 Chapter 16 of Problems in American Democracy. This is a LibriVox recording. All LibriVox recordings are in the public domain. For more information or to volunteer, please visit LibriVox.org. This reading by Allison Hester of Athens, Georgia. Problems in American Democracy by Times Williamson. Chapter 16. The Case Against Socialism. 155. Administrative difficulties confronting socialism. Under socialism, the work of government would be greatly increased. Thousands of intricate administrative rules would have to be drawn up for the control and direction of activities now attended to by individuals animated by personal interest. Now, it is seriously to be questioned whether the most highly centralized government could effectively administer the innumerable activities of our complex industrial life. Upon what basis would land be distributed? How would individuals be apportioned among the various employments? Upon what basis would the wages of millions of workmen be determined? Could so mechanical an agency as government foresee future business conditions expertly enough to direct the productive forces of the nation effectively? If prices are no longer to be fixed by competition, how and by means of what agency are they to be determined? These are only a few of the vital questions which would arise in connection with the administration of a socialist state. Various suggestions have been made with regard to some of these difficulties, but there is among socialists no general agreement as to the answer of any one of these questions. They continue to constitute, in the eyes of practical men, a grave obstacle to socialism. 156. Dangers of a Socialist Bureaucracy Governmental power would have to be highly centralized if a socialist state were effectively to administer the nation's economic activities as a unit, but this very concentration of power might easily result in the development of a bureaucracy. Waste and the possibility of corruption have unfortunately characterized even those governments over which the people exercise considerable control. It seems probable that the greater centralization of authority demanded by socialism would increase rather than decrease these dangers. It is to be noted here that the socialists who might be supposed to consider as paramount the interests of society or of the public are the very people who are at least inclined to do anything of the kind. 157. Footnote This concept was suggested to me by Professor Thomas Nixon Carver of Harvard University. Socialists look upon the state only as an agency for benefitting particular groups of individuals. The emphasis of political socialism upon class struggle, the frank admissions of the IWW that they seek to suppress all but the laboring class, and the establishment by the Bolshevists of a dictatorship of the proletariat, all these facts indicate that the socialists seek the welfare of a particular group rather than the welfare of the general public. But class legislation is repugnant to the principles of American democracy. We believe in government by the masses and for the masses. Furthermore, we are committed to the ideal of as much individual freedom and as little governmental compulsion as is compatible with the good of both individual and community. The concept of a socialist bureaucracy administered in the interests of particular groups runs counter to our fundamental beliefs and ideals. 157. Socialism would destroy personal initiative One of the strongest arguments against socialism is that it would destroy personal initiative. Socialism runs counter to human nature by undervaluing the principle of self-interest. Economists are generally agreed that the abolition of the institution of private property would cause the ambition of the individual to slack in. In spite of its defects, it is the competitive system with its promise of reward to the energetic and capable, which is largely responsible for the miraculous prosperity of modern times. Men ordinarily will not undergo systematic training, perfect inventions, strive to introduce greater and greater economies into their business, or undertake the risk of initiating new enterprises unless they are assured that they will be able to enjoy the fruits of their labor. And not only would socialism discourage ambition by abolishing private enterprise, but it might encourage inefficiency and shiftlessness. Every man would be guaranteed a job. Every individual would be protected against want. It is even likely that a socialist state would undertake to rear and provide for the offspring of its citizens. Human experience indicates that this degree of paternalism would encourage laziness and increase irresponsibility. It is sometimes said that under socialism, men would work as eagerly for social esteem as they now work for financial gain. This would be a highly desirable condition, but unfortunately, there is nothing in human experience to justify the hope that such a state of affairs will speedily be realized. The spread of altruism in the modern world is heartening, but no sensible person will shut his eyes to the fact that, for the immediate future at least, self-interest promised to be more widespread than altruism. The love of gain may not be the highest motive in life, but it is better than none, and for a long time to come, it will probably be the one which appeals most strongly to the average man. Socialists and non-socialists alike deplore the domination which self-interest exercises over human affairs. But whereas the non-socialist wisely tries to adapt a program of industrial reform to this hard fact, many socialists appear to believe that because the principle of self-interest often works out badly, they ought to act as though the principle did not exist. 158. Socialist theory of distribution unsound Both socialists and non-socialists admit that poverty is an undesirable condition, but over the method of improving the condition of the poor, the socialists and non-socialists disagree. The defender of capitalism begins by pointing out, under competitive conditions, the unskilled laborer is poor primarily because his labor is not highly productive. The socialist ignores this fact and insists that the laborer shall receive a share of wealth which shall be adequate to his needs. As we shall have occasion to point out in the next chapter, this attitude of the socialist indicates a fundamental defect in his theory. Socialism pays more attention to who shall eat and how much shall be eaten than it does to the more fundamental question of how food is to be produced and how much can actually be produced. Laws may oblige an employer to give his workmen twice as much as they add to the value of his product, but though this will benefit the workmen while it lasts, such a practice would, if widely adopted, lead to industrial bankruptcy. Footnote. It is assumed in this section that the productivity of the laborer is determined from the point of view of the employer. This is in accordance with the productivity theory which was discussed in Chapter 9. 159. Socialist theory of value unsound Many of the defects of the socialist doctrine are traceable to the fact that it rests upon false assumptions. One of these false assumptions is that commodities have value in proportion as labor has been expended upon them. This labor theory of value has been discarded by every authoritative economist of modern times. As has been pointed out in Chapter 8, value depends upon scarcity and utility. The soundness of the scarcity utility theory as well as the unsoundness of the labor theory may be brought out with reference to three classes of goods. First, there are commodities which have value in spite of the fact that no labor has been expended upon them. Virgin land, the gift of nature, is the most important example. Articles of this class have value because they satisfy men's wants, i.e. have utility and because they are scarce. Labor has nothing to do with their original value. Second, there are commodities which have no value even though much labor has been expended upon them. A building erected in a desert or in a wilderness is an example. Unwanted books or paintings by unknown artists are other examples. Commodities in this class may represent a great expenditure of labor and still have no value, first because they do not satisfy anyone's wants and second because they are not scarce, i.e. they are not fewer of them than are wanted. Third, articles may have a value which is out of proportion to the amount of labor expended upon them. The value of diamonds, old coins and rare paintings is disproportionate to the actual amount of labor involved in their production. A sudden change in fashion may cause the value of clothing and other commodities to rise or fall with little or no regard for the amount of labor expended upon them. In each case, it is not labor that determines value, but scarcity and utility. 160. Labor not the only factor in production. Labor is an important factor in production, but land, capital, coordination and government are also of vital importance to any modern industrial community. The great error of the socialist is that he overestimates the importance of the laborer and minimizes, or altogether denies, the importance of the individuals with whom the laborer cooperates in production. This error is explainable. The laborer does most of the visible and physical work of the production, while the part played by the landowner, the capitalist and the entrepreneur is less physical and often is apparently less direct. The complexity of the industrial mechanism very often prevents the laborer from appreciating the true relation existing between his own physical labor and the apparently indirect and often non-physical efforts of those who cooperate with him. It is in this connection that producers, cooperation and Bolshevism have performed a great service. They have demonstrated by the out and out elimination of the managing employer that the laborer alone cannot carry on modern industry. Such actual demonstrations of the value of factors of production other than labor are a far more service in correcting the viewpoint of the socialist than is any amount of theoretical argument. 161. Theory of class struggle unwarranted The theory of class struggle is based upon the claim that the laborer produces all wealth, but we have seen this claim to be unfounded. Therefore, the theory of class struggle is built upon an error. Ultimately, the theory of class struggle tends to injure the very class which seeks to gain by advocating it. For true and permanent prosperity for the labor in class, as well as for all other classes, can result only when all of the factors of production work together harmoniously. Fundamentally, the quarrel between capital and labor. Footnote. The phrase capital and labor is loose and inaccurate, but is in common use. Used in this sense, the word capital refers to the capitalist and employing classes, while the word labor refers to the workers. Is in the footnote. Is a suicidal as though the arms of a human body refuse to cooperate with the other members. There are indeed many antagonisms between capital and labor, but socialism seeks to ferment rather than eliminate them. Socialism preaches social solidarity and prosperity for all, but by inciting the class struggle, it makes for class hatred and a disharmony between the capital and labor which decreases prosperity and threatens economic ruin. 162. History has disproved socialism. Karl Marx bases his theory of a future socialist state upon a number of predictions, none of which has come true. According to Marx, socialism was inevitable. He declared that the centralization of wealth in the hands of the capitalists on the one hand and the increasing misery of the workers on the other would accentuate the class struggle and bring about the downfall of capitalism. As a matter of fact, laws are more and more restricting the undue concentration of wealth in the hands of a few. The middle classes, far from disappearing, as Marx predicted, are increasing in numbers and in wealth. The working classes are not becoming poorer and more miserable, but are securing a larger and larger share of the joint income of industry. The socialist revolution came in 1917, not in the most enlightened country in the world, as Marx had predicted, but in Russia, one of the most backward and civilized countries. This revolution did not demonstrate the superiority of socialism over capitalism, but revealed the fundamental weaknesses of socialism and led to a more widespread recognition of the merits of the capitalistic system. In the progressive countries of Western Europe and America, the likelihood of a socialist revolution has been greatly diminished by two developments. These developments, both of which were unforeseen by Marx, are as follows. First, the improving condition of the workers has rendered socialist doctrine less appealing. Second, the increasing effectiveness of legislation designed to remedy the defects of capitalism has caused attention to be directed to legislative reform rather than to socialism. With many who were formerly socialists, the supreme question has become not how to destroy the present order, but how to aid in perfecting it by means of appropriate legislation. 