Chapter XVI
After our sentimental masses have been led by a politically calculating President and an economically miscalculating plutocracy into a second war in one generation to save the world from foreign sin, it will be necessary for us to take up permanently pyramid building to create work for the demobilized soldiers and the discharged war workers. It is, therefore, important at this time to give thought to the social function of pyramid building. There is, of course, nothing to pyramid building of almost any magnitude as an engineering performance. It is much easier to build pyramids today with steam shovels than in the days of Pharaoh with slave labor. All there is to pyramid building really is having the will to decide what to build and to enforce the necessary discipline, organization and administration. The choice of pyramids is also relatively unimportant. What the people need is not so much the pyramids as the work of building them. Pyramid building is for social order what physical exercise is for personal health. All that matters about exercise is getting one of several suitable varieties and the right amount for the given person. The end of exercise is not what is done but the doing of it.
By pyramids I mean any kind of public works, housing or long-term capital investments by the state which would never be created by private capital and enterprise for a profit or for interest. In other words, I mean public investments which are strictly nonproductive or nonreproductive in a capitalistic sense. I expressly use the word pyramid building though I well know that the term and the idea are most unpopular. Many protagonists of increased public investment as a necessary part of any remedy for stagnation try to deflect from their pet projects popular objection to pyramid building by denying that their proposals are pyramid building or nonproductive. By a type of casuistry worthy of the traditional Philadelphia lawyer, these special pleaders seek to justify building better homes for workers than the workers can afford as being really productive and both financially and economically sound within the framework of the capitalist system. Such sophistry is intellectually dishonest and easily shown up for what it really is by any one who understands the first thing about public and private finance and accounting principles. It is, however, in the best tradition of democracy to get things done by deluding people as they wish to be deluded. This chapter is written to explain not to sell pyramid building. This being true, I have no interest in misrepresenting it or calling the thing by another name. The phrase “pyramid building” is more descriptive than the phrase “capitalistically nonproductive” which, in more technical terms, is what is meant.
The reason we have stagnation in peace under capitalism today is that there are not enough inducements to private capital and enterprise to build or create sufficient long-term investments for a profit. Many people consider this situation highly abnormal and think it must disappear as soon as we get back to normal, by which they mean the nineteenth century. The fact of the matter is that we are getting back to normal and that that is precisely why we shall have to start building pyramids. Egypt in the days of the Pharaohs was far more nearly normal in any long perspective of history than frontier America. Egyptian pyramid building went on over a thousand years. Frontier capitalism played out in a little over one century.
In any economy of comparative abundance, that is to say, one in which the food supply is easily obtained and abundant, pyramid building is a social necessity if there are not enough foreign wars or a sufficiently rapid industrialization in progress to create work for all. Of course, one of the fallacies of capitalism is the notion that industrialization can go on forever. Obviously, as we have already seen, industrialization, starting from the basis of a wholly unindustrialized community and accompanied by rapid population growth, can go on until the saturation point in industrialization and the peak of population growth are reached. Egypt had no industrialization and not enough foreign wars. In addition it had, for the period, an exceptionally productive agriculture, thanks to a semi-scientific use of irrigation and the periodic enrichment of the Nile Valley soil by reason of the river’s overflowing its banks. Our industrialization is over, our population growth has turned down and we have a surplus of food. We, therefore, have only war as an alternative to pyramid building. And between wars we shall have to build pyramids.
In preparation for the coming American pyramid building, we need a revolutionary change in ideology and values. The philosophy of capitalism, the frontier, Puritanism and expansion is at variance with pyramid building. Our social philosophy makes pyramid building appear a waste. Under capitalism any capital expenditure not made for interest or profit or one of a few capitalistically tolerated public purposes like police, defense, education and sanitation is waste. Schools eventually came, after considerable early nineteenth century opposition by sound liberals like Herbert Spencer, to be accepted as proper public investments, along with warships. The underlying theory of capitalism assumed that there was a perpetual scarcity of capital goods on which interest or profit could be earned. The fact that a return could be earned on an investment proved that it was good. Investments which were nonproductive of interest or profit, with certain exceptions already noted, as for schools and warships, were presumed to be wasteful and wicked. In the first place, it was taken for granted that the ability of an investment to earn a return in money was the final criterion of its utility and desirability. In the second place, it was considered evil to pay for nonproductive investments either out of taxes or public loans. Taxation was a necessary evil to be avoided as much as possible and the public debt was another evil to be kept as small as possible. Individuals should not be deprived of savings by taxation for public investment when they could, themselves, make a much better use of such savings through private investment.
