Clue to the Economic Labyrinth

Clue to the Economic Labyrinth
by Michael Flürscheim


Progress – (see Below – same as in The Economic and Social Problem)
Chapter I:   Wanted: A New Gospel (see below)
Chapter II:   The Land
Chapter III: Money
Chapter IV: The Effect of Scientific Paper Currency
Chapter V: Free Trade or Protection
Chapter VI: Banking
Chapter VII: Interest
Chapter VIII: Capital and Capitalism
Chapter IX: Exchange Banks and Co-operation
Chapter X: Democracy
Chapter XI: Socialism (and Conclusion)

The time is ripe, and rotten-ripe, for change;
Then let it come: I have no dread of what
Is called for by the instinct of mankind;
Nor think I that God’s world will fall apart
Because we tear a parchment more or less.
Truth is eternal, but her effluence,
With endless change, is fitted to the hour;
Her mirror is turned forward to reflect
The promise of the future, not the past.
He who would win the name of truly great
Must understand his own age and the next,
And make the present ready to fulfill
Its prophecy, and with the future merge
Gently and peacefully, as wave with wave.
The future works out great men’s purposes;
The present is enough for common souls,
Who, never looking forward, are indeed
Mere clay, wherein the footprints of their age
Are petrified forever; better those
Who lead the blind old giant by the hand
From out the pathless desert where he gropes,
And set him onward in his darksome way.
I do not fear to follow out the truth.
Albeit along the precipice’s edge.
Let us speak plain: there is more force in names
Than most men dream of; and a lie may keep
Its throne a whole age longer, if it skulk
Behind the shield of some fair-seeming name.
Let us call tyrants tyrants, and maintain
That only freedom comes by grace of God.
And all that comes not by His grace must fall;
For men in earnest have no time to waste
In patching fig-leaves for the naked truth.
—James Russell Lowell

Chapter I
Wanted: A New Gospel

The Old Gospel
A CARAVAN trudges wearily through the hot sand of the desert. At last an oasis is reached, and all rush toward the life-giving fluid. But only a meagre quantity is found, hardly sufficient for all, and already the more vigorous travellers are making use of their strength to monopolise this supply. Weak and tired pilgrims whose strength had barely sufficed to permit their reaching the oasis despair of being able to force their way to the spring.

Fortunately the leader approaches, and his exhortations are heard. He asks the strong ones to moderate their greed, and to let their poor brethren obtain some of the water. He shows them how wrong it is for them to store away water for future use before others have as much as quenched their thirst.

Who has not heard this gospel, preached in the holy writings of all peoples, resounding from every pulpit of our churches? They are old, very old, these admonitions—as old as humanity. Our parents have heard them before us, their parents before them, and their echoes come down to us, faintly and more faintly, from the ever-receding generations of the past.

But do not let us, in pondering over these glorious teachings of the brotherhood of man, of unselfish love and devotion, of charity and benevolence, of the division of the last loaf and coat, forget to look after our caravan, which, meanwhile, has continued its march.

The desert now lies behind the pilgrims, and a wonderful valley opens before their astonished eyes. As far as they can see extends quite a forest of fruit trees bending under their precious loads, while blooming meadows crossed by lovely little rivulets invite the wanderer to a delicious rest. Sweet feathered songsters fill the balmy air with their delightful melodies. A real paradise, from which cares and troubles of any kind seem forever banished, opens its inviting arms to our footsore travellers. Nearer and nearer they approach to it; already they see the entrance of the valley, and in a few hours they expect to rest there refreshed and happy.

But, oh, how dreadful! A roaring torrent separates them from the valley; its foaming rapids interpose a seemingly impassable barrier between our poor pilgrims and the lovely paradise.

A few intrepid men throw themselves into the seething waters; but most of them perish before the eyes of their companions, who cannot succour them. Only a few hardy swimmers succeed in reaching the opposite shore. The majority cannot swim and must remain on the desert side of the stream.

By irrigating the soil they raise scanty crops, and with the help of the fruits thrown over from the other side they manage to eke out a bare living. Unfortunately, most of the fruit thus thrown fails to reach the desert bank of the stream, and that which is successfully aimed is nearly always injured in its fall. The majority of the lucky ones, however, prefer to take their ease in the paradise they have attained to, little heeding the entreating voice of the leader, which is wafted to them over the stream.

