Class Friction and Formal Education


By FRED G. CLARK, General Chairman, American Economic Federation

Delivered before the Psi Upsilon Fraternity, Philadelphia, Pa., January 27, 1945

Vital Speeches of the Day, Vol. XI, pp. 366-368.

I WANT to talk to you gentlemen about a national problem in which you can and should play a part. Regardless of the success of America's vast educational program in the field of liberal arts and applied science, it has been a tragic failure in the field of human relations and is directly responsible for the hostile antagonisms that exist between what is rapidly becoming (from a psychological standpoint) America's "upper and lower classes."

Even our two major political parties are beginning to line up under the banners of social class—a condition which seems preposterous in a land such as our own—and could not possibly be based on reality.

About eight years ago I became very concerned about this trend and with the help of a group of men who shared my concern, set out to determine its causes.

To phrase it bluntly: Who killed Horatio Alger?

The American Economic Foundation spent, in research, several hundred thousand dollars to discover the reasons why the men who own America's productive tools are so disliked by the men who use them.

In seeking the point of infection, the trail led directly back to the classroom.

We could not discover one single text book that contained an accurate dissection of the economic body, and as a result the teacher was just as confused as was the student.

It does no good to learn more and more about something that is based on a false premise: You simply remove yourself further and further from reality.

It does no good to talk about "pink professors" and "hair-brained" students: They are simply products of the literature.

People act on what they believe to be true, and we discovered the most shocking beliefs in all groups and in all places.

For example, most businessmen know that the amount of payroll is about ten times as great as dividends and interest, and their conscience is accordingly clear on the matter.

But their clear conscience does not alter the fact that 65% of all people {this was in 1939) actually believed that factory profits exceeded factory payrolls*. Nor does it alter the political and sociological attitudes of the people who so believe.

If you honestly believed that, what would you do?

Most businessmen know that their so-called "economic power" is a myth, but that does not alter the fact that the majority of people believed that 2% of the people own 80% of America's wealth.

People act, not necessarily on what is true, but on what they believe to be true.

As many of you know, I and my associates, started to attack this ignorance through a radio quiz debate known as "Wake Up, America!" and some progress was made.

We discovered, however, that progress was discouragingly slow for a discouragingly simple reason—the language needed to express economic fact simply did not exist.

In criticizing the teaching of economic courses, we must remember that the educators have been trying (most of them honestly) to dissect the economic body without the use of a specialized vocabulary and it cannot be done.

What would happen to applied sciences such as anatomy, physics, and chemistry were they to be deprived of theirvocabularies?

Yet, that is the barrier that has prevented any precise approach to the problem of explaining man's materialexistence.

To get this discussion out of the academic realm, let me analyze the hopelessness of present economic language, and how it got that way.

For example, let's trace the semantic process that got the world into such an uproar over what is called the "capitalistic system."

As we all know, if a farmer has a cow, it is a cow and a proper possession; but if Borden owns a cow, it is "capital" and the ethics of owning it are questioned.

Now, when primitive man drew the picture of a cow there could be no doubt as to what he was writing about.

But as time passed, cows began to become complicated.

If you had a herd of cows they were naturally counted and recorded according to the number of "heads."

From the Latin word for head, "capita," emerged a tangled skein of confusion: The "head count" was a "capital count" of productive assets.

From this emerged the practice of classifying all tools of production as "capital goods."

This still made some sense, but the next step away from reality was dropping the word "goods" and making the adjective "capital" into a noun.

At this point the element of what we call money began to creep into the picture.

"Capital" being counted in numbers-labeled-money, the numbers became confused with the tools and lost their true significance as a device to record the cost of the tools.

From the noun "capital" came the derivative "capitalist" which quickly came to mean a person in possession of large sums of legal tender.

The next step was to coin the word "capitalism" which came to mean a way of life dominated by the afore-mentioned people.

Every effort made to defend capitalists as such is rendered futile by the words commonly used by the teachers, economists, lawyers, columnists, educators and businessmen.

These words have lost contact with their origin—that is, the tools of production.

We can have nothing but tangled thinking as long as we continue to use a tangle of words to express our thoughts.

The job is to untangle the words and, in the process, destroy them and substitute words of accurate meaning.

We have observed how the capitalism tangle took place: Now, let's see how simply the same word can be untangled to the complete satisfaction of the confused teachers and students.

To do this we need only a quick look at the fundamentals of our economic life.

They are three in number—natural resources, human energy and tools.

That is all there are, there is no more, and everything in our economic life is one of these three things or a product of them.

Everything in our economic life can be expressed in termsof these three things—natural resources, human energy and tools.

The man who makes a living cutting down trees and chopping them into fire-wood knows this because he is proving it to himself every day: He takes his tool—that is, his axe or saw—and with the expenditure of his energy applies it to the natural resource—which is the tree.

The product, that is, the fire-wood, is the result of using up natural resources, using up tools, and using up human energy.

But, for most people these three basic fundamentals are difficult to identify because they are camouflaged with thousands of labels which seem to mean thousands of different things.

For example, this building we are in tonight is composed of many things with hundreds of labels such as brick, mortar, steel, rugs, elevators, lighting fixtures, etcetera, but the building is actually the same as the fire-wood—the using up or natural resources, the using up of tools, and the using up of human energy.

Now, if everything in our economic life can be explained in terms of these three things, we must be able to explain a capitalist.

You will remember that in the dim dark past, "capital" was an adjective used to distinguish between goods that were to be consumed and goods that were to be retained and used for production.

A capitalist being one who owns capital, we instantly see that a capitalist is an owner of capital goods or, in other words, tools of production.

That isn't so bad: There is nothing inherently indecent about owning tools.

