Lessons from antiquity

Foreword

The wisdom that follows are from the second series of eBooks published in 2017 and 2018. Although success with organizational dysfunction was attained first in 2013, the years of 2013-2015 were spent in pursuits of the impossible. It was late in 2015 when we finally accepted the truth about audiences for truth and our naivety. Assuming change was top-down and that ROI mattered in implementation, we were hammered by delusion-speak catatonia.

Abandoning the wrong-audience approaches and climbing above the mentor line to stay glued to system think triggered the greatest learning surge of the paradigm and ideology. The energy being lost to impossible-audience efforts became available for knowledge building. Rapid advancement fed directly into implementation for proofing improved 2018 productivity levels over 2013 by 25%. Everyone in the “right” audience is happy with getting better. The wrong audience remains aggressively unresponsive.

The excerpts for the practitioner reflect this surge in effectiveness.

Practitioner essays

The first thing to be observed about all controversies between scientific parties is the large amount of mutual misunderstandings that enters into them. This element is not absent even in the most advanced sciences where homogeneous training, habits of exact statement, and a high level of general competence could be expected to exclude it. But where, as in business, conditions in all these respects are immediately less favorable than they are in mathematics or physics, men have an inadequate notion of what the other fellow really worries about. Hence a great part of the fighting is directed against positions which are indeed hostile fortresses in the imagination of the warrior but which on inspection turn out to be harmless windmills. Joseph Schumpeter (1921)

Though everything said in the text be infallibly true, yet the reader may be, nay cannot chuse but be very fallible in the understanding of it. John Locke 1702

Come now, Protagoras, uncover for me this part of your mind as well; how do you stand as regards knowledge? Do you agree with the majority there too, or do you think otherwise?

The opinion of the majority about knowledge is that it is not anything strong, which can control and rule a man; they don’t look at it that way at all, but think that often a man who possesses knowledge is ruled not by it but by something else, in one case passion, in another pleasure, in another pain, sometimes lust, very often fear; they just look at knowledge as a slave who gets dragged about by all the rest.

Now are you of similar opinion about knowledge, or do you think it is something fine which can rule a man, and that if someone knows what is good and bad, he would never be conquered by anything so as to do other than what knowledge bids him? In fact, that intelligence is a sufficient safeguard for a man? Socrates (352 BC via Plato)

Whether we will or not, the group system is here to stay, and every man interested in public affairs must recognize that it has to be dealt with as a condition, to be favored in such a way as to minimize its abuses and to increase its utility. William Howard Taft 1910

How could these institutional norms carry fire and sword round half the world? There must be a defect in my understanding. Charles Darwin 1862

Happiness is an activity of the soul in the direction of excellence in an unhampered life. Aristotle (345 BC)

Politicians are in the habit of laying it down as a self-evident proposition that no people ought to be free until they are fit to use their freedom. The maxim is worthy of the fool in the story, who resolved to not go into the water till he had learned to swim.  If men are to wait for liberty till they become wise and good in slavery, they may indeed wait forever. Lord Macaulay (1847)

We are far from realizing all that our passions make us do. For man often thinks he is in control when he is being controlled; and he is being controlled not because he is subject to restrictions and compulsions that are external to him, but because his self-knowledge and self-command are severely limited. The passions are the only orators who convince. Duc de La Rochefoucauld  (1675)

To act according to the dictates of prudence, of justice and proper beneficence, has no great merit when there is no temptation to do otherwise. But to act with cool deliberation in the midst of the greatest dangers and difficulties; to observe religiously, the sacred rules of justice in spite of both the greatest interests which might tempt and the greatest injuries which might provoke us to violate them; never to suffer the benevolence of our temper to be damped or discouraged by the malignancy and ingratitude of the individuals towards whom it may have been exercised; is the character of the most exalted and virtue. Self-command is not only a great virtue, but from it all other virtues derive their principal luster. Adam Smith (1760)

Everything that gives us a certain elevation over others by making us more perfect, by giving us a certain authority over them by making us more powerful, with honors and riches, seems to make us independent controllers. All those below us revere and fear us, they are always prepared to do what pleases us for our preservation, and they dare not harm us or resist our desires. It prostrates them at our feet. It excites them in our favor. It inspires in them all the impulses that tend to increase our grandeur. Nicolas Malebranche (1705)

Nothing is so easy as to find fault with human institutions and nothing is difficult as to suggest practical improvements. Condorcet and Godwin (1785)

We consider the measure proposed as calculated to exert a very unhappy influence on our apprentices – by seducing them from that course of industry and economy of time to which we are anxious to inure them. That it will expose the Journeymen themselves to many temptations and improvident practices. We consider idleness as the most deadly bane to usefulness and honorable living; and knowing. Where there is no necessity there is no exertion and so we fear and dread the consequences of such a measure upon the morals and well-being of society. Boston Master Carpenter Employers 1825

Workers regarded themselves as citizens and expected to earn a “competence,” which meant enough to support and educate their families and enough time to stay abreast of current affairs. More and more, however, in the late 19th century workers weren’t able to realize those dreams.

Ordinary workers refused to perform as cogs. In a variety of ways they sought to exert some control. Workers took off on traditional holy days or saints days, or did not come into work on “blue Monday.” Or they slowed down the grueling pace. Or they simply walked off the job. Come spring, factories often reported turnover of 200 and 300 percent.

At present the working man toils on through the period of a dreary existence, content if he can secure enough of the common necessities of life. He leaves behind him a family with no heritage but his own – no means to live but by hiring out to work for the benefit of others. Our descendants who wish to raise themselves from the conditions of wage earners, but they wish in vain. They cannot approach a field on which the capitalist has not set his mark and each succeeding age their condition becomes more and more hopeless.

They read the history of their country and learn there was a time when their fathers could have preserved balance. When our posterity look back to the opportunity that we are now losing, they will not bless our memory if we leave them nothing but a heritage of toil and dependence. Winston Lloyd Garrison (1840)

In 1841, it recognized the foreman of a dyeing factory “who ably contributed to setting, by his example, the habits of order and work that distinguish the workers connected with this establishment.” Other similar examples abound. Among them is that of Pierre Daniel Guerlepied, a simple laborer abandoned in childhood who, we read, owed the honor of becoming foreman in a veneer factory “to great diligence, exemplary conduct, and substantial intelligence.”

This representation of the foreman’s authority as a combination of authority, goodwill, and paternal spirit is well formulated in the “spinning manual” by the spinner Sébastien Lambert:

A good foreman is the workshop’s soul; the boss must turn to him; if there is a request or complaint to make, the workers must turn to him. . . . Here it is not a question of seeking the son of a prominent family or a man who is supported by important protectors; as much as possible, the choice must be a man who knows the field; who knows how to lead with dignity; who knows how to combine gentleness and strictness; who is energetic and affable; who defends the rights of the worker as well as those of the boss; who knows how, if required, to repair a loom when a spinner is not experienced enough to do it himself; who knows how to pass over certain minor errors and energetically repress the causes of unrest; in a word, a man who leads paternally and militarily. He must also know how to judge men and things with speed and energy.

This industrial propaganda, which made the foreman the archetype of the hardworking laborer, nonetheless imperfectly represented the true diversity of the spheres of recruitment. In any case, it underemphasized some of the attributes that were implicitly expected in the supervision of the workers, attributes that were much less linked to the possession of technical skill or enthusiasm for work than to leadership experience. This is why, in the wake of the Napoleonic Wars, many officers on half pay were recruited for these jobs. For example, in the Gros-Caillou tobacco factory in Paris, one of the largest factories in France at the time, with nearly a thousand laborers working in various workshops, two former soldiers were hired in 1811 as foreman and supervisor.

Other signs showed that skill, as appreciated as it was, did not suffice to place the person who demonstrated it in an incontestable leadership position. The issue of foreign technicians says a lot about this. When the first textile machines were imported in the late eighteenth century, this led to the employment of foreign technicians—primarily English ones—as foremen. The number of English workers in France in 1822 was estimated at fifteen thousand. Under the July Monarchy, British “forewomen” were sometimes employed to ensure the implementation of new methods. Around 1842, in Verneuil-sur-Avre, the spinner Waddington brought in Scottish female workers in order to “instruct the French workers in mechanical weaving, of which they then had a very poor knowledge.” Likewise, in the mid-nineteenth century, the Landerneau flax-spinning mill brought in nearly 250 Scottish women to work for the Breton firm.

For the industrialists, the recourse to these foreign female workers had the dual advantage of ensuring cheap labor and instructing local workers at a lower cost. However, these features of employment diminished the influence of these supervisory employees, who were considered to be outsiders to the community. The French workers objected to obeying a foreign authority, all the more so because the authority figures were women. During the labor riots of 1848, the “English forewomen” employed at the Petit-Quevilly flax-spinning mill had to leave the town; Waddington’s workers also demanded that eight English forewomen be removed from their posts. In this case, the workers’ attitude transcended mere xenophobia. The presence of a female authority overturned the workshop’s traditional hierarchy. These women actually possessed technical knowledge that enabled them to lead male subjects. However, these few experiments failed: it was the men who ultimately earned the supervisory and leadership positions while the women were relegated to auxiliary tasks.

These examples show the ambivalence of the foreman’s status during early industrialization. It seemed that the foreman had to belong to the community for the workers to accept his presence. However, he also had to distinguish himself from them in order to gain their respect and the manager’s trust. Thus technical skills were insufficient for imposing the foreman’s authority; other tools were needed too. Victor Grandin 1850

Legal records and the study of social conflicts from the first half of the nineteenth century abound with information on the interactions that formed the basis of the relationship of authority. The foreman certainly appeared most often as the master’s proxy in the workers’ daily life. The dismissal of workers might figure among his tasks, and this delegation of power was not easily accepted by the workers. It was also not unusual for him to be responsible for submitting the record book, as is demonstrated by some cases brought before the employment tribunal. These assignments sometimes exposed the foreman to the laborers’ anger: “A spinner whom his foreman had decided to dismiss punched him because he refused to turn over his book and he did not have time to adjust it at once.”

He was also the managerial spokesman for the workers. He also sometimes represented the manufacturer during employment-tribunal hearings. Thus the foreman Flipo spoke in the name of the company Prouvost Defresne in Roubaix in the case between it and the weaver Célestine Menarde from Leers. A simple letter explaining the manufacturer’s unavailability allowed for the delegation of authority before the employment tribunal.

The assessment was more delicate for factories where the delegation of authority benefited “an employee” whose true job within the company turned out to be difficult to define. The strength of the foreman’s authority also depended on the size of the company and the owner’s involvement.

The foreman was therefore above all the master’s proxy, responsible for representing him and defending his interests. Hence it was up to him to manage social conflicts, an instance of rupture in the daily order during which the limits of the exercise of his authority most appeared. He tried to bring the workers to their senses when a movement was starting. When the laborers of Forges Brullet in Dourlers decided to stop work in order to obtain a pay raise, the foreman went to the inn to try in vain to negotiate with them.

However, the foreman’s role was not limited to delivering pacifying words. He intervened alongside the managers to reestablish calm or negotiate with the workers. When two day laborers tried to lead the workers of the Manouvriez, Delarue & Co. sugar factory in Raisme in a strike for a pay raise, the foreman Lechef was beside the managers to chase the two leaders from the factory and reinstate calm. More than the owners, the foreman was the target of the workers’ physical violence: “Mr. Lechef was kicked in the right leg.” Was this a simple coincidence or a calculated gesture?

