By Victor Yarros

At this juncture a highly important and fundamental question formulates itself in our mind:

Since, as we are told with great stress, nothing more is needed for the complete pacification and harmonization of social antagonisms than an increase of wealth, through utilization of perfected methods of production; since, further, such an increase through such agencies is not only possible, but inevitable, in the natural development of industrial activity; and since, finally, the claims of capital to reward, in the shape of rent, interest, and profits, are perfectly legitimate and equitable, and in no way tend, as Socialists would have us believe, to clog or obstruct the wheels of production and exchange,—why, then, are those wheels obstructed? What is the cause of our disorders, and where is the source of the mysterious influences that have such a depressing and deplorable effect on our material relations? In a word, why do not Mr. Gunton’s desiderata actually take place,—that is, why is not machinery introduced, hours of labor shortened, and well-being progressively raised and extended?

Much importance is attributed, as we have seen, in the book to the desires, demands, and claims of the workers. Surely, then, on this side there need be no resignation to their lot and sheepish submission to and acceptance of things as they are? Who can say that labor lacks enthusiasm, energy, confidence or perseverance? We have had, one would think, enough of agitation and clamor for higher pay, shorter hours, better treatment, and many other things, to cause the capitalist to fulfil his part of Mr. Gunton’s programme. Why, then, does not practice correspond to theory, and why are not the aims of labor organizations achieved and their demands satisfied?

To this question Mr. Gunton somewhat tardily gives an answer which caps the climax of absurd misunderstanding of economic progress everywhere manifest in the book. The trouble is . .  . . due to mistaken conceptions of the laws of economic relations. The inverted notions of economic movement . .  . have naturally led to a mistaken and most uneconomic industrial policy. Having adopted the European industrial policy, born of a one-eyed political economy . .  . we have made as much of him [the laborer] as possible as a producer and as little as possible as a consumer. How very simple! Because employers have governed themselves, both negatively and positively, by the false teachings of political economists, we are in the midst of industrial war and confusion. But as soon as we succeed in refuting the fallacious reasoning of the one-eyed theorists, and convince capital and labor of the identity of their interests, of the harmony of their ultimate aims, and of the necessity of their friendly coöperation in increasing wealth and general well-being, we insure a complete reversal of the economic policy and lay the solid foundation for a new condition in which, instead of the Progress and Poverty of the past, we shall behold Wealth and Progress hand in hand.

Certainly the stupidity of a man who thus views industrial history is not of the common sort; natural ignorance alone could not give birth to such a brilliant piece of insanity. Rousseau is outdone. The fantasy of human individuals coming together to institute a social compact becomes the dullest invention of a commonplace mind beside the idea that capitalists, employers, and captains of industry of today, in pursuing their economic policy, deliberately follow distinct and definite instructions elaborated for their guidance by theoretical economists. Really, we can almost imagine how the affair was conceived and accomplished. One fine morning, some centuries ago, wealthy owners of all kinds of property, disgusted with the ennui and monotony of caste life and desirous of inaugurating a new era in history, met to consult as to the best mode of production. Invitations having been sent to all learned men of the time, they turned out in full force. The men of wealth laid their case before the men of brains, and the latter disinterestedly considered it. As a result of that conference the capitalistic system came into the world, and the modern relations between capital and labor, work and wealth, are the direct practical application of the theories and axioms of the political economy expounded at that remarkable gathering. Profits rise as wages fall, was the central truth of the science, and the enterprising gentlemen who, weary of the feudal system, had determined to make history and create new conditions of life, learned and remembered that truth, and since then have governed their actions in strict accordance therewith. They endeavor to grind the laborer down and keep him at the lowest level, that their profits may be high; they oppose every attempt on his part at bettering his condition, seeing in it a menace to their own prosperity and supremacy; and as a consequence of this we have what is called the social problem. Now history is to repeat itself. A new political economy must be created and spread among the wealthy who stand at the helm of things. They must be taught that profits and wages rise and fall together; that their interests are identical with those of the poor and portionless; and that they must endeavor to lift those below them if they wish to rise still higher. Happily, however, no new international convention is now required. The trouble and expense are saved by the fortunate and opportune appearance on the horizon of social science of a great genius whose voice is heard from end of the world to the other, and who is rapidly converting all the employers to his teachings. A little time and patience,—and the new ideas will cause a thorough transformation of industrial relations, and the social problem will be no more.

