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THE

ACQUISITIVE SOCIETY

^.(J' BY R.' H. TAWNEY

FELLOW 07 BALLIOL COLLEGE, OXFORD; LATE MEMBEB OF THE COAL INDUBTRT COMMISSION

f:

NEW YORK HARCOURT, BRACE AND COMPANY

COPTRMHT, 1920, BY HABCOUBT, BBACE AND HOWE, INC.

PRINTKD IN THE U. S. A. BY

THI OUINN a BODEN COMPANY

RAHWAV. N. J.

UNTVFT?SITY OF CALIFORNIA j

SANTA BAilBARA COLLEGE LiBRART '

CONTENTS

CHAPT£B

I Introductory

II Bights and Functions .

III The Acquisitive Society

IV The Nemesis of Industrialism V Property and Creative Work

VI The Functional Society .

{ VII Industry as a Profession .

VIII The " Vicious Circle " .

IX The Condition of Efficiency

X The Position of the Brain Worker

XI PoRRO Unum Necessarium .

PAOB 1

8

20

33

52

84

91

123

139

161

180

The author desires to express his acknowledgments to the Editor of the Hibbert Journal for permission to reprint an article which appeared in it.

THE ACQUISITIVE SOCIETY

I

INTRODUCTOEY

It is a commonplace that the characteristic virtue of Englishmen is their power of sustained practical activity, and their characteristic vice a reluctance to test the quality of that activity by reference to principles. They are incurious as to theory, take fundamentals for granted, and are more interested in the state of the roads than in their place on the map. And it might fairly be argued that in ordinary times that combination of in- tellectual tameness with practical energy is suflBciently serviceable to explain, if not to justify, the equanimity with which its possessors bear the criticism of more mentally adventurous nations. It is the mood of those who have made their bargain with fate and are content to take what it offers without re-opening the deal. It leaves the mind free to concentrate undisturbed upon profitable activities, because it is not distracted by a taste for unprofitable speculations. Most generations, it might be said, walk in a path which they neither make, nor discover, but accept; the main thing is that they should march. The blinkers worn by Englishmen en- able them to trot all the more steadily along the beaten

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2 THE ACQUISITIVE SOCIETY

road, without being disturbed by curiosity as to their destination.

\/ But if the medicine of the constitution ought not to be made its daily food, neither can its daily food be made its medicine. There are times which are not ordi- nary, and in such times it is not enough to follow the road. It is necessary to know where it leads, and, if it leads nowhere, to follow another. The search for another involves reflection, which is uncongenial to the bustling people who describe themselves as practical, because they take things as they are and leave them as they are. But the practical thing for a traveler who is uncertain of his path is not to proceed with the utmost rapidity in the wrong direction: it is to consider how to find the right one. And the practical thing for a nation which has stumbled upon one of the turning- points of history is not to behave as though nothing very important were involved, as if it did not matter whether it turned to the right or to the left, went up hill or down dale, provided that it continued doing with a little more energy what it has done hitherto; but to consider whether what it has done hitherto is wise, and, if it is not wise, to alter it. When the broken ends of its industry, its politics, its social organization, have to be pieced together after a catastrophe, it must make a decision; for it makes a decision even if it refuses to

>* decide. If it is to make a decision which will wear, it must travel beyond the philosophy momentarily in favor with the proprietors of its newspapers. Unless it is to move with the energetic futility of a squirrel in a revolv- ing cage, it must have a clear apprehension both of the

INTEODUCTORY 8

deficiency of what is, and of the character of what ought to be. And to obtain this apprehension it must appeal to some standard more stable than the momentary exi- gencies of its commerce or industry or social life, and judge them by it. It must, in short, have recourse to Principles.

Such considerations are, perhaps, not altogether ir- relevant at a time when facts have forced upon English- men the reconsideration of their social insjtitutions which no appeal to theory could induce them to under- take. An appeal to principles is the condition of any

'considerable reconstruction of society, because social in- stitutions are the visible expression of the scale of moral values which rules the minds of individuals, and it is impossible to alter institutions without altering that

s^moral valuation. Parliament, industrial organizations, the whole complex machinery through which society ex- presses itself, is a mill which grinds only what is put into it, and when nothing is put into it grinds air. There are many, of course, who desire no alteration, and who, when it is attempted, will oppose it. They have found the existing economic order profitable in the past. They desire only such changes as will insure that it is equally profitable in the future. Quand le Roi avail hu, la Pologne etait ivre. They are genuinely unable to understand why their countrymen cannot bask happily by the fire which warms themselves, and ask, like the French farmer-general : — " When everything goes so happily, why trouble to change it ? " Such persons are to be pitied, for they lack the social quality which is

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4 THE ACQUISITIVE SOCIETY

proper to man. But they do not need argument; for Heaven has denied them one of the faculties required to apprehend it.

There are others, however, who are conscious of the desire for a new social order, but who yet do not grasp the implications of their own desire. Men may gen- uinely sympathize with the demand for a radical change. They may be conscious of social evils and sin- cerely anxious to remove them. They may set up a new department, and appoint new oflScials, and invent a new name to express their resolution to effect some- thing more drastic than reform, and less disturbing than revolution. But unless they will take the pains, not only to act, but to reflect, they end by effecting nothing. For they deliver themselves bound to those who think they are practical, because they take their philosophy so much for granted as to be unconscious of its implications, and directly they try to act, that philosophy re-asserts itself, and serves as an over- ruling force which presses their action more deeply into the old channels. " Unhappy man that I am ; who shall deliver me from the body of this death ? " When they desire to place their economic life on a better foun- dation, they repeat, like parrots, the word " Produc- tivity," because that is the word that rises first in their minds; regardless of the fact that productivity is the foundation on which it is based already, that increased "^ productivity is the one characteristic achievement of the age before the war, as religion was of the Middle Ages or art of classical Athens, and that it is precisely in the century which has seen the greatest increase in produc-

INTRODUCTORY 5

tivity since the fall of the Roman Empire that economic discontent has been most acute. When they are touched "^ by social compunction, they can think of nothing more original than the diminution of poverty, because pov- erty, being the opposite of the riches which they value most, seems to them the most terrible of human af- flictions. They do not understand that poverty is a symptom and a consequence of social disorder, while the disorder itself is something at once more fundamental and more incorrigible, and that the quality in their social life which causes it to demoralize a few by exces- sive riches, is also the quality which causes it to de- moralize many by excessive poverty.

" But increased production is important." Of course it is! That plenty is good and scarcity evil — it needs no ghost from the graves of the past five years to tell us that. But plenty depends upon co-operative effort, -^ and co-operation upon moral principles. And moral principles are what the prophets of this dispensation despise. So the world " continues in scarcity," be- cause it is too grasping and too short-sighted to seek that " which maketh men to be of one mind in a house." The well-intentioned schemes for social reorganization put forward by its commercial teachers are abortive, be- cause they endeavor to combine incompatibles, and, if they disturb everything, settle nothing. They are like a man who, when he finds that his shoddy boots wear badly, orders a pair two sizes larger instead of a pair of good leather, or who makes up for putting a bad sixpence in the plate on Sunday by putting in a bad shilling the next. And when their fit of feverish energy

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6 THE ACQUISITIVE SOCIETY

has spent itself, and there is nothing to show for it except disillusionment, they cry that reform is imprac- ticable, and blame human nature, when what they ought to blame is themselves.

Yet all the time the principles upon which industry should be based are simple, however difficult it may be to apply them; and if they are overlooked it is not be- cause they are difficult, but because they are elementary. >/' They are simple because industry is simple. An in- dustry, when all is said, is, in its essence, nothing more mysterious than a body of men associated, in various degrees of competition and co-operation, to win their living by providing the community with some service which it requires. Organize it as you will, let it be a group of craftsmen laboring with hammer and chisel, or peasants plowing their own fields, or armies of mechanics of a hundred different trades constructing ships which are miracles of complexity with machines ^ which are the climax of centuries of invention, its func- tion is service, its method is association. Because its function is service, an industry as a whole has rights and duties towards the community, the abrogation of which involves privilege. Because its method is asso' ciation, the different parties within it have rights and duties towards each other ; and the neglect or perversion of these involves oppression. >' The conditions of a right organization of industry are, therefore, permanent, unchanging, an3capable of being apprehended by the most elementary intelligence, provided it will read the nature of its countrymen in the large outlines of history, not in the bloodless abstrac-

INTRODUCTORY 7

tions of experts. The first is that it should be subordi- nated to the community in such a way as to render the best service technically possible, that those who render no service should not be paid at all, because it is of the essence of a function that it should find its mean- ing in the satisfaction, not of itself, but of the end which it serves. The second is that its direction and govern- ment should be in the hands of persons who are re- sponsible to those who are directed and governed, be- cause it is the condition of economic freedom that men should not be ruled by an authority which they cannot control. The industrial problem, in fact, is a problem of right, not merely of material misery, and because it is a problem of right it is most acute among those sections of the working classes whose material misery is least. It is a question, first of Function, and sec- ondly of Freedom.

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n

RIGHTS AND FUNCTIONS

A FUNCTION may be defined as an activity which em- bodies and expresses the idea of social purpose. The essence of it is that the agent does not perform it merely for personal gain or to gratify himself, but recognizes that he is responsible for its discharge to some higher authority. The purpose of industry is obvious. It is to supply man with things which are necessary, useful or beautiful, and thus to bring life to body or spirit. In so far as it is governed by this end, it is among the most important of human activities. In so far as it is diverted from it, it may be harmless, amusing, or even exhilarating to those who carry it on, but it possesses no more social significance than the orderly business of ants and bees, the strutting of peacocks, or the struggles of carnivorous animals over carrion.

Men have normally appreciated this fact, however un- willing or unable they may have been to act upon it; and therefore from time to time, in so far as they have been able to control the forces of violence and greed, they have adopted various expedients for emphasizing the social quality of economic activity. It is not easy, however, to emphasize it effectively, because to do so requires a constant effort of will, against which ego- tistical instincts are in rebellion, and because, if that

will is to prevail, it must be embodied in some social

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EIGHTS AND FUNCTIONS 9

and political organization, which may itself become so arbitrary, tyrannical and corrupt as to thwart the per- formance of function instead of promoting it. When this process of degeneration has gone far, as in most European countries it had by the middle of the eight- eenth century, the indispensable thing is to break the dead organization up and to clear the ground. In the course of doing so, the individual is emancipated and his rights are enlarged ; but the idea of social purpose is discredited by the discredit justly attaching to the obso- lete order in which it is embodied.

It is not surprising, therefore, that in the new indus- trial societies which arose on the ruins of the old regime the dominant note should have been the insistence upon individual rights, irrespective of any social purpose to which their exercise contributed. The economic ex- pansion which concentrated population on the coal-meas- ures was, in essence, an immense movement of coloniza- tion drifting from the south and east to the north and west; and it was natural that in those regions of Eng- land, as in the American settlements, the characteristic philosophy should be that of the pioneer and the mining camp. The change of social quality was profound. But in England, at least, it was gradual, and the " industrial revolution," though catastrophic in its effects, was only the visible climax of generations of subtle moral change. The rise of modern economic relations, which may be dated in England from the latter half of the seventeenth century, was coincident with the growth of a political theory which replaced the conception of purpose by that of mechanism. During a great part of history men had -^

10 THE ACQUISITIVE SOCIETY

found the significance of their social order in its rela- tion to the universal purposes of religion. It stood as one rung in a ladder which stretched from hell to Para- dise, and the classes who composed it were the hands, the feet, the head of a corporate body which was itself

«/ a microcosm imperfectly reflecting a larger universe. When the Reformation made the Church a department of the secular government, it undermined the already en- feebled spiritual forces which had erected that sublime, but too much elaborated, synthesis. But its influence remained for nearly a century after the roots which fed it had been severed. It was the atmosphere into which men were born, and from which, however practical, or even Machiavellian, they could not easily disengage their spirits. Nor was it inconvenient for the new state- craft to see the weight of a traditional religious sanction added to its own concern in the subordination of all classes and interests to the common end, of which it conceived itself, and during the greater part of the six- teenth century was commonly conceived, to be the guar- dian. The lines of the social structure were no longer supposed to reproduce in miniature the plan of a uni-

' versal order. But common habits, common traditions and beliefs, common pressure from above gave them a unity of direction, which restrained the forces of indi- vidual variation and lateral expansion; and the center towards which they converged, formerly a Church pos- sessing some of the characteristics of a State, was now a State that had clothed itself with many of the attributes of a Church.

