"It sounds like a riddle, doesn"t it? But it is not. However, I will hasten to explain. As one of those citizens to whom for supposed public services the people have voted the blue ribbon, I have various honorary functions as to public matters, and especially educational affairs. This morning I have notice of an examination at ten o"clock of the ninth grade in the Arlington School. They have been studying the history of the period before the great Revolution, and are going to give their general impressions of it. I thought that perhaps, by way of a change, you might be interested in listening to them, especially in view of the special topic they are going to discuss."
I a.s.sured the doctor that no programme could promise more entertainment.
"What is the topic they discuss?" I inquired.
"The profit system as a method of economic suicide is their theme,"
replied the doctor. "In our talks. .h.i.therto we have chiefly touched on the moral wrongfulness of the old economic order. In the discussion we shall listen to this morning there will be no reference unless incidentally to moral considerations. The young people will endeavor to show us that there were certain inherent and fatal defects in private capitalism as a machine for producing wealth which, quite apart from its ethical character, made its abolition necessary if the race was ever to get out of the mire of poverty."
"That is a very different doctrine from the preaching I used to hear," I said. "The clergy and moralists in general a.s.sured us that there were no social evils for which moral and religious medicine was not adequate.
Poverty, they said, was in the end the result of human depravity, and would disappear if everybody would only be good."
"So we read," said the doctor. "How far the clergy and the moralists preached this doctrine with a professional motive as calculated to enhance the importance of their services as moral instructors, how far they merely echoed it as an excuse for mental indolence, and how far they may really have been sincere, we can not judge at this distance, but certainly more injurious nonsense was never taught. The industrial and commercial system by which the labor of a great population is organized and directed const.i.tutes a complex machine. If the machine is constructed unscientifically, it will result in loss and disaster, without the slightest regard to whether the managers are the rarest of saints or the worst of sinners. The world always has had and will have need of all the virtue and true religion that men can be induced to practice; but to tell farmers that personal religion will take the place of a scientific agriculture, or the master of an unseaworthy ship that the practice of good morals will bring his craft to sh.o.r.e, would be no greater childishness than the priests and moralists of your day committed in a.s.suring a world beggared by a crazy economic system that the secret of plenty was good works and personal piety. History gives a bitter chapter to these blind guides, who, during the revolutionary period, did far more harm than those who openly defended the old order, because, while the brutal frankness of the latter repelled good men, the former misled them and long diverted from the guilty system the indignation which otherwise would have sooner destroyed it.
"And just here let me say, Julian, as a most important point for you to remember in the history of the great Revolution, that it was not until the people had outgrown this childish teaching and saw the causes of the world"s want and misery, not primarily in human depravity, but in the economic madness of the profit system on which private capitalism depended, that the Revolution began to go forward in earnest."
Now, although the doctor had said that the school we were to visit was in Arlington, which I knew to be some distance out of the city, and that the examination would take place at ten o"clock, he continued to sit comfortably in his chair, though the time was five minutes of ten.
"Is this Arlington the same town that was a suburb of the city in my time?" I presently ventured to inquire.
"Certainly."
"It was then ten or twelve miles from the city," I said.
"It has not been moved, I a.s.sure you," said the doctor.
"Then if not, and if the examination is to begin in five minutes, are we not likely to be late?" I mildly observed.
"Oh, no," replied the doctor, "there are three or four minutes left yet."
"Doctor," said I, "I have been introduced within the last few days to many new and speedy modes of locomotion, but I can"t see how you are going to get me to Arlington from here in time for the examination that begins three minutes hence, unless you reduce me to an electrified solution, send me by wire, and have me precipitated back to my shape at the other end of the line; and even in that case I should suppose we had no time to waste."
"We shouldn"t have, certainly, if we were intending to go to Arlington even by that process. It did not occur to me that you would care to go, or we might just as well have started earlier. It is too bad!"
"I did not care about visiting Arlington." I replied, "but I a.s.sumed that it would be rather necessary to do so if I were to attend an examination at that place. I see my mistake. I ought to have learned by this time not to take for granted that any of what we used to consider the laws of Nature are still in force."
"The laws of Nature are all right," laughed the doctor. "But is it possible that Edith has not shown you the electroscope?"
"What is that?" I asked.
"It does for vision what the telephone does for hearing," replied the doctor, and, leading the way to the music room, he showed me the apparatus.
"It is ten o"clock," he said, "and we have no time for explanations now.
Take this chair and adjust the instrument as you see me do. Now!"
Instantly, without warning, or the faintest preparation for what was coming, I found myself looking into the interior of a large room. Some twenty boys and girls, thirteen to fourteen years of age, occupied a double row of chairs arranged in the form of a semicircle about a desk at which a young man was seated with his back to us. The rows of students were facing us, apparently not twenty feet away. The rustling of their garments and every change of expression in their mobile faces were as distinct to my eyes and ears as if we had been directly behind the teacher, as indeed we seemed to be. At the moment the scene had flashed upon me I was in the act of making some remark to the doctor. As I checked myself, he laughed. "You need not be afraid of interrupting them," he said. "They don"t see or hear us, though we both see and hear them so well. They are a dozen miles away."
