The Book of Life Part 33

Now comes modern machinery, and multiplies the productive power of the hand laborer by five, by ten, sometimes by a hundred. Here, for example, is the "Appeal to Reason" selling millions of cheap books for ten cents apiece, and making a profit on it; installing a gigantic press which takes paper, sheet after sheet, prints 128 pages of a book at one impression, and folds and st.i.tches and binds the books, all in one process, and turns them out complete at the rate of 10,000 copies per hour. Here is a factory which turns out 100,000 automobiles a month.

Here is a mill which turns out many millions of yards of cloth a month.

If our colonial ancestors had been told about these marvels, they would have said instantly: "Then, of course, everybody in that society will have all the books they want, and all the clothing they want, and all the automobiles. Everybody in that society will have five or ten or one hundred times as much goods as we have."

Imagine the bewilderment of our colonial ancestor if he had been told: "The majority of the people in that society will not have so much of the real necessities of life as you have. They will have a few cheap trinkets, designed to tickle their senses; they will have cheap newspapers, carefully contrived to keep their minds vacant and to keep them contented with their lot; they will have moving picture shows constructed for the same purpose; but all their material things will be flimsy, put together for show and not for permanence; their food will be adulterated, their clothing will be shoddy, everything they have will be made, not for their service, but for the profit of some one who lives by selling to them. The average wage earned by those who do the work of this new machine civilization will be less than half the amount necessary to purchase the necessities of a decent life, and one-tenth of the total population will be living in such poverty that they are unable to maintain physical fitness, or to rear their children into full sized men and women."

CHAPTER LIX

FOREIGN MARKETS

(Considers the efforts of capitalism to save itself by marketing its surplus products abroad, and what results from these efforts.)

If our a.n.a.lysis of present-day society is correct, we have the enormous populations of the modern industrial countries, living always on the verge of starvation, their chance for survival depending at all times upon the ability of their employers to find a profitable market for a surplus of goods. At first the employer seeks that market at home; but when the home markets are glutted, he goes abroad; and so develops the phenomenon of foreign trade and rivalry for foreign trade, as the basic fact of capitalism, and the fundamental cause of modern war.

Let us get clear a simple distinction concerning foreign trade. There is a kind of trade which is normal, and would thrive in a "free" society.

In the United States we can produce nearly all the necessities of life, but there are a few which we cannot produce--rubber, for example, and bananas, and good music. These things we wish to import. We buy them from other countries, and incur a debt, which we pay with products which the other countries need from us; wheat, for example, and copper, and moving pictures with cowboys in them. This is equal exchange, and a natural phenomenon. A "free" society would produce such surplus goods as were necessary to procure the foreign products that it desired. When it had produced that much, the workers would stop and take a vacation until they wanted more foreign products.

But under capitalism we have an entirely different condition--we produce a surplus of goods which we _have_ to sell in order to keep our factories running, and to keep our working population from starving. And note that it does not help us to get back an equal quant.i.ty of foreign goods in exchange. We must have what we call "a favorable balance"; that is, we must have other people going into debt to us, so that we can be continually shipping out more goods than we take back; continually piling up credits which we can "negotiate," or turn into cash, so that we can go on and repeat the process of making more goods, selling them for more profits, and putting the surplus into the form of more machinery, to make still more goods and still more profits.

And then, after a while, we come upon this embarra.s.sing phenomenon; nations which buy and do not sell must either do it by sending us gold, or by our giving them credit. The sending of gold cannot go on indefinitely, because then we should have all the gold, and if other nations had none that would destroy their credit. On the other hand, business cannot be done by credit indefinitely; for the very essence of credit is a promise to pay, and payment can only be made in goods, and how can we take the goods without ruining our own industry?

Fifteen years ago I pointed this out in a book. The argument was irrefutable, and the conclusion inescapable, but the few critics who noted it repeated their usual formula about "dreamers and theorists."

