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   IF the home is to produce, it must contain themeans of production. And if it is to produce comfortably, the "means of production"must include the machines which will make this possible.

   But by far the largest number of families inthis factory-dominated civilization have neither lands nor houses, tools nor machinery.Money enough to buy them is for these families an iridescent dream. They cannot seriouslythink about producing their own essentials of comfort nor of making themselves economicallyfree until some practical plan is available which would enable them to secure themeans for domestic production.

   How can a family today, which may be withoutany real capital to begin with, secure a home and furnish it with the machines thatare necessary to produce a standard of living as high as that to which it has beenaccustomed?


   With rising land values; with higher wages forbuilding labor and high prices of building materials; with tools, supplies, livestock, farm equipment, and above all machines, often outrageously high in price,(because of the selling extravagances of manufacturers and distributors), a sum ofmoney of which few families can boast today is necessary to establish the creativehome which I have been describing. The average disestablished family, even if itnow has a large income, finds the cost of living so high that it is certain to shrinkfrom the task of saving the money needed even for a modest first step toward acquiringits own means for domestic production.

   How is this family to go about securing the moneyto buy itself a homestead? How is it to buy all of the things over and above realestate which it will need if it is to produce for itself material comforts at leastequal to those which it now enjoys? It is difficult enough now to save. How is thefamily to make the outlays required for establishing a productive home and for equippingit with a full complement of domestic machines?

    Let us see whether these questions are not inreality much less difficult than they appear at first sight.


   Capitalization makes it possible to take anythingcapitalizable which produces an income of $60 yearly and realize nearly $1,000 uponit even though its real cost be only $100. The formula is:

   (I / M) x 100 = D

which gives us:

   ($60 / $6) x 100 = $1,000

I being the annual income from the property, M the prevailing costof money, and D the dollars realized through capitalization.

   Plainly, the process of capitalization makesit possible to borrow capital with relation to the income from an investment andnot the cost of the investment itself. Capitalize any income-basis with a net incomeof $60 yearly, and you can sell a thousand dollars worth of securities to secureit, even though it may actually cost you only a small part of that sum.

   If that is not magic, nothing is.


   Provided we have something to capitalize, themeans for buying a homestead, for buying domestic machinery and for buying all thatmay be necessary to make an organic homestead function, can readily be procured.

   Strange as it may seem, we have only in recentyears rediscovered that time, the one universal possession of all men, is capitalizable.

   The ancient world knew it well. Even in Americait was generally understood hardly more than half a century ago. Slavery was a systemfor capitalizing time. The slaves were merely unfortunate creatures whose time hadbeen made into property by law. In abandoning slavery, and the system of indenturingall sorts of workers, from servants to ministers of the gospel, which, is so similarto slavery, society lost sight of the fact that time was capitalizable. This wasno light loss to society; for the failure to provide every man with some method ofcapitalizing time made wage-slavery possible. Disestablished workers of all kinds,the professional workers as well as proletarians, have had no access to the accumulatedcapital of society until in recent years a new technique was developed which madeit possible for them to capitalize their time and so re-establish themselves.

   Now the one thing which the change in the economicsof the family and the home which is here proposed does is to release time. Let ourhomes cease to be merely a place for consumption; let them become places of productionas well, and much of our time is freed to be used for other things than the buyingof consumption goods.

   Less time has to be devoted to earning the moneyfor rent when we produce shelter for ourselves.

   Less time has to be devoted to earning the moneyfor food when we produce most of our own foodstuffs.

   Less and less time has to be devoted to earningmoney to buy things which are to be immediately consumed as more and more of theessentials of life are produced in the home itself.

    Time thus becomes available for earning moneyto buy the machines which make drudgeless domestic production possible.

   But what is most important, the time saved isreleased for capitalization.

   For the time which does not have to be used forprocuring the necessaries of life is in effect an income-base and with an income-base,the magic, of capitalization is made available for us. If by domestic productionwe cut our food bill in half, we save at least one day's time per week. If we canearn $10 per day, the 52 days saved during the year create an income base of $520.Applying the formula, ($520 / $6) x 100, we get $8,666. This sum becomes theoreticallyavailable to us for investment as a result of domestic production of foodstuffs alone.But the $8,666 can be realized only if we are willing to pay interest for its useindefinitely. And also it demands of us a financial wizardry sufficient to securemoney for 6%. In practice, money costs more than 6% and provision must be made forthe amortization of the principal. This cuts down the dollars actually realized throughcapitalization. More than $5,000 may be realized if the money is wanted to builda home. Less than $500 may be realized if the money is wanted to purchase a tractor.

   The saving of even one day's time per week throughdomestic production makes a capital of from $500 to $5,000 available to us.

