UNEMPLOYMENT 
 
 PROBLEM 
 
 ause and Cure 
 
 By 
 
Return this book on or before the 
 Latest Date stamped below. A 
 charge is made on all overdue 
 books. 
 
 U. of I. Library 
 
 DEC ttm 
 
 U t\ i 
 
 
 M 
 
 0 oil 
 
 •* 21 ' 3 ? 
 
 OCT ~C> 19 
 
 * 
 
 t V to 
 
 MAR 29 1948 
 MAY 18 \ C M 
 
 5 
 
 9324-S 
 
THE 
 
 UNEMPLOYMENT 
 
 PROBLEM 
 
 Cause and Cure 
 
 By 
 
 
 t }• l 
 
 
 Published by 
 
 THE SOCIOLOGY CLUB 
 
 Schenectady, N. Y. 
 
PREFACE 
 
 (By Author.) 
 
 “This book is more than necessary; it is urgent. I pub¬ 
 lish it.” 
 
 VICTOR HUGO. 
 
 PREFACE 
 
 (By the Sociology Club.) 
 
 These lectures were delivered to the Sociology Club. 
 The Club spent over twenty sessions in studying them, and 
 has now undertaken to publish them with the permission o£ 
 the author. 
 
 W. S. VAN VALKENBURGH, 
 
 Secretary Sociology Club, 
 
 Schenectady, N. Y. 
 
 July 24, 1916. 
 
DEDICATION 
 
 I dedicate this book to the American Slave Citizen, who 
 no longer fancies himself free, but who has become conscious 
 of his slavery and aspires to be free. 
 
 ANALYTICUS. 
 
For corrections of important errors 
 See Errata on the last page ot 
 this book. 
 
 Copyright, 1916 
 
 BY THE SOCIOLOGY CLUB 
 
THE UNEMPLOYMENT PROBLEM 
 
 CAUSE AND CURE 
 
 LECTURE 1. 
 Theory of Unemployment. 
 
 “Come now, and let us reason together.”—Isaiah: 1-18. 
 
 1. The unemployment problem is one of the most im¬ 
 portant problems that confronts the statesman, the reformer 
 and the economist to-day. It is at the root of tariff question; 
 it is at the root of Socialism, anarchism, and industrial syndi¬ 
 calism ; it is at the root of low-wage and high cost of living; it 
 is at the root of labor unions, strikes, trusts, labor laws, and 
 anti-trust laws; it is at the root of troubles in Morocco, Trans¬ 
 vaal, India, and China. -In short, i.t pervades the whole of 
 modern politics, and social science. 
 
 2. The treatment of the unemployment problem in the 
 past has been far from Satisfactory. The subject has to be 
 studied in its two aspects, the theoretical and the practical; it 
 
 1. As an illustration of the careless way of dealing with this im¬ 
 portant problem, I quote the following from “Unemployment and 
 Wage-Earner,” by John Mitchell: 
 
 I. “For a century this government possessed in its unappro¬ 
 
 priated natural resources, an ever-reliable absorber of labor seeking 
 employment. These resources no longer perform that function 
 directly, except in a limited decree. We have arrived at that state, in 
 which social actions in some form must to an extent take the place 
 cf individual effort. 
 
 II. “Well, what con be done for our unemployed? Alas, it is in 
 the end one of the deepest questions confronting our government. 
 Immediately in the United States, effective and to a point continuous 
 relief to our over-stocked labor market, is to be found in persisting in 
 American principles, -under which the wage earner is an independent 
 citizen, rather than in trying to follow the European examples, by 
 which the wage-earners are regarded the wards of society.” 
 
 Can any American undertake to harmonize the above two passages? 
 
the: unemployment problem 
 
 has also to be studied from two points of view, the ethical and 
 the economical. The treatment of the problem in the past has 
 been limited to its practical economic aspect, and it is no won¬ 
 der that the results have been so unsatisfactory. Our first 
 step ought to be, to frame and establish a correct theory oi 
 unemployment; the remedy if any will then,naturally suggest 
 itself. If it does not, the chances are that there is no possible 
 remedy, and that things will have to be allowed to go on as 
 heretofore. There was a time when people were trying to gel 
 perpetual motion, but theory of mechanics has uttered its ver¬ 
 dict on this point, and no sensible person dreams of perpetua 
 motion now. Theory has led the way to our modern system 
 of wireless telegraphy; before the theory of electric waves was 
 developed, attempts were being' made to get wireless com¬ 
 munication in other ways, but in the absence of theory those 
 efforts were naturally misdirected and could not lead to sue 
 cess. If unemployment be a necessary evil, 2 incapable o 
 being remedied, as some writers believe, it is best for us tc 
 know it; it would save us from many a wild-goose chase ir 
 search of an impossible scheme of reform. On the contran 
 if reform be Possible, theory will show in what direction tc 
 look for it. Therefore before taking any important practica 
 step, it is our duty to do a little hard and systematic 3 analvtica 
 thinking and to formulate if possible a scientific theory of un 
 employment. 
 
 2 No one theory as to the cause of trade fluctuations can yet b< 
 
 taken as proved.whatever, however, the explanation to be finally 
 
 adopted, there seems now some reason in theory for regarding th< 
 fluctuation as inevitable, or at least preventable only at the cost o 
 
 greater harm.whatever the cause or causes, they must be deer 
 
 seated.—Beveridge, “Unemployment, a Problem of Industry,” secom 
 edition 1910, page 64. 
 
 3. “We need to do a great deal more hard thinking in almos 
 
 every department of our Socialistic program. Take for instanc< 
 
 the pressing question of the unemployed. It is easy enough t( 
 
 demand that something should be done and I entirely agree witl 
 agitating the subject, but something more than agitation is required 
 It is of no use urging remedies which can be demonstrably prove( 
 to be worse for the patient than the disease itself. I fear that if w< 
 were to be given full power to-morrow to deal with the unemployec 
 all over England, we should find ourselves hard put to it to solvi 
 the problem.”—Sydney Webb, “The Basis and Policy of Socialism, 1 
 page 52. 
 
LECTURE I—THEORY OF UNEMPLOYMENT. 
 
 7 
 
 3. The most commonly accepted theory is, that there is 
 not work enough in the; world to go round for all. There 
 seems to be a notion, prevalent among the economists, and 
 also among the people generally, that the amount of work 
 available for the people of any country is a sort of fixed and 
 limited quantity, depending in some way, not clearly under¬ 
 stood, upon the natural resources of the 4 country. This work 
 is not enough to go round for all, and therefore a frantic effort 
 to get a proper share is everybody's duty, and an effort to 
 put more than one's share is not only desirable, and justifiable, 
 but even praiseworthy. According to this theory the unem¬ 
 ployed are those who cannot hold their own in the struggle 
 for work. In the course of this struggle, a considerable part 
 of work must necessarily be lost, but this loss is regarded as 
 inevitable. Now, if this theory be true, if there be a real 
 scarcity of work, and if it be necessary for every person to 
 have a fair share of it, would it not be highly desirable to cease 
 fighting, and by common consent to frame and enforce a code 
 of rules for the fair and equitable distribution of work to 5 all ? 
 Would any people allow a similar policy of competitive strug¬ 
 gle in a siege, where water was scarce, so. as to let half the 
 water be wasted bv fighting over it. in order that one man may 
 get a hundred gallons, and a hundred men might get none? 
 If, on the other hand, the theory be untrue, and if the amount 
 of work be unlimited, there should be no need of any struggle 
 at all, so that in either case there is no justification for the 
 struggle, fight and competition. But competition for work, 
 and consequent unemployment, is a fact and has to be ex¬ 
 plained. 
 
 4. The anti-capitalists attribute competition for work 
 
 4. .'“One must recognize that there Is a limit to any country’s 
 capacity to furnish work and that the limit has been reached in this 
 land.”—Prof. J. J. Stevenson. 
 
 5. The idea of equitable distribution of work through legislative 
 intervention is supported by the labor unions and the Socialists. 
 
 “A SHORTER WORKDAY,” suggested by organized labor for 
 many years as one method of easing the pressure of unemployment 
 by distributing it, has been adopted to some extent by employers 
 
 during this year. It would necessitate the employment of a 
 
 larger number of men to do the work.thus decreasing the number 
 
 of men out of work.”—“Menace of Employment,” Winfield Gaylord 
 
8 
 
 the: unemployment problem. 
 
 and unemployment, to the greed of the capitalist, to his hav¬ 
 ing monopolized implements of work, leaving only a few ap¬ 
 proaches to work open to the whole working force, thereby 
 compelling them to fight and struggle for a chance. But is the 
 capitalist really more greed}^ than the • wage-worker, whom 
 he is supposed to drive into competition with other workers? 
 liow could you explain the millions he gives away freely for 
 various charitable purposes if greed be his dominant motive? 
 Why should Rockefeller have given 25 millions to the Chicago 
 University, when the Chicago University gave him not one 
 cent in return? That 25 millions is only a fortieth part of his 
 enormous wealth is no answer to my question. Even to a 
 multi-millionaire 25 millions is not a small sum to give away. 
 There are instances where even this explanation fails. In anti¬ 
 capitalist literature Carnegie is pictured as the personification 
 of greed and avarice, and yet it is fairly well known that he 
 has already given away more than half his fortune in the ser¬ 
 vice of education. Leland Stanford dedicated his entire fortune 
 for the same purpose. Here the greed theory completely 
 breaks down, for, in these two instances, which are by no 
 means rare exceptions, there runs the strange anomaly of those 
 against whom a weapon is being forged, contributing deliber¬ 
 ately to its manufacture. The watchword of the revolutionist 
 is education; the revolutionist should be the last of the race 
 to impugn the motives of the philanthropic capitalist who aids 
 him in his cause. I do not imply that these endowments were 
 made without a motive. No human act is ever without motive. 
 My contention is that greed is not the motive and in some cases 
 not even a motive of the capitalist. "Save, save: accumulate, 
 accumulate, saving for saving's sake, accumulate for accumula¬ 
 tion's sake. This is Moses and the Prophets"—may be very 
 fine rhetoric, but it is very poor logic. Hvpocrisy is often sug¬ 
 gested as an explanation of such gifts. Hypocrisy may be de¬ 
 fined as preaching virtue without practicing it. When hvpo¬ 
 crisy starts practicing virtue it ceases to be hypocrisv. The 
 following is an extract from the Boston American, which is not 
 generally and never consistently a friend of capitalists: 
 
 "In the United States victims die every year and 
 month of phossy jaw, because the cheapest way of 
 making matches is the way that causes the disease. 
 
LECTURE I—THEORY OF UNEMPLOYMENT. 
 
 9 
 
 But a way of making matches entirely free from dan¬ 
 ger exists. This method—patented—was controlled 
 by the Match Trust. That trust has freely cancelled 
 its patent so that anybody might manufacture 
 matches without murdering men in the process, a very 
 creditable act. But still the manufacture of poison¬ 
 ous matches and manufacture of dreadful disease 
 goes on—FOR PROFIT.” 
 
 In the original article the words “for Profit” were em¬ 
 phasized to the fullest extent of the form, size and character 
 of type available. The editor believes that greed of profit is 
 the guiding star of the capitalist. Can he explain how the 
 match trust has chanced to rise above this passion and has 
 undergone this great sacrifice in the interest of its rivals? 
 Assuming that the capitalist is greedy, the next question is 
 what makes him so greedy? Assuming once more that he is 
 greedy, why does he block the way of the workman so effect¬ 
 ively as to keep some of the workers unemployed and unpro¬ 
 ductive, thereby preventing in part the production of wealth 
 when the production of wealth without limit, is the only pos¬ 
 sible way to fulfill the dictates of his greed? A complete and 
 correct theory of work and unemployment ought to be able to 
 answer all these questions satisfactorily. 
 
 5. The upholders of the competitive system seem to rely 
 simultaneously on two contradictory hypothesis. They try to 
 swim and skate at the same time. They pretend to believe 
 that work is amply sufficient for all, and yet utterly insufficient 
 for all at one and the same time. From their strenuous ef¬ 
 forts to capture work at home and abroad, it is evident that 
 they regard work as something extremely rare, and vet when 
 they are called upon to face the unemployment problem, they 
 turn round and protest, that there is always ample work for 
 all, that there is no need for any real worker to be without 
 work, unless he chooses to be so. They speak of the unem¬ 
 ployed as being really the unemployable human drones who 
 are being rightly served for what they deserve. These same 
 people, in controverting Socialism, or other schools of revolu¬ 
 tionary reform, trround once more and argue that there 
 is not work enough for all, that everybody must compete for 
 
10 
 
 THE UNEMPLOYMEN1 PROBLEM. 
 
 work and get what he can, and that if someone has to be with¬ 
 out work it is nobody's fault. The state is under no obliga¬ 
 tion to create work for the unemployed, nor is it possible to 
 provide work for them, unless you set them to dig holes and 
 fill them up. In fact, these men do not seem to have made up 
 their minds as to whether there is enough of work for all or 
 no. 
 
 6. But on the whole there seems to be a general feeling 
 that work is not enough for all, and that competition for work 
 is both necessary and justifiable. The struggle, the waste, and 
 misery of those who fail to secure their share of work are re- 
 gretable evils, but as necessary results of an inexorable law of 
 nature they are none the less inevitable. From their point of 
 view, it is as if the Creator of the world had blundered in his 
 work. If he had only made the earth less fertile, the rivers and 
 seas less navigable, the trees harder to fell, the earth and rocks 
 harder to bore, and the ores harder to smelt, there would have 
 been more work to do and the world would have been happier! 
 Unable to undo what God has done, they proceed to suggest 
 other remedies, such as checking the growth of population by 
 prudential restraints, or by immoral interference with laws 
 of nature, or by restriction of immigration. They seem to 
 
 6. I. Severe restriction of immigration should come, and come 
 quickly. But restriction to immigration is not enough; the surplus 
 population is already here! Our cities are over-crowded with utter¬ 
 ly unskilled labor. It is estimated that in New York City alone there 
 are 100,000 unemployed clerks. The great problem is already with 
 us.”—Prof. J. J. Stevenson. 
 
 (A Query to Prof. Stevenson: Are the 100,000 clerks included 
 in the utterly unskilled labor, or does he suggest that the utterly un¬ 
 skilled laborers have displaced the 100,000 clerks and thrown them 
 out of work?) 
 
 If. “A more strict regulation of immigration would have beet.. 
 
 advisable. We have admitted without hindrance, a very large 
 
 number who have made life harder for the wage-earner already here, 
 and have swollen the number of the unemployed.”—Prof. Devine. 
 
 III. John Mitchell also recommends “restriction to immigration” 
 as calculated to give “enormous practical relief.” 
 
LECTURE i—theory of unemployment. 
 
 11 
 
 argue that as the total amount of work is limited, any 7 increase 
 in population will decrease the share of work per head, and 
 conversely a decrease of population would increase the share. 
 
 7. To demonstrate the incorrectness of this view, let us 
 assume that on the night of December 31, 1911, all the unem¬ 
 ployed in the United States are carried in a steamer and dumped 
 into the Atlantic. We may now expect the new year to begin 
 with a perfect economic balance, a man for every work and a 
 work for every man. The unemployed in the United States 
 are estimated at about 8 two millions, and the cost in human 
 life to secure the balance is too barbarous to contemplate in 
 spite of its being imaginery. But as I fail to see any difference 
 between starving men on land and dumping them at sea, I 
 make the assumption with all due apology. And now to return 
 to the point: How long will the economic balance remain un¬ 
 disturbed? Will it remain so even for one single year or for a 
 month or even for one week ? The two millions of people, even 
 after their death, will continue to upset the balance. It is true 
 that being unemployed these men could earn nothing; but 
 they ate something, drank something, wore something, and 
 lived somewhere. Now that they are gone, the baker and the 
 clothier will have less demand for their goods. The rooms oc¬ 
 cupied by these people will also be vacant now. The wages of 
 the workers might for a time rise on account of there being no 
 
 7. This view is held by Socialists generally, though not yet 
 recognized officially in their platform. It can be found in the writings 
 o. leading Socialists. The following extract from the New York Call, 
 July 5, 1915, is an illustration: 
 
 “But the aftermath of war will be the same this time as 
 always, and the American workers must not let themselves 
 be deceived too much by this appearance of prosperity. After 
 the war is over, the armies will be disbanded all over 
 
 Europe. Those who cannot get work in their own 
 
 countries will look elsewhere and million-s of them will prob¬ 
 ably come to America, the land of freedom, and peace and 
 opportunity. The result may be the flooding of the Ameri¬ 
 can labor market and the doubling of the army of unem¬ 
 ployed here.”—“Menace of Unemployment,” Winfield R. Gay¬ 
 lord. 
 
 8. I take this figure from Edward Eads How’s telegram to 
 President Taft inviting him on behalf of the two million unemployed 
 to attend the convention at Cincinnati. John Mitchell estimates 
 the number at four and one-half millions. 
 
12 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 competition among them, but the demand for commodities in 
 several departments will go down, the prices will fall the trade 
 will suffer, some of the factories and stores will have to be 
 closed, wages will go down once more, a great number of 
 workers will be thrown out of employment ready for 9 10 another 
 dumping expedition ! Unemployment has nothing to do with 
 population. The popular fallacy, that over-population is the 
 cause of unemployment would be a good joke if it were inno¬ 
 cent, but the grave consequences of this belief make it a crime 
 against humanity and treason against their own faith in God. 
 
 8. Work is not something substantial, capable of exist¬ 
 ing by itself independent of man; work is the effort to sat'sfy 
 1G nced. As long as there is man there is need; as long as there 
 
 9. “What is even graver is, that we are year by year creating 
 new unemployables. The class is indeed no mere inheritance from an 
 evil past. Its members are not on the whole long lived. If we were 
 suddenly relieved of the whole of the present incubus without any 
 change in the conditions we should within ten or twelve years have 
 just as many unemployed on our hands a-s ever.”—Report of the Royal 
 Commission on the Poor Laws. Vol. Ill, by: 1, Rev. Prenderbury 
 Wakefield; 2, Francis Chandler; 3, George Lansbury; 4, Mrs. Sydney 
 Webb. 
 
 The honorable commissioners are, unfortunately, quite wrong 
 on one point, viz., their estimate of time. In-stead of ten or twelve 
 “years,” they ought to have said “weeks.” The existing unemployed 
 act like the steam in a boiler which prevents the formation of more 
 steam. The unemployed, even if they be paupers, are still consum¬ 
 ers and keep approximately an equal number of men at work. So 
 soon as they are taken off our hands, tho-se who worked for them will 
 he thrown out of work and our hands will be full again. The com¬ 
 missioners, like everybody else, are unconscious of the function of the 
 unemployed. They are doing an important service, and until you are 
 prepared to^ dispense with that service it is no u-se trying to get rid of 
 them in any way whatever. 
 
 10. Here and everywhere throughout this lecture the word need 
 is used in its widest sense, including every kind of need—including 
 even the most extravagant luxuries. From the producer’s point of 
 view every need is need, whether the need i-s real or fancied, sensible 
 o<- sdly. refined or vulgar, is a matter of no consequence whatever. 
 The only question that concerns him is, how urgent is the need? 
 The needs of the unemploj^ed are obviously far more urgent than 
 those of their possible employers. The allegation that the “unem¬ 
 ployed have crowded the labor market, bringing in more labor power 
 than there is need for,” i-s not only untrue, but also unfair, for the 
 urgency of their needs gives with absolute certainty, an amount of 
 employment to others who refuse to employ them in return. 
 
LECTURE I—THEORY OF UNEMPLOYMENT. 
 
 13 
 
 is need there is work. Each man, as he comes into the world, 
 brings witn him his share of need and work. Each man, as he 
 leaves the world, takes away with him his share of further need 
 and v/ork. There is neither too much work nor too little work 
 in the world; it is always exactly proportional to the number of 
 people. Therefore, unless any person withholds from another 
 person his rightful share of work, there is no reason for any 
 person being out of v/ork, and conversely if a person is out of 
 work, it is evident that something must have kept him out 
 oi his due share of work; for example, some other person may 
 have robbed him of his share, the means and method of rob¬ 
 bing him of his rights being merely a matter of detail. THIS 
 IS THEORY OF WORK. 
 
 9. The theory of unemployment is comparatively more 
 difficult. The roots of this evil extend far back into prehistoric 
 times—into the dawn of earliest civilization. It required for 
 its full development certain conditions which could only 
 come into existence at a certain stage of civilization, and these 
 conditions are therefore wrongly held responsible for the evil. 
 For example, insufficiency of work, partly due to a very large 
 part of our modern work being done by labor-saving machines, 
 and sudden increment of population, are two important sec¬ 
 ondary causes; they are responsible for the two popular fall¬ 
 acies, viz., that there is not enough of work for all, and that 
 over-population is the cause of unemployment. I have already 
 explosed the fallacy of both these views. A third cause of un¬ 
 employment usually alleged, is failure of resources. 
 
 10. n Failure of natural resources is not an impossible 
 cause, but no country in the world has yet reached this state 
 of exhaustion, and for a long time to come there is no fear of 
 such a thing coming to pass. The coal mines of Pennsylvania 
 may fail, and Niagara may cease to flow one day, but these 
 
 11. Failure of resources operates as a cause of unemployment 
 only when the failure is complete and extensive. A oartial failure, on 
 the contrary, creates more work. For example, if the fertility of the 
 soil i-s reduced by 10 per cent., 10 per cent, more land will have to be 
 brought under cultivation, o,r an amount of food grain shall have to 
 be imported and something given to foreign countries in exchange. 
 In either case there will be more work to do Local or temporary fail¬ 
 ure of resources may cause unemployment for a short time but as soon 
 as the disturbing causes are removed work i-s resumed with a com- 
 nensatins rush. 
 
14 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 things have not happened yet, and their possible failures in the 
 very distant future cannot be responsible for the unemploy¬ 
 ment of to-day. The same explanation is also offered with 
 reference to the unemployment in the countries of the old 
 world, and yet it is well known, that those countries and the 
 United States also, are making the most strenuous efforts to 
 capture foreign markets, and to defend their own markets 
 against foreign invasion. If failure of resources were the real 
 source of trouble, would it not be an extremely foolish and 
 short-sighted policy to waste the scanty resources of an ex¬ 
 hausted country on foreign markets? Could the people of 
 Britain ever dream of adopting a policy calculated to encour¬ 
 age exportation of wheat for any price? Failure of resources! 
 In what respect have they failed in the United States? Have 
 the mines failed to yield oil, and coal, and iron, and silver, and 
 gold? Have the Niagara Falls ceased to supply power, and 
 have copper wires ceased to transmit it? Has the land ceased 
 to grow vegetables or the seas to breed fish? Have the sheep 
 ceased to grow wool, or the hens ceased to lay eggs? And 
 lastly, has human ingenuity failed? Is the American of the 
 twentieth century less inventive and resourceful than his fore¬ 
 fathers in the eighteenth and nineteenth centuries? Failure of 
 resources in the United States! It is an insult to the land, and 
 its people. No, the resources have not failed, and are not likely 
 to fail for a long time yet. No capitalist ever complains of a 
 failure of resources. As far as he is concerned, they are inex- 
 hausted and inexhaustible. He is anxiously waiting for a de¬ 
 mand for more work to employ his resources. He wants more 
 work for his resources, not more resources for his work. In 
 other words, unemployment is not limited to labor, it extends 
 to the capitalist and his resources. 
 
 11. The Socialist Party of the United States holds capi¬ 
 talism to be the cause of unemployment. 
 
 “The Socialist Party of the United States declares 
 that the capitalist system has outgrown its historical 
 function, and has become utterly incapable of meet¬ 
 ing the problems now confronting society. We de¬ 
 nounce this outgrown system as incompetent and 
 corrupt and the source of unspeakable misery to the 
 whole working class. 
 
EECTUR"E I—THEORY OF UNEMPLOYMENT. 
 
 15 
 
 “Under this system * * * * Multitudes of 
 
 unemployed walk the streets of our cities or trudge 
 from state to state awaiting the will of the masters to 
 move the wheels of industry.’—National Socialist 
 Platform, 1912. 
 
 The Party platform does not state specificially in what 
 .way capitalism causes unemployment, but from the utterances 
 of the expounders of Socialism, it seems that in their opinion 
 capitalistic 12 ownership of implements of production and a 
 system of production for prifit are responsible for unemploy¬ 
 ment. As a typical illustration of their line of argument we 
 often hear something like the 13 following: “Here is a shoe 
 factory, and here outside the factory is a man who could make 
 
 12. “.The worker owns no machinery and can get access 
 
 to no machinery except on such terms as he may be able to make with 
 its owners. Socialists urge the people to consider the results of this 
 unprecedented situation. First, there is great insecurity of employ¬ 
 ment.But worse than the uncertainty of employment is the 
 
 absolute certainty that millions of men must always be out of work. 
 
 .If they could but work, their earnings would vastly increase 
 
 the amount of money in circulation and thus increase the buying power 
 of everybody. But they cannot work because they do not own the 
 machinery, without which they cannot work, and the men who own 
 it will not let it be used, because they cannot see any profits for them¬ 
 selves in having it used.”—Allan L. Benson, “Truth About Social¬ 
 ism,” page 16. 
 
 13. “A man possessing his own tools or land may always employ 
 himself, and though it may at times be necessary for him to sell his 
 products for a verv low price, he need not, except in extraordinary 
 times, become dependent on others for relief. The tools of the modern 
 worker are the machines; both it and the land are owned by others. 
 He cannot work on the land or at the machine except by permission 
 of others. If the owner does not find it profitable to employ him, 
 the workman must remain idle.”—Robert Hunter: Poverty. 
 
 This well-known Socialist throws in the qualifying clause, “though 
 it may at times be necessary for him to sell his products for a very 
 low price,” as if this were of no serious significance, and yet none 
 krows better than he, that this is just where the workman feels the 
 most pinch. There was a time, only a few years ago, when the worker 
 had his own tools and competed with the machine. Of course, he had 
 b- sell is labor “for a very low price,” but he was not dependent upon 
 others, if that be a consolation when a worker is unable to sell his 
 produce, and has to beg for is livelihood even after he has worked! 
 The workman, however, took a different view. He threw away his 
 tools and accepted the heavy yoke of the capitalist in order to escape 
 the still heavier yoke of the customer. See infra, paragraph 13. 
 
16 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 a pair of shoes if he were allowed to use the machinery, but 
 he cannot work without the permission of the capitalist who 
 owns the machinery, and the capitalist does not and will not 
 permit except on terms of what might be called voluntary 
 slavery, and not even on those terms if he cannot see his way 
 clear to make profit.” This line of argument might explain 
 why the employed workers are in the condition of slaves, but 
 it does not explain why some people should be unemployed 
 even when they are willing to work as slaves, or even on worse 
 terms. That unemployment is due to want of permission is a 
 fact, but that this want of permission has nothing to do with 
 capitalistic monopoly of implements, can be easily demon¬ 
 strated by a counter illustration. Here is a cabman, his imple¬ 
 ments of work are his cab and horse. Nobody has monopol¬ 
 ized them, he is free to make full use of them to earn his liveli¬ 
 hood ; yet the cabman is idle and unemployed for half his time; 
 sometimes he cannot get work for a whole day, and he is only 
 wasting his time in waiting for customers. Mr. Walker 
 passes by the way, the cabman offers his cab, but Mr. Walker 
 chooses to walk though he can afford to ride. The cabman 
 cannot work without the permission of Mr. Walker, and is 
 therefore unemployed. The same is true of every trade and 
 every profession. 
 
 12. The mistaken notion that the capitalist is the em¬ 
 ployer is the source of all the misconception of the real nature 
 of the economic problem. It leads the attention of all economic 
 thinkers and writers to be directed against the capitalist, and 
 worse than that, it kindles and keeps up a hatred against the 
 capitalist, and makes any scientific analysis impossible by 
 vitiating the powers of free and unbiased thinking. The strong 
 feeling against the capitalist is greatly responsible for the 
 economic situation growing ever more gloomy and threatening 
 each day. A solution of the problem requires a correct com¬ 
 prehension of the true relation of the capitalist to the indus¬ 
 trial and economic framework of society. 
 
 13. In every case employment depends upon the per¬ 
 mission of the customer who is the real employer. That this 
 granting or withholding of permission by the customer is done 
 indirectly through the agency of the capitalist does not alter 
 the fact, that the customer — not the capitalist — is the ultimate 
 
LECTURE I—THEORY OF UNEMPLOYMENT. 
 
 17 
 
 and therefore the true employer. The capitalist is no employer 
 at all, except in so far as he employs anybody for his private 
 service, or purchases anything for his private use. In his 
 capacity as a capitalist he is in every case merely an agent, 
 acting in behalf of the customer. He cannot be expected to 
 employ more men under him than he can expect to find work 
 for from his customers. He is the middleman between the 
 customer and the workers—i. e. between the real employer and 
 the employee. He is himself an employee of customers, work¬ 
 ing generally, not for any fixed salary, but for what profit he 
 can make. Consequently he has to be always on the lookout for 
 customers, and it is easy to see that, like the cabman on the 
 street, he is unemployed for most of his time. His profits are 
 his wages, and considering that his employment is so irregular 
 and uncertain, it is but natural that his wages should be 
 higher than if the employment were guaranteed and steady. 
 The question as to whether the wages of the capitalist are fair 
 and reasonable, considering the irregularity, uncertainty, risk 
 and extra expense often necessary to secure employment, or 
 whether they are unreasonably high and exhorbitant, even after 
 making all due allowance for risks, etc., is irrelevant at this 
 stage. But even admitting that they are higher than they 
 ought to be, that does not explain why so many willing work¬ 
 men are out of work. Unemployment has nothing to do with 
 capitalistic monopoly of instruments of work. A man is out 
 of work, not because his services are not needed by the capital¬ 
 ist, but because they are not needed by the customer, i. e., by 
 the employed section of society. The capitalist is also re¬ 
 sponsible for unemployment in so far as he too is an employed 
 member of society, but only to that extent and no more. He 
 bears no further responsibility by reason of his being a cap¬ 
 italist. Capitalism could not have been the cause of unemploy¬ 
 ment. when we know as a historical fact unemployment did 
 exist before capitalism. 
 
 14. The capitalist does not make unemployment. On the 
 
 contrary, in his capacity as a capitalist, he serves to diminish 
 unemployment to a slight extent. I am not referring to the 
 employment eiven to those who minister to his luxuries; this 
 he does, not in his capacity as a capitalist but merely as a rich 
 man ; any rich man, a lawyer, a doctor, a pastor, with a thou- 
 
18 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 sand dollars a week as wages, would do just the same thing. I 
 am referring to the extra employment given by the capitalist 
 in his capacity as a capitalist, i. e., in the course of his profes¬ 
 sional duties as a capitalist. I will, however, waive this line oi 
 argument for the present, as it involves a deeper study oi 
 nature of capitalism than what is possible in this lecture. I 
 will revert to this question when discussing the profit system. 
 Under the system of competitive commercialism, the capitalist 
 somewhat relieves unemployment in one more way. The 
 enormous waste due to competitive commercialism is well- 
 known, it will be found on every page of theoretical Socialism,, 
 and whatever else capitalism may have to say against Social¬ 
 ism, no capitalist has ever attempted to deny this charge. The 
 waste is too great to be overlooked, too clear to be denied. 
 This waste, whatever else we may have to say against it, has 
 one redeeming feature—it gives employment to workers. It is 
 at present the only chance of the. workman, and whatever 
 might be the state of things under Socialism, any prevention 
 of waste.at present would be one of the greatest and all but 
 universal calamity under the existing economic system. Foolish 
 as most of this waste no doubt is, it is at present our only hope 
 and the only reason why there is so much unemployment is 
 that there is not waste enough. Every method of avoiding 
 waste, every new invention of labor-saving machines, ever); 
 
 ' new system of organizing and economizing work, operates 
 most harmfully on the working class. On the contrary, a fire 
 or earthquake destroys a city, a war threatens to destroy a na¬ 
 tion, a great work is thus thrust upon a nation, the labor and 
 * resources of the country are in demand, capital and labor unite 
 for a time, men are at work, and everybody except the direct 
 victims of the catastrophe are happy for the time. Who car 
 expect a healthy moral sentiment to develop in a society where; 
 one man’s calamity is the only hope for another man’s lifei 
 Disguise the fact as you may, you cannot ignore it, that the 
 unemployed is the deadliest enemy of society. His life de¬ 
 pends upon his getting employment, but nobody cares to em¬ 
 ploy him except under pressure of some threatening calamity 
 and yet society is receiving employment from him all the time 
 With every morsel of bread he eats, and with every rag he 
 wears, he gives employment to somebody, for the food he eatgl 
 
lecture i—theory of UNEMPLOYMENT. 
 
 19 
 
 and the clothes he wears were made for him by somebody who 
 has thereby earned his wages. What more is necessary to 
 embitter human hearts and to create a race of Ishmaels? 
 
 15. The unemployed are the deadliest enemies of society. 
 The only reason why they do not seem to be so dangerous 
 ps they really are and ought to be, is that they are powerless 
 tc inflict the punishment which the ungrateful society so rich¬ 
 ly deserves. They are the plebeians, crushed and writhing 
 under the iron heels of social tyranny, whom the society, cal- 
 loused by a false sense of security, ignores with contemptuous 
 disregard. But now and then the worm will turn. A Marius 
 here, a Caesar there, will rise out of these very plebeians and 
 reduce the pride-blind patricians to most abject servitude. 
 Talk of the selfish capitalist! Who are the capitalists? They 
 are the Caesars of society; they are the unemployed with a 
 vengeance. The Socialist literature speaks of the capitalists 
 as being the idlers, the drones, the parasites of society. What 
 else could they be? What other chance had society left for 
 them? Thomas Tipton began his career in New York as a 
 parasite. He was willing and able to do real productive work, 
 but he was not wanted. He started shuffling money from 
 the pocket of one hotel-keeper to that of another and got a 
 part of the shuffled money as his share. The lesson he learned 
 he never forgot, but he was not born to remain a parasite. As 
 soon as he was in a position to employ himself, he proved him¬ 
 self a creative genius. He is to-day known as a wealth pro¬ 
 ducer and not a mere parasitic wealth shuffler. What if he had 
 remained for life the parasite he was compelled to be in the 
 earlier part of his career? What was there to prevent it? 
 There was a time when Andrew Carnegie was on the verge of 
 starvation. He wnated only an honest day’s work for honest 
 day’s wages and could not get it. What did society do for 
 him in his hour of distress? They compelled him to fight for 
 his life. Like the millions of unemployed he fought for his life, 
 but unlike those millions he won the fight. Whether he won by 
 chance or by ability, whether he won by fraud or by force has 
 no bearing on the question. He was compelled to wage an 
 uneven fight like all the rest of the unemployed: that, and 
 that alone is the point. The capitalist is often accused of hav¬ 
 ing a greater regard for the almighty dollar than for human- 
 
20 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 ity. What right has humanity to expect anything else? In his 
 clays of adversity it was the dollar that saved him, not human¬ 
 ity. Humanity, when it had the chance, wanted from him his 
 dollar, but the capitalist of to-day who was then but a needy 
 workman out of work was not wanted. The capitalist does 
 not owe his present success to humanity, and humanity, or 
 rather the inhumanity, to give it a more appropriate name, 
 has no right to take him to task for his devotion for the dollar. 
 In fact, considering the way he was treated by society when 
 they had the chance, I am compelled to acknowledge that the 
 capitalist has been far more clement and forgiving in his hour 
 of triumph than any Marius or Caesar could have been. 
 
 16. The capitalist is a moral victim of unemployment. 
 He does not create unemployment, it is unemployment that 
 has created 14 him, and so long as unemployment remains you 
 cannot unmake him. He is not responsible for unemploy¬ 
 ment; on the contrary his luxury and his competitive waste 
 have created a considerable amount of extra employment, and 
 to that extent he has relieved the pressure, By means of the 
 profit system he relieves the pressure still further, but, as I 
 said before I waive that consideration for the present. He can¬ 
 not relieve the whole of the pressure, for it is not in his power 
 to do it. He is not an independent employer by himself, he 
 can act only as an agent for the customer who is the real em¬ 
 ployer. He is a sort of private employment bureau, employ¬ 
 ing workmen for customers' use, but he differs from the bureau 
 in not asking the workman to wait until work comes up. He 
 employs them in anticipation of work, often at a risk to him¬ 
 self by giving more employment, than what the economic need 
 of the market allows. For every capitalist that succeeds, there 
 are twenty that fail, and failure of a capitalist, means, that 
 his business has cost him more than his income, that he has 
 given more employment to his workmen than what he has re¬ 
 ceived from his customers; the wages for the difference he has 
 paid out of his capital until he failed. The capitalist might, 
 
 14. “It (capitalism) can spring into life, only when the owner 
 of the means of production and subsistence (embryo-capitalist) meets 
 in the market with the free _ laborer selling his labor-power (une- 
 employed). And this one historic condition (unemploment) com¬ 
 prises a world’s history.”—Marx: Capital, Vol. 1, page 189. 
 
LECTURE i—theory of UNEMPLOYMENT. 
 
 21 
 
 with some show of justice, be accused of cutting down wages 
 and of making slaves of the men in his employment,—though 
 even on this point there is much to be said in his defense,— 
 but he is not responsible for the unemployment of those who 
 are not employed. The contention that labor saving mach- 
 ii.ery is one of the causes of unemployment need not be chal¬ 
 lenged; we are not discussing here, whether machinery causes 
 unemployment or no. Assuming that machinery is at least a 
 contributory cause of unemployment, the question before us at 
 present is whether capitalistic ownership contributes anything 
 towards further unemployment, or in other words, apart from 
 what unemployment may be caused by machinery independ¬ 
 ent of its capitalistic ownership, does the capitalistic owner¬ 
 ship itself cause any unemployment. Such ownership while it 
 no doubt contributes to his profit, does not in any way con¬ 
 tribute to unemployment. 
 
 17. The capitalist is not in the business for love or hate; 
 he is there for profit, and he will always follow the line of 
 greatest profit. His profit depends upon three things : Capital, 
 producer and consumer, or rather, purchaser. Without these 
 three, there can be no profits; no two of them could suffice, 
 all three of them are absolutely necessary. Of these three 
 he has the first, viz., the capital. That is what makes him a 
 capitalist. The existence of unemployment is in itself a con¬ 
 clusive proof, that there are workers willing to work and give 
 profit to the capitalist as a price of the opportunity to work. 
 If then, the workers are anxious to work and willing to let the 
 capitalist obtain the profit, and if the capitalist is anxious to 
 give employment and get the profit, and still if the workers 
 have to remain unemployed, and the capitalist has to go with¬ 
 out the desired profit, the cause of the unemployment must be 
 •Somewhere else. As there are three, and only three, factors 
 necessary for profit, and therefore for the employment of the 
 producers under the private capitalistic system, and as two of 
 these factors are shown to be not lacking, it follows as a neces¬ 
 sary conclusion, that the lack of the third factor must be the 
 cause of unemployment. In other words, unemployment is 
 not caused by the unwillingness of the capitalist to employ, 
 but by the unwillingness of the purchaser i. e., of the employed 
 workers, to buy the produce. As long as there is some one 
 
22 
 
 the: unemployment problem. 
 
 to buy what is produced, the capitalist will keep up the pro¬ 
 duction, and will employ all he can to the full limit of his 
 employing power. 
 
 18. This leads us to another theory of unemployment, 
 
 viz., the Anarchist Theory. According to the Anarchist phil¬ 
 osophy there is no purchaser for a part of the produce for the 
 simple reason that the purchasing power of the producing class 
 as a whole, is less than its total production on account of the 
 profits of the capitalist. By “capitalist” is meant here the 
 “owner of all kinds of property, such as-land, natural re¬ 
 
 sources, machinery, or money.” Suppose the worker in a fac¬ 
 tory produces in one day $10.00 worth of produce and gets as 
 wages only $4.00, then he can buy back from the market to 
 the extent of four dollars worth only. The remaining six dol¬ 
 lars worth will be left as unsold stock on the hands of the 
 capitalist. In all the domain of industry, take what branch or 
 trade you will, you will find always the same story; pro¬ 
 duced ; ten dollars; received as wages: four dollars. Even 
 the highly paid workers are no exceptions; an expert engi¬ 
 neer or supervisor who earns four thousand dollars a month, 
 has to produce by his expert advice or organizing ability, ten 
 thousand dollars a month, to earn the four thousand dollars 
 a month as salary, or else he would not be able to hold his 
 place very long. This is the main feature of the profit system. 
 Thus the workers as a whole are unable to buy back the whole 
 of the produce. The rest of the product remains unsold in the 
 hands of the capitalist and constitutes what is popularly called 
 “over production.” As long as the capitalist is unable to sell 
 what is already produced he cannot employ any more labor. 
 This is the Anarchist Theory of unemployment. For brevity, 
 we will call it “the Profit-System I5 Theory,” 
 
 19. In view of the fact that Anarchist literature is gener¬ 
 ally not very popular, and that it is often condemned before it 
 is read, I quote here the following extracts of one of the high- 
 
 15. This theory of unemployment wa-s first formulated by Sis- 
 mondi (who was not an Anarchist) in his new principles in 1819. He 
 might nevertheless be regarded as a forerunner of Anarchist phil¬ 
 osophy, just as Rodbertus is of scientific Socialism. Rodbertus i-s 
 often wrongly given credit for this theory, which was first published 
 by Proudhon ten years before Rodbertus expounded his theory of 
 “over-production and crises” in his letter to Von Kirchmann. 
 
lecture: i—theory of unemployment. 
 
 23 
 
 est authorities on Anarchist philosophy, in support of my pre¬ 
 sentation of the Anarchist theory: 
 
 “However numerous the occupations, the econ¬ 
 omic law remains the same— that the producer may 
 live, his wages must repurchase his product. * * * 
 
 If the working man receives for his labor an average 
 of three francs a day, his employer (in order to gain 
 anything, beyond his own salary, if only interest on 
 his capital) must sell the day's labor of his employee, 
 in the form of merchandise for more than three francs. 
 
 The working man cannot then purchase that which 
 he has produced for his master. It is thus with all 
 trades whatsoever. The tailor, the hatter, the cabi¬ 
 net maker, the blacksmith, the tanner, the mason, the 
 jeweler, the printer, the clerk, etc., even to the farm¬ 
 er and wine-grower, cannot repurchase their pro¬ 
 ducts ; since producing for a master who in one form 
 or another makes profit, they are obliged to pay more 
 for their own labor than they get for it. * * * * 
 
 The laboring people can buy neither the cloth which 
 they weave, nor the furniture which they manu¬ 
 facture, nor the metal which they forge, nor the jewels 
 which they cut, nor the prints which they engrave. 
 They can procure neither the wheat which they 
 plant, nor the wine which they grow, nor the flesh 
 of the animals which they raise. They are allowed 
 neither to dwell in the houses which they build, nor 
 to attend the plays which their labor supports, nor 
 enjoy the rest which their bodies require. And why? 
 Because the right of increase (i. e., profit system, 
 Analyticus) does not permit these things to be sold 
 at cost prices, which is all that laborers can afford 
 to pay. * * * Industry under the influence of 
 
 property (i. e., profit system, Analyticus) endeavors 
 to produce a great deal in a short time, because the 
 greater the amount of product, and the shorter the 
 time of production, the less each product costs. As 
 soon as a demand begins to be felt, the factories fill up, 
 and everybody goes to work. Then business is lively, 
 and both governors and governed rejoice. But the 
 
24 
 
 the: une:mpix>yme;nt probtkm. 
 
 more they work today the more idle they will be 
 hereafter. * * * It is when laborers, whose 
 wages are scarcely sufficient to support them from 
 one day to another, are thrown out of work, that the 
 consequences of the principle of property becomes 
 most frightful. In proportion to the increase re¬ 
 ceived by the capitalist, will be the frequency and 
 intensity of commercial .crises.”—Proudhon : What 
 is Property. First Memoir, Chapter IV, 5th prop. 
 
 Such then is the Anarchist theory of unemployment; is 
 it true? 
 