Now, however, the business mills have ground on, and what was theory has become fact before our eyes. We have trusted the nations of Europe for some $10,000,000,000 worth of goods, and they are powerless to pay, and if they did pay, they would bankrupt American industry. France wishes to collect an enormous indemnity from Germany, but n.o.body can figure out how this indemnity can be paid without ruining French industry. The French have demanded coal from Germany, and have got more than they can use, and are "dumping" it in Belgium and Holland, with the result that the British coal industry is ruined. The French clamor that the Germans must pay for the destruction they wrought in Northern France, and the Germans offer to send German workmen to rebuild the ruined towns; but the French denounce this as an insult--it would deprive French workingmen of their jobs! So I might continue for pages, pointing out the manifold absurdities which result from a system of industry for the profit of a few, instead of for the use of all.

Ever since I first began to read the newspapers, some twenty-five or thirty years ago, all our political life has been nothing but the convulsions of a social body tortured by the constricting ring of the profit system. Everywhere one group struggling for advantage over another group, and politicians engaged in playing one interest against another interest! My boyhood recollections of public life consist of campaign slogans having to do with the tariff: "production and prosperity," "reciprocity," "the full dinner pail," "the foreigner pays the tax," etc.

The workingman, under the profit system, is like a man pounding away at a pump. He can get a thin trickle of water from the spout of the pump if he works hard enough, but in order to get it he has to supply ten times as much to some one who has tapped the pipe. But the tapping has been done underground, where the workingman cannot see it. All the workingman knows is that there is no job for him if the products of "cheap foreign labor" are allowed to be "dumped" on the American market. That is obvious, and so he votes for a tax on foreign imports, high enough to enable his own employer to market at a profit. He does not realize that he is thus raising the price of everything that he buys, and so leaving himself worse off than he was before.

All governments are delighted with this tariff device, because they are thus enabled to get money from the public without the public's knowing it. "The foreigner pays the tax," we are told, and as a result of this arrangement the steel trust just before the war was selling its product at a high price to the American people, and taking its surplus abroad and selling it to the foreigner at half the domestic price. And we see this same thing in every line of manufacture, and all over the world. We see one nation after another withdrawing itself as a market for manufactured products, and entering the lists as a marketer. One more nation now able to fill all its own needs, and going out hungrily to look for foreign customers, adding to the glut of the world's manufactured products and the ferocity of international compet.i.tion!

At the close of the Civil War the total exports of the United States averaged approximately $300,000,000, and the total imports were about the same. In 1892 the exports first touched $1,000,000,000, while the imports were about nine-tenths of that sum. In the year 1913 the exports were nearly $2,500,000,000, while the imports were $600,000,000 less; and in the year 1920 our exports were over $8,000,000,000 and our imports a little over $5,000,000,000! So we have a "favorable balance"

of almost $3,000,000,000 a year--and as a result we are on the verge of ruin!

This "iron ring" of overproduction and lack of market exercises upon our industrial body a steady pressure, a slow strangling. But because the body is in convulsions, struggling to break the ring, the pressure of the ring is worse at some times than at others. We have periods of what we call "prosperity," followed by periods of panic and hard times. You must understand that only a small part of our business is done by means of cash payments, whether in gold or silver or paper money. Close to 99% of our business is done by means of credit, and this introduces into the process a psychological factor. The business man expects certain profits, and he capitalizes these expectations. Business booms, because everybody believes everybody else's promises; credit expands like a huge balloon, with the breath of everybody's enthusiasm. But meantime real business, the real market, remains just what it was before; it cannot increase, because of the iron ring which restricts the buying power of the ma.s.s of the people by the compet.i.tive wage. So presently the time comes when somebody realizes that he has over-capitalized his hopes; he curtails his orders, he calls in his money, and the impulse thus started precipitates a crash in the whole business world. We had such a crash in 1907, and I remember a Wall Street man explaining it in a magazine article ent.i.tled, "Somebody Asked for a Dollar."

