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CONTENTS
PREFACE xix
ACKNOWLEDGMENTS xxix
vii
viii CONTENTS
Feudalism 94
Distinctions Among Economic Systems 94
Capitalism 96
Commodities 97
Privately Owned Capital Goods 102
Wage Labor 108
Capitalism, the Surplus Product, and Profits 108
Conclusion 110
PART 2 MICROECONOMICS
Speedup 310
Deskilling 312
Unions 314
Recent Trends in Union Membership 314
PART 3 MACROECONOMICS
Financing 367
Infrastructure 369
xix
xx PREFACE
concepts, and summarizes some of the pertinent facts relating to life in a capitalist
economy.
Part 2, “Microeconomics,” develops the theory of the firm and of mar-
kets, including the labor market, and analyzes technological change using a
Schumpeterian model of dynamic monopolistic competition. Most important, it
develops the analysis of profits and the profit rate that provides the integrating prin-
ciple of three-dimensional economics and establishes the link between micro- and
macroeconomics.
Part 3, “Macroeconomics,” deals with the workings of the economy as a whole.
To provide a foundation for our study of macroeconomics, we examine inequality
both within and among nations, focusing in particular on uneven development on
a global scale. Here we introduce the concepts of aggregate demand and aggregate
supply and explain why unemployment is a more or less permanent feature of capi-
talist labor markets. This part of the book ends with a chapter on economic crisis and
one on the government’s role in the economy.
Instructors using the book in a microeconomics course may want to assign
Chapters 1–13 and Chapter 19. Those using it in a macroeconomics course might
want to focus on Chapters 1–7, 10, 12, and 14–19. For a one-semester course, Chap-
ters 1–10 and 19 might be appropriate, while other chapters could be included as time
and student interest permit.
Of course Annie Laurie told Azalea and Carin all about it as the three
sat together the next day after luncheon, in the schoolroom.
“Papa said he’d seen you,” Carin answered. “He was horseback
riding and late getting home, and he said he saw you out with the
Disbrows, and that Mrs. Disbrow looked like a ghost that had got
back to earth and didn’t like it very well. But he thought you were
wonderful to do that. He didn’t quite see how you could, feeling as
you do, but he thought it lovely of you just the same!”
“Well,” said Annie Laurie. “You see I didn’t feel quite the way I
thought I did when I saw that poor woman and Hannah; and then
poor Sam looked at me as if he thought I could set his world right if
I only would.”
“It’s a terribly twisted world,” mused Azalea. “Now, what if poor
little Hannah has her eyes straightened, and Sam goes to college,
and Mrs. Disbrow gets her health out West all out of the money that
was stolen from you, Annie Laurie? Those are all good things to
have happen.”
“Yes, they are,” answered Annie Laurie without anger. “They are
good things. But you remember what Elder Mills said that last night
about avoiding lies in word and act. I remember particularly
because it was something like what the preacher had been saying
over to the Baptist church only a few Sundays before. It seemed to
me they were all harping on that subject, but I begin to see why,
now. I can see that all false things are lies—that stealing is a sort of
lie—a saying that something is yours which isn’t. It will be like that
with the Disbrows, I suppose; no matter what good comes to them,
it won’t seem good—at least not to Mr. Disbrow, who knows the
truth about how he came by the money. It’s dreadful, when you
come to think of it, that a nice boy like Sam should be having things
out of that money he’s no right to.”
“You oughtn’t to speak as if it was an absolutely sure thing that he
took the money, Annie Laurie,” warned Carin. “Papa says we
mustn’t do that. He says it’s a kind of crime in itself to accuse
people of sins when you’re not sure they’re guilty.”
“I’ll try not to,” sighed Annie Laurie penitently, “but it’s very hard.
And, oh, Carin, it’s getting to be so sad at the house with the old
aunts always talking about the lost money and hunting and hunting
for it, and the business going to pieces and I not able to prevent it.”
That night when the Carsons sat at dinner, Carin told her father that
Annie Laurie had said Mrs. Disbrow was expecting her husband to
take the family West.
Mr. Carson brought his fist down on the table.
“Now, that can’t be,” he cried. “I won’t have that! I simply won’t.
