Book 1 — CHAPTER IIToC (continued 2)

The state, having control of transportation, will adopt the method now prevailing in South Australia, and will pay the manufacturer and the farmer in cash at least 50 per cent—if not more—of the value of his goods at the railroad station. These will then be transported by the state in conformity with the needs of the various villages, towns and cities to stores of its own. These will be run upon the coöperative plan; the goods sold at only a small margin above cost, this margin being kept to meet the expense of distribution; and the profits—if any—will be distributed at the end of the year amongst customers on the coöperative plan.

It is obvious, however, that if the state is to distribute in the most economical manner, it must have some control over production. It must not be called upon to transport and distribute more of any one thing than the public wants; nor must it be caught without enough to satisfy the needs of the consumer. This makes it indispensable to study the problem of control at the same time with the problem of distribution.

No function of the state will probably be more important in a coöperative commonwealth than that of controlling the production of those things which, because they are necessaries or have hygienic importance, a coöperative commonwealth should itself control, transport, and distribute.

The problem of control is not as difficult as it might at first seem. We know perfectly well to-day how much wheat, corn, beef, mutton, etc., are actually consumed by our population. All we have to do to determine this amount for ourselves is to take, for example, the amount of wheat produced in the country, and the amount exported, subtract the exports from the product and determine the amount consumed in this country. The same thing can be done practically with every staple product. The state, therefore, can determine every year in advance how much of every staple product must be produced for the needs of the country. It will, of course, add to the amount actually needed a margin to provide for poor crops and other accidents.

Let us consider how this control will be exercised as regards farm and dairy products. It has been already suggested that land should be classified according to geographical conditions, exposure, and soil. The productivity of the farm colonies will of course be known by the state. Every private farm will have its productivity roughly determined and every farmer will be expected to produce a minimum amount. Of the amount he produces, a part will be taken as taxes to furnish the government with the means to pay for administration. The rest will be paid for partly in gold and partly in orders on the state stores. The object of this system of payment is the following:

It has been explained that taxes will be paid in produce. This payment therefore needs no further comment. A minimum product ascribed to every farm will be paid for with orders on the state store. This represents the amount which the farmer must produce to keep his farm. It also represents the amount which the state must have to supply its citizens with food. All over and above this amount will be paid for in orders on the public store, or in cash, as the farmer shall elect; or, if the farmer chooses to dispose of this part to private traders he will be at liberty to do so. By this method the community will be furnished with produce belonging to three different categories: produce in the shape of a tax for which the farmer receives no compensation, this being practically the rent he pays the state for his land; second, the minimum produce for which the farmer receives equivalent orders on the public store, this category being the produce upon which the community depends for its sustenance.

The order upon the public store need differ in no way from the greenback of to-day except that, instead of entitling the holder to a dollar's worth of gold, it will entitle him to a dollar's worth of goods in the public store. Thus if wheat can be produced in a coöperative commonwealth at 50 cents per bushel, as seems likely,[183] the farmer will receive for every two bushels an order for one dollar on the public store.

The third category which represents the surplus above what the farmer is required to produce in order to keep his farm, will constitute a surplus of production applicable to exchange for luxuries and foreign goods. This exchange can be made directly by the farmer or by private banks and private merchants, or by the state.

Let us consider the control the state must exercise over, and the rôle it must play in, the distribution of products of socialized industries such as oil, sugar, steel, iron, leather, etc. The amount of iron and steel required by the nation in the course of a year is not as constant a quantity as the amount of wheat. It is, however, sufficiently constant to make it possible to establish a minimum. The state will begin by requiring socialized industries to furnish this minimum and determine the price to be paid for it, thus creating a stock on hand which can be accumulated so as to diminish the amount needed in subsequent years and furnish a reserve which can be called upon in case of extraordinary need. The state, having established the minimum of steel, sugar, oil, etc., which it needs, will require of the socialized industries to produce this minimum. It will also require them to produce, in addition, an amount necessary to contribute their share to the maintenance of the government. Every associated industry, therefore, will furnish at regular intervals the result of its manufacture in three categories similar to those already explained—a part for taxes; a minimum already referred to that will be paid for in orders on the public stores, and a surplus of which it can dispose either to the state or directly to foreign bankers and merchants. In this way, every associated industry will so adjust its manufacture as to produce these three categories; the proceeds of the surplus will be applicable in the first place to the support of workers through accidents, illness, and during old age; and the rest will be divided as profits amongst those engaged for example in the steel industry. These profits will be applicable to the purchase of luxuries either produced at home or produced abroad.

