THE DISPLACEMENT OF COMMUNIST IDEOLOGY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79B00752A000300030001-2
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 32
• Document Creation Date: December 23, 2016
• Document Release Date: July 8, 2013
• Sequence Number: 1
• Publication Date: February 18, 1955
• Content Type: REPORT

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Zzecutive
Confidential - For Private Draft of
Distribution Only 18 Feb., 1955
THE DISPLACEMENT
OF COMMUNIST IDEOLOGY
How 20th century fact outdates Marxist 19th century theory,
opening the way to a new area of Free World agreement.
The age-old law of survival asserts that man must work with all his
strength to stay alive. The law of privilege proclaims that if enough men
work hard enough, a few may hope for something more than mere survival.
We Americans believe that we have broken the tablets on which these
ancient laws were inscribed. We have broken them with the work-energy of half
a billion machines, some in factories but most in homes, some the size of a
thumb and others bigger than a house. These machines perform many thousands
of tasks that in ages past only the muscles of men could perform.
Here, then, is our special genius; we are the masters of the machine.
We Americans have come to understand fully that the machine is not a god, not
a devil, not a slave-driver, and not a power symbol, but only a big brother in
our labors, who rewards us in the degree that we cherish or abuse him. It is
the machine which makes it possible to offer to all the opportunities once
limited to the select few.
Who are we Americans? We are polyglot. We are millions of Russian
birth or ancestry, more millions of German, Polish, Chinese, African. We are
English, Indian, French, Irish, Greek, Scandinavian, Egyptian, Italian, Indo-
nesian, Javanese. Working together in laboratories, offices, factories, and
markets, we have proved that anything we have done, our cousins the world over
can do. If our special genius as a nation is mastery of the machine, then our
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special significance as a nation is the evidence we offer that mastery of the
machine, and everything that goes with it, lies within the grasp of any other
people anywhere. And remember that we are not the elect of the earth; most of
us are the sons and daughters of immigrants rejected in the lands of their
birth, who have come here in desperate search for a new land of opportunity.
Still in the early stages of our vast social experiment, we are
already beginning to see the outlines of a new philosophy which challenges many
of the assumptions of accepted doctrine. In time this may well develop into
an international political movement; certainly the need for it exists. It is
possible, but unlikely, that such a movement will proceed under United States
leadership - unlikely, because the new philosophy is so deeply ingrained in
both of our political parties that it will probably never appear as a clear-
cut issue.
In Europe, however, with her many-party systems, it might become a
rallying point for the dynamic center against the reactionary forces of the
extreme ,right and the extreme left. In the Muscovite dictatorship it will
probably continue for some time to be what it is now, a formless protest
movement. Our sympathy for the Russian people in their bondage leads us to
hope that it might someday become the basis for an opposition party even in
the Soviet world.
Energic liberalism is suggested as a working title for such a philo-
sophy, and I shall present ata later point in this discussion a suggested
16-task platform for its formulation into an active political force. Energic
liberalism proclaims that the true liberator of mankind from the long centuries
of insecurity and scarcity is not a self-proclaimed champion of the under-
privileged, but mechanical work-energy itself. The world mission of energic
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liberalism is to perfect a group of modern societies, differing in their
political institutions, but each rooted in a balanced consumer-centered
economy of plenty. It seeks to exploit to the fullest the boon of mechani-
cal work-energy, while treasuring and refining the magnificent humanitarian
bequests from the past. It maintains that in no other way can national energy
be absorbed in peaceful undertakings, and the threat of war avoided.
If the United States does not furnish the future leadership for
such a movement in political form, she is at least a rich source of clinical
data, because of our advanced position in many important phases of modern
industrial progress. Though our experiment is far from ended, we have come a
long ways especially in the last ten years.
Our progress is best measured by the degree by which mechanical work-
energy has replaced or supplemented muscular energy in our day's work. This
is revealed in a few simple figures. Our total stand-by horsepower in machines
of all sorts is approximately 6t billion, exclusive of those in military use.
Our population is 160,000,000. Engineers estimate that the potential work-energy
represented by the muscles of an adult human worker is about 1/20th of a horse-
power. Hence, each man, woman, and child in America has on the average at his
or her disposal the equivalent work-energy of 780 able-bodied servants.
It is hard for us to realize that there are places in the world today
where this situation is reversed, where machines yield only a tiny fraction of
the work-energy required for survival. There may be some consolation in
remembering that this is exactly where we started two centuries ago - and that
two centuries is only a paragraph in the history of mankind.
Where do these mechanical servants come from? We are told that all
work-energy, except that which comes from human muscles, is derived from
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special form of capital. But what is capital? In general, capital is not
money, as many of us have come to believe; it is buildings, work-animals,
hand tools, machines, highways, and many other things we can see and touch.
It is stored work-energy serving mankind. It is not dollars; dollar value
is merely the measure we use to make it easy to pass capital from one hand
to another.
We Americans have always been especially interested in a type of
capital which we call dynamic, or mechanical. This is the kind which pro-
duces goods and services from energy sources other than human muscles. It
is not new. The sail, the water-wheel, and the windmill go far back into
history, and the work-animal perhaps even farther. We are told that the
word capital originally meant a count of the heads of cattle, and that in
the time of Chaucer "catel" meant all wealth. Today dynamic capital refers
primarily to the electric motor and the gas engine.
Cattle were the beginning also of a very special kind of dynamic
capital, which might be called procreative. Originally, this referred to
the increase of the herd at calving time, whereas the modern example is a
factory that makes motors. In a week's output of these motors, there might
be as much horsepower - potential work-energy - as in all the factory
machines involved in their manufacture. We Americans seem to have under-
stood better than most the significance of procreative capital, its effect
on our national economy.
We have attempted to define dynamic capital in terms of work-energy.
