Part 36

We are not, however, to look on these reductions of danger as covering the whole problem. Life has its accidents and we can greatly reduce the evil results of them by patience and prudence, but there still 390 remains the more thoroughgoing effort by which the evil is anticipated and turned aside.

There should be that general harmony of effort, that proportion of its several parts to each other, that recognition of the common welfare, which fortify us against disaster, and force it in the background when it comes. There is a wise method in production, and a just relation of its agents to each other, which should greatly reduce the liability of a want of labor, and should ultimately remove it altogether. A true democracy should be exempt from this general failure in the results of activity. Much of our political economy has rested on inferences drawn from a faulty state of society, as if it and the conclusions contained in it expressed the real laws of our being. Society, in its most civilized forms, has always developed a proletariat, it has suffered drainage, and we have come to think this a sort of necessity, a natural result of social growth. With this starting point and expectation we are ready for periods of unemployment, and look at the misery which arises from them as a corrective. Superfluous lives cannot be gotten rid of on cheaper terms. We might as well suppose that disease is an inevitable attachment of physical life and must be left to go with it. Society never has too many workers, and when they are not wanted it is because they have been in some way misdirected. Strong men, industrious and intelligent men, are the wealth of society. There is never a time in which there is little or nothing to do in the world; if we think so it is because we cannot see, or see falsely. Our intelligence determines what is to be done and our diligence performs it. The world is never deficient in occasions for labor, no matter how defective we may be in performing it. Nor is well-devised labor wanting in its returns; intelligence and diligence, in full exercise, always contradict the notion. The world could not be the home of man on any other terms. Human life begins to be superfluous 391 the moment labor miscarries, and the miscarriage sinks down to those who have the least intelligence and industry. The constitutional disease of society, that which it has propagated with most show of knowledge, is ignorance and indolence. When we reach this stratum we are always in difficulty; the more in difficulty because we come to it in a sluggish rather than in a corrective temper.

Incident to indolence and ignorance are those vices of temper by which we wish to reach results without labor, or to reach them by the labor of others rather than by our own labor. As long as these vices are prevalent among men, whether in the upper or the lower strata of society, or, as is sure to be the case, in both, periods of arrest will come. Men will be baffled in their narrow aims, and will have no broader, more generous ones to put in their place. For a time they will lie idle till the customary impulses revive and once more set them in action. Industrial inactivity is like a financial panic. It is the result of the transient suspension of habitual feelings, and does not relax till men return to their usual frame of mind. These distrustful and apprehensive periods are liable to return as long as men are not pursuing sound purposes in a sober way. Any deficiency in fairness, integrity and mutual confidence divides society against itself, and renders a portion of its efforts futile. This is the more true as the division and subdivision of labor increases, and the final adjustment of returns is made by complicated exchanges. When a portion of the community finds its share of good things much reduced, when in the distribution of the rewards of labor, custom or cunning or force has robbed them of a reasonable portion, the motives of labor are greatly lessened, the means of exchange are lessened and the sense of unity and integrity of society is lost. There is in civilized society a large body of just and honest production which goes far to sustain the mind in renewed effort, and keep firm the ties which bind men 392 together. Yet the element of distrust, as in a financial crisis, extends through the community and weakens the points of life.

The first condition of social, economic strength is that all the members of society shall find suitable occupation and by means of it become the givers and receivers of aid. This plain, simple fact has been much obscured by accepting competition, often in an unethical and unsocial form, as the general law of economic activity. This law it is not; and it needs at all times to be held in check by ethical impulses and by the welfare of the community. It is this welfare which is the supreme law. Labor owes much of its degradation to a rigid and unreasonable application of competition. As we go down in the scale of occupations, and in efficiency in those occupations, the greater is the injustice and injury that attend on competition till we reach a point at which large numbers are pressed by it to the very verge of life. Then comes in that mischievous generalization which tends to make human degradation a permanent product of nature. The increase of human life is said to be geometrical, the increase of the means of life arithmetical, and so the two tendencies grind eternally against each other. Our best sympathy is expressed in letting this collision come to the quickest, shortest results. Some of this crushing process obtains between ill-trained and sluggish, well-trained and active men. Let it have way.

Yet the agricultural products of the world have not only never given out, they have never been brought near a maximum. Food, raiment and shelter are most varied in kind and abundant in quantity where men are most numerous. The Algonquin Indian wandered in the forest in the winter, unfed and unsheltered. The foundation of his trouble was his indolence and ignorance. The inhabitants of India may perish by famine in large numbers. The distress arises not from the fact that the people have outstripped the productive power of the world, but 393 because they have outstripped their wisdom in handling those powers.