The hierarchy was fully present to restore order, but the manager was unharmed and the violence was directed at the person who embodied authority on a daily basis. In 1833 in Oise, in order to cope with an influx of orders, a spinning factory sought to temporarily shorten the workers’ breaks. When the factory foreman presented this change to them, “murmurs” greeted his speech and “the workers claimed they were being treated like slaves.” In the wake of this, they stopped working. The foreman then made himself the intermediary between the spinners and the manufacturer; he had a discussion with some laborers, and he gauged the level of discontent before reporting to the management: “The foreman came to notify Mr. Poittevin and explained to him that having spoken to some of the generally most reasonable male workers and to some female workers, he had found out that the workers had become heated after drinking wine and that threats had been made against anyone wishing to enter the factory until further notice.”

Finally, during labor unrest, the master’s proxy could turn into an actual infiltrator among the workers, in close collaboration with all the authorities. During the 1825 labor agitation of Houlme, the mayor was forewarned by the foreman that work would begin again. Likewise, in Fécamp in 1830, in an atmosphere of fear due to unrest in Rouen, the police chief turned to various foremen of the town in order to obtain information on the workers’ state of mind.

Nevertheless, the foreman’s authority, which was sometimes placed at the service of workers’ claims, could turn against the manufacturer. In 1817, after workers at a Flavy le Martel spinning mill had a violent strike for a salary increase, the prefect noted, for example, that “this disorder was provoked by the factory foreman.” This type of alliance between workers and supervisors also existed outside the textile industry. For example, in a Seine-et-Oise axle factory in 1857, the foremen headed a delegation to go to protest a modification of the regulations that would stiffen the fines imposed on workers.

The factory foremen went to Paris, to the company’s headquarters, to present everyone’s complaints against this rule and to simultaneously complain about the inhumanity of the manger, who, they claimed, had refused the means to transport home an old man injured in the workshops. On the assurance that new regulations would be written by the company and submitted for my approval, they returned to work, and the laborers simultaneously did the same.

Here, the foreman became the workers’ key mediator before the management. In other cases, foremen and laborers undertook action together before the political authorities: in the 1840s, workers and foremen in the machine industries together petitioned to request that the import of English machines be prohibited. Foremen were even directly involved in worker revolts: in 1848, in Reims, the foreman Leloup took part in the pillaging of the Pradine machine-spinning mill, which occurred in February after the proclamation of the Republic.

These last examples testify to the foreman’s ambiguous position in the workplace. Before 1850, the foreman was a qualified and experienced worker, a team head, and a leader of men. However, the distinctive signs that had to raise him above the rest of the workforce did not always suffice to ensure his authority in the factory context. Helen Marot  1862

With regard to this particular hypothesis, that all natural impulses, all propensities sufficiently universal and sufficiently spontaneous to be capable of passing for instincts, must exist for good ends, and ought to be only regulated, not repressed; this is of course true of the majority of them, for the species could not have continued to exist unless most of its inclinations had been directed to things needful or useful for its preservation. But unless the instincts can be reduced to a very small number indeed, it must be allowed that we have also bad instincts which it should be the aim of education not simply to regulate, but to extirpate, or rather (what can be done even to an instinct) to starve by disuse.

Those who are inclined to multiply the number of instincts, usually include among them one which they call destructiveness: an instinct to destroy for destruction’s sake. I can conceive no good reason for preserving this, any more than another propensity which, if not an instinct, is very like one – what has been called the instinct of domination; a delight in exercising despotism, in holding other beings in subjection to our will. Instincts neither bend nor go away.

The man who takes pleasure in the mere exertion of authority, apart from the purpose for which it is to be employed, is the last person in whose hands one would willingly entrust it. Again, there are persons who are cruel by character, or, as the phrase is, naturally cruel; who have a real pleasure in inflicting, or seeing the infliction of pain. This kind of cruelty is not mere hard-heartedness, absence of pity or remorse; it is a positive thing; a particular kind of voluptuous excitement. The East and Southern Europe have afforded, and probably still afford, abundant examples of this hateful propensity. I suppose it will be granted that this is not one of the natural inclinations which it would be wrong to suppress. The only question would be whether it is not a duty to suppress the man himself along with it. John Stuart Mills (1865)

The factory owner delegated management responsibility to the foreman or First-line supervisor. The foreman was responsible for successfully running the entire factory. The control of workers by the foreman usually took the form of the drive system of management that was characterized by the use of force and fear. Most industrial workers put in 10 hr. days/ 6 days per week at about $1.50 per day. They rarely saw the owner. The foreman or supervisor exercised complete authority over the unskilled workers in his section, hiring and firing them, even setting their wages. P. H. Douglas 1870

In the first place, most managers are reluctant, except under the compulsion of circumstances, to undertake revolutionary improvement; in the second place, because of natural basic conditions of prosperity in America, there has not been general compulsion toward ideas and methods marking a radical departure from opportunism.

The reason why coercive “drive” methods have prevailed in the past has been that the central management has been indifferent to the methods pursued by foremen in handling men but has insisted rigidly upon a constantly increasing output and constantly decreasing costs. The higher the organization of the factory, the more nearly the factory approaches the condition of automatic plant equipment…. Men may be brought to clock-like regularity of action during their hours of factory service, and may gladly and happily meet every factory labor requirement, without the slightest loss of self-respect, or the slightest consciousness of surrender of independent volition

If the nineteenth-century factory was an assemblage of buildings and machinery, it was also a complex social organization, encompassing hundreds, often thousands, of individuals. Yet it was a fragmented, decentralized organization, for the typical manufacturer entrusted most aspects of the day-to-day operation of the large manufacturing plant to the first-line supervisors and skilled workers. The exact implications of this practice differed among industries and shops, but one point is clear: the technicians, clerks, and other staff specialists-not to mention the union representatives-who dominate the present-day manufacturing plant were unknown in the late-nineteenth-century factory. By modern standards the foreman’s empire was a formidable realm. Carl Hookstat 1875

Many American workers experienced the economic transformations of the late 19th century in terms of a wrenching loss of status. For free white men, pre-Civil War America, more than any previous society, was a society of independent producers and property holders. Farmers, shopkeepers, and craftsmen generally owned the property they worked. About four-fifths of free adult men owned property on the eve of the Civil War. High rates of physical mobility combined with the availability of western lands to foster a sense that the opportunity to acquire property was available to anyone who had sufficient industry and initiative.

After the Civil War, however, many American workers feared that their status was rapidly eroding. The expanding size of factories made relations between labor and management increasingly impersonal. Mechanization allowed many industries to substitute semi-skilled and unskilled laborers for skilled craft workers. A massive influx of immigrants from southern and eastern Europe saturated labor markets, slowing the growth of working-class incomes.

Echoing earlier debates over slavery, many working men and women feared that the great industrialists were imposing a new form of feudalism in America, which was reducing “freemen” to “wage slaves.” They demanded “a fair day’s wages for a fair day’s work” and an eight-hour work day. Native-born workers, fearing competition from low-wage immigrant workers, sometimes agitated for immigration restriction. Many observers feared that the United States was on the brink of a ruinous class war. B. S. Rountree 1882

Too many of us have stopped too soon on the path of scientific development of our industries. The man is infinitely well worth study and infinitely more difficult to study than the machine. We all believe that cleaner and better things are attainable than a constant struggle between profits at the top and penury at the bottom in the same establishment. Joseph Tiffin 1877

Before we are fully prepared to consider, in all its length and breadth, the important proposition that society can and should seriously undertake the artificial improvement of its condition upon scientific principles strictly analogous to those by which the rude conditions of nature have been improved upon in the process which we call civilization; before we are wholly ready to enter upon an argument to prove the feasibility, the desirability, and the right of society, as such, to adopt an aggressive reform policy guided entirely by scientific foresight rendered possible by an intelligent acquaintance with the fundamental laws of human action; before we can justly contemplate man in his social corporate capacity assuming the attitude of a teleological agent and adopting measures in the nature of final causes for the production of remote beneficial effects – before we can properly rise to this position, it seems necessary that we should first seek to obtain as just and true a conception as the human mind is capable of grasping, of the real and precise relations which man and nature mutually sustain to each other. Lester F. Ward (1881)

The greater the bureaucratization of public life, the greater will be the attraction of violence. In a fully developed bureaucracy there is nobody left with whom one could argue, to whom one could present grievances, on whom the pressures of power could be exerted. Bureaucracy is the form of government in which everybody is deprived of political freedom, of the power to act; for the rule by Nobody is not no-rule, and where all are equally powerless we have a tyranny without a tyrant. John R. Dunlap (1893)

I shall not urge details of dealing with men any more than to urge details of tools and materials we see, but I do urge that as the laws of nature are utilized by us all after keen inquiry into them in the mechanical and material side of our work, so the laws of human nature shall be given at least as keen study in the living and productive side of our work. For, since both the laws of mechanics and the laws of human nature are but a partial manifestation of the law of the universe, there can be no harmony and no basis for permanent peace in reaching for the highest production until we have readjusted our factories so that they operate in accordance with the laws of human nature. Ordway Tead (1895)

A host of questions concerning the origin and development of legal and political institutions await a socio-psychological settlement. Government and law are two of the most important products, or rather sides, of the social psychic process, and the attempt to understand them without understanding it is like an attempt to understand all organic species without reference to organic evolution as a whole, or to explain attention without reference to the whole process of the mental life.

The natural history of government and of the various forms of government, when it comes to be properly written, must seek the help of social psychology to explain the phenomena with which it deals. Monarchy, aristocracy, and democracy, with their variations and “perversions,” will be truly explained as phenomena only when they are shown to be expressions of the particular psychical processes which characterize particular stages of social growth, or special social coördinations. The same method of interpretation will have to be applied to the legal systems and institutions which are bound up with government.

It will be the further task of political science to show, through the facts of history and ethnography, what forms of government and of law are regularly associated with certain types of social psychic coordination. Thus it is possible that some degree of prevision may be reached as regards the relation between a society and its form of government; but no exact prevision, since, as individual psychology teaches, no two psychical coördinations can ever be exactly alike. On this account a socio-psychological interpretation of political and legal phenomena will, perhaps, be unacceptable to those who, like Comte, long for a rigid science of society, a “social physics,” which shall make possible in social life the exact prevision of the mathematical sciences. Charles A. Ellwood 1899

Wherever human beings are grouped together in mutual endeavor or for the accomplishment of a definite task, attitude is bound to be a controlling factor in their work. That their mental state, their will to do, their cooperative effort – all of which are synonymous – bear a true relation to their output, productivity and the success of the joint undertaking, is so obvious and has been proven so often as to require no supporting argument.

It is regrettable that modern industry has failed so often to comprehend this basic and vital economic truth or, comprehending it, has failed to grasp the opportunity and turn it to practical advantage. Directive and administrative energy has been turned too exclusively along mechanical and operative lines with disregard of the intrinsic and vitalizing psychological factors of producing. Arthur Twining Hadley 1900

During the medieval period the manufacture of cloth in England had been primarily for the needs of the town and neighborhood and it had been controlled by the gilds. This form of control was satisfactory in the days of the local market. Gradually, however, the position of the gild was weakened. Many other causes contributed to the decline of the gilds.

For one thing, the rise of coherent town governments, operating as agents of the national government, meant the transfer of many of the tasks of control which had formerly made the gilds so powerful from the gild to the municipality and to the nation. The gild was thus less able to control anyone who might wish to challenge its power. For another thing, the rise of a strong foreign demand for English cloth and the inability of the gild to regulate dealings for foreign markets demonstrated the unfitness of a local agency to cope with national and international problems. Again, even in the days when the gilds were most strongly organized they had found it difficult to keep control of every manufacturer. Always some restless spirit was fighting their monopoly.

