CHARLES REMOVES AN APPREHENSION.
"Now, Charles," said the teacher, "you shall help us a little on a point of conscience. We have, one and another, told a very bad story about the profit system, both in its moral and its economic aspects. Now, is it not possible that we have done it injustice? Have we not painted too black a picture? From an ethical point of view we could indeed scarcely have done so, for there are no words strong enough to justly characterize the mock it made of all the humanities. But have we not possibly asserted too strongly its economic imbecility and the hopelessness of the world's outlook for material welfare so long as it should be tolerated? Can you reassure us on this point?"
"Easily," replied the lad Charles. "No more conclusive testimony to the hopelessness of the economic outlook under private capitalism could be desired than is abundantly given by the nineteenth-century economists themselves. While they seemed quite incapable of imagining anything different from private capitalism as the basis of an economic system, they cherished no illusions as to its operation. Far from trying to comfort mankind by promising that if present ills were bravely borne matters would grow better, they expressly taught that the profit system must inevitably result at some time not far ahead in the arrest of industrial progress and a stationary condition of production."
"How did they make that out?"
"They recognized, as we do, the tendency under private capitalism of rents, interest, and profits to accumulate as capital in the hands of the capitalist class, while, on the other hand, the consuming power of the masses did not increase, but either decreased or remained practically stationary. From this lack of equilibrium between production and consumption it followed that the difficulty of profitably employing capital in productive industry must increase as the accumulations of capital so disposable should grow. The home market having been first, glutted with products and afterward the foreign market, the competition of the capitalists to find productive employment for their capital would lead them, after having reduced wages to the lowest possible point, to bid for what was left of the market by reducing their own profits to the minimum point at which it was worth while to risk capital. Below this point more capital would not be invested in business. Thus the rate of wealth production would cease to advance, and become stationary."
"This, you say, is what the nineteenth-century economists themselves taught concerning the outcome of the profit system?"
"Certainly. I could, quote from their standard books any number of passages foretelling this condition of things, which, indeed, it required no prophet to foretell."
"How near was the world--that is, of course, the nations whose industrial evolution had gone farthest--to this condition when the Revolution came?"
"They were apparently on its verge. The more economically advanced countries had generally exhausted their home markets and were struggling desperately for what was left of foreign markets. The rate of interest, which indicated the degree to which capital had become glutted, had fallen in England to two per cent and in America within thirty years had sunk from seven and six to five and three and four per cent, and was falling year by year. Productive industry had become generally clogged, and proceeded by fits and starts. In America the wage-earners were becoming proletarians, and the farmers fast sinking into the state of a tenantry. It was indeed the popular discontent caused by these conditions, coupled with apprehension of worse to come, which finally roused the people at the close of the nineteenth century to the necessity of destroying private capitalism for good and all."
"And do I understand, then, that this stationary condition, after which no increase in the rate of wealth production could be looked for, was setting in while yet the primary needs of the masses remained unprovided for?"