Let men covet wealth, and at the same time use narrowly and competitively the means of attaining it, and the two strata of society, upper and lower, will shape between them a human life in which want will stand over against luxury, hatred over against contempt, and the two classes, oppressed by spiritual destitution and physical poverty, will wage with each a variable and hopeless warfare such as wisdom and good will can alone leave behind us.

A first remedy for unemployment is to make employment remunerative; so remunerative that the workman shall be the buyer of many things as well as the seller of one thing. When his single sale of labor stands in equipoise over against his many purchases, we shall have buyers as well as sellers and our production and traffic will never cease. We have in trade-unions a first step in the adjustment of exchange. Workmen strive to escape the competition of the incompetent and shiftless, to redirect distribution in ways more just and equal, and by this means to be able to play their own part in economic life more advantageously for themselves and for all. This effort is new in its breadth of application, but has never been new with the wise and thrifty. Personal skill and professional attainments have always lifted themselves above the storm-swept plain of competition, and gathered about themselves a prosperity and comfort resting on special and superior exertion. So long as we subject ourselves to the fortunes of the indolent and set up our standards of life at the very foot of the slope, we shall have a competition like that of the Chinese to contend with. We shall march so near the verge of the precipice that many will be pushed over it, and the least flurry will be disastrous. A sufficient return for diligence is the first claim and the safety of labor; it enhances its motives and fortifies it in the 394 possession of what it holds.

With paucity of pay on the one side goes the superabundance of profits on the other side. The returns of management should be more moderate, more uniform, more consonant with the general welfare. We can hardly doubt that an industrial community, well-organized, with a fair share of intelligence, diligence and honesty, will commend reasonable prosperity extending to all its members. Indeed this is what actually takes place in the midway forms of effort. The very poor and the very rich complement each other. Healthy and wholesome activity is as possible to the community as to the individual. The chief difference lies in the increased complexity of communal action and the ease with which results are misunderstood and misinterpreted. The instinctive and voluntary life of the individual is replaced in the community by divided counsels. Men shape opinion and interpret results in view of their own interests rather than in view of the public welfare. The public welfare is as much within the scope of human thought, when attention is directed to it, as is individual well-being. Indeed the universal and stable prosperity of economic society is as much dependent on the diligence and sobriety of its members as is individual welfare on well-ordered labor. The qualities which enhance success in the one direction are much the same as those which cause it in the other direction. Extreme and intemperate action work the same mischief in the one field as in the other. Society is sufficient unto itself when its purposes and methods are truly social. A sudden suspension of labor, a large number out of employment, are the result of disturbing causes which have found their way into the ordinary processes of production. These causes are an unreasonable accumulation of power in single hands, speculative ventures and a social philosophy which holds in light esteem the immediate interests of the mass of 395 the community. I have in mind a peculiar manufacture which had provided the needed buildings, and surrounded itself with the homes and help called for. There came a combination of those engaged in this industry. The works, comparatively new, were discontinued. Production sought a new center and the old community was left to suffer the loss of slow dispersion.

We are protected against theft and criminal violence, but we are not protected against the unprovoked losses which come to us from the speculative aims of the adventuresome capitalist, though these losses may greatly exceed those of robbery. The stability of labor and the returns of labor are often affected in the great centers of production by opportunities, fanciful or real, which offer themselves to a few of achieving large wealth; opportunities not so much of creating wealth as of raking it together. The mass of men do not so much as conceive that they have any ground of complaint of operations which sweep out from under them the supports of well-devised industry. Wealth which in its making and use tends to break up the ordinary methods of industry, to throw off the minds of men from the familiar reconciliations of industry and, above all, to weaken the sense of responsibility which lies between labor and capital, must, from time to time, issue in industrial disaster to the confusion and loss of labor. Do the best we may and we cannot anticipate every disturbance, but we are inexcusable for overlooking the disasters we bring upon others who are working with us. Much of what is called enterprise renders those engaged in it almost wholly negligent of the incidental injuries which fall to those about them. The equilibrium of labor is dependent on the equilibrium of productive enterprises, and when these accept no restraints the disturbance will reappear here and there in the productive world very much at random. Labor presses at one point and is relaxed at another, subject to the speculative schemes of capital. Extreme wealth in the hands of a few lacks the economic and social and moral motives which 396 make it a calculable and reliable means in the hands of many. When it is in the process of accumulation it is lawless; when it is accumulated it sinks into indolence.

