by Socialism, there would still be a temptation to commit crime, owing to sexual jealousy and in a certain degree to intemperance and idleness. It cannot be doubted that intemperance and idleness would tend to diminish with the disappearance of the misery that reduces men to the physical condition that engenders these vices, but there would still, doubtless, be some intemperance and some idleness; there would certainly remain unhappy marriages; and as every man is to remain possessed of a small amount of property there would be minute questions of property sometimes involved. But it is hardly conceivable that such questions could involve any system of justice more elaborate than that of the justice of the peace, and possibly a single court of appeal. The diminution of competition would so simplify the law that no question would be likely to arise that the parties to the litigation could not themselves explain. How little litigation would be likely under a Socialist _regime_ may be judged by comparing the litigation to which the administration of the postoffice gives rise with the interminable lawsuits which result from the administration of railroads.[140] Moreover, it is to be hoped that a Socialist community would at last have leisure to study criminology and to understand that the criminal has to be treated as a sick man rather than a wicked one. The whole system of criminal procedure would be changed, and the type now known as the criminal lawyer would disappear. The existing system, under which every prosecuting officer considers his reputation involved in securing the punishment of every accused person brought before the court,[141] necessarily gives rise to a corresponding class of lawyer who regards his reputation as well as his fee involved in opposing the efforts of the prosecuting officer by any means, however unjustifiable. Of course, to the extent to which the competitive system was left standing, there would have to be lawyers to protect competitive interests. But these lawyers would be supported by the competitive system.

If, now, we consider that the large number of men liberated by the substitution of Socialism for our present form of government would not only diminish the labor of those now engaged in production, but that it constitutes the part of our population engaged in fanning the flame of hatred in the minds of men, the advantage to a community of having this perpetual source of trouble removed will be obvious. But we are not concerned so much now with the reduction of hatred under the Socialist plan as with its economy.

Let us next pass to the consideration of the wastefulness involved in the field of production itself:

In 1894 horses in the West became so valueless that they were left unbranded by their owners, lest the branding of them involve the payment of taxes thereupon. Cattle, on the other hand, have of late risen in value; the price of them fell so low some time ago as to involve the ruin of all those largely engaged in raising them; but to-day everyone is rushing back into this business. This state of things furnishes a fair opportunity of judging how imperfectly informed the producer is as to the needs of the community. _He is only informed that the community is overstocked with an article by being ruined in the course of producing it._ This plan is not only productive of misery to a large number of individuals in every community, but is necessarily an extremely wasteful one. The object of every community ought to be to produce the things it needs, not the things it does not need. The present system, on the contrary, obliges the community to be continually producing the things it does not need as the only means by which it can arrive at a knowledge of what it does need.

For under the existing system, overproduction occasions a surplusage of things in themselves valuable, but the exchange value of which has been diminished by their abundance. And the producer cannot afford to keep this surplusage, because he has fixed charges to pay. He has to sell his crop at a loss because he must have money to pay rent, or interest on mortgage, or salaries, or for his own support during the year. It is this pressure he is under to sell which impoverishes him. And its consequences are far-reaching; for as the price of raw cotton goes down, cotton manufacturers are encouraged to buy, and to increase the output of their factories; and so overproduction of raw material tends to result in overproduction of manufactured goods.

In a Socialist society the industry or good harvest of one year would have for effect a diminution of labor the next; or greater comfort or luxury next year for the same labor; no man's labor would be lost, and the bountifulness of Nature would be a blessing and not, as now, a misfortune.

The efforts to prevent the overproduction of cotton in the South gave rise to a convention in 1892, regarding which Professor Ely quotes a telegram from Memphis, January 8, as follows:

"That the farmers of the South are in earnest in their endeavors to solve the serious problems of overproduction of cotton is evinced by the enthusiastic meeting of delegates to the convention of the Mississippi Valley Cotton Growers' Association, which was called to order in this city this morning."[142]

And again the speech of the President of the Boston Chamber of Commerce:

"In 1890 we harvested a cotton crop of over eight million bales--several hundred thousand bales more than the world could consume. Had the crops of the present year been equally large, it would have been an appalling calamity to the section of our country that devotes so large a portion of its labor and capital to the raising of cotton."[143]

Nothing could better illustrate the evil of our present system and the benefits of Socialism than such a state of things as is described in the speech already quoted from the President of the Boston Chamber of Commerce.[144] If in a Socialist Society more bales of cotton were produced in any given year than the community or the world could consume, the community would store away the unused cotton and modify its agriculture in a manner to bring the cotton crop into proper relation to existing needs. But such an event could not be an "appalling calamity"; it could not be anything but a benefit; so much more wealth for the community; so much less labor for its citizens. And what is true of the cotton crop is equally true of all other crops. Overproduction is impossible in a cooperative community, for all the overproduction of one year would mean less work in that particular kind of production the next. Every citizen in the community would profit by so-called overproduction instead of, as now, suffering from it.

