The individual and the realization of human personality are developed by decentralization. Centralization results in the subordination of the individual to industry, the state, and society. Extremes of this appear in totalitarianism—communism and fascism, in which these subordinations and sacrifices are justified as leading toward good ends and an ultimate restoration of freedom. History, however, furnishes no case in which the subjection of the individual has resulted in an increase of freedom.
To repudiate centralization (which is artificial and not, as is claimed, inevitable) is not to repudiate progress. It is clear that this trend has been promoted politically through taxes, subsidies and tariffs. (The foregoing was the gist of Borsodi’s preceding article, of which the following is a continuation. —Ed.)
The Corporation vs. The Natural Person: Let me mention just one more enormously important field in which political power has been used to interfere with what seems to me the natural course of economic revolution. I refer to the special privileges with which the nation, the states and the municipalities of the country have endowed corporations. By a fiction of the law, corporations have been endowed with the rights of natural persons. Judicial corruption of the intent of those who wrote the Bill of Rights have given to these so-called artificial persons not only the rights of natural persons, but it has given them rights the law denies to natural persons.
No wonder corporate enterprises have prospered, while private and personal enterprises have declined. It has been made not only easier for the corporation to secure capital; it has been made easier for the corporation to escape financial responsibility, and to disregard the mortality which purely natural persons cannot evade. Whereas all the enterprises of a natural person must be reorganized at his death, there is no such death for a corporation. Consider whether the apparent superiority of our great corporations over small private and personal enterprises may not be due to the advantages conferred upon them by grace of law and of government rather than to their greater efficiency.
The Illusion of Prosperity and Security: The tendency toward centralization, along with the sacrifice of individual and local rights in the interest of the nation, is justified, mainly on the ground that it makes for security and prosperity. But only those who refuse to look at the modern world realistically can accept this assumption. The simple truth is that instead of making for security and prosperity, there is not a single nation in which this tendency to centralization is dominant—not excluding Russia —which is really secure and prosperous. Even in the United States, prosperity has always been spotty, and security the plaything of booms and panics. Before we accept this assumption (that the trend toward centralization during the past century is to be credited with the great increase in wealth which we enjoy as a nation if not as individuals), we must ask certain questions which those who defend centralization refuse to take into account.
To what extent is the so-called prosperity of the world today due to the ruthless exploitation of natural resources instead of to industrialism? We have turned immense areas of America into semi-deserts, and we have used the wealth which we have extracted from these regions to build and support our great cities. Should we not rather credit this prosperity to exploitations of the soil rather than to industrialism?
The historic accident which led to the development of the steam-engine before the hydro-electric generator, furnished factories with power at a time when it was denied to home-producers; spinning and weaving were transferred from the manor and the cottage, to the great centralized mill, not because mass production was necessarily more economical, but mainly because in the beginning of the industrial revolution, the only way in which power could be utilized was by moving the machine to a place where steam boilers and steam engines were available.
The Electrical Age vs. The Steam Age: But the coming of electricity transforms the situation. Electric power can be decentralized. The electric motor can be utilized not only in the custom shop and small factory; it can be used in the home itself. Even the generation of electricity itself can be decentralized. Giant power plants are wasteful. Small power plants are actually the most economical. The time may come when we will develop hundreds of small hydro-electric generating plants instead of concentrating water power at one point and having to build costly distribution systems to absorb the savings which large generating plants seem to effect. If a small part of the inventive genius which has been poured into the development of factory machinery is transferred to the development of efficient small tools and appliances, the competition between decentralized and centralized industry and production will for the first time be waged with some basis of equality between the rivals.
Already we see in the perfection of the domestic electric refrigerator, what may happen to centralized industry. So great are the natural advantages of small-scale production—the elimination of all distribution costs—that the ice industry has not only ceased to grow but may ultimately follow the Conestoga wagon industry into oblivion. The automobile, which furnishes individual transportation, is threatening to destroy the system of mass transportation which railroads represent. Unless the coercive power of the government is used even more than it is being used today to tax automobiles and gasoline, this decentralized form of transportation which we call the automobile has so many inherent advantages over the railroad that the railroad will slowly follow the canal into the museum of historical curiosities.
For nearly twenty years we have been experimenting with this matter of decentralized versus centralized production on the Borsodi homestead. We have gradually come to the conclusion that two-thirds of the products which the average family consumes can be more economically produced on a small scale at home or in local neighborhoods provided modern methods and modern machinery are applied to small scale production. It is possible not only to cook and bake at home more economically than to secure food processed in large centralized canneries, flour mills, packing plants and other food industries; it is possible to sew and weave at home and to produce better cloth and more artistic garments with less labor than is involved in trying to earn the money with which to buy factory-made products.
