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social wrongs and maladjustments spring directly from
the limitations of human nature, such as ignorance and
greed ; these would exist and be effective under any sys-
tem whatever. The evils which are specifically trace-
able to Capitalism, for example, oppression of labour,
unrighteous and unearned incomes, and the insufficient
distribution of productive property, can all be eliminated
through measures of social reform.

According to my opponent, however, social reform

1 "Principles of Economics," p. x; first edition.



SOCIAL EVILS AND REMEDIES 39

can afford only slight and temporary relief, and cannot
produce a "lasting or radical cure." The truth or un-
truth of this contention depends upon our definition of
terms and our standard of achievement. Measured by
any criterion taken from history and experience, the im-
provement in social conditions since the rise of the capi-
talist system is not "slight" ; judged by all the available
indications of our time, it is not "temporary." *

As to the future, every indication points to a great
acceleration of all movements for specific reforms. Such
will be the normal result of our increased knowledge of
social facts, forces, and possibilities, the awakening of
the social conscience, and the enlarged intelligence, de-
termination, and power of the less fortunate classes.
While I agree with my opponent neither as regards the
method nor the content of a "radical and lasting cure"
of our social evils, I believe that he is right in his state-
ment that our natural and technical resources are ade-
quate to provide all our people with abundant food,
clothing, and housing. I believe that we are moving,
slowly indeed, but steadily, toward this goal, and that
we shall reach it not by the futile way of Socialism, but
along the solid road of social reform.

In the light of past experience and present knowledge,
the direction of this road seems to be about as follows :

The three great economic defects of the existing sys-
tem are: insufficient remuneration of the majority of
wage-earners; excessive incomes obtained by a small
minority of capitalists; and the narrow distribution of
capital ownership.

1 See, for example, the historical review contained in Chapter XIII
of "Labor Problems," by Adams and Sumner.



40 SOCIALISM: PROMISE OR MENACE

For insufficient wages the essential and appropriate
remedy is a legal minimum wage which will prevent any
person from being compelled to work for less than the
equivalent of a decent livelihood, including adequate
protection against all the contingencies of existence.
While awaiting the realization of this condition, the State
must make legislative provision for insurance against
sickness, accident, unemployment, and old age, and for
decent housing of all whose wages are still inadequate.

Other necessary laws are those which will effect a
better adjustment between the supply of, and the demand
for labour, abolish improper forms and conditions of
female labour, prevent excessive hours of labour among all
classes of workers, make rational provision for the ad-
justment of industrial disputes, and establish a thorough
and universal system of industrial education. The
ends sought by all this legislation can and should be
promoted by an indefinite increase in the extent and
power of labour organizations.

Excessive incomes and profits can be prevented through
the abolition of special privilege and unregulated monop-
oly. All monopolistic concerns except those which ex-
perience will prove to be natural and necessary must be
absolutely destroyed. Such natural monopolies as rail-
roads, telegraphs, street railways, and municipal utilities
generally should be either owned and operated by the
appropriate public authority, or so regulated that their
owners will receive no more than the prevailing rate of
interest on the actual value of the property. If the
future should demonstrate that, even outside this field
of public utilities, there are certain commodities which
can be most economically produced under the control



SOCIAL EVILS AND REMEDIES 41

of a monopolistic concern, the State should either fix
the maximum prices at which these goods can be sold,
or become to some extent a competitor in their produc-
tion. A private unregulated monopoly is socially in-
tolerable.

Taxes should be gradually removed from production
and from the necessaries of life, and placed upon land,
incomes, and inheritances. If a considerable part of
the future increases of land values were appropriated
through taxation, land would become easier of access
to the landless, and unearned incomes would receive a
salutary check. As a result of the foregoing measures,
capital would be automatically restricted to the prevail-
ing or competitive rate of interest in all cases except
where the capitalist was able to secure more through
exceptional personal efficiency. In every instance,
therefore, the returns to the capitalist would not exceed
a fair and necessary payment for his social services.

