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cesses to be discussed later), as a matter of fact it is found
that many of these goods and services are debased. Thus
foodstuffs may contain deleterious poisons to preserve and
sell them, clothing may be shoddy, houses badly built, art and
recreation commercialized, the schools used to stifle the
creative instinct, religion corrupted. It becomes necessary,
therefore, to subject the first class as well as the third to
analysis for possible sources of waste.

Let us add one further note on the output of the first class.
If enough basic necessities — say in the terms of the minimum
budget of health and decency— were produced and distri-
buted to maintain the last family in America at the level of
that budget, we would not be so greatly concerned with the
wasted effort expended in classes two and three. Provided
there was enough to go around — and that nobody was in
actual physical want — we could look with a certain philoso-
phical toleration on the output of such superfluities as to-
bacco, chewing gum, steam yachts, cosmetics and even patent
medicines. But what shall we say if it develops that the


output of basic necessities in class one is at the present time
utterly inadequate? What if the great majority of American
families are now living below the minimum budget of health
and decency? Then the indictment of waste in the other
two groups takes on a new and sinister aspect.


According to the figures of the National Bureau of Eco-
nomic Research recently made public — undoubtedly the most
impartial and authoritative figures of national income ever
compiled* — it appears that from 1913 to 1919, the total money
income of the people of this country, if divided equally
among them on the basis of a theoretical family of five per-
sons, would just about equal the money cost of the mini-
mum budget in each year, after allowing a percentage for
necessary saving. That is, each family would get, on the
basis of an equal division, a money income of from $1,400
in 1913 to about $2,500 in 1919. The items of the mini-
mum budget priced year by year as the cost of living rose,
follow substantially the same curve from $1,300 to $2,550.°
This national income in dollars, needless to say, included the
purchasing of goods in all three classes, so it cannot be held
that there was a sufficiency of class one products bought back
by the income receivers. To make matters worse, the
Bureau found, as a matter of course, that nothing like an
equality of income obtained, but rather that 5 per cent of
the families received from 20 to 30 per cent of the total in-
come. This immediately operated to plunge the average of
the remaining 95 per cent of the families below the line of
the minimum budget, even had their income gone for noth-
ing but basic necessities.

When Senator Kenyon tells us in his housing report in

* Mitchell and others, Income in the United States, 1921. N. Y. : Harcourt
& Brace.

° In round amounts the figures year by year are as follows : (The average

income per family has been reduced 20 per cent in each year to allow for new

For a family of five persons.

Year Average Income Cost of Living

1913 ?1.420 ?1,280

1914 1,340 1,320

1915 1,430 1,350

1916 1,780 1,510

1917 2,090 1,820

1918 2,340 2,230

1919 2,480 2,550


1920,' that 16 million people in America did not live in
houses fit for human beings ; when we read the alarming
statistics of undernourishment in school children ; when we
walk through the slums of a great city, through the poor
white sections of the South, or through a coal mine district,
we know that these income figures of the Bureau only
state the obvious. For those who have eyes to see, it is a
commonplace that America does not produce and distribute
today sufficient basic necessities to keep half of its families
at the level of the minimum budget of health and decency.
The nezv and significant thing about the Bureau's figures is
the fact that if we took all the excess income away from the
rich and distributed it equally to the poor, still the minimum
budget would not be met unless practically every cent were
expended for the basic necessities of class one, and the out-
put of classes two and three eliminated altogether. In other
words, if we only produced basic wants and distributed them
equally, there would only be about enough to go around on
the basis of the minimum budget. Tliejieces^itX of not o^^^y
eliminating non-essential goods and services, but of speeding
up the pro duction of essentials. at ihe same time, is thus made
•mianifest. "


We have erected a rough standard to measure the wants
of men. We have in a general way classified the output of
the present economic system. Our next problem is that of
developing, if possible, a method for measuring the extent
of industrial waste.

We have already seen how the prevailing system is honey-
combed with wasteful goods and services. These have a
market, however, or they would not be produced. Some-
where people are found who can be prevailed upon to buy
them, and the psychology of this forcing of products is a
very interesting subject in itself. Money therefore takes no
cognizance of wealth or "illth" (to use Ruskin's phrase), but
reduces all output to a single unit. A dollar will buy equally
ten loaves of bread or a dose of opium. It becomes largely
meaningless for the purpose we have in hand. Furthermore,
the extreme lack of dependability in the value of the dollar
in terms of other commodities from year to year, raises

" Reconstruction and Construction, Senate Document, March, 1920.


further objections to its use in these premises. Imagine for
instance trying to write the economic history of -Russia dur-
ing the past five years in terms of the Russian ruble.

Cutting under the shadow of money to the reahty of the
underlying physical factors, it is seen that what really hap-
pens when society maintains a harmful industry, is that the
labor power of a large number of people is diverted from
the production of goods to the production of ills, that much
good material in the shape of plants, machinery, storehouses,
paper-stock, industrial alcohol and good drinking water, is
so diverted, and that the channels of transportation and dis-
tribution are clogged with the shipment and sale of an article
which satisfies no real human want. Plant, machinery, and
warehouses can all be converted back in turn to labor energy
or the natural resources which went into their construction —
such things as iron ore, standing timber, crude oil, granite,
waterpower and what not.

The quantitative measurement of waste therefore resolves
itself into two basic factors :

1. Energy of hand and brain devoted to ends which do not
supply the wants of man.

2. Natural resources, raw materials, and power similarly
diverted. (Perhaps, in the last analysis, natural re-
sources are convertible into labor power by virtue of
the fact that it takes labor power to render them use-


Opinion may well differ, and methods vary widely as to
the most effective means of exhibiting waste on this basis.
A possible method suggested, however, is to show the ap-
proximate number of workers employed directly in an anti-
social industry, and so far as can be determined, those em-
ployed indirectly; the labor hours they expend in a year;
and the approximate acreage of good standing timber, the
tonnage of coal, iron ore, copper ore, oil and what not, that
the industry has destroyed in erecting its plant and carrying
on its current operations. Considered with such measure-
ment, the amount of horsepower or similar energy units
wasted may be effectively employed — though again such
energy rests finally on an original expenditure of labor and
raw materials.