We learned one lesson by that panic; at least, the big financial men learned it, and had Congress pa.s.s what is called the "Federal Reserve Act," a provision whereby in time of need the government issues practically unlimited credit to banks. This, of course, is fine for the banks; it puts the credit of everybody else behind them, and all they have to do is to stop lending money--except to the big insiders--and sit back and wait, while the little men go to the wall, and the ma.s.s of us live on our savings or starve. We saw this happen in the year 1920, and for the first time we had "hard times" without having a financial panic.

But instead we see prices staying high--because the banks have issued so much paper money and bank credits.

CHAPTER LX

CAPITALIST WAR

(Shows how the compet.i.tion for foreign markets leads nations automatically into war.)

In a discussion of the world's economic situation, published in 1906, the writer portrayed the ruling cla.s.s of Germany as sitting in front of a thermometer, watching the mercury rising, and knowing that when it reached the top, the thermometer would break. This thermometer was the German cla.s.s system of government, and the mercury was the Socialist vote. In 1870 the vote was 30,000, in 1884 it was 549,000, in 1893 it was 1,876,000, in 1903 it was 3,008,000, in 1907 it was 3,250,000, in 1911 it was 4,250,000. Writing between 1906 and 1913, I again and again pointed out that this increase was the symptom of social discontent in Germany, caused by the overproduction of invested capital throughout the world, and the intensification of the compet.i.tion for world markets. I pointed out that a slight increase in the vote would be sufficient to transfer to the working cla.s.s of Germany the political power of the German state; and I said that the ruling cla.s.s of Germany would never permit that to happen--when it was ready to happen Germany would go to war, to seize the trade privileges of some other nation.

There was a time when wars were caused by national and racial hatreds.

There are still enough of these venerable prejudices left in the world, but no student of the subject would deny that the main source of modern wars is commercial rivalry. In 1917 we sent Eugene V. Debs to prison for declaring that the late world war was a war of capitalist greed. But two years later President Wilson, who had waged the war, declared in a public speech that everybody knew it had been a war of commercial rivalries.

The aims of modern war-makers are two. First, capitalism must have raw materials, including coal and oil, the sources of power, and gold and silver, the bases of credit. Parts of the world which are so unfortunate as to be rich in these substances become the bone of contention between rival financial groups, organized as nations. Some sarcastic writer has defined a "backward" nation as one which has gold mines and no navy. We are horrified to read of the wars of the French monarchs, caused by the jealous quarrels of mistresses; but in 1905 we saw Russia and j.a.pan go to war and waste a million lives because certain Russian grand dukes had bribed certain Chinese mandarins and obtained concessions of timber on the Yalu River. We now observe France and Germany vowed to undying hate because of iron mines in Lorraine, and the efforts of France to take the coal mines of Silesia from Germany, and give them to Poland, which is another name for French capitalism.

The other end sought by the war-makers is markets for manufactured products, and control of trade routes, coaling stations and cables necessary to the building up of foreign trade. England has been "mistress of the seas" for some 300 years, which meant that her traders had obtained most of these advantages. But then came Germany, with her newly developed commercialism, shoving her rival out of the way. The Englishman was easy-going; he liked to play cricket, and stop and drink tea every afternoon. But the German worked all day and part of the night; he trained himself as a specialist, he studied the needs of his customers--all of which to the Englishman was "unfair" compet.i.tion. But here were the populations of the crowded slums, dependent for their weekly wage and their daily bread upon the ability of the factories to go on turning out products! Here was the ever-blackening shadow of unemployment, the mutterings of social discontent, the agitators on the soap-boxes, the workers listening to them with more and more eager attention, and the journalists and politicians and bankers watching this phenomenon with a ghastly fear.

