In such periods of transition as ours, consciousness lags behind realities. The prevailing consciousness of our age is still the consciousness of the exclusive rights of the individual in all his economic activities and in the use of private property, just as it was in the nineteenth century in the heyday of liberal capitalism. Our time likes to overlook the fact that things have changed basically since then. We are no longer living in an economy of widespread, middle-sized private property. This is not a period in which prevails competition, nor, in this country particularly, are we justified in claiming that there are equal opportunities for everybody. The lag between consciousness and reality consists in this: that our philosophy of economic rights is still individualism; that is, hostile to any limitation of individual interests, whereas our reality contains monopolies, economic group power, and a decided disbelief in competition.
It should be remarked that economic individualism seemed bearable as long as the brake of competition existed. With the weakening of this brake organized and incorporated group interests started a mad struggle for their share of the pot, causing general dislocations and maladjustments in the economic setup.
In the nineteenth century both classical economics and actual reality agreed in this, that employment of labor and capital was the natural by-product of profitable business. Therefore no particular responsibility for employing men was recognized. Employment, so ran the prevailing economic philosophy, establishes and regulates itself if wages, prices and interest remain flexible. Today they are no longer so flexible. To a startling degree both prices and wages detach themselves from the conditions set by a competitive market; a whole world of new socioeconomic organizations and institutions has been developed to regulate prices and wages.
Regulate according to what? An optimist might assume that the idea of justice in prices and justice in wages had been revived and was the principal consideration. I do not share this opinion, in spite of the fact that the motive of justice is very of ten proclaimed. It seems to us that rather than a desire for justice, a will to economic power and success prevails, a will which very rarely is conscious of the implications of its own activities and is very of ten inclined to claim sovereign rights, as in the nineteenth century.
Under the pressure of proletarian living conditions and with the backing of the philosophy of abundance, labor claims higher hourly wage rates and social security. It of ten does not recognize as a valid argument that smaller and middle-sized employers cannot stand the pressure. Indeed, in a recent dispute between the railroads and the railroad workers, one representative of the latter voiced his opinion that it was no concern of the men where the railroads could get the money for higher wages. This may have been a slip of the tongue, but it is indicative of a mental trend, at least in the well-entrenched groups of organized labor. Professor Sumner Schlichter has aptly remarked, "…the fact that a given [union] policy causes a minority to suffer does not necessarily mean that a majority is benefiting. . . . Whether the union is divided between a majority that is indifferent to the effects of union policies upon employment and the minority that bears the burden of unemployment, depends upon how unemployment is distributed among its members. If it is concentrated by seniority rule among the junior members, the union may have little interest in employment problems, . . . if unemployment is spread thinly among all members by limited equal division of work, the union may be politically capable of interest in even a moderate degree of unemployment."*
From a strictly business point of view, it is the foremost concern of business to make profits. If such profit-making points in the direction of the employment of machinery rather than men, this course will be the one taken. Two processes appear natural then: to reduce costs, and/or to stabilize and increase prices. Since labor costs are in all but a few industries the biggest item, and since to a large extent the hourly rate is fixed by agreement, the pressure to reduce costs exerts itself in the line either of labor-saving machinery or of the utmost economizing on the labor that is still needed. We may quite rightly maintain that production becomes labor-shy. It has, under capitalistic conditions, always been an accepted American Economic philosophy that the employer has no obligation to employ. Today, however, this philosophy is more pronounced and more practiced than it ever was.
An article in the Monthly Labor Review (April, 1938), dealing with power farming and labor displacement, reveals the same attitude in agriculture. The article describes the invasion of tractor farming in the Mississippi Delta and in Washington County, Miss. (Data given separately for County and for rest of Delta.) Statistical data show that in cotton farming, under the influence of mechanization, the number of farms decreased within the period 1930-35 from 101,160 to 871765 in the Delta, whereas the average size of farms increased from 34.6 acres to 43.4 acres. The farm population in the Delta decreased by' approximately 52,000. The figures for Washington County are similar. This means that tenants and sharecroppers are actually being proletarianized and transferred into a mobile labor reserve to meet seasonal hand labor peaks. In recent years such mobile labor has become more or less the precondition of the extensive growth in large-scale, semi-mechanized cotton farming on practically three-quarters of the large-scale cotton farms in Texas, Oklahoma, Arizona and California. The mobile labor reserve is recruited largely from families who, until recently, were tenants, sharecroppers or laborers on the plantations, "but who are having the ground cut from under them." A few of these people migrated to the industrial North but the failure of industry to absorb rural emigrants forces most of the displaced ,tenants and sharecroppers to stay in the Delta (or Washington County ) towns—a stranded population, living on relief and on what meager revenues they earn during the seasonal hand labor peaks.
