The American Secret

MARCH, 1927



COLUMBUS discovered America, but the United States as an economic entity has been discovered by Europe since the World War. Not only the production of war material and the loans and gifts made to Europe after the Armistice, but above all the quick economic recovery made here after the war, created a profound impression on the older continent. Two things happened as a result. The first was the widespread conviction that the loans made in and after the war should be regarded as gifts, and the second was a widespread interest in ascertaining how it came about that we could spend enormous sums on the war and still remain prosperous. What was the secret of our workmen being steadily employed at a daily rate about equal to the weekly wage of European workmen?

So, in the past few years, delegation after delegation has come over from Europe, employers, workmen, investigators of all sorts, to study us and return to write books about what they saw, or thought they saw, here. The curious thing is that practically none of them indicate that they attained any real understanding of the fundamentals of our economic organization. But perhaps it is not curious after all, for the most tyrannous thing in the world is a point of view, and an attempt to describe us from the European point of view is almost certain to produce a result similar to that of the blind men of the poem who attempted a description of an elephant. Also, it is quite probable that we do not clearly understand ourselves, on the average, in spite of our reputation for being the most introspective of peoples. What I shall have to say here strikes at the root of the American system.

Human well-being largely consists of having material things and the leisure to enjoy them. Cant immediately interpolates that it is better to be spiritually rich and materially poor than to be spiritually poor and materially rich — a truism that generally correlates the fallacy that being materially rich tends to spiritual poverty, or, conversely, that spiritual richness is promoted by material poverty. Probably this false reasoning has its origin in the circumstance that Jesus was a poor man, for few are intelligent enough to observe that the character of Jesus would have been equally consistent with the possession of wealth. The well-known conversation with the rich young man was intended to convey a point of view to the latter and not to assert the necessity for poverty as prerequisite for spiritual salvation.

Now the only way to have material things is to do work. The nomad hunter who wishes to spend the night in comfort must work to construct a bed and a shelter, and, by the same token, I am at this present moment enjoying a vast amount of work that someone else has done for me. The roof that shelters me from the rain, the steam that keeps me warm, the electricity and the reading lamp at just the right angle over my shoulder, the comfortable chair, the writing tablet, and the pencil that needs no sharpening, are all the results of intelligent, well-directed work. I can have them, not because I have money, for I have none beyond my pay check, but because I have been able to trade my own work for the results of other people’s work.

The European analysis of this situation concerns itself with the technique of trading the least amount of my work for the greatest possible amount of other people’s work — an essentially individual solution, or, I might say, an uncivilized solution. Herbert Spencer has explained at length how the greatest individual benefit is attained through striving for the general good, but the Socialist group and the Menckenites have generally succeeded in obscuring the truth of this general principle, with the paradoxical result that the only really intelligent Socialists in the world are‘capitalistic’ employers. This ‘bourgeois’ group has been able to make a much more civilized and accurate analysis, which is as follows.

Admitting that the things everybody wants are the result of work, how can we get the most results from the least work? There are three evident things to do. The first is to direct work so that it does away with the necessity for repeated work, like piping water into the house instead of continually carrying it from a spring. The second is to analyze work and its products so as to eliminate everything that does not aid in attaining the desired result. Motion study is the example of this that will be easiest understood, but nearly all research falls into this group, whether it concerns the hardening of steel to permit giving the tool a sharper edge so that it will cut more with less work, or the making of artificial silk to eliminate the necessity for tending silkworms. The third thing is the multiplying of work, which began when the first man hitched an animal to the crooked stick with which he was breaking the soil and has attained the stage of hitching Niagara to the needs of the average man; and the end is not yet.

The third is by far the most important, things being as they are, for all human experience indicates that a man cannot do enough work in a year to afford him much comfort, unless he is able to multiply his work in this way. The great countries like China and India, where work is not multiplied, are countries where humankind, on the average, lives on the lowest plane of well-being. This is not for lack of intelligence, for the Japanese have shown how an Oriental people can, when it accepts the Western point of view, attain results that are comparable with ours.