Under this system the coöperative commonwealth will have goods to exchange with foreign countries and will to this extent be a merchant as regards all those things which it holds in excess of the needs of the community, and as regards that surplus which it may purchase from the farmer and the socialized industries. This leaves room for a system of private banks and private enterprises in international trade; for the farmer and the socialized industries will be free to trade their surplus through the government or through private individuals as they may consider most to their profit.

The distributive stores will present very much the same aspect as our department stores of to-day except that, though they may be even more gigantic in size, they are not likely to be as diverse; for a large proportion of the things now dealt in by department stores will doubtless remain in the hands of private industry. The essential duty of the state will be to provide its citizens with necessaries, not luxuries pertaining to taste and pleasure.

The state store will be divided into two departments, retail and wholesale; not that a different price need necessarily be charged in the retail than in the wholesale department, but because the machinery for furnishing builders with bricks is different from that for furnishing housewives with groceries. The state stores will also have a system for the regular delivery from door to door of such necessaries of life as are daily or at stated intervals consumed, e.g., milk, bread, coal, ice, meat, vegetables, and fruit, thereby applying postoffice economies to the distribution of these things.

The labor of distribution will be diminished by the slow transformation of city dwellings into gigantic apartment houses so constructed as to give the fullest supply of light and air to every room; and these apartment houses will have a distributing system of their own to the relief of the state.

As regards alcoholic drinks, the state will undoubtedly undertake the production of these with a view to taking this industry as far as possible out of private hands. It will not be necessary, however, to take it entirely out of private hands provided all private production is subjected to vigorous control. But the distribution of alcoholic liquors will probably be monopolized by the state on the Gothenburg plan with, perhaps, the important feature which characterizes the Public House Trust in England; that is, the persons in charge will receive a salary and an additional commission upon the sale of non-alcoholic drinks, but no commission on the sale of alcoholic drinks; and this with a view to giving the persons in charge an interest in selling non-alcoholic drinks. Under these circumstances, there will be no temptation to encourage drunkenness and the rule of not giving alcoholic drinks to persons already under the influence of liquor will be complied with.

It will be possible under such a general system for the state to serve as a medium for an exchange of labor that will greatly enhance the pleasure of life. Under existing conditions, the factory works summer as well as winter despite the fact that temperature makes work during the summer irksome and dangerous to health and life; and at the very time that the population is debilitated by being called upon to work in factories during the heat of June, July, and August, the farmer is in despair because he cannot find help to take in his harvest. Once industries are associated so that they have a definite knowledge of how much they have to produce, there is no reason why they should not so adjust the work of the factory as to keep it open during the eight cool months of the year, leaving the factory hands free to help the farmer in the country during the four hot months. The same thing holds good with the farmer who, during the short cold days of winter, has little to do on the farm and can, therefore, to his advantage as well as to the advantage of the community, devote those months to factory work. There need be nothing compulsory about this exchange, for socialized industry is master of its own time and can distribute its work throughout the year as it chooses. But the fact that the state is possessed of the knowledge how much is to be produced by every factory and how much by every farmer—how many men are needed in the winter in every factory and how many men in the summer on every farm, will enable the state to serve as a medium through which the factory hand can arrange to work on the farm during the summer and the farmer can arrange to work in the factory in the winter, if they respectively desire to do so.

It does not follow that the farmer is to be compelled to work long hours in the summer in the field and also in the factory during the winter; or the factory hand to give up his holiday in order to work on the farm during the summer. It has been shown that all the necessaries of life can probably be produced, even at the present time, by the adults in the community though they work no more than two hours and a half a day. If this be so, it would be easy so to adjust the work as to enable those who desire it to work more hours in the day and become entitled to so much longer vacation. The foregoing is only intended to show that in addition to the vacation which can be thus enjoyed, the farmer can relieve the monotonous existence of the farm during the winter months by work in the factory, and the factory hand can escape from factory conditions during the summer to his own advantage and to the advantage of the community at large.

