Exodus from poverty; or The other economics

Foreword

The writer of this book was endowed by nature with an original and logical mind of unusual power. His library was immense and he was a catholic and discriminative reader. His favorite books included all the greatest treatises on government and economics. This book, The Other Economics, was the crowning work of his life, though he did not live to put it in final literary form. This accounts for certain inequalities in style and development of thought occasionally noticeable.

The Rev. William Henry Talmage, who kindly undertook to edit the manuscript, wisely decided that it was not best to change the verbal form in which this master-thinker had embodied his novel system, even though in a few instances only a rough draft of the argument was outlined. Assistance was rendered in the verification of references by The Rev. E. J. Craft and Mrs. Ernestine Craft Cobern, son and daughter of Doctor Craft.

THE PUBLISHERS.

P. S The reader should bear in mind that the Author died August

30, 1912. This will explain some sentences which the European war has now changed into past history and entitles the Author to even greater regard.

EDITOiR'S PREFACE.

The startling new truths of Doctor Craft are many, and his arguments destructive to theories now dominating the minds of the average statesman, teacher and reformer ; on this account, we can scarcely hope that his valuable work will become immediately popular.

The Author stands alone— a John The Baptist— crying in the wilderness against the tremendous economic blunder of the race.

The Other Economics, which we have taken the liberty of also naming. Exodus from Poverty, lays the foundation for a real science of Economics. We may now understand the cause of poverty and realize the direction to take if we would escape its ravages.

Being more or less conversant with the (pliilosophy of the deceased Author, we are ready to reply to any criticism that may be brought to our attention, or to communicate with persons interested in this new message to humanity.

We have accepted the office of Secretary to The Other Economics League, (a non-partisan and non-sectarian or-- ganization) the purpose of which, at present, is to act as a nucleus around which favorable sentiment, relative to the Craft plan of a Government Economic Experiment Station, may gather for practical aims. The reader, therefore, who is convinced of the value of The Other Economics is invited to communicate with the Secretary.

The Rev. William Henry Talmage, Secretary of The Other Economics League, Chairman of

Social Service Commission of South Dakota, Flandreau,

South Dakota.

SOME OF THE SOURCES OiF INFORMATION*

Abstract of the Thirteenth Census.

Ancient Lowly, (The), Ward.

American Magazine.

American At Work, (The), Frazer.

Baxter, Sylvester, in The Outlook.

Bausket, F. N. in Van Norden Magazine.

Census, The Twelfth and Thirteenth.

Cosmopolitan, (The).

Distribution of Products, Atkinson.

Documentary History of The American Industrial Society.

Everybody's Magazine.

Evolution of Modern Capitalism, Hobson.

Effect of Machinery on Wages, Wells.

Economic Principles of Confucius, Chen-Huan-Chang.

Facts and Figures the Basis of Economic Science, Atkinson

Gompers, Samuel, in New York World.

Jacobs, Joseph, in American Magazine.

Labor Saving Machines, Samuelson.

Modern Industrial Progress, Cochrane.

Mitchell, John, in The Outlook.

Metropolitan, (The).

Matthews, John L., in Hampton's Magazine.

New York Times.

Nicholson, J. S., of University of Edinburgh.

New York World.

Nineteenth Century Magazine.

Outlook, The.

Poverty, Robert Hunter.

Privilege and Democracy, Howe.

Progress of Invention, Byrn.

Principles of Economics, Fetter.

Popular Electricity.

6 SOME OF THE SOURCES OF INFOaMATION

Popular Mechanics.

Recent Economic Changes, Wells

Railway Problems of Tomorrow, L. BuUard in Tech. Magazine.

Social Unrest, Brooks.

Short Studies, Froude.

Six Centuries of Work and Wages, Thorold Rogers of Oxford University.

Strabo Geographica.

Story of Sugar, George Thomas Surface.

Saturday Evening Post.

Scientific American.

Tarbell, Ida M., in The A!merican Magazine.

The Technical World.

Thirteenth Annual Report of the Commission of Labor on Hand and Machine Labor.

Whiteman, William, in Everybody's Magazine.