This difficulty was greatly increased when the government adopted, about 1325, a policy of encouraging foreign cloth-makers to settle in England and carried out this policy, somewhat intermittently in later centuries. These foreigners did not always become guildsmen. They might settle in towns where gilds were weak or in rural districts which the gilds did not control, and there carry on their crafts free from local supervision. Furthermore, the enclosure movement caused many people to leave the manors and to seek employment in craftsmanship. These persons would carry on their work in suburbs or in the country where such onerous regulations as the seven-year apprenticeship rule did not apply.

It must be admitted that the gilds got into difficulties because of their own foolish actions. They had gained in size and strength, and many of their members had become wealthy, with the result that they became grasping and arbitrary rather than filled with a desire for service. They made their membership requirements increasingly burdensome. Sometimes they would not accept apprentices unless the apprentices would promise to make no effort to get into the gild after they had finished their apprenticeship.

In other cases very large fines or admission fees were assessed upon those who wished to enter. To such an extent did they carry these practices that organizations of journeymen, which were in some ways like our modern trade unions, sprang up to protect the journeyman against the arbitrary practices of the master craftsmen.

Finally, while these various changes were undermining the strength of the gilds, they were dealt a blow from quite another direction. The gilds combined religious duties with their other work and when in 1547, as one event in the Religious Reformation in England, all property devoted to religious purposes was confiscated, the gilds suffered severe financial losses. The gilds declined in importance. William Kirk 1901

The break-up of medieval organization shows that men had become possessed of a spirit very different from that which moved them during the time of the gilds and manors. Under the manorial system, men worked merely for subsistence; that is, they produced food and other necessaries for their own livelihood. In the towns the guildsmen did, it is true, produce for a market, but it was a very small market and they could not hope to sell many goods or to accumulate large amounts of money.

Furthermore, channels of trade and methods of work were fixed by custom, and by gild rules which were largely statements of custom.  All this is changed. The old system, stable and customary, gave way to one of change and opportunity. There came into manorial life production for the market, sheep-raising as a business enterprise, and risk taking through a lease system. There came into town life a great change due to expanding foreign and domestic trade. The conditions of this wide market were such that men had increasing opportunity to gain not merely a comfortable living but to amass riches.

While industry and trade in outward appearance still bore largely their medieval aspects, a tremendous difference was soon to be brought about.  Conditions ready for a revolutionary change. It is frequently the case in human history that long periods of slow preparation set the stage for a most dramatic change. Since 1750 such a dramatic change has occurred. Various factors combined to make possible such a rapid, tremendous, and far-reaching change, that we speak of it today as the Industrial Revolution. Power-driven machinery, operated in great factories, became the method used to produce many of our want-gratifying goods. All of us know about the factory system and machinery in general terms and are accordingly able to assume its presence.

Even into the past and future stretches the web of economic relationships. We utilize the products of those who have worked before us. Their inventions, either of mechanical agencies or of such intangible devices as rules of law, morals, language, accounting or principles of business, are useful to us. Likewise we count upon the future. When we write a book, make a brick, build a house, or dig a well, it is the demand of the future as much as of the present that makes our work valuable. Thus are we interdependent with those who follow us. We are cooperators with generations yet unborn. G. F. Barnett 1903

Interdependence results from specialization.  The outstanding result of specialization is greater productivity than formerly. The interdependence flowing from specialization is worth taking up again that it may be seen as a whole. As our economic organization has become more and more specialized it has grown more and more interdependent.

One sees quite vividly the degree of his interdependence. For how many of the clothes which you are wearing are you dependent upon the efforts of someone else? How many of the articles of furniture in your home were made by others? For what proportion of things eaten at your table is the productive work of other persons responsible? How many persons took part directly or indirectly in producing the chair in which you are sitting or the shoes which you are wearing? How many articles which you ate at your last meal came from outside your city and how many from outside your own country?

The dependence of persons upon other persons is not the only form of interdependence which follows specialization. We have seen that our business units and our specialized middlemen are dependent upon ranges or series of other specialists. There is thus interdependence between industries, trades, and professions. Then, too, our industries are interdependent because they all rely upon the same limited supply of social resources, land, labor, capital, and acquired knowledge. The utilization of any part of this energy at a given time for one industry or for one purpose affects the amount that is available for other industries or other purposes. The growth or decline of one pursuit is thus a matter affecting in various ways the welfare of all others.

The interdependence of our business processes is well illustrated by the interdependence of prices. The prices which retail merchants charge for consumer’s commodities are related to each other through the principle of substitution. An advance in the price of one commodity usually creates an increased demand for available substitutes and thus favors an advance in the prices of these substitutes. The prices of goods sold to consumers are, of course, related not only to the demands of consumers but also to the prices the merchants had to pay the producers. The prices charged the merchants by these producers are related not only to the demands of the merchants (who reflected the consumer’s demands) but also to the cost of the various goods the producers employ in manufacture and distribution. This goes back to raw materials, and the prices of raw materials are related intimately to the prices of labor, current supplies, machinery, buildings, land, loans, leases, etc., which the farmers, miners, lumbermen, etc., employ.

The price of labor (wages) is intimately related to the prices of consumer’s goods; to the cost of living. And most of the less tangible services, loans, transportation, insurance, are the subjects of an organized business traffic, and the prices charged by the bank, the railway, and the insurance company are systematically related both to the prices which these enterprises must pay for their own goods, and to the prices of the wares dealt in by the enterprises which borrow money, ship goods, and carry insurance.

Present prices are affected by prices of the recent past, and by the anticipated prices of the near future. The price system has thus no definable limits in time and its system is an endless chain. This interdependent price system is typical of the interdependence of our whole business structure.  Our interdependence has an impersonal character. In spite of the fact that we constantly use the work of other people and specialize in doing work which is useful to other people in spite of the interdependence of modern society we come in little personal touch with our fellow cooperator.

Our relationships are impersonal. Under the old gild system, by way of contrast, the master craftsman and his workmen living in the same house, ate at the same table and knew intimately the personal affairs of one another. The craftsman who made shoes, clothing, or implements for a buyer in the same locality frequently made them for someone with whom he had a personal acquaintance and who would take a personal interest in the goods which he had purchased.

On the other hand, the specialized employee in a modern factory does not know his employer and may be known to those in authority only by number. He cannot even guess who will wear the shoes that he helps to make. The farmer who produces food supplies does not know the city dwellers who consume them, nor can producer or consumer in such a relationship feel a personal interest in one another. In hundreds of other ways, some of which we shall consider more fully later on, has specialization, combined with other features of our economic system, made for impersonality.  Specialization has resulted in a more speculative society.

Specialization has made business undertakings more speculative. It has brought new risks. Under it one producer is dependent upon others so that he, blameless himself, may suffer loss because of the failure of someone else to carry on his task successfully. Then, too, in a specialized society, production takes place for an anticipated demand of the future. It takes months for a good to be made, for the materials to pass through the hands of the various series of specialists, and meantime the demand may have disappeared. John L. Gillen 1904

Not least, the makers of the commodities for laborers continue to produce these on the accustomed scale, anticipating the transference of money income by capitalists to laborers, in the course of that continuance of investment of which the purchase of machinery and materials is the other part.  Some would have us believe that there is at present no organization at all.

They use hard words, such as “scramble for wealth,” “suicidal competition,” “exploitation,” “profit-hunting,” and say that the present state of things is “chaotic.” Now, whatever our present state may be, however unsatisfactory it is, it is certainly not chaotic. If it were really chaotic, everyone who goes to his daily work tomorrow must be a fool, since he would be just as likely to get his daily bread if he stayed at home or went elsewhere to amuse himself.

The very fact that we all know as well as we do that certain results will almost certainly follow upon a certain course of action shows that we are not living in chaos. Our system may be a bad system, but it is a system of some sort; it is not chaos. If a man holds a book too close to his nose, he cannot read it, and so it is with the world of industry. If we look at it from too close a standpoint, we can only see a blur.

Let us imagine a committee of the Economics Section of the Saturnian Association for the Advancement of Science reporting on what they had been able to see of affairs on our planet through a gigantic telescope big enough for them to see human beings moving on its face. Would they be likely to report that poor Mundus seemed quite chaotic? Would they report that everyone was scrambling for himself to the disadvantage of everyone else in such a way that the general good seemed entirely neglected? Would they say that all the land in the most convenient situations was lying idle, that nobody had a roof over his head, and that everyone was running about aimlessly or sitting idle, in imminent danger of starvation?

They might report something of this kind if they could carry on a conversation with certain people here and believed all they were told, but certainly not if they judged by their own observation. They would be much more likely to report that they had seen a very orderly people co-operating on the whole with a wonderful absence of friction, that they had seen them come out of their homes in the morning in successive batches and wend their way by all sorts of means of locomotion to innumerable different kinds of work, all of which seemed to fit somehow into each other so that as a whole the vast population seemed to get fed, and clothed, and sheltered. They would not, of course, vouch for the perfection of the arrangements.

They would see that there were occasional irregularities and hitches. They might see now and then too many vehicles in one street, too many passengers trying to travel by one train or tramcar. They might even see along our English country roads the melancholy spectacle of men tramping in both directions evidently in search of the same kind of work. They might be able to see that some had too much— more than they seemed to know how to dispose of without hurting themselves and others—while some evidently had too little for healthy and happy existence. But in spite of these defects, they would report, I think, that on the whole the machinery, whatever its exact nature, seemed to do its work fairly effectively.

And if we can imagine them able to go back five hundred or a thousand years, we can feel tolerably sure that they would report still more favourably, since they would then see that enormous improvement had taken place and would discover no appearance of any change which would suggest that the existing system is not the outcome of an orderly development of the institutions of the past. I insist so strongly on the fact that our existing machinery does work, not with any idea of contending that all is for the best in the best of all possible worlds, but because I think that in order to get any proper hold of economics it is necessary to begin by considering, not the defects of machinery, but the main principles involved in its construction and working. We are apt to begin with the defects because it is they that strike our eye and often excite our sympathy. W. B. Beveridge 1904

There is war between and among the classes. War, sometimes overt and violent, sometimes concealed and even unconscious, but war nevertheless. The war is all the more intense and irrepressible because it springs, not from personal hostility or accidental misunderstandings; but from ever-present organic economic causes. There is war between employer and employee. The employer is in business for profits. Industrial profits come from the work of the hired hand. The smaller the wages the larger the profits. The employee works for wages. Wages represent the product of his labor after deduction of the employer’s profit. The smaller the profit the larger the wages. The employer must strive to maintain or increase his profits under penalty of industrial extermination. His personal views and feelings cannot alter the situation.

The employee must strive to maintain or increase his wages under pain of physical destruction. His personal inclinations do not count. Sometimes this antagonism of interests expresses itself in petty bargaining and commonplace haggling, and at other times it assumes the form of violent conflicts: strikes, boycotts, and occasional dynamite explosions and, on the other hand, lockouts, black lists, injunctions, and jails. ”There is war between employer and employer. Each capitalist controls a share of an industry. The greater the share the larger, ordinarily, is his profit. His natural desire is to increase his share. He can do that only at the expense of his neighbor. Hence, the mad industrial competition, the merciless rivalry for the “market,” the mutual underbidding and underselling, the adulteration and falsification of commodities, the senseless speculative enterprises, and, finally, wholesale failure and ruin. There is war between worker and worker.

