II
Capitalism, like every other social system, implies a class that rules and a class that is controlled. The ruling class—pace those political theorists who refuse to know that a ruling class exists—is composed of the capitalist employers. And how do the capitalist employers differ from any others of the masters that the world has known? Not merely in that they possess accumulations and pay wages in money. These are incidental facts. What is essential is that the capitalist employers, in so far as they are truly such, are controlled in all their active dealings by the principle of commercialization.
And commercialization is a psychical phenomenon. It is the substitution, in economic conduct, of a process of calculation for a process of feeling and will. The antithesis between the two processes has long been recognized by practical men, under the form of the contrast between "business" and "sentiment." That much maligned abstraction of the economists, "the economic man," is nothing but the capitalistic entrepreneur, reacting as he must to a competitive situation. What the orthodox economists failed to observe is that so-called "economic conduct" is class conduct. It is confined to the merchants and manufacturers of a competitive régime, whose daily life consists in the manipulation of exchange values. Employers who enjoy a monopoly, independent laborers, and even the typical wage earners of capitalism, may—indeed, must—permit their actions to be governed by other motives, as well as by that of profit. But the capitalist employer in a competitive trade is quickly taught by bitter experience that it is not his function to judge and choose. His business is to calculate; and the less non-economic principles of action interfere with his decisions, the more certain he is of success. All elements essential to his business present themselves in the guise of exchange values. All magnitudes, thus, are commensurate: you compare one with the other and choose the greater. Intelligence is required for the ascertaining of relative magnitudes. But the calculation once made, action is determined. Whether you are a man of strong will or weak will, of active feelings or passive, you do not hesitate when, in effect, a dollar is offered you in exchange for fifty cents.
It is cool intelligence, not dominant personality, that, under a purely capitalistic system, determines the distribution of the seats of power. The capitalist employers are our ruling class, but of all classes that have ever held power, they least resemble personal rulers. They calculate, but conditions beyond their control determine. And, to be most successful, they must divest their calculations of all elements that are irrelevant to profit making. If I am a capitalist employer, operating under conditions of keen competition, I buy no more readily from an honest man than from a rogue, provided the rogue can give good title to the things he sells. I hire men, Teutons or Slavs or Latins, white, black or yellow, with a sole view to their effectiveness for purposes of profit. I may have private opinions on religion or politics or morals; on the use of alcohol or opium or tobacco. But unless I can relate such manifestations of virtues or vices to the point of profit, I must suppress these opinions, in my active dealings with men. It follows, then, that in all that concerns the capitalist employer, in all that concerns his essential rulership, he is a respecter of the liberties of men.
No one, it is true, is a capitalist employer, pure and simple. In his social life, every one is likely to retain some of his age-old prejudices, and to seek to enforce age-old oppressions. As a business man, no one would be so foolish as to refuse to sit in the same board of directors with any other capable business man, Hellene or βάρβαρος. In his club life, on the other hand, many a business man affects a patrician exclusiveness. The most Christian business man does not refuse to deal freely with atheists, but very likely he refuses to admit them to his house. As a mine operator I should employ negroes as skilled or unskilled laborers, as foremen or bosses, if such employment were favorable to financial results. I might none the less, as a citizen, attempt to exclude them from public office. In business hours, the exercise of personal, political or religious oppression is penalized by technical inefficiency and pecuniary loss. Out of business hours, however, every man tends still to revert to the aboriginal state of manhood, narrow, illiberal, obstinate, oppressive.
Capitalism, furthermore, is far from having attained complete dominance, even in business affairs. Personal whim, as a co-determinant of action, is not obsolete, but merely obsolescent. The president of a great manufacturing corporation of the Middle West detests cigarettes, and has promulgated the rule that no men whose fingers are cigarette stained shall be added to his staff. Mr. Henry Ford intends to confine the benefits of employment in his mills to men who are "worthy," that is, to men who conform to certain standards of conduct that are good in their employer's eyes. There are employers who will not tolerate in their shops the presence of Socialists; others who have engaged in a crusade to exterminate "knockers." In all such cases of essentially personal discrimination an attempt is made, however, to justify it on abstract grounds of efficiency. Cigarette smokers, loose livers, Socialists and "knockers" are poor workmen, assert these employers. The assertion, we all know, is far from being universally true. In so far as it is false, however, it is a gracious falsehood in the light of the spirit of capitalism. It is a concession to the principle that pecuniary considerations alone justify an invasion of personal liberty.
Discrimination on personal grounds is, moreover, so exceptional as to count as amiable eccentricity. It is recognized as a handicap, which can be overcome only by striking superiority in other directions. Mr. Ford may watch over the private conduct of his employees, because he is able to pay much higher wages than anyone else. The manufacturing concern to which reference has been made may discriminate against able workmen with cigarette stained fingers, because it is efficiently organized, and enjoys a monopoly position. Such instances are necessarily rare, and are interesting only as a contrast to the businesses controlled strictly by the spirit of capitalism.
Personal oppression may still be exercised within business hours: but it represents an added cost, readily determined by scientific management. The machinery for its suppression is in motion; it cannot forever survive. There is no equally effective machinery for the elimination of the personal oppression that emerges out of business hours. In one's business calculations, one regards a social prejudice, even if it is directed against oneself, as irrelevant to practical action, so long as it finds expression only beyond the realm of business. A persistent slanderer of alien races finds no difficulty in raising a loan from a foreign banker, provided that the security he offers is good. No element of revenge in the relations between Parisian banks and German customers has appeared since the Zabern incident. Indirectly, however, the social influence of capitalistic toleration is very considerable. One who has an alien partner may continue to cherish the heroic myth of Anglo-Saxon superiority, but it will be through desire for consistency, not out of conviction. International financial forays upon weak nations, like the late Six Power loan, have the effect of weakening many a national prejudice. National, racial and religious prejudices retain their pristine vitality only where capitalism has not yet reached a high state of development. It is in Russia and Rumania, economically backward states, not in England and America, the most capitalistic of all, that the policy of expelling heterogeneous elements flourishes. It is in the Old South, still in a precapitalistic stage, that the social gulf between the races is widest. It is on the Pacific Coast, whose whole volume of capitalistic industry could be overmatched by that of a city like Newark, that detestation of an alien race rises to the rank of a political issue.