That such measurement can only be rough approxima-
tions, goes without saying, but rough as they are, they will
show the cost of the industry to society as no money values
can ever hope to do. Furthermore they are cast in such
form as to be readily converted into estimates of what this
wasted effort might mean in another industry which func-
tioned directly towards the satisfaction of the wants of man.

On this basis, the wastes of a given industry necessarily
include not only the direct labor and materials used, but the
labor and materials expended by the transportation system
in handling the product, and the distribution system in sell-
ing it — not forgetting advertising outlays in labor hours and
good white paper.

We submit therefore that the method which should be em-
ployed in evaluating waste, is to determine what the waste-
ful process costs society in terms of lost labor hours, lost
materials, and lost horsepower, and that the most effective
way of showing the loss is to calculate what it might mean
if utilized in furnishing wealth — instead of — "illth." A
rough calculation shows for instance that the elimination
of the patent medicine industry would release energy enough
to give every child in the country between 7 and 13 years
of age, six months extra schooling.


What the aggregate output of "illth" amounts to in Amer-
ica has never been determined. We only know in a general
way the kinds of things and services which go to make it
up. First of all there are super-luxuries — such things as
palatial establishments, unHmited servants, costly jewelry,
luxurious banquets and entertainments, furs, motors, private
yachts, etc. — things which He outside the range of comforts
and conveniences. Then there is the vast output of advertis-
ing which, in 1916, was said to aggregate over 2 billions a
year. (It must be double that by now.) Advertising has a
distinct function in letting us know about new products, and
about coming events. Only a small percentage of modern
advertising is concerned with this necessary end, however.
The bulk of it is composed of what can only be termed loud
nasal lying as to the relative merits of competitive products
as like as two peas, or, more sinister still, the forcing


upon us of things which we do not need, and which often
hurt not only our pocketbooks, but our bodies and our souls
as well. Think of the beauty which sign boards mock and
destroy. (There are 5,000 sign boards on the east side
of the Pennsylvania tracks between Washington and New
York. I counted them one afternoon.)

Then there is the waste of armaments, a self-evident leak-
age against which even business men protest. They cost us
two to three billions a year at the present time in America.
This is enough to cover the country with 300,000 miles of
good macadam roads.

There is the vast waste inherent in abrupt changes in
fashions, engineered by a little group of designers, who hold
to the sound principle that quick fashions mean quick turn-
over. There are insurance schemes, stock exchanges, law
courts, banks, insofar as these activities serve no human
want. There is chewing gum, adulterated confectionery and
drinks. There is the great toll of alcohol and drugs.
There is the very considerable industry concerned with the
production of gambling devices. There is the time-honored
industry of prostitution. There are all quacks and mediums,
and cure-alls, and get-rich-quick performers. And probably
a considerable percentage of all shows and entertainments
are an adulteration of genuine recreation and art.


In the single category of luxuries alone, the Secretary of
the Treasury estimated that, in 1919, the total luxury bill
of the country was 22 billions of dollars. A careful scrutiny
of these detail figures, however, shows that about half of this
total would fall under the head of reasonable comforts, and
could not, according to our definition, be classified as waste
at all. But a cool eleven billions still remained as wanton
extravagance. Eleven billions in money in 1919 was the ap-
proximate equivalent of the annual efifort of about seven
million workers. If six or seven millions of our total work-
ing population are concerned with the production and distri-
bution of super-luxuries alone, it is not improbable that the
total labor force concerned with all "illth" is at least twice
that amount or from twelve to fourteen million workers


out of an aggregate working population of forty-two mil-
lions. (Census of 1920.)


We have considered in some detail the waste involved in
producing goods and services which do not satisfy any real
human want. This is the first major indictment against the
efficiency of the prevailing economic system. There are two
more. In addition to the production of "illth," we find the
present system guilty of supporting great numbers of po-
tential producers in idleness on any given working day, and
we find that even when workers are busy producing genuine
goods, the technical methods which they employ are often
prodigally wasteful of raw materials and human effort

During the starvation time in the Virginia colony, Captain
John Smith, engineer-in-chief, laid down the rule that "only
those who work shall eat." Just as it is impossible to con-
ceive, in the long run, of an economic system having any
other justification except the satisfaction of human wants,
so is it impossible to conceive of any other rule of work ex-
cept that laid down by the worthy Captain. If we live in
society and take the thousand and one things which others
have made for us, it is axiomatic that we should give society
something in return. Even defenders of the present order
dare not run counter in doctrine to this fundamental and
instinctive concept of justice, no matter how much they may
run counter to it in fact. Thus an elaborate mythology has
been constructed covering the compensating services of the
leisure class — the invaluable quid pro quo which they render
society by "saving" and "abstinence," by denial and morti-
fication. Behind the cover of this carefully nurtured doc-
trine, the idle rich can pursue their pleasures with the utmost
moral satisfaction.

The theory of waste must be based flatly on the assump-
tion that all able-bodied adults who live in society, must give
some equivalent for what they take — this equivalent not to
consist solely in moral doctrine. Libraries of books could
be written, and unending arguments could be spun as to what
constitutes an "equivalent." Is it measurable in hours,
pounds lifted, hedonistic units or the net precipitation of
swcciL 2'l^"


Online LibraryStuart ChaseThe challenge of waste → online text (page 2 of 3)