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CHALLENGE
OF WASTE



by
STUART CHASE




LEAGUE FOR INDUSTRIAL DEMOCRACY

70 Fifth Ave., New York



LEAGUE FOR INDUSTRIAL DEMOCRACY

70 Fifth Ave., New York City



Object

"EDUCATION FOR A NEW SOCIAL ORDER BASED
ON PRODUCTION FOR USE AND NOT FOR PROFIT"



OFFICERS:

(1921-1922)
President, Robert Morss Lovett Chairman
V ice-Presidents,



Chas. P. Steinmetz
Evans Clark
Florence Kelley
Arthur Gleason



Executive Commit-
tee, Norman Thomas

Treasurer, Stuart Chase

Secreta7-i/ and Director of Re-
search, Harry W. Laidler



Roser N. Baldwin
Anita C. BIocIc
Lonis B. Bondin
Albert De Silver
Robert W. Dunn
Ijonlse Adams Floyd



execi'tivb: committee

I.ewi8 Gannett
Felix Grendon
Jpssie Wallare Hnghan
Nicholas Kelley
Cedric Long
WilUnm P. Montaene



Mary R. Sanford
Helen Phelps Stokes
Arthur Warner
Sarel Zlmand
Bertha Poole Weyl



Costa Mesa, Cal.
Fanny Bixby Spencer

Sausalito, Cal.
George P. West

Washington, D. C.
Frederick C Howe
William H, .lolmston
Helen Sumner Woodbury

Atlanta, Oa.
Mary Kaoul Millis

Chicago. III.
Paul H. Douglas
Catherine Liillie

Indianapolis, Ind
Wiiliani P. Hapgood

Baltimore, Md.
Rroadus Mit^'Jiell

Amherst, Mass.
Emma S. Dakin

Boston, Mass.
Elizabeth G. Evans
Helen H. Hodge
James Mackaye
Charles Zeublin

Cambridge, Mass.
H. W. L. Dana
Arthur Ilolcombe



NATIONAI. COUNCIL

Wellesley. Mass.
Vida D. Scudder

Kalamazoo, Mich.

A. M. Twld

St. Paul, Minn.
Sarah T. Colvin
Arthur 1* Sueur

Orange, N. J.
William E. Bohn

Princeton. N. J.
James W. Alexander

New York City
Katharine -Anthony
Norman Hapgood
Morris Hillnuit
Prince Hopkins
Winthrop D. Liane
•Indah L. Mngnes
Darwin J. Meserole
William C. Pickens
George Soule
Caro Lloyd Strobeil
Alexander Trachtenberg
Thorstein Veblen

B. C. Vladeck
Agnes D. Warbasse



Katonah, N. Y.
A. J. Mnste

Rochester, N. Y.
Paul Blanshard
N. I. Stone

Cleveland, O.
Alice P. Gannett
David B. Williams

Columbus, O.
Edwin L. Clarke

Clearfield, Pa.
John Brophy

Philadelphia, Pa.
Franklin Edgerton
Richard W. Hogue
Alfred Baker Lewis

jieading, Pa.
James H. Manrer

Columbia, 8. C.
Josiah Morse

Madison, Wis.
Perc.v M. Dawson



The

CHALLENGE
OF W^ASTE



By STUART CHASE

Consulting Accountant, Labor Bureau, Inc.

Formerly Senior Accountant, Federal
Trade Commision



Copyright, 1922, by

LEAGUE FOR INDUSTRIAL DEMOCRACY

70 Fifth Ave., New York
■»

No. 2 SPECIAL RATES FOR BUNDLE ORDERS 1922



INTRODUCTION

The League for Industrial Democracy presents to the public
its second pamphlet on social problems. The first in the series,
"Irrepressible America," by Dr. Scott Nearing, analyzes the
social philosophy of the American people in these years follow-
ing the world war and points out the educational task ahead.

The present pamphlet deals with the wastes involved in
producing and distributing services and goods under the system
of production for profit. These wastes, as the author points
out, are becoming ever more widely acknowledged and the
problem at issue today is no longer their existence but the
extent to which they are inherent in capitalist production.