By this time it will have occurred to many readers familiar with the writings of Stuart Chase, the more radical New Dealers and the utopian socialists to ask why our now redundant industrial capacity cannot be devoted to producing more consumer goods to raise living standards rather than to pyramid building. The answer is to say: first, pyramids may yield consumer goods and raise the standard of living. Pyramids may or may not be great temples to a cult or monuments to a ruler. They may be houses for the working classes which they cannot afford to pay for if building has to be done on a sound business basis. Second, the production of pyramids can be planned. It can be stabilized and temporarily expanded or contracted as may be deemed expedient in the given economic phase of the moment to help iron out an industrial fluctuation. Here it has to be explained, somewhat theoretically and I fear abstrusely, that under any socialized or collectivist economy, control and planning by one central state-planning authority are indispensable, the chief social problem today being that of maintaining full and steady employment, which is to say, order—order of a kind capitalism cannot maintain, as demonstrated over the past ten years.
If the people were given by a supposedly benign socialist state enough purchasing power to pay for the full industrial output, less what it might be necessary to retain for government operating expenses and for new industrial capital to keep the productive plant intact, there would soon develop, even under socialism, the most awful industrial fluctuations and economic upsets. The reason is that the vagaries of consumer taste and demand are such that an economy geared mainly to their satisfaction cannot achieve stability. In an expanding capitalism, a continuous shortage of housing for a growing population and of railroads and capital goods for the opening up of new territory, always compensated for the faults and failings of unsteady consumer demand. And, as has already been pointed out, consumer demand for bread, shelter and clothes is a far more stable factor than consumer demand for automobiles, electric iceboxes and luxury goods generally. Whether all goods are produced by socialized plants, whether a mixed system of government and private enterprise prevails, or whether all enterprise is privately owned and managed, it may be said that the more free consumer spending there is, the more instability there will be in production because the more unpredictability there will be as to future demand. And the larger the percentage of luxury goods consumed, the greater will be this unpredictability and the greater the consequent disorders in industrial production.
Now there are, broadly speaking, just two ways to meet this difficulty: The one is rationing and the other pyramid building. Of the two, pyramid building seems by far the lesser evil or the greater good. Some reasons follow. For one thing, pyramid building can be used in conjunction with a large measure of consumer freedom in a free production sector of the economy, thus avoiding the necessity for rationing which must always meet with strong psychological resistance as a bureaucratic tyranny over taste. A system of rationing would undertake to prevent industrial fluctuations and facilitate planning by making payment of all wages and salaries in fifty or a hundred different kinds of coupons which would entitle the bearer to given quantities of given classes of goods.
Pyramid building would mean regimentation in the matter of housing, thus denying to the poor their present democratic freedom to pick their own slum hovel. But regimentation in housing would seem less apparent or oppressive than regimentation in the rationing of consumer articles. Pyramid building would also permit the making available of a large quantity and range of free or nearly free goods which every one needs and in respect of which there is not much choice, as in milk, to name only one example. In the selection of ice cream, there is flavor, color and packaging to choose. In the selection of milk, there is just good, medium and bad milk to choose, with every one preferring good milk if he can afford it.
Americans are apt to think of welfare exclusively in terms of money income and the availability of things that money will buy. It is easy to show how many forms of individual, family and group enjoyment can be made available by public investments of a nonproductive character. Members of a family living in a city like New York on an income of less than two thousand dollars a year can buy comparatively few luxuries, little recreation and little medical and dental service. If liberty be proportionate to opportunity to use it, they have very little economic freedom or choice. They would obviously be better off if five hundred dollars a year of their money income were retained and spent for them by the state in a way to yield them satisfactions which they could not buy the equivalent of for one thousand dollars a year. Such satisfactions would have to result mainly from pyramid building such as housing, amusement and recreation buildings and parks, medical and dental clinics, milk-distribution plants and equipment to make this standard commodity available to the masses at less than cost, and so forth. One has only to compare the old Coney Island with the new state reservation at Jones Beach, New York, the latter being a perfect example of pyramid building, to get an idea of what a paternalistic state can do in the way of adding to the real income of the people in the way of recreation.