What is the modern meaning of capitalism in the same sense? Capitalism refers
to the ownership of capital and the social significances arising out of that
ownership. In the past there were thought to be only two kinds of capitalism.
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These were first, private, and second, public or state. In modern times, however,
we recognize five distinct types. Public or state capitalism is now divided in
two. One is public service, the other military. The function of the first is
to undertake tasks which serve all people in a national economy; the function
of the second is to destroy the capital - and manpower - of a rival nation's
economy.
A third type - private capitalism - includes that capital which is
owned by individuals or families and employed by them in the hope of profit.
For the most part, it now refers only to farms or small retail or service
businesses. The traditional single or family owner of the large factory has
almost disappeared and these large enterprises almost without exception now take
the form of corporations whose ownership may be divided into hundreds, thousands,
or tens of thousands of shares. This we call joint-venture capitalism, the
fourth basic type. It is the powerhouse of our national economy because of
its emphasis on procreative capital and because of the fine balance it maintains
between cooperation within and competition without.
The fifth type, and now the most significant of all, is home capital-
ism. Home capitalism comprises capital owned and operated by a family for its
own benefit without expectation of profit. Up until the turn of the century,
there had been practically no dynamic capitol owned by individuals, except farm
animals. All else was static capital - homes, hand tools and the like. The
most striking development of the 20th century has been a spectacular growth of
home dynamic capitalism, work-energy delivered by electric motors and small
gasoline engines in the home and on the highway.
At this point I submit, as a basis for discussion, a table which has
enormous significance in the war of ideas that is raging throughout the world
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today. It suggests a new approach to economic theory which may free it from
the straight-jacket of 19th century thought-patterns.
The Five Types of Dynamic Capitalism
Units of potential work-energy in U. S. reduced to
a common denominator and separated into the five
types of dynamic capital now characteristic of free
national economies - 1953 figures except as noted.
1. HOME CAPITALISM
Passenger automobiles, motorcycles, motor boats
and yachts, light planes, home work shops, home
and garden mechanical appliances, etc.
2. JOINT-VENTURE CAPITALISM
Manufacturing, mining, warehousing, construction
equipment, locomotives, busses, trucks, commercial
aircraft, trolley cars, electric central stations;
gas utility stations, etc.
HORSEPOWER
4,707,631,000
1,093,007,000
3. PRIVATE CAPITALISM (Chiefly Farms and Family Businesses) 4031607,000
Light trucks (city delivery and farm), farm tractors,
stationary and mounted engines, irrigation pumps,
etc.
4. PUBLIC SERVICE CAPITALISM
Federal and municipal non-central power stations,
3i per cent of central station potential devoted
to public authorities, government-owned automobiles
and trucks, etc.
5. MILITARY CAPITALISM (1945 figures)
Military aircraft, trucks, Naval vehicles, tanks,
Merchant Marine.
TOTAL
76,154,000
1;146)474,00o
7,4261873,000
The five types of capitalism noted above exist naturally side by
side in the absence of forced collectivism. In each free national economy
the problem is simply one of finding among these five the ideal balance at
the current stage of its own development. Some of us may want more public
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service, less joint-venture capitalism; others are convinced the drift has gone
too far in the direction of public ownership. There may be disagreement about
how much energy should be earmarked for military purposes. These are family
disagreements, however; all nations in the free world stand together for the
principal of modern balanced capitalism against the narrow, obsolete 19th
century dogmas of the communist world.
The more mature the society and the more it is dedicated to true
democratic principles, the broader the distribution of mechanical energy in
private homes. Thus, the most significant fact revealed by this table is that
the energy represented by machines in U. S. homes today is far greater than
that in all industry and State enterprises combined, including the military.
This fact is of immense significance in our ideological war with the
Communist world, for home capitalism is the deadly foe of collectivism. It
has forced the Soviet ruling clique to withold deliberately the home machine
from the masses because of its anti-collectivist implications. In defense of
the moribund Marxist dogmas, it has set up elaborate, wasteful devices to achieve
false collectivism: the collective farm, which has degenerated into a nest of
informers and sloganeers; the Red Army, its size justified only as a means of
mass indoctrination of men while they are isolated from the facts of economic
life, the controlled labor union which has degenerated into a debating society,
with the last word always reserved for the Marxist sloganeers.
At this point, I should like to discuss certain significant trends in
the shifting balance among the five types of capitalism, as we have observed
them here in America. Energic liberalism .does not insist that any nation be
forced to copy the balance of any other nation, but rather that the ability to
shift is the first consideration. Current trends in one country, however, may
be worthy of study in others.
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First, consider military capitalism. During the 20th century, this
has been of highly volatile nature with us. On three separate occasions in
the past fifty years we have been confronted by violent eruptions of national-
istic ambitions, aimed at imperialistic world conquest and have been obliged
to divert a large part of our production to meet the threat. Twice the threat
has resulted in war, against a Prussia-dominated Germany and her allies. The
third threat, posed by Muscovite-dominated communist allies has not yet ended
in war, but it would be folly indeed to ignore the unmistakable evidence of war-
like intent of world communism. This intent is perhaps less clearly revealed in
Soviet military preparations than in the activities of the Muscovite-dominated
world communist party, with its confessed mission of inciting wherever possible
mob violence and small wars which will drift into big wars.
During the 20th century we have observed a very substantial increase
in public service capitalism, financed in very large measure by taxation on the
earnings of private and joint-venture capitalism.
To us it appears that the success of public service capitalism depends
on the existence of a dedicated bureaucracy. We have such a dedicated bureau-
cracy - in our schools, our courts, our military orders, our local police and
fire services, in the maintenance of our highways, and in an increasing number
of insurance and referee functions, and in hundreds of similar career activi-
ties which serve our whole people. We are very proud of this dedicated
bureaucracy.