Women and Her Oiccupation, W. J. Thomas, in American Magazine.

World's Work, The.

Zion's Herald, Boston.

*Others quoted in the body of the work.

Contents

PAGE

Foreword .• j

Editor's Preface ^ 4

Some of the Sources of Information 5-6

Chapter I Prices And Scarcity

The cause of poverty — The resulting system of economics — Proof descriptions from orthodox text books — Demand and desire for goods not the same — Effect of competition — Money value the measure of the increase of scarcity — Analysis of money value 13- 19

CHAPTER H

PRICES AND SCARCITY — CONTINUED

Statement of English Economist — Destruction of products — Labor as a commodity — Relation of wages to scarcity — Monopolies — The prosperity before a crisis — Rent and scarcity 20-24

CHAPTER HI

Save as much as possible — Save and rent money — Become an employer — Back to the farm — Avoid idleness — Become intelligent and skillful — Strike for higher wages — Be honest — Single Tax — Elimination of Middlemen — The Minimum Wage — Trusts — Foreign Immigration — Protective Tariff and Free Trade— Foreign Trade — Morality of Working Class — Profit Sharing — Government Control — Government Ownership — Present Socialism — Communism — All rules of business unworkable for the majority 25-49 e TABLE OF CONTENTS

CHAPTER IV

The daily per capita production — Per capita income from farms and factories — Fictitious wealth — The day of small things — Analysis of a panic — Products independent of money value — Products not affected by exchange — The object of trade — Products of labor redefined — Present system adjusted to the principle of increasing distress — Selfinterest and righteousness — New definition for wealth — Money and superstition — The orchard illustration — The rich man — The evil doctrine of class-hatred 50- 66

CHAPTER V

PROFITS

Profits not the cause of poverty — Profits in industrial combinations — The average "watermelon" — The sugar trust — Profit from transportation — Profits in agriculture — The real enemy 67- 72

CHAPTER VI

The effect of the increased productivity of labor — Sewing women — The cotton gin — Poverty of those in the cotton industry — The steam-ship and stokers' wages — Iron and steel — Wages in Europe — American tenements — Japan — Meat packing — Effect of occasional employment — Wages in relation to standards of living — Conclusion of Froude — Wages in former times — Cause of our nominal high wages — The per cent- without property 'j-Tt- 84

CHAPTER VII

RESTRICTED POWER MACHINERY

Its powers if it could be introduced— Little used in Agriculture — Little used in Manufacture — Possibilities under a right system — Its present incentive 85- 90

CHAPTER VIII

THE IMPENDING CRISIS

The displacement caused by steam-power— The vast work which it afforded— The job about finished— The dilemma of the unemployed 91-97

TABLE OF CONTENTS »

PART SECOND The Other System CHAPTER I

The two p^rinciples of economics defined — Both might be crude or highly evolved— Only the destructive principle has ever been tested — Co-operation and competition common to both principles — Blindness of some Socialistic thinkers — Essentials relative to the new system — An economic system not related to the morals of people — The constructive principle consistent with the ethics of religion 101-108

CHAPTER H

An outline — Donation of labor and products — New definition for Capital — Distribution by the rule of the common good — Expert aid from the Government — People are not their own — Individuals are not producers — The kind of poverty now prohibited by law — Wealth a virtue — Impossibility of overproduction — The public benefaction — Its consistency with the claims of Jesus 109-121

Chapter III

Cotton— Flax— Wool— Food— Chemical fertilizers — Productivity of water for food — Game farming — Cattle by the factory plan — Coal deposits — Peet — Oil and gas — Alcohol for light and heat — Electricity — Wind — Sunlight — The new water wheel — Iron — Copper — Lumber 122-130

Chapter IX

Automatic conveyors — Cars loaded by machinery — Automatic car lines — Concrete tubes — Automatic waiters — Mechanical stokers — Floating cranes— Automatic signals — Automatic stores— The inefficiency of the present system — Plan under The Other Economics 172-181