Let me repeat here that I refuse to be led aside into any discussion as to whether the religious preoccupation of the Oriental is not more important to the human soul than attention to material things. I have had considerable first-hand contact with Oriental religion and I cannot see that it produces less crime and more happiness than the tenets of Rotary clubs, nor is it clear to me why meditating on the infinite while sitting in rags on the ground should yield any clearer spiritual insight than doing so while sitting in a comfortable limousine. This discussion is limited to the physical well-being that comes from material things; spiritual well-being is another subject that demands another method of approach.


Before going any further, let us consider the relative amounts of horsepower generated by men from the food they eat, by machines from coal and petroleum, and from water power in the principal countries of the world. The accompanying chart reveals the significant fact that, although we ordinarily think of China as a country having nearly four times as many people as there are in the United States, the United States has the equivalent of many times the number of effective workers that there are in China. In short, the United States may be thought of as a country in which the work done is equivalent to the work that could be done by ten times as many people as there are in China, or almost forty times as many people as there are in the United States. Every person in the United States has thirty-five invisible slaves working for him, and the most significant thing is that these thirtyfive slaves do not consume anything, so that all the product is available for the ‘boss.’ The American workman is not a ‘wage slave,’ but a boss of a considerable force, whether he realizes it or not.

The comparative output of work per person in the various countries of the world is as follows: —

China 1
British India. 1 1/4
Russia 2 1/2
Italy 2 3/4
Japan 3 1/2
Poland 6
Holland 7
Prance 8 1/4
Australia 8 1/2
Czechoslovakia 9 1/2
Germany 12
Belgium 16
Great Britain 18
Canada 20
United States 30

The result of this is that, although the average wage is high, the average cost of work in this country is low. A blacksmith works eight hours a day at the rate of one-tenth horsepower, and is paid ten dollars for it. Two pounds of coal, costing less than one cent, will do the mechanical equivalent of the blacksmith’s work. Hence one blacksmith, at ten dollars, aided by eighteen pounds of coal, at ten cents, will do as much work, at half the cost, as ten blacksmiths at two dollars per day each. Since most of the work is done very cheaply by mechanical means, we can pay high wages and still get work done at less cost than any other country in the world.

Their relative yearly output of work seems, therefore, a sufficient explanation why people in the United States have so much more in the way of comfort and convenience than the people of any other part of the world have, on the average. The per capita output of work in this country is so much larger than the output of work in any other country that the consequent divisible wealth per capita is very much greater.

Not long ago, in talking to an English visitor about living conditions in coalmining towns, I pointed out to him that good roads and the multiplicity of automobiles had made it unnecessary to build towns for the miners when opening a new coal mine, in many instances, because the miners are able to come to the mine in their automobiles from existing towns and return home in the evening after their day’s work is over. My English visitor remarked, with a dry smile, that the English coal miner would never be able to come to his work in an automobile. I refrained from asking him why, since I suspected he did not know the right answer: namely, that the average daily production of an American coal miner is approximately three and one half times as much coal per man as the English coal miner produces. Out of the value of the product of his day’s work the American coal miner gets enough to enable him to have an automobile. The value of the product of an English coal miner’s day of work is not great enough so that he can get more than a meagre living out of it. C. F. Kettering tells me that the automobile output per day of American workmen is ten times as great as that of European workmen, which is the same as saying that a European workman has to work ten times as long as an American to get an automobile.


This leads up to three more questions, the first of which is whether most of the countries in the world have enough in the way of natural resources so that their inhabitants, with a sufficient output of work, can make a good living out of them. The answer to this question is probably ‘Yes.’ The countries which do not have coal are probably the most handicapped; but, in the present development of society, transportation is so generally available that it is possible to get coal in exchange for something else. Argentina is a firstclass Power with practically no coal supply, but it imports coal, both from England and from the United States, sufficient to meet its present needs, and the price of coal laid down at Buenos Aires is not excessive, because ocean freight rates are low compared with railroad freight rates. Japan is the best example of a country that has a very meagre endowment in the way of natural resources, and yet it has advanced from a country as economically poor as China into the position of one of the first ranking Powers within the memory of people still living. It is evident that, with its limited supply of power minerals, Japan should, as it does, direct itself toward the production of articles of relatively high value, the production of which calls for skill rather than mechanical energy. Where the supply of mechanical energy is scant the obvious thing to do is to use mental energy as much as possible.