163. Socialism Claims Too Much Socialism often appeals strongly to people who are unable to distinguish between plans which are realizable and promises which cannot be fulfilled. For example, socialism promises greatly to increase the productive power of the nation to shorten the hours of labor and to ensure a just distribution of wealth. These reforms, it is claimed, would be accompanied by the elimination of unemployment, poverty, vice, and attendant evils. It is maintained that socialism would encourage a higher moral tone and a healthier and more vigorous social life than now exists. Without doubt, these are desirable aims, but we must face the hard fact that socialism is not likely to attain them. Some of the ills which socialism claims to be able to cure are neither attributable to capitalism nor open to remedy by socialism. For example, crisis and unemployment are often due to the alternations of good and bad harvests, to the varying degree of severity and success of winters, to new mechanical inventions, and to changes in fashion. These forces are beyond the effective control of any state. This being so, it is unfair for socialists to attribute their evil effects to capitalism. It is likewise unwarranted that socialism should claim to be able effectively to control these forces. Other industrial evils are due to the infirmities of human nature and to the fact that we are a highly civilized people living more and more under urban conditions. Crime, vice, and disease are grave social problems which demand solution, but it is unfair for socialism to charge these evils against capitalism. Such defects are due partly to the fact that we are human and partly to the fact that much of modern life is highly artificial. Unless socialism contemplates a return to small, primitive communities, there is nothing to indicate that it would be able to materially reduce crime, vice, nervous strain, or ill health. Indeed, there is no evidence to show that socialism could make as effective headway against these evils as we are making under capitalism. 164. Defects of socialism outweigh its merits. It is only after the advantages of a system or an institution have been carefully weighed against its disadvantages that its value appears. A socialist system would have some obvious merits. It might eliminate unemployment since everyone would be an employee of the state, and as such would be guaranteed against discharge. Charitable aid would probably be extended to many people now left to their own resources. But certainly socialism could not cure ills which are due either to natural causes or to the infirmities of human nature. The abolition of private initiative and private property would strike at the root of progress. Socialism would also probably give rise to a series of new problems such as the evils arising out of a bureaucratic form of government. As its program now stands, it is probably fair to say that the defects of socialism greatly outweigh its merits. 165. Socialism underrates capitalism. The order of the socialist often causes him to underestimate the merits of capitalism and to exaggerate its defects. The striking achievements of capitalism, so in contrast with the negative character of socialism, are not generally appreciated by the socialist. On the other hand, the socialist places an undue emphasis upon the defects of the present system. The radical agitator too often overlooks the millions of happy, prosperous homes in this and other countries. He too often sees capitalism in terms of poverty, crisis, unemployment, vice, disease, and extravagance. Our age is not to be disparate of. An age of progress is always an age of adaptation and of adjustment. And it is precisely because American democracy is both a progressive ideal and a living, growing institution that it is confronted with problems. The socialist indictment is not a prelude to chaos. Four, through the process of adjustment, we are making steady progress in solving our problems. Capitalism has served us well, and though it has its defects, these are clearly outweighed by its merits. So long as we know of no other system which would work better, we are justified in retaining capitalism. 166. Necessity of a definite program of industrial reform. Socialism appeals to certain types of people because it offers a confident program, even though it is a mistaken and probably dangerous program. And it is the almost universal failure of non-socialists to advance a substitute program that is responsible for a large share of the resentment which industrial evils have aroused among non-socialists. If not socialism, what is the cry? We are challenged to move, to do something, to present a reform program which will justify the rejection of socialism. Lest our survey of industrial reform seem negative and devoid of constructive elements, therefore, the next chapter will be devoted to what may be called a democratic program of industrial reform. The basic idea of this program is that poverty is as unnecessary as malaria or yellow fever and that we can abolish poverty without sacrificing private property, personal initiative, or any of the other institutions which we hold dear. And chapter 16. Chapter 17 of Problems in American Democracy. This is a LibriVox recording. All LibriVox recordings are in the public domain. For more information or to volunteer, please visit LibriVox.org. This reading by Allison Hester of Athens, Georgia. Problems in American Democracy by Times-Williamson. Chapter 17. A Democratic Program of Industrial Reform. Footnote. The title of this chapter, as well as the material in sections 170 to 175, has been adapted, by permission, from the writings and lectures of Thomas Nixon Carver, professor of economics in Harvard University. End of footnote. 167. There is no simple remedy for the defects of capitalism. The economic system of a modern civilized nation is a vast and complicated affair, and its defects are both numerous and deep-lining. No one really familiar with the problem would propose so simple a remedy as socialism for so complex a disease as industrial maladjustment. History affords many examples of schemes that were designed to eliminate poverty from the world suddenly and completely, but no such scheme has succeeded. Let it be understood at the outset of this chapter, therefore, that really to eliminate the basic defects of our industrial system, we must resort to a series of comprehensive reforms rather than to a single scheme or theory. These reforms must be so wisely planned and so carefully executed as to attack the evils of capitalism from a number of angles simultaneously. The attack must be partly by legislative and partly by non-legislative methods. The series of reforms referred to above must have three aims. First, to give every individual exactly what he earns. Second, to make it possible for every individual to earn enough to support himself and his family at least decently. And third, to teach every individual to use wisely and economically the income which he receives. A program embodying these three aims has the disadvantage of seeming commonplace and slow of fulfillment to those who prefer novel and sensational schemes. But it has the advantage of being both workable and safe. 168. The Nature of Justice Among the advocates of socialism, the word justice is much used, but apparently little understood. Justice in industry implies that every individual shall receive precisely what he earns, no more, no less. If a monopolistic secures unearned profits, there is injustice. If a laborer adds to the value of a product to the extent of $5, there is injustice if he receives less than $5 in wages. Similarly, there is injustice if the laborer earns only $4 but receives $5. Wherever there is an unfair distribution of wealth, there is a double injustice. Some individual gets a share of wealth which he did not earn and to which, therefore, he is not entitled, while the individual who did earn that wealth is deprived of it. 169. The Importance of This All right-thinking reformers will agree with the socialists that much or all of the unearned wealth of the moneyed classes ought to be taken for the benefit of the community. But he who accepts the democratic program of industrial reform will not sanction the socialist proposal to eliminate poverty primarily by decreeing higher wages. In the first place, this proposal of the socialist is unjust. A man who earns $3 a day may not be able to live on that amount and it may be desirable for some agency to give him more than $3 a day. But that would be charity, not justice. It would be, as we have just seen, a double injustice. In the second place, such a practice would lead inevitably to national bankruptcy. Under the competitive system, wages tend to be determined by productivity. To attempt to eradicate poverty primarily by the raising of wages is futile, for employers cannot long pay out in wages more than the laborer adds to the product. Some employers might do so for a long time and all employers might do so for a short time, but if the practice were nationwide and long continued, it would result in economic ruin. To put a premium upon propagation by guaranteeing every man a job and to pay him, not according to productivity, but according to need, would be equivalent to building up a gigantic charitable institution. Charity is a necessary and laudable function, but the proper care of the dependent classes is possible only when the majority of the people are not only self-supporting, but actually produce a surplus, out of which the unfortunate can be cared for. If applicants for charity too largely outnumber those producing a surplus, national bankruptcy results. In the third place, an increase in wages might not benefit even those receiving higher wages unless they were able and willing to spend their income wisely and economically. 170. The Redistribution of Unearned Wealth The first step in our program is to apply the principle of justice to the problem of unearned wealth. The student should be careful at this point to distinguish between wealth which has been earned, however great, and wealth which has been acquired by unjust methods. American democracy will tolerate no interference with wealth which has been earned. On the other hand, it demands that unearned riches be redistributed in the form of services performed by the government for the people as a whole. There are three chief methods of redistributing unearned wealth. The first is by means of increased taxes on land. As was pointed out in the chapter on single tax, that income from land, which is due, not to the efforts of the owner, but either to natural fertility or to the growth of the community, may be considered as unearned. While the single tax is too drastic a reform, it is unquestioned that we need heavier taxes upon the unearned increment arising from land. A second method of redistributing unearned wealth is through the application of inheritance taxes. Reserving the whole problem of taxation for later discussion, it may be said here that in many cases large sums are willed to individuals who have done little or nothing to deserve them. Insofar as this is true, and insofar as such a tax does not discourage the activities of fortune builders, the inheritance tax is a desirable means of redistributing unearned wealth. The last method of redistributing unearned wealth is by a tax on those elements and profits which are due to the abuse of monopoly conditions. Complete monopoly rarely exists, but in many businesses there is an element of monopoly which allows the capitalist or entrepreneur to secure a measure of unearned wealth. In the interest of justice, much or all of this ought to be taken for the use of the community. 