   And cutting down the food bill by no means exhauststhe possibilities for saving time through domestic production.


   If credit were to be defined as electricity hasto be, by what it does rather than by what it is, the temptation to say that it ismoney would be irresistible.

   With money we can go anywhere and buy almosteverything. With credit too we can go anywhere and buy almost anything. In this crucialquality--as a medium for buying--money and credit are almost indistinguishable.

   It is not necessary to have money when it ispossible to secure credit.

   The business man who needs money with which toequip his factory can capitalize it and with the proceeds from the sale of stocksand bonds equip it as he desires. But with only time to capitalize we cannot adoptthe complex expedient of issuing stocks and bonds. Nor do we need to do so. Not onlycan we equip our homes with domestic machinery; we can secure the homes themselvesby taking full advantage of installment credit, probably without paying the financecorporation more for the credit we use than business men have to pay investment bankersfor the money they put into their corporations.

   In America we have only begun to capitalize timethrough the instrumentality of installment credit.

   But already nearly ten per cent of the nationalincome is devoted to the purchase of goods and real estate in this way. Nearly tenpercent of the time spent by the American people in earning money is now devotedto paying for what they have purchased on installment credit. On the average, thirtydays out of the average man's working year is already capitalized by him throughthe instrumentality of installment credit. Yet the yearly purchase of real estateon the installment plan amounts to only $1,600,000,000. None of us need hesitateto take the first step toward the establishment of a productive home for lack ofcapital. Of course we have to show under the rules of the economic game as it isplayed today that we can earn money, save money, and pay money when we owe it. Yetif we prove these things by accumulating a nest egg, however small, a building andloan association will be glad to capitalize for us the time that we are willing toappropriate to acquiring a home.


   Modern accountancy has made it plain that thereis a great difference between expenditures for investments and expenditures for currentexpenses. If the treasurer of a corporation makes out two checks, each for one thousanddollars, and sends one of them to a manufacturer of machinery for new machines whichhave been installed in his factory, and the other to a banker for interest on loans,the two expenditures are clearly distinguished in his mind and on the books of hiscorporation. One represents investment--the other overhead expense. The $1,000 investedin machinery is expected to earn enough not only to enable him to pay interest onthe investment, but the cost of the machinery itself. The $1,000 paid out for interestis an expense different in every respect. The treasurer finds it easy to distinguishbetween the two types of expenditures. But the self-same man may be very much surprisedif he is told that identically the same distinctions exist with regard to many expenditureshis wife makes for his home.

   If she presents him during the same week withtwo bills each for $25--one for an improved fruit press, and the other for groceries,he is apt to think of them both as just $50 worth of household expenses. Yet theexpenditure for the fruit press is distinctly investment, while the expenditure forgroceries is distinctly current expense. The difference is practical, not academic.If the fruit press is properly used, it immediately begins to earn its own cost.It either reduces her expenditures for preserved fruits and for table beverages,or, if she is already making these at home it reduces the amount of labor expendedin their production, and so frees her time for other activities. The saving madepossible with domestic machinery is so large, often larger than that which is possibleas, a result of the installation of machinery in a factory, that the investment inan appliance, such as a fruit press, is wiped out often in a single season. The equipmentis then on hand to effect similar savings in the future and to make the purchaseof other labor-saving machinery just so much easier.


   If the investment in house, in gardens, in poultryyards, in fruit trees, in farm equipment, in machinery of all kinds is consideredfrom this standpoint, no family should hesitate to use credit in order to purchasethem. For, unlike expenditures for consumption goods, they cost nothing. They payfor themselves, for their maintenance, for their depreciation in precisely the sameway that properly selected and properly operated machinery in the factory pays foritself. They are different only in that the net dividends upon the investment inthem is so much larger than in factory machinery.

   For with domestic machinery there is no costof marketing the production, and little loss from improper balancing of productionand consumption. The savings made possible by the use of machinery are not in largepart wasted by costs of transportation, selling, advertising, wholesaling and retailing.Nor is the net dividend whittled away through the production of a greater supplythan the market demands. Our own needs determine the amount produced and practicallyall that is produced is consumed.

   Our real problem is therefore only the initialproblem of securing the capital with which to purchase the machines which make domesticproduction practicable.


   That problem vanishes when proper use is madeof credit.

   There is, it is true, no excuse for buying oncredit if cash is available, or money can be borrowed on regular terms from a bank.Installment credit--the form most generally used--is rather expensive. But if dueallowance is made for this fact, it still remains the part of wisdom to buy equipmentfor domestic production on this plan provided in each instance the saving which aparticular purchase makes possible is greater than the cost of the installment credit.On most types of domestic machinery the savings justify the payment of even usurious"finance" charges. As a matter of fact, it is only because so very largea part of the installment buying of today consists of things that are productivein this sense that the whole edifice of installment buying has not already collapsed.The fact that so many of the things purchased on installments tend to pay for themselvesis the explanation of the public's ability to meet excessive selling costs and financingcharges.