Again and again it makes itself heard, that old and well-known command of charity, and more than ever since the world exists it is obeyed. A few of the successful swimmers, a Leo Tolstoy, for instance, seeing how little can, after all, be accomplished by almsgiving, renounce their enjoyments rather than monopolise them; and, at the risk of life, return to their brethren so that they may partake of poverty with them.

Good, well-meaning men they, and those also who without tiring throw fruits over, most of which are spoilt or never arrive, and are carried to the ocean by the waves of the stream, Wiser men, however, those few exceptional thinkers who spend day and night of their lives considering whether it might not be possible to construct a bridge by which the whole caravan could be brought over into the happy valley. They are not in the least deterred by the jibes or threats of the others, even of those whom to help they strain every nerve. “A bridge over such a wide and unfathomable stream! What a Utopia! The fools had better make use of their precious time to throw us some more fruits!” Such are the shouts occasionally coming over to them from the other shore.

Humanity has arrived at the border of the desert through which it has been wandering during so many centuries. A hard and continuous fight against terrible odds has marked the different stages of the struggle so far. Where the stronger managed to secure a larger share the weaker one suffered in consequence, and the exhortations of the moral leaders again and again demanded justice, or at least charity. The religious writings of all nations, their codes of morals, are filled with such demands. Where entreaty proved without effect, threats had to help. The most terrible torments of supposititious hells, cruel inventions of human fanaticism, have been shown in prospective to the hard-hearted rich, whose entrance into heaven has been made to appear more difficult than the passage of a camel through a needle’s eye.

Change of the Problem
Meanwhile, gradually, almost imperceptibly, the outlook on the march has changed. Let us listen to some of the observers.

“On the virgin soil of America’s prairies 100 men, with the help of powerful machines, produce in a few months the bread required by 10,000 men during a year. The wonders obtained in industry are still more astonishing. With those intelligent beings, the modern machines, the accomplishments of three or four generations of inventors, mostly unknown, 100 men produce the clothing which 10,000 men require during two years. In well-organised coal mines 100 men extract yearly enough fuel to supply warmth for 10,000 families in a rough climate.” (Kropotkine, The Conquest of Bread.[1])

As man does not only need bread, clothing and fuel, let us double, yea, even treble the number of men required to cater for his wants, and we arrive at the result that less than one-tenth of the population could supply all with the necessaries of life. This accords with the calculation of others, Dr. Theodor Hertzka, for instance, the well-known Austrian sociologist, who figures out what labour will be required to produce the common necessaries of life for the 22,000,000 inhabitants of Austria; with the result that all industries—agriculture, architecture, building, flour, sugar, coal, iron, machine building, clothing and chemical production—need 615,000 employed 11 hours per day 300 days a year to satisfy every imaginable want. But these 615,000 labourers are 12-3 per cent, of the population able to work, excluding all women and all persons under 16 years or over 50 years of age. Hence, should the 5,000,000 men instead of 615,000 be engaged in work, they would need to work only 36’9 days every year to produce everything needed for the support of the population of Austria. But should the 5,000,000 work all the year—say 300 days—each would need to work only one hour 2½ minutes per day. To produce all the luxuries in addition, these 5,000,000 would need to work only 2 hours and 12 minutes a day for only 2 months in the whole year.