 20. It must be admitted at the outset that the theory is 
 very plausible, so plausible in fact, that the average man in the 
 street, the advocate'of simple common sense as he styles him¬ 
 self, swallows the whole of it at one gulp without waiting to 
 see what he is doing. It has become one of the stock argu¬ 
 ments of the soap box politician, and even many of the 
 16 Socialist leaders who ought to know better, have subscribed 
 to that theory with the weight of their position as leaders. 
 Thus for once, the Anarchist theory has obtained a complete 
 17 victory over the Socialist philosophy! This is at least in part 
 due to a curious misconception. There is widespread belief 
 among the Socialists that this theory was originated and estab¬ 
 lished b y Marx. Well then, if Marx is the founder of the 
 theory, then that theory must be all right, for Marx should 
 know. But was Marx the founder or even the “finder” of the 
 theory? The theory did not originate with Marx. Proudhon’s 
 first Memoir was published in 1840, eight years before Marx 
 lifted his pen to draft the “Communist Manifesto,” twenty- 
 seven years before he published his own 18 scientific theory of 
 
 16. Socialists resent, with a show of righteous indignation, their 
 being mistaken for Anarchists, for which they themselves are to 
 blame. If they don’t like to be taken for Anarchists they should not 
 parade with false Anarchistic theories pinned on their hats. See infra, 
 para. 21, and foot note 20. 
 
 17. The Anarchist theory of unemployment has been accepted 
 even by the Industrial Relations Commission, (see Report of Comm, 
 on Industrial Relations, page 35.) The •Anarchist philosophy de¬ 
 serves congratulation-s for this monumental success! It ought to make 
 Proudhon smile even in his grave. 
 
 18. See infra., paragraph 52, f. n. 31. 
 
LECTURE I—THEORY OF UNEMPLOYMENT. 
 
 25 
 
 unemployment in his immortal work “Das Kapital.” Marx 
 did not found the theory. But he studied it,—as he studied 
 everything else,—and found it wanting. Marx did not ad¬ 
 vocate this theory, but he refuted and 19 repudiated it in the 
 most emphatic terms. 
 
 “It is purely a tautology to say that crises are 
 caused by the scarcity of solvent consumers, or of a 
 paying consumption. * * * But if one were to 
 
 attempt to cloth this tautology with a semblance of 
 a profounder justification by saying that the work¬ 
 ing class receive too small a portion of their own pro¬ 
 duct, and the evil would be remedied by giving them 
 a larger share of it, or raising their wages, we should 
 reply that crises are precisely always preceded by a 
 period in which wages rise generally, and the work¬ 
 ing class actually get a larger share of the annual 
 product intended for consumption. From the point 
 of view of the advocate of ‘simple’(!) common sense, 
 such a period should rather remove a crisis.”—Marx: 
 Capital, Vol. II, page 476. 
 
 h will be seen from the above that Marx did not advocate 
 the profit system theory of unemployment. On the contrary 
 he emphatically repudiated it. In a footnote to the above 
 Engels also endorses Marxian refutation of the profit system 
 theory. 
 
 19. Socialist writers are responsible for their irresponsible ref¬ 
 erences to Marx, conveying the suggestion that Marx advocated the 
 profit system theory. These writers usually content themselves with 
 a general statement, coupled with a vague reference to Marx, unsup¬ 
 ported by a citation, for example: Dr. Hughan in her “American 
 Socialism” refers to this theory as being elaborated by Rodbertus, 
 and later by Marx. She refers to “Wage Labor and Capital,” page 32, 
 but gives no quotation. In absence of a quotation the reader is gen¬ 
 erally content to accept the writer’s claims as being well -supported 
 wdthout taking the trouble to verify the given reference. Such a 
 reader, were he to go so far as to look up page 32 of “Wage Labor 
 and Capital” would be. quite surprised to find that there is not one 
 word advocating the idea that the profit system is the cause of 
 unemployment. On the contrary there is something to point the 
 other.way, for in the pas-sage of Marx referred to by Dr. Hughan, after 
 describing the evil effects of crises, Marx concludes with the remark: 
 “and yet none the less the most fortunate condition for wage labor 
 lies in the speedy increase of capital.” 
 
THE UNEMPLOYMENT PROBLEM. 
 
 26 
 
 21. But let us be fair to the anarchist. The correctness 
 or incorrectness of the theory does not depend upon what 
 Marx or Engels said about it. It must be judged on its own 
 merits. As I said before, the theory is plausible, but so is the 
 over-population theory ; what does that amount to? The theory, 
 that the earth is flat and steady is plausible, but it requires 
 mathematics and physics to prove that it is a rotating sphere. 
 The Anarchist theory (i. e., the profit system theory) is plaus¬ 
 ible, but is it true? Marx has shown that every crisis is pre¬ 
 ceded by a rise of wages and an increase of purchasing power. 
 It is evident that unemployment is not the result of diminished 
 purchasing power of the workers. Among the 20 prominent 
 Socialists who should know better but don’t, and who there¬ 
 fore repeat the same old fallacy, may be mentioned Victor 
 Berger. The following extracts are from his arguments: 
 
 “The Exploitation of Labor.” 
 
 “Since the working people do not receive the 
 full value of their products—because a considerable 
 profit is made by the employing'class on everything 
 the workers produce—can they be expected to buy 
 back these products? * * * In this way the 
 
 laboring people not being able to consume enough, 
 and by the 21 planless way in which production is car¬ 
 ried on in general, the so-called over-production is 
 created. * * * Of course no matter how much 
 
 20. Even Allan Benson, the Socialist Party candidate for Presi¬ 
 dent in 1916, has fallen into the same fatal error: 
 
 “The fact that the capitalist demands a profit upon 
 the worker’s labor renders the worker incapable of buying back 
 
 the very thing he has made. That is why there is not 
 
 always work for all.” —“Truth About Socialism,” page 17. 
 
 This old Anarchist fallacy, dead and buried by Marx, then again by 
 Engels in 1885, and lastly with solemn funeral ceremony at the Erfurt 
 Congress, in 1891, is once more made to walk to the street corners and 
 talk from the soap boxes by "the-very-clearest-and-cleverest-of-aH” 
 Socialists. 
 
 21. There is one spark of truth in the Socialist indictment, viz., 
 that planless production is a cause of crises and unemployment. Thi-s 
 point will be discussed later. It seems very strange, however, that 
 the^ Socialists •still place the responsibility for unemployment on 
 capitalism when they know that the essential feature of capitalism is 
 to substitute system in place of planlessness, and order in place of 
 chaos. (See Kautsky, “Class Struggle,” page 75 et. seq.) 
 
LECTURE I—THEORY Or UNEMPLOYMENT. 
 
 27 
 
 or how little the toilers of a nation create, they al¬ 
 ways create more than they are able to buy with their 
 wages, because they have never received the full value 
 of their production. In this way the so-called indus¬ 
 trial crises originate. They have come upon us about 
 once in every 22 twenty years, roughly speaking, since 
 the capitalist production began its way. 
 
 22. Now let us see what that argument leads to. We are 
 reminded that there is a crises about once every twenty years! 
 How about the first eighteen years of each cycle? Does the 
 worker get the full benefit of his production during this fairly 
 
 22. I. There is a slight error at this point. The crises come once 
 in every ten years. It was the chance coincidence of the crises with 
 the sun’s spots coming once in every 11J4 years that suggested at: 
 one time the sun spot theory of unemployment. I have never found 
 out the reason why the Socialists always talk of the 20 year cycle. 
 Marx and Engels speak of it as decennial. Marx: Capital, Vol. II, 
 page 211. Engels: Socialism Utopia to Science. 
 
 II. (By the Sec. Sociology Club.) The crises as stated above 
 ccme nearly regularly once in every ten years, not once in 20 years 
 as the Socialists generally say. The difference is not germain to 
 the theory under discussion and out of courtesy the author has ignored 
 it in his analysis. We should not have even mentioned it, except to 
 illustrate the carelessness with which the Socialists approach so im¬ 
 portant a question. Among the various references that we have col¬ 
 lected in the course of our study, the following is the most interesting: 
 
 “These crises have appeared in their most aggrevated 
 form every twenty years, with supplementary or milder 
 occasions in between, such as the “Roosevelt’' panic of 1907 
 and 1908.’’ 
 
 COUNTRY YEARS OF INDUSTRIAL DEPRESSIONS. 
 
 U. S. ___1814 1818 1826_ 1837 1847 1857 1867 1873 1882 1893 1907 1913 
 
 Great Britain _1815 1818 1826 1830 1837 1847 1857 1866 1873 1883 1893 _ 1913 
 
 France _ 1813 1818 1826 1830 1837 1847 1856 1866 1873 1882 1893 __ 1913 
 
 Belgium ____ 1837 1847 1855 1873 1882 1893 _1913 
 
 Germany_ 1837 1847 1855 _ 1873 1882 1893 _1913 
 
 “Menace of Unemployment/’ Winfield Gaylord. 
 With these figures before him, Mr. Gaylord still repeats the 
 phrase “every twenty years!” This is not a case of excusable ignor¬ 
 ance. It is carelessness pure and simple. It is time that the working 
 class aroused itself and endeavored to ascertain whether the solu¬ 
 tion of the unemployment problem can any longer be trusted to people 
 who do not know what they are talking about, or worse than that, 
 who do not care to know. It is an extremely dangerous hazard to 
 trust the destiny of the people to those who are satisfied with “high 
 places in the synagogues,” and who will not take the trouble to read 
 even the writing on the wall. 
 
28 
 
 the: unemployment problem. 
 
 long period? No! On the contrary it is just when in the nine¬ 
 teenth year his wages are the highest and his purchasing 
 power is at its best, that we reach the beginning of a crises! 
 John Spargo has shown ("Bitter Cry of the Children/’ page 
 43-44) that the death rate of infants had considerably fallen 
 during the crisis of 1871, when large numbers of women were 
 thrown out of work. This diminution of the death rate has 
 been attributed to the better care of infants, which care was 
 denied to them before the crisis, when the mothers were at 
 work. While as an argument against female labor the facts 
 are unanswerable, incidentally they prove, that the workers 
 can save and do save before the crises, and that an exhausted 
 purchasing power is therefore not the cause of crises. 
 
 23. And again, how is it that the period happens to be so 
 nearly exact twenty years? Why should the purchasing power 
 fail just once in twenty years? We can’t even say that it takes 
 nineteen years for the workers savings to run out, because the 
 year of industrial boom is the year before the crisis, not the 
 year after. During the nineteen years, industry, and there¬ 
 fore purchasing power of workers slowly but steadily in¬ 
 creases, so that the maximum amount of savings in the hands 
 of the workers is just before the crisis, whereas that of the 
 capitalist is for the same reason at a minimum at this time. 
 
 "On the eve of the crisis the bourgeois, with the 
 self sufficiency that springs from intoxicating pros¬ 
 perity, declares money to be a vain imagination. 
 Commodities alone are money. But now the cry is 
 everywhere, money alone is commodity.”—Marx, 
 Capital, Vol. I, page 155. 
 
 24. But the greatest weakness of the Anarchist theory is 
 its inability to explain how the crisis ends. Every crisis ends 
 in a year or two,—we know that; but how does it end? We 
 are told that a crisis comes because the workers cannot buy 
 with their wages what they have produced. If they can not 
 buy what they produce with the wages, when they hold their 
 jobs, they certainly could not buy it, when they lose their 
 jobs and earn little or no wages at all. The Anarchist (or 
 the Socialist in Anarchist shoes) tries to dodge out of the 
 difficulty by saying that during the crisis the production is 
 
LECTURE I—THEORY OF UNEMPLOYMENT. 
 
 29 
 
 suspended, or at least diminished, until the accumulated stock 
 is sold out. But how is the stock sold? Who can buy it? 
 Even during the crisis the wages are only a part of the produce 
 just as at any other time. “No matter how much or how 
 little the toilers of a nation create, they always create more 
 than they are able to buy back with their wages.” Therefore 
 it should be impossible to sell accumulated stock during the 
 crisis, that is, if the amount of wages being lower than the 
 value of the product, (or in other words, if the profit system) 
 be the cause of the crises. And conversely, since we know 
 that every crisis ends somehow, in spite of the profit system, 
 that system cannot be the cause of crises. The advocates of 
 that theory make one more heroic, though not a very scientific 
 defence, by introducing the foreign markets. Foreign mar-^ 
 kets! Where on God's earth is the foreign country in which 
 the workers do not create more than they receive as wages? 
 An absurd theory can only be bolstered up by such absurd de¬ 
 fence. It is a well known fact that when a crisis comes, it 
 covers almost in one day all the countries of the world. How 
 can the workers of any one country help those of another, 
 when both are in the same predicament? Hence, the profit 
 system is not the cause of crises, nor of unemployment which 
 constitutes the crises. The fact that the workers get as wages 
 only a part of the value they produce is indisputable. But it 
 is not the cause of unemployment, however plausible the ex¬ 
 planation may appear at first sight. 
 
 25. Another theory of unemployment is misapportion- 
 ment of labor to needs. For example, the needs of a certain 
 village would be best supplied by ten joiners. If five more 
 people take up the miners' trade, the trade will be crowded 
 and some of the joiners will be out of work. Competition 
 might decide who will remain at work and who will not, but 
 some men will have no work: that is certain. This theory is 
 endorsed by the 23 Socialists, and as a remedy for the evil they 
 
 23. In Socialist literature, this is generally referred to a-s anarchy 
 of production, or planlessness of production. (See paragraph 21, f. n. 
 21.) According to Engels crises are caused by introduction of capi¬ 
 talistic order in the midst of social chaos and anarchy, or to quote the 
 classical formula, they are caused by “contrast between the organiza¬ 
 tion of production in the single factory and the anarchy of production 
 in society at large.” 
 
30 
 
 THE UNEMPLOYMENT PROBLEM, 
 
 propose that the industries must be under the control of the 
 state, who will then try to apportion the men according to 
 the requirements of the trade. The state control of industry 
 might or might not be the best way to remedy the 
 evil, but we must first try to see whether misap- 
 portionment is the real cause of unemployment. Ac¬ 
 cording to this theory, one trade is over-manned at 
 the cost of some other trade which must necessarily 
 be under-manned. Unemployment in one trade will be com¬ 
 pensated by insufficiency of help in some other trade. Such 
 a state of things is extremely unstable; if a trade is insuf¬ 
 ficiently manned, the wages in that trade will rise on account 
 of high demand for labor, and the high wages will attract more 
 men until demand and supply are onbe more in equilibrium. 
 Insufficiency of help, whenever it occurs, is only a temporary 
 condition, and generally arises out of some sudden emergency. 
 A sudden squall of wind will heap up water in a place, but it 
 cannot keep it there very long, and the process of leveling be¬ 
 gins the very moment the level is disturbed. In the year 
 1897 there was the first outbreak of plague in India. The 
 demand for medical help rose so high that college boys who 
 had not completed their course of study were taken into ser¬ 
 vice and were paid salaries as high as those of properly quali¬ 
 fied doctors. But in two years things settled down, and to-day 
 the medical profession is as crowded and suffering from un¬ 
 employment as it was fourteen years ago, though the ravages 
 of plague are fp more extensive than when it first began. 
 Beveridge, in his lectures on unemployment, shows by a ref¬ 
 erence to numerous statistics that unemployment is not gen¬ 
 erally limited to one or two trades; it always affects nearly 
 all trades. Misapnortionment of labor cannot, therefore, be 
 the true cause of ^unemployment. 
 
 26. Another well-known theory of unemployment is the 
 
 24. Misapportionment of labor, or anarchy of production, to use 
 a more familiar formula, produces transient unemployment, which 
 soon passes away under the leveling influence of competition. This 
 view is endorsed by theoretical scientific Socialism. “In the totality 
 of this disorderly movement, is to be found its order. Throughout 
 these alternating movements in the course of this industrial anarchy, 
 competition, as it were, cancels one excess by another.’”—Marx: 
 “Wage Labor and Capital.” 
 
LECTURE I—THEORY OF UNEMPLOYMENT. 
 
 31 
 
 land monopoly theory of Henry George. This is only a modi¬ 
 fied form of the Socialist theory of capitalistic monopoly of 
 implements. There is, however, one important difference be¬ 
 tween the two theories. The Socialist theory is palpably 
 wrong. The Henry George theory like the Anarchist theory 
 is at least plausable. With the exception of land, every other 
 implement of labor is useful for producing things having a 
 market value only. The result of the labor is of no direct use 
 to the worker. A shoemaker can make a hundred shoes a 
 year, but he cannot eat them, he cannot drink them; he can 
 use only one, the remaining ninety-nine are useful to him only 
 if they can be sold. If there be no demand for them he will 
 have to remain unemployed whether the implements of labor 
 be free or no. With land it is altogether different. A man can 
 produce some of the most needful things with the application 
 of labor to land and live in a state of at least a contented 
 savage. The product of his labor has to him a direct use- 
 value, in addition to market-value, which depends only on 
 demand. Even if there be no demand, he may still work and 
 produce in part what he needs, if he has land at his disposal; 
 a man possessing land has no excuse for being unemployed. 
 To this extent, and to this extent only, the theory is true. 
 The mistake of Henry Georgeism lies in the assumption that 
 all unemployment results from monopoly in land. There are 
 various trades and professions that have to depend upon the 
 market-value of the labor, the labor having no direct use-value 
 to the worker himself, e. g., the labor of a musician, a painter, 
 a juggler, an astronomer, a teacher, etc. These men cannot 
 earn a living from land unless they change their trade, which 
 is often impossible and always impracticable, or unless they 
 give their land to others for a price or rent. But the latter 
 method is admittedly an abandonment of the principle itself. 
 
 27. The Henry George theory also ignores the need of 
 preliminary resources. Suppose I am out of work, suppose 
 also, that I am both willing and able to work on land for my 
 livelihood—which is to suppose rather too much—and sup* 
 pose now that a few acres of land are placed at my disposal in 
 older to help me out of my unemployment. How far will it 
 help me? I should still need the implements, either crude 
 
32 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 or improved, according to the development of industry in the 
 society where it falls my lot to be. I should need seed, grain 
 and other necessaries with which to do my work. Lastly I 
 should need food, clothing and shelter with which to sustain 
 life. All these things are absolutely essential for my well 
 being before I could reap the first harvest. For all these the 
 Henry George theory makes no provision whatever. All these 
 things are obtained from the land with the help of labor. 
 Others can and did obtain them before me with nothing more 
 than labor. “Here is your land,” they say, “if you can't pro¬ 
 duce what you need and get your living it will be your own 
 fault.” Presented in this form, the free-land system of Henry 
 George rises up 1 ike a brutal mockery, but I did not intro- ' 
 duce the brutality in it for it is inherent in the Henry George 
 philosophy. I have only brought to view what was hidden 
 under the misleading doctrine of Justice as expounded by 
 Henry George. Read his “Progress and Poverty,” “Free 
 Trade” and other well known books and convince yourself. 
 The free-land system—whatever else may be said in favor of 
 that system—will not solve the unemployment problem. It 
 will only serve to soothe the guilty conscience of the House of 
 Haves, by removing what in their opinion is the only excuse 
 for revolt among the discontented army of Have-Nots. 
 
 28 . Land monopoly is not a cause of unemployment, 
 whatever other sins we may charge against it. It is only a 
 possible cause. By this I mean that the owners of land could 
 create unemployment by virtue (?) of their ownership if they 
 were so minded, but they are not so minded. The motive for 
 owning land is to earn profits without work. The only way 
 to earn such profit is by permitting, in fact by inducing, others 
 to work on vour land on condition of pavment of rent. It is 
 true that the land owner refuses permission to use his land, 
 but it is not because he wants to keep it idle, but because he 
 wants the user to pay for its use. The gate-keeper at the 
 circus keeps out people not because he does not want them 
 to go inside of the tent, but because he wants them to pay for 
 the privilege of going in. He wished as many to go in as he 
 has accommodations for, onlv he wants them to pay for the 
 privilege. If then the land-owner desires rents and the 
 
LECTURE I—THEORY OF UNEMPLOYMENT. 
 
 33 
 
 -worker is willing to give the rent and yet if land and labor 
 remain unemployed, the causes of their unemployment must 
 be looked for somewhere else. In other words land monopoly 
 is not a cause of unemployment. 
 
 29. We have seen so far that unemployment is not due 
 to insufficiency of work, or to over-population, or to exhaus¬ 
 tion of resources, or to capitalistic monopoly of land or of 
 implements of work, nor to anarchy of production, except as a 
 passing phase. What then is the real cause? The immediate 
 and prevailing cause of unemployment is a previous unem¬ 
 ployment. Like an infectious social disease it passes from one 
 person to another steadily increasing in virulence as it grows. 
 A is out of work because B is out of work, B is out of work 
 because C is out of work, and so on without limit. There are 
 other contributory causes which concentrate unemployment 
 at certain times in certain localities, in an intensified condi¬ 
 tion, and these causes are therefore regarded as the chief causes 
 of the trouble. For example, a new invention may throw 
 thousands of workmen out of work. The introduction of the 
 linotype made havoc among the compositors. A plague in 
 Manchurea, a revolution in China, a famine in India, might, by 
 interfering with some particular trade, throw large masses of 
 workmen out of work. But these are only contributory causes 
 and must not be allowed to mislead us in our theoretical 
 analysis. The prevailing cause of unemployment is a ^prev¬ 
 ious unemployment. 
 
 30. The one reason why there has been so little theo- 
 retical work with regard to the unemployment problem is that 
 the attention of all those concerned with the solution of the 
 problem was taken up by the practical solution of the problem, 
 and the practical solution had reference to a particular form 
 of unemployment—the unemployment of the lower class of 
 waee-earner who is in need of work for earning his next meal. 
 These practical economists ignore the existence of an unem- 
 nlovment of any other kind, but the unemployment thus 
 ignored is quantatively more extensive and in its effect on 
 the economic and moral state of society, of far greater con- 
 
 25. At this stage we are discussing only the immediate cause, 
 "lhe ultimate cause i. e., the cause of the first unemployment will be 
 discussed later. (See paragraph 36). 
 
34 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 sequences than the particular kind of unemployment that at¬ 
 tracts our attention and excites our sympathy. The most 
 
 irritant poisons are not necessarily the deadliest. The most 
 painful diseases are not always the most fatal nor most in¬ 
 fectious ; the most heartrending form of unemployment is 
 neither the most dangerous nor the most extensive. In order 
 tr formulate a correct theory of unemployment we must begin 
 with the most generalized conception of unemployment. 
 
 31. A person is unemployed when he has the will and 
 the ability but not the opportunity to do any particular kind 
 of work for its equivalent economic remuneration. Unem¬ 
 ployment is of two kinds, acute and chronic. When the un¬ 
 employed person is in need of employment for the sake of 
 remuneration, which is needed for the satisfaction of some 
 urgent necessity such as food, clothing, medicine, etc., the cor¬ 
 responding unemployment is acute. When the person is able 
 tc tide over the difficulty in any way the corresponding un¬ 
 employment is chronic. Unemployment changes its character, 
 and under certain circumstances transforms itself from acute 
 to chronic or from chronic to acute. Miss Mule is unem¬ 
 ployed and has nothing wherewith to buy a breakfast for her¬ 
 self and mother. The unemployment is acute. A newspaper 
 reporter gives her some money to buy a few meals; as long 
 as the money lasts her unemployment is chronic. Prof. 
 Hardhead loses his situation on account of having held cer¬ 
 tain views in religion or politics. He is unemployed for some 
 years and he lives on his savings in the meantime; his unem¬ 
 ployment is chronic. His savings are exhausted; his unem¬ 
 ployment is now acute. If at this stage he accepts employ¬ 
 ment as a railway conductor or as a proof reader in a press 
 with a salary just sufficient to give him and his wife two 
 meals a day, he would, according to my definition, be now 
 suffering from chronic unemployment. Or if instead, he ac¬ 
 cepts an editorship of a paper and writes for pay against his 
 will,, something contrary to his convictions and gets for this 
 service a very high salary, he should still be regarded as suf¬ 
 fering from chronic unemployment—merely tiding over a dif¬ 
 ficulty by selling his conscience. To the individual victim of 
 unemployment, the acute type is of more concern than chronic. 
 To a student of economics, as to a doctor, the chronic type is 
 
lecture i—theory OF UNEMPLOYMENT, 
 
 35 
 
 more important than the acute, as it offers greater opportuni¬ 
 ties for study. When people speak of unemployment they 
 have in their mind only the acute unemployment. They are 
 generally unconscious of the existence of the other type: this 
 is the reason why no satisfactory theory of unemployment 
 has been developed in the past. With the generalized defini¬ 
 tion given above, it is easy to see how unemployment breeds 
 unemployment. 
 
 32. For example, here is Mr. Boots, with his implements 
 of work, his brushes and polishing cloth free for his use. He 
 is free to work night and day, if he chooses, but he has not 
 work enough and most of his time is wasted in waiting for 
 customers. He is not altogether unemployed, but the greater 
 part of his time passes in unemployment because many people 
 prefer to shine their own boots. What can Mr. Boots do dur¬ 
 ing this enforced idleness? He does to others what his possible 
 customers did to him. He mends his shirts, darns his stock¬ 
 ings, and paints his baby’s carriage. Thus he keeps a tailor 
 and a painter out of work. Mr. Tailor has a message for a 
 friend; if he had got Mr. Boots’ shirt for repairs he would 
 have gladly spent a part of his wages in talking over the tele¬ 
 phone. But as it is, he finds it prudent, and to some extent 
 even necessary, to walk to his friend’s house and back, a 
 couple of miles, in order to save a nickel. But the nickel thus 
 saved by Mr. Tailor is lost by the Telephone Company. They 
 are losing hundreds of nickels every hour in- this way. The 
 Telephone Company’s books will show what they earn, but 
 they have no means to find out how much they fail to earn 
 through unemployment. With more employment of their 
 service and more income they might open more stations, em¬ 
 ploy more wiremen to fit up the stations, and more operators 
 to work at the exchanges. They might also give more em¬ 
 ployment to manufacturers of wires, poles, insulators, trans¬ 
 mitters receivers, etc. A person who shines his boots and 
 darns his stockings is keeping all these men partly out of 
 work. 
 
 33. I do not blame a person for shining his boots any 
 more than I could blame Mr. Boots for repairing his shirts. 
 Shining boots is not only a cause, it is also a result of un¬ 
 employment: unemployment should be traced backward as 
 
36 the unemployment problem. 
 
 well as forward. A man shines his boots because somebody 
 else has kept him out of work. Shining boots is not a very 
 inspiring work or a pleasant recreation. No person would be 
 sc foolish as to save five cents by shining his own boots, if 
 he has an opportunity to do his proper work and earn ten 
 cents during that time. But he knows that he has no chance 
 of earning the ten cents for which he has the ability but not the 
 opportunity, and he wants to make the next best use of his 
 time in saving five cents. 
 
 34. Unemployment is an infectious social disease and 
 must be treated as such. When we speak of the unemployed 
 we are thinking only of those who are quite unemployed for 
 a considerable period. We overlook the far more important 
 and extensive unemployment of the partly employed and the 
 still more serious unemployment of the misemployed. Here 
 is a man of great inventive powers capable of inventing a new 
 machine for harnessing the tides or of discovering a new 
 chemical element harder than steel and lighter than aluminum. 
 But he has not the opportunity to do it and he is not the sort 
 of man to sit down and starve for want of work; so he dis¬ 
 sipates his powers in inventing a new advertisement, or pros- 
 titues them forVages, to discover a flaw in the wording of the 
 Sherman act. 
 
 35. Low wages is only unemployment in disguise with 
 slavery in the bargain! A man who works the whole time on 
 half wages has really a half-time employment; he is giving the 
 other half-time work gratis in order to retain the half-time 
 employment on which his life depends. But a man who is 
 forced to work for another without remuneration through 
 fear of some other consequences is a slave, and all underpaid 
 employees, whether hand worker or brain worker, are slaves. 
 Even the 26 capitalists are slaves—though through the efforts 
 of Socialists they have wrongly come to be regarded as slave 
 owners—and they cannot escape slavery as long as they are 
 partly unemployed. Seen in this light, unemployment is wider 
 and deeper than it appears at first sight. It is a social disease 
 
 26. “I believe that our general system of wage slavery holds the 
 soul of the rich as well as the poor in bondage.”—Prof. Miss Vida D. 
 Scudder. 
 
LECTURE I—THEORY OF UNEMPLOYMENT. 
 
 37 
 
 of universal extent and must be treated by the whole society 
 ly a united and organized effort 
 
 36. An important and by no means irrelevant question 
 might be asked at this stage of analysis: whence came the 
 first germ of the disease? Like all diseases, it will be found on 
 investigation, that the disease is due to some healthful and 
 useful organ once very serviceable but now no longer needed, 
 and that the disease germ is related to an innocent organism, 
 which first came into existence in prehistoric times, in much 
 the same w^ay as the present scorpion with a venomous sting 
 ’ is related to its stingless forefathers of the Silurian age. Long 
 before the dawn of earliest civilization, there was more work 
 t.) be done than man could wish to do. The most elementary 
 comforts of life depended upon an enormous amount of work, 
 and some means of avoiding work must have been man’s per¬ 
 petual care. The first effort in this direction must have been 
 an attempt to rob the fruits of others’ work, and for a time 
 this act must have been regarded as highly praiseworthy. 
 •Some reformers must have protested against it, but this pro¬ 
 test must have been regarded at first as a rebellion against “the 
 good old established plan, that they might take who have 
 power, and they should keep who can.” I can fancy the then 
 conservative leaders of that society justifying robbery as an 
 old and time-honored institution, giving automatically to the 
 most competent a reward for ability, and imposing upon every¬ 
 body the task of guarding their property in order to prove 
 that they deserved to keep it. They must have argued that a 
 free competition in trying to take the fruit of other men’s 
 work tended to make all men active, energetic, and watch¬ 
 ful. But in spite of all these specious arguments, society must 
 have come to regard robbery as an evil, and laws to prevent 
 and punish it must have been passed at an early period by a 
 nearly unanimous consent. This was probably the beginning 
 of government. But the problem of work was still unsolved, 
 laws against robbery being no solution of the real difficulty. 
 At this point conservation of products was an absolute neces¬ 
 sity and thrift was therefore also necessary. There was prob¬ 
 ably also another reason for regarding thrift as a virtue, but 
 we can not discuss it at present. I will take up this question 
 In one of the subsequent lectures. 
 
38 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 37. The next attempt must have been in the direction of 
 division of labor, and it was certainly a move in the right 
 direction. This most important step, which was one of the 
 earliest steps in the march of civilization, could not have been 
 the sort of deliberately scientific development such as is pre¬ 
 sented to us by the writers on political economy. It must 
 have resulted as a sort of compromise in the mutual attempts 
 of two persons to take the fruits of each other’s work. It 
 was taking the fruit of other men’s work by taking the other 
 man’s work itself. Whatever the genesis of the system might 
 be, it carried within itself the germs of two great social evils, 
 (1) The tendency towards a competitive monopoly, and (2) 
 The tendency towards unemployment. It required certain 
 conditions offered by modern civilization to develop these 
 evils. But the tendencies have always been there awaiting' 
 their time of fulfilment. I am not arguing against division 
 of labor. In spite of the two great evils that have grown 
 out of it, it is without doubt the foundation of all civilization, 
 modern, ancient, and prehistoric. As to the evils, but for 
 certain conditions peculiar to our modern civilization, the 
 germ could never have grown into a disease, and even now it 
 is not difficult to stamp out the disease, without in any way 
 interfering with civilization. It is no part of my work here to 
 trace the evolution of competitive monopoly out of division 
 of labor, but as to unemployment it is not difficult to trace the 
 eariler steps of its evolutuion. 
 
 38. Division of labor consists of a man taking another 
 man’s work in preference to his doing his own work. A 
 farmer has his plough broken during work; to repair it is now 
 his most important work, but he prefers to hand over his work: 
 to another farmer and takes instead his work of raising for 
 him a few bushels of wheat. To the second farmer whom we 
 will hereafter call the joiner, repairing the farmer’s plough is 
 easier than his own work of ploughing his own field. To 
 the first farmer, ploughing the joiners field is easier than his 
 own work of repairing his own plough. In this way work in 
 a society begins to be divided into kinds, and one man does 
 only one kind of work not only to satisfy his own needs, but 
 also needs of others for a remuneration. Such a system of 
 dividing work into kinds, is called division of labor. The sys- 
 
LECTURE 1—’THEORY OF UNEMPLOYMENT. 
 
 39 
 
 tem is morally just and economically sound, but in so far as it 
 consists of taking another man’s work, it contains the germ 
 of unemployment The system ceases to 1 be morally just when 
 the two works exchanged are economically unequal and the 
 exchange is brought about under circumstances giving one 
 party an unfair advantage over the other. It also ceases to 
 be economically sound when the work is so distributed that 
 some people remain without work, for a corresponding wealth- 
 producing power is wasted by want of use, or still further by 
 misuse. It is bad enough when a few million laborers are 
 out of work, but it becomes immeasurably worse when even 
 a single brain worker is out of work. The possibilities of 
 human brain are beyond calculation. Genius grows in the 
 palace and in the slums. Who can tell how much the world 
 has lost by stifling genius? Who can measure the harm done 
 by misdirected genius? For every Edison the world got, it 
 has probably lost a thousand who might have been the bene¬ 
 factors of the world, but who are today some of our daring 
 criminals, 'either in the jail or at large preying on society by 
 lawful crimes. In our modern society the system of division 
 of labor has reached a phase in which both these evils, the 
 moral and economic, are strongly developed: The germ has 
 grown into a malignant disease. In uncivilized state, the germ 
 cannot grow, for in spite of division, work is still so laborious 
 that no person can wish or hope to take work of more than a 
 few men at a time. No farmer could undertake to plough for 
 more than a dozen men; no joiner could undertake to repair 
 more than a dozen ploughs a da}^. In a civilized society it be¬ 
 comes possible for one man to do some kinds of work for a 
 thousand or even for a million men at a time. This method 
 of taking other men’s work may be perfectly legitimate as far 
 as the existing laws are concerned, but the resulting unem¬ 
 ployment is none the less an evil and must be removed. It is 
 not necessary to give up division of labor and turn back from 
 civilization to barbarism. All that is necessary to readjust 
 the state of things, so that the system should be once more 
 just and economic, is to revise the laws in such a way that no 
 person should be unemployed and a burden on others, unless 
 by some disability he is unable to do any sort of work. There 
 is no need to do anything in particular to secure fairness and 
 
40 
 
 THE UNEMPLOYMENT PROBLEM, 
 
 equity in exchange. With abolition of unemployment the 
 natural law of exchange will automatically adjust itself ap- 
 proximately to the requirements of equity. 
 
 39. But before proposing any practical scheme of reform r 
 we must try to see why a healthy institution was converted 
 into a seat of disease. Without this investigation the theory 
 would be incomplete, and we should have no guarantee that 
 the reform scheme might not miscarry and prove a source of 
 unforeseen dangers. It is a well-known fact that organs which 
 were at one time useful members of the body, but which r 
 under altered conditions, have ceased to be of any use, gen¬ 
 erally become sources of disease. The tonsils and the vermi¬ 
 form appendix are well-known illustrations. We find similar 
 phenomena in religions, social organizations, and politics. 
 The Levitical law was meant to fulfill a real want, and there 
 is no doubt that during the exile, and for some years after the 
 return, it did its duty well. But in course of time it ceased 
 to be of any use, corruption set in, worship became a farce, 
 and the temple was turned into a market place. Prophet after 
 prophet tried to introduce a reform without any success, until 
 at last the Prophet of Prophets demolished the temple and 
 substituted in its place a worship in spirit and truth. The 
 caste system among the Hindus must have at one time sup¬ 
 plied a real social and economic need, somewhat like the craft 
 unions among the European races, but in course of time the 
 need passed away, and the system has for a long time served 
 a very useful purpose in the hands of foreign conquerers to 
 split up the country, “to divide and rule.” In politics, the 
 feudal system was an important step towards a settled gov¬ 
 ernment, but in course of time the system became a danger, 
 and in all countries it had to be abolished in order to establish 
 a centralized government. 
 
 40. In economics, too, we have a similar phenomenon. 
 At one time in the evolution of society thrift served an extreme¬ 
 ly useful purpose and was rightly regarded a social and 
 economic virtue. To-day, under an altered condition of so¬ 
 ciety, it has ceased to be social virtue and has a very ques¬ 
 tionable economic value. This social supposedly organ—thrift 
 —once very useful but now needless, has become, under indiv¬ 
 idual control, the seat of a disease, viz., unemployed. But 
 
LECTURE I—THEORY OF UNEMPLOYMENT, 
 
 41 
 
 popular opinion with its immense conservatism still regards 
 thrift as a virtue and it is therefore necessary to examine this 
 claim closely with an unbiased mind. 
 
 41. 27 Thrift consists of two factors, industry and econ¬ 
 omy. Industry, as opposed to laziness, is certainly a virtue 
 and will always remain a virtue. Economy as opposed to dis¬ 
 sipation is also a virtue. The unscientific critic generally stops 
 at this stage. But as students of scientific analysis we must 
 go another step. Is industry opposed, to laziness alone? Is 
 there no_ third alternative? A man wants to work and can¬ 
 not get it. He cannot be regarded as industrious, for he is 
 not working, nor can he be called lazy, for he is willing to 
 work and is making every possible effort to get work. To tell 
 a man to be thrifty (i. e., industrious) when you know that he 
 cannot find work is simply adding an insult to his injuries. 
 The advise to be “thrifty” implies that there is available work ; 
 when no work is available the word “thrifty” has no meaning, 
 and having no meaning at all, it cannot signify a virtue. There 
 was a time when labor saving devices were unknown, and 
 when there was lots of work to do for anyone who wished to 
 work. Only a lazy man could be without work; the indus¬ 
 trious thrived and thrift came to be regarded as a virtue. That, 
 a man willing to work would not be able to get a chance to 
 work was at that time beyond the possibility of thought. 
 But the state of thines is changed; men are hunting for work 
 and cannot find it. Under these circumstances thrift has be¬ 
 come meaningless. It no longer represents a social virtue. 
 
 42. Though in the sense of industry “thrift” has ceased 
 tc be a virtue, it is at least not a vice. It is meaningless; that 
 I s the worst that can be said about it. But in the sense of 
 ‘economy” it has not only ceased to be a virtue but has been 
 transformed into a social vice. When we speak of economy 
 A-e are thinking of something as opposed to waste. Waste is 
 >f two kinds, (1) waste which profits nobodv, and (2) waste 
 'hich profits somebody. A typical illustration of the first is 
 he popular anecdote of Baron Rothschild entertaining Queen 
 Victoria with a cup of tea wh ich cost him £20.000. The Baron 
 
 27. The word “thrift” is ambiguous. It sometimes means indus- 
 
 rv and economy as denned above, and sometimes only economy, 
 n all cases the context shows in what sense the world is used 
 
42 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 is said to have burned £20,000 in Bank of England notes to 
 prepare the cup. “What a foolish and wicked waste/' says the 
 indignant apostle of thrift. As to whether the waste was 
 foolish or no, the Baron is the best judge, for he nfcist have 
 known what he was going to earn by such a flattering com¬ 
 pliment to the Queen Empress. But as to the waste being 
 wicked, I fail to see any wickedness in it. Would it have been 
 a wicked act if the Baron had presented the Bank of Eng¬ 
 land with a purse of $20,000. How could the same act be 
 wicked merely because it was done in an indirect way? Gen¬ 
 erally a deliberate waste which profits nobody, also hanns 
 nobody, and there is not need to discuss it any further, 'Isec- 
 ondly, such waste is extremely rare; it is not the kind of waste 
 we are thinking of when we talk of thrift. 
 
 43. The second kind of waste consists of spending money 
 for things or services which could be dispensed with. A man 
 may do without a cigar, he may live on oatmeal and pota¬ 
 toes, he may walk instead of riding on a car; he may shine 
 his boots and shave his beard, he may read his papers in a free 
 public library or read none at all. The poor in this country 
 generally practice so much thrift without deriving much bene¬ 
 fit thereby. Assuming that he has the means, he may go even 
 further—he may do without most' of the furniture and sit 
 cross-legged on the floor like a Turk or eat his food with his 
 fingers like a Hindu. But now, assuming that all the people 
 of the United States practice thrift like this, will it make the 
 country rich and prosperous? Could the Evening Pdst boast 
 of a circulation about two millions every week if every one 
 limited himself to reading only what is necessary? What 
 would become of the spoon and fork factories if all the people 
 in this country should start eating with their fingers? Thrift 
 is an excellent thing to preach as long as you are sure of its 
 not being practiced. Let the people of the United States 
 start practicing it, and within twelve months it will be one of 
 the most miserable countries in the world. The Hindus are 
 the most economic race of people in the world, but they are 
 neither rich nor prosperous. If people in this country dress in 
 plain clothes of cheaper material, what will become of the fac¬ 
 tories and clothing stores? If they give up smoking, hof( T many 
 tobacconists can escape ruin? If they abstain from all needless 
 
I ECTURE I—THEORY OR UNEMPLOYMENT. 
 
 43 
 
 luxuries, the portrait painters, piano makers, and lace weav¬ 
 ers will all be swept away. 
 
 44. “Thrift” is only another way of spelling “unemploy¬ 
 ment.” Every time I shave my beard.I keep the barber out 
 o 4 * employment. Every cigar that I do not smoke is so much 
 unemployment to the cigar-manufacturer. The very essence 
 of thrift is to give as little employment to others as you can. 
 So long as man was in an uncivilized state thrift was a virtue, 
 for it then served a very useful purpose of economizing labor. 
 It was the only way of saving labor. Division of labor was, 
 as stated before, the first step in civilization. “Thrift,” which 
 hadnffp to this point served a very useful purpose, now began 
 to be useless and only became an obstacle in the way of civ¬ 
 ilization. For, civilization required mutual employment. 
 “Thrift,” by which I mean individual thrift, stood for mutual 
 unemployment. Out of these opposing forces there arose a 
 tendency to obtain employment from others by every possible 
 means, without giving employment to others in return. In 
 the earlier days of civilization the tendency could not grow 
 into a disease, for nobody could wish to get from others more 
 work than he could do, and he could not do much. With 
 modern civilization and increased working power of the in¬ 
 dividual, taking other people's work in large quantities has 
 become possible, and unemployment, both chronic and acute, 
 has been the result. A civilized society that tries to depend 
 upon thrift cannot escape unemployment, and the more the 
 advance^rn civilization the more the unemployment), both 
 chronic and acute. It is the inevitable result of trying to live 
 like savages under conditions of the most advanced civiliza¬ 
 tion. Thrift is opposed to division of labor, and therefore to 
 that extent contradicts itself and defeats its own purpose. A 
 tailor who shaves himself to save a dime, spends much more 
 than the dime's worth of time and labor than a barber would, 
 and a barber who makes for himself a shirt will waste more 
 cloth, time, and labor than a tailor would, and yet the leaders 
 of our modern civilization advise the barber to make his shirt, 
 and the tailor to shave his beard, and call it “thrift!” 
 
 45. At this stage I must guard myself against a possible 
 and likely misinterpretation; anybody might hastily infer that 
 I advoeate a lazy, improvident mode of life as a solution of 
 
44 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 our present economic difficulties. I advocate nothing of the 
 sort. That I am opposed to thrift being regarded as a social 
 virtue and social ideal is a fact, but I would not advise any per¬ 
 son to give up thrift on that account. How I propose to get 
 rid of thrift I need not say at this stage. I will deal with the 
 question in its proper place under “Cure for Unemployment.” 
 It is sufficient at this stage to say what I do not intend to 
 advise. I do not advise anybody to abandon thrift, it would 
 be simply economic suicide. Any person who spends more 
 than he needs will not reform society. He will only bring him¬ 
 self to the end of his resources and lose even the small power 
 he possesses, of effecting some kind of reform. No person 
 can hope to achieve anything by abandoning thrift in a world 
 which regards it as an ideal. An advice to abandon thrift 
 would be like an advice to an Arabian Bedouin to go about un¬ 
 armed. Nor again would I advise society as a whole to give 
 up thrift and by “a gentlemen’s agreement” to spend to the 
 fullest extent of its power. One single thrifty man in such 
 a society would reduce the whole society to servitude unless 
 in the meantime the others change their minds and go back 
 to thrift. 
 
 46. Thrift, i. e. individual thrift, is to the individual in 
 economic warfare what armies and ammunition are to govern¬ 
 ment in international warfare. Everybody knows that these 
 ever-increasing armies wdiich have nearly transformed 
 Europe into a military camp are serious evils to-day and a 
 source of greatest possible danger in future, and yet no sen- 
 s ; ble statesman will recommend a policy of disarmament. 
 Every reason that is good against a policy of disarmament for 
 any nation is also a good reason against a policy of abandon¬ 
 ing thrift. Whichever method ultimately succeeds in reduc¬ 
 ing the armaments will also with due adaptations succeed in 
 abolishing thrift and putting an end to unemployment. The 
 two problems are strictly analogous, and anybody who has 
 studied the disarmament problem can have no difficulty in 
 anticipating my solution of the unemployment problem. 
 Thrift has to be abolished, but it cannot be abandoned. In 
 many countries nobody is allowed to go about with arms, but 
 in a society where going about with guns and shooting your 
 
lecture i—theory of UNEMPEOYMENT. 
 