The second question is, how can the countries that now have a relatively small output of work increase their output and thereby increase their capacity to produce and consume? What they need to do is to advance in the same general direction as the countries that have succeeded in multiplying their output of work. Contrary to the opinion of the old Pennsylvania farmer who refused to let his sons go to school because he didn’t want them to ‘earn their living a-settin’,’what such countries need is more people who are able to make their living ‘a-settin’.’ Much has been said about the unemployment situation in England, and many people seem to think that it is somehow the fault of the worker that he is unemployed. It seems clear, on the other hand, that the real difficulty is that there is not enough profitable employment available for him, and that is because no more capable brain than his has devised a way whereby, when capital and his labor arc jointly employed in the production of something useful, the value of the product is enough to furnish an adequate return to both. Going back to our agricultural simile, much the same situation would exist if there were not enough food produced by the primitive farmer to keep his ox in good condition. The ox is not to blame, because if the work is properly directed enough of a crop results to support both the ox and the farmer.

It seems clear that the only possible cure for the unemployment situation in Europe is through business men finding a way to provide employment and to manage the work with sufficient skill so that there is enough product to provide a good living for both the worker and his employer. This remedy, of course, presupposes that the European laboring man will be found willing to abandon his extraordinary delusion that there is a limited amount of work to be done in the country and that by limiting individual output of work he is providing work for others. Nothing, of course, could be further from the truth; there is no known limit to the amount of work that can be done in any country of the world. By deliberately limiting the work he does in a day the worker is making it impossible to produce enough so that there will be sufficient for a good living for himself and an adequate return on the capital employed in their joint enterprise. If the ox on the farm resolved to work the minimum possible amount, the result would be a crop failure, and both the ox and the farmer would suffer. In the old Hebrew story of the creation of man, God is represented as saying to Adam, ‘In the sweat of thy face shalt thou eat bread.’ Many centuries passed before man learned how to multiply the output of work by mechanical means and increase the supply, not only of bread, but of butter and sugar as well, without having to sweat more.

But even if the countries that now have a relatively small output of work seek to increase their output, can they ever hope to approach to the productivity that prevails in our own United States? No one can say with perfect certainty of being right, but Japan has demonstrated to us that a people of much ability can make a satisfactory showing of productive work with quite limited natural resources. The Australian native and our own American Indian demonstrate, on the other hand, how little use people of little ability make of natural resources. My own belief is that in many countries of the world the low intelligence level of the people constitutes more of a barrier to increase of productive work than scantiness of resources.


The third, and final, question is, what good does it do us? Such a question savors of the drawing of the red herring of smart talk across the trail of intelligent reasoning. With one who seriously questions whether I am any better off than my grandfather, though my house has three bathrooms and his had none, discussion is as futile as it is between a Christian Scientist and a Rockefeller Foundation doctor — the points of view on the accepted things of life are too far apart. But there are some things which are matters of proven fact, not of opinion. The life insurance companies and other social agencies have accurate statistics which show that the average length of life in this country has increased forty per cent in the last half century. In the past twenty years the infant mortality rate has been cut sixty per cent. The death rate from tuberculosis is now less than one half as high as it was in 1900. The State of New York hopes to eliminate diphtheria entirely by 1930. The scientific research and its application that have made this possible are a direct product of our abundance of work.

The capital which has been poured into the building of school buildings, from kindergartens to universities, and the number of people who devote their whole working time to the teaching of others are also a direct expression of abundance of work. Under social conditions where people have to work hard for a meagre living no one has the time or facilities for research, and people do not have the means to pay for teaching. The estimated value (1924) of the schools in New York State alone was $467,700,000 and the yearly cost of maintenance was $250,000,000. The absence of schools in Labrador until outside agencies provided them was a direct result of the meagre living that the people of the region were able to make. The grandchildren of a Finlander who trailed reindeer over the snow are able to acquire their education in a $4,000,000 high school in a mining town in Minnesota, equipped with electric stoves to do their cooking lessons on and with everything else in proportion. What magic has provided for the grandchildren so much more than was available to the grandfather? No magic whatever, but work — work done by mechanical energy, multiplying the useful efforts of man.