A whole book could be filled with statistics proving our immense progress in the arts of production and communication. I only give at random a few items as I find them among my scraps. From an address delivered by Professor Frank Parsons in Boston: ” Steam and electricity, and mechanical contrivances have multiplied the productive power of labour many-fold. A sewing machine will do the work of 12 to 15 women. A M’Kay machine enables one workman to sole 300 to 600 pairs of shoes a day; while he could handle but 5 or 6 pairs a day by former methods. A good locomotive will pull as much as 800 horses or 8,000 men; 4 men with the aid of machinery can plant, raise, harvest, mill, and carry to market wheat enough to supply with bread 1,000 people for a year. A girl in a cotton mill can turn out calico enough in a year to clothe 12,000 persons, more or less, depending somewhat on the size of the persons, and the number of changes of cotton they have. The total machine power of the country is equivalent to the labour of half a billion willing slaves, or an average of 20 to every human worker. On the basis of human slavery, the Athenians built up a civilisation in which every free man might have ample leisure for culture, and civic and social life. On the grander basis of service by the power of Nature; we are building a civilisation in which all shall be truly free, and shall enjoy ample leisure for development and association with far greater means for both than the Athenians ever possessed. In Athens, in her palmiest days, there were 5 or 6 slaves for every free man; our machinery already equals 20 for every worker, and in another fifty years may equal 40, 50, 60, or more for every man; or 100, perhaps, for every family. And these splendid servitors of steel and brass are exempt from the pangs of hunger and cold, are never oppressed with weariness, lose no liberty in their servitude, and find no misery in subjection.”

From Brotherhood of May, 1900: “Mr. Ernest H. Crosby tells of a factory he inspected where the manufacture of cheap socks was carried on. The manager showed him 400 sock- making machines. The machines run 24 hours a day, and only 50 boys are needed for all shifts; 5,000 dozen of socks are made daily. Under the old method, this work would have required about 50,000 men or women.”

The thirteenth Annual Report of the National Commissioner of Labour (America), for 1898 takes up the subject of hand and machine labour, and is one of the most exhaustive documents of its kind that has ever been issued.

Herewith are given a few extracts from tlie Report, as showing the number of men employed, the time consumed in manufacture, and the cost of certain articles:—

Ten ploughs, which cost $54.46 by hand labour, and on which 2 men were employed a total of 1,108 hours, cost, when made by machinery, $7.90, and took 52 men a total of 37 hours and 28 minutes to make.

One hundred blank books cost $219.79 when made by hand, and on them 3 men were employed a total of 1,272 hours. The same number of books, made by machinery cost $69.97, employing 20 men 245 hours.

Ruling 100 reams of paper by hand took 1 person 4,800 hours and cost $400, while 2 persons did the work by machine in 2 hours and 45 minutes, costing only 85 cents.

One hundred pairs of men’s fine boots, made by i person by hand in 2,225 hours, cost $556.24, while by machinery it took 296 hours with 140 men employed, and cost $74.39.

One hundred pairs of women’s fine shoes, made by hand by 1 workman in 1,996 hours, cost $499.16. By machinery it would take 140 workmen a total of 173 hours, and cost $54.65.

To make 100 dozen of brooms by hand took 9 men a total of 445 hours’ time and cost $73.19. By machinery the same work was done in a total of 295 hours’ time, and cost $47.93, with 105 hands employed.

One gross of wire-drawn brushes cost $16.75 when made by hand, employing 12 men a total of 300 hours. By machinery the same work was done in a total of 27 hours’ time, employing 25 men and costing $3.70.

Forty gross of vegetable ivory buttons cost $12.6, employing 6 men a total of 115 hours, while by machinery the same work was done by nine hands in a total of 14 hours, and cost $1.68.

One thousand yards of Brussels carpet by hand cost $270 in a total of 4,047 hours, 18 men being employed. By machinery the work was done by 81 men in a total of 509 hours, and cost $91.25.

One thousand axle clips made by hand took 2 men a total of 666 hours’ time, and cost $233.33. By machinery it took 9 men a total of 23 hours, and cost $4.28.

A large reduction in cost and hours of labour is exhibited in the manufacture of carriage hardware and equipments. The cost of a buggy made by hand, 6 persons being employed a total of 200 hours, was $15.66. By machinery one can be made at a cost of $8.09, employing 116 hands in a total of 39 hours.

One hundred men’s fine coats cost by hand $603.91, while by machinery they can be made for $201.

Engraving a woodcut 7¾ by 9 inches by hand cost $47.80. Made by machinery the cost was $14.40.

Fifty dozen files cost, when made by hand, $131. Made by machinery, the cost was $28.

Lithographing 1,000 copies in ten colours, size 10 by 15, cost by hand $92.87, and by machinery $52.75.