Overproduction is closely allied to invention, which, as is well known, has been a source of despair to workingmen; for improvements in machinery almost always throw large numbers of them out of employment. In India, as has been described, the destruction of hand-loom weavers by machinery brought about a misery hardly paralleled in the history of war; "the bones of the cotton-weavers are bleaching on the plains of India." Yet invention, far from bringing distress to the workingmen, as under our system it must, would in a cooperative commonwealth prove an unqualified advantage. For every invention that increases the efficiency of human labor diminishes the amount of time that must be spent in labor to obtain the same result. In a cooperative state the saving of labor is a benefit to every individual in the community, whereas under the competitive system the saving of labor is of immediate benefit to the owner of the patent alone, and means immediate distress to the laborers it particularly affects.

A standard objection to Socialism is that it would remove all stimulus to invention. This I believe to be a profound mistake.

In the first place, inventors are not always urged to invention by the prospect of financial reward. The great discoveries of humanity, at the basis of all our practical advances, were made by men who neither sought nor obtained a reward therefor. It was not with the view of making money that Newton discovered and propounded the laws of gravity, or Ohm the laws of electrical resistance. Nor do inventors to-day reap the reward of their inventions. Capitalists often have an interest in suppressing inventions; for inventions generally involve the expensive transformation of existing plants. For example, Mr. Babbage[145] describes how a patent for welding gun-barrels by machinery had long been unused because of the cheapness of hand labor; but as soon as a strike forced up wages recourse was had to the patent, which until then had been neglected.

Capitalists often prefer to dispense with an improvement rather than go to the expense which improvements generally occasion. This was the unwritten motive for the opposition of England to the construction of the Suez Canal, and was believed by M. DeLesseps to be the motive of their opposition to the Panama Canal.[146] Again, no one who has had personal acquaintance with inventors can believe that their discoveries are to any material extent the result of financial motive. It would be difficult to imagine the conditions under which Edison and Maxim would not invent. They cannot help inventing; they are as much under a necessity to invent as a hen to lay eggs. Undoubtedly there are certain environments which favor the production and utilization of inventing types, and others that disfavor the production and utilization of such types. And undoubtedly a motive for invention is a part of the environment which does contribute to invention; but would such a motive be wanting in a Socialist society? I think it can be shown that it would not only be present, but would be a stronger motive in the Socialist society than in our own; for under our own the reward which an inventor receives for an invention is a patent, and a patent is, as all lawyers will testify, merely a subject for litigation. In other words, every man who invents a useful thing has to overcome the objections of the patent office; the objections of infringers; the objections of owners of machines which would be superseded, all three obstacles of no small order. And not until they are all overcome, if indeed, they are, is the patent likely to be a source of income to the inventor. Under the Socialist order, however, every man is interested in increasing the productiveness of society to diminish the hours of labor; and nothing, moreover, would be easier than for a Socialist Society exceptionally to reward invention by diminishing the hours of labor due to it by the inventor.

If an inventor by any one invention shortened the hours of labor in an aggregate amount equivalent to a lifetime of his own work for the community, he ought to be relieved of the necessity of himself doing further work. If the invention were clearly due to inventive skill and not to accident, it would be to the interest of the industry in which he was engaged to furnish him with a laboratory where he could experiment with a view to further invention, as the General Electric Company does for its inventors and Mr. Westinghouse for his. There is not one inventor in a hundred but would laboriously avail of such an opportunity; for the delight of an inventor is to invent. So inventors would constitute one of the Honor group of the community. They would receive during their lives the consideration due to their inventiveness and industry. At present the enormous majority of inventors die poor and unknown. Of all the inventors in America only three that I know of are rich, Westinghouse, Bell, and Edison. Practically all the rest have been victims of their own inventive faculty. Who knows the name of the inventor of the slot machine so much in vogue to-day? His name was Percival Everitt, and he died a pauper in the street.

But we need not have recourse to argument to demonstrate that pecuniary reward is not necessary to stimulate invention. There is one profession in which a germ of self-respect has established the rule that no discovery or invention shall receive pecuniary reward--the medical profession. No doctor who wants to keep or earn a standing patents a medicine or surgical instrument. Those who do so are at once ostracized. Medicine or surgical inventions are deemed by self-respecting doctors too important to the community for the inventor to limit their use by patent.