The author has served as accountant and partner of the
firm of Harvey S. Chase Company, one of the largest firms
of public accountants in New England; as senior accountant
of the Federal Trade Commission, and as head of the accounting
section of the Government's investigation into the meat pack-
ing and the milk industries. He is at present consulting ac-
countant for the Labor Bureau, Inc. In these capacities he
has had unusual opportunities to observe at first hand the con-
duct of the nation's business.

Mr. Chase has not been content in this pamphlet to tabulate
reported wastes in industry, but has sought to obtain "an
aeroplane view" of the whole industrial system, and to raise a
number of fundamental questions.

What constitutes industrial waste? Why is it important to
the millions of people in America? What proportion of human
energy is expended today in the production of "illth," and
what in the production of wealth? How does industry utilize
its present equipment of men and machinery? Given adequate
incentives, can an industrial system, scientifically organized on
the basis of production for service, eliminate these wastes and
can such a system develop adequate incentives? These and
other problems he has attempted, in part at least, to answer.

The pamphlet makes no pretense at finality, for no final con-
clusions can be reached in regard to many phases of this
subject without years of painstaking investigation into each
important industry. Mr. Chase has, however, presented a series
of challenges which sooner or later must be met.

We take this opportunity to thank the author for his
contribution and, on Mr. Chase's and our behalf, to express our
appreciation to those members and friends of the League who
have helped in its preparation. The League plans in coming
pamphlets to deal with "Industrial Incentives" and several
other questions raised in this monograph.

HARRY W. LAIDLER,
Director of Research, L. I. D.



HC

■ 1063

THE CHALLENGE
OF WASTE

By Stuart Chase
_s

^ The wastefulness of the present industrial system has long

^ been subject to attack. Not only have opponents of the

' existing order drawn attention to its inefficiency, but business

y^ men themselves have from time , to time denounced certain

f leakages of the system as indefensible. Thus Mr, Hoover has

gathered together a group of engineers who have carefully

ro studied the operation of six industries — textiles, printing,

^ shoes, metal trades, men's clothing and the building trades —

publishing, as a result of their investigation, a remarkable

symposium on the preventible wastes in each'.

^ THE LESSON OF THE WAR

During the war, governments both here and abroad were
driven to a sharp realization of the extent of economic waste.
> The maintenance of "business as usual" made it impossible
^ to mobilize and equip a fighting force and at the same time
* to support a civilian population, "Business as usual" was,
^ therefore, forced to give way to a co-ordinated plan, crude,
but in certain respects very effective. The industrial re-
^ sources of the nation were surveyed — both as to raw mate-
^ rials and plant facilities — its productive possibilities meas-
Sl ured, and its major requirements calculated. This was done
hastily and often inaccurately, but it sufficed to bring about
a tremendous release of labor power and raw materials into
war industries and so-called "essential industries." The war
administration placed the transportation system on a national,
unified basis with competitive hauls eliminated. It shut off
capital from non-essential industries. It restricted the con-
sumption of luxuries, encouraged certain crops, rationed and
husbanded coal, reduced the output of excessive grades and
styles, and conserved necessary materials.

> Federated American Engineering Societies, Committee on the Elimination
of Waste (Hoover Engineers), Waste in Industry.



^



245893






As a result, the United States was able to support five
million of its most vigorous workers in productive idleness,
supply them with unlimited munitions of war, transport
great numbers of them overseas in American bottoms, and
still maintain the population at probably the highest average
standard of well-being ever enjoyed. In other words, with
perhaps a third of all industrial workers either in the army
or engaged in producing munitions of war of no consumable
value, the remaining two-thirds, by operating on a co-ordi-
nated plan, produced enough to supply the army, the muni-
tions workers and themselves with the necessities of life
on an unprecedented scale ! The wastes of productive effort
under the reign of normalcy were thus proved beyond all
gainsaying.

FUEL CONTROL

Take coal, for instance. Mr. Robert W. Bruere has given
us an excellent picture of how the war exposed waste in
this basic industry.^

"From the high central tower of the Fuel Administra-
tion the people of the United States for the first time
caught a fleeting glimpse of the coal industry as a whole
and of the relation it bears to national and international
industrial life. . . . When America entered the war,
she resembled, with respect to her primary source of
mechanical energy, a municipality dependent for its
water supply upon 11,000 separate wells, owned and
operated primarily in their individual interests by thou-
sands of enterprising individuals, with hundreds of
separate systems jostling in the highways that needed to
be kept clear for soldiers and guns ; its people bidding
against one another, offering fabulous prices for water,
yet parched with thirst. , . . With 11,000 coal mines
in operation, the engines of the nation were running cold
for lack of fuel."

