y\&>jg & fetOYio w\ ic.s Wtimm #» stSpi?: Mil H HiSpK: hee w=v i^lpi UNIVERSITY OF ILLINOIS LIBRARY Class Book Volume i Je 07-10M THE NEW SOCIALISM AND ECONOMICS By WILLIAM B. WEEDEN [Reprinted from The New World for December, 1893] 3 a vnnr> With the Compliments of the Author. '*fZ) x 5 & THE NEW SOCIALISM AND ECONOMICS. l/i cl > Whether we view the world of man from our own standing place, or from that of a recluse like Alexander Selkirk or his greater prototype Robinson Crusoe, we recognize at once a solid basis for the human society and fellowship Aybieli ik the most interesting portion of that worlds The mubh-abused word “ nature ” affords no elucidation of human society^ considered as human. Man makes his own footprint on the earth, treading like an ani¬ mal, perhaps, but in no sense does he leave the mark of an animal on his time, as that time is recorded through the changes of the earth’s surface. Livingstone dropped out of a high civilization and attached himself to another, half-developed society in mid- Africa — the same man yet not the same social being. He car¬ ried with him the results of European life, but could impart little of that culture to the society in which he found himself and in which his days were ended. The basis of social life is neither in man nor in things, but in the combination of man with his fellows, and in the use to which they put the things. The negative side of this proposition needs no proof. History is encumbered with the wreck of institutions which would have countervailed this simple truth. Many systems of religious faith have tried to isolate the individual and trans¬ late him into an unreal perfection. In our Christian experience the more the monk was alone the worse was it for him and for his system. The early nuns were not mothers, but they took the name of grandmothers in their vain effort to embody the ten¬ derness of family ties in the artificial society of monastic life. If we grant that any true society must have things on which it can rest and put forth its daily life, then the possession of things is a vital part of the whole system. All students are indebted to the Duke of Argyll for the serious work 1 in which he has embodied this important truth. With great learning and much ingenious speculation, he has attacked the old theories of economics and maintained that the principle of possession is an integral part of wealth itself. While the treatise is open to criticism on many sides, this great contention is well established, that wealth is weal and that its science absolutely begins in an analysis of possession. Matter is under the possession of nature, but wealth is under the possession of man. A rope is made of fibres, but it can be 1 The Unseen Foundations of Society , Murray, 1893, pp. 39 et seq. 2 The New Socialism and Economics. made only by twisting. The twist — though not a part of the fibre — becomes an inseparable accompaniment, without which a rope would be impossible. This principle, certain as it is, may not always be construed easily at first sight, and the neglect of it causes much social misapprehension. The analogy of the rope affords a very good illustration. The fibre is matter — not dead but inert. When it is twisted into thread, and afterwards into a rope, there enters a movement that readjusts the matter to higher purposes and to higher ends. The rope is not completed or adapted to its final uses, until this movement, this new impulse is stayed and supported by others of its kind ; thus a solid per¬ manence is built into the structure, beginning as matter and ending in a new organism. • Any sketch of society — democratic, aristocratic or even bar¬ barian— must embody these simple characteristics in one or an¬ other form. We are treating of societies about which anything is known or can be reasonably imagined. The new socialism freely constructs imaginary societies in which every fact of history is deliberately violated. The whole relation of man to things is cast aside, and a new man 1 — a social creature with new instincts 1 The fancied characteristics of this “faultless monster,” though incon¬ ceivable, are gravely set down. Here, for instance, is a fresh and schol¬ arly treatise, The Labor Movement, by L. S. Hobhouse, of Oxford. He says, page 13 : “ If society were able to control industry and wealth for the good of its own members as a whole, I imagine that the only differences in this re¬ spect would be two. First, it would be only the incompetent and not also the idle who would be allowed thus to live on the surplus products of other men’s industry. Idleness would be regarded as a social pest, to be stamped out like a crime. Secondly, the miscellaneous selection of the incompetent for suitable provision, at present effected by birth, fortune, favoritism, intrigue, quackery, and other means, would be superseded by a more scientific adjustment. All who could work would have to work.” The practical methods of controlling industry and wealth are elsewhere stated, page 79 : “ The profits of enterprise going to communities of consumers, whether in the form of cooperative societies, municipal bodies, or the State ; while rent and interest would go directly to the municipality or the nation.” It would be hardly profitable to contest this line of argument, if it were not a speci¬ men of a great deal of writing in this direction. What evidence is there that men and women when released from competitive control and worked in the great community of the State will work better or be less prone to idleness ? Does not every experiment in history prove the direct opposite ? Compare the work of any individual farmer and his laborers with the efforts of workers for industrial corporations or the employees of the State. The results grow stead¬ ily less as we ascend in the larger scale of communal effort. There is no patriotism involved here, as is sometimes claimed. Persons are not sacrificing The New Socialism and Economics. 