Chapter II: Economic Construction of the Cooperative Commonwealth (3)

It will be possible under such a general system for the state to serve as a medium for an exchange of labor that will greatly enhance the pleasure of life. Under existing conditions, the factory works summer as well as winter despite the fact that temperature makes work during the summer irksome and dangerous to health and life; and at the very time that the population is debilitated by being called upon to work in factories during the heat of June, July, and August, the farmer is in despair because he cannot find help to take in his harvest. Once industries are associated so that they have a definite knowledge of how much they have to produce, there is no reason why they should not so adjust the work of the factory as to keep it open during the eight cool months of the year, leaving the factory hands free to help the farmer in the country during the four hot months. The same thing holds good with the farmer who, during the short cold days of winter, has little to do on the farm and can, therefore, to his advantage as well as to the advantage of the community, devote those months to factory work. There need be nothing compulsory about this exchange, for socialized industry is master of its own time and can distribute its work throughout the year as it chooses. But the fact that the state is possessed of the knowledge how much is to be produced by every factory and how much by every farmer--how many men are needed in the winter in every factory and how many men in the summer on every farm, will enable the state to serve as a medium through which the factory hand can arrange to work on the farm during the summer and the farmer can arrange to work in the factory in the winter, if they respectively desire to do so.

It does not follow that the farmer is to be compelled to work long hours in the summer in the field and also in the factory during the winter; or the factory hand to give up his holiday in order to work on the farm during the summer. It has been shown that all the necessaries of life can probably be produced, even at the present time, by the adults in the community though they work no more than two hours and a half a day. If this be so, it would be easy so to adjust the work as to enable those who desire it to work more hours in the day and become entitled to so much longer vacation. The foregoing is only intended to show that in addition to the vacation which can be thus enjoyed, the farmer can relieve the monotonous existence of the farm during the winter months by work in the factory, and the factory hand can escape from factory conditions during the summer to his own advantage and to the advantage of the community at large.

Another object we have in view is to put an end to the anarchy which exists in all that part of our industry which has not been concentrated into trusts--the anarchy under which some things are produced in greater quantities than are needed, and some things needed are not produced in sufficient quantities--under which no producer can tell whether he is producing enough of a thing until the time for profiting by the knowledge has passed; no producer can tell whether he is producing too much of a thing until he is injured and even ruined by the discovery. It is, I think, obvious that all these objects are obtained by concentrating industry after the fashion of trusts in the hands of the men actually engaged in the process of production; by producing things not to make profit but to satisfy needs; and in the quantities which we know to be needed and not in quantities determined by the desire of the producer to make large profits cheeked only by the bankruptcy that attends production in larger quantities than the market will take.

Thus, the state orders thirty million tons of iron ore because we know that this amount of iron ore has served the needs of the country during a period of great activity, and will furnish not only all we can use ourselves in that year, but all that we can dispose of abroad. These thirty million tons represent then the maximum that we can usefully manufacture; and we can safely order thirty million tons because the state is not under the necessity to sell this iron to get gold with which to pay wages, rent, coal, and the running expenses of the factory. In a cooperative commonwealth there will be no rent to pay. The coal will be paid for in exactly the same way as the iron, by the issue of store orders.

The workers will get as nearly as possible the exact product of their work. There will be no capitalist who will take from them what the capitalist now takes, that is, about one-half of their earnings. Nor will those doing a low order of work receive as much as those doing a high order of work; every man will be paid according to his capacity; for we begin by assuming that the distribution of work according to capacity to-day is not far wrong, and so every man engaged in the steel industry will continue to receive the same wages as he received before with a certain prospect of an additional wage in the shape of profit, representing the difference in wage between the new conditions and the old.

Overwork will be impossible in the iron trade, because a sufficient number will be employed to prevent overwork. And unemployment will be impossible because if, at any period, it turns out that more iron is being produced than the community can use, the excess men employed in the previous year will be set to work by the state in some other industry.

The effect of such a discovery will be to diminish the number of hours required all round. It must not be forgotten how little work need actually be done to produce the things we need. Under these circumstances, we need hardly consider the question of overwork, for all will enjoy ample leisure. The hours of labor will not diminish in a great degree in the first year that an industry is taken over, for during the transition period, experience must be given time to demonstrate the extent to which hours of labor can be reduced.

And as regards unemployment, even though there be no industry in which, for instance, the surplus workers of the iron trade can be usefully employed, there will always be farm colonies where their labor can be self-supporting.

Another beneficial consequence of this system is that if, as is likely, it turns out that thirty million tons of iron are more than we can use, the state will not be obliged to dump the excess upon European markets as do now the trusts,[184] thereby incurring a heavy loss to the home industry and arousing the animosity of the European industry affected thereby.

