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Security for a Failing World

by Stanwood Cobb

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Chapter 14


The New Economic State

THE world depression with its abnormal condition of unemployment has forced many people to think more earnestly about the functions of government than they have ever thought before. Is it the duty of the State to guarantee a livelihood to every individual? Or must the individual bear his own economic burdens unaided by the State?

Government in its early stages did little for the governed except tax them. In return for taxes drained from peasant toil, rulers returned few of these benefits which are deemed a necessary obligation of the modern State.

In the Orient, even up to the present, autocratic government has been distinctly for the sake of those who govern. The State has felt itself under no obligation to render public works and utilities as a return for taxation.[1] Its aim has been to extort as much money as possible from the governed, and this

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money has been used as private fortunes for the rulers. True, at times there have been benevolent rulers who have accomplished great public works, but they are striking exceptions. In general the masses have been the object of exploitation, not of benefaction.

    [1. In Turkey, for instance, under Abdul Hamid no roads were made or even kept in repair. Bridges once fallen were never put up again, so that it became common word of guidance to travelers in Turkey to follow a road which crossed the river by a ford rather than one which crossed by a bridge. Even annual sums levied from the citizens of Constantinople specifically for the upkeep of the Constantinople bridges were spent on the personal gratifications of the Sultan and not on the bridges. In China, at the actual moment, taxation is in many provinces sheer exploitation and robbery on the part of the "tuchuns" or governors.]


It was not until the eighteenth century, even in Europe, that the concept was broached that government was for the sake of the governed and not for the sake of the governors. Since the revolutions in England which established true constitutional government, since Rousseau and the French Revolution, and since the founding of the United States and its Constitution — the evolution of government has been rapidly moving in the direction of benefits to the people.

But how far should these benefits go? The government should, of course, establish law and order. That, however, appears to be chiefly a benefit to the propertied classes. How far should government go in bringing benefits to the unpropertied class, the vast mass which constitute nine-tenths of all governed peoples? Letter and parcel post, roads, agricultural aid and information, education — these are some of things that modern governments undertake. Some also undertake ownership or management of railroads, of telegraphs, of monopolies in certain lines of distribution. City governments establish

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and maintain those services which are necessary to group living at modern standards of hygiene and protection. They even undertake to wipe out slums and to create "the city beautiful."

Today we are brought face to face with an even more fundamental need. Should the State guarantee a livelihood to every citizen? Never before the great depression has the modern State ventured to undertake any such obligation. True, it has realized its duty to ameliorate the tragic results of great catastrophies which have for the time being deprived large masses of people of food and shelter, but it has done this chiefly in a semi-public way by means of organized private charity.

Today, however, one of the most serious problems confronting all governments is: What shall it do in the face of wholesale unemployment and ensuing privation?

It is evident that no government dare today allow large masses of its citizens to starve to death. And since the matter of unemployment enters vitally into the problem of maintaining individual existence, the State finds itself drawn inevitably into vast new fields of operation in which there exists few precedents or guides to action.


Twenty years ago one of the world's authorities in fiduciary problems, George E. Roberts of the National City Bank of New York, said to me: "It

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makes little difference to the people what party rules, provided the economic life of the country is prosperous."

Now, for the first time in our history, the power of the government is projected into the industrial and economic life of the country, with the aim of restoring prosperity and establishing it on a stable foundation.

What we are developing in this country today is an Economic State in which the government assumes direct responsibility for the economic welfare of its citizens.

One of the most remarkable things about many governments during this crisis is the closeness with which they approximate the economic order of the Bahá'í State as projected by Bahá'u'lláh some seventy years ago.

A generation ago one could have enlisted little interest in or sympathy with the economic principles of the New World Order of Bahá'u'lláh, for the reason that an economic state was contrary to prevailing ideas regarding the duty and province of government. Now that the pendulum has swung in the other direction; now that this as well as other governments is seeking to discover safe and efficacious ways of guaranteeing a living to every citizen — the economic plan of Bahá'u'lláh assumes import because of certain remarkable features which will stabilize industry and commerce and create a permanent world-wide prosperity.

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It is not only the laborer who is experiencing insecurity today. White-collar men and coupon-clippers also are tasting the bitterness of poverty. The immense scope of the present depression has disillusioned the masses of the people as to the efficacy of thrift. Bank savings have proved no barrier to poverty. Fortunes in stocks and bonds which erstwhile yielded splendid incomes have become worthless as to current needs because no dividends have been forthcoming.