It is certainly much more economical, on the basis of our studies, to house people in individually owned homes in the country, than in large apartment houses in the cities.
It is much less costly, and much less wasteful to install electric pumps for running water and septic tanks for sewage disposal in each household, than to furnish these services by the best and largest centralized system developed up to the present time.
The simple truth of the matter is that the products and services in which centralized production is genuinely economical are much fewer in number than is generally supposed. It may be conceded that the only way to produce electric light bulbs inexpensively is in a factory (though the most economical size of factory may not be as large as is generally supposed). But because it is practicable to produce electric light bulbs in factories, it does not follow that flour can be ground from wheat more economically in a large centralized flour mill than it can be ground in the individual home. Not only does the mass production of flour involve mechanical and chemical treatment to preserve it from decay, but it furnishes an inferior article from the standpoint of nutrition and palatability.
Let me be specific with regard to flour. A careful comparison between the costs of large scale and small scale production of flour furnishes good grounds for doubting whether the mass production of flour in the amazingly ingenious roller mills of Minneapolis is really the most efficient method of supplying ourselves with this important article of food. Comparison of final costs, at which it is possible for the ultimate consumer to obtain flour by (1) grinding it at home in an electrically driven family mill for home consumption; (2) having it custom-ground by a neighborhood miller from locally purchased or home-grown wheat; and (3) buying the flour at retail from a store distributing the Minneapolis product, shows no such economy for the mass-produced flour as the protagonists of the division of labor, the factory system and socialization would have us believe.
If it is true that we have overrated the extent to which industrial centralization has contributed to the increase in the wealth of the nation; if it is true that we have aggrandized our cities by destroying our forests, mining our soils, wasting our mineral resources; if the huge factory is a steam-age relic rendered obsolete by the electrical age—then we shall have to reappraise certain institutions which we have tended to discard, along with the horse and buggy, as having outlived their period of usefulness. We shall have to ask ourselves whether the small industry, the custom craft, the local neighborhood, the farm, the home and the family, do not deserve some of the modernization which we are lavishing upon the national capitol, the metropolitan city, and the big industrial enterprises of the nation. These neglected institutions may, if modernized, provide us the general security and the general prosperity which it is plain our centralized institutions have failed to furnish.
Instead of applauding every so-called reform which substitutes atomism for the family; which substitutes flats for homes, cities for farms, factories for workshops; which substitutes national control for local control, we shall have to develop a healthy skepticism about them, and to ask ourselves whether there isn’t a better program for producing a desirable society than that involved in centralizing every aspect of life under the guidance of economic planners and public officials.
I have said that in ultimate terms the one quality which clearly differentiates decentralization from centralization is the development of the individual, and the realization of human personality. I think it is only necessary to mention the fact to have it become apparent that institutions like the family, the privately owned and occupied home, the self-sufficient farm or homestead, all possess this quality of developing the individual and of giving scope to the realization of the self. Centralized institutions, on the other hand—institutions like apartment buildings and hotels, commercial farms, large factories, and great cities—do not possess this quality. They subordinate man to his institutions; they give individuals no opportunity to develop their personalities except as reactions against the restrictions of their everyday work. Instead they produce a culture in which most individuals are spectators and in which only a few individuals, designing and planning for all the rest, participate in a creative life. While I base my pleas for decentralization upon ultimate human values—it should not be forgotten that this does not imply any repudiation of progress; it does not involve any sacrifice of prosperity and security.
But unless this plea is to be dismissed as hopelessly romantic, it must be implemented with a program. We must have a line of action by means of which the excessive centralization of today can be arrested, decentralization started, and ultimately a proper and natural balance between the two achieved.
Political Action Toward Decentralization: First of all there is political action. I mention this first not because I consider it most important, but for exactly the reverse reason—because I consider it least important. I do believe, however, that unless political government is to undo all the good which might be achieved by other methods of action, it is vital that legislation, taxation and administration shall cease to favor the centralization of society. We do not need legislation so much to promote decentralization, as we need legislation which will end the taxes, subsidies, and monopolies by which alone abnormal centralization is able to survive. Our present program of special privileges for industry, for labor unions, for farmers, for city dwellers, must be changed into one which will gradually eliminate every and any form of political interference with social and economic life.
