Looking Backward: 2000-1887 Read online

  CHAPTER XXII.

  We had made an appointment to meet the ladies at the dining-hall fordinner, after which, having some engagement, they left us sitting attable there, discussing our wine and cigars with a multitude of othermatters.

  "Doctor," said I, in the course of our talk, "morally speaking, yoursocial system is one which I should be insensate not to admire incomparison with any previously in vogue in the world, and especiallywith that of my own most unhappy century. If I were to fall into amesmeric sleep to-night as lasting as that other, and meanwhile thecourse of time were to take a turn backward instead of forward, and Iwere to wake up again in the nineteenth century, when I had told myfriends what I had seen, they would every one admit that your worldwas a paradise of order, equity, and felicity. But they were a verypractical people, my contemporaries, and after expressing theiradmiration for the moral beauty and material splendor of the system,they would presently begin to cipher and ask how you got the money tomake everybody so happy; for certainly, to support the whole nation ata rate of comfort, and even luxury, such as I see around me, mustinvolve vastly greater wealth than the nation produced in my day. Now,while I could explain to them pretty nearly everything else of themain features of your system, I should quite fail to answer thisquestion, and failing there, they would tell me, for they were veryclose cipherers, that I had been dreaming; nor would they ever believeanything else. In my day, I know that the total annual product of thenation, although it might have been divided with absolute equality,would not have come to more than three or four hundred dollars perhead, not very much more than enough to supply the necessities of lifewith few or any of its comforts. How is it that you have so muchmore?"

  "That is a very pertinent question, Mr. West," replied Dr. Leete, "andI should not blame your friends, in the case you supposed, if theydeclared your story all moonshine, failing a satisfactory reply to it.It is a question which I cannot answer exhaustively at any onesitting, and as for the exact statistics to bear out my generalstatements, I shall have to refer you for them to books in my library,but it would certainly be a pity to leave you to be put to confusionby your old acquaintances, in case of the contingency you speak of,for lack of a few suggestions.

  "Let us begin with a number of small items wherein we economize wealthas compared with you. We have no national, state, county, ormunicipal debts, or payments on their account. We have no sort ofmilitary or naval expenditures for men or materials, no army, navy, ormilitia. We have no revenue service, no swarm of tax assessors andcollectors. As regards our judiciary, police, sheriffs, and jailers,the force which Massachusetts alone kept on foot in your day far morethan suffices for the nation now. We have no criminal class preyingupon the wealth of society as you had. The number of persons, more orless absolutely lost to the working force through physical disability,of the lame, sick, and debilitated, which constituted such a burden onthe able-bodied in your day, now that all live under conditions ofhealth and comfort, has shrunk to scarcely perceptible proportions,and with every generation is becoming more completely eliminated.

  "Another item wherein we save is the disuse of money and the thousandoccupations connected with financial operations of all sorts, wherebyan army of men was formerly taken away from useful employments. Alsoconsider that the waste of the very rich in your day on inordinatepersonal luxury has ceased, though, indeed, this item might easily beover-estimated. Again, consider that there are no idlers now, rich orpoor,--no drones.

  "A very important cause of former poverty was the vast waste of laborand materials which resulted from domestic washing and cooking, andthe performing separately of innumerable other tasks to which we applythe cooperative plan.

  "A larger economy than any of these--yes, of all together--is effectedby the organization of our distributing system, by which the work doneonce by the merchants, traders, storekeepers, with their variousgrades of jobbers, wholesalers, retailers, agents, commercialtravelers, and middlemen of all sorts, with an excessive waste ofenergy in needless transportation and interminable handlings, isperformed by one-tenth the number of hands and an unnecessary turn ofnot one wheel. Something of what our distributing system is like youknow. Our statisticians calculate that one eightieth part of ourworkers suffices for all the processes of distribution which in yourday required one eighth of the population, so much being withdrawnfrom the force engaged in productive labor."

  "I begin to see," I said, "where you get your greater wealth."

  "I beg your pardon," replied Dr. Leete, "but you scarcely do as yet.The economies I have mentioned thus far, in the aggregate, consideringthe labor they would save directly and indirectly through saving ofmaterial, might possibly be equivalent to the addition to your annualproduction of wealth of one-half its former total. These items are,however, scarcely worth mentioning in comparison with other prodigiouswastes, now saved, which resulted inevitably from leaving theindustries of the nation to private enterprise. However great theeconomies your contemporaries might have devised in the consumptionof products, and however marvelous the progress of mechanicalinvention, they could never have raised themselves out of the sloughof poverty so long as they held to that system.