No matter what risk I run of doing the man an injustice, I won’t
have him leave this community. He’s under suspicion and he’s got to
stay here. I’m sorry for him, sometimes, when I see him walk into
town and all the men turn their backs on him and walk away. Of
course, it isn’t really fair—or at least, it may not be fair, for it is
possible that he is as innocent as you or I. But if he is guilty, he’s
getting only a small part of what he deserves. At any rate, I can
understand that he’s very uncomfortable in this town nowadays, and
that he’d like mighty well to get out of it. But he shan’t, if I have
anything to say about it.”
The next morning, however, Annie Laurie came with startling news.
“They’re gone!” she cried as she dashed into the schoolroom.
“Who?” the girls asked in unison.
“The Disbrows.”
“No!”
“Yes, they have. I was walking along the road and I happened to
look over toward their house, and there wasn’t any smoke coming
from the chimney. And there was something about the place—I
can’t describe it, because the curtains are forever down anyway—but
something that looked deserted. So I pelted across the field and
knocked at the door and no one answered. And then I tried the
door and it was locked. I saw the chickens were gone, too, and the
cow and the horses. They all went in the night.”
“But do you think Sam would let his family act like that?”
“Sam went to Rutherford yesterday to the academy. No, I don’t
think he knew a thing about it. He came over after I got home from
school to say good-bye, and he was very happy and—oh, well—
good, you know. No one could have looked as he did if he had
thought his father was a thief and his family sneaks.”
“But my goodness,” exclaimed Azalea, “don’t you suppose he’s
noticed how the men were treating his father—turning their backs
on him and all that? Pa McBirney said he just couldn’t bring himself
to shake hands with him any more. Don’t you suppose Mr. Disbrow
ever had spoken of that at home?”
“He always was bitter and fault-finding anyway,” said Annie Laurie.
“Mrs. Disbrow told me that. I suppose a little more or less
complaining wouldn’t mean anything to her.”
“But she certainly must have wondered at having the house torn up
in an hour or two, and at setting out in the night that way like
fugitives,” said Carin.
“Oh, well, you know she hated to go out driving with me for fear the
neighbors would be peeping at her, so I suppose she was well
pleased to go in the night. She’d hate to have folks find out what a
poor little handful of things they had, and all that.”
“Of course,” said Azalea, “it would be easy enough to find which way
they went, by the wagon marks. They must have had the cow tied
on behind the wagon, and so they could be followed easily and
overtaken if—if you wanted them to be, Annie Laurie.”
“Yes,—I know. If—I wanted them to be.”
The girl sank into a chair and rested her face in her hand, staring
straight before her. Azalea and Carin said nothing. They were
thinking very, very hard, too. The silence was long and intense.
Then they heard Miss Parkhurst’s steps approaching down the hall.
Annie Laurie struck her two hands together sharply.
“I can’t do it!” she cried. “I can’t let Sam’s people be chased like
that and brought back. I may be wrong, and weak, and not fair to
the poor old aunts, but I just can’t do it, that’s all there is to it.”
Carin and Azalea looked at her with perfect understanding.
“No,” said Carin softly, “you couldn’t do that, could you? Plenty of
people could, and they’d be just and right—maybe. But you
couldn’t, and I like you, Annie Laurie, because you can’t.”
Azalea clapped her hands.
“So do I!” she agreed. “It will all come right for you, Annie. That’s
what dear Ma McBirney would say if she knew. Somehow it will all
come right. But to have that poor, sneaking, miserable man chased,
and that sick woman, and little Hannah who is half-frightened out of
her life anyway—oo-oo-oo! You couldn’t.”
Miss Parkhurst opened the door. The three girls arose respectfully
and answered her good morning.
“Algebra this morning,” she said briskly. Perforce they turned their
thoughts to matters that were anything but exciting.
But if they could have known the experiences their friend Sam
Disbrow was going through, their lesson would have been even
poorer than it was—and Miss Parkhurst had already been obliged to
tell them that as mathematicians she did not consider them
brilliantly successful.
Sam had set off with a light heart. For the first time in his life he
was going away from home—that depressing and melancholy home,
against the gloom of which he had set all the forces of his really
happy and brave nature. But the home had been too much for him.
