Socialism As It Is

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"It must always be borne in mind that the contest between the State and
the corporate powers is a lasting one.... It must always be remembered
that their attitude throughout is one of hostility to this legislation,
and that if their relation to the law after it is enacted is to be
judged by the attitude towards the Interstate Commerce Law, it will be
one of continued effort to destroy its efficiency and nullify its
provision." Events have shown that he was right in his predictions, and
his idea that the war against monopolies must last until they are
deprived of their dominant position in politics is now widely accepted.

The leading demands of the small capitalists, in so far as they are
independently organized in this new movement, are now for protection, as
buyers, sellers, investors, borrowers, and taxpayers against the
"trusts," railways, and banks. Formerly they invariably took up the
cause of the capitalist competitors and would-be competitors of the
"Interests"--and millionaires and corporations of the second magnitude
were lined up politically with the small capitalists, as, for example,
silver mine owners, manufacturers who wanted free raw material, cheaper
food (with lower wages), and foreign markets at any price,--from
pseudo-reciprocity to war,--importing merchants, competitors of the
trusts, tobacco, beer, and liquor interests bent on decreasing their
taxes, etc.

The great novelty of the "Insurgent" movement is that, in dissociating
itself from Free Silver, Free Trade, and the proposal to _destroy_ the
"trusts," it has succeeded in getting rid of nearly all the "Interests"
that have wrecked previous small capitalist movements. At the same time,
it has all but abandoned the old demagogic talk about representing the
citizen as consumer against the citizen as producer. It frankly avows
its intention to protect the ultimate consumer, not against small
capitalist producers (_e.g._ its opposition to Canadian reciprocity and
cheaper food), but solely against the monopolies. Indeed, the protection
of the ultimate consumer against monopolies is clearly made incidental
to the protection of the small capitalist consumer-producer. The wage
earner consumes few products of the Steel Trust, the farmer and small
manufacturers, many. Nor does the new movement propose to destroy the
"trusts" by free trade even in the articles they produce, but merely to
control prices by lower tariffs. With the abandonment of the last of the
"Interests" and at the same time of the "consumers" that they use as a
cloak, the new movement promises for the first time a fairly independent
and lasting political organization of the smaller capitalists.

While Senator La Follette is the leading general of the new movement,
either Ex-President Roosevelt or Governor Woodrow Wilson seems destined
to become its leading diplomatist. While Senator La Follette declares
for a fight to the finish, and shows that he knows how to lead and
organize such a fight, Mr. Roosevelt and Mr. Wilson are giving their
attention largely to peace terms to be demanded of the enemy, and the
diplomatic attitude to be assumed in the negotiations. Perhaps it is too
early for such peaceful thoughts, and premature talk of this kind may
eliminate these leaders as negotiators satisfactory to the small
capitalists. Their interest for my present purpose is that they probably
foreshadow the attitude that will finally be assumed when the large
"Interests" see that they must make terms.

Mr. Wilson's language is at times so conciliatory as to create doubt
whether or not he will stand with Senator La Follette and the Republican
"Insurgents" for the whole of the small capitalist's program, but it
leaves no doubt that, if he lives up to his declared principles, he must
aim at the government regulation, not of "Big Business" merely, but of
all business--as when he says that "business is no longer in any sense a
private matter."

"We are dealing, in our present discussion," he said in an address,
delivered in December, 1910, "with business, and we are dealing
with life as an organic whole, and modern politics is an
accommodation of these two. Suppose we define business as economic
_service of society for private profit_, and suppose we define
politics as the accommodation of all social forces, the forces of
_business, of course, included_, to the common interest." (My
italics.)

It is evident that if the community gains by an extended control over
business, that business gains at least as much by its claim to be
recognized as a _public service_. And this Mr. Wilson makes very
emphatic:--

"Business must be looked upon, not as the exploitation of society,
not as its use for private ends, but as its sober service; and
private profit must be regarded as legitimate only when it is in
fact a reward for what is veritably serviceable,--serviceable to
interests which are not single but common, as far as they go; and
politics must be the discovery of this common interest, in order
that the service may be tested and exacted.