During recent years, it has expanded in the direction of many new
public service functions of an insurance or referee character. Most notable
perhaps among new insurance features are a series of massive safeguards against
the destructive effect of business crises. These have taken the form of
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intangible storage facilities for our immense productivity, operating in much
the same way that tangible storage facilities have been used in the past to
hold the surplus of a good year's harvest against the threat of future famine.
Another important insurance function is the protection of workers against the
hazards of technological progress which may abolish the need for special skills,
requiring a long period of retraining in new skills.
Our dedicated bureaucracy is also engaged in new types of referee or
semi-judicial tasks primarily designed to bring industrial competition under
limited social control, without hampering the immense vitality of free enter-
prise on which our progress has depended. Certain measures which we have
evolved, such as those against monopoly embodied in our anti-trust law, are
still almost unique in the world. Their purpose is the antithesis of the
cartel movement which has degenerated into monopolistic State corporations in
totalitarian states. Other new functions in the referee category are the
protection of the consumer against his own ignorance and gullibility, and the
protection of the public against anti-social abuses arising out of disputes
between organized labor and management.
Certain types of government bureaucratic expansion seemed to us to
be dangerous, especially the management of productive enterprises still in
their growth period. In such periods - and most of our private and joint-
venture capitalism is still in a period of active growth - the output is never
enough to supply all the populace immediately, and hence there must be an
element of favoritism somewhere. This creates an insoluble moral dilemma
which undermines the attitude of dedication. Usually the bureaucracy favors
itself by claiming a lion's share of a limited output as perquisites of office,
thus creating a privileged class with interests increasingly alien to that of
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the common man. Eventually, this corruption poisens the bureaucratic structure,
spreading even into sections which have a clear-cut public service mission.
Thi t suggests a discussion of the difference between totalitarian
corruption and democratic corruption. Democratic corruption is well known
and its symptoms easily recognized. It can be defined as money received by
a public servant, in defiance of legal and ethical rules, over and above the
salary he earns. In a true democracy it is in the interests of the opposition
political party or parties to expose it in the noisiest way possible and,
although there may be delays, eventual exposure is almost inevitable. Further-
more, exposure brings a quick and salutary cure.
In a totalitarian government on the other hand, such unearned rewards
are more often in terns of perquisites of office than spendable income. Totali-
tarian corruption thus takes the form of personal intrigue. Promotion to a
better job is due to shrewdness in trading personal influence in a black market
of intrigue more than to just rewards in the open market of proven performance.
Personal conspiracy rather than group productive effort is the order of the day
in the communist world.
When an ambitious understudy finds his promotion blocked by an
immediate superior who is buttressed by the rules of bureaucratic seniority,
he has only two choices. First, he can bend every effort, by trading favors
with others, to find a way around the block by creating a new supernumerary
position. Totalitarian bureaucracy is burdened down with these useless vestigal
appendices which no one dares to challenge because he will find no personal
benefit in doing so and may risk personal retaliation. The only other alter-
native for the ambitious understudy is to undermine the position of his superior,
which results in a type of personal sabotage which injures the whole enterprise.
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Modern totalitarian governments have attempted to cure this form of
corruption by a system of purges, as warnings to the lazy, incompetent or over-
ambitious official or manager. These purges, however, are so lost in the vast
number of purely political purges resulting from the internal struggles for
personal power that they have little salutary effect.
Thus, totalitarian corruption) taking the form of personal intrigue,
is an incurable cancer in the body politic and the body economic. It steals
from the common man the just rewards for his labor, in the form of high taxes,
far more than the most notorious class of laissez faire capitalists in history
have ever done in the form of high profits.
Another curious phenomenon in communism and in some splinter social-
istic dogmas is a relic of the historic emperor-god concept. This appears as
a beliefcthat-a'mat, hen he 'leaves a job with industry and takes another job
with government, is somehow endowed with a special holiness which improves his
morals and makes him more efficient. Perhaps the reason why we Americans dis-
agree with this assumption is that so many of us are the sons and daughters of
refugees who have fled from the tyranny of the emperor-gods. We know that there
are among us many men and women with exceptional talent and idealistic motives
who are happiest and most productive in government work, provided such work is a
genuine public service for all the people. Put them in a position, however,
where their task is not to serve all the people, but to determine who shall
get priority in the possession of automobiles,, coal to heat their homes, good
service on railroads) and a multitude of other consumer benefits, and their
idealism boomerangs against them.
In Russia this emperor-god complex has taken a curious form. Here the
emperor-god has become the trustee-pretender. This is one of the consequences of
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the Russian Revolution, and it is a pattern which is being forced on other
countries dominated or threatened by the Red Army. Here we have a situation
where a minority party seizes autocratic power in the confusion of mob
violence which it has itself created; now the members face the problems of
endowing their autocratic rule with some semblance of legitamacy in order to
maintain popular support for the privileged class which they have became - a
sort of communist party bourgeosie.
They then declare that all industrial capital is the property of the
worker, a curious symbol representing the unknown soldier of Marxian economics,
and in his name assume monopolistic control of all industry. The mass-men are
so flattered to be called owners that they can be easily beguiled into failing
to observe who obtains and enjoys the products of the factory which they in
theory own. The fiction of the trustee-pretender is kept alive by powerful
controls over all the creative, literary and artistic manpower of the nation,
emasculating all creative talent and debasing it into a petty bureaucracy of
loganeers.
Since the turn of the century, there has occurred another historic
shift in the balance among the five types of capitalism - this from private
to joint-venture capitalism.
