CHAPTER XIII
The Secular Trend

AS has been explained in earlier chapters, and as will readily be seen by any intelligent person who takes an interest in these matters, secular life among the peoples of Christendom is governed in recent times by three several systems of use and wont, sovereign action-patterns induced by the run of past habituation:—the mechanical system of industry ; the price-system ; and the national establishment. The existing industrial system is dominated by the technology of physics and chemistry, and is a product of recent times, a profoundly modified derivative of the handicraft industry. The current price-system is dominated by absentee ownership and is also a greatly altered outgrowth of the handicraft industry and its petty trade; its continued growth in recent times has, in effect, changed it into a credit-price system. The nation, considered as a habit of thought, is a residual form of the predatory dynastic State of early modern times, superficially altered by a suffusion of democratic and parliamentary institutions in recent times.

By continued growth of use and wont in recent times the price-system has in effect become a credit-price system; and driven by the same growth the system of ownership has to all intents and purposes become a system of absentee ownership, in all that concerns any effectual initiative and authority in the conduct of economic affairs. The effectual control of the economic situation, in business, industry, and civil life, rests on the control of credit. Therefore the effectual exercise of initiative, discretion, and authority is perforce vested in those massive aggregations of absentee ownership that make up the Interests. Within certain wide limits of tolerance, therefore, the rest of the community, the industrial system and the underlying population, are at the disposal of the Interests, as ways and means of business, to be managed in a temperate spirit of usufruct for the continued and cumulative benefit of the major Interests and their absentee owners. The nation, both as a habit of thought and as a governmental going concern, comes into the case, in effect and in the main, as an auxiliary agency the function of which is to safeguard, extend and facilitate this work of surveillance and usufruct which has by drift of circumstances become incumbent on the Interests.

Such appears to be the state of the case, in the large and in so far as the forces engaged have yet fallen into definite lines and groupings, in those respects which come in question here.

It will be seen, accordingly, that the current economic situation is drawn on lines of a two-sided division of its forces or elements :—the Interests ; and the underlying population. Such is the situation, typically, in the case of America; and such is also the state of things in the other civilised countries, in much the same measure in which they are civilised according to the same pattern. The Interests, properly speaking, are made up of those blocks of absentee ownership which are sufficiently massive to come into the counsels of the One Big Union of the Interests. Associated with these in their work, as copartners, auxiliaries, subsidiaries, extensions, purveyors of traffic, are the minor Interests and the business community at large; primarily the banking community. The work which they have in hand is to do business for a profit by use of the industrial system and the underlying population. For the purposes of business the underlying population has two uses:—as industrial man-power; and as ultimate consumers,—that is to say as ultimate purchasers, since the business interest does not extend beyond the ultimate sale of the goods.

To do a profitable business one should buy cheap and sell dear, as all reasonable men know. In its dealings with the underlying population the business community buys their man-power and sells them their livelihood. So it is incumbent on the business men in the case to buy the industrial man-power as cheap as may be, and to sell the means of living to the ultimate consumer as dear as may be. All of which is a platitudinous matter of course. The source of profits is the margin of sales-price over production-cost (or purchase-cost). In earlier chapters it has already been explained how this margin is widened by raising the level of sales-prices; both by efficient salesmanship in the merchandising trades and by a continued expansion of the outstanding volume of purchasing-power through a continued creation of credits at the hands of the investment bankers and similar credit-establishments. In the same connection something has also been said of the service which the agencies of government render, in the way of enhancing prices by contributing to the security of this expanded volume of credit and so helping to make it indefinitely expansible without risk.

On the side of costs the underlying population comes into the case as being the industrial man-power that is to be bought, including the skill and technical knowledge that makes up the state of the industrial arts. On this side this population comes in as vendors of the ways and means of production. For the present purpose they may be classed loosely under two heads :—the industrial workmen; and the farmers. Also loosely and with a negligible fringe of exceptions it may be said that both of these groups of industrial man-power come into the negotiations on a businesslike footing, governed by the principles of the price-system and aiming to sell as dear as may be.

In these endeavours to sell dear the farmers have hitherto met with no measurable success, apparently for want of effectual collusion. In effect and in the common run the farm population and its work and livelihood are a species of natural resources which the business community holds in usufruct, in the nature of inert materials exposed to the drift of circumstances over which they have no control, somewhat after the analogy of bacteria employed in fermentation.

The case of the industrial man-power in the narrower sense is somewhat different, the case of the specialised workman engaged in the mechanical industries. In great part, and more or less effectually, these have been drawn together in craft-unions to do their bargaining on a collusive plan for the more profitable sale of their manpower. In the typical case these unions are businesslike coalitions endeavoring to drive a bargain and establish a vested interest, governed by the standard aims and methods of the price-system.¹ The unions habitually employ the standard methods of the merchandising business, endeavoring to sell their vendible output at the best price obtainable; their chief recourse in these negotiations being a limitation of the supply, a strategic withdrawal of efficiency by means of strikes, union rules, apprenticeship requirements, and devices for consuming time unproduc-tively. The nature of the business does not admit the use of sales-publicity in this traffic in anything like the same measure in which that expedient is employed in ordinary merchandising. Hence the strategic stress of their salesmanship falls all the more insistently and effectually on the limitation of the vendible supply ; a running balance of unemployment and orderly inefficiency under union rules, rising promptly to the proportions of an embargo on productive work in any emergency. The aim being a scarcity-price for work done, quite in the spirit of business-as-usual.

Meantime the continued flow of credits and capitalisations continues to expand the volume of purchasing-power in the market, and so continues to enhance the price-cost of living for the workmen, along with the rising level of general prices. Which provokes the organised workmen to a more assiduous bargaining for higher wages; which calls for a more exacting insistence on mediocrity and obstruction in the day’s work and a more instant mobilisation in the way of strikes. On sound business principles, the organised workmen’s remedy for scarcity of livelihood is a persistent curtailment of output.

As a secondary effect—which may presently, in the course of further habituation, turn out to be its gravest consequence—this struggle for existence by way of sabotage fosters a rising tide of hostility and distrust between the parties to the bargain. There would seem to be in prospect a progressively settled and malevolent hostility on the part of the embattled workmen over against their employers and the absentee owners for whose ease and gain they are employed ; which should logically be counted on to rise in due course to that pitch of vivacity where it will stick at nothing. But in the mean time the logical recourse of the workmen in their negotiations for wages and livelihood, according to the logic of sound business under the price-system, is a strategic withdrawal of efficiency, of a passive sort, increasing in frequency and amplitude to keep pace with the increasing urgency of their case.

And the urgency of their case is increasing progressively, in the nature of things. The increasing stability of the credit system, such as it has attained during the past decade, enables the price-level to rise progressively, and thereby progressively to increase the price-cost of living. At the same time the business community, the absentee owners with whom the workmen are carrying on their acrimonious argument about wages and livelihood, are in a progressively stronger position and a progressively more determined frame of mind. They have learned to act in concert and have also learned that, in a business way, the industrial man-power is their common enemy, against which it is for them to make common cause, within reason,—that is to say within the bounds of profitable business.

While the business men are endeavoring to enhance the reasonable gains of business by expanding the volume of capital and lifting the level of prices, and so widening the margin of sales-prices over production-costs, the organised workmen are forever cutting in on the same margin by pushing up the labor-cost. And on this employers’ side of the argument, as well as on the side of the embattled workmen, the standard and reasonable recourse by which to bring their opponents to reason is a strategic use of unemployment, a conscientious withdrawal of efficiency, carried to such a point as will bring an effectual degree of privation on the ultimate consumers, including the workmen, without reducing the net aggregate sales-price of the decreased output when sold at the resulting enhanced price per unit. In all these negotiations there is, on the employers’ side also, relatively little effectual use to be made of salesmanlike publicity. The ordinary and effectual means employed is privation brought on by unemployment. So also, in these endeavors to economise on labor-cost as well as in the flotation of credits, capitalisations, and overhead charges, a more intelligent concert of action and a wider solidarity of interests on the side of the employers and owners is of great service; in that it enables the business of strategic unemployment to be carried out with a wider sweep and with increased confidence and security.²