171. Something more than justice is necessary. It is an error to suppose that justice would necessarily eliminate either low wages or poverty. As we have seen, justice would require the redistribution of a large amount of unearned wealth. But much more important is the question of large numbers of laborers whose wages are undesirably low. If the rule of justice were applied to this latter class, that is, if they were given just what they earned, many would continue to be poor. Indeed, if justice were strictly administered, it is even possible that among a few groups poverty would increase since some individuals are incapable of really earning the wages they now receive. Something more than justice, therefore, is necessary. We must not only see that a man gets as much as he produces, no more, no less, but we must make it possible for every individual actually to produce or earn enough to support himself decently or comfortably. This, in essence, is the distinction between the socialist and the liberalist, i.e., he who accepts the democratic program of industrial reform. The socialist would practice injustice and invite economic ruin in a vain effort to eliminate poverty. The liberalist seeks the abolition of poverty without violating either justice or economic law. 172. Why Wages Are Low A little thought will show that directly or indirectly poverty is sometimes the result of low wages. It follows, thus, that the source of some poverty would be dried up if an increase in wages could be secured in an economical manner. To come to the heart of the problem, wages are low because productivity is low. That is to say, employers operating under the conditions of free competition will pay laborers in proportion as the latter give promise of adding to the value of the product. When men are scarce, relatively to the supply of land and capital, the employer will be justified in offering high wages because under those circumstances the productivity of each of his prospective employees will be high. He will actually offer high wages because if he does not, the laborers will tend to hire out to his competitors. But if laborers are plentiful, relatively to the supply of other factors of production, the employer will be forced to offer lower wages because under the circumstances, each of the prospective employees shows promise of being able to add relatively little to the value of the product. In such a case, the employer will actually offer low wages because he need not fear that his competitors will hire all of the laborers applying for the jobs. Thus, when laborers are plentiful, relatively to the demand, the automatic functioning of the law of supply and demand will result in low wages. We need not waste time debating whether or not there ought to be such a thing as the law of supply and demand. A far more profitable exercise is to recognize that such a law exists and to consider how our program of industrial reform may be adapted to it. 173. An Economic Remedy for Low Wages Low wages are generally the result of low productivity and low productivity is in turn the result of an oversupply of laborers relatively to the demand. Granting the truth of these premises, an economical remedy for low wages involves two steps. First, the demand for labor. Footnote. By labor is here meant those types of labor which are poorly paid because oversupplied. Unskilled day labor is an example. End of footnote. Must be increased. And second, the supply of labor must be decreased. Any measure which will increase the demand for labor relatively to the demand for other factors of production will increase the productivity of labor and will justify the payment of higher wages. Competition between prospective employers will then actually force the payment of higher wages. Similarly, any measure which will decrease the supply of labor will strengthen the bargaining position of the laborer and other things remaining equal will automatically increase wages. 174. Increasing the demand for labor. If we bear in mind that modern industry requires a combination of the various factors of production, it will be seen that the utilization of laborers depends upon the extent to which land, capital and entrepreneur ability are present to combine with those laborers. Where there is a large supply of these factors, many laborers can be set to work. Thus, one way of increasing the demand for labor is to increase the supply of land, capital and entrepreneur ability. The available supply of land can be increased by several methods. Irrigation, reclamation and dry farming increase the available supply of farmland. The fertility of land may be retained and increased by maneuvering, rotation of crops and careful husbandry. Improved agricultural machinery will also enable land to be used in larger quantities and in more productive ways. And while we do not think of man as actually creating land, the draining of swamps and the filling in of low places increases the available amount of both farm and urban land. By whatever means the amount of available land is increased, the effect is to open more avenues to the employment of laborers. The supply of capital may be increased chiefly by the practice of thrift among all classes of the population. Capital arises most rapidly when individuals produce as much as possible and spend as little as possible for consumers goods. Any measure which will discourage the well-to-do from wasteful or luxurious ways of living and at the same time encourage the poor to save systematically, even though they save only a trifle, will add to the supply of available capital. Every increase in the supply of capital will enable more and more laborers to be set to work. Entrepreneurability may be increased by a variety of methods. The training of men for business callings increases the supply of entrepreneurs. Taxes on inheritances, excess profits, and the unearned increment of land will tend to force into productive work many capable men who now either idle away their lives or retire from business prematurely. It is also important that the well-to-do classes be encouraged to rear larger families since it is these classes which can best afford to give their children the higher forms of training and education. Lastly, it is desirable to teach that leisure is disgraceful and that whether one is rich or poor, the useful and productive life is the moral and patriotic life. He who does less well than he can does ill. 175. Decreasing the supply of labor Hand in hand with measures designed to increase the demand for labor should go consistent efforts to decrease the supply of unskilled and poorly paid labor. One of the most effective means of accomplishing this is to restrict by law the immigration to this country of masses of unskilled workers which glut the American labor market and force down the wages of unskilled workmen already here. The general problem of immigration will be discussed elsewhere. Here it is only necessary to note that as an economic proposition unrestricted immigration is undesirable. The supply of unskilled labor may be somewhat restricted by additional laws. It is clear that we ought to pass and enforce laws which would prevent the propagation of mental defectives. There are also to be laws which would discourage the marriage of individuals who show no promise of being able to rear and support children who are physically fit. It might not be expedient to pass legislation requiring a certain minimum income of persons intending to marry, but from the purely economic point of view such laws would certainly be advisable. Much in this general field can be done by non-legislative methods. Young people can be taught the desirability of postponing marriage until their earnings justify the acceptance of such a responsibility. Just as the will to do should be encouraged to prefer family building to social ambition so that poorer classes ought to be encouraged to postpone marriage until, through education or training, the proper support of a family is assured. This end must be secured through moral and social education rather than through legislation. The encouragement of thrift among the poorer classes of the population is an important factor in decreasing the supply of unskilled labor. Thrift increases savings, and by making possible the education or apprenticeship in a trade, it enables the children of the unskilled worker to pass from the ranks of the poorly paid to the ranks of the relatively well paid. Thus, not only does the practice of thrift by the poor add to the amount of capital and existence, and thus indirectly increase the demand for labor, but it helps the poor directly and immediately. Vocational education is of fundamental importance in decreasing the supply of unskilled labor. It renders higher wages economically justified by training individuals away from overcrowded and hence poorly paid jobs and toward those positions in which men are scarce and hence highly paid. If vocational education turns unskilled workmen into entrepreneurs, such education has the doubly beneficial effect of lessening the supply of unskilled labor and of increasing the demand for labor. The importance of trade schools, continuation schools, and other agencies of vocational education can hardly be exaggerated. Employment bureaus and labor exchanges are essential to the democratic program of industrial reform. Just as vocational education must move individuals from overcrowded to undercrowded occupations, so the employment bureau should move laborers from places where they are relatively little wanted and hence poorly paid to places where they are relatively much wanted and hence better paid. A coordinated system of national, state, and municipal employment bureaus is a valuable part of our program of industrial reform. 176. Importance of personal efficiency We have seen that the bargaining position of the laborer may be strengthened by any and all measures which would increase the demand for his labor, relatively to the demand for other factors of production. As a general proposition, this strengthened position would tend automatically to result in higher wages. Along with these measures, it should not be forgotten that the industrial position of the individual worker tends to improve in proportion as he increases his personal efficiency. It is of the greatest importance that the individual should strive to secure as thorough in education as possible and that he safeguard himself against accident and disease. He should realize also that employers seek men who are not only competent, but whose personal habits are attractive and trust inspiring. Regardless of the scarcity or oversupply of labor, personal efficiency will tend to enable the worker to receive larger wages than would otherwise be possible. 177. Something more than high wages is necessary We have taken some time to point out how wages might be increased without violating economic law, but high wages do not necessarily mean the abolition of poverty. Indeed, actual investigations have proved that often poverty exists regardless of whether wages are high or low. A family of four, for example, might be well fed, comfortably clothed, and otherwise cared for in a normal manner on, say, $3 a day, provided that the sum were utilized wisely. A second family of equal size, however, might spend $6 a day so carelessly that the children would be denied such vital necessities as medical attention and elementary education, while neither parents nor children would be adequately provided with food or clothing. 178. Income must be utilized wisely Thus, an indispensable factor in the abolition of poverty is the economical utilization of income. Aside from the fact that it increases the amount of capital in existence, thrift is imperative if a family is to get the full benefit of its income. In both the home and the school, the child should be taught the proper care and utilization of money. He should receive, in addition, fundamental instruction in such matters as expense accounting and budget making. Of likewise great value is the training of boys and girls to a proper appreciation of homemaking ideal, to which subject we shall return later. It is fortunate that we are directing more and more attention to these and similar measures, for they strike at the heart of one of the great causes of poverty, the inability of the individual to make the proper use of his income. Unless our citizens are trained to spend money wisely and to distinguish clearly between the relative values of services and commodities, an increase in wages will never eliminate malnutrition, illiteracy, and other elements of poverty. 179. Summary For the sake of clearness, let us summarize the essential feature of the Democratic Program of Industrial Reform. The first aim of this program is to give every individual precisely what he earns, no more, no less. Applying the principle of justice would result in heavy taxes on unearned wealth, secured through inheritance, or as rent from land, or as a monopoly profits. The second aim of our program arises from the fact that justice might not improve the condition of the laboring class, since some laborers manifestly could not earn enough to support themselves and their families decently. In addition to administering justice, therefore, we must put the individual in a position to earn an amount adequate to his needs. This involves two lines of action. First, the bargaining position of the laborer must be strengthened by the measures designed to increase the demand for his labor, relatively to the demand for the other factors of production. Second, increasing the personal efficiency of the worker will render him more attractive to the employer. The third aim of the Democratic Program of Industrial Reform is to teach the individual to use his income wisely and economically. Only after this has been done can we be assured that the raising of wages will materially improve the condition of the worker. 