"In this acceptation, society is the _senior partner_ in all
business. It first must be considered,--society as a whole, in its
permanent and essential, not merely in its temporary and
superficial, interests. _If private profits are to be
legitimatized, private fortunes made honorable_, these great forces
which play upon the modern field must, both individually and
collectively, be accommodated to a common purpose." (My italics.)

Business is no longer "to be looked upon" as the exploitation of
society, private profits are to be "legitimatized" and private fortunes
"made honorable"--in a word, the whole business world is to be
regenerated and at the same time rehabilitated. This is to be
accomplished, as Mr. Wilson explained, in a later speech (April 13,
1911), not by excluding the large capitalists from government, but by
including the small, and this will undoubtedly be the final outcome. He
said:--

"The men who understand the life of the country are the men _who
are on the make_, and not the men who are made; because the men who
are on the make are in contact with the actual conditions of
struggle, and those are the conditions of life for the nation;
whereas, the man who has achieved, who is at the head of a great
body of capital, has passed the period of struggle. He may
sympathize with the struggling men, but he is not one of them, and
only those who struggle can comprehend what the struggle is. I
would rather take the interpretation of our national life from the
general body of the people than from those who have made
conspicuous successes of their lives."

But the "Interests" are not to be excluded from the new dispensation.

"I know a great many men," Mr. Wilson says further, "whose names
stand as synonyms of the unjust power of wealth and of corporate
privileges in this country, and I want to say to you that if I
understand the character of these men, many of them--most of
them--are just as _honest_ and just as patriotic as I claim to be.
But I do notice this difference between myself and them; I have not
happened to be immersed in the kind of business in which they have
been immersed; I have not been saturated by the prepossessions
which come upon men situated as they are, and I claim to see some
things that they do not yet see; that is the difference. _It is not
a difference of interest_; it is not a difference of capacity; it
is not a difference of patriotism. It is a difference of
perception....

"Now, these men have so buried their minds in these great
undertakings that you cannot expect them to have reasonable and
rational views about the antipodes. They are just as much chained
to a task, as if the task were little instead of big. Their view is
just as much limited as if their business were small instead of
colossal. _But they are awakening._ They are not all of them
asleep, and when they do wake, they are going to lend us the
assistance of truly statesmanlike minds.

"We are not fighting property," Mr. Wilson continues, "but the
wrong conception of property. It seems to me that business on the
great scale upon which it is now conducted is the service of the
community, and the profit is legitimate only in proportion as the
service is genuine. I utterly deny the genuineness of any profit
which is gathered together without regard to the serviceability of
the thing done.... Men have got to learn that in a certain sense,
_when they manage great corporations, they have assumed public
office_, and are responsible to the community for the things they
do. _That is the form of privilege that we are fighting."_ (Italics
mine.)[33]

A second glance at these passages will show that Mr. Wilson speaks in
the name rather of struggling small capitalists, business men "on the
make," than of the nation as a whole. His diplomacy is largely aimed to
move the "honest" large capitalists. These are assured that the only
form of privilege that Mr. Wilson, representing the smaller business
men, those "on the make," is attacking, is their freedom from political
and government control. But the large capitalists need not fear such
control, for they are assured that they themselves will be part of the
new government. And as there is no fundamental "difference of
interests," the new government will have no difficulty in representing
large business as well as small.

No better example could be found of the foreshadowed treaty between the
large interests and the whole body of capitalists, and their coming
consolidation, than the central banking association project now before
Congress. Originated by the "Interests" it was again and again moderated
to avoid the hostility of the smaller capitalists, until progressives
like Mr. Wilson are evidently getting ready to propose still further
modifications that will make it entirely acceptable to the latter class.
Already Mr. Aldrich has consented that the "State" banks, which
represent chiefly the smaller capitalists, should be included in the
Reserve Association, and that the President should appoint its governor
and deputy governor. Doubtless Congress will insist on a still greater
representation of the government on the central board.

