Socialism As It Is

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[40] The _Outlook_, May 24, 1911.

[41] Governor Woodrow Wilson, Speech in Portland, Oregon, May 18, 1911.

[42] Speech in Senate, May 24, 1911.

[43] Miss Jessie Wallace Hughan in her "American Socialism of the
Present Day" (page 184) has quoted me as saying (in the _New York Call_
of December 12, 1909) that the amendability of the Constitution by
majority vote is a demand so revolutionary that it is exclusively
Socialist property. Within the limitations of a very brief journalistic
article I believe this statement was justified. It holds for the United
States to-day. It does not hold for agrarian countries like Australia,
Canada, or South Africa, for backward countries like Russia, or
dependent countries like Switzerland or Denmark, where there is no
danger of Socialism. And before it can be put into effect, which may
take a decade or more, the increased proportion in the population of
well-paid government employees and of agricultural lessees of government
lands and similar classes, may make a democratic constitution a safe
capitalistic policy, for a while, even in the United States.

[44] Lloyd George, _op. cit._, pp. 33, 34.

[45] Lloyd George, _op. cit._, p. 35.

CHAPTER IV

"STATE SOCIALISM" AND LABOR

State Capitalism has a very definite principle and program of labor
reform. It capitalizes labor, views it as the principal resource and
asset of each community (or of the class that controls the community),
and undertakes every measure that is not too costly for its
conservation, utilization, and development--_i.e._ its development to
fill those positions ordinarily known as _labor_, but not such
development as might enable the laborers or their children to compete
for higher social functions on equal terms with the children of the
upper classes.

On the one hand is the tendency, not very advanced, but unmistakable and
almost universal, to invest larger and larger sums for the scientific
development of industrial efficiency--healthy surroundings in childhood,
good food and healthy living conditions, industrial education, model
factories, reasonable hours, time and opportunity for recreation and
rest, and on the other a rapidly increasing difficulty for either the
laborer or his children to advance to other social positions and
functions--and a restriction of the liberty of laborers and of labor
organizations, lest they should attempt to establish equality of
opportunity or to take the first step in that direction by assuming
control over industry and government. From the moment it approaches the
labor question the "Socialist" part of "State Socialism" completely
falls away, and nothing but the purest collectivist capitalism remains.
Even the plausible contention that it will result in the maximum
efficiency and give the maximum product breaks down. For no matter how
much the condition of the laborers is improved, or what political rights
they are allowed to exercise, if they are deprived of all initiative and
power in their employments, and of the equal opportunity to develop
their capacities to fill other social positions for which they may prove
to be more fit than the present occupants, then the human resources of
the community are not only left underdeveloped, but are prevented from
development.

In the following chapters I shall deal successively with the plans of
the "State Socialists" to develop the productive powers of the laboring
people and their children--_as laborers_, together with the accompanying
tendencies towards compulsory labor, and formation of a class society.

"Our Home policy," says a manifesto of the Fabian Society (edited by
Bernard Shaw), "must include a labor policy, _whether the laborer wants
it or not_, directed to securing _for him, what, for the nation's sake
even the poorest_ of its subjects should have." (Italics mine.)[46]

Here is the basis of the attitude of the "State Socialist" towards
labor. Labor is to be given more and more attention and consideration.
But the governing is to be done by other classes, and the foundation of
the new policy is to be the welfare of society as these other classes
conceive it,--and not the welfare of the masses of the people as
conceived by the masses themselves.