He could feel it slowly and surely dragging him down into that pit of
gloom and distrust where the others lived, and to leave it behind, to
have a chance to go to school and get the education which he felt
he must have if he was to make anything of himself, filled him not
only with joy but gratitude.
Of course, he still wondered how his father had been able to
manage it. He knew that they were very poor—that his father had
not been able to make a success at anything. His garden never
flourished like that of his neighbors; his chickens never laid well; his
cow gave only a fraction of the milk she should; his cotton was but a
scanty crop; and even as an undertaker, the only one in Lee, he
sometimes was passed over for his remote rival in Rutherford.
Recently things had been going even more wrong than usual. Sam
could not explain it, but a general dislike of the whole Disbrow family
seemed to have invaded the town. His father never had been
popular, but lately Sam had noticed signs of actual aversion. How
was it to be accounted for? If ever the faintest shadow of an idea as
to the real reason for this dislike entered Sam’s mind, he thrust it
out, strangled and unrecognizable, from his consciousness. He
believed in his father because he believed in himself. He was not a
person to whom suspicion came naturally, although he had lived in
the midst of it all his days. There is a thing called reaction—the
sharp turning of the spirit against a condition or an idea. Sam had
reacted against the gray dispositions in his family. He was ready to
blossom into the scarlet of courage and good will, of power and joy,
if only a little sun could shine on him.
And now it seemed to be shining. He was going away to school as
other boys did. There would be a number of fellows he knew, and
chief among them would be Richard Heller, the banker’s son. He
liked Heller. He counted on him to “show him the ropes” at the
academy.
It was a long time since he had been in the smart town of
Rutherford. His heart leaped in him as he stepped out from the
station, his bag in his hand, and felt the throb of the busy town
about him. Automobiles were ranged in line about the station,
carriages with well-kept horses stood in the shade beneath the fine
elms, the paved streets were clean, the street cars new and fresh
looking, and everywhere were busy, active people, moving along
with that air of confidence and efficiency which too often was lacking
at Lee. And it exhilarated Sam. All that was strong and eager in
him liked it. He wanted to be a part of a community like that.
He took the street car that ran to the academy, and sat wrapt in
interest at noting the fine homes, the well-kept lawns, the excellent
public buildings. People were doing things here that were worth
while, said Sam to himself. And he, in his way, was going to be a
part of it. Perhaps he could stay in the Academy till he was
graduated—with honors, maybe—and then he would stay on at
Rutherford, and become a part of its busy, stirring life. He would
have a home like the one he was passing, with tall windows, and the
light streaming in through beautiful trees, and a porch like that, with
his family sitting out on it in the open, and not hiding away in the
shadow. Then there would be bright flowers, like those in that yard,
and friends coming and going the way they were from that house.
And they would be laughing—Annie Laurie loved to laugh—and
sometimes they would eat on the lawn. But he drew himself up with
a flush. What had Annie Laurie to do with it all? A girl like that—
would she care seriously for one of the queer, shiftless tribe of
Disbrow? Sam hit his knee angrily. Let him attend to what was
before him and stop thinking nonsense.
He reached the Academy, and walked along under its wonderful
white oaks to the Ballenger dormitories, where he knew Heller
stayed. Perhaps Heller could get him a room near his own. It was
rather a trick to get in the Ballenger dormitories and the fellows who
succeeded were considered lucky. But perhaps Heller could manage
it for him somehow—they always had been good friends.
He was directed along the corridors, hung with their many pictures,
and decorated with plaster casts, to a corner room on the third
story.
He knocked expectantly.
“Come!” commanded Heller’s voice.
Sam threw open the door.
“Dick!” he cried, “I’ve come on to school. What do you think of
that?”
He dropped his suit case and hastened toward Richard with
outstretched hand.
Dick took it silently. His eyes, that used to be so cordial in their
glances, turned upon Sam with a scrutinizing look. They searched
his drooping face sharply. Then something like the old expression
returned. Sam was not slow. He saw that something was quite
wrong—that Dick had been thinking evil of him in some way, and
that now that he had met him face to face, he was finding it difficult
to sustain the suspicion.
“What’s the matter, man?” Sam cried. “What are you looking at me
like that for? Why don’t you speak?”
