Quarterly Review of Economics 14 (1899-1900), 378-393.
By E.R.L. Gould
Critique by Punkerslut
As of late, I have been doing a great deal of research for a second edition of the book Class War. In my attempt to better understand the condition of those in poverty caused by economic injustice, I decided to investigate the tenement situation in populated areas. In this attempt, I picked up this word by E. R. L. Gould, which goes in to a great deal of depth on the extent of the problem of poor living conditions, its effects on societies, and its possible remedies. I feel that I have gained a great deal of insight into the problem by reading this. There is, though, one part of it that I come in to argument with. It is when Gould takes a political stance on the issue. He suggested, as a solution to the poverty of the masses, that investors take a more philanthropic approach to the question of housing. His argument was to the oppressor, to withdraw, not to the oppressed, to revolt. His ideals were counter-revolutionary. His desire to change the system was to use government regulation, as opposed to government ownership. There is, in fact, quite a distinct line between both of these two methods of economy, as I shall now explain...
When it comes to Socialism and Communism, there are two primary methods through legislation that an improvement in the working class condition can be achieved. One is regulation, by which the government places standards that must be followed for any capitalist entity to do business and trade. Such regulation that might be proposed for the working class involves simple and what is currently considered obvious. For example, minimum wage laws, overtime hours, and laws limiting age in certain working conditions such as factories, all of these can be considered forms of regulation that protect the working class. Other methods of regulation target the other side of the worker: the consumer. Laws sometimes regulate the quality of food that is purchased, the safety of products that are sold, and what is considered deceptive advertising, and allowing the prosecution of it. Other laws stemming from the idea of regulation are laws which set up bureaus, departments, and organizations to particularly enforce these laws. To protect the consumers, the U.S. government has created the Food and Drug Administration (FDA) and to monitor the fluctuations of the economy and bring out the truth of the matter, the U.S. government has also set up the Department of Labor. Initially, many of these organizations that were funded by the government for enforcing these economic regulations were poorly provided for financially, and often times very weak legally. Through the blessed spirit of justice, the strength of those who believe that there should never again be a victim lost to poverty, these organizations have garnered more strength, financially and legally. Unfortunately, the FDA has been used in political battles to outlaw drugs and other substances, turning a great mass of otherwise law-abiding, American citizens into political prisoners. To aid in this, the gods of congress have erected the Drug Enforcement Agency (DEA). Not at all unlike the stormtroopers of the gestapo, they have plundered and pillaged private residences, in their quest for what is unjust: the elimination of earthly pains through chemical fulfillment.
The other method that Socialism and Communism often take is that of ownership and operation. There is the method of rigidly regulating the economy, by placing a law that requires a certain amount of wage as the minimum, or by placing laws that protect factory and mine workers, or by making it illegal to produce potentially hazardous products, or by creating agencies and departments to investigate, enforce, and prosecute people for these laws. Then there is the method of ownership and operation. Instead of regulation, the law -- whether it is directed by the people or through representatives of the people, or even by dictators -- owns and operates the actual means of production. By this, they will have complete control over the industry. They will be deciding the amount of raw materials to purchase, the amount of labor to be used, the amount of pay per individual, the amount to produce. In the mining industry, for example, they will decide what hours the workers work, what pay they receive, and how many hours they work. Then the collective people, or their leader, will decide to which manufacturing plants the raw materials go, what those workers are paid and how long they work, and then what they produce. The government then decides what the manufacturing plants produce: tools, industrial and commercial electronics, recreational electronics, and household items. Then it is decided where the tools and industrial and commercial electronics will be applied. Some will be sent to the agricultural district to help with their production output, others will be sent to other regions to help the maintenance of current factories that are producing commercially used items and personally used items, and some machinery and tools still will be used to erect dwellings for the people, or even distribution centers ("stores"). Through the entire control of the economy, the collective whole won't just be regulating the input, output, and exchange rates, but rather, the collective whole will be organized in a method to best benefit the worker, the consumer, and ameliorate all poverty -- things which, Gould hopes, would be accomplished through simple regulation.
Communism and Socialism, unfortunately, now are recognized as rather vague terms, understood to mean a whole great deal of ideas (sometimes implying a police state, other times implying poverty, other times implying heavy government influence and control, and those alone represent just the misconceptions). But, it is still recognized generally that Socialism is a lesser from of economic control (i.e. regulation) and that Communism is a higher form of it (i.e. ownership). In this piece, Gould doesn't so much make an argument for, as much as he makes an agreement with, the idea of regulation, opposing that of ownership. The question I will be tackling in this critique is whether public regulation is better than public ownership of the means of production.
When there is only a regulation of the economy, laws which limit economical exchange, the main object in mind of every Capitalist is still to obtain wealth, a profit. It is in the mindset of every person to seek out and rationally achieve their self-interests. For the consumer, it is to choose the cheapest products and services on the market to satisfy their needs, and to work as hard as necessary when it comes to satiating their desires. For the Capitalist, however, the situation is somewhat different. Their primary end is to create wealth for themselves. The only thing that regulatory laws are capable of doing is inhibiting his desires to fully express this need. The law may require a minimum wage of only $5 or $6 per hour, but the Capitalist may respond with laying off workers. The law may require a tax on industrialists for causing poverty, by taxing them on every transaction in a certain region. The Capitalist may respond by refusing to do business in that certain region, or limiting business in general. These are not actions of the Capitalist retaliating towards the Socialist legislation -- this is the action of the Capitalist trying to manage their own business so as to cut all business expenditures that do not generate enough profit.
In a society where the means of production are owned by the public, the interest of the owners of the means of production -- the public -- would be their own. A king in a nation under the yoke of monarchy wants to serve his own interests from the public. Let's say that there is a congress elected to represent the people's interests. Even if the congress chooses to pass laws that restrict the king's power, he will try to override them. A law may require that taxation of a certain product is restricted -- his response is to overtax other products. A law may require that certain evidence is required to obtain a conviction on a suspect, but he may simply throw at the suspect a thousand other suspicions, to keep him indefinitely imprisoned. The same can be said of a Socialist nation. Just like a king can work around laws, so can Capitalists. In both cases, the laws are simply a hindrance to the oppressor of the people. A Socialist nation is by far much more free and much more liberated than a Capitalist nation, just as a Republic nation is by far much more free and much more liberated than a Dictator's nation. The people have seen that it is necessary to restrict the rights of a political ruler. When a political ruler only has so many rights, why have they not found it necessary to restrict the rights of an economic ruler -- one who can control who starves and who doesn't, who is homeless and who is not?
The best method of freedom and liberty in politics is Democracy and Anarchism, giving the people themselves their own right to govern themself. When it comes to the economic arena, it is also necessary that Communism is the best method, giving the people themselves their own right to govern themself -- just in another arena that is intrinsic to their happiness and justice. I do believe that Socialism is a step forward, just as a Republic is a step forward from Dictatorship, but neither of these are forms of completed freedom.