The narrow distribution of capital ownership is more
fundamental than the other two evils, because it threat-
ens the stability of the whole system. That the majority
of the wage-earners should, in a country as rich as
America, possess no income-bearing property, have no
ownership in the means of production, is a gross anomaly.
It is not normal, and it cannot be permanent. No
nation can endure as a nation predominantly of hired
men. Until the majority of the wage-earners become
owners, at least in part, of the tools with which they
work, the system of private capital will remain, in Hilaire-
Belloc's phrase, "essentially unstable."

The condition in which only a minority of the em-
ployees participate in the ownership of the business that



42 SOCIALISM: PROMISE OR MENACE

employs them, and which puts the responsible direction
of industry into the hands of a small number of very
powerful persons, is a pathological condition. It already
threatens the life of the present system.

To quote the historian Brooks Adams :

"The capitalistic domination of society, which has
prevailed for rather more than two generations, has
broken down, and men of the capitalist type have ap-
parently the alternative before them of adapting them-
selves to a new environment, or of being eliminated, as
every obsolete type has always been eliminated." l

One of the most important steps in this process of ad-
justment will be the distribution of a large measure of
capital ownership among the workers. This end can be
attained in a great variety of ways, but the two main
types must be copartnership and cooperative societies.
The change will necessarily come slowly, but such has
been the history of all fundamental and enduring im-
provements.

As I have already observed, a considerable part of our
social evils are not economic, but intellectual and moral.
For these the remedies must evidently be provided
through the mental and ethical education of the indi-
vidual, and the sources of such education are the press,
the school, and the church. The facts and relations
of industrial life must become better known, the moral
law must be more specifically applied to all phases of
economic activity, and the social and individual con-
science must be educated and quickened.

1 The Atlantic Monthly, April, 1913, p."43S-



SOCIAL EVILS AND REMEDIES 43

III. REJOINDER

BY MR. HILLQUIT

While I cheerfully admit that some of the reform
measures proposed by Dr. Ryan are entirely sound and
highly desirable, I cannot accept his programme as an
adequate remedy for the existing economic evils. I con-
sider it, furthermore, quite unwarranted to advance any
proposal of minor and immediate social reforms in oppo-
sition to the ultimate Socialist programme.

Socialism is not opposed to genuine social reform.
Many of the measures advocated by Dr. Ryan as a sub-
stitute for Socialism are contained in the Socialist plat-
form, and some of them have been first formulated by
Socialists. The Socialists advocate and support every
measure calculated to better the lot of the worker or to
curb excessive wealth or profits ; but they realize that all
such reforms are, and in the nature of things must be,
mere makeshifts, useful but temporary. They consider
them in the nature of palliative remedies administered
to the patient to soothe his pains and to strengthen his
system pending the more radical treatment of the basic
disease, but entirely powerless to effect a complete cure.

Let us imagine that the programme of reforms advanced
by Dr. Ryan has been fully realized. A minimum wage
has been established by law, the length of the workday
has been limited to a reasonable number of hours, and
proper provisions have been made for the relief of workers
in case of sickness, accident, unemployment, and old
age. Is it to be assumed that after the enactment of
such reforms the workers would rest forever passive and



44 SOCIALISM: PROMISE OR MENACE

contented ; that they would abandon all efforts toward
further betterment, and that the wheels of social progress
would come to a sudden stop ?

By no means. The capitalist would still make profits
from the labour of the worker, the worker would still
claim a larger share of the product. This movement can-
not logically stop until such time as complete social jus-
tice shall be established by returning to the working pop-
ulation as a whole the full product of their labour and
abolishing all "workless" incomes, except in the shape
of public support to the weak and disabled; in other
words, until Socialism shall be realized.

Thus Dr. Ryan and I start from the same premises,
the realization of the need of radical social changes.
The difference between us is the usual difference between
the Socialist and the non-Socialist reformer. The former
endeavours to follow the path of progress to the end,
while the latter remains faltering and inconclusive,
trying to accomplish the impossible task of establishing
a terminal at an indefinite point in the middle of the
road.