At this point the national establishment, federal and local, comes into the case, by way of constituted authority exercising surveillance and punitive powers. In effect and ordinarily the intervention of governmental agencies in these negotiations between the owners and the workmen redounds to the benefit of the former. Such is necessarily the case in the nature of things. In the nature of things, as things go in any democratic community, these governmental agencies are administered by a businesslike personnel, imbued with the habitual bias of business principles,—the principles of ownership; that is to say, under current conditions, the rights, powers, and immunities of absentee ownership. In the nature of the case, the official personnel is drawn from the business community,—lawyers, bankers, merchants, contractors, etc.; in the main and ordinarily drawn from the country towns and the trading-centers ; “practical men,” whose preconceptions and convictions are such as will necessarily emerge from continued and successful experience in the conduct of business of that character. Lawyers and magistrates who have proved their fitness by their successful conduct of administrative duties and litigations turning on the legal niceties of ownership, and in whom the logic of ownership has become second nature.³

In the negotiations between owners and workmen there is little use for the ordinary blandishments of salesmanship. The two parties to the quarrel—for it is after all a quarrel—have learned to know what to count on. And the bargaining between them therefore settles down without much circumlocution into a competitive use of tinemployment, privation, restriction of work and output, strikes, shut-downs and lockouts, espionage, pickets, and similar manœuvres of mutual derangement, with a large recourse to menacing language and threats of mutual sabotage. The colloquial word for it is ‘labor troubles.” The business relations between the two parties are of the nature of hostilities, suspended or active, conducted in terms of mutual sabotage; which will on occasion shift from the footing of such obstruction and disallowance as is wholly within the law and custom of business, from the footing of legitimate sabotage in the way of passive resistance and withholding of efficiency, to that illegitimate phase of sabotage that runs into violent offenses against persons and property. The negotiations have habitually and increasingly taken on this character of a businesslike dissension. So much so that they have come to be spoken of habitually in terms of conflict, armed forces, and warlike strategy. It is a conflict of hostile forces which is conducted on the avowed strategic principle that either party stands to gain at the cost of the other.⁴

It is of the essence of the new order in business that the tactical units now run larger than before, in larger parcels and with a greater degree of compactness and solidarity in action. In industrial business this is exemplified in the growth of corporations and in the tactical grouping of corporations under the surveillance of those massive Interests that govern the pitch and volume of business activity. In effect, as tactical units in the conduct of industrial business, the corporations are associations of absentee owners who are working together on a joint plan in a joint pursuit of gain. So that in effect such a corporation is a method of collusion and concerted action for the joint conduct of transactions designed to benefit the allied and associated owners at the cost of any whom it may concern. In effect, therefore, the joint-stock corporation is a conspiracy of owners ; and as such it transgresses that principle of individual self-help that underlies the system of Natural Rights ; in which democratic institutions as well as the powers and immunities of ownership are grounded. But the exigencies of business enterprise in recent times, as conditioned by the wide-reaching articulations of trade and industry, call for such large tactical units as will necessarily be composite in point of personnel and collusive in point of ownership.

And the official personnel of civil government, the constituted authorities who have had the making and surveillance of precedents and statutory regulations touching these matters in recent times, have necessarily been persons of businesslike antecedents, imbued with an inveterate businesslike bias, governed by business principles, if not also by business interests. Business exigencies, borne along on this habitual bent of the legislators and judiciary, and enforced by the workday needs of the substantial citizens, have decided that such collusion, conspiracy, or coalition as takes the form of (absentee) ownership is right and good, to be safeguarded in all the powers and immunities of ownership by the constituted authorities at any cost to the community at large. So that any strategic withdrawal of efficiency incident to the conduct of business by such an organisation of collusive ownership, any restriction of output to what the traffic will bear, any unemployment of equipment and man-power with a view to increased earnings on capital, has the countenance of the constituted authorities and will be defended by a suitable use of force in case of need.

It is otherwise, in a degree, with the collusive organisations of workmen. Being not grounded in ownership, their legal right of conspiracy in restraint of trade is doubtful at the best. It has also not the countenance of the substantial citizens ⁵ or of the minor business men, of the pulpit, or the public press. The effectual limits on strikes are somewhat narrower than on lockouts. Boycotts in support of strikes are illegal, and the more effectual methods of picketing are disallowed by courts and police, except in negligible cases. Since the striking workmen are not owners of the plant that is to be laid idle by their striking, they are excluded from the premises, and they are therefore unable to watch over the unemployment which they have precipitated, and to see to its unbroken continuance. This is a grave disability. The owners are more fortunate in this respect. The power to dispose of matters in the conduct of industry commonly attaches to ownership, and is not legally to be claimed on other grounds. The employer-owners are in a much better position to take care of any desired unemployment, as in case of a lockout. In the same connection it should be recalled that effectual collusion and concert of action is more a matter of routine and takes effect in a more compact and complete fashion on the side of the owners, who are already organised as a corporate unit. The block of ownership embodied in any ordinary business corporation of the larger sort covers a larger segment of the industrial processes involved in any given strike or lockout than does the body of industrial man-power with which the corporation is contending. This will more particularly be the case where and in so far as the old-fashioned craft-unions have not been displaced by an industrial union. It comes to a conflict between a corporate whole on the side of the owners against a fragment of the working forces on the side of the workmen.

So again, in any eventual resort to force, the workmen are under a handicap as against the owners,—a handicap due to law and precedent as well as to the businesslike predilections that are habitual among the personnel of the constituted authorities. Labor troubles are disorders of business, and business is a matter of ownership, while work and livelihood are not. The presumption, in law and custom and official predilection, is against the use of force or the possession or disposal, of arms by persons or associations of persons who are not possessed of appreciable property. It is assumed, in effect, that the use of weapons is to protect property and guard its rights; and the assumption applies to the use of weapons by private persons as well as to the armed forces of government. Under the statutes regulating the possession and use of weapons, such, e. g., as the so-called “Sullivan Law” of New York, it will be found that permits to carry weapons are issued in the main to substantial citizens, corporations, and to those incorporations of mercenaries that are known by courtesy as detective agencies ; these latter being in the nature of auxiliary forces employed on occasion by corporations which may be involved in strikes or lockouts. All this is doubtless as it should be, and doubtless the intention of it is salutary. So also it will be found that the state constabularies, as well as any units of the National Guards that may be called out on occasion of labor troubles, are, quite habitually and as a matter of routine, employed in safeguarding corporation property and guarding against trespassers on the corporation’s premises or interference with the corporation’s employees.⁶

This is not to be construed as partisanship, but rather as defensive measures for the preservation of things as they are, or as they recently have been. But the effect is much the same, by and large. It signifies that other than peaceable methods are not effectually at the disposal of the organised workmen in the recurring quarrel with their owner-employers. Of late years the difficulties in the way of any recourse to forcible measures, or even of preparation for demonstrations in force on the part of the unions, have been appreciably increased by the judicial use of the injunction. The injunction has been applied with increasing frequency and an ampler sweep and scope, and its restraint has fallen on the organised workmen, as a rule, rather than on the owners. In effect, the use of the injunction as a means of creating an actionable “contempt of court” enables the authorities to penalise by anticipation; which has visibly turned the endeavours of the unions into channels of passive resistance in preference to anything in the way of overt action. There can be no question but that, in its bearing on the rights and immunities of absentee ownership, this freer use of the injunction has had a notably salutary effect. In one way and another the organised workmen are perforce and progressively reduced to tactics of passive resistance, to tactics of unemployment and retardation by a strategic withdrawal of efficiency, after the same general pattern of inconspicuous restriction and retardation which the owners of industry habitually employ in adjusting the rate and volume of output to what the traffic will bear. And such undivided attention to the strategy of inaction on the part of the workmen is already giving them a visibly increasing proficiency, and is hastening the adoption of a standard routine of retardation. That is to say, the industrial man-power is by force of circumstances taking the same businesslike position as their owner-employers; prudently seeking their own advantage at the cost of any whom it may concern, unmoved by passion, except the passion for the main chance.

In so meeting their owner-employers on their own businesslike ground of graduated curtailment and abeyance the organised workmen are still somewhat at a disadvantage. They have not the countenance of popular sympathy in any unreserved way, inasmuch as they do not speak for a recognised businesslike vested interest. Morally the workmen are still in a precarious position, according to the common sense of a community which is by unbroken habit bound to rate all economic actions and claims in terms of price and ownership. The workmen are under a moral disability at this point, in that the industrial man-power has not been formally capitalised and written into an issue of corporation securities or similar credit-instruments bearing a fixed charge. It is not covered with negotiable paper, such as would invest it with a morally defensible claim to an undiminished income, and would therefore justify any conduct which may serve to make good such a claim. This ethical infirmity of the embattled workmen’s case should logically be remedied in some measure by habituation; by their getting used to it and getting their fellow-citizens used to it. In a degree such an effect of habituation is already visible, in the greater tolerance with which the community puts up with the inconveniences that result from the obstructive tactics employed in labor troubles.