 45 
 
 opponent or rival on least provocation is considered lawful 
 and meritorious, no man would think of advising his friend to 
 go out unarmed. In such a society you can imagine a man 
 preaching against the custom of the free use of arms. He 
 might work hard to introduce a law to prevent the use of arms 
 by citizens, but as long as the law remains unchanged, he 
 will neither go out unarmed himself nor advise others to do 
 it. I do not want thrift to be abandoned by anybody. I want 
 it to be abolished by way of proper and practical constitutional 
 reform. 
 
 47. But there is another and a stronger reason for my 
 not advocating the policy of “spend all you earn.” It will not 
 solve the unemployment problem. It is true that saving 
 causes unemployment, but it does not follow conversely that 
 spending all one earns will put an end to unemployment. 
 Converse propositions are not necessarily true. If you play 
 with a gambler as skillful as yourself, but not as honest, and 
 if he uses marked cards and loaded dice you are pretty sure to 
 lose; but it does not follow conversely that if he does not use 
 dishonest methods that you will surely win. You might win 
 and you might not, for it is now a matter of chance, and the 
 probability is that an honest player will sometimes win and 
 sometimes lose. Or, take another illustration: If I take a few 
 grains of potash cynide this evening I will not be living to¬ 
 morrow morning. That is a matter of absolute certainty with¬ 
 in the limits of human knowledge. But if I do not take the 
 cynide to-night is there any guarantee of my living to¬ 
 morrow? I might be bitten by a crait in my bed. I might be 
 shot by a loyal and patriotic gun-man. I might be run down 
 by a careless chauffer or get drowned in the river on my way 
 home. Then again, there is the possibility of death by heart 
 failure and other internal troubles. Life depends upon the 
 proper equilibrium of protoplasmic activities maintained by 
 proper functioning of all the organs and parts of organs. Any¬ 
 thing that seriously interferes with any of those functions will 
 ' cause death. Cynide causes death because it interferes with 
 one of those functions. But there would be death even if there 
 were no such thing in the whole world as cynide, because there 
 | are other things that interfere with some function. In the 
 
46 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 same way, while thrift practiced by the individual must surely 
 cause unemployment, it by no means follows that if thrift 
 were not practiced by the individual it will lead to the end of 
 unemployment. To illustrate this point, let us assume a small 
 community of but five persons. For simplification we will 
 call them A, B, C, D and E. If one of these saves he creates 
 unemployment. This fact is so obvious that I need not take 
 time to illustrate the point. But now let us assume that every 
 one spends all he earns, will that make unemployment im¬ 
 possible? If each of them bought from all the others and in 
 proportion to what each of the others produced there would 
 be no unemployment. But the mere fact that each of the five 
 individuals spends all his earnings carries with it no guarantee 
 as to how it will be spent. The other two conditions (1) 
 buying from all, and (2) buying from all in proportion to the 
 producer’s product, may not be fulfilled; there is at least no 
 guarantee of such fulfillment. On the contrary, if left to 
 chance, the probability is that there will be unemployment 
 e\en if the people spend all they earn. For example* suppose 
 A buys from B, C and D, but not fromE; B buys from A, C 
 and D but again not from E and so on. In that case E will be 
 unemployed although A, B, C and D and even E spend every 
 cent they earn. Unemployment caused by chance will not 
 probably be so extensive at first as when it is manufactured 
 systematically by the deliberate exercise of thrift. But there 
 will still be some unemployment caused by the haphazard 
 distribution of work by indiscriminately spending money. A 
 little unemployment will cause more unemployment and com¬ 
 pel everybody to revert to thrift which will bring them right 
 back to their starting point. Indiscriminate spending is no 
 remedy against unemployment and I therefore do not advocate 
 abandonment of thrift by individuals. It is no solution to the 
 unemployment problem. Incidentally let us note that anarchy 
 of consumption is only a possible, and not an essential cause 
 of unemployment. This fact must be kept in view in devising 
 a solution of the unemployment problem. 
 
 48. This brings up once more the Socialist theory of 
 anarchy of production, to the “planless way in which produc¬ 
 tion is carried on” as being the cause of unemployment. (See 
 
LECTURE I—theory of unemployment. 
 
 47 
 
 para. 21.) This view formulated by 28 Engels is one of the 
 leading propositions in the theory of scientific Socialism. 
 That this proposition contains a spark of truth is cheerfully 
 admitted, but it contains just a spark and no more. I have 
 already shown how anarchy of consumption may cause, and 
 in fact does cause unemployment. Now consumption must by 
 its very nature be anarchic, for the purpose of consumption is 
 the gratification of desire. As long as desire is free and 
 unfettered by law, consumption must be anarchic, that is; 
 uncontrolled by law and unregulated except by circumstances, 
 -such as inability to procure or consume. The ultimate pur¬ 
 pose of ail production is consumption. Therefore the more 
 perfectly it is adjusted to the needs of the consumer, the 
 more anarchic it appears to be. This is why capitalist pro¬ 
 duction appears to be anarchic, just in proportion as it elim¬ 
 inates chaos and introduces order. Imagine a hound chasing 
 a very lively hare on a moorland in which there are many 
 places for the hare to hide. Suppose the hare to be visable 
 to the hound but not to the spectators watching the chase. 
 The hare runs, stops, turns, and dodges in all possible ways, 
 controlled by no motive except the desire to maintain its free¬ 
 dom. The movements of the hound are controlled by those 
 of the hare, but to an observer who cannot see the hare, the 
 hound seems to follow no law whatever, and the more closely 
 the hound follows the hare the more erratic his movements 
 seem to be. The anarchy of production is only an apparent 
 anarchy, the apparition being due to the efforts of capitalism 
 to keep pace with consumption which is truly anarchic and 
 follows no law. Understood in this sense, anarchy of produc¬ 
 tion is no doubt the cause of unemployment and to this extent 
 the Socialists are right. But when, from this premise they 
 jump to the conclusion that capitalism is the cause of un¬ 
 employment, they are entirely off the track. Capitalism did 
 not create the anarchy ; the anarchy was there to start with : 
 capitalism introduced order, removed chaos to a large extent 
 and diminished anarchy. It is the height of absurdity to 
 accuse capitalism of having created an evil which it did not 
 
 28. “Organization of production in single factory, and the 
 anarchy of production in -society at large.”—Engels: Socialism' 
 Utopian and Scientific. 
 
48 
 
 the: unemployment problem. 
 
 create, but which, on the contrary, it has done something to re¬ 
 move ! The service of capitalism in this respect is frankly 
 recognized and fearlessly acknowledged by some of the high¬ 
 est exponents of modern scientific Socialism. 
 
 “It (speculation) is a necessary function of the 
 capitalist. By speculating * * * the merchant 
 
 helps to bring some order into the chaos of the plan¬ 
 less system of prodution that is carried on by in¬ 
 dividually independent concerns.”—Kautsky, Class 
 Struggle (Erfurt programme, page 75.) 
 
 Though Kautsky uses the merchant as an illustration, the 
 argument is applicable to all forms of capitalism, including 
 industrial capitalism. 
 
 49. Nor should I be understood to mean that thrift can 
 never be a virtue. There was a time when it was a virtue, and 
 the time will come when it will be a virtue 29 again, but it is 
 not a virtue to-day, and until the last willing worker has 
 found employment thrift cannot be a virtue, whatever else it 
 might be. Ingratitude can never be a virtue, and in our so¬ 
 ciety as it is to-day thrift is the worst form of ingratitude; 
 for a thrifty man obtains his opportunity to work from some¬ 
 body, then denies an equal opportunity to others, by practic¬ 
 ing economy, i. e., by refusing to employ others. Not content 
 with this, he turns round and reproves the needy for their 
 thriftlessness, i. e., for their having given him the opportun¬ 
 ity whereby he had earned his income. Thrift is unchristian. 
 It is easier for a camel to pass through the eye of a needle, 
 than for a rich man to enter the Kingdom of God. A rich 
 man is only a successful thrifty man, for it is not a man who 
 merely earns a large income that is rich, but a man who saves 
 much. Here is the explanation of what puzzles people so 
 much: Why should Jesus be so hard against a rich man 
 simply because he is rich? A man cannot be rich without 
 being thrifty, i. e., without ingratitude. Thrift is the cause of 
 poverty. There is no possible way of producing wealth ex¬ 
 cept by work; there is no possible way of practicing economy 
 in our society except by preventing work, i. e., by keeping 
 some person out of work. A man may spend money in a 
 
 29. This point will be considered in the second and subsequent' 
 lectures. 
 
LECTURE I—THEORY OF UNEMPLOYMENT. 
 
 49 
 
 good way or in a bad way, but there is only one way of saving 
 money, and it is the evil way at present—the way that leads 
 to unemployment and poverty. There is a poular miscon¬ 
 ception that saving is equivalent to increase of wealth; it is 
 not. It was so in the remote past in savage society where every 
 man worked for himself; if he saved anything at all it was 
 something that was produced. A savage fisherman who 
 catches ten fish and eats nine, saves one fish. Next morning 
 he is richer by one fish, and he can now spend a part of his 
 time in building a boat or some other form of wealth. If 
 every savage in that society, or group, did the same, the 
 wealth of the whole group would be increased. In this way 
 the more they save the wealthier they grow. In a civilized 
 society where division of labor is the predominating mode 
 of production, saving has a diametrically opposite effect. In 
 such a society a thrifty fisherman does not save his fish; he 
 sells all his fish and saves the money. Suppose he sells his 
 fish to a joiner, but refuses to buy chains, tables, and other fur¬ 
 niture in return. It would not increase the wealth of the 
 joiner; it will prevent production of furniture and keep him 
 poor. For in this case saving does not consist of saving of 
 produced wealth but of refusal of opportunity to produce. 
 Lack of opportunity to produce is unemployment, with pov¬ 
 erty as a by-product. 
 
 50. Closely connected with the problem of poverty is the 
 problem of high-cost-of-living. In spite of what economists 
 the thriftists have to say on this point, I claim that high cost 
 of living- has nothing to do with protection or free trade; it 
 has nothing to do with manufacturers or middlemen; it has 
 nothing to do with trusts or watered stocks; it has nothing 
 to do with taxes or with military expenditures; it has nothing 
 to do with the luxury or the extravagance of the rich, or 
 with the drunkenness or improvidence of the poor; it has noth¬ 
 ing to do with sun spots or any other nebulous theory. There 
 is one, and only one, cause of high cost of living, and that 
 cause is thrift. This can be easily proved, but considering the 
 importance of the subject, I have made this proposition the 
 basis of a whole lecture by itself which will be placed before 
 the public in due time. 
 
 51. To sum up: Unemployment breeds unemployment. 
 
50 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 The motive for keeping others out of employment has its roots 
 in the instinct of individual thrift that was developed in pre¬ 
 civilization times. It was a savage instinct, and, like fierce¬ 
 ness in the struggle for life and sex, was a savage virtue. 
 With the advent of civilization it was no longer needed, but 
 like everything else it was allowed to stay. It opposed civ¬ 
 ilization in its infancy and has now become the source of the 
 greatest dangers to modern civilized society; in fact it 
 threatens the very existence of civilization to-day. Trans¬ 
 formation of thrift into unemployment was an inevitable step 
 ir the process of evolution. Thrift alone without division of 
 labor could not have given rise to unemployment. Division 
 of labor made the transformation possible; modern civiliza¬ 
 tion, by carrying division of labor to the highest point of 
 productive efficiency, has made the transformation inevitable. 
 Thus we arrive at the following conclusions: 
 
 1. Unemployment in the final analysis is the re¬ 
 sult of the discordant combination of two conflicting 
 and mutually exclusive ideals, civilization with 
 division of labor based on mutual employment as a 
 socializing ideal, and individual thrift based on 
 mutual non-employment as an anti-social, individual 
 ideal. 
 
 2. Unemployment causes further unemploy¬ 
 ment. This is the theory of unemployment. 
 
 52. The same conclusion, viz., that thrift is the cause of 
 unemployment, can be directly deduced as a corollary from 
 the theory of work. Work in any country at any time is 
 made up of two factors: 
 
 Number of people x average need per head. 
 
 This quantity is the consuming function of a nation. The 
 producing power of a nation is also made up of two factors: 
 Number of people x average ability per head. 
 
 (a) For equilibrium, the production and consumption 
 must be equal. Hence we obtain the equation 
 population x average need 
 
 ^population x average ability. 
 
 It will be seen that the factor “population” is common 
 to both sides and cancels itself. It follows from this that in¬ 
 dustrial equilibrium is independent of population. 
 
LECTURE I—-THEORY OF UNEMPLOYMENT. 
 
 51 
 
 (b) Any permanent excess of consumption over produc¬ 
 tion is obviously impossible, for nobody can consume what is 
 not produced. 
 
 (c) In a society where division of labor is the estab¬ 
 lished mode of production, excess of 30 production over con¬ 
 sumption leads to unemployment. This excess may be brought 
 about in two ways; first, by increase of ability per head— 
 which means increased industry, and, second, by decrease of 
 need per head—which means economy of consumption by 
 practicing individual abstinence. The two together jointly 
 constitute individual thrift; therefore individual 31 thrift is the 
 cause of unemployment. Machinery is often referred to as a 
 cause of unemployment. This is no doubt true; it is only a 
 particular case of the general proposition that individual thrift 
 is the cause of unemployment. Machinery is only human 
 labor materialized in a specific form for the purpose of produc¬ 
 ing utimately, greatest possible produce with least possible 
 labor. It is, to borrow a Marxian phrase, congealed thrift. 
 But while it is true that machinery causes unemployment, it 
 does not follow from it, that capitalistic ownership of machin¬ 
 ery is also a cause of unemployment. I have already proved 
 that it is not. On the contrary, it can be shown that capital¬ 
 istic ownership, counteracts to certain extent, the unemploy¬ 
 ment caused by machinery. This point wil lbe discussed later. 
 (See Lecture V, Capitalism: Profit System). 
 
 30. The excess of production or “over-production” as it is popu¬ 
 larly called is only apparent. There is no real over-production worth 
 mentioning. (See supra paragraph 48.) 
 
 31. “No one can sell unless some one else purchases. But no 
 
 one is forthwith bound to purchase, because he has just sold. 
 
 If the interval in time between the two complementary phases of the 
 complete metamorphosis of a commodity becomes too great, if the 
 split between the sale and the purchase, becomes too pronounced, 
 the intimate connection between them, their oneness, asserts itself 
 by producing—a crisis.”—Marx: Capital Vol I, pages 127-128. 
 
 This is only the- Marxian way of saying that if a man practices 
 thrift,—if he earns money and does not spend it—he creates unem¬ 
 ployment. See also Kautsky, Class Struggle, page 73. In Vol. IT of 
 Capital, Marx also propounded another theory of crises, viz., cyclic 
 res-enerat’on of implements of production. This theory has never been 
 recognized even by the Socialists; it is therefore not necessary to dis¬ 
 cuss it here. (See Capital, Vol. II, page 211.) 
 
52 
 
 the: unemployment problem. 
 
 53. Unemployment is the Devil's Workshop. Most of 
 the social, religious, and political evils are manufactured in 
 this workshop. It is unemployment that transforms a priest 
 into a blackmailer and a temple into a market-place. Unem¬ 
 ployment is at the root of the 32 wage-slavery of the workman 
 and the profit-s’avery of the capitalist. It is the root of the 
 modern class struggle between the Proletariat and the Barons 
 o r Industry. The sweat-shops and sharkj-dens are all founded 
 on unemployment. It is responsible fdr women labor and 
 child labor. It is responsible for all sorts of corruption: the 
 buying and selling of votes in politics, the buying and selling 
 of justice in the courts, buying and selling of salvation in the 
 church, buying and selling of husbands and wives in social 
 transactions. It is responsible for the Boer war in Africa, 
 Russo-Japanese war in Asia, and embryonic 33 Anglo-German 
 war in Europe. The advocates of thrift, will Haye much to 
 answer for when the tirfie of reckoning ^ofries. The phrase, 
 “War is hell" has become a proverb; but what is thrift? It 
 is economic war. It consists of industry ai^fl economy; ac¬ 
 cording to the first requirements you try to take as much 
 employment from others as you can: this is industry. With 
 a system of division of labor such as we are living under, in¬ 
 dustry depends upon mutual employment. According to the 
 second, your aim is to give the least possible employment to 
 others: this is economy, which depends upon mutual non¬ 
 employment. When everybody practices thrift it becomes a 
 general economic warfare. Everybody wants work, but no¬ 
 body wants to give work to others and nobody can hope to 
 get it from another unless he can drive somebody into a 
 corner and compel him to give it. A thrifty people is a people 
 in a state of perpetual warfare. What is Hell? It is the 
 Devil's Workshop. Thus we arrive at the conclusion that 
 
 32. Here and elsewhere I have used the word “wage-slavery” in 
 its popular sense only. I mention this in anticipation of any apparent 
 contradiction in the subsequent lectures wherein I hope to prove that 
 there is no -such thing as wage-slavery and that what we call “wage- 
 slavery” is really an escaoe from slavery. 
 
 32. This was written in 1911 and published first in 1912. 
 
LECTURE i—theory oe unemployment. 
 
 53 
 
 '^Thrift, alias Unemplyoment, is the Devil's workshop where- 
 r. the greatest of our modern social evils are forged. Take, 
 ! or instance, one of the most painful ulcers at the heart of 
 modern civilized society, the white slave. Every link of the 
 :ursed chain that binds the helpless and hopeless victims of 
 :his most disgraceful form of slavery is manufactured in “un¬ 
 employment/' It is despair of escape from unemployment 
 :hat drives the victims to the traps, and to the subsequent 
 slavery of the most degraded type. It is unemployment 
 :hat drives the hunters of women to set the traps, in order to 
 earn a living and to escape unemployment. The evils of 
 inemployment are often supposed to be well understood: 
 they are not, they are scarcely beginning to be understood. 
 When the full measure of the evil is understood and realized, 
 no sacrifice will be regarded too great to stamp it out. 
 
 UNEMPLOYMENT MUST BE DESTROYED. 
 
 34. “The identification of depression in trade with insufficient 
 :onsumption, or excess thrift, is we venture to assert unassailable. 
 
 ... It means that the East-end problem with its concomitants 
 )f vice and misery, is traced to its economic cause, and that this 
 Konomic cause is the most respectable and highly extolled virtue 
 yf thrift.”—Mummery and Hobson: “The Physiology of Industry. 
 
The Rights of the Unemployed. 
 
 LECTURE II. 
 
 1. “Therefore all things whatsoever ye would that men should 
 do to you, do ye even so to them; for this is the law and the prophets.”’ 
 —Matthew: VII-12. 
 
 2. ‘'Be not deceived: God is not mocked; for whatsoever a mars 
 soweth, that he shall also reap.”—Epistle to Galatians: VI-7. 
 
 54. In the first lecture I have shown:— 
 
 (a) That unemployment is not caused by insufficiency 
 
 of work, over population, failure of natural re¬ 
 sources, capitalistic monopoly of implements of 
 work, or monopoly in ownership of land. 
 
 (b) That the immediate and prevailing cause of unem¬ 
 
 ployment is a previous unemployment. 
 
 c) That anarchy of production is only an apparent 
 phenomena which has no real existence; the ap- 
 perance is caused by the unrecognized existence of 
 anarchy of consumption. Anarchy of consumption 
 is a possible but not a necessary cause of unem¬ 
 ployment. 
 
 (d) That the ultimate cause of unemployment is the dis¬ 
 cordant combination of the two conflicting and 
 mutually exclusive ideals; civilization with division 
 of labor (based on mutual employment) as a social 
 ideal; and thrift (based on mutual unemployment) 
 as an individual ideal. 
 
 With these theoretical premises to start with we are now 
 in a position to formulate at least a plausible remedy for 
 u nemploy ment. 
 
 55. It is easy to see that any solution by way of re¬ 
 stricting immigration, or by increasing efficiency of the less 
 efficient workers is impossible. That such impossible solu¬ 
 tions should have been seriously suggested might seem a mat¬ 
 ter of surprise if we had never heard of men spending their 
 lives in achieving perpetual motion. Their zeal is commend¬ 
 able, but zeal alone cannot transmute unscientific nonsense 
 into scientific truth. The same remark applies to other fall- 
 
lecture II—the rights oe THE UNEMPLOYED. 55 
 
 acies, such as those based on ownership of land or capital. 
 The last mentioned method may have the effect of diminish¬ 
 ing the extent and mitigating the rigours of unemployment for 
 a time, but the relief will be of short duration. The small 
 amount of unemployment left over will act as a new centre 
 of disease, and from this spot, unemployment will begin to 
 grow again so that in a few years things will be as bad as 
 they are to-day, for the simple reason that the real cause of 
 unemployment will have been left untouched and unsuspected; 
 untouched because unsuspected. 
 
 56. Unemployment creates further unemployment wilich 
 creates still more unemployment and so on without end. Any 
 partial solution of the problem must therefore, necessarily fail. 
 A' complete solution is the only legitimate solution. Any 
 other solution is as good as none at all; for, given a small 
 amount of unemployment, however diminutive at first, general 
 unemployment is but a short step. The amount of time 
 necessary for the full development of the evil being dependent 
 upon the phase of civilization reached by the people at that 
 time. In a country like the United States, if 99 per cent, of 
 the unemployed were put to work to-day, leaving but 1 per 
 cent, unemployed against their will, this 1 per cent, will rapidly 
 create more unemployment and within 10 years the nation will 
 be in exactly the same condition as it is to-day. A complete 
 solution is the only possible solution. That is, if the theory 
 of the causes of unemployment be true. But none of the ex¬ 
 isting schools of philosophy have yet felt the need of a com¬ 
 plete and radical change in this respect. The solution, what¬ 
 ever it be, must be of a permanent standing character, opera¬ 
 tive at all time; we cannot, for example, relieve all the unem¬ 
 ployed in existence for the time, consider the problem as solved 
 and rest on our oars. For, in any free society, anarchy of 
 consumption will and must always exist. This is a permanent 
 cause of unemployment, which cannot be counteracted, and 
 therefore in this case unemployment cannot be prevented at 
 the source. We can only remedy the evil as fast as it is 
 created, but this could be done only if the solution is of a per¬ 
 manent standing character. 
 
 57. The ultimate cause of unemployment is the com¬ 
 bination of division of labor and thrift. Here is where we 
 
56 
 
 THE UNEMPLOYMENT PROBLEM, 
 
 should look for the correct solution. It is not possible, nor is 
 it necessary to give up division of labor; division of labor 
 alone by itself is not the cause of unemployment. Similarly,, 
 it is neither possible nor necessary to abandon thrift; thrift 
 alone could not and did not create unemployment. It is the 
 combination of the two, or rather the discordant character of 
 these two conflicting ideals, that is responsible for the eviL 
 It is not necessary to abandon either of them to remedy un¬ 
 employment. We must modify the character of the combina¬ 
 tion : that is all. Division of labor is a social ideal and thrift, in 
 its present form, is an individual ideal. The contradictory 
 character of the two ideals is the source of the trouble. Of ^ 
 these two, division of labor must be left as it is, for by its 
 nature it is social, and it cannot be changed to anything else. 
 Thus after eliminating all other alternatives, we find only 
 one alternative available, viz., to change the character of thrift 
 from individual to social. This then must be the solution 
 and very probably the only practicable solution, that is if 
 there is any solution at all, assuming of course, that the theory 
 of unemployment formulated above be true. Is such a change 
 possible, and is it practicable? Collective thrift in place of 
 individual thrift; can that be done? 
 
 58. It certainly is not impossible, for we are doing it in 
 some of our affairs to-day. Our life insurance, fire insurance 
 and all other insurance schemes are living examples of the 
 practicability of collective thrift. Why could we not extend' 
 the principle to unemployment insurance? Why could not 
 members of society save for a common future need, instead of 
 each individual trying to save for his personal need? There 
 is one serious objection to this method. In the case of insur¬ 
 ing houses against fire, those who need insurance most, are 
 also best able to pay for the protection, while those who are 
 unable to pay have no houses to insure and therefore do not 
 have to pay. Hence the system adjusts itself automatically 
 to the needs of society. But in the case of unemployment it 
 is exactly the reverse; those who need the insurance most are 
 the least able to pay for it, while those who are best able to 
 pay need it the least. Collective thrift for insurance against 
 unemployment is not a self-adjusting machine. It must there¬ 
 fore ; be controlled, regulated and maintained artificially, ex- 
 
lecture II—the rights oe the UNEMPLOYED* 
 
 5 ? 
 
 actly as we do in other similar cases. Our judicial system is a 
 collective insurance against injustice, (sometimes it is merely 
 a farce and a caricature, but for the purpose of our present 
 analysis it is not necessary to refer to the weak spots of the 
 system). The judicial system is, as.I have said, an insurance, 
 but it is not run on commercial lines as in the case of fire in¬ 
 surance. The man who pays the most does not get the best 
 out of it; at least that is the presumption. Imagine what 
 kind of justice we would have in a society, where justice is 
 manipulated along commercial lines, and where the quantity 
 and quality of the justice delivered is proportional to the price 
 demanded and paid, or demanded and not paid! Justice, as the 
 product of our courts is a case of compulsory collectivism on 
 strictly communistic lines; each individual being compelled 
 to pay according to his ability and allowed to receive accord¬ 
 ing to his need. The scheme for insurance against unemploy¬ 
 ment must be worked out on the same basis. It must be a 
 compulsory insurance wherein each member of society will 
 have to pay according to his ability to pay, and each mem¬ 
 ber will receive as much employment as he needs or desires, 
 and of the kind that he desires and is qualified for. This is the 
 conclusion we have arrived at as the result of the theory of 
 unemployment, and it remains now only to formulate a prac¬ 
 ticable scheme wherein these principles may be incorporated. 
 Incidentally, we will also have to investigate the claims of 
 the unemployed. Is the claim of a man to get a job in any 
 way analogous to his right to get justice in the courts of 
 judicature? On the answer of this question will depend the 
 ethical merit of the scheme. 
 
 59. The scheme of reform that I intend to propose tenta¬ 
 tively is the Guaranteed Employment Scheme. It consists of r 
 
 (1) The formation of a department of state: The Guar¬ 
 anteed Employment Bureau. This bureau will give to any 
 person willing to work, on receiving his application, real or 
 nominal employment, according to his trade, profession or 
 attainment. The salary will commence from the date of re¬ 
 ceiving the application. 
 
 (2) The employment will not depend on whether or not 
 there is available work. Work or no work; every applicant 
 
 1. See infra, paragraph 93 . 
 
38 
 
 the: une:mployment problem. 
 
 will receive employment upon receipt of his application. If 
 there be work, he will have to do it. If not, he will still get his 
 regular wages and will be expected to hold himself in readi¬ 
 ness for work whenever there is work to be done. 
 
 (3) If the bureau can find work enough to keep the whole 
 force profitably employed, the bureau will be self supporting. 
 But if there be no work for the whole or even for a part of the 
 force employed, the corresponding wages will be a loss to the 
 State. This loss will be made up by adequate and equitable 
 taxes assessed for the purpose. 
 
 (4) These taxes (called the Guaranteed Employment 
 Fund) will consist of: 
 
 (a) Foreign import duties and patent fees. 
 
 (b) Income tax on wages of wage earner. (Note: For 
 purposes of taxation, a minimum amount of living expense 
 will de deducted from the wages before calculation of assess¬ 
 ment). 
 
 (c) Income tax on rents, profits and interest. (Note: 
 Profits and dividends, if reinvested will be exempt from tax for 
 this purpose.) 
 
 (d) Taxes on increments of values of land, and other 
 natural resources. 
 
 (5) The working details of the scheme will be drawn 
 'up by a properly constituted committee and will be revised* 
 'From time to time as necessary. 
 
 60. At first sight this scheme appears to be absurd, un¬ 
 just and impracticable. I have discussed it with my friends 
 and acquaintances here and elsewhere, and such has been in¬ 
 variably the first criticism. But after arguing my case for 
 some time 1 have always succeeded in obtaining a complete or 
 nearly complete approval. I therefore feel encouraged to place 
 this scheme before the citizens of the United States of America 
 with a view to give it a practical trial. I believe that the 
 citizen of the United States may be trusted to do it such 
 justice as it deserves. But before dealing with the merits of 
 the scheme I must answer the objections against it. 
 
 61. The scheme is said to be “absurd.” It is not absurd; 
 it cannot be absurd as it is the logical and necessary outcome 
 of the theory of unemployment. If the theory be right, the 
 scheme cannot be wrong. It seems that when people say “ab- 
 
lecture: II—the rights of the UNEMPLOYED. 
 
 59 
 
 surd” they do not mean absurd in the logical sense, but merely 
 something strange unheard of or unusual. There is really 
 no need of arguing over so hazy and unintelligible an objection. 
 Nevertheless, to do full justice to this objection, I must 
 frankly admit that the scheme appears very unlike the other 
 schemes that have been proposed from time to time in the 
 past. It does not sound heroic for there is no mention of 
 “sabotage/' confiscation or class struggle, no thunderous de¬ 
 nunciation of “malefactors of great wealth/' It promises to 
 better the condition of the already over-taxed workers by add- 
 irg to the burden of their taxes. It promises to inaugurate 
 economic equality by making the sky-high profits of the rich 
 exempt from taxation. It should not be surprising if at first 
 the proposition should be pronounced absurd. My duty is to 
 prevent its being killed by popular prejudice without a trial be¬ 
 fore the tribunal of scientific reasoning. 
 
 62 . Every new scheme has had to face that self-same 
 danger. Many of the greatest achievements in history and 
 science were at first ruled out as being absurd. The areo- 
 plane, the telephone, and the photograph were all “absurd/* 
 When M. Lesseps proposed the construction of the Suez 
 Canal his scheme was called absurd. When Westinghouse 
 endeavored to market the air-brake he was laughed at for the 
 “absurd" idea of stopping a railway train in full speed by 
 blowing a few puffs of vacuum! It is the same story once 
 more; the t ew scheme is always absurd. In the fifteenth cen¬ 
 tury Columbus discovered America. The discovery of America 
 was of course an accident, for nobody knew before, that this 
 continent was here. Columbus was trying to reach India by 
 tiavelling westward. Everybody said that the scheme was 
 absurd. India is to the East of Europe, so how could it be 
 reached by going West! To the people who knew nothing of 
 theory the world was flat because it appeared flat. If the 
 earth were flat as they supposed it to be, an eastern country 
 could not be reached by going west. To be sure the scheme 
 was absurd! To Columbus who had given more attention to 
 theory, the world was round and the success of his scheme 
 Was assured even before it was attempted. 
 
 63. If the theory of unemployment thus far expounded 
 be correct, then it must be admitted that the solution of the 
 
60 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 problem under discussion is not only a solution, but it is the 
 only correct solution. If, on the contrary the theory be wrong, 
 then the whole solution goes overboard and there will be no 
 further need to discuss it. The question of absurdity or 
 Validity of the Solution is therefore not a legitimate ques¬ 
 tion until the validity of the theory is either proved or dis¬ 
 approved. The theory is at all times open to criticism and 
 revision. In the mean time while the theory remains un¬ 
 challenged we shall have to proceed on the supposition that it 
 is valid, and therefore that the solution indicated by the theory 
 is not absurd. It must be understood that this conclusion 
 refers to the general nature of the solution, but not to details. 
 From his theory Columbus inferred that it was possible to 
 reach India by sailing westward, but that theory did not tell 
 him what kind of a ship he should sail in, how it should be 
 provisioned or what was the best season to start the voyage, 
 Neither did it give him any indication of the unexpected dif¬ 
 ficulties that might stand in his way and block his passage 
 to India by the western route as the subsequently discovered 
 continent of America ultimately did. Questions of details re¬ 
 quire separate study. 
 
 64. The scheme is said to be unjust. “Is it not unjust,” 
 savs the wage earner, “to make a working man pay a part of 
 his hard earned income to another man for doing nothing?” 
 
 Before answering this objection I must protest against the 
 Words in which the objection is expressed. I take objection 
 to the words “for doing nothing.” This is generally the first 
 objection. If a man is to be paid for doing nothing, the pay¬ 
 ment must stop whenever he begins to work! Money paid for 
 doing nothing is blackmail. The Guaranteed Employment 
 Scheme is not a blackmailing scheme. According to the 
 Scheme nobody would be paid for doing nothing. The em- 
 plovees of the Guaranteed Employment Bureau are to be 
 paid as a compensation for your inability to employ them, 
 profitably or otherwise. It is like paying the wages of your 
 standing army in time of peace. They are employed for the 
 'nurnose of fiehting and paid for the fighting they do during 
 a war. But they are also paid year after year, even in time of 
 peace, merely to keep themselves in readiness for fighting 
 when the occasion and the need arrives. Here is a working 
 
LECTURE II—THE RIGHTS OF THE UNEMPLOYED. 
 
 61 
 
 man out of work today; he was wanted yesterday for work, 
 and he might be wanted to-morrow, but he is not wanted to¬ 
 day, and so you think you may leave him to starve to death in 
 the meantime. Is this not an extremely short sighted policy? 
 What if the United States Government followed a similar 
 policy and disbanded its army and navy during periods of 
 peace ? The men who are out of work to-day have to be main¬ 
 tained like* your army and navy at your cost to-day in view 
 of their services being needed by you in future. 
 
 65. But this is only a side issue. The main question 
 refers to the justice of the scheme. It is evident that the word 
 “just” with reference to the objection under discussion means 
 “just” according to the abstract universal, moral standard 
 recognized by all men in all countries at all times, and not 
 according to some particular legal conventional standard, 
 current in any particular country at any particular time. Jacob 
 buys the whole birthright from his starving brother for a dish 
 of soup. The transaction is generally regarded as morally 
 unjust, though it was and still is, in most countries legally 
 just. If my opponent had meant that my Guaranteed Em¬ 
 ployment scheme is unjust in the sense of being incompatible 
 with the existing laws of this country, I would not care to 
 waste words in refuting it. But when he claims that the 
 scheme is morally unjust, he deserves to be treated with 
 greater respect, and for this reason I have taken up this ob¬ 
 jection before all others. 
 
 66. Now suppose I were to show you that you—I mean 
 society—have done something to put some men out of work 
 for the sake of some benefit which society has obtained there¬ 
 by, would it not be clear justice on the part of society to put 
 them to employment again? Suppose I were to show fur¬ 
 ther that these unemployed persons have given, and are still 
 giving you the employment on which your livelihood and your 
 prosperity depends, would it not be the height of injustice and 
 tyranny to deny them an equivalent of what you have re¬ 
 ceived from them? Take for instance, the patent laws. What 
 is a patent? It is a reward given by society to an inventor. 
 Everybody knows that modern unemployment is to a large 
 extent due to inventions. In uncivilized countries there are 
 no inventions or labor saving devices and there is compara- 
 
62 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 tively no unemployment. Most of the inventions are labor 
 saving devices, and must necessarily put some labor out of 
 employment. These inventions on account of reduced cost of 
 production and consequent cheaper prices, induce an increased 
 demand, and take back part of the labor to meet it; but the 
 increase of work in this way cannot keep pace with the ever 
 increasing power of invention to displace labor, and in the 
 course of time unemployment of a part of the population be¬ 
 comes an established condition of society. I have no quarrel 
 with the inventors. Most of inventions have been a blessing 
 to society, generally, but this is no reason for ignoring the 
 harm that is done to some people on that account. On the 
 contrary, in proportion to the great benefits of the invention 
 to society in general, the duty to compensate the few victims 
 of invention becomes all the more binding, I mean morally 
 binding. 
 
 67. But the claim of the unemployed is even stronger. 
 The patent is a tax on society for the purpose of rewarding 
 the inventor. The unemployed are required to bear their share 
 of the tax. They are called upon to give their moral and legal 
 support to reward the inventor, and to pay for his service 
 which has thrown them out of employment, and yet his claim 
 for compensation is regarded as unjust. I have no grudge 
 against the patent law. I have referred to it merely as an 
 illustration of how the laws of the country are responsible for 
 unemployment and how the society is, on that account, mor¬ 
 ally responsible to compensate the unemployed. In fact the 
 very constitution of the United States makes for unemploy¬ 
 ment. According to the constitution of the United States 
 it is not allowable for the government to levy income tax, 
 except with certain limitations. An income tax is not strictly 
 unconstitutional but the limitations are such as to make it 
 practically unconstitutional. No government can exist with¬ 
 out some kind of a tax and a man can pay a tax only out of 
 what he has earned, so that every tax is in one sense an in¬ 
 come tax. But what the constitution means is that the amount 
 of tax shall have no direct reference to the amount of income. 
 What then is the basis of taxation? A man’s income is divid¬ 
 ed into two parts, one part is laid aside as saving and the other 
 
LECTURE II—THE RIGHTS OF THE UNEMPLOYED. 
 
 63 
 
 part is spent for something. Most of the taxes in this coun- 
 tiy are taxes on what a man spends for. Every dollar spent is 
 spent employing others. There is no other way of spending 
 money. Thus we arrive at the conclusion that according to 
 the constitution of the United States, employment is taxed, 
 and that most of the tax is a tax on employment. The people 
 of this country are a free people and they have the right to 
 adopt what constitution they choose, but if they choose to 
 tax employment of productive labor as if it were something 
 highly undesirable, they ought not to be surprised at the con¬ 
 sequence of that policy; they might as well tax education, 
 truthfulness and benevolence, and then puzzle themselves out 
 of their wits to discover why the people become stupid, dis¬ 
 honest and avaricious. The constitution is responsible for un¬ 
 employment and the society that has adopted the constitution 
 and stands by it is morally bound to compensate the unem¬ 
 ployed. 
 
 68. I have not finished with this argument, Mr. Wage- 
 earner ; the unemployment problem has yet a stronger hold 
 on you. You have questioned the justice of making you pay 
 a part of your hard-earned income for the benefit of the un¬ 
 employed. Your income! How did you earn your income? 
 You say you are employed by a railroad company. You do 
 work on the road and get your wages. Have you ever tried to 
 figure out how you ever yet your employment? You say the 
 railroad company is your employer and that the superintend¬ 
 ent of your department employed you. You are wrong, sir. 
 The railroad company is only a sort of middleman between 
 you and your employer, your real employer being the passeng¬ 
 er who rides inside the car. He is your employer and he pays 
 you your wages. The railroad company acting like an employ¬ 
 ment bureau, bring the employer and employe together and 
 receive by way of profit their wages, for this service rend¬ 
 ered you both. No single passenger can be said to be your 
 employer. But every passenger has contributed to give you 
 your present employment. You too in turn are an employer 
 of thousands of people in several ways. The unemployed even 
 while they cannot earn have yet to spend. They have to eat 
 something, drink something, wear something, and live some- 
 
64 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 where. They pay for all these things and are therefore part 
 employers to thousands of people. You Mr. Wage-earner as 
 a worker on the railroad have received a part of your employ¬ 
 ment from the unemployed. For many of the things he uses 
 are carried to him by the railroad for which he has paid the 
 freight and out of this you have received your wages. Is he 
 not entitled to his share of employment from you, when you 
 have received your share of employment from him? True, 
 he cannot compel you to -repay the debt, but that is a defect 
 of the law. There was a time when there were no patent 
 laws and genius could be easily robbed of its due. If the law 
 does not compel you to repay the employment you have re¬ 
 ceived and are still receiving from others, the law must be 
 altered and made to conform with the moral standard of jus¬ 
 tice. On you Mr. Wage-earner, and on your class, therefore, 
 rests the moral responsibility for the relief of the unemployed. 
 You and your class must therefore carry the whole burden 
 of relieving the unemployed, the financial burden being one 
 of the burdens, that wage earners must assume. The unem¬ 
 ployed have the best possible moral claim to be employed by 
 society and there is nothing unjust in their demands. It is 
 your refusal to employ them that is unjust. 
 
 69. And you are being rightly served for your injustice 
 and ingratitude. What you call the modern wage-slavery, is 
 only a result of th : s grave iniustice. The Socialists attribute 
 wage-slavery to the greed of the capitalist, but I have never 
 been able to follow their arguments and accept their conclu¬ 
 sions. On the contrarv, the greed of the capitalist is as far as 
 1 can see the result of this primary injustice, and as long as 
 the injustice lasts, no labor laws nor anti-trust laws can remedy 
 the evil. On the contrary the moment you start giving em¬ 
 ployment to those who need it and who are morally entitled 
 to it, the whole of the capitalistic edifice will begin to disin- i 
 tegrate and crumble awav, and what is more important, the 
 capitalist will no longer fight for saving the wreck. For be¬ 
 fore long he will cease to possess—or rather cease to be 
 possessed by—the motive that actuates him at present, and 
 he will have discovered and in fact realized by partial ex¬ 
 perience that his best interests lie in permitting the industry 
 
LECTURE II—THE RIGHTS OF THE UNEMPLOYED. 
 
 65 
 
 tc pass into the hands of 2 society. There will be no need for 
 anti-trust laws and labor laws. The trust will have ceased 
 to exist for want of motive, and the condition of labor will 
 leave no occasion for enacting any labor laws. 
 
 70. The opponents of the Guaranteed Employment 
 scheme have one more defense along the same line, viz; that 
 the scheme is unjust. Nobody as far as I know has yet raised 
 the objection I am going to consider next,—no human being 
 could have the coolness to say it openly, whatever one may 
 feel whispering on the wrong side of his heart. But it is a 
 possible objection, one which his Infernal Majesty is sure to 
 urge in defense of his workshop, and it is therefore necessary 
 for me to act as a Devil’s advocate in order to offer the objec¬ 
 tion in its most advantageous and apparently unassailable 
 form. 
 
 71. “No person,” says the Devil’s advocate, “is compelled 
 to give work or employment to another person if he does not 
 wish to.” The acceptance of another man’s work under divi¬ 
 sion of labor is always by the giver’s free will, never by com¬ 
 pulsion. No man is compelled to ride a car if he chooses 
 to walk. Nobody is compelled to buy a piece of bread and 
 thereby give employment to the farmer and baker, if he chooses 
 to remain hungry, even to the point of starving himself to 
 death. If Miss Mule be starving it mip-ht be an act of kind¬ 
 ness to employ her, but kindness is no duty; she has no claim 
 to be employed either against the individual or against the 
 society as a whole. It is certainly true that even in her ex¬ 
 treme destitution during a period of unemployment she became 
 an employer and has given some employment to the farmer, 
 
 2. “There is one problem above all others, with which the pro¬ 
 letariat regime must primarily occupy itself. It will in all cases be 
 
 compelled to solve the question of the relief of the unemployed. 
 
 An actually effective maintenance of all the unemployed must com¬ 
 pletely alter the relative -strength of the proletariat and capitalist. 
 
 once things have gone thus far the employer would be beaten in every 
 conflict (i. e. if there still remains a conflict; Analyticus) with his em¬ 
 ployees.once the capitalist recognized, however, that they had 
 
 the right only to bear only the risk and burdens of capitalist business, 
 these men would be the very first ones to renounce further extension 
 of capitalist production and to demand that their undertakings be pur¬ 
 chased because they could no longer carry them on with any advant¬ 
 age.^Kautsky: Social Revolution, page 113. 
 
THE UNEMPLOYMENT PROBLEM. 
 
 66 
 
 the baker, and a host of other workers in several trades, but 
 she has done it freely and of her own accord, for the gratifica¬ 
 tion of her own desires and without any coercion. She may 
 withhold employment if she likes and as long as she likes, and 
 we will not compel her to do so much as to eat one morsel of 
 bread to save her life. We do not compel her to employ any¬ 
 body and we will not permit others to compel us to employ 
 her. 
 
