Part 4

The facts are as follows: People have been here on the earth a very long time, millions of years they think. Machines they have had for only a very short time, or, as you now see them, for only two generations. Before they had machines nearly everyone tilled the soil. There was no industry save handicraft. In the space of one hundred years these conditions have so remarkably changed that now only half the people are required to till the soil; the other half live by industry. This does not mean what you thought at first; it does not mean that half the fields have been abandoned so that half the people might go into industry. You are careful to get this straight, for it is very important. On the contrary, since machines appeared whole new continents of land have been opened to cultivation. This was necessary in order to feed the industrial workers who live in cities, far off from fields, and buy their food, whereas formerly everyone generally speaking produced his own food, even the people of what once were called cities going forth seasonally to till and reap the earth. Actually, the number of people engaged in agriculture has greatly increased; yet it is only half the population where before it was the whole of it. What does this mean? It means that since the advent of machines the human race has enormously increased in number; it has so increased that the half of it which now is agricultural is greater than the whole of it was before. The new, non-agricultural half is the industrial part: it is the part that serves machines.

This fact is so astonishing that you wish to verify it. You ask them what would happen if all the machines in the world should vanish suddenly away. Their answer is that half the people living would perish in a week. And that is what you thought.

What may you deduce from these facts?

First, you will be amused that people are so naïve as to think they make machines. Then you may say there are two kinds of people here, agricultural and industrial. The earth makes one kind; machines make the other. And you will feel as sure of this as if you had proved it to your senses when you have looked at a typical industrial city where people live densely in compacted habitations with no visible errand on earth but to run to and fro tending the machines that hum night and day in the factories. Those tall, cylindrical, erupting forms called smokestacks will appear to you as generative symbols. If they were not there, neither would the people be there. Not only would the people not be there. They would be nowhere. They could never have existed. If the smokestacks disappeared, so would all these people, the industrial part of the population, leaving only the agricultural part—the part belonging to the soil—as it was before.

As a planetary tourist, you may be at least as certain these thoughts are true as men are that they are untrue; and even if they were true that would make no difference really. The problems are practical. We must think of machines as machines act, logically.

One difficulty is that whereas the machine is automatically, unerringly logical, and nothing else, man has only a little logic; he has, besides, emotions, sentiments, instincts. In his unlogical character he has often opposed himself to the machine, meaning to destroy it. At the opening of the Liverpool and Manchester Railway, the first railroad in Great Britain and the first in the world, the anti-machine feeling of British craftsmen was dramatically symbolized by a lone weaver seated at a loom on a high hill. England was the industrial machine’s first habitat on earth. There fanatical men led mobs against it.

Frail and clumsy as it was at first, its life was indestructible. And now man would not dare destroy it if he could. His own life is bound up with it. Steadily it has grown more powerful, more productive, more ominous. It has powers of reproduction and variation which, if not inherent, are yet as if governed by an active biological principle. Machines produce machines. Besides those from which we get the divisible product of artificial things, there are machines to make machines, and both kinds—(both the machines that make machines and those that transform raw materials into things of use and desire)—obey some law of evolution.

Compare any kind of machine you may happen to think of with what its ancestor was only twenty-five years ago. Its efficiency has doubled, trebled; its shape has changed; and, as it is in the animal kingdom so too with machines, suddenly a new species appears, a sport, a freak, with no visible ancestor.

Man’s sense of material power within his environment has increased proportionately. It is colossal. Benefits such as formerly he would have thought beyond supernatural agency if he could have imagined them at all he now confers upon himself. More without end presents only technical difficulties. No physical circumstance forbids him. Nevertheless the fact, and only the more strange it is, that for reasons which he names economic or political he seems powerless to inform the augmenting body of machine phenomena with a rational or benign spirit.

III

THE LAW OF MACHINES

No longer do we speak of machines. They are too numerous and too different. We speak of industrial equipment, which means machine-power in general.