While some gains are pretty sure to accompany the acquisition of great wealth, once acquired, it disturbs the even flow of economic forces, and may easily give rise to irregular occupation that brings serious disturbance to those whose daily wants are to be supplied by labor. It may be thought that these fluctuations in production arise from its very nature, and that if we leave men of very different degrees of intelligence to contend with each other for the prizes of industry, great inequalities of prosperity are sure to appear. We can escape them only by forcing back enterprise and making the moderate, medium men the standards of achievement. This presentation seems plausible, and will always be urged by those who are willing or eager to take large risks. Men of large productive power are easily stimulated, and their resources are kept, in reference to the community at large, in the most fruitful form when they are compelled to moderate their efforts, and are not left to the extreme and eccentric ways normal to them. The community is interested in habitual lines of industry more than in those which disturb the minds by sudden profits which cannot be emulated or repeated. Men will separate themselves from their fellows in the rivalries of production. Only thus is the power of intelligence fully disclosed, yet the ordinary arrangements of society, its privileges and opportunities, should be made as equal as possible; no unfair advantage should be given to one or another form of production; nor methods be allowed to the successful in achieving wealth which are not admissible in the community at large. The laws of the game should be wisely framed and firmly preserved. It is the able and ambitious who bring the most strain to safe restrictions, and for whom they are chiefly made. Equality of opportunity is the cardinal 397 principle, and cannot be sacrificed in favor of enterprise. The enterprise that is wholesome keeps within this law. It may also be thought that this rigid restraint would deprive the community of some of the most prevalent means of welfare as well as of some of the most illustrious agents in prosperity, and that those great and efficient combinations which we have come to designate as trusts would be lost to us; that as the result of this loss we should quickly settle down into a sluggish routine, mediocre ideas ruling the public mind, and so miss that very prosperity of which we are in search. Industrial corporations are most efficient agents in wealth-making. We cannot for a moment think of throwing any real obstacle in the way of their formation. But while we need their aid, we should also remember the evils which are liable to come with them. They are the creatures of law, and the law in giving birth to them should assign them the form and restrictions which are most consistent with the public welfare. They are not to be allowed to fall into speculative hands, an instrument of unrestrained power.

Industrial corporations afford ready means by which small capital and moderate men are compacted into a service quite beyond the range of individual producers. The difficulty has been that much dishonesty has entered into the formation of corporations, and that unreasonable power has been exercised by those who have had them in charge. The responsibility of a corporation to the community, expressed in a sound financial organization and in the relation of its officers to its stockholders, would in no way restrain the usefulness of these industrial agencies, and would make them wholly consistent with extended and equal opportunities in production. Immense wealth has often been acquired in connection with corporations whose usefulness to the public has been thereby restricted and the profits of stockholders disregarded. Nowhere is the eagerness of personal enterprise so tempted, nowhere does it display itself more 398 disadvantageously than in the large and oftentimes obscure undertakings of corporations. It is not in reduction of these agencies, but in behalf of their safe and profitable use, that the claim arises for uniform and well-regulated action. In large corporations, as in insurance companies, when the business itself has fallen into routine, extravagant salaries have been resorted to as a means of increasing the returns of officers. Oftentimes the plea for raising salaries is one which is self-propagating. Expenses have been greatly enlarged and the remuneration must keep pace with them. Yes, but will not this very increase lead to increased expenditure? Industrial corporations have been, in the present generation, a conspicuous means of production, but they have also conspicuously promoted a bad distribution of wealth, and so helped to promote irregularity and ultimate suspension in the productive process. There may never come a time in which the adventuresome capitalist will not magnify his own usefulness to the community, but there may come a time in which men shall see that the wealth of a few may be purchased at the expense of that general comfort which is the proper return of industry.

A possible rapidity in the acquisition of wealth inflames the speculative temper. We mean by the speculative temper, purchase and sale, not in reference to production but with the hope of making large profits independently of production. Speculation is an expression of a venturesome spirit which, in its impatience, lays light emphasis on the usually slow methods of increase, and promises itself a rapid road to success. This hope is often disappointed, and when disappointed carries with it a more or less extended retardation of business. When the annual losses by bankruptcy in the United States reach $200,000,000, the distress of those whose means of livelihood have been involved in this overthrow must become a very sensible factor. 399 Such a sum would, in its successful use, provide for many households.

