I
There is no such thing as capitalism, say the conservatives. It is an empty sound, a curse in the name of a false god, directed by the revolutionaries against the world of things as they are, as they always have been and always shall be. Capitalism is a reality, say the radicals. It is the appropriate designation of the current system—a vulgar, hideous system, a brute mechanism set in motion by the energy of blind greed, a mechanism through which human values and human lives are thrust, to emerge smudged and flat and dead. The soul of capitalism? Pernicious paradox!
Capitalism is no less a reality than was feudalism. The capitalist employer is the most prominent figure in the modern state, just as the knight was the most prominent figure in the mediæval. But the order of knights did not of itself constitute feudalism: equally characteristic was the class of serfs. In a fundamental sense the system consisted in the mutual relation between knight and serf. Capitalism, in like manner, implies a class of employers and a reciprocal and conditioning class of workers, but as a system it consists in the mutual relation of these classes. The conscious existence of the members of both classes is shaped, or at least colored, by the capitalistic relation. Not in the same way, however; for capitalism induces one set of reactions in the minds of the employing class, and another set of reactions in the minds of the employed. But these diverse reactions are equally the product of capitalism, its inevitable concomitants, its psychical essence.
Capitalism is, to be sure, not the whole of modern life; nor was feudalism the whole of the life of the Middle Ages. In the feudal state there were classes that were not, strictly speaking, under feudal law. Such were the clergy, the merchants and artisans of the towns, the freemen of the villages. Moreover, there were individuals who rose superior to the system, such as the great feudatories, who often assumed a regal freedom from the narrow feudal rules. There were also elements that proved incapable of assimilation, aliens, outlaws, mendicants. But the popular mind, with its inveterate bent towards order and uniformity, generalized the relation beyond the range of its proper application. To the worldly bishop, even the Pope was a great feudatory; to the beggar's apprentice, his master was a species of knight. So at the present time there are numerous elements that are incongruous with capitalism. The independent worker and the small merchant, the professional classes, the artists and the politicians, are not properly governed by capitalistic rules. The great magnates of the industrial world have won for themselves a measure of immunity from the laws that govern the conduct of the typical capitalist-employer. But the predominance of the capitalistic system is evidenced by the fact that all these non-assimilable forms are being translated into capitalistic terms. A farm is no longer a "holding," it is an "investment" or a "job." A political magnate is a "boss" and his supporters are "workers"; the political machine itself is "invested capital." The buildings of church or school are, with increasing frequency, described as "plant." We are beginning to hear of "efficiency control" of college curricula; of the "unit costs" of saving souls. Our most exalted dignitary is "the people's hired man"; and the late King Humbert of Italy was wont to speak of assassination as a "trade risk."
With due allowance for the whimsical quality of some of the instances cited above, we must yet admit that they indicate a general tendency to translate all current experience into capitalistic terms. Such instances are but indications of the collective conviction that capitalism is the most significant fact in modern life. Why then do our conservatives insist upon rejecting the term, upon denying the very content of the concept? Chiefly because those who have depicted capitalism have sketched it in black crayon, instead of painting it in the rosy hues of romance.
To speak of capitalism as endowed with a soul, is indeed a paradox. But the conception of soul is itself paradoxical. The man of science dispenses with it in so far as he can. All that compels us rationally to posit the existence of soul, is its works, good and evil. The hypothesis of a human soul has been forced upon us by the fact that there is in the action of man an element that transcends the needs and purposes of the body, an element that we often see growing into such commanding importance that it reduces the body to the rank of mere instrument. Capitalism, too, appears to subserve purposes that transcend its proper ends. To what end, in profit-making, is the destruction of personality, the corruption of the sentiment of humanity, that the Socialists attribute to capitalism? To the Socialists themselves capitalism appears endowed with a soul, to whose purposes capital's immediate processes are merely instrumental. Only, the soul is one of unmixed evil.
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.