Mr. Wilson emphasizes the need of action in this direction in the name
of "economic freedom," which can only mean equal financial facilities
and the indirect loan of the government's credit to all capitalists,
through means of a government under their common control:--

"The great monopoly in this country is the money monopoly. So long
as that exists, our old variety and freedom and individual energy
of development are out of the question. A great industrial nation
is controlled by its system of credit. Our system of credit is
concentrated. _The growth of the nation, therefore, and all our
activities are in the hands of a few men_ who, even if their action
be honest and intended for the public interest, are necessarily
concentrated upon the great undertakings in which their own money
is involved, and who necessarily by every reason of their own
limitations, chill and check and destroy genuine economic freedom.
This is the greatest question of all, and to this statesmen must
address themselves with an earnest determination to serve the long
future and the true liberties of men." (My italics.)

Undoubtedly this is a great question; the establishment of a political
control over credit will mean a political and financial revolution. For
it will establish the power of the government over our whole economic
system and will lead rapidly to a common political and economic
organization of all classes of capitalists for the control of the
government, to a compromise between the group of capitalists that now
rules the business world and that far larger group which is bound to
rule the government. The financial magnates have seen this truth, and,
as Mr. Paul Warburg said to the American Association (New Orleans, Nov.
21, 1911), "Wall Street, like many an absolute ruler in recent years,
finds it more conducive to safety and contentment to forego some of its
prerogatives ... and to turn an oligarchy into a constitutional
democratic federation [_i.e._ a federation composed of capitalists]."

Mr. Roosevelt has announced a policy with regard to monopolies that
foreshadows even more distinctly than anything Mr. Woodrow Wilson has
said the solution of the differences between large and small
capitalists. He urges that a government commission should undertake
"supervision, regulation, and control of these great corporations" even
to the point of controlling "monopoly prices" and that this control
should "indirectly or directly extend to dealing with all questions
connected with their treatment of their employees, including the wages,
the hours of labor, and the like."[34]

This policy is in entire accord with the declarations of Andrew
Carnegie, Daniel Guggenheim, Judge Gary, Samuel Untermeyer,
Attorney-General Wickersham, and others of the large capitalists or
those who stand close to them. It is in equal accord with the
declarations of _La Follette's Weekly_ and the leading "Insurgent"
writers.

It is true that the private monopolies, as Mr. Bryan pointed out (_New
York Times_, Nov. 19, 1911), "will soon be in national politics more
actively than now, for they will feel it necessary to control Colonel
Roosevelt's suggested commission, and to do that they must control the
election of those who appoint the commission."

But the private monopolies will soon be more actively in politics no
matter what remedy is offered, even government ownership. The small
capitalist investors, shippers, and consumers of trust products can only
protect themselves by securing control of the government, or at least
sharing it on equal terms with the large capitalists.

The reason that Mr. Roosevelt's proposal was hailed with equal
enthusiasm by the more far-sighted capitalists, whether radical or
conservative, small or large, was that they have an approximately equal
hope of controlling the government, or sharing in its control. The
unbiased observer can well conclude that they are likely to divide this
control between them--and, indeed, that the complete victory of either
party is economically and politically unthinkable. Already banks,
railways, industrial "trusts," mining and lumber interests, are being
forced to follow a policy satisfactory to small capitalist investors,
borrowers, customers, furnishers of raw material, and taxpayers--while
small capitalist competitors are being forced to abandon their effort to
use the government to restore competition and destroy the "trusts."

In the reorganization of capitalism, the non-capitalists, the wage and
salary earning class are not to be consulted. Taken together with those
among the professional and salaried class who are small investors or
expect to become independent producers, the small capitalists constitute
a majority of the electorate (though not of the population), or at
least hold the political balance of power. It is capitalist interests
alone that really count in present-day politics, and it is for
capitalists alone that government control would be instituted.

