The transition from the original predatory phase of the pecuniary culture to the succeeding commercial phase signifies the emergence of a middle class in such force as presently to recast the working arrangements of the cultural scheme and make peaceable business (gainful traffic) the ruling interest of the community. With the same movement emerges a situation which is progressively more favourable to the intellectual animus required for workmanship and an advance in technology. The state of the industrial arts advances, and with its advance the accumulation of wealth is accelerated, the gainfulness of business traffic increases, and the middle (business) class grows along with it. It is in the conscious interest of this class to further the gainfulness of industry, and as this end is correlated with the productiveness of industry it is also, though less directly, correlated with improvements in technology.
With the transition from a naïvely predatory scheme to a commercial one, the “competitive system” takes the place of the coercive methods previously employed, and pecuniary gain becomes the incentive to industry. At least superficially, or ephemerally, the workman’s income under this pecuniary régime is in some proportion to his product. Hence there results a voluntary application to steady work and an inclination to find and to employ improvements in the methods and appliances of industry. At the same time commercial conceptions come progressively to supplant conceptions of status and personal consequence as the primary and most familiar among the habits of thought entailed by the routine of daily life. This will be true especially for the common man, as contrasted with the aristocratic classes, although it is not to be overlooked that the standards of propriety imposed on the community by the better classes will have a considerably corrective effect on the frame of mind of the common man in this respect as in others, and so will act to maintain an effective currency of predatory ideals and preconceptions after the economic situation at large has taken on a good deal of a commercial complexion. The accountancy of price and ownership throws personal prestige and consequence notably less into the foreground than does the rating in terms of prowess and gentle birth that characterises the predatory scheme of life. And in proportion as such pecuniary accountancy comes to pervade men’s relations, correspondingly impersonal terms of rating and appreciation will make their way also throughout men’s habitual apprehension of external facts, giving the whole an increasingly impersonal complexion. So far as this effect is had, the facts of observation will lend themselves with correspondingly increased facility and effect to the purposes of technology. So that the commercial phase of culture should be favourable to advance in the industrial arts, at least as regards the immediate incidence of its discipline.
CHAPTER V
Ownership and the Competitive System
I.Peaceable Ownership
The pecuniary system of social organisation that so results has grave and lasting consequences for the welfare of society. It brings class divergence of material interests, class prerogative and differential hardship, and an accentuated class disparity in the consumption of goods, involving a very extensive resort to the conspicuous waste of goods and services as an evidence of wealth. These consequences of the pecuniary economy may be interesting enough in themselves, even to the theoretician, but they need not be pursued here except in so far as they have an appreciable bearing on the community’s workmanlike efficiency and the further development of technology.[110] But the more direct and immediate technological consequences of this move from a predatory to a peaceable or quasi-peaceable economic system are also sufficiently grave—partly favourable to workmanship and partly otherwise—and these it is necessary for the purposes of this inquiry to follow up in some detail.
The interest and attention of the two typical pecuniary classes between whom the affairs of industry now come to lie, presently part company and enter on a course of progressive differentiation along two divergent lines. The workmen, labourers, operatives, technologists,—whatever term may best designate that general category of human material through which the community’s technological proficiency functions directly to an industrial effect,—these have to do with the work, whereby they get their livelihood, and their interest as well as the discipline of their workday life converges, in effect on a technologically competent apprehension of material facts. In this respect the free workmen under this peaceable régime of property are very differently placed from the servile workman of the predatory régime of mastery and servitude. The latter has little if any interest in the efficiency of the industrial processes in which he is engaged, less so the more widely his status differs from that of the free workman. His case is analogous to that of the tenant at will, who has nothing to gain from permanent improvement of the land which he cultivates. Whereas the free workman is, at least immediately and transiently, and particularly in his own current apprehension of the matter, quite intimately dependent on his own technological proficiency and vitally interested in any available technological expedient that promises to heighten his efficiency. Such is particularly the case during the earlier phases of the régime of peaceable ownership, so long as the free workman is in the typical case working at his own discretion and disposes of his own product in a limited market. And such continues to be the case, on the whole, under the wage system so long as the large-scale production and investment have not put an end to the employer’s intimate supervision of his employés. Indeed, under the driving exigencies of the competitive wage system the workmen are somewhat strenuously held to such a workmanlike apprehension of things, even though they may no longer have the same intimate concern in their own current efficiency as in the earlier days of handicraft. The severe pressure of competitive wages and large organisation, it might well be thought, should logically offset the slighter attraction which work as such has for the hired workman as contrasted with the man occupied with his own work. The effect of this régime of free labour should logically be, as it apparently has in great part been, a close and progressively searching recourse to the logic of matter-of-fact in all the workmen’s habitual thinking, and in all their outlook on matters of interest, whether in industry or in the other concerns of life that may conceivably be of more capital interest.