Chapter X

Tree-felling machinery — Automatic lumber machines — Cement in the place of wood — Automatic moulds — Suggestions of Mr. Edison — Grading— Trench digging — Rock crushing 182-189

Chapter XI Wealth And Leisure For All

Making of machines does not provide employment equal to that displaced — The canthook — The steam engine — The sewing machine — The present per cent, of inefficiency and poverty — Bounties of nature sufficient for wealth for all — Applied science ample— Methods by which to obtain wealth 190-196

TAI3LE OF CONTENTS U

Chapter XII The Mental And Moral Powers Of The Poor

Cruelty of popular opinion — Powers of poor in relation to the use of money — All equal in reasoning faculties who are normal — Slums in relation to propagating slums — Absence ot hereditary divisions of society — The new compound — Present repression of individual talents — Diary of a farmer's wife — Some advantages to state in wealth for all — Babies not loafers — Present system and rebels — The relation of income to morals 197-208

Chapter XIII

Blindness of false philosophy— The burglar — Gradual starvation in relation to sentiment — Moral philosophy of the burglar — Cause of most suicides — The immorality of the present system — The girl in the slums — The effects of the abolition of poverty — A new vision of Christianity 209-217

Chapter XIV An Object Lesson Needed

The urgency of doing something — Theories not' accepted until demonstrated — Safeguards — The timeliness of a Government test — All men ready — Superiority of character to business rules — Nature of the object lesson — Its interest to Socialists Tactics — The danger of any other than a Government test 218-224

Chapter XV The Government Economic Experiment Station

Reasons for station — Purely business — Power to enforce rules — Explanatory — A reverse economic principle evolving reverse business rules — Not subject to a majority vote — Expert supervision — Civil Service tests — Inducements to enter — Size of first unit — Its symmetry — The cost — Special aids given by Government — Locations — Employment for all — The adjustment generally if successful 225-238

CHAPTER I PRICES AlTD SOARCITT

There can be no further progress of the race until the cause of poverty is apprehended and abolished.

We are at present in grave danger of becoming so much engrossed in vain efforts to heal the multiplying wounds of poverty that our age of civilization will topple and fall, as others have done, before we are able to strike the evil at its source.

The Cause of Poverty

Can two men, all things being equal, get much from each other while struggling to give little?

Will not both remain in a state of poverty even though surrounded by inexhaustible bounties of nature?

Is not the effect the same when men are a multitude?

The attempt to attain wealth under the principle of giving little defeats the aim. It establishes competition and economic anarchy ; produces concentration, as men plus machinery become unequal factors; and evolves a system perfectly adjusted to scarcity and its perpetuation from wliich there is no escape for the majority as long as that principle survives.

The microbe of poverty lurks in the principle, that each unit of society shall give as little as possible to collective society, in all matters pertaining to the production and distribution of the means of existence.

The Resulting System

The present economic system began as an adjustment to scarcity when men were ignorant of the bounties of nature and the powers of applied science and, like lower animals, began to engage in a competitive struggle for existence *

A system of business which is an adjustment to the scarcity of things desired is not workable unless that scarcity is perpetuated. Therefore the production and distribution of the common necessaries — enough for all who assist in producing and distributing them — is and always has been and always must be impossible as a business enterprise under the existing economic system. If this ideal is to be reached and those evils which now menace the Church, State and Home be suppressed, there is but one remedy : the present system of economics must be abolished. Compromises with it will but prolong our social agonies.

That so-called economic science which only attempts to examine our present economic system commenting upon certain modes of industrial warfare, may be counted trustworthy as far as it goes; but it does not include the '"cause" or the "cure" of poverty within its survey. In all university text-books on economics, statements similar to the following may be found: Scarcity of things desired is the one objective condition of value.

Exchange in the usual economic sense is the transfer of goods by two owners, each of whom deems the goods taken more than the value-equivalent of the one given.

Where a two sided competition exists, the bidding goes on until a price is reached where the least eager seller and the least eager buyer have the narrowest possible motive for exchange.

In a group of consumption goods, all of the same quality, the marginal utility declines as the quantity increases. If there is a remarkable potato crop, potatoes fall in value.

