Of course, the bankers did not "make the panic," as has been sometimes ignorantly asserted; they only made money out of it both ways—out of high prices in May and out of low prices in November. And this illustrates one of the great defects of the competitive system—that it puts different sets of men in a position where they can make individual profit out of the misfortunes of their neighbors; bankers out of panics; distillers and liquor dealers out of drunkenness; manufacturers and retailers out of adulteration, and so down the whole gamut of production and distribution; and this is the process which the bourgeois approves because it "makes character."
But the unemployment that is the necessary result of all periods of depression, whether produced by overproduction or overinvestment, deserves more than passing mention for its fruits in the shape of misery, pauperism, prostitution and crime, are menacing and prejudicial to the race.
§ 2. Unemployment
The subject of Unemployment has just been treated by an expert in a book[34] hailed by the press as the final word on the subject. All the theories ever propounded as to the cause of unemployment have been reviewed in this book, from overproduction, underconsumption, competition, to "spots on the sun." And the author concludes in favor of competition.[35] As regards the facts and the explanation of these facts, there seems to be no essential disagreement between orthodox economists and Socialists. Both trace unemployment back to competition. And in addition to the arguments given by Mr. Beveridge for tracing unemployment to competition, I venture to add that competition must be decided to be the primary cause, because it is itself the cause of the other so-called causes occasionally proposed—overproduction, underconsumption, underemployment, underpayment—in fact, all except "spots on the sun," which can, I think, except for purposes of hilarity be definitely abandoned.
But although we are agreed as to facts, we very much differ as to emphasis. Mr. Beveridge, and indeed all orthodox economists, pass lightly over the injustice, the immorality and the agony of unemployment. He refers to the "cyclical fluctuation" which gives rise to unemployment as a mere failure of adjustment between demand and supply. "No doubt," he says, "the adjustment takes time and may only[36] be accomplished with a certain amount of friction and loss." Now this "friction and loss," when expressed in money and wealth, seem to us socialists stupid because avoidable; but when expressed in human life and misery, they seem so intolerable that we are prepared if necessary to shatter to bits the whole system that underlies them, in order to "remould it nearer to the heart's desire." We are relieved then when we discover that by applying wisdom instead of temper to the solution of the problem, it is unnecessary to do any shattering, that we can remould it without violence, and that this is what Socialism proposes to do. Mr. Beveridge disposes of the Socialist solution in a sentence: "To abolish the competitive stimulus," he says, "is to abolish 'either the possibility of, or the principal factor in material progress.'"[37] But these few words beg the whole question: Need we abolish the competitive stimulus in the adoption of the Socialist cure? Can we not confine ourselves to eliminating the gambling element in it? Can we not diminish the stakes without abandoning them altogether? Can we not take our arsenic in tonic instead of in fatal doses? These questions belong to our constructive chapters at the end of the book. I shall take up here only a few other points about unemployment which orthodox economists do not sufficiently emphasize, in order that there may be no doubt as to the magnitude of this evil and as to the duty upon us to eliminate it if we can.
Few things irritate the bourgeois more than to speak of workingmen as "wage slaves." I have seen college professors lose their temper over this word so often that they have served to suggest that in using it we are, as children say, getting "warm." We are very near the Negro we are looking for in the woodpile. Unemployment will help us in our search.
Not only the slave, but the savage, has a great advantage over the workingman, in that the former is never unemployed and the latter need never be so unless he chooses. Unemployment then is the peculiar product of our civilization. It is only under this competitive system of ours that a strong, hearty, able-bodied man, not only willing, but burning to work, with plenty of work to be done and with plenty of food to be eaten, is refused both. Although there are vacant lots in the heart of our cities and deserted farms within a few miles of them, the unemployed and the women and children dependent on them are to starve because owing to the "failure of adjustment between supply and demand," no one for two years past has been able to make money by employing them. Why this is so will more fully appear in Book II, Chapter III. It is only necessary here to point out the forces that tend to make the wage slave not only more unfortunate, but more dangerous to the community than the African slave.
The slave owner has the same interest in the welfare of his slaves as the cowboy in his cattle. God knows this is not much, but it is sufficient to keep slaves and cattle in good condition if only for the purpose of getting work out of the one and high prices out of the other. The interest that a slave owner has in the health of his slaves is a continuing one; it lasts during the working years of his slave. The owner has paid a price or his slave has cost him a certain amount to raise. The interest of the owner, therefore, is to get the most work out of the slave during his working years. For this purpose he lengthens these working years to the utmost possible; and accordingly feeds and clothes his slave sufficiently and does not overwork him.
The interest of the factory owner is just the opposite. He has paid nothing out of his capital for what is called the "free labor" he employs; and because free labor exacts a high wage and short hours, it is to the interest of the factory owner to get the greatest work possible out of his employee, regardless whether his employee is overworked. It is to his interest, not only to use his employee, but to use him up; and to this end he speeds up his machinery to the utmost point in order to force his employees to do the greatest work possible during the hours of employment, and has recourse to pacemakers. He does this with perfect security, because he has an unlimited amount of young labor always at his disposal to replace employees prematurely worn out from overwork and the diseases that come from overwork. The factory owner does not adopt these methods out of hardness of heart, but out of the necessity of the market. If he pays a workingman high wages for short hours, he must get the greatest work out of him if he is to compete successfully with other factory owners in the same line of business. Even the most merciful factory owners have to overwork their employees in order to sell goods at prices fixed by the merciless market. This system results in manifold evils. It creates a class not only of unemployed, but of unemployables; men who cannot render efficient service because of disease and of the drunkenness to which overwork tends; for when a workingman feels his strength begin to wane he has recourse to stimulants to last his day out, and once the habit of stimulants is contracted, he loses his appetite for nourishing food and becomes thereby more and more confirmed in the use of intoxicants.
We have here, therefore, a perpetual and necessary production of unemployed and unemployable; the industrial town resembles a gigantic threshing machine which produces its regular quota of unemployed and unemployables as certainly as a threshing machine produces chaff.