But whatever may be the relative strength of the two parties to this controversy, present or prospective, the negotiations between them are visibly falling into more tangible and more standardised shape and are conducted on increasingly businesslike principles of what the traffic will bear, and on both sides alike the negotiations as to what the traffic will bear are carried on in terms of competitive unemployment, mutual defeat, designed to hold the work and output down to such a minimum as will yield the most profitable price per unit to one party or the other. In due consequence, as the contending forces achieve a more effectual mobilisation on a larger scale, and as these tactics of inaction and retardation take effect with greater alacrity and consistency, the practicable minimum of work and output should logically become the ordinary standard practice. So that in “ordinary times” the effectual volume of work and output should run at a minimum.

So soon as the contending forces achieve a sufficiently alert and inclusive mobilisation on both sides, and bring their strategy to a finished and consistent routine, this ordinary balanced minimum of work and output should logically fall somewhat short of the ordinary consumptive needs of the underlying population. The fluctuations should run under, as a general rule. It is reasonable to expect that any fluctuations in excess would be curbed with all due dispatch by a watchful businesslike application of unemployment on one side and the other. In effect, the contending forces are doing team-work in the strategic use of unemployment. Business principles worked out on conservative lines of “watchful waiting” and “safety first” may be counted on with some confidence to keep the run of current production temperately short of current consumptive needs, so soon as these businesslike dispositions have been completed,—in the absence of disturbing causes; and fluctuations in deficiency would come in as workday incidents of the tactical routine. This follows in the nature of the case. The conflict of interests in the case is a conflict of business interests, in which each of the contending parties endeavors to bring the other to terms by as unremitting a pressure of privation as the traffic will bear, leaving the benefit of the doubt quite consistently on the side of deficiency.

The manner in which this routine of deficiency is expected to work out, on business principles consistently applied, is shown in a concrete way in the situation of American industrial business as it has been running during the interval since the Armistice. The dispositions on both sides of the controversy have not yet been perfected, but the results already achieved are enough to serve as notice of what may eventually be looked for. Strategic unemployment of plant and man-power results in a depletion of stocks on hand ; a deficiency of maintenance, repairs and replacements; resulting in an impairment of the means of production, a consequent lowering of the practicable level of production and output, and a correspondingly lowered base-line on which further tactics of competitive unemployment will run. The logic of the case, as well as the object-lessons of current experience, appears to say somewhat unequivocally that these mutual businesslike negotiations in unemployment will in all reason work out in so closely-shorn a withdrawal of productive efficiency as to yield but a scant margin for maintenance and necessary extensions and a still more dubious margin for necessary repairs and replacements.⁷

A further line of considerations runs to the same general effect. The several tactical units engaged in this business of strategic unemployment for a revenue, the concerns which do business in industry and its output as well as the associations of workmen that negotiate with them for a division of the proceeds, are, each and several, fractional segments of a larger composite industrial mechanism and of the industrial system at large. Each unit large or small, composite or single, pursues its own ends, negotiates for its own differential advantage at the cost of any whom it may concern, by a strategic retardation of the industrial process within that segment of the whole which is subject to its particular jurisdiction as a business concern, in detachment from the rest of the system or with slight and contingent regard for any ulterior consequences which its tactics of unemployment may have for the rest. Such is the nature of that system and canon of free competition which has stood over out of the eighteenth century as an axiomatic fact of Natural Right, and which still underlies the law and morals of business enterprise.

As business concerns, and therefore as tactical units in the management of industrial business, these several segments of the business community go about their business on a competitive basis, on the principle of “putting it over”; also called caveat emptor. But as industrial factors, and therefore as technological units engaged in the conduct of industrial production, they are members of a close-knit industrial system, bound in a comprehensive fabric of interlocking processes of work, in such a way that the continued working of any one member is conditioned on the due working of the rest. Technologically each member of the system, each of these tactical units, is bound to bear its due part in the ceaseless give and take of interlocking industrial processes. So that any retardation or suspension of the rate and volume of output at any point in the industrial system will check the work throughout a series of industrial plants and processes that go before and that follow after in the balanced sequence of operations, and it will therefore cripple the industrial system at large by that much.

Owing to this articulated character of industrial work as carried on by the methods of the mechanical industry, the ulterior (systemic) consequences of any strategic suspension or retardation of work at any point are likely to be more serious than the direct waste and loss incurred at the initial point, where the strategic unemployment is applied. This applies with especial force, of course, in the case of unemployment initiated in the key industries ; but it will apply in only a lessening degree outward from the key industries throughout that fabric of “continuation industries” whose interlocking processes of work play into one another to maintain the due rate and volume of output ; and it will apply with increasing urgency and effect as the industrial system takes on more of the character of the mechanical industry and is organised on the lines of quantity production.⁸

In recent times, and especially in recent years, the balance, articulation, and interdependence of industrial processes has been growing visibly greater, wider, more delicate, and more imperative. At the same time the facilities for instant and drastic suspension of work in the various mechanical industries are being greatly perfected; both in the way of a swift and resolute mobilisation of the workmen and in the way of loyal concert of action and standard methods of unemployment among the owner-employers and the governmental agencies of surveillance and enforcement.

The work of industrial confusion by recourse to unemployment in the pursuit of business has been greatly facilitated and abridged. The recourse to unemployment is readier and more sweeping, and the articulations of industry are growing progressively more extensive and more exacting, resulting in a wider and pro founder effect in the way of derangement and deficiency due to suspension of work at any point. These two lines of improvement in methods—in business and in technology—converge and concur in such a way that the ceaseless, though fluctuating, application of unemployment entailed by the current exigencies of business will have presently—if not rather, has already—brought the industrial system to such a state of chronic, though fluctuating, derangement as will result in a chronic, though fluctuating, margin of deficiency; whereby the rate and volume of output of those goods and services that make up the livelihood of the community will fall short of current needs by a progressively widening margin of deficiency. The eventual outcome of such progressive disallowance of work, disability, and privation, can, of course, not be predicted ; although it seems plain that there should be an eventual limit to its continuance.⁹

Over against this orderly drift into retardation and industrial paralysis there are, of course, other factors at work running to the contrary effect. There is a continued run of discoveries, inventions, adaptations, and short-cuts in the industrial arts, new ways and means and new uses of the old. With the result that the coefficient of productive capacity per unit of man-power continues to gain in a cumulative fashion. New processes, new materials from near and far, are continually being turned to account, and new methods of turning old materials to account and of coordinating known processes for the more efficient use of old resources, as well as for incorporating new resources into the routine of the day’s work,—these improvements and accelerations in the industrial arts continue to insinuate themselves into the fabric of the industrial system, in spite of the uniformly conservative management on the part of the business community as touches all new projects and project-makers in the industrial field.

But all such advances in the mechanic arts bring new complications in the working structure of the industrial system; whether the innovations come by way of an increased scale of operation or by way of a new procedure in the mechanics of production and distribution; whether they draw into the complex of industry material and power-resources previously unknown or unused,—as, e. g., petroleum and the obscure industrial metals, or power transmission by electricity; or they facilitate and abridge the work in hand—as, e. g., the Bessemer and the basic processes in steel production, or the internal combustion engine for use in vehicles, or the synthetic production of drugs, dyes, and condiments. At every move the network of technological interrelations will be drawn to a finer mesh, a more close-knit and more widely inclusive web of give and take, within which the working balance of coordinations runs on a continually closer margin of tolerance. With the result that a disturbance, in the nature of retardation or deficiency at any critical point, will carry derangement and sabotage farther and faster than before through the main lines and into the intricate working details of production. With every further move along the lines on which the industrial arts are advancing, therefore, sabotage—that is to say strategic unemployment at the instance of the owner-employers or of the workmen —becomes a swifter and more widely corrosive agency of miscarriage and decay.

