Equality by Edward Bellamy (popular romance novels TXT) 📕

some increase, although not at all an equal one, in the buying power of the community. But when the capitalist increased his output by the aid of machinery, with no increase in the number of workers employed, there was no corresponding increase of purchasing power on the part of the community to set off against the increased product. A certain amount of purchasing power went, indeed, in wages to the mechanics who constructed the labor-saving machines, but it was small in comparison with the increase in the output which the capitalist expected to make by means of the machinery, otherwise it would have been no object to him to buy the machine. The increased product would therefore tend directly to glut yet more the always glutted market; and if any considerable number of capitalists should introduce machinery in the same way, the glut would become intensified into a crisis and general stoppage of production.

"In order to avert or minimize such a disaster, the capitalists could take one or two courses. They could, if they chose, reduce the price of their increased machine product so that the purchasing power of the community, which had remained stationary, could take it up at least as nearly as it had taken up the lesser quantity of higher-priced product before the machinery was introduced. But if the capitalists did this, they would derive no additional profit whatever from the adoption of the machinery, the whole benefit going to the community. It is scarcely necessary to say that this was not what the capitalists were in business for. The other course before them was to keep their product where it was before introducing the machine, and to realize their profit by discharging the workers, thus saving on the labor cost of the output. This was the course most commonly taken, because the glut of goods was generally so threatening that, except when inventions opened up wholly new fields, capitalists were careful not greatly to increase outputs. For example, if the machine enabled one man to do two men's work, the capitalist would discharge half of his force, put the saving in labor cost in his pocket, and still produce as many goods as ever. Moreover, there was another advantage about this plan. The discharged workers swelled the numbers of the unemployed, who were underbidding one another for the opportunity to work. The increased desperation of this competition made it possible presently for the capitalist to reduce the wages of the half of his former force which he still retained. That was the usual result of the introduction of labor-saving machinery: First, the discharge of workers, then, after more or less time, reduced wages for those who were retained."

"If I understand you, then," said the teacher, "the effect of labor-saving inventions was either to increase the product without any corresponding increase in the purchasing power of the community, thereby aggravating the glut of goods, or else to positively decrease the purchasing power of the community, through discharges and wage reductions, while the product remained the same as before. That is to say, the net result of labor-saving machinery was to increase the difference between the production and consumption of the community which remained in the hands of the capitalists as profit."

"Precisely so. The only motive of the capitalist in introducing labor-saving machinery was to retain as profit a larger share of the product than before by cutting down the share of labor--that is to say, labor-saving machinery which should have banished poverty from the world became the means under the profit system of impoverishing the masses more rapidly than ever."

"But did not the competition among the capitalists compel them to sacrifice a part of these increased profits in reductions of prices in order to get rid of their goods?"

"Undoubtedly; but such reductions in price would not increase the consuming power of the people except when taken out of profits, and, as John explained to us this morning, when capitalists were forced by competition to reduce their prices they saved their profits as long as possible by making up for the reductions in price by debasing the quality of the goods or cutting down wages until the public and the wage-earners could be cheated and squeezed no longer. Then only did they begin to sacrifice profits, and it was then too late for the impoverished consumers to respond by increasing consumption. It was always, as John told us, in the countries where the people were poorest that the prices were lowest, but without benefit to the people."

THE AMERICAN FARMER AND MACHINERY.

"And now," said the teacher, "I want to ask you something about the effect of labor-saving inventions upon a class of so-called capitalists who made up the greater half of the American people--I mean the farmers. In so far as they owned their farms and tools, however encumbered by debts and mortgages, they were technically capitalists, although themselves quite as pitiable victims of the capitalists as were the proletarian artisans. The agricultural labor-saving inventions of the nineteenth century in America were something simply marvelous, enabling, as we have been told, one man to do the work of fifteen a century before. Nevertheless, the American farmer was going straight to the dogs all the while these inventions were being introduced. Now, how do you account for that? Why did not the farmer, as a sort of capitalist, pile up his profits on labor-saving machinery like the other capitalists?"