“Sit down,” answered Dick brusquely. “Something is the matter,
Sam, but I’d rather be skinned than tell you what it is. All the same
I’m not going to go around snubbing you and leaving you in the dark
after all the good times we’ve had together.”
“I should think not, indeed,” cried Sam. “Skin away, old man. Let’s
have the operation over with.”
Dick, it was evident, dared not give himself time to think. He blurted
out what he had to say.
“My dad wrote me that you were thinking of coming down here to
school.”
“Well?”
“Well, and he said the neighbors all were wondering where in the
dickens your father got the money to send you.”
“I don’t know,” answered Sam angrily, “that it is any of their blamed
business.”
“It mightn’t be under some circumstances,” Dick went on. “But—”
“Yes?”
“This is where the skinning process comes in.”
“Rip ahead.”
“But they think it mighty queer, you know, that your dad should
come into money just at the time that Simeon Pace’s money
disappeared.”
Sam was on his feet.
“Say!” he gasped, “I don’t understand.”
“They say,” went on Dick, gulping with distress, yet determined to
finish the whole story then and there, “that Simeon Pace carried his
money in his hollow tin arm, and that your father took that arm from
Simeon Pace’s body, and helped himself to the money. Now, there
you are, and—dang it, Sam,—you’ll have to try to forgive me for
telling you.”
Sam sank into his seat again and sat staring. The little clock on the
mantel shelf ticked off the seconds briskly—ticked on and on, and
still Sam sat and stared, and Dick waited, hardly daring to breathe.
He could see that Sam was going over the whole situation—was
balancing this against that, thinking over the things he had noticed,
“sizing up” the situation with his good clear brain.
Suddenly he got up and seized his suit case.
“Where you going?” shouted Dick.
“Home,” said Sam quietly. “I’m going home.”
Dick ran forward and, grasping Sam’s hand, wrung it with all his
strength.
“Oh, Sam,” he cried. “How I wish it could have been otherwise! But
I had to tell you. I couldn’t let a thing like that lie between us.”
“No,” said Sam wearily. “It’s got to be cleared up. Living a lie! I
remember a sermon—Annie Laurie and I heard it—living a lie! No, I
couldn’t. Good-bye, Dick. It—it wasn’t for me, was it?” He looked
about the charming room, and through the window at the great
campus. “Good-bye. And—thank you. You did right. It was the
only thing to do, since we were such old—”
“Friends!” cried Dick with a half-sob. “Such old friends, Sam. Yes,
go home and clear it up. And come back, old man—whatever you
do, come back!”
CHAPTER XI
MARCHING ORDERS
Sam saw nothing now of the inviting homes and their lovely gardens
as he rode back to the station. The world seemed black shot
through with little darts of scarlet. They kept teasing him—these
darting flecks of red, sharp-pointed and angry. At the station he
found that it was an hour and a half before train time, so he sat
down stolidly to wait. He had missed his luncheon, and it was now
near dinner time, but it did not occur to him to get anything to eat.
The time, too, raced by, keeping pace with those swift-speeding
thoughts of his, on which he could not have drawn the reins had he
tried. And presently he was on the train again, going homeward.
He soon would see his father, who would not, Sam had to confess
with biting shame, look him in the eye nor answer any question
frankly. Moreover, it would be his fate to add to his mother’s misery;
he would see Hannah turning away from him even more than she
had. And all the town would be looking at him with the eyes of
suspicion. He would read: “Son of a thief! Son of a thief!” in their
averted glances.
Of course his father might not be guilty. And yet, somehow,
shamefully, heart-breakingly, it was borne in upon him that he was.
And why should he, Sam, who had done no harm to anyone, go
back to face it? Why should Annie Laurie and her friends see his
shame? He could disappear now—slip off the train at the next
station—and walk and walk till he reached some place where nobody
knew him, and then he could go to work and care for himself, and
win an honorable name. That was what America was for, he had
heard Mr. Carson say, to give a chance to the individual. A man had
a right to prove himself, and to be judged by himself, apart from and
regardless of his family.
Yet, to run away from a thing like that, to let the old neighbors think
him a poor wretch, to lose the regard of—of all those he cared
about, was out of the question. And moreover, he couldn’t let his
father go on keeping back the fortune that belonged to others. He’d
have to go back and make him right himself.