Of course, it will be necessary to educate the people to the use of public facilities for recreation and to the enjoyment of luxuries like a state-subsidized theater, opera, physical culture, adult education, and recreation center for each large community. Persons with incomes above five thousand dollars a year need not worry about getting homes outside of the slums, medical care, or recreation, since they are able to take care of these needs fairly well by shopping around for themselves in the free, commercial market. But the poorest third of the population, who have nearly two thirds of all the children, have little real freedom of choice or ability to satisfy their elementary needs in the free commercial market.
Pyramid building can and must be carried over into the supplying of standard types and grades of food, raw material like coal, and services like heat, light and transportation. These economic goods can be made nearly free or sold way below cost if the plants used in their production are treated as pyramids and built by the state out of a reserved part of the national income. The point here is that the production and distribution, gratis or nearly gratis, of economic goods through pyramid building would not be done primarily with the view of raising living standards and certainly not of catering to the vagaries of popular taste, but with an eye single to stabilizing maximum production and employment. These objectives of order can be achieved by having men dig holes and fill them up again, by war or by building structures and creating industrial capital capable of yielding public satisfactions. But if the left-motif in public investment is not public order, public order will not be a result. This means that public investment must be integrated with a totalitarian scheme of things and not done in the good democratic way of log rolling as public investment is now done in this country. If an attempt is made to give the people what they want, it will inevitably break down, because their several wants will not add up to a feasible program and rhythm of integrated and stabilized production and distribution. Certain strategically situated minorities will get more and other weaker minorities will get less than should be coming to them under any rational scheme of social justice. And the resulting pattern of production will break down because of bottlenecks in some branches and overproduction in others. We cannot have social order with pressure-group economic planning and interventions as at present under democracy.
Our farms have excess productive capacity. They are the most important area for raising our citizens of tomorrow. And they cannot operate on a free-market basis. The people need more milk but cannot pay for more milk under the present system. The state can spend hundreds of millions of dollars endowing the milk industry with productive capital to effect distribution of milk below cost. The idea will not be to give people with large families or a taste for milk something for nothing. The idea will be simply to create greater social stability by subsidizing agriculture, and, for this purpose, it will be found preferable to give away milk rather than to pay farmers for killing hogs.
Pyramid building would unquestionably increase regimentation just as the building of several new bridges and tunnels by which to enter New York has increased the regimentation of New York traffic. How much less regimented was the Indian’s way of paddling his own canoe to any part of the island he chose to visit a few centuries ago! Most of the talk nowadays against regimentation is nonsensical or intellectually dishonest. Those who do most of this talking are the well to do or the rich who have least ground to complain about regimentation. The rich do not need to ride in the subways, though their chauffeurs must submit to the regimentation of traffic lights and policemen. The rich do not need to live in congested areas, but can enjoy the luxury of an individual country estate, though as a matter of fact most of them prefer to occupy an expensive apartment in the city. Such apartments, incidentally, so far as regimentation is concerned, are not greatly different from the nearby abodes of the poor except as to the amplitude of space and the facilities enjoyed. There is no more individuality to a row of Park Avenue apartments than there is to an East Side slum, in fact there is less because the architecture on Park Avenue is more standardized. The truth is that neither the rich nor the poor really mind regimentation as such. The best proof is to be found in any expensive and overcrowded night club whither the rich repair for amusement rather than to the wide-open spaces where they might enjoy freedom from regimentation and opportunity for the expansion of an individual personality which none of them have or desire. The regimentation the rich really oppose is the regimentation by government which curtails the power of money, usually to exploit the weakness of others. Obviously the poor do not mind such regimentation, as it does not affect the man who has no money.