 72. I hope I have stated my adversary's case as fairly, 
 clearly, and completely as could be expected from the Devil's 
 advocate. And now for the reply. Mr. Advocate, you do 
 compel Miss Mule to be an employer whether she wishes 
 or not. I do not use the word compel in any metaphorical 
 sense; in the sense in which women and children are com¬ 
 pelled to work in factories doing heavy work for long hours i 
 cn low wages, in the sense in which the strikers are often com¬ 
 pelled to return to the mills, if the mill owners do not climb 
 down or are rather compelled to climb down in the meantime. 
 For compulsion by hunger or through fear of unemployment ! 
 is a compulsion of different type and I know you will argue ; 
 that you did not give hunger to Miss Mule, or create in her , 
 the instinct of preferring to save her life at the cost of her 
 liberty, or her savings, or may be her honor too. Whoever gave 
 her life, or instinct, ought to have made adequate provision 
 for her; if he did not it is his fault, not yours, and you ought 
 not to be made to pay for it. But I do not give you a chance 
 to hide behind this defense. I am not using the word “com¬ 
 pel" in any metaphorical sense; when I say “compel" I mean 
 “compel" by direct legislative and executive compulsion, with 
 the force of the who^ society organized for that compulsion, ; 
 
 73. To begin with, who pays your police and your mag¬ 
 istrates, your mayors and your governors, your president and 
 his staff, your army and your navy? Every man and woman 
 in the United States pay their wages, and what is more im- 1 
 portant for our present argument, is compelled to pay. Even 
 poor Miss Mule on the verge of starvation has to pay her share i 
 of the wages of these government employees before she can 
 taste one mouthful of bread or teaspoonful of tea. A news¬ 
 paper reporter gives her a dime to buy her breakfast; out of 
 this she is compelled to give half a dime to pay the w^ages of 
 
LECTURE ii—the rights of the UNEMPLOYED. 
 
 67 
 
 the government employees before she is allowed to buy bread 
 with the other half dime. The farmer who raised the wheat 
 had to pay the land revenue tax. The miller who makes the 
 flour had to pay the building tax and machinery tax. The rail¬ 
 road company, the baker, the store-keeper, and the proprietor 
 of the restaurant had all to pay one or more taxes. All these 
 taxes are ultimately included in the price of the bread. No¬ 
 body can buy a piece of bread without paying his share of the 
 taxes at the same time. Miss Mule is “compelled” to pay the 
 wages of the farmer, baker, and the railroad company only in a 
 metaphorical sense, but she is “compelled” to pay her share of 
 of the taxes in a literal sense. She is compelled to be an em¬ 
 ployer of the whole society as represented by the government, 
 and to pay the wages of the government. “But,” you might 
 say, “you do it for the protection of life and property; her 
 life and property, too, along with that of all others.” Maybe 
 you do it with the best possible intentions and I will not ques¬ 
 tion your motives, but how do you know that she wants it? 
 It might be wiser at times for a man to ride a car, rather than 
 to walk a mile or two through snow on a windy day; but 
 would you allow the railway company to compel a man to 
 ride a car and pay his fare, or rather to pay his fare first and 
 then to let them ride the car if he needs and cares to do it. Yet 
 this is what you are doing to Miss Mule today. You compel 
 her to pay for protection of property without waiting to see 
 if she has any property to protect, or if she thinks it worth pro¬ 
 tecting. Apart from employment she is compelled to give 
 voluntarily to several workmen in different trades; you com¬ 
 pel her to employ the civil and military officers and to pay 
 the wages. But when she complains that the bargain is one¬ 
 sided, forced and unfair, and demands employment in return 
 for what you have taken from her you turn round and say 
 vou never compelled anybody. Mr. Advocate, are you sure 
 that vou are speaking the truth? I say that every citizen in 
 the United States is compelled to pay his share of the tax ; I 
 say that this money raised by taxation is used in paying the 
 wages of the government which represents the society as a 
 whole; I say that every individual is thus compelled to be an 
 employer of society; and therefore I say by way of conclusion 
 that every individual has a moral right to obtain in return, 
 
68 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 employment from society as a whole or from its representa¬ 
 tive, the government. I challenge you, Mr. Devil's Advocate, 
 to contradict me on one of these points if you can. 
 
 74. No taxation without representation. This principle 
 is accepted as an axiom by all civilized people—except of 
 course where a civilized race has the ambition to hold another 
 uncivilized, semi-civilized or decivilized race in endless ser¬ 
 vitude. Taxation without representation is slavery. For slav¬ 
 ery has generally been defined as compulsion to give a part 
 of one's work, or its equivalent, wdthout the giver's consent, 
 and taxation is a compulsion to give the equivalent of a part 
 of one's work. Taxation without representation is a taxation 
 without consent and is therefore a form of slavery, whatevei 
 the purpose of the taxation might be. In a society, organized 
 politically, and therefore having some form of government, 
 involuntary unemployment, or even the prospect of such un¬ 
 employment, constitutes a form of slavery, for, if taxation 
 without representation is slavery, so is taxation without guar¬ 
 anteed employment and for similar reasons; all civilized peo¬ 
 ple in general and the liberty loving citizens of the republic 
 of the United States ought to be ashamed of its existence; if 
 they are not it is not my fault; I have done all I could to 
 awaken their conscience. 
 
 75. But taxation is not the only method of compelling 
 the unemployed to be employers of others. The standard of 
 civilization which we pretend to adopt and compel other mem¬ 
 bers of society to adopt is another method of compelling the 
 unemployed to be employers. If Miss Mule were an Abyssin¬ 
 ian, a Zulu or Hotentot woman and if she had no money to 
 spare, she might have preferred to go about without clothes 
 and nobody would have thought of preventing her. But she] 
 is an American woman, a member of a civilized society in a 
 civilized country. If she is without employment and has to 
 go without food it does not concern us, but if on that ac¬ 
 count she tries to economize what little savings she has and 
 goes out in search of work like an African woman without any 
 clothes we think we have a right, as a civilized society, to ar¬ 
 rest her and send her to prison. As a civilized society we 
 have the right to compel her to employ the cotton and wool 
 merchant, weaver, and clothier, but we ignore her right to de- 
 
LECTURE II—THE RIGHTS OF THE UNEMPLOYED. 
 
 69 
 
 mand employment from society. So that we have here one¬ 
 sided rights and duties. In a civil society the right as well as 
 duties must be mutual and well balanced. One-sided rights and 
 duties constitute slavery. In an African savage society Miss 
 Mule could have no rights but she would have no corres¬ 
 ponding duties either, and she would have been enjoying a 
 state of savage liberty. But here in civilized New York she 
 has a duty toward society of being property dressed, but she 
 has no corresponding rights to demand the means of obtaining 
 the dress. She has duties without rights, society has towards 
 her rights without duties. In other words she is a slave, and 
 she is a slave because we insist on enforcing a certain stand¬ 
 ard of civilization. Civilization without an adequate provi¬ 
 sion for guaranteed employment is slavery. Mr. Devil's Ad¬ 
 vocate, I challenge you once more, to answer this charge if you 
 can. 
 
 76. We are not quite through with this argument as yet. Let 
 ns give the opponent every possible line of defense. If there is 
 anything that can be said in defense of the wage-earner’s right 
 to hold fast what he has,—anything against a tax for the re¬ 
 lief of the unemployed, let us have it. He shall have no excuse. 
 The unemployed as consumers, give employment to the work¬ 
 ers, and are therefore entitled to receive employment in re¬ 
 turn; that was our argument. "'But,” asks the opponent, “how 
 does he give the employment? Where does he pay the wages 
 from? In order to give he must have first received; in order to 
 spend he must have earned. When the unemployed worker 
 buys a piece of bread, and pays for it, he does not create a 
 new obligation. He only returns what he has received. With 
 his last penny he squares account. Unless he gives more than 
 he has received, he has no claim—nobody owes him any¬ 
 thing. If you take one single operation, such as buying a 
 piece of bread he seems to give employment to others, but if 
 you take into consideration the whole life, you will see that 
 he does nothing of the kind; he simply returns the employ¬ 
 ment that he previously received! He has therefore no right to 
 demand employment from others; nobody owes him any em¬ 
 ployment. If they employ him it is their own concern; there 
 is no obligation. 
 
 77. There is no doubt that the argument in this form 
 
70 
 
 the; unemployment problem. 
 
 has considerable force. Whether the conclusion, viz., that the 
 '‘unemployed have no claim/' be valid or not, the general prin¬ 
 ciple underlying the argument is certainly valid. We cannot 
 determine a person's claims or liabilities from one single 
 transaction; we must add together, all assets, all claims, all 
 liabilities, and strike the balance. We must consider all the 
 transactions as part of one complete transaction, and con-' 
 sider the problem as a whole. This is what is known as a 
 dialectic method—the method that in Socialist literature made 
 Hegel famous. This method consists of studying a process 
 or a phenomenon as a whole instead breaking it up into parts 
 and studying each part separately without reference to other 
 parts. This latter method of studying a phenomenon in sep¬ 
 arate, and isolated parts, without their relation to each other 
 or to the whole, is called the ^metaphysical method. As an 
 illustration of this method, suppose we study the French 
 Revolution in this way; we study first the work of D’alembert, 
 then the works of Voltaire and Rousseau. Then an account 
 of the “gabelle,” then the fall of Bastille and so on until we 
 reach Boneparte y s coronation. We should then have gone 
 through the whole history of the revolution, and yet see no* 
 revolution anywhere. It is this sort of study of isolated facts 
 which prevents the economists of older schools seeing the 
 revolutionary nature of capitalism. It is the same mistake 
 again which the Socialists are making in their turn regarding 
 the nature of capitalism. They look at capitalism as an: 
 isolated phenomenon, without its relation to all other phen¬ 
 omena, and arrive at the absurd conclusion that it has "out¬ 
 lived its historic function V 9 The only scientific way to study 
 a phenomenon is to study it as a whole. This does not mean 
 that we should not analyse. In philosophy as in science 4 
 analysis is the only practical method of studying complex' 
 phenomena; the dilectic method is not opposed to the analyti¬ 
 cal. The dialectic method requires us to study the whole- 
 phenomena, either as a whole, if we can, or analysed into parts 
 to facilitate study, but not the study of only one part, to the 
 
 3. The term “dilectic” and “metaphysical” are both incorrect. It 
 is unfortunate that they have gained a prominent place in Socialist 
 literature. If I were free to introduce substitutes I should use the 
 terms “systemic” and “isolation” methods respectively. 
 
LECTURE II—THE RIGHTS OF THE UNEMPLOYED, 
 
 71 
 
 entire exclusion of other parts. In the analytical method 
 while the phenomenon is divided into parts, for convenience, 
 no part is regarded as isolated; each part is always maintained 
 in its proper relation to all other parts. 
 
 78, Let us now follow up the question of the rights of 
 unemployed, considering the phenomenon as a whole. Let us 
 consider production as a whole, the producers as a whole,—of 
 which individual workers are parts, consumers as a whole,—of 
 which the individuals are parts. The rights of individuals 
 arise out of their relation to society as a whole just as the 
 'weight of anybody is the aggregate result of the separate grav¬ 
 itational forces between it any every other body. Let us con¬ 
 sider ‘‘market” as a whole—the storehouse of the produce 
 of human labor held in store for human consumption. Every 
 individual who earns a dollar throws a dollar's worth of pro¬ 
 duce, or service, into the market. No matter who'the pro¬ 
 ducer is, the economic law is always the same. The laborer 
 tlirows in a dollar’s worth of ditch, and the President of the 
 United States throws in a dollar’s worth of statesmanship. 
 The policeman throws in a dollar’s worth of public protection, 
 i. e., protection of the public who hire him, and the New York 
 gunman throws in a dollar’s worth of private protection to the 
 individuals who hire him. The minister in the pulpit throws 
 ir a dollar’s worth of blessings of the world above for those 
 who are looking for it, and the scarlet woman throws in dol¬ 
 lar’s worth of pleasure of the world below for those who prefer 
 it. The teacher throws in a dollar’s worth of intelligence. 
 The saloonkeeper throws in a dollar’s worth of unintelligent 
 recreation. In all cases they receive employment from the 
 ’“market” and wages for the service they rendered to the “mar¬ 
 ket.” Every time a man spends a dollar he throws the dollar 
 back into the market and receives a dollar’s worth of service 
 or commodities. He employs the “market,” the employment 
 being distributed among the individuals who constitute the 
 market. 
 
 '79. A person who earns a dollar and spends 80c receives 
 a dollar’s worth of employment and returns 80c worth of it. 
 He withholds 20c worth of opportunity to work and earn 
 wages. In other words he is a robber to that extent—I mean 
 a robber of opportunity. We do not know whom he robs— 
 
72 
 
 THE: UNEMPLOYMENT PROBLEM, 
 
 he does not know that himself, but we know that 
 he robs somebody. It is like a man who throws a 
 bomb in a crowd; he does not know whom he is 
 going to strike; he may now know it even after he 
 has struck, but he must know that he has injured some¬ 
 body. This bomb does not hurt everybody, it hurts a few, 
 the majority escape. The unemplyoment created by one man's 
 savi ng hurts only a few who remain unemployed, the others 
 escape; but the fear of being struck any minute, and the con¬ 
 sequent panic, hurts all alike. 
 
 80. We have seen, by treating the economic process as 
 a whole, that the man who saves causes unemployment and 
 robs the unemployed of opportunity to work and earn. The 
 unemployed have therefore a moral right to compensation. 
 This answers the objection but it will probably not satisfy 
 the questioner; he will be silenced but not convinced. We 
 have evidently overlooked something. What is it? The un¬ 
 employed person in buying bread spends what he had earned. 
 That w T as the starting point of the objection. If he spends 
 what he previously earned he returns the opportunity to work 
 that he got from the “market” in the first place. The ac¬ 
 counts are squared; there is no robbery. That was the ob¬ 
 jection to our line of reasoning. 
 
 81. “The person spends what has previously earned;” is 
 that always true? We know it is not true. If a man could 
 live only on his earning, he would be starved as soon as his 
 earnings are spent. If every unemployed died so fast the 
 fear of unemployment would be so great that society could 
 not tolerate it for one month. As a general rule the unem¬ 
 ployed succeed In borrowing from friends or friendly strangers. 
 They hope to pay by their future earnings, by opportunities 
 which they expect in the near future; they spend the borrowed 
 money, and give opportunity to work to others, expecting to* 
 receive equal opportunity for themselves in return. If they 
 do not receive back that opportunity they are robbed. Those 
 who lend the money are also robbed, but they are robbed of 
 money, when it is not returned ; we are not discussing rob¬ 
 bery of money; we are discussing the robbery of opportunity 
 to work, so we will leave that out of consideration. The un¬ 
 employed in spending money give employment to others of 
 
LECTURE II—THE RIGHTS OF THE UNEMPLOYED. 
 
 73 
 
 which they themselves are robbed, by those who ultimately 
 receive that opportunity and do not return it. I think this is 
 clear enough to convince the opponent. 
 
 82. The Guaranteed Employment scheme unjust! On 
 the contrary it is the absence of guaranteed employment that 
 is unjust. Every civilized society is pledged to give employ¬ 
 ment to every individual who needs it. In a civilized Society 
 no person is allowed to commit suicide. Various reasons are 
 put forward in support of this law. These reasons might be 
 good or they might not be, but if they are good enough to 
 justify our interference with suicides, they are equally good 
 as pledges for guaranteed employment. 
 
 83. First among these for example is the argument that 
 this country is a Christian country and its laws are based on 
 the teachings of Christ. Suicide is an unchristian act and can¬ 
 not be allowed by the laws. The argument is of very doubtful 
 validity for this country is not a Christian country in the same 
 sense in which Spain was a Christian country in the past and 
 Turkey is a Mohammedan country to-day. It is not a Christian 
 country even in the sense in which England is a Christian, 
 country to-day. Secondly, prevention of suicide by compul- 
 sary legislation has as little to do with the teachings of Christ 
 as the semi-idolatrous celebrations of “Tabuts” have to do 
 with the teachings of Mohammed. But assuming for the sake 
 of argument the validity of the reasons given above, assuming 
 that this country in regarding itself a Christian country is 
 pledged to have its laws in conformity with the teachings of 
 Christ, it follows that it is pledged to make adequate provision 
 for the unemployed. For equal in importance to the duty of 
 obeying the ten commandments is the duty to provide for 
 those who have not. It is the most imperative of all Christian 
 duties. It shows itself like a water-mark through every paee 
 of the Gospels. It is the very essence of christianitv; outside 
 that there is no Christianity whatever. The Hon. Mr. Dives 
 may attend the church every Sunday with a spotless white 
 collar and the most attractive necktie, he may eat the choicest 
 turkey on Christmas day. But he is no Christian as long as 
 Lazarus is starving outside the gate.. The people of the 
 United States may repudiate Christianity if they do not care 
 for it, but they cannot claim to be Christians so long as there 
 
74 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 is one single person in the States, in want of food, or clothes, 
 or house. “All things whatsoever ye would that men should 
 do to you, do ye even so to them. For this is the law and the 
 prophets/' This and this alone is Christianity. Show me the 
 man willing to work, able to work, and yet who does not wish 
 other men should give him an opportunity to work to earn an 
 honest living! No man who claims to be Christian can be 
 consistently opposed to the payment of a tax, that will give 
 to others what he is equally anxious to receive from others. 
 The plea of Christianity carries with it a pledge for a system 
 of guaranteed employment; the two things are inseparable. 
 A man may not even believe in the existence of God or Jesus 
 and yet be a Christian in the true sense of the term, at least so 
 says the Bible. But no opponent of the guaranteed employ¬ 
 ment bureau, whose opposition is based on a pretext of its not 
 being an imperative duty, can be a Christian. I call upon every 
 preacher and interpreter of the scriptures; priest, parson or 
 rabbi, to support me if I am right, or to contradict me with 
 chapter and verse if I am wrong. I maintain that a nation, 
 that presumes to prevent a suicide by reason of its professed 
 Christianity, is thereby pledged to provide guaranteed em¬ 
 ployment, and I want to be contradicted if I am wrong. 
 
 84. Another plea for prevention of suicide is, that a man 
 has no right to destrov his own life. I will not question the 
 truth of this hypothesis. I have only to ask you a counter 
 question. Who gave you the right to interfere with me if I 
 choose to hang myself? No man has a right to ride a car 
 without paving the fare, but if a man rides a car without pay¬ 
 ing, and if the railway company or the car conductor who rep¬ 
 resents them for the time, does not choose to enforce their 
 rights will you interfere and put the man out? No man in this 
 country has a right to have two wives, but if somebody breaks 
 the law and the government of this country for some good 
 reasons connive at the act, would it be right for the Mikado 
 of Japan or the Sultan of Turkey to send their police to this 
 country to arrest the man, and punish him for bigamy? I 
 might or might not have the right to hang myself, but I want 
 to know how you got the right to interfere. If I try to murder 
 another man and you, or the police who work for you, try 
 to interfere; T can understand your conduct. You argue 
 
LECTURE II—THE RIGHTS OF THE UNEMPLOYED, 
 
 75 
 
 that you have accepted from him by way of 4 5 tax the wages for 
 protecting him from a murderous attack, and that in return 
 for these wages you are pledged to protect him and to pro¬ 
 vide in anticipation the best means of protecting him. You 
 profess to be the keeper of his life and you claim the right 
 to interfere. But are you the keeper of my life also? If not, 
 why do you interfere? If you are, you are pledged to make 
 adequate provision for the safety of what has been trusted to 
 your keeping. You have no right to prevent suicide without 
 a provision for those whom you compel to live. In compelling 
 a man to live you are pledged to provide a guaranteed employ¬ 
 ment, 
 
 85. Compulsion to live without a guaranteed provision 
 is absurd. Imagine a man tossed into a car in which all the 
 seats are occupied or reserved. Many seats are apparently 
 vacant but every one of them is reserved. There is no place 
 for him. He asks the men to do something for him but nobody 
 can do anything. The man's coming there was a mistake, 
 but none of the passengers had brought him there, it is not 
 their fault, and they are not responsible for providing him 
 with a seat. He is not wanted and he can't get a seat unless 
 somebody wants him. This is the only thing they have to say. 
 One of the passengers seems to be leader and spokesman, 
 evidently he is their best sample of clear head and undefiled 
 heart. Our seatless passenger turns to him for a solution 
 of the difficulty. “I am willing," he says, “to pay for my seat 
 but there is none available and you know that I cannot re¬ 
 main like this, without a seat very long; what am I to do?" 
 5 “God knows," says the spokesman, the leader of the passeng¬ 
 ers ; “I don't." Seeing that there is no further hope the mart 
 thinks of leaving the car by jumping out of the window, for 
 lie discovers that he cannot retrace his steps and go back the 
 
 4. This is not my conception of tax; at this stage I am only fol¬ 
 lowing the popular conception. The theory and principles of taxa¬ 
 tion as I understand will be discussed in a separate lecture; in the 
 meantime I am content to follow the popular conception when I can, 
 modifying it a little where I must. 
 
 5. In a meeting in the Cooper Union ex-President Taft, then a 
 candidate for the Presidency, was asked, “What a man was to do, who 
 being out of work, and able to work, could find no work/' “God 
 knows,” said Mr. Taft, “I don’t." 
 
f6 
 
 THE UNEMPLOYMENT PROBLEM* 
 
 Way he came in. “Gentlemen,” he says, “I am sorry for having 
 troubled you, but I did not come here of my own account—in 
 fact I have no idea as to how I came here at all. It was some- j 
 body’s mistake, but since you say it was not your mistake, I 
 will not compel you to give me a seat, and now by your leave 
 I will 6 jump out of the window and leave you free to enjoy 
 your seats.” “No!” the passengers cry aloud with one voice, 
 “we will not let you go.” “There is no place for you here, so 
 you cannot stay; that is evident, but we are good people and 
 we will not let you go, and yet, for want of a seat it seems 
 that you will have to go after all!” This is what we are doing 
 to our unemployed to-day. We will not let them stay—they 
 are not wanted—and we will not let them go; we are too good 
 to allow it. How are we to get out of this muddle? “God 
 knows, I don’t.” 
 
 86. In fact civilization is itself a pledge for guaranteed 
 employment Without such a guarantee there can be no 
 civilization, just as without a guarantee for enforcement of 
 laws there can be no government. Civilization is the forma¬ 
 tion of a civil society, that is, a society the members of 
 which are possessors of civil rights and are under obligation 
 
 6. The following extract from a newspaper is a sample of the 
 hundred that challenge the. reader ot newspapers: 
 
 JOB GONE, GIRL LEAPS TO DEATH, 
 jumps From Third Story of Troy Rooming House After Standing 
 Heedless of Cries From Street. 
 
 ‘‘Heedless of cries from street, Helen Leroux, of Fitch¬ 
 burg, Mass., about seventeen years of age, leaped from the third 
 story of the rooming house at 55 Fourth Street, Troy, early la>st night 
 and is in Samaritan hospital, with no chance of recovery. The girl 
 had been in the city about four months and had been employed by the 
 Watervliet Chemical Company, Federal Street and Bridge Avenue. 
 Monday afternoon she was taken suddenly ill while at work and was 
 sent to the Samaritan hospital but was discharged that night. It was 
 said that when she reported for work yesterday she was dismissed. 
 She then went to her room and remained there all day. A little after 
 6:00 o’clock last night pedestrians in Fourth Street saw the girl climb 
 out upon the coping on the third floor of the rooming house con¬ 
 ducted by Mrs. Katherine Bowden. She stood there fully three 
 minutes, not heeding the cries of the people below her. A man, who 
 lives in the first floor, dashed to the girl’s room and was reaching out 
 of a window to seize her when she jumped. She landed head first on 
 the stone flagging. Her skull is fractured and she is injured internally. 
 
lecture: ii—the rights of the UNEMPLOYED. 
 
 77 
 
 to perform civil duties. The terms civil rights and civil duties 
 like all other fundamental conceptions are difficult to define, 
 but a few illustrations might serve to clarify the point I am 
 endeavoring to make. I walk along the street. I have a 
 right there and nobody has a right to prevent it. This is a 
 civil right; at some place I lose my way and I want to ask 
 somebody to show me the way. I have a right to get help 
 from society and the society through the agency of a police¬ 
 man gives me the needful help. I receive this help, not as a 
 charity, but as a right. Where and how did I get this right? 
 I did not purchase this right just as I purchased the right to 
 occupy my bed by paying for it. This is a civil right which 
 I obtained by virtue of being a member of this society. The 
 day I touched the American soil I got the right and I will re¬ 
 main in possession of the right as long as I stay here. It 
 might be said that I have purchased the right by the payment 
 of my share of taxes, but that would be wrong, for the tax is 
 not the price of rights; and the exchange of the tax and the 
 rights is not a purchase. Suppose I refuse to pay the tax; I 
 will be punished; there is not the least doubt about it; but 
 shall I lose any of my rights as a citizen? With the exception 
 o^ such rights as are incompatible with the punishment, I will 
 lose no rights whatever; for example if I am sent to jail I lose 
 for the time the right to use the street but not the right to be 
 protected by the police if somebody attacks me. If a tax were 
 the price of my rights, and I refused to pay, anybody could 
 murder me with impunity. But even a murderer who is to be 
 executed to-morrow cannot be murdered with impunity to¬ 
 day. He has a right to be protected and so has the man who 
 does not pay his tax. 
 
 87. But the fact that tax is not the price of civil rights 
 w ill be clearer by another argument. Taxes and civil rights 
 bear no relation of quantity like a commodity and its price. 
 Civil rights are equal: taxes are unequqal. If tax were a price 
 I should be free to judge for myself whether the rights pur¬ 
 chased at the price is a good bargain or not. I have no such 
 right to judge for myself. I cannot refuse to to pay the tax 
 on the grounds that I do not need the rights or that they are 
 not worth the price. I get the rights whether I want them 
 or not,, and I have to pay the tax—wrongly called the price— 
 
78 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 whether I think the rights as worth the price or not. The 
 taxes are not the price of the rights. I get the rights because 
 I am a citizen; I owe a duty of paying my taxes because I am 
 a citizen; both the rights and the duties unconnected with one 
 another are civil rights and duties respectively, and arise 
 separately out of my being a citizen. 
 
 88. There are four conceivable ways of earning wealth 
 from others. First by begging. This method is too well 
 known to require explanation. Second by robbing—includ¬ 
 ing stealing, swindling, frauds, blackmail, etc. This method 
 consists of taking advantage of a disability of other men who 
 cannot prevent their money being taken away from them 
 in this way. (Of these methods, blackmail is particularly 
 important for the purposes of our theory. In theory, the 
 blackmailer does not create a disability; he only keeps on the 
 lookout for it and takes advantage of the chance when it 
 comes, without direct violation of the law.) Third, by process 
 of exchange by private contract including wages. This is the 
 prevailing way of earning wealth. It is the legitimate, and 
 economically, most conducive to the welfare and prosperity 
 of the world. And fourth, by civil right. This method is of 
 theoretical interest only. It is not current anywhere except in 
 a very limited scale, such as the old age pensions. This is 
 the method recommended by Bellamy in his “Equality.” It is 
 the method advocated by some, but not by all schools of So¬ 
 cialism, and by all 7 anarchist-communists. Of these four 
 methods, the first three only are found in practice. The first 
 two are regarded as objectionable and attempts are made to 
 stop them by law. It is, however, nearly impossible to prevent 
 begging and blackmail. The first, i. e., begging, is not diligent- 
 1) prosecuted because permitting it is erring on the side of vir¬ 
 tue, and the second because it is impossible to frame a law 
 that will punish blackmail without introducing a greater evil 
 
 7. The Anarchists are generally divided into two schools, the 
 Communinists and the Individualists. The Individualists stand for 
 the individual's right to the full produce of hi-s labors. The ideal of 
 the Anarchist communist is practcally the same as scientific Social¬ 
 ism except that they repudiate government entirely, whereas the 
 scientific Socialist recognizes it as a means to an end, until its func¬ 
 tion is fullfilled, after which he thinks it will naturally cease to exist 
 
lecture II—the rights of the UNEMPLOYED. 
 
 79 
 
 and probably without indirectly encouraging it more than it 
 could prevent it. The third method is unquestionably the 
 best but it depends upon a man getting employment, and we 
 must see how a man can get it. 
 
 89. There are similarly four conceivable methods of get¬ 
 ting employment from others: (1) Begging, (2) robbing, in¬ 
 cluding blackmail, (3) by private contract, and (4) as a civil 
 right. Of these four, employment by civil right is practically 
 unknown. It is just the same thing as my “Guaranteed Em¬ 
 ployment.Employment by private contract has a suspicious 
 resemblance to slavery and the government of the United 
 States is supposed to take a every possible care to prevent any 
 such contract if it seems to be in the nature of slavery. Gen¬ 
 erally all contracts for employment are one sided, for the em¬ 
 ployee has nothing to offer to his employer in exchange for the 
 privilege of being employed. And as the employer is under no 
 obligation to employ, he can dictate what terms he chooses 
 and in most cases the employment degenerates into slavery. 
 In the absence of civil right and right by private contract, there 
 remain but two other possible ways of obtaining employment, 
 viz., begging and blackmail, and these are mostly in use. Both 
 methods are lawful; the laws might prevent a man begging for 
 a loaf or for a penny, but they have to allow begging for em¬ 
 ployment. Every application for employment begins with, 
 “I beg to apply for . . . . ” and ends with “I beg to be, sir, your 
 most obedient servant.” The status of an applicant for work 
 is the status of a beggar. The applicant knows it and is pre¬ 
 pared for the sort of reception he often meets. The employer 
 knows it, though in some cases he is polite enough to avoid 
 appearances. 
 
 90. Employment by blackmail is at present the most 
 popular method. It is perfectly lawful , for by its very nature 
 laws are, and always will be powerless to prevent it. A com¬ 
 petent surgeon needs employment, but he cannot get it until 
 somebody has broken a bone; a lawyer wants employment 
 but he cannot get it unless people quarrel with one another. 
 The builders are out of work, they beg for work and cannot 
 get it. A fire destroys a whole city and the builders have now 
 their chance. A cabman at the door looks at me with greedy 
 eyes every morning for me to employ him, but he does not get 
 
80 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 work from me unless on some morning I have overslept and 
 have to hurry up to my work, or unless the morning is frosty 
 and the cold unbearable. A girl wants work as a house-maid 
 but cannot get it until some house-wife becomes incapacitated 
 and is unable to work for herself. In all cases men have to 
 wait for somebody to get in trouble and then take advantage 
 of his trouble to get employment. This is blackmail in every 
 possible sense of the term. 
 
 91. To sum up: The individual members of society have 
 to depend on begging or blackmail for employment; it cannot 
 be obtained as a matter of right, and any attempt to obtain it 
 by private contract has an almost unavoidable tendency to de¬ 
 generate into slavery. Begging for employment is a method 
 always open to all but it is the least successful of all the 
 methods and as a matter of fact all employment reduces itself 
 to blackmail,—either the employer blackmailing the employee, 
 or the employee blackmailing the employer. It all depend^ 
 upon which of the two parties is most needy. And as in most 
 cases the employee is the more need-pressed of the two, he is 
 the victim, and the whole industrial system degenerates into 
 slavery. And now to return to the point: can a society be 
 regarded as civilized, the members of which have no civil 
 right or in fact any right to obtain something that that 
 same civilization has made obligatory to all, and where the 
 members are compelled in the absence of such right, to beg 
 oi to invent and carry out an extensive system of blackmail? 
 In a civilized society every member has as much moral right 
 to receive employment when he needs it, as he has to receive 
 protection against felons when he needs it, and this right 
 must be recognized. The laws cannot, and need not try to 
 prevent blackmail-employment, as it would be beyond their 
 power to do it, but they ought not to make a virtue of it and 
 compel everybody to resort to that method. In an uncivilized 
 society giving and receiving employment is of no conseciuence: 
 men can employ themselves in hunting and fishing; if they 
 employ one another it is a matter of mutual accommodation 
 and of less importance; anyway it is not obligatory. In a 
 civilized society, giving and receiving employment is of prim¬ 
 ary importance, the rich and the poor alike have to depend for 
 all they earn on their being employed. We are civilized in so 
 
LECTURE II—THE RIGHTS OF THE UNEMPLOYED, 
 
 81 
 
 far as to allow no begging or robbing for money; we are civ¬ 
 ilized enough to compel men to earn money rightfully by 
 working. But we are uncivilized in so far, that we make no 
 provision for supplying the needful employment. We com¬ 
 pel men to be employed but we do not compel ourselves to 
 employ them. We compel men to seek employment by beg¬ 
 ging, blackmail, or voluntary slavery, and for this great 
 achievement we call ourselves civilized. Civilization implies 
 a civil right of every citizen to an equqivalent of the civil duty 
 imposed on him. In a civilized state of society, giving employ¬ 
 ment of some kind to others is a civil duty, and the society 
 must respect the corresponding right by having an adequate 
 provision for guaranteed employment.. A refusal to recognize 
 this right would be slavery. • 
 
 92. The duty of the state to provide employment for 
 the unemployed is not a new idea. It has been suggested and 
 discussed by several schools of 'reform; it is one of the planks, 
 though not an important one, of the Socialist platform; but it 
 has never received the support it deserves for the simple rea¬ 
 son that in the past it was founded on consideration of senti¬ 
 ment instead of on cool and impartial logic. People have al¬ 
 ways felt that there was something wrong somewhere and that 
 the people through the government ought to do something to 
 put it right. Having first arrived at the conclusion; the need 
 of having something of sufficient shape in the form of an 
 argument to support the conclusion made itself felt at an early 
 p>eriod. The -Tight to work” was derived as a corollary to 
 the “right to live.” But the argument could not create convic¬ 
 tion as it is weak at every point. The right to live is a purely 
 negative right: it means that no person ought to shorten 
 another man's life. It does not create an obligation to pro¬ 
 vide with means of preserving life for another man if he needs 
 them. In this respect it resembles all other negative rights. 
 I have a right to walk along the streets and nobody has a 
 right to prevent me. But if I cannot walk T have no right to 
 demand crutches in order that I might walk. I must try to 
 find crutches for myself or give up the idea of walking on the 
 streets. The right to live belongs to the same class. No 
 person has the right to push me from the Harvard bridge into 
 th.e Charles River below, but if I lose my balance and fall into 
 
82 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 the river, I have no right to demand the services of a swimmer 
 to jump in after me and pull me out. The right to work be¬ 
 longs to the same class. I have a right to manufacture cigars 
 for my livelihood; nobody can rightfully prevent it. But I 
 have no right to compel people to smoke in order that I may 
 get work. All these rights are negative rights and Socialists 
 using one of them to do the work of a positive right have 
 spoiled a good case by a bad argument. The mass of people 
 tc whom the appeal was made could instinctively feel the 
 workmen's right to get work. But in absence of strong argu¬ 
 ments capable of bearing the conclusion they came to regard 
 these claims as appeals to charity. And the duty of the state 
 to provide for the unemployed as a matter of charity alone,— 
 a good thing to be done, if it can be done. But there seems 
 to be no possibility of the state being able to do it without a 
 great expenditure and there the question generally ends. 
 
 93. And the people are right; if the right to work has no 
 stronger foundation than the right to live, or than the right 
 of a cripple to the use of crutches, the government is under no 
 obligation to provide work. Every man or woman has a 
 right to marry, but it does not follow that the government 
 should procure husbands and wives if the parties cannot find 
 partners to marry them. The people of this country are not 
 close fisted misers. They have a sense of duty and a zeal 
 in the performance of it. They have spent millions for war, 
 th&n escape by paying one cent for tribute. When the peo¬ 
 ple are awakened to their duty they do it. From the nameless 
 widow who drops her cent in the Salvation Army charity box 
 to the nameless millionaire who drops two and a half million 
 dollars in the Technology charity box there is a strong sense 
 of duty that never been rivalled in the history of the European 
 races. All that is necessary is to show to the American citi¬ 
 zen that he owes to the unemployed the duty of providing a 
 guaranteed employment, to emancipate the slave citizen from 
 the bonds of unemployment, and there is no doubt that he will 
 do the duty at any cost, even at the cost of a second civil war, 
 if the sacrifice is required of him once more. I have done 
 my duty in thi's respect; I have shown that the right to work is 
 unlike the negative right to use crutches; it is a positive right 
 like the workmen's right to his wages, like the creditor’s -righ 
 
LECTURE II—THE RIGHTS OF THE UNEMPLOYED. 
 
 83 
 
 to the repayment of debt, like the grocer’s right to the price of 
 the goods supplied; like a man’s right to get police protection 
 in the street, and judicial protection in the courts. I have pre¬ 
 sented the bill on behalf of the unemployed and I am sure the 
 American citizen will not dishonor it. The unemployed ask 
 for no charity; they ask for what is their due. They have given 
 you employment and they only ask back what you have taken 
 from them, and nothing more. One word more before I 
 conclude. I present this bill not to the idle rich who has done 
 nothing to earn his wealth; who received it from his father 
 and whose only achievement now is to waste it away in dis¬ 
 sipation ; nor to the stock-exchange, gambler or swindler, nor 
 to the child of fortune who awoke one morning with dollars 
 raining through his roof. This bill is presented to the honest 
 wage-earner who has received employment from others in 
 some form and who must therefore pay back the debt. The 
 rich always claim—and often rightly—that they too are wage- 
 earners and that their large incomes are only their wages 
 of ability; of comparatively greater services they do in the 
 work of initiative ability, supervision, and control. If they 
 th : nk so thev may stand along with the wage-earner and pay 
 their share of the bill; but any rich man who claims to be an 
 idle rich, who has done no service for society, and has there¬ 
 fore received no employment is under no obligation to pay! 
 Let the rich choose for himself whether he prefers to be ranked 
 a drone and 8 escape payment, or to be ranked with the honest 
 toilers—brain and muscle workers—and pay his share of the 
 tax for employing the unemployed. We of the great army of 
 toilers have nothing to lose. 
 
 94. Incidentally I may take up at this point the ques¬ 
 tion, why I have exempted the capitalist from taxation for 
 
 8. This might appear to contradict the provisions of paragraph 
 59 If any capitalist stood up to claim exemption on the -strength of 
 the argument, presented above, the tentative programme will have to 
 be revised in response to their logical claim. But I have a moral cer¬ 
 tainty, that no capitalist will claim exemption on the ground that his 
 income i*s unearned and represents no service. Not only would he 
 refuse to make such a claim, but on the contrary he would strongly 
 resent any such imputation, though in some cases at least such imputa¬ 
 tion is no doubt very richly deserved 
 
84: 
 
 THE UNEMPLOYMENT PROBLEM.' 
 
 the purpose of relieving the unemployed. A complete dis¬ 
 cussion of this question would be out of order at this stage, for 
 we are discussing just now the rights of the unemployed only. 
 In the first place, I do not propose to exempt the whole of the 
 capitalistic profit from taxation, but only the reinvested 
 profit. Reinvesting profit is by itself a process of relieving 
 the unemployed, consequently in the act of reinvesting, the 
 capitalist has fulfilled his obligation, to the unemployed, at 
 least to the extent of the reinvested earnings. As to the other 
 part, the part used in saving or spent in a haphazard way ac¬ 
 cording to his own needs, convenience or fancy, his responsi¬ 
 bility is equal to that of any other employed worker, and that 
 part is therefore not exempt. In other words, I consider the 
 capitalist to be a capitalist, only to the extent of his rein¬ 
 vested capital. As to what he saves in cash or spends for his 
 consumption his moral obligation is on a level wdth that of an 
 employed worker, rendering service and earning his wages 
 in the form of profits in return for that service. To the extent 
 of his uninvested earnings, he is a worker like any other work¬ 
 er, and is therefore responsible for unemployment. In his 
 capacity as a worker, he must share the burden of tax for the 
 relief of the unemployed. 
 
 95. To conclude. The unemployment of the unem¬ 
 ployed is the sin of employed wage earner. He is a robber for 
 he has received employment without giving equivalent re¬ 
 turn. The only way to atone for the sin is by giving employ¬ 
 ment to the unemployed. The Guaranteed Employment 
 scheme is not unjust. On the contrary it is the most just of 
 claims, that any social reformer has ever made on behalf of 
 the oppressed. Society has received and is receiving employ¬ 
 ment from the unemplgyed, both jointly and severally, with 
 compulsion and without, and ought to give adequate return for 
 what they received. Society, by adopting certain principles 
 as the basis of their constitution and by accepting other prin¬ 
 ciples as the foundation of social integrity, has created unem¬ 
 ployment and must therefore compensate the victims of their 
 policy. Society in adopting certain standards of civilization 
 has given an implied pledge for guaranteed employment and 
 society must either stand by the pledge or abandon civiliza¬ 
 tion. A refusal to give guaranteed employment would be a 
 
vECTURE II—THE RIGHTS OP THE UNEMPLOYED. 
 
 85 
 
 lisgraceful breach of pledge. A provision for guaranteed 
 employment is an urgent duty and an’inviolable obligation of 
 ivery civilized society, and therefore of the state or govern- 
 nent which represents the society, and has for the time under- 
 ;aken the task of enforcing the rights and discharging the 
 luties of society. Unemployment is a leprosy-spot on civiliza- 
 ;ion and it is the result of the great sin of the wage-earner. 
 To cleanse society of this dire disease is the first duty and the 
 nost sacred duty of the state and must be done at any cosj). 
 
 UNEMPLOYMENT MUST BE DESTROYED. 
 
f 
 
 ' 
 
 Wage Slavery: Cause and Cure 
 
 LECTURE III. 
 
 1. “Give and it shall be given unto you; good measure pressed 
 down, and shaken together and running over, shall men give into' 
 your bosom. For with the same measure that ye meet withal, it shall 
 be measured to you again.”—Luke: VI-38. 
 
 2. “Be not deceived: God is not mocked: for whatsoever a man.' 
 soweth, that shall he also reap.”-—Epistle to Galatians: VI-7. 
 
 96. The next Objection against the Guaranteed Employ¬ 
 ment scheme is, that it is impractical. It is an important ob¬ 
 jection, for if the scheme is impossible, no amount of argument: 
 in support of its moral claims, can make it possible. An im¬ 
 possible duty is no duty, says the Sankhya philosophy. As the 
 workers are under no obligation to perform miracles, they can¬ 
 not be persuaded to adopt an impossible scheme of reform. 
 We must therefore try to see if the scheme is really imprac¬ 
 tical, and if so to what extent it is impractical. The foremost! 
 of all objections under this head is, that there is not work, 
 enough for all. This objection is presented in several formsj 
 and the reply, though it is the same reply in all cases, has also 
 to be presented in several forms so as to suit the objections or 
 rather the several forms of the objection. 
 
 97. What work are you going to give the employees em¬ 
 ployed under the guaranteed employment scheme? The army 
 
 1. For the sake of convenience I have used the word wage-slav¬ 
 ery thus far in the popular sense. In the next lecture I will explain 
 my own views on this point. 
 
 2. In this lecture I will limit myself to such practical objections 
 as concerns the wage worker directly. Other practical objections will 
 be considered later. The subject will be discussed from what i-s 
 known in labor literature as the “prolatariat” point of view. This must 
 necessarily involve some contradictions, for I could not pledge myself 
 to maintain consistently a position which I accept provisionally for 
 a limited use. For example, throughout this lecture I have proceeded 
 on the assumption that every worker, including the wage worker, is 
 entitled to the full produce of his labor, and that the condition of the 
 wage-worker is one of slavery, though I do not hold either of these 
 views. The incorrectness of both these views will be demonstrated in’ 
 the next lecture. (See Lecture IV, Capitalism: The Wage System.) 
 
LECTURE III—WAGE SLAVERY: CAUSE AND CURE. 
 
 8 : 
 
 and navy are fully manned; the government has all the 
 police they want, the postal department is full; there is no 
 more work to absorb more men in any department. Where can 
 the government use them? I cannot answer that question at 
 this stage, and I don't think I am bound to answer it even if I 
 could. If there had been sufficient work for all, the existing 
 non-guaranteed bureaus would have been amply sufficient for 
 the needs of the society. There would have been no unem¬ 
 ployment problem and no need of a scheme. But we know 
 that for some reason under the present system of work-dis¬ 
 tribution there is not work enough for all the unemployed; 
 that something has to be done to meet the situation. Some 
 men are compelled to remain without work. These men, 
 willing to work and unable to get it, are a dangerous element 
 in every way. Some of them will degenerate into habitual 
 and professional loafers, others more dangerous will be crim- 
 inals-violators of law, but some and probably a very large sec¬ 
 tion of them, who are by far the most dangerous, will be law- 
 evaders, human sharks of all kinds, criminals and yet not crim¬ 
 inals technically in the eyes of law, inventors of all kinds of 
 fakes and swindles. In every case somebody has to bear, will¬ 
 ingly or unwillingly, consciously or unconsciously, the burden 
 of supporting them. 
 