On the other hand the owners under this régime of peaceable ownership have to do with the pecuniary management, the gainful manipulation of property. In the transitional beginnings of this system of peaceable ownership and free workmen the owners are in the typical case owners of land or similar natural resources; but in due course of time there arises a class of owners holding property in the material equipment of industry and deriving their gains and livelihood from a businesslike management of this property, at the same time that the landlords also fall into more businesslike relations with their tenants on the one hand and with the industrial community that supplies their wants on the other hand. These owners, investors, masters, employers, undertakers, businessmen, have to do with the negotiation of advantageous bargains; it is by bargaining that their discretionary control of property takes effect, and in one way or another their attention centres on the quest of profits. The training afforded by these occupations and requisite to their effectual pursuit runs in terms of pecuniary management and insight, pecuniary gain, price, price-cost, price-profit and price-loss; and these men are held to an ever more exacting recourse to the logic of the price system, and so are trained to the apprehension of men and things in terms which count toward a gainful margin on investments and business undertakings; that is to say in terms of the self-regarding propensities and sentiments comprised in human nature, and perhaps especially in terms of human infirmity.
This last point in the characterisation may seem unwarranted, and may even strike unreflecting persons as derogatory. It is, of course, not so intended; and any degree of reflection will bring out its simple bearing on the facts of business. As is well and obviously known, the sole end of business as such is pecuniary gain, gain in terms of price. It need not be held, as has sometimes been argued, that one businessman’s gain is necessarily another’s loss; although that principle was once taken for granted, as the foundation of the Mercantilist policies of Europe, and is still acted on uncritically by the generality of statesmen. But it is at any rate true, because it is contained in the terms employed, that a successful business negotiation is more successful in proportion as the party of the second part is less competent to take care of his own pecuniary interest, whether through native or acquired incapacity for pecuniary discretion or from pecuniary inability to stand out for such terms as he otherwise might conceivably exact. A shrewd businessman can, notoriously, negotiate advantageous terms with an inexperienced minor or a necessitous customer or employé. Pecuniary gain is a differential gain and business is a negotiation of such differential gains; not necessarily a differential of one businessman as against or at the cost of another; but more commonly, and more typical of the competitive system, it is a differential as between the businessman’s outlay and his returns,—that is to say, as between the businessman and the unbusinesslike generality of persons with whom directly or indirectly he deals as customers, employés, and the like. For the purposes of such a negotiation of differentials the weakness of one party (in the pecuniary respect) is as much to the point as the strength of the other,—the two being substantially the same fact. The discipline of the business occupations should accordingly run to the habitual rating of men, things and affairs in terms of emulative human nature and of precautionary wisdom in respect of pecuniary expediency. Instead of workmanlike or technological insight, this discipline conduces to worldly wisdom.[111]
But the disparity between the discipline of the business occupations and that of industry is by no means so sheer as this contrast in their main characteristics would imply, nor do the men engaged in these two divergent lines of work differ so widely in their habitual outlook on affairs or their insight into facts. Such is particularly the case in the earlier and simpler phases of the régime, before the specialisation of occupations had gone so far as to divide the working community in any consistent fashion into the two contrasted classes of businessmen on the one side and workmen on the other. As this modern régime of peaceable ownership and pecuniary organisation has advanced and its peculiar features of organisation and workmanship have reached a sharper definition, the division between the two contrasted kinds of endeavour—business and workmanship—has grown wider and the disparity in the distinctive range of habits engendered by each has grown more marked. So that something of a marked and pervading contrast should logically be found between the habitual attitude taken by members of the business community on the one hand and that of the body of workmen on the other hand; and this contrast should, logically, go on increasing with each successive move in advance along this line of specialisation of occupations and “division of labour.” Some such result has apparently followed; but neither has the specialisation been complete and consistent, nor has the resulting differentiation in respect of their intellectual and spiritual attitude set the two contrasted classes of persons apart in so definitive a fashion as a first and elementary consideration of the causes at work might lead one to infer.
Businessmen have to do with industry; more or less remotely perhaps, but often at near hand, for it is out of industry that their business gains come; and they are also subject to the routine of living imposed by the use of the particular range of industrial appliances and processes available for that use. The workmen on the other hand have also to do with pecuniary matters, for they are forever in contact with the market in one way and another, and it is in pecuniary terms that the livelihood comes to them for which they are set to work. And both businessmen and workmen enter on their two divergent lines of training with much the same endowment of propensities and aptitudes. Yet it appears that the training in pecuniary wisdom that makes up the career of the typical businessman is after all of little avail in the way of technological insight or efficiency, as witness the ubiquitous mismanagement of industry at the hands of businessmen who are, presumably, doing their best to enhance the efficiency of the industries under their control with a view to the largest net gain from the output.[112] If the “efficiency engineers” are to be credited, it is probably within the mark to say that the net aggregate gains from industry fall short of what they might be by some fifty per cent, owing to the trained inability of the businessmen in control to appreciate and give effect to the visible technological requirements of the industries from which they draw their gains. To appreciate the kind and degree of this commonplace mismanagement of industry it is only necessary to contrast the facility, circumspection, shrewd strategy and close economy shown by these same businessmen in the organisation and management of their pecuniary, fiscal and monetary operations, as against the waste of time, labour and materials that abounds in the industries under their control. But for the workmen likewise, their daily work and their insight into its requirements and possibilities are, by more than half, a “business proposition,” a proposition in the pecuniary calculus of how to get the most in price for the least return in weight and tale.