Whatever shadow of reason some may be inclined to detect in Rousseau’s Social Contract, there is no danger of any one not wholly destitute of intelligence sharing Mr. Gunton’s puerile philosophy or endorsing his science. Men spoke before they had grammatical rules, and political economy, the grammar of commerce and trade, cannot be responsible for the defects and imperfections of the language of economic facts. Political economy deals with ready facts and actual phenomena, classifying them and explaining their origin, meaning, and tendency. The classical economists, while not entirely free from class motives, are nevertheless principally occupied with a scientific consideration and exposition of the fundamental questions of production, consumption, and exchange, in which they have done important and valuable work. The vulgar (I am following Marx in thus dividing the economists into classical and vulgar) economists, on the other hand, simply observe facts, and, in the belief (or rather pretence) that what is is right, put down these facts as fixed and inevitable laws of economic activity. They make the operations of Lombard and Wall streets the data of their science and seek to justify them by assumptions and à priori reasoning. They are, so to speak, under contract to turn out polished goods of whatever raw material they are supplied with, and at short notice. Mr. Gunton has perfroemd a similar service. He has reduced to a science the ignorant and contradictory schemes of trades unionists and empirical reformers.

Unfortunately for the theorists, the capitalists trouble themselves as little about political economy as they do about the millennial utopias of the antagonists of political economy. They have not the need, desire, or patience to give theoretical economy a moment’s attention. They govern themselves by the necessities of the market and practical lessons of the hour. The investigations of learned economists can have no influence upon the actual conditions of the economic world: that is determined by forces and factors which science can only seek to discover and formulate. It cannot change things that are by advocating change; it simply concerns itself with the how and (partly) with the why. Instead of being the innocent victims of evil-minded and guilty theorists, the capitalists are really responsible for the false and lame and vicious and hypocritical theories that are industriously spread by their willing and pliant tools, the vulgar economists. Preaching played no part whatever in the development of the bourgeois economic policy, though it does eminent service now, in befogging the minds of the exploited by sophistry and lies. Capitalists, for the very reason that they desire to hold themselves independent of all codes, scientific or other, are lavish in their reward of those who plead their cause and save them from the wrath of the oppressed multitude. They may even find it convenient to liberally pay those who, like Mr. Gunton, recommend preaching and praying for their own salvation as the remedy for all evils, though none better than they appreciate the childlike and primitive naïveté of those who sincerely advocate this method of salvation.

Once more we are left without an answer to the question why, if there is no inherent antagonism between capital and labor, is not the economic movement orderly, progressive, and harmonious? And this omission entitles us to pronounce without further examination all of Mr. Gunton’s remaining argument as worthless and undeserving of attention. Of what value can be the suggestions and advice of a physician who has shown himself incapable of understanding the nature and the origin of the disease under treatment? A correct and scientific diagnosis of the malady is the first and most important duty devolving upon the social doctor; the remedies are a secondary consideration. Mr. Gunton offers no satisfactory explanation of the cause and growth of the social disease; therefore we are justified in dismissing him as a quack and his remedies as quack-medicine.

For the same reason and in the same manner do we excuse ourselves for not following him into his historical excursions and watching how he demonstrates by recorded facts his deductive reasoning. But it may be well to note that the plot of short-hours agitation and legislation in England, which is amde to serve so admirably as an illustration and practical proof of Mr. Gunton’s ideas, is worked out by Marx, in that splendid chapter of his Capital entitled The Working Day, in a very different manner, and is made to carry a very different lesson. We are inclined to think that in this disagreement Mr. Gunton is as reliable in his matter of fact statements as he is sound in his logic when, in another place, he combats and disproves Marx’s ideas of wages under capitalism by a triumphant reference to an epoch which Marx distinctly characterizes as the eve of the birth of capitalism.

Let us now briefly outline the Socialist view of the present economic situation. Let us glance at the Socialist method of analyzing the social problem and accounting for its origin and development. We invite Mr. Gunton and all others who ride the eight-hours hobby-horse to slowly follow us. They cannot fail to become conscious of the fact that, if the Socialist view of the situation is true and correct, all the talk about shorter hours being any remedy at all is thoughtless and non-sensical and the great expectations founded upon it wholly illusory. They will see that radicalsm ust abandon the eight-hour delusion, and that non-radicals, instead of making and destroying their own men of straw, must attack and destroy the real Socialist position before marching out for new conquests.