IV. SURREJOINDER

BY DR. RYAN

My opponent contends that many of the proposals
set forth in my main paper are contained in the Socialist
platform, and that some of them were first formulated
by Socialists. The latter statement appears to me to
be very doubtful. Of late years the Socialist party
has been fairly enterprising in adopting among its
"immediate demands" reform measures which have



SOCIAL EVILS AND REMEDIES 45

attained a certain degree of popularity, and claiming
them as its own.

For example, the legal minimum wage has been advo-
cated and agitated by different groups of social reformers
for several years, but it made its first appearance in an
American Socialist platform in 1912. When it was
embodied in the Progressive platform about a month
later, some of the leading Socialists claimed that Roose-
velt had stolen it from them !

As a matter of fact, the German Socialists in the early
years of their parliamentary activity opposed some very
necessary social reforms; Socialists everywhere subor-
dinate such measures to party welfare and tactics.; and
no Socialist platform, so far as I am aware, contains a
single reform proposal which was not borrowed from
non-Socialist sources. From the Socialist viewpoint,
however, all these and similar policies are consistent and
logical.

The reformative principles and measures which have
been sketched in my preceding article are adapted to
meet specifically all the main abuses of our present in-
dustrial system. In greater or less degree they have
all withstood the test of experience. They can be made
effective as rapidly as is consistent with the limitations
of human nature, the lessons of history, and justice to
all classes of the community.

When their full results have been attained; when a
decent minimum of working and living conditions has
been secured to all persons ; when the great majority of
all the workers possess some share in the means of pro-
duction ; when economic opportunity has become equi-
tably distributed, through industrial education and the



46 SOCIALISM: PROMISE OR MENACE

abolition of private monopoly ; when no capital is able
to get more than the competitive or ordinary rate of in-
terest; when unusual profits are possible only to those
directors of industry who in active competition with
their fellows can produce unusually large amounts of
product ; and when the working-class is in a position to
secure an ever increasing share of the national product,
up to the limit of industrial resources and social well-
being then there will be nothing left of the social
question except that healthy measure of discontent
which is a condition of all individual development and
social progress.

My opponent attributes to me the thought that, when
the reforms that I have advocated had been realized,
social progress would stop and the workers become
"passive and contented." But have I not explicitly re-
pudiated that supposition in the statement that the
workers would be in a position to go farther, and obtain
an indefinitely increasing share of the national product ?
How much farther they would be enabled to progress,
I cannot tell. I am not a prophet. I can only indicate
the next important step which seems to be continuous
with the past, and to be authorized by experience. Pos-
sibly the process will go on until interest as we now have
it will be for the most part abolished. I hope so, but I
believe that this result will be reached not through So-
cialism, but through the direct ownership of the greater
part of the instruments of production by the workers
themselves by such methods as copartnership schemes
and cooperative societies.

And I submit that this will be more democratic, more
conducive to individual initiative, freedom, and oppor-



SOCIAL EVILS AND REMEDIES 47

tunity, and in a hundred ways more desirable than a
society in which the State has a monopoly of all social
power, and in which the individual can act only through
the State.

Mr. Hillquit has, therefore, misunderstood my Posi-
tion when he says that I would establish a terminar
social progress "at an indefinite point in the middle ol
the road." I do not attempt to fix a terminal anywhere,
for the simple reason that the facts do not warrant such
an attempt.

My opponent does set a limit to industrial evolution,
namely, the Socialist State. In so doing he abandons
the position of the evolutionist for that of the Utopian.
I am the more consistent evolutionist because I do not
attempt to forecast any final or fixed industrial system.
The only Utopia of which I know anything is on the other
side of the grave.

My opponent contends that Socialism is the logical
and necessary outcome and terminus of industrial prog-
ress. I do not see either the necessity or the logic;
for I am unable to accept the a priori social philosophy
which underlies Mr. Hillquit's social faith and hope.

