CHAPTER II

ECONOMIC CONSTRUCTION OF THE COOPERATIVE COMMONWEALTH

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 Schaeffle, in a book still widely read, entitled the "Quintessence of Socialism." But this book loses some of its authority when we remember that Schaeffle followed it with another, entitled "Why Socialism is Impossible"; and assuredly the state Socialism described by Schaeffle 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 before their 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 cooperative 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 cooperative 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. The _laissez faire_ school had barely announced their doctrine and proceeded to legislate in accordance therewith, before the abominable consequences of the _laissez faire_ doctrine became so obvious that steps had at once to be taken to put 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 practical Socialist 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.

Sec. 1. HOW SOCIALISM MAY COME

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 the development 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 have created 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 the _bona fide_ desire 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.

Sec. 2. REFORM AND REVOLUTION

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 triumphantly passed, 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 end or 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 furnishing _bona fide_ travellers 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 the benefits 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.

Sec. 3. POSSIBLE TRANSITIONAL MEASURES

I shall describe the cooperative 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 declares the 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 to _organize_ and _control_ the 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 of order, 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 to _own_ all sources of production (this is state Socialism); but is to have the right and power to _organize_ and _control_ the 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 the Socialist 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 of _power_ for 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 looking forward 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 cooperative scheme of industry if, having no capital, they have to work each in his own industry under the new and prosperous conditions which cooperative 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 being able 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 improving the 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 in _Everybody'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 the _Social 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 cooperative 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 not _own_ the oil industry; it would reserve the right to _control_ it. 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 role 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 to be 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 common error 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 by _manual_ workers."[161] No such foolish proposition has ever been propounded by any Socialist however "extreme."[162] Socialists recognize the enormous role 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 role 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 cooperative commonwealth certainly play the dominant role. 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 are essentially 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 cooperative 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 enter into 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 role of the farm colony seems to me of such importance that it is hardly possible to give too much attention to it.

Sec. 4. FARM COLONIES

The first farm colony was established in Holland. The system has since taken root all through Europe, but has reached its finest development in the Canton of Berne, in Switzerland. It proceeds upon the principle that while it is difficult to make money out of farm land, it is easy to get nourishment from it, and that the most obvious remedy for idle labor is to apply it to idle land.

In Switzerland it is also recognized that idle labor is divided into two distinct classes--the unemployed and the unemployable--and the unemployable must be again classified into those unable to work through physical defect and those unable to work through moral defect; that is to say, those who are morally willing and physically unable and those physically able and morally unwilling. There are therefore in Switzerland two different kinds of farm colonies: forced colonies which deal with the tramp, the drunkard, and the misdemeanant--all those persons upon whom discipline has to be exercised; and free colonies for those physically disabled or who are out of employment through causes over which they have no control.

It is in the poorest countries in Europe that farm colonies have reached their highest development. Switzerland has been driven to organize farm colonies by the fact that she is too poor to disregard the burden of the unemployed and unemployables. It is in the richest countries, England, France, and America, that the farm colony system has been most neglected. The farm colony plan is the cheapest as well as the best way of solving the problem of pauperism, deserving or undeserving. This question has been fully treated elsewhere[165] and it is only referred to here in sufficient detail to explain why it is believed that the farm colony system will form an essential feature of every Socialistic community. For although there will be an enormous diminution in the number of those unwilling or unable to work (for the reason that under a cooperative commonwealth no one need be overworked and, therefore, no one need be reduced to the physical exhaustion which is the prime cause of pauperism), and although there will be fewer drunkards because drunkenness, also, is largely due to overwork, nevertheless, until the cooperative commonwealth has been in operation several generations, that part of the population that is unwilling or unable to work will have to be provided for. And even later there will certainly be some part of the population that will require discipline as regards work. The farm colony system, more and more indispensable in our existing civilization, will perform an important role in the gradual transformation of society from the competitive to the cooperative form. It probably presents to-day one of the most perfect pieces of constructive Socialistic work in which legislators can engage. For it has the extraordinary advantage of satisfying an immediate necessity of the competitive system and at the same time realizing some fundamental principles of Socialism; for example, that every man and woman is entitled to work; that the aged are entitled to support; and that the state should own enough land to assure both these things.

The fact that our railroads are now awakening to the necessity of handling the tramp proves the necessity of the system, and the fact that in Switzerland the forced colonies have been made to pay their own expenses indicates its economy. Indeed, no proposed legislation illustrates so well the power driving us towards Socialism as the history of attempts at legislation in this direction in New York State.

Twelve years ago a farm colony bill was drawn by a committee appointed by the charitable societies in New York; but it did not secure at Albany a moment's serious attention. We were told by our legislators that poverty is not a crime. When we answered that our bill did not make it a crime more than the penal code, but only purposed to substitute for the expensive and degenerating system of the misnamed workhouse, inexpensive and regenerating work on a state farm, and that the plan had operated effectually in Holland and Belgium for over a hundred years, we were told that the plan might do in Holland, but would not do here. So in the archives of the French senate may still be read the report made by Thiers, when appointed by Louis Philippe on a committee to investigate the first railroad ever built, which concludes as follows: "Railroads may serve a purpose in England, but they are not suited to France."

A similar bill, improved by borrowing from late experience in Switzerland, drawn by a similar committee (to which was added the Commissioner of Charities, Mr. Hebberd) was presented at Albany at the session of 1909, and although not passed, was sufficiently well received to encourage the hope that it will pass at the session of 1910. It had the support of the great railroads in New York state; for the railroads have discovered that the tramp is an intolerable nuisance.[166] Colonel Pangborn of the Baltimore & Ohio has lately estimated that the damage occasioned by tramps to railroads in the United States amounts in a single year to twenty-five million dollars.[167] For the tramp in America does not tramp; he rides on railroads; he sets fire to freight cars and freight stations; he obstructs the lines, wrecks trains, and is a fruitful cause of action for damages. The measure, therefore, which was thrown out by the Assembly when proposed from motives of humanity, may be passed as a measure of self-defence, and self-defence thus constitutes an element of the power always at work on the side of progress that neither ignorance nor interest will be able to resist.

The reason for believing that the farm colony will perform an important function not only during the period which must elapse before the cooperative commonwealth, but also after the cooperative commonwealth has been attained, is that work on land seems to be the only work to which the unemployed and unemployables can be suitably put.