3 — is thrust into being, to enjoy a new relationship of things with these new creatures. The oddest feature of the whole business is that reasonable men and women welcome such pure romance and try to hug the delusion that there is real humanity in these shadowy visions. All this romantic looking backward doubtless throws forward the adumbration of the old fable of the Golden Age. Enthusiasts from the dawn of history to the time of Rous¬ seau busied themselves with this mischievous fable. Its worst mischief was that it gave something for nothing. To teach men that labor is in itself a curse seemed to be godly service to the gentle dreamers of antiquity. But we may safely assume that all the wars and pestilences of these latter five thousand years have done less harm to mankind than this mischievous dogma. If labor is a curse, then every “ labor-saving ” invention would be a double curse. For .nothing is plainer than that the wants of man are multiplied by every triumph over matter throrfgh mechanism and the subjection of force. If it be a curse to work, then work¬ ing through harnessed force, by demon and demiurge, is a curse of an aggravated kind. The fable of a Golden Age is not only vain, it is a chimera of the worst kind. Science has interpreted only a small portion of the story of nature; but in that inter¬ pretation it has cleared away an immense thicket of false and fictitious ideas. Science may not be able to render all the ideas which philosophy establishes or faith cherishes, but it has cleared a ground on which all mental action must place itself if it would appeal to the human reason. Fact has not taken the place of fancy, but it has fixed certain limits within which fancy must confine itself. Principles that are imagined and necessarily un¬ proved may not be equivalent to fact, but they must be agreeable to fact. Principles that may be or ought to be in the dreams of the most ardent enthusiast are strictly limited by the facts that are. Science has proven this for all eternity, and not even phi¬ losophy can contradict it. I have said that whenever man puts matter into a new form of organization, he gives it a certain bent and direction which must have permanence to result in stable value. All the forms of self for a common principle, but are seeking worldly goods or their own ease. No Scipios or Washingtons were ever evolved from commuual workers. The modern State has always found it impossible to execute great works promptly and economically without recourse to contract, which brought in indi¬ vidual enterprise. Matter, whether in the form of land, gold or wheat, re¬ quires subdivision into many hands to render it vital and reproductive. Hence the importance of the Duke of Argyll’s argument for possession. 4 The New Socialism and Economics . wealth have this characteristic. A bushel of wheat, a case of biscuit, a dollar readily occur to the mind, as representatives of permanent values. There are other economic values, less tan¬ gible and not so easily construed. They are incorporeal, though often very substantial. A copyright of “ Ta-ra-ra Boom-de-ay ” would be worth hundreds, possibly thousands; but a copyright of Shakespeare would be worth millions. Society has tried more and more to keep for itself the great immaterial values, and to leave to the economic market only matter and the primary com¬ binations of matter. The greatest exception in this direction is the field occupied by the law of patents. This is only tem¬ porary. An invention as valuable as the Bell telephone sooner or later loses its patent right. Society intends to hold the final control of ideas for itself and directs the administration of law and legislation in that way. The 44 good-will ” of an economic organization, which has a positive economic value, might be construed as a thoroughly incorporeal value, possessed by the market and convertible for the owner. But this exception is more apparent than actual. 44 Good-will ” depends on an expectation of immediate service, which though incorporeal as compared with wheat, is not so in the sense we are discussing. If the New York 44 Herald ” were to be suspended for three years, its immensely valuable 44 good-will” would be totally lost. There are great immaterial values, which are not economic, and owing to the blessings of representative government, these values are in possession of the poorest citizens. The mental assurances of faith and the institutions of religion, the succession of the state, law, order and police protection, the privilege of good roads, — all this immaterial organization of daily life, has become the property of the poor. A generation since, personal liberty and freedom of personal action might have been included, and perhaps rendered as the chief of these immaterial goods. ‘This is now in doubt and abeyance. Labor, now organized outside the religious, the political, and the old social forms of organization, claims to control personal freedom toward particular ends, and to administer anew on the laws of contract. It is needless to say that this is a temporary phase of the social problem. However labor may be adjusted to the future wants of society, it cannot finally control personal freedom. I have consciously avoided the mention of capital. If econo¬ mists differ in defining wealth, they separate more widely in defining capital. In modern life, credit has become so widely The New Socialism and Economics. 