Thus today both the laborer and the capitalist (in the form of the investor from small to great) have found themselves in the same predicament. What can be done about it? There is wide-spread insecurity in the midst of a ridiculous plenty. We have within our country a surplus of raw materials, a surplus of labor, and a surplus of needs and desires. If these three factors could be brought together, all want would be abolished. Yet the whole situation waits upon the catalytic of money to perform this union. If these three factors are brought together without the medium of money, which is certainly possible, we have state socialism. To many this appears the ideal solution. It is not, however, the solution which the Bahá'í World State offers. The Bahá'í economic system is a controlled or balanced capitalism which permits self-interest to operate within restricted spheres.

Self-interest is still the strongest motivation of

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effort and efficiency. Human nature as it is today and as it will be for thousands of years to come cannot act collectively without some scope for the profit motive. It is as idle to seek to abolish that motive as it is to seek to limit sex expression to the purpose of procreation. Human organized society must be based on reasonable grounds of human psychology.

But how can the self-seeking motives in the industrial and commercial life of the world be controlled so as to prevent the evils of present day individual capitalism? The control cannot be purely political for this reason — political organization is an expression of the people and a people who universally desire uncontrolled opportunity for the satisfaction of greed will find ways of violating or vitiating government regulation.

A certain measure of control must be contributed partly by popular opinion. The right kind of combination of government function and of a new economic consciousness will make possible the new economic order of the Bahá'í World State which may be described as a modified form of capitalism.

The Bahá'í State requires no one to serve without motives of personal reward. Self-seeking incentives are allowed still to operate, but within the practical range of mutuality as between individuals and between classes. It is to be a fifty-fifty proposition. All economic enterprise must be fair. It must be mutually advantageous and the rewards and profits must be equitably distributed as between the classes.

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This great law of mutuality and equity is the only possible basis of security whether economic or political. Any government which desires stability must offer clearly perceived advantages to the vast majority of its citizens, and any government which would endure today must guarantee economic security. How is this to be done?


In the Bahá'í State there are four main provisions which will inaugurate complete equity and mutuality, as between labor and capital; and which will so spread the profits of industry throughout the entire population as to maintain a steady equilibrium between investment, production, and consumption.

The labor throughout all industry will share in the ownership, management, and profits of factories; and this, not by illusionary methods of stock purchase but by mere fact of workmanship. Thus labor will receive not only wages but also a large share in the dividends. In this way the profits of industry will be so distributed that consumption will always be able to keep up with production, and the recurrent chronic depressions of the past will be avoided.

For it is evident that one of the chief causes of this as well as of previous depressions is the pyramiding of investment. The capitalist does not usually consume all the profits of his industry or the returns from his investments, and a large part of

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this capitalistic income tends therefore to be reinvested. This re-investment causes more factories to be built and more goods to be manufactured and placed upon the market. (For investment is of no value to the capitalist unless it produces dividends, and the only way investment can produce dividends is by selling goods or service at a profit.) Thus, as the process of dividend-drawing and re-investment continues, the point is inevitably reached, in every prosperity cycle, where there is a surplus of goods and a scarcity of consumer-power. But such a situation does not immediately halt production. For the pressure of great masses of greedy capital, like the pressure of mighty reservoirs about to burst, continues to flood an already saturated market with goods until an economic cataclysm occurs.

The solution for this is not, as the capitalist suggests, a complicated system which would attempt to restrain and regulate production, but by the establishment of an equilibrium between the productive and consumptive powers of the nation. This balance must be brought about by increasing relatively the wealth of the masses and decreasing relatively the wealth of the capitalistic class. Such an adjustment will be effected within the Bahá'í Economic State by the system of profit-sharing described above, reinforced by a system of income and inheritance taxes as described in the following paragraphs.

Sharply graduated income taxes will purposely prevent the accumulation of large fortunes. When

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such a system of taxation is put into effect it will discourage men from even attempting to amass large fortunes; for it will not be of any advantage to earn enormous incomes of which the State will take the major part. Such a system of taxation, preventing huge aggregations of capital under individual or family ownership, will make a vast change in the industrial world, throwing open industry and commerce once more to the ambition of small operators and giving a greatly expanded opportunity to the average person.

Moreover, whatever fortunes are allowed to be accumulated within this modified capitalistic system will tend to be widely distributed at death, both by inheritance taxes and by principles of combined law and usage which will cause a wide division of property to all heirs, even to relatives of the third degree and to institutions of learning.