Viewed in this light the statements of Mr. Woodrow Wilson that "business
is no longer in any proper sense a private matter," or that "our
program, from which we cannot be turned aside, is, that we are going to
take possession of the control of our own economic life," and the
similar statements of Mr. Roosevelt, are not so Socialistic as they
seem. What their use by the leading "conservative-progressive" statesmen
of both parties means is that a partnership of capital and government is
at hand.

FOOTNOTES:

[31] Lincoln Steffens in _Everybody's Magazine_, beginning September,
1910.

[32] _McClure's Magazine_, 1911.

[33] Governor Woodrow Wilson, Speech of April 13, 1911.

[34] The _Outlook_, Nov. 18, 1911.

CHAPTER III

THE POLITICS OF THE NEW CAPITALISM

We are told that the political issue as viewed by American radicals is,
"Shall property rule, or shall the people rule?" and that the radicals
may be forced entirely over to the Socialist position, as the
Republicans were forced to the position of the Abolitionists when
Lincoln signed the Emancipation Proclamation. Mr. Ray Stannard Baker
notes also that capital is continually the aggressor, as were the
slaveholders, and that the conflict is likely to grow more and more
acute, since "no one imagines that these powerful men of money will give
up their advantage lightly" any more than the old slaveholders did.

Another "insurgent" publicist (Mr. William Allen White) says that the
aim of radicalism in the United States is "the regulation and control of
capital" and that the American people have made up their minds that
"capital, the product of the many, is to be operated fundamentally for
the benefit of the many." It is one of those upheavals, he believes,
which come along once in a century or so, dethrone privilege, organize
the world along different lines, take the persons "at the apex of the
human pyramid" from their high seats and "iron out the pyramid into a
plane."[35]

If the aim of the "progressives" is the overthrow of "the rule of
property" as Mr. Baker claims--if, in the words of Mr. White again,
"America is joining the world movement towards equal opportunity for all
men in our modern civilization," then indeed the greatest political and
economic struggle of history, the final conflict between capitalism and
Socialism, is at hand.

But when we ask along what lines this great war for a better society is
to be waged, and by what methods, we are told that the parties to the
conflict are separated, not by practical economic interests, but by
"ideas" and "ideals," and that the chief means by which this social
revolution is to be accomplished are direct legislation and the recall
and their use to extend government ownership or control so as gradually
to close one door after another upon the operations of capital until its
power for harm is annihilated, _i.e._ democracy and collectivism. In
other words, the militant phrases used by Socialists in earnest are
adopted by radicals as convenient and popular battle cries in their
campaign for "State Socialism," as to banking, railroads, mines, and a
few industrial "trusts," but without the slightest attempt either to end
the "rule of property" or to secure "equal opportunity" for any but
farmers and small business men. They do nothing, moreover, to bring
about the new political and class alignment that is the very first
requirement, if the rule of property in all its forms is to be ended, or
equal opportunity secured for the lower as well as the comparatively
well-to-do middle classes.

Similarly the essential or practical difference between the "Socialism"
of Mr. Roosevelt's editorial associate, Dr. Lyman Abbott, who
acknowledges that classes exist and says that capitalism must be
abolished, and the Socialism of the international movement is this, that
Dr. Abbott expects to work, on the whole, with the capitalists who are
to be done away with, while Socialists expect to work against them.

Dr. Abbott claims that the "democratic Socialism" he advocates is
directly the opposite of "State Socialism ... the doctrine of
Bismarck," that it "aims to abolish the distinction between
possessing and non-possessing classes," that our present industrial
institutions are based on _autocracy_ and _inequality_ instead of
liberty, democracy, and equality, that under the _wages system_ or
capitalism, the laborers or wage earners are practically unable to
earn their daily bread "except by permission of the capitalists who
own the tools by which the labor must be carried on." He then
proceeds to what would be regarded by many as a thoroughly
Socialist conclusion:

"The real and radical remedy for the evils of capitalism is the
organization of the industrial system in which the laborers or tool
users will themselves become the capitalists or tool owners; in
which, therefore, the class distinction which exists under
capitalism will be abolished."[36]

