We took five million of our young men, the very cream of our industrial force, and withdrew them from all productive activities; we put them into uniforms, and put them through a training which meant that they were eating more food and wearing more clothing and consuming more goods than nine-tenths of them had ever done in their lives before. We built camps for them, and supplied them with all kinds of costly products of labor, such as guns and cartridges, automobiles and airplanes. We treated two million of them to an expensive trip to Europe, and there we set them to work burning up and destroying the products of industry, to the value of many billions of dollars. And not only did we supply our own armies, we supplied the armies of all our allies. We built millions of dollars worth of ships, and we sent over to Europe, whether by private business or by government loans, some $10,000,000,000 worth of goods—more than ten years of our exports before the war.
All the labor necessary to produce all this wealth had to be withdrawn from industry, so far as concerned our domestic uses and needs. It would not be too much to say that from domestic industry we withdrew a total of ten million of our most capable labor force. I think it would be reasonable to say that two-thirds of our productive energies went to war purposes, and only one-third was available for home use. And yet, we did it without a particle of real suffering. Many of us worked hard, but few of us worked harder than usual. Most of us got along with less wheat and sugar, but nobody starved, nobody really suffered ill health, and our poor made higher wages and had better food than ever in their lives before. If this argument is sound, it proves that our productive machinery is capable, when properly organized and directed, of producing three times the common necessities of our population. Assuming that our average working day is nine hours, we could produce what we at present consume by three hours of intelligently directed work per day.
Let us look at the matter from another angle. Just at present the hero of the American business man is Herbert Hoover; and Mr. Hoover recently appointed a committee, not of Socialists and "Utopians," but of engineering experts, to make a study of American productive methods. The report showed that American industry was only thirty-five or forty per cent efficient. Incidentally, this "Committee on Waste" assessed, in the case of the building industry, sixty-five per cent of the blame against management and only twenty-one per cent against labor; in six fundamental industries it assessed fifty per cent of the blame against management and less than twenty-five per cent against labor. Fifteen years ago a professor of engineering, Sidney A. Reeve by name, made an elaborate study of the wastes involved in our haphazard and planless industrial methods, and embodied his findings in a book, "The Cost of Competition." His conclusion was that of the total amount of energy expended in America, more than seventy per cent was wasted. We were doing one hundred per cent of work and getting thirty per cent of results. If we would get one hundred per cent of results, we should produce three and one-third times as much wealth, and the income of our workers would be increased one or two thousand dollars a year.
Robert Blatchford in his book, "Merrie England," has a saying to the effect that it makes all the difference, when half a dozen men go out to catch a horse, whether they spend their time catching the horse or keeping one another from catching the horse. Our next task will be to point out a few of the ways in which good, honest American business men and workingmen, laboring as intelligently and conscientiously as they know how, waste their energies in keeping one another from producing goods.
CHAPTER LXII
THE COST OF COMPETITION
(Discusses the losses of friction in our productive machine, those which are obvious and those which are hidden.)
The United States government is by far the largest single business enterprise in the United States; and a study of congressional appropriations in 1920, made by the United States Bureau of Standards, reveals the fact that ninety-three per cent of the total income of the government went to paying for past wars or preparing for future wars. We have shown that modern war is a product of the profit system, and if civilized nations would put their industry upon a co-operative basis, they could forget the very idea of war, and we should then receive fourteen times as much benefit from our government as we receive at present; we should have fourteen times as good roads, fourteen times as many schools, fourteen times as prompt a postoffice and fourteen times as efficient a Congress. What it would mean to industry to abolish war is something wholly beyond the power of our imagination to conceive; for along with ninety-three per cent of our government money there goes into military preparation the vast bulk of our intellectual energy and inventive genius, our moral and emotional equipment.
Next, strikes and the losses incidental to strikes, and the costs of preparing against strikes. This includes, not merely the actual loss of working time, it includes police and militia, private armies of gunmen, and great secret service agencies, whose total income runs up into hundreds of millions of dollars per year. Industrial warfare is simply the method by which capitalists and workers determine the division of the product of industry; as if two men should co-operate in raising poultry, and then fall to quarrelling over the ownership of the eggs, and settle the matter by throwing the eggs at each other's heads.
Next, bankruptcy. Statistics show that regularly some ten per cent of our business enterprises fail every year. Take any block occupied by little business men, grocers and haberdashers and "notions," and you will see that they are always changing. Each change represents a human tragedy, and the total is a frightful waste of human energy; it happens because we can think of no better way to distribute goods than to go through the work of setting up a business, and then discover that it cannot succeed because the neighborhood is already overstocked with that kind of goods.
Next, fires which are a result of bankruptcy. You may laugh, perhaps, thinking that I am making a joke; but every little man who fails in business knows that he has a choice of going down in the social scale, or of setting fire to his stock some night, and having a big insurance company set him on his feet again. The result is that a certain percentage of bankrupts do regularly set fire to their stores. Some fifteen years ago there was published in "Collier's Weekly" a study of the costs to society of incendiary fires. The Fire Underwriters' Association estimated the amount as a quarter of a billion dollars a year; and all this cost, you understand, is paid out of the pockets of those who insure their homes and their stores, and do not burn them down.