Hand in hand with this new industrial order will go a direct responsibility of the State toward every citizen. Everybody in the Bahá'í State is guaranteed a livelihood. The State assumes responsibility either of securing employment for the individual or of supplying him with the necessities of life. Thus no citizen of the Bahá'í State will suffer privation and want. Such a guarantee on the part of the State is an enormous responsibility and calls for a highly complicated form of human engineering. Already, however, we have seen the dawn of such ideas. The governments of the future will not shrink from this obligation, no matter how arduous or complicated is its application.

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The Bahá'í principle of joint ownership of industry by capital and labor will help not only to prevent business depressions; but also to bridge the historic tragic gulf between capital and labor. As long as labor receives merely wages, it tends to be but a commodity bought by the capitalist and exploited for his own benefits. "You have abolished physical slavery," said 'Abdu'l-Bahá to an American audience, "but you have yet to abolish chattel slavery, the slavery of labor to the machine." Huge strikes, violence, disaffection, the paralyzing of industry and general chaos can only ensue from obstinacy on the part of industrialists and hesitancy on the part of governments to adjust the economic conditions in accordance with the dictates of justice and humanitarian ideals.

There will be no security to the individual or to the State until such economic justice is established. Education and general enlightenment are giving the masses everywhere the ability to know economic facts and to agitate for the rights of labor. If the wealthy classes assert only a will-to-power, be sure the masses will also assert a will-to-power which will not be satisfied with securing merely justice.[2]

    [2. 'Abdu'l-Bahá predicted that unless the interests of capital and labor were mutualized, there would occur a series of strikes in this country which would cripple production and paralyze our whole technological culture. Such an eventuality is still imminent, it would seem.]

The solution must be brought about not by violence

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but by sympathetic cooperation on the part of capital and labor. "The capitalist will in due time," says 'Abdu'l-Bahá, "voluntarily accept those limits to his fortune and power which Bahá'u'lláh prescribes. He will of his own accord share his profits with labor. He will find actual joy in assisting the poor and in helping to establish a social and economic order which guarantees security to every individua1."


Economic interchange between nations is facilitated and stabilized by laws of Bahá'u'lláh which virtually abolish tariffs. The whole world will eventually become one vast economic union such as the forty-eight states of the American Commonwealth now represent. Increased prosperity will result to all nations from this free and healthy circulation of goods. Just as the United States has demonstrated how great a factor of prosperity has been an untrammeled commerce existing between a hundred and twenty million people living in their respective forty-eight sovereign States, so the whole world will find for itself vast economic gain in an international commerce based upon universal peace, co-operation and unity.


Today no religion can thrive and hold the allegiance

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of the masses that does not show a deep concern for the economic problems that confront industry. Religion must offer ideal institutions based upon just and cooperative foundations, and it must moderate the expression of greed and exploitation in the economic life. In reality greed is the only thing that can prevent economic prosperity in this age of science, invention, and technology. Greed can always create obstacles to human welfare by obstructing the ideal expression and flow of economic forces.

It is not the invention of machinery but the economic organization which is bringing trouble upon the human race. Under an ideal economic organization machinery can be nothing but a means to universal comfort, security, and happiness. It will create new sources of pleasure and culture at the same time that it increases the amount of leisure for the individual. "The United States cannot yet produce more than the American people would like to consume," says the Brookings Institution in a recent research report. "The wants of the nation are large enough to absorb a productive output many times that achieved in the peak year 1929."


Just at the time when humanity needs it most, there has arisen such a religion of power — a religion which is fast spreading over the whole world, pervading every civilized country with its lofty ideals of social, economic and political justice. The World

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Order of Bahá'u'lláh presents the perfect pattern for humanity — the pattern which will solve every social, economic and political difficulty — a pattern towards which the most advanced secular thought of the world is astonishingly tending.

But the mere pattern is not enough. There must be the acceptance and conviction, the obedience of humanity to these divinely inspired laws. It is here that the idealists, the leading thinkers of the world who are superbly progressing in vision and power toward a new world order, need the support of a great spiritual movement which has the potentiality of harnessing the vast majority of humanity to noble ends and of subordinating to the larger needs of the common good the rebellious and exploitive few who still remain self-seeking.

This cannot be accomplished in a moment, in a decade. But the beginnings of the new World State are already emerging from the womb of Time. Its consummation, its perfect working out must be the aim and effort of humanity for many centuries to come. Here is a vision, a task, large enough to command the admiration and zeal of every human being; large enough to absorb all human energy and lead it into the glorious achievement of a perfect civilization.4.

    [4. For further details concerning the economic and political principles of the Bahá'í State see J.E. Esslemont's "Bahá'u'lláh and the New Era." Bahá'í Publishing Committee, Box 348, Grand Central Station, New York City. Price, 50c.]

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