Mid-Channel of Depression

When the business slump of the sort that belongs to capitalist enterprise was first encountered, it was looked upon as a wicked jolt, but accidental. Next it was manifest that economic dislocations came in a series, but men dwelt upon causes peculiar to the individual recurrence. The third phase was that of elaborate academic scrutiny; pioneer work was done in the assembly of materials and in their statistical dissection; though most of the bloodhounds wound up in the neighborhood of the door of the capitalist system, the posse did not surround the place and open fire. The chase seemed more important than the quarry.

Books dealing with the present depression make definite advance. They boldly accuse competition, national and international; and they urgently set forth co-operation and social planning as the remedy. They are less descriptive than analytical, and they have reached the maturity which is willing to be experimental. Gratifying as are the accomplishments of recent writers, we must remember that what they do is to give delayed and adapted expression to a thesis set forth by Karl Marx and Friedrich Engels eighty-five years ago. If we may judge by the volumes here under discussion, academic opinion, after a long and miry detour to get around the socialists, has brought up in their midst.

Writers like G. D. H. Cole and Stuart Chase unite objective inspection with reforming zeal—a combination difficult to overcome and impossible to neglect. Men of their talents are being heard above the din of politicians and business nostrum-makers. They are sufficiently sure of themselves not to indulge in dramatics, and thus their arguments and conclusions become more convincing. They preserve a sense of humor which lights dark corners.

This last accomplishment is particularly possessed by Stuart Chase. It is hard to overestimate his usefulness to a society which, ignorant of the causes of its ailment, yet wants profoundly to be cured. With never an attempt to disavow his theoretical antecedents, he writes American economics in the American language. His success in winning the ear of millions is richly deserved, for his approach is fresh, his inspection is efficient and accurate, and his results are set forth in a style which reminds one of a first-rate steeplechase mount that steadily picks up ground on the level stretches so he may clear the hurdles without losing his stride. Chase’s English is brisk and flavorful, and back of it is a very nimble mind indeed.

In his “A New Deal” he asks what an economic system is for, reviews the laissez-faire traditions which we have inherited, pictures the New Economic Era, describes the murky pit into which we have fallen, and considers proposals for getting out and staying out. As to the last, he thinks the road to violent revolution in America is blocked, and the one to business dictatorship “has mud holes and soft shoulders.” He recommends the third road, that of “drastic and progressive revision of the economic structure avoiding an utter break with the past.” He says in the end: “This may not be enough, but by the Eternal it should be tried. And woe to Supreme Courts, antiquated rights of property, checks and balances and democratic dogmas which stand in its path.” His is the way of bit-by-bit collectivization, always in accordance with a plan, a plan subject to revision as experience indicates. His scheme is eclectic, now utilizing the ballot, now the autonomous economic concentrations of business, now the power of leadership which relies more upon the promise of good results than upon the sanctions of consistency.

Mr. Cole’s “Economic Tracts for the Times” is in the main a collection of recently published articles, but the scope and arrangement of these is such that the book is hardly less systematic than his “Guide Through World Chaos” which was executed as a unified treatise. Mr. Cole began, a precocious academician, by writing about English industrial society; his proposals for its alteration accepted collectivist premises and expanded in the important quarter of methods of control and management. He was one of the most articulate in the small but influential group of “Guild Socialists.” As the present books show, his province has widened, and problems within the shop and within his own and other nations are seen against a background of international imperatives. It is natural that England should give us accurate account of the international vexations, and point out exits. In this she continues her honorable tradition in political economy. “A Guide Through World Chaos” is not over-titled. We have had too much humility and too little resolve.

After a review of the main aspects of capitalist society as they appear historically and currently, he believes (with reasons objectively given) that capitalism cannot be rehabilitated. Like Mr. Chase, he does not assent to the plans of revolutionists, certainly not for his own country. He wants the supersession of capitalism by socialism, definite objective being accompanied by gradual execution. Banking and finance he regards as the nerve center of the economic system, and these are to be socialized in the beginning; also there must be agencies for carrying through a policy of national investment and national economic development. Mr. Cole accepts the challenge, always flung at the socialist, to present plans for the competent management of socialized undertakings, and goes far, in his designs, toward removing doubts under this head. He wants, for intranational use, a managed currency unrelated to the accidents of gold supply, gold to be employed, however, in international payments. He does not believe that the countries now off the gold standard will return to it except with devalued currencies.

Mr. Cole’s work on the international economic crisis holds lessons for the United States. His analysis of the contribution of creditor America to world collapse amounts to much more than European complaint, and he goes on to show how our creditor position blocks the future for us so long as we hold to debt collection and protective tariffs. Every American who wants to be aware of his economic environment ought to read these sections, whatever else he neglects.

In “Profits or Prosperity” Professor Fairchild makes the point, not altogether new but carefully developed, that universal and continuing private profit is impossible in the nature of the case, and that the social surplus can be availed of only in consumption and, presumably, a resulting higher standard of living. He considers that private ownership of product is the first and critical point for collectivist attack, rather than ownership of capital instruments. Most acquainted readers will feel that he distinguishes enterprise from capital too radically, and that non-contractual shares embrace a wider interest than he supposes. His book, though open-minded and conscienceful, is far more dilute than those previously spoken of.

Professor Boucke, in his “Laissez Faire and After,” gives us an illuminating appraisal of old dogmas in the light of recent practice. He is scholarly, even erudite; he preserves a philosophic calm throughout his painstaking examination of our economic development in the last centuries; his conclusion, that uncoordinated private initiative must be largely displaced by deliberate social interference, is put with persuasiveness, but also with spirit. He can be abrupt enough when occasion requires: “Depressions? They are the fault of no one in particular, neither of a captain of industry nor of a dominant class. They are Laissez Faire itself, as applied science has directed it. The cure is not a recurrent respite from labors, but a revaluation of services, guided centrally by men not enslaved to the profiteering motive.”

A special doctrinal service is performed by Professor Boucke in showing, as against retrospective claims of many conservatives today, that the classical let-alone policy was really such, and that governmental interference was not contemplated by its proponents as even an emergency part of the system. To attempt to square the present wholesale adoption of interference with the initial principle, on the ground that there has been a growth in the application of a device and not an abandonment of premise, is demonstrated by Professor Boucke to be illegitimate. This book is very satisfying to the thoughtful mind which demands not only indictment but explanation; it says profound things with simplicity and charm.