A Conservative Speaks

I SPEAK as a Conservative. In my youth I ran the gamut of revolutionary movements. Anarchist, pacifist, I. W. W. sympathizer, I have sought this path and that to a better, a more commodious life, not only for myself, but for all men.

In Russia, I witnessed the mass struggle of millions. I saw them try to move from pre-capitalism to Communism at one step. In China, I lived through the agonizing torture of man as he sought to free himself from the barbarities of feudalism — glamorous and luxurious for those on top, retching misery for those at the bottom. In Europe, I felt the pangs of instability and insecurity.

Therefore I speak as a Conservative. Let no man think of me as a Tory, as a Bourbon, as a heartless marauder in a predatory world. For I have nothing to defend — not even chains to lose. Like so many who have written for a living, I have nothing of the goods of this world but what I earn and consume to-day. And I can earn that and consume that no matter which cause I favor, for such is the way of my work.

Therefore I plead no personal cause. My tax bill will be not much higher or lower whichever way we go. The household servants I employ will be as few one way as the other and their loss would not seriously affect my personal life. All the property I own is an old farm which can sustain me on a low but comfortable standard of living one way or the other. Not a single personal interest — that is, not a single materialist consideration — moves me to hold or express my opinion.

If my current views associate me with similarly-minded individuals who may be capitalists, manufacturers, merchants, other views would associate me with equally if not more interesting individuals. And if there is a monetary reward for defending my point of view I have long known that colleagues who defend other and opposite points of view are as well or even better paid. My income-tax statement, I am sure, cannot compare with that of such an opponent of Conservatism as Mr. Heywood Broun.

I go into these personalities to clear the decks. I want to say what I have to say without any consideration of praise or disdain. I want to project some ideas without having my presentation suffer from that personal equation which is whatever I am.


In terms of goods, poverty has been most general in non-capitalistic countries. For the immediate objective of capitalism is that standards of living shall ever be on the rise. More particularly, capitalism seeks that the purchasing capacity of a constantly increasing number of purchasers shall ever be on the rise.

Mass production, modern merchandising, advertising, the creation of new commodities, the popularization of old ones, have but one objective — namely, increased usage, increased consumption. And in pursuance of this single objective it has become altogether clear, beyond the barest shadow of a doubt, that not the expensiveness of a commodity but its cheapness makes it of greater value to its producer. The less it costs to buy an article, the more readily that article comes within the purchasing power of an increasingly large number of people.

The classical example is the motorcar. Ford makes more money selling $500 cars than anyone makes selling $10,000 cars. This is so obvious that anybody understands the rule who understands anything at all. But we need not limit ourselves to motorcars.

Oranges were once luxuries. Beef was a luxury and very expensive — that is to say, even hamburger was beyond the daily purchasing power of workers. Students of food consumption note the popular shift from a large consumption of starchy foods, such as oatmeal, white bread, and potatoes, to protein foods, like beef, eggs, and green vegetables. It is the cheapening of the price of the latter, in ratio to wages earned, that has increased the number of those to whom they are available.

Take such an item as fruit — always a great luxury to city dwellers. Fruit in many forms, as juices, cocktails, or salads, in tins and jars, fresh and preserved, for the table or at a soda fountain, has been made available to millions who in my childhood knew only sour apples and black bananas.

Women’s clothes indicate most remarkably the workings of this theory. For to-day a woman can purchase within any price range better styles, more durable cloths, sturdier dyes, and more alluring patterns for very much less money than ever before. The mechanization of textile production, introduction of rayon and acetates, competitive improvements in undergarments, stimulation of the use of cosmetics, deodorants, hair removers, nail beautifiers, soaps and creams and whatnot, have served to give to the working woman the ‘tone’ which formerly belonged only to those who regarded themselves as ultra-exclusive.

In every human activity, every walk of life, this rule is constantly in evidence. To repeat the rule: in the capitalist system the objective of production is to bring prices down so that more people come within the price range of a commodity.

This, then, is the only economic system in which it is possible to give practical application to the moral dictum of the greatest good for the greatest number without utilizing political disturbance as a means to that end. In this alone, if in nothing else, capitalism justifies itself.

