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It will not probably be denied that the burden of proof is on those who affirm that our social condition is utterly diseased and in need of radical regeneration. My task at present, therefore, is entirely negative and critical: to examine the allegations of fact and the doctrines which are put forward to prove the correctness of the diagnosis and to Warrant the use of the remedies proposed.
When anyone asserts that the class of skilled and unskilled manual laborers of the United States is worse off now in respect to diet, clothing, lodgings, furniture, fuel, and lights; in respect to the age at which they can marry; the number of children they can provide for; the start in life which they can give to their children, and their chances of accumulating capital, than they ever have been at any former time, he makes a reckless assertion for which no facts have been offered in proof. Upon an appeal to facts, the contrary of this assertion would be clearly established. It suffices, therefore, to challenge those who are responsible for the assertion to make it good. .
Nine-tenths of the socialistic and semi-socialistic, and sentimental or ethical, suggestions by which we are overwhelmed come from failure to understand the phenomena of the industrial organization and its expansion. It controls us all because we are all in it. It creates the conditions of our existence, sets the limits of our social activity, regulates the bonds of our social relations, determines our conceptions of good and evil, suggests our life-philosophy, molds our inherited political institutions, and reforms the oldest and toughest customs, like marriage and property. I repeat that the turmoil of heterogeneous and antagonistic social whims and speculations in which we live is due to the failure to understand what the industrial organization is and its all-pervading control over human life, while the traditions of our school of philosophy lead us always to approach the industrial organization, not from the side of objective study, but from that of philosophical doctrine. Hence it is that we find that the method of measuring what we see happening by what are called ethical standards, and of proposing to attack the phenomena by methods thence deduced, is so popular.
The advance of a new country from the very simplest social coordination up to the highest organization is a most interesting and instructive chance to study the development of the organization. It has of course been attended all the way along by stricter subordination and higher discipline. All organization implies restriction of liberty. The gain of power is won by narrowing individual range. The methods of business in colonial days were loose and slack to an inconceivable degree. The movement of industry has been all the time toward promptitude, punctuality, and reliability. It has been attended all the way by lamentations about the good old times; about the decline of small industries; about the lost spirit of comradeship between employer and employee; about the narrowing of the interests of the workman; about his conversion into a machine or into a "ware," and about industrial war. These lamentations have all had reference to unquestionable phenomena attendant on advancing organization. In all occupations the same movement is discernible in the learned professions, in schools, in trade, commerce, and transportation. It is to go on faster than ever, now that the continent is filled up by the first superficial layer of population over its whole extent and the intensification of industry has begun. The great inventions both make the intension of the organization possible and make it inevitable, with all its consequences, whatever they may be. I must expect to be told here, according to the current fashions of thinking, that we ought to control the development of the organization. The first instinct of the modern man is to get a law passed to forbid or prevent what, in his wisdom, he disapproves. A thing which is inevitable, however, is one which we cannot control. We have to make up our minds to it, adjust ourselves to it, and sit down to live with it. Its inevitableness may be disputed, in which case we must reexamine it; but if our analysis is correct, when we reach what is inevitable we reach the end, and our regulations must apply to ourselves, not to the social facts.
Now the intensification of the social organization is what gives us greater social power. It is to it that we owe our increased comfort and abundance. We are none of us ready to sacrifice this. On the contrary, we want more of it. We would not return to the colonial simplicity and the colonial exiguity if we could. If not, then we must pay the price. Our life is bounded on every side by conditions. We can have this if we will agree to submit to that. In the case of industrial power and product the great condition is combination of force under discipline and strict coordination. Hence the wild language about wageslavery and capitalistic tyranny. . .
The movement of the industrial organization which has just been described has brought out a great demand for men capable of managing great enterprises. Such have been called "captains of industry." The analogy with military leaders suggested by this name is not misleading. The great leaders in the development of the industrial organization need those talents of executive and administrative skill, power to command, courage, and fortitude, which were formerly called for in military affairs and scarcely anywhere else. The industrial army is also as dependent on its captains as a military body is on its generals. One of the worst features of the existing system is that the employees have a constant risk in their employer. If he is not competent to manage the business with success, they suffer with him. Capital also is dependent on the skill of the captain of industry for the certainty and magnitude of its profits. Under these circumstances there has been a great demand for men having the requisite ability for this function. As the organization has advanced, with more impersonal bonds of coherence and wider scope of operations, the value of this functionary has rapidly increased. The possession of the requisite ability is a natural monopoly. Consequently, all the conditions have concurred to give to those who possessed this monopoly excessive and constantly advancing rates of remuneration.
Another social function of the first importance in an intense organization is the solution of those crises in the operation of it which are called the conjuncture of the market. It is through the market that the lines of relation run which preserve the system in harmonious and rhythmical operation. The conjuncture is the momentary sharper misadjustment of supply and demand which indicates that a redistribution of productive effort is called for. The industrial organization needs to be - insured against these conjunctures, which, if neglected, produce a crisis and catastrophe; and it needs that they shall be anticipated and guarded against as far as skill and foresight can do it. The rewards of this function for the bankers and capitalists who perform it are very great. The captains of industry and the capitalists who operate on the conjuncture, therefore, if they are successful, win, in these days, great fortunes in a short time. There are no earnings which are more legitimate or for which greater services are rendered to the whole industrial body. The popular notions about this matter really assume that all the wealth accumulated by these classes of persons would be here just the same if they had not existed. They are supposed to have appropriated it out of the common stock. This is so far from being true that, on the contrary, their own wealth would not be but for themselves; and besides that, millions more of wealth, many-fold greater than their own, scattered in the hands of thousands, would not exist but for them. .