Every day we seem to be increasing our capacity to make land productive. We not only make new discoveries, but profit by those of more ancient civilizations than our own. It has long been known that in the East they subject grain to the same system of replanting that truck gardeners do early vegetables.[168]

Dr. Fesca informs us that in Japan rice is treated in the same way: "It is allowed first to germinate; then it is sown in special warm corners, well inundated with water and protected from the birds by strings drawn over the ground. Thirty-five to fifty-five days later, the young plants, now fully developed and possessed of a thick network of rootlets, are replanted in the open ground. In this way the Japanese obtain from twenty to thirty-two bushels of dressed rice to the acre in the poor provinces, forty bushels in the better ones, and from sixty to sixty-seven bushels in the best lands. The average, in six rice-growing States of North America, is at the same time only nine and a half bushels."[169]

Agriculturists are familiar with the results obtained by Major Hallett's growing what he called "pedigree cereals"; that is to say, by using as seed only the best ears in his crop; and by giving to each grain sufficient space he obtained sometimes as much as 2500 grains for one grain planted. Even better results were obtained by Grandeau.[170]

We are only beginning to know how much can be produced out of an acre of ground. One thing, however, is certain: where labor is cheap and land limited as in the case of our unemployed, there is no method known by which labor can produce better results than by putting it to what is called "intensive culture"; and as the secrets of intensive culture become more known, it becomes clear that if the state would only take the trouble to set aside a certain amount of land for the purpose, it could without further expense than that of the first installation make able-bodied unemployed and unemployables self-supporting.

This is not a question of fertility; it is simply a question of space. Unfertile land is made fertile by intensive culture. It has been said that the Paris gardener defies the soil and the climate. Every truck gardener there stipulates in renting land that he "may carry away his soil down to a certain depth, when he quits his tenancy."[171] In other words, soil is now a manufacture; we are no longer confined to fertile areas; we can make any area fertile by the application to it of industry and intelligence.

Municipalities can contribute enormously to the fertility of the land around them. A district near Paris, called Genevilliers, was a few years ago a desert tract of sand. The city poured over this tract the sewage of the city after a filtration that deprived it of its offensive features. This tract has become of fabulous fertility; but the municipality having failed to buy this land before this operation, the increased value of the land has accrued to the persons who happened to be the owners of it; whereas if the city had begun by purchasing the land at the price at which it could have been purchased before this operation, it would have had here a tract of enormous value that, by the farm colony system, would have greatly contributed to relieve the city of the burden of pauperism.

It would seem as though the art of using manure were practically unknown in this country by the farmers. The results that can be obtained in this way are given in the Farmer's Bulletin, No. 242, where an intelligent use of manure resulted in crops of 6.7 tons of hay for every acre of cultivation;[172] and this not by the application of any extraordinary science, but simply by recognizing the obvious fact that manure must be spread daily and not allowed to lose most of its value from being piled into heaps, where it burns and degenerates.[173]

The farm colony must be so organized that it furnishes work summer and winter. As its name implies, the colony is not confined to work on land. Many skilled workmen would lose their skill if they were put to farm work. Swiss colonies, therefore, have a few industries established in each colony to which skilled workmen are put. This occupies unskilled inmates during the winter months when the weather is too inclement for out of door work, and also teaches them. Moreover, in a self-supporting farm colony there is work which can be done by the aged and the infirm, teaming, taking care of animals, plucking fruits and vegetables, preparing them for preserving, and all the small jobs that attend large housekeeping.

The farm colony plan will in part relieve the state of the expense of old-age pensions. Every industry will provide pensions for its own workers and thus the state will be relieved by the guilds; but there will always be some aged left unsupported by such private industries as will continue to exist by the side of the guilds. Of these it may be expedient to relieve some in their own homes; but many will find in the free farm colony an abiding place more congenial to themselves than the almshouse, and far less expensive to the state. It will be more congenial because there will be no more disgrace attending a free farm colony than any other state employment, and because it will be organized so as to render its work as agreeable as possible. It will never be so attractive as work outside the colony because it will be subject to the kind of regulations that attend all big institutions, so there is little fear of these colonies becoming larger than is good for the community. But it will be a home rather than an almshouse, and it will be less expensive to the state because of the work which even the aged can do.

The farm colony furnishes a system by means of which the state can compel the unwilling, able-bodied tramp and pauper to earn his own livelihood; where it can afford work to the unemployed without cost to the state; and can utilize to the utmost possible the services of those who are not able-bodied.

It must not be imagined that discipline of a harsh character is necessary. There are in every one of these colonies in Europe dark cells, where a man who will not work, or will not obey rules, is confined and kept on bread and water until he consents to work and to obey rules; and the very fact of the existence of these cells, and of this system, has been found sufficient to secure good work and obedience to rules without using the dark cells except under exceptional circumstances. The director of one of the Dutch colonies told me that he did not use the dark cell once a year.

There is no reason why the farm colony system should not be extended to the treatment of all crime except that we have prisons, prison managers, and a prison administration which stand in the way of radical prison reform; and the general stupidity which prefers the ills we have to the blessings which, obvious as they are, we have not imagination enough to comprehend. The folly of keeping an enormous population of criminals idle, within four walls, at an enormous expense to the community, when we could keep them busy to their great advantage, physical, intellectual, and moral, without a penny of cost to the community, is one of those things which future generations will find it difficult to believe.[174]

In the cooperative commonwealth there will be no prisons, no penitentiaries, no almshouses, no tramps, no unemployed. There will be farm colonies of various grades, from those that have no discipline beyond that necessary to secure the observance of rules necessary to all institutional life, through those that have just enough discipline to keep lazy men at work, to those that have sufficient discipline to keep even criminals at work. For although it is obvious that under a cooperative commonwealth in which there is no necessity for exhausting any individual, no necessity for alcoholism or stimulation, no anxiety regarding the means of existence; where there is throughout a high standard of living, ease for the mind and abundance for the body, the production of the natural criminal ought to be immensely diminished, yet the occasional criminal will have to be provided for.

For further study of the farm colony system as it has been developed in Switzerland, and as it might be applied in the United States under existing conditions, the reader is referred to "The Elimination of the Tramp."[175] It is hoped, however, that enough has been said regarding these colonies to enable us to consider the immense role which an intelligent classification of farm colonies would play, not only under existing conditions, but in the future cooperative commonwealth.

A single farm colony for dealing with tramps as proposed in the bill now before the Assembly of New York State would render an indispensable service by taking off the streets and highways the vagrants who, because they are now confounded with the unemployed, tend to confuse the mind of the public on this all-important subject. But although such a colony, organized under the same conditions as the forced labor colony in Switzerland, would render this service without cost to the state beyond that of first installation, its usefulness in the problem of production at large would be extremely small. It would attain its purpose if it were self-supporting. But if this tramp colony proves a success, the same system could be applied not only to take care of all our dependent and criminal classes, but to play an important role in the production of the necessaries of life.

There ought to be three distinct classes of colonies:

The criminal farm colony surrounded by walls where the strictest discipline would be enforced, and within which the inmates would be confined to intensive cultivation, handicrafts, and some form of machine industry.

The forced labor colony for misdemeanants and able-bodied vagrants and paupers where larger liberty would be enjoyed; and

The free labor colony where there would be no regulation except that indispensable in all institutions.

Perhaps to these should be added probationary colonies as described in the "Elimination of the Tramp," p. 59, for those as to whose willingness to work there is doubt. These would furnish the "test" so much sought by English Poor Law Guardians. From these probationary colonies the inmates would be graduated down to the forced labor colony, or up to the free. So also criminals would be prepared for social life by passing through the forced labor colony, and inmates of the forced labor colony prepared for social life by passing through the free labor colony.