Modern machinery, although inherently of untold blessing to mankind, operates as a curse upon the toiler under the prevailing system of individual ownership. It does not lighten the burdens of the worker. It does not reduce his hours of labor—it displaces him from his employment. The marvelous productivity of the machine creates the dread legions of jobless workers, the fierce competition for a chance to work, and the consequent lowering of wages below the living standard. The automatic, almost self-operating, machine makes child and woman labor possible and profitable, and the children and wives of the workers are drafted into the field of industry competition with their fathers and husbands. The more women and children are at work in factories the rarer become the opportunities for men to find work and the lower become their wages. Child and woman labor means lower wages for man. Low wages for men mean more child and woman labor, and so the workers move forever in a vicious circle of misery and privation.

There is war between producer and user. Business is conducted for profits. The larger the prices of the commodity or the higher the rate of service the greater, ordinarily, is the profit of the capitalist. Hence, the everlasting quarrels between the seller and the buyer, the landlord and the tenant, the carrier and the passenger, the aggressive and inexorable “producer,” and the pitiable “ultimate consumer.” The individualistic and competitive system of industry is a system of general social warfare; an ugly, brutal fight of all against all. It is a mad, embittered race for wealth or bread, without plan or   system, without pity or mercy. It has produced the abnormal type of the multi-millionaire with a hoard of material wealth enough to last thousands of families for countless generations to come, and the children of the slums succumbing for lack of the barest necessaries of life.

It operates through periods of feverish activity during which men, women, and even children of tender age are worked to exhaustion, and periods of inactivity and depression during which millions of willing workers are forced into idleness and starvation. The system of competition has not been without merit. It has organized industry, stimulated invention, and increased human productivity a hundred fold. It has created vast wealth and evolved higher standards of life. It has broken down the barriers between countries and united all modern nations into one world-wide family of almost identical culture and civilization. It has played an important and useful part in the history of human growth. W. M. Leiserson 1905

We may roughly distinguish four stages in the history of industry during mediaeval and modern times. It will be wiser, for the present, to leave the ancient world out of account. First, there is that stage of affairs when there is no separate body of professional craftsmen at all; where all that can be called “industry,” as distinguished from agriculture, is carried on within the household group, for the satisfaction of its own needs, by persons whose main business is the cultivation of the land or the care of flocks. The main activities of all except the fighting class are still in this stage preponderantly agricultural; but the cultivators of the soil make their own clothes and furniture and utensils, and there is practically no outside “market” for their manufactures.  It represents a long step in evolution when professional craftsmen come into existence: men who, though they may have small holdings of land which they cultivate, and may indeed receive remuneration in the shape, to some extent, of these holdings, are yet primarily craftsmen—primarily, for instance, weavers or smiths.

Such a specialisation alike of agriculture and industry affords one of the earliest and most striking examples of division of labour, and brings with it some of the advantages which Adam Smith sets forth in his celebrated chapter. Production in this stage is still on a small scale; it takes place either at the customer’s home or in a small workshop or room or shed within or adjoining the craftsman’s own dwelling; and there is no intermediary between producer and consumer. The producer either works on the customer’s own materials or, if he buys his own material and has not only “labour” but a “commodity” to sell, he deals directly with a small neighbouring circle of patrons.

There is a “market” in the modern business or economic sense, but it is a small and near one, and the producer is in direct touch with it; though, indeed, it may sometimes consist, not of the ultimate consuming public, but of fellow-artisans in some other mystery.  The next stage is marked by the advent of various kinds of commercial middlemen, who act as intermediaries between the actual makers in their small domestic workshops and the final purchasers, the widening of the market being both the cause and the result of their appearance.  And, finally, with the advent of costly machinery and production on a large scale we have the condition of things to which we are accustomed in our modern factories and works, where the owners or controllers of capital not only find the market, but organise and regulate the actual processes of manufacture. To these several stages it is difficult to give brief designations which shall not be misleading. It is common to speak of them as:

  1. The family or household system,
  2. The gild or handicraft system,
  3. The domestic system or house industry, and
  4. The factory system.

Capitalism of today means certain things with respect to the worker:

The worker secures his livelihood under a wage system. That is, he sells his services to another, who converts these services into, say, a commodity, and this commodity belongs to the person who has hired the laborer. In other words, the worker has been “divorced from the product.”

The worker has also been “divorced from his tools.” The tools capital goods belong to another to his employer. Closely connected with this is the further fact that the worker has been “divorced from control of the conditions of work.” “Conditions” is here a broad term, including methods of processing, supervision of technique, hours, sanitary conditions, etc. To be sure, the worker has something to say concerning certain phases of the conditions of work, but the initiative manifestly rests with his employer.

Typically, labor today is group labor. It is performed under the conditions of the factory system. This is dependent upon the progress in technology already mentioned.

It presupposes “such a development of the industrial arts (including organization and management) as enables indirect methods of production to afford profitable employment to group labor using tools or machinery.” Clearly, also, it is dependent upon the development of large markets.  Most of the industrial arts, too, were organised with regard to the requirements of the city market by small independent masters, who each hoped to get a fair share of existing trade rather than to extend it; the regulations of their craft gilds were not favourable to the formation or application of capital. Similar obstacles existed in the rural districts, though they were gradually breaking down on all sides, so that there were steadily increasing opportunities for the investment of capital during the fourteenth and fifteenth centuries.

Powerful as capital is, and great as are the advantages which it has to offer, the conditions of life in the fourteenth and fifteenth centuries were so unfavourable to it as to delay its introduction and to check its operations. The whole social system stood in its way; for the organisation of much of the labour of the towns was so rigid as to admit of little modification, while in the rural districts the survival of villenage presented still greater obstacles to the enterprise of moneyed men.

Astriction to one place is perfectly congruent with natural economy; the mediaeval landowner was satisfied to employ, as best he could, the labour which he found available, and was able to retain it under his control. With the capitalist the case is different; he possesses wealth which he can direct to any profitable undertaking that opens up, and he has the means of compelling or attracting labour to follow in the direction where his enterprise sees the probability of reward. So long as slavery was in vogue, the transference of labour could be effected in the most ruthless fashion by the purchase and export of slaves; but this was no longer possible at the epoch when capital began to take part in the industrial development of mediaeval Europe; slavery had ceased to exist; labour tended to follow capital because it was attracted, not because it was forced. Leon C. Marshall 1906

By economic forces I shall mean anything and everything which tends to bring men into economic relations. Thus, the invention of machinery which tends to increase division of labour, the concentration of the industrial population, improved means of transport and communication, the credit system, the general demand for elementary and technical education, and, in a word, the whole structure, organization, and movement of society, is perpetually opening and closing opportunities for combination and for the mutual furtherance of each other’s purposes by men of differing faculty, opportunity, and desire. And these conditions determine how far and in what way the general desire of every man to accomplish his own purposes, whatever they may be, shall become an economic force, urging him to enter into relations with other men, with a view to the more effective accomplishment of his own purposes.

Whether I pursue my purposes directly through the application of my own resources and capacities to their accomplishment, or indirectly by entering into an economic relation with other men, applying my resources directly to the accomplishment of their purposes and only indirectly to the accomplishment of my own, in either case my motives are identical.   The fundamental assumption upon which civilized society rests is that each member of society is doing something to make the general conditions of life easier for society as a whole. If there were no such thing as society, this would not be the case. If the world were divided up among a population of hermits, each home would practically be a world by itself, having nothing to do with other homes.

Since the world is the home of people who have complicated dealings with each other, it has come to pass that each gets tolerated by the other in seeking his own personal ends solely upon the implied condition that each will be an agent to do some sort of work for his fellows. Wherever a collection of human beings begins to resolve itself into a society, the process involves a tacit agreement that some of the persons will attend to a certain work needed by the society, while others will look after the remainder. If a hundred farmers should happen to buy land in the same township remote from other settlements, these farmers would sooner or later illustrate the change that has gone on, with difference of detail, in the development of every civilization or part of civilization.  The fundamental grievance of classes against other classes in modern society is that the supposed offenders are violators of this primal law of reciprocity.

Criticisms of institutions or of the persons operating them resolve themselves into charges that whereas the parties in question are presumed to be useful social agencies, they are in reality using their social office for the subordination of public weal to private gain. This is at bottom the charge of the dissatisfied proletarian of all classes against employers, capitalists, corporations, trusts, monopolies, legislators, and administrators. This is also in large part the implied countercharge against organized labor.

The most serious count in the wage-earner’s indictment of other classes is not primarily that these classes draw too much pay, but that they are not doing the work that their revenues are supposed to represent. Back of all formal contracts or statutes or institutions, therefore, is this unwritten law of civilization that every citizen shall be a public servant. The cycles of social growth, arrest, decay, have always illustrated in turn observance, neglect, and violation of this law. Men and institutions have begun by serving their day and generation in a socially needful way. They have sometimes ended by making their day and generation serve them in a socially harmful way. Then has come social condemnation, rejection, substitution. H. G. Moulton 1907

The unrest of our society today is due, in large measure, to suspicion that men are falling more and more into the position of toilers for other men who are evading the law of reciprocal service. Dissatisfaction is fed by belief that many occupations, needful in themselves, are becoming less and less a social benefaction and more and more a means of levying tribute over and above the value of the service. Successful and arrogant individualism seems to defy the law of mutualism that must reign in right society.  The evils of commerce in the following order: “The trader is a go-between, who profits by the general anarchy and the non-organization of industry. The trader buys up products, he buys up everything; he owns and detains everything, in such sort that:

