(analyzes further the profit system, which strangles production, and makes true prosperity impossible.)

we have seen that in an exploiting society there is a surplus which is taken by the exploiter; and that under the modern system this surplus must be sold at a profit before production can continue. the vital fact in such a society is that the worker has not the money to buy back all that he produces; therefore it is inevitable that a surplus product should accumulate. when this happens, production must be cut down, and during that period the worker is without a job, and without means of living. the fact that he needs the product does not help him; the point is that he has not the money to buy it. in such a society the productive machinery is never used to the full. the machinery is controlled by a profit-seeking interest, seeking an opportunity to make sales, and restricting production according to the prospect of sales. so the actual product bears no relationship to the possible product, and people who live in an exploiting society can form no conception of true prosperity.

for, you see, the market is limited by the competitive wage system. we have seen that in our own rich, prosperous country only one family out of six has more than $1,000 a year income; only one family out of twelve has $2,000 a year. it does not make any difference that the warehouses are bursting with goods; a family constitutes a market of so many dollars a year, and then, so far as the profit system is concerned, that family is non-existent; that family stops consuming, and the productive machinery is halted to that extent.

i have been accustomed to portray the profit system under the simile of an iron ring riveted about the body of a baby. that ring would cause the baby some discomfort at the beginning, but it would not be serious, and the baby would get used to it. but as the baby grew the trouble caused by the ring would increase, and finally there would come a time when the baby would be suffering from a whole complication of troubles, and for each of these troubles there would be but one remedy—break the ring. does the baby cry all the time? break the ring! is its digestion defective? break the ring! is it threatened with convulsions or with blood poisoning? break the ring!

here is our industrial society, growing at a rate never equalled by any human baby; and here is this iron ring riveted about its middle. here is poverty, here is unemployment, here is graft, here is crime, here is war and plague and famine; and for all these evils there is but one cause, and but one remedy. break the ring! set production free from the strangulation of the profit system.

i will admit that there may have been a time in the history of the social infant when this ring was necessary. i admit that if the great industrial machine was to be constructed, it was necessary that the mass of the people should consume only part of what they produced, and should allow the balance to be reinvested as capital. but now it has been done, and the process is complete. we have a machine capable of producing many times more than we can consume; shall we still go on building that machine? shall we go on starving ourselves, to save the money, to multiply over and over again the products, in order that we may be thrown out of work, and be starved even more completely?

a few generations ago we had in colonial america a society that in part at least was "free." in that society everybody got the necessities of life. they did not have the modern sunday supplement and the moving picture show, but they had bread and meat and good substantial clothing, and furniture so well made that we still preserve it. the children in those days grew up to be strong and sturdy men and women, who would have seen nothing to envy in the bodies or minds of the slum population of new york and chicago. in short, they had all the true necessities of life; and yet their work was done by hand, the power process was unknown and undreamed of.

now comes modern machinery, and multiplies the productive power of the hand laborer by five, by ten, sometimes by a hundred. here, for example, is the "appeal to reason" selling millions of cheap books for ten cents apiece, and making a profit on it; installing a gigantic press which takes paper, sheet after sheet, prints 128 pages of a book at one impression, and folds and stitches and binds the books, all in one process, and turns them out complete at the rate of 10,000 copies per hour. here is a factory which turns out 100,000 automobiles a month. here is a mill which turns out many millions of yards of cloth a month. if our colonial ancestors had been told about these marvels, they would have said instantly: "then, of course, everybody in that society will have all the books they want, and all the clothing they want, and all the automobiles. everybody in that society will have five or ten or one hundred times as much goods as we have."

imagine the bewilderment of our colonial ancestor if he had been told: "the majority of the people in that society will not have so much of the real necessities of life as you have. they will have a few cheap trinkets, designed to tickle their senses; they will have cheap newspapers, carefully contrived to keep their minds vacant and to keep them contented with their lot; they will have moving picture shows constructed for the same purpose; but all their material things will be flimsy, put together for show and not for permanence; their food will be adulterated, their clothing will be shoddy, everything they have will be made, not for their service, but for the profit of some one who lives by selling to them. the average wage earned by those who do the work of this new machine civilization will be less than half the amount necessary to purchase the necessities of a decent life, and one-tenth of the total population will be living in such poverty that they are unable to maintain physical fitness, or to rear their children into full sized men and women."