180. Social Problems There is an important word to be said here. The Democratic Program of Industrial Reform is economically sound and, ultimately, it would eliminate poverty. But it is not an immediate cure for all of the social and economic ills of American democracy. There will long continue to be persons who no amount of care can render capable of earning enough to support themselves. There are many other individuals who may ultimately become self-supporting, but who, for some time to come, will need special care and attention. There are, lastly, many other individuals who are partially or entirely self-supporting. Women and children, for example, but whose social and economic interests need to be safeguarded by legislation. The Democratic Program of Industrial Reform could ultimately eliminate many of the basic social problems now confronting us. Meantime, we are under the necessity of grappling with such questions as labor disputes, the risks of industry, crime, and dependency. Indeed, no matter how vigorously and intelligently we attack the defects of capitalism, it is probable that we shall always have to face grave social problems. Part 3 of the text will accordingly be devoted to a consideration of American social problems. End of Chapter 17. Chapters 18 and 19 of Problems in American Democracy. This is a LibriVox recording. All LibriVox recordings are in the public domain. For more information or to volunteer, please visit LibriVox.org. This reading by Allison Hester of Athens, Georgia. Problems in American Democracy by Times-Williamson. Part 3. American Social Problems. Chapter 18. Industrial Relations. 181. Labor and Capital. Strictly speaking, five distinct factors are involved in production. Land, labor, capital, coordination, and government. As a matter of fact, we are accustomed to speak of the immediate conduct of industry as involving only two factors, labor and capital. Used in this sense, the term labor refers to the masses of hired workmen while the term capital is held to include not only the individual who has money to invest, i.e. the capitalist proper, but also the entrepreneur or managing employer. Labor and capital cooperate actively in production, while the other factors remain somewhat in the background. As we have seen, both labor and capital are essential to industry, and fundamentally their interests are reciprocal. But in spite of this basic harmony, there are many points of differences and antagonism between labor and capital. This chapter discusses the more important of these disagreements and outlines some suggested methods of reducing or eliminating them. 182. The Factory System and the Laborer. Wherever it has penetrated, the Industrial Revolution has concentrated large numbers of landless laborers in industrial establishments controlled by relatively few employers. Very early in the development of the factory system, the laborer saw that he was at a relative disadvantage in bargaining with employers. Not only does the average laborer lack funds to tide him over a long period of unemployment, but the fact that his labor is generally his sole reliance obliges him to secure work at all hazards. The anxiety and discontent of laborers have been increased by the realization that the factory system affords little opportunity for the average workman to rise to the position of an employer. Most laborers are unable to secure either the training or the capital necessary to set themselves up as independent businessmen. 183. Rise of Labor Organizations. The risks and limitations which the factory system imposes upon the laboring classes have encouraged workmen to organize for the purpose of promoting their mutual interests. The individual gains, it has been found, when his interests are supported by a group of workmen acting as a unit and bringing their united pressure to bear upon the employer. The labor organization has been the result of this discovery. A labor organization may be defined as a more or less permanent and continuous association of wage earners entered into for the purpose of improving the conditions of their employment. The first labor organizations in the United States were formed early in the 19th century, but it was not until about 1850 that the trade union assumed national importance. After 1850, however, and particularly after the Civil War, the trade union grew rapidly. In 1881, a number of national trade unions combined to form the American Federation of Labor. This body, while exercising no real authority over the trade unions comprising it, is nevertheless an important agency in coordinating trade union policies throughout the country. It is important also as a means of formulating and expressing the aims and ideals of the working classes. The Federation had a membership of 2,604,701 in 1914 and in 1920 included more than 4,500,000 members. With the exception of the railroad brotherhoods, nearly all of the important trade unions in the country are affiliated with the American Federation of Labor. 184. Rise of Employers' Associations The growing power of the trade union after 1850 stimulated the growth of employers' associations. In 1886, the first National Employers Association was organized under the name of the Stowe Founders National Defense Association. Later, there was formed a number of other important associations including the National Association of Manufacturers, the National Council for Industrial Defense, and the American Anti-Boycott Association. The primary purpose of the Employers Association is the protection of the employer's interests against trade union aggression. Some of the associations are frankly hostile to the trade union movement while others take the stand that the organization of laborers is undesirable only if the power of the trade union is abused. The promotion of friendly relations between labor and capital is increasingly an important concern of the employer's association. 185. What the trade union wants One of the basic aims of the trade union is either to raise wages or to prevent the reduction. Because of the constant shiftings of supply and demand, the prices of commodities are rarely stationary for very long. Over an extended period of time, prices are either rising or falling. During a period of rising prices, the workmen are at a relative disadvantage. Footnote, rising prices affect all who purchase commodities, of course, but here we are intent upon the position of the laborer only. End of footnote. Because they have to pay for commodities higher prices than they had anticipated when they contracted to work for a definite wage. In such a case, the union attempts to secure higher wages for its members. When, on the other hand, prices are falling, the workmen gain because they do not have to pay as high prices as they had anticipated. In this latter case, the laborers attempt to maintain their advantage by opposing any reduction in wages. The desire of the trade unions to improve the general condition of the working classes has steadily widened the program of organized labor. Shorter hours and better conditions of work are important trade union demands. Unions quite generally approve the principle of a minimum wage, at least for women and child workers. Formally, and to some extent even now, the unions have opposed the introduction of labor-saving machinery on the grounds that it displaces workmen and hence causes unemployment. Union members generally prefer to be paid by the hour or by the day rather than so much per unit of product. The reason given for the preference is that strain and undue fatigue often result from piecework as the system of pay on the basis of units of product is called. Trade unions universally demand that employers recognize the principle of collective bargaining, by which is meant the privilege of workmen dealing with the employer collectively or through the union. Very often also, the unions demand the closed shop, that is to say, a shop from which all non-union employees are excluded. 186. What the employer wants. Price movements likewise affect the employer, but whereas the laborer is at a relative disadvantage when prices are rising, the employer tends to gain. For the reason that he secures for his product higher prices than he had expected. Footnote. In a period of rising prices, the employer's costs also tend to rise, but generally not so rapidly as do prices. End of footnote. Suppose, for example, that a shoe manufacturer can make a profit if a pair of shoes sells for $4. If later, the price rises to $5 and his expenses remain stationary or very nearly so, he reaps an unusually large profit. And whereas in a period of falling prices, the laborer tends to gain, the employer often loses heavily for the reason that he must sell at a relatively low price goods produced at a relatively high cost. If, in the case given above, the price of the pair of shoes falls from $4 to $3, while the expenses of the manufacturer remain stationary or very nearly so, he may take little or no profit. Thus, while prices are rising, the employer attempts to maintain his advantage by resisting an increase in wages. While in a period of falling prices, he seeks to cut down his expenses by reducing wages. In either case, the immediate interests of the workmen and employer are antagonistic. Just as the growing complexity of the industrial situation has enlarged the trade union program, so the aims of employers have steadily increased in number and in importance. On the grounds that it restricts the fullest utilization of his plant, the employer very often objects to a shortening of the working day, even where there is a corresponding decrease in the day wage. Some employers are unwilling to provide sanitary workshops for their employees or otherwise to improve the conditions of employment. The employer generally objects to the minimum wage, as constituting an interference with his right to offer workmen what wages he chooses. Collective bargaining is accepted by many employers, but many others insist upon the right to hire and discharge men as they see fit without being forced to consider the wishes of the union. Employers often oppose the closed shop and insist upon the open shop, an open shop being defined as one in which workmen are employed without regard to whether or not they are members of a union. 187. Methods of Industrial Warfare Both capital and labor back up their demands by a powerful organization using a variety of weapons. The trade union generally attempts to enforce its demands by threat of, or use of, the strike. A strike is a concerted stoppage of work initiated by the workmen as a group. Sometimes accompanying the strike is the boycott, which may be defined as a concerted avoidance of business relations with one or more employers, or with those who sympathize with those employers. The strike is generally accompanied by the practice of picketing, by which is meant the posting of union agents whose duty it is to attempt to persuade non-union workmen not to fill the places of the striking workmen. Pickets may also attempt to persuade customers not to patronize the employer against whom a strike has been launched. Sometimes picketing leads to intimidation and violence on the part of either the strikers or the representatives of the employers. In turn, the employer may employ a variety of weapons against workmen with whom he cannot agree. An employer may make use of the lockout. That is, he may refuse to allow his labor force to continue at work. Many employers also use the backlist, i.e., the circulation of information among employers for the purpose of forewarning one another against the employment of certain designated workmen. The employer may also attempt to end a strike by persuading non-union men to fill the places vacated by the strikers. Such men, as except, are known as strike breakers. On the plea that the strike may result in the destruction of his property, the employer may resort to the injunction. This is an order secured from a court and restraining certain laborers and the employer's interests. 