Indeed, a government official has recently pleaded with capital in the
name of labor that the time has come when it pays to treat labor as well
as valuable horses and cattle. George H. Webb, Commissioner of Labor of
Rhode Island, begins his report on Welfare Work by assuring the
manufacturers that it is profitable. He says: "Mankind, at least that
portion of it that has to do with horseflesh, discovered ages ago that a
horse does the best service when it is well fed, well stabled, and well
groomed. The same principle applies to the other brands of farm stock.
They one and all yield the best results when their health and comforts
are best looked after. It is strange, though these truths have been a
matter of general knowledge for centuries, that it is only quite
recently that it has been discovered that the same rule is applicable to
the human race. We are just beginning to learn that the employer who
gives steady employment, pays fair wages, and pays close attention to
the physical health and comfort of his employees gets the best results
from their labor."[47]

Mr. George W. Perkins, recently retired from the firm of J. P. Morgan
and Company, who has managed the introduction of pensions, profit
sharing, and other investments in labor for the International Harvester
Company, has also expressed the view that these measures were profitable
"from a pecuniary standpoint." A good illustration is the calculation of
the Dayton Cash Register Company, which has led in this "welfare work,"
that "the luncheons given each girl costs three cents, and that the
woman does five cents more of work each day." Some such calculation will
apply to the whole colossal system of governmental labor reforms now
favored so widely by far-sighted employers.[48]

In order that the private policy of the more enlightened of the large
corporations should become the policy of governments, which employers as
a class know they can control, only two conditions need to be filled.
Since all employers must to some degree share the burdens of the new
taxes needed for such governmental investments in the improvement of
labor, there must be some assurance, first, that all capitalists shall
share in the opportunity to employ this more efficient and more
profitable labor; and second, that the supply of cheap labor, which has
cost almost nothing to produce, is either exhausted or, on account of
its inefficiency, is less adapted to the new industry than it was to the
old. The impending reorganization of governments to protect the smaller
capitalists from the large (through better control over the banks,
railroads, trusts, tariffs, and natural resources) will furnish the
first condition, the natural exhaustion or artificial restriction of
immigration now imminent together with the introduction of "scientific
management," the second. From a purely business standpoint the greatest
asset of the capitalists' government, its chief natural resource, the
most fruitful field for conservation, and the most profitable place for
the investment of capital will then undoubtedly be in the labor supply.

In presenting the British Budget of 1910 to Parliament, Mr. Lloyd George
argued that the higher incomes and fortunes ought to bear a greater than
proportionate share of the taxes, because present governmental
expenditures were largely on their behalf, and because the new labor
reforms were equally to their benefit.

"What is it," he said, "that enabled the fortunate possessors of
these incomes and these fortunes to amass the wealth they enjoy or
bequeath? The security insured for property by the agency of the
State, the guaranteed immunity from the risks and destruction of
war, insured by our natural advantages and our defensive forces.
This is an essential element even now in the credit of the country;
and, in the past, it means that we were accumulating great wealth
in this land, when the industrial enterprises of less fortunately
situated countries were not merely at a standstill, but their
resources were being ravaged and destroyed by the havoc of war.

"What, further, is accountable for this growth of wealth? The
spread of intelligence amongst the masses of the people, the
improvements in sanitation and in the general condition of the
people. These have all contributed towards the efficiency of the
people, _even as wealth-producing machines_. Take, for instance,
such legislation as the Educational Acts and the Public Health
Acts; they have cost much money, but they have made infinitely
more. That is true of all legislation which improves the conditions
of life for the people. An educated, well-fed, well-clothed,
well-housed people _invariably leads to the growth of a numerous
well-to-do class_. If _property_ were to grudge a substantial
contribution towards proposals which insure the security which is
one of the essential conditions of its existence or toward keeping
from poverty and privation the old people whose lives of industry
and toil have either created that wealth or made it productive,
then _property_ would be not only shabby, but shortsighted."
(Italics mine.)[49]

The property interests should be far-sighted enough to support the
present economic and labor reforms, not because there is any fear in
Great Britain either from a revolutionary Socialist movement or from an
organized political or labor union upheaval, for Mr. Lloyd George
ridicules both these bogeys, but because such reforms _contribute
towards the efficiency of the people, even as wealth-producing
machines_--and increase the incomes of the wealthy and the well-to-do.

