The instinct of workmanship, and the state of industrial arts

by Thorstein Veblen

The source from which the new line of businessmen drew the accumulations of wealth by force of which they were enabled to do business is somewhat in dispute; but however interesting a question that may be in its own right, it does not particularly concern the present inquiry, and the like is true for the still more interesting and spectacular phenomena that marked the growth and decline of that early business era that ran its course within the life-history of the handicraft system.[117] Throughout that great period of business activity on the continent of Europe that gathered head in the sixteenth century and that closed in decay and collapse in the seventeenth, the principles (habits of thought) which underlay, authenticated and animated the business community and its pecuniary traffic continued to be much the same as animated the body of craftsmen in their pecuniary relations from the beginning of the era of handicraft to its close. Such, in its turn, was also the case with the later business era that set in with the great industrial advance of England in the Eighteenth Century, and such continued to be the case through the greater part of its life-history in the Nineteenth Century. Of the latterday and latest developments in business practice and principles the like cannot unhesitatingly be said, but this too is a matter that does not immediately concern the inquiry at this point. But the principles of the new and larger business were the same as had been slowly worked out under the system of petty trade. These business principles have proved to be very tenacious and stable, even in the face of apparently adverse technological circumstances, coming as they do out of a long and rigorous habituation of very wide sweep and having acquired the authenticity due to formal recognition in legal decisions and to the painstaking definition given them in the course of a protracted and exacting struggle against the institutional remnants of the feudal system. These circumstances attending the genesis and growth of modern business principles have led to their being formulated in a well-defined conceptual scheme of customary right and also to their embodiment in statutory form. To this, perhaps, they owe much of their tenacious resistance to latterday exigencies that have tended to modify or abrogate them. In their elements, of course, these business principles are even older than the era of handicraft, being substantially of the same nature as that sentimental impulse to self-aggrandisement that lies at the root of the predatory culture and so makes the substantial core of all pecuniary civilisations.

The distinguishing mark of any business era, as contrasted with the handicraft economy, is the supreme dominance of pecuniary principles, both as standards of efficiency and as canons of conduct. In such a businesslike community efficiency is rated in terms of pecuniary gain; and in so far as business principles rule, efficiency in any other direction than business traffic can claim recognition only in the measure in which it may be reduced to terms of pecuniary gain. Workmanship, therefore, comes to be rated in terms of salesmanship. And the canons of workmanship, and even of technological efficiency, fall more and more into pecuniary lines and allow pecuniary tests to decide on points of serviceability.

The instinct of workmanship is accordingly contaminated with ideals of self-aggrandisement and the canons of invidious emulation, so that even the serviceability of any given action or policy for the common good comes to be rated in terms of the pecuniary gain which such conduct will bring to its author. Any pecuniary strategist—“captain of industry”—who manages to engross appreciably more than an even share of the community’s wealth is therefore likely to be rated as a benefactor of the community at large and an exemplar of the social virtues; whereas the man who works and does not manage to divert something more from the aggregate product to his own use than what one man’s work may contribute to it is visited not only with dispraise for having fallen short of a decent measure of efficiency but also with moral reprobation for shiftlessness and wasted opportunities. So also, to the current common sense in a community trained to pecuniary rather than to workmanlike discrimination between articles of use, those articles which serve their material use in a conspicuously wasteful manner commend themselves as more serviceable, nobler and more beautiful than such goods as do not embody such a margin of waste.[118]

Under this system of business principles, in one way and another, the sense of workmanship is contaminated in all its ramifications by preconceptions of pecuniary merit and invidious distinction. But what is here immediately in question is its deflection into the channels of gainful business, together with the more obvious consequences that follow directly from the substitution of differential gain in the place of material serviceability as the end to which the instinctive propensity of workmanship so comes to drive men’s ideals and efforts under the discipline of the pecuniary culture.