It has been estimated by M. Chevalier (Hearne’s “Plutology,’ pp. 170, 171) that “the labour of one American in the transport of goods was as effective, in the year 1841, as the combined labour of 6,657 subjects of Montezuma.” But in this year 1901 it is probably as 120,000 to one. Sir Frederick Bramwell estimates that the engine of an Atlantic liner does the work of 117,000 rowers.

It is stated that in India a good spinner will not be able to complete a hank in a day, but in Great Britain and America one man usually attends a mule containing 1,088 spindles. Each of them spins three hanks a day; thus the assisted labour of the Anglo-Saxon is to the unassisted labour of the Indian as 3,264 to 1. Mulhall estimated that the steam power in use in 1899 was equal to the energy of 55,580,000 horses.

In publishing magazines, the time for 10,000 copies has fallen from 170 to 14 hours, and the cost from $302.50 to $4.62. The cost of making 1,000 lbs. of bread has been reduced from $5.59 to $1.55, and in work-time from 28 to 8 hours. Making 500 lbs. of butter has been cut down from 125 to 12 hours, and the labour cost from $10.66 to $1.78. In mining 100 tons of bituminous coal, the work has been reduced from 342 hours to 188 hours within the past decade. Ploughing 1 acre of land has been reduced by machinery from 10 hours to 5 hours; manuring from 25 hours to 1 hour; digging trees takes one-twelfth of the time previously necessary, and the self-binder has reduced harvesting down to one-eighth, while the ratio in threshing is 32 to 1 of the machine. The figures given above as the cost of articles is for labour only.

Mr. Samuel Brown, President of the Industrial Association of New Zealand, stated in his address of September 25, 1899, that the proprietor of Kirkpatrick’s Jam Factory, with about four boys and five machines, turns out about 3,000 jam tins in a day. In California they use a single automatic machine, about 100 feet long, which turns out 300,000 tins per day.

Leone Levy has calculated that to make by hand all the yarn spun in England by the use of the self-acting mule would take 100,000,000 men. It is reckoned that 30 men, with modern machinery, could do all the cotton spinning done in Lancashire a century and a half ago.

William Godwin Moody of Brooklyn, author of “Land and Labour in the United States,” and “Our Labour Difficulties,” sworn and examined before the Senate Committee on Education and Labour, in 1885 says: “Now one girl with her loom will weave as much cloth as could 100 women in my mother s time. One man will go into the field to-day and will do the work that required from 50 to 100 men to do when I was a boy.” Question. “Do you mean in agricultural pursuits?” Answer. “Yes. A single man with a reaping machine, one of the smallest capacity, with 6 or 7 feet cutting board, will go into the field and will cut and bind from 15 to 20 acres of grain in a day of ten hours. When my father went into the field with a sickle upon his arm, it took four men a full day to cut and bind a single acre, and the Scotch Agricultural Society reported, in an examination upon that matter, that it required five men for one day to cut and bind one acre of grain; but now one man will cut and bind from 15 to 20 per day; or, going beyond that, one of the improved machines will cut and thresh and sack the yield of 50 acres in a day.”

In November, 1899, I read a report in the papers that the new cigarette-making machine will throw out of work 1,500 girls in Liverpool, and many more in other cities. The machine rolls from 500 to 800 cigarettes in a minute.

It is estimated that 140,000 shoe-makers can now do as much work as 2,500,000 could have done in the same time 100 years

The work required to produce those wonder-working Aladdin lamps, the labour-saving machines, has decreased in the same measure. The number of workers saved by planing, shaping, slotting, and milling machines alone is incalculable, and the most of the work they do could not have been done at all by file and chisel. The improvements in this department follow each other daily. My friend John Richardson, managing director of the engineering works of Robey & Co., Lincoln, showed me a little machine by which conical cog-wheels were cut at a cost of a penny a piece which formerly had cost eight shillings each. And so I might go on and on for hours.

We see, as far as productive power is concerned, that the paradise of our picture has been reached. Where this power has increased more than twenty-fold in the course of centuries there ought to be more than enough for all, and another gospel ought to take the place of that which long ages have so accustomed us to that the following admonition of an American Fabian is quite in its place: “London boasts of her 6,000,000 in missions, etc., besides uncounted sums in private almsgiving, while New York records with pride her £1,000,000 spent in municipal charity, her  1,000,000 in organised charity, her £1,000,000 given by societies, £1,000,000 by churches, and £2,000,000 of private personal giving—£6,000,000 in all.