But it is repeated until it has become a commonplace which people are afraid to question, that there is some social danger in the possession of large amounts of wealth by individuals. I ask, Why? I heard a lecture two years ago by a man who holds perhaps the first chair of political economy in the world. He said, among other things, that there was great danger in our day from great accumulations; that this danger ought to be met by taxation, and he referred to the fortune of the Rothschilds and to the great fortunes made in America to prove his point. He omitted, however, to state in what the danger consisted or to specify what harm has ever been done by the Rothschild fortunes or by the great fortunes accumulated in America. It seemed to me that the assertions he was making, and the measures he was recommending, ex-cathedra, were very serious to be thrown out so recklessly. It is hardly to be expected that novelists, popular magazinists, amateur economists, and politicians will be more responsible. It would be easy, however, to show what good is done by accumulations of capital in a few hands-that is, under close and direct management, permitting prompt and accurate application; also to tell what harm is done by loose and unfounded denunciations of any social component or any social group. In the recent debates on the income tax the assumption that great accumulations of wealth are socially harmful and ought to be broken down by taxation was treated as an axiom, and we had direct proof how dangerous it is to fit out the average politician with such unverifled and unverifiable dogmas as his warrant for his modes of handling the direful tool of taxation.
Great figures are set out as to the magnitude of certain fortunes and the proportionate amount of the national wealth held by a fraction of the population, and eloquent exclamation.points are set against them. If the figures were beyond criticism, what would they prove? Where is the rich man who is oppressing anybody? If there was one, the newspapers would ring with it. The facts about the accumulation of wealth do not constitute a plutocracy, as I will show below. Wealth, in itself considered, is only power, like steam, or electricity, or knowledge. The question of its good or ill turns on the question how it will be used. To prove any harm in aggregations of wealth it must be shown that great wealth is, as a rule, in the ordinary course of social affairs, put to a mischievous use. This cannot be shown beyond the very slightest degree, if at all. .
Although we cannot criticise democracy profitably, it may be said of it, with reference to our present subject, that up to this time democracy never has done anything, either in politics, social affairs, or industry, to prove its power to bless mankind. If we confine our attention to the United States, there are three difficulties with regard to its alleged achievements, and they all have the most serious bearing on the proposed democratization of industry.
The question, therefore, arises, if it is proposed to reorganize the social system on the principles of American democracy, whether the institutions of industrialism are to be retained. If so, all the virus of capitalism will be retained. It is forgotten, in many schemes of social reformation in which it is proposed to mix what we like with what we do not like, in order to extirpate the latter, that each must undergo a reaction from the other, and that what we like may be extirpated by what we do not like. We may find that instead of democratizing capitalism we have capitalized democracy-that is, have brought in plutocracy. Plutocracy is a political system in which the ruling force is wealth.
If this poor old world is as bad as they say, one more reflection may check the zeal of the headlong reformer. It is at any rate a tough old world. It has taken its trend and curvature and all its twists and tangles from a long course of formation. All its wry and crooked gnarls and knobs are therefore stiff and stubborn. If we puny men by our arts can do anything at all to straighten them, it will only be by modifying the tendencies of some of the forces at work, so that, after a sufficient time, their action may be changed a little and slowly the lines of movement may be modified. This effort, however, can at most be only slight, and it will take a long time. In the meantime spontaneous forces will be at work, compared with which our efforts are like those of a man trying to deflect a river, and these forces will have changed the whole problem before our interferences have time to make themselves felt. The great stream of time and earthly things will sweep on just the same in spite of us. It bears with it now all the errors and follies of the past, the wreckage of all the philosophies, the fragments of all the civilizations, the wisdom of all the abandoned ethical systems, the debris of all the institutions, and the penalties of all the mistakes. It is only in imagination that we stand by and look at and criticize it and plan to change it. Everyone of us is a child of his age and cannot get out of it. He is in the stream and is swept along with it. All his sciences and philosophy come to him out of it. therefore the tide will not be changed by us. It will swallow up both us and our experiments. It will absorb the efforts at change and take them into itself as new but trivial components, and the great movement of tradition and work will go on unchanged by our fads and schemes. The things which will change it are the great discoveries and inventions, the new reactions inside the social organism, and the changes in the earth itself on account of changes in the cosmical forces. These causes will make of it just what, in fidelity to them, it ought to be. The men will be carried along with it and be made by it. The utmost they can do by their cleverness will be to note and record their course as they are carried along, which is what we do now, and is that which leads us to the vain fancy that we can make or guide the movement. That is why it is the greatest folly of which a man can be capable, to sit down with a slate and pencil to plan out a new social world.