An Inquiry into the Nature of Peace and the Terms of Its Perpetuation

The articulate recognition of this division into contrasted pecuniary classes or conditions, with correspondingly (at least potentially) divergent pecuniary interests, need imply no degree of approval or disapproval of the arrangement which is so recognised. The recognition of it is necessary to a perspicuous control of the argument, as bears on the possible systematic and inherent discrepancy among these men in respect of their material interests under the projected Imperial rule. Substantially, it is a distinction between those who have and those who have not, and in a question of prospective pecuniary loss the man who has nothing to lose is differently placed from the one who has. It would perhaps seem flippant, and possibly lacking in the courtesy due one's prospective lord paramount, to say with the poet, Cantabit vacuus coram latrone viator.

But the whole case is not so simple. It is only so long as the projected pecuniary inroad is conceived as a simple sequestration of wealth in hand, that such a characterisation can be made to serve. The Imperial aim is not a passing act of pillage, but a perpetual usufruct; and the whole question takes on a different and more complex shape when it so touches the enduring conditions of life and livelihood. The citizen who has nothing, or who has no capitalisable source of unearned income, yet has a pecuniary interest in a livelihood to be gained from day to day, and he is yet vulnerable in the pecuniary respect in that his livelihood may with the utmost facility be laid under contribution by various and sundry well-tried contrivances. Indeed, the common man who depends for his livelihood on his daily earnings is in a more immediately precarious position than those who have something appreciable laid up against a rainy day, in the shape of a capitalised source of income. Only that it is still doubtful if his position is precarious in such a fashion as to lay him open to a notable increase of hardship, or to loss of the amenities of life, in the same relative degree as his well-to-do neighbour.

In point of fact it may well be doubted if this common man has anything to apprehend in the way of added hardship or loss of creature comforts under the contemplated régime of Imperial tutelage. He would presumably find himself in a precarious case under the arbitrary and irresponsible authority of an alien master working through an alien master class. The doubt which presents itself is as to whether this common man would be more precariously placed, or would come in for a larger and surer sum of hard usage and scant living, under this projected order of things, than what he already is exposed to in his pecuniary relations with his well-to-do compatriots under the current system of law and order.

Under this current régime of law and order, according to the equitable principles of Natural Rights, the man without means has no pecuniary rights which his well-to-do pecuniary master is bound to respect. This may have been an unintended, as it doubtless was an unforeseen, outcome of the move out of feudalism and prescriptive rights and immunities, into the system of individual liberty and manhood franchise; but as commonly happens in case of any substantial change in the scheme of institutional arrangements, unforeseen consequences come in along with those that have been intended. In that period of history when Western Europe was gathering that experience out of which the current habitual scheme of law and order has come, the right of property and free contract was a complement and safeguard to that individual initiative and masterless equality of men for which the spokesmen of the new era contended. That it is no longer so at every turn, or even in the main, in later time, is in great part due to changes of the pecuniary order, that have come on since then, and that seem not to have cast their shadow before.

In all good faith, and with none but inconsequential reservations, the material fortunes of modern civilised men—together with much else—have so been placed on a pecuniary footing, with little to safeguard them at any point except the inalienable right of pecuniary self-direction and initiative, in an environment where virtually all the indispensable means of pecuniary self-direction and initiative are in the hands of that contracted category of owners spoken of above. A numerical minority—under ten percent of the population—constitutes a conclusive pecuniary majority—over ninety percent of the means—under a system of law and order that turns on the inalienable right of owners to dispose of the means in hand as may suit their convenience and profit,—always barring recourse to illegal force or fraud. There is, however, a very appreciable margin of legal recourse to force and of legally protected fraud available in case of need. Of course the expedients here referred to as legally available force and fraud in the defense of pecuniary rights and the pursuit of pecuniary gain are not force and fraud de jure but only de facto. They are further, and well known, illustrations of how the ulterior consequences of given institutional arrangements and given conventionalised principles (habits of thought) of conduct may in time come to run at cross purposes with the initial purpose that led to the acceptance of these institutions and to the confirmation and standardisation of these habitual norms of conduct. For the time being, however, they are "fundamentally and eternally right and good."