“Instead of exulting in the fact that she gives £6,00,000 a year ‘to the poor,’ New York should rather hide her head in shame that she has so many poor to give to. What sort of an economic system is this which works so badly that 6,000,000 a year will scantily serve to patch it up to keep it going? Is this peace or is it war which requires a city to expend 6,000,000 a year in the gathering up and caring for part of the crushed, the diseased, the mangled, and the disabled of its citizens?

“A really intelligent community would as soon think of boasting of its epidemics and diseases as of its expenditure for ‘the poor’—would as soon vaunt itself on the length of its death list as upon the magnitude of its charities. Pompous rehearsals of the sums given ‘for sweet charity’ are to be sighed over rather than rejoiced in.”

I add two poems by noble women who have awakened to the truth that something far better is required than mere charity:—

“Ye mustn’t make this earth too good,”
Says Aunt Maria Jane; ”
It gives us Christian work to do
Relievin’ of its pain.

“Things always has been bad down here
In this poor vale of tears;
An’ what’s bin always must jest be
Thro’ all our mortal years 1

“I hain’t no use for them new ways
You call reform; it’s sin
To try to change what’s bin ordained—
The Lord to fight agin.

“Fer sorrers that the Lord has sent
To try us here below,
If patient borne, will reap reward
When we to Heaven shall go.”

But spite of Aunt Maria Jane,
And good folks such as she,
We’re going right ahead to cure
This old world’s misery.

I think the Angels must be tired
Of winging it above.
And that they’d like to walk with us
On earth in brother-love.

But first we’ve got to make it fit
For Angel feet to tread;
So where the devil’s brambles grow
Let’s plant God’s flowers instead.
–   –  —Mary P. Irving, in the Social Gospel.


I GAVE a beggar from my little store
Of well-earned gold. He spent the shining ore
And came again, and yet again, still cold
And hungry as before.

I gave a thought, and through that thought of mine
He found himself a man, supreme, divine,
Bold, clothed, and crowned with blessings manifold,
And now he begs no more.
– – —Ella Wheeler Wilcox.

The great problem of the twentieth century is to find out why actual wealth production, instead of keeping pace with productive power, lags more and more behind it; why the chasm between the two becomes deeper from year to year, why it appears more unbridgeable with every new advance in productive facilities. To build a bridge across this chasm is the task before us—the thought, which is to clothe the beggar—the cure of this old world’s misery. To implore or threaten the luckier ones, who through greater force or ability, or through more favourable circumstances, have succeeded in entering the desired paradise is an anachronism; for a fraction of the intellect thus wasted would build the bridge that allows the meanest to enter the realm of abundance.

Citizens of a new world, while you slept the new day dawned. Up to your new work! Cease your wailings for charity and your threats against the rich; begin ramming the piles of the bridge that will lead from misery to prosperity![i]

This call is meant not only for the ministers of religion, for the preachers of morals and ethics, who make a speciality of appealing to the fortunate, expecting the millennium from their sacrificing spirit. No, it is also intended for a totally different class: it is addressed to the revolutionary forces, to social democrats and anarchists; it is addressed to all workers for reform. Here they are inciting the people against the employers of labour, or against landlords, or against plutocracy, or against the organisers of trusts, etc. Leave these men alone; let them eat their fill—do not even envy them; but use your whole time and power to reform the conditions which have created this sad spectacle of over-feeding in the midst of want. If you come to look a little closer you will find as noble men in their ranks as amongst yourselves. They will cease to oppose you, they will even fight on your side—many of them do so already—as soon as you prove to them that you are not their antagonists, that your victory will not take a single enjoyment from them, will even add one far beyond any they can now call their own: the feeling of unalloyed happiness, such as they cannot know under present conditions. Who can be happy, surrounded by want and misery?

Make it clear to them that you do not demand even as much spirit of sacrifice as the preachers do, that you want to leave to the rich all they possess of labour’s products, the full enjoyment of their savings. They may even add to their hoards by means of their skill and enterprise.