Another object we have in view is to put an end to the anarchy which exists in all that part of our industry which has not been concentrated into trusts—the anarchy under which some things are produced in greater quantities than are needed, and some things needed are not produced in sufficient quantities—under which no producer can tell whether he is producing enough of a thing until the time for profiting by the knowledge has passed; no producer can tell whether he is producing too much of a thing until he is injured and even ruined by the discovery. It is, I think, obvious that all these objects are obtained by concentrating industry after the fashion of trusts in the hands of the men actually engaged in the process of production; by producing things not to make profit but to satisfy needs; and in the quantities which we know to be needed and not in quantities determined by the desire of the producer to make large profits cheeked only by the bankruptcy that attends production in larger quantities than the market will take.

Thus, the state orders thirty million tons of iron ore because we know that this amount of iron ore has served the needs of the country during a period of great activity, and will furnish not only all we can use ourselves in that year, but all that we can dispose of abroad. These thirty million tons represent then the maximum that we can usefully manufacture; and we can safely order thirty million tons because the state is not under the necessity to sell this iron to get gold with which to pay wages, rent, coal, and the running expenses of the factory. In a coöperative commonwealth there will be no rent to pay. The coal will be paid for in exactly the same way as the iron, by the issue of store orders.

The workers will get as nearly as possible the exact product of their work. There will be no capitalist who will take from them what the capitalist now takes, that is, about one-half of their earnings. Nor will those doing a low order of work receive as much as those doing a high order of work; every man will be paid according to his capacity; for we begin by assuming that the distribution of work according to capacity to-day is not far wrong, and so every man engaged in the steel industry will continue to receive the same wages as he received before with a certain prospect of an additional wage in the shape of profit, representing the difference in wage between the new conditions and the old.

Overwork will be impossible in the iron trade, because a sufficient number will be employed to prevent overwork. And unemployment will be impossible because if, at any period, it turns out that more iron is being produced than the community can use, the excess men employed in the previous year will be set to work by the state in some other industry.

The effect of such a discovery will be to diminish the number of hours required all round. It must not be forgotten how little work need actually be done to produce the things we need. Under these circumstances, we need hardly consider the question of overwork, for all will enjoy ample leisure. The hours of labor will not diminish in a great degree in the first year that an industry is taken over, for during the transition period, experience must be given time to demonstrate the extent to which hours of labor can be reduced.

And as regards unemployment, even though there be no industry in which, for instance, the surplus workers of the iron trade can be usefully employed, there will always be farm colonies where their labor can be self-supporting.

Another beneficial consequence of this system is that if, as is likely, it turns out that thirty million tons of iron are more than we can use, the state will not be obliged to dump the excess upon European markets as do now the trusts,[184] thereby incurring a heavy loss to the home industry and arousing the animosity of the European industry affected thereby.

Again, no financial panic can hurt the iron industry. The bankers may gamble to their heart's desire. If they withhold gold the worst they can do is to injure those engaged in competitive industry. No withholding of gold can affect an industry which produces for use and not for profit and receives weekly the wages of its employees in a currency which, because it is not gold or based upon gold and not, therefore, within the control of the banker or the financier, escapes entirely the evil effects of financial operations. Nor can such an industry be affected by what are called "industrial panics"; for industrial panics are the result of overproduction—of the anarchy that exists under the competitive system. These panics may affect competitive industries, but cannot affect guild industries built on yearly state orders for definite amounts calculated beforehand from the known needs of the community, and not left as now to the anarchy and accidents of the market.

Neither financial nor industrial panics can ever have the terrible consequences in a coöperative commonwealth that they have under existing conditions, because in a coöperative commonwealth all the necessaries and most of the comforts of life will be produced upon the coöperative plan, and therefore, a financial or industrial panic can only affect that part of industry which proceeds under the competitive system and as regards, for the most part, luxuries and not necessaries of life.