Being a pecuniary majority—what may be called a majority of the corporate stock—of the nation, it is also fundamentally and eternally right and good that the pecuniary interests of the owners of the material means of life should rule unabated in all those matters of public policy that touch on the material fortunes of the community at large. Barring a slight and intermittent mutter of discontent, this arrangement has also the cordial approval of popular sentiment in these modern democratic nations. One need only recall the paramount importance which is popularly attached to the maintenance and extension of the nation's trade—for the use of the investors—or the perpetuation of a protective tariff—for the use of the protected business concerns—or, again, the scrupulous regard with which such a body of public servants as the Interstate Commerce Commission will safeguard the legitimate claim of the railway companies to a "reasonable" rate of earnings on the capitalised value of the presumed earning-capacity of their property.

Again, in view of the unaccustomed freedom with which it is here necessary to speak of these delicate matters, it may be in place to disclaim all intention to criticise the established arrangements on their merits as details of public policy. All that comes in question here, touching these and the like features of the established law and order, is the bearing of all this on the material fortunes of the common man under the current régime, as contrasted with what he would reasonably have to look for under the projected régime of Imperial tutelage that would come in, consequent upon this national surrender to Imperial dominion.

In these democratic countries public policy is guided primarily by considerations of business expediency, and the administration, as well as the legislative power, is in the hands of businessmen, chosen avowedly on the ground of their businesslike principles and ability. There is no power in such a community that can over-rule the exigencies of business, nor would popular sentiment countenance any exercise of power that should traverse these exigencies, or that would act to restrain trade or discourage the pursuit of gain. An apparent exception to the rule occurs in wartime, when military exigencies may over-rule the current demands of business traffic; but the exception is in great part only apparent, in that the warlike operations are undertaken in whole or in part with a view to the protection or extension of business traffic.

National surveillance and regulation of business traffic in these countries hitherto, ever since and in so far as the modern democratic order of things has taken effect, has uniformly been of the nature of interference with trade and investment in behalf of the nation's mercantile community at large, as seen in port and shipping regulations and in the consular service, or in behalf of particular favored groups or classes of business concerns, as in protective tariffs and subsidies. In all this national management of pecuniary affairs, under modern democratic principles, the common man comes into the case only as raw material of business traffic,—as consumer or as laborer. He is one of the industrial agencies by use of which the businessman who employs him supplies himself with goods for the market, or he is one of the units of consumptive demand that make up this market in which the business man sells his goods, and so "realises" on his investment. He is, of course, free, under modern principles of the democratic order, to deal or not to deal with this business community, whether as laborer or as consumer, or as small-scale producer engaged in purveying materials or services on terms defined by the community of business interests engaged on so large a scale as to count in their determination. That is to say, he is free de jure to take or leave the terms offered. De facto he is only free to take them—with inconsequential exceptions—the alternative being obsolescence by disuse, not to choose a harsher name for a distasteful eventuality.

The general ground on which the business system, as it works under the over-ruling exigencies of the so-called "big business," so defines the terms of life for the common man, who works and buys, is the ground afforded by the principle of "charging what the traffic will bear;" that is to say, fixing the terms of hiring, buying and selling at such a figure as will yield the largest net return to the business concerns in whom, collectively or in severalty, the discretion vests. Discretion in these premises does not vest in any business concern that does not articulate with the system of "big business," or that does not dispose of resources sufficient to make it a formidable member of the system. Whether these concerns act in severalty or by collusion and conspiracy, in so defining the pecuniary terms of life for the community at large, is substantially an idle question, so far as bears on the material interest of the common man. The base-line is still what the traffic will bear, and it is still adhered to, so nearly as the human infirmity of the discretionary captains of industry will admit, whether the due approximation to this base-line is reached by a process of competitive bidding or by collusive advisement.

The generalisation so offered, touching the material conditions of life for the common man under the modern rule of big business, may seem unwarrantably broad. It may be worth while to take note of more than one point in qualification of it, chiefly to avoid the appearance of having overlooked any of the material circumstances of the case. The "system" of large business, working its material consequences through the system of large-scale industry, but more particularly by way of the large-scale and wide-reaching business of trade in the proper sense, draws into the net of its control all parts of the community and all its inhabitants, in some degree of dependence. But there is always, hitherto, an appreciable fraction of the inhabitants—as, e.g., outlying agricultural sections that are in a "backward" state—who are by no means closely bound in the orderly system of business, or closely dependent on the markets. They may be said to enjoy a degree of independence, by virtue of their foregoing as much as may be of the advantages offered by modern industrial specialisation. So also there are the minor and interstitial trades that are still carried on by handicraft methods; these, too, are still somewhat loosely held in the fabric of the business system. There is one thing and another in this way to be taken account of in any exhaustive survey, but the accounting for them will after all amount to nothing better than a gleaning of remnants and partial exceptions, such as will in no material degree derange the general proposition in hand.