Mr. Bruere should know, for he sat in that high central
tower. He goes on to tell how, for the period of the war,
the coal industry functioned as a co-operative public service.
The Fuel Administration went about its task precisely as
an engineer would tackle the job of converting 11,000 wells
into a modern system of water supply. It dealt with the

2 Bruere, The Coming of Coal.



coal fields as a single great reservoir. It worked out a budget
covering the needs of the essential industries and of the
domestic consumer. It made maps (and acted on them)
charting the coal-producing and coal-consuming territories,
'divided the nation into zones, eliminated cross-hauling and
thus "balanced the load" between the demands of consumers
and the capacity of producers. Where only 552,000,000 tons
of bituminous coal had been produced in 1917, the Fuel
Administration's budget for the year ending March, 1919,
called for 624.000,000 tons. By December 21, 1918, actual
shipments to tidewater were 9 per cent ahead of the budget !
The Great Lakes program called for 28,000,000 tons of
cargo coal; a total of 28,153,000 tons was supplied. "Such
results were possible only because of complete control of
shipments, and the full information on which to proceed.
It was an amazing and illuminating demonstration of the
fact that our greatest national resource could be administered
for the benelit of the whole nation. It was no longer a possi-
bility, the thing had been done."

Broadly speaking, however, the United States was only
an amateur in the matter of co-ordinated control, as was to
be expected from its late entrance into the war. Sir Leo
Chiozza-Money, the noted English statistician and economist,
has written an exhaustively documented accounf of how the
British Empire co-ordinated its industrial life as the one
method of avoiding defeat and humiliation. He constructs
a telling outline of a whole nation turning from the play-
things of stock exchanges, haggling of markets, and com-
petitive advertising, to the stark, underlying realities of pro-
ducing and delivering food, coal, clothing, ships and muni-
tions — on the principle that a straight line is the shortest
distance between two points.

War, as we shall see, is in itself the quintessence of waste,
but the war just passed has taught at least this one important
lesson: Given enough incentive, it is possible for human
intelligence to rTse tatkeJicighf of organising and controllvng
a vast industrial system to a perfectly tangible end. Though
the end was death and the vainglory of "national honor,"
men there were, and minds there were, big enough to seize
the whole industrial structure — groggy with profit-seeking —
and shake it and hammer it into a workable vehicle for

3 Chiozza Money, The Triumph of NationaUzation.



producing given things at given places in a given time. Yes,
the "thing has been done." And the importance of having
done it, from the standpoint of the conception of waste now
to be outhned, is indeed great.

WHAT IS WASTE?

In spite of the fact that industrial waste has long been a
matter of interest and speculation, it has never been sub-
jected to much critical analysis. It has for the most part
been developed as a patchwork of uncor related observations.
What has been particularly lacking has been the absence of
any reliable standard by which waste may be measured.

People tend to think of waste — when they think of it at all
— in two categories, garbage cans and Taylor systems.
They think of waste paper, refuse, sewage, odds and ends
generally. They think of the patriotic exertions of fellow
townsmen beseeching them to win the war by baling their
Sunday newspapers, or by saving their peachstones. The
Department of Commerce instituted a waste reclamation
service to promote just this sort of thing. And, of course,
waste of this nature is a real economic problem. There are
many interesting methods abroad, technical and otherwise,
for turning refuse normally thrown away into valuable prod-
ucts. But when all is said and done, this type of waste is
only a drop in the bucket from the standpoint of an aeroplane
view of the whole industrial system.

Business men think of waste as synonymous with "ineffi-
ciency," connoting in turn all the hue and cry of the past
ten years in pursuit of the goddess efficiency. How many
youths have knelt — their correspondence school books in
their hands — before this deity. Pep, efficiency, success — the
holy trinity.