As I have suggested above, the private capitalism of the 19th century,
on which so much of our modern economic thinking is still based, now exists
only in the modified form in a limited number of areas: chiefly, farms and
retail or service business, large in number but small in capital. Most of our
massive industrial and commercial enterprises now take the form of corporations,
creatures of the State in which a share of private ownership is permitted only
under the laws and regulations of the State, with dividends controlled by the
taxing power.
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The fact that the evidence of ownership is intangible has vitally
weakened the pride of possession which has always been characteristic of
private capitalism, and has opened the door to social controls which would
have been unthinkable a century ago. It has also resulted in a new science
of taxation which together with the new controls, has abolished the need for
violent social revolution.- History proves that revolution is futile unless
followed by scientific taxation (which the violence usually inhibits) whereas
taxation can accomplish peacefully and effectively any and all social reforms
that revolution could possibly hope to accomplish.
Of all the 20th century developments in work-energy, the most
sensational has been the birth and growth of machines in the home. As noted
before, the potential horsepower of home machines is far in excess of the
total horsepower potential in industry, government, including the military,
transportation, communication and all other activities. The work-energy potential
in home workshops and home appliances is double that of all factories com-
bined. The horsepower of workers' automobiles parked outside the average
factory is many times that of the machines in the factory. The combined
horsepower of all the outboard and inboard motors in private boats - a large
number of which are productive inasmuch as they are used for fishing - is
greater than that of all ocean liners, freighters and river craft.
Even more remarkable than the total horsepower of home machines is
the breadth of distribution. Lacking a complete inventory of all tools and
appliances in U. S. homes, we cannot give a precise figure. Our statisticians
have no easy job, due to the furious pace of our progress; they complain that
their task is like trying to make a land survey of an avalanche. No inventory
has been made of the electric motors in our homes. There are now so many that
it would cost many millions of dollars just to count them. In spite of these
handicaps, we can make a close estimate.
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We know from registration statistics that 72% of American families
own at least one automobile. We know, also, that many others - city dwellers
who use taxicabs, the physically handicapped, those too old to drive, and many
others - could afford them and do have household machines. Data from manu-
facturers and other sources indicate that between 90% and 95% of all American
families possess some sort of machine - the most dynamic form of property that
the world has ever known. This, of course, explodes Marx's two-class theory.
Our "propertyless proletariet" is now but a tiny fraction of our citizenry and
is growing smaller every day. Ours is indeed a consumer-centered economy of
plenty.
Since the war there has been a sudden spurt in the popularity of
home wood-working and metal working shops. One item alone, the i-inch electric
drill, is now to be found in one in every for-homes. The rapid expansion of
the home "factory" together with the growing popularity of the small garden
tractor and similar implements, points to a new type of energic society. The
trend is still in an early stage and is remarkable more for the swiftness of
Its drift than for its present weight.
More and more homes are becoming combined factories and mechanized
farms which support the basic needs of family survival, while the enjoyment
of greater opportunities come from the earnings in the outside world of one
or more members of the family. In the future, these outside earning careers
will probably be, for the most part, control operations in industry, the
maintenance crafts; distribution and communications, the dedicated bureau-
cracy; research and the professions.
There are already many pilot operations of this type in American
homes and others are fast taking shape. Unquestionably a powerful new impulse
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will be given in this direction when the threat of communist imperialism is
relaxed to a point where our leading scientists are able to transfer their
research and development from atomic power and devote their talents to the
trapping and use of solar energy. The significance of this is that it will
bring work-energy into many parts of the world where industrial progress has
been impeded by scarcity of mineral fuels. The weight and bulk of coal and
petroleum, and their random occurrence in nature, have created transportation
difficulties which only the sun can dispel.
Parallel with the spectacular birth and growth of the home machine,
there has occurred an equally sensational evolution in the factory machine.
This crude, clumsy dinosaur has gone through a significant qualitative change
during the past century which has widened the gulf between modern countries
and those still in the bondage of the outworn 19th century idea-patterns set
by Karl Marx and his contemporaries.
What these false prophets lacked was engineering foresight. They
assumed that the pattern of the 19th century machine was fixed, that it
might multiply in nuMber but never in nature, that its effect on the worker
and on society was clearly and permanently fixed.
The other day I studied such a machine in a local museum. I reminded
myself that it came before the electric vire was broadcasting its power to
multitudes of electric motors, and before the day of the internal combustion
engine powered by gasoline. At that time, machines were huge, clumsy masses
of steel using falling water or steam from burning coal for energy, and per-
forming a limited number of tasks previously performed by the muscles of man
and of animals. Sometimes, also, thanks to their vast concentration of raw
power, they were able to perform individual tasks requiring work-energy beyond
the combined strength of all the men or animals which could be concentrated in
their place.
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Marx described with vigor the impact of these dinosaurs on the life
of his times. Because they were in such a rudimentary stage of development,
they never finished the jobs they started, laying huge demands on the muscles
of men to complete the process of production. This Caused a massing of
workers in collectivist work patterns and shitater patterns near the machines,
a massing which made them easy prey to agitators, especially since many of
the tasks required were uninspiring and degrading, involving only repetitive
muscular activity.
In the Communist Manifesto, Marx's assumption is stated thus: "Owing
to the extensive use of machines and the division of labor, the work of the
proletarians has lost all individual Character, and consequently all Charm for
the workman. He becomes an appendage of the machine and it is only the most
simple, most monotonous, and most easily acquired knack that is required of him."
This concept of the machine as a slave-driver of the worker, forcing
him to give his life' to repugnant, repetitive routine is a perfect example of
how the observations of A thought leader in one age may become the frozen cult
of a succeeding age. What Marx did not realize was the inherent capacity of
the machine, reborn with advancing technology, to take to itself all repetitive
routines, thus converting the worker from a slave to a caretaker and partner.
This shattered the collectivist work-pattern, just as the automobile shattered
the shelter pattern; by dispersing the factory worker over vide suburban areas
distant from the factory.