Again, there runs through the length and breadth of this business community a certain measure of incompetence or inefficiency of management, as seen from the point of view of the conceivable perfect working of the system as a whole. It may be due to a slack attention here and there; or to the exigencies of business strategy which may constrain given business concerns to an occasional attitude of "watchful waiting" in the hope of catching a rival off his guard; or to a lack of perfect mutual understanding among the discretionary businessmen, due sometimes to an over-careful guarding of trade secrets or advance information; or, as also happens, and quite excusably, to a lack of perfect mutual confidence among these businessmen, as to one another's entire good faith or good-will. The system is after all a competitive one, in the sense that each of the discretionary directors of business is working for his own pecuniary gain, whether in cooperation with his fellows or not. "An honest man will bear watching." As in other collusive organisations for gain, confederates are apt to fall out when it comes to a division of what is in hand. In one way and another the system is beset with inherent infirmities, which hinder its perfect work; and in so far it will fall short of the full realisation of that rule of business that inculcates charging what the traffic will bear, and also in so far the pressure which the modern system of business management brings to bear on the common man will also fall short of the last straw—perhaps even of the next-to-the-last. Again it turns out to be a question not of the failure of the general proposition as formulated, but rather as to the closeness of approximation to its theoretically perfect work. It may be remarked by the way that vigilant and impartial surveillance of this system of business enterprise by an external authority interested only in aggregate results, rather than in the differential gains of the interested individuals, might hopefully be counted on to correct some of these shortcomings which the system shows when running loose under the guidance of its own multifarious incentives.

On the opposite side of the account, it is also worth noting that, while modern business management may now and again fall short of what the traffic will bear, it happens more commonly that its exactions will exceed that limit. This will particularly be true in businessmen's dealings with hired labour, as also and perhaps with equally far-reaching consequences in an excessive recourse to sophistications and adulterants and an excessively parsimonious provision for the safety, health or comfort of their customers—as, e.g., in passenger traffic by rail, water or tramway. The discrepancy to which attention is invited here is due to a discrepancy between business expediency, that is expediency for the purpose of gain by a given businessman, on the one hand, and serviceability to the common good, on the other hand. The business concern's interest in the traffic in which it engages is a short-term interest, or an interest in the short-term returns, as contrasted with the long-term or enduring interest which the community at large has in the public service over which any such given business concern disposes. The business incentive is that afforded by the prospective net pecuniary gain from the traffic, substantially an interest in profitable sales; while the community at large, or the common man that goes to make up such a community, has a material interest in this traffic only as regards the services rendered and the enduring effects that follow from it.

The businessman has not, or at least is commonly not influenced by, any interest in the ulterior consequences of the transactions in which he is immediately engaged. This appears to hold true in an accentuated degree in the domain of that large-scale business that draws its gains from the large-scale modern industry and is managed on the modern footing of corporation finance. This modern fashion of business organisation and management apparently has led to a substantial shortening of the term over which any given investor maintains an effective interest in any given corporate enterprise, in which his investments may be placed for the time being. With the current practice of organising industrial and mercantile enterprises on a basis of vendible securities, and with the nearly complete exemption from personal responsibility and enduring personal attachment to any one corporate enterprise which this financial expedient has brought, it has come about that in the common run of cases the investor, as well as the directorate, in any given enterprise, has an interest only for the time being. The average term over which it is (pecuniarily) incumbent on the modern businessman to take account of the working of any given enterprise has shortened so far that the old-fashioned accountability, that once was depended on to dictate a sane and considerate management with a view to permanent good-will, has in great measure become inoperative.

By and large, it seems unavoidable that the pecuniary interests of the businessmen on the one hand and the material interests of the community on the other hand are diverging in a more and more pronounced degree, due to institutional circumstances over which no prompt control can be had without immediate violation of that scheme of personal rights in which the constitution of modern democratic society is grounded. The quandary in which these communities find themselves, as an outcome of their entrance upon "the simple and obvious system of Natural Liberty," is shown in a large and instructive way by what is called "labor trouble," and in a more recondite but no less convincing fashion by the fortunes of the individual workman under the modern system.