Obviously, the system of store orders cannot be applied upon the first transfer of an industry from the hands of the capitalist to those of the guild. For a time gold will have to be used until the transformation from capitalism to coöperation has been sufficiently extended to put the state in a position to open public stores. There need, however, be no anxiety as to the state not being in possession of enough gold to handle this part of the business, because it will obviously be the first duty of the coöperative commonwealth to expropriate the mines and put itself in possession of the gold necessary to carry on financial operations with the guilds until such time as the public stores can be usefully opened. Moreover, in taking over the gold mines, the state will also take over the iron mines; and iron ore will be furnished to the iron guild under conditions that will make the necessity of the use of gold far smaller than it would be if the iron ore remained in private hands and had to be paid for in gold. The state will only have to pay gold representing the labor cost of extracting the ore, and will not have to pay miners' profits.

Under this system, there is no temptation to mine more ore or to cut down more forests than is absolutely necessary for the needs of the community. When every member in the community is educated to understand that waste means more work for himself and that the saving of waste means less work for himself, every man in the community will have a direct personal interest in discouraging waste and promoting economy.

Obviously, too, industry will be conducted at its maximum efficiency. Instead of being slaves of the market, we shall become its master. We shall have only so many factories running as are necessary to produce the things we need. Every factory will be running at maximum capacity, at maximum efficiency.

It will be observed that it is proposed to pay the same price for pig iron after taking over the industry as was paid under competitive conditions at the time of the transfer. The objection may be made that this is obviously improper; that it is not fair to the workers in other industries to pay what is known to be an excessive price to the workers in pig iron. To this it may be answered that it will always be better to apply a regular rule than to leave questions of this kind to arbitrary administrative action. Besides, the rule that on taking over a new industry the price paid for the production of the first year shall be the price ruling at that time, will eventually put all industries upon the same footing. At the excessive prices now ruling, the workers will during the first year get a larger proportion than they will ultimately be entitled to; but the larger proportion they will get this year will be needed to face the initial expenses of a higher standard of life.

But here comes the most serious objection that can be made to this plan. It has been said that these prices will have to be revised; that if those manufacturing cotton thread believe themselves to be receiving less for the work they accomplish in their industry than those engaged in making pig iron, they will insist on revision; if so, there will be continual altercations between industries as to the price to be paid for their goods and as to the share in this price that each is to receive; and the problem arises, who is to settle these innumerable questions?

This difficulty is the one that tends to make communists of us. It would be easy to wave away this difficulty by providing that the total profits be divided equally amongst all the members of the community. Humanity, however, is not prepared for such a system. Generations of selfishness have so determined the minds of those who are likely to have to decide these questions in a coöperative commonwealth, that the idea of paying the man at the head of the iron guild the same wages as the man who puddles, will seem too preposterous to be entertained. Whether man will ever develop to a point of unselfishness that will enable him to entertain this idea is a matter of speculation. Suffice it to recognize that if Socialism is to come within one hundred years, and if we take into account the attitude of the public mind as it is to-day, and the slowness with which the public mind changes in matters so radical as these, we shall have to recognize that Communism is still beyond the range of practical politics; and we shall have to face the problem how the questions of the price of goods and the remuneration of the individual are to be solved.

§ 8. Remuneration

It has been pointed out that the proportion at present received by the various grades of workers in an industry, from the man who manages the whole industry to those who do the least skilled work, will at first be maintained. It may be that the salaries paid to managers at present rates may seem so exorbitant[185]—so out of all proportion to those paid to others—that there will be an outcry against it, leading to a diminution of these salaries. For present high salaries to managers are due to the extraordinary difficulty of handling industry under competitive conditions—difficulties that will in great part disappear when coöperative conditions are substituted for competitive conditions. With the exception of these highest salaries, probably the wisest rule will be to maintain at first the proportion that exists at the time when the industry is taken over. Taking over these industries will at once raise the salaries of all because they will receive the share of the profits which now comes to the capitalist, after the deduction of sums paid to annuitants. Nevertheless, it cannot be expected that the proportion now existing will be indefinitely maintained.