In the absence of engineering foresight, which might have anticipated
the disappearance of the dinosaur machine, the future of these workers looked
black indeed. The distribution of the benefits of this new source of energy
lay entirely within the power of the owner-adventurers who had built and now
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owned the machine. There was no modern science of taxation to challenge a
selfish distribution of benefits, and modern joint-venture enterprise had
not yet modified the traditional concept of private ownership. According to
Marx, and his analysis seems to be supported by much historic evidence, these
owner-adventurers together with their servants, entertainers, and captive
careerists formed a ruling class, the bourgeoisie, whereas the propertyless
worker class made up the proletariat. The bourgeoisie appears to have operated
much as the Russian communist party does today but it was much more loosely
organized.
The cure of this condition proposed by communism was to create a
small minority group of agitator-adventurers who would convert the slumbering
discontent of the workers into mob violence under cover of which the agitator-
adventurers would seize dictatorial power. Once in power they would swiftly
change roles, claiming to be trustee-pretenders of the rights and interests of
the workers. The task assigned to these trustee-pretenders was to convert their
minority dictatorship into a worker's paradise.
The Marxist paradise was vague in outline and he gave no indication as
to how it was to be achieved. Nor do we find directions as to how the corrup-
tion inevitable in a dictatorship is to be avoided. No one has yet found an
answer to the ancient truism that "power corrupts and absolute power corrupts
absolutely."
The newer bourgeoisie of the trustee-pretenders is still the same
privileged class as the bourgeoisie of the owner-adventurers. It differs only
in its slogans, which are newer, in that they are now only a century out-of-date.
A true engineer-prophet - a Leonardo da Vinci of philosophy - should
have been able to forecast the evolution of the factory machine by studying the
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rudimentary forms of an electric switch and a camshaft fifty years ago. But
none did. Even today, there is too little recognition in philosophic circles
of the social significance of automation. Automation refers to the inherent
ability of the machine to take over all repetitive muscular routines of the
worker and to convert him into a maintenance man, a trouble-shooter, and a
caretaker.
Some weeks ago I saw one of the most modern machines of this type in
a branch factory of the Ford Motor Company in Cleveland. A single machine -
or continuing complex of machines - occupied acres of floor space. It took
huge, rough steel cylinder blocks - the rough, basic bodies of automobile
engines - as they came fresh from the foundry. Hundreds of steel hands turned
At, shifted it, and pushed it along. Thousands of electric switches controlled
various processes as it moved. Holes were drilled, surfaces were polished
hundreds of separate operations all controlled by electronic devices.
All was mathematically precise. There was little room for human
error. Of course, provision had to be made for mechanical errors, and failures
could be predicted on the basis of theoretical chance. Hence, the whole prOcess
was divided into sections. When a line of cylinder blocks came to a section
where the probability of switch failure or machine breakdown was high, the
line split in two and identical processes took place in each line. The purpose
was to increase the chance that at least one line was in operation at all tines.
In addition to this, a bank of cylinder blocks finished up to that point was
maintained at each section break. If a failure occurred in the preceding section,
this reserve supply was then fed into the section following.
There were workmen attending this machine, but they bore no resemblance
to workers who clustered around the dinosaur machines back in the days of Marx.
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They were maintenance men, trouble-shooters, switch control men, inspectors.
Not one of them was engaged in repetitive, muscular work. Every man was truly
a technician.
Automation is still not the invariable rule in American industry, but
the trend is moving very fast.
In another 20 or 30 years, it is quite possible that we will have
abolished most "repulsive" repetitive routines, and thus remade the whole pattern
of industrial society. At present, of the 800,000 odd hourly production workers
in automotive factories, less than half are engaged in such routine work as
assembly, punch and drill press operations, and they are rapidly being replaced
by control operators, maintenance men, trouble-shooters, inspectors and the like.
Moreover, automation, by cutting costs, is making it possible for mre people
to own automobiles and trucks, and this is true also of household mechanical
appliances. This creates a growing demand for the services of mechanics and
marketing specialists who must be conveniently located to every home and farm.
Naturally, the work pattern of these individuals is highly decentralized. In
addition, there are over 5 million truck and taxicab drivers whose work-pattern
is decentralized to the Nth degree.
Altogether there are about 9 3/4 million workers in all branches of
the automotive industry, with only a fraction holding jobs involving physical
massing and repetitive work routines. Thus, every step made in the direction
of automation, the inevitable goal of the evolution of the modern machine, is
a step away from the social function and influence of the 19th century dinosaur.
It may be claimed that I am placing too much emphasis on our mechani-
cal servants, ignoring many other types of consumer goods in the non-mechanical
category - such as food, clothing, and shelter. Yet, here the penalty of 19th
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century thinking is equally tragic, for a crucial error of the old philosophers -
and many of the new - is to under-rate problems of distribution and marketing
as compared with those of production.
It was Marx's theory that the distribution of consumer goods was a
relatively unimportant function of their manufacture, a distortion of economic
fact which still prevails in left-wing ideology. In the Short History of the
Communist Party, the bible of modern communism, the author of the chapter on
dialectical materialism, now known to have been Stalin, mentions "production"
or "productive" forces over 200 times and "marketing" or "distribution" only
twice, and then simply in terms of transportation. This is significant because
the communists give so much lip-service to dialectical materialism as the means
of modernizing their dogmas.
Here is a factory making shoes and there, 100 miles away, is a farmer
who needs a pair of work shoes. Inside the factory is a worker who needs a
bushel of potatoes. Both of these men are producers, but the work-energy each
puts into production is wasted unless he can convert it into consumption, and
100 miles is a long walk. It would require an amount of muscular work-energy
far greater than that required to make the shoes or grow the potatoes.