The welfare problem, so far as the masses are concerned, is not to reduce regimentation but to improve it. The new revolution cannot give every laborer an automobile and chauffeur to free him from the regimentation of the subway, but it can improve the subways. It cannot give him a country estate to free him from the regimentation of the city but it can give him a slumless city. All this can be done only on the basis of pyramid building. Razing the city slums of the democracies would be a wholly nonproductive expenditure. British and American democracy arose with urban slums and must disappear with them. Democracy cannot eradicate slums. The only forces that can wipe out the slums will also wipe out democracy and capitalism.
The cry of our rich lovers of democracy and freedom against regimentation is never more strident than when raised against socialized medicine, plant and equipment for which come under the head of pyramids, because nonreproductive. To say that saving or prolonging life and conserving health for the poor by means of facilities they cannot afford to pay for, is capitalistically productive is all nonsense. Capitalistically considered, the lives of the poor are not worth saving since the higher birth rate of the poor takes care of their higher death rate. Capitalists who oppose socialized medicine are on sound capitalistic grounds. Only, if we are to practise capitalism, we should be much more ruthless than we now are and allow sickness and death among the poor to operate unchecked by charity, thus saving considerable money for the taxpayers. Under chattel slavery, of course, capitalism should practise socialized medicine, but under democracy the capitalists, not owning the workers and having an unlimited supply available, should not waste any of their money on the health of the workers except, of course, for measures of quarantine and isolation of infectious or contagious diseases which might menace the wealthy. Nothing could be more hypocritical than the criticism of socialized medicine made by the higher-ups of the American Medical Association, among our most ardent believers in democracy, whose fees put their services beyond the means of the poor, or by the wealthy whose yearly expenditures on medical attention exceed the total income of the average factory worker’s family.
The bad faith of the attack on socialized medicine is best seen in its continuously repeated charge that socialized medicine would deprive the individual of his liberty of choice in the obtaining of a doctor. The charge, of course, is absurdly untrue as no contemplated or practiced scheme of socialized medicine anywhere leaves those with means to pay for private medical attention without opportunity to select their own doctor. Even in communist Russia, where socialized medicine has been carried to its logical extreme, the well-paid higher officials of the Soviet regime hire medical experts for special attendance outside of their official state employment hours and pay them extra for such attendance. All that socialized medicine would mean in a mixed economy, combining private and public enterprise, would be the availability to millions of people, as a matter of right and not of charity, of medical and dental service they cannot now afford and do not enjoy. Actually, of course, the majority of laymen have no knowledge which permits them to make an intelligent choice of a doctor to treat their particular ailment. As a practical matter, most persons if seriously ill will call the nearest doctor or one they happen to know and not to have selected on the basis of expert knowledge, information or comparison. They will then leave it to this doctor to select for them another or other medical experts according to his opinion of their needs and his acquaintance with and knowledge of available experts. The same thing happens under socialized medicine or in an army infirmary. The right of the individual to choose his own doctor, no matter how rich he may be, is largely a meaningless right. His choice is usually determined by the accidents of location and casual acquaintance and by the decisions of doctors who know more about other doctors than he does.
There is another and subtler consideration which favors, if not actually imposes, pyramid building under any nonexpanding collectivism, and that is the need for the enforcement of Spartan discipline to avert demoralization. In an expanding society and a fast growing population, with the industrial revolution in full swing, scarcity alone suffices to enforce a healthy social discipline and to prevent a deterioration of mass morale. A fully industrialized static economy, in which the population curve has flattened out, cannot have discipline enforced by need or scarcity as in the early days of capitalism. If the static economy is in the last phase of capitalist collapse there may be plenty of need by individuals who cannot find jobs or obtain remunerative prices for farm output. But this need is not the result of scarcity and, most important of all, it does not impose discipline. This need is due to unemployment. Such need, therefore, causes the ruling classes to mitigate it with relief. Work for the needy disciplines; unemployed relief for the needy demoralizes. The morale, discipline and character of a nation cannot be maintained with a third of the population directly or indirectly on relief. Capitalism can no longer maintain the discipline of work. It can only prolong its decline by relief which demoralizes instead of disciplining. The succeeding socialist state must keep the people fully employed in order to maintain social discipline and morale. Yet it will not have in highly industrialized and raw-material rich countries like the United States the disciplining force of scarcity. Therefore, it must go in continuously for pyramids or wars to insure scarcity.