It is evident from this statement of the situation that in capitalistic production it is essential for wealth, in the sense of purchasing power, to be widely diffused. Thus, contrary to Marxian theory, in the United States the ownership of wealth is more widely diffused than in any other country on earth.

Opponents of the capitalist system suffer a confusion between actual ownership of wealth and control of the agencies of production and distribution. For instance, it may be said for the sake of argument that control of the management of the United States Steel Corporation rests with J. P. Morgan and Company. But it is evident that the ownership of the wealth produced by this corporation is divided between about 200,000 investors and 200,000 employees. Both groups, up to 1929, found that the amount of wealth which they took out of this corporation steadily increased, and the indications are that, except as exorbitant taxes may intervene, the investor and the employee will continue to draw increasingly from this wealth-creating and wealth-diffusing agency.

In a country where more than one hundred billion dollars is invested in homes and farms, where one hundred and twenty billion dollars is in savings bank deposits and insurance policies, where the curve of wages is — over a period, say, of half a century — steadily moving upwards, it is evident that the diffusion of wealth is constant. No greater proof of that need be adduced than the volume of business done by chain and department stores even in a year like 1933 — usually referred to as a depression year. The volume of business amounted to $25,037,225,000, or $208.64 for every man, woman, and child in the country. Such trade is impossible unless the diffusion of wealth is widespread.

Here, however, we face a difficulty. In this constant shift of population from one economic bracket to another, a residue of unshiftable people appears. These marginal human beings lag behind, and their economic status is often pitiful. In the rural regions they are termed hillbillies and share-croppers, and in the cities they dwell in slums.

The capitalist system has within itself no adequate solution for the welfare of these marginal peoples. They often represent a psychological as well as an economic deficiency. Frequently they are hostages to a changing mechanization of production. Sometimes they represent a geographical shift of an economic centre with which they could not catch up, as, for instance, when a greater use is found for oil than for bituminous coal and miners get stuck in a profitless coal region.

These unfortunates often contrast with another and numerically smaller marginal group, the excessively rich. In the United States this group consists of a few individuals, principally women who inherit wealth which they themselves do not employ with any social usefulness. Their personal conduct is often so distressing as to bring shame upon the original producers of the wealth. For instance, the investment of a huge inherited fortune in tax-exempt government bonds is an outrageous withdrawal of wealth from productivity.

Both these groups bear unfortunate witness to the imperfections of the capitalist system. But numerically the two groups are small as compared with the total population which benefits from widespread diffusion of wealth and the enlarged availability of an increasing number of desirable commodities. The marginal poor should become the object of state aid, that they might be educated, trained, or re-oriented to fit into the wage and price scales current for the whole population. The marginal rich should be taxed equably so that their wealth might be made available for productivity. For dead wealth — and nontaxable government bonds are dead wealth — serves no one beneficially.

Three specific characteristics mark the operations of the capitalist system at its best: —

(1) A higher return to the investor than he can receive from economic passivity, as when he invests in government bonds for security only.

(2) Wages so scientifically just that the purchasing power of the worker constantly increases.

(3) An adequate return to the farmer so that manufactured goods and the benefits of urban living are more generally available to him.

These three characteristics are normal in the United States.


The relationship between democracy and capitalism is not an inherent one, but this is a self-evident truth: democracy continues to flourish in countries where capitalism is most developed; it declines and disappears in those countries where the capitalist system is underdeveloped or does not exist.

The capitalist system is most perfectly developed in the United States, Great Britain, France, the Scandinavian countries, Holland, Switzerland, and Czechoslovakia. These are, in exact parallel, the most democratic countries in the world. (I could include certain South American parallels which would bear out the conclusion.) France, where the capitalist system has been forced to undergo the test of the war, inflation, depression, and the fear of future wars, witnesses at the moment a simultaneous attack on both capitalism and democracy.

In Communist, Fascist, and precapitalist countries, democracy does not exist. In such a land as Japan, where there is a confusion between capitalism and feudalism, there is also a confusion between democracy and military plutocracy. China differs from India only in this, that, whereas in India democracy does not even appear, in China its development is abortive because of the shift from an emerging capitalism to new projections of colonization on China’s soil.