 98. The question for us today is, whether the burden 
 of the unemployed should be borne by the individuals on whom 
 chance may throw the burden, or whether the whole society 
 ought to be made to share it. I believe that if somebody has 
 to bear the burden at all, it would be best for the individual 
 as well as for the society that all should bear it alike. I do 
 not refer here to the moral obligation of the society to share 
 the burden as I have fully discussed that part of the question 
 already, I am now dealing with the subject from a strict 
 utilitarian point of view. Even after leaving aside every con¬ 
 sideration of duty, and weighing the profits and looses of this 
 policy, it is easy to see that in the long run it would be profit¬ 
 able to have the burden shared by all. If Japan invaded this 
 country, the west coast would have to bear the brunt of the 
 fight, but when the bill comes round the whole nation has to 
 pay, not only the men of Los Angeles, San Francisco, and 
 Seattle. Apart from consideration of justice, prudence would 
 
88 
 
 THE UNEMPLOYMENT PROBLEM, 
 
 dictate the same policy. If the west coast alone had to bear 
 the whole cost, what guarantee is there that the west coast 
 would not raise the white flag as soon as the first Japanese 
 dreadnaught comes in view ? I do not doubt the courage or the 
 patriotism of the Western people, but when we are discuss¬ 
 ing a question on strict profit and loss basis, we have no right 
 to assume that the western people might not take a similar' 
 view. As a matter of policy alone apart from all other con- ] 
 siderations it is highly desirable that the burden of the un- 
 employed should be borne alike bv all. 
 
 99. Nor is it possible to shirk this duty effectively for a. | 
 long time. You may not pay your share today, but tomorrow 
 or the day after you will have to pay when the bill comes j 
 round. In fact you are paying it right now. A skillful swind¬ 
 ler goes to the stores and robs them of a hundred dollars. • 
 You think the store proprietor has borne the burden; it is his ! 
 loss and you think it does not concern you. But it does con- i 
 cern you for you have to pay the compensation some days 
 later; in fact you begin to pay it even before the stores are- 
 robbed. Among the several items that go to make the cost 
 of any thing you purchase, is the risk of the trade. Every 
 trader knows that there are always various risks in trade, in 
 spite of all possible care some of these will visit him. He 
 therefore adjusts his prices so as to cover these risks. If na 
 risks come round, he gets so much more profit. If he loses 
 more than what he had looked for, he is a loser. One trader 
 may lose more heavily then another but on an average the 
 extra cost to cover the risk is always greater than the actual 
 losses, and therefore society not only pays the swindler's bill, 
 but something more because they pay it through a middle 
 man. So that, if you have to pay for the unemployed at all 
 
 it is best for you and the whole society to do it in a methodi- - 
 cal and business-like way. They will have to pay less,—in 
 the long run much less—than they pay now. They will also 
 have a greater control and a more direct interest in exercising' 
 that control. 
 
 100. The question “What work, etc., does not concern 
 me. It is you who have to answer it. It is you who have to 
 bear the burden, either directly if you adopt this scheme, or 
 indirectly if you allow things to go on as heretofore. It is 
 
LECTURE III—WAGE SLAVERY: CAUSE AND CURE* 
 
 89 
 
 therefore your duty to find out means to make your burden 
 lighter. In my capacity as a member of society, bearing my 
 share of burden with you, I will also take my share of the duty 
 of suggesting a profitable work, but in my present capacity 
 as propounder of the guaranteed employment scheme, I 
 •ignore all responsibility of suggesting the work. My duty at 
 this stage is to show that the burden of keeping up the guar¬ 
 anteed employment bureau is light and easily bearable, ever! 
 without any work, that is, even if you have to pay the wages 
 at a dead loss, and will be still lighter when a part of the force 
 employed is provided with useful work. The number of un¬ 
 employed in the United States is estimated as being two mil¬ 
 lions, so that a tax of five cents to the dollar will cover the 
 cost of keeping them and their families even without any work. 
 This of course is a very exaggerated estimate. Five cents to 
 the dollar gives the unemployed higher wages than what many 
 of the wage earners receive at present. Secondly, under good 
 management the government might be able to find work for at 
 least half the force, thereby earning a part of the cost. The 
 actual tax, society will have to pay under working condi¬ 
 tions, will probably not exceed two cents to the dollar. 
 
 101. But even thus the comparison is not quite fair. The 
 unemployed is a burden on society today. He begs, he steals, 
 he becomes a faker, a shark, a sycophant, anything he can 
 obtain a living by, and society has to bear the burden. I only 
 ask society to do the same thing methodically, in a business¬ 
 like way, by the whole society on an organized plan, instead 
 ot by some persons who chance to be compelled reluctantly 
 to bear the whole load. But apart from the cost of living the 
 unemployed costs the wage earner far more in an indirect way 
 than it would to keep him on a pension. Among the unem¬ 
 ployed there are always some men, if not all in fact the major¬ 
 ity of them, who are willing to work, anxious to get work at 
 any cost, and unable to get a chance in any other way, they 
 offer to sell their labor for any price, however low, and on any 
 terms, however degrading. They escape being loafers by 
 choosing to be slaves instead, and being voluntary slaves, no 
 anti-slavery law, however stringent, can save them from the 
 self-inflicted slavery. In fact their status as wage slaves is in¬ 
 comparably better than being unemployed. But in enslav- 
 
90 
 
 THE UNEMPLOYMENT PROBLEM, 
 
 itig themselves they bring the whole of the wage earner class, 
 to the condition of slaves. This is the price you have to pay, 
 Mr. Wage Earner, for enjoying the privilege of letting the un¬ 
 employed take care of themselves. Can you afford to pay 
 this price any longer? 
 
 102. No wage earner can expect to get the Tull value of 
 his labor so long as another willing worker is greedily waiting 
 and watching for an opportunity to displace him on half-wage. 
 \ou enact your labor laws and after waiting for a time you 
 are surprised to see each one of them a dead letter, and that 
 the condition of labor is just what it was or if anything a little 
 Worse than before. What else should you expect? The op¬ 
 pressed wage earner in whose interest the laws are supposed 
 to have been made, seems to have every possible motive to 
 defeat the laws and to help his oppressor. Why does he be¬ 
 have like this? Why does he voluntarily throw away the help 
 offered him by law? Simply because the laws cannot help 
 him. They cannot give him an employment when he has not, 
 or help him to 3 4 keep it when he has. The employer has ab¬ 
 solute power over the wage earner in this respect, and having 
 power in this respect he has oractically an unlimited power in 
 every other respect. The laws may ignore the power but they • 
 cannot deny it. In this way a few men out of work can reduce 
 and do reduce the whole working community to a condition of 
 absolute slavery, and no law can prevent it. 
 
 103. Now, American wage earner, I appeal to your com¬ 
 mon sense. Is it so very hard for you to pay two or perhaps 
 five cents out of every dollar to place your worst enemy out of 
 
 3. See paragraph 96, foot note 2. For complete discussion of the ! 
 doctrine of “full value/’ see Lecture IV. 
 
 4. The following extract from “Boston American” (approximate ; 
 date, October, 1911), illustrates the futility of labor laws: 
 
 “Our factory inspectors are investigating these charges,” 
 said Chief Whitney of the State Police. “Any employer 
 whom we find violating the labor laws of the commonwealth 
 
 will be prosecuted.. The department is doing its best 
 
 to punish the violators, but .... the women and children 
 who are suffering as the result of these violations do not 
 
 complain to this office .They are even afraid to give 
 
 us any assistance in our investigations.” 
 
 May I ask here what help the commonwealth gives to the women and 
 children who lose their jobs. 
 
LECTURE III—WAGE SEAVERY: CAUSE AND CURE. 
 
 SI 
 
 your way? Do you think that this price for buying him over 
 to neutrality too high for you to pay? If I were you, I would 
 gladly pay even half of my income to buy over so dangerous 
 a foe. He should have no business standing there outside 
 your factory gate, an unconscious but irresistable weapon in 
 the hands of your employer, for use against you. Cost what 
 it may, you have to get him out of your way. All he wants is 
 employment, and work or no work you must give it to him. 
 If you have no work to give him to earn his wages from, you 
 must pay it from your pocket as a dead loss, and even at five 
 cents to the dollar you will find it an extremely profitable bar¬ 
 gain ; and the sooner you do it, the better will it be for your own 
 sake. For the time is fast approaching when ten cents will 
 not suffice and by that time you will not have even one cent 
 to spare. The time for starting the Guaranteed Employment 
 Bureau is now and you have not a day to lose. In fact it is 
 already late; ten years ago one cent to the dollar would have 
 been enough. 
 
 104. “What work can you give to your employees? 
 Will you set them to dig holes and fill them up?” I am ex¬ 
 tremely thankful for the suggestion; of course you meant it for 
 a sarcasm, but I intend to take it seriously. As I said in an¬ 
 swering the previous objection it is no part of my duty to sug¬ 
 gest a scheme of work, and I ought not be compelled to do it. 
 But nobody seems to be inclined to respect my rights in this 
 respect. I have been repeatedly and persistently challenged 
 to suggest some profitable work without which my scheme is 
 in danger of not beinp* regarded seriously. The suggestion, 
 made by the questioner has saved me from the danger. It is 
 one of the cleverest schemes that human ingenuity has in¬ 
 vented. First the work is unlimited and can absorb any 
 amount of labor without producing any useful results; for 
 the one great dread of our industrial svstem is the dread of 
 over-production! Digging holes and filling them up will pro¬ 
 duce nothing, and there is no fear of competitive rivalry! 
 
 105. Secondly it will serve as a crucial test to discrim¬ 
 inate between a real worker and an idler, who professes to be 
 a willing- worker out of work. A real worker will tuck up his 
 sleeves, take up his spade, and start digging right away; 
 whether the work is productive or no is not his concern. The 
 
92 THE UNEMPLOYMENT PROBLEM, 
 
 idler will invent an excuse and sneak away. While discuss¬ 
 ing the unemployment problem I have always found my way 
 blocked by the loafer problem, Amono- the unemployed, there 
 always are and always will be. some loafers who do not want 
 to work. “What are you going to do with these human 
 drones/' is the problem. I will set them to dig holes and fill 
 them up. It is a complete solution of the loafer problem. 
 With any other kind of work the loafer has a chance of shirk¬ 
 ing. Any work intended for profit would necessarily suffer in 
 the hands of a loafer, and he would always hope that the em¬ 
 ployer would in his own interest give the work to Somebody 
 else, and leave him free. With digging holes the loafer has no 
 chance whatever; he can’t spoil anything except his Own 
 chance of getting lighter and more respectable work later on. 
 He must make u^ his mind to improve himself and fall in line 
 with the workers or fall out of the System and starve. 
 
 106. Thirdly the dig-hole scheme will have a healthy ef¬ 
 fect on the workman in keeping his muscles in good working 
 condition. At present a workman out of work gets scantv 
 food ; worry and want of work degenerates his nerves and 
 muscles so that when he gets work after some days, his work¬ 
 ing power is considerably impaired. Digging holes will keep 
 his muscles well exercised, his mind free from anxiety and 
 his appetite in healthy state. Digging holes and filling them 
 up for the sake of health and practice, is not a new invention. 
 It is in use in the armies and navies of the world. During 
 periods of no-work the men are required to ring noiseless bells, 
 to ride wooden horses, to kill lifeless pigs, and to fight mock- 
 fights, all for the sake of keeping the workmen in good work¬ 
 ing Condition. If digging holes is good for the army, it is at 
 least as good, for men in other trades. 
 
 107. But by far the greatest merit of the “dig-hole 
 scheme" lies in its absurdly foolish and unprofitable character. 
 It will show, as nothing else will, how unworthy of office are 
 those who organize and control industry,—the “men of abil¬ 
 ity" as they Call themselves. These people claim higher wages 
 as reward for ability, and we are called upon to swear alleg¬ 
 iance to this Nebuchadnezzar idol for the blessing it is sup¬ 
 posed to bring to the world. If digging holes is all they can 
 invent to keep a willing and needy workman at work, it is 
 
LECTURE III—WAGE SLAVERY: CAUSE AND CURE. 
 
 93 
 
 time they change their trade^ and we will try to see if we 
 could not possibly invent something better. Digging holes! 
 That is what we are doing on an extensive scale today. Here 
 is a man out of work and unable to get a legitimate work, he 
 becomes a criminal and sets a whole army of police, lawyers, 
 judges, jurors, newspaper reporters to run after him. What 
 profitable results have you to show for this work? Is this or is 
 this not digging holes without being half so harmless. It is 
 digging holes in the moral ground of the nation and leaving 
 them unfilled. During my stay in Massachusetts I heard that 
 the Knowles Blake pump foundry has women workers in the 
 ccre-room. The Boston newspapers moved heaven and earth 
 to awaken the commonwealth of Massachusetts, and a bill for 
 non-employment of women in the foundries was expected to 
 come ud for discussion during the next 5 sessiom What be¬ 
 came of the bill I do not know and I never tried to find out. 
 Let us suppose for the sake of argument such a law to be en¬ 
 acted, what will be the result? The women workers will be 
 dug out of factories and men workers will be filled in, but in 
 every other respect things will be just what they are or per¬ 
 haps much worse. The men out of work today, beg or steal — 
 that is the worst they can do. But the women turned out of 
 work might do what the men cannot; they might turn the 
 white-way into a red light district. 
 
 108. Digging holes and filling them up! Foolish as the 
 scheme is, beyond doubt it is incomparably superior,—mor¬ 
 ally, physically, and even economically,—to what we are doing 
 today. Here is an army of men adulterating foods and drinks, 
 ir. order that they may be able to under-sell their rivals, and 
 
 5. The following news items from two Boston papers (October, 
 1911) will prove instructive: 
 
 T. “Women Coreworkens—Advisability of their employment dis¬ 
 cussed before the Committee on Labor.” 
 
 The advisability of permitting women to be employed in co r e- 
 rooms in this commonwealth was discussed at length before the 
 committee on labor the principle feature being the presence of a 
 score or more of the women and girls who are at present working 
 in rooms of this character, in various establishments in greater Boston. 
 a! 1 appearing in opposition to the biU.” 
 
 TT. “One of the members. Mary Mardini. fore-woman in the co»*e- 
 room of the Blake Pump Works, addressed the meeting and strenuously 
 opposed the prohibition of women core-makers.” 
 
94 
 
 the: UNEMPLOYMENT PROBLEM. 
 
 get e mp l o yment, and here is another army of men trying to 
 detect and punish the first army. Is not this digging holes 
 and filling them? And who pays for this work? You, Mr. Wage 
 Earner, you are paying for it, and what is worse, you have 
 absolutely no control over the work for which you pay, or a 
 voice to decide how much you should pay for it. Foolish as 
 the “dig-hole-and-fill-them” scheme is, vou Mr. Wage Earner 
 have the least right to take me to task for it. Later on, after 
 I have finished this series of lectures, I intend in another series 
 to make some practicable suggestions as to the work that may 
 be profitably offered to the employees of the Guaranteed Em¬ 
 ployment Bureau; but at this stage I studiously and delib- ' 
 erately refuse to do it. My scheme is, Guaranteed Employ¬ 
 ment-work or no work and I mean to stand by it. If you 
 can find out some work, it is to your own advantage to do so, : 
 but if you cannot, you should not expect me to help you. This i 
 is my argument: Here is a group of men willing and able to 
 work; these men represent an enormous amount of idle energy ; 
 as they are, they are a source of greatest danger to the com¬ 
 monwealth ; to employ them without having any profitable 
 work to be done will cost you something, but the cost is very 
 little and the removal of a serious danger is an enormous I 
 gain. If you can give them some profitable work, it will be a 
 further advantage, but even if you cannot, the advantage of 
 getting a dangerous element under your control is worth 
 being paid for, and even if you have to pay as high as five cents 
 to the dollar, it will still be a very profitable bargain. There¬ 
 fore I say that all the unemployed in the United States must 
 be employed right away without any further delay, and the 1 
 the cost of this employment must be borne by the wage earner, 
 in the form of a tax. If you can earn back a part or even the 
 whole of the cost by profitable work, there is no reason why 
 you should not do it. But this is a secondary consideration 
 and not an important part of the Guaranteed Employment 
 Scheme. 
 
 109. Here is another objection: the American wage earn¬ 
 er is a practical man of business. You can never persuade 
 him to part with his dollar unless you could first convince him 
 of his getting two dollars in return. Therefore, unless you 
 have some profitable work to show as part of your scheme, j 
 
LECTURE III—WAGE SLAVERY: CAUSE AND CURE. 
 
 95 
 
 you need not expect him to sympathize with your ideas and 
 support your scheme. A very strong objection indeed. The 
 American wage earner a practical man of business! This is 
 unexpected news. Do I understand that every American wage 
 earner gets two dollars as wages for every dollar’s worth of 
 work? I never knew it. As far as my information goes he gets 
 half a dollar as wages for every dollar’s worth of work and 
 very often not even as much. You are not the man of busi¬ 
 ness you profess to be, you Mr. American Wage-Slave. Slave? 
 No! No! No! I am sorry for using that word; permit me to 
 correct myself without further delay. In calling the wage 
 earner a "slave” I have thoughtlessly insulted the desecrated 
 image of God, the poor oppressed sample of humanity, the 
 slave, who when chance made it possible, gave to the world 
 a Joseph, a Kutubuddin, an Aesop, or a Toussaint L’overture. 
 The manacled body of a slave had a free soul within, but you, 
 Mr. Wage Slave are a slave body and soul, just free enough to 
 sell yourself and no more, and even this freedom you fling 
 away and offer yourself for sale and pray that you might be 
 purchased in preference to somebody else. You offer your 
 wives and children to be sold to your bread master, to be har¬ 
 nessed to the machines and for this great achievement, you 
 claim to be called a practical man of business! Well I take 
 you at your word. As long as the unemployed are standing 
 outside your factory gate, waiting for a chance to take your 
 place, you w : U remain a slave. If you value your freedom and 
 wish to be able to treat with your employer on terms of equal¬ 
 ity, instead of your present unconditional submission to what 
 he dictates, you must pay the proper price for it. If you are 
 the man of business you profess to be, you ought to have no 
 difficulty to see your own interest in providing for the unem¬ 
 ployed. I may also add that the small cost of your liberty will 
 soon be compensated by a raise in your wages, so that as a 
 matter of business you lose nothing at all and your gain of 
 freedom is an enormous gain. 
 
 110. The objection that there is not enough work is not 
 a fair, honest, and straight-forward objection. There is 
 another objection at the back of this objection which the 
 opponent does not want to show himself with ; he is there¬ 
 fore trying to hide himself behind this objection. Work is not 
 
96 
 
 THIS UNEMPLOYMENT PROBLEM, i 
 
 the real question. The real question is “who is to pay?” In 
 asking persistently to show what work could be given for the 
 unemployed the opponent hopes, that if you could show the 
 work he would immediately escape all further responsibility; - 
 for whoever profits by the work must pay the wages. There 
 the question ends. The opponent wants to dodge himself out 
 of his duty of providing for the unemployed. That is one rea- 1 
 son why I have so persistently refused to answer the ques¬ 
 tion, not that I am unable to answer it. If the people of the 
 United States accept my theory and adopt my scheme, they f 
 will have to begin it as a matter of duty, and of social policy j 
 for the welfare of the commonwealth, not for the economic I 
 equivalent of what they pay but for the other important re¬ 
 sults that are expected to follow, and more than that, to right ! 
 a wrong, to do social justice, to give to the unemployed what I 
 belongs to them. They will have to pay for maintaining the | 
 bureau just as they are paying for the army, navy, and police, 
 for the moral and economic welfare of the commonwealth. 
 
 111. Once the workers realize that it is their moral duty 
 
 to pay and that it is to their own interest to pay, there will be 
 no more questions asked as to what the work shall be. There 
 is never any difficulty to find work. Anybody could find work, j 
 and useful work too, for all the workers in the world if some¬ 
 body else would guarantee the payment of the wages. The . 
 finding of useful work is no problem at all. The whole prob- j 
 lem is one of wages: who should pay the 6 wages? I have stated 
 my views and given my reasons: The working class must i 
 bear all the financial burden for the relief of the unemployed. j 
 What has the working class to say to that proposition? The | 
 Socialist Party claims to be the spokesman of the working j 
 class and the custodian of the working class interests. L,et us j 
 see what they have to say in the interests of the working jj 
 class. . : 
 
 112. The 23rd of August, 1914, was scheduled as the date 
 for the beginning of an International Congress of the Socialist * 
 
 6. The Socialist Party in its National platform in 1912 savo j 
 nothing whatever, as to where the waees should come from. From j 
 their political demands, it seems that they hold the capitalist should 
 bear the financial burden, but article 9 of their industrial demands 
 make this inference rather doubtful. 
 
LECTURE; III—WAGR SUAVRRY: cause: and cure:. 
 
 97 
 
 Party to be held in Vienna, Austria. A part of the intended 
 working program of that Congress referred to the unemploy¬ 
 ment problem. The sudden outbreak of the war a few weeks 
 before the appointed time made the meeting in Vienna 
 impossible. The program, therefore, remains a tentative 
 issue to this day, but as M. Ed. Vaillant, the French delegate 
 w r hose duty it was to collect the necessary information and to 
 submit his report, had consulted the Socialist parties of all 
 countries before drawing up that program, there is a moral 
 certainty that it represents the most revised expression of 
 Socialist views from all countries. Section eight of this pro¬ 
 gram is as follows: 
 
 “ 8 . Social assurance against all the risks of 
 the working class life and labor,—unemployment, 
 accidents, sickness, invalidity, infirmity, old age, etc. 
 without working man's contribution, and managed 
 quite independently by the unions of the insured. 
 Assurance guaranteeing to all those insured repara¬ 
 tion for risks undergone, compensation to be at least 
 equal to the Droved loss of working capacity or 
 wages. Establishments of all institutions and 
 measures for the prevention of risks. Graduated 
 tax upon capital and income of the wealthy class, the 
 provision of an annual credit in the budget of neces¬ 
 sary sums for the complete working and develop¬ 
 ment of social insurance, the capitalized funds from 
 the employers contributions furnishing the useful 
 complementary sums." 
 
 It will be seen that the Socialist program differs from the one I 
 suggest, in two points; first,the financial responsibility should 
 not rest upon the working class, and second, that it should fall 
 upon the capitalists. 
 
 7. I have never been able to -see why the Congress of 1914 was 
 impossible, and no Socialist papers have tried to explain it. I can¬ 
 not see why the executive committee could not have arranged for 
 a meeting in Norway, Sweden or the United States, either for the 
 same date or a few weeks later. It is possible that the custodians of 
 the. working cla-ss interests did not care to hold any Congress while 
 their wards were happy at their jobs of grinding out munitions for the 
 belligerents. If that is the real reason we should not expect to find 
 it anywhere in dry ink. 
 
98 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 113. The Socialists contend that capitalism is the cause 
 of unemployment (although this is really in conflict with the 
 correct theories of scientific Socialism.) If capitalism were the 
 cause of unemployment it would be but fair and just to make 
 capitalism pay for the consequences caused “by the misrule of 
 the capitalist 8 class.” But capitalism does not cause unem¬ 
 ployment and it would be unjust to punish it for a crime it 
 never committed. The Socialists must, therefore, reconsider 
 and revise their position on this point. For similar reasons I 
 maintain that the working class, as a class, is responsible for 
 the existence of unemployment and must therefore pay for its 
 abolition. Lastly I have shown that it is to the interest of the 
 working class to have a system of guaranteed employment 
 maintained at any cost, and cost what it may, the workers must 
 pay the price. 
 
 114. But, is the worker able to pay the cost? That is, of 
 course, a very important question. That some of the workers 
 cannot even get a living wage is indisputable. But such star¬ 
 vation wages will not be taxed at all. In the case of higher 
 wages, the minimum living expense will first be set aside be¬ 
 fore any tax is assessed. It is only the workers, best able to 
 pay, who will have to pay; the rest will be exempt. What is 
 wrong with such an arrangement? If the working class as a 
 whole were unable to pay the tax, the whole scheme would 
 fall through; but is the working class, as a whole, on the verge 
 of pauperism and unable to pay the tax? Let us see. 
 
 115. The United States is rapidly becoming a land of 
 strikes. There is scarcely a day in the calendar without a 
 strike taking place somewhere in the nation. How are these 
 strikes sustained? Take for example the strike at the General 
 Electric plant in Schenectady, N. Y., when 12,000 toilers stop¬ 
 ped work and remained at home for over three weeks. During 
 this time they did not earn one cent, and yet they lived and 
 spent money. It is quite certain that neither the General 
 Electric Company nor the Wall Street financed that strike. 1 
 There is but one other source from which the funds arose; the 
 workers financed the strike. It is impossible to deny this. 
 
 8. National platform of the Socialist Party of the United States, 
 
LECTURE III—WAGE: SGAVGRY: CAUSE AND CURE- 
 
 99 
 
 If the workers can finance these continual strikes they can 
 finance the guaranteed employment scheme, for this scheme 
 is nothing more than a strike viewed from another angle. 
 Imagine all the unemployed gone out on strike and refusing 
 to visit the factory gate on a no-wage basis! They prefer to 
 stay at home and maintain the strike until conditions of work 
 and wages in the factory are brought to a more satisfactory 
 standard, provided, in the mean time that the workers under¬ 
 take to finance the strike. Seen in this light, the guaran¬ 
 teed employment scheme is only a strike in the interests of 
 all the workers, both employed and unemployed, and con¬ 
 ducted by the workers without work, and financed by the 
 workers with work. To be sure, there are some very import¬ 
 ant differences between such a strike and one of the usual 
 kind. In the first place there will be no scabs in this strike, 
 for who will go to the factory gate merely to tramp up and 
 down without the barest hope of getting a job when he is as¬ 
 sured of wages by just sitting home? Then, there will be no 
 pickets, there is no need for them; nor will there be any police- 
 made riots to protect the scabs, and finally, this is the only 
 kind of a strike, which the capitalist will not fight against. 
 There will be no advantage to the capitalist to fight against a 
 strike of this kind and he could not fight against it if he would. 
 Against such a strike the capitalist has as much chance, as a 
 submarine has against an aeroplane. 
 
 116. Or we might compare the guaranteed employment 
 scheme, depending upon the workers' funds to the trade 
 unions. The employment at the bureau may be compared to 
 the unemployment benefit and the tax is comparable to the 
 union dues. If the workers can pay dues to their local and 
 national unions, they can certainly pay dues for the unem¬ 
 ployment scheme. It is not difficult to see from this analogy 
 that the tax for the guaranteed employment bureau can be 
 and must be paid by the workers. It would be foolish to 
 expect the capitalist to pay the workers' dues, particularly 
 when the purpose of the dues is to organize a fight against 
 him. 
 
 117. Nor is it possible to make the capitalist pay the 
 taxes. It may be desirable to make him pay. It may be desir¬ 
 able to get a pie^e of pie at the counter and make the cash- 
 
100 
 
 the: unemployment problem. 
 
 ier pay for it,the only objectionable feature of such a plan is 
 that it will not work. In the same way the worker cannot 
 tax the capitalist. The man who can conceive of a method to 
 tax the capitalist is not yet born. Of course it is possible to 
 take from the capitalist the whole or nearly the whole of his 
 property and call it taxation, just to please one’s fancy, but 
 that is not a tax in the true sense of the term. It is not pos¬ 
 sible to make this point clear without entering into the 
 theories of taxation. I therefore leave that part for the present 
 and content myself with just one illustration for the sake of 
 clarity. The intoxicating drinks of this country are taxed 
 fairly high. Does that make the saloon-keeper poor? You 
 know that it does not; in fact the saloon, in spite of the heavy 
 taxation, is a very profitable venture. The reason is simple. 
 The capitalist is not a taxpayer. He is merely a tax gatherer. 
 He collects from his customers every cent that he pays as tax 
 in advance, and a little more. He collects the little more in 
 two ways; first, to his duties of buyer and seller is now added 
 to the duty of tax collector and he adds to the tax his share of 
 the collector’s fees in adjusting the prices of commodities; 
 secondly, he does not know exactly how much of the com¬ 
 modity he is going to sell; he can collect the tax only on what 
 he does sell. Therefore he has to keep well within the safe 
 limit by distributing the tax paid, over the smallest possible 
 amount of his commodity. For example, if a saloon-keeper 
 pays $500.00 for licensing his saloon, he may distribute this 
 tax over 5,000 bottles of whiskey. If then, he succeeds in sell¬ 
 ing 6,000 bottles he will have collected $600.00 as a tax. All 
 though he has had to pay the government only $500.00. All 
 methods of taxing the capitalist turn out to be in the long run, 
 but methods of 9 giving him a tax instead. An attempt to tax 
 the capitalist is like trying to empty the water pipe by open- 
 
 9. “Indirect taxes add to the price of goods not only the tax 
 
 itself but also the profit on the tax.Those who pay -such taxes to 
 
 the government seldom or never ask for their reduction or repeal, 
 
 but on the contrary generally oppose such propositions.The 
 
 reduction of war tax on whiskey was strongly opposed by the whis¬ 
 key ring composed of great distillers. The match manufacturers 
 fought bitterly the abolition of tax on matches.—Henry George: Pro¬ 
 tection or Free Trade, page 84. 
 
RECTORE III—WAGE SGAVERY^ CAUSE AND CURE. 
 
 1D1 
 
 ing the faucet When the faucet is opened it is not the pipe 
 that is emptied, but the reservoir at the back of the pipe. Any 
 tax on the capitalist is automatically transferred to the real 
 source of wealth,—the labor power of the working-class. It 
 is impossible to tax the capitalist as a class. In all cases the 
 worker has to pay it, and the sooner the worker recognizes 
 this fact the better it will be for all of us. Therefore, consider¬ 
 ing all these reasons I am compelled to take a stand against 
 the Socialist Party program of taxing the capitalist. The 
 worker must pay the taxes; willy-nilly, he pays them anyway, 
 and it would be much to his advantage if he would understand 
 it at the outset, and accept the responsibility with open eyes, 
 a cheerful heart, and a clear conscience. 
 
 118. Another method very popular among the Social¬ 
 ists, though it has no support in the theory of scientific Social¬ 
 ism, a method which for that reason is not yet officially 
 recognized by the party, is that of reducing the hours of work. 
 Though not officially recognized this method is steadily grow¬ 
 ing in popularity and is being supported by many prominent 
 Socialists. The following extract may be taken as a fair sample 
 of what the leading Socialists have to say on this point: 
 
 A SHORTER WORKDAY: 
 
 It would necessitate the employment of a 
 large number of men to do the same work, using the 
 same machinery 
 
 “2. By thus reducing the number of men out of 
 work, it would increase effective demand for labor in 
 proportion, and thus have a tendency to raise wages. 
 
 “3. By increasing the average wage it would 
 Rave a tendency to reduce the relative percentage 
 of profits on the products of labor, thus increasing 
 the relative purchasing power of wages. 
 
 “4. By shortening the hours of labor it would 
 leave the workers less exhausted at the close of the 
 day, and more capable of sustained study and thought 
 —more capable of organization. 
 
 “5. Even when the profit-takers had compen¬ 
 sated themselves for the increased wages at the end 
 of the day by taking on an increase in price at the 
 other end, the improvement in the condition of labor 
 
102 
 
 THE UNEMPLOYMENT PROBLEM, 
 
 and life would be a net and permanent gain—resulting 
 in the absolute progress in the other direction, name¬ 
 ly, intelligent self-control;”—“Menace of Unemploy¬ 
 ment/' Winfield R. Gaylord. 
 
 119. As to the advantages of paragraphs 4 and 5, I 
 should certainly be in favor of a shorter work day; that is, if 
 those advantages would accrue, which I gravely doubt. But 
 as I am discussing the question from the unemployment^ 
 point-of-view, I will waive my objections and concede, pro¬ 
 visionally, that these two advantages would follow in the wake 
 of the shorter work day. But I cannot leave this argument 
 without at least one effort to remind the workers that as long 
 as unemployment remains all the other reforms are wasted 
 efforts. The blight of unemployment will wither every 
 scheme for the betterment of the workers. Take for example 
 the eight-hour reform, and let us see how far it will help the 
 worker to better himself by study and thought. The eight 
 hour law gives him no more security over his job than he had 
 before; he will therefore try to save what he can for a rainy 
 day. He saves two hours of labor time from the factory, and 
 he puts in this time doing domestic work, such as planting 
 cabbage in his back yard, or repairing his furniture which he 
 would have given to another worker if he had been working 
 at the factory. Thus, in this way he creates an equivalent 
 amount of unemployment for another worker. And he does 
 this without even a pretence of the intellectual betterment 
 for himself that the two extra hours of leisure are calculated 
 to bring. As long as unemployment remains all other reforms 
 are impossible. 
 
 120. This question is only a side issue. The main point 
 is, will the shorter work-day abolish, or even appreciably 
 diminish unemployment. I maintain that it will not. A sim¬ 
 ple illustration will show why it will not. Suppose I am a cap- j 
 italist and that I own a biscuit factory. I employ 100 workers i 
 with wages averaging $20.00 per week, with a ten hour day and 
 
 a sixtv hour week. Out of these 100 workers only 40 are 
 occupied in producing the biscuits that I place upon the mar¬ 
 ket. The remaining 60 workers do not produce a single bis¬ 
 cuit, in fact they produce nothing for the market today. Their 
 work consists of creating means and developing methods of 
 
 
LECTURE III—WAGE SLAVERY: CAUSE AND CURE- 
 
 103 
 
 production for future use, i. e., for industrial development. 
 For instance the factory chemist is trying to discover a better 
 substitute for yeast, or the engineer is occupied in planning 
 a new building or installing new machinery. At first sight it 
 would appear that these workers who produce for the future 
 are few in number and that I have exaggerated a little too 
 freely when I said that 60 workers were employed in non¬ 
 productive (i. e., remotely-productive) capacities. I have not 
 exaggerated at all; in fact I have underestimated a little in 
 order to keep within safe limits. The wages of the chemist are 
 $200.00 per week, which means ten average workers rolled in 
 one and the same is true of the engineers. Out of the men 
 employed in producing the biscuit for the market some get 
 wages as low as $5.00 and you will have to count four of them 
 as one worker. It is easy to see then, that as economic units, 
 there are only 40 workers (though there might be 100 human 
 beings necessary to make the equivalent of 40 average work¬ 
 ers), employed in producing goods for the market, i. e., to sat¬ 
 isfy the demand of the public as the consumer. It is also easy 
 to see that there are 60 average workers employed in indus¬ 
 trial development work. The forty producers turn out bis¬ 
 cuits worth $50.00 each, so that after paying their wages I 
 realize a profit of $30.00 per head. But the 60 workers em¬ 
 ployed in development do not bring in any profit at this time; 
 their work will bring profit in the future, but at the present 
 time I cannot market their product, not even to pay their 
 wages. If it had not been for the other 40 workers who creat¬ 
 ed goods that netted me $30.00 profit per head, I would not 
 have been able to maintain the other staff of 60. In fact I 
 employ just 60 workers for the simple reason that my profits 
 are just enough to pay the wages of 60 and no more. The field 
 of industrial development is unlimited in extent, and so prom¬ 
 ising of results in future that I would gladly employ all the 
 workers who are unemployed all over the world, in all the 
 trades and professions if I could only discover some way to 
 pay their wages. At present my only source of wages is the 
 ■profit that I make from the producers and I can employ onlv 
 GO average workers because my present rate of profit is only 60 
 per cent. Now imagine the work day to be shortened to 8 
 hours. In order to supply the market I will have to put 10 
 
104 THE UNEMPLOYMENT PROBLEM 
 
 more men on the production side and pay out $200.00 a week 
 in extra wages which will now cut down my profit, and I will 
 be compelled to reduce my development force from 60 to 50. 
 The total number of employed is neither increased nor de- 
 creased. My own profits are cut down, I must admit that; 
 but the unemployment problem is just where it was when we 
 started and that is what I wanted to prove. 
 
 121. This illustration, though fictitious, is not unreal as 
 it represents the state of affairs in all industries where cap-' 
 italism prevails. The division of the industrial army into its j 
 two parts is not always so definite; for example, the same i 
 manager and the same engineer are in charge of production as ‘ 
 well as development. The same floor-sweeper, the same gate- 
 keeper and the same night watchman may be in charge of the 
 duties of both departments. Sometimes the extension con- j 
 sists merely of purchase from outside, such as purchase of new ■ 
 machinery. In such a case the working force on the develop¬ 
 ment side is not in the factory at all, but in some far away 
 factory where the work appearing to the casual observer as a t 
 production for the market is really the extension work of the 
 first factory. These and various other reasons disguise the 
 fact that by far the largest part of industrial armies are en¬ 
 gaged in extension work. But however disguised, the fact ! 
 remains that all the surplus labor of the worker which con¬ 
 stitutes the profit of the capitalist class includes in all cases 
 the foregoing form of industrial development. Any cutting' 
 down of the profits must necessarily cut down industrial de- ! 
 velopment to just that extent. On industrial development,, 
 not on mere production of commodities, for daily use, is 
 based modern civilization. On that same industrial develop¬ 
 ment depends also the far more advanced type of the civiliza¬ 
 tion of the future. A philosophy which claims for the workers 
 the full product of their toil or the social equivalent in value, 
 and allows no deduction for new industrial development is 
 therefore not revolutionary, but reactionary. It is worse than 
 this, it is industrial suicide. In all the popular literature on 
 this subject the workers employed on the development side 
 are left out of calculation. The writers on this subject have 
 always in mind only the labor force employed for necessities 
 of the market. They are right when they argue that with 
 
ITCTURE) III—WAGE SLAVERY: CAUSE) AND CURE- 
 
 10? 
 
 shorter work-day more men will be employed on the produc- 
 tion side and that is the only part of industry they have in 
 view. They forget that every additional hand on the produc¬ 
 tion side means one less on the development side. A shorter 
 work-day is no solution of the unemployment problem, what- 
 e\ er else may be said in its favor. On the contrary, para¬ 
 doxical as it may appear—the solution of the problem will 
 be found to be in an effective prologation of the work-day. It 
 was a knowledge of this fact that led Marx to conclude that 
 "the most fortunate conditions for wage labor lie in the speedy 
 increase of capital.” 
 
 122. In all fairness to the philosophy of Socialism I must 
 repeat that scientific Socialism does not stand for the eight 
 hour law on the ground that it would relieve unemployment. 
 It advocates the eight hour day and recommends the working 
 class to fight persistently for this right but for an entirely 
 different 10 reason, and one which it would be here entirely 
 out of place to discuss. As to taking profit and investing it 
 into new development work, it is not only the privilege but 
 according to Marx, it is the duty and the ^function, of the 
 capitalist; any expenditure of this profit by the capitalist for 
 purely personal use is, in his opinion, a breach of duty, or, 
 rather, a down-right I2 “robbery.” The "purpose to give to the 1 
 
 10. Marx: Capital, Vol I, page 25S. 
 
 11. I. “A certain quantity of surplus labor is required for the 
 purpose of discounting accidents, and by (for?) the necessary and 
 progressive expansion of the process of reproduction in keeping with 
 the development of the needs and the advances of population, called 
 accumulation from the point of view of the capitalist. It is one of the? 
 civilizing sides of capital that it enforces this surplus labor in a man¬ 
 ner and under conditions which promotes the development of the 
 productive forces, of social conditions, , , , , Marx: Capital, Voh 
 III, page 953. 
 
 11. “When we appropriate capital, we must at the same time 
 take over its social function. The most important of these is the ac¬ 
 cumulation of capital. Capitalists do not consume their entire in¬ 
 come. A portion they lay aside for the extension of production.”—' 
 Kautsky: Social Revolution, page 136. 
 
 12. “So far therefore as his actions are a mere function of capital 
 —endowed as capital is in his person, with consciousness and a will—' 
 his own private consumption is a robbery perpetrated on accumula¬ 
 tion.—Marx: Capital, Vol I, page 649, 
 
106 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 workman all they 13 produce” is not scientific Socialism; it is 
 either unscientific nonsense or scientific individualism accord¬ 
 ing to the spirit in which it is said. In either case it is preach¬ 
 ing falsehood in the name of truth. No one who understands 
 scientific Socialism takes exception to the capitalistic appro¬ 
 priation of surplus and its transformation into new capital 
 for future use. It is recognized as one of the greatest elements 
 of: human progress and redeeming feature of capitalism., which 
 according to scientific Socialism has proved to be a failure 
 its everything else. According to this view the capitalist is a 
 14 trustee for the coming generations and holds for them in 
 the form of profit their share of coming civilization. 
 
 123. Mr. Gaylord, in arguing that the shorter work day 
 will cut down profit and thus increase the purchasing power 
 of the worker betrays his ignorance of the very fundamental 
 principles of scientific Socialism. The purchasing power of 
 the worker has nothing to do with total produce; it is con¬ 
 cerned with commodities for final consumption only. To re¬ 
 turn to the illustration of the biscuit factory. The wages of 
 the workers, that is, the wages of all the 100 workers, are 
 expected to be sufficient to buy the total produce of the 40 
 biscuit producers. Nobody is supposed to buy any part of 
 what the other 60 workers produce. Under capitalism, the 
 purchasing power of the worker as a whole is always ex- ! 
 actly equal to the total produce available for final consump¬ 
 tion. It is neither more nor less. The natural law of value 
 automatically takes care of that. There is never any trouble, 
 there never can be any trouble, about the purchasing power 
 of the workers as a whole. The v/hole trouble lies in the 
 unequal distribution of the purchasing power among the 
 workers, and cutting down the profits of the capitalist cannot 
 possibly remedy this evil, no matter how much the profits 
 are cut down, whether bv taxation, or by the introduction of 
 
 13. “The purpose of Socialism is to give the workers all they 
 produce.”—Allan Benson: Truth About Socialism, pa.ee 18. 
 
 14. “The distinguishing feature of capitalism, the keynote of mod¬ 
 
 ern progress, is the enormous accumulation of wealth, which con¬ 
 stitutes the very condition of existence of the economic -structure 
 under capitalism. Under that system, the capitalist becomes in a sense, ; 
 a trustee of society.”—Stone: Intercollegiate Socialist, page 34, ! 
 
 March, 1916. 
 
LECTURE III—WAGE SLAVERY : CAUSE AND CURE* 
 
 107 
 
 the shorter work day. With a shorter work day a five dollar 
 hod carrier will still get five dollars and the thirty dollar mech¬ 
 anic will still get thirty dollars and the hundred dollar engi¬ 
 neer will still get one hundred dollars. The purchasing power 
 will be distributed as unequqally as before. Yet it is easy to 
 see that if the workers were taxed in proportion to their in¬ 
 comes, the hundred dollar engineer would come down to 
 ninety; the thirty dollar mechanic nearly to twenty-seven and 
 the five dollar hod carrier would suffer no reduction at alh 
 Taxing the workers would at least have some effect—though 
 not much—toward equalizing the purchasing power of the 
 workers, (if that be necessary), but cutting the profits of the 
 capitalist would have no such effect whatever. 
 
 124. The shorter work day cannot solve the unemploy¬ 
 ment problem. The emancipation of the workers must come 
 from the workers themselves. They have 'created unem¬ 
 ployment and they must bear the cost of removing it. They 
 are the beneficiaries of the reform and they must pay the price 
 for their emancioation. Anv other scheme for skillfully “put¬ 
 ting it over” on the capitalist is doomed to failure. You can¬ 
 not tax the capitalist as a class. The shorter work day is not 
 altogether impossible, but it will be fruitless, and will lead 
 to sad disaopointment if any relief from unemployment is ex¬ 
 pected to follow from it. The profit system is not the cause 
 of unemployment and any attempt to strike at the profits will 
 be wasted efforts. THERE IS ONLY ONE WAY TO 
 EMANCIPATE THE WORKERS, and that is, BY A 
 SYSTEM OF GUARANTEED EMPLOYMENT FINAN¬ 
 CED BY THE EMPLOYED WORKERS for the equal 
 benefit of all the workers whether employed or unemployed. 
 This is what I mean when I say that the emancipation of the 
 workers must come from the workers themselves. It must 
 come from the worker’s own brain, and brawn, and pocket- 
 book; there is no other way but this. 
 
 125. We have seen thus far, that it is the duty of the 
 worker to finance the Guaranteed Employment system, and 
 moreover that it is to his own interest to do it; in fact that it 
 is the only way to improve the condition of labor. We have 
 also seen, that at least to some extent, the worker is also able 
 to bear the financial burden. But the question still remains: 
 
THE UNEMPLOYMENT PROBLEM. 
 
 108 
 
 "‘Can he bear the whole burden?” The success of the scheme 
 depends entirely upon the answer to this question. If the 
 worker fails to come up to what is expected of him; if he 
 breaks down under the burden of taxation for the relief of the 
 unemployed,^then the unemployment problem cannot be solved. 
 A pr-aciiSaTsolution will turn out ultimately to be no solu¬ 
 tion at all, for unrelieved residue of unemployment will breed 
 more unemployment. The worker must either bear the whole 
 burden, or none at all. If he cannot bear the whole burden, 
 he need not bear any; it would be as useless as building a dam 
 half-way across the river. We must try to figure out first, 
 Whether the worker can and will bear the whole burden. 
 Incidentally we must also find out how much that burden is 
 going to be. 
 