The social effects of rural mechanization are indeed disturbing. Again there is a philosophy behind rural mechanization, the abandonment of the tenant-cropper system, use of day labor, larger-scale farming and displacement of labor population from the land. This philosophy was neatly expressed in Bulletin 298 of the Delta Experiment Station, under the heading "Making Cotton Cheaper." Here it is stated that just as industry has mechanized in self-defense, the farms must do likewise as rapidly as possible. "From 30 to 50 percent of present Delta farm laborers must ultimately be replaced by machinery if plantations are to escape foreclosure." Justification? "Operating costs on five tractor-operated plantations in 1931 average $16.45 per cotton acre. This is $11.12 less than the per-cotton-acre cost of operation on the five tenant-operated plantations, or a difference of 40 percent." It is stated that farm labor's daily income is still below that of industrial labor: "Neither labor nor operator will ever be satisfied again with living standards possible under a system" which requires "so much overhead and the support of so many human beings per unit area." Only farm machines and power can equalize farm labor income and industrial labor income. Therefore from 30 to 50 percent of present Delta farm labor must be replaced by machinery.
In addition to this outright displacement, the remaining labor must be put on a cash, or day,basis, rather than on any longer contracts. This has the double effect, according to the aforementioned Bulletin, of increasing the efficiency of labor from 50 to 100 percent and reducing overhead cost. Then, putting aside any social inhibitions that might arise, the Bulletin states that "modern farm machines are just as essential to farmers who expect to earn decent livings and fair returns on their investments as are linotypes to printers, compressed air and concrete-mixing machines to contractors, modern spinning and weaving machines to textile manufacturers, or other modern equipment to other American industries." And the Bulletin continues: "It is not up to American farms to absorb, even at pauper wages, either the labor released from modernized industry, or non-essential farm labor replaced by the economical use of adapted farm machines. American genius must find other fields for replaced labor, both from modernized farms and industry, if peasantry is to be avoided."
This is indeed a telling document, in more ways than one. It puts the profitableness of land use above the living of men on the land, it puts wage and proletarian labor above any other form of labor, it denies on principle any responsibility of American farms for the employment of labor. And it does all that on the assumption that commercial farming and mechanized production for profits is the one and incontestable form of land use. But we have to qualify the last statement: the Bulletin is aware that another form is possible, that is, peasantry. But obviously peasantry, to the authors of the Bulletin, is incompatible with American standards. May we ask the question : are large-scale unemployment and proletarization of tenants more compatible with American standards? Do they conform better with that "equality of opportunity" of which this country has ever been so proud ? And last but not least : are unemployment and proletarization better guarantees for the much-touted democratic institutions of this country? All these questions cannot be escaped; they must be faced squarely. Of course, one might be so indelicate as to ask the authors of the Bulletin why a "peasantry must be avoided" at all costs. France, Germany and Italy until now and England until the eighteenth century demonstrate that peasantry is a decent, stable and prosperous form of existence, which is exactly the ideal of traditional American philosophy, rather than large-scale, mechanized, indebted farming, which clears the countryside of its population and reduces the farmer to a day-laborer. There is some thing basically wrong in the philosophy expressed in the aforementioned Bulletin. It is understandable that the only way of salvation for an individual district may be deemed to lie in the direction the Bulletin indicates, but this cannot be exalted into a basic philosophy for American agriculture.
Who is Responsible?
Who, then, is responsible? The Monthly Labor Review article (written by Paul S. Taylor) tells us exactly where the responsibility rests: "Certainly the Nation cannot evade the responsibility for dislocation of from one-third to one-half of the cotton workers." If we were to ask the American manufacturer on whom the responsibility ultimately rests, he would tell us that this is the business of the Nation rather than his own. And if we ask labor leaders who should provide relief for that part of unemployment which is traceable to certain unwise labor policies, we shall likewise be advised that the Nation has to take care of it. So there is a highly laudable agreement that an authority exists whose proper business it is to carry the responsibilities refused by all the parties engaged in the economic struggle.
Yet who is the Nation? The Nation is personified by the Government. The question arises, is it the function of the Government to assume the responsibilities which the participants in economic life refuse to accept? This question is the more unavoidable if the Government in question is a democratic government. A democratic government depends on the will of the people. Unless one is a believer in that mystic and obsolete doctrine which holds that the State is omnipotent, omniscient and omnipresent, one must grant to the State the powers and prerogatives necessary to the discharge of the duties laid at its doorstep by the participants in the economic life of the nation. And here again appears the remarkable lag between consciousness and reality: the public in general, following the American tradition, dislikes state interference; but each group in the economic struggle urges state help for the attainment of its own interests. In the first stages of this development, the government faces a task alien to its whole tradition and functions: it interferes wherever the pressure is the greatest, but finds out that new pressures follow the interference. The government, in this stage, appears as taking sides now for this group, now for that, and continues busily trying to satisfy the claims raised by all powerful groups. It cannot be doubted that the state thus gains in competence and power but loses in strength and authority.
At any rate in this process there grows up a government officialdom, well-versed in economic questions, which has the will to assume responsibilities and, for the fulfillment of its task, to go as far as the situation necessitates. Every Congressman is increasingly aware that whatever his ideas and information may be, government officialdom knows better; it covers him up with facts and disillusions him with a picture of what the implications of his ideas are. The complicated business of law-making in this field of economic and social life increasingly exceeds the real understanding and comprehension of the normal Congressman. The legislative power actually becomes concentrated in the hands of a hard-working, well informed bureaucracy. It cannot be otherwise but that this bureaucracy should increasingly determine the issues and prepare, if not shape, the final decisions. The second stage in development is approached.
By this I mean that the government more and more ceases to be a participant in the general struggle of group interests, but becomes an arbiter whose decisions are final, even if mitigated by a democratic smoke-screen. Under the cover of traditional democratic institutions there arises a formerly unknown and unaccepted trend toward government autonomy and authority over that sphere of the people's life which hitherto, by natural right or however else, was deemed to be a private affair or a social concern not subject to government authority. The origin of this trend lies partly in the failure of nineteenth century liberalism, partly in the survival of a liberal and individualistic ideology after the rise of monopolism and organized pressure groups. In both cases the idea of any social responsibility inherent in economic activities was utterly denied. With the vigor of an elemental force this responsibility imposes itself today on our generation, and since all subsidiary institutions which might carry it are either decayed or terribly weakened, the government has emerged as the exclusive representative of social responsibility.
Right here we are standing at the threshold of a new heresy, a heresy which, however, replaces an old one. The old heresy was this, that economic interest and social welfare are identical; the more the individual could follow his interests in full freedom, the greater the happiness and the stronger the guarantee of the good of all. There was recognized no common weal as an entity separate from individual interests. The heresy of our present time apparently goes the opposite way, by detaching social responsibility from economic life, leaving the latter free to run amok and transferring the former to the government as its exclusive function. This solution is contrary to a basic doctrine of Catholic social philosophy, to the doctrine of subsidiarity which means, in plain words, that responsibilities should be met where they arise, and only when minor social units are unable to cope with them has the next higher social unit to lend its assistance. This solution, moreover, is contrary to all sound policy, as history amply proves. Divorcing social responsibility from economic life presses government into a function for which it is basically unfit, unless it usurps power over the whole socio economic setup. In our time fascism affords the final proof of this. But such usurpation, in the last analysis, destroys the freedom of man and there with, certainly in the long run, the power of all government. Our generation has lost the belief in the "nature of things," although all our distress hammers the nature of things social, political and economic into our minds. It is against the nature of things to divorce social responsibility from economic life and to invest it in the government, with a sort of naive confidence that all is well, just as it was against the nature of things to deny all social responsibility and to absorb the common welfare in the pursuing of individual interest. We were free to choose the one road in the nineteenth century and we are again free to choose the other in the twentieth-hut the choice once taken, we are no longer free to pay or not to pay the price for what we choose. The social unrest of the nineteenth century may well be followed by political restlessness and catastrophies originating in a basically wrong allocation of responsibilities.