The gap between the factory and the farm, between producer-consumer
and producer-consumer, must be filled by some sort of distribution system. This
system may be a relatively simple one, if the standard of living is low. In
such a case, the farmer will be able to afford only a few articles, like shoes,
and hence he can afford the time it takes to walk or take a bus to the retail
outlet and to stand in a queue for a long time waiting to be supplied.
Now suppose that his buying power is increased, together with that
of tens of millions of other producers. What happens? Not only does the
number of shopping trips increase but the busses are more crowded and the
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queues are longer. The problem of volume is immensely complicated by the
problem of variety. There is strong evidence that as a nat on prospers; the
problems of distribution increase more nearly in
than in
arithmetical ratio.
In the U. S.; we have been forced to learn this lesson and to learn
it well. Fortunately, one of the most valuable heritages we carried away from
our British mercantile colonial period is an instinctive feeling for the
importance of marketing and distribution. This has been a cardinal feature
in the development of our consumer-centered economy of plenty, equal in sig-
nificance to our mastery of the machine.
One of the best measures of the importance of distribution in our
economy is in terms of potential work-energy. The horsepower of our goods-
carrying railroads, merchant ships and trucks is over 10 times of that of all
our goods-making factory machines combined. Yet even this does not tell the
whole story. Our vastly, complex system of distribution of consumer goods would
be wholly inadequate but for the motorizing of the consumer himself.
Surveys have indicated that over 20% of our use of private motor cars
is in connection with shopping. This means that there is far more potential
work-energy dedicated to that part of the distribution system that lies between
the retail outlet and the home, than that lying between the factory or farm and
the retail outlet. This astounding fact, largely ignored by traditional econo-
mists, lends further support to the contention that the total distribution
problem expands more ini than in arithmetical progression.
Is the negle t of distribution in the communist world, as revealed in
the failure even to build an adequate hard-surface highway system; accidental
or deliberate? Is it merely a confession of failure of bureaucratic organization
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or is it deliberate and reactionary opposition to progress? There is strong
evidence that it is the latter. Many Russian towns do not have a single hard
surface road. City dwellers not far away from farm areas face starvation
while crops rot for lack of transport. Why this neglect? Because free travel
is in itself a menace to dictatorship because it disrupts the whole concept
of an identity-card civilization? A man on a truck cannot be forced to listen
to propoganda broadcasts. Retail outlets are of their very nature anti-
collectivist because Of the small size of the typical unit and the scattering
of units, and the more widely shops are scattered, the more difficult it is
to control the thought-patterns of the managers and clerks.
We have seen that, as our economy of plenty has matured, there has
taken place a massive transfer of workers from the manufacture of consumer
goods of the food-and-shelter type into their distribution, paralleling a
similar transfer from manufacturing to distribution, maintenance and operating
tasks in the case of home mechanical goods. Both are highly decentralizing trends
working directly against the collectivism projected by 19th century economists.
The net result of automation, removing men from the repulsive status
of unthinking slave of the machine, plus the huge demands for labor in the
maintenance of mechanical servants in the home and on the highways, plus the
vastly increased need for manpower in the distribution industries have created
a work and shelter pattern for American workers which is diametrically opposed
to the basic Marxian thesis and to certain of the socialistic dogmas which are
popular today. This helps to explain why the extreme left in most countries of
the world seems to us to be at least as reactionary as the extreme right. In
fact, it is probably moreso because of its exclusive commitment to an outworn
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23
dogma, whereas the extreme right, while its precepts may be even more out of date,
is more divided and therefor less damaging in its effect on a national economy.
We do not condemn all types of socialism. Socialistic thought has had
a powerful effect on the evolution of our American institution. Our American
socialism, however, has not been beguiled by the false lure of government owner-
ship. It has applied itself to making our amazing industrial advances of
broader benefit to all the people and has played an important part in the
evolution of a new type of government function - the referee-insurance state.
The same in general can be Said of our union labor movement. In the
United States the rank and file,workman has looked with keen suspicion on any
effort of his union leader to use his office to promote his personal political
ambitions in the larger sphere of national politics. The rank and file worker
expects his union official to work for his interest as a consumer equally as
much as his interest as a worker. This has been responsible for the great
emphasis on collective bargaining as against the development of pressure
politics in legislation. The Labor movement in America is not a producer
movement. It is a well-balanced producer-consumer movement. The American
workman is more interested in what his earnings can buy than in who owns the
factories which produce the things he needs and wants.
In summary, 20th century decentralizing influences have now become
more violent than the centralizing influence of the dinosaur machine of the
19th century. Political and social organization based on an assumed collecti-
vist pattern of workers are doomed. It must be expected that political and
military leaders whose personal and political fortunes depend on forced
collectivism will fight the new trend with desperation, and that they will
defend their reactionary position with military force if necessary. And no one
is more dangerous than the defender of a lost cause.
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It seems inevitable, therefore, the modern communist autocrats will
be forced to continue to expand military capitalism at the expense of home
capitalism. The Muscovite communists are trapped by their own outworn dogmas,
and their cause is doomed. We must be alert, but we can be comforted by the
fact that ours is the true wave of the future. Neither the Red Army nor the
Cominform can stop the surge of progress.
This discussion, fragmentary as it is, may be enough to indicate that
the concept of energic liberalism is the most modern and up-to-date philosophic
approach. It is also in complete agreement with modern scientific thought. ?
Modern 5-part capitalism as it exists today in many countries is the only true
type of scientific capitalism.
The advance of scientific thought has thrown a new light on the nature
of capital. When we haven't been thinking of capital as dollars, we have thought
of it as a form of matter. Yet the wise man of science now tell us that matter
is energy, a balance of active positive and negative forces. In another and
special sense, dynamic capitol is simply a balance between conflicting forces.