If this idea of social service to-day animates the medical profession, why should it not ultimately animate other professions, other industries, other occupations? Why should it not animate them all?

Another profession has furnished the elements for all invention and has never asked a pecuniary reward--I mean the teachers. If, for example, we take such a subject as electricity, it will be found that all the fundamental discoveries that enable the modern use of electricity are due entirely to the researches of men who, out of sheer love of the work, added research to the occupations for which they were paid. Sir Isaac Newton was the first to discover the use of glass as a non-conductor of electricity. Galvani and Volta, who gave their names--one to Galvanic, and the other to Voltaic electricity--were professors in Italy. The action of the electric current on a compass needle was discovered by Professor H.O. Oersted in Copenhagen; and the nature of electro-motive force, current strength and resistance, were determined by Professor G.S. Ohm in Holland. But the greatest discoveries of all were made by Faraday, who refused a title in order to remain a professor all the days of his life. Is it possible that with the record of these men before us, we can maintain the theory that gain is the only stimulus to invention? If we think a little, we shall see how essentially childish this notion is.

There are three principal motives for invention:

The desire to make money is one, but my experience of inventors has persuaded me that it is the least, and is only perceptible in inventors of the smallest caliber.

The faculty of invention is itself the determining motive. A man who has a faculty _must_ exercise that faculty or suffer. The artist _must_ paint; the sculptor _must_ sculpt; the musician _must_ make music; the poet _must_ make rhymes. Lowell said that when he had no time to state a proposition carefully in prose, he stated it in rhyme.

No one who has worked with inventors would be guilty of the error that inventors need the stimulus of money reward. The mind of the inventor teems with inventions as a herring at spawning season teems with spawn. And as the herring must relieve herself of her spawn so must the inventor relieve himself of his inventions. One great inventor of the present day was in 1883 so fertile that the company who had secured his exclusive services paid him to go to Europe and stop inventing in order to avoid the ruinous expense of taking out his patents. The inventor is driven by two forces: a function that insists upon being exercised, and the pleasure which this exercise occasions. Every man who can do a thing well loves doing that thing. To-day when athletics bring notoriety it is very natural to conclude that men row to get this notoriety. But in the old days when there was little or no notoriety, men who could row, rowed for the pleasure of it; men who could box, boxed for the pleasure of it. So to-day because a few inventors--a very few--have become wealthy, the conclusion is drawn that inventors invent only to make money. It is a pardonable fallacy, but one that it takes very little intellectual effort to explode.

A man gifted with curiosity and imagination will forget altogether the needs of the body in his effort to attain his end. Inventors are notoriously improvident. Bernard Palissy not only forgot to eat, but to furnish food to his wife and children. Nay, he not only starved himself and them, but burned his furniture to the last chair in his desperate efforts to get the glaze he was in search of. A chemist will forget mealtime and bedtime in his laboratory. There is no force in the world more compelling than the force of an idea; none to which the body is under a more complete subjection. An inventor in pursuit of a solution needs no more stimulus than a stag in the rutting season in pursuit of his doe. The theory that he does, and that it is the stimulus of money that he needs, is that of the amateur who has never seen an inventor at work, or of the bookkeeper who reduces everything--body, mind, soul, and heart--to dollars and cents.

An inventor may have been compelled to abandon research by the necessity of making money or by the difficulty of finding it. Many an one has been crushed by just such difficulties as these; and indeed it may justly be said that more inventions are lost to us by the money difficulty than are secured to us by the stimulus of a money reward.

A third motive is the desire for consideration which is at the bottom of many other desires--at the bottom even of the desire for money itself. For if we analyze the desire for money we shall perceive that it includes two very different motives: the motive of prudence--the desire to secure the comforts and luxuries of life; and the motive of ambition, or the desire for the consideration of others. Now the former is the first in time, for a man must begin by securing the material things of life. But once these are secured the motive that keeps men making money is desire for consideration. And this desire, though evil when excessive, is in moderation one of the greatest of human virtues; for it sets men upon deserving the affection of their neighbors and promotes unselfishness and self-sacrifice. One of the curses of the competitive system is that the desire for consideration, which in its essence is a virtue, is converted by our money system into a vice, because money is the chief instrument in securing consideration.[147] More will have to be said on this subject later. Here we may content ourselves with noting that in a Socialist society consideration will be secured not meretriciously through money, but deservedly through service. The inventor who shortens hours of labor for the community will belong to the Honor Roll. He will secure this recognition not after having forced his invention on the capitalist and fought its merits through the courts, created unemployment for his fellows, and crushed competition out of the field his patent covers--but directly from the industry he has benefited, without the waste that attends the establishing of patent rights to-day. The inventor under Socialism will have a stronger stimulus than he has to-day; for the chances of securing livelihood and consideration are certainly not more than one in a hundred, whereas under Socialism they will be a hundred to one. There will not be the opposition of invested capital to overcome; nor the hostility of his fellow-workman; nor the villainy of the infringer. If his invention can reduce the hours of labor or otherwise benefit the community, it will be hailed with delight and honor. And so even though he need no stimulus he will under Socialism have it; for his reward will be prompt and secure.