You only ask them to help you in the construction of the bridge so that others, too, may get a chance of gathering their share of the still untouched fruits.[ii]Or at least, demand of them what Carlyle demanded of England’s governing class “Anti-Corn Law League asks not, Do something; but, Cease your destructive misdoing, Do ye nothing. … No; instead of working at the Ark, they say: ‘We cannot get our hands rightly warm’; and sit obstinately burning the planks. No madder spectacle at present exhibits itself under this sun. … We will say mournfully, in the presence of Heaven and Earth, that we stand speechless, stupent, and know not what to say. That a class of men entitled to live sumptuously on the marrow of the earth, permitted simply, nay entreated, and as yet entreated in vain, to do nothing at all in return was never heretofore seen on the face of this planet.”

The New Gospel
Let us bear no ill-will toward anybody who makes use of existing conditions to get on; let us try to change the conditions which permit the few to prevent the progress of others. As long as the trees are full of fruit the stores accumulated by some are not in the least in our way, provided the access to the trees remains open. Our sole task must be to open the road and to grant fair play.

This is the new gospel that is wanted. In place of the old one—exhorting, pillorying, and condemning the rich—we must proclaim the new, which attempts to break down the barrier opposing the access of all to wealth. Instead of appealing to justice and charity to obtain alms, we must create reforms that enable us to dispense with alms. But nothing can be done until we have found out the nature of the reforms required. It is useless to call for an assault of Error’s battlements as long as the position of the fort is totally unknown. No orders can be issued to the man at the helm unless a correct chart shows us where to find the desired port.

Help given by Religion
But when once the path lies clear before us, the help of the old gospel’s preachers will be invaluable—the help of those excellent men and women who know how to approach the hearts of the people, backing their appeals by arguments of a transcendental order. As to the nature of these arguments, I should have much to say if it were not so far apart from the purpose of this work. I can only intimate my belief that the men of the churches leave unused the best weapon offering to their hands in daily increasing efficiency. I speak of Psychic Science or Occultism, not to be confounded with the ordinary Séance spiritism, from which it is as far apart as Astronomy is from Astrology, or Chemistry from Alchemy. As the master-mind of modern Psychic Science, Dr. Karl du Prel, so well expressed it: “The teachings of ethics are left in mid air when the metaphysical feeding ground is abstracted—the belief in our continued existence after physical death, Rome’s history shows how little materialism and morals can co-exist for any extended period. As long as our creeds base themselves on traditions only they cannot save the belief in immortality. Unfortunately, their best ally, Occultism, which offers them the scientific proofs of the great truth, the only kind of proofs accepted by the majority of our educated men, is spurned by them.”

A people fallen into materialism is doomed. Mobocracy and Tyranny govern in turn, as the ignorant or the educated gain the mastery for a time. In the end, the latter generally keep on top, without lasting advantage for the community, as long as governors and governed are alike destitute of that higher aim which barren materialism never affords, because it cannot truly penetrate into the phenomena of life. Again, the downfall of a tyrant is no real advantage while Nihilism prevails on the opposing side. Of what benefit can the death of a Julius Caesar be when a Brutus is a common cut-throat, who, as Cicero’s letters prove, through his man of straw, Scaptius, extorted 48% interest from the town of Salamis, in Cyprus? The victory of such a man could never have checked Rome’s rapid decline. Without morals there cannot be any real revival, and without transcendentalism morals are bound to deteriorate.

[1] Translated from the French edition.

[i] In the chapter on “Socialism” I shall treat the question whether I have the right to call the present position of our workers a miserable one in the absolute meaning of the word “misery”; but there cannot be the shadow of a doubt that I may speak of “relative misery” when our latent productive power supplies the standard of comparison.
[ii] Christ’s admonition to the rich man: “Go and sell that thou hast and give to the poor” is still preached by some sincere social reformers of our time; though the same men would never advise a soldier to throw away his gun and fight without arms. To make any headway with the reform work in our days, the sinews of war are more necessary than ever, and far from reproaching philanthropists with making money in whatever honest way they can, and then using their means to forward reform, we ought to be glad to see them acquire more room to their elbows for the good work. (See more on this subject at the close of next chapter.)