The difference between the England of Shakespeare,

RIGHTS AND FUNCTIONS 11

still visited bj the ghosts of the Middle Ages, and the England which merged in 1700 from the fierce polemics of the last two generations, was a difference of social and political theory even more than of constitutional and political arrangements. Not only the facts, but the minds which appraised them, were profoundly modified. The essence of the change was the disappearance of the idea that social institutions and economic activities were related to common ends, which gave them their signifi- cance and which served as their criterion. In the eighteenth century both the State and the Church had abdicated that part of the sphere which had consisted in the maintenance of a conunon body of social ethics; what was left of it was repression of a class, not the discipline of a nation. Opinion ceased to regard social institutions and economic activity as amenable, like personal conduct, to moral criteria, because it was no longer influenced by the spectacle of institutions which, arbitrary, capricious, and often corrupt in their prac- tical operation, had been the outward symbol and ex- pression of the subordination of life to purposes trans- cending private interests. That part of government '^ which had been concerned with social administration, if it did not end, became at least obsolescent. For such democracy as had existed in the Middle Ages was dead, and the democracy of the Revolution was not yet born, so that government passed into the lethargic hand of classes who wielded the power of the State in the inter- ests of an irresponsible aristocracy. And the Church ^ was even more remote from the daily life of mankind than the State. Philanthropy abounded; but religion, v^

12 THE ACQUISITIVE SOCIETY

once the greatest social force, had become a thing as pri- vate and individual as the estate of the squire or the working clothes of the laborer. There were special dis- pensations and occasional interventions, like the acts of a monarch who reprieved a criminal or signed an order for his execution. But what was familiar, and human and lovable — what was Christian in Christianity had largely disappeared. God had been thrust into the frigid altitudes of infinite space. There was a limited monarchy in Heaven, as well as upon earth. Provi- dence was the spectator of the curious machine which it had constructed and set in motion, but the operation of which it was neither able nor willing to control. Like the occasional intervention of the Crown in the pro- ceedings of Parliament, its wisdom was revealed in the infrequency of its interference.

y The natural consequence of the abdication of authori- ties which had stood, however imperfectly, for a common purpose in social organization, was the gradual disap- pearance from social thought of the idea of purpose it- self. Its place in the eighteenth century was taken by the idea of mechanism. The conception of men as united to each other, and of all mankind as united to God, by mutual obligations arising from their relation to a common end, which vaguely conceived and imper- fectly realizTO, had been the keystone holding together the social fabric, ceased to be impressed upon men's minds, when Church and State withdrew from the center

^ of social life to its circumference. What remained when the keystone of the arch was removed, was private rights and private interests, the materials of a society rather

EIGHTS AND FUNCTIONS 13

than a society itself. These rights and interests were the natural order which had heen distorted by the ambi- tions of kings and priests, and which emerged when the artificial super-structure disappeared, because they were the creation, not of man, but of Nature herself. They had been regarded in the past as relative to some public end, whether religion or national welfare. Hencefor- ward they were thought to be absolute and indefeasible, and to stand by their own virtue. They were the ulti- mate political and social reality; and since they were the ultimate reality, they were not subordinate to other aspects of society, but other aspects of society were subordinate to them.

The State could not encroach upon these rights, for the State existed for their maintenance. They deter- mined the relation of classes, for the most obvious and fundamental of all rights was property — property abso- lute and unconditioned — and those who possessed it were regarded as the natural governors of those who did not. Society arose from their exercise, through the con- tracts of individual with individual. It fulfilled its object in so far as, by maintaining contractual freedom,- it secured full scope for their unfettered exercise. It failed in so far as, like the French monarchy, it over- rode them by the use of an arbitrary authority. Thus conceived, society assumed something of the "appearance of a great joint-stock company, in which political power and the receipt of dividends were justly assigned tii those who held the most numerous shares. The currents of social activity did not converge upon common ends, but were dispersed through a multitude of channels,

*14 THE ACQUISITIVE SOCIETY

created by the private interests of the individuals who composed society. But in their very variety and spon- taneity, in the very absence of any attempt to relate them to a larger purpose than that of the individual, lay the best security of its attainment. There is a mysti- cism of reason as well as of emotion, and the eighteenth century found, in the beneficence of natural instincts, a substitute for the God whom it had expelled from contact with society, and did not hesitate to identify them.

"Thus God and nature planned the general frame And bade self-love and social be the same."

The result of such ideas in the world of practice wai a society which was ruled by law, not by the caprice of Governments, but which recognized no moral limita- tion on the pursuit by individuals of their economic self-interest. In the world of thought, it was a political philosophy which made rights the foundation of the social order, and which considered the discharge of obli- gations, when it considered it at all, as emerging by an inevitable process from their free exercise. The first famous exponent of this philosophy was Locke, in whom the dominant conception is the indefeasibility of private rights, not the pre-ordained harmony between private rights and public welfare. In the great French writers who prepared the way for the Revolution, while believ- ing that they were the servants of an enlightened ab- solutism, there is an almost equal emphasis upon the sanctity of rights and upon the infallibility of the

EIGHTS AND FUNCTIONS 15

alchemy by which the pursuit of private ends is trans- muted into the attainment of public good. Though their writings reveal the influence of the conception of society as a self-adjusting mechanism, which afterwards became the most characteristic note of the English in- dividualism, what the French Revolution burned into the mind of Europe was the former not the latter. In England the idea of right had been negative and de- fensive, a barrier to the encroachment of Governments. The French leapt to the attack from trenches which the English had been content to defend, and in France the idea became affirmative and militant, not a weapon of defense, but a principle of social organization. The ^ attempt to refound society upon rights, and rights springing not from musty charters, but from the very nature of man himself, was at once the triumph and the limitation of the Revolution. It gave it the enthusiasm and infectious power of religion.

What happened in England might seem at first sight to have been precisely the reverse. English prac- tical men, whose thoughts were pitched in a lower key, were a little shocked by the pomp and brilliance of that tremendous creed. They had scanty sympathy with the absolute affirmations of France. What captured their imagination was not the right to liberty, which made no appeal to their commercial instincts, but the expedi- ency of liberty, which did ; and when the Revolution had revealed the explosive power of the idea of natural right, they sought some less menacing formula. It had been offered them first by Adam Smith and his precursors, who showed how the mechanism of economic life con-

16 THE ACQUISITIVE SOCIETY

verted " as with an invisible hand," the exercise of in- dividual rights into the instrument of public good. Bentham, who despised metaphysical subtleties, and thought the Declaration of the Rights of Man as absurd as any other dogmatic religion, completed the new orientation by supplying the final criterion of political institutions in the principle of Utility. Henceforward emphasis was transferred from the right of the indi- vidual to exercise his freedom as he pleased to the ex- pediency of an undisturbed exercise of freedom to society.

The change is significant. It is the difference be- tween the universal and equal citizenship of France, with its five million peasant proprietors, and the organ- ized inequality of England established solidly upon class traditions and class institutions; the descent from hope to resignation, from the fire and passion of an age of illimitable vistas to the monotonous beat of the factory /engine, from Turgot and Condorcet to the melancholy mathematical creed of Bentham and Ricardo and James Mill. Mankind has, at least, this superiority over its philosophers, that great movements spring from the heart and embody a faith, not the nice adjustments of the hedonistic calculus. So in the name of the rights of property France abolished in three years a great mass of property rights which, under the old regime had robbed the peasant of part of the produce of his labor, and the social transformation survived a whole world of political changes. In England the glad tidings of democracy were broken too discreetly to reach the ears of the hind in the furrow or the shepherd on the hill;

EIGHTS AND FUNCTIONS 17

there were political changes without a social transfor- mation. The doctrine of Utility, though trenchant in the sphere of politics, involved no considerable interfer- ence with the fundamentals of the social fabric. Its exponents were principally concerned with the removal of political abuses and legal anomalies. They attacked sinecures and pensions and the criminal code and the procedure of the law courts. But they touched only the surface of social institutions. They thought it a monstrous injustice that the citizen should pay one-tenth of his income in taxation to an idle Government, but quite reasonable that he should pay one-fifth of it in rent to an idle landlord.

The difference, neverthelesss, was one of emphasis and expression, not of principle. It mattered very little in practice whether private property and unfettered eco- nomic freedom were stated, as in France, to be natural rights, or whether, as in England, they were merely assumed once for all to be expedient. In either case they were taken for granted as the fundamentals upon which social organization was to be based, and about which no further argument was admissible. Though Bentham argued that rights were derived from utility, not from nature, he did not push his analysis so far as to argue that any particular right was relative to any particular function, and thus endorsed indiscrimi- nately rights which were not accompanied by service as well as rights which were. While eschewing, in short, the phraseology of natural rights, the English Utilitarians retained something not unlike the substance of them. For they assumed that private property in

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18 THE ACQUISITIVE SOCIETY

land, and the private ownership of capital, were natural institutions, and gave them, indeed, a new lease of life, by proving to their own satisfaction that social well- being must result from their continued exercise. Their negative was as important as their positive teaching. It was a conductor which diverted the lightning. Behind their political theory, behind the practical conduct, which as always, continues to express theory long after it has been discredited in the world of thought, lay the acceptance of absolute rights to property and to eco- nomic freedom as the unquestioned center of social organization.

The result of that attitude was momentous. The motive and inspiration of the Liberal Movement of the eighteenth century had been the attack on Privi- lege. But the creed which had exorcised the specter of agrarian feudalism haunting village and chateau in France, was impotent to disarm the new ogre of industrialism which was stretching its limbs in the north of England. When, shorn of its splendors and illusions, liberalism triumphed in England in 1832, it carried without criticism into the new world of capitalist industry categories- of private property and freedom of contract which had been forged in the sim- pler economic environment of the pre-industrial era. In England these categories are being bent and twisted till they are no longer recognizable, and will, in time, be made harmless. In America, where necessity com- pelled the crystallization of principles in a constitu- tion, they have the rigidity of an iron jacket. The magnificent formulae in which a society of farmers

EIGHTS AND FUNCTIONS 19

and master craftsmen enshrined its philosophy of free- dom are in danger of becoming fetters used by an Anglo-Saxon business aristocracy to bind insurgent movements on the part of an immigrant and semi- servile proletariat.

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THE ACQUISITIVE SOCIETY

This doctrine has been qualified in practice by par- ticular limitations to avert particular evils and to meet exceptional emergencies. But it is limited in special cases precisely because its general validity is regarded as beyond controversy, and, up to the eve of the present war, it was the working faith of modern economic

^ civilization. What it implies is, that the foundation of society is found, not in functions, but in rights; that rights are not deducible from the discharge of functions, so that the acquisition of wealth and the enjoyment of property are contingent upon the per- formances of services, but that the individual enters the world equipped with rights to the free disposal of his property and the pursuit of his economic self- interest, and that these rights are anterior to, and in-

s^dependent of, any service which he may render. True, the service of society will, in fact, it is assumed, re- sult from their exercise. But it is not the primary motive and criterion of industry, but a secondary con- sequence, which emerges incidentally through the ex- ercise of rights, a consequence which is attained, in- deed, in practice, but which is attained without being sought. It is not the end at which economic activity aims, or the standard by which it is judged, but a

by-product, as coal-tar is a by-product of the manu-

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THE ACQUISITIVE SOCIETY 21

facture of gas; whether that by-product appears or not, it is not proposed that the rights themselves should be abdicated. For they are regarded, not as a con- ditional trust, but as a property, which may, indeed, give way to the special exigencies of extraordinary emergencies, but which resumes its sway when the emergency is over, and in normal times is above dis- cussion.

That conception is written large over the history of the nineteenth century, both in England and in America. The doctrine which it inherited was that ^ property was held by an absolute right on an in- dividual basis, and to this fundamental it added an- other, which can be traced in principle far back into history, but which grew to its full stature only after the rise of capitalist industry, that societies act both unfairly and unwisely when they limit opportunities of economic enterprise. Hence every attempt to im- pose obligations as a condition of the tenure of prop- erty or of the exercise of economic activity has been met by uncompromising resistance. The story of the struggle between humanitarian sentiment and the the- ory of property transmitted from the eighteenth cen- tury is familiar. No one has forgotten the opposi- tion offered in the name of the rights of property to factory legislation, to housing reform, to interference with the adulteration of goods, even to the compulsory sanitation of private houses. " May I not do what I like with my own ? " was the answer to the proposal to require a minimum standard of safety and sanita- tion from the owners of mills and houses. Even to

20 THE ACQUISITIVE SOCIETY

this day, while an English urban landlord can cramp or distort the development of a whole city by with- holding land except at fancy prices, English munici- palities are without adequate powers of compulsory purchase, and must either pay through the nose or see thousands of their members overcrowded. The whole body of procedure by which they may acquire land, or indeed new powers of any kind, has been carefully designed by lawyers to protect owners of property against the possibility that their private rights may be subordinated to the public interest, because their rights are thought to be primary and absolute and public interests secondary and contingent.

No one needs to be reminded, again, of the influence of the same doctrine in the sphere of taxation. Thus the income tax was excused as a temporary measure, because the normal society was conceived to be one in which the individual spent his whole income for himself and owed no obligations to society on account of it. The death duties were denounced as robbery, because they implied that the right to benefit by in- heritance was conditional upon a social sanction. The Budget of 1909 created a storm, not because the taxa- tion of land was heavy — in amount the land-taxes were trifling — but because it was felt to involve the doc- trine that property is not an absolute right, but that it may properly be accompanied by special obligations, a doctrine which, if carried to its logical conclusion, would destroy its sanctity by making ownership no longer absolute but conditional.

THE ACQUISITIVE SOCIETY 23

Such an implication seems intolerable to an influ- ential body of public opinion, because it has been ac- customed to regard the free disposal of property and the unlimited exploitation of economic opportunities, as rights which are absolute and unconditioned. On the whole, until recently, this opinion had few antag- onists who could not be ignored. As a consequence the maintenance of property rights has not been seri- iously threatened even in those cases in which it is evident that no ser\'ice is discharged, directly or in- directly, by their exercise. 'No one supposes, that the owner of urban land, performs qua owner, any func- tion. He has a right of private taxation; that is all. But the private ownership of urban land is as secure to-day as it was a century ago; and Lord Hugh Cecil, in his interesting little book on Consen^atism, declares that whether private property is mischievous or not, society cannot interfere with it, because to interfere with it is theft, and theft is wicked. l\o one sup- poses that it is for the public good that large areas of land should be used for parks and game. But our country gentlemen are still settled heavily upon their villages and still slay their thousands. No one can argue that a monopolist is impelled by " an invisible hand " to serve the public interest. But over a con- siderable field of industry competition, as the recent Report on Trusts shows, has been replaced by com- bination, and combinations are allowed the same un- fettered freedom as individuals in the exploitation of economic opportunities. No one really believes that the production of coal depends upon the payment of

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U THE ACQUISITIVE SOCIETY

mining royalties or that ships will not go to and fro unless ship-owners can earn fifty per cent, upon their capital. But coal mines, or rather the coal miner, still pay royalties, and ship-owners still make fortunes and are made Peers.

