Under this system men have worked for wages and not because they wanted the things they were producing, nor because the men who employed them wanted the things, _but simply because the things could be sold and a profit made in the sale_.

You will remember, Jonathan, that in a former letter I dealt with the nature of wealth. We saw then that wealth in our modern society consists of an abundance of things which can be sold. At bottom, we do not make things because it is well that they should be made, because the makers need them, but simply because the capitalists see possibilities of selling the things at a profit.

I want you to consider just a moment how this works out: Here is a workingman in Springfield, Ma.s.sachusetts, making deadly weapons with which other workingmen in other lands are to be killed. We go up to him as he works and inquire where the rifles are to be sent, and he very politely tells us that they are for some foreign government, say the j.a.panese, to be used in all probability against Russian soldiers.

Suppose we ask him next what interest he has in helping the j.a.panese government to kill the Russian troops, how he comes to have an active hatred of the Russian soldiers. He will reply at once that he has no such feelings against the Russians; that he is not interested in having the j.a.panese slaughter them. Why, then, is he making the guns?

He answers at once that he is only interested in getting his wages; that it is all the same to him whether he makes guns for Christians or Infidels, for Russians or j.a.ps or Turks. His only interest is to get his wages. He would as soon be making coffins as guns, or shoes as coffins, so long as he got his wages.

Perhaps, then, the company for which he is employed has an interest in helping j.a.pan defeat the troops of Russia. Possibly the shareholders in the company are j.a.panese or sympathizers with j.a.pan. Otherwise, why should they be bothering themselves getting workpeople to make guns for j.a.panese soldiers to kill Russian soldiers with? So we go to the manager and ask him to explain the matter. He very politely tells us that, like the man at the bench, he has no interest in the matter at all, and that the shareholders are in the same position of being quite indifferent to the quarrel of the two nations. "Why, we are also making guns for Russia in our factory," he says, and when we ask him to explain why he tells us that "There is profit to be made and the firm cares for nothing else."

All our system revolves around that central sun of profit-making, Jonathan. Here is a factory in which a great many people are making shoddy clothing. You can tell at a glance that it is shoddy and quite unfit for wearing. But why are the people making shoddy goods--why don't they make decent clothing, since they can do it quite as well?

Why, because there is a profit for somebody in making shoddy. Here a group of men are building a house. They are making it of the poorest materials, making dingy little rooms; the building is badly constructed and it can never be other than a barracks. Why this "jerry-building?" There is no reason under the sun why poor houses should be built except that somebody hopes to make profit out of them.

Goods are adulterated and debased, even the food of the nation is poisoned, for profit. Legislatures are corrupted and courts of justice are polluted by the presence of the bribe-giver and the bribe-taker for profit. Nations are embroiled in quarrels and armies slaughter armies over questions which are, always, ultimately questions of profit. Here are children toiling in sweatshops, factories and mines while men are idle and seeking work. Why? Do we need the labor of the little ones in order to produce enough to maintain the life of the nation? No. But there are some people who are going to make a profit out of the labors which sap the strength of those little ones. Here are thousands of people hungry, clamoring for food and perishing for lack of it. They are willing to work, there are resources for them to work upon; they could easily maintain themselves in comfort and gladness if they set to work. Then why don't they set to work? Oh, Jonathan, the torment of this monotonous answer is unbearable--because no one can make a profit out of their labor they must be idle and starve, or drag out a miserable existence aided by the crumbs of cold charity!

If our social economy were such that we produced things for use, because they were useful and beautiful, we should go on producing with a good will until everybody had a plentiful supply. If we found ourselves producing too rapidly, faster than we could consume the things, we could easily slacken our pace. We could spend more time beautifying our cities and our homes, more time cultivating our minds and hearts by social intercourse and in the companionship of the great spirits of all ages, through the masterpieces of literature, music, painting and sculpture. But instead, we produce for sale and profit.

When the workers have produced more than the master cla.s.s can use and they themselves buy back out of their meagre wages, there is a glut in the markets of the world, unless a new market can be opened up by making war upon some defenseless, undeveloped nation.