At the same time, and in great part by help of these same technical appliances and powers, the business community is able, also in a progressive fashion, to bring sound conservative business principles to bear on industry in a swifter and more comprehensive way and with a slighter margin of error. That is to say, novelties will be disallowed with a freer hand and the tactical manœuvres of unemployment will gain something in frequency and amplitude; measures to suppress or disable the organisations of workmen and malcontents will take on added scope, assurance, vigor, and despatch. And the organised workmen, too, are coming to realise the increasing need as well as the increasing facilities for meeting their owners on a business footing and carrying on their negotiations in strategic unemployment and retardation with a wider and more effectual coordination and manoeuvres and a more provident attention to their needful financial resources.¹⁰

Under these circumstances it seems reasonable to expect that the systematic retardation and derangement of productive industry which is entailed by the current businesslike management will work out in a progressive abatement of the margin of net output of the industrial system at large ; that this progressive abatement of the net industrial output will presently reach and pass the critical point of no net return—as counted in physical units of livelihood; and that in the calculable future the industrial system, so managed on sound business principles, will run on lines of a progressively “diminishing return,” converging to an eventual limit of tolerance in the way of a reduced subsistence minimum ; beyond which the situation at large should apparently be liable to revision by an intrusion of some sort of “disturbing causes.” ¹¹

It is conceivable that the civilised peoples might yet save themselves alive out of this impasse, in spite of their addiction to business, if it were not for their national integrity.

Business-as-usual, helped out by its later extensions and facilities, may be counted on to hold the ordinary level of employment and output down to the minimum of what the traffic will bear, with a reasonable degree of consistency, and with something of a conservative downward trend to a lower minimum. Frequent and substantial oscillations below the ordinary level are to be looked for, due to repeated and inconclusive trials of endurance between the owners and the workmen, in their businesslike endeavors to bring one another to terms in a struggle of mutual discomfort. These persistent excursions below the ordinary level should have a cumulative effect and establish a downward trend in the average run, such as to depress the practicable minimum. Provided always that a partial failure, or abrupt recession, of the state of the industrial arts, due to curtailment of technological instruction and personnel at home or abroad, does not bring the whole case to a precipitate liquidation.

As is the current practice, these manœuvres of strategic deficiency will continue to be financed by a conservative but effectual creation of capitalised credits, in great part if not in the main. Such is, in effect, the established practice on the side of the owners, and such is now beginning to be the recourse also of the organised workmen. By this means these recurring depressions of the ordinary level of employment and output will, in some measure and progressively, be incorporated in the routine and will progressively lower the minimum which the traffic will bear. Such will necessarily be the case, inasmuch as any deficiency brought about in this way in the physical output will not count as a deficiency in money-values and will therefore not disturb the course of the businesslike negotiations on which the whole matter turns. Money-values are the conclusive realities of business, and the outstanding money-values will not suffer so long as the price per unit is suitably enhanced by a limitation of the output and an enlargement of the outstanding volume of purchasing-power. The progressive reduction of output through unemployment will take effect in physical terms of goods and services, not in terms of price, as current experience goes to show ; price being a function of scarcity and purchasing-power.

In the long run, so soon as the privation and chronic derangement which follows from this application of business principles has grown unduly irksome and becomes intolerable, there is due to come a sentimental revulsion and a muttering protest that “something will have to be done about it,”—as, e. g., in the case which has arisen in the coal industry. Thoughtful persons will then devise remedial measures. As a matter of course, in a community which is addicted to business principles, the remedial measures which are brought under advisement in such a case by responsible citizens and officials are bound to be of a businesslike nature; designed in all reason to safeguard the accomplished facts of absentee ownership in the natural resources involved and in the capitalised overhead charges which have been incorporated in the business. Necessarily so, for the community at large is addicted to business principles, and the official personnel is so addicted in an especial degree, in the nature of things.

Yet all the while there are certain loose ends in this fabric of business convictions which binds the mentality of these peoples. There is always the chance, more or less imminent, that in time, after due trial and error, on duly prolonged and intensified irritation, some sizable element of the underlying population, not intrinsically committed to absentee ownership, will forsake or forget their moral principles of business-as-usual, and will thereupon endeavor to take this businesslike arrangement to pieces and put the works together again on some other plan, for better or worse.

“Other things remaining the same,” some such shifting of the economic base should be due to follow, eventually. Not because a better plan than the present businesslike one has been projected or is likely to be conceived; but because, “human nature being such as it is,” the present businesslike management of the industrial system is incompetent, irrelevant, and not germane to the livelihood of the underlying population. It is not that absentee ownership is wrong, in principle. “The law allows it, and the court awards it.” It is only that its concrete working-out is incompatible with the current state of the industrial arts, and that the material welfare of the civilised peoples is conditioned on the full and orderly operation of the industrial system in which this state of the arts is embodied.

This precarious state of the case is now beginning to engage the attention of the substantial citizens and of their constituted authorities,—on whom it is incumbent, through good report and evil report, to guard the status quo of capitalised overhead charges. Being “practical men,” they bend their energies to the preservation of an arrangement which will not work, lest a worse evil befalL The accomplished facts of absentee ownership must and shall be preserved; and it is for the authorities and the substantial citizens to take measures to that end. The national integrity of the civilised peoples comes into the case as a pivotal factor at this point.

Whatever will bear the appearance of being a national interest, of being bound up with the fortunes of the national establishment, will find a ready lodgment in the popular sentiment as an article of patriotic infatuation. Such things become right and good, and it becomes the dutiful privilege of all citizens to cherish these things and to devote their substance and energies to the furtherance of them, without scrutiny or afterthought. Indeed, further scrutiny of any article of belief or practice which has found lodgment in the community’s habits of thought as a standard item of national aspiration or national pretension will be odious, to the point of presumptive criminality. So also, whatever can be made to bear the appearance of hindering or trifling with those aspirations that are covered by the habitual canons of national integrity in force at a given time and place are presumptively treasonable. Such treason is the gravest of crimes, —next after lèse majesté. Indeed, the spirit of national integrity touches the skirts of divinity and carries more than a trace of religious intolerance. So that the crime of treason comes near to the unique atrocity of sin against the Holy Ghost. In both cases there is the same dutiful renunciation of sobriety and reason in dealing with delinquents, and the same presumption of guilt in the accused.

Uncritical devotion to the national pretensions being a meritorious habit, it is also a useful article of camouflage, a shelter for gainful enterprises and transactions which might otherwise be open to doubt, a means of avoiding unfavorable notice and of procuring a profitable line of good-will. In this sense it has come to have a merchantable value, so that professions of such devotion have become a businesslike matter-of-course among those who follow “gainful pursuits.” Which weeds out profitless argument and reflection in these premises and dispenses with any irritating afterthought. And men will commonly believe and live up to those things which they habitually profess. That is the meaning of autosuggestion. “Auto-intoxication” can not properly be applied in this connection, since the term has been assigned a specific meaning in medical usage.

What is yet more to the point is the secondary effect of these businesslike professions of national faith, in that the young are taught to believe what their elders profess to believe. This indoctrination of the young by un-deviating habituation in word and deed, precept and example, is very much in the foreground of their schooling just now, and it should logically bring grave consequences in the way of an accentuated nationalist bias in the incoming generation. It is something like drill in the manual of arms, both in respect of the mental qualities involved and in respect of the automatic responses induced in persons subjected to it. The resulting action-pattern of national animation runs on much the same lines as the habitual use of the Paternoster and Rosary, and carries the like uncritical assurance of well-doing.

In an earlier chapter something has already been said of the salesmanlike piety that is habitually professed by those who do business in the country towns. They and all their folks and ways are given to blamelessly devout observances and professions, by routine of the day’s work in pursuit of salesmanlike gains. There is no especial degree of hypocrisy and no appreciable mental strain involved in their so professing and acting on a belief in religious verities of which they neither have nor seek an understanding. It is all a foregone conclusion, a businesslike matter-of-course incident to their “gainful pursuit.” But in this as in other matters men (and women) come to believe what they habitually profess, and with a jealous solicitude they train their offspring, by precept, example, and systematic schooling, into due conformity with these canons of salvation and profitable respectability. So also as regards the secular faith and observances of national integrity. And in an eminent sense the country towns have the making of the community’s ideals and mentality, beyond any other one agency. In much the same measure they have also the making of the country’s official personnel and their mentality. National integrity, religious intolerance, and business principles march together under the banners of the country town in a co-partnership of means and ends, for the Glory of God and the good of man.

In any democratic community, such as the American, the official personnel which is vested with jurisdiction and initiative will be, in the main, such as the country town has made them, by exacting habituation and by selective elimination of the unfit. Fitness for responsible office being, on the whole, tested by conformity to these three canonical articles : national integrity, devout observance, and business-as-usual. A democratic community addicted to business enterprise and devout observances will not tolerate an official personnel endowed with a different equipment of habitual predilections. Exceptions may occur, but they are sporadic and negligible, and they fall into abeyance at any juncture of national exigency. Such a community will trust no one but its substantial citizens; which is another way of saying the same thing. Anyone may assure himself of the truth of this statement, as a general proposition, by a cursory survey of the case as it presents itself at large or at any point.