 126. A reference to the theory of unemployment al¬ 
 ready discussed (see Lecture I, para. 44) will show that the 
 Worker as a whole is always able to bear the financial burden 
 for the relief of the unemployed as a whole, no matter how 
 small or how large that army of unemployed should be. 
 Every penny saved corresponds to a penny worth of unem¬ 
 ployment somewhere; if it be a dollar saved, it would mean 
 a dollar’s worth of unemployment. The amount of total sav¬ 
 ing on one side is always equal to the total amount of unem¬ 
 ployment on the other side. It is an exact mathematical law 
 which allows no exception. The relation of saving to unem¬ 
 ployment is like the relation of positive and negative charges 
 of electricity. The relation is always one of equality: the total 
 positive charge is always exactly equal to the total negative 
 charge, no matter how one of the charges is collected and 
 stored; nor does it matter whether the charge is collected in 
 one place or scattered over a large number of conductors. The 
 positive and negative charges may be near together or many 
 thousand miles apart; but in every case the total positive 
 charge is exactly equal to the total negative charge. The 
 Same law applies to economics and with the same amount of 
 exactness. The total savings of the workers, and therefore 
 their ability to relieve unemployment is always equal to the 
 amount of unemployment in need of relief for example before 
 every crisis, as was pointed out by Marx, the wages are high¬ 
 est, and the savings of the workers reach the maximum, the 
 
lecture in— wage: suave:ry: cause: and cure. 
 
 109 
 
 money in hands of the capitalist (except what he holds as 
 deposited savings of the workers) is practically nil, and the 
 result is a crisis. In the industrial depression that follows, 
 wages fall away, either by reduction of rate or by long periods 
 of unemployment; the savings of the workers are exhausted, 
 the crisis now ends, and most of the unemployment disappears 
 also. The amount of unemployment in need of relief, and the 
 ability of the workers to give that relief, are always exactly 
 equal. The.question, “how much the financial burden is going 
 to be” cannot be answered, for it depends upon the amount of 
 unemployment, which varies from a few hundred thousand to 
 several millions. But there is no need to answer that ques¬ 
 tion. We know that the ability of workers to relieve unem¬ 
 ployment is always equal to the need of the unemployed, and 
 that is enough. 
 
 127. It must be noted, however, that the ability to bear 
 the burden is sufficient only when the whole ability of the 
 workers is applied collectively. If part of the workers refuse 
 to contribute their share according to their ability the scheme 
 will fail, for it can then relieve only a part. The unrelieved 
 part will create more unemployment and spoil the whole pro¬ 
 gramme. And the workers recognizing this possibility and 
 the futility of partial efforts, will refuse to contribute in the 
 first place unless they have a guarantee that when they con¬ 
 tribute, every one else will contribute also. Under the pres¬ 
 ent system of social evolution such a guarantee is possible only 
 b) means of a scheme of taxation under governmental control. 
 There is no other method I can think of, that will carry with 
 il a guarantee that all the workers will pay their share. The 
 worker as a whole can bear the whole burden if you can find 
 means either to compel or to persuade him to do his share. 
 
 128. But closely connected with the question “can the 
 worker bear the whole burden?” is the question “will he bear 
 it?” It is a question of psychology, not of economics. If a 
 man has only a five-cent-piece in his pocket, and you happen 
 to need it very badly, he may give it to you with a cheerful 
 heart and even thank you for the opportunity you gave him 
 to render you a useful service. If he happens to have five 
 dollars, and you need them just as badly, he will find it harder 
 to part with the money, he may easily give half a dollar, i. e., 
 
110 
 
 the; unemployment problem. 
 
 ten per cent., but not the whole five dollars, although such a 
 sacrifice will not place him in a worse condition than the giv¬ 
 ing of five cents when he had only five cents to give. If he 
 had 500 dollars, the chances are that even ten per cent, would 
 be difficult to part with. When the savings of the workers 
 and consequently their ability to contribute to the relief of the 
 unemployed are the highest the psychological difficulty of 
 parting with the money is also the greatest; and yet it is just 
 under these conditions that the need of relief is most acute, and 
 the burden of relief that the workers are expected to bear is also 
 the heaviest. 
 
 129. Fortunately the problem carries its own solution. 
 Between a wave of industrial prosperity when the wages are 
 highest and the savings accumulate, and the succeeding crisis, 
 when millions are thrown out of work, there is a short period 
 of transition. This period of transition is a result of the credit 
 system, and a by-product of capitalism. During the wave 
 of prosperity the worker is able to save, and he generally de¬ 
 posits his savings in the bank. The capitalist borrows this 
 money, and uses it to keep the industry going on; the savings 
 of the worker accumulate; the debt if the capitalist also keeps 
 piling up, until it exceeds his credit. Then comes the crash ; 
 some capitalists, unable to borrow more, are compelled to shut 
 down their work. This is the beginning of the crisis. This little 
 unemployment is the starting point of more unemployment 
 which constitutes the crisis. During the period of transition, 
 and even later during the early stages of the crisis there is 
 very little unemployment calling for relief. At this stage it 
 is very easy to relieve unemployment, for the amount needed 
 for relief is very small, and the worker is then best able to 
 pav. If the first batch of unemployed be promptly and ef¬ 
 ficiently relieved, the crisis will be effectively arrested, for a 
 crisis is only unemployment coming down with a rush. It is 
 like using the lightning conductor to prevent a lightning 
 stroke; the accumulated electricity has to be removed in some 
 way; the conductor gradually and imperceptibly carries 
 away the accumulated electricity, relieves the tension, and 
 averts the crash. The Guaranteed Employment Bureau, 
 armed bv the power to tax, will graduallv take away the sav¬ 
 ings, relieve unemployment as fast as it comes to the sur 
 
EECTURE III—WAGE SEAVERY: CAUSE AND CURE. 
 
 Ill 
 
 face, avert the crisis, and the subsequent paralysis of industry. 
 
 130. in any country, the proper time to start the Guar¬ 
 anteed System is when ttiat country is m a wave of prosperity, 
 approaching the peak of the wave, before the depression be¬ 
 gins. The United States is at this moment passing through 
 such a wave. There is practically no unemployment any- 
 wnere; workers are everywhere in demand. The capitalists 
 are afraid of strikes, and are trying to propitiate the work¬ 
 ers, by concessions, bonuses, and promises. Two years ago, 
 wiienever industrial relations were strained, and a strike was 
 in view, it was the workers who pleaded for arbitration. The 
 capitalist turned away with real or feigned indifference. They 
 said they had nothing to arbitrate. Today, it is the capital¬ 
 ists who plead for arbitration, and the workers who refuse to 
 arbitrate. They are conscious of their transient power, and 
 are trying to make the best of it by making greater and great¬ 
 er demands. There is certainly a great crash ahead, every¬ 
 body knows this much, but nobody seems to know how to 
 avert it. In the meantime, workers are trying to save what 
 they can, so as to be able to face the crash when it comes, 
 blissfully unconscious of the fact, that by their saving they are 
 actually helping to make the crash. Between the present pros¬ 
 perity and the coming cisis, there is the period of transition 
 which may last a year or two, or perhaps only a few months. 
 The time to start the Guaranteed Employment Bureau is now; 
 
 not a day to lose. If once the crisis begins, and the first 
 group of unemployed remains unrelieved for an appreciable 
 length of time, there will be in a few weeks from Jive to ten 
 million workers out of work. It will then need from 10 to 
 15 per cent, of the employed workers’ wages to help the unem¬ 
 ployed ; and although it will be even then possible in theory 
 for the workers to contribute that amount, it would be im¬ 
 possible to persuade them to pay it. For in the face of the 
 crisis, no worker will have the courage to give away a large 
 part of his income, to help others when he may himself need 
 help any minute. 
 
 131. If, on the contrary, the Guaranteed Employment 
 Bureau were started now, a tax of not exceeding two per cent, 
 will place in the hands of the bureau, a sufficient sum to em¬ 
 ploy the first batch of unemployed as soon as they happen to 
 
112 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 be thrown out of work. Prompt and efficient relief of the first 
 batch will have the effect of restoring confidence. The work¬ 
 ers will no longer try to save feverishly, and thus precipitate 
 the crisis. With increase of workers’ expenditure, the demand 
 will increase, and crisis will be averted, at least for a time. In 
 the meantime the funds in the hands of the bureau will again 
 begin to increase, and its credit will improve. With in¬ 
 creased confidence in the efficiency of the bureau the fear of 
 unemployment will pass away, and with it the motive for sav¬ 
 ing, and consequent manufacture of crisis. A little unemploy¬ 
 ment there will always be—due to anarchy of consumption, but 
 the bureau could easily handle that proposition. 
 
 132. This nation has at this moment a unioue oppor¬ 
 tunity to introduce this reform. “Revolution” I ought to have j 
 said, for this change from individual to social thrift is noth¬ 
 ing short of a revolution, which will entirely alter the whole 
 social structure. But as the word “revolution” is associated 
 in popular imagination with blood and thunder, even when 
 the revolution revolutes nothing, I will be content to use the 
 word reform. The nation is at this moment in a wave of un¬ 
 precedented prosperity. The war in Europe has for the time 
 arrested the stream of immigration which simplifies the work. 
 For although in the long run, the need of the immigrants is 
 sure to create work and thus balance the increased supply of 
 labor, yet a sudden arrival of a few million people into the 
 labor market just when we begin to re-arrange our affairs 
 would seriously interfere with our plans, and obstruct the 
 scheme of reform. There is a tide in the affairs of nations as 
 of individuals, which if taken at the flood carries them to for¬ 
 tune. Such a tide we have at present—the opportunity is too 
 good to repeat itself. The statesmanship of the American 
 leaders, and the intelligence of the American workers is on 
 trial. History will judge how they acquit themselves. I may 
 add that the American capitalist has also been on trial. It is 
 his duty as a capitalist, to prolong the period of transition, 
 and postpone the hour of crash, so as to give the workers a 
 chance to organize for the purpose of inaugurating this reform. 
 Urged by an inexorable law, against which he cannot revolt 
 even if he wanted to, he is trying his utmost to create work, 
 so as to keep the wheels of industry running a little longer. He 
 
LECTURE: III—WAGE SLAVERY: cause and cure. 
 
 113 
 
 has stimulated the demand for preparedness, for which there 
 is no real justification from a strictly military point of view. 
 But as a means of prolonging the period of transition, and of 
 postponing the crisis, it is impossible to think of a better 
 method. Whatever the purpose and motive of those who 
 started the “preparedness” policy, it is no doubt rendering a 
 very valuable service. It seems almost as if the Fates have 
 conspired to abolish unemployment, by introduction of the 
 Guaranteed Employment scheme, by offering every possible 
 facility to inauguerate the reform. 
 
 133. There is one more objection to the scheme of Guar¬ 
 anteed Employment, which comes from the Socialists and 
 which may therefore be taken up at this point with advant¬ 
 age. According to the Socialists, when capitalism is abolished 
 and when the workers own the means of production, they will 
 solve the unemployment problem. What this objection ex¬ 
 actly means I do not know, and I have not yet met a Socialist 
 who feels the need of making it clearer; there is their objec¬ 
 tion : take it for what it is worth. If they mean by it, that 
 when the workers own the means of production they will have 
 the power to solve the problem, I should certainly agree with 
 them, but in this case there is no objection to answer. They 
 need not try to prove that they will possess that power; their 
 power is not in question. Why talk of the power they will 
 have after they own the means of production, when I concede 
 that they have the necessary power even now. Of course, I 
 realize that they are no more conscious of their power, than 
 the elephant is of his. My function is not to give them any 
 new power, but to awaken them to the power they already 
 possess. If they cannot use the power they have now, neither 
 will they, when they have more power in future. Uncon¬ 
 sciousness of power is ever the strongest chain that ties the 
 beast to his master’s yoke. More power may produce more 
 service, but it does not necessarily lead to more freedom. If 
 the worker will not emancipate himself now when he has all 
 the power he needs for the task, neither will he do it when he 
 has more power, because the spirit of freedom is not in him. 
 
 134. But if the Socialist means by that objection, that the 
 worker lacks the power to solve the problem now, and that 
 no solution of the unemployment problem is possible at pres- 
 
114 
 
 THE UNEMPLOYMENT PROBLEM 
 
 ent, then I shall first ask him to prove it. It might be a 
 objection worth a serious consideration, if it were true; bt 
 is it true? Where are the proofs? I have shown that capita 
 ism is not the cause of unemployment, and therefore its abol 
 tion is not necessary for the solution of the problem. If as 
 result of the abolition of unemployment, capitalism passe 
 away, let it go—I do not think I would go into mourning, an 
 lament its death. If on the contrary it manages to live an 
 serve society in some other way let it stay. I have no quarrY 
 with it. I am neither for it nor against it. But even assun 
 ing for the sake of argument that my line of proof is not su: 
 ficient to convince the Socialist, and assuming that in his opir 
 ion our efforts will fail, what then? Even then there is no ot 
 jection to the scheme. If the workers, united as workers fc 
 economic emancipation, fail, the mere process of welding tc 
 gether the conflicting elements into one solid mass, with 
 common interest, and a common purpose, will still be a decide J 
 gain; what has the Socialists to say to that? Whether th| 
 scheme succeeds or fails, the Socialist, for one, can have not! 
 ing to say against it. 
 
 135. Lastly, if the objection means, that after the work( : 
 gets possession of the means of production, the unemploymer 
 problem will be solved so easily, that it would be a waste c l 
 time and energy to solve the problem now, then,—what ther 
 If this argument means anything at all, it means that all ii 
 dustrial demands of the workers are a waste of time an 
 energy. Under Socialism the work-day will be much shorte 
 than at present—four hours or perhaps only two hours, a< 
 cording to some authorities on this subject. Does it mea 
 that the movement for eight-hour-day is a waste of time an 
 energy and that the Socialists must oppose this movement 
 Under Socialism as they claim there will be no child labor, n 
 sweated labor, no adulteration. The women will have th i 
 right to vote; the children will have free education, the ol 
 will be pensioned,the industries will be safe and sane—no fir< 
 works in the clothing industry, or water -works, the stock ma 
 ket. Is that a reason why these things should be tolerate 
 without a protest now? Why should the Socialist fight shouk 
 er to shoulder with the trade unionist, the I. W. W., and th 
 
lecture: hi—wage slavery* cause and cure. 
 
 115 
 
 suffragist, and refuse to co-operate with the army for abolition 
 of employment. 
 
 136. As a matter of fact they are not opposed to an at¬ 
 tempt to solve the unemployment problem now. The na¬ 
 tional platform has, "relief of the unemployed/' as one of 
 their express demands. The opposition to this scheme from the 
 Socialists, if any, will be only from such Socialists as do not 
 know what they are talking about. There will be no objection 
 to the scheme of Guaranteed Employment from Socialists 
 who understand Socialism. If you hear a Socialist opposing 
 a Guaranteed Employment scheme to be introduced right 
 now under capitalism, do not waste your time and his time in 
 arguing it out; tell him to go and read his National party plat¬ 
 form. 
 
 "Unemployment. 
 
 "The immediate government relief of the unem¬ 
 ployed by extension of all useful public works, all per¬ 
 sons employed on such works to be engaged directly 
 by the government."—National Socialist Platform, 
 1912. 
 
 Does it look very much like an opposition to the Guaranteed 
 Employment scheme? No, the Socialist—if he is really a So¬ 
 cialist—cannot be opposed to the scheme as a whole, thomgh 
 we will have differences on matters of detail. 
 
 137. There are a few other objections to the Guaranteed 
 Employment scheme but none of them are very serious. They 
 are mentioned here only with a view to exhaust this part of 
 the subject. First among these is the moral effect of the 
 Guaranteed Employment scheme. It is urged that this sys¬ 
 tem will tend to make men lazy. It will be a factory manu¬ 
 facturing loafers. People will leave their present employ¬ 
 ments and seek employment under the Guaranteed Employ¬ 
 ment Bureau. The objection is easily answered, once you 
 accept the principles that underlies the formation of the bureau. 
 For example the bureau may have powers to hire out help to 
 employers and to receive commission. The employee will in 
 this case have nothing to gain, for the bureau will probably send 
 him to the same work and keep a part of the salary as com¬ 
 mission. By leaving his place the man will have to do the 
 same work on less salary. In some cases, however, the sys- 
 
THE; UNEMPLOYMENT PROBLEM, 
 
 JIG 
 
 tern will have a distinct advantage, as for example when the t 
 wages are unreasonably low; for the effect of the bureau will 
 be to raise wages. The employer must either raise the wages , 
 or close his work. If the work is of an unprofitable character, 
 depending for its existence on the low wages of helpless work¬ 
 ers, the sooner it is stopped the better. If on the contrary 
 the work be necessary and profitable, the employer will pay 
 higher wages to retain the workmen in the very beginning or 
 will let them go and take them back from the bureau on higher 
 wages. In most cases the employer will prefer the former 
 course. The idea that the bureau will encourage laziness is a 
 mistake. The bureau will make every possible effort to find j 
 work and when everything fails they may even have recourse i 
 to digging holes and filling them to keep the men busy. There 
 will be no need of going to this extreme but it is necessary to 
 be prepared to answer all objections, real and imaginary/j 
 But as mentioned before there will be no need of such an ex- j 
 treme provision for the bureau will have enough profitable I 
 work on hand as will be explained in another series of lectures. 
 
 138. Another objection against Guaranteed Employ¬ 
 ment scheme is that nobody will make an effort to find out 
 work for himself. Everybody will simply walk to the bureau 
 and get employment—perhaps for doing nothing—when just 
 at this moment he might be wanted somewhere for work. On 
 the one hand there will be men without work getting wages 
 for nothing and on the other hand there will be work without 
 men to do it. It is rather a strange sort of objection to deaf 
 with, for it is no objection at all; it is one of the merits of the 
 scheme that has been presented in the form of an objection. 
 Let us compare what happens today with what would hap¬ 
 pen under the Guaranteed Employment scheme with a con¬ 
 crete illustration. A window cleaner leaves his home in the 
 morning and goes from door to door in search of work. He 
 has to walk down a whole street before he comes to a house 
 where he is wanted. After finishing his work he goes tramp¬ 
 ing again before he comes to the right place once more. He 
 is busy the whole day. but half or more than half of his time 
 is wasted in hunting for work, and only the other half of his 
 time and work is spent profitably. And yet perhaps beyond 
 the place he stopped after a day's work was a house which had 
 
LECTURE 111—WAGE SLAVERY'. CAUSE AND CURE* 
 
 117 
 
 leeded cleaning very badly, and which has to wait until chance 
 )rings this or another window cleaner that way. With the 
 oureau system the houses that need cleaning will have only 
 ;o send a card or a telephone call, and the window cleaner in¬ 
 stead of wasting his time in tramping from door to door will 
 •eceive his orders from the bureau and. go straight to the work. 
 He will do more work with less expenditure of time and energy 
 and the people will therefore get their work done cheaper. 
 
 139. That nobody will make an effort to find work for 
 limself is no objection at all: nobody ought to be expected 
 :o do it. Time and energy spent in doing useless work is fool- 
 sh waste; it produce's no useful results. Every sensible man 
 vill try to invent means to avoid it. What are the “want ads.” 
 n the newspapers for? They are intended to minimize the 
 vaste in seeking work, and as far as they go, they are doing 
 :heir work well, but they are far from sufficient to meet the 
 *equirements of a complex society in which division and sub¬ 
 division of labor has extended to every department of work. 
 [ do not mean that the bureau should not allow anybody to 
 
 in search of work for himself if he chooses to do it; every- 
 Dody will be free to do it then as he does now. But nobody 
 would care to do it because it is a foolish waste and has no 
 :ompen'Sating advantage. We might as well have argued be¬ 
 fore the streets were indicated by name plates that such an ar¬ 
 rangement should not be introduced for the people would no 
 onger run up and down streets and ask every person for name 
 Di the street, but would depend upon the plates for informa¬ 
 tion. 
 
 140. Hunting for work is undesirable in every way; apart 
 Prom the economic waste of time and energy in search of work, 
 apart from economic loss due to unemployment of productive 
 power for want of work, the effort of searching for work has 
 a highly demoralizing effect. A man who can not get work 
 after the first few attempts is at first discouraged, then dis¬ 
 heartened, then follows a loss of self respect. He begs for 
 work almost as if he were begging for food; at this stage is a 
 parting of ways, if bold and unscrupulous he becomes a crim¬ 
 inal, if a coward he becomes a loafer, if neither he becomes a 
 sort of cross between a loafer and a criminal; he borrows with¬ 
 out definite intention of repayment and has not even the sense 
 
118 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 of gratitude which a beggar might feel for what he receives as 
 charity; he becomes a parasite, a shark, a faker, whatever he 
 can invent safe enough and yet dishonest enough to make 
 him a criminal from the moral but not from the legal point 
 of view. Or unable to bear repeated disappointments he seeks 
 solace in drink, keeps in low, demoralizing company. If he 
 gets work at this stage, he is generally so far demoralized as to 
 be unable to keep it. If on the contrary he chances to get 
 work at the very start or soon afterwards, he generally gets 
 puffed with a false sense of exceptional ability to which he 
 attributes his success. He arrogates an attitude of contempt 
 towards his less fortunate rivals whom he regards unworthy of 
 success and deserving the calamity that follows as a just re¬ 
 ward for their incomptency. The victims of failure are dis¬ 
 heartened, the victims of success become heartless. Who are 
 the greedy capitalists? They are merely the victims of suc¬ 
 cess in this struggle for work. Par from being a disadvantage 
 I should think that the end of individual effort to find and 
 secure work,—-the end of struggle for work, will be a great 
 moral and economic advantage, and this alone even if there 
 were no other advantage, should be sufficient to justify the 
 formation of the Guaranteed Employment Bureau. 
 
 141. Unemployment together with individual responsi¬ 
 bility for work, lends itself as an excellent tool in the hands of 
 business sharks for purposes of extortion and demoralization. 
 I have read of some employment bureaus that have their of¬ 
 fices in league with saloons. I have also read that in some of 
 the states the practice is being discontinued by law. It is 
 a good thing for law to prevent such demoralizing practices if 
 it can, but I fail to see how a law can prevent secret touts em¬ 
 ployed by saloons to bring unemployed men with promises 
 to help them. These touts are always on the lookout for men 
 out of work; they offer their help by way of introduction to 
 some person whom they expect to meet at the saloon. The 
 rest of the story is easily conjectured and need not be nar¬ 
 rated in details. The conclusion in most cases is the acquire¬ 
 ment of drinking habit, with or without an employment. If 
 the incompetent alone were unemployed, it would be b?d 
 enough ; if competent men were out of work for a time, it would 
 still be tolerable, but unemployment degenerates competent 
 
LECTURE 111—WAGE SLAVERY; CAUSE AND CURE* 
 
 119 
 
 men and makes them incompetent, not simply by want of use 
 and exercise, but by setting on foot certain demoralizing pow¬ 
 ers, who themselves are also victims of unemployment. 
 Economic loss due to unemployment is threefold, firstly due 
 to wealth producing power compelled to remain idle; secondly 
 due to wealth producing power destroyed by degeneration, 
 and thirdly due to wealth producing transformed into wealth 
 destroying power, as the only means of escape, by men of 
 heads without hearts, who create and let loose powers of de¬ 
 struction in order to escape unemployment for themselves. 
 On the other hand there is absolutely no advantage, moral or 
 economic, in our present system of each man trying to find 
 work for himself; so long as he does the work when he gets 
 it, it makes no difference how he gets it, either by his own ef¬ 
 fort or with the help of a bureau. In fact it makes a little dif¬ 
 ference the other way: A man would prefer to work a whole 
 day without a meal if circumstances require it, but spending a 
 day in search of work without any definite prospect in future 
 and with a memory of disappointments in the past is positively 
 hateful to every worker. The Guaranteed Employment Bu¬ 
 reau will put an end to all these evils at one sweep. 
 
 142. Another objection to the Guaranteed Emplovment 
 Scheme is that it will encourage extravagant habits. People 
 will cease to be frun?l and soend as fast as they earn without 
 trying to save anything. If by extravagance is meant indis¬ 
 creet expenditure it is not a very serious question at all, and 
 besides a general education, there is no need to make any 
 •provision. Such extravagance carries its own penalty which 
 is just sufficient for the purpose. If a man spends a dollar 
 today attending the theater, he will have a dollar less to¬ 
 morrow and will have to forego some comfort or necessity. A 
 little discomfort of this kind will not do him much harm, but 
 it will be just enough to teach him to be careful and balance 
 'his present desires against his future desires and choose ac¬ 
 cordingly. But any system that throws all the weight in favor 
 of the future and forbids all expenditure except what is ab¬ 
 solutely necessary to keep body and soul together is not a 
 desirable system. The objection that people will be extravag¬ 
 ant, if that is meant that they will no longer be miserly, is 
 no objection at all; we have here once more one of the merits 
 
120 
 
 Tim UNEMPLOYMENT PROBLEM. 
 
 of the scheme presented in form of an objection. Economy 
 is not a virtue by itself, it is a virtue in so far as it serves to 
 avert a greater evil ; when there is no evil to be averted, it is 
 no longer a virtue. In a malerious district every person has 
 to keep a sufficient stock of quinine and laxatives. What 
 would you think of a scheme of sanitary reform opposed on 
 the ground that, with improved sanitary conditions there will 
 be no maleria, and people will no longer be careful enough to 
 keep a stock of quinine. The most important object we have 
 in trying to save, is to provide for future need, if the future 
 need is better provided for, by the scheme I have suggested, 
 there is no reason why anybody ought to suffer privation when 
 he has means wherewith to live a comfortable life. Why 
 should a man starve himself on half meals, live in cold rooms 
 ir> winter, and go about in a seedy hat or patched boots, when 
 he has money enough to pay for a full meal, a fire, or for buy¬ 
 ing a new hat and boots? If he behaves like this today it is 
 because he has no guarantee of earning anything tomorrow; he 
 prefers to live on half a meal today in order to avoid a pos¬ 
 sible no-meal tomorrow. He only chooses the lesser evil. 
 Economy in this sense is not a virtue; it is only a lesser evil. 
 I have called it "a lesser evil” because from the individual’s 
 point of view it is the lesser evil; but from the social point of 
 view it is really the greater evil because it keeps other people 
 out of work, and that it perpetuates itself. Every man who 
 tries to live on half a meal keeps the farmer, the miller, the 
 baker, and the carrier out of work to that extent. I do not 
 blame the poor half starved wage earner for his economy: He 
 is acting under pressure of necessity, but I blame our social 
 system which creates the necessity and I blame the leaders 
 of society who insist on perpetuating it in the name of virtue. 
 
 143. But the poor man practicing economy is not the 
 only sinner in this respect. The rich do the same thing. If 
 the poor man stints himself of bread, the rich stints him¬ 
 self of automobiles. The manager of a factory who gets 
 $1,000 a week is content to spend only $200 and keeps away 
 $800 as savings for future use. A rich man who would have 
 a dozen automobiles and does not; who would buy a string 
 of pearls for his wife and does not; who would build a pala¬ 
 tial house for his monkey and does not. does on a large scale 
 
LECTURE III—WAGE SLAVERY: CAUSE AND CURE* 
 
 121 
 
 what the poor does on a small scale, viz., to keep a large num¬ 
 ber of willing workmen out of work* I do not blame the rich 
 man any more than I could blame the poor. He too is act¬ 
 ing under pressure of necessity ; with a guaranteed income, he 
 too would spend as fast as he earned and there would be no 
 such thing as manufactured unemployment. 
 
 144. At this point I must digress a little to criticize the 
 unreasonable attitude of the 15 church on this question. It at¬ 
 tributes the economic difficulties of modern civilization to the 
 modern spirit of extravagance and preaches a simple life as a 
 remedy. I can understand Jesus Christ preaching simple life 
 and denouncing extravagance. When he preached, there was 
 no science of economy and no unemployment problem. He 
 could regard the subject from the moral point of view alone, 
 and from the moral point of view he was certainly right. ] f 
 the church had preached simplicity as a moral discipline, and 
 denounced extravagance as a moral weakness and Stopped 
 there, I should have nothing to say against it; but when they 
 preach simple life as a remedy for the modern economic dis¬ 
 ease, they are committing one of the greatest blunders that 
 demands immediate correction. Every act of extravagance is 
 work and wages to somebody; every act of self-denial is unem¬ 
 ployment to somebody. From the economic point of view ex¬ 
 travagance is extremely useful in relieving the unemployed; if 
 is a partial solution of the unemployment problem. Any re-* 
 turn to simple life would be a serious calamity, 
 
 145. “But,” says the representative of the church, “should 
 we preach to the people to ignore the claims of morality and 
 to practice extravagance for the Sake of its economic bless¬ 
 ings? Or should we preach both extravagance for the sake 
 of economics and self denial for the sake of moral discipline; 
 Why should economy 1 and morality be at war with one anoth¬ 
 er? True economy ought to be in conformity with the true 
 morality. The third question 1 will answer later, but as tc: 
 
 15. The following i-s a sample of church-logic on the economics o 
 modern society and its relation to the labor problem: “The com 
 troversy at Lawrence is but a manifestation of the National dis¬ 
 ease of extravagance and selfishness. Our people have forgotten -sim 
 plicity and are living at a reckless rate.”—Kev. Dr. J. DeNorrnandy 
 Roxberry. 
 
122 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 the first two, I confess my inability to answer them; I only 
 plead that I am not responsible for an answer. You placed 
 yourselves in an impossible position; you adopted an im¬ 
 possible combination of two incompatible ideals as the basis 
 of your social structure and you insist on maintaining that ab¬ 
 surdity; an absurd hypothesis must always lead to absurd 
 conclusions, and you must now be prepared to meet the situa¬ 
 tion in which you find yourself. It is a well known law of 
 mathematics that a surd introduced in an equation can¬ 
 not be got rid of by any amount of transposition. You can 
 shift it from one side to another or from the numerator to the 
 denominator and vice versa, but you cannot get it out of the 
 equation and so long as it remains, the equation cannot be 
 solved. The only way to solve the equation is to square the 
 surd, nothing else can be used as a substitute. In our social 
 problem we have introduced a surd. The injustice of receiving 
 employment without giving in return, is the surd; nothing but 
 a fair and square justice can remove the surd. If you try to 
 return employment in any other way you have to be extravag¬ 
 ant. If you cease to be extravagant, you create so much more 
 unemployment. If you obey the moral law, you violate the 
 economic law, if you obey the economic law. you violate the 
 moral law. To preach simple life and practice extravagance 
 is about the only thing you can do now, and if appearances 
 could be trusted, you have made a glorious progress along 
 this line. 
 
 146. “Why should morality and economics be at war?” 
 was one of your questions. True morality and true economics 
 ought not to be irreconcilable under normal conditions, both 
 ought to dictate the same policy, but we are not living under 
 normal conditions. In normal state of health the taste of a 
 person may be relied upon in determining what is good for his 
 health, but a morbid taste developed under abnormal condi¬ 
 tions would be utterly irreconcilable with the requirements of 
 health. In adopting thrift as an ideal we have introduced ab¬ 
 normal conditions. Receiving employment without eiving 
 it in return, is contrary to the laws of moralitv, creatine un¬ 
 employment as the method of preventing it is contrary to 
 the laws of economics. We have allowed the framework of 
 our social structure to be warped on both the moral and 
 
LECTURE HI—WAGE SLAVERY; CAUSE AND CURE. 
 
 123 
 
 economic sides and nothing but a squaring up of the distortion 
 can help us out of the dilemna. 
 
 147. One of the bitterest cries against modern economic 
 conditions is the ery against the unequal distribution of 
 wealth. It is the inevitable result of the iron law of need and 
 counter need,—popularly known by the misleading name, the 
 law of demand and supply. It is not because the capitalist is 
 greedy, or heartless or unscrupulous. Even if the capitalists 
 were to take an oath to be clean capitalists, and to stand by it. 
 taking nothing in excess of what is conceded as “just profit, ,r 
 even then the unequal distribution of wealth could not be 
 averted. The instinct of extravagance serves to a slight ex¬ 
 tent to counteract this inequality. The extravagant capital¬ 
 ist robs himself of a part of his opportunity centered in his 
 wealth, and gives it to somebody else. But it is often said that 
 the capitalist robs his workers in order to be able to spend his 
 large profits in extravagance ; he ought not to spend the wealth 
 so obtained in dissipation. In answering this objection I must 
 note that we are now discussing the question from a strictly 
 economic point of view and any reference to the moral aspect 
 of dissipation would be out of place. Suppose a millionaire 
 robs his workmen of half their wages and spends them in 
 building a palatial kennel for his dog. He robs half of a loaf 
 from his weavers and gives it to his mason. But for this act 
 the weaver would have been a trifle better off and the mason 
 would have starved to death for want of employment. The 
 extravagant capitalist eciualizes the distribution of wealth be¬ 
 tween the weaver and the mason. In other words extravag¬ 
 ance is not the cause of econoic evil, on the contrary it is a 
 partial remedy. 
 
 148. Now to return to the question regarding savings: 
 Saving is not a virtue by itself, it is only a remedy against 
 a greater evil. To oppose a reform intended to put an end 
 to that evil on the ground that the remedy will no longer 
 be needed is either wicked or foolish. Even as a remedy it is 
 absolutelv worthless. It creates more harm than it cures. 
 Every dollar saved keeps somebody out of employment, who? 
 in turn is compelled to keep somebody else out of work. Every 
 dollar that is saved is the first link of a long chain of unem¬ 
 ployment, and the whole society,—including even the capital- 
 
124 
 
 the unemployment problem. 
 
 ist,—4s enslaved by fetters of its own making. Now and then 
 an extravagant capitalist ventures to break a link of the chain 
 by giving employment to others without any real need—just 
 for the sake of some real or fancied pleasure, and the voice 
 of indignant society denounces him as a malfactor. Citizens 
 of the United States are you awake? Unemployment is the 
 sole cause of wage slavery and misery of the wage slave. The 
 capitalist has not created wage slavery. On the contrary he 
 does something to equalize wealth and to mitigate the rigor of 
 the slavery. If he does not do more than what he is doing at 
 present, it is because he is himself a wage slave of others and 
 a victim of unemployment. There is only one cause of wage 
 slavery: viz., unemployment actual and prospective; there is 
 only one cure for wage slavery, viz., Guaranteed Employment* 
 There is no other way out of this hell on earth. 
 
 UNEMPLOYMENT MUST BE DESTROYED. 
 
Capitalism and the Wage System 
 
 “Be content with your wages.”—Luke 111:14. 
 
 149. Thus far we have discussed the question from the 
 workers’ point of view only. Where does the capitalist come 
 in? Will he be friend or foe? Will he help the movement or 
 will he throw obstruction in the way? One thing is certain, 
 that either as a friend or foe he represents a power that can¬ 
 not be overlooked. We cannot afford to ignore the capitalist. 
 This brings us face to face with Socialist philosophy. It 
 would be more correct to say, 'Anti-capitalistic Philosophy/ 
 for the views to be discussed in this and in some of the follow¬ 
 ing lectures, are held by the followers of several other schools 
 of sociology besides Socialism. But whatever their differ¬ 
 ences in other respects, they all agree in their criticism of capi¬ 
 talism. Any one of these schools may therefore be taken as 
 lepresentative of all others. I have preferred Socialism, not 
 merely because it is numerically the most important, but also 
 because it has a copious literature, and an extensive organiza¬ 
 tion for propagation of that literature. It is therefore neces¬ 
 sary to define the term "Socialism,” so as to include all these 
 systems of philosophy, without doing violence to any of the 
 current definitions. Socialism, in its broadest sense, is an 
 ideal state of society, where each worker will receive the 
 full produce of his labor; or when the production is complex, 
 depending upon the combined labor of several persons, each 
 person will receive his full share in value, of the total joint 
 produce, his share being measured bv the amount of labor he 
 was required to contribute. A Socialist according to this con¬ 
 ception, is a person who avows this ideal, and strives to bring 
 about a state of societv in which this ideal will be realized, so 
 that every worker will receive the full produce of his toil, or 
 its; equivalent in value. The term "Socialism,” when used in 
 the sense of a philosophic system, means a system of social 
 and economic philosophy, with "full produce to workers” as 
 
THE UNEMPLOYMENT PROBLEM. 
 
 126 
 
 its objective. The ^‘Socialist” in the narrower sense, stands 
 for public ownership and democratic control of centralized 
 means of production, as a method of reaching that ideal. In a 
 still narrower sense, a Socialist is a member of one of the 
 political parties in any country, such as the Socialist party, or 
 the Socialist Labor party, in the United States. None of 
 these definitions include “Scientific Socialism/’ for the simple 
 reason that scientific Socialism is not any kind of Socialism at 
 all. Scientific Socialism is an analytical study of social evolu¬ 
 tion. It is a pure theory, and is not tied down to any particular 
 ideal. 
 
 150. As I said before, capitalism is a power,—an immense 
 power. In popular Socialism it is regarded as a power of evil, 
 and an unmitigated evil, or when discussed by Socialists who 
 are leniently inclined, it is at best regarded as a necessary evil. 
 Lvery Socialist argument begins with an indictment of capi¬ 
 talism, and the overthrow of capitalism is then a necessary 
 and legitimate conclusion. This so-rt of reasoning is wholly 
 unscientific. No p*ood has ever been done by indictments and 
 anathemas. We know electricity is a great power and in its 
 natural state is almost always a power of evil. The 
 
 same is true of other natural forces. But much as 
 
 we may lament the havoc caused by lightning, 
 
 floods and cyclones we never indict them; we study 
 them. We try to unravel the mystery of their laws of 
 operation, and when we discover the laws we do not rebel 
 against them or try to overthrow the powers, or to violate the 
 laws of nature, we obey the laws and adapt ourselves to them, 
 so that by obeying nature we command and control her. Our 
 duty then, is not to indict capitalism, but to study it. A 
 scientist does not indict cholera. He studies it under a micro¬ 
 scope and tries to discover what is not visible to the unaided 
 eye. He does not indict poison, he analysis it and tries to 
 understand its workings with an ultimate view of eliminat¬ 
 ing its evils by devising a means to make it leave the system. 
 
 1. “The purpose of Socialism is to give to the workers all they 
 produce .... Socialists agree that the heart and soul of their philoso¬ 
 phy lies in public ownership under democratic srovernment, of the 
 means of life: . . . Public ownershio is the rock upon which it is 
 determined to stand or fall.”—Allan Benson: Truth About Socialism, 
 pages 18-19. 
 
I,ECTURE IV-CAPITALISM AND THE WAGE SYSTEM. 
 
 127 
 
 151. Among all the anti-capitalists, including the So¬ 
 cialists, the indictment of capitalism seems to have been the 
 most favorite method from time immemorial. The Old Testa¬ 
 ment condemned interest, and the New Testament condemned 
 profits, but with one solitary exception no Socialist writer 
 from Isaiah to Moses Hilkowitz has ever felt the need to study 
 capitalism, to analyze the process and conditions of capi¬ 
 talistic production. Capitalism is irobbery, capitalism shall be 
 Overthrown; this is the law and the prophets. The only ex¬ 
 ception I referred to is the illustrious Karl Marx. His most 
 important work is not a glowing picture of the Socialist state, 
 but a cold, mathematically precise study of capitalism. I do 
 not want you to carry the impression that I follow Marx 
 through thick and thin and that I am thoroughly in agreement 
 with all his views. I am not. I do not accept the Marxian 
 conception of value, nor do I admit his theory of the class 
 struggle. But the most serious of my complaints against 
 Marx is that he neglected the relation of the unemployment 
 problem to capitalism. He had the ability and the opportunity 
 
 2. The following extracts are collected from one single issue of a 
 Socialist paper. They illustrate the intensity of Socialist sentiment 
 against capitalism. Who could expect an unprejudiced and scientific 
 study of capitalism from persons in such an unscientific mood? 
 
 a. One touch of Capitalism makes the whole world shudder. 
 
 b. Capitalist reformers would regulate wage slavery while Social¬ 
 ists would abolish it. 
 
 c. Capitalist charity is like the vampire bat that draws the blood 
 o i its victim while it fans him. 
 
 d. Capitalism isn’t a system—it’s a bloody mess. 
 
 e. Clip the claws of the crafty capitalists by voting for Benson 
 and Kirkpatrick. 
 
 f. Capitalism is a slaughter house in which the workers are the 
 sheep. 
 
 g. Capitalism is the worker’s greatest and only enemy and it 
 exists only through his ignorance. 
 
 h. Capitalism is economic cannibalism. 
 
 i. Every dollar made in profits adds to the world’s poverty ano 
 misery. 
 
 j. The art of making some men rich also includes the art of 
 making other men poor. 
 
 k. Capitalism has no flag, but if it had it would have to be black 
 in order to be appropriate. 
 
 l. Socialism demands much because the world is in need of much 
 of which capitalism has deprived it. 
 
128 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 to study the problem and he threw it 3 away. At one moment he 
 had it almost between his thumb and 4 forefinger and let it go. 
 The Socialists are loyal to Marx at least in this, if in nothing 
 else, that like him they neglect the unemployment problem. 
 But the purpose of this lecture is a study of capitalism, not a 
 criticism of Socialism, much less of the Socialists. 
 
 152. What is capitalism. The mere possession of money 
 is not capitalism, nor does it consist of purchase and owner¬ 
 ship of things that can be used as implements of production. 
 The essential feature of capitalism is profit, or rather the 
 profit system. A capitalist may not always make profit, but 
 if he expects or intends to make profit when he undertakes a 
 work, his functioning in this capacity is sufficient to make him 
 a capitalist. There are three leading types of capitalists; the 
 money-lending capitalist, the merchant-capitalist and the 
 manufacturing-capitalist. In the first case the capitalist lends 
 money with or without security as he sees fit, and takes inter¬ 
 est for the money loaned. This is the oldest type of capitalism 
 and from which the others have been s derived by modification. 
 
 3. “The question why this free laborer (i. e., the unemployed') 
 confronts him (the capitalist) in the market, has no interest for the 
 owner of money; .... and for the present it interests us just as little.” 
 —Marx, Capital, Vol. I, p. 188. 
 
 From the words “for the present” it would seem that Marx in¬ 
 tended to take up this question later. I r or some reason he never took 
 up that question again. As a tribute to his analytical genius, and spirit 
 of fair-mindedness it is only reasonable to assume that he forgot. 
 
 4. Se-e Lecture I Para. 15, Note 14; Para. 52, Note 31. 
 
 5.. According to Marx, industrial capitalism is the fundamental, 
 and the other two forms are derived types: 
 
 “In the course of our investigation we shall find that both 
 merchant’s capital and interest bearing capital are derivative 
 forms, and at the same time it will become clear why these 
 two forms appear in the course of history before the modern 
 standard form of capital.”—Marx, Capital, Vol. I, page 183. 
 
 How Marx happened to fall into this error I am unable to ex¬ 
 plain. The fact that the other forms were historically prior to in¬ 
 dustrial capitalism ought to have put him on his guard, for a derived 
 form must always follow the fundamental form, in time. It is possible, 
 however, that by “derived form” he only meant economically depend¬ 
 ent, in which case the error is reduced to merely a wrong choice of 
 terms. In capital, Vol. II, page 63, he proves that industrial capi¬ 
 talism is the predominating type, and the other two are now subor¬ 
 dinate to and dependent on it. which is certainly true, but this, does 
 riot mean that they are “derived forms.” 
 
LECTURE; IV—CAPITALISM AND THE WAGE SYSTEM. 
 
 129 
 
 Suppose a money lender lends money to a hatter who has made 
 a hundred hats, but who has not been able to sell them; the 
 money lender lends the money and takes the hats in return as 
 security against the time that the hats will be sold. After the 
 sale of the hats the money lender recovers the money lent with 
 interest. Now suppose that the money lender agrees to sell 
 the hats and take in return for this service the difference be¬ 
 tween the money advanced and the price recovered: in this 
 event you have the transformation of the money lender into 
 the hat merchant. The term “money advanced” now super¬ 
 sedes the former term “money loaned” and the interest which 
 is now indefinite in amount, together with the remuneration of 
 the merchant for his task of selling, is. called “profit.” The 
 hats are said to be “bought” in accordance with this operation. 
 Now if the merchant were to take another step forward he 
 would buy the hats before they were finished, buying them 
 step by step as they are being produced, that is to say, in the 
 process of manufacture. In this capacity he is called a “manu¬ 
 facturing capitalist.” The money advanced is now said to be 
 “invested.” The money lender is the fundamental type of capi¬ 
 talist; merchant capitalist and industrial capitalist being the 
 derived forms. 
 