The economists and political scientists of democracy and capitalism, whose thinking has been done in the unrealistic terms of hedonism and Benthamism, have tended to overlook the social necessity of discipline. Consequently, they have failed to see how democracy depended for its discipline on the transient coercions of scarcity, need and national defense operative in the era of the frontier, empire building, rapid population growth and industrialization. This discipline was made effective partly by the hunger of the masses and partly by the greed of profit seekers. Today agricultural surpluses and relief eliminate the discipline of hunger for the masses; and lack of opportunity to make large profits eliminates the discipline of greed for the capitalists. The masses are growing soft and demoralized on relief and a lack of work, and the capitalists are growing soft and demoralized on tax-exempt government bonds and a lack of new business ventures. The theorists of capitalism and democracy never foresaw the day when their system would lack discipline any more than they foresaw the day when it would lack dynamism. The socialist state must rely largely on war and pyramid building for discipline, without which no society can long maintain a higher order of culture or perpetuate itself.
Many of the socialists of the utopian schools as well as most present-day New Dealers think that the big social problem is how to achieve greater abundance. The problem is not that at all. Abundance without dynamism or discipline may be called the cause of our trouble. The problem is not how to get abundance, but how to get on in spite of it. For, if we cannot work out a formula for preserving dynamism and discipline with abundance, we shall have to get rid of abundance in order to recover dynamism and discipline. This we shall do in going to war, and this is about the only plausible rationalization for our going to war.
Abundance, if permanently compatible with dynamism and discipline, which remains to be proved, must be a by-product of better social order, organization, management and morale and not the main social objective. A socialist state in which a painless and nearly effortless abundance of material goods and services was enjoyed by everyone would quickly disintegrate and soon perish. It did not take Russian communism, which started out with free love and free abortions, long to find out that all that nonsense had to be stopped and the stern virtues of the family and the workshop had to be restored. Interestingly enough, during the past ten years of depression, communist Russia, Fascist Italy and Nazi Germany have been tightening up on discipline and democratic America, England and France have been relaxing on discipline.
An economy of easy abundance would create no spiritual values to give life dignity and meaning. Five million middle-class American homes with shiny bathtubs and chromium-plated mechanical gadgets do not in their entirety contain the spiritual values to be found in one medieval Gothic cathedral. There is no need to denounce a business civilization. It contains the seeds of its own destruction. Its smug prigs grow too comfortable and selfish to breed. The rest is natural history and jungle law.
A civilization must exalt a tradition of heroism. This it may do in war or pyramid building. Liberalism never glorified heroism in theory but, in its frontier empire-building days, it exemplified heroism in its practice. Now that the frontier and empire building are over for the democracies, the communities dominated by capitalism and democracy face the problem of developing a new design for living heroically. The Utopian socialists and New Dealers would build pyramids only for the greater ease of the masses. Pyramids, of whatever the type, must be built for the greater glory of the larger community, call it race, nation or cult as you like. Pyramids must express heroism and sacrifice, not hedonism and ease.
It must not be forgotten, of course, that the culture of capitalism inherited many dynamic taste factors from the preceding culture of medieval Catholicism and feudalism. It inherited tastes which are still aesthetically normative but no longer sufficiently dynamic to create full employment. As long as the rich kept on growing richer on the rising prosperity of an expanding capitalism, tastes surviving from Renaissance and pre-Renaissance days caused rich men to produce the counterparts of pyramids in the great mansions and country estates which the newly arrived vulgarians of trade built all over England and our eastern seaboard. The lavish expenditures by the eighteenth and nineteenth century plutocracy on mansions fulfilled almost every requirement of pyramids except that of socially convenient periodicity. They were built when times were good rather than when they were most needed, during hard times. Now that the rich everywhere are on the greased skids of taxation, inflation and hard times, they can no longer build many pyramids. And even many of the rich who can still afford to build pyramids lack the noblesse oblige or confidence to do so, preferring the shoddy ease of expensive city apartments, which are indistinguishable from office buildings or warehouses, to the state which should go with their wealth. They are economizing to compensate for the drop in interest rates on their tax-exempt bonds.