188. The Cost of Industrial Warfare The struggles of labor against capital constitute a species of warfare which involves the general public. Regardless of whether a particular dispute ends in favor of the laborers or the employer, every strike, lockout, or other interference with industrial cooperation lessens the amount of consumable goods in existence. Thus, aside from the fact that industrial warfare encourages class antagonisms, it is an important cause of the relative scarcity of goods and the resulting tendency of prices to rise. Often, great injury results from a dispute which was originally of small proportions. In 1902, for example, the anthracite coal strike cost the country more than $100 million, though the strike had been initiated because of a local dispute over recognition of the union. In 1919, when we were suffering from a general scarcity of goods, there occurred in this country more than 3,000 strikes involving a loss of more than $2 billion in decreased production. 189. Necessity of Industrial Peace Industrial warfare very often results in the correction of abuses, but in many cases it seems to bring little or no benefit to either labor or capital. In any case, it is a costly method and one which constitutes a menace to the peace of the community. American democracy demands that in the settlement of disputes between labor and capital, industrial warfare be replaced by some method less costly, less violent, and more in harmony with the principles of justice and civilized behavior. Responsibility for the present extent of industrial warfare cannot definitely be placed upon either capital or labor, but at least both sides should be obliged to recognize that the public is a third party to every industrial dispute. We should insist upon fair play for both capital and labor, but we should likewise insist that the interests of the public be safeguarded. 190. Some Methods of Industrial Peace As has already been pointed out, profit sharing is not of great importance in lessening industrial unrest. Various systems of bonuses and pensions have temporarily improved the position of some groups of workmen, but experience has proven both bonuses and pensions to be limited in scope. Employers are often unwilling to adopt such devices as these, while the laborers frequently regard them as paternalistic measures, which at best are a poor substitute for the higher wages to which they consider themselves entitled. Existing evils are often lessened by welfare work, which include such measures as the establishment of schools, libraries, and playgrounds for the laborers. But in many cases, welfare work is initiated by the employer for the purpose of diverting the attention of the workmen from their fundamental grievances. And for this reason, it is often opposed by the workmen. All of the measures enumerated in this section are of more or less value, but as methods of combating industrial welfare, they have proved to be palliative, rather than remedial or preventative. 191. The Trade Agreement In some industries, there is a growing tendency for employers not only to recognize the union, but also to make a collective contract or trade agreement with the unionized workmen. The trade agreement may lead to the formation of councils in which representatives of both workmen and employer attempt to reach a friendly agreement upon disputed matters. The trade agreement has been particularly successful in many industries in England. In this country, it is best known in the soft coal mining industry in eastern United States and in the needle trades of New York City. On the whole, the trade agreement has not been markedly successful in the United States. Although it smooths out minor differences, the unions still prefer to back their more important demands by use of the strike. 192. Voluntary Arbitration Since 1898, the several states have been giving an increasing amount of attention to the creation of boards of industrial consolation, mediation, and arbitration. But note, the words consolation, mediation, and arbitration are variously used, but the following distinction may be of use. Mediation is an attempt to get the disputed to come together for the purpose of discussing their grievances. Conciliation is aid extended to the disputed in the actual settlement of the dispute. Arbitration implies that a third party settles the dispute and renders a decision. End of footnote. Most states now have some provision for a board whose duty it is to attempt to eliminate industrial warfare. The powers and duties of these boards vary from state to state. In some states, the board may investigate labor disputes on its own initiative, but it is not obliged to make an investigation. In other states, the investigation of industrial disputes is compulsory. Boards of the type discussed in this section have no power to compel the disputants to arbitrate their troubles, though they may persuade the parties involved to resort to arbitration. When the disputants agree to allow the state board to arbitrate the dispute, and when also they previously promised to abide by the decision of the board, the award of the state board is binding upon both sides. When the parties to the dispute have not previously agreed to abide by the board, the board cannot force an acceptance of its decision, but can only rely upon public sentiment to help effect a just settlement. 193. Compulsory arbitration in New Zealand and Australia. The frequent refusal of labor and capital willingly to submit their differences to arbitration has led to the development of the principle of compulsory arbitration. In New Zealand, compulsory arbitration was adopted as early as 1894. In that country, the arbitrating body is known as the Court of Arbitration, the decisions of which are absolute in binding. At the discretion of the court, the awards handed down may be extended to embrace other employees or employers in the same trade, or in the same locality, or in the whole country. Violations of the award, either by labor or by capital, are punishable by heavy fines. An even more drastic form of compulsory arbitration has been adopted in Australia. Due to the influence of many complicating factors, the status of compulsory arbitration in these two countries is uncertain. Many students of the question maintain that this form of arbitration has materially reduced industrial warfare. On the other hand, other authorities declare that compulsory arbitration in New England and Australia has not markedly improved industrial relations. 194. Compulsory arbitration in the United States Although the principle of compulsory arbitration has been familiar to American students of labor problems for more than a quarter of a century, there is, as yet, very little sentiment in favor of its application to industrial disputes in this country. The explanation of this is not far to seek. Individualism is so strong in the United States that compulsory arbitration is regarded by many Americans as an unwarranted interference in private business. It is still generally true that both labor and capital prefer to settle their disputes in open struggle. Equally important, perhaps, is the feeling that compulsory arbitration laws would nullify the constitutional guarantee that no citizen shall be deprived of life, liberty, or property without the due process of law. However, a definite step toward compulsory arbitration was taken when in 1920 the state of Kansas established a court of industrial relations, quote, for the purpose of preserving the public peace, protecting the public health, preventing industrial strife, disorder, and waste, and securing regular and orderly conduct of the businesses directly affecting the living conditions of the people, end quote. The law of 1920 declared illegal the suspension of work in those industries which are designated as essential and necessary to the community life. Industrial disputes arising in such industries are subject to compulsory arbitration by the court. The merits of this court are still being debated. Some authorities declare that the court has already demonstrated its value, but other observers claim that so far this tribunal has not operated to reduce labor troubles in Kansas. 195. Status of the demands of labor. For a number of years, the attitude of labor has been clearly aggressive, while the attitude of capital has tended to be one of resistance. In view of this fact, the simplest way of considering the merits of the industrial situation is to examine the demands of labor. The justice of these demands cannot be gone into here, but a few words of general application may be helpful. The proper determination of wages depends, of course, upon the particular circumstances. No general rule can be laid down except the very obvious one that wages cannot permanently go so high as to wipe out profits in an industry, nor yet so low as to render it impossible for the workmen to secure a decent living. The steady improvement of living and working conditions is desirable and is a challenge to any progressive society. Shorter work hours are desirable wherever the cutting down of the working day does not too greatly hamper production. Many economists feel that an eight-hour day will prove a social gain only if introduced gradually. They believe that it should be introduced in proportion as the industrial productivity of the country increases to compensate for the shortening of the working day. Opposition to the introduction of labor-saving machinery is both useless and short-sighted. The officials of most unions now advise workmen not to oppose the adoption of machinery, but rather to fit themselves to operate the machines. The question of a closed shop or an open shop is largely a matter of opinion. The problem will probably continue to be disputed for a long time to come. Many students of labor conditions feel that the closed shop is justifiable only when accompanied by the open union. By an open union is meant a union into which all laborers competent to do the work are admitted freely. Where the open union principle is adopted, Professor Talsig points out, the closed shop is no longer a monopolistic device to shut out competition and raise wages for a small group. It becomes instead a means of promoting mutual aid and collective bargaining. Many employers still refuse to recognize the principle of collective bargaining, but from the social point of view, collective bargaining is desirable. In many cases, it so strengthens the position of the laborers that they are able to compete with the employer more nearly on terms of equality. Under such conditions, competition in the labor market is in a healthy state. The difficulty is, of course, that some unions may take advantage of their strengthened position to enforce unduly severe conditions upon the employer. 196. The Outlook Although it is probable that industrial disagreements will long endure, we have a right to expect that continued progress will be made in settling these disputes peaceably. By many, it is believed that compulsory arbitration is the most effective method of securing industrial peace, but for reasons already given, the extension of this form of arbitration will probably be slow in this country. English experience would indicate that we have not yet exhausted the possibilities of the trade agreement. But though this device is becoming better known in the United States, both the American laborer and the American employer are still disposed to settle their differences by means of the strike, the lockout, and similar weapons. The present century is an age of industrial stress and change, and it is possible that the ultimate solution of the disputes between labor and capital has not yet been advanced. From the data now at hand, however, it is maintained by many that labor disputes must ultimately be eradicated through the development of industrial democracy. Industrial democracy implies the joint direction of industrial policies by employer and employees working together harmoniously and in the spirit of equality. When industrial democracy is attained, according to this view, mutual trust in the spirit of friendly cooperation will enable labor and capital to adjust their differences peaceably and economically without dictation from any outside source. End of chapter 18. Chapters 19 and 20 of Problems in American Democracy. This is the LibriVox recording. All LibriVox recordings are in the public domain. For more information or to volunteer, please visit LibriVox.org. This reading by Allison Hester of Athens, Georgia. Problems in American Democracy by Times Williamson. Chapter 19. Health in Industry. 