We shall see more of this in a later chapter. In the
meantime I would observe that this belief in Socialism
as the industrial finality is another proof that the Social-
ist is not more but less scientific than the social reformer.



CHAPTER III

THE SOCIALIST INDUSTRIAL STATE
I. IMMORAL AND IMPRACTICABLE

BY JOHN A. RYAN, D.D.

THE most important feature of the many-sided thing
that we call Socialism is its proposed reorganization
of industrial society. This is the goal of Socialist phi-
losophy, Socialist action, Socialist hopes. Is it a desir-
able goal ?

It would replace the present system of private owner-
ship, operation, and distribution by collective ownership
and operation of the means of production, and social
distribution of the product of industry. Let us see in
some detail what this involves, as applied to land and to
capital.

"The nearest approach to a volte-face which Socialists
have made since Marx has been in relation to agrarian-
ism. Marx thought that the advantage of concentrating
capital would be felt in agriculture as in other industries,
but, in spite of temporary confirmation of this view by
the mammoth farms which sprang up in North America,
it now appears very doubtful. . . . Recognition of this
has led reformists to substitute a policy of actively
assisting the peasants for the orthodox policy of leaving
them to succumb to capitalism. Their formula is:

48



THE SOCIALIST INDUSTRIAL STATE 49

'Collectivize credit, transport, exchange, and all sub-
sidiary manufacture, but individualize culture.'" l

By a referendum vote of two to one, the Socialist party
in the United States adopted in 1909 the following dec-
laration :

"... The Socialist party aims to prevent land from
being used for the purpose of exploitation and specula-
tion. It demands the collective possession, control,
or management of the land to whatever extent may be
necessary to attain that end. It is not opposed to the
occupation and possession of land by those using it in a
bona-fide manner without exploitation. " 2

Exploitation, says Walling, m^ansr^the employment
of labourers, and this is the^entral point in the Socialist
policy. " 3 Accordingly, the Socialists of the United
States would permit individual occupation and cultiva-
tion of land by persons who employed no labourers.
Whether they would extend the same privilege to farmers
who hired one or two assistants is not certain. Nor
is it of great importance for our discussion.

According to John Spargo, only those instruments
which can be owned and operated more efficiently by
the State than by private persons or corporations will
need to come into the Socialist industrial organization.
During the transition to Socialism any private enterprise
that can survive in competition with the collectivist
concern in the same field may remain undisturbed. 4

Were this the ideal and method of "revolution"

1 Ensor, "Modern Socialism," p. xxxi.

2 Cited by Walling, "Socialism As It Is," p. 316.
8 Idem, p. 311.

4 Spargo and Arner, "Essentials of Socialism," pp. 242-270; New
York, 1912.

E



50 SOCIALISM: PROMISE OR MENACE

accepted by the majority of authoritative Socialists, we
should not be much concerned about the purely eco-
nomic theories and projects of Socialism. We should be
comforted by the conviction that, outside the field of
natural monopolies, the great majority of industries
would be more capably conducted by private than by
collective agencies, and that all attempts to socialize
them by the method of competition would inevitably
fail. The average upholder of the system of private
capital fears not fair competition with State industries,
but forcible expropriation.

However, the great majority of Socialists would prob-
ably refuse to sanction this method.

And yet the dominant Socialist thought of the day
does seem to admit the possibility of a considerable
element of private capital during at least the earlier
period of the new order. The oft-quoted passage from
Kautsky shows how far even an "orthodox" member
of the party is willing to go in this direction :

"Nevertheless, it may be granted that the small
industry will have a definite position in the future in
many branches of industry that produce directly for
human consumption; for the machines manufacture
essentially only products in bulk, while many purchasers
desire that their personal taste shall be considered. . . .
The most manifold property in the means of production
national, municipal, cooperatives of consumption
and production, and private can exist beside each
other in a Socialist society; the most diverse forms of
organization bureaucratic, trades-union, cooperative,
and individual ; the most diverse forms of remuneration
of labour fixed wages, time wages, piece wages, par-