In a cooperative commonwealth free labor would have no objection to industrial work conducted within these colonies, because the less work there is to be done in any given industry, the less hours would the workers in that industry have to give to it. So that every industry carried on in the colony would by so much diminish the amount of goods produced outside by that industry, and to that extent relieve the free labor engaged therein. This great objection to penal labor being removed, the state will have an advantage in distributing the industries throughout its colonies according to geographical conditions.

The criminal colonies will naturally be more industrial in their character than the agricultural, because they will have to be operated within prison walls. They will nevertheless include truck gardening and horticulture.[176] Penal colonies, therefore, will group themselves around great water power, which will be retained by the state and not dissipated by the gift of franchises to private corporations.[177]

Misdemeanants and tramps will preferably be set to work on large farms which, because of their size and remoteness from towns, will render escape difficult. The methods adopted in Switzerland for making escape difficult if not impossible, are fully described in the "Elimination of the Tramp."[178]

As in these colonies there is more or less work to be done all the year round, it would be indispensable to build in connection with them factories which could be operated during the winter months, the state being careful to limit the factories to the production of things already socialized, so as not to compete injuriously with private industry.

Free labor colonies ought to be located near large centers of population, not only because of the character of the things they will produce, for example, milk, vegetables, and fruits, which need a market at the door, but also because it is in these great centers that pauperism and unemployment express themselves in largest figures and in greatest variation. In these colonies inmates will remain the shortest terms, and it is important, therefore, to have them in proximity to places where the inmates are likely to live in order to avoid the heavy expense of transportation.

Free labor colonies will be engaged in the production of milk for two reasons: The hygienic importance of milk is so great that it should as much as possible be removed from the competitive field. It is important that milk should be produced as near as possible to the town where it is to be consumed. It is wiser, therefore, to assign the production of milk to the free labor colony, near the city, than to the penal or forced labor colony that would be comparatively remote. But it must not be imagined that the production of milk can be confided exclusively to such inexpert labor as that of the inmates of free labor colonies. The production of milk can only be entrusted to careful experts receiving a relatively high rate of wages. Free labor colonies, therefore, will have to be provided with a corps of men and women trained in the production of milk and dairy products.

It may be suggested that the fact that dairy products must be entrusted to trained experts is a reason for not associating the production of milk with free labor colonies. This objection disappears when account is taken of the fact that dairy farms should have connected with them such subsidiary products as chickens and pigs. Skimmed milk is of the greatest value in these subsidiary productions; so also is the garbage that would accumulate in such an institution as a farm colony. The care of pigs and poultry can be confided to defectives such as we are likely to find in a free labor colony. It furnishes work all the year round; it enriches the soil rather than impoverishes it.

Free labor colonies, therefore, will be engaged in the production of milk, pigs, poultry, vegetables, fruits, and flowers. They will be furnished with grain by the forced labor colonies in the States where grain can be cultivated on a large scale; and by distributing industries among the three classes of colonies and arranging for exchange of products, the whole colony system ought not only to be self-supporting, but to produce more than the colonies can themselves consume. The disposition made of these products will be studied in connection with the problem of distribution.

Under such a plan, no pauperism or even poverty will be tolerated in the towns. As soon as a man, woman, or family is incapable of self-support in the competitive field, or because of sickness or accident in the cooperative field, they will be taken out of the town where their presence is an expense and a nuisance not only to themselves, but to the community, to a free farm colony where health can be restored and defectives put to the best use possible.

Farm colonies in the Rocky Mountain region where sheep and cattle can be fed on public land for nine or ten months in the year, and fed by hand during the remaining two or three months, will furnish cattle and sheep to municipal packing-houses that will distribute meat with the economy of the postoffice system from door to door.

State farm colonies in the grain-growing districts will furnish grain to all the other colonies and wheat to municipal bakeries that will distribute bread with the economy of the postoffice system from door to door.

Free labor colonies adjoining cities will produce milk, butter, and dairy products, pork and pork products, chickens, eggs, vegetables, fruits, and flowers and distribute them with the economy of the postoffice system from door to door.

State factories distributed amongst penal colonies in accordance with the geographical conditions that will make them most efficient, will furnish garments, shoes, hats, etc., to the other colonies at the cheapest possible price.

By the side of these productions, there will be maintained exactly the same system of private ownership that exists to-day with all the virtues that emulation produces free from the fatal consequences that make failure result in misery, pauperism, prostitution, vagrancy, and crime. For so long as the individual prospers in his private enterprise, he will be encouraged to maintain it; whereas the moment he fails, he will come within the state system under which the private individual having proved his inability to support himself and his family under the competitive plan, will be shown how to support himself and his family by state institutions that will have reduced this task to a science.

That the state will occasionally fail in this task is to be expected. But what is the worst consequence that can result from failure? Nothing more than the maintenance of the competitive system in every field of industry where the state fails. If the state fails to furnish good bread, private initiative will take the baking of bread from the state and will keep it until the state succeeds in furnishing bread to the taste of the public. If the state fails in furnishing garments, private initiative will keep garment making in its hands except in so far as the state makes garments for the inmates of its own institutions.

Many problems connected with this system of production will occur to the mind of the intelligent reader. These problems, however, will be found to belong more strictly to the question of distribution and government control--two subjects that cannot be intelligently discussed until the question of private property in land has been answered.

Sec. 5. LAND

Socialism was formerly defined as including state ownership of land. This idea is to-day, however, abandoned in favor of a much more intelligent system:

One principal difference between the Socialist and the Single Taxer is that the Single Taxer is opposed to state ownership of all land; and it is probable that the Single Taxer is more wise in this respect than the state Socialist. In the first place, the state Socialist who wants all land to be owned by the state ignores some very fundamental facts in human nature: He ignores the fact that humanity has for generations cultivated the instinct of ownership in land. There is nothing dearer in life to the French peasant than the strip of land barely sufficient to support life, and he will cling to that strip of land until some accident has torn it from him and reduced him to the condition of a pauper. Out of this instinct of ownership springs the extraordinary industry of the farmer--an industry which is not excelled or equalled in any but sweated trades.

The life of the peasant or small farmer is one of hardship that leaves no moment for leisure, and of monotony that populates our lunatic asylums.[179] Not only is the life of the farmer one of the hardest, but it is also one of the least secure. The failure of a single crop, the loss of a single horse, disease in a chicken yard, a violent hail-storm--any of these may oblige a farmer to put that first small mortgage on his farm which is the beginning of his ruin. Nevertheless, the farmer sticks to his farm and labors on it from the rising of the sun, through the glare of noon and up to the last ray in the west, because the land is his own and he has for it the kind of affection that a mother has for her child--an affection that makes no sacrifice too great. It would seem unwise to deprive the farmer of the satisfaction of ownership and the community of the industry and productivity which this sense of ownership results in.