While a machine is running, it is being continuously attacked by many
anti-capital forces such as corrosion, rust and friction. So, too, managers
grow senile, their judgment is undermined by personal difficulties, or they are
corrupted by too much enjoyment of the rewards of their talents. Thus, capital
Is nothing but the current balance between pro-capital and anti-capital forces,
and the management of the capital is subject to another set of conflicting
forces, which result in profit or loss.
It is strange that the 19th century philosophers, of whom Marx is
a typical example, so ignored the negative forces. It appears that they were
so fascinated by profit that they could not see that loss was equally significant.
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Mich of our confusion today stems from this error. We still hear much about a
profit economy, but little about a profit-and-loss economy. In the American
economy, loss is quite as important as profit; it is a purge of inefficiency.
Totalitarian governments are still frantically, and unsuccessfully, searching
for a substitute for the loss purge.
In quite another way, our attitude toward capital is being influenced
more and more by scientific thought. This is particularly true in the case of
dynamic or mechanical capital. Thanks to the small electric motor and the
internal combustion engine, powering hundreds of millions of machines which
perform a growing variety of tasks, we are now approaching the variability of
species on which biological science is based. Mechanical work-energy is show-
ing itself as adaptable to environment as living species, its environment being
the needs of mankind.
What controls the selection of the machine species, and the organi-
zations that maintain and serve the machines? In our free society, the
initiative for this does not came from an all-knowing central authority but
from individual citizens who see the need for work-energy, and the need for
servicing existing machines, immediately around them. This initiative arises
sometimes from a single individual but more often from a cooperative or joint-
venture enterprise, a partnership or corporation. The freedom of individuals
to join together in joint ventures to enlarge the benefits of our new-found
work-energy is one of the most important of all our freedoms.
Let us observe the automotive industry as an example of how this
voluntary cooperative effort to meet consumer needs actually works. There are
today six large corporations engaged in the manufacture of motor cars and
trucks in the United States. There would be more, but for the fact that the
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modern automobile is improving so fast that larger design and engineering staffs
are necessary than smaller companies can afford.
This handicap does not apply, however, from the moment the new car
or truck leaves the factory gate. The total problem of making this product
of maximum use to every family is now broken up into hundreds of thousands of
small local problems. How are these cars and trucks, of varied types and cost,
to be placed in the hands of individuals and families best able to own and use
them in big cities, towns and out on farms and ranches? That task is performed
by 47,000 independent car and truck dealers; some are corporations, some partner-
ships, and some individuals. These dealers also provide repair and maintenance
service to keep these vehicles running on the highways. But there are, in
addition, 74,000 independent garages which perform a similar service.
But how are these vehicles to be fueled and maintained along the
road? This task is performed by filling stations, 200,000 of which are
independently owned and operated. Add all these and smaller service components
together and we find that the automotive needs of the American public have
created 350,000 manufacturers, distributors, and service and supply units,
each independent in operation and all operating in hope of profit, and all
constantly subject to the purge of loss0 since all face local competition.
The totalitarian idea.for a solution to such a problem would be a
gigantic, all-wise squid with 350,000 tenacles reaching into every corner of
a nation. It would be a biological monstrosity which would be ludicrous if it
were not so tragic. Totalitarian governments have been Shrewd enough never to
recognize the existence of such a problem.
The very suggestion that any central planning agency within a
totalitarian government could possibly duplicate such a field organization
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even in a single industry borders on the fantastic - and there are dozens of
other industries which are Obliged to depend on local joint-venture initiative
to distribute and service their products. The location and constant relocation
of such units by a central authority to accomodate a mobile population,
rendered even more mobile by the machine-powered vehicles: and the planning of
elaborate synthetic systems of reward and punishment as a substitute for profit
and loss in such a decentralized organization, would meet insuperable obstacles.
No totalitarian government has ever solved an organization problem of this
magnitude and none has ever dared try. The Russian automobile today stands as
the greatest fiasco in modern industry and it illuminates the grandiose social
fiasco of what we once so breathlessly watched as the "great Russian experiment."
Many fears have been expressed that the full exploitation of mechanical
work-energy will of necessity result in a purely materialistic society. This
assumption is widely held and has been used in anti-American propoganda,
curiously enough by the Muscovite apologists, who are themselves wholly
dedicated to materialism. Ammunition for the slander has been plentiful in
the soul-searching self-criticism of our own writers who have been shocked by
some of the antics of our parvenus.
Energic liberalism maintains that throughout history every under-
privileged group has gone through a parvenu stage of at least one generation
before its cultural and humanistic yearnings come into force. One of the
inevitable penalties of a rapid and wholesale liberation of large masses of
people from poverty is a large amount of unattractive parvenu behavior. Yet
this is temporary; already we are going through a mellowing stage in America.
One of the most interesting phases of this is a drift toward religion.
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What is strengthening our churches is the basic fact that all great
religions are based on the power of love and their places of worship have been
the best means by which personal love can be converted into social love. Modern
psychologists and psychiatrists, once regarded as foes of the church are now
becoming staunch allies for they have helped redefine the conflicts in man and
in human society in terms of love versus hate, rather than in good versus evil.
They have made it clear that while one man's evil may be another man's good,
there can be no confusion between love and hate. The clerics also are coming
more and more to think of their mission as displacing hate with love.
I hope that the discussion thus far has laid the groundwork for a
presentation of a 16-Task Program for Energic Liberalism to which every man,
woman and child can contribute in some degree. Here are our tasks:
1. To re-examine present-day economic thought-patterns which are
still largely based on the dinosaur machine of the 19th century, and to revise
economic theory to place proper emphasis on mechanical work-energy as the
basic element in local, national and world economies.