The cost of management under competitive conditions is far higher than it would be under coöperative. A railroad man once pointed out to me that the coöperative system is impossible because it would be impossible for the government to find men capable of handling railroads at the price habitually paid by the government for such services. He pointed out that genius is necessary to handle railroads,—the genius of such men as J.J. Hill and the late E.H. Harriman. When, however, it was explained to him that the reason why it was necessary to have such men as Harriman and Hill run our railroads was the competition between them, and when he was asked whether it would be necessary to have such men if our railroads were run as our postoffice is run, he admitted that under such conditions nine-tenths of the difficulty of management would be eliminated.

Obviously, therefore, the enormous salaries paid to men at the head of trusts, life insurance companies, and railroad systems, would no longer be earned, and of course they would no longer be paid.

What is true regarding the heads of these industries is true throughout a large part of the administration. It would need less of the faculty which characterizes the larger carnivora and more of the faculties which characterize the beaver and the ant. For these humbler services lower wages would be paid. This does not mean, however, that there will not be in the state room for men of the constructive ability of Harriman and Hill; but these men will not be the servants of our industries, they will be the servants of our state; and the genius that is now absorbed by business, will, in a coöperative commonwealth, be more usefully employed in the larger fields of politics.

After this slight digression, let us return to the question how far the remuneration will be subject to revision.

It may be that the lower grades will not be subject to revision at all; that all the iron ore we need can be produced by working four hours a day during eight months of the year, and that the rate of wages earned upon the old scale increased by the profits to which workers will be entitled will, without changing the proportion, furnish a standard of comfort such as to-day it is difficult to foresee. It is probable, however, that workingmen who are to-day members of the Socialist party will not agree with this prognosis, but will insist that in a coöperative commonwealth the whole scheme of remuneration will have to be revised. If this be so, it is useless to deny that the revision of this rate of wages will be a matter of difficulty and that the difficulties arising will tend to be perpetual.

Obviously, there must be some plan devised under which these matters will be better adjusted than by a government board, as has been suggested by certain Socialists. Mr. Hillquit[186] quotes with approval the words of Kautsky that government in a coöperative commonwealth will change in character, and that the state will no longer govern, but administer, and this is to a large degree true. But if the administration is to determine what every man is to receive as compensation for the work he does, it is clear that matters of such vital importance cannot be referred to the arbitrary action of a board of administrators.

It seems to me that it will be indispensable to submit these matters to an industrial parliament in which every industry will be represented. And as the determination of these questions will be a matter of the greatest importance to every individual, it is probable that these parliaments will have to be bicameral for the same reason that our government is bicameral; for the same difficulty will present itself. New York insists upon having its large population represented in Congress. Rhode Island, on the other hand, in spite of its small size, insists upon having its state sovereignty represented; so New York is given a representation in proportion to its population in the Lower House and Rhode Island is given equal representation in the Upper House. Exactly the same situation will present itself it regard to industries: Certain industries will be enormous and will want to be represented in proportion to their size; for example, the steel industry. Others will be much smaller but perhaps of much greater importance; for example, the engineers. They will want to be fairly represented in spite of their small size and I see no way of adjusting this other than by adopting an industrial parliament of two chambers, in one of which representation will be according to numbers, while in the other every industry will be equally represented irrespective of size. This may seem a cumbersome system, but it will take no more time than the administration of the trade union takes to-day, and will not be half as costly; for the trade union of to-day has to accumulate funds to provide for unemployment, old age, sickness, and strikes. Strikes and unemployment it will not be necessary to provide against and the others will be provided for by every guild for their own members. The question, therefore, of the adjustment of price and wages will occupy far less time than is now occupied by federations of trade unions.

It is probable that the conclusions to which the industrial parliament will come will not be final. It will be deemed wise to refer them for execution to the general government. This matter, however, belongs to the chapter on the political aspect of Socialism.