There is no conceivable advantage in depriving the farmer of the ownership of his farm. The farmer now pays taxes on his land. The right of the state to exact a tax puts the state in the position of a landlord except that the state calls the tribute it levies on the farm a "tax," whereas the owner calls this tribute "rent." Of course there is a great difference between the tax levied by the state and the rent paid by the farmer to the private owner, because the one is light and the other heavy. This is the material difference which must not be lost sight of in the discussion of the subject. Every farmer expects to pay taxes to the state and all he asks is that the tax be not an onerous one. It can be rendered less onerous in the cooperative commonwealth than to-day because a cooperative commonwealth will not exact payment of taxes in money, but will content itself with payment in produce. Instead of the state taking over the land and depriving the farmer of ownership, and exacting rent, the cooperative commonwealth will leave the ownership in the farmer and exact a tax in produce; and so long as this tax is paid, the farmer will remain the undisputed owner of his land, and will continue to give it that hourly care without which the best results can hardly be obtained.

There is nothing in modern Socialism, therefore, to frighten the farmer. He cannot but benefit by it, for his taxes will be levied in produce instead of in cash; and it is the conversion of farm produce into cash which is the farmer's main difficulty to-day, as was seen when money was discussed.

The title of a farmer under a cooperative commonwealth will be much like that of the peasant in the Island of Jersey, who generally purchases his land on condition of paying a certain amount to the owner per annum. These Jersey titles are just as secure as freeholds in England or in this country, subject of course to the payment of the rent charged.

The tax in produce, however, which the farmer is to pay the state will be far more just and fair. Land will be classified according to productivity, and the farmer will never be called upon to furnish the state with a larger proportion of his crop than he can afford. On the other hand, farmers will not be allowed to keep the ownership of land which they do not use. If it is to the benefit of the community that land be drained, the owner will be called upon to drain it within a definite period. If he does not drain it within that period, the state will take his undrained land from him. Nor will the farmer be allowed to cut down timber where the maintenance of the timber is deemed important to the commonwealth.[180] He will be taught forestry and the propagation of deer, and shown how to produce as much income out of his timber as he would out of the land when cleared. Above all, he will be relieved from the exorbitant prices which he now pays the trust for every article which he does not himself produce. The state will undertake the task of distribution, so that he can receive as the farmer in South Australia does to-day--a part payment in cash for all produce he delivers at the nearest railroad, and a subsequent payment when his goods have been sold through the instrumentality of the state. But this last belongs to Distribution.

Prices will not be lowered by the competition of farm colonies. On the contrary, they will be maintained by the prices asked by farm colonies. Farm-colony prices will allow every efficient farmer a substantial living, and the farmer will have the benefit of the example and advice furnished him by the nearest farm colony, which will be a model farm.

It may be objected that under this system the farmer will not have sufficient motive for adopting modern methods. There are undoubtedly farmers who are averse to the adoption of modern methods; but there are also thousands of farmers eager to know modern methods. Rev. J.D. Detrich, who produced 6.7 tons of hay for every acre in cultivation on his farm[181] was so pestered by neighbors who called to study his methods that he was obliged to remove to an adjoining State. Recalcitrant farmers will slowly be compelled to adopt modern methods by the fixing of prices that will make modern methods indispensable to prosperity.

In every way, therefore, the farmer will be benefited by the introduction of Socialism. He will keep the title of ownership in his farm that is dear to him; he will pay his taxes in produce instead of in cash; he will have the benefit of education and advice at his door; and he will be relieved of the exorbitant prices now demanded by the trusts, and of that greatest of all his anxieties, the conversion of his produce into cash.

As regards city land, the problem is a very different one, because the treatment of city land is an essential part of the whole municipal problem.

Practically all municipal problems may be reduced to one--namely, crowding. As long as farmers live half a mile apart as they do on a standard 160-acre farm in the West, sewage and garbage are matters of individual rather than social interest. Provided the farmer does not pollute springs and water courses, he may dispose of his sewage and garbage as he chooses; but the moment men and women are crowded into cities on the vertical as well as on the horizontal plane, the disposal of sewage and garbage becomes of vital importance to the whole community.

So also the maintenance of roads is a comparatively simple problem in the country, where traffic is light; whereas in the city, where traffic is great, the pavement of the streets presents problems not only of resistance, but of noise. The droppings of horses on the country road can be neglected; whereas those of horses passing a thousand per hour in a crowded city street create a dust injurious to health, and give rise to the problem of street cleaning.

Again, where land is plentiful compared with population, the rent charged for land is small and often negligible; whereas where land is scarce compared with the population, as in the island of Manhattan, the rent becomes prohibitive for all except the wealthy, and workingmen are reduced to the alternative between living near their work in unwholesome tenements and living far from their work in less unwholesome conditions. And this scarcity of land gives rise to many problems of congested districts, of tuberculosis, sanitation, transportation, and of rent.

If we look back on the whole history of our civilization, we shall see an unconscious struggle always going on between private interest and public spirit. The one tends to divide cities into two districts, one composed of the palaces of the rich, the other of the slums of the poor, and seeks to convert every problem of municipal government into means of increasing private wealth. The other, on the contrary, we find manifested in the "Age of Faith" building cathedrals; in the Age of Beauty or Renaissance, building public squares and gardens; and in recent years taking such services as transportation out of the hands of private individuals and vesting them in the city. This struggle between public and private interest has been, up to the present time, unconscious or fitful. The Socialist asks that it should become conscious and progressive; that is all.

Let us take a few concrete instances: It was not until dark alleys were found to facilitate the work of criminals that municipalities were driven to light the streets; it was not until a district of Birmingham had become a menace to public welfare because its filth engendered both disease and crime that the municipality was driven to put an end to it; it was not until cholera began its ravages that municipalities were driven to provide clean dwellings; it was not until the evils attending imperfect transportation became intolerable that New York was driven to build subways; it was not until fires devastated the city that New York organized its fire department; it was not until the filth of the streets was intolerable that the city took the cleaning of streets out of the hands of private contractors. Up to the present time municipal activities have been forced into existence by the growth of the evils to a point where they could no longer be endured.

Over a century ago it was said that municipalities were "sores upon the body politic," and this phrase has been solemnly quoted ever since as a sort of slogan of despair; whereas the municipality might be and ought to be, if intelligently administered, the mainspring of all our great national activities. The Socialist asks that, instead of waiting for evils to become intolerable before we attempt to cope with them and then adopting measures which, because they come late, are inadequate, we should take up municipal administration as a housekeeper takes hold of the administration of her house, adopting measures which we must inevitably in the end adopt before the evils become intolerable, and before the city becomes so over-built as to make the difficulty of coping with these evils insurmountable.

This is the spirit in which a citizen should approach the question of city land; and if we do approach it in this spirit, the problem of how to put an end to the evils arising from private ownership of land is in many respects similar to those which present themselves in our effort to put an end to the evils of private ownership of stock.

For example, some land will be in the hands of men who have contributed absolutely nothing to its value. They have inherited it, and upon the rent which conditions have enabled them to exact they have lived lives of uselessness if not of profligacy. One has abjured his American nationality to avoid the payment of the personal tax, and applies the sums which he receives, thanks to the industry of the community in New York, to the publishing of a conservative newspaper in London opposed to every effort permanently to improve the conditions of humanity there. Some land will be in the hands of men and women who have invested it in the economies of a laborious life and for whom it represents an old-age pension. Between these two, there is every degree of merit.