Moreover, as Professor Ely has pointed out, the tendency of invention in a Socialist state would be to replace work which now involves drudgery by machinery that would tend to lessen or eliminate it.

If it were conceivable that a law could be made or enforced requiring that millionaires, and none but millionaires, were to serve as stokers, there is no doubt that all the ingenuity in the land would at once be put to making the work of stoking less detestable than it now is; if necessary, naval architecture would be so reformed from top to bottom, as to reduce the work of stoking to that pressure of a finger upon a button which is the only physical work imposed by modern conditions upon the millionaire to-day.

The improvements due to invention would in a Socialist society differ, perhaps, in character but not in quantity, for invention obeys the particular stimulus which gives rise to it. Thus Karl Marx points out[148] that mechanical traction was not introduced into mines until a law forbade the use of women and children there, and the "half-time system stimulated the invention of the piecing-machine," thereby replacing child labor in woolen-yarn manufacture. Again, immense improvements have been made in charging and drawing gas retorts, owing to labor troubles, and there is no doubt that all arduous work would soon be made less arduous if we all had to take a turn at it.

The objection that Socialism, would destroy the stimulus to invention has been treated at what may seem disproportionate length on account of its extreme importance. For it is owing to human inventiveness that production to-day tends to outstrip consumption. Of all the speculations upon the possible advantages of a new social order those which concern themselves with the shortening of the average working day are the most fascinating, yet the most dangerous. They are fascinating because, of the many afflictions of the present order it is the excessive workday that we feel most, for it is that which robs so many of us or our need of personal life; and we know that any reduction of the hours of labor would mean an immediate increase in the quantity, and an ultimate increase in the quality, of our life. But they are dangerous speculations because they probe to the very heart of that wonderfully complicated economic process which we call Capitalism. To make any scientific estimate of the social labor time required to produce the commodities socially necessary for our health and happiness would require an elaborate and intimate investigation of the most secret details of industry, trade, and transportation, such as there is little likelihood of ever being made. Nevertheless, it is possible, in the light of some data already at our command, to get a suggestive glimpse into the probabilities of the situation.

The 13th Annual Report of the Bureau of Labor is an exhaustive study of the actual time required to produce some 600 different commodities, ranging all the way from apple trees to loaves of bread and shingles. The principal object of this Report was to compare the cost of production by hand with the cost of production by machine; and it has demonstrated the enormous progress that has been made in the art of production by the substitution of machine for hand labor. For example, before the introduction of machine labor it took about sixty-three hours and a half to produce thirty bushels of barley; whereas to-day, with the use of machinery, the same amount can be produced in two hours and forty-two minutes (p. 24-5). The Report, in estimating the cost of producing, includes breaking the ground, sowing and covering seed and pulverizing topsoil, hauling water and fuel for engine, reaping, threshing, measuring, sacking and hauling to the granary (p. 432-3).

Having these figures it would seem to be a very simple matter to ascertain the total time required to produce the various commodities consumed by the average workingman's family. It would seem as though all we had to do was to make out a list of these commodities, get the time cost of each from the Report and add these together to get the total. Unfortunately, however, the Report does not cover all the items which would have to be included in this list of necessaries; and to make an estimate from a single commodity or from two or three commodities would be a little dangerous, because some of the commodities have much higher time values than others and would therefore introduce many elements of uncertainty.