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For the purposes of a genetic inquiry into this modern business situation and its bearing on the sense of workmanship and on the technological phenomena in which that instinct comes to an expression, it is necessary summarily to recall certain current facts pertinent to the case: (a) It is a competitive system; that is to say it is a system of pecuniary rivalry and contention which proceeds on stable institutions of property and contract, under conditions of peace and order. (b) It is a price system, i. e., the competition runs in terms of money, and the money unit is the standard measure of efficiency and achievement; hence competition and efficiency are subject to a rigorous accountancy in terms of a (putatively) stable money unit, which is in all business traffic assumed to be invariable. (c) Technologically this situation is dominated by the mechanical industries; so much so that even the arts of husbandry have latterly taken on much of the character of the mechanic arts. Hence a somewhat thoroughgoing standardisation of processes and products in mechanical terms; which for business purposes has with a fair degree of success been made convertible into terms of price, and so made subject to accountancy in terms of price. (d) Hence consumption is also standardised, proximately in mechanical terms of consumable products but finally, through the mechanism of the market, in terms of price, and like other price phenomena consumption also is competitively subject to and enforced by the like accountancy in terms of the money unit. (e) The typical industries, which set the pace for productive work, for competitive gains, and through the standard rates of gain ultimately also for competitive consumption, are industries carried on on a large scale; that is to say they are such as to require a large material equipment, a wide recourse to technological insight and proficiency, and a large draught on the material resources of the community. (f) This material equipment—industrial plant and natural resources—is held in private ownership, with negligible exceptions; the noteworthy exceptions to this rule, as e. g., harbours, highways, and the like, serving chiefly as accessory means of industry and so come in chiefly as a gratuitous supplement to the industrial equipment held in private ownership and used for competitive gain. (g) Technological knowledge and proficiency is in the main held and transmitted pervasively by the community at large, but it is also held in part—more obviously because exceptionally—by specially trained classes and individual workmen. Relatively little, in effect a negligible proportion, of this technological knowledge and skill is in any special sense held by the owners of the industrial equipment, more particularly not by the owners of the typical large-scale industries. That is to say, the technologically proficient workmen do not in the typical case own or control any appreciable proportion of the material equipment or of the natural resources to which this technological knowledge and skill applies and in the use of which it takes effect. (h) It results that the owners of this large material equipment, including the natural resources, have a discretionary control of the technological proficiency of the community at large, as well as of those special lines of insight and skill that are vested in these specially trained expert men in whom a specialised proficiency is added to the general proficiency that is diffused through the community at large. (i) In effect, therefore, the owners of the necessary material equipment own also the working capacity of the community and the usufruct of the state of the industrial arts. Except for their effective ownership of these elements of productive efficiency their ownership of the material equipment of industry would be of no effect. But the usufruct of this productive capacity of the community and its trained workmen vests in the owners of the material equipment only with the contingent qualification that if the community does this work it must be allowed a livelihood, whereby the gross returns that go in the first instance to these owners suffer abatement by that much. This required livelihood is adjusted to a conventional standard of living which, under the current circumstances of pecuniary emulation, is in great part—perhaps chiefly—a standardised schedule of conspicuous waste.

In what has just been said above, the view is implied that the owners of the material means, who are in great part also the employers of workmen and are sentimentally spoken of as “captains of industry,” have, in effect and commonly, but a relatively loose grasp of the technological facts, possibilities, and requirements of modern industry, and that by virtue of their business training they are able to make but a scant and uncertain use of such loose ideas as they have on these heads. To anyone imbued with the commonplaces of current economic theory it may seem that exception should dutifully be taken to this view, as being an understatement of the businessmen’s technological merits. In current theoretical formulations the businessman is discussed under the caption of “entrepreneur,” “undertaker,” etc., and his gains are spoken of as “wages of superintendence,” “wages of management,” and the like. He is conceived as an expert workman in charge of the works, a superior foreman of the shop, and his gains are accounted a remuneration for his creative contribution to the process of production, due to his superior insight and initiative in technological matters. This conception of the businessman and his relation to industry has stood over from an earlier period, the period of the small-scale industry of handicraft and petty trade, when it still was true that the owner-employer, in the typical case, kept a personal oversight of his workmen and their work, and so filled the place of master-workman as well as that of buyer and seller of materials and finished goods. And such a characterisation of the businessman and his work will still hold true in the modern situation in so far as he still is occupied with industry conducted on the same small scale and continues to fill the place of a foreman of the shop. But under current conditions—the conditions of the past half century—and more particularly under the conditions of that large-scale industry that is currently accounted the type of modern industry, the businessman has ceased to be foreman of the shop, and his surveillance of industry has ceased effectually to comprise a technological management of its details; and in corresponding measure this traditional theoretical conception of the businessman has ceased to apply.