5 diffused that it is very difficult to distinguish it from capital in its economic bearing. I am not seeking new economic terms, but only such use of doubtful words as will throw light on the social problems which beset our daily life. Wealth that could be told off by any sort of account, enumerated under any head, ac¬ cessible or convertible in any form, has been treated as capital by all economists. I propose to treat capital 1 as social energy. It is social force, condensed and ready for action, just as the force condensed in the magnet is ready for the next orderly im¬ pulse of nature. Neither good nor bad in itself, it is generally subjected ethically to the will of the operator who releases the energy. All will agree that the basis of society is in persons, things and their interaction or relative use. Now there must be a state or condition in which these persons and this substance — whether it be material or immaterial — can exist and can unfold their action. To have a society in any civilized sense, we must have a social condition, just as a government must have an atmos¬ phere of order and law for the exercise of its functions. The obverse of this is anarchy. This social condition, the climate of civilization, deserves more attention than it has received from either theorists or thinkers. It belongs to no person and can be appropriated by no class, what¬ ever may be their rights or their power. There is a pervading notion that the immediate producer — whether he toil with his hands or produce through the use of capital — has especial rights and privileges, that society owes most to the mightiest and nearest worker. Nothing could be farther from the truth. To whom do all men, strong or weak, rich or poor, owe most ? To the infant; and secondly to the old woman — the woman who is infirm, help¬ less, deprived of the control of that life in which she has lived so much. It is of the essence of civilization to thus embody human¬ ity in an ideal, and to subject to it all the strength of Hercules, all the wealth of Croesus. We are not treating the religious ex¬ pression of this principle, but the common humane experience of every individual and every society. We establish law and govern¬ ment to secure life and goods. Beyond these elementary parts of civilization, we maintain the social atmosphere and condition of 1 To show the difficulties of treating capital technically I would cite one of the most accomplished modern economists, who finds it necessary to classify it under the following heads : “ Individual, Trade, Social, Consumption, Auxiliary, Potential, Circulating and Fixed, Specialized, Personal.” Alfred Marshall, Principles of Economics , i. 126-138. 6 The New Socialism and Economics. good living. Though the production of things be important and not to be neglected, the use of things is even more important. This use of things, we repeat, must be social, native to the atmos¬ phere, palpitating with the life of the community. A society neglecting this obvious truth fails to reach its social end, just as surely as it would fail in humanity, if it should be indifferent to the infant or the old woman. Hence we would treat capital as social energy, as an integral part of this social condition and atmosphere, which is essential to civilization as the air is necessary to our own lungs. This princi¬ ple bears directly on the disputes of labor and capital, or rather between the employed and those who employ them, and vice versa. Machines are in great demand just now. In harnessing force to the wants of man we have set up myriads of machines, and placed them in organizations which are almost as complex as the ma¬ chines themselves. Meanwhile the nominal owners are not as powerful, socially, as the men who serve and drive these machines. The doctrine prevails that the immediate worker should control not only himself but the means of working and all other workers who may wish to compete for the work, that is, for the serving of the machines. He or his representatives would direct in their own interest these great social organizations, these implements necessary in the daily and hourly movement of society. A “ griev¬ ance,” whether well or ill founded, becomes a new point of social departure, from which a whole community can be turned awry until that grievance or fancy is adjusted. A strike or lockout fol¬ lows, either one being a most expensive method for reducing social disorder. Who pays for this cost an,d enormous waste of social force ? It is a common notion that the “ capitalist,” — an alien and un¬ natural creature imposed between the whole community and labor represented with a large L, — that this alien pays out of his own pocket for all these distorted social operations. Nothing could be more falsely conceived. The “ capitalist,” whether rich or poor, wise or ignorant, is only a social agent, directing and thereby im¬ proving or wasting the social energy I have attempted to describe. For himself, he gets little at any time, in comparison with the fund he manages and dispenses. If he feed upon nightingales’ tongues and dress in purple and fine linen, he spends a very small portion of the social stores he dispenses. The capitalist, employer and promoter of enterprises, owns even in a nominal sense but a small part of the capitalized resources of any community. In The New Socialism and Economics. 