The problem of compensation in taking over of city land will prove as complicated as in the socialization of industries, and very much the same principles will apply. Every city presents problems of its own, and it is difficult, therefore, to lay down general principles applicable to all cities. But one point seems clear: We shall have to live in our cities while we are transforming them, and this means that the transformation will have to be slow. If the state undertakes to transform the slums into habitable tenements, the present families of the slums must be accommodated somewhere while the transformation takes place.

Rebuilding our cities to accommodate them to the changed conditions of a cooperative commonwealth, will be little more than doing on a large scale what Birmingham did on a small scale when it converted its slums into Corporation Street. If it is to be done well, it must be preceded with the deliberate preparation indispensable to the success of every large undertaking.

The Single Taxers are right when they claim that the enhancement of the value of land due to the industry of the many ought not to be appropriated by the idle few. The "unearned increment" should accrue to the whole community and not to a few landowners. As, therefore, the enhancement of the value of land due to crowding is a peculiar feature of the city, and distinguishes it from the country, it seems indispensable that city land should eventually be owned by the city; by the mass of citizens who labor and dwell therein.

Another thing seems clear, namely, that a city cannot be transformed to suit the needs of a cooperative commonwealth so long as the city is owned by a few individuals who, by virtue of their ownership, have a right to resist the transformation.

The ownership in city land is, therefore, totally different from ownership in farmland. In the latter case, there is no necessity for suppressing private ownership; whereas in the city, such suppression seems indispensable. It may be added that the beautiful parts of every city are due to state ownership. The Place des Vosges was built by Henry IV; the Place Vendome was built by Louis XIV; the Place de la Concorde was built by Louis XV; the Champs Elysees and the Arc de l'Etoile were built by the two Napoleons. Practically all the great monuments of Paris were built by the state. Her streets were planned by the state, and the height of her private buildings regulated by the state. The same thing is true of London and Vienna. It is in our American cities alone that private initiative being allowed full sway, our buildings look like ill-assorted books in a neglected library; that we are committed to interminable streets and avenues which pass what monuments we have but lead up to none. In a word, our cities are committed to conditions so inartistic that the task of making them beautiful seems impossible short of destroying and rebuilding them altogether.

Sec. 6. SUMMARY OF PRODUCTIVE SIDE OF ECONOMIC CONSTRUCTION

It will be seen that modern Socialism does not propose to interfere with the private ownership of the farmer in his farm, and that the production of agricultural and dairy products will remain much in the same hands as at present, except that the state will have farm colonies to standardize production; to weed out those farmers who, because of their incapacity, are unable to produce what the land is capable of producing; and to furnish work not only for unsuccessful farmers, but for all who cannot earn a living in socialized industries or under competitive conditions. Such a condition of things will involve no redistribution of tasks. It will leave every man working in the industry in which he is; it will leave those who are engaged in competition still engaged in competition where it is not productive of injurious result. It will raise wages in all socialized industries, and raise the purchasing power of these industries by reducing prices; it will, therefore, raise the standard of life for the workingman, secure for him clean and wholesome habitations, and a possibility of maintaining a home in the best sense of the word, where our present civilization makes such a home impossible. By farm colonies it will make the exploitation of men, women, and children impossible. Children will not work at all until they have reached the fullest education of which they are capable; women will not be allowed in industrial work as long as they are bearing and rearing children; and men need never receive a sweated wage when they have state institutions where they can in exchange for their work, have board, lodging, and as much wage as they can in addition earn. There will be no criminal class, for no man need be driven to crime by want; and by the abolition of the criminal class and the criminal environment, it is probable that crime resulting from economic causes will tend to disappear. Nor will a woman be driven by need to prostitution. Every industry will provide compensation for its own superannuated and defectives, and the state will have but few for whom to furnish old-age pensions. The community will be relieved, therefore, of the enormous burden of vagrancy, pauperism, prostitution, and crime; and all this without interfering with any competitive industry capable of supporting its workers up to the standard of life created by socialized industry, and without any such convulsion as will throw upon the state the dangerous problem of assigning tasks.

We have heretofore considered only the problem of production; we have still to consider that of distribution.

Sec. 7. DISTRIBUTION.

At the present time anarchy reigns over production and distribution. This anarchy has been in great part already replaced in the field of manufacture by the trust. By combination, or as Mr. Rockefeller says, "by cooperation" (Book II, Chapter III), all those engaged in the manufacture of the same thing have eliminated competition so as to obtain the advantages of production on a large scale. The cooperative commonwealth will avail itself of the work already done by the trust, and as has been already shown, will leave all these trusted industries in the hands of those actually engaged in the work thereof.

In the field of agricultural production, however, little has been done to diminish the anarchy of distribution.[182]

The anarchy which now characterizes distribution must be considered under two heads: competition in the field of transportation, and competition in the field of retail trade. America is unique among the nations of the world for insisting upon railroads being run on the competitive system. In Europe franchises are given to railroads with a view to public welfare and the distinct policy of avoiding competition. Capitals are adopted as railroad centers and franchises so granted as to furnish a system of main lines radiating from these centers in such a manner as to compete with one another the least possible. In America we have proceeded upon the plan that railroads are to compete just as traders do, and that it is by competition that rates are to be kept down. Railroads competing with one another between the same places are run at a social loss, the community is better served by one railroad run in the interests of the country than by two between the same points run in the interests of private individuals.

As regards transportation then there seems to be no room for competition whatever. The state should own all systems of transportation with a view to bringing the produce of the country and of the factory to the consumer at the lowest possible cost to the community.

Let us consider how a cooperative community will deal with competition in the retail trade.

There is no reason why the private retailer conducting a business for his own account should not continue to exist side by side with a system of state distribution. There are reasons of propinquity and convenience that enable the small retailer to live to-day next door to the big department store. In the same way, the private retailer can perfectly well continue to live by the side of the state distributing system. Nevertheless, some parts of retail trade will be taken over absolutely, for example, milk, for hygienic reasons. And other departments will be so completely in the hands of the state that so long as the state furnishes a good quality it will be improbable that private enterprise will find it useful to interfere; as for example, the baking of bread.

As regards all those things which are likely to remain in the hands of individual enterprise, as, for example, things in which taste plays an important role--garments, hats, wallpaper, furniture, musical instruments, other instruments of pleasure such as athletic goods, bicycles, automobiles, steam launches, photographic apparatus--the retailing of these is likely to remain as much a matter of private enterprise as the production of them.

As regards the necessaries of life the consumer should be able to get them at the lowest possible price. All things of a hygienic character, which it is of the utmost importance that the consumer should have of the purest quality, the state will undertake not only to transport, but to distribute in state stores. It is of course conceivable that in some towns the state store will not be conducted to the satisfaction of its citizens, and private enterprise will therefore run a store in that place better than the state. In such case, private enterprise ought to be encouraged in its competition. But inasmuch as good state management will be in a cooperative commonwealth a matter of the greatest importance, it is not likely that the citizen will long endure bad administration. This belongs more to the political aspect of Socialism than to the economic, and will be studied there. We shall therefore now pass to a brief consideration of just how this system of distribution will work.