  1. He holds both Production and Consumption under his yoke because both must come to him either finally for the products to be consumed, or at first for the raw material to be worked up. Commerce with all its methods of buying, and of raising and lowering prices, its innumerable devices, and its holding everything in the hands of middlemen, levies toll right and left; it despotically gives the law to Production and Consumption, of which it ought to be only the subordinate.
  2. It robs society by its enormous profits—profits levied upon the consumer and the producer, and altogether out of proportion to the services rendered, for which a twentieth of the persons actually employed would be sufficient.
  3. It robs society by the subtraction of its productive forces; taking off from productive labor nineteen-twentieths of the agents of trade who are mere parasites. Thus, not only does commerce rob society by appropriating an exorbitant share of the common wealth, but also by considerably diminishing the productive energy of the human beehive.
  4. It robs society by the adulteration of products, pushed at the present day beyond all bounds. And in fact, if a hundred grocers establish themselves in a town where before there were only twenty, it is plain that people will not begin to consume five times as many groceries. Hereupon the hundred virtuous grocers have to dispute between them the profits which before were honestly made by the twenty; competition obliges them to make it up at the expense of the consumer, either by raising the prices, as sometimes happens, or by adulterating the goods, as always happens. In such a state of things there is an end to good faith. Inferior or adulterated goods are sold for articles of good quality whenever the credulous customer is not too experienced to be deceived.
  5. It robs society by accumulations, artificial or not, in consequence of which vast quantities of goods collected in one place are damaged and destroyed for want of a sale. Fourier says: ‘The fundamental principle of the commercial systems, that of leaving full liberty to the merchants, gives them absolute right of property over the goods in which they deal; they have the right to withdraw them altogether, to withhold or even to burn them, as happened more than once with the Oriental Company of Amsterdam, which publicly burnt stores of cinnamon in order to raise the price. What it did with cinnamon it would have done with corn; but for the fear of being stoned by the populace it would have burnt some corn in order to sell the rest at four times its value. Indeed, it actually is of daily occurrence in ports for provisions of grains to be thrown into the sea because the merchants have allowed them to rot while waiting for a rise. It is society that bears the cost of this waste, which takes place daily under the shelter of the philosophical maxim of full liberty for the merchants “
  6. Commerce robs society, moreover, by all the loss, damage, and waste that follow from the extreme scattering of products in mil lions of shops, and by the multiplication and complication of carriage.
  7. It robs society by shameless and unlimited usury—usury absolutely appalling. The trader carries on operations with fictitious capital, much higher in amount than his real capital. A trader with a capital of twelve hundred pounds will carry on operations, by means of bills and credit, on a scale of four, eight, or twelve thousand pounds. Thus he draws from capital which he does not possess, usurious interest, out of all proportion with the capital which he actually owns.
  8. It robs society by innumerable bankruptcies, for the daily accidents of our commercial system, political events, and any kind of disturbance must usher in a day when the trader, having incurred obligations beyond his means, is no longer able to meet them; his failure, whether fraudulent or not, must be a severe blow to his creditors. The bankruptcy of some entails that of others, so that bankruptcies follow one upon another, causing widespread ruin. And it is always the producer and the consumer who suffer; for commerce, considered as a whole, does not produce wealth, and invests very little in proportion to the wealth which passes through its hands.
  9. Commerce robs society by the independence and irresponsibility which permit it to buy at the epochs when the producers are forced to sell and compete with one another, in order to procure money for their rent and necessary expenses of production. When the markets are overstocked and goods cheap, trade purchases. Then it creates a rise, and by this simple manoeuvre despoils both producer and consumer.
  10. It robs society by a considerable drawing of capital which will return to productive industry when commerce plays its proper subordinate part, and is only an agency carrying on transactions between the producers (more or less distant) and the great centres of consumption—the communistic societies. Thus the capital engaged in the speculations of commerce (which, small as it is, compared to the immense wealth which passes through its hands, consists nevertheless of sums enormous in themselves) would return to stimulate production if commerce was deprived of the intermediate property in goods and their distribution became a matter of administrative organization. Stock-jobbing is the most odious form of this vice of commerce.
  11. It robs society by the monopolising or buying up of raw materials, For (says Fourier), the rise in price on articles that are bought up, is borne ultimately by the consumer, although in the first place by the manufacturers, who, being obliged to keep up their establishments, must make pecuniary sacrifices, and manufacture at small profits in the hope of better days; and it is often long before they can repay themselves the rise in prices which the monopoliser has compelled them to support in the first instance. In short, all these vices, besides many others which I omit, are multiplied by the extreme complication of mercantile affairs; for products do not pass once only through the greedy clutches of commerce; there are some which pass and repass twenty or thirty times before reaching the consumer. In the first place, the raw material passes through the grasp of commerce before reaching the manufacturer who first works it up; then it returns to commerce to be sent out again to be worked up in a second form; and so on until it receives its final shape. Then it passes into the hands of merchants, who sell to the wholesale dealers, and these to the great retail dealers of towns, and these again to the little dealers and to the country shops; and each time that it changes hands it leaves something behind it. Albert C. Hodge 1909

Problems connected with the social control of industrial affairs are very complex and baffling in machine industry. It is not merely that we “do not know.” We do not know that we do not know. Our measures of control are largely based upon the hypotheses of simple industry. Through social inheritance the popular mind has been firmly established in the dogma of the infallibility of competition under any and all circumstances, so that our formal social control is organized on the assumption that price should correspond with cost and that this will come about when the “normal” has been worked out.

We are gradually coming to a proper realization of the shortcomings of “free” competition as the law of trade in complex industry, and are coming to rely more and more upon formal social control in the guise of state action laying down the rules of the game under which our industrial operations must be performed. And we are making increasing use of informal social control. We are striving to develop codes of ethics and to bring home to the individual a sense of personal responsibility.

All this brings us clearly face to face with a very serious problem— whether we possibly can control the great political forces which economic forces have created. For the whole political and moral evolution was inherent in the machines that replaced the hand labor of former times. You would not have had the trusts in a regime of hand labor; you would not have had the enormous mills that united to form the trusts. It is the machine that has made the size of a mill so important and has made it impossible for any but the big one to survive. The fact that only a few did survive first caused those few to compete so vigorously with each other that they made almost no profits, then enabled them to save their profits by consolidating, and finally incited them to seek, besides legitimate profits to which they had a perfect right, an income not founded in justice and one to which a harsh term may correctly be applied.

It is fair to say that this whole enormous transformation, which runs through the plan of modern industry and through the relations of employers and employed, which enters into and perverts our political life, and even lowers the moral tone of society, was inherent in the original steam engine which Watt manufactured in England more than a century and a quarter ago. It was all brewing in that teakettle which as a boy he sat and watched, noting the force of the steam as it raised the lid and let it fall. He saw that the force might be put to great account in driving such primitive machinery as he knew of; but he was far from foreseeing the transforming effects of the innumerable machines which his engines were destined to make available. No one for a hundred years thereafter realized their full economic and political consequences.

In modern industrial society, on the contrary, there is no permanent association of the laborer with the instruments of production. He secures equipment with which to work by means of a “contract” expressed in pecuniary terms, and running for a stipulated period. He owns no equities in the property with which he works. When the contract expires, it need not be renewed. No other property owner is compelled to make a new contract with him. The bait of higher wages, drawing him from place to place, is likely to prevent his identification with a group animated by a spirit of solidarity. He has the tremendous advantages which come from freedom of movement and the chance to take advantage of the best opportunity which presents itself. He has the disadvantages which attend short-time contracts. These last are outgrowths of two sets of conditions:

  1. Those affecting employment, causing it to increase or decrease, and to pay higher or lower wages; and
  2. His own industrial powers, which may be partially impaired or even totally collapsed, from accident or sickness to which he is exposed.

When they are gone, as they will eventually be in old age, he has no respectable surety of support.  Industrial accidents occur because we have not yet learned absolutely to control the dangerous natural forces which we have, pent up in our machines, and because we have not learned properly and exactly to adjust our movements to these huge engines of production— and destruction. In general their causes are resident in the system as a whole and cannot be directly imputed to “individuals.” Unfortunately, however, their consequences may be quite concentrated. They are no respecters of persons, and are as likely as not to rob of their productive abilities laborers who have families dependent upon them.

The problem involves: first, a prevention of industrial accidents, attended as they are with great losses of productive power; and second, the devising of some legal measure to compensate the injured and innocent party for his loss.  J. O. McKinsey 1910

This “Industrial Revolution” movement has done far more than shower upon us a series of “great inventions” or bless mankind with a new technique. Appearing gradually and working indirectly it has affected our whole world of thought, of action and of institutions; it has modified our economics, our politics, our ethics, and even our religion; it has changed in nature, number, and form our baffling problems; it has written itself large in our culture. In view of its many-sidedness and the gradual way in which it has effected and is still effecting its changes, it seems amiss either to call it “industrial” or to refer to it as a “revolution.”

We look in vain for its beginnings. We know that early medievalism could have given us nothing which, even erroneously, could be called an “industrial revolution.” Before it could appear the mediaeval scheme of values had to be transformed. Desires for earthly things had to be freed from their unethical taint; a wholesome respect for the world had to be built up; man had to acquire greater reverence for his own powers and functions; people had to learn to conform to the things of this world if they would transform it. This change in the attitude toward life and its problems was intimately associated with several other lines of development.

The course of the “revolution” has been as comprehensive as its antecedents. The changes in technique are most clearly appreciated. Even here the tendency toward a “machine-process” embracing a large part of the industrial system is generally overlooked as is also the seemingly antagonistic fact that up to the present the conquest of the older system by the machine has been partial and incomplete. On the economic side, the increasing importance of capital, the rise of the “factory system,” the disappearance of “domestic industry,” the trend toward large-scale production, the separation of the laborer from the “tools of his trade,” and increasing class differentiation based upon differences in industrial functions are most clearly seen.

These aspects of the movement raise the questions of artificially controlling the tendencies inherent in the development of the machine-system, the determination of the size of the industrial entity, the social control of large aggregates of wealth such as railroads and capitalistic monopolies, the elimination of economic insecurity which alike attends labor and capital, the equities of the distribution of wealth, and the urban enigmas of overcrowding, housing, sanitation, vice, and poverty.

They reveal, too, just over the horizon the more ominous questions of property, inheritance, and the reconstruction of industrial society. The questions reveal but a single aspect of the influence of the Industrial Revolution. Political, ethical, religious, and social questions have all been involved in the general transformation of life and values. In many cases they are inseparably connected with economic problems. For instance, when the machine took over the work of the home, the latter became a new institution.

One writer insists that the home, and woman as well, for all that, has not yet adapted herself to the new society. We all complain that the “machine-process has entered our colleges, and that college instruction is being “standardized” and college graduates “tagged.” We all, at least occasionally, complain of the inability of law and religion alike to adjust themselves to modern industrialism. And our friends in ethics tell us that the newer industrial life is effecting startling changes in our standards of social and individual ethics. Quite as important, the new technique is being rapidly extended over a wider and wider area, constantly affecting the fortunes of people less and less adapted to it. Its extension preserves a frontier where machine- culture is constantly pushing back a civilization founded on a less complex technique. The reaction upon our system is fraught with grave consequences. William H. Spencer 1910

Whether we fasten our eyes upon the ordering of the individual life or upon the life of a social group, over-specialization looms before us as one of the gravest and largest social dangers, the more insidious because it conceals its “social” nature and masquerades as individual liberty. Society, we have admitted, properly requires its individual members to specialize—that is, devote a considerable amount of their time and energy to serving society by the performance of certain routine work which shall contribute to the social support. Modern methods of mechanical production and of business organization favour a continual advance of this specialization, and have brought about certain notable changes in its character and its reaction upon those who undergo its influence.

So long as the specialization needed to contribute to social service meant that each person should ply some particular trade or profession, should apply himself exclusively to the production of some single class of commodities as farmer, tailor, doctor, under conditions which required considerable variety of skill and experience, and evoked a corresponding interest in the work, so long as the range of specialism at least allowed each man to see the end and the utility of the work he did, no net injury to individuality was wrought.

But where machinery of ever nicer character is brought more and more into play, and where the arrangement of large businesses and the increased specialism of small businesses, proceeding apace over the industrial world, brings about an ever finer subdivision of labour, for the express purpose of rendering such labour as far as possible unskilled and purely mechanical, in order that a larger quantity of routine products may be turned out by each worker in a given time, such specialization has distinctly degrading effects upon the life and character of the workers.  Enlightened teachers of humanity—such as Carlyle, Emerson, Ruskin, Tolstoy—have uttered vain protests against the degradation of individual life and character by this narrowing and monotonizing of all labour on the one hand, and the grossly materialistic conception of civilization involved in measuring prosperity by quantity of mechanically wrought goods on the other hand. No one acquainted widely with the facts of industry can seriously question the statement that the conditions of much modern work tend to crush out all human interest in it.

A man can get no pleasure from his work when it imposes a constant strain upon the same muscles and nerves, and can be most easily done so far as the actions become automatic; when the tedium of constantly repeating the same narrow movements compels the cultivation of indifference; when strict confinement to a single process hides from him the true, purpose and utility of his work, and he cannot claim any single whole commodity as the product of his labour. By such methods the economic “cost of production” of commodities is reduced to a minimum, but the real human cost is continually enhanced. That cost consists in the degradation of the individuality of the worker, primarily as worker, but secondarily as consumer, by the oppression of society.