§ 9. Circulating Medium under Socialism

It may not be clear at first sight why it is proposed to substitute store checks for greenbacks or gold. Early Socialist writers—particularly Rodbertus—attached much importance to the elimination of gold and the substitution therefor of what they called "labor checks"; a currency representing time spent in labor. Modern Socialist writers have been disposed to cast aside all efforts to substitute this kind of currency for gold. Mr. Hillquit quotes Kautsky[187] with approval on this subject:

"'Money,' says Kautsky, 'is the simplest means known up to the present time which makes it possible in as complicated a mechanism as that of the modern productive process, with its tremendous far-reaching division of labor, to secure the circulation of products and their distribution to the individual members of society. It is the means which makes it possible for each one to satisfy his necessities according to his individual inclination (to be sure within the bounds of his economic power). As a means to such circulation, money will be found indispensable until something better is discovered.'"[188]

Upon this point I find myself at variance with modern Socialists. In Book II, Chapter VI, on Money, I have endeavored to show how the use of gold for currency puts those who own and handle gold in a position practically to control the entire country. If I have failed in proving this, there will be no occasion for substituting anything for gold. But if I have failed, it is, I think, my fault; or perhaps Socialist writers on this subject have not had, and do not possess, the intimate knowledge of financial affairs indispensable to an understanding of this subject. If Mr. Kautsky had practiced law in America, and had had American financiers for his clients, he would not, I think, have failed to understand that money is still more to-day what it always has been since the beginning of the civilized world—the "root of all evil." By money, I mean not currency, which is indispensable, but the use of precious metals as the sole fundamental medium of exchange; because the amount of such precious metals being limited, the few, who under competitive conditions contrive to get control of these metals, become by virtue of this control masters not only of our economic, but of our political conditions.

Mr. Hillquit says[189] that the principal economic classes and interest groups are represented by separate and well-defined political parties; and that the "only exception seems to be presented by the money-lending group of capitalists, who, as a rule, do not form parties of their own. This, however, may perhaps be accounted for by the function of money capital, which can become operative only in connection with the other forms of capitalistic ownership, but has no independent productive existence."

It is misleading to endeavor to draw conclusions from political groups which characterize politics in Germany and France, and there is, I think, a better reason why the great "money-lending group of capitalists" or financiers do not form parties of their own.

Mr. Hillquit is doubtless right in saying that the "Republican party is substantially the party of the modern capitalists," "while the Democratic party is largely the party of the middle class"; nevertheless, in America, as in Europe, the so-called interests and capitalists belong to no one party, because they must and do control both. And it is because Socialist writers do not seem to be aware of the extent to which they do control politics, that comparatively little interest is taken by these writers in questions of currency.

No one who lived in Europe during the Boer war is ignorant of the immense desire of both France and Germany to intervene on behalf of the Boers, and they certainly would have intervened not only because it afforded them a good opportunity to crush England, which one of them openly and the other less openly desired to do, but because such a war would have been popular with the masses in both countries. One thing alone prevented this: Financiers in France and Germany were heavily interested in African gold mines and it was their influence that turned the scale against the crushing of England at that time.

In America, the revelations of the life insurance investigation told all the world what Wall Street previously knew: that big corporations contribute to both Republican and Democratic parties and practically control the action of the Democratic side of our legislatures as well as the Republican. Nothing could have been more transparent than the influence of financiers in the decision whether Cannon and the rules that make Cannon supreme in Congress were to be maintained. The Wall Street Group, which had a lobby in Washington, appealed to the Republican majority not to disorganize their party by fighting against Cannon personally, promising that the Republican party would alter the rules that gave him his present autocratic power; and when in compliance with this promise, Cannon was reëlected and the rules came up, the same lobby secured enough Democratic votes to maintain the rules in spite of the adverse votes of the insurgent Republicans, the argument then used being that the tariff bill could not be passed unless the rules were maintained.

Again, after Taft had, on three separate occasions, solemnly promised the people, if he were elected, a revision downward of the tariff, the same lobby secured a revision of the tariff upwards. We are assured by Messrs. Aldrich and Payne that the revision is a revision downward. How, then, will they explain the extraordinary haste with which ships sought to reach this port before the new tariff came into effect?[190] Were these ships hurrying to port in order to escape the payment of a low tariff? It may be answered that although the tariff was raised as regards certain articles, it was lowered as regards others. To this I have but to quote the Reviews of Reviews for September, 1909, and the articles entitled, "The Payne-Aldrich Tariff," which follow in subsequent numbers. The Review of Reviews is quoted rather than other periodicals because it is recognized as a supporter of the so-called Roosevelt policies and, therefore, cannot be accused of Socialistic tendencies. It is seldom that the Interests have gone so far as to elect a presidential candidate on a definite promise and deliberately, as soon as the candidate was elected, to violate their promise. But the Interests have at this moment such control over our politics that they can even do this; and it seems very doubtful whether this treachery will ever be materially punished.

