Bernard London

“ In our present haphazard organization, the product of the worker’s toil continues to benefit and produce income for its owner long after the one whose sweat created it has spent and exhausted the meagre compensation he received for his labor.
The worker’s wages are exhausted in a week or a month in the purchase of food, clothing and shelter. He has for himself little that is permanent to show for his hours of toil, whereas the owner of the building or machine which the worker’s labor helped to construct has a unit of capital goods which will last for years or even decades. ”

“ Therefore I propose that when a person continues to possess and use old clothing, automobiles and buildings, after they have passed their obsolescence date, as determined at the time they were created, he should be taxed for such continued use of what is legally “dead.” He could not deny that he does not possess such goods, as he might hide his income to avoid paying an income tax, because they are material things, with their date of manufacture known. Today we penalize by taxation persons who spend their money to purchase commodities, which are necessary in order to create business. ”

“ Even in the present organization of our economic society, we recognize in many instances the necessity of destroying some of our wealth in order to increase it. For example, coal is wealth, but it is burned up and destroyed daily in locomotives, furnaces and other devices in order to create power to drive machinery and manufacture goods. Similarly, oil is wealth, but to serve its purpose it must be used and consumed in the engines of automobiles and the whirring wheels of factories. ”

“ My plan would rectify the fundamental inequalities of our present economic system, in which we follow a hit-or-miss method, one getting much more than he needs or can use, and another less or nothing. We should learn to use our material resources so that all can partake of them, yet so that none will be any poorer or worse off than today. ”

“ Wealth, like food, must be digested for human beings to be able to live, function and create—in other words, to produce more wealth. If we want to acquire new wealth, the supply lines must be drained so that fresh commodities can come in. If there are stale goods left in the lines, the fresh supply must force them out.
The cause of our present stagnation is that the supply line or arteries furnishing the needs of the country are clogged with obsolete, outworn and outmoded machinery, buildings and commodities of all kinds. ”

“ Society is suffering untold loss in foregoing the workpower of ten million human beings. The present deadlock is the inevitable result of traveling along blind alleys. Chaos must unavoidably flow from an unplanned economic existence. ”

“ And, when capital purchases the automobile or the building, it will be doing so only for that limited period of years, after which the remaining value left in the product will revert to labor, which produced it in the first place, and which thus will receive its rightful share in the end, even if it did not do so in the beginning.
Miracles do not happen. They must be planned in order to occur. Similarly in this time of economic crisis, we must work out our own salvation. ”

“ Grain is wealth, but we destroy it by feeding it to cattle, by consuming it ourselves, and by scattering it on the ground as seed to produce more grain. It is by this process that people live, function and create material goods.
Wealth may be compared to our language. Although we use our language every day, it does not get used up. ”

“ I contend that any business or corporation, public or private, which operates and expects to get an income of several billions of dollars a year from its operations, deserves much attention, and requires thoughtful planning, in order to perfect the machinery of its organization. [Pg 19] The aim should be to make it function smoothly in order to satisfy the self-supporting multitudes, by providing them with regular employment at a living wage which will assure the American standard of living. ”

“ We must work on the principle of nature, which creates and destroys, and carries the process of elimination and replacement through the ages. There would be no overproduction, were this method adopted, for production and consumption would be regularized and adjusted to each other, and it would no longer be necessary to send our surplus goods to find outlet in foreign markets. We would not then, as we do today, have to sell these goods on credit and later have to beg for our money, which in the long run foreign nations do not want to repay anyway. ”

“ Such a socially responsible system, which is anxious for the well-being of all of its citizens, is on a vastly sounder and more permanent basis than one which allows business merely to take out profits without improving the organization with new methods and without renewing the equipment. ”

“ It is far cheaper to destroy useless and obsolete goods now, and perhaps some of our synthetic wealth as well, than to risk destroying far more priceless assets, such as [Pg 17] human life, and undermining the health and confidence of the people, by continuing to fight the depression with our old, slow and costly methods. ”

“ I would have the Government assign a lease of life to shoes and homes and machines, to all products of manufacture, mining and agriculture, when they are first created, and they would be sold and used with the term of their existence definitely known by the consumer. ”

“ We should tax the man who holds old things for a longer time than originally allotted.
Under the present estate and inheritance tax system, the State has to wait an indefinite period, and allow the owner of a building or commodity to keep on earning and adding more to his fortune until he dies, before it can collect its inheritance tax. ”

“ The weights and measures we use are standardized and regulated by the Government so that they may not be violated. But, though we may not realize it, this system is incomplete because in the description of things it omits consideration of two elements which are equal in importance to those in everyday use in determining real values. These are life and time, life with respect to the commodity produced, and time, the period it should last. ”

“ Wouldn’t it be profitable to spend a sum of—say—two billion dollars to buy up, immediately, obsolete and useless [Pg 7] buildings, machinery, automobiles and other outworn junk, and in their place create from twenty to thirty billion dollars worth of work in the construction field and in the factory? Such a process would put the entire country on the road to recovery and eventually would restore normal employment and business prosperity. ”