At the very moment when everybody is talking about the importance of increasing the output of wealth, the last question, apparently, which it occurs to any states- man to ask is why wealth should be squandered on futile activities, and in expenditure which is either disproportionate to service or made for no service at all. So inveterate, indeed, has become the practice of payment in virtue of property rights, without even the pretense of any service being rendered, that when, in a national emergency, it is proposed to extract oil from the ground, the Government actually proposes that every gallon shall pay a tax to landowners who never even suspected its existence, and the ingenuous proprietors are full of pained astonishment at any one questioning whether the nation is under moral obliga- tion to endow them further. Such rights are, strictly speaking, privileges. For the definition of a priv- ilege is a right to which no corresponding function is attached.

The enjoyment of property and the direction of in- dustry are considered, in short, to require no social justification, because they are regarded as rights which stand by their own virtue, not functions to be judged by the success with which they contribute to a social purpose. To-day that doctrine, if intellectually dis- credited, is still the practical foundation of social or-

THE ACQUISITIVE SOCIETY 25

ganization. How slowly it yields even to the most insistent demonstration of its inadequacy is shown by the attitude which the heads of the business world have adopted to the restrictions imposed on economic activity during the war. The control of railways, mines and shipping, the distribution of raw materials through a public department instead of through com- peting merchants, the regulation of prices, the attempts to check " profiteering " — the detailed application of these measures may have been effective or ineffective, wise or injudicious. It is evident, indeed, that some of them have been foolish, like the restriction of im- ports when the world has five years' destruction to repair, and that others, if sound in conception, have been questionable in their execution. If they were attacked on the ground that they obstruct the efficient performance of function — if the leaders of industry came forward and said generally, as some, to their honor, have : — " We accept your policy, but we will improve its execution; we desire payment for service and service only and will help the state to see that it pays for nothing else " — there might be controversy as to the facts, but there could be none as to the prin- ciple.

In reality, however, the gravamen of the charges brought against these restrictions appears generally to be precisely the opposite. They are denounced by most of their critics not because they limit the oppor- tunity of service, but because they diminish the op- portunity for gain, not because they prevent the trader enriching the community, but because they make it

26 THE ACQUISITIVE SOCIETY

more difficult for him to enricli himself; not, in short, because they have failed to convert economic activity into a social function, but because they have come too near succeeding. If the financial adviser to the Coal Controller may be trusted, the shareholders in coal mines would appear to have done fairly well during the war. But the proposal to limit their profits to 1/2 per ton is described by Lord Gainford as " sheer robbery and confiscation." With some honorable exceptions, what is demanded is that in the future as in the past the directors of industry should be free to handle it as an enterprise conducted for their own convenience or advancement, instead of being com- pelled, as they have been partially compelled during the war, to subordinate it to a social purpose. For to admit that the criterion of commerce and industry is its success in discharging a social purpose is at once to turn property and economic activity from rights which are absolute into rights which are con- tingent and derivative, because it is to affirm that they are relative to functions and that they may justly be revoked when the functions are not performed. It is, in short, to imply that property and economic activity exist to promote the ends of society, whereas hitherto society has been regarded in the world of business as existing to promote them. To those who hold their position, not as functionaries, but by virtue of their success in making industry contribute to their own wealth and social influence, such a reversal of means and ends appears little less than a revolution. For it means that they must justify before a social tribunal

THE ACQUISITIVE SOCIETY 27

rights which they have hitherto taken for granted as part of an order which is above criticism.

During the greater part of the nineteenth century the significance of the opposition between the two prin- ciples of individual, rights and social functions was masked by the doctrine of the inevitable harmony be- tween private interests and public good. Competition, it was argued, was an effective substitute for hon- esty. To-day that subsidiary doctrine has fallen to pieces under criticism; few now would profess adher- ence to the compound of economic optimism and moral bankruptcy which led a nineteenth century economist to say : " Greed is held in check by greed, and the desire for gain sets limits to itself." The disposi- tion to regard individual rights as the center and pivot of society is still, however^ the most powerful element in political thought and the practical foundation of industrial organization. The laborious refutation of the doctrine that private and public interests are co- incident, and that man's self-love is God's Providence, which was the excuse of the last century for its wor- ship of economic egotism, has achieved, in fact, sur- prisingly small results. Economic egotism is still wor- shiped; and it is worshiped because that doctrine was not really the center of the position. It was an outwork, not the citadel, and now that the outwork has been captured, the citadel is still to win.

What gives its special quality and character, its toughness and cohesion, to the industrial system built up in the last century and a half, is not its exploded theory of economic harmonies. It is the doctrine that

28 THE ACQUISITIVE SOCIETY

economic rights are anterior to, and independent of economic functions, that they stand by their own vir- tue, and need adduce no higher credentials. The prac- tical result of it is that economic rights remain, whether economic functions are performed or not. They remain to-day in a more menacing form than in the age of early industrialism. For those who control in- dustry no longer compete but combine, and the rivalry between property in capital and property in land has long since ended. The basis of the New Conservatism appears to be a determination so to organize society, both by political and economic action, as to make it secure against every attempt to extinguish payments which are made, not for service, but because the own- ers possess a right to extract income without it. Hence the fusion of the two traditional parties, the proposed " strengthening " of the second chamber, the return to protection, the swift conversion of rival industrialists to the advantages of monopoly, and the attempts to buy off with concessions the more influential section of the working classes. Revolutions, as a long and bitter ex- perience reveals, are apt to take their color from the regime which they overthrow. Is it any wonder that the creed which affirms the absolute rights of property should sometimes be met with a counter-affirmation of the absolute rights of labor, less anti-social, indeed, and inhuman, but almfimst as dogmatic, almost as intoler- ant and thoughtless as itself?

A society which aimed at making the acquisition of wealth contingent upon the discharge of social obliga-

THE ACQUISITIVE SOCIETY 29

tions, which sought to proportion remuneration to serv- ice and denied it to those by whom no service was per- formed, which inquired first not what men possess but what they can make or create or achieve, might be called a Functional Society, because in such a society the main subject of social emphasis would be the per- formance of functions. But such a society does not exist, even as a remote ideal, in the modern world, though something like it has hung, an unrealized the- ory, before men's minds in the past. Modern societies aim at protecting economic rights, while leaving eco- nomic functions, except in moments of abnormal emer-^ gency, to fulfil themselves. The motive which gives color and quality to their public institutions, to their policy and political thought, is not the attempt to secure the fulfilment of tasks undertaken for the pub- lic service, but to increase the opportunities open to individuals of attaining the objects which they conceive to be advantageous to themselves. If asked the end or criterion of social organization, they would give an an- swer reminiscent of the formula the greatest happiness of the greatest number. But to say that the end of social institutions is happiness, is to say that they have no common end at all. For happiness is in- dividual, and to make happiness the object of society is to resolve society itself into the ambitions of num- berless individuals, each directed towards the attain- ment of some personal purpose.

Such societies may be called Acquisitive Societies, because their whole tendency and interest and pre- occupation is to promote the acquisition of wealth. The

>/'

30 THE ACQUISITIVE SOCIETY

appeal of this conception must be powerful, for it has laid the whole modern world under its spell. Since England first revealed the possibilities of industrial- ism, it has gone from strength to strength, and as in- dustrial civilization invades countries hitherto remote from it, as Russia and Japan and India and China are drawn into its orbit, each decade sees a fresh ex- tension of its influence. The secret of its triumph is obvious. It is an invitation to men to use the pow- ers with which they have been endowed by nature or society, by skill or energy or relentless egotism or mere good fortune, without inquiring whether there is any principle by which their exercise should be limited. It assumes the social organization which determines the opportunities which different classes shall in fact possess, and concentrates attention upon the right of those who possess or can acquire power to make the fullest use of it for their own self-advancement. By fixing men's minds, not upon the discharge of social obligations, which restricts their energy, because it de- fines the goal to which it should be directed, but upon the exercise of the right to pursue their own self- interest, it offers unlimited scope for the acquisition of riches, and therefore gives free play to one of the most powerful of human instincts. To the strong it promises unfettered freedom for the exercise of their strength; to the weak the hope that they too one day may be strong. Before the eyes of both it suspends a golden prize, which not all can attain, but for which each may strive, the enchanting vision of infinite ex- pansion. It assures men that there are no ends other

THE ACQUISITIVE SOCIETY 31

than their ends, no law other than their desires, no limit other than that which they think advisable. Thus it makes the individual the center of his own universe, and dissolves moral principles into a choice of ex- pediences. And it immensely simplifies the problems of social life in complex communities. For it relieves them of the necessity of discriminating between dif- ferent types of economic activity and different sources of wealth, between enterprise and avarice, energy and unscrupulous greed, property which is legitimate and property which is theft, the just enjoyment of the fruits of labor and the idle parasitism of birth or for- tune, because it treats all economic activities as stand- ing upon the same level, and suggests that excess or defect, waste or superfluity, require no conscious ef- fort of the social will to avert them, but are corrected almost automatically by the mechanical play of eco- nomic forces.

Under the impulse of such ideas men do not be- come religious or wise or artistic; for religion and wisdom and art imply the acceptance of limitations.* But they become powerful and rich. They inherit the earth and change the face of nature, if they do not possess their own souls; and they have that appear- ance of freedom which consists in the absence of ob- stacles between opportunities for self-advancement and those 'whom birth or wealth or talent or good fortune has placed in a position to seize them. It is not diffi- cult either for individuals or for societies to achieve their object, if that object be sufficiently limited and inmiediate, and if they are not distracted from its

32 THE ACQUISITIVE SOCIETY

pursuit by other considerations. (The temper which dedicates itself to the cultivation of opportunities, and leaves obligations to take care of themselves, is set upon an object which is at once simple and practicable* The eighteenth century defined it. The twentieth century has very largely attained it. Or, if it has not attained it, it has at least grasped the possibilities of its attain- ment. The national output of wealth per head of population is estimated to have been approximately $200 in 1914. Unless mankind chooses to continue the sac- rifice of prosperity to the ambitions and terrors of nationalism, it is possible that by the year 2000 it may be doubled.

IV

THE NEMESIS OF INDUSTRIALISM

Such happiness is not remote from achievement. In the course of achieving it, however, the world has been confronted by a group of imexpected consequences, which are the cause of its malaise, as the obstruction of economic opportunity was the cause of social malaise in the eighteenth century. And these consequences are not, as is often suggested, accidental mal-adjustments, but flow naturally from its dominant principle : so that there is a sense in which the cause of its perplexity is not its failure, but the quality of its success, and its light itself a kind of darkness. The will to economic power, if it is sufficiently single-minded, brings riches. But if it is single-minded it destroys the moral re- straints which ought to condition the pursuit of riches, and therefore also makes the pursuit of riches mean- ingless. For what gives meaning to economic activity, as to any other activity is, as we have said, the pur- pose to which it is directed. But the faith upon which our economic civilization reposes, the faith that riches are not a means but an end, implies that all economic activity is equally estimable, whether it is subordinated to a social purpose or not. Hence it divorces gain from service, and justifies rewards for which no function is performed, or which are out of all proportion to it.

Wealth in modern societies is distributed according to

33

34 THE ACQUISITIVE SOCIETY

opportunity; and while opportunity depends partly upon talent and energy, it depends still more upon birth, social position, access to education and inherited wealth; in a word, upon property. For talent and energy can create opportunity. But property need only wait for it. It is the sleeping partner who draws the dividends which the firm produces, the residuary lega- tee who always claims his share in the estate. ^ Because rewards are divorced from services, so that what is prized most is not riches obtained in return for labor but riches the economic origin of which, being regarded as sordid, is concealed, two results follow. The first is the creation of a class of pensioners upon industry, who levy toll upon its product, but contribute nothing to its increase, and who are not merely tol- erated, but applauded and admired and protected with assiduous care, as though the secret of prosperity re^ sided in them. They are admired because in the ab- sence of any principle of discrimination between in- comes which are payment for functions and incomes which are not, all incomes, merely because they rep- resent wealth, stand on the same level of appreciation, and are estimated solely by their magnitude, so that in all societies which have accepted industrialism there is an upper layer which claims the enjoyment of social life, while it repudiates its responsibilities. The ren- tier and his ways, how familiar they were in England before the war! A public school and then club life in Oxford and Cambridge, and then another club in town; London in June, when London is pleasant, the moors in August, and pheasants in October, Cannes in

THE NEMESIS OF INDUSTRIALISM 35

December and hunting in February and March; and a whole world of rising bourgeoisie eager to imitate them, sedulous to make their expensive watches keep time with this preposterous calendar!

The second consequence is the degradation of those who labor, but who do not by their labor command large rewards; that is of the great majority of man- kind. And this degradation follows inevitably from the refusal of men to give the purpose of industry the first place in their thought about it. When they do that, when their minds are set upon the fact that the meaning of industry is the sendee of man, all who labor appear to them honorable, because all who labor serve, and the distinction which separates those who serve from those who merely spend is so crucial and fundamental as to obliterate all minor distinctions based on differences of income. But when the cri- terion of function is forgotten, the only criterion which remains is that of wealth, and an Acquisitive Society reverences the possession of wealth, as a Functional Society would honor, even in the person of the hum- blest and most laborious craftsman, the arts of creation.

So wealth becomes the foundation of public esteem, and the mass of men who labor, but who do not ac- quire wealth, are thought to be vulgar and meaning- less and insignificant compared with the few who ac- quire wealth by good fortune, or by the skilful use of economic opportunities. They come to be regarded, not as the ends for which alone it is worth while to produce wealth at all, but as the instruments of its

36 THE ACQUISITIVE SOCIETY

acquisition by a world that declines to be soiled by con- tact with what is thought to be the dull and sordid business of labor. They are not happy, for the reward of all but the very mean is not merely money, but the esteem of their fellow-men, and they know they are not esteemed, as soldiers, for example, are esteemed, though it is because they give their lives to making civiliza- tion that there is a civilization which it is worth while /for soldiers to defend. They are not esteemed, be- cause the admiration of society is directed towards those who get, not towards those who give ; and though workmen give much they get little. And the rentiers whom they support are not happy; for in discarding the idea of function, which sets a limit to the acquisi- tion of riches, they have also discarded the principle which alone give riches their meaning. Hence unless they can persuade themselves that to be rich is in it- self meritorious, they may bask in social admiration, but they are unable to esteem themselves. For they have abolished the principle which makes activity sig- nificant, and therefore estimable. They are, indeed, more truly pitiable than some of those who envy them. For like the spirits in the Inferno, they are punished by the attainment of their desires.