197. Industry and Health. Wherever the industrial revolution has progressed beyond the initial stages, there has been an enormous increase in wealth and prosperity. At the same time, serious evils have accompanied the transition from a relatively simple agricultural stage to a stage dominated by the factory system. The tendency toward overcrowding and rapidly growing cities, the difficulties of maintaining a normal family life where mother or children are employed in factories and the danger of over strain, accident and disease in industrial pursuits, all these factors render very important the problem of health in industry. Though health in industry is only one phase of the general problem of health, it will be impossible here to exhaust even that one phase. We shall, accordingly, confine ourselves to the discussion of three questions. First, child labor. Second, the employment of women in industrial pursuits. And third, the insurance of our industrial population against accident, sickness, old age and unemployment. 198. Child labor, extent and causes. There are in this country more than 2 million children between the ages of 10 and 15 engaged in gainful occupations in all sections of the country. Large numbers of children are found in agriculture. This industry generally being beyond the scope of child labor laws. The employment of children in factories, mines, quarries, mills and shops on the other hand is now considerably restricted by law. This is true of all parts of the country. However, child labor is still of wide extent in the United States due to the large number of children found in agriculture, domestic service, street trades, stores, messenger service and tenement homework. Of the immediate causes of child labor, one of the most important is the poverty of the parents. Where the parents are themselves day laborers, it is often considered necessary or desirable to increase the family earnings by putting the children to work. From the standpoint of the employer, child labor is rendered possible and even desirable by the development of types of work easily performed by small children. In many cases, the tendency of parents to put young children to work is encouraged by the lax administration of school attendance laws. This tendency has also been encouraged by the indifference of the public to the evil effects of child labor. 199. Effects of Child Labor Students of the problem of child labor unanimously condemn the practice of habitually employing young children outside the home where poorly paid children compete with men and women, they serve either to displace adults or by competition to lower the wages of adults. The effects upon the children themselves are injurious. Stunted, crippled and diseased bodies are the result of steady work at two tender and age. Schooling is interrupted so that child workers generally develop into illiterate and inefficient adults. When children are forced into gainful occupations at an early age, the family life is disrupted and proper home training is difficult, if not impossible. Still, another factor is the greater temptation to vice and crime confronting the child outside the home. 200. Child Labor Laws Since 1870, the growing acuteness of the child labor problem, together with an aroused public opinion, has served to increase the number of laws restricting child labor. At the present time, 45 states forbid the employment in certain industries of children under 14 years of age. A federal child labor law was passed in 1916, but two years later, the measure was declared unconstitutional by the Supreme Court. Footnote. For an explanation of this point, see section 214 of this chapter. End of footnote. In 1919, a new federal law was enacted. In order to avoid the charge of unconstitutionality, this measure attacks child labor indirectly. The law levies an excise tax of 10% on the entire net profits received from the sale of all the products of any mine, quarry, mill, cannery, workshop, factory, or manufacturing establishment, which employs children contrary to certain age and hour specifications. The effect of this 10% tax is so to reduce the profits of the employers affected as virtually to prohibit child labor. By this means, the act prohibits child labor in several important groups of industrial establishments. The difficulty with the law is that it touches only about 15% of our 2 million child workers. It does not affect, for example, the large number of children employed in agriculture, domestic service, street trades, stores and restaurants, messenger service, and tenement homework. 201. Minimum provisions of a good child labor law. The passage of more comprehensive child labor laws is being advocated by a number of social agencies, notably by the National Child Labor Committee. The minimum provisions of a good child labor law have been set forth by the committee somewhat as follows. As a general proposition, no child should be regularly employed in a gainful occupation who is under 16 years of age. There should be an even higher age limit for child workers in quarries, mines, and other dangerous places. Children should not work more than eight hours a day, nor should they be allowed to engage in night work until they have reached the age of, say, 20 years. All child applicants for industrial positions should first be required to pass educational tests and a physical examination. A good child labor law should provide for a core of factory inspectors, as well as for other means of securing the inefficient administration of the law. Lastly, it is important that there be close cooperation between employers and the school authorities in the matter of child labor. 202. Increased number of women in industry. There have always been women in industry, but of recent years, the proportion of women so engaged has increased so rapidly as to create a serious social problem. From needlework, domestic service, and teaching, women have spread rapidly into trade, commerce, and the professions. A few years ago, transportation and police work were monopolized by men, but today women are entering these fields rapidly. Though they outnumber men, only in domestic and personal service, women are numerous in practically every important calling except plumbing and street cleaning. All together, more than 8 million women are engaged in gainful occupations in the United States. 203. Why women receive lower wages than men? Women generally receive lower wages than men. One reason for this is the physical weakness of women, which renders them less desirable in many types of work. Social conventions, home attachments, and often the lack of venturesome spirit combine to keep women from moving about in search of improved working conditions to the same extent as men. The expectation of marriage causes many young women to neglect to increase their efficiency, and this at least prevents their wages from increasing as rapidly as those of young men who undergo consistent training. The trade union is still little developed among women workers, a factor which often prevents higher wages from being secured. Low wages are often traceable to the fact that there is an oversupply of girls and women in the labor market. Large numbers of girls and women are partially supported at home and are able and willing to work for pin money only. Many employers take advantage of this fact to offer very low wages. 204. Legislation regulating the labor of women. Although it would seem desirable to keep young children out of industry altogether, there is a general agreement among students of the problem that the labor of women ought to be further regulated rather than actually prohibited. A number of states have already enacted laws designed to safeguard women in industry. In some states, the number of working hours for women has been cut from 11 to 9, while in other states, the maximum number of hours during which women may work is 8. Some states prohibit night work in industrial establishments. The great majority of the states now provide for proper rest periods, garden machinery, the ventilation of work rooms, and were practicable seats for women employees. To the extent that women actually do the same amount and quality of work as men, there is a growing feeling that men and women ought to receive equal pay. 205. The minimum wage. A minimum wage law is one which specifies that in certain occupations, laborers may not be paid less than a stipulated wage. The aim of the minimum wage is to protect the laborer against employment, which, under freely competitive conditions, does not pay wages high enough to guarantee a decent living. The first minimum wage law in the United States was passed by Massachusetts in 1912. The movement grew rapidly and by 1921, more than a dozen additional states had adopted the minimum wage laws. In some states, the law applies only to specified industries. In others, it covers all occupations. In some states, the law covers only the employment of women. But in most cases, the principle of the minimum wage applies to women and minors under 18, or even 21 years of age. In some foreign countries, the minimum wage is also extended to the labor of men. But in the United States, men are everywhere exempted from the operation of such laws. 206. Arguments in favor of the minimum wage. The champions of the principle of the minimum wage advance a number of arguments in its favor. It is contended that no industry is socially desirable if it cannot pay a living wage. For, when wages fall below a certain minimum, real health and vice are natural results. When laborers are themselves unable to improve their economic position, it is said it becomes the duty of the states to guarantee them a living wage. Another argument in favor of the minimum wage is that it not only eliminates considerable poverty, but it makes possible a healthier and more contented labor force. It is claimed that strikes and social unrest are partially eliminated by the minimum wage. 207. Arguments against the minimum wage. In spite of the rapid spread of minimum wage legislation in this country, the principle has met with considerable opposition. It is claimed by some that where poverty is due to bad personal habits, the mere payment of a higher wage will not abolish poverty. It is also urged that because of price changes and the cause of differing concepts of a standard of living, it is difficult to determine what is really a living wage. Some employers maintain that the minimum wage is contrary to economic law, since it forces the payment of a wage which the laborer often does not earn. The compulsory nature of the minimum wage is also opposed on the grounds that it constitutes an undue interference with individual rights. Footnote. Normally an important argument against the minimum wage was this. There are large numbers of people who cannot earn the minimum wage and because employers will tend not to employ them, such persons will have to be supported by charity. The force of this argument is reduced, however, by the fact that most minimum wage laws now make special provision for the part-time employment of such persons. And a footnote. 208. History. In spite of the fact that most states now have detailed laws providing for the guarding of machinery and the supervision of dangerous occupations, a half million persons are injured or killed annually in industrial employment in the United States. A considerable amount of ill health is traceable to working with drugs and acids. Continued work in dusty meals and shops, as well as long exposure to the excessively dry and excessively moist atmosphere required by certain manufacturing processes also gives rise to occupational diseases. Old age frequently brings poverty and distress in spite of a life of hard work. Lastly, the laborer runs the risk of unemployment. 