"Good heavens!" I whispered--for, in spite of his a.s.surance, I could not realize that they did not hear me--"are we here or there?"
"We are here certainly," replied the doctor, "but our eyes and ears are there. This is the electroscope and telephone combined. We could have heard the examination just as well without the electroscope, but I thought you would be better entertained if you could both see and hear.
Fine-looking young people, are they not? We shall see now whether they are as intelligent as they are handsome."
HOW PROFITS CUT DOWN CONSUMPTION.
"Our subject this morning," said the teacher briskly, "is "The Economic Suicide of Production for Profit," or "The Hopelessness of the Economic Outlook of the Race under Private Capitalism."--Now, Frank, will you tell us exactly what this proposition means?"
At these words one of the boys of the cla.s.s rose to his feet.
"It means," he said, "that communities which depended--as they had to depend, so long as private capitalism lasted--upon the motive of profit making for the production of the things by which they lived, must always suffer poverty, because the profit system, by its necessary nature, operated to stop limit and cripple production at the point where it began to be efficient."
"By what is the possible production of wealth limited?"
"By its consumption."
"May not production fall short of possible consumption? May not the demand for consumption exceed the resources of production?"
"Theoretically it may, but not practically--that is, speaking of demand as limited to rational desires, and not extending to merely fanciful objects. Since the division of labor was introduced, and especially since the great inventions multiplied indefinitely the powers of man, production has been practically limited only by the demand created by consumption."
"Was this so before the great Revolution?"
"Certainly. It was a truism among economists that either England, Germany, or the United States alone could easily have supplied the world"s whole consumption of manufactured goods. No country began to produce up to its capacity in any line."
"Why not?"
"On account of the necessary law of the profit system, by which it operated to limit production."
"In what way did this law operate?"
"By creating a gap between the producing and consuming power of the community, the result of which was that the people were not able to consume as much as they could produce."
"Please tell us just how the profit system led to this result."
"There being under the old order of things," replied the boy Frank, "no collective agency to undertake the organization of labor and exchange, that function naturally fell into the hands of enterprising individuals who, because the undertaking called for much capital, had to be capitalists. They were of two general cla.s.ses--the capitalist who organized labor for production; and the traders, the middlemen, and storekeepers, who organized distribution, and having collected all the varieties of products in the market, sold them again to the general public for consumption. The great ma.s.s of the people--nine, perhaps, out of ten--were wage-earners who sold their labor to the producing capitalists; or small first-hand producers, who sold their personal product to the middlemen. The farmers were of the latter cla.s.s. With the money the wage-earners and farmers received in wages, or as the price of their produce, they afterward went into the market, where the products of all sorts were a.s.sembled, and bought back as much as they could for consumption. Now, of course, the capitalists, whether engaged in organizing production or distribution, had to have some inducement for risking their capital and spending their time in this work. That inducement was profit."
"Tell us how the profits were collected."
"The manufacturing or employing capitalists paid the people who worked for them, and the merchants paid the farmers for their products in tokens called money, which were good to buy back the blended products of all in the market. But the capitalists gave neither the wage-earner nor the farmer enough of these money tokens to buy back the equivalent of the product of his labor. The difference which the capitalists kept back for themselves was their profit. It was collected by putting a higher price on the products when sold in the stores than the cost of the product had been to the capitalists."
"Give us an example."
"We will take then, first, the manufacturing capitalist, who employed labor. Suppose he manufactured shoes. Suppose for each pair of shoes he paid ten cents to the tanner for leather, twenty cents for the labor of putting, the shoe together, and ten cents for all other labor in any way entering into the making of the shoe, so that the pair cost him in actual outlay forty cents. He sold the shoes to a middleman for, say, seventy-five cents. The middleman sold them to the retailer for a dollar, and the retailer sold them over his counter to the consumer for a dollar and a half. Take next the case of the farmer, who sold not merely his labor like the wage-earner, but his labor blended with his material.
Suppose he sold his wheat to the grain merchant for forty cents a bushel.
The grain merchant, in selling it to the flouring mill, would ask, say, sixty cents a bushel. The flouring mill would sell it to the wholesale flour merchant for a price over and above the labor cost of milling at a figure which would include a handsome profit for him. The wholesale flour merchant would add another profit in selling to the retail grocer, and the last yet another in selling to the consumer. So that finally the equivalent of the bushel of wheat in finished flour as bought back by the original farmer for consumption would cost him, on account of profit charges alone, over and above the actual labor cost of intermediate processes, perhaps twice what he received for it from the grain merchant."
"Very well," said the teacher. "Now for the practical effect of this system."
"The practical effect," replied the boy, "was necessarily to create a gap between the producing and consuming power of those engaged in the production of the things upon which profits were charged. Their ability to consume would be measured by the value of the money tokens they received for producing the goods, which by the statement was less than the value put upon those goods in the stores. That difference would represent a gap between what they could produce and what they could consume."
MARGARET TELLS ABOUT THE DEADLY GAP.
"Margaret," said the teacher, "you may now take up the subject where Frank leaves it, and tell us what would be the effect upon the economic system of a people of such a gap between its consuming and producing power as Frank shows us was caused by profit taking."