These dangers of over-specialization, due to a defective order of society which subordinates the interests of the producer to the supposed interests of the consumer, are not confined to individuals, but beset the life of larger units of society. Nations are specializing more and more, some confining themselves to growing corn or cotton, sugar or tobacco, others to particular departments of manufacture. England is devoting herself to textile and metal manufactures, ship building, and certain branches of commerce; within England large districts are monotonized by exclusive devotion to pottery or iron; town life is becoming more strongly differentiated from the country, the town itself divided into residential and business quarters, while these again are split by endless subdivision.

These are but the wider social aspects of an excessive division of labour, which reaches its culmination in the machine-tender of the most highly organized modern factory—a man whose working life is incomparably narrower in scope and more vacant of human interest than that of any living creature in the past. Local specialization exaggerates the ill effects of over-specialism upon the individual worker by furnishing a material environment which offers no relief. To have one’s life bounded by a horizon of “black country” or “potteries,” “cotton” or “coal,” the land and labour of which are alike devoted to a single industry, implies not merely a daily dullness and monotony of outward life, but an absence of all wholesome stimuli to the development of the intellectual and moral tastes which make for the progress of national life and character. Leverett S. Lyon 1911

Observe some of the consequences connected with the social control of machine industry in the interests of the fuller service of society. This is, of course, not exclusively a machine industry topic. It is connected with all the other phases of our society, particularly with its pecuniary organization. Whether for better or worse, industry is conducted for gain today. Social control is needed lest the individual gain in ways harmful to society. To control wisely means to know. To know is difficult in a new, complex, rapidly changing situation.

How can we control the genie? As will appear, it is permissible to speak of the industries which preceded the industrial revolution as “simple” industries and of the industries of today as “complex industries. This classification helps us to appreciate some of the difficulties connected with social control of industrial matters today, for, in itself, a complex situation is difficult to cope with. Then, too, during the many generations of simple industry certain attitudes of mind developed—certain slogans, maxims, watchwords, and theories.

These, reasonably well adapted to simple industry, have by social inheritance come down to us, and we try to apply them to complex industry with more or less disastrous consequences. Since the reign of the machine—the new technology— has been too brief for us to have developed new attitudes of mind— indeed, even expert students are often at a loss to know what new attitudes should be developed—it follows that for some time to come we are likely to be in a state of uncertainty and bewilderment with respect to many matters of social control.

Our old mental landmarks have been swept away, but we have not yet learned what ones may safely be set up in their place. One illustration will suffice. Under simple industry there grew up a faith in “free” competition as an efficient organizing force for industrial society. Free competition involves, among other things, adequate knowledge of the essential facts by all interested parties, and mobility with respect to productive forces.  Under simple industry these conditions obtained. Men could ascertain essential facts; furthermore, it was easy to abandon an unprofitable line of activity and easy to take up a new one.

Under complex industry, however, adequate knowledge and mobility of productive forces are not readily secured; consequently the conditions which would render competition efficient as a universal regulator no longer obtain in large sections of industry. None the less there still rests firmly in the minds of the general public, and, as a result, in the minds of most of our legislators, the conviction that competition is under all circumstances “the life of trade.” Accordingly, much of our legislation (witness the Interstate Commerce Act and almost all of our trust legislation) proceeds calmly on the assumption that most matters may wisely be left to “free” competition. It is, of course, true that competition still has very important functions and possibly an increasing range of functions to perform in our industrial society.

Little is gained, however, by attempting to apply eighteenth-century philosophy concerning competition to twentieth-century conditions. What is true concerning our mental attitude toward competition is equally true in many other fields. Apparently it will be many generations before we shall have developed scientific knowledge and public information competent to cope with the problems of control raised by the presence of indirect costs, but at least we may begin.  Paul A. Douglas 1912

The classical economic viewpoint postulates the rational individual as the unit of society. Each individual, according to this viewpoint, is possessed of certain natural and inalienable rights, fundamental among these natural and inalienable rights are private property, free competition and freedom of individual contract, noninterference with the natural law of supply and demand in the fixing prices and wage rates, the right of the employer to manage his business to suit himself, and the right of the worker to work where, men, and for whom he pleases.

It is considered to be the sole province of government and law to uphold these and correlative rights, thus allowing to the individual the greatest initiative and freedom in “life, liberty, and the pursuit of happiness,” so long as he does not interfere with the natural rights of others. But any combination of individuals which interferes with these natural rights, and especially with free contract and competition, is looked upon as artificial and against the laws of nature. Hence the doctrine of laissez faire.

When these rights are recognized and upheld, and the individual, so long as he does not violate the natural rights of others, is allowed to seek his own interest freely, equality of opportunity is realized, each individual naturally tends to subserve the interest of his fellows, harmony of interest prevails in society, and the social and economic position to which any individual may rise by the exercise of industry and thrift is limited only by his abilities. It is the disregard of these rights which produces the absence of natural social harmony and the appearance of classes and class conflict.

Such classes and conflict are, however, unnatural, artificial, and, in the long run, cannot endure. It will be seen that the fundamental assumptions underlying this viewpoint are: a natural social order, resting on unchanging natural law and natural rights, existing prior and superior to social organization and will; a fixed social constitution and relationships; sacredness of property; the rationality of human nature, and the competitive equality of individuals aside from personal differences, which tend initially to be slight.

The progressive-uplift viewpoint postulates a fundamental and ultimate harmony of interests in society. It recognizes the present existence of social classes and class conflict, but regards these as the temporary outcome of lack of sufficient social interaction, knowledge, and understanding. Science and democracy, however, are gradually overcoming these lacks. As science increases the knowledge of social facts, forces, and relationships, as democracy, especially through universal education, develops, and, particularly, as the practices of industrial democracy, especially through collective bargaining, spread, there evolves a common social viewpoint and a real social will of the people destined to do away with classes and class conflict, and to substitute in their place social justice and social harmony in the pursuit of general social well-being.

Present social conflict is due mainly to the existence and mutual opposition of an employing and a working class. But already there is developing a strong third party—sometimes called “the people,” sometimes the “consumers”—unbiased in its viewpoint, standing for social justice, and representing the true social will, a party already capable, in ordinary cases, of acting as mediator and arbiter between the warring classes. With the growth of knowledge of social affairs and the increase of social interaction fostered by democracy, this third party will gradually control the warring classes and ultimately absorb them. The social will will then be supreme and social harmony will prevail.

The attainment of this end involves a constant extension of social control in the form of legislation and public opinion, in the support of the weaker warring class—the workers. The progressive-uplift viewpoint rests mainly on the following fundamental assumptions:

  1. That man is not rational but is capable of a high degree of rationality.
  2. That man is the product of his total social environment and inheritance.
  3. That increased knowledge and increased association of individuals and classes will produce increased mutual understanding, sympathy, and harmony of viewpoint.
  4. That a strong social group is capable of freeing itself from class interest and bias, of knowing what right, justice, and welfare are for all in society, and of thus standing as an impartial arbiter between warring classes.
  5. That social will is an expression of natural law.

In the crasser elements of this viewpoint, social will is regarded as superior to natural law in social affairs. In every historical epoch, the prevailing mode of economic production is exchange, and the social organization necessarily following from it, form the basis upon which is built up, and from which alone can be explained, the political and intellectual history of that epoch; and, consequently, the whole history of mankind (since the dissolution of primitive society, holding land in common ownership) has been a history of class struggles, contests between exploiting and exploited, ruling and oppressed classes: that the history of these class struggles forms a series of evolutions in which, nowadays, a stage has been reached where the exploited and oppressed class—the proletariat—cannot attain its emancipation from the sway of the exploiting and ruling class—the bourgeoisie—without, at the same time, and once and for all, emancipating society at large from all exploitation, oppression, class distinctions, and class struggles. MacGregor R. Lennard 1913

The laborer, like all the rest of us, is the product of heredity and environment. That is to say, he is not rational in the sense that his response to any given mental stimulus is invariable and is uniform with that of all other men. On the contrary, like the rest of us, he is a bundle of notions, prejudices, beliefs, unconscious preconceptions and postulates, the product of his peculiar heredity and environment. These unconscious and subconscious psychic elements necessarily mix with and color his immediate impressions, and they together limit and determine his intellectual activity.

What is or has been outside his ancestral and personal environment must be either altogether incomprehensible to him, or else must be conceived as quite like or analogous to that which has already been mentally assimilated. He cannot comprehend what he has not, or thinks he has not, experienced. Now it is well known that the environment of the laborer under the modern capitalistic system has tended to become predominantly one of physical force.

He has been practically cut off from all knowledge of market and managerial activities. The ideals, motives, and cares of property-ownership are becoming foreign to him. More and more, in his world, spiritual forces are giving way to the apparent government and sanction of blind physical causation. In the factory and the mine, spiritual, ethical, customary, and legal forces and authorities are altogether in the background. To the laborer, as the product of this environment, the proprietary and managerial claims of the employer tend to become, of necessity, simply incomprehensible.

The only kind of production which he can recognize is the material outcome of physical force—the physical good. Value unattached to and incommensurable with the physical product or means of production is to him merely an invention of the employing class to cover up unjust appropriation. He knows and can know nothing about the capitalized value of managerial ability or market connections. To him, then, only the ownership of the physical product and the physical means of production is in question, and the important point with him is: By what physical force are these things made what they are.

It is a matter of simple observation that the employer exerts no direct or appreciable physical force in connection with the productive process. Therefore, in the eyes of the laborer, he cannot have any natural rights of proprietorship and management based on productive activity. In the same way all other grounds on which ownership and the managerial rights of the employer are based have become inconclusive to the laborer. Appropriation, gift, inheritance, saving, contract, in themselves do not produce any physical effect on the only goods which he can recognize.

Therefore they cannot be used prove property in any just or natural sense. They hold in practice simply because back of them is the physical force of the police and army established and maintained by the middle class to protect its proprietary usurpations. Thus the whole claim of the employer to the right to manage his own business to suit himself has become and becoming in a way incomprehensible to the laborer on grounds of natural equity. At the same time, by virtue of habit and the sanction of physical force as a productive agent, he sees himself even more clearly the rightful proprietor of his job and of the products of it. This is the natural and inevitable outcome of the conditions under which he lives and toils.

Undoubtedly the picture drawn here is too definite in its outlines. The laborer of today is not so completely under the domination of the machine and the machine process as I have assumed him to be. What I have assumed to be actualities exist perhaps only as more or less manifest tendencies.

The unionist laborer does not recognize the sacredness of contract. This is, if anything, a more serious charge than the preceding one. Is it possible that a man who deliberately and without any personal grievance stands ready to repudiate his contract obligations can be acquitted of moral or intellectual inferiority? Is it possible that he can be called reasonable, and that he deserves to be dealt with in any other way than by denunciation or legal and physical obstruction? Is it possible that these are not proper and effective weapons with which to recall him from his seeming perversity?

The employer returns to these questions, unhesitatingly, a decided negative. In so doing he meets with the approval of men generally who are well to do and educated. To the employer contract is the obviously necessary basis for any successful industrial activity. Violation of contract is therefore to him, and to those socially allied to him, the unpardonable economic sin. Without doubt it is rightly so. The essential business operations involve time and the division of labor. The benefits of capitalistic production, therefore—without which most of us would be reduced to primitive penury—require that men trust their means in the hands of others, and that many men be depended upon to perform certain economic tasks and obligations in certain definite ways and at certain times.

