My Life and Work
name of "banker" and oust them once for all from the place of influence
which that name gives them, banking would be restored and established as
the public service it ought to be, and the iniquities of the present
monetary system and financial devices would be lifted from the shoulders
of the people.
There is an "if" here, of course. But it is not insurmountable. Affairs
are coming to a jam as it is, and if those who possess technical
facility do not engage to remedy the case, those who lack that facility
may attempt it. Nothing is more foolish than for any class to assume
that progress is an attack upon it. Progress is only a call made upon it
to lend its experience for the general advancement. It is only those who
are unwise who will attempt to obstruct progress and thereby become its
victims. All of us are here together, all of us must go forward
together; it is perfectly silly for any man or class to take umbrage at
the stirring of progress. If financiers feel that progress is only the
restlessness of weak-minded persons, if they regard all suggestions of
betterment as a personal slap, then they are taking the part which
proves more than anything else could their unfitness to continue in
their leadership.
If the present faulty system is more profitable to a financier than a
more perfect system would be, and if that financier values his few
remaining years of personal profits more highly than he would value the
honour of making a contribution to the life of the world by helping to
erect a better system, then there is no way of preventing a clash of
interests. But it is fair to say to the selfish financial interests
that, if their fight is waged to perpetuate a system just because it
profits them, then their fight is already lost. Why should finance fear?
The world will still be here. Men will do business with one another.
There will be money and there will be need of masters of the mechanism
of money. Nothing is going to depart but the knots and tangles. There
will be some readjustments, of course. Banks will no longer be the
masters of industry. They will be the servants of industry. Business
will control money instead of money controlling business. The ruinous
interest system will be greatly modified. Banking will not be a risk,
but a service. Banks will begin to do much more for the people than they
do now, and instead of being the most expensive businesses in the world
to manage, and the most highly profitable in the matter of dividends,
they will become less costly, and the profits of their operation will go
to the community which they serve.
Two facts of the old order are fundamental. First: that within the
nation itself the tendency of financial control is toward its largest
centralized banking institutions--either a government bank or a closely
allied group of private financiers. There is always in every nation a
definite control of credit by private or semi-public interests. Second:
in the world as a whole the same centralizing tendency is operative. An
American credit is under control of New York interests, as before the
war world credit was controlled in London--the British pound sterling
was the standard of exchange for the world's trade.
Two methods of reform are open to us, one beginning at the bottom and
one beginning at the top. The latter is the more orderly way, the former
is being tried in Russia. If our reform should begin at the top it will
require a social vision and an altruistic fervour of a sincerity and
intensity which is wholly inconsistent with selfish shrewdness.
The wealth of the world neither consists in nor is adequately
represented by the money of the world. Gold itself is not a valuable
commodity. It is no more wealth than hat checks are hats. But it can be
so manipulated, as the sign of wealth, as to give its owners or
controllers the whip-hand over the credit which producers of real wealth
require. Dealing in money, the commodity of exchange, is a very
lucrative business. When money itself becomes an article of commerce to
be bought and sold before real wealth can be moved or exchanged, the
usurers and speculators are thereby permitted to lay a tax on
production. The hold which controllers of money are able to maintain on
productive forces is seen to be more powerful when it is remembered
that, although money is supposed to represent the real wealth of the
world, there is always much more wealth than there is money, and real
wealth is often compelled to wait upon money, thus leading to that most
paradoxical situation--a world filled with wealth but suffering want.
These facts are not merely fiscal, to be cast into figures and left
there. They are instinct with human destiny and they bleed. The poverty
of the world is seldom caused by lack of goods but by a "money
stringency." Commercial competition between nations, which leads to
international rivalry and ill-will, which in their turn breed wars--
these are some of the human significations of these facts. Thus poverty
and war, two great preventable evils, grow on a single stem.
Let us see if a beginning toward a better method cannot be made.
CHAPTER XIII
WHY BE POOR?
Poverty springs from a number of sources, the more important of which
are controllable. So does special privilege. I think it is entirely
feasible to abolish both poverty and special privilege--and there can be
no question but that their abolition is desirable. Both are unnatural,
but it is work, not law, to which we must look for results.
By poverty I mean the lack of reasonably sufficient food, housing, and
clothing for an individual or a family. There will have to be
differences in the grades of sustenance. Men are not equal in mentality
or in physique. Any plan which starts with the assumption that men are
or ought to be equal is unnatural and therefore unworkable. There can be
no feasible or desirable process of leveling down. Such a course only
promotes poverty by making it universal instead of exceptional. Forcing
the efficient producer to become inefficient does not make the
inefficient producer more efficient. Poverty can be done away with only
by plenty, and we have now gone far enough along in the science of
production to be able to see, as a natural development, the day when
production and distribution will be so scientific that all may have
according to ability and industry.