When there is a glut in the market, Jonathan, you know what happens.

Shops and factories are shut down, the number of workers employed is reduced, the army of the unemployed grows and there is a rise in the tide of poverty and misery. Yet why should it be so? Why, simply because there is a superabundance of wealth, should people be made poorer? Why should little children go without shoes just because there are loads of shoes stacked away in stores and warehouses? Why should people go without clothing simply because the warehouses are bursting with clothes? The answer is that these things must be so because we produce for profit instead of for use. All these stores of wealth belong to the cla.s.s of profit-takers, the capitalist cla.s.s, and they must sell and make profit.

So you see, friend Jonathan, so long as this system lasts, _people must have too little because they have produced too much_. So long as this system lasts, there must be periods when we say that society _cannot afford to have men and women work to maintain themselves decently_! But under any sane system it will surely be considered the maddest kind of folly to keep men in idleness while saying that it does not pay to keep them working. Is there any more expensive way of keeping either an a.s.s or a man than in idleness?

The root of evil, the taproot from which the evils of modern society develop, is the profit idea. Life is subordinated to the making of profit. If it were only possible to embody that idea in human shape, what a monster ogre it would be! And how we should arraign it at the bar of human reason! Should we not call up images of the million of babes who have been needlessly and wantonly slaughtered by the Monster Idea; the images of all the maimed and wounded and killed in the wars for markets; the millions of others who have been bruised and broken in the industrial arena to secure somebody's profit, because it was too expensive to guard life and limb; the numberless victims of adulterated food and drink, of cheap tenements and shoddy clothes?

Should we not call up the wretched women of our streets; the bribers and the vendors of privilege? We should surely parade in pitiable procession the dwarfed and stunted bodies of the millions born to hardship and suffering, but we could not, alas! parade the dwarfed and stunted souls, the sordid spirits for which the Monster Idea is responsible.

I ask you, Jonathan Edwards, what you really think of this "buy cheap and sell dear" idea, which is the heart and soul of our capitalistic system. Are you satisfied that it should continue?

Yet, my friend, bad as it is in its full development, and terrible as are its fruits, this idea once stood for progress. The system was a step in the liberation of man. It was an advance upon feudalism which bound the laborer to the soil. Capitalism has not been all bad; it has another, brighter side. Capitalism had to have laborers who were free to move from one place to another, even to other lands, and that need broke down the last vestiges of the old physical slavery. That was a step gained. Capitalism had to have intelligent workers and many educated ones. That put into the hands of the common people the key to the sealed treasuries of knowledge. It had to have a legal system to meet its requirements and that has resulted in the development of representative government, of something approaching political democracy; even where kings nominally rule to-day, their power is but a shadow of what it once was. Every step taken by the capitalist cla.s.s for the advancement of its own interests has become in its turn a stepping-stone upon which the working-cla.s.s has raised itself.

Karl Marx once said that the capitalist system provides its own gravediggers. I have cited two or three things which will ill.u.s.trate his meaning. Later on, I must try and explain to you how the great "trusts" about which you complain so loudly, and which seem to be the very perfection of the capitalist ideal, lead toward Socialism at a pace which nothing can very seriously hinder, though it may be quickened by wise action on the part of the workers.

For the present I shall be satisfied, friend Jonathan, if you get it thoroughly into your mind that the source of terrible social evils, of the poverty and squalor, of the helpless misery of the great ma.s.s of the people, of most of the crime and vice and much of the disease, is the "buy cheap and sell dear" idea. The fact that we produce things for sale for the profit of a few, instead of for use and the enjoyment of all.

Get that into your mind above everything else, my friend. And try to grasp the fact, also, that the system we are now trying to change was a natural outgrowth of other conditions. It was not a wicked invention, nor was it a foolish blunder. It was a necessary and a right step in human evolution. But now it has in turn become unsuitable to the needs of the people and it must give place to something else. When a man suffers from such a disease as appendicitis, he does not talk about the "wickedness" of the vermiform appendix. He realizes, if he is a sensible man, that long ago, that was an organ which served a useful purpose in the human system.