The state, having control of transportation, will adopt the method now prevailing in South Australia, and will pay the manufacturer and the farmer in cash at least 50 per cent--if not more--of the value of his goods at the railroad station. These will then be transported by the state in conformity with the needs of the various villages, towns and cities to stores of its own. These will be run upon the cooperative plan; the goods sold at only a small margin above cost, this margin being kept to meet the expense of distribution; and the profits--if any--will be distributed at the end of the year amongst customers on the cooperative plan.

It is obvious, however, that if the state is to distribute in the most economical manner, it must have some control over production. It must not be called upon to transport and distribute more of any one thing than the public wants; nor must it be caught without enough to satisfy the needs of the consumer. This makes it indispensable to study the problem of control at the same time with the problem of distribution.

No function of the state will probably be more important in a cooperative commonwealth than that of controlling the production of those things which, because they are necessaries or have hygienic importance, a cooperative commonwealth should itself control, transport, and distribute.

The problem of control is not as difficult as it might at first seem. We know perfectly well to-day how much wheat, corn, beef, mutton, etc., are actually consumed by our population. All we have to do to determine this amount for ourselves is to take, for example, the amount of wheat produced in the country, and the amount exported, subtract the exports from the product and determine the amount consumed in this country. The same thing can be done practically with every staple product. The state, therefore, can determine every year in advance how much of every staple product _must_ be produced for the needs of the country. It will, of course, add to the amount actually needed a margin to provide for poor crops and other accidents.

Let us consider how this control will be exercised as regards farm and dairy products. It has been already suggested that land should be classified according to geographical conditions, exposure, and soil. The productivity of the farm colonies will of course be known by the state. Every private farm will have its productivity roughly determined and every farmer will be expected to produce a minimum amount. Of the amount he produces, a part will be taken as taxes to furnish the government with the means to pay for administration. The rest will be paid for partly in gold and partly in orders on the state stores. The object of this system of payment is the following:

It has been explained that taxes will be paid in produce. This payment therefore needs no further comment. A minimum product ascribed to every farm will be paid for with orders on the state store. This represents the amount which the farmer _must_ produce to keep his farm. It also represents the amount which the state _must_ have to supply its citizens with food. All over and above this amount will be paid for in orders on the public store, or in cash, as the farmer shall elect; or, if the farmer chooses to dispose of this part to private traders he will be at liberty to do so. By this method the community will be furnished with produce belonging to three different categories: produce in the shape of a tax for which the farmer receives no compensation, this being practically the rent he pays the state for his land; second, the minimum produce for which the farmer receives equivalent orders on the public store, this category being the produce upon which the community depends for its sustenance.

The order upon the public store need differ in no way from the greenback of to-day except that, instead of entitling the holder to a dollar's worth of gold, it will entitle him to a dollar's worth of goods in the public store. Thus if wheat can be produced in a cooperative commonwealth at 50 cents per bushel, as seems likely,[183] the farmer will receive for every two bushels an order for one dollar on the public store.

The third category which represents the surplus above what the farmer is required to produce in order to keep his farm, will constitute a surplus of production applicable to exchange for luxuries and foreign goods. This exchange can be made directly by the farmer or by private banks and private merchants, or by the state.

Let us consider the control the state must exercise over, and the role it must play in, the distribution of products of socialized industries such as oil, sugar, steel, iron, leather, etc. The amount of iron and steel required by the nation in the course of a year is not as constant a quantity as the amount of wheat. It is, however, sufficiently constant to make it possible to establish a minimum. The state will begin by requiring socialized industries to furnish this minimum and determine the price to be paid for it, thus creating a stock on hand which can be accumulated so as to diminish the amount needed in subsequent years and furnish a reserve which can be called upon in case of extraordinary need. The state, having established the minimum of steel, sugar, oil, etc., which it needs, will require of the socialized industries to produce this minimum. It will also require them to produce, in addition, an amount necessary to contribute their share to the maintenance of the government. Every associated industry, therefore, will furnish at regular intervals the result of its manufacture in three categories similar to those already explained--a part for taxes; a minimum already referred to that will be paid for in orders on the public stores, and a surplus of which it can dispose either to the state or directly to foreign bankers and merchants. In this way, every associated industry will so adjust its manufacture as to produce these three categories; the proceeds of the surplus will be applicable in the first place to the support of workers through accidents, illness, and during old age; and the rest will be divided as profits amongst those engaged for example in the steel industry. These profits will be applicable to the purchase of luxuries either produced at home or produced abroad.

Under this system the cooperative commonwealth will have goods to exchange with foreign countries and will to this extent be a merchant as regards all those things which it holds in excess of the needs of the community, and as regards that surplus which it may purchase from the farmer and the socialized industries. This leaves room for a system of private banks and private enterprises in international trade; for the farmer and the socialized industries will be free to trade their surplus through the government or through private individuals as they may consider most to their profit.

The distributive stores will present very much the same aspect as our department stores of to-day except that, though they may be even more gigantic in size, they are not likely to be as diverse; for a large proportion of the things now dealt in by department stores will doubtless remain in the hands of private industry. The essential duty of the state will be to provide its citizens with necessaries, not luxuries pertaining to taste and pleasure.

The state store will be divided into two departments, retail and wholesale; not that a different price need necessarily be charged in the retail than in the wholesale department, but because the machinery for furnishing builders with bricks is different from that for furnishing housewives with groceries. The state stores will also have a system for the regular delivery from door to door of such necessaries of life as are daily or at stated intervals consumed, e.g., milk, bread, coal, ice, meat, vegetables, and fruit, thereby applying postoffice economies to the distribution of these things.

The labor of distribution will be diminished by the slow transformation of city dwellings into gigantic apartment houses so constructed as to give the fullest supply of light and air to every room; and these apartment houses will have a distributing system of their own to the relief of the state.

As regards alcoholic drinks, the state will undoubtedly undertake the production of these with a view to taking this industry as far as possible out of private hands. It will not be necessary, however, to take it entirely out of private hands provided all private production is subjected to vigorous control. But the distribution of alcoholic liquors will probably be monopolized by the state on the Gothenburg plan with, perhaps, the important feature which characterizes the Public House Trust in England; that is, the persons in charge will receive a salary and an additional commission upon the sale of non-alcoholic drinks, but no commission on the sale of alcoholic drinks; and this with a view to giving the persons in charge an interest in selling non-alcoholic drinks. Under these circumstances, there will be no temptation to encourage drunkenness and the rule of not giving alcoholic drinks to persons already under the influence of liquor will be complied with.

