Capitalists Are Not Spendthrifts

You have probably been present at various gatherings where amateur Bolshevists made speeches. You have heard rich men scolded or damned. The capitalist is portrayed as living on a scale of prodigal luxury, spending fortunes on jewelry, fine clothing, costly food, and every other personal gratification. But these orators know little about their subject. There is probably not one socialist in a hundred who ever experienced a real friendship with even one rich man. As a matter of record, rich men are surprisingly frugal. It is not the rich man himself who squanders the fortune, but more often the rich man's son and daughter. These children we shall eventually curb by inheritance taxes or other suitable measures; but I seriously question whether the "old man" requires curbing. At most, he can eat only a limited quantity of food. Few rich men are inordinately fond of clothes and jewelry. Personal adornment is more likely to appeal to the laborer than the capitalist. It is the employee who yearns for the silk shirt, while the boss's idea of real luxury is to get into a woolen shirt and the old slouch hat.

The Bolshevist's Mistake

The reason why the Bolshevists depict the income-tax payer as squandering millions on personal extravagance, is because they themselves would do so if given his opportunities. We cannot get away from the law of equal and opposite reaction. The reaction from carrying a hod is to run riot among the bright lights. The reaction from bossing a business is to go fishing or to weed the garden. As a strictly commercial proposition, I would rather undertake to board and clothe Mr. Rockefeller than any "comrade" in the whole of Russia!

It has been said that the test of intelligence is whether you can think in terms of percentages. The percentage of his total resources spent by the rich man on personal sustenance and indulgence, is remarkably low. With others than the rich, the percentage of total resources spent on personal sustenance and indulgence, is remarkably high.

The whole subject can be clarified by separating it into these two distinct questions: (I) Do the rich spend too much on living expenses? and (2) Is the concentration of business capital an evil or a benefit? In the vast majority of cases, the personal expenditures of the rich are not a cause for social concern except for the example involved. A few horrible cases have been advertised as typical. They are not typical, but exceptional. The vast majority of rich men are too busy to squander money. Moreover, their deepest instinct is not to squander but to conserve. This is why they are rich men; were this not so, they would not be rich men but Bolsheviki. The following quotation from Horace Mann describes the situation exactly:

"However rich a man may be, a certain number of thicknesses of woolen or silk is all he can comfortably wear. If he has a dozen palaces, he can live in but one at a time. He can have the animal pleasure of eating but one man's rations. Hence, the wealthiest, with all their riches, are driven back to a cultivated mind for the real enjoyment of their money."

On the other hand, the waste of money by any one - whether rich or poor - is equally wrong and ostentatious expenditures cause many of our troubles.

Capital Must Be Concentrated - Not Dissipated

In answer to the second question: The concentration of business capital is a benefit, - in fact, a necessity. The rich man does not have the bulk of his wealth in houses, automobiles, and food, - but rather in railroads, factories, and farms, that are occupied and operated by others. The danger of wealth is not a question of amount but mode of uses. It did not need the colossal failure of the experiment in Russia to convince economists and statisticians that capital should be concentrated instead of dissipated. Capital is like steam; before it can do work, it must be concentrated. Nineteen people out of twenty waste wealth. The twentieth person invests wealth in useful enterprises. This twentieth person automatically becomes well off. In his hands, wealth functions for the good of the community.

The Bolsheviki refuse to see this. They have too many speaking engagements to spend any time on statistics Statistics show that the dream of demobilizing wealth is ludicrous. Read King's "Wealth and Income of the People of the United States." He shows that if capitalists were stripped of all their resources of rent, interest, and profits, and if these were bestowed upon the wage workers, wages would be increased not over 20 per cent at the most. In other words, by shattering all investments and dividing the booty, wage workers might get a 20 per cent "raise" - momentarily. Then all jobs would be gone and all incomes would cease, for the next step would be to dissipate the capital itself. If the United States is to remain a going concern, capital must be mobilized - not demobilized. Even financial investments with only a temporary length of life are better than none at all.