But efficiency, thus pursued, is only another method of
increasing profit under the price system. It deals with
means, not ends. It provides methods, and often very
sound ones, for reducing costs, increasing output, and getting
to windward of one's competitors. But it is to be doubted if
business men would be interested in a universal installation
of efficiency methods resulting in lower industrial costs, but
unchanged profit levels. The widespread use of what Veb-
len calls "business-like sabotage" makes it perfectly evident



that efficiency from the social point of view is never contem-
plated for a moment. The captain of industry uses efficiency
devices if they promise to increase his profit. On the other
hand, he will strangulate an industry — cane sugar for in-
stance—if that offers a better chance of strengthening his
balance sheet. Efficiency is only one of the weapons in his
armory. It may be used for social or for anti-social ends.

Not in cost systems, adding machines or even discredited
methods of brick-laying, is the heart of the problem of waste
to be found, any more than in the garbage pail. An effici-
ency system can be introduced into a factory which manu-
factures poison gas or patent medicines. A sound theory of
waste, as we shall see, would refuse to recognize the necessity
of making poison gas or quack remedies at all.

No. The question of waste must be approached with fresh
eyes which see the economic process as a whole, which see
particularly the physical stuff of things under the meta-
physics of money and credit and price. The Fuel Admin-
istration from its high central tower did not cast a budget
in terms of money, but one in terms of tons of coal. Dollar
bills under a boiler never raised a pound of steam.

There is of course no department of life or industry in
which, from some more or less logical viewpoint, statistics
of waste could not be compiled — heart-rending statistics.
But with the shifting and changing of these viewpoints, all
hope of an authentic case against waste — and particularly
its quantitative measurement — tends to vanish. Thus the
vegetarian points out with unimpeachable accuracy that for
one unit of human food value found in beef, sixteen units
have been sacrificed in the corn which feeds the steer. Here
is a very wasteful process indeed from a certain standpoint,
but the stubborn fact remains that most Americans demand
beef. Again, the anti-nicotine advocate appals us with the
sheer waste involved in growing, manufacturing and sell-
ing a minor poison. But tobacco has reached the position of
a necessity in the workingman's budget. It cannot be elimi-
nated out of hand. Again, some inquisitive citizen with a
mathematical turn of mind will calculate the potential horse
power of all the rivers of a continent — compare it with the
developed water-power — and write the balance off as waste,
in the Sunday supplement. The scientific woods are full of
such charming followers of the Absolute.



It is the very diversity of these standpoints which gives us
pause, and makes it imperative that we find if possible a
lowest denominator which will pass the pragmatic test as a
genuine measure of waste.



THE WANTS OF MAN

Before the deficiency of a thing can be measured, a stand-
ard of judgment must be set up. Waste cannot be measured
or even condemned, unless the clear potentialities of a non-
waste method are established. Two hundred years ago —
before the first steam engine — there was no waste in pump-
ing out coal mines by hand. The better method lay in the
womb of time.

In the last analysis, tJic sole aim of an economic system is
to supply the wafnts of man. It is quite obvious that the
present system is mainly concerned with supplying money
profits to certain favored individuals, with the satisfaction
of wants coming in the back door as a by-product. But by
and large, from century to century, men work in order that
they may eat — (and sometimes for the fun of working). If
we can define the wants of man, we have then a yardstick
which may be clapped down over any industrial system to
determine :

(1) How far the system is concerned with producing
such wants.

(2) How efficiently it uses available technical knowledge
to produce them.

(3) What proportion of the population are faiHng to
receive the quota as defined.

What are the wants of men?

Here the cynic waits for the whole theory to collapse on
its own threshold. What god or demon will draw a ring
around the wants of man and yoke to the statistician's plow?
Agreed, gentlemen. The wants of man are impossible of
exact definition. They are constantly growing, shrinking,
changing. In a certain sense they are different for every
living person. One man's meat is sometimes another man's
poison. Any allowable definition of the wants of man must
be built without a roof — it must be open to the sky.

What does man want? Life! A more abundant life!
Bread and beauty, if you please. Our cynic as well as

8



our artist must agree to this. What constitutes a more
abundant Hfe? More bread, more beauty. And we cannot
permit cynics and artists to argue that this does not include
certain unchanging classifications of wants which the facts
as to man's place in nature render imperative. Thus every-
one must eat— and he must eat certain combinations of pro-
tein, fats, carbohydrates, together with the accessory vita-
mines, or he sickens and dies, and his_ aesthetic wants be-
come a matter of very secondary consideration. He must
in certain climates have clothes to wear to keep him from
cold or heat, and in nearly all climates he must have a house
or shelter of some sort in which to live, and particularly to
protect his children.