Gradually, perhaps in the course of many centuries, it has ceased to be of any use. It has lost its original functions and become a menace to the body.

Capitalism, Jonathan, is the vermiform appendix of the social organism. It has served its purpose. The profit idea has served an important function in society, but it is now useless and a menace to the body social. Our troubles are due to a kind of social appendicitis. And the remedy is to remove the useless and offending member.

VII

FROM COMPEt.i.tION TO MONOPOLY

It may be fairly said, I think, that not merely compet.i.tion, but compet.i.tion that was proving ruinous to many establishments, was the cause of the combinations.--_Prof.

J.W. Jenks._

The day of the capitalist has come, and he has made full use of it. To-morrow will be the day of the laborer, provided he has the strength and the wisdom to use his opportunities.--_H.

De. B. Gibbins._

Monopoly expands, ever expands, till it ends by bursting.--_P.J. Proudhon._

For this is the close of an era; we have political freedom; next and right away is to come social enfranchis.e.m.e.nt.--_Benjamin Kidd._

I think you realize, friend Jonathan, that the bottom principle of the present capitalist system is that there must be one cla.s.s owning the land, mines, factories, railways, and other agencies of production, but not using them; and another cla.s.s, using the land and other means of production, but not owning them.

Only those things are produced which there is a reasonable hope of selling at a profit. Upon no other conditions will the owners of the means of production consent to their being used. The worker who does not own the things necessary to produce wealth must work upon the terms imposed by the other fellow in most cases. The coal miner, not owning the coal mine, must agree to work for wages. So must the mechanic in the workshop and the mill-worker.

As a practical, sensible workingman, Jonathan, you know very well that if anybody says the interests of these two cla.s.ses are the same it is a foolish and lying statement. You are a workingman, a wage-earner, and you know that it is to your interest to get as much wages as possible for the smallest amount of work. If you work by the day and get, let us say, two dollars for ten hours' work, it would be a great advantage to you if you could get your wages increased to three dollars and your hours of labor to eight per day, wouldn't it? And if you thought that you could get these benefits for the asking you would ask for them, wouldn't you? Of course you would, being a sensible, hard-headed American workingman.

Now, if giving these things would be quite as much to the advantage of the company as to you, the company would be just as glad to give them as you would be to receive them, wouldn't it? I am a.s.suming, of course, that the company knows its own interests just as well as you and your fellow workmen know yours. But if you went to the officials of the company and asked them to give you a dollar more for the two hours' less work, they would not give it--unless, of course, you were strong enough to fight and compel them to accept your terms. But they would resist and you would have to fight, because your interests clashed.

That is why trade unions are formed on the one side and employers'

a.s.sociations upon the other. Society is divided by antagonistic interests; into exploiters and exploited.

Politicians and preachers may cry out that there are no cla.s.ses in America, and they may even be foolish enough to believe it--for there are lots of _very_ foolish politicians and preachers in the world! You may even hear a short-sighted labor leader say the same thing, but you know very well, my friend, that they are wrong. You may not be able to confute them in debate, not having their skill in wordy warfare; but your experience, your common sense, convince you that they are wrong.

And all the greatest political economists are on your side. I could fill a volume with quotations from the writings of the most learned political economists of all times in support of your position, but I shall only give one quotation. It is from Adam Smith's great work, _The Wealth of Nations_, and I quote it partly because no better statement of the principle has ever been made by any writer, and partly also because no one can accuse Adam Smith of being a "wicked Socialist trying to set cla.s.s against cla.s.s." He says:

"The workmen desire to get as much, the masters to give as little as possible. The former are disposed to combine in order to raise, the latter in order to lower the wages of labor.... Masters are always and everywhere in a sort of tacit, but constant and uniform, combination, not to raise the wages of labor above their actual rate. To violate this combination is everywhere a most unpopular action, and a sort of a reproach to a master among his neighbors and equals....

Masters too sometimes enter into particular combinations to sink the wages of labor.... These are always conducted with the utmost silence and secrecy, till the moment of execution."