If, as I believe, it is important that the competitive system be allowed to survive in the coöperative commonwealth, it is obvious that it can only be tolerated on the condition that the community be safe from such political control as this. And for this reason it seems to me essential that the use of gold as currency be limited; and that as regards the exchange of all the necessaries of our existence, we should have a currency that entirely escapes the control of the financier. This is the reason why I have insisted on the use of store checks which are just as convenient and secure as our present greenbacks.

There seems to be no other way of eliminating the undemocratic autocracy of the financier than by some such system as the one above described; that is to say, the issue by the state of orders on the public stores to the extent of the goods in the public stores, which may in their general appearance differ but little from the greenback of to-day: Instead of reading "Good for $1.00 gold currency," they will read "Good for $1.00 at the public stores." This public store currency will eliminate the use of gold and silver throughout the socialized industries and as regards all agricultural products except a very small portion. Every socialized industry and every farmer will furnish to the state the bulk of his produce—that is, the minimum exacted by the state—in exchange for this kind of currency.[191] It is only the surplus—the amount produced by the farmer and factory above the minimum established by the state—that the farmer and the factory will be at liberty to sell for gold instead of exchanging for public store notes; and of this surplus the farmer and factory will be free to sell as much as they choose for public store notes, so that gold and silver will constitute a small part of the medium of exchange. This system will have the following advantages:

It will practically eliminate the present control of political and economic conditions by financiers. So long as the currency used in exchanging necessaries and comforts is rescued from the control of financiers, it is a matter of comparative indifference whether the financiers control the currency used in the manufacture and distribution of luxuries, for such control will have practically no effect upon the things necessary to human existence.

It will give to the state the use of the gold coin which is now accumulated in its treasury for the redemption of its notes; and the state will use this large gold fund for the purchase of the products of other nations.[192]

Let us see how this proposed system of store notes will work in a given manufacture:

The state will order the steel guild to manufacture thirty million tons of pig iron (the amount produced in 1907 was a little over twenty-six millions); and will allot to the steel guild for the supply of steel six hundred and sixty million dollars in store notes, this being calculated at the rate of $20 a ton. (The price in 1907 was a little over $22.) These $660,000,000 will be paid to the steel guild in the following manner:

Every week a number of store orders will be issued to the amount of the wages of the week and of the fixed charges. At stipulated periods the steel guild will furnish the state pig iron so that the state will never have advanced to the guild store orders amounting to more than the value of the pig iron in the store, an exception of course being made for the first few weeks that the industry proceeds upon this basis. Upon the delivery of pig iron at these stated periods, the state will deliver the difference between the weekly amounts already paid and the price of the pig iron delivered. If deliveries of pig iron can be made once a month, this will enable a repartition of a part of the profits so that the workers will not have to wait until the end of the year before they receive their profits, the final dividend being paid at the expiration of each year.

Such an order as the above will serve the following purposes and have the following consequences: the steel guild will have a definite order for a definite amount of pig iron to manufacture. It will know exactly how many men it will need to manufacture this pig iron. It will employ a few more men than those employed in 1910. The state will issue to the steel guild weekly the amount of store notes necessary to pay the wages upon the same scale as in 1910. Men engaged in the Steel Trust at the moment of transference will continue to work and receive the same rate of wages; but they will be entitled to their share of the profits after the amounts due annuitants and the amounts necessary to create a fund for old age and sickness have been deducted. Obviously, this first order of thirty million tons is far larger than the country uses, because a large part of the product of 1907 was exported. The amount thus exported will be at the disposal of the state either to export, or exchange for foreign products, or to set aside as a reserve upon which the state can draw in case of deficit.