*Prof. Alfred Russell Wallace's book "Social Environment and Moral Progress" has appeared since the death of Dr. Craft and contains some statements of views strikingly similar to his. Such statements are welcomed as showing how another mind working independently felt the need of a new system of economics ; though unfortunately the aged scientist failed to see the "root-cause" of the evils which he has so vividly depicted and therefore failed in the application of the correct remedy.— W. H. T.

PRICES AND SCARCITY 15

It may be of advantage to the seller to destroy a part of the supply when the increased price of the smaller amount will give a larger total.

Monopoly is such a degree of control over the supply of goods in a given market that a net gain will result to the seller, if a portion is withheld.

Demand is the desire for goods united with the power to give something in exchange.

Demand tends to diminish as the price increases.

Rent may be defined as the value of the scarce uses of wealth during a given period.

The wage system is the organization of industry wherein some men owning capital buy at their competitive value the services of men without capital.

Money-wages are paid out of money received for the product, and this amount, after allowing for the upkeep of capital and other necessary expenses, is the superior limit above which wages cannot permanently rise. The inferior limit below which wages cannot permanently fall is in general given in Ricardo's formula of "necessary wages". Laborers must have enough to live on or they will not live themselves; and enough to feed their children or their children will not live.

There is a temptation to invest capital in machinery in such a degree as to reduce the demand for the products of machinery. If one man tries to save he can do so ; but if everyone tries to save, and to convert his capital into permanent investments a great . many people will fail to realize their expected profit because of an overproduction of machinery.

The period leading up to a crisis is one of general prosperity.^

Quite a startling revelation is obtained by a close analysis of the above orthodox and standard descriptions. They form at once a terrible indictment of the present economic system. The general principle implied in all the above statements is that '^Scarcity of things desired is the one objective condition of value" The subjective condition of value is in the subject, or

1 Modern Industrial Progress, Cochrane, p. 212 et passim.

person, viz: his desire for goods. The objective condition of value is the scarcity of the goods. Both of these conditions are necessary in order that anything may have a money-value. Goods which no one wants cannot be sold. If every one has all he wants of them they have no commercial value. If everybody has all he wants of the kind of goods offered for sale the goods cannot be sold. Therefore the scarcity of goods must be permanent, for otherwise the business of producing goods for sala could not be permanent. The scarcity of goods cannot be permanent unless the scarcity of goods is permanently endured by a portion of the population. In order that prices may continue, a corresponding amount and variety of poverty must continue also. Therefore in order to abolish poverty you would necessarily have to abolish prices which would abolish profits and wages, exchange and a scarce medium of exchange, which would abolish the present economic system — the very existence of which depends upon the perpetuation of poverty. Poverty cannot be abolished while prices for labor and products continue.

The "demand" for goods, under the present system of business, is not merely the desires of consumers and their willingness to work, although their labor may have produced the goods. One owns the desires and the other party to the proposed exchange owns the goods. The one will not regard the other's desire as more than a value-equivalent for the goods which he is offering for sale. If you take your desires to a bank you cannot give them in exchange for money. They alone are not a demand. The law of "demand and supply" demands money, or something that can be exchanged for money ; and people are scarce to whom money is not scarce. If it were not so, money would be worthless ; for it is one of the things desired and the one objective condition of its value is scarcity. Everybody knows that inflated money is dangerous, and that if gold should become as plentiful as common earth, all business would be suspended until some other scarce medium of exchange could be discovered which would cause things exchanged to be sufficiently scarce.

PRICES AND SCARCITY 17

"Where a two-sided competition exists, and the bidding goes on until a price is reached where the least eager buyer and the least eager seller have the narrowest possible motive for exchange, the seller sells at the lowest price that will give him the least profit that will enable him to continue in business". For this reason, as a general rule, profits are small. The buyer also must have the narrowest possible motive for refusing to buy. About ninety per cent, of buyers are wage earners and farmers who pay themselves small wages. When such a consumer wants the goods the price must be made only so high for him, in proportion to his ability to buy, that he shall have the smallest possible motive for refusing to give money or goods in exchange for goods that he wants. If he is a low wage earner, sufficient food and clothing and shelter to sustain life, must be so low in price, in proportion to his wages, that he has the smallest possible motive for refusing to buy them. The other alternatives open to him are to become a beggar or a thief. If he is a high wage earner and is trying to buy a silk dress for his wife, the price must be only enough to tempt him to buy silk instead of cloth of lower grade. All consumers must have the smallest possible motive for refusing to buy. Consumption must be small. Therefore production must be small in proportion to the population, because goods that cannot be sold cannot be produced.

