Part I

CHAPTER I
Introductory

IN recent times absentee ownership has come to be the main and immediate controlling interest in the life of civilised men. It is the paramount issue between the civilised nations, and guides the conduct of their affairs at home and abroad. The Great War arose out of a conflict of absentee interests and the Peace was negotiated with a view to stabilise them.

This state of things is not precisely new, nor has it come on suddenly. It is a growth out of the past, but it has reached something like a culmination during these opening decades of the century ; and it is an outcome of cumulative changes which have been directed to no such end. The years of the Great War and the Armistice have brought many things to a head, and among other things they have also thrown this factor into the foreground of the situation. And the experience of the War and after has stirred men to a crude and uneasy realisation of this state of things. Under one form of words or another, issues which arise out of the sovereign rights of absentee ownership are stirring the popular sentiment and engaging the attention of the officials with an ever increasing urgency. These issues are the substance of all those desperate perplexities that beset the constituted authorities and they underlie all those dissensions that continually trouble the nation’s industry and business. With the result that popular attention and sentiment are gathering about the issues of absentee ownership more and more directly and consciously with each further move,—questions of its aims and uses, its necessary limitations, its continued security, its rightful claims, and its possible eventual abridgment or disallowance.

It is true, this particular form of words—”Absentee Ownership”—has not been commonly employed to describe this peculiar institution which now engrosses public policy and about which controversy is beginning to gather. But that only marks a deficiency of speech. It is only within the last few decades, and only by degrees, that the facts in the case have been changing in such a way as to call for the habitual use of such a phrase as “absentee ownership.” It is only within the last few decades, and only by degrees, that absentee ownership has visibly come to be the main controlling factor in the established order of things. Yet it is no less true that this peculiar institution which this form of words is fit to describe has now plainly come to be the prime institutional factor that underlies and governs the established order of society. At the same time and in the same degree it has, as a matter of course, become the chief concern of the constituted authorities in all the civilised nations to safeguard the security and gainfulness of absentee ownership. This state of things is now plain to be seen, and it is therefore beginning to cloud the sentiments of the underlying population at whose cost this security and gainfulness are maintained.

So, by degrees the drift of changing conditions has been heading up in a new alignment of economic forces and of economic classes. So that the dominant considerations which now govern the material fortunes of the community are no longer the same as they have been in the recent past ; nor indeed such as they are alleged to be in the present. These matters are still spoken of in terms handed down from the past, and law and custom still run in terms that are fit to describe a past situation and conform to the logic of a bygone alignment of forces. As always, the language employed and the principles acted on lag behind the facts. But when, as now, the facts have been changing at an unexampled rate the language and the principles will lag behind the facts by an unexampled interval. Yet under the urgent pressure of new material conditions some degree of adjustment or derangement of these ancient principles is due to follow. Continued “lag, leak and friction” is bound to count for something in the outcome. Continued irritation and defeat begot of a system of law and custom that no longer fits the material conditions of life will necessarily be an agency of unrest, particularly as touches the frame of mind of that fraction of the community on whom the irritation and defeat continue chiefly to fall.

Therefore these time-worn principles of ownership and control, which are now coming to a head in a system of absentee ownership and control, are beginning to come in for an uneasy and reluctant reconsideration; particularly at the hands of that underlying population who have no absentee ownership to safeguard. Their questioning of these matters habitually takes the shape of personal recrimination and special pleading, but the drift of it all is no less evident. Those traditions that underlie the established order and that guide legal and administrative policy, proceed on an assumed community of class interests, a national solidarity of interests, and an international conflict of interests; none of which is borne out by material facts. Therefore these traditional policies that still govern the conduct of affairs, civil and political, legal and administrative, are also falling under suspicion of being incompetent, irrelevant and impertinent, if not downright mischievous. The losers under these rules of the game are beginning to see that law and politics, too, serve the needs of the absentee owners at the cost of the underlying population.

So, popular interest and sentiment no longer cluster about these respectable heirlooms of civil liberty and national rivalry with the same enthusiastic bigotry as in the recent past. Among these unblest classes who have to pay its cost, patriotic animosity is no longer so unreflectingly self-sufficient as it once was, and as perhaps it always should be. Among these classes of the underlying population the new alignment of material interests is beginning to threaten the continued life of the patriotic spirit. The effectual division of interest and sentiment is beginning visibly to run on class lines, between the absentee owners and the underlying population. In material effect, the national frontiers no longer divide anything but national groups of special interests, and these special interests are quite uniformly interests of absentee owners. National rivalries are useful to these special interests; hence the feverish urgency with which the constituted authorities and the substantial citizens are concerned to foment national animosity and to penalise backsliders.

Of course these matters are not currently spoken of in these terms. The new alignment of interest and sentiment is not formally recognised, not yet. A decent respect for the obsolete amenities of Natural Liberty forbids it, and there is always the human propensity to hold fast that which once was good. And more particularly, the bygone issues of national ambition still continue to hold the affections of the substantial citizens, and the spirit of national rivalry still continues to serve the needs of the special interests. Therefore national ambitions must and shall be preserved and all conflict of class interests must and shall be ignored.