As you may know, the industrial equipment of the world is increasing by terrific momentum. The machine is spreading over the face of the earth like an idea new truth. And this is so notwithstanding the fact that the industrial equipment already existing in the world is so great that if for one year it were worked at ideal capacity the product could not be sold for enough to pay the wages of labour, to say nothing of the cost of material, overhead charges, or profit. Markets would be glutted with goods. Producers would be ruined.

It follows that the pressing anxiety of industry is how to regulate and limit production in order not to overwhelm its markets. Its chronic nightmare is overproduction, meaning a quantity of divisible products in excess of the immediate sum of effective desire. Hence combines, pools, rings, cartels, committees, and associations of manufacturers, which the courts are powerless to prevent even where they are forbidden by law. These are a vital measure of mutual preservation. Yet they are but protocols of truce. They very soon break down and have to be made all over again.

Control of production, save here and there for a little while, is a myth. It could be managed only in case there was a monopoly of machine-power. Once there was. There is no longer, and never will be again. Industrial production, taking it broadly, increases in an uncontrollable manner.

The evidence is notorious, first in the efforts of national industry to increase the sale of goods in its own country, and then in the strife among industrial nations for access to foreign markets.

A steam calliope jamming its way through the crowded street of New York City to advertize a new model of a popular motor-car at a reduced price is a spectacle to bear reflection. It is a symptom of saturation in the home market. When Henry Ford was making only a thousand cars a day, he did not advertize. There was a ready cash-demand for the whole of his product. When his output passed five thousand cars a day, he began to advertize on billboards and to sell on the instalment plan.

As the natural cash-demand for a thing is overtaken, it begins to be pressed for sale on credit. At this point finance steps in. Credit companies with millions of capital are formed expressly for the purpose of lending buyers the money with which to buy. Desire shall be made effective. Selling on credit in this manner has latterly and suddenly assumed such proportions as to represent in the affair of business a new pattern. Some old-fashioned minds have been debating it as an evil. They attack it on the ground that it betrays the virtue of thrift. But thrift has ceased to be a virtue. To consume—to consume more and more progressively—to be able to say in the evening “I have consumed more to-day than I consumed yesterday”, this now is a duty the individual owes to industrial society.

For see what would happen if people all over the world should return of a sudden to the former ways of thrift—to the habit of doing without? There would be depression in industry. Machines would stop. Millions who tend them would be disemployed. Nothing would be safe, not even your own money, for there would be panic on the exchange and trouble at the bank.

One is not speaking of the United States alone. The multiplication of things is greater here than anywhere else because we make machines faster and work them harder; but you will find the same necessity acting also in France, the very cradle of thrift, where now cheap motors are sold on credit: anyone who will buy may borrow the money to buy with. Why is this in France? To stimulate the motor habit? To serve a private profit-motive? The habit will follow; the profit may. But there is another reason, touching foreign trade, which we are coming to elucidate.

In order to sell abroad, an industrial nation must be able to produce cheaply. To produce cheaply, it must produce in large quantities by a multiple method called mass-production. And you can safely manage this mass-production only provided you have a fairly large and constant base of domestic demand. So the sale of French motor-cars in France, though it be on credit, must be large enough to support the method of mass-production, for otherwise France would be unable to meet the competition of Ford, who now exports motor-cars to Europe—even builds them there. Then the British manufacturers, to meet the competition of both France and Ford, also undertake against their genius to produce motor-cars by the quantity method, and, having achieved the method, their next dilemma is what to do with the product. They advertize at home to create a popular motor-car habit and at the same time press their cars for sale in foreign markets, even in France and Germany, as these countries press theirs for sale in Great Britain.

Competition among industrial nations to exploit one another’s internal markets is but one profile of all that dangerous activity taking place in the name of foreign trade. The industrial powers holding their feet in China’s doorway and France fighting the native in Morocco are other aspects of the same thing. China so long as possible shall be an open market for the surplus product of western machines; there shall be more wanting in Morocco.

