

One’s rank in the industrial army is the only path to honor and prestige except for those in the arts and the professions who are eligible for a few perquisites and minor privileges. Red ribbons make up the highest honors for those employed as artists, authors, engineers, inventors, physicians, teachers, and so on. The reward systems in the arts and professions are more complex than the system for other jobs. For example, an author is permitted to reduce his regular work hours by any earned royalties. All books and newspapers are published by the government. There is no censorship and the state is obligated to publish any work as long as the author pays for the first printing.



According to Dr. Leete, credit cards are given to all citizens enabling them to acquire goods and services necessary for a comfortable life. Each citizen is provided with an annual allotment of goods and services. Each time that a purchase is made a cardboard credit card is punched according to the “prices” assigned by government bureaucrats. Money is used only as a unit of account. These credit cards function in manner very similar to today’s debit cards. Identical amounts are deposited by the U.S. Treasury into every cardholder’s account. Different people consume different combinations of goods and services. Government administrators set “prices,” and individuals make these purchases using their cards. When excess demand or supply occurs, prices or production levels are adjusted. When funds are needed for investment purposes, government officials remove the required amount from the pool to be distributed among the citizens.



Each credit card includes an amount sufficient to live comfortably in society. Any unused credit is returned to the government. In addition, individuals could will personal possessions freely to their descendents, but because most needs are met by the government the majority of these possessions revert to the state. The government uses such excesses to make improvements that are shared by all.



The credit cards can only be used at government-owned distribution centers with each center carrying the same products. Edith Leete takes Julian to see one of these centers where sample rooms display the various commodities. She explains that orders can be sent by a small pneumatic tube to a central warehouse with goods being shipped to people’s houses across town via a system of larger pneumatic tubes. The “prices” are symbols that expedite government accounting. The nonexistence of competition permits government bureaucrats to set “prices” any way they want to.



All the world’s great nations have copied the American system of nationalism (actually command socialism) with universally honored credit cards. There are no wars or other international conflicts. International trade is accomplished by accounting procedures with balances being settled every few years by an international trade council. There is free trade and free emigration as people have the freedom to select and change their nationality. In addition, each person speaks a native language and a universal language.



Leete explains that crime is nearly nonexistent because everyone receives the same credit and, therefore, there is no need to steal and there is virtually no need for prisons. There are no crimes involving monetary gains because there is no money. No people are involved in financial operations. Crime faded away among the educated except for the mentally ill who were treated in hospitals. There exists no military, few police, few prisons, no Internal Revenue Service, no charity, no government debt, no political parties, no banks, no strikes, no jury system, no attorneys (legal decisions are made by judges appointed by the President), and no churches, denominations, sects, or clergy. However, individuals are permitted to broadcast their religious views in sermons delivered over a type of radio or telephone system.



Without greed there is no government corruption. A small group of bureaucrats run the entire economy. The sole function of the government administration is to direct the nation’s industries. Higher bureaucratic positions are filled by, and elected by, individuals who have retired from the industrial army and are past 45 years of age. The job of the government is to provide economic abundance and a social welfare system. Democracy exists with voting at various levels. A President serves for a term of five years.



The government provides public kitchens with central public and private dining rooms. This system does not allow for the individuality of food, but does permit social interaction and eliminates the need for the individual to prepare meals. Housework is mechanical and washing is done in public laundries. Electric power has replaced fossil fuels, thus eliminating the pollution of coal furnaces. Healthcare is socialized. Medical care is provided by the state with doctors selected individually but paid by the government. Music is piped into rooms via a type of cable radio system in which a person can select programs “on-demand” and can control the volume.



The message of Looking Backward is that everyone shares equally because all people alive at a particular time have received the aggregated technological accomplishments of preceding generations of men, and every person alive at a certain time has a right to an equal share of what has been accumulated. It is argued that a program of equalization would eliminate social ills, bring about a feeling of solidarity, and transform the nation into a brotherhood of man. Income equality is based on common humanity because civilization is people’s common inheritance and, therefore, all individuals are entitled to an equal share of the country’s income.



The above idea reminds me of, and is analogous to, Harvard philosopher John Rawls’s idea that there is no good reason to allow the distribution of wealth and income to be determined by the possession of natural endowments or by social and historical factors. Rawls contends that individuals do not deserve the genetic or other assets they are born with. He explains that, from a moral perspective, the level of effort people are willing to put forth is, to a great extent, influenced by their natural endowments. Consequently, those who are more productive due to their greater natural abilities have no moral right to greater rewards, because the abilities and motivations that make up their work cannot be morally considered to be their own. He considers the distribution of natural talents as a common asset and argues that people should share in the fruits of this distribution. Rawls also maintains that individuals who are not fortunate enough to have wealthy parents do not merit worse starting points and, consequently, worse life prospects than those who were so fortunate. He contends that society should equalize the prospects of the least well off by taxing the undeserved inherited gains of children of rich persons, and using the tax proceeds to aid the least well off.