7 our country small proprietors, farmers, professional men, widows and orphans, families with narrow resources, depositors in savings banks, seamstresses and the like are the chief owners of capital. 1 These classes, making the great majority of any community, are but indirectly connected with the great producing interests. When an aggression of labor or capital prevails, the resulting cost is charged upon these non-resisting members of society. A few capitalists or employers are ruined in a revolution of labor and employment, but the class of employers remains, and it charges the cost of the revolution upon the main body, the non-resist¬ ing mass of society. There is no ethical influence here: this is not a matter of will or choice, but of necessary economic evolu¬ tion. Conversely, when business improves and social energy is better economized, the great body of consumers are benefited: wit¬ ness the gradual reduction of prices in the cost of living and of comforts. Let us consider anew the relations of capital and social action, of production and distribution in a large sense, as they affect the whole of society. Economists value highly “ immaterial ” things, such as political security, orderly business, and conditions of in¬ dustrial energy; they construe these airy somethings into solid values, the equivalent of land and precious metals. Bearing this in mind, society should look carefully that it preserve its imma¬ terial creations, or, as I have termed it, the state or condition in which social development can get its best extension and expres¬ sion. If Labor grasps control, 2 not only of its own effort, but 1 Very few comprehend the wide diffusion of capital, pr know how the bulk of capital- is owned and held. In 1892 the eleven principal manufacturing corporations of Lowell, Mass., including cotton and woolen, the machine shop and bleachery, aggregated $14,950,000 in capital. This was without surplus, At the same time the seven chief savings banks of that city had $17,636,965 in deposits. These deposits belonged almost entirely to mill operatives of this and the preceding generation. We may safely assume that the capitalized wages of these successful industries fully equal the capital of the employing corporations. Dividends have been disbursed and consumed by the shareholders; but we may fairly infer that they were consumed almost entirely, while a large fraction of the wages was capitalized. The operatives of Lowell have not lived penuriously, but have been models of intelligence and self-improvement. 2 Marshall, Principles of Economics : “ There is some misuse of wealth in all ranks of society ; but speaking generally, we may say that every increase in the income of the working classes adds to the fullness and nobility of human life ; because it is used chiefly in the supply of real wants,” p. 181. “ But there is a grave danger that progress may be retarded in consequence of a common belief that a reduction of the hours of labor will raise wages generally by merely making labor scarce,” p. 732. 8 The New Socialism and Economics. of the whole organized resources of society, then the state or con¬ dition of social action in that society is faulty and ill-regulated. Such a distorted social action and misapplication of social energy can be readily traced in Australasia 1 to-day. A new society, with great resources and great opportunities for labor, falls under vir¬ tual control of labor organizations. Wages are raised, hours are shortened, and labor expended on public works is concentrated on the vital organs of the community instead of being circulated outward, toward the limbs of private enterprise and individual production. The State is forced to lend its power to the misdi¬ rected movement. Parties and politicians bid for the labor vote; loans are contracted and public works extended beyond the needs of the community. What follows ? Credit both public and pri¬ vate fails, commercial disasters thicken, and a partial paralysis fetters production, in a country blessed with fine natural resources and the means of modern development. Such work is a prodigious waste of social energy. If it were not caused by ignorance it would be the worst wickedness. This is embezzlement made worse, because it is disguised. The laborer, the servant of a machine — or even of an inherited social tool like a shovel — assumes that society must give him all he chooses to demand for impelling those machines or tools. Massing with his fellows, he bends political power to the will of this new form of organization, the trade-union in one or another shape. Dis¬ order, ruined