BOOK II[ToC]
WHAT CAPITALISM IS
Socialism is necessarily twofold: destructive and constructive; critical and remedial. We shall take the critical or destructive rôle of Socialism first; setting down the evils in our existing industrial system which Socialism criticizes and seeks to destroy, and leaving the remedial or constructive rôle of Socialism where it properly belongs—to the end. For this reason the present book, which treats of the evils of the existing industrial system, is entitled "What Capitalism is."
Evils of Capitalism
For nearly two centuries men have produced and distributed the things they needed, upon what is called "the competitive system." That is to say, every individual is free to choose his particular share in this work and to make out of his work all that he can, in order with the money so made to purchase for himself the things that he individually needs. The farmer undertakes to furnish us with food, the forester with lumber, the miner with iron. Another set of men run railroads, steamboats, wagons, etc., to distribute the things produced to those who are engaged in selling them—by wholesale to the trade, or by retail to the consumer. Every man engaged in production and distribution is in a measure competing with every other man engaged in it, each trying to make out of his particular calling the largest amount of money possible with the view of being able with the money so earned to purchase for himself the largest amount of necessaries, comforts, and luxuries. This so-called competitive system has been elaborately described by all writers of political economy from de Quesnay and Adam Smith, the fathers of our present system of political economy, to the present day; and because it follows the predatory plan of nature (by which one set of animals lives by devouring another set), it is claimed by some so-called philosophers to be "natural" and therefore wise. The most notorious author of this so-called scientific justification of the competitive system is Herbert Spencer.
The competitive system, however, has been found to result in great waste, misery, and disease; and it is to these evil consequences that the Socialist desires to put an end. He claims that the competitive system is not wise, not scientific, and above all, not economical, but is the most wasteful system conceivable. He alleges that the only intelligent, economic way of producing and distributing the things we need is by coöperation; and the whole economic issue between Socialism and our present industrial system is that Socialism stands for coöperation, and our present system for competition.
It is by no means a necessary part of Socialist philosophy that competition be entirely eliminated. On the contrary, it has been pointed out and will later be further seen that competition has many useful qualities.[22] Socialism, however, points out that competition, when allowed full sway in producing and distributing the necessaries of life, is the direct occasion of the larger part of the misery in the world, and insists, therefore, that as regards production and distribution of the necessaries of life, competition be sufficiently eliminated to assure to all men the opportunity to work, and as nearly as possible the full product of their work. The limitation in italics is the definite dose to which reference has already been made.[23]
One prominent feature of the competitive system is that men do not work for the purpose of supplying the needs of their fellow creatures. The Steel Trust does not manufacture steel to satisfy our need for steel; the farmer does not raise wheat to satisfy our need for bread; they produce these things simply for the purpose of making money for themselves in order that with this money they can procure for themselves the things they need. Socialism claims that the rôle played by money in the competitive system is unfortunate, because the amount of money available at any given time is not always properly adjusted. Sometimes it is so badly adjusted that there is more cotton in one place than the people in that place can use, and in another more people who need cotton than there is cotton to give them; so that it is deliberately proposed to burn cotton for lack of consumers in one place, while consumers are allowed to suffer for lack of cotton in the other. So a short time ago thousands were dying of starvation for lack of wheat in India, while we had such a superabundance of it in America that we were exporting it every day. But that wheat was not available for India because it had to be converted into money.
Socialists allege that this bad situation would never arise if things were produced for the purpose of satisfying human needs instead of for making money.