August, 1910. 



American Hae Journal 



feel he has been specially invited to 

 make an answer. Furthermore, the so- 

 cialist is sure he is the only one com- 

 petent to answer correctly. 



Firstly, let me say that Mr. Doolittle 

 does not know very much, if anything 

 about socialists and socialism, for if he 

 did he would not assert that socialist 

 papers are blaming the tariff for higher 

 prices of lumber and other commodities. 

 They know better. 



To undertsand the reason of the com- 

 paratively swift advance in the prices 

 of most commodities, not only in this 

 country, but the world over, one must 

 know a little about the principles of 

 political economy. The socialist move- 

 ment is based on economic principles 

 eminated by Karl ;\Iar.\-, and I will en- 

 deavor to set forth brielly a few of his 

 tenets, and then make special application 

 of them to the problem in hand, which is 

 this: When practically all other com- 

 modities are rapidly advancing in price, 

 why does the bee-keeper get for his pro- 

 duct (honey), the price that held good 

 23 years ago? 



According to Marx, the real value of 

 a commodity is the average social labor 

 necessary to produce it. Production Is 

 no longer an individual affair, it is a 

 social matter. To produce a section of 

 honey, for instance, Mr. Doolittle's labor 

 is concerned with only one part — the fill- 

 ing of the sections and preparing them 

 for the jobber; but others assisted him 

 by making the section-frames and the 

 wax- foundation. Behind them is an 

 army of others providing the raw mate- 

 rial, from the cruiser who located the 

 timber up to the man who sawed the 

 wood into thin strips. Modern produc- 

 tion begins with the discovery of the 

 raw material, and ends by placing the 

 goods in the hands of the consumer. 

 This accounts for the expression, "social 

 labor necessary," in the definition. 



Mr. Doolittle says that he occasion- 

 ally exchanges honey for butter, that is, 

 he trades the product of his labor di- 

 rectly for that of the farmer, or, 

 stripped to its elements, he exchanges 

 labor for labor. Sometimes he sells for 

 money, that is, gold, which is also the 

 product of labor. Economic law says 

 that in the transaction there must, on 

 the average, be an even exchange of 

 labor value, of the necessary labor to 

 produce the honey and the gold remain 

 constant, prices will remain stationary, 

 but if one of them require more or less, 

 then more or less of the other must be 

 given in exchange. 



For instance, suppose it takes as much 

 labor to produce 130 sections of honey 

 as it does to produce one ounce of gold, 

 then they are of equal value. But if by 

 improved methods 200 sections can be 

 produced by the same amount of labor, 

 while it takes as much labor as before 

 to produce the ounce of gold, then Mr. 

 Doolittle will have to give his 200 sec- 

 tions for the ounce of the precious metal. 

 The price of section honey we say has 

 fallen. Conversely, if the ounce of gold 

 is got with less labor than formerly, but 

 there is no change in the labor neces- 

 sary to produce the sections, then more 

 than an ounce of gold must be given for 

 the 130 sections, or, if we want to give 

 only the even ounce of gold, then we 

 must be content with the fewer sections. 



The price of honey is supposed to have 

 gone up, hut as a matter of fact, the 

 price of gold has gone down, as ex- 

 pressed in terms of honey. 



Of course, all kinds of variations may 

 and do occur. It is possible, for in- 

 stance, for improved methods of produc- 

 tion to keep equal step with both section 

 honey and gold, in which case the ex- 

 change will be constant, and we say 

 there is no variation in prices. 



During the past 15 years the price of 

 most commodities have simply soared, 

 and are about 50 percent above what 

 they were in 1895. What is the cause? 

 The undoubtedly correct answer is, de- 

 preciation of gold, due to improved 

 methods of mining the ore and securing 

 the metal. So improved are the process- 

 es that in the past 25 years the world's 

 output of gold is equal to that of the 

 previous century and a half. Therefore 

 to buy an article that cost an ounce of 

 gold IS years ago, we must give an 

 ounce and a half. In common speech, 

 prices have gone up 50 percent, and, so 

 far as I can judge, the end of the up- 

 ward flight is not yet. 



So much for the general principle. 

 But to answer Mr. Doolittle's specified 

 instance requires another application of 

 the same theory. He is apart producer of 

 a section of honey, though doubtless he 

 thought he was doing it all ; but produc- 

 tion is not complete until the section is 

 in the hands of the consumer. Produc- 

 tion essentially consists in moving — mov- 

 ing the article from where it is not 

 wanted to where it is wanted. His part 

 is to move the section-frame several 

 times; to move foundation about as 

 often; to move the combined result into 

 the hive, then out, then into the shipping- 

 case; next to the depot. Many others 

 move the honey along to the consumers, 

 and when it reaches him, movement 

 ceases, and production is finished. Or- 

 dinarily the consumer pays full value — 

 no more, no less — for the labor stored 

 up in the section. There is very little 

 robbing at the point of consumption — 

 exploitation takes place in the field of 

 production. Mr. Doolittle's section is 

 being sold to the consumer at its real 

 value, just as he gets full value when 

 he buys. But, like all other workers, 

 he is undoubtedly being exploited as a 

 producer. It is not a fair deal for him, 

 therefore, to compare the retail price 

 he pays, with the wholesale price he gets. 

 Let him compare retail prices with retail, 

 and wholesale with wholesale. 



The extent to which a producer or 

 worker is exploited depends upon the 

 kind of industry he is in. Broadly speak- 

 ing, in the agricultural field the worker 

 gets about .SO percent of what he pro- 

 duces ; but the percentage is steadily de- 

 creasing as methods are improved. In 

 the industrial world the worker gets 

 about 16 percent; not so many years ago 

 he got 25 percent. The iron law is that 

 the worker gets, no matter in what coun- 

 try, just enough to sustain him in the 

 standard of living peculiar to the region 

 in which he lives. A bee-keeper is es- 

 sentially a worker, ivith a modest capi- 

 tal invested, therefore he gets skilled 

 workers' wages, plus the percentage of 

 his capital necessary to replace the an- 

 nual losses due to the deterioration of 

 his hives and appliances. Improved 



methods enable him to produce by his 

 own unaided labor more honey than he 

 could produce 23 years ago, hence the 

 price, as compared with many other 

 commodities, has gone down; but Mr. 

 Doolittle is doubtless enjoying about the 

 same kind of a living he got a score of 

 years ago. 



It is utterly impossible in a short ar- 

 ticle to cover all the ground that ought 

 to be gone into to make the proposition 

 clear, so I have tried to keep close to 

 essentials. In closing, I would ask that 

 Mr. Doolittle will kindly note that even 

 if I am a socialist, I have not said a 

 word about the tariff, and I would 

 humbly suggest that before he imputes 

 statements to socialists he ought to in- 

 vestigate a little, and learn from their 

 literature, what they actually do say. 



One thing I am grateful for : Mr. 

 Doolittle did not trot out the law of 

 supply and demand, which has found 

 its grave, due to overwork. For a long 

 time it was deemed the steam of the 

 economic engine, but Karl Marx proved 

 it to be merely a regulator. The few 

 who still believe it to be the driving 

 force will have a hard job to explain 

 why prices went steadily up during the 

 period of depression that is said to be 

 now happily past. 



Victoria, B. C. 



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