Again, no financial panic can hurt the iron industry. The bankers may gamble to their heart's desire. If they withhold gold the worst they can do is to injure those engaged in competitive industry. No withholding of gold can affect an industry which produces for use and not for profit and receives weekly the wages of its employees in a currency which, because it is not gold or based upon gold and not, therefore, within the control of the banker or the financier, escapes entirely the evil effects of financial operations. Nor can such an industry be affected by what are called "industrial panics"; for industrial panics are the result of overproduction--of the anarchy that exists under the competitive system. These panics may affect competitive industries, but cannot affect guild industries built on yearly state orders for definite amounts calculated beforehand from the known needs of the community, and not left as now to the anarchy and accidents of the market.

Neither financial nor industrial panics can ever have the terrible consequences in a cooperative commonwealth that they have under existing conditions, because in a cooperative commonwealth all the necessaries and most of the comforts of life will be produced upon the cooperative plan, and therefore, a financial or industrial panic can only affect that part of industry which proceeds under the competitive system and as regards, for the most part, luxuries and not necessaries of life.

Obviously, the system of store orders cannot be applied upon the first transfer of an industry from the hands of the capitalist to those of the guild. For a time gold will have to be used until the transformation from capitalism to cooperation has been sufficiently extended to put the state in a position to open public stores. There need, however, be no anxiety as to the state not being in possession of enough gold to handle this part of the business, because it will obviously be the first duty of the cooperative commonwealth to expropriate the mines and put itself in possession of the gold necessary to carry on financial operations with the guilds until such time as the public stores can be usefully opened. Moreover, in taking over the gold mines, the state will also take over the iron mines; and iron ore will be furnished to the iron guild under conditions that will make the necessity of the use of gold far smaller than it would be if the iron ore remained in private hands and had to be paid for in gold. The state will only have to pay gold representing the labor cost of extracting the ore, and will not have to pay miners' profits.

Under this system, there is no temptation to mine more ore or to cut down more forests than is absolutely necessary for the needs of the community. When every member in the community is educated to understand that waste means more work for himself and that the saving of waste means less work for himself, every man in the community will have a direct personal interest in discouraging waste and promoting economy.

Obviously, too, industry will be conducted at its maximum efficiency. Instead of being slaves of the market, we shall become its master. We shall have only so many factories running as are necessary to produce the things we need. Every factory will be running at maximum capacity, at maximum efficiency.

It will be observed that it is proposed to pay the same price for pig iron after taking over the industry as was paid under competitive conditions at the time of the transfer. The objection may be made that this is obviously improper; that it is not fair to the workers in other industries to pay what is known to be an excessive price to the workers in pig iron. To this it may be answered that it will always be better to apply a regular rule than to leave questions of this kind to arbitrary administrative action. Besides, the rule that on taking over a new industry the price paid for the production of the first year shall be the price ruling at that time, will eventually put all industries upon the same footing. At the excessive prices now ruling, the workers will during the first year get a larger proportion than they will ultimately be entitled to; but the larger proportion they will get this year will be needed to face the initial expenses of a higher standard of life.

But here comes the most serious objection that can be made to this plan. It has been said that these prices will have to be revised; that if those manufacturing cotton thread believe themselves to be receiving less for the work they accomplish in their industry than those engaged in making pig iron, they will insist on revision; if so, there will be continual altercations between industries as to the price to be paid for their goods and as to the share in this price that each is to receive; and the problem arises, who is to settle these innumerable questions?

This difficulty is the one that tends to make communists of us. It would be easy to wave away this difficulty by providing that the total profits be divided equally amongst all the members of the community. Humanity, however, is not prepared for such a system. Generations of selfishness have so determined the minds of those who are likely to have to decide these questions in a cooperative commonwealth, that the idea of paying the man at the head of the iron guild the same wages as the man who puddles, will seem too preposterous to be entertained. Whether man will ever develop to a point of unselfishness that will enable him to entertain this idea is a matter of speculation. Suffice it to recognize that if Socialism is to come within one hundred years, and if we take into account the attitude of the public mind as it is to-day, and the slowness with which the public mind changes in matters so radical as these, we shall have to recognize that Communism is still beyond the range of practical politics; and we shall have to face the problem how the questions of the price of goods and the remuneration of the individual are to be solved.

Sec. 8. REMUNERATION

It has been pointed out that the proportion at present received by the various grades of workers in an industry, from the man who manages the whole industry to those who do the least skilled work, will at first be maintained. It may be that the salaries paid to managers at present rates may seem so exorbitant[185]--so out of all proportion to those paid to others--that there will be an outcry against it, leading to a diminution of these salaries. For present high salaries to managers are due to the extraordinary difficulty of handling industry under competitive conditions--difficulties that will in great part disappear when cooperative conditions are substituted for competitive conditions. With the exception of these highest salaries, probably the wisest rule will be to maintain at first the proportion that exists at the time when the industry is taken over. Taking over these industries will at once raise the salaries of all because they will receive the share of the profits which now comes to the capitalist, after the deduction of sums paid to annuitants. Nevertheless, it cannot be expected that the proportion now existing will be indefinitely maintained.

