It has already been spoken of above that the processes of industry are bound in a comprehensive system of give and take, in such a manner that no considerable fraction of this industrial system functions independently of the rest. The industrial system at large may be conceived as a comprehensive machine process, the several sub-processes of which technologically inosculate and ramify in what may be conceived as a network of elements working in a moving equilibrium, none of which can go on at its full productive efficiency except in duly balanced correlation with all the rest. This characterisation will strictly apply only so far as the machine technology has taken over the various branches of industry, but it applies in a loose though by no means idle fashion also as regards those elements of the industrial system in which the machine technology has not yet become dominant. In so far as the industrial system is of this character it will also hold that the business management of any one branch or line or parcel of industries will have its effect on the rest, primarily and proximately on those other branches or lines with which the given parcel stands in immediate relations of give and take, through the market or more directly through technological correlation,—as, e. g., in the transportation system. Business management which affects a large section of this balanced system will necessarily have a wide-reaching effect on the working of the system at large. Such business control of industry, as has just been remarked above, is exercised with a view to pecuniary gain; but pecuniary gain in these premises comes from changes, and apprehended changes, in the efficiency of the various industrial processes that are touched by such control, rather than from the workday functioning of the several items of equipment involved. The changes which so bring gain to these larger businessmen may be favourable to the effective working of industry, but they may also be unfavourable; and the opportunities for gain which they afford the larger businessmen may be equally profitable whether the disturbance in question is favourable or unfavourable to industrial efficiency. The gains to be derived from such disturbance are proportioned to the magnitude of the disturbance rather than to its industrial productiveness. It should follow, of course, that if the machine technology should come so to dominate the industrial situation as to bind all industry in a rigorously comprehensive balanced process, the material fortunes of the community would come to rest unreservedly and in all details in the hands of those larger businessmen who hold the final pecuniary discretion.
In qualification of this broad proposition it is to be noted that, while the gains of the superior rank of businessmen accrue in the manner indicated,—by means of disturbances which may indifferently be favourable or unfavourable to industry,—yet in the long run it is necessarily true that the gains which so inure to the pecuniary magnates must be derived from the net product of industry and will in the long run be larger in the aggregate the more productive the community’s industry is. What makes business profitable to the businessmen is, after all, their usufruct of the community’s industrial efficiency. In the long run nothing can accrue as income to the pecuniary magnates more than the surplus product of industry above the subsistence of the industrial community at large. But so long as the magnates have not come to a working arrangement on this basis and “pooled their interests” the proposition as formulated above appears to be adequate to the facts,—that the gains of these larger businessmen are a function of the magnitude of the disturbances which they create rather than of their productive effect.
It should also follow, and so far as the above characterisation holds it does follow, that the current pecuniary organisation of industry vests the usufruct of the community’s industrial proficiency in the owners of the industrial equipment. Proximately this usufruct of the industrial community’s technological knowledge and working capacity vests in the detail owners of the equipment, but only proximately. At the further remove it vests only in the businessmen whose command of large means enables them to create and control those pecuniary conjunctures of industry that bring about changes in the market value and ownership of the equipment.
FOOTNOTES
[1] Cf. Jacques Loeb, Comparative Physiology of the Brain and Comparative Psychology, ch. i.
[2] Cf. W. James, Principles of Psychology, ch. xxiv and xxv, where, however, the difference between tropism and instinct is not kept well in hand,—the tropisms having at that date not been subjected to inquiry and definition as has been true since then; William McDougall, Introduction to Social Psychology, ch. i.
[3] Loeb, Comparative Physiology of the Brain, pp. 177–178.
[4] Cf. Graham Wallas, Human Nature in Politics, especially ch. i.
[5] Cf., e. g., James, Principles of Psychology, ch. xxiv; William McDougall, Introduction to Social Psychology, ch. iii.
[6] Loeb, Comparative Physiology of the Brain, especially ch. xiii.