As indicated at the outset, the undertaking in this chapter has been to plant a few seminal ideas about the social function of pyramid building as a key to an understanding of the near future rather than to outline a program of pyramids to build. The thing for the elite now to understand about pyramid building is the why rather than the what or the how. Our problem in respect to production is to find ways of spending more money so as to permit of the most efficient public control and the best social order. Our ideas of economy belong to the eighteenth and nineteenth centuries and neither to the thousands of years that preceded them nor to the years immediately to come. It has always been the function of a ruling class to spend money unproductively, except during that brief era of expanding capitalism when they could invest money at high rates of return. We are now getting back to normal. We must get rid of the concept that a nation can live beyond its income. Whatever a nation consumes it has to produce. With our productive capacity and labor underemployed, our main problem is to spend and consume more so as to bring our production and employment up to capacity. In doing this, the idea is not to achieve abundance, though that may be a tolerable by-product, but to achieve full employment with order and freedom from present industrial fluctuations.
The defenders of democracy and capitalism who really know what it is all about frankly admit that unemployment is necessary for their system and prefer it to a loss of individual liberty or an increase of state control. This is not an issue which can be debated since it is, fundamentally, an issue of ultimate values. De gustibus non est disputandum. The issue will have to be resolved by force and not persuasion. The force may be only the pressure of events and strong minority group demands for better public order. Be that as it may, if large scale unemployment proves inconsistent with public order, as this book argues, those who prefer freedom with unemployment to regimentation with order will just have to be ploughed under in the chaos which their beloved freedom brings on and in the ensuing revolutionary steps to restore order.
To sum up the discussion of pyramid building. If the new revolution succeeds and does not land us in permanent chaos, it will probably develop a mixed economy. As regards private and public ownership and enterprise, this economy will consist of two sectors: one of small-scale enterprise in which private initiative will operate and one of large-scale enterprise in which public ownership and initiative will prevail. As regards the allotment of the productive factors, this economy will be divisible into a free sector in which consumer preference will govern and another sector in which the state will determine production. The goods produced in the free sector will have to be paid for by individuals. The goods produced in the controlled or planned sector will be paid for collectively and distributed free or below cost, such goods consisting in large part of the satisfactions individuals will receive from roads, public works, parks and cultural and recreational facilities of every sort provided by the state. In the free sector governed largely by consumer preference, of course, the state will constantly intervene to prevent or correct serious miscalculations and maladjustments. Industries losing consumer demand will have to be promptly readapted to other lines of production without the slow, costly and socially disruptive processes of failure, bankruptcy, idleness and reorganization peculiar to free enterprise. In the controlled or pyramid-building sector, the central objective will be the maintenance of order or full production and employment. This will mean using state demand and production in this sector to compensate for excesses or deficiencies in the sector ruled by consumer preference and industrial calculation to meet such preference. It will also mean the use of public investment as a general instrument of social policy, actual uses made of the instrument naturally being determined in every case largely by the changing objectives of social policy. Presumably the maintenance of full production and employment will be a fairly constant objective of social policy in any rationally conducted society. Preparation for war, preparation for greater economic self-sufficiency or a simple raising of living standards are special objectives which, in addition to that of order, may influence and guide the use of the pyramid instrument in given countries at different times.
The chief essential for the success of economic planning and social order is the suppression of what we now know as democracy or the parliamentary—i.e. log rolling, pressure group—form of government. This will probably have to be learned in war when the anarchy of parliamentary government becomes intolerable from the point of view of defense, the demands of which carry more weight with the people than the peacetime demands of welfare which democracy relegates to the secondary order of charity. Charity is only a Christian virtue while defense is a national virtue. Therefore, socialism must be inaugurated by national war (duly blessed by the Christian Church) and not by Christian influences which are so obviously secondary in our culture.