209. The principle of social insurance. As a general rule, laborers do not voluntarily ensure themselves against illness, accident, or old age. This is partly because they lack the necessary funds and partly because they lack the foresight necessary for such action. If, therefore, the risks of industry are adequately to be insured against, the initiative must be taken by someone other than the laborer. As a result of this situation, there is developed the principle of social insurance. Social insurance as distinguished from insurance by trade unions or private agencies is compulsory and is administered, or at least supervised, by the state or federal authorities. From the standpoint of the community, social insurance may be justified on four grounds. First, the risks of industry are largely beyond the control of the individual workmen, and hence, y'all not to be held wholly responsible for the penalties which industry may inflict upon him. Second, the community gets the benefit of the laborer's efforts, and thus ought to feel morally obligated to safeguard his employment. Third, an injury to the laborer restricts the productivity of the community by crippling or removing one of its productive agents. Fourth, compulsory insurance is a social necessity for where nothing has been laid aside for a rainy day, the interruption of earnings subjects the laborer and his family to hardship and disaster. Wisely administered social insurance prevents a great deal of poverty and distress, which would otherwise constitute an added burden upon charitable organizations. Two, ten, insurance against accidents. Accident insurance has been a feature of social insurance programs in Germany, France, and Great Britain for almost half a century. But in this country, it was not until 1910 that the compulsory insurance against industrial accidents began to be effective. Since 1910, however, the movement has grown rapidly, and at the present time, the majority of the states provide for compensation to workmen for accidents sustained in connection with their work. Formerly, our courts quite generally held that when a workman could be shown to have suffered an accident because of personal negligence, not entitled to compensation. Under the accident insurance laws of most states, it is now held, however, that the personal negligence of the injured workman does not forfeit his right to receive compensation. In most states, the cost of accident insurance is borne primarily by the employer. Two, eleven, insurance against sickness. Footnote, sometimes known as health insurance. Compulsory sickness insurance has been highly developed in several European countries, but so far we have left insurance of this type to private efforts. The question is attracting considerable attention in this country, however, and it is believed that this form of social insurance will soon be provided for by state law. In 1914, the American Association for Labor Legislation outlined a model sickness insurance law. Such a law would provide a sickness benefit for a number of weeks, arranged for medical care and, in case of death, pay a funeral benefit. The cost of such insurance would be divided equally between workman and employer, while the state would bear the cost of administering the law. This cost would be considerable because illness may be feigned and hence there would have to be more careful supervision than in the case of accident insurance. 2012, insurance against old age Compulsory insurance against old age is an important feature of social insurance systems in European countries, but it is very little known in the United States. We are familiar with the federal pensioning of military veterans and with local pensions for firemen and policemen, as well as with state and local pensions for teachers. Such insurance does not, however, touch the question of old age employees in industrial pursuits. Trade unions sometimes provide a measure of old age insurance for their members, but the proportion of workmen affected by this practice is very small. In 1920, a beginning toward compulsory old age insurance was made when a federal law provided for compulsory old age insurance for the civil service employees of the federal government. The question of compulsory old age insurance is also being vegetated in a number of states. 2013, should social insurance extend to unemployment? It is contended by many that to ensure workmen against the loss of their jobs would encourage shiftlessness and, that for this reason, the principle of social insurance ought not to apply to unemployment. It is obvious that a considerable share of unemployment is traceable to personal negligence and it is probably true that insurance against unemployment would discourage thrift and foresight on the part of many workmen. On the other hand, it has been shown statistically that a large share of unemployment is due to crop failures, market fluctuations, and other conditions beyond the control of the workmen. And so far as this is true, there would be a great deal of unemployment whether it were insured against or not. This is the cause. Therefore, some employment is inevitable and because unemployment is in many cases beyond the control of the individual, it becomes necessary or at least desirable for the state to ensure workmen against this unavoidable risk. Insurance against unemployment has never been tried out in this country but it is likely that we shall someday follow the example of the leading European countries and include this type of protection in our general program of social insurance. 214 Obstacles to Labor legislation Labor legislation of the type discussed in this chapter is making rapid headway in the United States. Nevertheless, it should be noted that in this field we are behind the more advanced countries of Western Europe. The chief explanation of this relative backwardness is that the extension of labor legislation in this country has met with considerable opposition. The reasons for this opposition may be summed up as follows. First, the spirit of individualism is so strong in this country as effectively to check legislation which appears paternalistic. The weak position of women and children in industry has somewhat lessened the force of this argument in the case of laws designed to safeguard these two groups but labor legislation in behalf of men is still regarded suspiciously in many quarters. Second, it is difficult to secure uniform laws among the several states. Labor legislation in this country has been primarily a state concern but the attitude of the various states towards social insurance, the minimum wage, and other types of labor legislation has been so divergent that the resulting laws have often been conflicting. In many cases, states fear to enact laws that they believe will hamper local employers and encourage the migration of capital to states which are more lenient in this regard. Third, an important obstacle to labor legislation in the United States has been the difficulty of enacting laws which the courts will not declare unconstitutional. The constitutional provision that no one shall be deprived of life, liberty, or property without due process of law has often been interpreted by the courts in such a way as to nullify laws designed to safeguard the interests of the working classes. For example, a law restricting the employment of women might be declared unconstitutional on the grounds that it interferes with the liberty of women to work as many hours and for a smaller wage as they choose. Within the last decade, however, the obstacle of constitutionality appears to have declined in importance. Our Supreme Court often reversed their own decisions as well as negative the decisions of the lower courts and it is therefore difficult to ascertain what is truly the trend of judicial decision. Nevertheless, many authorities believe that we are on the verge of an era in which the courts will weigh labor legislation primarily in the light of its social benefit and only secondarily with respect to how it squares with the technicalities of the constitution. End of Chapter 19 Chapter 20 Immigration and Assimilation 215 Racial Elements in Our Population The Federal Census of 1920 gave the population of the continental United States as 105,710,620. Approximately 9 tenths of this population is white while about one tenth is Negro. Those who are neither white nor Negro, namely American Indians and Asiatics together constitute less than one half of one percent of the population. The great majority of our people are either European immigrants or the descendants of European immigrants who came to this country within the last century and a half. With reference to European immigration we distinguish three groups, the foreign born, the native born children of the foreign born and the natives. Natives include those whose ancestors have been in this country two or more generations. On the basis of this classification about one seventh of our population is foreign born while over one third is either foreign born or the native born children of foreign born parents. The ease with which immigrants have adapted themselves to American life prevents any accurate classification of nationalities in our population but probably Great Britain and Ireland, Germany, Italy Russia including Poland and Austria-Hungary have in the order named contributed the largest numbers. 216. The old immigration European immigration to the United States may be divided into two groups, the old and the new. The old immigration extended from the beginning of our national history to about the year 1880 and was derived chiefly from Great Britain and Ireland, Germany and the Scandinavian countries. Between 1820 the first year for which we have accurate records and 1880 about nine tenths of our immigrants came from these countries. The striking features of the old immigration should be noted. In comparison with present day immigration it was relatively small in volume in view of the abundance here of free land and our consequent need for pioneers. The small volume of immigration prevented the rise of serious problems. Moreover the old immigration was largely made up of individuals who were similar to the original American colonists and political ideals social training and economic background. The old immigration therefore merged with the native stock fairly easily and rapidly. 217. The old gives way to the new immigration. In the period centering about the year 1880 there was a distinct shift in the immigration movement. Whereas before 1880 most of our immigrants had been Anglo-Saxons and Teutons from northern Europe after 1880 the majority of our immigrants were members of the Mediterranean and the Slavic races from southern and southeastern Europe. Before 1880 about nine tenths of the aliens coming to our shores were from northern Europe and only one tenth were from southern and southeastern Europe. In the period since 1880 less than one fourth of our immigrants have come from northern Europe while more than three fourths have been derived from southern and southeastern Europe. The bulk of this new immigration has come from Russia, Poland, Austria, Hungary, Greece, Turkey, Italy and the Balkan countries. 218. Increasing volume of immigration. Since it is in connection with the new immigration that the modern immigration problem arises it will be profitable to inquire more fully into the character of the movement after about 1880. Not only has the character of immigration changed since the 80s but the volume of immigration has steadily increased of approximately 35 million immigrants who have come to our shore since 1800. More than half have come within the last 35 years. The peak of immigration was reached in the decade preceding the world war when as many as a million and a quarter of immigrants landed in this country in a single year. This heavy flow was interrupted by the world war but after the signing of the armistice in the fall of 1918 a heavy immigration again set in. But note, various classes of immigrants are excluded from the states by the immigration laws summarized in section 223 of this chapter. In addition to these laws which may be said to constitute the basis of our permanent immigration policy, President Harding signed in May 1921 a bill relative to the temporary exclusion of aliens who would ordinarily be admissible. This temporary exclusion act provided that between July 1st 1921 and June 30th 1922 the number of immigrants entering the United States from any other country might not exceed 3% of the former immigrants from that country who were within the bounds of the United States at the time of the last census. And a footnote. 219, distribution of the new immigration. One of the most significant facts in connection with the immigration problem is that our immigrant population is unequally distributed about two thirds of the immigrants in this country are in the North Atlantic Division. About a quarter of them are located in the North Central Division while less than one tenth are located in the western and southern sections of the country combined. Three fourths of our foreign born live in the cities of the North Atlantic and the North Central Divisions. 