It will be possible under such a general system for the state to serve as a medium for an exchange of labor that will greatly enhance the pleasure of life. Under existing conditions, the factory works summer as well as winter despite the fact that temperature makes work during the summer irksome and dangerous to health and life; and at the very time that the population is debilitated by being called upon to work in factories during the heat of June, July, and August, the farmer is in despair because he cannot find help to take in his harvest. Once industries are associated so that they have a definite knowledge of how much they have to produce, there is no reason why they should not so adjust the work of the factory as to keep it open during the eight cool months of the year, leaving the factory hands free to help the farmer in the country during the four hot months. The same thing holds good with the farmer who, during the short cold days of winter, has little to do on the farm and can, therefore, to his advantage as well as to the advantage of the community, devote those months to factory work. There need be nothing compulsory about this exchange, for socialized industry is master of its own time and can distribute its work throughout the year as it chooses. But the fact that the state is possessed of the knowledge how much is to be produced by every factory and how much by every farmer--how many men are needed in the winter in every factory and how many men in the summer on every farm, will enable the state to serve as a medium through which the factory hand can arrange to work on the farm during the summer and the farmer can arrange to work in the factory in the winter, if they respectively desire to do so.

It does not follow that the farmer is to be compelled to work long hours in the summer in the field and also in the factory during the winter; or the factory hand to give up his holiday in order to work on the farm during the summer. It has been shown that all the necessaries of life can probably be produced, even at the present time, by the adults in the community though they work no more than two hours and a half a day. If this be so, it would be easy so to adjust the work as to enable those who desire it to work more hours in the day and become entitled to so much longer vacation. The foregoing is only intended to show that in addition to the vacation which can be thus enjoyed, the farmer can relieve the monotonous existence of the farm during the winter months by work in the factory, and the factory hand can escape from factory conditions during the summer to his own advantage and to the advantage of the community at large.

Another object we have in view is to put an end to the anarchy which exists in all that part of our industry which has not been concentrated into trusts--the anarchy under which some things are produced in greater quantities than are needed, and some things needed are not produced in sufficient quantities--under which no producer can tell whether he is producing enough of a thing until the time for profiting by the knowledge has passed; no producer can tell whether he is producing too much of a thing until he is injured and even ruined by the discovery. It is, I think, obvious that all these objects are obtained by concentrating industry after the fashion of trusts in the hands of the men actually engaged in the process of production; by producing things not to make profit but to satisfy needs; and in the quantities which we know to be needed and not in quantities determined by the desire of the producer to make large profits cheeked only by the bankruptcy that attends production in larger quantities than the market will take.

Thus, the state orders thirty million tons of iron ore because we know that this amount of iron ore has served the needs of the country during a period of great activity, and will furnish not only all we can use ourselves in that year, but all that we can dispose of abroad. These thirty million tons represent then the maximum that we can usefully manufacture; and we can safely order thirty million tons because the state is not under the necessity to sell this iron to get gold with which to pay wages, rent, coal, and the running expenses of the factory. In a cooperative commonwealth there will be no rent to pay. The coal will be paid for in exactly the same way as the iron, by the issue of store orders.

The workers will get as nearly as possible the exact product of their work. There will be no capitalist who will take from them what the capitalist now takes, that is, about one-half of their earnings. Nor will those doing a low order of work receive as much as those doing a high order of work; every man will be paid according to his capacity; for we begin by assuming that the distribution of work according to capacity to-day is not far wrong, and so every man engaged in the steel industry will continue to receive the same wages as he received before with a certain prospect of an additional wage in the shape of profit, representing the difference in wage between the new conditions and the old.

Overwork will be impossible in the iron trade, because a sufficient number will be employed to prevent overwork. And unemployment will be impossible because if, at any period, it turns out that more iron is being produced than the community can use, the excess men employed in the previous year will be set to work by the state in some other industry.

The effect of such a discovery will be to diminish the number of hours required all round. It must not be forgotten how little work need actually be done to produce the things we need. Under these circumstances, we need hardly consider the question of overwork, for all will enjoy ample leisure. The hours of labor will not diminish in a great degree in the first year that an industry is taken over, for during the transition period, experience must be given time to demonstrate the extent to which hours of labor can be reduced.

And as regards unemployment, even though there be no industry in which, for instance, the surplus workers of the iron trade can be usefully employed, there will always be farm colonies where their labor can be self-supporting.

Another beneficial consequence of this system is that if, as is likely, it turns out that thirty million tons of iron are more than we can use, the state will not be obliged to dump the excess upon European markets as do now the trusts,[184] thereby incurring a heavy loss to the home industry and arousing the animosity of the European industry affected thereby.

Again, no financial panic can hurt the iron industry. The bankers may gamble to their heart's desire. If they withhold gold the worst they can do is to injure those engaged in competitive industry. No withholding of gold can affect an industry which produces for use and not for profit and receives weekly the wages of its employees in a currency which, because it is not gold or based upon gold and not, therefore, within the control of the banker or the financier, escapes entirely the evil effects of financial operations. Nor can such an industry be affected by what are called "industrial panics"; for industrial panics are the result of overproduction--of the anarchy that exists under the competitive system. These panics may affect competitive industries, but cannot affect guild industries built on yearly state orders for definite amounts calculated beforehand from the known needs of the community, and not left as now to the anarchy and accidents of the market.

Neither financial nor industrial panics can ever have the terrible consequences in a cooperative commonwealth that they have under existing conditions, because in a cooperative commonwealth all the necessaries and most of the comforts of life will be produced upon the cooperative plan, and therefore, a financial or industrial panic can only affect that part of industry which proceeds under the competitive system and as regards, for the most part, luxuries and not necessaries of life.

Obviously, the system of store orders cannot be applied upon the first transfer of an industry from the hands of the capitalist to those of the guild. For a time gold will have to be used until the transformation from capitalism to cooperation has been sufficiently extended to put the state in a position to open public stores. There need, however, be no anxiety as to the state not being in possession of enough gold to handle this part of the business, because it will obviously be the first duty of the cooperative commonwealth to expropriate the mines and put itself in possession of the gold necessary to carry on financial operations with the guilds until such time as the public stores can be usefully opened. Moreover, in taking over the gold mines, the state will also take over the iron mines; and iron ore will be furnished to the iron guild under conditions that will make the necessity of the use of gold far smaller than it would be if the iron ore remained in private hands and had to be paid for in gold. The state will only have to pay gold representing the labor cost of extracting the ore, and will not have to pay miners' profits.

Under this system, there is no temptation to mine more ore or to cut down more forests than is absolutely necessary for the needs of the community. When every member in the community is educated to understand that waste means more work for himself and that the saving of waste means less work for himself, every man in the community will have a direct personal interest in discouraging waste and promoting economy.

Obviously, too, industry will be conducted at its maximum efficiency. Instead of being slaves of the market, we shall become its master. We shall have only so many factories running as are necessary to produce the things we need. Every factory will be running at maximum capacity, at maximum efficiency.

It will be observed that it is proposed to pay the same price for pig iron after taking over the industry as was paid under competitive conditions at the time of the transfer. The objection may be made that this is obviously improper; that it is not fair to the workers in other industries to pay what is known to be an excessive price to the workers in pig iron. To this it may be answered that it will always be better to apply a regular rule than to leave questions of this kind to arbitrary administrative action. Besides, the rule that on taking over a new industry the price paid for the production of the first year shall be the price ruling at that time, will eventually put all industries upon the same footing. At the excessive prices now ruling, the workers will during the first year get a larger proportion than they will ultimately be entitled to; but the larger proportion they will get this year will be needed to face the initial expenses of a higher standard of life.