2. To maintain the principle that mechanical work-energy in itself,
is the true liberating force of the 20th century, and on this principle create
a new world liberal movement which, in each nation, will energize the political
center, leaving the right and left as lunatic fringes.
3. To cherish and expand, in this new machine age, the individual
freedoms so laboriously won from central governments over past centuries.
4. To resist the selfish, unsocial exploitation of mechanical work-
energy, either by private owners of factory machines, or by organized minorities
claiming control of these machines as self-appointed trustees of the interests of
the under-privileged but whose own selfish interests as a privileged ruling class
are inevitably opposed to those of the common man.
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5. To challenge government corruption by granting equal rights at
the polls to at least one opposition party and to assure for such opposition
access to all media of mass communication, such as television, radio, newspapers,
magazines, and books.
6. To promote in each national society an ever broader distribution
of mechanical work-energy in private homes, in the form of small machines, and
to encourage the improvement of factory machines to eliminate repetitive work
routines.
7. To grant to managers, engineers, technicians and their supporting
careerists rewards sufficient to maintain a high state of productivity, even if
this involves changes in the historic reward patterns of a national society.
8. To maintain a fluid and rational balance, suited to the needs of
each national economy, among the five characteristic types of modern capitalism -
home, private, joint-venture, public service and military.
9. To defend and encourage industrial competition as the most work-
able purge of incompetence and the best stimulus to greater productivity.
10. To develop a rational system for the mass distribution of
consumer goods, in which system an all-weather highway network is the basic
element.
11. To protect, by various forms of state and. private insurance:
workers temporarily deprived of gainful employment by the transfer of the
workload from muscles to machines or by improvement of machines.
12. To recognize taxation as the major social-economic science of
modern times and to promote its rational, balanced development.
13. To challenge the efforts of privileged intellectuals to slander
the new society of universal opportunity and to glamorize the starving past.
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14. To exert political and other pressures to support large-scale
enterprises aimed at the development of solar energy, comparable in scope to
the present development in atomic energy.
15. To welcome the new vitality of modern religion and to support
its mission of re-emphasizing the importance of personal and social love.
16. To cherish the rich treasury of the humanities bequeathed to
us from the long centuries of desperate poverty, as monuments to the uncon-
querable spirit of man.
All of us are confronted by immense new tasks even beyond these,
for the machine has created almost as many problems as it has solved, and we
are challenged, each in our own way, to help in their solution.
The master problem is the creation of a consumer-centered economy of
plenty, firmly based on political institutions adapted to the machine age. Each
of us must share in the solution - the continuing solution - as citizens and
voters. Fortunately, our two-party system is ideally suited to the creation
and constant modification of these institutions.
We continue to discover new, underprivileged classes created by the
swift march of our progress. Because of our life-saving medical advances, our
population contains far more grandmothers and grandfathers than ever before.
The homes of their children can no longer hold them. Where will they go? What
can they find to do that will satisfy their need for accomplishment and self
respect? We have barely begun to come to grips with this new problem.
We have the task of finding how to use well our larger freedom from
long hours of muscular labor. In coming to this new land, we have brought many
cherished customs and many comforting faiths. Shall we hold tightly to our own
special inheritances, or shall we share our best with the best of those from
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other lands? What are the best? We think we know; at least we know which are
the worst. They are the remnants of privilege - intellectual, priestly, politi-
cal, cultural. These we reject.
We welcome the special gifts of our races: the poetry of the Irish,
the trading genius of the British, the family integrity of the Jew, the stern
scholarship of the German, the imaginative technology of the Russian, the flair
of the French, the unquenchable optimism of the negro, the wisdom of the
Oriental; these are only a few out of many.
We grant freedom of worship to all faiths. Here and there, in all
these, we sometimes discover a few relics of privilege, where the god serves
only to support the arrogant, self-esteem of the anointed. We also find here
a rich heritage of loving-kindness, and consolation in the grief that none of
us can hope to avoid, and rituals of prose and song that make us one with ages
past.
How shall we educate our children - all children - to get the most
out of our consumer-centered economy of plenty and to contribute most to it?
Here lies one of our greatest failures to date and one we cannot, as parents
and citizens afford to neglect longer.
Why are our young engineers-to-be spending so much time on raffia
busy-work? Where is the school that is looking hard and straight at the
universal problem of maintaining our household machines - of managing our
mechanical servants? How long would the aristocracies of the Past have
survived if children had not learned to manage servants? We; all of us; are
the aristocracy of the present.
All in all, we have set for ourselves the most difficult tasks of
any nation in all history, and they are so numerous that we cannot hope that
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a central authority can tell us where to apply ourselves. The freedoms which
made all our progress possible also demand that we seek out the tasks we can do
best and go to work. Fortunately, the machine which has placed these tasks
before us has also given us the mobility and strength to accomplish them.
Let us not forget one salient fact about the tasks we face.
For century after century, mankind has been struggling with problems
of survival and of finding opportunities for a richer life above the subsis-
tence level. With no known source of surplus work-energy to draw on, each
problem had to be attacked over again with each succeeding generation. Our
problems, difficult as they may appear, are in a very different category;
they are new in nature. Moreover, it is inevitable that tomorrow the world
will move along in the same direction we have gone, slowly in some places,
more rapidly in others. Bence, we may hope that our solutions may influence the
happiness of millions far beyond our day and place. What greater opportunity
has ever been open to any generation?
Our forefathers have bequeathed to us a tradition of loyalty to the
land of our birth or adoption. To this we now add another loyalty, which will
steadily grow in strength. It is loyalty to the age we live in, an age unlike
any that has gone before. To our traditional pride of place we now add pride
of time. It is a good thing to do, for the world has become too small for strong
and conflicting loyalties of place. But time is without limit or bo'zadary
today is the best of all, and we share this day with all who walk the earth.
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