These persons who make up this official personnel, and in whose hands is the power to act, locally, departmentally, and at large, will go into action as practical men, faithful to the joint governance of these settled habits of thought whose creatures they are. With a mentality compounded of national integrity and business principles they will devoutly follow out the drift of the two conjointly ; to such effect that in the official apprehension the community’s fortunes are bound up with the pursuit of its business enterprise; that is to say, with the continued gains of its absentee owners. It lies in the nature of democratic institutions that any such community will select its official personnel from among its absentee owners, that is to say its substantial citizens. And it lies in the nature of the substantial citizen-official to let business interests coalesce with the national integrity in such a way as to make the safe-keeping of business-as-usual the first and constant care of the official establishment. So that any conjunction of circumstances which may threaten to encroach on the accomplished facts of absentee ownership or of capitalised overhead charges at any point will forthwith be rated as a menace to the national integrity and a call for official measures of repression to guard the public’s safety.

Business-as-usual and the national integrity are joint and integral factors in that complex of habits of thought that makes up the official mentality ; so that any irritation of the official sensibilities along either line will unavoidably bring a response along the two together and indiscriminately. In that parallelogram of forces in which business principles and the sense of national integrity combine jointly to move and direct the democratic officials there is no distinguishing the two joint factors. The fact may also be worth noting, although it is essentially of secondary consequence, that since any given democratic official is also in effect a substantial citizen, his pecuniary interests as an owner in his own right will fall into line with his civic principles at large in this mattter, and will therefore coalesce with his civic virtue and give urgency and singleness of purpose; with the result that the weight of the official establishment, national and local, will in the nature of things be brought to bear on the side of ownership at any juncture of doubt or dissension.

The point of immediate interest here is not any merit or demerit that may attach to this run of the facts, but only the fact that such is the run of them.

So far as concerns the argument at this point, the upshot of this run of the facts is that the habit of thinking in terms of national solidarity and civic allegiance, ingrained in the community at large as well as in its official personnel, comes into the case as an effectual bar to any departure from the standard routine. Faithful adherence to business principles and to the businesslike management of industry is second nature to the substantial citizen. But by process of growth, such businesslike management of the industrial system has become incompatible with the current state of the industrial arts; so that the continued management of industry for business purposes results in an industrial stalemate.

In that intractable dissension which divides the owner-employers and the organised workmen, the resources and appliances of constituted authority are brought into action on the side of the employer-owners, in effect and in the main. That such should be the case lies in the nature of things; partly for reasons reflected in the last few paragraphs above. Also in great part this run of the facts is grounded in ancient and standard law and custom, as well as in current statute and precedent.

The rights, powers, and immunities of ownership, including the incidents of free contract, are grounded in principles of law and usage which are by ancient habit deeply embedded in the popular common sense as well as in the common law. This body of law and usage grew out of habituation to an earlier order of things, and has therefore stood over from some time before anything like the present system of industry and business had come into action; before ownership and its share in the management of industry had passed over into absentee ownership and engendered the current credit system. So that these ancient principles of law and of common sense, in which the rights, powers, and immunities of ownership are grounded, are by way of being holdovers. The material circumstances have moved out of their way. But all the while that the shift to absentee ownership and credit has been going forward, the ancient principles have been progressively construed, adapted, and amplified to meet the newly arisen exigencies ; and the work of construction and amplification has been carried on by men whose immersion in business affairs has imbued them with a steadfast bias ; to such effect that, as a matter of formal scope and authority, the ancient principles have been enabled to sanction whatever arrangements may be expedient for absentee ownership and its administration. In point of statutory provision and constructive precedent, the rights, powers, and immunities of absentee ownership and capitalised overhead charges have all that sanction and stability that belong to habits of thought which are embedded in immemorial common sense. They are right and good, in point of statutory provision and constructive precedent, before the law; indeed, the law and the lawgivers have been busy with their enforcement and reënforcement, for some time past.

But they are not equally secure in point of common sense ; that is to say, the grounds of habitual morality are not similarly stable. The material exigencies of life and the habituation enforced by them have not been running on precisely the same lines as those exigencies of business which have given rise to these statutory provisions and constructive precedents. At any juncture where a discrepancy arises between law and common sense it is incumbent on the constituted authorities to take precautionary measures and guard the provisions of law against inroads of common sense. Under the circumstances, therefore, it has become the prime and particular duty of the constituted authorities to safeguard the rights, powers, and immunities of absentee ownership, at any cost to the underlying population.

Under “the majestic equality of the law,” the organised workmen enjoy the same rights, powers, and immunities of absentee ownership and capitalised overhead charges as their owner-employers with whom they are forever at odds. But their circumstances are different, and the incidence of these legal provisions is therefore different in their case. They have, in effect, no enforceable absentee rights and powers, and they have been unable to capitalise their income into fixed overhead charges on industry, collectible in absentia. They and their claims and circumstances do not fit into the legal framework of business-as-usual conducted on the current plan; which is their misfortune, if not their fault. The legal validity of any of those demands and perquisites for which they contend is of a slight and dubious nature. Being not capitalised into a corporate entity with fixed charges and limited liability, as their absentee owners are, any concerted action on their part is likely to be obnoxious to the law which penalises conspiracy. A few hundred or a few thousand absentee owners acting in collusion as stockholders in a corporation, on the other side of the controversy, are not guilty of conspiracy in the eyes of the law. So also, since the workmen are not owners of the plant about the use or unemployment of which the controversy turns, they have no right of access to the premises and are therefore unable to supervise and enforce the unemployment of the works in support of their contention. It is otherwise with the employer-owners. By and large, the legitimate powers of the workmen in such a controversy extend no farther than to take or leave the terms offered them by the employer-owners. Even a boycott is obnoxious to the law.

In effect it is recognised as a matter of common sense that this right of individual and passive unemployment is scarcely adequate to serve the turn in their negotiations with their owner-employers. Quite visibly the substantial citizens and the constituted authorities are of that mind. Indeed they are animated with a lively apprehension on that score, and precautionary measures are taken to guard against anticipated excesses on the part of the workmen at this point. There is no similar apprehension and no similar precautions are taken as regards the owner-employers. It is quite plainly the persuasion of the substantial citizens and the official personnel that the organised workmen may, at any juncture, be provoked by these disabilities into exceeding the limits of sabotage countenanced by the law—the passive withdrawal of efficiency—and that they will be likely, on due provocation, to resort to such “direct action” as will jeopardise the rightful holdings and incomes of the absentee owners in the case. The substantial citizens and the official personnel are moved by no serious apprehension that precautionary measures are necessary to restrain the employer-owners within the law. The ordinary legal correctives and remedies are sufficient for that purpose. Whereas such precautionary measures of forcible repression to keep recalcitrant workmen within due bounds and to safeguard the interests of the owners belong in the standard routine of things to be done. No doubt, all this is as it should be, in view of the relevant facts.¹²

By force of ancient law and custom and by the later drift of circumstances it has come about that the resources and apparatus of constituted authority, whether by administrative direction or permissively, will in the main serve the needs of the employer-owners in their controversial dealings with their industrial man-power. It will not be denied that this state of the case has a very appreciable dramatic and sentimental value ; but the merits of the arrangement, whether as a question of public morals or of class interest, will not engage the argument at this point. What is of immediate interest is the objective consequences of the arrangement. One of these immediate consequences is an abiding sense of grievance and hostility on both sides of the negotiations, but more pronounced perhaps on the side of the workmen. Mutual distrust and sharp practice has come to be of the essence of the case; working out in a standard policy of mutual defeat.

By force of law and custom, as progressively construed and amplified by successive generations of businesslike officials, any manœuvres which violate or exceed the immunities and powers of ownership are disallowed in this strategy of mutual defeat by which the working of the industrial system is governed. This bears on the manœuvres of the workmen in a peculiarly drastic way, since they are vested with none of the powers and immunities of ownership,—except in that Pickwickian sense in which “the majestic equality of the law” deals impartially with rich and poor. In effect, their powers and immunities in these premises are wholly of a negative order, such as will enable them to do nothing, to withhold efficiency, to lie idle and to put in their working-time as waste fully and ineffectively as the circumstances will permit ; in short to go in for that negative sabotage which is of the essence of business management in industry. So they concentrate their endeavors and ingenuity on this line. Bent on defeating their owner-employers by such ways and means as are at their disposal, they apply themselves with all diligence to delivering as nearly nothing as may be in return for such wages as their latest manœuvres in unemployment have enabled them to carry off, for the trartsient time being. So that by what foots up to a concerted policy of mutual defect the two parties in interest work together to pare the effectual work and output of industry down to whatever level of deficiency the traffic will bear in the short run.