A society ruled by these notions is necessarily the victim of an irrational inequality. To escape such in- equality it is necessary to recognize that there is some principle which ought to limit the gains of particular classes and particular individuals, because gains drawn from certain sources or exceeding certain amounts are illegitimate. But such a limitation implies a stand-

THE NEMESIS OF INDUSTRIALISM 37

ard of discrimination, which is inconsistent with the assumption that each man has a right to what he can get, irrespective of any service rendered for it. Thus Jt privilege, which was to have been exorcised by the gos- pel of 1789, returns m a new guise, the creature no longer of unequal legal rights thwarting the natural exercise of equal powers of hand and brain, but of unequal powers springing from the exercise of equal rights in a world where property and inherited wealth and the apparatus of class institutions have made op- portunities unequal. Inequality, again, leads to the mis-direction of production. For, since the demand of one income of £50,000 is as powerful a magnet as the demand of 500 incomes of £100, it diverts energy from the creation of wealth to the multiplication of luxuries, so that, for example, while one-tenth of the people of England are overcrowded^ a considerable part of them are engaged, not in supplying that deficiency, but in making rich men's hotels, luxurious yachts, and motor- cars like that used by the Secretary of State for War, " with an interior inlaid with silver in quartered ma- hogany, and upholstered in favna suede and morocco," which was recently bought by a suburban capitalist, by way of encouraging useful industries and rebuking pub- lic extravagance with an example of private economy, for the trifling sum of $14,000.

Thus part of the goods which are annually produced, and which are called wealth, is, strictly speaking, waste, because it consists of articles which, though reckoned as part of the income of the nation, either should not have been produced until other articles had already

38 THE ACQUISITIVE SOCIETY

been produced in suflBcient abundance, or should not have been produced at all. And some part of the popu- lation is employed in making goods which no man can make with happiness, or indeed without loss of self- respect, because he knows that they had much better not be made^ and that his life is wasted in making them. Everybody recognizes that the army contractor who, in time of war, set several hundred navvies to dig an artificial lake in his grounds, was not adding to, but subtracting from, the wealth of the nation. But in time of peace many hundred thousand workmen, if they are not digging ponds, are doing work which is equally foolish and wasteful ; though, in peace, as in war, there is important work, which is waiting to be done, and which is neglected. It is neglected because, while the effective demand of the mass of men is only too small, there is a small class which wears several men's clothes, eats several men's dinners, occupies several families' houses, and lives several men's lives. As long as a minority has so large an income that part of it, if spent at all, must be spent on trivialties, so long will part of the human energy and mechanical equipment of the nation be diverted from serious work, which enriches it, to making trivialities, which impoverishes it, since they can only be made at the cost of not making other things. And if the peers and millionaires who are now preaching the duty of production to miners and dock laborers desire that more wealth, not more waste, should be produced, the simplest way in which they can achieve their aim is to transfer to the public their whole in- comes over (say) $5,000 a year, in order that it may

THE NEMESIS OF INDUSTRIALISM 39

be spent in setting to work, not gardeners, chauffeurs, domestic servants and shopkeepers in the West End of London, but builders, mechanics and teachers.

So to those who clamor, as many now do, " Produce ! Produce ! " one simple question may be addressed : — " Produce what ? " Food, clothing, house-room, art, knowledge? By all means! But if the nation is scantily furnished with these things had it not better stop producing a good many others which fill shop windows in Regent Street? If it desires to re-equip its industries with machinery and its railways with wagons, had it not better refrain from holding ex- hibitions designed to encourage rich men to re-equip themselves with motor-cars? What can be more child- ish than to urge the necessity that productive power should be increased, if part of the productive power which exists already is misapplied ? Is not less pro- duction of futilities as important as, indeed a condi- tion of, more production of things of moment ? Would not " Spend less on private luxuries " be as wise a cry as " produce more " ? Yet this result of inequal- ity, again, is a phenomenon which cannot be prevented, or checked, or even recognized by a society which ex- cludes the idea of purpose from its social arrange- ments and industrial activity. For to recognize it is to admit that there is a principle superior to the mechanical play of economic forces, which ought to determine the relative importance of different occu- pations, and thus to abandon the view that all riches, however composed, are an end, and that aU economic activity is equally justifiable.

40 THE ACQUISITIVE SOCIETY

The rejection of the idea of purpose involves an- other consequence which every one laments, but which no one can prevent, except by abandoning the belief that the free exercise of rights is the main interest of society and the discharge of obligations a secondary and incidental consequence which may be left to take care of itself. It is that social life is turned into a scene of fierce antagonisms and that a considerable part of industry is carried on in the intervals of a disguised social war. The idea that industrial peace can be secured merely by the exercise of tact and forbear- ance is based on the idea that there is a fundamental identity of interest between the different groups en- gaged in it, which is occasionally interrupted by re- grettable misunderstandings. Both the one idea and the other are an illusion. The disputes which matter are not caused by a misunderstanding of identity of interests, but by a better understanding of diversity of interests. Though a formal declaration of war is an episode, the conditions which issue in a declaration of war are permanent; and what makes them per- manent is the conception of industry which also makes inequality and functionless incomes permanent. It is the denial that industry has any end or purpose other than the satisfaction of those engaged in it.

That motive produces industrial warfare, not as a regrettable incident, but as an inevitable result. It produces industrial war, because its teaching is that each individual or group has a right to what they can get, and denies that there is any principle, other than the mechanism of the market, which determines what

THE NEMESIS OF INDUSTRIALISM 41

they ought to get. For, since the income available for distribution is limited, and since, therefore, when cer- tain limits have been passed, what one group gains another group must lose, it is evident that if the rela- tive incomes of different groups are not to be deter- mined by their functions, there is no method other than mutual self-assertion which is left to determine them. Self-interest, indeed, may cause them to re- frain from using their full strength to enforce their claims, and, in so far as this happens, peace is se- cured in industry, as men have attempted to secure it in international affairs, by a balance of power. But '^ the maintenance of such a peace is contingent upon the estimate of the parties to it that they have more to lose than to gain by an overt struggle, and is not the result of their acceptance of any standard of re-, muneration as an equitable settlement of their claims. Hence it is precarious, insincere and short. It is with- out finality, because there can be no finality in the mere addition of increments of income, any more than in the gratification of any other desire for material goods. When demands are conceded the old strug- gle recommences upon a new level, and will always recommence as long as men seek to end it merely by increasing remuneration, not by finding a principle upon which all remuneration, whether large or small, should be based.

Such a principle is offered by the idea of function, because its application would eliminate the surpluses which are the subject of contention, and would make it evident that remuneration is based upon service,

42 THE ACQUISITIVE SOCIETY

not upon chance or privilege or the power to use op- portunities to drive a hard bargain. But the idea of function is incompatible with the doctrine that every person and organization have an unlimited right to ex- ploit their economic opportunities as fully as they please, which is the working faith of modern industry; and, since it is not accepted, men resign themselves to the settlement of the issue by force, or propose that the State should supersede the force of private associa- tions by the use of its force, as though the absence of a principle could be compensated by a new kind of machinery. Yet all the time the true cause of in- dustrial warfare is as simple as the true cause of inter- national warfare. It is that if men recognize no law superior to their desires, then they must fight when their desires collide. For though groups or nations which are at issue with each other may be willing to submit to a principle which is superior to them both, there is no reason why they should submit to each other.

Hence the idea, which is popular with rich men, that industrial disputes would disappear if only the output of wealth were doubled, and every one were twice as well off, not only is refuted by all practical experience, but is in its very nature founded upon an illusion. For the question is one not of amounts but of proportions; and men will fight to be paid $120 a week, instead of $80, as readily as they will fight to be paid $20 instead of $16, as long as there is no reason why they should be paid $80 instead of $120, and as long as other men who do not work are paid anything

THE NEMESIS OF INDUSTRIALISM 43

at all. If miners demanded higher wages when every superfluous charge upon coal-getting had been elimi- nated, there would be a principle with which to meet their claim, the principle that one group of workers ought not to encroach upon the livelihood of others. But as long as mineral owners extract royalties, and exceptionally productive mines pay thirty per cent, to absentee shareholders, there is no valid answer to a de- mand for higher wages. For if the community pays anything at all to those who do not work, it can afford to pay more to those who do. The naive complaint, that \^ workmen are never satisfied, is, therefore, strictly true. It is true, not only of workmen, but of all classes in a society which conducts its affairs on the principle that wealth, instead of being proportioned to func- tion, belongs to those who can get it. They are never satisfied, nor can they be satisfied. For as long as they make that principle the guide of their individual lives and of their social order, nothing short of in- finity could bring them satisfaction.

So here, again, the prevalent insistence upon rights, and prevalent neglect of functionSj^Jbrings meii^ into a vicious circle which they cannot escape^ without es- caping^ fromjhe false philosophy which dominates them. But it does something more. It makes that philosophy itself seem plausible and exhilarating, and a rule not only for industry, in which it had its birth, but for politics and culture and religion and the whole com- pass of social life. The possibility that one aspect of human life may be so exaggerated as to overshadow,

44t THE ACQUISITIVE SOCIETY

and in time to atrophy, every other, has been made familiar to Englishmen by the example of " Prussian militarism." Militarism is the characteristic, not of an army, but of a society. Its essence is not any par- ticular quality or scale of military preparation, but a state of mind, which, in its concentration on one par- ticular element in social life, ends finally by exalting it until it becomes the arbiter of all the rest. The purpose for which military forces exist is forgotten. They are thought to stand by their own right and to need no justification. Instead of being regarded as an instrument which is necessary in an imperfect world, they are elevated into an object of superstitious veneration, as though the world would be a poor in- sipid place without them, so that political institutions and social arrangements and intellect and morality and religion are crushed into a mold made to fit one activity, which in a sane society is a subordinate activity, like the police, or the maintenance of prisons, or the cleans- ing of sewers, but which in a militarist state is a kind of mystical epitome of society itself.

Militarism, as Englishmen see plainly enough, is fetich worship. It is the prostration of men's souls before, and the laceration of their bodies to appease, an idol. What they do not see is that their reverence for economic activity and industry and what is called business is also fetich worship, and that in their devo- tion to that idol they torture themselves as needlessly and indulge in the same meaningless antics as the Prus- sians did in their worship of militarism. For what the military tradition and spirit have done for Prus-

THE NEMESIS OF INDUSTRIALISM 45

sia, with the result of creating militarisriL, the com- mercial tradition and spirit have done for England, with the result of creating industrialism. Industrial- ism is no more a necessary characteristic of an econom- ically developed society than militarism is a necessary characteristic of a nation which maintains military forces. It is no more the result of applying science to industry than militarism is the result of the applica- tion of science to war, and the idea that it is some- thing inevitable in a community which uses coal and iron and machinery, so far from being the truth, is itself a product of the perversion of mind which in- dustrialism produces. Men may use what mechanical instruments they please and be none the worse for their use. What kills their souls is when they allow their instruments to use them. The essence of industrial- ism, in short, is not any particular method of indus- try, but a particular estimate of the importance of industry, which results in it being thought the only thing that is important at all, so that it is elevated from the subordinate place which it should occupy among human interests and activities into being the standard by which all other interests and activities are judged.

When a Cabinet Minister declares that the great- ness of this country depends upon the volume of its exports, so that France, with exports comparatively lit- tle, and Elizabethan England, which exported next to nothing, are presumably to be pitied as altogether in- ferior civilizations, that is Industrialism. It is the confusion of one minor department of life with the

46 THE ACQUISITIVE SOCIETY

whole of life. When manufacturers cry and cut them- selves with knives, because it is proposed that boys and girls of fourteen shall attend school for eight hours a week, and the President of the Board of Education is so gravely impressed by their apprehensions, that he at once allows the hours to be reduced to seven, that / is Industrialism. It is fetich worship. When the Gov- ernment obtains money for a war, which costs $28,- 000,000 a day, by closing the Museums, which cost $80,000 a year, that is Industrialism. It is a con- tempt for all interests which do not contribute ob- viously to economic activity. When the Press clamors that the one thing needed to make this island an Ar- cadia is productivity, and more productivity, and yet more productivity, that is Industrialism. It is the confusion of means with ends.

Men will always confuse means with ends if they are without any clear conception that it is the ends, not the means, which matter — if they allow their minds to slip from the fact that it is the social purpose of industry which gives it meaning and makes it worth while to carry it on at all. And when they do that, they will turn their whole world upside down, because they do not see the poles upon which it ought to move. So when, like England, they are thoroughly industrial- ized, they behave like Germany, which was thoroughly militarized. They talk as though man existed for in- dustry, instead of industry existing for man, as the Prussians talked of man existing for war. They re- sent any activity which is not colored by the predom- inant interest, because it seems a rival to it. So they

THE NEMESIS OF INDUSTRIALISM 47

destroy religion and art and morality, which cannot exist unless they are disinterested; and having de- stroyed these, which are the end, for the sake of in- dustry, which is a means, they make their industry itself what they make their cities, a desert of unnat- ural dreariness, which only forgetfulness can make en- durable, and which only excitement can enable them to forget.