  "No mode more wasteful for utilizing human energy could be devised,and for the credit of the human intellect it should be remembered thatthe system never was devised, but was merely a survival from the rudeages when the lack of social organization made any sort of cooperationimpossible."

  "I will readily admit," I said, "that our industrial system wasethically very bad, but as a mere wealth-making machine, apart frommoral aspects, it seemed to us admirable."

  "As I said," responded the doctor, "the subject is too large todiscuss at length now, but if you are really interested to know themain criticisms which we moderns make on your industrial system ascompared with our own, I can touch briefly on some of them.

  "The wastes which resulted from leaving the conduct of industry toirresponsible individuals, wholly without mutual understanding orconcert, were mainly four: first, the waste by mistaken undertakings;second, the waste from the competition and mutual hostility of thoseengaged in industry; third, the waste by periodical gluts and crises,with the consequent interruptions of industry; fourth, the waste fromidle capital and labor, at all times. Any one of these four greatleaks, were all the others stopped, would suffice to make thedifference between wealth and poverty on the part of a nation.

  "Take the waste by mistaken undertakings, to begin with. In your daythe production and distribution of commodities being without concertor organization, there was no means of knowing just what demand therewas for any class of products, or what was the rate of supply.Therefore, any enterprise by a private capitalist was always adoubtful experiment. The projector having no general view of the fieldof industry and consumption, such as our government has, could neverbe sure either what the people wanted, or what arrangements othercapitalists were making to supply them. In view of this, we are notsurprised to learn that the chances were considered several to one infavor of the failure of any given business enterprise, and that it wascommon for persons who at last succeeded in making a hit to havefailed repeatedly. If a shoemaker, for every pair of shoes hesucceeded in completing, spoiled the leather of four or five pair,besides losing the time spent on them, he would stand about the samechance of getting rich as your contemporaries did with their system ofprivate enterprise, and its average of four or five failures to onesuccess.

  "The next of the great wastes was that from competition. The field ofindustry was a battlefield as wide as the world, in which the workerswasted, in assailing one another, energies which, if expended inconcerted effort, as to-day, would have enriched all. As for mercy orquarter in this warfare, there was absolutely no suggestion of it. Todeliberately enter a field of business and destroy the enterprises ofthose who had occupied it previously, in order to plant one's ownenterprise on their ruins, was an achievement which never failed tocommand popular admiration. Nor is there any stretch of fancy incom
paring this sort of struggle with actual warfare, so far asconcerns the mental agony and physical suffering which attended thestruggle, and the misery which overwhelmed the defeated and thosedependent on them. Now nothing about your age is, at first sight, moreastounding to a man of modern times than the fact that men engaged inthe same industry, instead of fraternizing as comrades and co-laborersto a common end, should have regarded each other as rivals and enemiesto be throttled and overthrown. This certainly seems like sheermadness, a scene from bedlam. But more closely regarded, it is seen tobe no such thing. Your contemporaries, with their mutualthroat-cutting, knew very well what they were at. The producers of thenineteenth century were not, like ours, working together for themaintenance of the community, but each solely for his own maintenanceat the expense of the community. If, in working to this end, he at thesame time increased the aggregate wealth, that was merely incidental.It was just as feasible and as common to increase one's private hoardby practices injurious to the general welfare. One's worst enemieswere necessarily those of his own trade, for, under your plan ofmaking private profit the motive of production, a scarcity of thearticle he produced was what each particular producer desired. It wasfor his interest that no more of it should be produced than he himselfcould produce. To secure this consummation as far as circumstancespermitted, by killing off and discouraging those engaged in his lineof industry, was his constant effort. When he had billed off all hecould, his policy was to combine with those he could not kill, andconvert their mutual warfare into a warfare upon the public at largeby cornering the market, as I believe you used to call it, and puttingup prices to the highest point people would stand before going withoutthe goods. The day dream of the nineteenth century producer was togain absolute control of the supply of some necessity of life, so thathe might keep the public at the verge of starvation, and alwayscommand famine prices for what he supplied. This, Mr. West, is whatwas called in the nineteenth century a system of production. I willleave it to you if it does not seem, in some of its aspects, a greatdeal more like a system for preventing production. Some time when wehave plenty of leisure I am going to ask you to sit down with me andtry to make me comprehend, as I never yet could, though I havestudied the matter a great deal, how such shrewd fellows as yourcontemporaries appear to have been in many respects ever came toentrust the business of providing for the community to a class whoseinterest it was to starve it. I assure you that the wonder with us is,not that the world did not get rich under such a system, but that itdid not perish outright from want. This wonder increases as we go onto consider some of the other prodigious wastes that characterized it.