The industrial equipment of the world meanwhile goes on increasing, though it is already so great that its capacity cannot be fully utilized. In the United States alone there is probably enough surplus machine-capacity to satisfy the whole demand of Great Britain’s foreign customers for staple merchandise, such as textiles, iron and steel manufacturers, rubber tires, motor-cars, electrical apparatus, machinery, glass, garments, shoes, cutlery, and so on. Great Britain not only has a surplus of machine-power; she has besides an excess of man-power represented by say one and one-quarter millions unemployed. She could easily take on the entire foreign trade of France; but in France also there is a surplus of machine-power. Both Great Britain and France dread the competition of Germany, whose production of goods with her existing equipment could be increased, under incentive, nobody knows how much.

The exterior facts do not make sense. They represent industry to be witless, in that, while dreading surplus as the evil that devoureth profit, it is at the same time bent to push supply to a point beyond saturation. Industry does not do this. Necessity does it. There is an interior fact. The tendency of the divisible product of machines to exceed the sum of effective desire is the last thing that industry wishes for. It is owing to a principle hitherto mentioned, namely, the principle that the cheapness of things is in proportion to the quantity produced. Which now is to be explained.

It is the economic function of the machine to cheapen production. There is otherwise no point to it. But, if we say things are more cheaply made by machine than by hand, we speak very loosely. What we mean is that a quantity of things is more cheaply made by machine than by hand.

For example, the cost of a single yard of cloth produced by machine is hundreds of times greater than the cost of a single yard of it produced by hand. Obviously, the power-loom is a very costly piece of machinery to build, and so is the engine that drives it. If you produced on a power-loom only the amount of cloth a weaver could make by hand, nobody could afford to buy it. But when you produce on the power-loom a quantity of cloth one hundred times greater than a weaver can make by hand, then, of course it is much cheaper. And the more you produce the cheaper it is. So with anything. The greater the quantity, the lower the cost. Hence the terms quantity, or mass-production, meaning, first, to standardize the product, as to make it all black, all one texture, all one width or shape, and then to bring a chain of machine-power continuously to bear upon its multiple production.

Observe the working of this principle. Take watches. At one time they were made by hand, slowly, laboriously, in stances being not uncommon of a craftsman spending half his lifetime to make a very fine one. Under these conditions watches are rare and costly. Only the very rich can buy them. Suddenly they began to be made by machines. A very good watch can be made for fifty dollars. There are a million people who want watches at that price. This is an original demand, a kind of vacuum, represented by a million people who have never had watches and now for the first time may possess them. Watches cannot be made fast enough to meet this want. The industry, for that reason, expands very fast. Then all at once the demand is satisfied. The million have watches. The vacuum has been filled. Hereafter the demand will tend to be static: it will increase slowly as the population increases or as people in general grow richer, little by little. The watch-making industry, therefore, is depressed. It has to limit production. Now comes someone with the idea that by carrying the machine method further a watch can be made for ten dollars. There are twenty million people who can afford to buy watches at that price. The ten-dollar watch appears. The demand again is like a vacuum, twenty times greater than the first. For a while ten-dollar watches cannot be made fast enough. The makers of fifty-dollar watches throw away their old machines, install new ones, increase their production, reduce their costs, and not only make what was a fifty dollar watch for twenty-five but contribute also, in a competitive manner, to the supply of ten-dollar watches. Suddenly what happened before happens again. The twenty million have watches. The vacuum is filled. Then someone says: “But there are one hundred million who would buy watches at two dollars”. So the process is repeated, still lower in the pyramid. The two-dollar watch is not a fine watch, but it will keep time; and as you would know, with the improvement that has taken place in machine practice the cost of making any kind of watch, even the finest, has been greatly reduced. A watch ceases to be a luxury or a token of caste. It is a necessary part of man’s personal equipment, all the way down to the base of the pyramid.

There you have the cycle. The use of the machine is to cheapen the cost of production. The sign is quantity. When the supply at a given price has overtaken the effective demand you have either to idle your machinery, in which case your cost of production will rise, or open a wider demand at a lower price. To lower the price and keep a profit you have to cheapen the cost of production still more. This you can do only by increasing the quantity, which again overtakes the demand, creating again the same necessity to cheapen the cost by increasing the quantity in order to be able to make a lower price for greater demand. Thus supply pursues demand, downward through the social structure.