Once given the understanding that capital is tools and that capitalism is the practice of supplying tools to multiply the productivity of human energy we can see the unreality of the arguments against capitalism.

No one opposes the use of tools.

The entire history of man's struggle to improve his material welfare is the history of his tools.

Every man and every nation is constantly striving to increase the quantity and quality of their tools.

Every tool-using nation is capitalistic: It is just a case of what kind of capitalism it has.

This reduces the argument to what kind of capitalism is best for the people and as a result, gives us tangible issues into which we can get our intellectual teeth.

Perhaps the simplest example of how a word can undergo change of meaning is found in the Russian word "bolshevik" which means "the larger of two parts."

This word took on a political significance after the 1903 London Conference of the Socialist Party at which time the Party split up into two groups "menshevik" and "bolshevik."

The English political equivalent of "menshevik" is "minority"; the English political equivalent of "bolshevik" is "majority."

In other words, bolshevism literally means "rule by majority" or, if you will, democracy.

But in Webster's dictionary the definition of bolshevist reads: "Any radical especially one who believes in the overthrow of capitalism by force."

To illustrate the fantastic distortion of word usage, we need only summarize the experience of the two words "capital" and "bolshevik."

If one said that "tools of production" is an antonym for "the larger of two parts," it would be considered gibberish, but today we glibly say that "capitalism is an antonym of bolshevism" and most people consider it an accurate statement.

The tragedy of modern word usage lies not in the field of metaphysics or theology: It lies in the field of man's material existence.

We are trying to communicate to each other economic and political facts and our only medium of communication is a maze of slippery, ambiguous, emotional words.

Time does not permit a detailed discussion of the hundreds of slanted words that have crept into our vocabulary.

Consider the words "living wage" and consider three men, on the same assembly line, doing identical work at identical wages.

The first man is a bachelor and shares his wages with no one.

The second man is married and has one child; he shares his wages with two others.

The third man has a wife, two children and an invalid mother; he shares his wages with four others.

In the light of these circumstances, the phrase "living wage," important as it may be, does not even belong in the field of economics; it belongs in the field of sociology and birth control.

The need of a simple book which would make these things clear through the development of a new vocabulary prompted me to search for a writer or writers who would undertake to carry out such a project.

Unfortunately, the specifications called for what seemed to be nonexistent; namely, a person with knowledge of the economic body who was able to discard all technical legal, accounting, economic and sociological words contained in textbooks and commonly used by teachers, writers, commentators and businessmen.

After about a year of futile search, my associate, Mr. Richard Rimanoczy, and I decided to undertake the work ourselves.

To insure substantial agreement, each draft of the manuscript was sent to a list of about one hundred people of all schools of thought and persuasions.

For example, the list included such contrasting persons as Norman Thomas and Dr. Lewis H. Haney; James B. Carey and Rose Wilder Lane; Arthur Garfield Hays and Clare Boothe Luce; The Rt. Rev. Msgr. John A. Ryan and Channing Pollock; Dr. Frederick L. Schuman and Samuel B. Pettengill.

During the next 24 months the manuscript was in three drafts, each one being subjected to detailed criticism.

The result is the current book entitled "How We Live" which is a complete dissection of the economic body.

It was written with a vocabulary of 714 root words, all of which are basic American and understandable to every literate person.

The success of this economic primer was amazing even to us who were fully conscious of its importance.

Not only has it been, accepted by colleges and secondary schools but it has broken all records for retail sales of books on economics.

My purpose in speaking to you gentlemen regarding this effort is not a personal one, inasmuch as the authors are accepting no royalties, but with all the sincerity at my command, I want to urge you to consider its significance in terms of your own college or university.

It is only in the classroom that America's economic and political confusion can be cleared up.

The people—both left and right—have come to depend upon politicians and pressure groups to save them from the "opposition."

In some countries there may be valid reasons for the existence of rightists and leftists, but in America there are none, and this truth can be established only through the medium of education.

If the same degree of interest that is displayed by alumni in the athletic progress of their schools could be applied to the progress of the departments of economics and political science, immediate and important results could be obtained.

This new vocabulary is not a license to go witch hunting for "pink professors."It is an opportunity to clear up the confusion, most of which is honest, which defeats the current efforts to explain the workings of the economic body.

Until this is done there can be no understanding of how human beings produce and exchange the necessities of life,-nor can there be complete knowledge of the division of these things between the workers who use the tools and the people who own them.

Without a better understanding between workers in agriculture, in factories, in transportation, in service, and in exchange, of their relationship to one another and of their relationship to the tool owners and to government, there can be no harmony within our nation.

This vocabulary is the first step toward such an understanding.

Without the adoption of such a vocabulary, the cause and effect of economic behavior will remain mysterious and the problem of living in harmony with our fellowmen will remain unsolved.

I believe that a good start has been made.

I have mentioned the fact that the manuscript was sent to men of widely varying beliefs and in closing, I would like to quote from two of these men.

After looking at the finished draft, Norman Thomas made the following statement: "This book makes its point that under any ism man must reckon with certain basic and to a large extent unchangeable facts in order to improve his material welfare."

Jumping to the other end of the scale is the comment of Henry J. Taylor: "This is the most useful and essential piece of economic simplification I have ever seen. If every student first read this approach to the problems of how we live, countless sad and dangerous confusions in our general thinking could be easily avoided."

I give you these quotations only to demonstrate that "How We Live" is a dispassionate dissection completely without bias or slant and can, therefore, be sincerely recommended for consideration not only by your respective colleges and universities but, because of its simplicity, by your preparatory schools.

The present generation of school children will be the adults who decide whether or not this war was fought to establish a better world or merely to make the world safe for stultifying restriction of individual freedom.

What they believe to be true in the realm of man's material existence will guide their actions in the settling of problems.

And every one of these problems is economic!