In the short run, under the spur of tactical necessity, the traffic will bear and the exigencies will enjoin so effectual a disallowance of work and output as to leave a margin of livelihood and maintenance uncovered, and to entail a shrinkage of the available man-power and material equipment. Under the hands of a businesslike official personnel, supported by a like-minded body of substantial citizens, the vindication of property rights coalesces in principle with the vindication of the national integrity, to such effect that any proposal to disallow or abridge the sovereign rights of absentee ownership in the conduct of industry will be constructive sedition. So that the spur of tactical necessity will drive with an unmitigated incentive to the one line of strategy which this posture of things leaves open,—an alert and obstinate disallowance of work and output. Short runs of intensified strategic sabotage come therefore to predominate in the contest between employers and employees ; succeeding one another with increasing urgency and decreasing intervals; so that the long run falls into shape as a discontinuous chain of deficits, with scant and vanishing in-ternodes of recovery. This describes the present rather than the future. And since the several lines of productive industry are bound by the state of the industrial arts into an increasingly intricate and exacting network of give and take, they will each and several be subject to undesigned and unforseen stoppages induced by tactical stoppages in related lines of industry, with increasing frequency and amplitude as business principles take the upperhand and the spirit of salesmanship finally displaces workmanship in the conduct of industry. All the while any shrinkage in the rate and volume of oufput and any curtailment of the material factors engaged is to be covered over and made good on the books with a capitalisation of credits and a rising level of prices, due to an increased volume of purchasing-power thereby thrown on the market. A progressively increasing volume of working capital is required for the conduct of an increasingly stubborn campaign of labor troubles and an increasingly large and exacting expenditure on sales-publicity; which is to be covered with a running creation of credits, duly capitalised and thrown on the market as an addition to the outstanding purchasing-power.

In recent times, and in a progressively increasing measure, the national establishments and the spirit of national integrity among the peoples of Christendom have been an agency of dissension and distress, a means of curtailing and impairing the material conditions of life for the underlying population, and an arrangement for the increase and diffusion of ill-will among men. Such is their major and ordinary outcome. Coupled with this is commonly some slight differential advantage to some special Interest in whose service these agencies are employed. In recent times the differential gains which so accrue from this usufruct of national ill-will, inure in the main, to certain commercial and financial Interests sheltered under the national Flag.

The net aggregate amount of these differential gains which so accrue to these special Interests at the cost of such ill-will and distress to the common run will ordinarily foot up to no more than a vanishing percentage of their net aggregate cost to the underlying populations that are employed in the traffic. In the material respect these institutional holdovers work out in a formidable aggregate loss of life and livelihood; while in the spiritual respect their staple output is a tissue of dissension, distrust, dishonesty, servility, and bombast. The net product is mutual and collective defeat and grief.¹³

Apart from any glamor of national prowess, in the way of blood and wounds, the nations have also a certain sentimental value as standard containers, each of its distinctive cultural tincture, very precious to persons of cultivated tastes in these matters. So also, as a matter of history these national commonwealths, as well as the territorial states in their time, have served to alleviate local animosities, each within its jurisdiction, and to bring consistency and correlation into the process of industry and of civil life within their several territories. But all that is beside the point today. The work of correlation, standardisation, and concatenation of local units and of the processes of work and life has been taken over, irretrievably, by the industrial arts, which do not go by favor of nationalities. The industrial arts, and the industrial system in which they go into action, have no use for and no patience with local tinctures of culture and the obstructive routine of statecraft. The mechanistic system of industry is of a collective and cooperative nature, essentially and of necessity a joint enterprise of all the civilised peoples, in so far as their civilisation is of the occidental pattern ; and there is substantially only one sucL pattern. This industrial system runs on a balanced specialisation of work among its working members; standardised quantity production, which is always and of necessity in excess of the local needs ; free draught on a limitless range of material resources from far and near. No isolated industrial undertaking and no isolated cultural activity is self-sufficient within the sweep of this industrial system of Christendom. And any degree of wilful isolation is straitway and automatically penalised by a corresponding degree of impotence, under the impassive run of the industrial system at large, which draws impartially on far and near. In this new industrial order of things the national establishments and their frontiers and functionaries come in as an extraneous apparatus of deflection and obstruction, employed to perpetuate animosities and generate lag, leak, and friction.

Of this nature are customs-duties, shipping-subsidies, trade-concessions, consular service, passport regulations, national protection and enforcement of claims in foreign parts. Much has been said in censure of these and the like contrivances of discrimination, and much more in the way of censure is doubtless merited. The closer the scrutiny of this apparatus and its working, the more deplorable it all proves to be, in its material consequences. But this notorious imbecility of it all does after all not immediately concern the argument at this point. It is of more immediate interest to note that in all these diplomatic, legislative, and administrative measures in restraint of trade and industry, the measures are taken for the benefit of business, to stabilise, fortify and enhance the gains of one and another among the special business Interests that are domiciled in the country; that the national establishment is in this way employed in the service of these business concerns, at the cost of the national community at large; that in this way the national interests have come to be identified with the gainful traffic of these business Interests ; that the sense of national integrity is by habitua-tion to this routine of subservience made to cover the maintenance of business-as-usual and the insurance of capitalised earnings. The subservience of the national establishment and the official personnel to the aims and manoeuvres of business becomes a fact of prescriptive use and wont, passes into law and custom, and is embedded in the community’s common sense as a matter of workday routine.

In the last analysis the nation remains a predatory organism, in practical effect an association of persons moved by a community interest in getting something for nothing by force and fraud. There is, doubtless, also much else of a more genial nature to be said for the nation as an institutional factor in recent times. The voluminous literature of patriotic encomium and apology has already said all that is needed on that head. But the irreducible core of national life, what remains when the non-essentials are deducted, still is of this nature; it continues to be self-determination in war and politics. Such is the institutional pedigree of the nation. It is a residual derivative of the predatory dynastic State, and as such it still continues to be, in the last resort, an establishment for the mobilisation of force and fraud as against the outside, and for a penalised subservience of its underlying population at home.

In recent times, owing to the latterday state of the industrial arts, this national pursuit of warlike and political ends has come to be a fairly single-minded chase after unearned income to be procured by intimidation and intrigue. It has been called Imperialism; it might also, in a colloquial phrasing, be called national graft. By and large, it takes the two typical forms of graft : official salaries (The White Man’s Burden), as in the British crown colonies and the American dependencies; and of special concessions and advantageous bargains in the way of trade, credits and investments, as, e. g., the British interests in Africa and Mesopotamia or the American transactions in Nicaragua and Haiti. The official salaries which are levied by this means on the underlying population in foreign parts inure directly to the nation’s kept classes,, in their rôle of official personnel, being in the nature of perquisites of gentility and of political suction. The special benefits in the way of profitable trade and investment under national tutelage in foreign parts inure to those special Interests which are in close touch with the nation’s official personnel and do business in foreign parts with their advice and consent.

All the while, of course, all this trading on the national integrity is carried on as inconspicuously as may be, quite legally and morally under democratic forms, by night and cloud, and is covered over with such decently voluble prevarication as the case may require, prevarication of a decently statesmanlike sort ; such a volume and texture of prevarication as may serve to keep the national left hand from knowing what the right hand is doing, the left hand in these premises being the community at large, as contrasted with the Interests and the official personnel. In all such work of administrative prevarication and democratic camouflage the statesmen are greatly helped out by the newspapers and the approved agencies that gather and purvey such news as is fit to print for the purpose in hand. The pulpit, too, has its expedient uses as a publicity agency in furtherance of this gainful pursuit of national enterprise in foreign parts.

However, the present argument is not concerned with the main facts and material outcome of this imperial statecraft considered as a “gainful pursuit,” but only with the ulterior and residual consequences of the traffic in the way of a heightened sense of national integrity and a closer coalescence of this national integrity with the gainful pursuits of all these dominant business Interests that engage the sympathies of the official personnel. By this means the national integrity becomes ever more closely identified, in the popular apprehension, with the security and continued enlargement of the capitalised overhead charges of those concerns which do business in foreign parts; whereby the principles of business and absentee ownership come in for an added sanction ; so that the official personnel which has these matters in charge is enabled to give a more undivided attention and a more headlong support to any manoeuvres of strategic sabotage on industrial production which the exigencies of gainful business may dictate, whether at home or abroad.