The temper which goes with sanguine and unscrupulous methods is a careless, and often a cruel, one. The democratic notion of equality is overridden, is pushed aside as of no significance in the business world. The same persons who insist on an open shop, and give free play to competition when it depresses labor, regarding it as a familiar and convenient principle in determining wages, may combine with each other to control products and enhance profits. The general welfare, which is the controlling idea, is lost sight of or readily forgotten. They have one standard when they look out on the community at large, and another standard when they are preparing the way to make and hold fast their own gains. The directors of business come easily to think that the welfare of the community is identical with their own welfare, and that the enterprise with which they sustain their own affairs is identical with that on which the public prosperity depends. They readily come to the conclusion that their activity, so essential to the community, should be cherished by the community. How possibly can production progress without them. Discrimination in their favor is a short cut to the common prosperity. Men of comfortable means and the poor even owe what they have to the enterprise which scatters wealth everywhere. There is sufficient truth in this feeling, when not too boldly put, to hide its failures. The expenditures of the very rich in the purchases and exchanges they involve do carry a measure of advantage to all, but they also bear with them an unjust distribution, a luxury and a poverty, which weaken the unity and sap the strength of society. It is the very gist of democracy that each man shall count one; that in spite of the diversities and the advantages among men they shall still remain units of the same value in the freedom and propagating power by which the gains of the race are stored. It is neither identity nor 400 arbitrary difference that is admissible, but every man and every class of men carry with them the potentialities, the social and spiritual possibilities, which are the germs of historic development. This is the principle with which all petty social distinctions and all civic tyrannies have been at war.

While, therefore, the evil of monopolies may appear in various forms and be met in different ways, they cannot be permanently removed except by social conditions which equalize opportunities and compel wealth and power, in all their activity, to conform to general safety. Production in all its forms and in all its agents must be subject to that temper of fairness, and come under those principles of equal rights, which bind the parts of the community together, and make them one producing and one enjoying agency. Every assertion of settled superiority in persons, classes and races must be set aside, and the world in its physical, intellectual and spiritual wealth be left open to all. Thus history has treated men, and is more and more treating them, in their claims to consideration. This birthright of men is not to be denied or stolen; for they who steal it have nothing more than this same birthright to plead in extenuation, the combinations which look to the defense and extension of these original gifts are in order, and all combinations which carry them beyond the bounds of their own territory are another outbreak of anarchy.

The soundness of this assertion has been recently exemplified in the history of Pittsburg. Pittsburg is the center of an industry which has come, perhaps more than any other, under the domination of a few leading men. In the Homestead strike they succeeded in dealing a heavy blow to workmen in their efforts to secure something like a fair hold on production. A little inquiry into a community built up for a few and ordered by them discloses conditions quite at war with general well-being. Wages are kept down by the constant presence of the unemployed: the accidents of a dangerous occupation are left to fall 401 upon workmen; the health of the community suffers great neglect, the remonstrances of workmen are met with the response, If they do not like the method let them quit; and the general good order and comfort of citizens receive but little attention. Here is an object lesson in which work, sure, skilful and unflinching; wealth, eager, unscrupulous and unsympathetic, have divided the world between them; no right gained, no power lost. Men may make wealth under these conditions, withdrawing it from the fitting returns of labor, but they cannot, wise as they may be or generous as they may seem to be, restore that wealth to the community in a form in which it will subserve the same living purpose it might have subserved if it had never been withdrawn. The life of a community is achieved where its activity is most intense and constant. Failing in our service at these vital centers, no extraneous effort will cover our fault. We might as well draw sap from a tree and then pour it out on its roots.

We have now given three constitutional remedies for the want of employment. The first is a more equal distribution of the rewards of production, thus making the demand for products as extended and uniform as their production. The second is increased restraints, especially in connection with corporations, in the action of the leaders of industry, rendering them more amenable to the wants of the community to which they belong. The third, arising from the other two and supporting them, is more unity, more harmony between the several agents of production.

There was a report not long since in England of an industrial commission, which had given protracted attention to the irregular demand for labor. The remedies offered were chiefly palliative. It may be thought that this form of cure is all within our reach; that what is here offered as constitutional correctives are beyond our power. There is some truth in the feeling, and would be much truth in it, 402 were not the actions and the sentiments now enforced under urgent consideration for reasons of public welfare, not directly involved in unemployment. We cannot expect to remove so grave an evil as this, the wavering demand for labor, short of some important change in the organization of society. Society is a structure of so many and such delicate dependencies that its perfect action must include the general integrity of the current relations between men. Unwholesome results of frequent recurrence are the most direct proof of an unsound system. Palliatives may soften the evil but cannot overcome it. We should aim immediately to reduce the difficulty and ultimately to remove its causes.

QUESTIONS IN BUSINESS ADMINISTRATION. 403

BUSINESS ECONOMICS.

The Modern Industrial System.

1. Describe the three-field system of agriculture. Page 2.

2. What were the significant characteristics of a manorial society? Page 2.

3. What is said to justify the institution of private property? Page 4.

4. What is competition in modern industrial life? Page 4.

5. Why has the name “capitalistic production” been applied to modern industry? Page 6.

6. Compare the domestic system of industry with the factory system. Page 7.

7. What are the fundamental conditions of our economic life? Page 8.

The Agricultural Resources of the United States.