The cost of production of a modern workman has constantly increased, with the advance of the industrial arts. The period of preparation, of education and training, necessary to turn out competent workmen, has been increasing; and the period of full workmanlike efficiency has been shortening, in those industries that employ the delicate and exacting processes of the modern technology. The shortening of this working-life of the workman is due both to a lengthening of the necessary period of preparation, and to the demand of these processes for so full a use of the workman's forces that even the beginning of senescence will count as a serious disability,—in many occupations as a fatal disability. It is also a well ascertained fact that effectual old age will be brought on at an earlier period by overwork; overwork shortens the working life-time of the workman. Thorough speeding-up ("Scientific Management"?) will unduly shorten this working life-time, and so it may, somewhat readily, result in an uneconomical consumption of the community's man-power, by consuming the workmen at a higher rate of speed, a higher pressure, with a more rapid rate of deterioration, than would give the largest net output of product per unit of man-power available, or per unit of cost of production of such man-power.

On this head the guiding incentives of the businessman and the material interest of the community at large—not to speak of the selfish interest of the individual workman—are systematically at variance. The cost of production of workmen does not fall on the business concern which employs them, at least not in such definite fashion as to make it appear that the given business concern or businessman has a material interest in the economical consumption of the man-power embodied in this given body of employees. Some slight and exceptional qualification of this statement is to be noted, in those cases where the processes in use are such as to require special training, not to be had except by a working habituation to these processes in the particular industrial plant in question. So far as such special training, to be had only as employees of the given concern, is a necessary part of the workman's equipment for this particular work, so far the given employer bears a share and an interest in the cost of production of the workmen employed; and so far, therefore, the employer has also a pecuniary interest in the economical use of his employees; which usually shows itself in the way of some special precautions being taken to prevent the departure of these workmen so long as there is a clear pecuniary loss involved in replacing them with men who have not yet had the special training required. Evidently this qualifying consideration covers no great proportion of the aggregate man-power consumed in industrial enterprises under business management. And apart from the instances, essentially exceptional, where such a special consideration comes in, the businessmen in charge will, quite excusably as things go, endeavour to consume the man-power of which they dispose in the persons of their employees, not at the rate that would be most economical to the community at large, in view of the cost of their replacement, nor at such a rate as would best suit the taste or the viability of the particular workman, but at such a rate as will yield the largest net pecuniary gain to the employer.

There is on record an illustrative, and indeed an illustrious, instance of such cannily gainful consumption of man-power carried out systematically and with consistently profitable effect in one of the staple industries of the country. In this typical, though exceptionally thoroughgoing and lucrative enterprise, the set rule of the management was, to employ none but select workmen, in each respective line of work; to procure such select workmen and retain them by offering wages slightly over the ordinary standard; to work them at the highest pace and pressure attainable with such a picked body; and to discharge them on the first appearance of aging or of failing powers. In the rules of the management was also included the negative proviso that the concern assumed no responsibility for the subsequent fortunes of discharged workmen, in the way of pension, insurance or the like.

This enterprise was highly successful and exceedingly profitable, even beyond the high average of profits among enterprises in the same line of business. Out of it came one of the greater and more illustrious fortunes that have been accumulated during the past century; a fortune which has enabled one of the most impressive and most gracious of this generation's many impressive philanthropists, never weary in well-doing; but who, through this cannily gainful consumption of man-power, has been placed in the singular position of being unable, in spite of avowedly unremitting endeavour, to push his continued disbursements in the service of humanity up to the figure of his current income. The case in question is one of the most meritorious known to the records of modern business, and while it will conveniently serve to illustrate many an other, and perhaps more consequential truth come to realisation in the march of Triumphant Democracy, it will also serve to show the gainfulness of an unreservedly canny consumption of man-power with an eye single to one's own net gain in terms of money.

Evidently this is a point in the articulation of the modern economic system where a sufficiently ruthless outside authority, not actuated by a primary regard for the pecuniary interests of the employers, might conceivably with good effect enforce a more economical consumption of the country's man-power. It is not a matter on which one prefers to dwell, but it can do no harm to take note of the fact for once in a way, that these several national establishments of the democratic order, as they are now organised and administered, do somewhat uniformly and pervasively operate with an effectual view to the advantage of a class, so far as may plausibly be done. They are controlled by and administered in behalf of those elements of the population that, for the purpose in hand, make up a single loose-knit class,—the class that lives by income rather than by work. It may be called the class of the business interests, or of capital, or of gentlemen. It all comes to much the same, for the purpose in hand.