“ The essential and bitter irony of the present depression lies in the fact that millions of persons are deprived of a satisfactory standard of living at a time when the granaries and warehouses of the world are overstuffed [Pg 4] with surplus supplies, which have so broken the price level as to make new production unattractive and unprofitable. ”

“ Of course, the inauguration of such a system of planned obsolescence will be opposed by many merely because it is new, for it is hard for us to abandon our old notions and adjust ourselves to a new way of thinking. ”

“ New products would constantly be pouring forth from the factories and marketplaces, to take the place of the obsolete, and the wheels of industry would be kept going and employment regularized and assured for the masses. ”

“ If the plan I propose is adopted, there will be a source of permanent income to the State from goods and merchandise in existence, and which are bound to continue to exist. Through a process of checking control of what the manufacturer sells to the dealer, and through reports by retailers of what they sell to the consumers, the Government will know by the end of the year just what income it will be sure of getting, and this amount it will be paid irrespective of whether people are making big profits or not. ”

“ When used for their allotted time, they should be retired, and replaced by fresh merchandise. It should be the duty of the State as the regulator of business to see that the system functions smoothly, deciding matters for capital and labor and seeing that everybody is sufficiently employed. The Government will have the power to extend the life of articles for a year or two (upon agreed terms) , if they are still useable after their allotted time has expired and if employment can be maintained at a high peak without their replacement. ”

“ If a machine has been functioning steadily for five years or so, it can fairly be considered dead—dead to the one who paid his money for it—because he has had all the use of it during those five years and it will have paid for its life by its earnings in the five-year period. ”

“ The widespread suffering from unemployment and [Pg 16] want in this country today is a symptom of a fundamental maladjustment—a sickness, if you like, in our body economic. Almost every sickness can be cured, provided we get the right doctor to diagnose the case and prescribe the proper medicine, but the patient must take the medicine in order to get well. My plan is in essence a prescription for the relief and cure of the ailments from which our economic organization is today suffering. ”

“ In the description of things under the present organization of society, we continually make use of a system of weights and measures. Thus, a commodity is evaluated in terms of size—shape, weight, value, etc. ”

“ However, modern technology and the whole adventure of applying creative science to business have so tremendously increased the productivity of our factories and our fields that the essential economic problem has become one of organizing buyers rather than of stimulating producers. ”

“ If it were decreed that the life of wheat were to be no more than two years, for example, no man would buy the grain solely for speculation, thus creating an artificial market and holding a club over the farmer’s head, as today. ”

“ The situation in which the country now finds itself, in which there is poverty amidst plenty, is well illustrated by the analogy of a great giant standing in a pool of fresh water up to his lips, yet crying out that he is thirsty because he is paralyzed and cannot stoop to drink. ”

“ To start business going and employ people in the manufacture of things, it would be necessary to destroy such things in the beginning—but for the first time only. After the first sweeping up process necessary to clean away obsolete products in use today, the system would work smoothly in the future, without loss or harm to anybody. ”

“ If we add the elements of life and time to our measurement of what we produce, and say that the life of this automobile shall be not more than 5 years, or the life of this building shall last not more than 25 years, then, with the addition of our customary measurement of these commodities, we will have a really complete description of them right from the beginning. ”

“ At the present time our country has plenty of everything, yet people are in want because of a breakdown in distribution, an inadequate division of the fruits of labor. Worn-out automobiles, radios and hundreds of other items, which would long ago have been discarded and replaced in more normal times, are being made to last another season or two or three, because the public is afraid or has not the funds to buy now. ”

“ So, too, the paralysis which prevents our economic society from consuming the abundant supplies of raw materials and manufactured commodities which glut our markets must be cured before normal conditions can be restored.
Furniture and clothing and other commodities should have a span of life, just as humans have. ”

“ The Government should be enabled to advance a sum of money to certain Trust Agencies to purchase part of these obsolete buildings and machines and clothing. They should be thrown into a junk pile, and money lent toward creating new buildings, machines and commodities. ”

“ If we can afford to sink ships, that cost millions of dollars to construct, merely for the purpose of giving [Pg 14] target practice to the gunner, then surely we can afford to destroy other obsolete and useless products in order to give work to millions and pull the country out of the dire catastrophe in which it is now wallowing. ”

“ Factories, warehouses, and fields are still intact and are ready to produce in unlimited quantities, but the urge to go ahead has been paralyzed by a decline in buying power. The existing troubles are man-made, and the remedies must be man-conceived and man-executed. ”

“ In the course of 30 years under this arrangement, most construction and production would undergo a fundamental change for the better, as old, dilapidated and obsolete buildings and machines disappeared and new ones appeared in their place. ”

“ Moreover, the present method of collecting revenue under the income tax is speculative and uncertain, because the profits of industry and business, upon which the income tax is based, are subject to vast fluctuations. ”

“ These are obstructing the avenues of commerce and industry and are preventing new products from coming through. There is little demand for new goods when people make their old and worn-out things do, by keeping them longer than they should. ”

“ During this period some manufactured commodities would have been destroyed and replaced 15 times, others 10 times, still others 5 times, etc., depending on the span of life allotted to each, in order for it to earn sufficient for its purpose before it dies. ”