We return, then, to the phenomenon of the simultaneous growth and recession of capitalism and democracy in specific areas.

To those for whom political liberty as enunciated, for instance, in the Constitution of the United States has no significance, the preservation of democracy is futile. But the current view of the world forces the overwhelming conviction that for the individual man there can be no will, no personality, no character, almost no value in life, unless he enjoys that liberty.

It may be true, as opponents of capitalism will argue, that man cannot live by money incentive alone, and that in both Communist and Fascist countries men serve the state for no reward save the moral satisfactions which come from social service. That may or may not be true. Soviet Russia’s admission of the theory of differentiated wages, Stakhanovism, the use of technical experts rather than ideologically correct party workers in management, and other evidences, force the conclusion that Russia’s experience is much the same as ours — namely, that men work best when their rewards include a greater purchasing power than their neighbors achieve with less notable work. In a word, in both countries it is not only a case of living up to the Joneses, but also of getting more than the Joneses.

If, then, social consciousness does not provide ample stimulation for productivity, why should the individual sacrifice his liberties for a cause which in the end brings him back to capitalism, under which he could enjoy his liberties? What motive should impel me lightly to trade away my rights under the Constitution of the United States?

It is at this point that the individual must choose for himself between a tried human experience and an asserted philosophic idealism. Admitting certain specific weaknesses and imperfections in the capitalist system, I yet retain political and social liberties under democratic institutions which are invaluable to me as a human being. If I sacrifice those liberties, will mankind be rid of the weaknesses and imperfections of our economic order? Do I envisage such results in Soviet Russia, Germany, Italy, Japan? Why should I assume that potentially their systems will restore human liberty when it is evident that the very persistence of these systems depends upon the destruction of human liberty? Stalin may authorize his people to smile or to use cosmetics, but there can be no liberty unless we can do either or neither without his interference.

Democracy, even in the well developed capitalist countries, is beginning to suffer from the expanding power of government. The Chief Justice of England, Lord Hewart of Bury, wrote a remarkable treatise, The New Despotism, against such expansion. We limit it here through the Supreme Court. Only in the United States is specific provision made in the organic law and in the machinery of government to limit the expanding power of government. Yet, when we analyze the provisions in our Constitution, we discover that many of them which in operation safeguard human personal rights were originally designed to safeguard property rights. In the American system, human rights and property rights are identical in theory and practice.

The interrelation between liberty and capitalism causes one to pause before any major revision of the capitalist system; for we have to measure the value of each reform by its possible effect upon democratic government and upon human liberty.

The question poses itself in this manner. Human beings can learn to live under any form of government. The Germans have lived under the dramatic semi-democracy of the Kaiser and under the sclerotic despotism of Hitler. The Russians built a subway in Moscow without utilizing the financial or engineering mechanism of capitalism. In China, during a twenty-year period of political and social revolution, when no one economic system applied to the entire country, remarkable progress was made in banking, manufacturing, communications, and every field of economic endeavor.

What, then, makes one system superior to another? Two factors, I think. One is the rising standard of living, the greater availability of useful and pleasant commodities and services; the other is human liberty.

Liberty is no God-given benefit to man. No Moses, no Solon, handed it down. Every evidence of human liberty is the product of an endless, vigilant struggle between the individual man and government. Whether it is trial by jury or freedom of the press, or the right to a writ of habeas corpus, each manifestation of liberty marks a successful struggle — and each right can be destroyed unless man is willing to struggle to maintain his rights to liberty.

Shall I, then, not judge the value of an economic system by its relationship to human liberty? And shall I not accept the evidence of history and the experience of the race? When I shall see the human liberty in Soviet Russia, in Italy, in Germany, in China, that I see in the United States and Great Britain, then, and only then, shall I feel justified in revising my view of the value of the capitalist system. Until then I am morally bound to conserve capitalism because I seek to conserve democracy.