exchanges, paralyzed production, social loss, follow these diversions of social organization, these misapplications of social energy. This plunder and waste of the accretions of civil¬ ized life is partly caused and largely increased by the wrong dogma above cited, — the mistaken notion that the capitalist, or a class of persons called capitalists, pays- for any experiments and any losses the laborer and organizations of labor may choose to im¬ pose upon society. The modern capitalist-employer — important as his function is — is only a small part of the great whole of so¬ ciety. If his proper function be interfered with, he will not be the only loser. As the experience of Australasia shows, his losses and those of his class are soon multiplied and levied upon society at large. In the final extension of the recoil, the laborer, like Samson, has pulled down the structure which protected him while it protected all parts of society. My contention is, that the state and condition of social action 1 An interesting and complete account of the labor troubles in Australasia may be found in the weekly London Times, July 28 and August 4, 1893. The New Socialism and Economics. 9 to which industrial energies are allied, just as the sail joins with the breeze or the piston rod combines with the current of steam, constitutes immaterial wealth, that it is the part of wealth which has cost most and the part best worth preserving. It is clear that things are valuable in civilization, but the use of things is yet more valuable ; just as the steam is worth more than the coal whence it came, and the stroke of the piston is more valuable than the current of steam. The whole process and arrangement of society grows more complex with every stride of civilization. This com¬ plexity is the finest result proceeding from all the centuries. It is the essence of growth and of human development. Yet for this reason, it is more and more dependent on order and upon the sub¬ jection of each individual, whether laborer or capitalist, to the canons of social order. I have argued that the social condition which admits of our present civilization and which affords a basis for the action of social energy, is the birthright of everybody and should be cher¬ ished and preserved by every one. This principle is freely ad¬ mitted by many for the present time and gainsaid or opposed in looking forward to the future. The socialist ignores the logic of events. Gathering the evils of civilization into the focus of his vision, he would change the orderly sequence of life. He would administer the future — generally through some form of adminis¬ tration of the State — in a new way for better results. But we can judge of the future only by the past. All forms of society, aristocratic or democratic, despotic or republican, have recognized qualitative differences in their individual members. A better sol¬ dier or sailor, inventor or planter, poet or singer, soon made an impression on those societies and found his reward. This princi¬ ple, if not rejected, is oppressed by socialism. The mass of society and not the essential qualities of its individual members occupies the attention and stimulates the inventive plans of socialists. 1 This is not the method of nature, which improves by variation and not by mere succession and repetition. The greatest and best regulated quantity — if it filled the universe — could not produce better quality without variation. Progress comes by diffusing 1 This is well brought out by Mr. Gilman : “ No more ingenious scheme, however, than scientific socialism has ever been imagined by the perverse in¬ tellect of partial thinkers for diminishing the progress of civilization. The philosophic thinker is repelled by the exaggerated emphasis which they place on the material comfort of the least successful part of the human race.” — - Socialism and the American Spirit , p. 342. 10 The New Socialism and Economics. quality through the mass, and not by merely increasing the bulk of the mass; and the qualit) 7- of individuals, once attained, be¬ comes a common heritage. No one invents for himself alone. The quality pertaining to the inventor, which was sacred, becomes common and human through the appreciation of the mass and not by the sluggish weight of that mass. This quality of the individual man and woman is something worth study and deep investigation. It is something far more subtile and delicate than the old canons of aristocracy could define. All the colleges of heraldry could not show the fine differences exist¬ ing between man and man to-day. To define these differences, to secure and keep them active and potent, is an essential and inevi¬ table part of the present social enigma. Enormous social forces are being released every day; we need personal force and corre¬ sponding individual men and women, quite as much as we need a larger meed of material comfort and companies of laborers to propel machines. Any improvement in this direction, any sug¬ gestion or novel impulse, is always welcomed by all interested in social progress. The socialist has thus far shown no method, or plan, by which the quality of individuals could be improved or even sustained. We may grant privileges and endow classes through institutions, but then we do not reach the centre of the problem, which affects the condition and future