   Some figures compiled by Mr. Milan V. Ayers whichwere published in "Advertising and Selling" for August 8, 1828, are herearranged in two columns, one representing the public's purchases of productive goodsand the other of non-productive goods, for the purpose of demonstrating this fact.

					Productive	Non-Productive		TotalNew passenger cars		778			1,556			2,334New trucks			485							485Used cars and trucks	400			561				961Household furniture					789				789Pianos							234				234Phonographs						174				174Sewing machines		106							106 Washing machines		104							104Prperty improvements	108							108Radio sets						181				181 Jewelry store goods					108				108 Clothing							282				282 Tractors				75							75 Vacuum cleaners		56							56 Other farm machinery	31							31 Gas stoves			27							27 Mechanical refrigeration	16							16 Miscellaneous (not classified)						108	Totals           	2,186		3,885			6,179

   The classification of the items as productiveand non-productive in this table is open to much question. Furniture, to considerone type which I have classified as non-productive, might well be classified as productiveon the assumption that the family which provides itself with furniture is producingfor itself what a family in a hotel rents along with the shelter, laundry and maidservice which the hotel furnishes. Pianos, phonographs and radio sets might alsobe classified as productive on the assumption that they enable the family to produceits own entertainment instead of paying for it in a club, theatre or movie. But evenif these items are classified as non-productive, 36 percent of all the purchasesof the American people on the installment Plan are of a productive character. Addthe purchases of real estate, which are estimated at more than four times the aggregatepurchases of all the non-productive items, and it is plain that most of present dayinstallment buying is self-liquidating in the same sense that investments in factories,factory machinery and real capital for business purposes generally are self-liquidating.

   In spite of the high cost of commercial installmentcredit, in spite of the terrific burden of selling costs that are loaded upon manyof the things sold on the installment plan, it is the part of wisdom for those ofus who are without capital to buy and equip a productive home on the installmentplan.


   So long as our scientists, engineers, inventors,all those whose ideas predetermine the developments of this industrial age, continueto concern themselves with the development of factory machinery and factory techniques;so long as clever business men, advertising men and salesmen continue the developmentof mass production of consumption goods with distribution in the national marketat the expense of the local production with local distribution, there is little hopefor any great development in domestic production. But let them once begin to seethe enormous market for household appliances which a general movement toward economicself-sufficiency would bring into existence, and captains of industry would beginthe process of cramming domestic machinery down the throats of the masses, just astheir prototypes have always crammed new ideas down the throats of the masses inevery age.

   Alexander crammed Greek ideas down the throatsof all the populations he conquered. Caesar crammed Roman ideas down the throatsof most of Europe. Constantine crammed Christian ideas down the throats of the masseswherever his rule extended. Manufacturers with their factories have up to very recenttimes crammed the ideas of Smith and Mill concerning the production and distributionof wealth down the throats of most of the world. Between the industrially-mindedbig-business men of America, the Fascists of Italy and the Bolsheviks of Russia,mass-production under scientific management is being crammed down the throats ofthe modern world.

   For the quantity-minded care nothing about thenature of ideas but only about how they can be turned to account for their own aggrandizement,their own power, their own glory, and how they can use a new idea for the purposeof winning in the competition with their fellows. The ideas which they impose onmankind vary from age to age. There is no consistency in them. They are perfectlywilling to be pagan in one age and Christian in the next; competitive in one ageand monopolistic in another.

   For the past one hundred and fifty years theyhave been busily developing the factory, filling the world with smokestacks, andharnessing mankind to factory machinery. In the next fifty years they may turn aroundand undo all that they have recently done by decentralizing electric power and promotingthe sale of domestic machinery.

   Well, let them wheedle, flatter, frighten, evenbully mankind into the idea of domestic production. Let them develop. and manufacturedomestic machinery, furnish the individual home with power, multiply the agenciesfor credit so that larger and larger sections of the population can buy the meansof domestic production. Let them wax rich and powerful in the process--as those whopioneer in it surely will. They will at least make it possible to lessen the uglinessof civilization instead of, as today, making it almost impossible to do so. Aboveall, they will make it easier for the quality-minded to achieve the freedom to bethemselves.

   There will be fewer factories, less waste ofprecious raw materials, and more time for all of us to devote to expressive livingif business men devoted themselves to making such a world. And certainly in a worldfilled with creating and producing homes there would be more comfort than prevailsin the factory-dominated homes of today.