His thoughts came clashing together as a returning wave meets and
breaks against an advancing one upon the seashore. And the tumult
and raging was too much for him. He found himself incapable of
going on just then. The train stopped for a moment at some
woodland siding—the track was but a single one and such stops
were occasionally necessary—and almost without thinking, Sam
leaped from the platform and slipped away into the twilight.
He walked along, hardly knowing where he was going. His suit case
was not much of a handicap, for there was little enough in it. He
could not have told, if any one had asked him, why he kept on
pounding along the road, nor why, when he came to a heavily
wooded hill, he should have gone in through an opening in the trees
and begun to climb its gentle slope. He only knew that he was
grateful to have the trees closing around him like that, hiding him
from the sight of men.
He went on, stumbling over roots, half-starting at deep shadows,
and reached the summit. Here the trees had been cut away, and
though the songs of those beneath him surged up to his ears, he
presently found himself standing beneath the clear sky, perfectly
sheltered from view. There was a scythe-like young moon, well
toward the zenith, and a few pale stars. The weather had softened
and warmed and spring was sending her sweet messages abroad.
He stood for a moment looking upward; then he cast himself on the
ground, with his face to the earth, and in the solitude his sharp
suffering gave vent to itself in sobs.
Nor was it alone for the shame and sorrow of the present that he
wept. It seemed as if all the tears he had held back during his
lonely and baffled boyhood had their way now and streamed from
his eyes. He cried blindly, passionately. He emptied his soul of
grief. And then he sat up weakly and looked around him. The
whippoorwills were calling to each other. Distant hounds were
barking. The delicate little moon was running her fragile skiff over
the sky-sea toward its western port. It was night, and the world
was asleep. What was it Annie Laurie sang?
He hoped she was sleeping—that poor Annie Laurie, who was having
so much trouble, and none of it in any way her fault. And had she,
too, been suspecting him? Had she held this terrible idea of his
father and kept it to herself? Had she come to his house that day
she had been so kind and good, to see what they were like—the
Disbrows? He seemed to be on fire from head to foot with shame.
Back and forth, like wild beasts pacing, raged his thoughts. He had
no idea of the passage of time. Only the stars kept moving on,
beautifully, in their wonderful order, and the wind, growing chillier
now, blew upon him, and still the whippoorwills called. By and by
the color of the world began to change. Something strange
happened to the night—it grew pale, thin, transparent. The birds
began stirring about, making soft noises. The cattle lowed in the
near-by fields. Then a kind of milky lightness, delicate as one of
Carin’s scarfs, drifted up into the sky. Presently it turned a soft pink;
then rosy red; then it was edged with orange and embroidered with
saffron. It was sunup, and Sam Disbrow faced the most important
day of his life.
He had to make up his mind whether he was a coward or a brave
man—whether he was going to run away or stay and fight. And he
didn’t know. As he got dizzily to his feet, he hadn’t an idea which he
was. But the colors in the sky seemed to be cheering him on like
trumpets. Something wild, strange and splendid swept into his spirit
—something that made him feel as if he were about to set out on a
march with brave men—men who could die for an idea. It was as if
he had swung into the ranks, and his leader had shouted “Forward,
march!”
Sam went down the hill, and struck a road on the far side of it. He
followed it to a farmhouse and asked if he might have some
breakfast. They gave him good bacon and corn bread, butter and
milk. He ate like one famished, and then, having learned the
schedule of the trains, and that he had barely time to catch the next
one bound toward Lee, he ran as hard as he could to the distant
station. The train drew in while he was yet a block away, but he
sent out a shout that startled the engineer in his cab. Good-
naturedly, they held the train for him. He swung on the rear
platform. And, though he could not forget for a moment all that he
was going back to, still he was indefinably happy.
“Forward, march,” his invisible leader had commanded. Sam did not
stop to find a name for this leader—to call him God. He obeyed, and
having placed himself under marching orders, he fell asleep, and
when the conductor called him at Lee, arose refreshed, and went
out to fight his battle.
There were not many persons on the street. A mid-forenoon
quietude rested over the little town. A few neighbors Sam did meet,
but they had no chance to turn the cold shoulder to him this
morning for he hardly saw them. He was bent for home, and he
strode forward with no thought of anything but meeting his father
face to face and hurling at him the question:
“Did you take Simeon Pace’s money?”