of each and every individual man and woman. No better means for developing quality and lifting the individual has been so far practiced or even discovered than ownership and possession of property. In one of the old cere¬ monies of manumission, the emancipated serf dropped a coin at the feet of his sovereign. It was a symbol of deep significance. The right to own and the duty of expending in the highest cause were corner-stones of the old individuality. Have we found any better way of endowing every man with power, of making every citizen a king over his own circumstance ? Will free transporta¬ tion and free theatre tickets dignify the common man, like the possession of his own dollar earned by his own effort ? The common avenue and certain bridge to possession and the more solid forms of property is through wages. The wage s} r s- tem has become more elastic and easy with every decade of prog¬ ress. While it is defective, it embodies more of the needs of common life than any mode of organizing labor hitherto tried, or even suggested. Modified by cooperation and profit sharing, it has great possibilities of development. In the newer societies, The New Socialism and Economics . 11 especially, it helps to bring out the qualitative differences of men we have insisted upon. Many individuals have made their first earnings the vaulting pole by which they have gained higher position and larger opportunity. I would not ignore the evils of the present time. Great material forces are being put to use, new appetites are being created, and in the inevitable social changes many individuals suffer. But the whole of society gains by the new life, and in trying to meliorate the hard cases of the transition, we should not trifle with the great social foundations of civilization. The wage system affords a ready means for bring¬ ing all labor — whatever its qualitative differences — into imme¬ diate use and employment. As it exists, and with all its defects, it is a marvel of development and organization. If one knows something of its delicate operation and knows of the relations of employer and employed as social life pulsates through the mech¬ anism of labor and wages ; then one shudders as shallow theorists flippantly trifle with the organization through which society moves along in its daily work. 1 The greatest and most instructive study for man is in man him¬ self. I have tried to show that the use of things is far more important than the very thing itself. Possession and property 2 are bound up with the use of things, as the twist of fibres makes a rope out of matter that was loose and useless. The vegetable fibre was afloat in the wind and had to be stayed by man. This bent and twist of the fibre was something human, conferred by man when he was directing, controlling, creating. This creation belongs to society as a whole and is merely administered for the time by capitalist or employer. Any interference with the natural development of this creative force by either laborer or capitalist, labor or capital, must inevitably cause a great social waste. Capi¬ tal is social energy and cannot be diverted from the uses of society by any one class. When capital, employment or production is diverted even for the benefit of a large fraction of society, — as it was diverted for the laborers in Australasia, — then the social waste is enormous and falls on the whole of society, including the innocent with the guilty. The cost of this waste, this eccentric 1 The Daivn, an organ of the Christian Socialists, says : “ Business itself to¬ day is wrong. It rests upon a negation of the social law. Each man is for himself, each company for itself. It is based on competitive strife for profits. This is the exact opposite of Christianity.” 2 “ In attacking private property the Socialists make their worst blunder.”— Gilman, Socialism and the American Spirit, p. 3G2. 12 The New Socialism and Economics. development of force, is borne in largest proportion by the non¬ resisting members of society. When the power of the State is di¬ rected into these eccentric channels, when production is fostered politically, then the social waste becomes worse, as has been shown in France several times and as was shown lately in Australasia. The harmonious action of these great social forces playing in and through political grooves, depends on the larger social condi¬ tion, as I have termed it. The greatest business of man, as it is the highest work of nature, is to vary and establish the qualitative differences which embody improvement and make progress possi¬ ble. These qualitative germs are planted and secured in indi¬ vidual men and women. The social condition is an atmosphere widely diffused and constantly active. To bring its stimulating influence into contact with all individuals, large and small alike, nothing has been yet discovered so potent as wages. Whether the laborer be a barrister or a shoveler, he can honestly earn his fee or wage. The foundation for individual quality and estab¬ lished variation is in possession. Immaterial and immortal life cannot be transmitted and maintained without a visible and tan¬ gible seed. Out of possession proceeds creative energy and the new life. We need not arraign the new socialism, for we stand by history and observed facts. It remains for the new socialism to prove its own case. *