No political party at present, neither the Democratic, Republican nor the Socialist party, is interested in such a program. All existing parties differ only in the degree to which they are opposed to it. In spite of the fact that decentralization is in the original tradition of America, it is unrepresented at the present by any organized group. I would like to see such a group formed—-regardless of the present political affiliations of those who join it. And I would like to see that group work realistically to put these principles into effect within whatever framework of party alignments they can manage most effectively.
Economic Action Toward Decentralization: Secondly, there is economic action. I believe in restricting political action to removing interferences with what seems to me the natural course of economic life. But that leaves us with the necessity for providing means for dealing with the land question and the social problems which cannot be entirely solved by individual action.
Such grave problems as unemployment, old age, and mental and physical sickness—with which we are now trying to deal politically—would cease to be major problems in a society in which the family, country life, and private property functioned effectively. But until unemployment, sickness and old age are again taken care of, family by family, adequate provision for the victims of industrialism must be made. The mere fact that in an integral society—with a proper balance between centralized and decentralized institutions—we would still have to have large factories (if only to furnish us with motors, tools, steel and other products which lend themselves to large-scale production), and that we would still need cities of some sort, means that some kind of group and social action must be provided for taking care of the victims of centralization and the unfortunates of society. Decentralization would lessen the magnitude of the problem, but it would not entirely eliminate it.
Instead, however, of relying upon political action for dealing with these social problems, it seems to me wiser to extend the idea of consumer cooperation into certain economic fields with which it has not been much associated. Instead of thinking of cooperation merely as a means of saving small sums of money in distributing goods, I would like to see cooperation developed as a technique for dealing with many of the problems which we now believe can only be dealt with politically.
Cooperation can be used to furnish social insurance just as it has been used to furnish fire and life insurance.
Cooperation can be used to operate public utilities and railroads.
Cooperation can be used to create new credit and money systems.
I would even go so far as to say that our public school system would be better if it were divorced from its dependence upon politics and operated cooperatively.
I go still further. Cooperation can be used to effect a redistribution of land and to provide homesteads to the millions who are today propertyless and entirely dependent upon industrial and commercial employment. While we are trying to act politically upon the land question—to end the present speculation and concentration of ownership of land—-we can use cooperation as they did in Denmark for immediate action. If homestead projects leading to individual ownership through cooperative purchase of land and cooperative building construction, such as are being developed in Rockland County, New York, under the auspices of the School of Living, were to be multiplied in sufficient numbers, we might need little political action.
Educational Action to Develop Decentralization: Finally there is a third course of action—action in the field of education—which I believe most important because upon it all possibility of useful political and effective economic action depends.
If the program which I here recommend in the field of politics and of economics is not to prove disappointing, the leadership of this movement must not drift into the hands of mere politicians and mere businessmen—it must come from educators. The decentralization of society is to me an educational movement. If mankind adopts this better way of living, it will be because, somehow or other, men follow the leadership of an aristocracy of learned men. If this movement is to be implemented in the spirit of its philosophy—if the means it adopts are to be identical with its ends—then we should begin by using our universities and our agricultural and mechanical colleges to develop folk schools or people’s colleges—to train leaders who can grapple directly with the problem of how people should live. The university should be the center to which the leaders of our folk come for inspiration, for research, and for the exchange of experiences; the folk schools should be centers where the leaders teach by the way in which they live as well as by the instruction which they impart. Such an educational movement could, in my opinion, not only arrest the present drift toward centralization, but spiritualize the ideals, develop arts and crafts, and transform the way in which the people of America live.
This is no chimerical program. Within a period of hardly more than a quarter of a century, the social, economic and political life of Denmark was transformed by the Danish folk school movement. From one of the most poverty-stricken and hopeless peoples in the world, the Danes have become one of the most self-reliant. It may be true that other factors than the folk school entered into the transformation, but the student of that remarkable people cannot resist giving to the folk school the greatest part of the credit for that transformation and for carrying modern knowledge and ancient wisdom to the rank and file of people in every village in Denmark.
Centralization has not saved us from depressions in the past. Indeed it helped to create them for us. We should not therefore expect the present faith in centralization to save us from the next one.
But decentralization we have never tried. It may be true that there is not time enough for decentralization to save the nation as a whole from what promises to become the worst financial and industrial collapse of our history. But it can save many individual families who are now drifting without plan or policy. And it can, if we are able to develop it as a philosophy and as a movement, furnish the American people in their coming period of trial a new faith in their original tradition and lead them to abandon the mirage of centralization and collectivism.