The cost of management under competitive conditions is far higher than it would be under cooperative. A railroad man once pointed out to me that the cooperative system is impossible because it would be impossible for the government to find men capable of handling railroads at the price habitually paid by the government for such services. He pointed out that genius is necessary to handle railroads,--the genius of such men as J.J. Hill and the late E.H. Harriman. When, however, it was explained to him that the reason why it was necessary to have such men as Harriman and Hill run our railroads was the competition between them, and when he was asked whether it would be necessary to have such men if our railroads were run as our postoffice is run, he admitted that under such conditions nine-tenths of the difficulty of management would be eliminated.

Obviously, therefore, the enormous salaries paid to men at the head of trusts, life insurance companies, and railroad systems, would no longer be earned, and of course they would no longer be paid.

What is true regarding the heads of these industries is true throughout a large part of the administration. It would need less of the faculty which characterizes the larger carnivora and more of the faculties which characterize the beaver and the ant. For these humbler services lower wages would be paid. This does not mean, however, that there will not be in the state room for men of the constructive ability of Harriman and Hill; but these men will not be the servants of our industries, they will be the servants of our state; and the genius that is now absorbed by business, will, in a cooperative commonwealth, be more usefully employed in the larger fields of politics.

After this slight digression, let us return to the question how far the remuneration will be subject to revision.

It may be that the lower grades will not be subject to revision at all; that all the iron ore we need can be produced by working four hours a day during eight months of the year, and that the rate of wages earned upon the old scale increased by the profits to which workers will be entitled will, without changing the proportion, furnish a standard of comfort such as to-day it is difficult to foresee. It is probable, however, that workingmen who are to-day members of the Socialist party will not agree with this prognosis, but will insist that in a cooperative commonwealth the whole scheme of remuneration will have to be revised. If this be so, it is useless to deny that the revision of this rate of wages will be a matter of difficulty and that the difficulties arising will tend to be perpetual.

Obviously, there must be some plan devised under which these matters will be better adjusted than by a government board, as has been suggested by certain Socialists. Mr. Hillquit[186] quotes with approval the words of Kautsky that government in a cooperative commonwealth will change in character, and that the state will no longer govern, but administer, and this is to a large degree true. But if the administration is to determine what every man is to receive as compensation for the work he does, it is clear that matters of such vital importance cannot be referred to the arbitrary action of a board of administrators.

It seems to me that it will be indispensable to submit these matters to an industrial parliament in which every industry will be represented. And as the determination of these questions will be a matter of the greatest importance to every individual, it is probable that these parliaments will have to be bicameral for the same reason that our government is bicameral; for the same difficulty will present itself. New York insists upon having its large population represented in Congress. Rhode Island, on the other hand, in spite of its small size, insists upon having its state sovereignty represented; so New York is given a representation in proportion to its population in the Lower House and Rhode Island is given equal representation in the Upper House. Exactly the same situation will present itself it regard to industries: Certain industries will be enormous and will want to be represented in proportion to their size; for example, the steel industry. Others will be much smaller but perhaps of much greater importance; for example, the engineers. They will want to be fairly represented in spite of their small size and I see no way of adjusting this other than by adopting an industrial parliament of two chambers, in one of which representation will be according to numbers, while in the other every industry will be equally represented irrespective of size. This may seem a cumbersome system, but it will take no more time than the administration of the trade union takes to-day, and will not be half as costly; for the trade union of to-day has to accumulate funds to provide for unemployment, old age, sickness, and strikes. Strikes and unemployment it will not be necessary to provide against and the others will be provided for by every guild for their own members. The question, therefore, of the adjustment of price and wages will occupy far less time than is now occupied by federations of trade unions.

It is probable that the conclusions to which the industrial parliament will come will not be final. It will be deemed wise to refer them for execution to the general government. This matter, however, belongs to the chapter on the political aspect of Socialism.

Sec. 9. CIRCULATING MEDIUM UNDER SOCIALISM

It may not be clear at first sight why it is proposed to substitute store checks for greenbacks or gold. Early Socialist writers--particularly Rodbertus--attached much importance to the elimination of gold and the substitution therefor of what they called "labor checks"; a currency representing time spent in labor. Modern Socialist writers have been disposed to cast aside all efforts to substitute this kind of currency for gold. Mr. Hillquit quotes Kautsky[187] with approval on this subject:

"'Money,' says Kautsky, 'is the simplest means known up to the present time which makes it possible in as complicated a mechanism as that of the modern productive process, with its tremendous far-reaching division of labor, to secure the circulation of products and their distribution to the individual members of society. It is the means which makes it possible for each one to satisfy his necessities according to his individual inclination (to be sure within the bounds of his economic power). As a means to such circulation, money will be found indispensable until something better is discovered.'"[188]

Upon this point I find myself at variance with modern Socialists. In