He forgot that he was a son, and must pay a son’s deference, or that
Hector Disbrow, suspected of being a thief, was his father. He felt as
if his soul must put that inquiry to the soul of the man. And on his
answer depended honor, happiness, everything.
As he drew near the house, he saw that there was something
unusual about it. With a sick feeling, he realized that it looked even
more vacant and dejected than ordinarily. He tried the front door;
found it locked; sped to the rear; was unable to enter; and then,
rushing to the stable, realized the whole truth. His family had gone.
They had run away in the night. The whole thing was true. His
father was a thief—and now he was making of himself a fugitive.
But the feeling of having come back to fight a battle as a brave man
would fight it, did not desert him. The black despair of the night
before had been routed by all the better angels of his nature. He
was in the thick of the battle now, beyond question. He turned his
back on the house and went toward the town.
On his way, he met Hi Kitchell, who had been excused from school
because of a toothache, and who was running along, his hand to his
face, quite willing to talk about his misery to anyone. Sam called
him.
“Hello, Hi. Toothache?”
“You bet!”
“What you going home for? Why don’t you go to a dentist?”
“Naw. I’m going home.”
“No use in that. Turn around the other way. Come on down to the
dentist’s.”
Hi wriggled. “I’m afraid.”
“I’ll go with you.”
“Will yeh?”
“You bet I will. And Hi, I’ve got a trouble that’s much worse than
toothache.”
“Have you, Sam—for sure?”
“For sure I have, Hi. Now if you had a terrible trouble what would
you do? I’ve told you where to go to get a toothache cured, but
where would you go if—if everything you cared for seemed tumbling
to pieces?”
Hi came up close to Sam. He had forgotten about his toothache,
and he looked at Sam with his ferret eyes, in which the tears had
now gathered.
“Sam,” he said under his breath, “I know about your trouble. I’ve
heard of it. And—and you know your people have gone away.
They’ve gone over the mountain, I reckon. Why, Sam, if I was in
trouble like that I’d go straight to Mr. Summers.”
“But he’s the Methodist preacher, you know, and my folks are
Baptists.”
“What’s the difference?” cried Hi defiantly. “I don’t see no
difference. Anyway, if Mr. Summers was a Populist I’d go to him just
the same.”
Sam was surprised to hear himself laughing.
“I will,” he declared, and he and Hi tramped on toward town. At the
dentist’s office Sam started to turn in with Hi, but Hi stopped him.
“You don’t need to come,” he said. “I reckon I can stand a little
tooth-tinkering. You get on to Mr. Summers. And—and, Sam—”
“Yes?”
“If you don’t want to stay up there to the house alone, you come
down to our place. My ma, she’d love to have you. Sam—”
“Yes.”
“We know what trouble is, ma and me, see? Don’t nobody around
these parts know better than we do. Mr. Carson, he set us on our
feet, and now we can hold up our heads and look people in the
face. My, but it feels good! But we know what trouble is—all kinds,
pretty near. You come to us.”
Sam held out a tense hand.
“Put it there, Hi.”
Hi “put it there” and turned valorously up the dentist’s terrible stairs.
As for Sam, he kept vigorously on his way. He thought of those
automobiles he had seen the day before, and he felt as if he were all
cranked up, with a good spark on, and was ready for a long hard
run. So he turned up Burchard Avenue, and in at the gate of the
little Methodist parsonage.
The first person he saw was Mrs. Summers, who had just got baby
Jonathan asleep and was setting him out of doors in his carriage, to
grow. She held up a small brown finger to warn Sam that
conversation was not to be permitted in the vicinity of the sleeping
prince, and led the way into the living room. Then she went in
search of her husband, who, it appeared, was shut up in the cell-like
room he called his study. He came striding out of his retreat and
grasped Sam by the hand.
“Thought you were off to Rutherford, son.”
“So I was, sir, but—I came back.”
“So I see. Why?”
“I—I heard what they were saying about my father, sir. Dick Heller
told me.”
“Well, well, he did, eh? It was better on the whole, I reckon. I had
two minds to tell you myself, and then I just lacked the ginger. But
now you know what you’re up against, don’t you? And your folks
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