I know some young workers in our country who call themselves social revolutionists, and are impatient when they hear me talk about compensation for the capitalists. These young people feel ugly towards the capitalists, and for this I do not blame them, seeing how they have been treated. But the point of my criticism is that these young enthusiasts want to be ugly to the capitalists in an old-fashioned, out of date way, with guns and barricades, while I want to be ugly in the modern way of high finance.
What is it we really want? Is it to kill the capitalists? No, but merely to take from them their power to exploit labor. And how do they get this power? By guns and barricades? They hold it that way, of course; but inside each modern country they have devised the new and infinitely more effective scheme of financial manipulation, the creation of imaginary money with which to buy everything in sight. And it is this weapon I want to turn against them. Why, for heaven’s sake, do we want to have insurrections and riots, when by means of this modern Aladdin’s magic we can walk peaceably into every factory and take charge? The capitalists have created the magic lamp for us—this wonderful new Federal Reserve System; all we have to do is to turn out the present board of bankers’ bankers, and put in a new board of workers’ bankers, and create a hundred billion dollars of new money, and pay for the industries, and there you are! Not a court in the land can stop us, and if any capitalist tries to, he is a revolutionist, and we have criminal syndicalism laws for him!
This is “inflation,” we are told; and inflation raises the cost of goods, and so brings no benefit to the worker. Yes, Judd, but get the point clear—inflation is one thing if you use it to buy goods, and quite a different thing if you use it to buy factories. In buying goods, you buy on a rising market, but in buying factories you buy at a fixed price, and so it is the owners who suffer the loss. And that is the beauty of this scheme I am unfolding; these Wall Street gentry have “passed the buck” to us—and we pass it right back!
The Russian revolutionists made a grave mistake in their dealings with world capitalism; they were too honest. They repudiated the debts of the Tsar’s government—declaring that the money had been spent to enslave the Russian workers, and they would never repay it. Therefore world capitalism went to war with Russia, and is still at war, and that error in tactics has cost the new government many times the debts of the old regime. But how much more clever were the capitalist governments of Italy and France! They also owed us money; but they were so polite—they are the politest people in the world! They owed it, of course, and they would pay, of course; never would they dream of failing to pay their debts; but just now they were very poor, and couldn’t pay, and wouldn’t we please lend them another hundred million or so? We loaned it—because if they go bankrupt they will also go Bolshevik, and that scares the gizzard out of our bankers. So these smooth capitalist nations have never paid us a dollar, but their credit is still good, and we never think of them as criminals and murderers—oh, nothing like that, it is all between gentlemen in Wall Street, and the worthless bonds have been worked off on the general public, and all is serene!
So, Judd, I say, let us be gentlemen, too, and pay! Pay any price the capitalists ask—anything to get them out of the factories, and get the workers in! It will mean that we support a horde of parasites for awhile; but we are doing that, anyhow, and can do it better then, because we shall double production. Young Johnny Coaloil will still be able to keep his yacht and his chorus girls on the Riviera, and Mrs. Silly Splash will continue to wear diamond-embroidered bathing suits at Palm Beach; but notice the difference, Judd—from now on they can buy nothing but goods with their money, they can no longer buy the means of production, and so they will not be able to increase their income!
On the contrary, we can proceed at once to cut it down, by means of an inheritance tax. We already have such a tax—the Coolidge crowd is trying to get rid of it at this moment, and likewise the publicity clause of the income tax, which exposes the big exploiters to uncomfortable daylight! But we can put it back, Judd; we can make the provisions that gifts in anticipation of death count as inheritance; we can register the owners of the bonds, and so wipe out that whole mass of privilege in a generation or two. I promised to show you how the useful workers of America can take possession of their industrial plant, and here is the way. Nothing prevents them but lack of knowledge; and that is why I am writing these letters!
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.