 153. In a modern civilized society in which capitalism is 
 the prevailing mode of production, the capitalist performs a 
 two-fold function; firstly, he performs the individual function 
 of bridging the time-gap, thus rendering a valuable service to 
 the individual, and secondly, he performs the social function 
 of taking from the workers a part of their produce and of con¬ 
 verting it into productive capital for future use; in this manner 
 he renders an extremely important service to society. The 
 capitalist often performs, or rather is supposed to perform a 
 tMrd function, viz., supervision of industry, but this is a mis¬ 
 take. Supervision of industry is a labor function, and even 
 when performed by a capitalist is still a labor function. 
 Imagine a diamond cutter rich enough to own his own 
 diamonds and the machinery necessary to cut the diamonds; 
 
 6. He (Capitalist, as director and superintendent) creates surplus 
 value, not because he performs the work of a capitalist, but because he 
 also works, aside from his capacity as a capitalist.—Marx, Capital, Vol. 
 Ill, page 450. 
 
130 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 he would now be a capitalist and a laborer combined, but 
 though he worked along side of his hired workers, we would 
 not say that cutting diamonds was therefore a function of the 
 capitalist; we should rather say, that this particular capitalist 
 was also a laborer; cutting the diamonds is always a labor 
 function, even when it is done by a capitalist—who for the time 
 should be regarded as a laborer. In the same way, a capital¬ 
 ist who keeps his own account books, hires his help, or plans 
 the alterations to his factory, is just to that extent a laborer. 
 The proper fundamental functions of a capitalist are two and 
 only two, viz., (1) Bridging of time-gap, and ( 2 ) appropria- 
 t on of surplus value for re-investment. There are also some 
 secondary or derived functions which will be considered later. 
 
 154. What is time-gap? Every individual is a consumer 
 before he is a producer; he must consume before he can pro¬ 
 duce. You must put coal and water into an engine before 
 you can take work out of it. You have to switch the current 
 into a lamp or a fan motor before it can give out light or a 
 breeze. A man is at best a machine, not only physically, but 
 intellectually, as well. He must eat food from his birth during 
 the course of many years, till his muscles are in proper condi¬ 
 tion to produce anything, even by the simplest type of manual 
 labor. He must read books and consume the intellectual pro¬ 
 duct of other men to get his education, before he can turn out 
 any intellectual work himself. In all cases he must consume 
 before he produces. Individually, man is a consumer before 
 he is a producer. This is the law of Nature,—law of God, if 
 you please. 
 
 155. Socially, man is a producer before he is a consumer. 
 
 There are men who are recognized as consumers first, and 
 some men who may not be producers at all, but society re¬ 
 gards this as a breach of law, as something that must be 
 averted or discontinued, as something that should not be tol¬ 
 erated, much less encouraged. Socially, man is recognized as 
 a producer only. To the producer belongs the full product of 
 his toil: That is our social ideal. It may not always be prac¬ 
 ticed, and we should have sense enough to know that it can¬ 
 not be practiced,—but I will waive that point for the present; 
 nevertheless, we still regard that as our social ideal. A person 
 who openly avows this ideal, “to the producer the full product 
 
LECTURE IV—CAPITALISM AND THE WAGE SYSTEM, 
 
 131 
 
 of his toil,” and endeavors to carry it to its logical conclusion is 
 a 7 Socialist. Is this ideal right in theory and practicable in 
 its application ? 
 
 156. Whether the ideal be right or wrong, there is one 
 thing certain, and that is, that it is an impossible ideal; it 
 cannot be followed out consistently without making excep¬ 
 tions and modifications at every step. If the produce belongs 
 to the producer, then obviously, it belongs to nobody else, 
 certainly not to one who has produced nothing whatever. 
 Therefore, a person who has not produced, he has no right to 
 consume, for nothing belongs to him. If a man has not pro¬ 
 duced neither has he a right to consume. According to our 
 social standard, man must produce before he consumes. This 
 is the law of man. 
 
 157. Between these two laws there is a hopeless contra¬ 
 diction ; it is impossible to reconcile them, and one of the laws 
 must be violated. When the laws of man are in conflict with 
 the laws of Nature, the laws of man must go overboard. Sex¬ 
 ual affinity is a law of Nature. Suppose the laws of man 
 were to regard such affinity as wrong, and that statutes were 
 enacted to prevent all sexual-intercourse, or that the marriage 
 system were to be abolished by law, what would be the result? 
 The world would go on undisturbed. There would be secret 
 
 7. As stated before, the word Socialism is used here in the broad¬ 
 est sense, as will be seen from the following illustrations; 
 
 a. Under Socialism, the whole product of labor is to be dis¬ 
 tributed among the workers. Thus far we are orthodox.—‘Charles E. 
 Russell, N. Y. Call, June 18th, 1916. 
 
 b. “We call upon our citizenship, .... to eliminate the injustices 
 exposed by this commission, to the end that each laborer may secure 
 the whole product of his labor.”—Page 156, Report of the Commis¬ 
 sion of Industrial Relations, supplemental statement by Frank P. 
 Walsh, chairman. 
 
 c. Inasmuch as most good things are produced by labor, it fol¬ 
 
 lows that all such things of right belong to those whose labor has pro¬ 
 duced them.to secure to each laborer the whole product of his 
 
 labor, or as nearly as possible, is a worthy subject for any good gov¬ 
 ernment.—Abraham Lincoln, (quoted by Frank P. Walsh). 
 
 d. (Under Anarchism) with the incubus of privilege removed, 
 producers would retain all their product/’—John Beverley Robinson, 
 Economics of Liberty, page 106. 
 
 e. “Labor is entitled to all it produ es.”—Joseph J. Ettor, Indus¬ 
 trial Unionism. 
 
132 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 marriages or open violation of the laws regarding sexual mat¬ 
 ters. The same thing happens to the economic law. The law 
 of Nature requires consumption before production. The laws 
 of man demand production first, the laws of man are there¬ 
 fore violated, for man could not live at all without violating 
 such laws. If everyone who had not first produced were 
 denied the right to consume, not a single baby in the world 
 would live to be 24 hours old. The human law of “production 
 first” has to be violated at every step. 
 
 158. And so it is violated at every step; there are various 
 ways of doing it, but no matter what the method, the purpose 
 is always the same: the revolt against the human or rather 
 the inhuman law of “production first.” All our social institu¬ 
 tions are directed towards this revolutionary end, viz., the 
 overthrow of the law of “production first.” The oldest institu¬ 
 tion, the one that has persisted through all the types of civil¬ 
 ization is the family. Within the family, the rule of produc¬ 
 tion first, and also the underlying principle “to the producer 
 belongs the full product” are wholly ignored; more than that, 
 a family is compelled in all civilized countries to suspend this 
 law to some extent; a man who does not support his wife and 
 children will be compelled to support them by law, or by the 
 force of public opinion. All charitable ‘institutions (what¬ 
 ever their name or form) violate this law and are respected 
 for this act of violation. A church that would refuse admis¬ 
 sion unless the person first pays the admission fee will scarce¬ 
 ly be held in reverence. But neither the family nor the church, 
 nor the charitable institutions suffice to overthrow the law; 
 the law still prevails, and some systematic method of attack¬ 
 ing it becomes necessary. Capitalism is one method directed 
 towards this end; how far it has succeeded in performing this 
 function is the question for our present study. 
 
 159. According to the law of Nature, man must consume 
 before he can produce. Need to consume comes into existence 
 before the ability to produce. According to the inhuman 
 and unnatural social law, the right to consume comes into ex¬ 
 istence after his produce, therefore the need to consume al¬ 
 ways comes into existence before the right to consume. The 
 interval of time between the need to consume and the sub¬ 
 sequent right to consume is the TIME-GAP. This time-gap 
 
LECTITRE IV—CAPITALISM AND THE WAGE SYSTEM, 
 
 133 
 
 may be short or long, it may be definite or indefinte, but in all 
 cases it is urgent, and unless it is bridged in some way the 
 individual will suffer, and the suffering may culminate 
 in death. The need of bridging this time-gap is there¬ 
 fore one of the most urgent and universal of human 
 needs. The only possible way to bridge the time-gap 
 for any individual is by consuming what somebody else has 
 produced, but since according to the social law no person has 
 a right to consume the produce of others, he can only con¬ 
 sume it by the producer’s consent. In the family this consent 
 is given by the older members through love, and affection. In 
 charitable institutions it is given by the donors through a 
 sense of real or pretended love for those in need. But there 
 are many occasions where both these methods fail; the family 
 and the charitable institutions are both unable to give to the 
 full extent of the needs of the individual. Suppose, for ex¬ 
 ample, that I desire to start my career as a dentist. My poor 
 parents might be able to give me food and clothing during 
 my boyhood, but they could not bear the expense of necessary 
 college education much less can they bear the preliminary ex¬ 
 pense of starting me up in the profession, such as providing 
 the necessary tools, furniture and other accessories, and yet 
 unless I buy these first I could not produce the necessary 
 service. I cannot be a producer first. I must be a consumer 
 to a large extent before I can fill the first tooth. I might have 
 the necessary ability and aptitude. Perhaps I am sufficiently 
 gifted by Nature to become the ablest and most successful 
 dentist in the nation. I would perhaps not rise above the 
 mediocre but whether I will rise above or fall below is but a 
 matter of conjecture. What the future has in store for me, this 
 social law decrees, I shall not know because I have not “pro¬ 
 duced first.” 
 
 160. Now there comes upon the scene the capitalist who 
 loans me money. He helps me to tide over the time till I 
 obtain my education, tools and equipment. In course of 
 time, 1 produce according to my ability and return the loan. 
 I also pay an extra amount as interest for the service he has 
 rendered to me; he has bridged the time-gap. The question 
 whether the interest is moderate and proportional to the ser¬ 
 vice rendered, or excessive and out of all proportion to the 
 
134 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 service, is certainly important, but it cannot be discussed at 
 this stage. We are discussing at this stage only the nature of 
 the service and not the amount of payment. The capitalist has 
 bridged the time-gap and rendered a valuable service to me 
 by lending me the money before I could produce anything. In 
 other words, he enables me to consume before I produce, and 
 he does it in defiance of the social law of production first. 
 
 161. The same thing may be said of the other forms of 
 capitalism. A merchant who buys commodities from the pro¬ 
 ducer is only bridging the time-gap. Suppose a farmer has 
 produced wheat; he needs coal and blankets for the winter, 
 and also other urgent necessities, but he cannot buy any of 
 these things until he has first sold his wheat. The farmer is 
 now confronted with the time-gap. In this case the time-gap 
 is not apparent at first sight but it can easily be recognized 
 with a little analysis. The time-gap does not only mean the 
 time until a person has produced. The time necessary for the 
 8 sale must also be added, for he cannot consume before he 
 buys, and he cannot buy before he sells. Or, we may look at 
 it this way: the man has produced a thing according to his 
 own ideas of production but not from society's point of view, 
 because society does not consider a thing as produced in an 
 economic sense unless it is of use to somebody who is willing 
 to pay for it, and the only way to prove its usefulness is to 
 try to sell it; if it is sold its usefulness is established; if it is 
 not sold it is because nobody wants it, hence it is not useful 
 and, from a social point of view is no production at all. I will 
 not commit myself to the assertion that this method of reason¬ 
 ing is good logic, but good logic or bad logic it is logic em¬ 
 ployed by those who believe that to the worker belongs the 
 full product of his toil. In any case the prolongation of the 
 time-gap up until the moment of sale is indisputable. 
 
 162. A farmer who has produced wheat, but who has not 
 vet been able to sell it is facing the time-gap. To tide over this 
 interval he may borrow money from the money-lending-capi- 
 
 8. In a society where all products assume the form of commodi¬ 
 ties, these commodities must be sold after they have been produced. 
 Ic is only after their sale that they can serve in satisfying the require¬ 
 ments of their producer. The time necessary for their sale is super 
 added to that necessary for their production. 
 
lectors IV—capitalism and the wage system. 
 
 135 
 
 talist, and buy what he needs, and pay back the amount, after 
 he has sold his wheat, together with interest, which latter is 
 but remuneration to the money lender for his services in hav¬ 
 ing bridged the time-gap. The merchant, in the mean time, 
 may take the wheat as security and sell it in behalf of the 
 farmer. Thus we see that the merchant is essentially a 
 money-lender, the wheat which he buys being a security for 
 the loam According to the Socialist philosophy a merchant is 
 only a parasite and takes profit for doing nothing. The fact 
 that he inverts the relation of production to consumption and 
 thus bridges the time-gap is frankly admitted,—sometimes, 
 even the importance of the service is admitted,—and yet his 
 right to remuneration for this important service is ignored! 
 
 163. The manufacturing capitalist is only a merchant in 
 a more extended sense. A merchant buys finished product. 
 A manufacturer buys unfinished product (raw material, mach¬ 
 inery, labor power, etc.) In other words he buys goods in the 
 process of the making. He thus bridges the time-gap a little 
 more effectively than the other two types of capitalist, and 
 he therefore now stands out as the most predominating type. 
 The fact that the manufacturing capitalist bridges the time- 
 gap is so evident that it should not need illustrations to 
 demonstrate it, and still for some reason entirely incompre¬ 
 hensible to me, I have found that while many Socialists can 
 see the time-p-ap and its bridging by the money-lender and 
 bv the merchant, they find it impossible to see any time-gap 
 bridged by the industrial capitalist. Therefore at the risk of 
 tiresome repetition I will give one or two further illustrations. 
 Suppose that I am a chemist, and that I intend to invent a 
 method of producing sugar from the pulp of corn cobs. Any 
 chemist will grant that such a feat is not impossible, though 
 it has not as yet been accomplished. As to the usefulness of 
 such a discovery it is not necessary to argue, for it is perfectly 
 plain that such an achievement would be far more useful than 
 the making of diamonds from charcoal. In order to accom¬ 
 plish this result it may be necessary to experiment for a year 
 or two, or, perhaps for five, ten, or even twenty years. During 
 this time I shall need food, clothing and shelter. I shall need 
 the necessary chemicals, machinery and scientific instruments 
 such as the chemical balance or the polarizing microscope. I 
 
136 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 shall also need books giving the results of previous endeavors 
 of other chemists along this same, or similar lines. Lastly 
 I shall need the help of a number of educated and uneducated 
 laborers to help me in my investigation. In other words I 
 must consume the produce of the labor of other workers before 
 I can produce my formula for converting corn-cobs into sugar. 
 The result of my work, if successful, may be worth ten times 
 or even a hundred times the value of which I previously con¬ 
 sume but whatever the result I must consume before I pro¬ 
 duce ; I am confronted with the time-gap, and before I can be¬ 
 gin my researches, this problem must first be taken care of. Be 
 it understood that neither my parents nor any charitable in¬ 
 stitutions can help me, and even if they could it would be 
 too much to expect of them. But a capitalist can help me, 
 and he must help me if I am to undertake the venture, or rathe** 
 if he counts upon the profit arising from my endeavor. He 
 may lend me the money, or buy the necessary chemicals, 
 machine and other equipment, and lend me its use. He may 
 also give me as wages a sufficient amount to cover the cost of 
 my living during the time of the experiment. And then, if the 
 work is successful he will take the formula for what it is 
 worth. 
 
 164. The same thing is true of all kinds of labor. In 
 every case there is the time-gap. The worker is willing and 
 able to produce, but his produce lies in the future and is not 
 available for immediate consumption, but he needs the neces¬ 
 sities of life NOW; between the time of his need at the present 
 moment and his possible product of the future (including the 
 future sale) is the time-gap. The wages, or rather the wage 
 system, is the method of bridging the time-gap. This is why 
 I am not opposed to the 9 wage-system. The Socialists say 
 
 9 .If laborer “B” is employed with surplus-values produced by lab¬ 
 orer “A,” then in the first place “A” supplied this surplus value without 
 having the just price of his commodity reduced by one farthing, 
 and in the second place, thi-s transaction is none of “B’s” concern. 
 What “B” demands and has a right to demand is that the capitalist 
 should pay him the price of his labor power. “Both sides are gainers; 
 the laborer by having the fruit of his labor advanced to him (that is 
 the fruit of the unpaid labor of others) before he has performed any 
 labor, (that is, before his own labor has borne fruit.) . . . .”—Marx, 
 Capital, Vol. t, page 642. 
 
 The quotation in the above is from Sismondi. 
 
I ECTURE IV—CAPITALISM AND THE WAGE SYSTEM. 
 
 137 
 
 that they are opposed to the wage system. Can they explain 
 why? Can they give one single argument against it? They can¬ 
 not; at least, I have never come across their argument if they 
 have any. I can understand a man being opposed to come par¬ 
 ticular phase of the wage-system; we might discuss fairly 
 whether the wages should be by time work or by piece-work; 
 we might well inaugurate a movement to stop sweated labor 
 and to introduce a law to establish the minimum wage. On 
 these and other cognate questions there is ample room for dif¬ 
 ference of opinion, but as to the question whether the wage 
 system is fundamentally wrong there is no room for disagree¬ 
 ment. There is nothing whatever that can be said against the 
 principle of the wage system. There is room for improve¬ 
 ment along many lines, indeed there is very urgent need of 
 some improvement also, but there is no excuse for abolishing 
 the wage system. The next step in economic evolution will 
 not be the abolition, but the perfection of the wage system, or 
 at least a step in the direction of such perfection. 
 
 165. The wage system is a system of production where 
 the producer receives as remuneration a stipulated wage for 
 his services, the whole produce of his labor being surrendered 
 to the employer in exchange for the wages. Wages, accord¬ 
 ing to Marx is the price of labor power; I should define wages 
 as price of effort. The two definitions are nearly, but not 
 quite identical. Effort is only the use or application of labor 
 power towards a useful end. Therefore to this extent the two 
 definitions are in agreement, but they differ in this, that the 
 Marxian definition refers to the wage system as it is, or rather 
 as Marx thinks it is, while my definition refers mainly to 
 the ideal wage system, that is to the wage system as it should 
 be, and therefore also to the wage system as it is in theory, but 
 not in fact. My definition approximately applies also to the 
 wage system as it is, but in this respect it is no worse than the 
 Marxian definition, for that definition also applies only ap¬ 
 proximately to the present wage system. My definition pre¬ 
 sents an ideal or objective towards which we may direct our 
 efforts; the Marxian definition supplies no objective, and in 
 the absence of a definite objective, the modern Socialist re¬ 
 volts against the wage system as a whole, and therefore un¬ 
 knowingly against the philosophy of scientific Socialism, and 
 
138 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 turns back to the old ideal of "to the producer the full produce.” 
 
 166. “Wages” in theory is and in practice should be the 
 price of effort, and a perfect wage system would be one in 
 which each individual would receive as wages an amount 
 proportional to his effort, no matter how much or how little 
 his produce should be. The wages under such a system will 
 not depend upon his success, but only upon his effort, the 
 more strenuous and earnest the effort, the higher the reward. 
 At this stage there would arise the question as to how the 
 effort should be measured. By what chemical balance could 
 the efforts of a hod-carrier be measured with those of a watch¬ 
 maker? Which constitutes the greater effort, that of the chem¬ 
 ist who by patient and carefully executed experiments sup¬ 
 plies the basis of a new theory of matter, or of a mathemati¬ 
 cian who analyses the data supplied by the chemist, and toils 
 with lengthy equations which represent that new theory? 
 Which needs more nerve, the dare-devil leap of a movie-actress 
 from a railroad train into a roaring torrent, or the continuous 
 facing of death from day to day in a white lead factory? How 
 could you apportion wages according to effort when you 
 do not know how to measure effort? I must frankly admit that 
 I am unable to answer these questions. I wish I could, but I 
 cannot. 1 must acknowledge my inabilitv without qualifica¬ 
 tion or evasion. But with my acknowledgment 1 must also 
 add that the time to answer them has not yet arrived, and my 
 failure to answer them therefore has no significance whatever. 
 We are nowhere near the promised land; we are yet far away 
 in the wilderness and it is idle to discuss at this time how the 
 Jordan should be crossed. When we reach the Jordan we shall 
 see. Maybe, the power that leads us and guides us up to that 
 point will also part the waters for us, that is, if you are dis¬ 
 posed to be a fatalist or inclined to believe in miracles. Or we 
 might take a rational and scientific view; the engineers in 
 charge of the expendition will study on the spot the river bed 
 and the banks and construct a bridge. Suffice it to say, that 
 the time to discuss that question will be when we reach there, 
 not now. 1 am not discussing the perfect wage system at this 
 stage. Our present duty is to make the wage system better 
 than it is today. When the time to introduce the perfect wage 
 s> stem comes, the men whose duty and privilege it will be to 
 
LECTURE IV—CAPITALISM AND THE WAGE SYSTEM, 
 
 139 
 
 meet the problem, will do their duty as best they can. Our 
 duty now, is to take a step, towards the perfect wage system, 
 not a step away from it, by abolishing it entirely, and by going 
 back to the good old plan, that they may take who have the 
 power, and let them keep who can. The Guaranteed Employ¬ 
 ment system is in no sense a perfect wage system, but neither 
 is it final. When in the course of evolution the time to inau¬ 
 gurate the perfect wage system comes there will also be men 
 fit to undertake the task. To me has been assigned the humbler 
 task, to bring to you the message of hope and inspiration, and 
 to awaken you to possibilities of the glorious day when, 
 
 "No step will walk with aimless feet 
 Not a soul shall be destroyed 
 Or cast as rubbish to the void 
 When God has made his file complete." 
 
 From two to five million men of all trades and professions, 
 willing to work, able to work, and yet unable to find an op¬ 
 portunity to work, tramping the streets with aimless feet from 
 day to day, cursing the day when they were born, and willing 
 to sell their souls for a piece of bread, cast as rubbish upon the 
 industrial scrap heap of modern civilization f Is this a very in¬ 
 spiring sight! Now weigh against this a system where every 
 willing and able worker is provided for. No more aimless 
 feet; not a soul to be bought for ten cents; no men, women or 
 children to be thrown out and degenerated into unemployables. 
 How do the two systems compare? Who is there that will be 
 opposed to the Guaranteed Employment scheme and turn back 
 to the "full produce" game with all the horrors that it means? 
 
 167. "Full produce system" with all the horrors that it 
 means; that is exactly what I say. This is no idle rhetoric. I 
 repeat every word deliberately to show that I mean what I 
 say. If to the producer belongs the full produce then it be¬ 
 longs to no one else. You cannot escape this conclusion. It 
 belongs to him for use, for hoard, or to throw away or to trade 
 with another person on such terms as he chooses for himself. 
 If it belongs to nobody else, nobody has a right to use it. 
 Therefore a man who has not produced has no right to con¬ 
 sume. But a man has to consume first, this is the law of 
 Nature, and therefore he must first obtain the right to consume 
 by trading away his right to his future product, for that is aL 
 
140 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 he can trade with,—that is all the exchangeable assets that he 
 possesses. This is capitalism, and capitalism of the most 
 atrocious type, and yet the Socialists will tell you, that their 
 ideal is “the full produce to the producer.” It is an old story— 
 the world has suffered more from the hands of honest, well- 
 meant, earnest fanatics than* from villians. The religious wars, 
 and the Inquisition were not invented by wicked men who 
 enjoyed the sufferings of the millions. They were results of 
 honest efforts of very sincere fanatics who meant to do well, 
 and many of whom themselves went to the stake rather than 
 cause suffering to others, but they thought they were doing 
 good. They worked in the name of Jesus, and they sang, 
 “Peace on earth, good will to men.” In spite of all the wars 
 and other evils that they set on foot they still deserve to be 
 forgiven for they were sincere and knew not what they did. 
 
 168. The Socialists mean well; their sincerity is often 
 above suspicion, and their enthusiasm is admirable, but their 
 narrow mindedness and dogmatism is regrettable. If they have 
 advocated the doctrine of “full produce” it is not because they 
 are wicked and want to cause suffering, it is because they are 
 not awake to the full measure of the evil which that doctrine 
 involves. They cry out loudly demanding that the wage sys¬ 
 tem be crucified, and that the full produce system be released, 
 because they know not what they do. 
 
 - 169. The “full produce system” is essentially ^anti¬ 
 social. It is individualism carried to its bitter end. It is at the 
 root of the system of private property against which the So¬ 
 cialists are thundering anathemas. If to the producer belongs 
 the full produce, then it belongs to him and to no one else. If 
 I produce a new anti-toxin it belongs to me. Society may be 
 scourged by a plague, and men and women be dying in thou¬ 
 sands, but what is that to me? I have no use for all the anti¬ 
 toxin in my possession, but that makes no difference. The 
 
 10. “As a matter of fact this traditionally Socialist standard (‘the 
 right to the full produce of one’s labor?’) is not Socialistic at all, but 
 
 the essence of individualism.The persistence in Socialistic thought 
 
 of the demand for the ’full product of one’s labor’ is a survival of 
 primitive handicraft individualism.”—Skelton, Socialism, a Critical 
 Analysis. 
 
LECTURE IV—CAPITALISM AND THE WAGE SYSTEM 
 
 141 
 
 people must buy it from me and on terms dictated by me, or 
 go without it. If Socialism ever succeeds at all it will be not 
 by adhering to the doctrine of full produce, but by Abandon¬ 
 ing it. It is one of the ironies of history that Socialism should 
 advocate the most anti-social doctrine, and that industrial 
 capitalism should be the first to give it a practical challenge. 
 
 11. According to John Spargo, when the Socialists talk of “full 
 produce’’ they don’t mean it. But, the stupid opponent of Socialism, 
 “the average man,” misconstrues this shibboleth, as he misconstrues 
 also the other shibboleth, (abolition of wage slavery.) (See note 12 
 infra.) But if these phrases are misleading, and liable to be mis¬ 
 understood by the “average man” why insist on using them. Surely 
 the English language is rich enough to permit the use of words capable 
 of expressing correctly what they are meant to express. If the first use 
 oi these phrases was the result of unlucky choice, due to unguarded 
 error, fifty years time is more than sufficient for revision, and sub¬ 
 stitution of appropriate phrases. The fact seems to be, that, the So¬ 
 cialists have, with good intentions no doubt, accepted the doctrine of 
 full produce in all earnestness, in blissful ignorance of its true char¬ 
 acter. The leaders in the Socialist movement who know better but who 
 lack the courage of their conviction, are playing the facing-both-ways 
 game, trying to be scientifically correct, and unscientifically 
 popular at the same time For example, Morris Hillquit has 
 evidently abandoned the full produce claim, and yet he tries 
 tc maintain a semblance of the orthodox Socialist ideal; “ . . . . social 
 justice shall be established by returning to the working population 
 as a whole, the full product of their labor. . . .” Note the words “as 
 a whole.” According to Hillquit’s conception of justice there is no 
 need for each individual worker to get the equivalent of his share, 
 no matter how much or how little he produces. He (Hillquit) will 
 be. satisfied if the workers as a whole get the full produce, irrespective 
 of how it is distributed among the workers. If a man producing ten 
 cents gets nearly one thousand dollars, and ten men producing one 
 hundred dollars each, get ten dollars each, it would be, according to 
 Morris Hillquit, an equitable distribution in conformity with his con¬ 
 ception of social justice, provided the total, one thousand dallars and 
 ten cents remains in the hands of the eleven workers. Mr. Morris 
 Hillquit has (perhaps unintentionally) made a -sorry mess by trying 
 to mix individualism with Socialism. The doctrine of full produce is 
 individualism. Equal, and equitable treatment of workers, singly and 
 as a whole, is Socialism. The full produce to workers, as a whole, is 
 neither the one nor the other. It is ju-st a sample of meaningless 
 rhetoric. 
 
142 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 Incidentally I may note at this point that 12 scientific Socialism 
 does not take its stand on this absurd doctrine. 13 Marx never 
 advocated such an outrageous system. In the Communist 
 Manifesto he advocated, or rather forecast a state of society 
 “in which free development of each is the condition of the free 
 development of all/' Engels speaks of it as a state in which 
 means of production are free, and man also free. (Socialism 
 
 12. “Sociaists are too often judged by their shibboleths rather 
 
 than by their principles which those shibboleths imperfectly express, 
 or seek to express. Declaiming rightly against the wage system as 
 a form of slave labor, the ‘abolition of the wage slavery’ is forever 
 inscribed on their banner. The average man is forced to the conclusion, 
 that Socialists are working for a system, in which the workers will 
 devide their actual products, and then barter the surplus for the sur¬ 
 plus products of other workers.Karl Kautsky, perhaps the great¬ 
 
 est living exponent of modern Socialism, has made this point perfectly 
 clear. He accepts without reserve the belief, that wages, unequal 
 and paid in money will be the method of remuneration for labor in 
 the Soc : alist regime.”—John Spargo, Socialism, page 315. 
 
 Question: What does Spargo mean by “average man”? Does he 
 mean average Socialist, or average non-Socialist?” 
 
 13. “Marx never argued that producers of wealth had a right to 
 the wealth produced The ‘right of labor to the whole of the produce’ 
 was, it is true, the keynote of the theories of Ricardian Soc'alists. An 
 echo of this doctrine appeared in The Gotha programme of the Ger- I 
 man Socialists, to which reference has already been made (s^e suo- 
 plementary note below) and in the popular agitation of Socialism in 
 this and other countries it is echoed more or less freouently. Just 
 in proportion as the ethical argument for Socialism is advanced, and 
 appeal made the sense of justice the rich idler is condemned and the I 
 ethics of distribution based upon production becomes an important I 
 feature of propaganda. But Marx nowhere ind lges in this kind of 
 argument. Not a single line of ‘Capital’ or his minor economic 
 treatises, can any hint of the doctrine be found. He invariably scoffs j 
 at the ‘ethical distribution’ idea.”—John Spargo, Socialism, page 229. 
 
 SUPPLEMENTARY NOTE—“It is true that such phrases as 
 ‘Labor is the source of all wealth’ are constantly met with in the 
 popular literature on Socialism. So far as that is the case it is not 
 due to teachings of Marx but rather in spite of it. In the writings of | 
 the early Ricardian Socialists, these phrases abound, but nowhere in 
 all the writings of Marx, will such a thing be found. For many years 
 the opening statement of the programme of the German party con¬ 
 tained the phrase, ‘Labor is the source of all wealth and all culture.’ 
 but it was adopted in spite of the protest of Marx. The Gotha pro¬ 
 gramme was adopted in 1875. a draft was submitted to Marx and he ; 
 wrote that is was ‘utterly condemnable and demoralizing to the party.’ ” 
 —John Spargo, Socialism, page 225. 
 
LECTURE IV—CAPITALISM AND THE WAGE SYSTEM. 
 
 143 
 
 Utopia to Science.) While Marx and 14 Engels have only 
 ignored the full produce doctrine, Kautsky expressly repud¬ 
 iates it as being anti-Socialistic, and an inheritance from the 
 Bourgeois mode of 1 Thought. But though this doctrine is 
 foreign to and incompatible with the philosophy of scientific 
 Socialism, it is the Socialism of the rank and file. It is the So¬ 
 cialism of Benson, Hillquit, Russell and Kirkpatrick. Jt is the 
 Socialism of the American Socialist, the New York Call and 
 the Appeal to Reason. It is the Socialism of the majority of 
 the Socialist voters of the United States. This is the reason 
 why I have taken so much time in dealing with it. 
 
 170. Or there is another possibility; it is possible that I 
 have misunderstood Socialism, and that the Socialist doctrine 
 of full produce, means something entirely different from what 
 I understand; in other words I am unknowingly attacking a 
 nightmare Socialism of my own creation. In order to leave no 
 room for needless misunderstanding, I submit a statement of 
 the doctrine as I understand it. According to my understand¬ 
 ing :—• 
 
 (a) If a person produces anything singly and unaided, the 
 
 full produce belongs entirely to him. 
 
 (b) If several persons produce anything jointly, the 
 
 whole product belongs jointly to all. 
 
 (c) In such a case, the produce cannot generally be dis¬ 
 
 tributed. The producers are therefore entitled to 
 
 the full value of the produce. 
 
 14. “In a society of private producers, private individuals or their 
 families have to bear the cost of creating intellectual workers. An 
 intellectual slave always commanded a higher price, and intellectual 
 workers get higher wages. In an organized Socialist society, society 
 bears the cost, and to it therefore belong the fruits, the greater value 
 produced by intellectual labor. The laborer himself has no further 
 claim. Whence it follows that there are many difficulties connected 
 with the beloved claim of the worker for the full product of his toil/’— 
 Engels: Landsmarks of Scientific Socialism page 222. Quoted by Dr. 
 Skelton, in Socialism: A Critical Analysis. 
 
 15. “ ‘To each accordng to his deeds,’ will always be found in¬ 
 applicable. .... Thi-s notion, .... springs from the modes of thought, 
 that are peculiar to the modern system of private property.—Kautsky’s 
 Class Struggle, page 139. 
 
144 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 (d) All persons who have joined in the production, are 
 
 entitled to a share of the produce, or of the value 
 of the produce. 
 
 (e) In apportioning the share of the individual, each 
 
 worker is regarded as being entitled to a share 
 of the produce (or its equivalent in value) in pro¬ 
 portion to the labor he is called upon to contribute, 
 in order to do his part of work. (The actual 
 amount of labor spent by the worker may be more 
 or less than what is required of him; his share of 
 produce depends not on the actual labor spent, but 
 on the labor he is expected to spend under the ex¬ 
 isting condition of industrial development. This 
 is technically referred to as “socially necessary 
 labor” or more briefly “social labor”). Approxi¬ 
 mately speaking, the worker is entitled to a share 
 of the produce, in proportion to his contribution 
 of labor. Therefore a person who contributes no 
 labor is entitled to no share of the produce. 
 
 (f) In computing the share of the worker, the word “pro¬ 
 
 duction” must be construed in its most extended 
 sense. It includes not only what is popularly un¬ 
 derstood by the word “production” but also the 
 several auxiliary processes, such as production of 
 raw material, machinery, tools, transportation, 
 storage, sales, etc. It includes also the pro¬ 
 cesses, supervision, control, initiative planning etc. 
 
 (g) Productive labor, does not include the labor of mere 
 
 stockholders. Any share of the produce which is 
 taken by the capitalist in the form of a profit must, 
 therefore, be regarded as robbery. Labor spent in 
 the process of, or auxiliary to, taking profit does 
 not contribute to help production, and therefore 
 does not create a right to a share in the produce. 
 The profits of the capitalist must, therefore, be 
 regarded as robbery, no matter how much labor 
 he spent in collecting the profit. But what the 
 capitalist takes as wages for supervision (i. e., when 
 a capitalist happens to be also a supervisor) is not 
 robbery; as a supervisor the capitalist is a pro- 
 
LECTURE IV—CAPITALISM AND THE WAGE SYSTEM. 
 
 145 - 
 
 ducer, and takes only the equivalent of what he 
 produces (assuming for the sake of argument that 
 he does not take for himself higher wages than 
 those he would pay to a hired director or super¬ 
 visor). The share of the worker is, therefore, in 
 no way reduced by what the capitalist takes as 
 wages of supervision. What the capitalist takes 
 as profit, is what rightfully belongs to the sev¬ 
 eral workers, whose share is reduced by this 
 amount, 
 
 (h) The purpose of Socialism is to give to each worker 
 the full produce of his labor in this sense, viz: his 
 share of the total produce, in proportion to his 
 labor, taking into account the equivalent shares 
 of all other workers, who have contributed labor, 
 no part of the produce being deducted for payment 
 to anyone who has not contributed his labor for 
 the purpose of production. 
 
 NOTE—1. It is generally conceded by all Socialist writers, that a 
 deduction for the cost of maintenance of government is 
 necessary, and that under Socialism, the share of the 
 worker will be deducted by that amount. It is not clear 
 whether such deduction is regarded as a necessary and 
 unavoidable evil, or whether it is regarded as a legiti¬ 
 mate apportionment, being the share of government em¬ 
 ployees for their share of labor in the form of adminis¬ 
 tration, (administration being regarded as a part of 
 “production” in its extended sense.) I am also unable 
 to say whether this lack of clearness vs accidental or in¬ 
 tentional. It is certainly not due to a mere difference of 
 views between different writers, for the same writer often 
 endorses the two opposite views. 
 
 2. It is generally conceded also, that a second deduction will be 
 made for the benefit of persons unable to produce. The 
 need of such a deduction is always recognized, but the 
 measure of their share, and the basis of their right is 
 generally not clear. Whatever the basis of their right, 
 it is certainly not “the producer’s right to his own pro¬ 
 duce”. (x\ccording to my analysis, wages should be the 
 price of effort. In the case of persons unable to pro¬ 
 duce, the mere willingness to produce is* the maximum 
 effort, more effort than this, being impossible by the 
 hypothesis of the problem. I should therefore consider 
 these men as entitled to full wages, which should be 
 paid to them from the surplus produce of other workers, 
 
THE UNEMPLOYMENT PROBLEM. 
 
 146 
 
 to which surplus the producers themselves have no right 
 or title.) 
 
 3. A third deduction for public utilities, such as roads, parks, 
 street lighting, etc., and a fourth deduction for creation 
 of new capital, is also sometimes conceded. With the 
 last concession, the doctrine of “full produce” goes en¬ 
 tirely out of existence; but I am sure the average So¬ 
 cialist will refuse to admit, (perhaps even fail to recog-; 
 nize) the surrender implied by that concession. 
 
 This is what I understand to be the full produce doctrine 
 of the Socialists. If this statement be not a correct presenta¬ 
 tion of their doctrine, then in spite of my earnest efforts I have 
 understood nothing, and everything I have said against the 
 Socialists is a mere waste of time and breath. It is the duty 
 of the Socialists now to re-state their case, in simpler, clearer, 
 and unmistakable words if they can, so as to preclude the possi¬ 
 bility of a misunderstanding. In the meantime I must proceed 
 on the supposition, that the Socialists have endorsed the full 
 produce doctrine, in good faith no doubt, but without realizing 
 what a demoralizing doctrine they had endorsed, and that they 
 will cheerfully abandon it when they see their error. 
 
 171. The Socialists, as I said, are sincere, well meant and 
 enthusiastic. If there is any person whose heart bleeds at the 
 suffering and misery of the workers, it is the Socialist. If 
 there is any field, from which volunteers for the fight for 
 economic justice may be called, it is from the ranks of the So¬ 
 cialist Party. If there is anywhere today a religion of hu¬ 
 manity and a gospel of brotherhood it is Socialism that is 
 preaching it. How comes it then that these same Socialists, 
 have taken for their motto, as it were, the most anti-social 
 doctrine, "to the producer belongs the full produce of his toil?”l 
 It is no answer to say that Marx and Engels did not advo¬ 
 cate it, for the question still remains unanswered, why mil¬ 
 lions of Socialists have accepted it. Nor do we gain anything 
 by using the words "full social value” in place of full produce; 
 the one doctrine is as anti-social as the other. We are forced 
 to choose between the two alternatives; either that the Social¬ 
 ists are not Socialists at all, and that all the talk of human 
 brotherhood and social equality is all rank hypocrisy, or that 
 our analysis has been entirely wrong at some point, that in 
 spite of the apparently perfect reasoning we have blundered 
 
LECTURE IV—CAPITALISM AND THE WAGE SYSTEM. 
 
 147 
 
 somewhere and that their doctrine is right after all. The first 
 alternative is entirely out of the question. Millions of people 
 acting together, fighting together, sometimes even suffering 
 together, cannot be hypocrites. They could not be if they 
 wanted to; they would soon betray one another and disin¬ 
 tegrate the whole movement. Mistaken, they might be, but 
 they cannot be hypocrites; the good faith of the Socialists is 
 above question. Nor is this ideal limited to Socialists it is 
 endorsed so widely, that I have been compelled to widen the 
 term “Socialism” so as to make it cover them all. You cannot 
 escape the difficulty by throwing stones at the Socialists; you 
 will have to throw the first stone at Abraham Lincoln! When 
 we find a person of his moral eminence and love of justice 
 endorsing this doctrine, it is time to stop and think. When 
 millions of people advocate a doctrine, the chance is, that 
 there is some element of truth or justice underlying that doc¬ 
 trine. When Abraham Lincoln stands at the head of those mil¬ 
 lions, the chance becomes a certainty. There can be no doubt, 
 that the doctrine of “full produce” contains an element of jus¬ 
 tice. Our duty is to 1 search for and discover that element. 
 
 172. Socialists claim, that to the producer belongs the 
 full produce of his toil. Why full produce? Why not one-half, 
 one-third or one-fourth? Why is it wrong to take more than his 
 full share? For the simple reason that it is, or at least it is 
 supposed to be the outcome of his effort. In other words the 
 doctrine of full produce is only a practical device to reward 
 effort in proportion to its merits. It is the first step towards 
 the perfect wage system. This is the element of truth, 
 justice and equity in the doctrine of “full produce.” We have 
 seen already how difficult it is to measure effort adequately 
 and reward it accordingly; the need of some method of 
 measuring it approximately, must have been felt as soon as a 
 sense of justice and equity was awakened in the human heart.' 
 It is also evident that the produce of labor is the only natural 
 method of measuring effort, and it has been the only prac¬ 
 tical method until now. But this method of rewarding effort 
 has proven to be a complete failure; produce is nowhere pro¬ 
 portional to effort, and this method of equitable distribution 
 turns out to be an instrument of greatest iniquity. When 
 this fact is once realized, half the social revolution will have 
 
.148 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 been achieved. In the first place, produce is not necessarily 
 proportional to effort; secondly, in exchange of products, the 
 ^equality of exchange value does not hold true for individual 
 exchanges, because the exchange is always between parties 
 who are unequally needy, and the one whose needs are more 
 urgent has to give greater produce and receive less. Thirdly! 
 in many cases one of the exchanging parties has no ready 
 made produce to give in exchange; he has therefore to barter 
 away his future producing power. The man whose producing j 
 power belongs to another is nearly, if not quite, a slave, 
 and the “full produce" system carries within itself the germ 
 of industrial slavery. The full produce system thus turns out 
 to be the fountain head of industrial slavery. 
 
 173. A perfect wage system on the contrary, giving tc 
 each person the price of his effort, is the most equitable sys¬ 
 tem that could be conceived. True, we cannot have a perfect 
 wage system today; very well then, let us have the next best 
 practicable thing. Let us have a system, first, such that every 
 effort will be rewarded to some extent if not to the full ex¬ 
 tent ; second, that the reward should in no case fall below a 
 certain minimum; if we are unable to measure effort, and if we 
 must err at all let us at least see that we err on the 
 safe side; third, that for the rest, let the reward be 
 left to competition, chance and accident as at present, taking 
 steps, continuously and progressively, to increase the elemen 4 
 of competition, and diminish the element of chance as far as 
 human power permits. The Guaranteed Employment schenh 
 formulated in the previous lecture will be found to meet thes( 
 requirements, but if perchance, I have overlookd something " 
 would be thankful to receive your comments and criticism! 
 that I may reconsider and revise the scheme. 
 
 174. As a matter of equity and social justice, the wag* 
 svstem is immeasurably superior to the full produce system 
 The full produce system is anti-social. It tends to make even 
 person a “dog in the manger," barking and snapping at every 
 one that approaches his hoard. It is the root of the institution 
 of private property. It places the sacredness of property abov 
 
 16. The Marxian rule of “equality of exchange” is true only on a 
 average in the long run. It is not meant to be applied to individua 
 transactions. 
 
LECTURE IV—CAPITALISM AND THE WAGE SYSTEM. 
 
 149 
 
 human life. By ignoring the time-gap, it lays the foundation of 
 unemployment with all its evils. Under the full produce 
 system, the relation of the individual to society is expressed 
 by the formula—each to receive according to his ability and 
 each to contribute according to his need—or, we may simplify 
 the formula still further—take what you can and give what 
 you must. In complete contrast with this system is commun¬ 
 ism, which is represented by the formula—give what you can 
 and take what you must. This was the system taught by 
 Jesus, practiced by his apostles and 17 disciples. That this sys¬ 
 tem failed and had to be abandoned may prove that it is im¬ 
 practicable, or rather that it was impracticable at that time, 
 but the righteousness and justice of the system is indisput¬ 
 able. Between these two extremes stands the wage system, 
 whether perfect or imperfect. The wage system is represented 
 by the formula—give what you can, take also what you can 
 between certain limits. The perfect wage system differs from 
 the imperfect, by the nature and character of those limits, and 
 is thus an intermediate step between individualism and com¬ 
 munism. The imperfect wage system of today is a step to¬ 
 wards the perfect wage system. In point of righteousness, the 
 w r age system is far ahead of the full-produce-system, though it 
 is not quite so righteous as the communism of Jesus and his 
 disciples. 
 