§ 10. Summary

Let us now consider the purposes we have in view in this proposed economic organization of the coöperative commonwealth and how far we attain these purposes:

The main object of a coöperative commonwealth is to give to all workers as nearly as possible the exact product of their work. It may be interesting to note that this is the ideal that Mr. Roosevelt himself proposes, and he objects to Socialism because he thinks Socialism will on the contrary allow the "thriftless and the vicious" to profit. These words describe not a coöperative commonwealth, but existing conditions. For example, such a degenerate as Harry Thaw, who would, I suppose, according to Mr. Roosevelt be classified as one of the "thriftless and vicious," obtains his income from the profit created by others who work for it; whereas those who work, instead of getting the full product of their work, are obliged to see that nearly if not altogether one-half of it goes to the support of the idle, among them this young man. These are the exact conditions to which Socialism proposes to put an end, and, therefore, I point out that the principal object that Socialism has in view is to do exactly the thing that Mr. Roosevelt wants to see done—to undo the very things to which Mr. Roosevelt objects.

Another principal object of this proposed organization is to prevent overwork and unemployment, that necessarily lead to drunkenness, pauperism, prostitution, and crime.

A third thing which this system of organization proposes to do is to preserve the resources of the country; and here again we find ourselves realizing the ideal of Mr. Roosevelt. The single idea of a lumberman is to sell lumber—not to preserve it; the idea of a coal miner is to sell coal—not to preserve it; the idea of an iron miner is to sell ore—not to preserve it. In a coöperative commonwealth there is no desire to make profit out of these things. The one object in view is to use our lumber, coal, and ore to the best advantage and with the least waste.

Another object we have in view is to produce with the greatest economy, with the greatest efficiency. We do not want forty refiners engaged in refining sugar where seven will suffice.[193] We want all our factories while they are working, to be working at their best efficiency, not on half time or with only one-half the engines going. We also want the things we need to be produced in such a way as to take advantage of every waste product—a thing that can only be done when industry is concentrated in the hands of a single guild instead of being distributed as it tended to be (before the organization of trusts) in the hands of many competing manufacturers.

This system of production and distribution would maintain the present check upon overpopulation which Mr. Huxley regarded as the principal objection to Socialism;[194] for under this plan, although every member of the community would be assured a comfortable income, his comforts would be limited by the number of children he brought into the world. Experience shows that the prudence of the middle class to-day constitutes a check upon overpopulation; that, in other words, overpopulation is to be feared, not in the middle class, but in those, such as the extremely poor, who are under no prudential check.[195]

The imprudent in such a coöperative commonwealth as is above described, have always before them the prospect of the state farm with its different degrees of unattractiveness. If, therefore, to-day workingmen look upon the almshouse with abhorrence, it does not seem unreasonable to suppose that the workers in a coöperative commonwealth, accustomed to a far higher standard of living than the workingman of to-day, would be deterred as much by the prospect of committal to a farm colony as a self-respecting worker to-day is deterred by the prospect of the almshouse.

But there is another point of view from which the question of overpopulation must be considered: The increasing independence of women in America has already served to diminish the increase of population to the extent which our sociologists regard as alarming. The population of the United States is increasing chiefly through immigration and the increase of immigrants. Here, as elsewhere, it is the extremely poor that propagate. Indeed, as women become more and more independent economically, as they certainly would in a coöperative commonwealth, there seems to be more danger of underpopulation than overpopulation. But here the state can no doubt exert a very important influence; for if there seems danger of underpopulation it might increase its tax upon the industries of the state and apply the tax to the support of children so as to relieve parents at the expense of the entire state, of the cost of educating children, thereby removing all economic motive for underpopulation.

I think, moreover, that since Mr. Huxley's day the whole opinion as to overpopulation has changed. There is not a shadow left of the fears of Malthus; for the extraordinary results published in the 13th Annual Report of the Bureau of Labor show that productivity is likely to increase rather than diminish in a coöperative commonwealth, in view of the fact that all those now engaged in pure competition and therefore a burden on the community, will be put to the work of production, thereby increasing the productivity of the nation relatively to its numbers.

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