Julian falls in love with Edith Leete and discovers that she is the great granddaughter of his former fiancée, Edith Bartlett. Julian hears a sermon by Mr. Barton on the evils of the 19th century and the immeasurable advances that have been made since then. He becomes depressed because he realizes that he was once part of that inhumane and barbaric system. He has changed and now realizes how bad the 19th century was.



Toward the end of the novel, Julian has a nightmare in which he is back in 1887 Boston. As he wanders around town, he sees misery, waste, filth, and the gap between the many struggling poor and the privileged few. In his dream, he tries to explain to his friends (including Edith Bartlett) the horrendous nature of the 19th century and the joys of 20th-century society. They become furious with him and will not listen. When he awakens, he finds that he is still in the year 2000.



Bellamy claimed that all people voluntarily conformed to the new society of equality based on solidarity and camaraderie. He maintained that everyone is perfectly satisfied with an arrangement of the equal distribution of property. Based on an understanding of human nature, it is improbable, unrealistic, and absurd that people living in a capitalist system would surrender to this new arrangement that eliminates money, the profit motive, social status, individualism, and materialism. No details are provided regarding how this change occurred. What made people no longer care about money, wealth, and property? Bellamy simply said that it was the equal distribution of property that led to tremendous moral improvement and to the elimination of crime and wickedness. He optimistically had faith in the power of reason to control men’s actions. He presented this situation as an accomplished fact that occurred early during the 20th century. This certainly goes against what we know about human nature. Crimes are committed no matter what system is in effect.



What about the problem of incentives and motivation in a socialist economy? This is a great difficulty for Looking Backward and for Bellamy. How and why will people do things without incentives? Bellamy has a hard time explaining why people work hard when their material circumstances will not be affected. His system of prizes, deprivations, and love of country is certainly not adequate or persuasive. People are motivated differently and some are not motivated at all. Bellamy puts a great deal of faith in centralized government and very little in individual initiative. He ignores man’s nature to work for the betterment of himself and his family. Markets create incentives to search for opportunities that a person’s singular knowledge provides to him. Knowledge and opportunities are constantly changing, highly local, and individuated. A person’s actions are motivated from within. Individuals may seek to attain their goals and values, to better the conditions of their lives, to accomplish something outstanding, and so on. Capitalism offers freedom and a variety of goods and services. Socialism, on the other hand, stifles incentives, discourages originality, fosters political corruption, eliminates the diversification and differentiation of goods and services and encourages people to act in the same ways.



There are also problems in Looking Backward with respect to deciding what to produce and how to allocate what is produced. Bellamy emphasizes the distinction between production and distribution. However, he has bureaucrats make both production and allocation decisions rather than relying on market responses as would be done under a capitalist system. There are just too many details in complexities to be grasped by Utopian planners who are much more concerned with wholes than with particulars.



According to Austrian economist Ludwig von Mises, it is impossible to have rational central planning under socialism. Without market-based prices, decision-making by central planners would be irrational and arbitrary. Because of the elimination of market-based prices, a centralized planned economy would be unable to allocate resources rationally. Socialism is inherently unworkable, destroys individual motivation, and suppresses the means of economic calculation. Monetary calculation is a tool of action. It is prices, articulated through the common denominator of money, that make economic calculation possible.



Socialism destroys the incentives of profits and losses, private ownership of property, and the benefits of competition. Without market prices to convey information to decision-makers, there would be no competition and no profit-or-loss system. Competitively determined market prices permit individuals to assess the relative values of scarce means in competing applications. Market prices are used to discover relative values of alternative uses of goods and services. The social function of the price system is to promote the use of knowledge in society by making calculations possible. Calculation is necessary for a person to determine the best allocation of his scarce resources. Rational economic calculation depends on the shorthand signals of market prices to make decisions regarding the alternative uses of scarce resources.



Looking Backward is the story of an overweening state that supplies too much. However, ironically, we never see anyone actually working, striving, pursuing, or producing anything. The novel portrays a world in which it is permissible to obtain things from a government agency but not from an individual producer or seller. Such buying and selling is thought to be antisocial. Bellamy likes the notion of conscious design, appreciates the need to organize and administer production, and calls for public ownership and management of the means of production, an industrial army, equal income, and a welfare system. He apparently condemns the market system because it does not result from deliberate design. He does not understand that something can be useful, and even be superior, even if it is not the result of the articulated rationality of central planners. If Bellamy were alive today and could see our socioeconomic conditions, he would still think he was correct and would argue that his utopia has been postponed but that it will still one day be a reality.

