(Shows how much wealth we could produce if we tried, and how we proved it when we had to.) One of the commonest arguments in defense of the present business system runs as follows: The amount of money which is paid to labor is greatly in excess of the amount which is paid to capital. Suppose that tomorrow you were to abolish all dividends and profits, and divide the money up among the wage workers, how much would each one get? The sum is figured for some big industry, and it is shown that each worker would get one or two hundred dollars additional per year. Obviously, this would not bring the millennium; it would hardly be worth while to take the risk of reducing production in order to gain so small a result.
But now we are in position to realize the fallacy of such an argument. The tax which capital levies upon labor is not the amount which capital takes for itself, but the amount which it prevents labor from producing. The real injury of the profit system is not that it pays so large a reward to a ruling class; it is the "iron ring" which it fastens about industry, barring the workers from access to the machinery of production except when the product can be sold for a profit. Labor pays an enormous reward to the business man for his management of industry, but it would pay labor to reward the business man even more highly, if only he would take his goods in kind, and would permit labor, after this tax is paid, to go on making those things which labor itself so desperately needs.
But, you see, the business man does not take his goods in kind. The owner of a great automobile factory may make for himself one automobile or a score of automobiles, but he quickly comes to a limit where he has no use for any more, and what he wants is to sell automobiles and "make money." He does not permit his workers to make automobiles for themselves, or for any one else. He reserves the product of the factory for himself, and when he can no longer sell automobiles at a profit, he shuts the workers out and automobile-making comes to an end in that community. Thus it appears that the "iron ring" which strangles the income of labor, strangles equally the income of capital. It paralyzes the whole social body, and so limits production that we can form no conception of what prosperity might and ought to be.
Consider the situation before the war. We were all of us at work under the competitive system, and with the exception of a few parasites, everybody was occupied pretty close to the limit of his energy. If any one had said that it would be possible for our community to pitch in and double or treble our output, you would have laughed at him. But suddenly we found ourselves at war, and in need of a great increase in output, and we resolved one and all to achieve this end. We did not waste any time in theoretical discussions about the rights of private capital, or the dangers of bureaucracy and the destruction of initiative. Our government stepped in and took control; it took the railroads and systematized them, it took the big factories and told them exactly what to make, it took the raw materials and allotted them, where they were needed, it fixed the prices of labor, and ordered millions of men to this or that place, to this or that occupation. It even seized the foodstuffs and directed what people should eat. In a thousand ways it suppressed competition and replaced it by order and system. And what was the result?
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 ............