The extreme Socialists went wide of the mark in their reasoning that
industry would inevitably crush the worker. Modern industry is gradually
lifting the worker and the world. We only need to know more about
planning and methods. The best results can and will be brought about by
individual initiative and ingenuity--by intelligent individual
leadership. The government, because it is essentially negative, cannot
give positive aid to any really constructive programme. It can give
negative aid--by removing obstructions to progress and by ceasing to be
a burden upon the community.
The underlying causes of poverty, as I can see them, are essentially due
to the bad adjustment between production and distribution, in both
industry and agriculture--between the source of power and its
application. The wastes due to lack of adjustment are stupendous. All of
these wastes must fall before intelligent leadership consecrated to
service. So long as leadership thinks more of money than it does of
service, the wastes will continue. Waste is prevented by far-sighted not
by short-sighted men. Short-sighted men think first of money. They
cannot see waste. They think of service as altruistic instead of as the
most practical thing in the world. They cannot get far enough away from
the little things to see the big things--to see the biggest thing of
all, which is that opportunist production from a purely money standpoint
is the least profitable.
Service can be based upon altruism, but that sort of service is not
usually the best. The sentimental trips up the practical.
It is not that the industrial enterprises are unable fairly to
distribute a share of the wealth which they create. It is simply that
the waste is so great that there is not a sufficient share for everyone
engaged, notwithstanding the fact that the product is usually sold at so
high a price as to restrict its fullest consumption.
Take some of the wastes. Take the wastes of power. The Mississippi
Valley is without coal. Through its centre pour many millions of
potential horsepower--the Mississippi River. But if the people by its
banks want power or heat they buy coal that has been hauled hundreds of
miles and consequently has to be sold at far above its worth as heat or
power. Or if they cannot afford to buy this expensive coal, they go out
and cut down trees, thereby depriving themselves of one of the great
conservers of water power. Until recently they never thought of the
power at hand which, at next to nothing beyond the initial cost, could
heat, light, cook, and work for the huge population which that valley is
destined to support.
The cure of poverty is not in personal economy but in better production.
The "thrift" and "economy" ideas have been overworked. The word
"economy" represents a fear. The great and tragic fact of waste is
impressed on a mind by some circumstance, usually of a most
materialistic kind. There comes a violent reaction against
extravagance--the mind catches hold of the idea of "economy." But it
only flies from a greater to a lesser evil; it does not make the full
journey from error to truth.
Economy is the rule of half-alive minds. There can be no doubt that it
is better than waste; neither can there be any doubt that it is not as
good as use. People who pride themselves on their economy take it as a
virtue. But what is more pitiable than a poor, pinched mind spending the
rich days and years clutching a few bits of metal? What can be fine
about paring the necessities of life to the very quick? We all know
"economical people" who seem to be niggardly even about the amount of
air they breathe and the amount of appreciation they will allow
themselves to give to anything. They shrivel--body and soul. Economy is
waste: it is waste of the juices of life, the sap of living. For there
are two kinds of waste--that of the prodigal who throws his substance
away in riotous living, and that of the sluggard who allows his
substance to rot from non-use. The rigid economizer is in danger of
being classed with the sluggard. Extravagance is usually a reaction from
suppression of expenditure. Economy is likely to be a reaction from
extravagance.
Everything was given us to use. There is no evil from which we suffer
that did not come about through misuse. The worst sin we can commit
against the things of our common life is to misuse them. "Misuse" is the
wider term. We like to say "waste," but waste is only one phase of
misuse. All waste is misuse; all misuse is waste.
It is possible even to overemphasize the saving habit. It is proper and
desirable that everyone have a margin; it is really wasteful not to have
one--if you can have one. But it can be overdone. We teach children to
save their money. As an attempt to counteract thoughtless and selfish
expenditure, that has a value. But it is not positive; it does not lead
the child out into the safe and useful avenues of self-expression or
self-expenditure. To teach a child to invest and use is better than to
teach him to save. Most men who are laboriously saving a few dollars
would do better to invest those few dollars--first in themselves, and
then in some useful work. Eventually they would have more to save. Young
men ought to invest rather than save. They ought to invest in themselves
to increase creative value; after they have taken themselves to the peak