But here comes the most serious objection that can be made to this plan. It has been said that these prices will have to be revised; that if those manufacturing cotton thread believe themselves to be receiving less for the work they accomplish in their industry than those engaged in making pig iron, they will insist on revision; if so, there will be continual altercations between industries as to the price to be paid for their goods and as to the share in this price that each is to receive; and the problem arises, who is to settle these innumerable questions?

This difficulty is the one that tends to make communists of us. It would be easy to wave away this difficulty by providing that the total profits be divided equally amongst all the members of the community. Humanity, however, is not prepared for such a system. Generations of selfishness have so determined the minds of those who are likely to have to decide these questions in a cooperative commonwealth, that the idea of paying the man at the head of the iron guild the same wages as the man who puddles, will seem too preposterous to be entertained. Whether man will ever develop to a point of unselfishness that will enable him to entertain this idea is a matter of speculation. Suffice it to recognize that if Socialism is to come within one hundred years, and if we take into account the attitude of the public mind as it is to-day, and the slowness with which the public mind changes in matters so radical as these, we shall have to recognize that Communism is still beyond the range of practical politics; and we shall have to face the problem how the questions of the price of goods and the remuneration of the individual are to be solved.

Sec. 8. REMUNERATION

It has been pointed out that the proportion at present received by the various grades of workers in an industry, from the man who manages the whole industry to those who do the least skilled work, will at first be maintained. It may be that the salaries paid to managers at present rates may seem so exorbitant[185]--so out of all proportion to those paid to others--that there will be an outcry against it, leading to a diminution of these salaries. For present high salaries to managers are due to the extraordinary difficulty of handling industry under competitive conditions--difficulties that will in great part disappear when cooperative conditions are substituted for competitive conditions. With the exception of these highest salaries, probably the wisest rule will be to maintain at first the proportion that exists at the time when the industry is taken over. Taking over these industries will at once raise the salaries of all because they will receive the share of the profits which now comes to the capitalist, after the deduction of sums paid to annuitants. Nevertheless, it cannot be expected that the proportion now existing will be indefinitely maintained.

The cost of management under competitive conditions is far higher than it would be under cooperative. A railroad man once pointed out to me that the cooperative system is impossible because it would be impossible for the government to find men capable of handling railroads at the price habitually paid by the government for such services. He pointed out that genius is necessary to handle railroads,--the genius of such men as J.J. Hill and the late E.H. Harriman. When, however, it was explained to him that the reason why it was necessary to have such men as Harriman and Hill run our railroads was the competition between them, and when he was asked whether it would be necessary to have such men if our railroads were run as our postoffice is run, he admitted that under such conditions nine-tenths of the difficulty of management would be eliminated.

Obviously, therefore, the enormous salaries paid to men at the head of trusts, life insurance companies, and railroad systems, would no longer be earned, and of course they would no longer be paid.

What is true regarding the heads of these industries is true throughout a large part of the administration. It would need less of the faculty which characterizes the larger carnivora and more of the faculties which characterize the beaver and the ant. For these humbler services lower wages would be paid. This does not mean, however, that there will not be in the state room for men of the constructive ability of Harriman and Hill; but these men will not be the servants of our industries, they will be the servants of our state; and the genius that is now absorbed by business, will, in a cooperative commonwealth, be more usefully employed in the larger fields of politics.

After this slight digression, let us return to the question how far the remuneration will be subject to revision.

It may be that the lower grades will not be subject to revision at all; that all the iron ore we need can be produced by working four hours a day during eight months of the year, and that the rate of wages earned upon the old scale increased by the profits to which workers will be entitled will, without changing the proportion, furnish a standard of comfort such as to-day it is difficult to foresee. It is probable, however, that workingmen who are to-day members of the Socialist party will not agree with this prognosis, but will insist that in a cooperative commonwealth the whole scheme of remuneration will have to be revised. If this be so, it is useless to deny that the revision of this rate of wages will be a matter of difficulty and that the difficulties arising will tend to be perpetual.

Obviously, there must be some plan devised under which these matters will be better adjusted than by a government board, as has been suggested by certain Socialists. Mr. Hillquit[186] quotes with approval the words of Kautsky that government in a cooperative commonwealth will change in character, and that the state will no longer govern, but administer, and this is to a large degree true. But if the administration is to determine what every man is to receive as compensation for the work he does, it is clear that matters of such vital importance cannot be referred to the arbitrary action of a board of administrators.

It seems to me that it will be indispensable to submit these matters to an industrial parliament in which every industry will be represented. And as the determination of these questions will be a matter of the greatest importance to every individual, it is probable that these parliaments will have to be bicameral for the same reason that our government is bicameral; for the same difficulty will present itself. New York insists upon having its large population represented in Congress. Rhode Island, on the other hand, in spite of its small size, insists upon having its state sovereignty represented; so New York is given a representation in proportion to its population in the Lower House and Rhode Island is given equal representation in the Upper House. Exactly the same situation will present itself it regard to industries: Certain industries will be enormous and will want to be represented in proportion to their size; for example, the steel industry. Others will be much smaller but perhaps of much greater importance; for example, the engineers. They will want to be fairly represented in spite of their small size and I see no way of adjusting this other than by adopting an industrial parliament of two chambers, in one of which representation will be according to numbers, while in the other every industry will be equally represented irrespective of size. This may seem a cumbersome system, but it will take no more time than the administration of the trade union takes to-day, and will not be half as costly; for the trade union of to-day has to accumulate funds to provide for unemployment, old age, sickness, and strikes. Strikes and unemployment it will not be necessary to provide against and the others will be provided for by every guild for their own members. The question, therefore, of the adjustment of price and wages will occupy far less time than is now occupied by federations of trade unions.

It is probable that the conclusions to which the industrial parliament will come will not be final. It will be deemed wise to refer them for execution to the general government. This matter, however, belongs to the chapter on the political aspect of Socialism.

Sec. 9. CIRCULATING MEDIUM UNDER SOCIALISM

It may not be clear at first sight why it is proposed to substitute store checks for greenbacks or gold. Early Socialist writers--particularly Rodbertus--attached much importance to the elimination of gold and the substitution therefor of what they called "labor checks"; a currency representing time spent in labor. Modern Socialist writers have been disposed to cast aside all efforts to substitute this kind of currency for gold. Mr. Hillquit quotes Kautsky[187] with approval on this subject:

"'Money,' says Kautsky, 'is the simplest means known up to the present time which makes it possible in as complicated a mechanism as that of the modern productive process, with its tremendous far-reaching division of labor, to secure the circulation of products and their distribution to the individual members of society. It is the means which makes it possible for each one to satisfy his necessities according to his individual inclination (to be sure within the bounds of his economic power). As a means to such circulation, money will be found indispensable until something better is discovered.'"[188]

Upon this point I find myself at variance with modern Socialists. In