The capitalist system is by no means perfect. It is an evolving, changing, flexible process of production and distribution. Like every dynamic human experience, it contains within itself the germs of its own destruction, and against the spread of these germs we who seek to conserve the benefits of the system must be eternally vigilant. These evils may be summarized as follows: —

(1) The principal weakness of capitalism is a tendency to monopoly. Large-scale production, the control of capital by banking groups, government price-fixing as under the NRA, control of operations during wars, the nationalistic stabilization of essential industries, are but a few of the causes which may result in monopoly.

There are instances when monopolies represent the most efficient and socially beneficial structure for the production and distribution of goods, and these instances are often cited to prove a rule.

The error, however, lies in this: the capitalistic-democratic system can only maintain itself by the elimination of decadent energy and the generation of new, vital energy. Thus, in the more highly developed capitalistic countries, new initiative, new capacity, comes to the top in every change from one commodity type to another. For instance, no wagon-trust monopoly could prevent the rise of the automobile; no ice trust could destroy electrical refrigeration; no theatrical trust could impede radio; no banking group interested in cereals could limit the consumption of citrous fruits.

Monopolies tend to rigidities in the production of goods: take what we give you, for there is nothing else. Competition forces ingenuity and inventiveness to curry the favor of the consumer. Without competition the capitalistic system breaks down in its every phase. Nevertheless, those that have achieved the top seek to hold it, and will permit themselves the momentary luxury of seeking to do business by monopolistic rather than by competitive processes. It is a shortsighted error. Sooner or later a brilliant competitor will rise to destroy the monopoly. This has been American economic history in all but two or three fields.

(2)The tendency to bureaucracy is not only evident in government, but in business as well. After the initial pioneering group has disappeared from an enterprise the organization tends to become stabilized into a more or less self-perpetuating bureaucracy in which seniority rather than capacity marks men off for advancement. In prosperous times such a tendency can do little harm, but during a depression or a competitive fight an enterprise may be utterly destroyed by a bureaucracy. And unfortunately psychological factors, nepotism, social relationships, often strengthen a bureaucratic group in its strangle hold upon an industry.

In the capitalist system there is no room for uncompetitive overhead, and that is what a bureaucracy represents. It destroys itself by the evidence of the balance sheet, and there comes a time when the most perfectly conceived alibis for unthinking management cease to be acceptable. The bureaucracy under capitalism is an error.

(3) Excessive wealth often defeats itself in Caligulan exhibitionism. Really the evil is limited to the individual. In fact his excesses, in economics, act as a means for a swifter redistribution of wealth.

Nevertheless the picture of a grandson of a great pioneer with five or six concubines or the granddaughter of a great pioneer in quest of Sybaritic excitation, in contrast with that of the other marginal people, those who have nothing, those who perhaps never can have anything because they are residual tail-enders in a fierce struggle — these contrasting pictures ever before us stir such pity, such an emotional antagonism to all wealth, to all ownership of property, that an entirely false conception of the capitalist system replaces experience and knowledge.

In England the social system of royalty intervenes to save society from its fools. In the United States no such social mechanism is possible. Education, the church, breeding, have failed to safeguard society against the psychopathic rich. They are one of the major liabilities of our way of life, and a means must be found to curb them.

(4) Capitalism and democracy both recognize the individual as the centre of power; under Communism and Fascism the centre of power is the state. The individual in these systems possesses only such rights and powers as the state permits him to enjoy; under our system the state has only such powers as we delegate to it. Under these other systems the state can at its will completely destroy any individual or any class or group of individuals; under our system, at an election we can throw out of office all who control the state.

Herein lies the essential difference in point of view between our system and theirs. Under both Communism and Fascism, class distinctions are inevitable, whereas we seek to avoid class distinctions altogether.

As beneficial as this is to the individual in a democratic state, it has this essential weakness, that when an attack is made upon the capitalist system there are no capitalists to defend it, and when an attack is made on democracy there are no democrats to defend it. That sounds like a rhetorical inexactitude, but when we look at current literature, at current lecturing, even at the current drama, the emphasis is all in opposition and the defensive forces are weak. Even the so-called free press, even the great capitalistic monthlies, publish vicious, unjustified, and badly conceived attacks on the very system which keeps them alive.