  "Apart from the waste of labor and capital by misdirected industry,and that from the constant bloodletting of your industrial warfare,your system was liable to periodical convulsions, overwhelming alikethe wise and unwise, the successful cut-throat as well as his victim.I refer to the business crises at intervals of five to ten years,which wrecked the industries of the nation, prostrating all weakenterprises and crippling the strongest, and were followed by longperiods, often of many years, of so-called dull times, during whichthe capitalists slowly regathered their dissipated strength while thelaboring classes starved and rioted. Then would ensue another briefseason of prosperity, followed in turn by another crisis and theensuing years of exhaustion. As commerce developed, making the nationsmutually dependent, these arises became world-wide, while theobstinacy of the ensuing state of collapse increased with the areaaffected by the convulsions, and the consequent lack of rallyingcentres. In proportion as the industries of the world multiplied andbecame complex, and the volume of capital involved was increased,these business cataclysms became more frequent, till, in the latterpart of the nineteenth century, there were two years of bad times toone of good, and the system of industry, never before so extended orso imposing, seemed in danger of collapsing by its own weight. Afterendless discussions, your economists appear by that time to havesettled down to the despairing conclusion that there was no morepossibility of preventing or controlling these crises than if they hadbeen drouths or hurricanes. It only remained to endure them asnecessary evils, and when they had passed over to build up again theshattered structure of industry, as dwellers in an earthquake countrykeep on rebuilding their cities on the same site.

  "So far as considering the causes of the trouble inherent in theirindustrial system, your contemporaries were certainly correct. Theywere in its very basis, and must needs become more and more maleficentas the business fabric grew in size and complexity. One of thesecauses was the lack of any common control of the different industries,and the consequent impossibility of their orderly and coordinatedevelopment. It inevitably resulted from this lack that they werecontinually getting out of step with one another and out of relationwith the demand.

  "Of the latter there was no criterion such as organized distributiongives us, and the first notice that it had been exceeded in any groupof industries was a crash of prices, bankruptcy of producers, stoppageof production, reduction of wages, or discharge of workmen. Thisprocess was constantly going on in many industries, even in what werecalled good times, but a crisis took place only when the industriesaffected were extensive. The markets then were glutted with goods, ofwhich nobody wanted beyond a sufficiency at any price. The wages andprofits of those making the glutted classes of goods being reduced orwholly stopped, their purchasing power as consumers of other classesof goods, of which there was no natural glut, was taken away, and, asa consequence, goods of which there was no natural glut becameartificially glutted, till their prices also were broken down, andtheir makers thrown out of work and deprived of income. The crisis wasby this time fairly under way, and nothing could check it till anation's ransom had been wasted.

  "A cause, also inherent in your system, which often produced andalways terribly aggravated crises, was the machinery of money andcredit. Money was essential when production was in many private hands,and buying and selling was necessary to secure what one wanted. Itwas, however, open to the obvious objection of substituting for food,clothing, and other things a merely conventional representative ofthem. The confusion of mind which this favored, between goods andtheir representative, led the way to the credit system and itsprodigious illusions. Already accustomed to accept money forcommodities, the people next accepted promises for money, and ceasedto look at all behind the representative for the thing represented.Money was a sign of real commodities, but credit was but the sign of asign. There was a natural limit to gold and silver, that is, moneyproper, but none to credit, and the result was that the volume ofcredit, that is, the promises of money, ceased to bear anyascertainable proportion to the money, still less to the commodities,actually in existence. Under such a system, frequent and periodicalcrises were necessitated by a law as absolute as that which brings tothe ground a structure overhanging its centre of gravity. It was oneof your fictions that the government and the banks authorized by italone issued money; but everybody who gave a dollar's credit issuedmoney to that extent, which was as good as any to swell thecirculation till the next crises. The great extension of the creditsystem was a characteristic of the latter part of the nineteenthcentury, and accounts largely for the almost incessant business criseswhich marked that period. Perilous as credit was, you could notdispense with its use, for, lacking any national or other publicorganization of the capital of the country, it was the only means youhad for concentrating and directing it upon industrial enterprises. Itwas in this way a most potent means for exaggerating the chief perilof the private enterprise system of industry by enabling particularindustries to absorb disproportionate amounts of the disposablecapital of the country, and thus prepare disaster. Businessenterprises were always vastly in debt for advances of credit, both toone another and to the banks and capitalists, and the promptwithdrawal of this credit at the first sign of a crisis was generallythe precipitating cause of it.

