LETTER XVI
My dear Judd:
We have been discussing the problem of how the workers are to get possession of the industrial machinery of the country. I have proposed to pay for it; but there are some who insist that the workers should seize the plant. It has been built by the workers, and taken from them by fraud; if we purchase it, we merely continue exploitation under another form; the government replaces the owners as task-master, and collects the profits and pays them to the owners in the form of dividends.
This statement sounds all right, but it overlooks the essential factor in our business situation—that “iron ring” I have been telling you about. At the present time not one per cent of our factories are run at full capacity all the year round; but when we get possession for the workers, we break the iron ring, and can run them all day and all night. We have five million unemployed—the average of good years and bad, you remember—five million men to go to work, to turn out more goods for themselves and for all. We cut out the wastes and reduplication; and according to the lowest estimate, we double our production of goods.
The plant we propose to buy is worth, roughly, one hundred billion dollars, and its annual product is twenty billions, possibly thirty; let us say twenty, to be safe. We pay for it with five per cent bonds, which means the former owners get five billions a year. If we double production, we have forty billions a year, which leaves thirty-five billions for us. In other words, Judd:
We can work half an hour a day for the owners, and four hours a day for ourselves, and be twice as rich as at present.
So you see why I am in favor of compensation! Not because I love the owners, but because, as a matter of cold cash, we shall do better that way. I will go so far as to argue that if we try to pay nothing, we shall really pay more. If we try to kick the bosses out, and seize the factories, and run them by workers’ councils—obviously, that may mean civil war. The bosses have the factories, and they have machine-guns and airplanes and poison gas—a system for wiping out the lives of thousands of workers, if necessary. One of the embarrassments of physical force revolution is that it may fail, and the workers, instead of getting the factories, may get castor oil and Fascist clubs. There is a big group of our masters who think that is what the workers need, and would take delight in administering it.
I know some young revolutionists who are prepared to die for the proletariat, in a fine spirit of martyrdom. They are impatient of talk about money, but I beg them to pause and consider the balance sheet of Compensation versus Confiscation. Even though they succeed in their revolution, they surely cannot do it without industrial waste. They will have to stop the machines while they are fighting; they may shoot holes in the factories, and even burn some of them down. And just what will that cost? We are reckoning, you understand, on our possible double production—forty billions a year. The interest we pay the owners is five billions a year. So now:
If in the course of our revolution we destroy one-eighth of our industrial plant, it would have been cheaper to pay the owners for the whole thing.
Or, suppose we have the good luck to get by without much fighting—what then? Well, the present management, which knows the industry, and is keeping the plant going—this management is hired by the owners, and is loyal to the owners, and will have to be booted out the back door, which will certainly stop production, cripple it for months, perhaps years. But if our government comes to the owners in a business deal, and buys the plant, the management will stay on, as it did when we took over the railroads during the war. On that basis, we shall not lose an hour of the plant’s time, nor will the workers lose an hour of their wages. And how does this figure up, in the balance sheet of Compensation versus Confiscation? Listen:
If our industrial plant is idle for six weeks, we have lost what would have paid the owners for a year.
And again, an obvious consequence:
Every day over six weeks that the plant is idle, the workers are paying from their own pockets!
Our young revolutionists are going by the Russian model, and that is natural, because many of them come from there. But Russia had a small industrial plant, and we have a great one, enormously complicated. Moreover, Russia had no middle class, while we have a powerful one, ready to turn out at a moment’s notice and use machine guns and poison gas in the interest of property rights. The workers’ revolution succeeded in Russia, because the country was broken by war; but to bring us to a similar state of disorganization would take decades of suffering and waste—I venture the guess that it would be twenty times cheaper to buy the capitalists out, than to bring America to the point where a physical force revolution could prevail.
And yet, having said all that, fairness compels me to admit another side. I have been setting forth the ideal procedure; but this is not an ideal world, and many times we have to take what we can get, instead of what we want. Having told you my hopes, I will now tell you my fears.
The masses of our country are ignorant and unorganized. More than half of them do not vote at all; a large percentage value their votes at two dollars each, and the rest take their party as they take their God—from their grandfathers. They are interested in baseball and prize fighting, and jazz, and the doings of the “smart set”; they do not know how to think, and they never read anything but the “kept” newspapers and magazines, which tell them they are the greatest people in the world. Never in history has there been so elaborate a system for the hoodwinking of a hundred million people; and they lap up the propaganda, and go to the polls and vote their government into a branch-office of J. P. Morgan and Company.
But all this does not stop the process of industrial evolution; rather it speeds it up—giving the rich more money to produce more goods, and causing the poor to have less money to buy the goods. So the crisis comes on like a cyclone; and we shall find ourselves with our factories idle and millions of people starving, and no idea of the next step to take. There will be no time to teach the masses, no machinery for reaching them; but the desperate workers in our cities will hear the voice of the Communist soap-boxer, saying, “Take the factories, and produce goods for yourselves and your fellows.” The soap-boxer will ask: “Do you have to starve, because the majority has not voted you food?” He will ask: “Does a man have to remain a slave because the majority has not voted him free?” So it may happen that the hungry workers seize the factories and attempt to run them; and we shall have to make the best of it and help them to success.
In such an emergency, the social changes will be sudden and drastic; and that is the reason why I do not attempt to foretell what the new industrial forms will be. Just how the business will be managed depends in great part upon those who now have the power in their hands; they may choose either to be stubborn and brutal, or to display vision and a sense of justice, not to say of common prudence. You can see the difference this makes if you compare the great French revolution of a century and a half ago with the series of changes that have taken place in England during the same period. England has become a partly democratic country in fact, while remaining a monarchy in form; the reason being that the governing classes never pushed the people to the last extreme, but made concessions, just enough to keep themselves in power.
There is room for a variety of compromises between the workers and the capitalists, and also between the workers and the state. The capitalists may permit the setting up of shop committees, with the right of control over working conditions; they may consent to representation of the workers in boards which oversee each industry, with power to make adjustments and enforce decrees. Or both sides may prefer to call upon the government to do the adjusting. Or again, the workers may get control of the government, and laws may be passed providing for the taking over of control by the trade unions. A practical program has been worked out by the railway brotherhoods, the Plumb plan; providing for the purchase of the roads by the government, and their operation by a board representing the government, the brotherhoods, and the bondholders until the latter have been paid off. The day may come when the money-masters of this country will wish they had had the statesmanship to put that plan into operation while there was time.
I have argued here for government ownership of industry; but you must understand—that is not the same thing as operation of industry by politicians. The people who understand an industry are those who work in it; and the way to combine democracy with efficiency is to make each industry a self-governing unit, and confine the part of government to supervision, and the regulation of prices. Let us have an industrial constitution and an industrial parliament, and let every man become a citizen of industry, with a voice in the control, and equal rights with all other citizens. That is the goal we work towards, and it is a strictly American goal, in line with American traditions. The practical steps are, first, to organize the workers in each industry, and make them class conscious, awake to their own interests; and second, to use the power of the state to open the books of each industry and expose the profits, cutting down the share which goes to the idle owners, and increasing the share which goes to the useful workers.