Why is this? Is there no conserving force in the country? Where are the conservatives to state their case? The answer is that they are producing and distributing goods and services. The men they hire to advertise their wares are specialists in the science of merchandising and are not designed by training to defend economic and social systems. That is why so many of the notable leaders in industry and banking appear so feeble in public life.

In England, men are trained for both business and public life. But we are only one generation from pioneering and our strong men are not philosophers. Nor do they think in terms of defending anything, because they are still building, still creating their world. It is not their function to study the whys and wherefores of their system. Theirs it is to create, produce, and distribute commodities, to arrange services, and to improve the purchasing power of their customers.

Yet the picture presents this weakness, that the non-producers are always flaw pickers. They can easily discover what is wrong with a system because they have nothing to do with its operations. The producers, on the other hand, have no time and less inclination to defend themselves. They are only capable of pouting against the injustice of an unappreciative world.


Facing these situations, it is clear that capitalism and democracy in the United States must at the present stage fight a corrosive attack upon themselves, not by philosophic defense or by supine apologies, but by specific steps which are not to be remedies for some momentary distress or allurements designed to win an election. The objective should be the improvement of the capitalist system and the conserving of democracy.

First comes the whole problem of employment. In the United States unemployment and reëmployment during the depression and the recovery have been considered politically. Loth have become political weapons for the destruction and retention of political power.

The fact that no one in the United States knows how many unemployed there are as compared with the unemployed in 1929 is not only astonishing, but a self-evident criticism of government. Billions of dollars are available for all sorts of useful and useless projects, but not a cent for an employment census, scientifically conducted. Not a single figure used by anyone on the subject of employment or unemployment has any validity whatsoever. All are guesses — and it is clear from the variety of evidence that all the guesses are quite distant from the facts.

An employment census is the most essential economic step which can be taken in the United States to-day.

Yet certain facts are clear even without supporting figures. We know that a large number of people are unemployed. We do not know whether it is necessary for them to be permanently pauperized either by unemployment or by government relief. We must assume, however, that under the capitalist system there can be no general prosperity if a large part of the population is without consuming power earned by its own activity.

Herein lies a danger not only to capitalism but to democracy, because when human beings depend upon the state for their livelihood they are likely to become enslaved politically to those who at the moment control the state. It is not a question of their corruption by a vicious political machine; they would be corrupted by an angelic political machine.

Secondly, in the United States we face the specific task of restoring orderly processes of democratic government. These processes have become disorganized and confused by the depression and the assumption of emergency permissive powers. The American democratic scheme depends for its successful operation upon a strict adherence to the doctrine of limited powers and authority. Ultimate power must remain vested in the people, and this is possible only when all legislation and government authority are controlled by the limitations upon authority in the Constitution. Deviations from the essential structure, without orderly change, can only increase confusion and distress.

Thirdly, we have set up a form of relief to care for our marginal population. No matter how much this relief costs in money, it is justified by humane considerations. But it is now necessary to revalue the processes, for it is evident that relief has been so handled that a section of the population is being permanently pauperized and therefore being forced into a morally degraded condition. The problem is so to reorganize relief activities that they become focused on their own elimination. This can only be accomplished, except in certain specific instances, by making it possible for private enterprise to absorb an increasing number of employees.

Fourthly, restrictions placed upon economic activity, particularly stateimposed rigidities and exorbitant taxation, prevent private industry from expanding sufficiently to reëmploy the total number of unemployed. These restrictions should be removed as rapidly as possible.

Finally, capitalism depends for its advance upon the stimulation and expansion of markets. In the United States this is always possible if prices are brought down so that increasingly numerous brackets of the population find that their purchasing power is available for greater consumption. Such stimulation and expansion must be left to the ingenuity and inventiveness of private enterprise and to the competitive process.

In a word, fundamentally our task, in conserving capitalism and democracy, is to restore freedom of action to the individual and to depend upon competition to achieve our main objective, which is to have our standard of living ever higher for a greater number of people.