The point in speaking of this contingent whose place in the economy of human affairs it is to consume, or to own, or to pursue a margin of profit, is simply that of contrasting this composite human contingent with the common man; whose numbers account for some nine-tenths or more of the community, while his class accounts for something less than one-tenth of the invested wealth, and appreciably less than that proportion of the discretionary national establishment,—the government, national or local, courts, attorneys, civil service, diplomatic and consular, military and naval. The arrangement may be called a gentlemen's government, if one would rather have it that way; but a gentleman is necessarily one who lives on free income from invested wealth—without such a source of free, that is to say unearned, income he becomes a decayed gentleman. Again, pushing the phrasing back a step farther toward the ground facts, there are those who would speak of the current establishments as "capitalistic;" but this term is out of line in that it fails to touch the human element in the case, and institutions, such as governmental establishments and their functioning, are after all nothing but the accustomed ways and means of human behaviour; so that "capitalistic" becomes a synonym for "businessmen's" government so soon as it is designated in terms of the driving incentives and the personnel. It is an organisation had with a view to the needs of business (i.e. pecuniary) enterprise, and is made up of businessmen and gentlemen, which comes to much the same, since a gentleman is only a businessman in the second or some later generation. Except for the slightly odious suggestion carried by the phrase, one might aptly say that the gentleman, in this bearing, is only a businessman gone to seed.

By and large, and taking the matter naively at the simple face value of the material gain or loss involved, it should seem something of an idle question to the common man whether his collective affairs are to be managed by a home-bred line of businessmen and their successive filial generations of gentlemen, with a view to accelerate the velocity and increase the volume of competitive gain and competitive spending, on the one hand, or by an alien line of officials, equally aloof from his common interests, and managing affairs with a view to the usufruct of his productive powers in furtherance of the Imperial dominion.

Not that the good faith or the generous intentions of these governments of gentlemen is questioned or is in any degree questionable; what is here spoken of is only the practical effect of the policies which they pursue, doubtless with benevolent intentions and well-placed complacency. In effect, things being as they are today in the civilised world's industry and trade, it happens, as in some sort an unintended but all-inclusive accident, that the guidance of affairs by business principles works at cross purposes with the material interests of the common man.

So ungraceful a view of the sacred core of this modern democratic organisation will need whatever evidence can be cited to keep it in countenance. Therefore indulgence is desired for one further count in this distasteful recital of ineptitudes inherent in this institutional scheme of civilised life. This count comes under the head of what may be called capitalistic sabotage. "Sabotage" is employed to designate a wilful retardation, interruption or obstruction of industry by peaceable, and ordinarily by legally defensible, measures. In its present application, particularly, there is no design to let the term denote or insinuate a recourse to any expedients or any line of conduct that is in any degree legally dubious, or that is even of questionable legitimacy.

Sabotage so understood, as not comprising recourse to force or fraud, is a necessary and staple expedient of business management, and its employment is grounded in the elementary and indefeasible rights of ownership. It is simply that the businessman, like any other owner, is vested with the right freely to use or not to use his property for any given purpose. His decision, for reasons of his own, not to employ the property at his disposal in a particular way at a particular time, is well and blamelessly within his legitimate discretion, under the rights of property as universally accepted and defended by modern nations. In the particular instance of the American nation he is protected in this right by a constitutional provision that he must not be deprived of his property without due process of law. When the property at his disposal is in the shape of industrial plant or industrial material, means of transportation or stock of goods awaiting distribution, then his decision not to employ this property, or to limit its use to something less than full capacity, in the way for which it is adapted, becomes sabotage, normally and with negligible exceptions. In so doing he hinders, retards or obstructs the working of the country's industrial forces by so much. It is a matter of course and of absolute necessity to the conduct of business, that any discretionary businessman must be free to deal or not to deal in any given case; to limit or to withhold the equipment under his control, without reservation. Business discretion and business strategy, in fact, has no other means by which to work out its aims. So that, in effect, all business sagacity reduces itself in the last analysis to a judicious use of sabotage. Under modern conditions of large business, particularly, the relation of the discretionary businessman to industry is that of authoritative permission and of authoritative limitation or stoppage, and on his shrewd use of this authority depends the gainfulness of his enterprise.