But all the while the drift of circumstances goes forward and cuts the lines of the new cleavage of interest and sentiment no less deep and with no less intractable ill-will on both sides, for all their being decently covered over with patriotic invective and authentic verbiage about the common good. And all the while, under one form of words or another, men’s everyday interest and attention gathers more and more consciously about this ill-defined and shifty issue of absentee ownership, and about its place and value in the country’s industry, to the slowly increasing neglect of obsolete political ambitions. And all the while it is increasingly evident that patriotic sentiment and national ambitions are no longer of any material consequence, except as ways and means by which the statesmen are enabled to further the material interests of the substantial citizens. A “substantial citizen” is an absentee owner of much property.

This summary description of things as they are may seem overdrawn. But it is intended to describe the present drift of things, rather than the accomplished facts hitherto. It is drawn from current observation rather than from the historical records ; so that it aims to describe the current facts rather than the current talk about these facts. Of course there is no intention to intimate that the ancient and honorable habits of national conceit and patriotic intolerance have been forgotten or even that they are by way of becoming inoperative ; nor is it that the rightful claims of absentee ownership are being neglected or being formally questioned and required to show cause why. Those cardinal realities of the established order have not gone out of date or out of mind, neither the one nor the other. Nor is there an effectual resolution any-where being taken to put either of them away; not yet. But these ancient and honorable pillars of the old order are by way of becoming holdovers, both the one and the other; and the spokesmen of both are beginning to find themselves on the defensive. As witness the Treaty of Peace, which foots up to little if anything else than a plan of defense for the vested interests, concerted between the several custodians of the old order, at any cost to the world’s peace or to the underlying population. As witness also the later conferences of the Powers at Genoa, at The Hague, and at Lausanne, which have turned on little else than measures designed to stabilise the rightful claims of absentee owners as against the defection of the Russians and other recusants, together with the equitable distribution of absentee perquisites among the several groups of vested interests represented by the several governments concerned.

In effect, and notoriously, it has been the chief and engrossing business of all the statesmen of the Armistice and the Treaty, on the winning and the losing side alike, to safeguard these two essential holdovers that go to make up the status quo ante. National rivalry is a necessary means of making things safe and profitable for the absentee owners, as will appear more in detail in the further argument. All this is a traditional matter of course and has consequently aroused no particular discussion. Indeed, it is so much a matter of course as to be taken for granted. But the defensive measures concerted by these statesmen, and their continued manoeuvres for the stabilisation of absentee interests, go to show which way the cleavage of interests runs. Statesmen do not resort to counsels of desperation, such as underlie the Treaty and the later negotiations concerning partition of colonies and military establishments, except to save a precarious situation. And the same defensive purpose, it must be admitted, runs through that desperate recourse to the strong arm of repression which today engages the energies of the civilised governments, all and several, with the clamorous approval of their substantial citizens whose pecuniary interests are sought to be safeguarded by these measures.

Now, this red line of cleavage, in material interest and in sentiment, runs not between those who own something and those who own nothing, as has habitually been set out in the formulas of the doctrinaires, but between those who ov/n more than they personally can use and those who have urgent use for more than they own. The issue now is turning not on a question of ownership, as such, but on absentee ownership. The standard formalities of “Socialism” and “Anti-socialism” are obsolete in face of the new alignment of economic forces. It is now not so much a question of equity in the distribution of incomes, but rather a question of expediency as regards the absentee management of productive industry, at large and in detail. It is not a matter of moral revulsion. It may be said, of course, and perhaps truthfully, that the absentee owners of the country’s industrial equipment come in for a disproportionate share of the “national dividend,” and that they and their folks habitually consume their share in superfluities ; but no urgent moral indignation appears to be aroused by all that. All that has long been a familiar matter of course, and no substantial question as to the merits of that arrangement has yet been seriously entertained. Efforts to capitalise such a sentiment for purposes of disturbance have uniformly failed.

What the material circumstances are bringing to men’s attention is a question of how to get the work done rather than of what to do with the output. It is a question of the effectual use of the country’s industrial resources, man-power, and equipment.¹ Investment and corporation finance have taken such a turn and reached such a growth that, between them, the absentee owners large and small have come to control the ways and means of production and distribution, at large and in detail, in what is to be done and what is to be left undone. And the business interests of these absentee owners no longer coincide in any passable degree with the material interests of the underlying population, whose livelihood is bound up with the due working of this industrial system, at large and in detail. The material interest of the underlying population is best served by a maximum output at a low cost, while the business interests of the industry’s owners may best be served by a moderate output at an enhanced price.

1: Cf., e. g., Walther Rathenau, “Die neue Wirtschaft,” Schriften, vol. V.