But we may approach the question from another standpoint. The Report does furnish the time value of ten of the principal crops and of bituminous coal. Let us, then, restate the problem in the following form:

_Assuming social ownership of land (including bituminous coal lands) and modern machinery, how many hours' labor per day would be required to produce enough of the principal crops to sell at farm or mine for a sum sufficient to buy the necessaries of existence for the average family?_

The first step, obviously, is to determine what constitutes the necessaries of existence for the average American family. Here again we may resort to official statistics. In the year 1900-01 the U.S. Bureau of Labor entered upon an investigation of the income and expenditure of the average American family. Agents were sent out all over the country to collect data at first hand. These agents got reports from some 25,440 families, and the figures are tabulated and summarized in the 18th Annual Report of this Bureau.[149]

These 25,000 families had the necessaries of existence, we know, simply because they managed to live, survive, and reproduce. Their average income was $749.50; their average expenditure, $699.24, thus representing a saving of $50 a year. But many of these families had boarders, many had grown-up children or wife at work, many had lodgers, so that the income was artificially increased or diminished by these factors. There were, however, 11,156 families among these which the report designates as "normal"; these were distinguished by the following characteristics: a husband at work; a wife at home; not more than five children--none over 14 years of age; no dependents, boarders, lodgers, or servants (p. 18). Good units, you see, from a statistical standpoint. Now, the average income of these normal families was $650.98; the average expenditure $617.80.[150]

Here, then, we have over 10,000 families, of five persons each, who manage to live on $617.80 a year, without resorting to crime or charity. That they live in straitened conditions is undoubtedly true, but they are by no means submerged, for in their cooperation with the agents of the Bureau of Labor they all displayed qualities of intelligence which are not to be found among the submerged. In short, they were average self-respecting American workingmen's families.

But let us assume that $617.80 is inadequate; let us provide a margin of safety by allowing $800 as the minimum for procuring the necessaries of existence.[151] Below is a table showing time cost per unit (bushels or pounds) of ten principal crops and of bituminous coal. This is derived from the tables on pages 24-25 of the 13th Annual Report of the Bureau of Labor, which are assumed to be accurate.

------------+-------------+--------------+---------+----------- | | Time Cost. | | Time Cost Commodity. | Quantity. +--------------+ Unit. | in | | Hrs. | Min. | | Minutes. ------------+-------------+------+-------+---------+----------- Barley | 30 bush. | 2 | 42.8 | 1 bush. | 5.427 Wheat | 40 " | 6 | 17.4 | 1 " | 9.435 Hay | 2 tons | 15 | 30.5 | 1 ton | 465.25 Oats | 40 bush. | 7 | 5.8 | 1 bush. | 10.645 Rice | 60 " | 17 | 2.5 | 1 " | 17.042 Rye | 25 " | 25 | 10 | 1 " | 60.40 Corn | 80 " | 42 | 38.1 | 1 " | 31.97 Potatoes | 220 " | 38 | ... | 1 " | 10.364 Tobacco | 2,750 lbs. | 606 | 5.1 | 1 lb. | 13.22 Cotton | 1,000 " | 78 | 42 | 1 " | 4.72 Bit. Coal | 200 tons | 379 | 36 | 1 ton | 113.88 ------------+-------------+------+-------+---------+-----------

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:: _x_ minutes: 185,759,513,000 minutes. Working this out we find that _x_ equals 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 2-1/2 hours should be sufficient to procure the necessaries of existence, valuing these at $800.

----------+-----------+--------------+---------+--------+----------- | Average |Average Total |Time | |Total Time | Annual |Value on Farm |Cost in | | Cost in Commodity.| Production| Dec. 1, |Minutes. | Unit. |Thousand | 1898-1907.| 1898-1907. | | |Minutes. ----------+-----------+--------------+---------+--------+----------- | Millions | | | | Barley | 117 bush.| $53,872,896| 5.427 | 1 bush.| 633,959 Wheat | 642 " | 444,206,221| 9.435 | 1 " | 6,057,270 Hay | 59 tons | 524,124,456| 465.25 | 1 ton | 27,449,750 Oats | 841 bush.| 265,595,639| 10.645 | 1 bush.| 8,952,445 Rice | 18 " | 14,594,913| 17.042 | 1 " | 305,756 Rye | 29 " | 16,527,099| 60.40 | 1 " | 1,751,600 Corn |2,309 " | 953,158,114| 31.977 | 1 " | 73,834,893 Potatoes | 255 " | 134,236,563| 10.364 | 1 " | 2,642,820 Tobacco | 743 lbs. | 59,548,881| 13.22 | 1 lb. | 9,822,460 Cotton |5,233 " | 457,787,442| 4.72 | 1 " | 24,699,760 Bit. Coal | 260 tons | 290,858,483| 113.88 | 1 ton | 29,608,800 | +--------------| | +----------- | |$3,214,510,707| | |185,759,513 ----------+-----------+--------------+---------+--------+-----------

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 1-1/4 hours for these items, thus making the work-day 3-3/4 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 cooperative 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 family _at 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 cooperative 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.

FOOTNOTES:

[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 L100,000,000 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._