Competition between buyers and sellers, or producers and consumers, each trying to get much by giving little-, causes the average man to give little and to get little. Small profits result in small wages, and small profits and wages result in small consumption which necessitates small production because of the small purchasing power of small wages and small profits.

The race, as yet, is an economic dwarf due to the restrictive power of our short-sighted grasping system.

*Tn a group of consumption goods, all of the same quality, the 'marginal utility' declines as the quantity increases," because the "utility" of goods is measured by their price in the market. Potatoes at a low price are not less useful for food, and are not less desirable to hungry work-people in the city not far distant, who are not able to buy enough of them to supply their wants. When farmers have produced a so-called overproduction of potatoes they do not plant as many the following year. Then the greater scarcity of potatoes causes them to command a higher price. The difference in the money values was not in the potatoes, for the potatoes of the preceding year were not different in any of the attributes that belong to them. The increased value of the potatoes of the following year was not in the potatoes produced but in those which were not produced, or in the potatoes before which the minus sign should be placed. The increased money value was the money value of scarcity and the unsupplied wants of the people who wanted potatoes and could not buy them.*

Money values are not measures of wealth. They measure poverty. The minus sign should be placed before the dollar mark. The money value of products, lands and all property as given in Census Reports shows the money value of the poverty of our people. Wealth for all, would cause wealth to have no money value. Money values fall in proportion as goods desired and produced are more nearly enough for all, while their money values rise in proportion as they are not enough for all. The money value of land, for instance, increases in proportion as the land is taken by private owners, and the number of people who desire land and cannot get it, increases. Therefore the money value is not in the land but in the landless. Its commer-

*puring a recent year of so-called overproduction in the potato belt jn Maine, a farmer produced one hundred and fifty bushels of potatoes which he permitted to rot in the ground because he could not sell them. The price was so low that no one could get wages digging them and hauling them to the market- The following year he produced but one hundred bushels which he sold for twenty-five dollars. This money does not^ represent the value of the potatoes for the greater amount of the preceding year had no money value. It does not represent the value of the wants of the people who are able to buy a sufficient supply of potatoes, for more people bought potatoes during the preceding year of greater abundance. The truth is apparent that the money value is the value of a minus quantity of potatoes and human wants which were unsupplied.

PRICES AND SCARCITY 19

cial value depends on its "rental" value, which depends upon the number of the landless. So we find rent defined in substantiallyall standard text-books as "the value of the scarce uses of wealth during a given period."

Manifestly money values measure the degree of poverty endured by the average competitor for the ownership of goods. And money, which measures poverty, is a means of perpetuating poverty because money itself is scarce. One must get possession of something that is scarce before he can get common necessaries for himself or family. If he gets possession of very much of that one scarce thing it will be still scarcer for other families.

Because the scarcity of things desired is the one objective condition of value "it may be of advantage to the seller to destroy a part of the supply, when the increased price of the smaller amount will give a larger total." The fact that multitudes are in want and seeking work is not a "demand." Therefore men must now either destroy a part of goods on hand, or do what is equally brutal in effect, suspend production until "consumption overtakes production." This is only another method of increasing scarcity and the prices of goods so that a smaller number of people shall be able to obtain them. The brutality is not in our individual business men or the "soulless corporations'* which they form, but in the economic system which they obtained by inheritance from their savage ancestors in the cave and jungle.

To desire a further continuance of that system which damns the majority of the race to perpetual poverty and gnaws away the vitals of nations, argues a soul void of the spirit of his Maker and an intellect, in business rr^atters, on a par with the jackal.