That is very plainly put, Jonathan. Adam Smith was a great thinker and an honest one. He was not afraid to tell the truth. I am going to quote a little further what he says about the combinations of workingmen to increase their wages:

"Such combinations, [i.e., to lower wages] however, are frequently resisted by a contrary defensive combination of the workmen; who sometimes too, without any provocation of this kind, combine of their own accord to raise the price of labor.

Their usual pretenses are, sometimes the high price of provisions; sometimes the great profit which their masters make by their work. But whether these combinations be offensive or defensive, they are always abundantly heard of.

In order to bring the point to a speedy decision, they have always recourse to the loudest clamour, and sometimes to the most shocking violence and outrage. They are desperate, and act with the extravagance and folly of desperate men, who must either starve, or frighten their masters into an immediate compliance with their demands. The masters upon these occasions are just as clamorous upon the other side, and never cease to call aloud for the a.s.sistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combinations of servants, laborers, and journeymen.

"But though in disputes with their workmen, masters must generally have the advantage, there is however a certain rate, below which it seems impossible to reduce, for any considerable time, the ordinary wages even of the lowest species of labor.

"A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more; otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation."

Now, my friend, I know that some of your pretended friends, especially politicians, will tell you that Adam Smith wrote at the time of the American Revolution; that his words applied to England in that day, but not to the United States to-day. I want you to be honest with yourself, to consider candidly whether in your experience as a workman you have found conditions to be, on the whole, just as Adam Smith's words describe them. I trust your own good sense in this and everything. Don't let the politicians frighten you with a show of book learning: do your own thinking.

Capitalism began when a cla.s.s of property owners employed other men to work for wages. The tendency was for wages to keep at a level just sufficient to enable the workers to maintain themselves and families.

They had to get enough for families, you see, in order to reproduce their kind--to keep up the supply of laborers.

Compet.i.tion was the law of life in the first period of capitalism.

Capitalists competed with each other for markets. They were engaged in a mad scramble for profits. Foreign countries were attacked and new markets opened up; new inventions were rapidly introduced. And while the workers found that in normal conditions the employers were in what Adam Smith calls "a tacit combination" to keep wages down to the lowest level, and were obliged to combine into unions, there were times when, owing to the fierce compet.i.tion among the employers, and the demand for labor being greatly in excess of the supply, wages went up without a struggle owing to the fact that one employer would try to outbid another. In other words, temporarily, the natural, "tacit combination" of the employers, to keep down wages, sometimes broke down.

Compet.i.tion was called "the life of trade" in those days, and in a sense it was so. Under its mighty urge, new continents were explored and developed and brought within the circle of civilization. Sometimes this was done by means of brutal and b.l.o.o.d.y wars, for capitalism is never particular about the methods it adopts. To get profits is its only concern, and though its shekels "sweat blood and dirt," to adapt a celebrated phrase of Karl Marx, n.o.body cares. Under stress of compet.i.tion, also, the development of mechanical production went on at a terrific pace; navigation was developed, so that the ocean became as a common highway.

In short, Jonathan, it is no wonder that men sang the praises of compet.i.tion, that some of the greatest thinkers of the time looked upon compet.i.tion as something sacred. Even the workers, seeing that they got higher wages when the keen and fierce compet.i.tion created an excessive demand for labor, joined in the adoration of compet.i.tion as a principle--but among themselves, in their struggles for better conditions, they avoided compet.i.tion as much as possible and combined.

Their instincts as wage-earners made them keen to see the folly of division and compet.i.tion among themselves.

So compet.i.tion, considered in connection with the evolution of society, had many good features. The compet.i.tive period was just as "good" as any other period in history and no more "wicked" than any other period.

But there was another side to the shield. As the compet.i.tive struggle among individual capitalists went on the weakest were crushed to the wall and fell down into the ranks of the wage workers. There was no system in production. Word came to the commercial world that there was a great market for certain manufactures in a foreign land and at once hundreds and even thousands of factories were worked to their utmost limit to meet that demand. The result was that in a little while the thing was overdone: there was a glut in the market, often attended by panic, stagnation and disaster. Rathbone Greg summed up the evils of compet.i.tion in the following words: