DEMOCRACY AND PLUTOCRACY
One of the most difficult things to learn in social science is that every action inside of the social organism is attended by a reaction, and that this reaction may be spread far through the organism, affecting organs and modifying functions which are, at the first view of the matter, apparently so remote that they could not be affected at all. It is a more simple statement of the same fact to say that everything in the social organism displaces everything else. Therefore, if we set to work to interfere in the operation of the organism, with our attention all absorbed in one set of phenomena, and regulate our policy with a view to those phenomena only, we are very sure to do mischief. The current speculations about social policy and social reform suffer very largely from this error.
The organization of a modern civilized society is intensely high; its parts are extremely complicated. Their relations with each other are close, and all the tendencies of our time are making them closer; and the closer they are, the more surely and immediately are interferences distributed through them. The bonds of connection between them are constantly becoming more delicate and subtle; and they are sublimated, as it were, so that they escape the observation of the senses. In a simple society, even though it be on the height of the best civilization, all the parts of the organization lie bare to view, and every one can see the relations of agriculturist, transporter, banker, merchant, professional man, debtor, creditor, employer, and employee, in their visible operation. In a highly organized society as, for instance, in a big city, those same relations have all become automatic and impersonal. They have escaped from control; they are regulated by assumptions and understandings that every one is to do so and so; that certain uniform and constant motives, aims, and desires will present themselves as long as human society endures; and that men will, therefore, continue to exert themselves in a certain manner for the satisfaction of their wants. This is what we mean by natural law, and by the field of a science of society. If any one will look over his dinner table the next time he sits down to dinner, he can see the proofs that thousands of producers, transporters, merchants, bankers, policemen, and mechanics, through the whole organization of society and all over the globe, have been at work for the last year or more to put that dinner within his reach, on the assumption that he, too, would do his work in the organization, whatever it is, and be prepared to pay for the dinner when it reaches him. All these thousands and millions of people, therefore, have co-operated with each other for the common good of all, without acquaintance or conventional agreement, and without any personal interest in each other, under the play of forces which lie in human nature and in the conditions of human existence on this earth.
Now, the organs of society do not impinge upon each other with hard and grating friction, like blocks of granite wedged together. If they did the case would be easier, for then we should have only a mechanical contact, and the relations would be of a simple order. Neither are the relations those of an orchestra, which produces harmony by voluntary co-operation under training, according to a predetermined scheme, yet subject to the laws of harmony in sound. Nor are the relations like those of an army, where the co-operation is arbitrary, and enforced by discipline, although controlled by expediency for the attainment of an end under set conditions. The organs are elastic and they are plastic. They suffer both temporary and permanent modifications in form and function by their interaction on each other, and by the arbitrary interferences to which they are subjected by legislation or artifice of any kind. Thus, for instance, it is impossible to say how taxes will diffuse themselves; they may force a change in the immediate organ on which they fall — transporters, merchants, bankers — or they may be transmitted more or less through the organization.
It is this elasticity and plasticity of the organs of society which give the social tinker his chance, and make him think that there are no laws of the social order, no science of society; no limits, in fact, to the possibilities of manipulation by "The State."
He is always operating on the limit of give and take between the organs; he regards all the displacement which he can accomplish as positively new creation; he does not notice at all, and probably is not trained to perceive, the reaction — the other side of the change; he does not understand that he must endure a change on one side for all the change which he affects on the other. Since it is so hard to learn that exchange means exchange, and therefore has two sides to it, a giving and a taking — since, I say it is so hard to learn this, and people talk even about buying and selling as if they were independent operations, a fallacy which is itself the outcome of a high organization with a money system — then it is not strange that it should be so hard to learn that all social change is change, has two sides to it — the cost and the gain, the price and the product, the sacrifice and the obtainment.
Hence we see one fallacy of nearly all the popular propositions of "reform": they would not be amiss, perhaps, if the change which they propose could be made and everything else remain the same.
In the proposition it is assumed that everything else is to remain the same. But it is inevitable that other things will not remain the same; they will all of them adjust themselves to the new elements which are introduced. If we make a change involving expense, taxes must be increased, and every taxed interest must undergo a change to fit it to the new conditions. I know of no reform by state agency which does not involve increased taxation.
Let us note another fact. In the advancing organization of society, the tendency is all the time to subdivide the functions, and each one is assumed by a different set of persons; thus the interests of living men and women become enlisted in all the play of the organs, and are at stake in all the legislative and other interferences. What I have called the elasticity and plasticity of the organs means in fact the rights, interest, happiness, and prosperity of the one set of human beings versus the same interests of another set of human beings. It is men who strive, and suffer, and plan, and fight, and steal, and kill, when the great impersonal and automatic forces push them up against each other, or push group against group. The tendency is all the time to go back from the industrial struggle to the military struggle. Every strike illustrates it. Better educated people, while talking about respect for law, seize upon legislation as the modern mode of pursuing the military struggle under the forms of peace and order — that is to say, they turn from industrial competition and industrial effort to legislative compulsion, and to arbitrary advantages won and secured through the direction and the power of the state. When the strikers and Knights of Labor declare that they are going to reach after this power, they have simply determined to contend for the latest form of force by which to supersede the industrial struggle for existence by a struggle of craft and physical force. Yet there are those who tell us that this is really a supersession of the struggle for existence by intelligence and "ethical" forces, as if every page of the Congressional Record did not reveal the sordidness of the plans and motives by which it is all controlled.
Here comes in another fallacy in the philosophy of state interference. Let the reader note for himself with what naivete the advocate of interference takes it for granted that he and his associates will have the administration of their legislative device in their own hands and will be sure of guiding it for their purposes only. They never appear to remember that the device, when once set up, will itself become the prize of a struggle; that it will serve one set of purposes as well as another, so that after all the only serious question is: who will get it? Here is another ground for a general and sweeping policy of non-interference. Although you may be in possession of the power of the state to-day, and it might suit you very well, either to triumph over your business rivals and competitors; or to bend to your will the social organ which stands next to you, and with which you have the most friction (as, for instance, shippers with transporters); or to see your pet reform (temperance, for instance) marching on, you would far better consent to forego your satisfaction, lest presently your rivals, or the railroads, or the liquor-sellers, should beat you in a political struggle; and then you must suffer wrong and in the end be forced to give up industrial and persuasive methods altogether and devote your whole energy to the political struggle, as that on which all the rest depends.
Of all that I have here said, the Interstate Commerce Law is the instance which stands out in point with the greatest distinctness. The shippers and transporters, the competing railroads, the people who can extort passes and those who do not want to give them, the people at way-stations and those at competing points, and other interests also which cluster about the transportation, which is the most important element in the opening up of this great and rich continent, all clash and struggle for shares in the wealth which the people of the United States produce. The contest has phases and vicissitudes of every description. The politicians, editors, economists, litterateurs, lawyers, labor agitators, and countless others who, in one way or another, have something to make out of it, join in the struggle, taking sides with the principal parties, or hovering around the strife for what may turn up in it. When once the fatal step is taken of invoking legislation, the contest is changed in its character and in its arena. That is all that is accomplished; from that time on the questions are: who will get this legislative power? Which interest or coalition of interests (such as passed the bill) will get this, the decisive position in the battle, under its control? Already, in some of the Western States, the next phase has developed itself. The majority interest, by numbers, seizes the power of the state and proceeds to realize its own interest against all others in the most ruthless fashion. That capital has means of defense is unquestionable; that it will defend itself is certain; that it cannot defend itself without resorting to all the vices of plutocracy seems inevitable. Thus the issue of democracy and plutocracy, numbers against capital, is made up. It is the issue which menaces modern society, and which is destined to dispel the dreams which have been cherished, that we were on the eve of a millennium. On the contrary, it will probably appear that the advance of civilization constantly brings new necessity for a still more elevated activity of reason and conscience, and does not tend at all to a condition of stability, in which the social and political problems of the race would reach a definitive solution.
DEFINITIONS OF DEMOCRACY AND PLUTOCRACY
All the words in -ocracy properly describe political forms according to the chief spring of political power in them: an autocracy is a political form in which the predominant force is the will of the monarch himself; an aristocracy is a form in which the predominant and controlling force is the will of a limited body, having the possession of the qualities which are most esteemed and envied in that society; a theocracy is a form in which the predominant force is some conception of God and his will, and, inasmuch as the will of God can come to men only through some finite channel, a theocracy easily passes into a hierocracy, in which the predominant force is possessed and wielded by a priesthood; a bureaucracy is a form in which the ultimate control of things political lies in the hands of a body of office-holders. In each case the name designates that organ which, upon ultimate analysis, is found to have the power to say what shall be and what shall not be.
A democracy, then, is a political form in which the ultimate power lies with the demos, the people. This mass, however, while unorganized, could not express its will or administer the affairs of the state; there has never been any state organized on such a plan. The demos, for political purposes, has always excluded women, minors, resident aliens, slaves, paupers, felons, etc., according to the constitution in each case; the "people," therefore, has always meant some defined section of the population, not the whole of it. Furthermore, in any modern state, even a superficial study of the current phrases and accepted formulae will show that the word "people" is used in a technical sense to mean, not even the whole body of legal voters, but a limited number of them. A writer who rages at the idea that there are any "classes" will, in the next paragraph, reiterate all the current formulae about the "people," and reveal by the context that he means to distinguish the people as peasants, artisans, and uneducated persons, from the rich, the educated, and the banking, mercantile, and professional classes.
Yet the current dogmas about the rights and wisdom of the people have no truth whatever, and no moral beauty, except when they are affirmed of the whole population, without any exception whatever. The dogmas in question are not really maxims or principles of actual political life and administration; they are sublime conceptions of the undeveloped power of growth and civilization in human society. As inspiring ideals, as educational motives, as moral incentives, they have incalculable value; but then they are philosophical and academical generalities, not every-day rules of action for specific exigencies. When they are once dragged down into the mud of practical politics, and are cut to the measure of party tactics, they are most pernicious falsehoods.
For instance, the notion that a human society, acting as a whole, bringing its reason and conscience to bear on its problems, traditions, and institutions, constantly reviewing its inherited faiths, examining its experiments, profiting by its own blunders, reaching out after better judgment and correcting its prejudices, can, in the sweep of time, arrive at the best conclusions as to what is socially true and wise and just, that man can get on earth, is a grand conception, and it is true. If the doctrine that the people ought to rule, and that the people know what is wise and right means this, it is true and fruitful. It will be noticed, however, that this doctrine implies that the people are to embrace every element in the society, including all the women and children, for in no sense could this grand consensus be true unless it was universal. It is of its very essence that the whole voice should be in it; it is its catholicity which constitutes its guarantee. If the feminine element is left out of it, its guarantee is gone; it is one-sided and imperfect; it is no longer human and social; it has sunk from the grade of a grand and inspiring conception to that of the party cry of a dominant interest. Neither is it true if the children are left out of it, for it is only in the sweep of time, after long and patient revision, that the judgments have authority. It must therefore be the work of generations to make those judgments; it is only the undying society, in its continuity and undistinguished generations, which can make them, and if they are to be true, the fire and hope of youth are as essential components as the inertness and conservatism of age.
Now, however, turn this same dogma into a maxim that peasants and artisans are the "people," that they are the depositaries of social and political wisdom, as distinguished from the sages and philosophers. Tell the young man not to worry about learning, to sneer at culture, to spend his nights on the street and his Sundays reading dime novels and the Police Gazette, and, when election day comes, to throw his vote so as to make a political job for himself or his friend; tell him that this is what is meant by the doctrine that the people ought to rule, and that in doing all this he will be uttering the oracles of political wisdom — then the great doctrine has turned into one of the most grotesque and mischievous falsehoods ever imagined.
In practise, therefore, democracy means that all those who are once admitted to political power are equal and that the power lies with the numerical majority of these equal units. If then the political divisions form themselves class-wise, then the most numerous class becomes the demos and is the depositary of political power. For this reason if we establish a democracy and then set the classes and the masses against each other, it is the utmost treason against democracy, because it ingrafts upon it from the start the worst vices of social discord and social greed which have disgraced the older political forms.
A plutocracy is a political form in which the real controlling force is wealth. This is the thing which seems to me to be really new and really threatening; there have been states in which there have been large plutocratic elements, but none in which wealth seemed to have such absorbing and controlling power as it threatens us. The most recent history of the civilized states of Western Europe has shown constant and rapid advance of plutocracy. The popular doctrines of the last hundred years have spread the notion that everybody ought to enjoy comfort and luxury — that luxury is a sort of right. Therefore if anybody has luxury while others have it not, this is held to prove that men have not equally shared in the fruits of civilization, and that the state in which such a condition of things exists has failed to perform its function; the next thing to do is to get hold of the state and make it perform its function of guaranteeing comfort and physical well-being to all. In the mean time, with the increasing thirst for luxury and the habit of thinking of it as within the scope of every man's rights, the temptations of dishonest gain increase, and especially are all those forms of gain which come, not from defalcation and theft, but from the ingenious use of political opportunities, put under a special code by themselves. A man who is "on the make," to use a slang phrase produced from the very phenomena to which I refer, does not think of himself as dishonest, but only as a man of the world. He is only utilizing the chances which he can get or make to win gain from the conjuncture of political and social circumstances, without intentional crime such as the statute has forbidden. This runs all the way from the man who sells his vote to the statesman who abuses official power, and it produces a class of men who have their price.
The principle of plutocracy is that money buys whatever the owner of money wants, and the class just described are made to be its instruments. At the same time the entire industrial development of the modern world has been such as to connect industry with political power in the matter of joint-stock companies, corporations, franchises, concessions, public contracts, and so on, in new ways and in great magnitude. It is also to be noted that the impersonal and automatic methods of modern industry, and the fact that the actual superintendent is often a representative and quasi-trustee for others, has created the corporate conscience. An ambitious Roman used to buy and bribe his way through all the inferior magistracies up to the consulship, counting upon getting a province at last out of which he could extort enough to recoup himself, pay all his debts, and have a fortune besides. Modern plutocrats buy their way through elections and legislatures, in the confidence of being able to get powers which will recoup them for all the outlay and yield an ample surplus besides.
What I have said here about the venality of the humbler sets of people, and about the greed and arrogance of plutocrats, must not be taken to apply any further than it does apply, and the facts are to be taken only as one's knowledge will warrant. I am discussing forces and tendencies, and the magnitude attained as yet by those forces and tendencies ought not to be exaggerated. I regard plutocracy, however, as the most sordid and debasing form of political energy known to us. In its motive, its processes, its code, and its sanctions it is infinitely corrupting to all the institutions which ought to preserve and protect society. The time to recognize it for what it is, in its spirit and tendency, is when it is in its germ, not when it is full green.
Here, then, in order to analyze plutocracy further, we must make some important distinctions. Plutocracy ought to be carefully distinguished from "the power of capital." The effect of the uncritical denunciations of capital, and monopoly, and trust, of which we hear so much, is, as I shall try to show further on, to help forward plutocracy.
THE CONFLICT OF PLUTOCRACY AND DEMOCRACY
Not every rich man is a plutocrat. In the classical nations it was held that the pursuits of commerce and industry were degrading to the free man; and as for commerce, it was believed that every merchant was necessarily a cheat, that he must practise tricks from the necessity of the case, and that a certain ever-active craftiness and petty deceit were the traits of character in which his occupation educated him. As for the handicrafts, it was argued that they distorted a man's body and absorbed his mind and time, so that he was broken in spirit, ignorant, and sordid. The same ideas as to commerce and, in part, as to handicrafts, prevailed through the Middle Ages.
The classical civilization was built upon human slave power. For that reason it exhausted itself — consumed itself. It reached a climax of organization and development, and then began to waste capital and use up its materials and processes. It is, however, clear that any high civilization must be produced and sustained by an adequate force. In the case just mentioned it was human nerve and muscle. Now, modern civilization is based on capital, that is, on tools and machines, which subjugate natural forces and make them do the drudgery. It is this fact which has emancipated slaves and serfs, set the mass of mankind free from the drudgery which distorts the body and wears out the mind, at the same time producing a high civilization and avoiding the wear and tear on men.
The "dignity of labor" and the "power of capital" are therefore both products of the same modern movement. They go together; it is the power of capital which has made labor cease to be servile; it is the power of capital which has set women free from the drudgery of the grain-mill and the spinning-room; it is the power of capital which has enabled modern men to carry on mining and quarrying without misery, although in the classical times those forms of labor were so crushing that only the worst criminals or the lowest order of slaves were condemned to them. Every high civilization is unnatural, inasmuch as it is the product of art and effort. It is, therefore, unstable — ready to fall again to the original level, if the force and intelligence by which it is produced and maintained should fail. Our civilization is supported by capital and by modern science; if either of these fail — if we exhaust our capital, or if our science is not adequate to the tasks which fall upon it, our civilization will decline.
The dignity of capital is correlative with the dignity of labor. The capitalist has not simply fallen under the ban from which the laborer has escaped; the modern times have produced classes of men, masters of industry and accumulators of capital, who are among the most distinct and peculiar products of modern times. At what other epoch in history has any such class of men existed? There have, in earlier times, been great merchants, who have shown that the notion of a merchant as a man who cheats in weights and bets on differences, is a contemptible and ignorant calumny; the great masters of industry, however, are something entirely modern, and the vituperation of such a class as parasites, plunderers, speculators, and monopolists, is as ignorant and inexcusable as the older misconceptions of laborers which have gone out of fashion. A great capitalist is no more necessarily a plutocrat than a great general is a tyrant.
A plutocrat is a man who, having the possession of capital, and having the power of it at his disposal, uses it, not industrially, but politically; instead of employing laborers, he enlists lobbyists. Instead of applying capital to land, he operates upon the market by legislation, by artificial monopoly, by legislative privileges; he creates jobs, and erects combinations, which are half political and half industrial; he practises upon the industrial vices, makes an engine of venality, expends his ingenuity, not on processes of production, but on "knowledge of men," and on the tactics of the lobby. The modern industrial system gives him a magnificent field, one far more profitable, very often, than that of legitimate industry.
I submit, then, that it is of the utmost importance that we should recognize the truth about capital and capitalists, so as to reject the flood of nonsense and abuse which is afloat about both; that we should distinguish between the false and the true, the good and the bad, and should especially form a clear idea of the social political enemy as distinguished from everybody else. The recent history of every civilized state in the world shows the advance of plutocracy, and its injurious effects upon political institutions. The abuse and the vice, as usual, lie close beside the necessary and legitimate institution. Combinations of capital are indispensable, because we have purposes to accomplish which can be attained in no other way; monopolies exist in nature, and, however much modified by art, never cease to have their effect. Speculation is a legitimate function in the organization, and not an abuse or a public wrong. Trusts, although the name is a mistake, are evidently increasing in number all over the world, and are in great measure a result of the modern means of communication, which have made it possible for persons having a common interest, although scattered over the earth, if their number is not too great, to form combinations for the exploitation of a natural monopoly. What is gained by uncritical denunciation of these phenomena, or by indiscriminate confusion of definitions? The only effect of such procedure will be to nourish the abuses and destroy the utilities.
The first impulse is, when a social or industrial phenomenon presents itself, which is not considered good or pleasant, to say that we must pass a law against it. If plutocracy is an abuse of legislation and of political institutions, how can legislation do away with it? The trouble is that the political institutions are not strong enough to resist plutocracy; how then can they conquer plutocracy? Democracy especially dreads plutocracy, and with good reason.
There is no form of political power which is so ill-fitted to cope with plutocracy as democracy. Democracy has a whole set of institutions which are extra-legal, but are the most powerful elements in it; they are the party organization, the primary, the convention, etc. All this apparatus is well adapted to the purposes of plutocracy: it has to do with the formative stage of political activity; it is very largely operated in secret; it has a large but undefined field of legitimate, or quasi-legitimate, expenditure, for which there is no audit. As the operations of this apparatus are extra-legal they are irresponsible, yet they reach out to, and control, the public and civil functions. Even on the field of constitutional institutions, plutocracy always comes into the contest with a small body, a strong organization, a powerful motive, a definite purpose, and a strict discipline, while on the other side is a large and unorganized body, without discipline, with its ideas undefined, its interests illy understood, with an indefinite good intention.
If legislation is applied to the control of interests, especially when the latter are favored by the facts of the situation, the only effect is to impose on the interests more crafty and secret modes of action. Mr. Adams says that, since the Interstate Commerce Law was passed, the methods of railroad men have become more base and more secret than ever before. The legislator, in further efforts to succeed in his undertaking, can only sacrifice more of the open and honest rights which are within his reach, just as the Russian Government, in trying to reach the discontented elements in its society, and crush them by severity, only puts honest people to unlimited inconvenience and loss, but does not catch the Nihilists. Under a democracy, when the last comes to the last, the contest between numbers and wealth is nothing but a contest between two sets of lawyers, one drawing Acts in behalf of the state, and the other devising means of defeating those Acts in behalf of their clients. The latter set is far better paid in consideration, in security, and in money.
I therefore maintain that this is a lamentable contest, in which all that we hold dear, speaking of public interests, is at stake, and that the wise policy in regard to it is to minimize to the utmost the relations of the state to industry. As long as there are such relations, every industrial interest is forced more or less to employ plutocratic methods. The corruption is greater, perhaps, on those who exercise them than on the objects of them. Laissez-faire, instead of being what it appears to be in most of the current discussions, cuts to the very bottom of the morals, the politics, and the political economy of the most important public questions of our time.