THE SOCIALIST INDUSTRIAL STATE $1

ticipation in the economies in raw material, machinery,
etc., participation in the results of intensive labour;
the most diverse forms of circulation of products, like
contract by purchase from the warehouses of the State,
from municipalities, from cooperatives of production,
from the producers themselves, etc. The same mani-
fold character of economic mechanism that exists to-day
is possible in a Socialist society. . . ." l

Substantially the same views are expressed by Mr.
Hillquit 2 and Mr. Walling. 3 As in the matter of land,
however, so here, it is not clear whether these writers,
or representative Socialists generaUyy-^would permit
the private producer under Socialism to employ a small
number say, one, two, or three of wage-earners.

In view of the foregoing paragraphs, those objections
against Socialism which are based on the assumption
that the scheme would involve collective ownership of
all, even the smallest instruments of production, have
ceased to be pertinent or effective. Antiquated likewise
are the objections directed against complete confiscation
of all private capital ; collective ownership of all homes ;
compulsory assignment of occupations; equality of re-
muneration; and the use of labour-checks instead of
money. So far as I can learn, none of these proposals
is now regarded by authoritative Socialists as essential.

Other criticisms of doubtful validity assume the im-
possibility of forecasting the social demand for commodi-
ties and of managing industries of national magnitude.
In some fashion both of these difficulties have been met

1 "The Social Revolution," pp. 164, 166.

1 "Socialism in Theory and Practice," p. 113.

9 Op. cit.,p. 432.



52 SOCIALISM: PROMISE OR MENACE

by the great trusts, such as the Standard Oil Company
and the United States Steel Corporation.

I shall, therefore, criticise only those features of the So-
cialist industrial programme which seem to be inherently
necessary, or which are so regarded by the dominant
thought of the Socialist movement to-day. All the ob-
jections that I shall urge may be reduced to two proposi-
tions, one of which is formally ethical, and the other of
which, though immediately concerned with problems
of expediency, is ethical fundamentally. The former
has to do with the manner of abolishing Capitalism;
the latter with the injury that would be done to human
welfare and human rights by an attempt to carry out the
industrial proposals of Socialism.

According to Mr. Hillquit, the majority of Socialist
writers now favour compensation of the displaced capi-
talists, instead of outright and universal confiscation. 1
But he is careful to state that they regard the question
not as one of justice, but only of expediency. Mr.
Walling tells us that Socialists would not interfere with
savings-bank accounts, life-insurance policies on a rea-
sonable scale, nor very small pieces of other property,
but that they regard as a matter of pure expediency the
compensation of the wealthier classes. 2 His understand-
ing of the Socialist position with reference to the latter
owners is that they would get at most only modest an-
nuities, which would cease with the lives of their then
living descendants.

If it were systematically carried out, the rule of paying
for the capital taken over by the State only when and to

1 Op. cit., pp. 103, 104. * Op. tit., p. 429.



THE SOCIALIST INDUSTRIAL STATE 53

the extent that this policy were found to be expedient,
would undoubtedly mean that many of the small and
weak owners would fare as badly as the rich proprietors.
That the principle of expediency would govern the entire
process of expropriation, is clearly seen from the refusal
of Socialists to commit themselves or the party to a defi-
nite programme of compensation, and from their practi-
cally unanimous contention that only the future can de-
termine whether and how much compensation shall be
allowed.

In principle, then, the Socialists deny that the capi-
talists have any moral right to compensation ; in prac-
tice they would carry out this principle to the extent
dictated by expediency.

This principle and this proposed policy are undoubtedly
immoral. To ascertain the ethical basis of this con-
clusion let us examine briefly the four main sources of
capital.

One part is the fruit of wages and salaries, and of
business gains or profits (as distinct from interest) re-
sulting from exceptional directive and inventive ability
in conditions of full and fair competition. Inasmuch as
this capital is specifically traceable to labour, whether
physical or mental, it has been honestly earned, and ought
to be paid for.

A second part of existing capital originated in natural
resources and opportunities, such as lands, mines, forests,


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