Indeed, so delicate has become the adjustment of the modern productive enterprise, and so intimately are apparently independent enterprises related, that the failure of a single individual to perform his contract obligation may possibly involve hundreds of others in financial ruin and the members of a whole commonwealth in temporary economic distress. This, of course, is in itself altogether commonplace. It is stated here merely because it shows why contract is and must be considered by the business class as the most sacred of all economic obligations. The business man’s attitude toward contract is the inevitable outcome of his activity and environment.

It is not so much a personal virtue with him as an evolutional necessity. He cannot see things otherwise. He is made so by the conditions of his life. As a matter of fact, the laborer is so circumstanced that obligation to contract with the employer must appear secondary in importance to his obligations to fellow-workers. This is not difficult to show. Ever since the establishment of the money wage system, the everyday experience of the laborer has been teaching him the supreme importance of mutuality in his relations with his immediate fellow-workers. The money payment, related, not to the physical result of his efforts, but to its economic importance, has been blotting out for him any direct connection between effort and reward. Experience has taught him to look upon his labor as one thing in its effects and another thing in its reward. Curtice N. Hitchcock 1915

The man of intelligence has the special privilege of being able to contemplate and understand universal laws, so as to draw from them the greatest possible benefit, avoiding any rebellion against these supreme laws and rules. Everyone adheres to the laws of nature, everyone conforms, everyone obeys. Encouragement and persuasion are unnecessary. With adherence unavoidable, the man of intelligence is concerned about avoiding attempts to defy universal law.

Ignorance of this natural order was the root cause of public and private distress. Transgressions of the rule of avoidance are the most widespread and usual causes of the physical evils that afflict men. Instruction on the laws of the natural order would form the basis of a good society. Without this knowledge, governments and the conduct of men can be characterized only by obscurity, aberration, confusion and disorder.  Francois  Quesnay  (1752)

Summarized briefly, the claims of the efficiency engineers are that by adopting their methods production can be increased from 200 to 300 per cent., with an increase of from 30 to 60 percent in wages (Taylor fixed 60 percent as the maximum), and with an increase of profits of from 200 to 400 per cent; and, be it noted, their appeal is always to facts and not to theory.

There is a clear assumption running through their statements that the greatest (not the sole) reason for the present small production is the soldiering of the workmen; that this soldiering is not only caused by the union, but that it is inseparable from the union, and that with the introduction of the efficiency system the union will, in fact, disappear. The clear implication is that all these things are desirable. It goes without argument that such a scheme, if practicable, is of immediate advantage to the employer, for he gets his extra gains at once. How much of these gains would disappear if the system were universally applied is another question. This raises the whole subject of the cause of values, which cannot be gone into here. With the system universally applied, more goods would be produced, and this would undoubtedly benefit the consumer; but how much good the employer, as such, would get out of it, would be determined by the same forces as at present. D. P Smelser 1915

I am not saying that this revolution is a beneficent one, but I assert without fear of successful contradiction that it demonstrates that economic absolutism, however beneficent it may be, or however much it may increase wages for the time being, is inconsistent with the democratic movement of the last hundred and fifty years. In view of the exploitation under the Old system, and the gross inequalities of wealth produced by it, modern democracy has success fully rejected it. Again, I am not asserting that the new condition is better than the Old. I merely call attention to the belief that the old, in the light of political democracy, proved to be untenable, and the world for good or for ill is passing inevitably to another experiment.

In the generations since the industrial revolution things have been left to the capitalists and the employers, and, while many of them have made large fortunes and wielded large power, the social, economic, and political results have not been such as to appeal largely to the modern democratic altruistic sentiment. I am not a pessimist; I believe the evils complained of are going to be remedied, and that, too, by peaceful means, but it will be done not by destroying the labor unions, not by reverting to greater absolutism in industry—at least not unless we can destroy our ideals of political democracy and make the suffrage depend on property.

A nation with free speech, a free press, and as wide a suffrage as ours, and, above all, with as high a degree of concentration of wealth as we have, is destined for good or for ill to try the experiment of industrial democracy. If the régime of individualism and private property cannot adjust itself to modern democratic ideals by evolutionary processes, it is likely to give way to the more doubtful experiment of socialism. The unions do restrict output. They do in one way or another what they consider a fair day’s work for their present wages. The action does have a demoralizing influence on them. This does spell inefficiency, it does mean ultimately low general wages, low profits, and consequently hardship for the public, that is, the consumer.

We all have an interest in avoiding these things. But it should be remembered that the workmen would not have this power, and consequently would not dare even to attempt such a policy, if the old idea that the workman was helpless, and ought to leave the fixing of his task, the amount of his wages, and the conditions of his employment entirely to the employer, had not broken down. John L. Gillen 1916

The old plan in England led not only to lessened production and inefficiency but to moral and physical degeneracy. England finds herself deadlocked on a system so inefficient that profits have been reduced until the employers are probably paying all they can afford to pay, but the laborer finds himself unable to perpetuate his kind and maintain even the present low scale of living. Yet the English employer may find that his profits must be still further reduced unless he will realize that production is a mutual concern and not his concern only; that he cannot say to universally unionized labor, as he did for generations to the unorganized workmen, “You will starve or you will work for me on terms and at wages that will give me my former rate of profit.”

The efficiency engineers have gone on the supposition that not only the present scale of profits must be maintained or the capitalist will not invest his capital, but that the capitalist must have the major portion of the gain from increased efficiency. Truly the capitalist will not so invest so long as he can do better elsewhere, but he may find that he can do better with his capital only if he can get some other set of workmen equally good to work for him on the terms rejected by his former workmen.

On the supposition that the unions can be ignored, the advocates of efficiency have demanded not only the present scale of profits but by far the larger share of the fruits of increased efficiency for the employer. This is by implication to demand the maintenance of the present scheme of distribution of wealth, and, in fact, to claim for the employer all or by far the larger share of the gains from the progress. This suggests the controversy over the gains of improved machinery—a fruitful field—and a question not understood by the efficiency engineers, but I cannot go into that here. They can get this only if they can ignore or crush union labor.

In the present state of public opinion, I do not believe they can do either. I believe with all my soul in efficiency and greatly increased efficiency—I foresee national disaster and decay unless we can attain that efficiency. I believe with the efficiency engineers that the efficiency must rest on scientific experiment and scientific laws. I admit many of the evils laid at the door of the labor unions, but I do not believe that the labor union can in this matter be ignored, or that it can be broken down by the methods suggested; nor can I believe that scientific investigation has gone far enough to justify Mr. Taylor’s conclusion that an increase of 30 to 60 percent over present wages is all that is desirable or safe. If so, and efficiency increases as he claims it will, this means much greater inequality of wealth—an in equality which, in the opinion of the majority of mankind, has already gone much too far for the public good. Such an outcome does not seem promising for the future of political democracy, or for the moral or spiritual advance of mankind. Clarence H. Northcott 1916

A summary of the principal characteristics of the traditional methods of handling labor illustrates the sharp conflict between these methods and the interest of the enterprises. The traditional management of labor had two principal characteristics: crudity and reliance upon drive methods as a means of increasing output. Its crudity is illustrated by disregard of obvious fundamentals of labor efficiency, such as:

  • The fact that different jobs require different qualifications and that different men have different qualifications, and therefore each man must be carefully selected with reference to the job for which he is hired.
  • The fact that the quantity which can be produced depends upon the methods which are used and that the ordinary worker is incapable of determining the best and easiest method.
  • The fact that output may be greatly increased if the workers, instead of being left to train themselves or to be trained by non-experts, are given systematic instruction by experts.
  • The effect of physical conditions of work-light, heat, and air upon working capacity; and particularly the disregard of the fatigue factor and failure to study it and to take measures to reduce it.
  • The fact that prospect of advancement on the basis of merit along a definite and clearly perceived road is an incentive.
  • The fact that aggrieved men tend to withhold their best, and that a drive policy is not powerful enough to prevent them from withholding it.
  • The fact that workers are capable of contributing numerous valuable ideas for improvement of processes and product, and will do so if properly approached.
  • The fact that men can be induced to respond to liberal and considerate treatment by giving better service, instead of simply taking advantage of it.

The traditional method of making workers more productive was to push and drive them, to demand more of them, put pressure on them, rather than to assist them to develop their proficiency and to reward them for putting forth their best effort. The threat of discharge, the pace-setter, the cut piece-rate, bonuses to foremen and gang bosses based on the output of their men, were the typical instruments of this system of management.

In some instances, especially in sweated industries and in industries where immigrants, women, or children were largely employed, the drive system succeeded in greatly speeding up production. Taking the country as a whole, however, the effect of the drive system seems to have been the opposite of what was intended, for it was largely responsible for a tacit conspiracy among workers to restrict output. This deliberate restriction of output efficiency, which was largely a result of the piece-rate cutting policy, was almost universal, and resulted in the output of most shops being far below what the workmen could easily accomplish.

Not only did the drive system of management result on the whole in limitation rather than in increase of output, but it was a most potent cause of antagonism between workers and management. The basic principle of the system, that the workers could be coerced into giving the largest output of which they were capable without a corresponding increase in their pay, was, of course, naturally calculated to produce trouble.  But the effect of the drive system went farther.  The successful operation of the system required that the workmen submit to being driven.

In applying the drive system, therefore, the management was compelled to seek to create a docile and submissive attitude on the part of the workers. This could be done only by overawing and cowing them, causing them to feel a sense of weakness and dependence, and, above all, by causing them to fear the management. The management, therefore, deliberately pursued a policy designed to cause its men to fear it. Management maintained as a matter of policy a brusque, more or less harsh, distant, and stern attitude toward the men. To be lenient or friendly or considerate, to give ear to complaints or to redress grievances, was regarded as “pampering” them.

To indulge in this would ruin discipline, cause the men to think they had rights which they did not have, or cause them to think that the management was weak and could be bluffed or “worked.”  The result would be to foster discontent, to stimulate arrogant demands, to create trouble instead of good will. Above all, the men must be made to feel that the management was strong and powerful, determined to have its way and not to be trifled with. The greater the fear of itself which the management produced by the drive policy, the greater the ill will it created against itself. Although the drive system failed to develop a high degree of efficiency, it laid the foundation of industrial unrest broad and deep. I. M. Rubinow 1918

We must bear in mind that employers and employees together are bound up in a system for which neither can be held responsible, that many of the former too would gladly break its fetters, and that the waste, material and human, of the system, is disadvantageous to the majority of  both classes. The profounder problem is one of distribution not of production. It is one, not of relation of employer to employee, but of capital to labor. It is the problem of the relation of profits, interest, and rent to wages.

So long as the capitalist regards labor as a necessary cost, so long as the worker regards interest, rent, and profits as deductions from the wealth which he creates, that unsettled question is a flaming sword which cleaves their interests apart. “The rules give the men a voice in the management, but I am sorry to say there is no Committee strong enough to administer the rules as it relates to management: they go so far but stop as they see an invisible pressure being brought upon them which is going to affect the security of their living, a kind of victimization which you cannot prove.”

Your contracting place is finished and you want another place, but the management sends you ‘odding’; you are middle-aged and you cannot keep pace with the younger element; and you look after a fresh place, but everywhere is full up; and when you come out of the office you can see other men set on. This is what is going on all around the district, and you want to strengthen these men by having the rules enacted by Act of Parliament to make them binding; and if cases like this happen, there wants to be a Tribunal appointed by Government, representative of all classes so that a man shall have a fair hearing and equality of justice; this will give him a security and it will reduce this insecurity of work.”