Statecraft as a gainful pursuit has always been a furtive enterprise. And in due proportion as the nation’s statecraft is increasingly devoted to the gainful pursuit of international intrigue it will necessarily take on a more furtive character, and will conduct a larger proportion of its ordinary work by night and cloud. Which leads to a substitution of coercion in the place of consultation in the dealings of the official personnel with their underlying population, whether in domestic or foreign policy; and such coercion is increasingly accepted in a complaisant, if not a grateful, spirit by the underlying population, on a growing conviction that the national integrity is best provided for by night and cloud. So therefore it also follows that any overt expression of doubt as to the national expediency of any obscure transaction or line of transactions entered into by the official personnel in the course of this clandestine traffic in gainful politics, whether at home or abroad, will presumptively be seditious; and unseasonable inquiry into the furtive movements of the official personnel is by way of becoming an actionable offense; since it is to be presumed that, for the good of the nation, no one outside of the official personnel and the business Interests in collusion can bear any intelligent part in the management of these delicate negotiations, and any premature intimation of what is going on is likely to be “information which may be useful to the enemy.” Any pronounced degree of skepticism touching the expediency of any of the accomplished facts of political intrigue or administrative control is due to be penalised as obnoxious to the common good. In the upshot of it all, the paramount rights, powers, aims, and immunities of ownership, or at least those of absentee ownership, come in for a closer identification with the foundations of the national establishment and are hedged about with a double conviction of well-doing.

In that strategy of businesslike curtailment of output, debilitation of industry, and capitalisation of overhead charges, which is entailed by the established system of ownership and bargaining, the constituted authorities in all the democratic nations may, therefore, be counted on to lend their unwavering support to all manœuvres of business-as-usual, and to disallow any transgression of or departure from business principles. Nor should there seem any probability that the effectual run of popular sentiment touching these matters will undergo any appreciable change in the calculable future. The drift of workday discipline, as well as of deliberate instruction, sets in the conservative direction. For the immediate future the prospect appears to offer a fuller confirmation in the faith that business principles answer all things. The outlook should accordingly be that the businesslike control of the industrial system in detail should presently reach, if it has not already reached, and should speedily pass beyond that critical point of chronic derangement in the aggregate beyond which a continued pursuit of the same strategy on the same businesslike principles will result in a progressively widening margin of deficiency in the aggregate material output and a progressive shrinkage of the available means of life.

1: The American Federation of Labor may be taken as a type-form; although it goes perhaps to an extreme in its adherence to the principles and procedure of merchandising, in all its aims and negotiations, its constant aim being an exclusive market and a limitation of supply.

2: As has appeared, e. g., in the wide-concerted campaign lately carried on for the suppression of the unions, spoken of by courtesy as a “campaign for the open shop.”

3: There is no fault to be found with all this, of course ; but it is necessary to note the fact. It is one of the substantial factors in the case, and it lies in the nature of things in any democratic community. Life and experience in these democratic communities is governed by the price-system. Efficiency, practical capacity, popular confidence, in these communities are rateable only in terms of price. “Practical” means “businesslike.” Driven by this all-pervading bias of business principles in all that touches their practical concerns, no such democratic community is capable of entrusting the duties of responsible office to any other than business men. Hence, in increasing measure as the situation has moved forward and approached the current highly businesslike order of things, the incumbents of office are necessarily persons of businesslike antecedents, dominated by the logic of ownership, essentially absentee ownership. Legislators, executives, and judiciary are of the same derivation in respect of the bias which their habits of life have engendered and in respect of the drift to which their bias subjects them in their further conduct of affairs. There need of course be no question of the good faith or the intelligence of these responsible incumbents of office. It is to be presumed that in these respects they will commonly grade up to the general average, or something not far short of that point. But by force of the businesslike personal equation that is ingrained by habit in the official personnel, the growth of use and wont, of law and custom, of precedent and enactment, during recent times has fallen into lines drawn on considerations of expediency for business; it has followed that line of least resistance which the sound bias of legislators, executives, and judiciary has made easy and reasonable, at the same time that it has conformed to the logical bent of the substantial citizens. Doubtless in good faith and on sound principles, the ceaseless proliferation of statutes, decisions, precedents, and constitutional interpretations, has run, in the main and with increasing effect, on these lines that converge on the needs and merits of absentee ownership.

As a late and notable illustrative instance of this logical bias, it has been found on judicial consideration that such corporate income as is distributed under the absentee form of a stock-dividend is legally exempt from the income tax.

So again, in the main and ordinarily, the “injunction” which has lately come into extensive application in American practice is an expedient for the conservation and enforcement of the rights and immunities of absentee ownership in case of controversy between owners and workmen. The injunction has other uses, but in practical effect this is its main and ordinary use. Effectual recourse to the injunction to enforce the demands of the workmen is of rare occurrence and of doubtful legitimacy. In effectual scope and force the injunction has grown with the growth of the scope and range of absentee ownership and at the call of issues which have arisen out of its administration and safe-keeping.

4: Many public spirited citizens, and many substantial citizens with an interest in business, deplore this spirit of division and cross purposes that pervades the ordinary relations between owners and workmen in the large industries. And in homilet-ical discourse bearing on this matter it is commonly insisted that such division of sentiment is uncalled for, at the same time that it works mischief to the common good, that “the interests of labor and capital are substantially identical,” that dilatory and obstructionist tactics bring nothing better than privation and discontent to both parties in controversy, as well as damage and discomfort to the community at large.

Such homiletical discourse is commonly addressed to the workmen. It is a plain fact of common sense, embedded in immemorial habit, that the business men who have the management of industrial production must be free to limit their output and restrain employment with a view to what the traffic will bear. That is a matter of sound business, authentic and meritorious. Whereas unemployment brought to bear by collusion among the workmen in pursuit of their special advantage will interfere with the orderly earnings of business and thereby bring discouragement and adversity upon the business community, and so will derange and retard the processes of industry from which the earnings are drawn. As things go, because the continued subsistence and material comforts of the community are contingent upon the continued profits of the business men in charge, prosperity is a function of earnings, not of wages ; and the material fortunes of the community at large are in practical fact bound up with the continued peace of mind of the absentee owners of the industries, which in turn is bound up with the continued run of free income from the business. This is commonplace and familiar, an habitual fact of common sense, to which no sound man has a right or an inclination to take exception; for settled usage makes all things right. The workmen are not similarly within the familiar bounds of common sense in applying unemployment and restriction of output to enforce their notions of what the traffic will bear in the way of wages. Their assumption of a business standing in an argument with their employers and owners violates common sense; that is to say it is not their right according to the precedents of use and wont, however securely it may be within the statutory formalities. It is not sound common sense, because it has not been ingrained by workday habituation into the action-pattern of the community. By use and wont hitherto the workmen have in practical effect been free to take or leave the terms offered by their owner-employers; and by use and wont the employer-owners have been free to offer such terms as the traffic would bear in the way of earnings. But increasingly for some time past the workmen have been drawing together on a businesslike plan of demanding all that the traffic will bear in the way of wages, and of enforcing their demands by the same businesslike recourse to unemployment and retardation that has long served the needs of the employer-owners in their dealings with the market and the livelihood of the ultimate consumers. In its character of industrial man-power, this organised fraction of the underlying population is endeavoring to negotiate for terms on the footing of a dc-facto Business Interest. (The agricultural manpower, and the population at large as a body of consumers, have not yet made an effectual move of the kind.) And right lately the organisation, animus, and tactics of these industrial workmen have been brought to such a point of businesslike efficiency as to constitute a menace to reasonable earnings and to a reasonable balanced return on the outstanding capitalisation. Therefore, since prosperity depends on a continued free run of earnings on the outstanding capitalisation, the businesslike attitude and tactics of the organised workmen are also a menace to the prosperity of the community at large.

5: As has been remarked in an earlier passage, a “substantial citizen” is an absentee owner of much property.

6: Cf. e. g., Report on the Steel Strike of 1919, by the Interchurch Movement, pp. 235-248.

7: An illustrative instance is that of the American railways, which have been suffering a shrinkage of physical assets for want of due repairs and replacements. The commitments of the railway corporations in the way of fixed charges hinder their applying an adequate proportion of their earnings to repairs and replacements, at the same time that the rigidity of their outstanding capitalisation hinders their writing off the resulting depreciation and obsolescence of the plant; whereby they are driven to charging more than the traffic will bear in the way of freight and passenger rates as well as in the way of retrenchment on wages and dismissal of workmen. All of which works together cumulatively toward a progressive decline of efficiency and a more accentuated policy of strategic unemployment.