 175. But while the righteousness of the wage system 
 may be conceded, its practicability may still be questioned. 
 What guarantee is there that the little germ of competition 
 and "get what you can” policy may not lead back to individual¬ 
 ism and economic slavery? Whether the wage system will pro¬ 
 gressively advance and evolve into ideal communism or recede 
 into the “each-man-for-himself-and-the-Devil-take-the-hinder- 
 most” state, depends wholly upon the economic forces that 
 dominate the modes of production and distribution. You 
 have heard of the Mississippi river flowing southwards down 
 into the Gulf of Mexico. No. it does not flow downward; any 
 scientist will tell you that this river is flowing up hill, i. e., 
 every drop of water when it reaches the ocean, is from one to 
 three miles farther from the center of the earth, than it is at 
 
 17. Acts 11:45; IV:34. 
 
150 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 St. Paul or St. Louis. If the earth stop rotating tonight, this 
 river will flow backward, and before the end of the next day, 
 St. Paul, and St. Louis will be under water several miles deep. 
 If, on the contrary, the rotation were quickened by about 
 double the amount the river will rush toward the ocean with 
 such momentum that it would drain the northland; Mexico 
 and Panama would be deep under water and a man might 
 walk from Quebec to Greenland without seeing any water, 
 other than what he might carry with him. 
 
 176. Whether the wage system will develop into com¬ 
 munism or into free capitalistic competition, or stay as it is 
 depends entirely upon the economic forces that control and 
 guide the course of evolution. We know one thing for cer¬ 
 tain, that the law of full produce is impossible, because it is 
 unnatural. Every person must consume before he produces; 
 any attempt to persistently enforce the law must lead to cap¬ 
 italism ; for capitalism is only a method, and so far the only 
 practical method of obeying the law formally and violating 
 it in effect. If a person is to get only what he has produced 
 or its equivalent, then he can consume, before production, only 
 by borrowing from somebody; that “somebody” then becomes 
 a capitalist. The law of full produce necessarily leads to cap¬ 
 italism, capitalism leads to wage system, which may be per¬ 
 fect or imperfect, but it is always a wage system. Thus we 
 see that the natural course of evolution is, from full produce 
 system to wage system and not backward. Any attempt to 
 reintroduce the full produce system will be a retrogressive 
 movement, and we will have to go over the whole course once 
 more until we reach again the present form of wage system; 
 only, since we have gone through that experience once we will 
 probably reach the wage system stage in one single genera¬ 
 tion instead of wasting centuries to reach that point. There 
 is no fear of going back from the wage system, i. e., even 
 from the crudest and worst form of wage system to full pro¬ 
 duce system. You could not do it if you tried with all the re¬ 
 sources of the world at your disposal.. The stars in their 
 course are fighting against it. My purpose in arguing against 
 the full produce system, is not that I am afraid of such a sys¬ 
 tem being introduced, but that I am afraid of efforts being 
 made in this impossible direction; efforts that will not only 
 
LECTURE IV—CAPITALISM AND THE WAGE SYSTEM. 
 
 151 
 
 be wasted, but the misguided efforts and consequent failure 
 will have a demoralizing effect. More than that, a retro¬ 
 grade move generally stays the course of evolution and ar¬ 
 rests progress. The whales have evolved from fishes; they 
 had grown into air-breathing animals, but they went back to 
 sea and attempted to be fishes again. What have they 
 achieved? Other land animals progressed, some more, some 
 less, some took to air and are today the lords of the upper 
 world. Some developed into opposums, thence into marmo¬ 
 sets, thence by degrees into lemurs, apes, antropoids, man, 
 civilized man. During these millions of years the whales have 
 not even regained their gills; they are drowned if held under 
 water long enough. They are neither land animals nor fishes 
 now. Any attempt to introduce the full produce system cannot 
 succeed, but it may deflect the course of evolution and paralyze 
 progress; that is why I am trying to oppose that unrighteous 
 and impossible doctrine. 
 
 177. I believe that the wage system by progressive ad¬ 
 vance will evolve into communism. On this point I might be 
 wrong. Maybe it will evolve into something else or again it 
 may not evolve into anything in particular, but just into a bet¬ 
 ter and still better type of wage system. Anyway we are not 
 discussing communism, but wage system, and we would not 
 be justified in such a digression here, except for the purpose 
 of judging the ethical merits of the wage system by compar¬ 
 ing it with what has been recognized by universal consent as 
 an ideal economic system, a system that represents the King¬ 
 dom of Heaven on earth more truly than any other known 
 economic system. Marx in his criticism of the Gotha pro¬ 
 gramme takes the same view. He repudiates the full pro¬ 
 duce doctrine as demoralizing to the Socialist Party; he sug¬ 
 gests a more advanced wage system as an intermediate, prac¬ 
 tical step, with the communistic form of distribution as an 
 ideal to be reached only when right time comes. 
 
 178. The contention that the wage system is really a 
 step towards communism and that the system of full produce 
 is a backward and anti-social step is so contrary to the popular 
 notions on this subject that all argument in support of that 
 contention would be of no avail except with those who think 
 for themselves and accept or reject an argument on its merits. 
 
152 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 The majority take their opinions second-hand; to them the 
 wage system must be wrong because Haywood says it is 
 wrong; the full produce system must be right because Allan 
 Benson says so. And lastly, are we not told that the ethical 
 ideal of Socialism is the same as that promulgated by Jesus 
 Christ? Why—even the 28 encyclopedia admits that! If it could 
 be shown by reference to the Gospels, that Jesus condemned 
 the wage-system and advocated the full produce system I 
 would certainly reconsider my views—for much as I believe 
 in thinking for myself, I have not yet begun to consider my¬ 
 self infallible, and when I find my views in conflict with 
 those of other thinkers greater than myself, I think it my duty 
 to revise my reasoning, to make sure that I am not thinking 
 a mistake. What has Jesus to say on this question? Does he 
 condemn the wage system? 
 
 179. “I. For the Kingdom of Heaven is like unto a man that 
 
 is an householder, which went out early in the morning to hire 
 laborers into his vineyard. 
 
 “2. And when he had agreed with the laborers for a penny 
 a day, he sent them into his vineyard. (Marginal note: The 
 Roman penny is.seven pence half penny.) 
 
 “3. And he went out about the third hour, and saw 
 others standing idle in the market place. 
 
 “4. And he said unto them; go ye also into the vine¬ 
 yard, and whatsoever is right I will give you. And they went 
 their way. 
 
 “5. Again he went out about the sixth and ninth hour, 
 and did likewise. 
 
 “6. And about the eleventh hour he went out and found 
 others standing idle, and saith unto them, why stand ye here 
 all the day idle? 
 
 “7. They say unto him, because no man hath hired us. 
 
 He saith unto them, go ye also into the vineyard; and what¬ 
 soever is right, that shall ye receive. 
 
 “8. So when even was come, the lord of the vineyard 
 saith unto his steward, call the laborers, and give them their 
 hire, beginning from the last unto the first. 
 
 28. This claim is always found in Socialist literature, although I 
 am not able to say how far it is true. Some writers are more specific. 
 For example, Mr. Carl D. Thompson expressly mentions the En¬ 
 cyclopedia Britannica, as admitting that “the ethics of Socialism are 
 closely akin to ethics of Christianity.” Thus far I have not been able 
 to verify this citation. 
 
i.kcture: iv—capitalism and the wage SYSTEM. 
 
 153 
 
 “9. And when they came that were hired about the elev¬ 
 enth hour, they received every man a penny. 
 
 “10. But when the first came, they supposed that they 
 should have received more; and they likewise received every 
 man a penny. 
 
 ’ “11. And when they had received it they murmured 
 against the good man of the house. 
 
 “12. Saying, these last have wrought but one hour, and 
 thou hast made them equal unto us, which have borne the 
 burden and the heat of the day. 
 
 “13. But he answered one of them and said, Friend I do 
 thee no wrong: didst thou not agree with me for a penny? 
 
 “14. Take that thine is, and go thy way: I will give unto 
 this last even as unto thee.” 
 
 Matt. XX :1-14. 
 
 Here we have the Kingdom of Heaven compared to the ideal 
 wage system, where the wages are paid according to the effort 
 to produce, ~ot according to the amount produced, nor even 
 according to the period of active employment; the time during 
 which a worker is able and willing to work being also paid for, 
 though no man had hired him. When my opponents can 
 point out an ethical authority higher than Jesus in support of 
 the full produce system, it will be time for me to reconsider 
 my views. 
 
 180. At this point I may digress a little to discuss 
 whether Socialism is opposed to religion. It is an important 
 question, but not important enough to take a lecture by itself; 
 it is at best a side issue, and must be treated as such. I think 
 I may deal with it now while I am at it, and be done with it. 
 The popular opinion on this question seems to be, that Scien¬ 
 tific Socialism is opposed to religion, because it is materialistic, 
 and is therefore opposed to religion which is generally theistic 
 and always idealistic. Judged bv the same standard of popular 
 opinion, popular Socialism is not opposed to religion, nay on 
 the contrary it is the highest expression of religion. This is 
 altogether wrong: the facts are just the reverse; popular So¬ 
 cialism is opposed to religion, scientific Socialism is not. 
 
 181. The two 19 fundamental doctrines of scientific So¬ 
 cialism are, (1) The theory of materialistic conception of his- 
 
 19. “These two great discoveries: the materialistic conception of 
 history, and the revelation of the -secret of capitalist production 
 through surplus value, we owe to Marx. With them Socialism be¬ 
 came a science.”—Engels: Socialism, Utopia to Science. 
 
154 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 tory, (it would be more correct to call it, theory of economic 
 interpretation of history; it is altogether incorrect to call it 
 economic determinism), and (2) the theory of surplus value to¬ 
 gether with its corollary, the tneory of capitalistic accumula¬ 
 tion. Of these two, the theory of surplus value is neither for 
 nor against religion; neither friend nor foe has drawn it into 
 this controversy, and we can safely leave it out of this discus¬ 
 sion. The doctrine of materialistic conception of history is 
 often accused of being opposed to religion, but it is no more 
 opposed to religion than is the theory of gravitation. The fact 
 that Marx and Engels, the first propounders of the theory were 
 irreligious (i. e., when measured by the orthodox standard), 
 does not prove that the theorv itself is opposed to religion. 
 Suppose for the sake of argument, that Newton were an 
 atheist, or agnostic;would it make his theory of gravitation 
 irreligious, or anti-religious? The materialistic conception of 
 history was an attempt,—I think a very successful attempt,—to 
 reduce history to science, just as the theory of gravitation was 
 an attempt to reduce astronomy to science. The two theories 
 are so like one another in their nature, that it is impossible to 
 convict the one and acquit the other. That the theory of 
 materialistic conception of history has not been so well sup¬ 
 ported by facts as the theory of gravitation, I do not deny,—I 
 may even concede, that later research may prove the Marxian 
 theory to be entirely wrong; but whether right or wrong, that 
 theory is in no way opposed to religion. If it is possible to be¬ 
 lieve in the law of gravitation without surrendering the belief 
 in a diety behind that law, whv is it impossible to believe in 
 the law of materialistic basis of history, without surrendering 
 one’s belief in the power that presides, over matter, and over 
 the laws according to which matter operates in response to 
 that Will behind. Maybe, there is no Will or Power,—who 
 knows? In absence of direct and demonstrable knowledge, let 
 each one decide for himself as he thinks best; there is nothing 
 in the theory of materialistic conception of history, which pre¬ 
 cludes a belief in a deity, or in a group of ethical teachings, 
 which claim to have been insoired by that deity. In other 
 words the fundamental principles of scientific Socialism are 
 not opposed to religion. 
 
 182. According to the prophet Micah the entire concep- 
 
I,ECTURF, IV—CAPITALISM AND THE WAGE SYSTEM. 
 
 155 
 
 lion of religion is reduced to this: “What doth the Lord re¬ 
 quire of thee, but to do justly, to love mercy, and to walk 
 humbly with thy God?” Wherein is the doctrine of mater¬ 
 ialistic conception opposed to this conception of religion? or 
 take the Christian standard. “All things whatsoever you would 
 men should do unto you, do ye even so unto them, for this is 
 the law and the prophets.” Wherein is it opposed to mater¬ 
 ialistic conception of history? Or again take one of the Pagan 
 conception of religion. According to 20 Vedanta, the most im¬ 
 portant school of Hindu religious philosophy, “the CAUSE of 
 all phenomena is MATTER, thus says the scripture.” Surely, 
 this one religion at least is not opposed to scientific Socialism \ 
 Scientific. Socialism—and by this I mean the twc fundamental 
 doctrines of scientific Socialism—is not opposed to religion. 
 
 183. But when you come to popular Socialism it is a dif¬ 
 ferent story. Almost every phase of popular Socialism is op¬ 
 posed to religion. Religion stands for “wage system,” popular 
 Socialism stands for “full produce.” According to religion, all 
 service deserves to be paid irrespective of labor spent in its 
 performance; “They also serve who only stand and wait.” Ac¬ 
 cording to popular Socialism, service deserves to be paid only 
 in proportion to labor; service without labor deserves no pay¬ 
 ment whatever. There are various other points of conflict be¬ 
 tween popular Socialism and religion, but these two are most 
 important, and are sufficient to condemn the former. In fact 
 the full produce doctrine alone is enough to condemn it. It 
 was this fiendish doctrine over which Marx lost his temper 
 when he denounced the Gotha programme of the Socialist 
 party, as damnable and demoralizing. To conclude, it is popular 
 Socialism that is opposed to religion, not scientific Socialism. 
 
 184. The present wage system is by no means perfect. It 
 makes no provision for the unemployed; but even as it is, it 
 is an enormous improvement over the older system, where men 
 were 18 free producers, free to produce if they happened to have 
 the means, and free to hang themselves if after producing they 
 found themselves unable to dispose of their product. “It was 
 their own fault. They were free to produce something else, 
 v/hy did they not produce something that could be sold ? They 
 
 20. Vedanta-sutra, 1-4-27. 
 
 18. See Lecture I. Para 11, Note 13. 
 
156 
 
 THE UNEMPLOYMENT PROBLEM. 
 
 are entitled to the full produce of their labor and they have it. 
 It they cannot dispose of it they are themselves to blame, any¬ 
 way it is no concern of ours/' Now there steps in the indus¬ 
 trial capitalist with his wage system. He gives the wages to 
 the worker and takes the produce. As far as the wage earner 
 is concerned he is certainly better off than if he had the full 
 produce which he can not promptly sell, or which, he is some¬ 
 times unable to sell at all. The weak point of industrial capi¬ 
 talism is only this, that it cannot provide for the whole of the 
 unemployed. Low wages or bad conditions of labor are not 
 caused by capitalism, they are the necessary by-products of un¬ 
 employment, and will entirely disappear when the Guaranteed 
 Employment system is introduced and unemployment is elim¬ 
 inated ; even though the capitalistic system should continue for 
 some time. The reason is obvious. All the evils attributed to 
 capitalism are really evils of unemployment, none of them are 
 evils of capitalism, no, not one. 
 
 185. The real objection to the wage system is not that the 
 worker receives wages, but that he receives only a part of his 
 produce. This objection is only another way of saying that to 
 the producer belongs the full product of his labor. I have 
 shown that this doctrine is anti-social, that it is impossible to 
 carry out in practice without making numerous exceptions and 
 modifications, and that it does not even serve the one purpose 
 which is its pretence, namely to reward effort adequately. 
 But all these objections seem to be forgotten by the advocates 
 of that doctrine. They seem somehow to have fixed on the 
 idea that the full produce doctrine stands for social and 
 economic justice and as long as that idea remains all other 
 objections are of little avail. What if the principle fails in 
 practice? We must make it work. If a principle of justice fails 
 to work the inference is obvious that there must be a greater 
 injustice somewhere in our social dealings which counteracts 
 this principle. It is our duty then, to find out and eradicate 
 the other injustice and not to ignore a principle of justice be¬ 
 cause the world is not right enough for it. If the world is not 
 right, it must be made right. The objection that the principle 
 is anti-social is also disposed of in the same way. If giving the 
 worker the full produce of his work be not conducive to the 
 welfare of society, then so much the worse for such a society. 
 
LECTURE IV—CAPITALISM AND THE WAGE SYSTEM. 
 
 157 
 
 A society that cannot thrive and prosper under justice has no 
 right to prosper, no, not to exist. If the principle does not fit 
 in with the needs of society, society must remodel itself and 
 readjust its needs. The full produce system is a principle of 
 justice, and justice comes before everything else. This is 
 their plea. 
 
 186. The whole question then turns upon the justice of 
 the full produce scheme. If the scheme be an ambodiment of 
 justice everything that I have said against it falls to the ground, 
 and the wage system stands condemned, Jesus and his para¬ 
 bles notwithstanding. Is the full produce system just or un¬ 
 just? On the answer to this question depends the ethical justi¬ 
 fication or condemnation of the wage system. Does the pro¬ 
 duce belong wholly, or even in part to the producer? That 
 depends upon what is produced, why it is produced and how 
 it is produced. 
 
 187. It depends upon what is produced. A girl wishes 
 to marry a man of her choice. The parents object, not because 
 she is too young to know what is good for her, but be¬ 
 cause—as they claim—she has no right to dispose of herself, 
 because she did not produce herself. She was produced by 
 the parents to whom she belongs and who have the right to 
 dispose of her as they please. Is the claim of the parents valid? 
 No. The producer's right depends upon what is produced. 
 
 188. It depends upon why it is produced. A novelist writes 
 a piece of fiction. He is considered entitled to the full pro¬ 
 duct of his imagination. He is given the copyright which is 
 the right to his product. A newspaper reporter sends in an 
 imaginary story to his paper. The sensational news helps to 
 sell millions of copies. The reporter is charged for fabrication 
 of news and escapes the penitentiary by a technical flaw in the 
 evidence of the prosecution. He now claims a part of the 
 profit of the sensational number; he claims the right to the full 
 produce of his imagination, like that of the novelist. Will the 
 courts sustain his claim? No. His right to the proceeds of 
 the sale denends upon why he fabricated. 
 
 189. The right depends upon how it is produced. An in¬ 
 ventor conceives a new idea and makes a sketch. A clerk in 
 his office secretly copies that sketch; when accused of robbing 
 the inventor he pleads not guilty. "Your honor/’ he says, "I 
 
158 
 
 the: unemployment problem. 
 
 did not steal another man’s produce; the inventor’s sketch is 
 in his note book and still in his possession, but I produced the 
 copy myself. It is the product of my labor and therefore be¬ 
 longs to me!” No judge would accept such a plea, for the pro¬ 
 ducer’s right depends upon how a thing is produced. 
 
 190. The mere production of anything does not by itself 
 create the producer’s right to it. The right depends upon 
 various other conditions and may be total or partial or it may 
 not exist at all. It depends upon the particular circumstances. 
 Suppose I invent a method of extracting gold from the sea 
 water, make the necessary apparatus and extract a pound of 
 gold in one day. Am I entitled to take that gold? You say, 
 ' yes.” Suppose I extract a hundred tons in one day. You 
 smile but still say "yes.” If a man extracts one ton of gold in 
 a day he deserves to have it. That is your argument. Suppose 
 I extract all the gold in the sea in one day, would I still be en- 
 entitled to it? You hesitiate a moment, and finally decide that 
 the producer has a perfect title to it. It may be dangerous and 
 inexpedient to permit a man to possess such an enormous pow¬ 
 er. but you also realize that violence to justice is even more 
 dangerous; and besides, expediency has nothing to do with the 
 question. Is the producer entitled to all the gold he produces 
 according to our standard of justice and without regard to 
 expediency? We say "yes.” To the producer belongs, or 
 rather ought to belong the full product of his labor. 
 
 191. Now let us take another example. A chemist de- 
 velpes a new method of extracting oxygen from the atmos¬ 
 phere. He extracts one pound of oxygen every day. Is he 
 entitled to that produce? Without the least hesitation you say 
 "yes.” But suppose he extracts one million pounds a day. Is 
 he entitled to that much? Now you begin to hesitate. Some 
 say "yes” but do not seem sure about it; others say "no.” Lastly, 
 let us suppose he extracts all the oxygen and stores it in 
 barrels and doles it out to the public on payment of whatever 
 he can get for it. Is he entitled to all the oxygen in his posses¬ 
 sion, or to what he can get in exchange for it? There can be 
 no hesitation now; no person, whatever his ethics or politics, 
 would favour such ownership: our professed faith in the doc¬ 
 trine of full produce notwithstanding. And yet there is no dis¬ 
 tinction between the extraction of gold from the sea and the 
 
LECTURE IV—CAPITALISM AND THE WAGE SYSTEM. 
 
 159 
 
 extraction of oxygen from the air. The extraction of oxygen 
 by one man may be very inconvenient for the others, but what 
 of that? If it is right, it is right, and we must bear our incon¬ 
 venience with philosophic resignation. We cannot have one 
 standard of justice for gold and another for oxygen; we must 
 either accept the ownership of the means of life as right, or 
 repudiate the doctrine of full produce. There is no third alter¬ 
 native. 
 
 192. I do not claim to have proved as yet that the doc¬ 
 trine of full produce is wrong; I have only proved that a re¬ 
 pudiation of the doctrine is the only alternative to what may 
 be called the social slavery to owners of the means of livelihood. 
 But we have not yet proved such slavery to be morally wrong. 
 It may be very disagreeable to those who have to bear the yoke, 
 and may be often a great misfortune, resembling in effect 
 storms, earthquakes and diseases, something to be avoided if 
 possible, but to be borne with fortitude when unavoidable. 
 The question before us is not, whether or not the full produce 
 doctrine if carried to its logical consequence would lead to 
 results harmful to many, but whether it is right, that is, right 
 according to our present day conception of right and wrong, 
 that is in other words according to our present day standard 
 of 21 justice. Is the producer entitled to the full produce of his 
 labor? Why is he entitled to it? What is produce? And lastly, 
 who is a producer? 
 
 193. A man crosses the ocean, goes over to another con¬ 
 tinent, takes possession of land and puts up a fence to keep 
 out late comers. Is he justified in the possession of this land? 
 Has he produced the land? A second man goes to Alaska, dis¬ 
 covers a vast field of gold, takes possession of all the gold with¬ 
 in his reach; has he produced the gold? A third man goes to 
 Mahoning, scrapes the soil and collect the iron ore; has he pro¬ 
 duced the ore? A forth goes to Colorado, bores a shaft a thou¬ 
 sand feet deep and takes possession of the coal; has he pro¬ 
 duced the coal? A fifth goes to Vermont, selects a piece of 
 
 21. The question, whether our present day conception of right 
 and wrong is correct or incorrect is irrelevant. Whenever we discuss 
 the moral standing of any claim we always mean the moral standing 
 according to our conception of the fundamental principles as we 
 understand them at the time I 
 
160 
 
 the; unemployment problem. 
 
 marble, chisels away all excess material until a beautiful statue 
 of Appollo or Diana stands out to view; has this sculptor pro¬ 
 duced the statue? No more than the Mahoning miner pro¬ 
 duced the ore. The statue was there inside the marble all the 
 time awaiting a sculptors skillful fingers. His only achieve¬ 
 ment is to take possession of what already existed. There is 
 no such thing as production, with one exception, which I will 
 discuss later. All the so-called production is merely the pro¬ 
 cess of taking possession. Sometimes it is a simple process 
 such as walking over to where the thing lies. Sometimes it 
 is a little more difficult such as boring into the earth, as is 
 the case in mining. Sometimes training and skill are needed 
 as in the case of the sculptor. Sometimes it requires the use of 
 machinery as is the case of extracting oxygen from the air. 
 Sometimes patience is the most necessary requisite, such as 
 in trapping and hunting, waiting for the thing to come to you, 
 or as in farming, waiting for the crops to grow. But in all 
 cases it is merely a process of taking possession. This fact 
 once clearly understood, there is no longer any difficulty, as to 
 whether the producer is entitled to his produce or not. The 
 worker produces nothing and is entitled to nothing on the 
 strength of this claim. His work in all cases consists of taking 
 possession of what in popular language is called “his produce/’ 
 194. Possession alone does not create the right to 
 possess. If a person has a right to a thing before he takes posses¬ 
 sion, he retains the right after the possession also, and this 
 right will remain although the labor in taking possession be 
 infinitisimal. Similarly if the worker has no right to it at the 
 start, no amount of labor can give him the right. The oxygen 
 in the air belongs equally to all, and I have a right to my share 
 of it. I may take the whole or a part of that amount with or 
 without labor as may be necessary. I take a part of my share 
 of oxygen every minute of my life at every breath I draw, with 
 almost no labor, (part of which oxygen I retain in my system.) 
 If I want more than this for any other use, e. g., for arts, in¬ 
 dustries or commerce, I must install the necessary apparatus, 
 chemicals, and machinery. I am entitled to all the oxygen 
 I take possession of (I produce in the popular language) pro¬ 
 vided I do not take more than my share. This oxygen is mine 
 not because I produce it; I am entitled to produce it (i. e., take 
 
lecture: iv—capitalism and the wage SYSTEM. 
 
 161 
 
 possession of it) because it belongs to me. This explains why 
 we instinctively regard one pound of oxygen as rightfully be¬ 
 longing to the producer; why we hesitite over the question of 
 a million pounds, (because we are not sure whether a person 
 in extracting a million pounds has not exceeded his limit) and 
 lastly also, why we unhesitatingly refuse to recognize the right 
 of men to extract all the oxygen no matter how much labor he 
 spends in the process of extracting it. A man's right to the 
 produce of his labor does not depend upon the labor spent in 
 producing it (i. e., taking possession of it). If he has the right 
 to it, before production, he will retain that right although no 
 labor is expended. If he has no right to it to start with, no 
 amount of labor will give him that right. A burglar who 
 climbs up to the third story, opens a window, cracks a safe, 
 and takes possession of the contents does not thereby obtain 
 the right to those contents. The doctrine that a worker is 
 entitled to the full produce of his labor has no moral justifica¬ 
 tion. There is no such thing as produce. All the so-called pro¬ 
 duce is merely a process of taking possession. The world be¬ 
 longs collectively to all, and distributively to each according to 
 his share. To each belongs his share or such part of his share 
 as he may take 22 possession of. 
 
 195. As I said before there is one exception where the 
 worker produces in the real sense. In this case the produce is 
 a real produce not merely a taking possession. A sculptor who 
 makes a statue or an engineer who constructs an aqueduct, 
 have first to create a mental image of what they wish to do. 
 They have also to create a mental picture of the several pro¬ 
 cesses they will have to adopt to reach the desired result. This 
 is production in the true sense; the rest is all taking posses¬ 
 sion. Even the simplest form of work requires a production 
 of this kind, sometimes followed by the possession of the 
 means of production, such as chisels, mathematical tables or 
 well trained fingers, wrists and arms; this is auxiliary posses- 
 
 22. The question whether the possession of the larger capitalists 
 are within the limit-s of their legitimate share or exceed that share 
 naturally suggests itself, but we cannot stop to discuss it here. It will 
 be discussed under capitalism and centralization. At present the dis¬ 
 cussion is limited to the wage system. 
 
162 
 
 the: unemployment problem. 
 
 sion. All this production corresponds to what is known in the 
 literature of scientific Socialism as “Labor-power.” Every 
 worker is entitled, not to the full produce of his labor, or its 
 equivalent of social value, but to his labor power or its equiv¬ 
 alent in social value. The value of labor power is wages. 
 Therefore, a worker is morally entitled to 23 wages, nothing 
 more, nothing less. He has certainly no right to the full pro¬ 
 duce of his labor. 
 
 196. Under capitalism the form of remuneration is what 
 is known as the wage system. The worker receives not the full 
 produce of his toil, nor its equivalent in value, but only the full 
 price of his labor power. This is an important step indeed. 
 But under capitalism, there is some labor power that is not 
 paid anything at all, viz: unemployed labor power; this is the 
 weak spot of capitalism. A Guaranteed Employment system 
 will correct this omisssion and place the wage system on a just 
 and logical basis. 
 
 197. There is another and far stronger reason why the 
 worker is not entitled to the full produce of his labor (using 
 the word produce as popularly understood.) The total pro¬ 
 duce, according to Marxian analysis, consists of two parts, the 
 necessary produce and the surplus produce. Of these two the 
 worker receives the necessary produce, or more correctly, its 
 equivalent in value, in the form of wages. On this point there 
 is no need of further discussion. The capitalist takes the sur¬ 
 plus 24 produce. This is the bone of contention. The Socialists 
 claim that this surplus belongs to the worker because he 25 pro- 
 
 23. (With the wage system under capitalistic mode of pro¬ 
 duction.) “Every condition of the problem is satisfied, while the laws 
 that regulate the exchange of commodities have been in no way vio¬ 
 lated. Equivalent has been exchanged for equivalent. For the capi¬ 
 talist, as buyer, paid for each commodity, for the cotton, the spindle 
 and the labor power, its full value.’’—Marx, Capital, Vol I, page 217. 
 
 24. The capitalist takes only a part of the surplus. The worker 
 gets the other part. The individual worker’s share of the surplus is 
 generally very small, but it is still large enough to have an important 
 sociological significance. For the present, however, I have entirely 
 ignored the worker’s share of surplus received, as if the capitalist ap¬ 
 propriated the whole of the surplus, and the worker got no part of it. 
 
 25. This claim of the popular soap-box Socialist has no support 
 in Marxian philosophy. According to Marx the surplus does not 
 properly belong to the waee worker. (See Para. 164. foot note 9.) See 
 also Capital, Vol I, page 216.) 
 
LECTURE IV—CAPITALISM AND THE WAGE SYSTEM. 
 
 163 
 
 duces it. The capitalist not only challenges this claim, but sets 
 up a counter claim for himself. At this point we are not con¬ 
 cerned with the claims of the capitalist, but the wage-worker’s 
 claim deserves a serious and careful study. Does surplus be¬ 
 long to the worker by virtue of his having produced it? Is it a 
 valid claim, that is, valid according to our present day standard 
 of equitable reward? 
 
 198 . The mere fact that the worker produces the surplus 
 creates no such moral claim. Every worker has to consume 
 before he can produce. He can only consume from the surplus 
 of those that have gone before him. His surplus, therefore, 
 belongs to those that are to follow him. This is so plain that 
 I do not know how to make it simpler. If you cannot accept 
 this conclusion, I must give up the whole effort as utterly im¬ 
 possible. One may well question the right of the capitalist to 
 collect this surplus; one may suggest what he considers a 
 better method of collecting the surplus from one generation 
 and handing it over to the next; one may question the ef¬ 
 ficiency of the capitalistic method of collecting surplus and hold¬ 
 ing it in trust for the coming generation; one may even im¬ 
 peach capitalism for its failure to discharge its duty as trustee 
 for the coming generation, and lastly, one may question the 
 equity of the ratio in which the surplus is divided, leaving an 
 insignificant margin for the workers who produce it, and the 
 lion’s share for the coming generation who have contributed 
 nothing towards its production, (as if we had done anything 
 to earn the surplus which we consumed before our production 
 began.) We may raise numerous other questions but there 
 is no room whatever as to the need of future generations. The 
 needs for their consumption can be supplied only from the sur¬ 
 plus produce of the present day worker. The present day 
 worker received surplus from the past generation, and owes 
 a moral debt which can be paid only by the surrender of a part 
 of their surplus for the future generations. The capitalist col¬ 
 lects this surplus or rather this part of surplus and holds it as n 
 26 trust for the coming generation. The capitalistic method 
 may not be the best method, but it is at present the only 
 method. Whatever we mav have to say for or against it, the 
 
 26. See Lecture- III, Para. 122, note 14. 
 
164 
 
 THE: UNEMPLOYMENT PROBLEM. 
 
 worker's claim to the full produce of his labor has not a leg 
 to stand on. The full price of his labor power is all he can 
 rightfully demand. “Full produce" is an impossibility. A bet¬ 
 ter wage system is all that can be or should be expected, but as 
 
 long as unemployment remains, the wage system cannot be 
 bettered. So here is your choice: either a Guaranteed Employ¬ 
 ment system, with a consequent improvement in the wage- 
 system in the direction of perfection, or an unguaranteed sys¬ 
 tem together with what you call the wage slavery. The full 
 produce system is impossible. You cannot get it at any price. 
 There are only two systems to choose between. Now make 
 your choice. 
 
 199. Incidentally this brings up another important and 
 long postponed question. Is there a wage slavery? That the 
 worker is not independent, that he has to work hard, and that 
 very often he does not get even the full price of his labor 
 power, but has often to work on half wages; all these facts are 
 unchallengable. But, none of these constitute slavery. De¬ 
 pendence is not slavery. Children are always dependent in 
 all parts of the world, but they are nowhere regarded as slaves. 
 All civilization implies more or less organization; all 
 organization implies dependence. A person who identifies 
 slavery with dependence must, to be consistent, be opposed 
 to all forms of government, all forms of organized society, and 
 all civilization. Hard work is not slavery. In the savage state 
 hard work is the rule, for the productivity of labor is so low 
 that it takes a full day's work to produce the merest necessities 
 of life. These savages are not slaves no matter what else you 
 call them. The heroes of science are wearing away their lives 
 in incessant toil but they are not slaves. A low paid worker 
 may be rightly called a slave but even in this case his slavery 
 is not wage slavery. His work may be divided into two parts, 
 one part, for which he receives wages and which is not slav¬ 
 ery, and the other part for which he receives no wages, and 
 which is no doubt slavery. This latter part of work he gives 
 free as the price of a temporary escape from unemployment. 
 His real slavery, therefore, is the unemployment from which 
 he is trying to escape. 
 
 200. An argument very much in favor among the Social- 
 
LECTURE; IV— CAPITALISM AND THE WAGE SYSTEM. 
 
 165 
 
 ists is : the capitalist ownership of the means of production con¬ 
 stitute the slavery of the workers. “He who owns that, where¬ 
 by I live owns me/’ Here is one more illustration of what we 
 find so abundantly in Socialist literature, good rhetoric, bad 
 logic. The baker owns the bread whereby I live but he does 
 not own me; on the contrary he caters like a slave for a ten 
 cent piece, though his life nor even his little luxuries would be 
 in serious peril for ten cents. The druggist owns the medicine 
 and the doctor owns the knowledge of the medicine whereby 
 I live, but the druggist and the doctor are more obedient to 
 my call than a negro slave of fifty years ago. It is true that I 
 own some money, but their lives are not half as dependent on 
 my money, as mine on their medicine. If there is any economic 
 slavery anywhere at all, and the fact can scarcely be doubted, 
 the cause of that slavery must be looked for somewhere else. 
 It is not the “ownership of that whereby I live.” 
 
 201. Slavery is duty without right. In a civilized state 
 unemployment is slavery because the civilization (i. e., organ¬ 
 ized society, with a government, to enforce the duty of the in¬ 
 dividual), imposes duties without giving an equivalent right. 
 What we call wage slavery is not slavery but an escape from 
 unemployment, and therefore escape from slavery. Hard work 
 and other disagreeable features of this form of escape are cer¬ 
 tainly not to be denied, but all these evils together, do not pile 
 up near as high as the single evil of unemployment. If they 
 did, why, any person could at any moment throw up his job and 
 go among the unemployed. But, no person seems to have any 
 preference to unemployment. Hard work, bad food, bad hous¬ 
 ing, occupational risk, separation from the family, humilation, 
 anything, even immediate 27 death by suicide, seems to be wel- 
 
 27. The following extract from the Saturday Evening Post i-s one 
 out of the many I have collected in the course of my studies on this 
 subject: 
 
 “But the tragedy that Bodie will never forget cost a single 
 life—that of an unknown young man. The Standard Shaft had reach¬ 
 ed a depth of one thousand feet and McGuire, the foreman, was stand¬ 
 ing beside the opening, talking with a friend, when a young man came 
 up to him. McGuire did not notice the stranger at first, who -stood 
 a few feet away, whittling a stick and waiting for the foreman to 
 speak to him. Afterward it was remembered that throughout the 
 short conversation the young man had not raised his eyes, but had 
 
166 
 
 the: unemployment problem. 
 
 come as a means of escape from unemployment. Fifty years 
 ago when chattel slavery was in vogue the negro slaves tried 
 to escape slavery by running away. They faced the jungles, 
 the rattlesnakes, the diseases of the swamps, and the blood¬ 
 hounds all to escape from slavery. Today the worker accepts 
 what you call the wage slavery as a means of escape from un¬ 
 employment. This is why I say “wage slavery” is not slavery 
 but rather an escape from unemployment, which is slavery 
 (in fact one of the worst forms of slavery). If you can prove 
 to me that unemployment is not slavery, or that wage-work 
 even in its worst form is not an escape from that slavery, try it. 
 I am open to conviction. 
 
 202 . To conclude. The doctrine of full produce has no 
 moral justification whatever. It is impossible to apply it con¬ 
 sistently in practice, and is anti-social as far as it can be ap¬ 
 plied. The wage system is the only just and equitable method 
 of remuneration. It is true that the wage system as it is today 
 is far from perfect but the fault is not fundamentally in the 
 wage system, nor in capitalism, which introduced that system; 
 it is entirely the result of unemployment which capitalism has 
 not created, and which capitalism has been unable to cure. 
 The evils incident to the wage system are the evils of unem- 
 
 looked'at the floor or the shaft or the stick he was whittling. ‘Well? , 
 said the foreman. ‘They tell me you’re the bos-s,’ said the stranger. 
 ‘What of it?’ ‘Any chance for a job today?’ ‘No chance.’ The young 
 can continued to whittle at the stick. Then, after a pause: ‘Well, to¬ 
 morrow, maybe?’ ‘No. Nothing tomorrow. Full up.’ The young man 
 stopped whittling and.did not speak again. He stood for a moment, as 
 though thinking; then he reached out and jabbed the penknife into a 
 scantling and. with the half-whittled stick still in his hand, deliberately 
 jumped into the shaft. Before the knife had ceased quivering its owner 
 was dead—a battered, unrecognizable bundle a thousand feet deep in 
 the earth.” 
 
 This case is highly instructive. The Bodie mine was 
 owned by the workers; they owned all the gold they produced. They 
 were rolling in gold, living in a paradise—a fool’s paradise of course, 
 for -since everybody had an abundance of gold, the prices of all things 
 went up in proportion. A penny newspaper cost a dime, and so on. 
 And lastly,—and this is the most important point,— the ownership of 
 the means of production by the workers did not solve the unemploy¬ 
 ment problem at Bodie. While the employed workers were getting 
 the full produce of their labor, the unemployed could get into the mine 
 only by jumping into the shaft. 
 
LECTURE IV—CAPITALISM AND THE WAGE SYSTEM. 
 
 167 
 
 ployment only and will be remedied only when the Guaran¬ 
 teed Employment system is established and unemployment 
 eliminated.. There is no other remedy for the faults of the 
 wage system. 
 
 “UNEMPLOYMENT MUST BE DESTROYED.” 
 
SUPPLEMENTARY NOTE. 
 
 By The Sociology Club. 
 
 121-1. In paragraph 121 the author maintains that the 
 solution of the unemployment problem will not be achieved 
 by the shortened workday, but rather, by an effective in¬ 
 crease of the work-day. It is because of seeming paradoxical 
 nature of this statement at first sight that the Club deems 
 this further elucidation essential to a better understanding of 
 the author's position. 
 
 121-2. To illustrate the point we may suppose that 40 
 per cent, of a given working population are employed in pro¬ 
 ducing commodities for regular consumption, including even, 
 those engaged in such personal service occupations as the 
 waiter, valet and actor. 55 per cent, are employed in develop¬ 
 mental industry, among which may be mentioned those oc¬ 
 cupations having to do with the creation of new capital, com¬ 
 modities and services intended for future consumption; pur¬ 
 suits from which no immediate benefit is derived, as the labors 
 of the moving picture stars, road builders, miners and experi¬ 
 mental workers, and the remaining 5 per cent, are entirely 
 unemployed. The problem as thus presented, is to provide 
 work for that 5 per cent. The plan of the labor unions which 
 is also endorsed by the Socialists, is to cut down the hours of 
 work that room may be provided for the unemployed. 
 
 121-3. There is but one objection to this proposition: 
 it will not work. Not only is the most important question of 
 where the extra wages are to come from ignored, but it reverts 
 itself into a case of robbing Peter to pay Paul and never pay¬ 
 ing him. Continuing our supposition, the shortening of the 
 work day would require 45 per cent of the production workers 
 to do what was formerly done by the 40 per cent, without 
 a corresponding reduction in wages. This cuts into the profits 
 just to that extent and necessitates so much capital being with¬ 
 drawn from the fund covering developmental industry, hence 
 instead of 55 per cent, being engaged in development work, 
 The curtailing of profit by increasing the cost of production 
 
SUPPLEMENTARY NOTE 
 
 169 
 
 5 per cent, decreases the funds available for development in 
 proportion and therefore throws a corresponding number of 
 workers in the latter branch of industry out of work, which 
 leaves but 50 per cent., whereas before there were 55 per cent, 
 so employed. 
 
 121-4. Reduction of the hours of work cannot help to 
 solve the unemployment problem. The proper, and scientific 
 solution, and the only practical solution is to place these 
 5 per- cent, of unemployed as extra help in the field of 
 development. The necessary extra wages being drawn from 
 the increased surplus of the 40 per cent, of productive workers, 
 assuming that surplus is capable of being increased. And if 
 surplus were not capable of being increased, a solution of the 
 unemployment problem would be impossible, but surplus can 
 increase and does increase so the unemployment problem is 
 not incapable of solution. The increase of surplus mav be 
 further accomolished in one of the two following ways, first; 
 by increase of the hours of work, second; by improvement 
 in the means and methods of work without a corresponding 
 reduction of the word-day. The method of actual prolongation 
 is undesirable to both the worker and the capitalist; to the 
 worker because it takes it out of his life, to the capitalist be¬ 
 cause it does not bring in the maximum amount of profit. No 
 capitalist can make the worker work more than 24 hours a day. 
 To effective prolongation there is no limit, and besides it does 
 not hurt the worker in any way. In either case the only possible 
 and practicable way to absoirb all the unemployed is by in¬ 
 creasing the hours of work, actual or effective, which will in 
 turn increase the amount of surplus with which to pay the 
 wages of the 5 per cent, additional workers now engaged in 
 development work, and who formerly had no work at all. 
 
 121-5. From the foregoing it would seem clear that the 
 shorter work-day, whatever else may be said in its favor, does 
 not incline towards a solution of the unemployment problem. 
 
 121-6. Just as all tricks appear simple after being ex¬ 
 posed by the magician, so do all paradoxes become alight with 
 consistency after they are explained. 
 
 121-7. Undoubtedly it was the penetrating wisdom of 
 Marx who, concluding that the remedy of this problem was 
 
170 
 
 SUPPLEMENTARY NOTE 
 
 to be found in an effective prolongation of the work-day was 
 prompted to write that “the most fortunate condition for wage 
 labor lies in the speedy increase of capital.” 
 
 SOCIOLOGY CLUB. 
 
NOTICE TO READERS 
 
 Lecture V.—“Capitalism and Profit System" is in progress 
 and will be published shortly. 
 
 A word to readers: 
 
 The most pointed criticism of any and all parts of the 
 preceeding lectures is cordially invited and anxiously awaited 
 by the publishers. Any such will be forwarded to the author 
 for modification, correction or explanation of his views, as the 
 case may be and will be incorporated in the papers containing 
 the lectures that are to follow. Replies to the questions, how¬ 
 ever, will be sent on request separately to those who send them 
 in. 
 
 Respectfully, 
 
 THE SOCIOLOGY CLUB, 
 
 W. S. Van Valkenburgh, Secretary. 
 
 331 Mohawk Avenue, 
 
 Scotia, N. Y. 
 
ERRATA 
 
 Page 63, paragraph 68, line 8, should read, “get your em¬ 
 ployment ?” instead of “yet your employment.” 
 
 Page 82, paragraph 93, line 10, should read, “..rather than 
 escape,” instead of “than escape.” 
 
 Page 108, paragraph 125, line 6, should read, “a partial 
 solution” instead of “a practical solution.” 
 
 Page 111, paragraph 130, line 26, should read “there is 
 not a day,” instead of “-not a day.”