Professor Hoxie says: “The law, in so far as it assumes to represent the essence of positive justice but reflects the relations of handicraft industry, has no comprehension of modern industrial conditions, nor of their inevitable consequences, and no modes of dealing with them except by prohibition. It has no comprehension of a machinery for dealing out justice in a state of society changed and changing from that in which it was conceived.”

The entrenched power of consolidated wealth is exercised directly over industry, and indirectly over government, over a multitude of voluntary associations, and over public opinion. With this power we are here concerned only in so far as it is used to stay the process of industrial adaptation to social needs. In one respect this power is itself the revelation of consummate adaptation, for it rests on combination and by its success shows how much more capable to survive and flourish is combination than its natural foes. But capitalistic combination, like some savage potentate, would secure by fratricide the throne it won by parricide. That is, it would destroy or nullify those other forms of combination which are also being shaped within the new industrial world, and which are the necessary safeguards against its own great power. In particular, it attacks the more effective forms of state supervision and regulation, and it deliberately attempts to suppress the growth of its own direct and proper counterpart, the organization of labor in unions. These activities imperil the needed reconstruction. Here indeed is the greatest peril that lies in the path, the opposition of the vast pervasive power of change-abhorring wealth.

This power is both direct and indirect, and a brief survey of both manifestations will indicate its magnitude. Directly, it is the autocrat of the whole world of business. In respect of wealth, great as is the concentration of ownership, it is little as compared with the concentration of control. This has been brought about not only by the growth of industrial and commercial corporations and their alliance through trusts, voting trusts, combines, cartels, trade associations, interlocking directorates, rings and understandings of all kinds; but still more through certain inner developments of modem finance. One of these is the modern banking system, under which the banks, the trust companies, insurance companies, and other depositaries of the funds of the public, all closely interlinked, determine the direction in which new capital shall flow, the industrial soil which it shall fructify.

This is the inmost circle of a wider oligarchy, which, by its increasing control over prices, would control, among other things, the wages of labor. It is easy to see how this power over prices gives capital a great advantage in the struggle with labor. It may be able so to manipulate profits that demands for better wages or conditions appear to spell disaster. Or, failing that, it can represent wage-increases as additional taxes upon the consumer, and indeed ensure that they shall be such, so starting a vicious (and profitable) cycle of higher prices, which in time makes the seeming gains of labor specious and vain. We must at the same time remember that the economic oligarchy is itself the result of the economic system which it in part controls.

The system is in fact more powerful than the oligarchy—a truth which is generally applicable to political oligarchy as well. Just as the wage-system dominates the life of the worker, so does the price system dominate the activity of the employer. The employer is impelled to secure himself as far as possible against the dangers of the speculative method of production, against the constant risk of rising costs or falling prices, against the loss of his market through competition or changes in demand, against the vagaries of the business cycle; and in the process, unless he occupies a peculiarly sheltered position, he is bound to exercise over labor whatever control he can.

Capital possesses certain advantages over labor which by its very nature it is bound to exploit—and will continue to exploit save as liberation comes through the development of new forces strong enough to change the system by which both capital and labor are for the present bound. Labor is hired by capital and not capital by labor. Labor is “fired” by capital and never capital by labor.

In respect of the less direct forms of control, the power of wealth ramifies so far into every nook and cranny of the social structure that a review of this kind can but suggest the broader channels of its exercise. The control of politics is of course the first external aim of economic power. I have indicated how great is the advantage which the law and constitution give to the upholders of the status quo. This is reinforced by the party system, with its secret machinery, its antiquated cumbrousness, its chicanery, and its dependence for funds on generosity, however motived. H. B. Drury 1920

In those days old hands were seldom discharged, and new ones were but slowly taken on; and the industrial machine ran smoothly and evenly, like an engine with a big fly wheel. But now with the abandonment of stocking the jolting and self-destruction of the whole organism are terrible and ruinous. With the constant “on and off” of employment which our general industrial system entails, the condition of large masses of the workers is fatally bad.

If their wages when actually in work are fair, yet their total and average in the long run are wretchedly small; saving becomes hopeless; long periods of unemployment occur; and the effect on the character of the man is most baneful. The sufferings entailed in the process are so great, that he loses his courage, he loses hope and object in life, he loses the habit of steadfast industry, and in cases where ill-fortune continues he loses actual skill and efficiency.

Finally, if a long period of want of employment brings about the break-up of the home and the adoption of the life of the tramp, the tragedy of this transition is so great that (as statistics show) a return afterwards to normal life is rarely possible. The man becomes adapted to an aimless existence. “When shall I get work again?” inquired the needy workman of the old fortune-teller. “You will have bad luck for two or three years,” said she, “but after that. “ Yes, after that?” hurriedly asked the anxious querist. “You will get used to it!” Oliver S. Morris 1920

How near these various activities run to the line of Fraud we must leave the parties concerned to judge, but of their signification as illustrating the intolerable Waste of our present system everyone can form an opinion. For all this vast expense of labor and treasure represents only the internecine warfare of firms with one another —each bent on destroying its rival or rivals— and whatever. Trade one firm gains in the process is lost by some other, so that the total advantage or profit to the community is absolutely zero. The multiplication of officials—as has been seen in the past history of Russia—strangles the spontaneous vitality of the people; it creates a vast body of parasites, as bad as the dividend-drawing parasites of Commercialism; and betrays the public into the power of a class hostile to change and to progress.

The ignorance displayed by the War Office and the high Civil authorities concerning the common and necessary conditions of life among the masses is something astonishing; it has led to perpetual altering of regulations and to every kind of vacillation and uncertainty; it has bred a deep distrust in the minds of the people, and in this hour of national crisis, if carried much farther, might easily lead’ to something like revolution.

A mere tinkering at our existing industrial arrangements will never do what we want; and now that the War has brought us face to face with some of the facts of life and given people furiously to think in a way that they have never done before, the need of a radical Change stands out more clearly before us, and the realisation of such a thing seems less distant and a good deal more feasible.  Are we approaching (I hardly dare ask the question) an age of good sense in the affairs of mankind?

Is the long-deferred Coming-of-Age of Humanity at last to be celebrated? Let us not pray the gods for any stupendous gifts for the coming generations-for towering genius or intellect or universal heroic character-but only for a modest boon, such as they surely cannot grudge or refuse to grant—to be able, namely, to conduct our own affairs with a little good sense, just a very little, as much for instance as a sheep might have. Here we are, the human race, planked down  upon this planet with (at the present day) most marvelous powers of industrial production at our command, amply sufficient, if decently used, to supply every one with all the necessaries of life—and only requiring a very moderate degree of intelligence so to make use of them; and lo instead of settling down to make the best of so excellent a situation we deliberately leave nine-tenths of our brothers and sisters to live in squalid and abject poverty, while the rest of us employ our precious time and energies in mad and destructive warfare.

The truth is that Life and Work to-day under the commercial-industrial regime have become so hideous and monotonous and altogether detestable that to the plain man the very notion of their possible charm and- beauty has become ludicrous, and not to be entertained.    What then are the necessary conditions for making Work a pleasure? They are so extraordinarily simple that it is a marvel that they have so far escaped attention and been neglected. Work is a pleasure when it is free and creative in character—and that is the whole mystery of the matter. There is little else to be said.

The real obstacle — both to the spread of any such Ideal, and to the practical working of it out—lies in the matter  we have mentioned above, the excess of possessive instinct which pervades large classes. The very extensive and wealthy classes who to-day control production and derive their riches from the enslavement of labor, dread above all things the freeing of the worker and the prospect of the latter becoming self-determining and master of his fate.

Though it is notorious that the present dispensation produces a rather futile, mean, and miserable master-class, together with a dismal, weary, and sad-eyed worker class, yet the whole political and social engine is concentrated on the effort to maintain it as it is, and to disguise or conceal its evil character.  I understand that wicked as the War is, it is in its essence the outcome and result of something more wicked; and I pray that when afterwards – the millions return to their homes they will see to it that never again shall the soulless regime of the past be reinstated, but that industrial life shall go forward into a new land—the land of freedom and of joy.

There is one thing which the War has done, in which we are all agreed. It has convinced us that it will be no use in the future pleading Poverty as our excuse for the continuance of the past conditions. This People of ours, which has been able to rise up and pour out money like water for the purposes of the present conflict, can never again say that resources are wanting for the far more important purpose of creating for itself a really worthy and great national life. Charles Gide 1921

Summarized briefly, the claims of the efficiency engineers are that by adopting their methods production can be increased from 200 to 300 per cent., with an increase of from 30 to 60 percent in wages (Taylor fixed 60 percent as the maximum), and with an increase of profits of from 200 to 400 per cent; and, be it noted, their appeal is always to facts and not to theory.

There is a clear assumption running through their statements that the greatest (not the sole) reason for the present small production is the soldiering of the workmen; that this soldiering is not only caused by the union, but that it is inseparable from the union, and that with the introduction of the efficiency system the union will, in fact, disappear. The clear implication is that all these things are desirable. It goes without argument that such a scheme, if practicable, is of immediate advantage to the employer, for he gets his extra gains at once. How much of these gains would disappear if the system were universally applied is another question. This raises the whole subject of the cause of values, which cannot be gone into here. With the system universally applied, more goods would be produced, and this would undoubtedly benefit the consumer; but how much good the employer, as such, would get out of it, would be determined by the same forces as at present. Robert Hunter 1922

I am not saying that this revolution is a beneficent one, but I assert without fear of successful contradiction that it demonstrates that economic absolutism, however beneficent it may be, or however much it may increase wages for the time being, is inconsistent with the democratic movement of the last hundred and fifty years. In view of the exploitation under the Old system, and the gross inequalities of wealth produced by it, modern democracy has success fully rejected it. Again, I am not asserting that the new condition is better than the Old. I merely call attention to the belief that the old, in the light of political democracy, proved to be untenable, and the world for good or for ill is passing inevitably to another experiment.

In the generations since the industrial revolution things have been left to the capitalists and the employers, and, while many of them have made large fortunes and wielded large power, the social, economic, and political results have not been such as to appeal largely to the modern democratic altruistic sentiment. I am not a pessimist; I believe the evils complained of are going to be remedied, and that, too, by peaceful means, but it will be done not by destroying the labor unions, not by reverting to greater absolutism in industry—at least not unless we can destroy our ideals of political democracy and make the suffrage depend on property.

A nation with free speech, a free press, and as wide a suffrage as ours, and, above all, with as high a degree of concentration of wealth as we have, is destined for good or for ill to try the experiment of industrial democracy. If the régime of individualism and private property cannot adjust itself to modern democratic ideals by evolutionary processes, it is likely to give way to the more doubtful experiment of socialism. The unions do restrict output. They do in one way or another what they consider a fair day’s work for their present wages. The action does have a demoralizing influence on them. This does spell inefficiency, it does mean ultimately low general wages, low profits, and consequently hardship for the public, that is, the consumer.

We all have an interest in avoiding these things. But it should be remembered that the workmen would not have this power, and consequently would not dare even to attempt such a policy, if the old idea that the workman was helpless, and ought to leave the fixing of his task, the amount of his wages, and the conditions of his employment entirely to the employer, had not broken down. James Ford 1923

We are far from realizing all that our passions make us do. For man often thinks he is in control when he is being controlled; and he is being controlled not because he is subject to restrictions and compulsions that are external to him, but because his self-knowledge and self-command are severely limited. The passions are the only orators who convince. Duc de La Rochefoucauld  1675

 

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