Mr. Lloyd George continued:--

"We have, more especially during the last 60 years, in this country
accumulated wealth to an extent which is almost unparalleled in the
history of the world, but we have done it at _an appalling waste of
human material_. We have drawn upon the robust vitality of the
rural areas of Great Britain, and especially Ireland, and spent its
energies recklessly in the devitalizing atmosphere of urban
factories and workshops as if the supply were inexhaustible. We are
now beginning to realize that we have been spending _our capital_,
at a disastrous rate, and it is time we should take a real,
concerted, national effort to replenish it. I put forward this
proposal, not a very extravagant one, _as a beginning_." (My
italics.)[50]

In order to do away with the economic waste of profitable "human
material" and the still more serious exhaustion of the supply, the
propertyless wage earner or salaried man for the first time obtains a
definite status in the official political economy; he becomes the
property of the nation viewed "as a business firm," a part of "our"
capital. His position was much like a peasant or a laborer during the
formation of the feudal system. To obtain any status at all, to become
half free he had to become somebody's "man." Now he is the "man," the
industrial asset, of the government. This paternal attitude towards the
individual, however, is not at all similar to the paternalist attitude
towards capital. While the individual capitalist often does not object
to having his capital reckoned as a part of the resources of a
government which capitalists as a class control,--roughly speaking in
proportion to their wealth,--we can picture his protests if either _his_
personal activity or ability or _his_ private income were similarly
viewed as dependent for their free use and development on the benevolent
patronage of the State. However, for the _workers_ to become an asset of
the State, even while the latter is still viewed primarily as a
commercial institution and remains in the hands of the business class,
is undoubtedly a revolutionary advance.

Mr. Winston Churchill also gives, as the basis for the whole program,
the need of putting an end to that "waste of earning power" and of "the
stamina, the virtue, safety, and honor of the British race," that is due
to existing poverty and economic maladjustment.[51] Mr. John A. Hobson,
a prominent economist and radical, shows that the purpose of the "New
Liberalism" is the full development of "the productive resources of our
land and labor,"[52] and denies that this broad purpose has anything to
do with Socialist collectivism.

Professor Simon Patten of the University of Pennsylvania writes very
truly about the proposed labor reforms, that "they can cause poverty to
disappear and can give a secure income to every family," without
requiring any sacrifice on the part of the possessing classes. No one
has shown more clearly or in fewer words how intimately connected are
the advance of the worker and the further increase of profits. "Social
improvement," Professor Patten says, "takes him [the workman] from
places where poverty and diseases oppress, and introduce him to the full
advantage of a better position.... It gives to the city workman the air,
light, and water that the country workman has, but without his
inefficiency and isolation. It gives more working years and more working
days in each year, with more zeal and vitality in each working day;
health makes work pleasant, and pleasant work becomes efficiency when
the environment stimulates men's powers to the full.... The unskilled
workman must be transformed into an efficient citizen; children must be
kept from work, and women must have shorter hours and better
conditions."[53]

Professor Patten has even drawn up a complete scientific program of
social reforms which lead _necessarily_ to the economic advantage of
_all_ elements in a community without any decrease of the existing
inequalities of wealth. "The incomes and personal efforts of those
favorably situated," says Professor Patten, "can reduce the evils of
poverty without the destruction of that _upon which their wealth and the
progress of society depend_." (Italics mine.)

The reform program begins with childhood and extends over every period
of the worker's life. Ex-President Eliot of Harvard and President Hadley
of Yale and other leading educators propose that its principles be
applied to the nation's children. Dr. Eliot insists that greater
emphasis should be laid on vocational and physical training and the
teaching of hygiene and the preservation of the health, which will
secure the approval of every "State Socialist." Anything that can be
done to elevate the health of the nation, and to increase its industrial
efficiency by the teaching of trades, will pay the nation, considered as
a going concern, a business undertaking of all its capitalists. It might
not improve the opportunity of the wage earners to rise to better-paid
positions, because it would augment competition among skilled laborers;
while it would probably improve wages somewhat, it might not advance
them proportionately to the general increase of wealth; it might leave
the unequal distribution of wealth, political power, and opportunity
even more unequal than they are to-day, but as long as the nation as a
whole is richer and the masses of the people better off, "State
Socialists" will apparently be satisfied.