Food, shelter and clothing comprise the most elementary
wants of man. After them follow other classifications al-
most equally essential to mankind in civilized communities.
The development of communication between people — chan-
nels without which human society is impossible - an alphabet,
a language, books, education are all imperative wants of
man. Religion of some sort he wants. Art he demands —
music, painting, architecture and design, poetry, literature
and the theatre. Recreation and play he wants — dancing,
running, swimming, mountain climbing, games. The latter
is a very fundamental want, for the body declines rapidly
if it is not satisfied. Health he wants, and the services of
doctors, nurses, hospitals, sanitary measures. Love he wants
— not only sexual, but all the pleasant relationships of fam-
ily and friends. Some men just want to know. They are
moved by a divine curiosity. We call what they do pure
science and it is one of the most precious of man's wants.

A system of production which turns out the facilities for
satisfying these wants in reasonable abundance and in some
sort of relative balance, can be taken as a non-wasteful sys-
tem so far as its aims are concerned. The technical efficiency
of the process involved, and whether or not unnecessary la-
bor energy is consumed therein, is a further question which
demands attention, and which we will discuss presently.

THE MINIMUM BUDGET

These ten fundamental wants of man, broadly interpreted,
cover practically the whole field. The only limitation which
a theory of waste can put upon them is that the quality of the



goods and services which go to the satisfaction of these wants
should be reasonably sound and wholesome, free from adul-
teration and degradation, and that the more ornate and com-
plex goods and services should not be produced until the
simple and more basic wants have been met. In respect to
this latter proviso, we already have an excellent quantitative
list in the minimum Budget of Health and Decency compiled
by the United States Department of Labor. This budget
is designed to meet the personal wants of a family of five
persons. It lists several hundred articles of food, clothing,
shelter and incidentals — lists them in terms of physical units.
It is possible — and in fact it has been done in part — to multi-
ply out each item on this family budget for all the 21 million
theoretical families of five in America, and thus roughly de-
termine the gross requirements of certain basic wants. In
1921, for instance, we needed, on this basis, about:
3,800,000,000 square yards of cotton goods;
635,000,000 square yards of woolen goods;

95,000,000 dozen pairs of stockings;
290,000,000 pairs of shoes;

11,000,000,000 pounds of meat;
5,000,000,000 pounds of sugar.

Perhaps 90 per cent by weight of all our physical wants
can be reduced to perfectly tangible commodities, in per-
fectly tangible quantities up to a certain stage of manufac-
ture. Individual preferences will tend to determine the ulti-
mate stages.

Here then is a possible standard — rough, un-roofed, but
capable, as will be shown, of measuring the wastes of the
present economic system. It should be observed that the
economic system as we have discussed it here comprises all
human effort which goes into the production of goods and
services — the labor of the housewife, the artist, the scientist
and the priest, as well as that of the industrial worker and
the farmer.

OUTPUT OF PRESENT SYSTEM

From the standpoint of the ten fundamental wants here-
in enumerated, it is immediately apparent that (1) a portion
of the output of the present system goes to satisfy those
wants; that (2) another portion can only be classed as pro-
ducts seriously detrimental to man and quite outside the

10



category of wants; and that (3) the remainder falls into
an intermediary classification consisting of items which do
no particular good and no particular harm to the consumer

^ In the first class fall foodstuffs, textiles, housing, schools,
parks, medical attendance, concerts, highways, laboratories,
and so forth. .

In the second class fall many patent medicines, distilled
spirits, opium, machine guns, poison gas, prostitution, gam-
bling and speculation, quackery, super-luxuries, dishonest ad-
vertising, "Billy Sundayism" and all else that breaks and dis-
torts the bodies and the minds of men.

In the third class fall chewing gum, much of our adver-
tisements, fashions, moving pictures, tobacco, best sellers
and the like.

It is to be noted that the second class, from the standard
erected, is almost totally composed of waste, and the effort
concerned therein worse than thrown away. The third class
provides a rich field for waste research, but cannot be ruled
out in toto.

A further qualification is necessary in respect to the hrst
class. While from a pure classification standpoint this group
contains no waste (barring the question of technical pro-


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Online LibraryStuart ChaseThe challenge of waste → online text (page 1 of 3)