There might be more plausibility in the argument, if our trust magnates were men of conscience and a keen sense of responsibility; but as a matter of fact their attitude toward their work is purely predatory. They are not administrators of production at all, but parasites upon production, exploiters and wreckers. Far from striving to regulate the madness of the public, they are competing among themselves to fan it to a flame, so that they may capitalise the expectations of their own properties.[[5]]
[5]. Anyone who wishes to make a scientific study of the true functions of modern finance is advised to read Professor Veblen’s last book, “The Theory of Business Enterprise,” a most extraordinary study of the whole field of present-day economics. In my opinion this book, together with its author’s other masterpiece, “The Theory of the Leisure Class,” constitutes the greatest contribution to social science ever made in America, and perhaps the greatest in the world since Carl Marx. It might be worth while to add in passing that Professor Veblen was turned out of Mr. Rockefeller’s University of Chicago for writing it.
The ebb of the tide is coming; the only question is, when? According to precedent, it should come in 1913; but I expect it much sooner, partly because I do not believe that we had anything like a thorough liquidation in 1904, and partly because of the extreme violence of the present activity. During the last year the “boom” has reached real estate, and that always means that other avenues of investment are clogged.
I anticipate the storm in 1908 or 1909; but I do not predict it, because it depends upon uncertain factors. Another great war might put it off ten years; and on the other hand, crop failures might precipitate it this summer. What I do believe that I can predict—for reasons which I stated in the introduction to this argument—is the course which political events in this country will take from the hour when the “hard times” arrive.
As we saw from the Chicago Tribune item, the first sign of trouble is the turning out of work of a million workingmen; and what are the consequences—the economic consequences—of the turning out of work of a million men? According to the census the average yearly wage of the factory employee is four hundred and thirty-seven dollars. Dr. Peter Roberts says that the average wage in the anthracite coal district is less than five hundred dollars. In the Middle States a third of all the workers get less than three hundred a year, and in the South nearly sixty per cent. get less. It was proven before the Industrial Commission that the maximum wage of the hundred and fifty thousand railroad and track hands and the two hundred thousand carmen and shopmen, was a hundred and fifty dollars in the South, and less than three hundred and seventy-five in the North. And this to feed and clothe a family, and provide against sickness, accident, and old age! The meaning of it is simply that when a million men are laid off, in a month or two they and their families are starving.
And that, you understand, means a loss of a market—of a market of five million people—a population equal to that of the Dominion of Canada. And of course, therefore, those whose work it has been to supply these people, will be out of work, and likewise those who supply the suppliers. And even this is by far the least of the consequences; for another part of our domestic market depends upon the fact that our workingmen too have been able to form trusts. And when this period of depression comes, their trusts will fall to pieces, and competition will begin again—a process which they will find all the brickbats and dynamite in the country cannot check. The employers will, of course, be straining every nerve to make ends meet; and so wages will go down, and when strikes are declared, the starving workingman will “scab” and the strikes will fail. We shall have riots, and perhaps gatling guns in our streets, but the wages will go down; and step by step as the wages go down, consumption goes down, with the loss of another Dominion of Canada. When the thing is once started, it will be an avalanche that no power upon earth can stop; and it will be the beginning of the Revolution.
The word has an ominous sound. The reader thinks of street battles and barricades. By a Revolution I mean the complete transfer of the economic and political power of the country from the hands of the present exploiting class to the hands of the whole people; and in the accomplishment of this purpose the people will proceed, as in everything else they do, along the line of least resistance. It is very much less trouble to cast a ballot than it is to go out in the streets and shoot: and our people are used to the ballot method. However, the staid and respectable Harper’s Weekly, which calls itself a “Journal of Civilisation,” suggested in 1896 that if Mr. Bryan were elected, it might be necessary for the propertied classes to keep him out of office. If anything of that sort is attempted in this coming crisis, why then there will be violence—just as there will be in such countries as Germany and Russia, which have yet to learn to let the people have their own way. The worst feature of the situation with us is that we have gotten into the habit of letting our elections be carried by bribery; and that is likely to play us some ugly tricks in this new emergency.
The reader perhaps objects to my theory that this change must come with suddenness. It is such a tremendous change—and would it not be better if it were brought about little by little? Undoubtedly it would have been a great deal better; but the time to begin was ten or twenty years ago. Now the horse is stolen, and we are venting all our energies, and cannot even succeed in getting the stable-door locked afterward.
They are bringing it about gradually in Australia and New Zealand—the only countries in the world in which the people are effectually regulating the progress of the Juggernaut of Capitalism. That is because these countries are very young, with comparatively little capital, no slums, and an intelligent working-class. I have an idea—I do not know whether there is anything in it—that the extraordinary success of New Zealand may in part be due to the fact that it was a convict-settlement; the men whom capitalism makes into criminals being for the most part a very superior class of people, active, independent, and impatient of injustice. Transported to a new land, and given a fair chance, I should think that a burglar or a highwayman ought to make a very excellent Socialist.
You ask, perhaps, if the thing is not also being accomplished gradually in England and on the Continent; you point to “Municipal trading,” to the London County Council, to the state-owned railroads and telephones of Germany, Switzerland, Sweden, etc. You have been accustomed to hear these things referred to as State Socialism, and you have accepted the statement—not understanding that the essence of Socialism is democracy, and that it is fundamentally opposed to paternalism in every conceivable form. Municipal and State ownership is not State Socialism at all, but State Capitalism. Under it, the government buys certain franchises, pays for them with bonds, and then runs the roads to pay the bondholders. Undoubtedly it is a better system for the people than private Capitalism, for the reason that it fixes the exploiters’ tax, instead of letting stock-watering go on indefinitely. But, unfortunately, economical administration by the State is possible at present only in such countries as have an aristocratic governing-class, jealous of the power of the capitalist. In this country the holders of the municipal bonds, who also own the street-car factories and the steel mills and the coal mines, would use the interest they got from the city to bribe the city’s servants to pay exorbitant prices for all the street-cars and steel rails and coal and other supplies which the city would have to have in order to operate the roads. You have seen that perfectly illustrated in the case of our Post Office. For example, we pay the railroads in rent for our mail-cars twice as much per year as it costs to build the cars; and the cars are so flimsy that the insurance companies, which own a large share of the railroads and the cars, refuse to insure the lives of the mail-clerks who work in them!