The capitalistic system — the system embodying rent, interest, and profits — presupposes the existence of freed and free laborers (freed from feudal ties and free from the encumbrance of capital and other self-employing means) who depend upon the price of their labor-commodity for existence. The class possessing the means of production will not hire these free laborers and set them to work except with a view of personally profiting by the transaction. In other words, they must be sure of a demand for the product of the hired laborers at a higher price than the cost limit before they enter the field as employers. And it is hardly necessary to add that, once in the field as profit-makers, the employers devote their attention to devising plans of increasing the rate of profit. But, whether great or small, the question is whence comes their profit and who ultimately pays it. Now, it is obvious in the first place that the consumers of the finished article pay the share which is inventoried as profit at the same time that they reimburse the outlay for labor and other items in the cost of production. Who are the consumers? None other than the producers themselves. For there are only classes in society,—the capitalists and wage-laborers. The capitalists being the owners of the manufactured commodities (virtually if not nominally in all cases) are not to be considered as buyers. They say, then, to the laborers: We consent to employ you on the condition that you pay us for the articles to be created by your labor and put on the market more than the sum total of our expense in producing them. That is to say, one day’s wages shall only buy one-half a day’s products. The laborer, anxious to sell his labor in order to obtain food, thinks that half a loaf is better than none and accepts the offer. What happens next? The laborers, upon receiving their wages, find that they can get for them only one-half of the articles that their labor throws out. The capitalists are left in the possession of the other half. Whether they are in equity entitled to it or not, the question now is, how do they dispose of it? To what use do they put it? Do they consume it all? If they did, there would not be any labor problem, in the distinctive sense in which we now use this expression. There would, to be sure, still be a decided difference in the standard of living and degree of development between the laboring class and the employing class. The latter would enjoy much and produce little or nothing; the former would toil hard and live very poorly. There would be diversity of opinion as to the justice, propriety, and beneficence of such a condition, but there could be no cry of over-production, no complaint of lack of employment for able and willing hands, and no trace of the thousand and one peculiar characteristics of the modern industrial struggle.

Under that system—which was the system of feudalism—we can easily conceive how a plan might be devised whereby both the rich and the poor would be benefited. If Mr. Gunton should prove to the rich that by raising the standard of living of their dependents and permitting them to increase their consumption they would enlarge their own opportunities and ascend still higher in the scale of refinement and luxury, we can understand how they would be induced to act upon his advice. Equality of course could never be attained under such conditions. The poor would improve themselves, but so would the rich; the poor would be allowed to become less poor only that the rich might become more rich. The total wealth would be augmented, and the share of the poor would be increased, but only relatively to their past consumption, not to the proportional division of the total product. They would still consume only half of it, and the other half would still go to their masters. (Economists who meet the protests of the modern laborers by assuring them that they more and better things than the princes and lords of past centuries will please take to heart this truth and see that their irrelevant comparison no longer beguiles anybody.)

With the breaking-up of the feudal relations the material interest of the wealth owners in the laborers ceased. The causes that made serf labor unprofitable and brought about the new order of things severed the last tie between the rich and the poor. The laborers secured freedom at the expense of the necessaries of life. [3] The new methods of production have so increased wealth that the few capitalists no matter how extravagant and wasteful they may be, in what luxuries they may revel, can only consume a small portion of the product left after the laborers’ purse has been exhausted. If production is to continue without interruption, a market away from home must be found for the surplus product. If it is found, the result is the same as would be if the capitalists could themselves consume it. The product would be got rid of in foreign markets as rapidly as it was created without causing the laborers to undergo periods of idleness and starvation. But today, as is well known, even this avenue is almost completely closed. Capitalism being developed in all civilized countries, the search for foreign markets is a common need and occupation. Kropotkine shows that annexation is the bottom cause and end of modern war. The product cannot all be sold abroad and must largely remain in the home market. This necessitates periodical crises, a stopping of the wheels of production and a throwing out of resourceless laborers into the streets at certain intervals, and a chronic malady of relative over-production. The capitalistic system is thus characterized by suffering at once from abundance and scarcity,—over-production and under-consumption. The laborers are perpetually starving, and the capitalists have more goods than they know what to do with.

In view of this situation an individual steps forward with a solution of the dilemma. Produce more, he tells the owners of the means of production, and let your workmen have a little more than you have been in the habit of allotting to them in the past. Is it necessary to hear another word from him before declaring him a presumptuous ignoramus who has not the faintest glimpse of the situation and who attempts to cure a malady which he does not begin to understand? Even if the proposition could be carried out, it would not effect any change, for, though more would be paid out to the laborers, more would be produced, and the difficulty of finding a market for the surplus product would remain precisely as it is now. But, of course, it is obvious to all reasoning minds that such an increase of production is out of the question. The very causes that have brought about the present stagnation invincibly stand in the way of a revival of industrial activity. If there were a possibility of any such revival, it would actualize itself in the natural course of things.