Torn by suspicions and recriminations, avid of power, and oblivious of duties, desiring peace, but un- able to " seek peace and ensue it," because unwilling to surrender the creed which is the cause of war, to what can one compare such a society but to the inter- national world, which also has been called a society and which also is social in nothing but name? And the comparison is more than a play upon words. It is an analogy which has its roots in the facts of his- tory. It is not a chance that the last two centuries, which saw the new growth of a new system of indus- try, saw also the growth of the system of international politics which came to a climax in the period from 1870 to 1914. Both the one and the other are the ^ expression of the same spirit and move in obedience to similar laws. The essence of the former was the repudiation of any authority superior to the individual reason. It left men free to follow their own inter- ests or ambitions or appetites, untrammeled by subor- dination to any common center of allegiance. The es- sence of the latter was the repudiation of any au- thority superior to the sovereign state, which again was conceived as a compact self-contained unit — a unit

48 THE ACQUISITIVE SOCIETY

which would lose its very essence if it lost its inde- pendence of other states. Just as the one emancipated economic activity from a mesh of antiquated tradi- tions, so the other emancipated nations from arbitrary subordination to alien races or Governments, and turned them into nationalities with a right to work out their own destiny. "^ Nationalism is, in fact, the counterpart among na- tions of what individualism is within them. It has similar origins and tendencies, similar triumphs and defects. For nationalism, like individualism, lays its emphasis on the rights of separate units, not on their subordination to common obligations, though its units are races or nations, not individual men. Like individ- ualism it appeals to the self-assertive instincts, to which it promises opportunities of unlimited expansion. Like individualism it is a force of immense explosive power, the just claims of which must be conceded before it is possible to invoke any alternative principle to con- trol its operations. For one cannot impose a super- national authority upon irritated or discontented or oppressed nationalities any more than one can subor- dinate economic motives to the control of society, until society has recognized that there is a sphere which they may legitimately occupy. And, like individual- ism, if pushed to its logical conclusion, it is self-destruc- tive. For as nationalismj in its brilliant youth, be- gins as a claim that nations, because they are spiritual beings, shall determine themselves, and passes too often into a claim that they shall dominate others, so in- dividualism begins by asserting the right of men to

THE NEMESIS OF INDUSTRIALISM 49

make of their own lives what they can, and ends by condoning the subjection of the majority of men to the few whom good fortune or special opportunity or privilege have enabled most successfully to use their rights. They rose together. It is probable that, if ever they decline, they will decline together. For life cannot be cut in compartments. In the long run the world reaps in war what it sows in peace. And to expect that international rivalry can be exorcised as long as the industrial order within each nation is such as to give success to those whose existence is a strug- gle for self-aggrandizement is a dream which has not even the merit of being beautiful.

So the perversion of nationalism is imperialism, as v the perversion of individualism is industrialism. And the perversion comes, not through any flaw or vice in human nature, but by the force of the idea, because the principle is defective and reveals its defects as it reveals its power. For it asserts that the rights of nations and individuals are absolute, which is false, instead of asserting that they are absolute in their own sphere, but that their sphere itself is contingent upon the part which they play in the community of nations and individuals, which is true. Thus it con- strains them to a career of indefinite expansion, in which they devour continents and oceans, law, mo- rality and religion, and last of all their own souls, in an attempt to attain infinity by the addition to them- selves of all that is finite. In the meantime their rivals, and their subjects, and they themselves are conscious of the danger of opposing forces, and seek to pur-

50 THE ACQUISITIVE SOCIETY

chase security and to avoid a collision by organizing a balance of power. But the balance, whether in inter- national politics or in industry, is unstable, because it reposes not on the common recognition of a prin- ciple by which the claims of nations and individuals are limited, but on an attempt to find an equipoise which may avoid a conflict without adjuring the as- sertion of unlimited claims. No such equipoise can be found, because, in a world where the possibilities of increasing military or industrial power are illimitable, no such equipoise can exist.

Thus, as long as men move on this plane, there is no solution. They can obtain peace only by surren- dering the claim to the unfettered exercise of their

>/ rights, which is the cause of war. What we have been witnessing, in short, during the past five years, both in international affairs and in industry, is the break- down of the organization of society on the basis of rights divorced from obligations. Sooner or later the collapse was inevitable, because the basis was too nar-

>/ row. Eor a right is simply a power which is secured by legal sanctions, " a capacity," as the lawyers de- fine it, " residing in one man, of controlling, with the assistance of the State, the action of others," and a right should not be absolute for the same reason that a power should not be absolute. No doubt it is better that individuals should have absolute rights than that the State or the Government should have them; and it was the reaction against the abuses of absolute power by the State which led in the eighteenth century to the declaration of the absolute rights of individuals.

THE NEMESIS OF INDUSTKIALISM 51

The most obvious defense against the assertion of one extreme was the assertion of the other. Because Gov- ernments and the relics of feudalism had encroached upon the property of individuals it was affirmed that the right of property was absolute; because they had strangled enterprise, it was affirmed that every man had a natural right to conduct his business as he pleased. But, in reality, both the one assertion and the other '^ are false, and, if applied to practice, must lead to disaster. The State has no absolute rights; they are limited by its commission. The individual has no absolute rights ; they are relative to the function which he performs in the community of which he is a mem- ber, because, unless they are so limited, the conse- quences must be something in the nature of private war. All rights, in short, are conditional and deriva- tive, because all power should be conditional and de- rivative. They are derived from the end or purpose of the society in which they exist. They are condi- tional on being used to contribute to the attainment of that end, not to thwart it. And this means in practice that, if society is to be healthy, men must regard themselves not as the owners of rights, but as trustees for the discharge of functions and the instru- ments of a social purpose.

V

PROPERTY AND CREATIVE WORK

The application of the principle that society should be organized upon the basis of functions, is not recon- dite, but simple and direct. It offers in the first place, a standard for discriminating between those types of private property which are legitimate and those which are not. During the last century and a half, political thought has oscillated between two conceptions of prop- erty, both of which, in their different ways, are ex- travagant. On the one hand, the practical founda- tion of social organization has been the doctrine that the particular forms of private property which exist at any moment are a thing sacred and inviolable, that anything may properly become the object of prop- erty rights, and that, when it does, the title to it is absolute and unconditioned. The modern industrial system took shape in an age when this theory of prop- erty was triumphant. The American Constitution and the French Declaration of the Eights of Man both treated property as one of the fundamental rights which Governments exist to protect. The English Rev- olution of 1688, undogmatic and reticent though it was, had in effect done the same. The great individ- ualists from Locke to Turgot, Adam Smith and Ben- tham all repeated, in different language, a similar con- ception. Though what gave the Revolution its dia-

52

PROPERTY AND CREATIVE WORK 53

bolical character in the eyes of the English upper classes was its treatment of property, the dogma of the sanctity of private property was maintained as tena- ciously by French Jacobins as by English Tories; and the theory that property is an absolute, which is held by many modern Conservatives, is identical, if only they knew it, with that not only of the men of 1789, but of the Convention itself.

On the other hand, the attack has been almost as undiscriminating as the defense. " Private property " has been the central position against which the social movement of the last hundred years has directed its forces. The criticism of it has ranged from an im- aginative communism in the most elementary and per- sonal of necessaries, to prosaic and partially realized proposals to transfer certain kinds of property from private to public ownership, or to limit their exploita- tion by restrictions imposed by the State. But, how- ever varying in emphasis and in method, the general note of what may conveniently be called the Socialist criticism of property is what the word Socialism itself implies. Its essence is the statement that the economic evils of society are primarily due to the unregulated operation, under modern conditions of industrial organ- ization, of the institution of private property.

The divergence of opinion is natural, since in most discussions of property the opposing theorists have usu- ally been discussing different things. Property is the most ambiguous of categories. It covers a multitude of rights which have nothing in common except that they are exercised by persons and enforced by the State.

54 THE ACQUISITIVE SOCIETY

Apart from these formal characteristics, they vary in- definitely in economic character, in social effect, and in moral justification. They may be conditional like the grant of patent rights, or absolute like the own- ership of ground rents, terminable like copyright, or permanent like a freehold, as comprehensive as sov- ereignty or as restricted as an easement, as intimate and personal as the ownership of clothes and books, or as remote and intangible as shares in a gold mine or rubber plantation. It is idle, therefore, to present a case for or against private property without specify- ing the particular forms of property to which refer- ence is made, and the journalist who says that " pri- vate property is the foundation of civilization " agrees with Proudhon, who said it was theft, in this respect at least that, without further definition, the words of both are meaningless. Arguments which support or demolish certain kinds of property may have no appli- cation to others; considerations which are conclusive in one stage of economic organization may be almost irrelevant in the next. The course of wisdom is neither to attack private property in general nor to defend it in general; for things are not similar in quality, merely because they are identical in name. It is to discriminate between the various concrete embodiments of what, in itself, is, after all, little more than an ab- straction.

The origin and development of different kinds of proprietary rights is not material to this discussion. Whatever may have been the historical process by which they have been established and recognized, the

PROPERTY AND CREATIVE WORK 55

rationale of private property traditional in England is that which sees in it the security that each man will reap where he has sown. " If I despair of enjoying ^ the fruits of labor," said Bentham, repeating what were in all essentials the arguments of Locke, " I shall only live from day to day; I shall not undertake labors which will only benefit my enemies." Property, it is argued, is a moral right, and not merely a legal right, because it insures that the producer will not be de- prived by violence of the result of his efforts. The period from which that doctrine was inherited differed from our own in three obvious, but significant, respects. Property in land and in the simple capital used in most industries was widely distributed. Before the rise of capitalist agriculture and capitalist industry, the ownership, or at any rate the secure and effective occu* pation, of land and tools by those who used them, was a condition precedent to effective work in the field or in the workshop. The forces which threatened prop- erty were the fiscal policy of Governments and in some countries, for example France, the decaying relics of feudalism. The interference both of the one and of the other involved the sacrifice of those who carried on useful labor to those who did not. To resist them was to protect not only property but industry, which was indissolubly connected with it. Too often, indeed, resistance was ineffective. Accustomed to the misery of the rural proprietor in France, Voltaire remarked with astonishment that in England the peasant may be rich, and " does not fear to increase the number of his beasts or to cover his roof with tiles." And

56 THE ACQUISITIVE SOCIETY

the English Parliamentarians and the French phi- losophers who made the inviolability of property rights the center of their political theory, when they defended those who owned, were incidentally, if sometimes unin- tentionally, defending those who labored. They were protecting the yeoman or the master craftsman or the merchant from seeing the fruits of his toil squandered by the hangers-on at St. James or the courtly parasites of Versailles.

In such circumstances the doctrine which found the justification of private property in the fact that it enabled the industrious man to reap where he had sown, was not a paradox, but, as far as the mass of the population was concerned, almost a truism. Prop- erty was defended as the most sacred of rights. But it was defended as a right which was not only widely exercised, but which was indispensable to the per- formance of the active function of providing food and clothing. For it consisted predominantly of one of two types, land or tools which were used by the owner for the purpose of production, and personal posses- sions which were the necessities or amenities of civil- ized existence. The former had its rationale in the fact that the land of the peasant or the tools of the craftsman were the condition of his rendering the eco- nomic services which society required; the latter be- cause furniture and clothes are indispensable to a life of decency and comfort. The proprietary rights — and, of course, they were numerous — which had their source, not in work, but in predatory force, were protected from criticism by the wide distribution of some kind

PEOPERTY AND CREATIVE WORK 57

of property among the mass of the population, and in England, at least, the cruder of them were grad- ually whittled down. When property in land and what simple capital existed were generally diffused among all classes of society, when, in most parts of England, the typical workman was not a laborer but a peasant or small master, who could point to the strips which he had plowed or the cloth which he had woven, when the greater part of the wealth passing at death consisted of land, household furniture and a stock in trade which was hardly distinguishable from it, the moral justification of the title to property was self- evident. It was obviously, what theorists said that it was, and plain men knew it to be, the labor spent in producing, acquiring and administering it.

Such property was not a burden upon society, but a condition of its health and efficiency, and indeed, of its continued existence. To protect it was to main- tain the organization through which public necessi- ties were supplied. If, as in Tudor England, the peas- ant was evicted from his holding to make room for sheep, or crushed, as in eighteenth century France, by arbitrary taxation and Seignurial dues, land went out of cultivation and the whole community was short of food. If the tools of the carpenter or smith were seized, plows were not repaired or horses shod. Hence, before the rise of a commercial civilization, it was the mark of statesmanship, alike in the England of the Tudors and in the France of Henry IV, to cherish the small property-owner even to the point of offending the great. Popular sentiment idealized the

/

68 THE ACQUISITIVE SOCIETY

yeoman — " the Joseph of the country who keeps the poor from starving " — not merely because he owned property, but because he worked on it, denounced that " bringing of the livings of many into the hands of one," which capitalist societies regard with equanimity as an inevitable, and, apparently, a laudable result of eco- nomic development, cursed the usurer who took advan- tage of his neighbor's necessities to live without labor, was shocked by the callous indifference to public wel- fare shown by those who " not having before their eyes either God or the profit and advantage of the realm, have enclosed with hedges and dykes towns and hamlets," and was sufficiently powerful to compel Gov- ernments to intervene to prevent the laying of field to field, and the engrossing of looms — to set limits, in short, to the scale to which property might grow.

When Bacon, who commended Henry VII for pro- tecting the tenant right of the small farmer, and pleaded in the House of Commons for more drastic land legis- lation, wrote " Wealth is like muck. It is not good but if it be spread," he was expressing in an epigram what was the commonplace of every writer on politics from Fortescue at the end of the fifteenth century to Harrington in the middle of the seventeenth. The modern conservative, who is inclined to take au pied de la lettre the vigorous argument in which Lord Hugh Cecil denounces the doctrine that the maintenance of proprietary rights ought to be contingent upon the use to which they are put, may be reminded that Lord Hugh's own theory is of a kind to make his ancestors turn in their graves. Of the two members of the

PROPERTY AND CREATIVE WORK 69

family who achieved distinction before the nineteenth, century, the elder advised the Crown to prevent land- lords evicting tenants, and actually proposed to fix a pecuniary maximum to the property which different classes might possess, while the younger attacked en- closing in Parliament, and carried legislation compel- ling landlords to build cottages, to let them with small holdings, and to plow up pasture.