The view here spoken for, that the modern businessman is necessarily out of effectual touch with the affairs of technology as such and incompetent to exercise an effectual surveillance of the processes of industry, is not a matter of bias or of vague opinion; it has in fact become a matter of statistical demonstration. Even a cursory survey of the current achievements of these great modern industries as managed by businessmen, taken in contrast with the opportunities offered them, should convince anyone of the technological unfitness of this business management of industry. Indeed, the captains of industry have themselves latterly begun to recognise their own inefficiency in this respect, and even to appreciate that a businessman’s management of industrial processes is not good even for the business purpose—the net pecuniary gain. And it is all the more ineffectual for the purposes of workmanship as distinct from the businessmen’s gains. So, a professional class of “efficiency engineers” is coming into action, whose duty it is to take invoice of the preventable wastes and inefficiencies due to the business management of industry and to present the case in such concrete and obvious terms of price and percentage as the businessmen in charge will be able to comprehend. These men, in a way, take over the functions assigned in economic theory to the “entrepreneur;” in that they are men of general technological training and insight, who go into their inquiry on the ground of workmanship, take their data in terms of workmanship and convert them into terms of business expediency, somewhat to the same purpose as the like work of conversion was done by the owner-employers under that small-scale system of industrial enterprise from which the current theoretical concept of the “entrepreneur” was derived. It is then the duty of these efficiency engineers to present the results so obtained, for the conviction and guidance of the businessmen in charge, who thereupon, if their business training has left them enough of a sense of workmanship, will give permissive instructions to the expert workmen in direct charge of the industrial processes to put these statistically indicated changes into effect. It is the testimony of these efficiency engineers that relatively few pecuniary captains in command of industrial enterprises have a sufficient comprehension of the technological facts to understand and accept the findings of the technological experts who so argue for the elimination of preventable wastes, even when the issue is presented statistically in terms of price. These men go about their work of ascertaining the efficiency, actual and potential, of any given plant, process, working force, or parcel of material resources, by the methods of precise physical measurement familiar to mechanical engineers, and as an outcome they have no hesitation in speaking of preventable wastes amounting to ten, twenty, fifty, or even ninety per-cent, in the common run of American industries.[119]

The work of the efficiency engineers being always done in the service of business and with a view to business expediency, their findings bear directly on the business exigencies of the case alone, and give definitive results only in terms of price and profits. How much greater the ascertained discrepancies in the case would appear if these findings could be reduced to terms of serviceability to the community at large, there is no means of forming a secure conjecture. That the discrepancy would in such case prove to be appreciably greater than that shown by the price rating is not doubtful. Under such an appraisal, where the given industrial enterprises would be brought to the test of net serviceability to the community instead of the net gain of the interested businessmen, many industrial enterprises would doubtless show a waste of appreciably more than one hundred per cent of their current output, being rather disserviceable to the community’s material welfare than otherwise.

That the business community is so permeated with incapacity and lack of insight in technological matters is doubtless due proximately to the fact that their attention is habitually directed to the pecuniary issue of industrial enterprise; but more fundamentally and unavoidably it is due to the large volume and intricate complications of the current technological scheme, which will not permit any man to become a competent specialist in an alien and exacting field of endeavour, such as business enterprise, and still acquire and maintain an effectual working acquaintance with the state of the industrial arts. The current technological scheme cannot be mastered as a matter of commonplace information or a by-occupation incidental to another pursuit. The same advance to a large and exhaustive technological system, in the machine industry, that has thrown the direction of industrial affairs into the hands of men primarily occupied with pecuniary management has also made it impossible for men so circumstanced at all adequately to exercise the oversight and direction of industry thereby required at their hands. And the ancient principles of self-help and pecuniary gain by virtue of which these men are held to their work of business enterprise make it also impossible for them adequately to surrender the discretionary care of the industrial processes to other hands or to permit the management of industry to proceed on other than these same business principles.