Doubtless it will occur to those who cannot separate sentimentalism and ethical considerations from economic facts that, as the present system is clearly not only a cannibalistic one so far as it affects the laborers, but a suicidal one so far as the capitalists themselves are concerned, and that since it is plainly to the interest of the capitalists to end this ominous and threatening condition and avert the certain catastrophe by removing its cause,—the under-consumption of the labore,r—all that is needed to insure prompt action is to show the capitalists that their own security and prosperity demand that they return to the laborer all that is left of the total product after their own consumption is abundantly supplied. Let the capitalists keep enough of it to satisfy every conceivable desire and indulge every taste and whim, but let them surrender all the rest to the laborers. Then there will always be a home market, and the evils of over-production will be unknown. The question as to the equity of the shares may be settled at leisure; we shall, at least, have guaranteed work and bread to all.

Truly, a desirable and rational plan. Indeed, of what use to the capitalist is the surplus product which he withholds from the laborer and cannot consume himself? Why continue to play the dog in the manger? Let him recognize the importance of the laborer as consumer as well as producer, and adopt a policy which will benefit the laborer without really and materially injuring himself. All that he sanely cares about is the preservation of his comfortable and pleasant mode of living; this, pending a revolution in ethical and social ideas, he can be well assured of, as the laborers, being immensely relieved, would not be likely to press matters further, and would willingly agree to indefinitely postpone the final settlement of the remaining claims. But unfortunately (and, from our standpoint, fortunately) a compromise of such a nature is an impossibility. This scheme might be practicable if there were but one capitalist in opposition to the laborers, or (which is the same thing) if the capitalist class, while arrayed against the laboring class, presented a solid, harmonious, coöperating front; if in their own ranks prevailed peace, order, identity of interests, and unity of purpose. Then it could be shown to them that in a sense and up to a certain point the prosperity of the laborer is a guarantee of their own advancement, and there might be hope of inducing them to view the laborer otherwise than merely as an appendage to machinery in the process of production. But not so now. The capitalists have not for their motto than an injury to one is the concern of all, but that each is for himself. The struggle for existence and supremacy is waged as bitterly and mercilessly in their own camp as it is between them and the laborers. Economic relations not being governed by benevolence or even far-seeing prudence, the capitalist draws no line at which his war with the world ends. On finding himself in a critical condition, with under-paid laborers and without a market for his wares, he, instead of entering into negotiations with the enemy-laborer in front of him, savagely turns upon the one next to him in line. To preserve himself, he attacks a fellow-capitalist, endeavoring to crush him and drive him out of his class. He sees that the quickest way to save himself from ruin and create a greater demand for his own product is to kill a competitor and diminish the number of suppliers. If he succeeds in this, there is no need for him to think about the capacity of the laborers to consume more. No matter how little each individual laborer consumes, provided a large number of such laborers go to him to make their small purchases, he is contented and secure. The individual capitalists seek to escape the evils growing out of their class monopoly by greater concentration of the monopolized wealth. Whatever the ultimate consequences, the necessity for immediate victory compels this course. In war there are victories which are worse than defeats in their indirect results, but those engaged in mortal combat can only think of direct results. Accordingly, the fight amongst the capitalists becomes more and more desperate in proportion as the poverty of the laborers becomes more and more intense.

Is it not the climax of lunacy to expect that a sermon on the subject of the laborer’s capacity for consumption would reach the ears of the fighting hosts and bring the war to a close? And is it not evident that it is equally useless for laborers to expect any substantial concessions from the capitalists?

Socialists know that the present conflict between capital and capital and capital and labor, this three-cornered fight, is the inevitable and direct effect of the inherent and fundamental vice of usury, which dooms the capitalistic system to an early extinction. Because of this knowledge they pronounce all moderate measures futil and ridiculous, and regard eight-hours and kindred remedies as about as efficacious as fasting and prayer. Since the malady is not temporary and accidental, the cure cannot be entrusted to the hands of empiricists and quacks. Socialists arrive at the conclusion that usury and equity, capitalism and social order, reward of capital and justice to labor, are mutually exclusive. Consequently they do not flatter, delude, or pacify the laborer; neither do they waste any efforts on the humanization of capitalists. They declare that the capitalistic order must be wiped out if the countless millions who mourn are to wipe their tears and know the joys of life. And all who desire progress without poverty must prepare to bury the whole system of usury forever. Reward of capital has no other source than the exploitation of labor, and such exploitation paralyzes industry and obstracts development. Only when labor alone is rewarded will wages repurchase the total product, and, consumption thus keeping pace with production, the latter will increase practically without limit. And labor, to secure equity, needs freedom, full freedom, and nothing but freedom. Let there be the light and warmth of freedom, and the flower of progress will grow and expand luxuriously. Wealth will keep on multiplying, the proportion of effort to satisfaction will keep on diminishing, and the labor problem of today will disappear, there arising instead the problem of thinking and working humanity in its relation to the blind forces of hostile and unintelligent nature.