"As I have said," replied the girl, "the profits made by labor-saving machinery resulted from the increased productiveness of the labor employed, thus enabling the capitalist either to turn out a greater product with the same labor cost or an equal product with a less labor cost, the workers supplanted by the machine being discharged. The amount of profits made was therefore dependent on the scale of the business carried on--that is, the number of workers employed and the consequent figure which labor cost made in the business. When farming was carried on upon a very large scale, as were the so-called bonanza farms in the United States of that period, consisting of twenty to thirty thousand acres of land, the capitalists conducting them did for a time make great profits, which were directly owing to the labor-saving agricultural machines, and would have been impossible without them. These machines enabled them to put a greatly increased product on the market with small increase of labor cost or else the same product at a great decrease of labor cost. But the mass of the American farmers operated on a small scale only and employed very little labor, doing largely their own work. They could therefore make little profit, if any, out of labor-saving machinery by discharging employees. The only way they could utilize it was not by cutting down the expense of their output but by increasing the amount of the output through the increased efficiency of their own labor. But seeing that there had been no increase meanwhile in the purchasing power of the community at large, there was no more money demand for their products than before, and consequently if the general body of farmers through labor-saving machinery increased their output, they could dispose of the greater aggregate only at a reduced price, so that in the end they would get no more for the greater output than for the less. Indeed, they would not get so much, for the effect of even a small surplus when held by weak capitalists who could not keep it back, but must press for sale, had an effect to reduce the market price quite out of proportion to the amount of the surplus. In the United States the mass of these small farmers was so great and their pressure to sell so desperate that in the latter part of the century they destroyed the market not only for themselves but finally even for the great capitalists who conducted the great farms."

"The conclusion is, then, Helen," said the teacher, "that the net effect of labor-saving machinery upon the mass of small farmers in the United States was ruinous."

"Undoubtedly," replied the girl. "This is a case in which the historical facts absolutely confirm the rational theory. Thanks to the profit system, inventions which multiplied the productive power of the farmer fifteenfold made a bankrupt of him, and so long as the profit system was retained there was no help for him."

"Were farmers the only class of small capitalists who were injured rather than helped by labor-saving machinery?"

"The rule was the same for all small capitalists whatever business they were engaged in. Its basis, as I have said, was the fact that the advantage to be gained by the capitalists from introducing labor-saving machinery was in proportion to the amount of labor which the machinery enabled them to dispense with--that is to say, was dependent upon the scale of their business. If the scale of the capitalist's operations was so small that he could not make a large saving in reduced labor cost by introducing machinery, then the introduction of such machinery put him at a crushing disadvantage as compared with larger capitalists. Labor-saving machinery was in this way one of the most potent of the influences which toward the close of the nineteenth century made it impossible for the small capitalists in any field to compete with the great ones, and helped to concentrate the economic dominion of the world in few and ever fewer hands."

"Suppose, Helen, that the Revolution had not come, that labor-saving machinery had continued to be invented as fast as ever, and that the consolidation of the great capitalists' interests, already foreshadowed, had been completed, so that the waste of profits in competition among themselves had ceased, what would have been the result?"

"In that case," replied the girl, "all the wealth that had been wasted in commercial rivalry would have been expended in luxury in addition to what had been formerly so expended. The new machinery year by year would have gone on making it possible for a smaller and ever smaller fraction of the population to produce all the necessaries for the support of mankind, and the rest of the world, including the great mass of the workers, would have found employment in unproductive labor to provide the materials of luxury for the rich or in personal services to them. The world would thus come to be divided into three classes: a master caste, very limited in numbers; a vast body of unproductive workers employed in ministering to the luxury and pomp of the master caste; and a small body of strictly productive workers, which, owing to the perfection of machinery, would be able to provide for the needs of all. It is needless to say that all save the masters would be at the minimum point as to means of subsistence. Decaying empires in ancient times have often presented such spectacles of imperial and aristocratic splendor, to the supply and maintenance of which the labor of starving nations was devoted. But no such spectacle ever presented in the past would have been comparable to that which the twentieth century would have witnessed if the great Revolution had permitted private capitalism to complete its evolution. In former ages the great mass of the population has been necessarily employed in productive labor to supply the needs of the world, so that the portion of the working force available for the service of the pomp and pleasures of the masters as unproductive laborers has always been relatively small. But in the plutocratic empire we are imagining, the genius of invention, through labor-saving machinery, would have enabled the masters to devote a greater proportion of the subject population to the direct service of their state and luxury than had been possible under any of the historic despotisms. The abhorrent spectacles of men enthroned as gods above abject and worshiping masses, which Assyria, Egypt, Persia, and Rome exhibited in their day, would have been eclipsed."

"That will do, Helen," said the teacher. "With your testimony we will wind up our review of the economic system of private capitalism which the great Revolution abolished forever. There are of course a multitude of other aspects and branches of the subject which we might take up, but the study would be as unprofitable as depressing. We have, I think, covered the essential points. If you understand why and how profits, rent, and interest operated to limit the consuming power of most of the community to a fractional part of its productive power, thereby in turn correspondingly crippling the latter, you have the open secret of the poverty of the world before the Revolution, and of the impossibility of any important or lasting improvement from any source whatever in the economic circumstances of mankind, until and unless private capitalism, of which the profit system with rent and interest were necessary and inseparable parts, should be put an end to."

CHAPTER XXIX.

I Receive An Ovation.

"And now," the teacher went on, glancing at the gallery where