William and Robert Cecil were sagacious and re- sponsible men, and their view that the protection of property should be accompanied by the enforcement of obligations upon its owners was shared by most of their contemporaries. The idea that the institution of pri- vate property involves the right of the owner to use it, or refrain from using it, in such a way as he may please, and that its principal significance is to supply him with an income, irrespective of any duties which he may dis- charge, would not have been understood by most public men of that age, and, if understood, would have been repudiated with indignation by the more reputable among them. They found the meaning of property in the public purposes to which it contributed, whether they were the production of food, as among the peas- antry, or the management of public affairs, as among the gentry, and hesitated neither to maintain those kinds of property which met these obligations nor to repress those uses of it which appeared likely to conflict with them. Property was to be^an aid to creativejwork^ not ^ an_alternative_J;oJj;, The patentee was secured pro- tection for a new invention, in order to secure him the fruits of his own brain, but the monopolist who grew

60 THE ACQUISITIVE SOCIETY

v^ fat on the industry of others was to be put down. The law of the villa^ebound the peasant to use his land, not as he himself might^nd most profitable^, but to grow the corn the village needed. Long after political changes had made direct interference impracticable, even the higher ranks of English landowners continued to dis- charge, however capriciously and tyrannically, duties which were vaguely felt to be the contribution which they made to the public service in virtue of their estates. "When as in France, the obligations of ownership were repudiated almost as completely as they have been by the owner of to-day, nemesis came in an onslaught upon the position of a noblesse which had retained its rights

/ and abdicated its functions. Property reposed, in shorty not merely upon ponvpniPTinp^ nr the appetite for gain, butjon a moral principle^ It was protected not only for the sake of those who owned, but for the sake of those who worked and of those for whom their work provided. It was protected, because, without security for property, wealth could not be produced or the business of society carried on.

Whatever the future may contain, the past has shown no more excellent social order than that in which the mass of the people were the masters of the holdings which they plowed and of the tools with which they worked, and could boast, with the English freeholder, that " it is a quietness to a man's mind to live upon his own and to know his heir certain." With this con- ception of property and its practical expression in social institutions those who urge that society should be organ-

PEOPERTY AND CREATIVE WORK 61

ized on the basis of function have no quarrel. It is in agreement with their own doctrine, since it justifies property by reference to the services which it enables its owner to perform. All that they need ask is that it should be carried to its logical conclusion.

For the argument has evidently more than one edge. If it justifies certain types of property, it condemns others ; and in the conditions of modern industrial civi- lization, what it justifies is less than what it condemns. The truth is, indeed, that this theory of property and the institutions in which it is embodied have survived into an age in which the whole structure of society is radically different from that in which it was formu- lated, and which made it a valid argument, if not for all, at least for the most common and characteristic kinds of property. It is not merely that the ownership of any substantial share in the national wealth is con- centrated to-day in the hands of a few hundred thou- sand families, and that at the end of an age which began with an affirmation of the rights of property, pro- prietary rights are, in fact, far from being widely dis- tributed. Nor is it merely that what makes property insecure to-day is not the arbitrary taxation of uncon- stitutional monarchies or the privileges of an idle nohlesse, but the insatiable expansion and aggregation of property itself, which menaces with absorption all property less than the greatest, the small master, the little shopkeeper, the country bank, and has turned the mass of mankind into a proletariat working under the agents and for the profit of those who own.

The characteristic fact, which differentiates most

62 THE ACQUISITIVE SOCIETY

modem property from that of the pre-industrial age, I and which turns against it the very reasoning by which ' formerly it was supported, is that in modern economic i conditions ownership is not active, but passive, that to |most of those who own property to-day it is not a means X)f work but an instrument for the acquisition of gain or the exercise of power, and that there is no guarantee that gain bears any relation to service, or power to responsibility. For property which can be regarded as a condition of the performance of function, like the tools of the craftsman, or the holding of the peasant, 'or the personal possessions which contribute to a life of health and eflSciency, forms an insignificant proportion, as far as its value is concerned, of the property rights exist- ing at present. In modem industrial societies the great mass of property consists, as the annual review of wealth passing at death reveals, neither of personal acquisitions such as household furniture, nor of the owner's stock- in-trade, but of rights of various kinds, such as royal- ties, ground-rents, and, above aU, of course shares in industrial undertakings which yield an income irre- spective of any personal service rendered by their owners. Ownership and use are normally divorced. The greater part of modern property has been atten- uated to a pecuniary lien or bond on the product of industry which carries with it a right to payment, but which is normally valued precisely because it relieves the owner from any obligation to perform a positive or constructive function.

Such property may be called passive property, or property for acquisition, for exploitation, or for power.

PROPERTY AND CREATIVE WORK 63

to distinguish it from the property which is actively used by its owner for the conduct of his profession or the upkeep of his household. To the lawyer the first is, of course, as fully property as the second. It is questionable, however, whether economists shall call it " Property " at all, and not rather, as Mr. Hobson has suggested, " Improperty," since it is not identical with the rights which secure the owner the produce of his toil, but is opposite of them. A classification of pro- prietary rights based upon this difference would be in- structive. If they were arranged according to the close- ness with which they approximate to one or other of these two extremes, it would be found that they were spread along a line stretching from property which is obviously the payment for, and condition of, personal services, to property which is merely a right to pay- ment from the services rendered by others, in fact a private tax. The rough order which would emerge, if all details and qualification were omitted, might be something as follows: —

1. Property in payments made for personal services.

2. Property in personal possessions necessary to health and comfort.

3. Property in land and tools used by their owners.

4. Property in copyright and patent rights owned by authors and inventors.

5. Property in pure interest, including much agri- cultural rent.

6. Property in profits of luck and good fortune: " quasi-rents."

7. Property in monopoly profits.

64 THE ACQUISITIVE SOCIETY

8. Property in urban ground rents.

9. Property in royalties.

The first four kinds of property obviously accompany, and in some sense condition, the performance of work. The last four obviously do not. Pure interest has some afiinities with both. It represents a necessary economic cost, the equivalent of which must be born, whatever the legal arrangements under which property is held, and is thus unlike the property representd by profits (other than the equivalent of salaries and payment for neces- sary risk), urban ground-rents and royalties. It re- lieves the recipient from personal services, and thus resembles them.

The crucial question for any society is, under which each of these two broad groups of categories the greater part (measured in value) of the proprietary rights which it maintains are at any given moment to be found. /if they fall in the first group creative work will be vencouraged and idleness will be depressed; if they f aU_ in the jecond, the result will be the reverse. The 7acts vary widely from age to age and from country to coun- try. Nor have they ever been fully revealed; for the lords of the jungle do not hunt by daylight. It is probable, at least, that in the England of 1550 to 1750, a larger proportion of the existing property consisted of land and tools used by their owners than either in con- temporary France, where feudal dues absorbed a con- siderable proportion of the peasants' income, or than in the England of 1800 to 1850, where the new capitalist manufacturers made hundreds per cent while manual workers were goaded by starvation into ineffectual re-

PROPERTY AND CREATIVE WORK 65

volt It is probable that in the nineteenth century, thanks to the Revolution, France and England changed places, and that in this respect not only Ireland but the British Dominions resemble the former rather than the latter. The transformation can be studied best of all in the United States, in parts of which the population of peasant proprietors and small masters of the early nine- teenth century were replaced in three generations by a propertyless proletariat and a capitalist plutocracy. The abolition of the economic privileges of agrarian feudalism, which, under the name of equality, was the driving force of the French Revolution, and which has taken place, in one form or another, in all countries touched by its influence, has been largely counter- balanced since 1800 by the growth of the inequalities springing from Industrialism.

In England the general effect of recent economic development has been to swell proprietary rights which entitle the owners to payment without work, and to diminish those which ^an properly be described as functional. The expansion of the former, and the process by which the simpler forms of property have been merged in them, are movements the significance of which it is hardly possible to over-estimate. There is, of course, a considerable body of property which is still of the older type. But though working landlords, and capitalists who manage their own businesses, are still in the aggregate a numerous body, the organization for which they stand is not that which is most representa- tive of the modern economic world. The general tend- ency for the ownership and administration of prop-

66 THE ACQUISITIVE SOCIETY

erty to be separated, the general refinement of property into a claim on goods produced by an unknown worker, is as unmistakable as the growth of capitalist industry and urban civilization themselves. Villages are turned into towns and property in land changes from the hold- ing worked by a farmer or the estate administered by a landlord into " rents," which are advertised and bought and sold like any other investment. Mines are opened and the rights of the landowner are converted into a tribute for every ton of coal which is brought to the surface. As joint-stock companies take the place of the individual enterprise which was typical of the earlier years of the factory system, organization passes from the employer who both owns and manages his business, into the hands of salaried officials, and again the mass of property-owners is swollen by the multiplication of rentiers who put their wealth at the disposal of indus- try, but who have no other connection with it. The change is taking place in our day most conspicuously, perhaps, through the displacement in retail trade of the small shopkeeper by the multiple store, and the substi- tution in manufacturing industry of combines and amal- gamations for separate businesses conducted by compet- ing employers. And, of course, it is not only by eco- nomic development that such claims are created. " Out of the eater came forth meat, and out of the strong came forth sweetness." It is probable that war, which in barbarous ages used to be blamed as destructive of property, has recently created more titles to property than almost all other causes put together.

Infinitely diverse as are these proprietary rights, they

PEOPEKTY AND CREATIVE WORK 67

have the common characteristic of being so entirely sepa- rated from the actual objects over which they are exer- cised, so rarified and generalized, as to be analogous almost to a form of currency rather than to the property which is so closely united to its owner as to seem a part of him. Their isolation from the rough environ- ment of economic life, where the material objects of which they are the symbol are shaped and handled, is their charm. It is also their danger. The hold which a class has upon the future depends on the function which it performs. What nature demands is work : few work- ing aristocracies, however tyrannical, have fallen; few functionless aristocracies have survived. In society, as in the world of organic life, atrophy is but one stage removed from death. In proportion as the landowner becomes a mere rentier and industry is conducted, not by the rude energy of the competing employers who dominated its infancy, but by the salaried servants of shareholders, the argument for private property which reposes on the impossibility of finding any organization to supersede them loses its application, for they are already superseded.

Whatever may be the justification of these types of property, it cannot be that which was given for the property of the peasant or the craftsman. It cannot be that they are necessary in order to secure to each man the fruits of his own labor. For if a legal right which gives $200,000 a year to a mineral owner in the North of England and to a ground landlord in London " se- cures the fruits of labor " at all, the fruits are the pro- prietor's and the labor that of some one else. Property

y

68 THE ACQUISITIVE SOCIETY

has no more insidious enemies than those well-meaning anarchists who, by defending all forms of it as equally valid, involve the institution in the discredit attaching to its extravagances. In reality, whatever conclusion may be drawn from the fact, the greater part of modern property, whether, like mineral rights and urban ground-rents, it is merely a form of private taxation which the law allows certain persons to levy on the industry of others, or whether, like property in capital, it consists of rights to payment for instruments which the capitalist cannot himself use but puts at the disposal of those who can, has as its essential feature that it confers upon its owners income unaccompanied by per- sonal service. In this respect the ownership of land and the ownership of capital are normally similar, though from other points of view their differences are important. To the economist rent and interest are dis- tinguished by the fact that the latter, though it is often accompanied by surplus elements which are merged with it in dividends, is the price of an instrument of pro- duction which would not be forthcoming for industry if the price were not paid, while the former is a differ- ential surplus which does not affect the supply. To the business community and the solicitor land and capital are equally investments, between which, since they pos- sess the common characteristic of yielding income with- out labor, it is inequitable to diecriminate ; and though their significance as economic categories may be dif- ferent, their effect as social institutions is the same. It is to separate property from creative ability, and to divide society into two classes, of which one has its

PROPERTY AND CREATIVE WORK 69

primary interest in passive ownership, while the other is mainly dependent upon active work.

Hence the real analogy to many kinds of modern property is not the simple property of the small land- owner or the craftsman, still less the household goods and dear domestic amenities, which is what the word suggests to the guileless minds of clerks and shopkeepers, and which stampede them into displaying the ferocity of terrified sheep when the cry is raised that " Prop- erty " is threatened. It is the feudal dues which robbed ^ the French peasant of part of his produce till the Revo- lution abolished them. How do royalties differ from quintaines and lods et ventes? They are similar in their origin and similar in being a tax levied on each incre- ment of wealth which labor produces. How do urban ground-rents differ from the payments which were made to English sinecurists before the Reform Bill of 1832 ? They are equally tribute paid by those who work to those who do not. If the monopoly profits of the owner of hanalites, whose tenant must grind corn at his mill and make wine at his press, were an intolerable oppression, what is the sanctity attaching to the monopoly profits of the capitalists, who, as the Report of the Government Committee on trusts tells us, " in soap, tobacco, wall- paper, salt, cement and in the textile trades . . . are in a position to control output and prices " or, in other words, can compel the consumer to buy from them, at the figure they fix, on pain of not buying at all ?

All these rights — royalties, ground-rents, monopoly profits — are " Property." The criticism most fatal to them is not that of Socialists. It is contained in the

70 THE ACQUISITIVE SOCIETY

arguments by which property is usually defended. For if the meaning of the institution is to encourage indus- try by securing that the worker shaU receive the produce of his toil, then precisely in proportion as it is important to preserve the property which a man has in the results of his own efforts, is it important to abolish that which V he has in the results of the efforts of some one else. The considerations which justify ownership as a function are those which condemn it as a tax. Property is not theft, but a good deal of theft becomes property. The owner of royalties who, when asked why he should be paid £50,000 a year from minerals which he has neither discovered nor developed nor worked but only owned, replies " But it's Property ! " may feel all the awe which his language suggests. But in reality he is be- having like the snake which sinks into its background by pretending that it is the dead branch of a tree, or the lunatic who tried to catch rabbits by sitting behind a hedge and making a noise like a turnip. He is prac- tising protective — and sometimes aggressive — mimicry. His sentiments about property are those of the simple toiler who fears that what he has sown another may reap. His claim is to be allowed to continue to reap what another has sown.