The remedy which is ordinarily applied in such a case is that universal solvent of business exigencies, the creation of new credit obligations, with which to provide needed working capital, and which are duly capitalised with the due complement of fixed charges, payable out of an advance of prices due to the resulting increased volume of outstanding purchasing-power helped out by a temperate limitation of output.

8: The case has latterly been well illustrated by what happens in the way of ulterior consequences for industry at large when work is suspended or seriously abridged (for strategic purposes), in coal-mining, railroad transportation, or steel production.

9: All the while there need, also of course, result no decline in the community’s total wealth, as counted in money-values. Business should presumably continue on a conservatively prosperous footing, with fluctuating variations, and with an increasing devotion to salesmanship and overhead. Any shrinkage in physical possessions, in the current output of goods and services, or in the available means of subsistence and physical comfort, could and presumably would be offset, or more than offset, by a conservative creation and capitalisation of new credits, with new and valuable fixed charges. Such a running creation of capitalised wealth will be all the more imperatively called for, in that the progressively widening deficiency in the material supply, coupled with rising prices and rising costs, will entail an urgent and progressive need of additional funds to serve as working capital.

It is perhaps unnecessary to note that such a view of these matters will not have the countenance of the certified economic experts. Those economists and public men who still faithfully construe the current situation in terms of the nineteenth century, as defined by formulas which have stood over from the eighteenth century, will scarcely see these matters in this light. By received preconception, credit is deferred payment, capital is assembled “production goods,” business is the helper of productive industry, salesmanship is the facility of the “middleman,” money is “the great wheel of circulation” employed in a “refined system of barter,” and absentee ownership is a rhetorical solecism.

10: Right lately, since 1920, certain of the more businesslike unions have gone into banking with a view to financing their own affairs. So far the plan appears to be practicable. It is expected that by this means these unions will be able to extend, consolidate and standardise those measures of unemployment and retardation that are advisable in their business. It should greatly “facilitate and abridge the labor” of conscientiously withdrawing efficiency in those lines of work with which these unions have to do. The farmers, too, are looking hopefully, and desperately, in the same direction with a similar end in view.

11: All the while there is not, at least not for the time being, any reason to apprehend that this progressive deficit of industrial production will cause a shrinkage in the country’s aggregate wealth—as counted in money-values; or even that the current rate of increase of such wealth will fall off. All that is in the main a question of capitalisation, and therefore it is a question of the continued creation of credit and overhead charges. The aggregate of possessions, as counted in terms of “production goods” and livelihood, should presumably continue to fall off, as during the past few years; but wealth, as counted in money-values, should presumably continue to increase, perhaps at an accelerated rate, as during the past years. And as a matter of course the wealth in hand should continue, perhaps at an accelerated rate, to gravitate into progressively larger blocks of absentee ownership.

Just now (1923) the appearances would seom to say that the critical point of no net aggregate product has been reached and passed within recent years, since the Armistice. Yet it is quite possible that these appearances are transient and misleading. There is no reasonable doubt but that the countries of Europe have been running on a deficit, industrially speaking, during these years; and indeed on a progressively widening margin of deficit.

In effect, these Europeans have also curtailed their technological personnel by uncovered consumption of technical manpower during the War; while the production and upkeep of technological personnel and facilities are now running short of current needs, in rate, volume and quality, due to the present state of Peace. So that the Europeans, and by consequence the Americans also, face a technological deficit, and therefore a fore-sumptive disintegration of their industrial system.

Nor need it be doubted that the Americans have also been running slightly short of a net balance in their industrial output, as counted in physical units. But a cautious appraisal would perhaps say that this net industrial deficiency may be a transient effect due to transient causes connected with the War and the inordinately businesslike terms of the Peace ; and that so soon as the international bargaining between the Interests has been concluded, and so soon as the earnings of the “profiteers,” past and prospective, shall have been duly stabilised and capitalised, this businesslike embargo on industry and livelihood will be lifted. Such appears to be the expectation of the statesmen. It is a point in doubt.

12: It has been said, with a disquieting verisimilitude though perhaps with unwarranted breadth, that “The Intelligence Service of the Army has for its primary purpose” a surveillance of certain obnoxious civil organisations; and the organisations enumerated as obnoxious are organisations of workmen and farmers,—the list includes the American Federation of Labor. It is to be presumed that such an avowal will not be found formally correct. It is at least inexpedient; but there is a disquieting verisimilitude about it, in view of the known facts.

Apart from international intrigue and intimidation, almost wholly in pursuit of business interests, the workday use of the administration’s military arm is to keep the domestic peace. In practical effect and in the common run, the enforcement of domestic peace works out in restraining unruly workmen and safeguarding the interests of property and business, in the recurrent cases of dispute between owners and employees. The like will apply generally to measures of “preparedness” in the way of armed force; whether under the auspices of the Federal administration or as carried on in the several states; whether they come under the name of the National Guard, State Militia, State Constabulary, or Municipal Police,—although some substantial reservation is to be entered as regards the last mentioned. The like is also true of those private enterprises in preparedness, the so-called Detective Agencies, which make a business of supplying mercenaries and “under-cover men.” These mercenary fighting men are used by the employer-owners, almost wholly, as against the workmen. This private traffic in mercenaries is presumably quite right and proper, being permitted by the authorities and approved by the substantial citizens; although with some demur from the side of the organised workmen.

To complete the sketch at this point it is necessary to note that in those states or municipalities where the carriage or possession of firearms is subject to “Permit,” the prohibition of arms will chiefly affect the workmen and others who have no substantial standing as owners or custodians of property; the need of guarding valuable property rights being the usual ground on which such permits are issued. Whether by intention or not, this regulation has the effect of leaving the employer-owners and their retainers armed, while the workmen are not armed except by evasion of the law. In the same connection, and as a characteristic circumstance, it appears that the larger industrial corporations come somewhat habitually into the market for firearms and ammunition, as good and valuable customers. This corporate preparedness includes rifles and machine-guns; whereas there appears to be little demand on the part of the same concerns for guns of such calibre as would be at all properly called artillery, such as “quick-firers” and “trench-mortars.”

What has just been said is no more than a pro forma recital of obvious facts, of course. It is a description of the state of the case at large, and is to be taken with such qualifications as may be called for in detail.

13: As has been remarked in an earlier passage, this characterisation has nothing to say as regards the moral or aesthetic excellence of these institutional holdovers, as to the righteousness, goodness, or beauty of national integrity, patriotic intolerance, or political intrigue. These are questions of taste and fashion, about which there is no disputing. Nor do these questions touch the present argument, which has to do with the objective consequences of these institutional factors.

By derivation, in point of institutional pedigree, the democratic nations of Christendom are a “filial generation” of those dynastic and territorial monarchies which filled Europe with a muddle of war and politics in early modern times. And these national establishments, and the spirit of national integrity on which they trade, are still essentially warlike and political. That is to say, predation is still the essence of the thing. The ways and means of the traffic are still force and fraud, at home and abroad. The actualities of that “self-determination of nations” which has so profoundly engaged the sentiments of thoughtful persons, always foots up to a self-determination in respect of warlike adventures, political jobbery, and territorial aggrandisement Witness the newly self-determining nations, Poland, Czechoslovakia, Jugoslavia.

There are, doubtless, many mitigating circumstances, and many fanciful card-houses of cultural and linguistic conceits erected in good faith by the apologists of Chauvinism. But in point of fact, “realpolitik” continues to make satisfactory use of the chauvinists in a pursuit of its own ends by force and fraud. So also the universal type-form of national solemnities, even when staged by the mildest mannered and most amiable curators of the spiritual antiquities, continues to be a worshipful magnification of past warlike adventures, backed with a staging of histrionic obsequies of war-heroes, with parade of guns, uniforms and battle standards. “Breathes there a man with soul so dead, Who never to himself hath said, ‘This is my own, my native land/ “ when the national anniversary is being magnified with warlike fireworks and bombast, while veterans, Red Cross nurses and Boy Scouts parade their uniforms to martial music under banners? In any one of these democratic commonwealths the acid test of sound and serviceable citizenship still is the good old propensity to fight for the flag without protest or afterthought. There is no question but this is a meritorious frame of mind. It is also the frame of mind which is sedulously drilled into the incoming generation.