40% of the present population of New York City is foreign born while in Boston and Chicago more than a third of the population is foreign born. In the smaller manufacturing cities of the North Atlantic Division it often happens that from half to four fifths of the population is foreign born. 220, economic effects of immigration. In the earlier part of our national history Freeland was abundant and immigration relatively small in volume. After the 80s, Freeland disappeared and immigration increased rapidly. It was toward the end of the 19th century therefore that the economic aspect of the immigration problem became acute. In the last decades of that century manufacturing developed rapidly and American cities became important centers of population. Large numbers of immigrants were attracted by the opportunities for employment in urban centers. In addition to this factor immigrants continued to concentrate in the cities partly because of the spirit of clannishness partly because of the disappearance of Freeland and partly because the development of agricultural machinery reduced the demand for agricultural laborers. Still another influence was the fact that the unfamiliar American farm was less attractive to the southern European immigrant than was the opportunity of performing unskilled labor in the city. Today four fifths of our immigrants are unskilled laborers who are employed chiefly in mining, construction work, transportation and domestic service. From the economic standpoint the chief objection to unrestricted immigration is that it prevents the wages of American workmen from rising as rapidly as would otherwise be the case. The newly arrived immigrant usually has a lower standard of living than has the native American. That is to say the immigrant is content with less in the way of food, clothing, house room and education than is the native. When newly arrived immigrants come into competition with native workmen the immigrant generally offers to work for a lower wage than the native. But though relatively low this wage is so much higher than the newly arrived immigrant has been used to that he feels justified in marrying early and rearing a large family. This adds to the supply of unskilled labor. In order to compete with the recent immigrant the native must accept relatively low wages. In order to get along on these relatively low wages the native must either lower his standard of living or postpone marriage. Sometimes he has lowered his standard of living. Sometimes he has preferred to retain his relatively high standard of living and to get along on the decreased wage either by postponing marriage or by permanently abandoning his plans for a normal family life. It is contended therefore that an oversupply of unskilled immigrant labor in this country has had at least two injurious results. First it has kept the standard of living of American workmen from rising as rapidly as would otherwise have been possible. Second it has caused the birth rate to decline among the native groups. Two twenty one social effects of immigration. The tendency of immigrants to concentrate in American cities gives rise to a number of serious social problems. Urban congestion is unqualifiedly bad. It is difficult or impossible for immigrants living in crowded quarters to maintain proper health standards nor does overcrowding conduce to healthy morals. The foreign boron do not show an unusual tendency toward crime which is remarkable when we consider the immigrants ignorance of our laws as well as the ease with which unscrupulous persons exploit him. On the other hand the children of the foreign boron often show a strong tendency towards crime and vice. A fact which is attributed to the bad social conditions surrounding their homes. The percentage of dependency among immigrants is rather high. This is not surprising however for many immigrants must go through an adjustment period in which lack of financial reserves is likely to force them to call upon the charitable agencies for temporary aid. Two twenty two difficulty of assimilating the new immigration. Those who made up the old immigration assimilated rapidly. They were relatively like the native stock in manners and customs. The volume of immigration was relatively small and the newcomers spread out into frontier communities where habitual contact with natives was unavoidable. Those who make up the new immigration have assimilated less rapidly. They are relatively unlike native stock in language, race and customs. The volume of immigration is very great and rather than being uniformly distributed the new immigrants tend to concentrate in cities where they are often little subject to contact with natives. Members of foreign colonies not only tend to remain ignorant of American life but unfamiliarity with self-government encourages their exploitation by political bosses. We are committed by the most careful students that the lack of proper civic ideals among unassimilated foreigners in American cities is a large element in the corruption of our municipal governments. Two twenty three restrictive legislation exclusive control of immigration is vested in the federal government. During the Civil War Congress actually encouraged immigration but since 1882 our policy has been one of restriction. In the latter year the first general immigration act was passed though considerable legislation on the subject was already on the statute books. Supplementary laws were enacted from time to time. The most important piece of legislation since 1900 being the immigration act of 1917. A brief summary of this and previous acts will serve to show the nature and extent of federal control over immigration. The chief aim of our immigration laws has been so to restrict immigration as to protect us against undesirable persons. In the interest of health persons afflicted with contagious diseases such as tuberculosis and trachoma a virulent eye disease are excluded. Certain persons whose character is clearly immoral are excluded. Polygamists are excluded. The act of 1917 excludes anarchists and likewise bars from our shores all criminals except those who have committed political offenses not recognized by the United States. In order to reduce unnecessary tax burdens as well as to safeguard community health we also exclude insane persons, idiots epileptics, beggars and other persons likely to become public charges. Contract laborers are specifically excluded. The act of 1917 using the term contract labor to include anyone induced assisted, encouraged or solicited to come to this country by any kind of promise or agreement expressed or implied true or false to find employment. Persons over 16 years of age are excluded from the United States if they cannot read English or some other language. But note certain near relatives of admissible aliens, purely political offenders and persons seeking refuge from religious persecution are exempted from this literacy test however. The bars against Asiatics call for a special word. 224. Asiatic Immigration By Asiatic immigration is here meant Chinese and Japanese immigration. Immigrants from other parts of Asia being relatively unimportant. The discovery of gold in California in 1849 caused a large number of Chinese Coolies to migrate to this country. This immigration grew steadily until 1882 in which year the entrance of Chinese laborers into the United States was forbidden. Our exclusion policy has been repeatedly reaffirmed as the result of which there are today fewer than 70,000 Chinese in this country. The majority of these are found on the Pacific Coast, engaged as small tradesmen, truck farmers or personal servants. Japanese immigration to this country did not become noticeable until about 1900. After that date, however, the volume of Japanese immigration so alarmed the Pacific Coast states that a Japanese exclusion policy was formulated as early as 1907. At present the only classes of Japanese that are allowed to reside in this country permanently are former residents parents, wives or children of residents settled agriculturalists, the latter being Japanese already in possession of land here. There are at present fewer than 120,000 Japanese in this country. Most of them are found on the Pacific Coast, engaged in occupations similar to those of the Chinese in the same area. Footnote, Chinese and Japanese students desiring to study in this country are allowed to enter the United States by special arrangement. Those most familiar with the situation are practically unanimous in declaring for the continued exclusion of Chinese and Japanese immigrants. In the case of both races the standard of living is so much lower than that of Native Americans that open competition between the newly arrived Asiatic and the Native American would result in the latter being driven from the labor market. The most important social reason for the exclusion of these two races is that the differences of race and religion existing between Asiatics and Native Americans render assimilation of the Chinese and Japanese extremely difficult if not impossible. 225. The future of immigration A half century ago the belief was current that an immigration policy was unnecessary since the sources of immigration would eventually dry up. The sources of the old immigration have dried up somewhat but new sources have been opened up in southern and southeastern Europe. Immigration is a pressing social problem and it is likely that it will be even more pressing in the future. The American frontier has disappeared and our boundaries are fixed. Urbanization is proceeding at a rapid rate. Industry is becoming more complex. Public opinion is more insistent that such social problems as immigration shall be solved. 226. What shall be our attitude toward immigration? There is no good reason why immigration should be absolutely prohibited. On the other hand the most public spirited students of the question believe that the careful restriction of immigration is imperative. Clearly it is our duty to accept only such immigrants as show promise of becoming capable and efficient American citizens. It is also clearly our duty to accept even this type of immigrant only in such numbers as we can conveniently assimilate. We must not be selfish with America but we should not be misled by the statement that anyone in Europe has a right to make his home in this country. Those who come to this country are personally benefited no doubt but unrestricted immigration may lower the tone of American life and prematurely injure our social and political institutions. America is for the present generation but is also for posterity. The millions of unborn have as much right to be considered as have the millions now clamoring at our gates. For this reason the right of an individual to migrate to America must be interpreted in the light of what he will mean to the future of this country. 227. Helping the immigrant in his new home. The readjustment, assimilation or Americanization of the immigrant is a problem of vital importance. The term Americanization is variously interpreted and must be used with care. Americanization ought not to force the immigrant to give up his native tongue or his old country customs. It ought to be a mutually helpful process whereby Native Americans would help the immigrant in adjusting himself to his new environment. While in turn the immigrant would be permitted and encouraged to make his own contribution to American life. Since the immigrant has little or no opportunity to contribute to American life, until he has become adjusted to his new home, it follows that the most fundamental part of an Americanization program is one of helping the immigrant solve his problems. In carrying out this part of the Americanization program, it is essential that the newly arrived alien be protected against unscrupulous persons who seek to exploit him. Adequate laws ought to be supplemented by the work of immigrant aid societies and other private organizations whose duty it would be to protect immigrants against dishonest boarding houses, swindlers, unreliable banks and other forms of imposition. Friendly help of this type will do much toward encouraging and inspiring the alien in his new life. Improvement in the immigrant's economic status is an important part of an Americanization program. Not only does the undue concentration of immigrants in cities spell ill health in a great temptation to crime and vice, but immigrant laborers sometimes secure lower wages in cities than they would receive in the more sparsely settled parts of the country. Of considerable interest, therefore, is the recent development of plans for redistributing immigrants into the rural and sparsely populated districts. Since 1907, the Division of Information in the Bureau of Labor Statistics has done valuable work in finding employment for immigrants in rural districts. Much remains to be done, however. The school, of course, is an important agent of Americanization. Whether or not the immigrant retains his old country language, he ought to learn to speak, read and write English. The school is likewise an important means of instructing the newcomers and their children in the essentials of American history and government. Where the school is being used as a real community center, the institution becomes truly a method of introducing the foreign born to the everyday activities of American life. The increasing emphasis upon the racial traits of different immigrant groups, with a view to encouraging unique contributions to the culture of the community, deserves special notice. Americanization measures of the type touched upon in this section help to build the nation on a sound foundation, a friendly and intelligent cooperation. End of Chapter 20