President Hadley is even more definite than Dr. Eliot. The new
educational policy so thoroughly in accord with the interests of the
business and capitalist classes demands "for the people" every
opportunity in education that will make the individual a better
_worker_, while it allows his development as a _man_ and a _citizen_ to
take care of itself. President Hadley urges that we follow along German
lines in public education. What he feels we still lack, and ought to
take from Germany, are the "industrial training and the military
training of the people": the children are forced to go to the elementary
schools for a time, and during that part of their education they are
kept out of the shops and the factories. They, however, receive
instructions in the rudiments of shop and factory work."[54] In other
words, the children are kept out of the factory, but the shop and the
factory are permitted to enter the school. Doubtless an improvement, but
not yet the sort of education any business or professional man would
desire for his own children at twelve, fourteen, or sixteen years of
age.[55]

"State Socialism" looks at the individual, and especially the
workingman, almost wholly from the standpoint of what the community, as
_at present organized_, the capitalists being the chief shareholders, is
able to make out of him. Each newborn child represents so much cost to
the community for his education. If he dies, the community loses so and
so much. If he lives, he brings during his life such and such a sum to
the community, and it is worth while to spend a considerable amount both
to prevent his early death or disablement and to increase his industrial
efficiency while he lives. According to this view, Professor Irving
Fisher of Yale has calculated that the annual child crop in the United
States is worth about seven billion dollars per annum, a sum almost
equal to the annual value of our agricultural crops. In both cases great
economies are possible. Professor Fisher has estimated that 47 per cent
of the children who die in America less than five years old could be
saved at an average cost of $20 per child, which means an annual loss to
the nation of $576,000,000, according to Professor Fisher's calculation
of what would have been the future value of all the children now lost
(above their cost of maintenance).

"We have counted it our good fortune," says Professor Fisher, "to
dwell in a land where nature has been so prodigal that we have not
needed to fear want. We are only beginning to realize that this
very prodigality of nature has produced a spirit of prodigality in
men.

"It is the purpose of the conservation movement to rebuke and
correct this national trait, and the resources of science are now
concentrated in this mighty effort in that direction.

"The conservation of human life will, I believe, constitute the
grandest movement of the twentieth century.

"Not only do human beings constitute by far the greatest part of
our natural resources, but the waste of human life and strength is
by far the greatest of all wastes. In the report of President
Roosevelt's conservation commission, although his commission was
primarily appointed to conserve our natural rather than our vital
resources, it was pointed out that _human beings, considered as
capitalized working power, are worth three to five times all our
other capital_, and that, even on a very moderate estimate, the
total waste and unnecessary loss of our national vitality amounts
to _one and one half billions of dollars per year_."[56]

When the "State Socialist" policy has taken possession of the world,
which may be in the very near future, or, more correctly speaking, when
the world's business and politics are so organized as to give this
policy a chance for a full and free application, is it not evident that
every advanced nation will consider it as being to its business interest
to put an end to this vast, unnecessary loss of life? And if half a
billion a year is lost through unnecessary deaths of very young
children, is it not probable that an equal sum is lost through death
later in childhood or early youth, another similar sum through
underfeeding in later life, or through lack of sufficient exercise,
rest, recreation, and outdoor life, and a far larger amount through lack
of industrial training? Is it not certain that unnecessary industrial
accidents, sickness due to overwork and early old age due to overstrain,
are responsible for another enormous loss? And, finally, is not
unemployment costing a billion a year to the "nation, considered as a
business firm"? This last-named loss has been calculated, for the United
States alone, as 1,300,000 years of labor time annually. If a round
million of these years are saved--if we estimate their value in profits
at the low figure of $1000 each,--we have another billion (even
allowing for 300,000 unemployable).[57]

