The business career in its public relations

by Albert Shaw

But things were not, in reality, going from bad to worse. The beginnings of a better order had to be based upon two things: first and foremost, the sheer creation of capital; second, the discipline and training of workers. In the first phases, the new modern business period had to be a period of production. There had got to be developed the instrumentalities for the creation of wealth. Until the industrial system had raised up its class of efficient workers and had created its great mass of capital for productive purposes, there could be no supply of cheap goods; and without an abundant and cheap output there could be no possible diffusion of economic benefits; in other words, no marked amelioration of the prevailing poverty.

It required some development of wealth to lift our modern peoples out of a poverty too grinding and too debasing for intellectual or moral progress. It is true that the factory towns, created as they have all been by modern industrial conditions during the past century, brought their distinctive evils. There was overcrowding in ill-built tenement houses; and long hours for women and children in the factories. Yet with these and many other disadvantages, the new industrial system made for discipline and for intelligence, and above all for a new kind of solidarity and for a sense of brotherhood among workers.

In due time the worst evils began to be mitigated, largely through the application of those very methods of organization which had characterized the new kind of industry itself. Thus for men who had applied steam power to manufacturing and had begun to build railroads, it was soon perceived to be a matter not only of sanitary and social service, but of pecuniary profit, to provide water supplies, public illumination, and other conveniences to the crowded city dwellers. Moreover, with the progress of industry and the development of railroads and steam navigation, production and trade took on an ever-increasing volume.

Then the world began to be less poor. There had been no rich men in the modern sense, and of course no such thing as capitalized corporations for production. The richest man in the United States at the time of his death, a little more than a hundred years ago, was George Washington, with his land and his slaves; and so in England and France there were no rich men in the modern sense—that is to say, no men who controlled great masses of productive capital. The men of wealth were those who held landed estates. The chief business of all countries was agriculture. The capitalistic system in industry and trade existed in its rudiments and in limited measure; but all its great achievements were yet to be wrought.

All modern business life, then, is the result of this growth of productive capital, and its application and constant reapplication to the production of wealth. It made its way by virtue of an intense individual initiative and a fierce competitive struggle. But unlovely as were these things, many of their phases were necessary at a certain stage. It was this fierce competition that compelled capital to pay the lowest possible wages in order to market cheap goods. But the same situation stimulated the use, one after another, of new labor-saving inventions in order to increase the per capita productivity. This process was attended by the higher efficiency of the worker and an increase in his earning capacity. As his position began to improve, the worker gained some hope and cheer; and he and his fellows began to organize, with the result that both wages and conditions of labor were steadily improved, and the workman began to attain approximately his share of benefits.

All this is a familiar story, although the depth of its significance is beyond the compass of any living human intelligence. It is easy to say in a glib sentence that the amount of wealth produced every few years nowadays is equal to all the accumulated wealth of all the centuries down to the early part of the nineteenth; but the social meaning of so great a change baffles all attempt at full comprehension.

The competitive system, which had been essential to the launching of this modern period of production, and which had given to it so much of its irresistible momentum, at length brought the economic organization to a point of development where, in some fields of production, it was no longer a benefit. The accumulation of capital had become so large,—and with new inventions the possible output had become so abundant, that it was well nigh impossible to trust to the blind working of demand and supply to regulate things in a beneficial way. It began to dawn on men's minds that a successful period of competitive economic life might lead to a period largely dominated by non-competitive and coöperative principles.

The superior possibilities of this newest régime, along with its many difficulties and perplexities, began to captivate the minds, not merely of theoretical students and onlookers, but, even more, of great masters of industry and productive capital. It began to be seen that in place of blind and fierce competition as a regulator of prices and as an equalizer of supply and demand, there might come to be gradually substituted some more consciously scientific methods of business administration and of the adjustment of production to the needs of the market.

Furthermore, with the development of business on the great scale, capital had become relatively abundant and cheap, while, on the other hand, labor was becoming relatively expensive and exacting. It was evident that the modern system of industry had passed through its earlier period to one of comparative maturity; and that the problem of wealth production was no longer so exclusively the pressing one, but that the problems of distribution were demanding more attention.

How to organize business life on a basis at once stable and efficient; how to see that capital was assured of a normal even though a declining percentage of dividends; while labor should be rewarded according to its capacity and desert,—were problems which took on public rather than private aspects. And when the business world began to face these problems with the consciousness that they were to be met, it had virtually passed over from the lower plane of moral and social responsibility to the higher plane where what the directing minds do or decide is not measured solely by immediate results in money-getting, but also by the test of larger social and public utilities.