It is sometimes suggested that the less attractive char- acteristics of our industrial civilization, its combination of luxury and squalor, its class divisions and class warfare, are accidental maladjustments which are not rooted in the center of its being, but are excrescences which economic progress itself may in time be expected to correct. That agreeable optimism will not survive an

PEOPEKTY AND CREATIVE WORK 71

examination of the operation of the institution of pri- vate property in land and capital in industrialized com- munities. In countries where land is widely distributed, in France or in Ireland^ its effect may be to produce a general diffusion of wealth among a rural middle class who at once work and own. In countries where the development of industrial organization has sepa- rated the ownership of property and the performance of work, the normal effect of private property is to trans- fer to functionless owners the surplus arising from the more fertile sites, the better machinery, the more elabo- rate organization. No clearer exemplifications of this " law of rent " has been given than the figures supplied to the Coal Industry Commission by Sir Arthur Lowes Dickenson, which showed that in a given quarter the costs per ton of producing coal varied from $3.12 to $12 per ton, and the profits from nil to $4.12. The dis- tribution in dividends to shareholders of the surplus accruing from the working of richer and more acces- sible seams, from special opportunities and access to markets, from superior machinery, management and or- ganization, involves the establishment of Privilege as a national institution, as much as the most arbitrary exac- tions of a feudal seigneur. It is the foundation of an inequality which is not accidental or temporary, but necessary and permanent. And on this inequality is erected the whole apparatus of class institutions, which make not only the income, but the housing, education, health and manners, indeed the very physical appear- ance of different classes of Englishmen almost as dif- ferent from each other as though the minority were

72 THE ACQUISITIVE SOCIETY

alien settlers established amid the rude civilization of a race of impoverished aborigines.

So the justification of private property traditional in England, vphich saw in it the security that each man would enjoy the fruits of his own labor, though largely applicable to the age in which it was formulated, has undergone the fate of most political theories. It has been refuted not by the doctrines of rival philosophers, but by the prosaic course of economic development. As far as the mass of mankind are concerned, the need which private property other than personal possessions does still often satisfy, though imperfectly and precari- ously, is the need for security. To the small investors, who are the majority of property-owners, though owning only an insignificant fraction of the property in exist- ence, its meaning is simple. It is not wealth or power, or even leisure from work. It is safety. They work hard. They save a little money for old age, or for sick- ness, or for their children. They invest it, and the interest stands between them and all that they dread most. Their savings are of convenience to industry, the income from them is convenient to themselves. " Why," they ask, " should we not reap in old age the advantage of energy and thrift in youth ? " And this hunger for security is so imperious that those who suffer most from the abuses of property, as well as those who, if they could profit by them, would be least inclined to do so, will tolerate and even defend them, for fear lest the knife which trims dead matter should out into the quick. They have seen too many men drown to be criti-

PEOPERTY AND CREATIVE WORK 73

cal of dry land, though it be an inhospitable rock. They are haunted by the nightmare of the future, and, if a burglar broke it, would welcome a burglar. "2 , This need for security is fundamental, and almost the '^ gravest indictment of our civilization is that the mass of mankind are without it. Property is one way of organizing it. It is quite comprehensible therefore, that the instrument should be confused with the end, and that any proposal to modify it should create dismay. In the past, human beings, roads, bridges and ferries, civil, judicial and clerical offices, and commissions in the army have all been private property. Whenever it was proposed to abolish the rights exercised over them, it was protested that their removal would involve the destruction of an institution in which thrifty men had invested their savings, and on which they depended for protection amid the chances of life and for comfort in old age. In fact, however, property is not the only method of assuring the future, nor, when it is the way selected, is security dependent upon the maintenance of all the rights which are at present normally involved in ownership. In so far as its psychological foundation is the necessity for securing an income which is stable and certain, which is forthcoming when its recipient cannot work, and which can be used to provide for those who cannot provide for themselves, what is really demanded is not the command over the fluctuating proceeds of some particular undertaking, which accompanies the owner- ship of capital, but the security which is offered by an annuity. Property is the instrument, security is the object, and when some alternative way is forthcoming

v^

74 THE ACQUISITIVE SOCIETY

of providing the latter, it does not appear in practice that any loss of confidence, or freedom or independence is caused by the absence of the former.

Hence not only the manual workers, who since the rise of capitalism, have rarely in England been able to accumulate property sufiicient to act as a guarantee of income when their period of active earning is past, but also the middle and professional classes, increas- ingly seek security to-day, not in investment, but in insurance against sickness and death, in the purchase of annuities, or in what is in effect the same thing, the accumulation of part of their salary towards a pension which is paid when their salary ceases. The profes- sional man may buy shares in the hope of making a profit on the transaction. But when what he desires to buy is security, the form which his investment takes is usually one kind or another of insurance. The teacher, or nurse, or government servant looks forward to a pen- sion. Women, who fifty years ago would have been re- garded as dependent almost as completely as if femi- ninity were an incurable disease with which they had been born, and whose fathers, unless rich men, would have been tormented with anxiety for fear lest they should not save sufficient to provide for them, now re- ceive an education, support themselves in professions, and save in the same way. It is still only in compara- tively few cases that this type of provision is made; almost all wage-earners outside government employ- ment, and many in it, as well as large numbers of professional men, have nothing to fall back upon in sickness or old age. But that does not alter the fact

PEOPERTY AND CREATIVE WORK 75

that, when it is made, it meets the need for security, which, apart, of course, from personal possessions and household furniture, is the principal meaning of prop- erty to by far the largest element in the population, and that it meets it more completely and certainly than property itself.

Not, indeed, even when property is the instrument used to provide for the future, is such provision de- pendent upon the maintenance in its entirety of the whole body of rights which accompany ownership to-day. Property is not simple but complex. That of a man who has invested his savings as an ordinary shareholder comprises at least three rights, the right to interest, the right to profits, the right to control. In so far as what is desired is the guarantee for the maintenance of a stable income, not the acquisition of additional wealth without labor — in so far as his motive is not gain but security — the need is met by interest on capital. It has no necessary connection either with the right to resid- uary profits or the right to control the management of the undertaking from which the profits are derived, both of which are vested to-day in the shareholder. If all that were desired were to use property as an instrument for purchasing security, the obvious course — from the point of view of the investor desiring to insure his future the safest course — would be to assimilate his position as far as possible to that of a debenture holder or mortgagee, who obtains the stable income which is his motive for investment, but who neither incurs the risks nor receives the profits of the speculator. To insist that the elaborate apparatus of proprietary rights which dis-

76 THE ACQUISITIVE SOCIETY

tributes dividends of thirty per cent to the shareholders in Coats, and several thousands a year to the owner of mineral royalties and ground-rents, and then allows them to transmit the bulk of gains which they have nOt earned to descendants who in their turn will thus be relieved from the necessity of earning, must be main- tained for the sake of the widow and the orphan, the vast majority of whom have neither and would gladly part with them all for a safe annuity if they had, is, to say the least of it, extravagantly mal-d-propos. It is like pitching a man into the water because he expresses a wish for a bath, or presenting a tiger cub to a house- holder who is plagued with mice, on the ground that tigers and cats both belong to the genus felis. The tiger hunts for itself not for its masters, and when game is scarce will hunt them. The classes who own little or no property may reverence it because it is security. But the classes who own much prize it for quite different reasons, and laugh in their sleeve at the innocence which supposes that anything as vulgar as the savings of the petite bourgeoisie have, except at elections, any interest for them. They prize it because it is the order which quarters them on the community and which provides for the maintenance of a leisure class at the public expensa " Possession," said the Egoist, " without obligation to the object possessed, approaches felicity." Functionless property appears natural to those who believe that so- ciety should be organized for the acquisition of private wealth, and attacks upon it perverse or malicious, be- cause the question which they ask of any institution is, " What does it yield ? " And such property yields much

PROPERTY AND CREATIVE WORK 77

to those who own it. Those, however, who hold that social unity and effective work are possible only if society is organized and wealth distributed on the basis of function, will ask of an institution, not, " What dividends does it pay ? " but " What service does it per- form ? " To them the fact that much property yields income irrespective of any service which is performed or obligation which is recognized by its owners will appear not a quality but a vice. They will see in the social confusion which it produces, payments dispropor- tionate to service here, and payments without any serv- ice at all there, and dissatisfaction everywhere, a con- vincing confirmation of their argument that to build on a foundation of rights and of rights alone is to build on a quicksand.

From the portentous exaggeration into an absolute of what once was, and still might be, a sane and social in- stitution most other social evils follow the power of those who do not work over those who do, the alternate subsen'ience and rebelliousness of those who work to- wards those who do not, the starving of science and thought and creative effort for fear that expenditure upon them should impinge on the comfort of the slug- gard and the faineant, and the arrangement of society in most of its subsidiary activities to suit the conven- ience not of those who work usefully but of those who spend gaily, so that the most hideous, desolate and par- simonious places in the country are those in which the greatest wealth is produced, the Clyde valley, or the cotton towns of Lancashire, or the mining villages of Scotland and Wales, and the gayest and most luxurious

4 ^V»

78 THE ACQUISITIVE SOCIETY

those in which it is consumed. From the point of view of social health and economic efficiency, society should obtain its material equipment at the cheapest price pos- sible, and after providing for depreciation and expan- sion should distribute the whole product to its working members and their dependents. What happens at pres- ent, however, is that its workers are hired at the cheap- est price which the market (as modified by organization) allows, and that the surplus, somewhat diminished by taxation, is distributed to the owners of property. Profits may vary in a given year from a loss to 100 per cent. But wages are fixed at a level which will enable the marginal firm to continue producing one year with another; and the surplus, even when due partly to efficient management, goes neither to managers nor manual workers, but to shareholders. The meaning of the process becomes startlingly apparent when, as in Lancashire to-day, large blocks of capital change hands at a period of abnormal activity. The existing share- holders receive the equivalent of the capitalized expecta- tion of future profits. The workers, as workers, do not participate in the immense increment in value; and when, in the future, they demand an advance in wages, they will be met by the answer that profits, which before the transaction would have been reckoned large, yield shareholders after it only a low rate of interest on their investment.

The truth is that whereas in earlier ages the pro- tection of property was normally the protection of work, the relationship between them has come in the course of the economic development of the last two centuries to

PROPERTY AND CREATIVE WORK 79

be very nearly reversed. The two elements which com- pose civilization are active effort and passive property, the labor of human things and the tools which human beings use. Of these two elements those who supply the first maintain and improve it, those who own the second normally dictate its character, its development and its administration. Hence, though politically free, the mass of mankind live in effect under rules imposed to protect the interests of the small section among them whose primary concern is ownership. From this sub- ordination of creative activity to passive property, the worker who depends upon his brains, the organizer, in- ventor, teacher or doctor suffers almost as much embar- rassment as the craftsman. The real economic cleavage is not, as is often said, between employers and employed, but between all who do constructive work, from scientist to laborer, on the one hand, and all whose main interest is the preservation of existing proprietary rights upon the other, irrespective of whether they contribute to con- structive work or not.

If, therefore, under the modern conditions which have concentrated any substantial share of property in the hands of a small minority of the population, the world is to be governed for the advantages of those who own, it is only incidentally and by accident that the results will be agreeable to those who work. In practice there is a constant collision between them. Turned into an- other channel, half the wealth distributed in dividends to functionless shareholders, could secure every child a good education up to 18, could re-endow English Uni- versities, and (since more eflScient production is im-

80 THE ACQUISITIVE SOCIETY

portant) could equip English industries for more ef- ficient production. Half the ingenuity now applied to the protection of property could have made most indus- trial diseases as rare as smallpox, and most English cities into places of health and even of beauty. What stands in the way is the doctrine that the righta of prop- erty are absolute, irrespective of any sociaL_fjinction which its owners may perform. So the laws which are most stringently enforced are still the laws which pro- tect property, though the protection of property is no longer likely to be equivalent to the protection of work, and the interests which govern industry and predomi- nate in public affairs are proprietary interests. A mill- owner may poison or mangle a generation of operatives ; but his brother magistrates will let him off with a cau- tion or a nominal fine to poison and mangle the next. For he is an owner of property. A^Japdowner may draw rents from slums in^which young children die at the rate of 200 per 1000j_but he will be none the leas welcome in politesociety. For property has no obliga- tions and therefore can do no wrong. Urban land may be held from the market on the outskirts of cities in which human beings are living three to a room, and rural land may be used for sport when villagers are leaving it to overcrowd them still more. No public authority intervenes, for both are property. To those who believe that institutions which repudiate all moral significance must sooner or later collapse, a society which confuses the protection of property with the pres- ervation of its functionless perversions will appear as precarious as that which has left the memorials of its

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PBOPERTY AND CREATIVE WORK 81

tasteless frivolity and more tasteless ostentation in the gardens of Versailles.

Do men love peace ? They will see the greatest enemy of social unity in rights which involve no obligation to co-operate for the service of society. Do they value equality? Property rights which dispense their owners from the common human necessity of labor make in- equality an institution permeating every corner of society, from the distribution of material wealth to the training of intellect itself. Do they desire greater in- dustrial efficiency? There is no more fatal obstacle to efficiency than the revelation that idleness has the same privileges as industry, and that for every additional blow with the pick or hammer an additional profit will be distributed among shareholders who wield neither.