And what separates the advanced "State Socialism" of Mr. Hearst's
brilliant editor, Mr. Arthur Brisbane, from the Socialism of the
organized Socialist movement? Has not Mr. Brisbane hinted repeatedly at
a possible revolution in the future? Has he not insisted that the crux
of "the cost of living question" is not so much the control of prices
by the private ownership of necessities of life (as some "State
Socialist" reformers say, and even some official publications of the
Socialist Party), as the _exploitation_ of the worker _at the point of
production_, the fact that he does not get the full product of his
labor--phrases which might have been used by Marx himself?

The _New York Evening Journal_ has even predicted an increasing conflict
of economic interests on the political field--failing to state only that
the people's fight must be won by a class struggle, a movement directed
against capitalism and excluding capitalists (except in such cases where
they have completely abandoned their financial interests).

Asked whether the influence of the Interests (the "trusts") would
increase or diminish in this country in the near future, the _Journal_
answered:--

"The influence of the interests, which means the power of the
trusts, or organized industry and commerce, will go forward
steadily without interruption.

"Just as steadily as early military feudalism advanced and grew,
UNTIL THE PEOPLE AT LAST CONTROLLED IT AND OWNED IT, JUST SO
STEADILY WILL TO-DAY'S INDUSTRIAL FEUDALISM advance and grow
without interruption UNTIL THE PEOPLE CONTROL IT and own it.

"The trusts are destined to be infinitely more powerful than now,
infinitely more ably organized.

"And that will be a good thing in the long run for the people. The
trusts are the people's great teachers, proving that destructive,
selfish, unbrotherly competition is unnecessary.

"They are proving that the genius of man can free a nation or a
world. They are saying to the people: 'You work under our ORDERS.
One power can own and manage industry.'

"It is hard for individual ambition just now. But in time THE
PEOPLE WILL LEARN THE LESSON AND WILL SAY TO THE TRUST OWNERS:--

"'THANK YOU VERY MUCH. WE HAVE LEARNED THE LESSON. WE SEE THAT IT
IS POSSIBLE FOR ONE POWER TO OWN AND CONTROL ALL INDUSTRY, ALL
MANUFACTURES, ALL COMMERCE, AND WE, THE PEOPLE, WILL BE THAT ONE
POWER.'

"Just as the individual feudal lords organized their little armies
in France, and just as the French people themselves have all the
armies in one--UNDER THE PEOPLE'S POWER--so the industries
organized NOW by the barons of industrial feudalism, one by one,
will be taken and put together by the people, UNDER THE PEOPLE'S
OWNERSHIP."[37]

Yet we find the _Journal_, like all the vehicles and mouthpieces of
radicalism, other than those of the Socialists, unready to take the
first step necessary in any conflict; namely, to decide who is the
enemy. Unless defended by definite groups in the community, "the rule of
property," could be ended in a single election. Nor can the group that
maintains capitalist government consist, as radicals suggest, merely of
a handful of large capitalists, nor of these aided by certain cohorts of
hired political mercenaries--nor yet of these two groups supported by
the deceived and ignorant among the masses. Unimportant elections may be
fought with such support, but not revolutionary "civil wars" or "the
upheavals of the centuries." _In every historical instance such
struggles were supported on both sides by powerful, and at the same time
numerically important, social classes, acting on the solid basis of
economic interest._

Yet non-Socialist reformers persist in claiming that they represent all
classes with the exception of a handful of monopolists, the bought, and
the ignorant; and many assert flatly that their movement is altruistic,
which can only mean that they intend to bestow such benefits as they
think proper on some social class that they expect to remain powerless
to help itself. Here, then, in the attitude of non-Socialist reformers
towards various social classes, we begin to see the inner structure of
their movement. They do not propose to attack any "vested interests"
except those of the financial magnates, and they expect the lower
classes to remain politically impotent, which they as democrats, know
means that these classes are only going to receive such secondary
consideration as the interests of the other classes require.