So came the great war. Social discontent was forgotten over night, and England and France plunged in to down their hated rival, once and for all time. Now they have succeeded: Germany's ships have been taken from her, and likewise her cables and coaling stations; the Berlin-Bagdad Railroad is a forgotten dream; the British sit in Constantinople, and the traffic goes by sea. American capitalism wakes up, and rubs its eyes after a debauch of Presbyterian idealism, and discovers that it has paid out some $20,000,000,000, in order to confer all these privileges and advantages upon its rivals!

Ever since I can remember the world, there have been peace societies; I look back in history and discover that ever since there have been wars, there have been prophets declaiming against them in the name of humanity and G.o.d. As I write, there is a great world conference on disarmament in session in Washington, and all good Americans hope that war is to be ended and permanent peace made safe. All that I can do at this juncture is to point out the fundamental and all-controlling fact of present-day economics: that for the ruling cla.s.s of any country to agree to disarmament and the abolition of war, is for that cla.s.s to sign its own death warrant and cut its own throat. American capitalism can survive on this earth only by strangling and destroying j.a.panese capitalism and British capitalism, and doing it before long. The far-sighted capitalists on both sides know that, and are making their preparations accordingly.

What the members of the peace societies and the diplomats of the disarmament conferences do is to cut off the branches of the tree of war. They leave the roots untouched, and then, when the tree continues to thrive, they are astounded. I conclude this chapter with a concrete ill.u.s.tration, cut from my morning newspaper. We went to war against German militarism, and to make the world safe for democracy--meaning thereby capitalist commercialism. We commanded the German people to "beat their swords into plough-shares"; that is, to set their Krupp factories to making tools of peace; and they did so. We saddled them with an enormous indemnity, making them our serfs for a generation or two, and compelling them to hasten out into the world markets, to sell their goods and raise gold to pay us. And now, how does their behavior strike us? Do we praise their industry, and fidelity to their obligations? Here are the headlines of a news despatch, published by the Los Angeles Times on December 10, 1921, at the top of the front page, right hand column, the most conspicuous position in the paper. Read it, and understand the sources of modern war!

_NEW ATTACK BY BERLIN_

DUMPING GOODS BY WHOLESALE

Cheap German Trash Puts Thousands of Americans Out of Employment

Glove Plants Shut Down and Potash Industry Killed by Teuton Intrigue

CHAPTER LXI

THE POSSIBILITIES OF PRODUCTION

(Shows how much wealth we could produce if we tried, and how we proved it when we had to.)

One of the commonest arguments in defense of the present business system runs as follows: The amount of money which is paid to labor is greatly in excess of the amount which is paid to capital. Suppose that tomorrow you were to abolish all dividends and profits, and divide the money up among the wage workers, how much would each one get? The sum is figured for some big industry, and it is shown that each worker would get one or two hundred dollars additional per year. Obviously, this would not bring the millennium; it would hardly be worth while to take the risk of reducing production in order to gain so small a result.

But now we are in position to realize the fallacy of such an argument.

The tax which capital levies upon labor is not the amount which capital takes for itself, but the amount which it prevents labor from producing.

The real injury of the profit system is not that it pays so large a reward to a ruling cla.s.s; it is the "iron ring" which it fastens about industry, barring the workers from access to the machinery of production except when the product can be sold for a profit. Labor pays an enormous reward to the business man for his management of industry, but it would pay labor to reward the business man even more highly, if only he would take his goods in kind, and would permit labor, after this tax is paid, to go on making those things which labor itself so desperately needs.

But, you see, the business man does not take his goods in kind. The owner of a great automobile factory may make for himself one automobile or a score of automobiles, but he quickly comes to a limit where he has no use for any more, and what he wants is to sell automobiles and "make money." He does not permit his workers to make automobiles for themselves, or for any one else. He reserves the product of the factory for himself, and when he can no longer sell automobiles at a profit, he shuts the workers out and automobile-making comes to an end in that community. Thus it appears that the "iron ring" which strangles the income of labor, strangles equally the income of capital. It paralyzes the whole social body, and so limits production that we can form no conception of what prosperity might and ought to be.