  "It was the misfortune of your contemporaries that they had to cementtheir business fabric with a material which
an accident might at anymoment turn into an explosive. They were in the plight of a manbuilding a house with dynamite for mortar, for credit can be comparedwith nothing else.

  "If you would see how needless were these convulsions of businesswhich I have been speaking of, and how entirely they resulted fromleaving industry to private and unorganized management, just considerthe working of our system. Overproduction in special lines, which wasthe great hobgoblin of your day, is impossible now, for by theconnection between distribution and production supply is geared todemand like an engine to the governor which regulates its speed. Evensuppose by an error of judgment an excessive production of somecommodity. The consequent slackening or cessation of production inthat line throws nobody out of employment. The suspended workers areat once found occupation in some other department of the vast workshopand lose only the time spent in changing, while, as for the glut, thebusiness of the nation is large enough to carry any amount of productmanufactured in excess of demand till the latter overtakes it. In sucha case of over-production, as I have supposed, there is not with us,as with you, any complex machinery to get out of order and magnify athousand times the original mistake. Of course, having not even money,we still less have credit. All estimates deal directly with the realthings, the flour, iron, wood, wool, and labor, of which money andcredit were for you the very misleading representatives. In ourcalculations of cost there can be no mistakes. Out of the annualproduct the amount necessary for the support of the people is taken,and the requisite labor to produce the next year's consumptionprovided for. The residue of the material and labor represents whatcan be safely expended in improvements. If the crops are bad, thesurplus for that year is less than usual, that is all. Except forslight occasional effects of such natural causes, there are nofluctuations of business; the material prosperity of the nation flowson uninterruptedly from generation to generation, like an everbroadening and deepening river.

  "Your business crises, Mr. West," continued the doctor, "like eitherof the great wastes I mentioned before, were enough, alone, to havekept your noses to the grindstone forever; but I have still to speakof one other great cause of your poverty, and that was the idleness ofa great part of your capital and labor. With us it is the business ofthe administration to keep in constant employment every ounce ofavailable capital and labor in the country. In your day there was nogeneral control of either capital or labor, and a large part of bothfailed to find employment. 'Capital,' you used to say, 'is naturallytimid,' and it would certainly have been reckless if it had not beentimid in an epoch when there was a large preponderance of probabilitythat any particular business venture would end in failure. There wasno time when, if security could have been guaranteed it, the amount ofcapital devoted to productive industry could not have been greatlyincreased. The proportion of it so employed underwent constantextraordinary fluctuations, according to the greater or less feelingof uncertainty as to the stability of the industrial situation, sothat the output of the national industries greatly varied in differentyears. But for the same reason that the amount of capital employed attimes of special insecurity was far less than at times of somewhatgreater security, a very large proportion was never employed at all,because the hazard of business was always very great in the best oftimes.

  "It should be also noted that the great amount of capital alwaysseeking employment where tolerable safety could be insured terriblyembittered the competition between capitalists when a promisingopening presented itself. The idleness of capital, the result of itstimidity, of course meant the idleness of labor in correspondingdegree. Moreover, every change in the adjustments of business, everyslightest alteration in the condition of commerce or manufactures, notto speak of the innumerable business failures that took place yearly,even in the best of times, were constantly throwing a multitude of menout of employment for periods of weeks or months, or even years. Agreat number of these seekers after employment were constantlytraversing the country, becoming in time professional vagabonds, thencriminals. 'Give us work!' was the cry of an army of the unemployed atnearly all seasons, and in seasons of dullness in business this armyswelled to a host so vast and desperate as to threaten the stabilityof the government. Could there conceivably be a more conclusivedemonstration of the imbecility of the system of private enterprise asa method for enriching a nation than the fact that, in an age of suchgeneral poverty and want of everything, capitalists had to throttleone another to find a safe chance to invest their capital and workmenrioted and burned because they could find no work to do?