CHAPTER II PRICES AND SCABCITir— CONTINUED

One prominent economist illustrates the foregoing principle as follows :

"U there are five hundred spinning mills in Lancashire where three hundred would suffice, the destruction of two hundred mills would no whit diminish the amount of real capital. If the two hundred mills were burnt down, though the individual owners would sustain loss, that loss, estimated in money, would be compensated by a money rise in the value of the other mills."^

The fact that many work-people in Lancashire are needing clothes (and are at work, or begging for work) would not give any money value to the two hundred mills that were destroyed. They would be needed, with all their distress, to sustain the money value of the three hundred mills that are still running. The amount of goods desired and not produced gives the money value to the mills and their product. This fact is evident when we remember that the mills and their product would have no money value if they were not scarce, and that they diminish in money value in proportion to their abundance. When the two hundred mills are destroyed the three hundred remaining would be equal in money value to the five hundred because of the greater number of people who would not be able to obtain sufficient supply of clothes. Therefore the money value is really in the distress of people and not in the mills. It is of vital importance that this grewsome genius of our present business system be clearly understood by all men who believe in the ethics

1 Poverty, Robert Hunter, p. 337.

PRICES AND SCARCITY CONTINUED 31

of brotherhood or in the principles of religion. This is the block before the wheels of progress. Men cannot perpetuate "distress" six days of the week and relieve it on the seventh.

If by act of Providence, or conspiracy of farmers, farm products should be reduced by one-fourth, prices would rise in much greater proportion. The money value of the smaller product at a much greater price would be much more than that of the larger product at the former price. Census Reports and stock exchanges would show that our national wealth in farm products is greatly increased when there is less food and more people suffering hunger. The increased money value would be in the one-fourth that zms not produced and the distress of the greater number of people whose wants were unsuppHed. That would be the only change in things visible and invisible which could have any relation to the increased money values, or be measured by them. The increased wealth of the nation would consist wholly in its increase of poverty.

In London fish markets, sometimes a part of the supply of fish is destroyed in order that the remaining amount may bring a higher price and yield a profit. (This custom is becoming common in America in various vocations). The increased money value lies in the fish destroyed and in the unsupplied wants of those people who could not get them at the higher price. This is only another way of stating the law of the present economic system, which no university text-book on economics describing the present economic system, will dispute: "Scarcity of things desired is the one objective condition of value." By causing them to be scarcer we increase the price and the number of people who cannot get them.

Labor is a commodity. This is universally admitted. But did anyone ever see labor? What was its color, size and shape? What we have seen were laborers digging ditches and carrying burdens. We cannot detach "labor" from laborers and treat it as a separate being. "Labor is a commodity" is only a short way of saying, laborers are a commodity bought and sold in the market. The commodity is still a commodity when it can talk and have something to say about the price at which it shall be sold. This is a law of the existing economic system. It is worse than brutal because we are human.

Therefore laborers are "a commodity" which capitalists buy at its competitive value. But laborers, in shop, school or pulpit, should not forget that they are indirectly buying and selling each other when they go to the store and buy goods, at the lowest possible price, which were made by other laborers who were bought at the lowest possible price.

Wages, or the price of laborers, fall in proportion as laborers are less scarce. The Black Death, which killed off a great portion of the working population of England, caused a temporary scarcity of laborers and increased their wages, or their price in the market. This was highly satisfactory to the laborers who survived. In Sparta, according to Plutarch and Thucydides,^ when laborers became too cheap, the highly civilized rulers granted the favor to young men of the aristocracy to engage in the sport of killing unarmed laborers until they became scarcer and could be sold at a higher price. Those laborers were better fed and clothed when they became scarcer and their money value was increased. When cattle are excessively cheap the farmer does not feed them as much valuable grain. The lack of safety devices to protect the lives of work-people, unsanitary conditions in factories and tenement houses, drunkenness and vice, .excessive labor and insufficient nourishment, or any other causes which shorten the lives of work-people and diminish their number, tend to increase their scarcity and prices ; which higher price is very satisfactory to those who manage to survive.