And how about us? We have that “favorable balance of trade,” so ardently desired by the prosperity boosters; indeed, we have got such a bellyful of it that for the first time we are forced to realize that it’s nothing but wind. Europe owes us, in one form or another, some $19,000,000,000, and can’t even pay the interest; they made no pretense of trying—until they had to borrow some more! Italy came, bowing low and grinning behind its cap, agreeing to pay several billions in the course of 65 years—on condition that we lend another $200,000,000 right off! Germany did the same thing, and France will be doing it, probably before these words see the light of day. Our great financiers accept these paper pledges, for the reason that they are stuck with $19,000,000,000 of them already, and can’t contemplate what will happen when the whole thing turns out to be wind. We go on adding about a billion a year, because the only way we can keep our factories going is to ship our surplus goods abroad—and take nothing back, because that would stop the factories!
We promised our people “prosperity,” you remember, if only they would vote for Coolidge; and they did so, good, patient souls; so now we have to deliver it. The way of “prosperity” is to keep them working to feed and clothe Frenchmen and Germans and Italians and Chinamen and Guatemalans and Haytians—anybody who will send us a beautiful engraved sheet of paper promising to pay us 65 years from now! To be exact, Judd, they don’t even have to engrave the paper; we do that in Wall Street, and they send us a “mission” of white or yellow or black gentlemen in frock coats, to sign opposite the red seal. So here, Judd, you have this wonderful jazz system in its final, delirium stage—our whole people starving themselves on half wages, and sending the surplus abroad, so that our rich men may fill their vaults with pieces of paper which they dare not permit to be redeemed! We already have more than half the gold in the world, and far from taking any more, we have to ship some abroad now and then, to keep some debtor nation from going bankrupt!
Don’t you wish, Judd, that you could find some benevolent storekeeper to do business with you on this ultra-modern jazz basis? Never, never can he be persuaded to take your money, but takes only checks, and does not cash them for 65 years; and if at any time you need money, you threaten to go broke, and immediately he gives you cash and takes some more checks; and if ever you try to send him a truckload of goods, to pay off at least part of the debt, he holds up his hands in a fit of high-tariff horror and says he couldn’t think of taking goods, it would ruin the people inside his store who have the jobs of making that same thing! “For God’s sake, take away your truck,” he exclaims. “Just mail me another paper promise, and anything in the place is yours!”
I conclude with one more sentence for you to learn, Judd:
Our present system of “high finance” is a soap-bubble, which differs from other soap-bubbles in just one respect—it is as big as the world.
LETTER XIII
My dear Judd:
The essence of our industrial system is the private ownership of the means of production; with profit for the private owner as the motive power of industry. The capitalist produces the goods we need, and in order to get them we pay him everything above the bare means of keeping us alive and enabling us to raise the next generation. If this system should break down, it is obvious that we must change to some form of social ownership of the means of production; instead of having the capitalist produce for us, we must do it for ourselves, and the motive power will be, not the desire of the capitalist for profit, but our own desire for the goods.
What difference will that make in the industrial system? At first you might see no difference at all. The worker will go to the factory, where he will find foremen and superintendents in charge, and a time-clock keeping tab on him. On Saturday night he will get his pay envelope, and will take the money and spend it at the stores. The goods produced in the factory will be shipped to all parts of the world, to people who pay for them by checks, which go through banks and a clearing-house—you might follow the whole process, and fail to realize there had been any change. At only one place would the difference appear—inside the pay envelopes. There being no longer any absentee owners, drawing off rent, interest and profits, those who do the work, whether of hand or brain, will now be the only people to draw anything out; and consequently there will be considerably more in each pay envelope.