  "Now, Mr. West," continued Dr. Leete, "I want you to bear in mind thatthese points of which I have been speaking indicate only negativelythe advantages of the national organization of industry by showingcertain fatal defects and prodigious imbecilities of the systems ofprivate enterprise which are not found in it. These alone, you mustadmit, would pretty well explain why the nation is so much richer thanin your day. But the larger half of our advantage over you, thepositive side of it, I have yet barely spoken of. Supposing the systemof private enterprise in industry were without any of the great leaksI have mentioned; that there were no waste on account of misdirectedeffort growing out of mistakes as to the demand, and inability tocommand a general view of the industrial field. Suppose, also, therewere no neutralizing and duplicating of effort from competition.Suppose, also, there were no waste from business panics and crisesthrough bankruptcy and long interruptions of industry, and also nonefrom the idleness of capital and labor. Supposing these evils, whichare essential to the conduct of industry by capital in private hands,could all be miraculously prevented, and the system yet retained; eventhen the superiority of the results attained by the modern industrialsystem of national control would remain overwhelming.

  "You used to have some pretty large textile manufacturingestablishments, even in your day, although not comparable with ours.No doubt you have visited these great mills in your time, coveringacres of ground, employing thousands of hands, and combining under oneroof, under one control, the hundred distinct processes between, say,the cotton bale and the bale of glossy calicoes. You have admired thevast economy of labor as of mechanical force resulting from theperfect interworking with the rest of every wheel and every hand. Nodoubt you have reflected how much less the same force of workersemployed in that factory would accomplish if they were scattered, eachman working independently. Would you think it an exaggeration to saythat the utmost product of those workers, working thus apart, howeveramicable their relations might be, was increased not merely by apercentage, but many fold, when their efforts were organized under onecontrol? Well now, Mr. West, the organization of the industry of thenation under a single control, so that all its processes interlock,has multiplied the total product over the utmost that could be doneunder the former system, even leaving out of account the four greatwastes mentioned, in the same proportion that the product of thosemillworkers was increased by cooperation. The effectiveness of theworking force of a nation, under the myriad-headed leadership ofprivate capital, even if the leaders were not mutual enemies, ascompared with that which it attains under a single head, may belikened to the military efficiency of a mob, or a horde of barbarianswith a thousand petty chiefs, as compared with that of a disciplinedarmy under one general--such a fighting machine, for example, as theGerman army in the time of Von Moltke."

  "After what you have told me," I said, "I do not so much wonder thatthe nation is richer now than then, but that you are not allCroesuses."

  "Well," replied Dr. Leete, "we are pretty well off. The rate at whichwe live is as luxurious as we could wish. The rivalry of ostentation,which in your day led to extravagance in no way conducive to comfort,finds no place, of course, in a society of people absolutely equal inresources, and our ambition stops at the surroundings which ministerto the enjoyment of life. We might, indeed, have much larger incomes,individually, if we chose so to use the surplus of our product, but weprefer to expend it upon public works and pleasures in which allshare, upon public halls and buildings,
art galleries, bridges,statuary, means or transit, and the conveniences of our cities, greatmusical and theatrical exhibitions, and in providing on a vast scalefor the recreations of the people. You have not begun to see how welive yet, Mr. West. At home we have comfort, but the splendor of ourlife is, on its social side, that which we share with our fellows.When you know more of it you will see where the money goes, as youused to say, and I think you will agree that we do well so to expendit."

  "I suppose," observed Dr. Leete, as we strolled homeward from thedining hall, "that no reflection would have cut the men of yourwealth-worshiping century more keenly than the suggestion that theydid not know how to make money. Nevertheless, that is just the verdicthistory has passed on them. Their system of unorganized andantagonistic industries was as absurd economically as it was morallyabominable. Selfishness was their only science, and in industrialproduction selfishness is suicide. Competition, which is the instinctof selfishness, is another word for dissipation of energy, whilecombination is the secret of efficient production; and not till theidea of increasing the individual hoard gives place to the idea ofincreasing the common stock can industrial combination be realized,and the acquisition of wealth really begin. Even if the principle ofshare and share alike for all men were not the only humane andrational basis for a society, we should still enforce it aseconomically expedient, seeing that until the disintegrating influenceof self-seeking is suppressed no true concert of industry ispossible."