Is it not clear that nearly every element in the community will soon
combine to do all that is humanly possible to put an end to such costly
abuses and neglect; and that conscientious and wholesale efforts to
preserve the public health and to secure industrial efficiency cannot be
a matter of the distant future, when movements in that direction have
already been initiated in Great Britain, Australia, Germany, and some
other countries? Sir Joseph Ward, Premier of New Zealand, says that the
people of that country have already calculated the value of each
child--and, on this basis, made it the subject of certain governmental
investments. He says:--

"To return to the annuity fund, apart from the assistance it gives
to the wife and children if the father is sick, it also contributes
the services of a medical man for a woman at childbirth, and the
State pays $30 for that purpose. If all of this is not needed to
pay the physician, the rest may be used for carrying on the home.
This has all been done with the view to helping the birth rate and
bringing into the world children under the most healthy conditions
possible, so that they may have a free chance of attaining man's or
woman's estate.

"We assess the value of an adult in our country as $1500. So, _from
a business standpoint and on national grounds_, we regard the
expenditure of a sum up to $30 as judicious, when the value of the
infant to the country may be fifty times that sum. Thus the small
wage earner's wife and children are provided for, and his fear
about being able to provide for a large family is decreased."
(Italics mine.)[58]

"I am of the opinion," declares Mr. Churchill, "that the State should
increasingly assume the position of the reserve employer of labor," and
that "the State must increasingly and earnestly concern itself with the
care of the sick and aged, and, above all, of the children." He looks
forward "to the universal establishment of the _minimum standards_ of
life and labor, and their progressive elevation as the increasing
energies of production may permit."[59]

Mr. Churchill rejects the supposition that the government intends to
stop with the extension of the eight-hour law to miners. "I welcome and
support this measure, not only for its own sake," he said, "but more
because it is, I believe, simply the precursor of the general movement
which is in progress, all over the world, and in other industries
besides this, towards reconciling the conditions of labor with the
well-ascertained laws of science and health."[60]

It might be supposed that this measure would prove costly to employers,
but this is only a short-sighted view. In the first place, working for
less hours, the miners will produce somewhat more per hour, but an even
more important ultimate benefit comes from the fact that the most
experienced miners, those who are most profitable, being subject to less
overstrain, will have a longer working life.

Another measure already enacted towards establishing "a national
minimum" applies to the wages in ready-made tailoring and some less
important industries, to which shirt-waist making is soon to be added.
These are known as the "sweated" trades, "where the feebleness and
ignorance of the workers and their isolation from each other render them
an easy prey to the tyranny of bad masters and middlemen one step above
them upon the lowest rungs of the ladder, and themselves held in the
grip of the same relentless forces,"--where "you have a condition not of
progress but of progressive degeneration." Mr. Churchill asked
Parliament to regard these industries as "sick and diseased," and "to
deal with them in exactly the same mood and temper as we should deal
with sick people," and accordingly boards were established for the
purpose of setting up a minimum wage.[61]

But if employers are forced to pay higher wages, it may be thought that
they will lose from the law. This Mr. Churchill effectively denies.

"In most instances," he says, "the best employers in the trade are
already paying wages equal or superior to the probable minimum
which the Trade Board will establish. The inquiries I have set on
foot in the various trades scheduled have brought to me most
satisfactory assurances from nearly all the employers to whom my
investigations have addressed themselves.... But most of all I have
put my faith in the practical effect of a powerful band of
employers, perhaps a majority, who, whether from high motives or
self-interest, or from a combination of the two--they are not
necessarily incompatible ideas--will form a vigilant and instructed
police, knowing every turn and twist of the trade, and who will
labor constantly to protect themselves from being undercut by the
illegal competition of unscrupulous rivals."