(X tindeed, functionless property is the greatest enemy of legitimate property itself. It is the parasite which kills the organism that produced it. Bad money drives out good, and, as the history of the last two hundred years shows, when property for acquisition or power and prop- erty for service or for use jostle each other freely in the market, without restrictions such as some legal sys- tems have imposed on alienation and inheritance, the latter tends normally to be absorbed by the former, be- cause it has less resisting power. Thus functionless *^ property grows, and as it grows it undermines the crea- tive energy which produced property and which in earlier ages it protected. It cannot unite men, for w^ what unites them is the bond of service to a common purpose, and that bond it repudiates, since its very

82 THE ACQUISITIVE SOCIETY

essence is the maintenance of rights irrespective of service. It cannot create; it can only spend, so that the number of scientists, inventors, artists or men of letters who have sprung in the course of the last cen- tury from hereditary riches can be numbered on one hand. It values neither culture nor beauty, but only the power which belongs to wealth and the ostentation which is the symbol of it.

So those who dread these qualities, energy and thought and the creative spirit — and they are many — will not discriminate, as we have tried to discriminate, • * between different types and kinds of property, in order that they may preserve those which are legitimate and abolish those which are not. They will endeavor to pre- serve all private property, even in its most degenerate forms. And those who value those things will try to promote them by relieving property of its perversions, and thus enabling it to return to its true nature. They will not desire to establish any visionary communism, [T for they will realize that the free disposal of a suflBciency ' of personal possessions is the condition of a healthy and self-respecting life, and will seek to distribute more widely the property rights which make them to-day the privilege of a minority. - But they will refuse to submit to the naive philosophy which would treat all proprie- tary rights as equal in sanctity merely because they are identical in name. They will distinguish sharply be- tween property which is used by its owner for the con- duct of his profession or the upkeep of his household, and property which is merely a claim on wealth pro- duced by another's labor. They will insist that prop-

PEOPERTY AND CREATIVE WORK 83

erty is moral and healthy only when it is used as a con- dition not of idleness but of activity, and when it in- volves the discharge of definite personal obligations. Qj[ They willendeavor, in short, to base it upon the prin- 1^ ciple of function.

VI

THE FUNCTIONAL SOCIETY

The application to property and industry of the prin- ciple of function is compatible with several different types of social organization, and is as unlikely as more important revelations to be the secret of those who cry " Lo here ! " and " Lo there ! " The essential thing is that men should fix their minds upon the idea of pur- pose, and give that idea pre-eminence over all subsidiary issues. If, as is patent, the purpose of industry is to provide the material foundation of a good social life, then any measure which makes that provision more ef- fective, so long as it does not conflict with some still more important purpose, is wise, and any institution which thwarts or encumbers it is foolish. It is foolish, for example, to cripple education, as it is crippled in England for the sake of industry ; for one of the uses of industry is to provide the wealth which may make pos- sible better education. It is foolish to maintain prop- erty rights for which no service is performed, for pay- ment without service is waste; and if it is true, as statisticians affirm, that, even were income equally di- vided, income per head would be small, then it is all the more foolish, for sailors in a boat have no room for first-class passengers, and it is all the more important that none of the small national income should be mis- applied. It is foolish to leave the direction of indu ry

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THE FUNCTIONAL SOCIETY 85

in the hands of servants of private property-owners who themselves know nothing about it but its balance sheets, because this is to divert it from the performance of service to the acquisition of gain, and to subordinate those who do creative work to those who do not.

The course of wisdom in the affairs of industry is, after all, what it is in any other department of organ- ized life. It is to consider the end for which economic activity is carried on and then to adapt economic or- ganization to it. It is to pay for service and for service only, and when capital is hired to make sure that it is hired at the cheapest possible price. It is to place the responsibility for organizing industry on the shoulders of those who work and use, not of those who own, because production is the business of the pro- ducer and the proper person to see that he discharges his business is the consumer for whom, and not for the owner of property, it ought to be carried on. Above all it is to insist that all industries shall be conducted in complete publicity as to costs and profits, because pub- licity ought to be the antiseptic both of economic and political abuses, and no man can have confidence in his neighbor unless both work in the light.

As far as property is concerned, such a policy would possess two edges. On the one hand, it would aim at abolishing those forms of property in which ownership is divorced from obligations. On the other hand, it would seek to encourage those forms of economic organi- zation under which the worker, whether owner or not, is ijf^ to carry on his work without sharing its control or its profits with the mere rentier. Thus, if in certain

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spheres it involved an extension of public ownership, it would in others foster an extension of private prop- erty. - For it is not private ownership, but private owner- ship divorced from work, which is corrupting to the principle of industry; 'and the idea of some socialists that private property in land or capital is necessarily mischievous is a piece of scholastic pedantry as absurd as that of those conservatives who would invest all prop- erty with some kind of mysterious sanctity. It all de- pends what sort of property it is and for what purpose it is used. Provided that the State retains its emi- nent domain, and controls alienation, as it does under the Homestead laws of the Dominions, with sufficient stringency to prevent the creation of a class of fune- tionless property-owners, there is no inconsistency be- tween encouraging simultaneously a multiplication of peasant farmers and small masters who own their own farms or shops, and the abolition of private ownership in those industries, unfortunately to-day the most con- spicuous, in which the private owner is an absentee shareholder.

Indeed, the second reform would help the first. In so far as the community tolerates functionless property it makes difficult, if not impossible, the restoration of the small master in agriculture or in industry, who cannot easily hold his own in a world dominated by great estates or capitalist finance. In so far as it abolishes those kinds of property which are merely parasitic, it facilitates the restoration of the small property-owner in those kinds of industry for which small ownership is adapted. A socialistic policy towards the former is not

THE FUNCTIONAL SOCIETY 87

antagonistic to the " distributive state," but, in modern economic conditions, a necessary preliminary to it, and if by " Property " is meant the personal possession9 ^ which the word suggests to nine-tenths of the popula- tion, the object of socialists is not to undermine prop- erty but to protect and increase it. The boundary be- tween large scale and small scale production will always be uncertain and fluctuating, depending, as it does, on technical conditions which cannot be foreseen : a cheap- ening of electrical power, for example, might result in the decentralization of manufactures, as steam resulted in their concentration. The fundamental issue, how- ever, is not between different scales of ownership, but between ownership of different kinds, not between the large farmer or master and the small, but between prop- erty which is used for work and property which yields income without it. The Irish landlord was abolished, not because he owned a large scale, but because he was an owner and nothing more; if, and when English land- ownership has been equally attenuated, as in towns it already has been, it will deserve to meet the same fate. Once the issue of the character of ownership has been settled, the question of the size of the economic unit can be left to settle itself.

The first step, then, towards the organization of eco- nomic life for the performance of function is to abolish those types of private property in return for which no function is performed. The man who lives by owning without working is necessarily supported by the indus- try of some one else, and is, therefore, too expensive a luxury to be encouraged. Though he deserves to be

88 THE ACQUISITIVE SOCIETY

treated with the leniency which ought to be, and usually is not, shown to those who have been brought up from infancy to any other disreputable trade, indulgence to individuals must not condone the institution of which both they and their neighbors are the victims. Judged by this standard, certain kinds of property are obviously anti-social. The rights in virtue of which the owner of the surface is entitled to levy a tax, called a royalty, on every ton of coal which the miner brings to the surface, to levy another tax, called a way-leave, on every ton of coal transported under the surface of his land though its amenity and value may be quite unaffected, to distort, if he pleases, the development of a whole district by refusing access to the minerals except upon his own terms, and to cause some 3,500 to 4,000 million tons to be wasted in barriers between different proper- ties, while he in the meantime contributes to a chorus of lamentation over the wickedness of the miners in not producing more tons of coal for the public and inciden- tally more private taxes for himself — all this adds an agreeable touch of humor to the drab quality of our in- dustrial civilization for which mineral owners deserve perhaps some recognition, though not the $400,000 odd a year which is paid to each of the four leading players, or the $24,000,000 a year which is distributed among the crowd.

The alchemy by which a gentleman who has never seen a coal mine distills the contents of that place of gloom into elegant chambers in London and a place in the country is not the monopoly of royalty owners. A similar feat of presdigitation is performed by the

THE FUNCTIONAL SOCIETY 89

©"wner of urban ground-rents. In rural districts some landlords, perhaps many landlords, are partners in the hazardous and difficult business of agriculture, and, though they may often exercise a power which is socially excessive, the position which they hold and the income which they receive are, in part at last, a return for the functions which they perform. The ownership of urban land has been refined till of that crude ore only the pure gold is left. It is the perfect sinecure, for the only function it involves is that of collecting its profits, and in an age when the struggle of Liberalism against sinecures was still sufficiently recent to stir some chords of memory, the last and greatest of liberal thinkers drew the obvious deduction. " The reasons which form the justification ... of property in land," wrote Mill in ^ 1848, " are valid only in so far as the proprietor of land is its improver. . . . In no sound theory of private property was it ever contemplated that the proprietor of land should be merely a sinecurist quartered on it." Urban ground-rents and royalties are, in fact, as the Prime Minister in his unregenerate days suggested, a tax which some persons are permitted by the law to levy upon the industry of others. They differ from public taxation only in that their amount increases in propor- tion not to the nation's need of revenue but to its need of the coal and space on which they are levied, that their growth inures to private gain not to public benefit, and that if the proceeds are wasted on frivolous expenditure no one has any right to complain, because the arrange- ment by which Lord Smith spends wealth produced by Mr. Brown on objects which do no good to either is part

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of the system which, under the name of private prop- erty, Mr. Brown as well as Lord Smith have learned to regard as essential to the higher welfare of mankind.

But if we accept the principle of function we shall ask what is the purpose of this arrangement, and for what end the inhabitants of, for example, London pay $64,000,000 a year to their ground landlords. And if we find that it is for no purpose and no end, but that these things are like the horseshoes and nails which the City of London presents to the Crown on account of land in the Parish of St. Clement Danes, then we shall not deal harshly with a quaint historical survival, but neither shall we allow it to distract us from the busi- ness of the present, as though there had been history but there were not history any longer. We shall close these channels through which wealth leaks away by re- suming the ownership of minerals and of urban land, as some communities in the British Dominions and on the Continent of Europe have resumed it already. We shall secure that such large accumulations as remain change hands at least once in every generation, by in- creasing our taxes on inheritance till what passes to the heir is little more than personal possessions, not the right to a tribute from industry which, though quali- fied by death-duties, is what the son of a rich man in- herits to-day. We shall treat mineral owners and land- owners, in short, as Plato would have treated the poets, whom in their ability to make something out of noth- ing and to bewitch mankind with words they a little resemble, and crown them with flowers and usher them politely out of the State.

vn

INDUSTEY AS A PROFESSION

Rights without functions are like the shades in Homer which drank blood but scattered trembling at the voice of a man. To extinguish royalties and urban ground- rents is merely to explode a superstition. It needs as little — and as much — resolution as to put one's hand through any other ghost. In all industries except the diminishing number in which the capitalist is himself the manager, property in capital is almost equally pas- sive. Almost, but not quite. For, though the majority of its owners do not themselves exercise any positive function, they appoint those who do. It is true, of course, that the question of how capital is to be owned is distinct from the question of how it is to be admin- istered, and that the former can be settled without prejudice to the latter. To infer, because shareholders own capital which is indispensable to industry, that therefore industry is dependent upon the maintenance of capital in the hands of shareholders, to write, with some economists, as though, if private property in capi- tal were further attenuated or abolished altogether, the constructive energy of the managers who may own capi- tal or may not, but rarely, in the more important indus- tries, own more than a small fraction of it, must neces- sarily be impaired, is to be guilty of a robust non-sequitur and to ignore the most obvious facts of

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92 THE ACQUISITIVE SOCIETY

contemporary industry. The less the mere capitalist talks about the necessity for the consumer of an efficient organization of industry, the better; for, whatever the future of industry may be, an efficient organization is likely to have no room for him. But though share- holders do not govern, they reign, at least to the extent of saying once a year " le roy le veult." If their rights are pared down or extinguished, the necessity for some organ to exercise them will still remain. And the ques- tion of the ownership of capital has this much in com- mon with the question of industrial organization, that the problem of the constitution under which industry is to be conducted is common to both. f That constitution must be sought by considering how industry can be organized to express most perfectly the principle of purpose. The application to industry of the principle of purpose is simple, however difficult it may be to give effect to it. It is to turn it into^^Prg: fession. A Profession may be defined most simply as a trade which is organized, incom_pletelyj^ no doubt ^ but genuinely, for the performance of function. It is not simply a collection of individuals who get a living for themselves by the same kind of work. Nor is it merely a group which is organized exclusively for the economic protection of its members, though that is normally among its purposes. It is a body of men who carry on their work in accordance with rules designed to enforce certain standards both for the better protection of its members and for the better service of the public. The standards which it maintains may be high or low: all professions have some rules which protect the interests

INDUSTRY AS A PROFESSION 93

of the community and others which are an imposition on it. Its essence is that it assumes certain responsibilities for the competence of its members or the quality of its wares, and that it deliberately prohibits certain kinds of conduct on the ground that, though they may be profitable to the individual, they are calculated to bring into disrepute the organization to which he belongs. While some of its rules are trade union regulations de- '^ signed primarily to prevent the economic standards of the profession being lowered by unscrupulous competi- tion, others have as their main object to secure that no member of the profession shall have any but a purely professional interest in his work, by excluding the in- centive of speculative profit.

The conception implied in the words " unprofessional conduct " is, therefore, the exact opposite of the theory and practice which assume that the service of the public is best secured by the unrestricted pursuit on the part of rival traders of their pecuniary self-interest, within such limits as the law allows. It is significant that at the time when the professional classes had deified free competition as the arbiter of commerce and industry, they did not dream of applying it to the occupations in which they themselves were primarily interested, but maintained, and indeed, elaborated machinery through which a professional conscience might find expression. The rules themselves may sometimes appear to the lay- man arbitrary and ill-conceived. But their object is clear. It is to impose on the profession itself the obliga- tion of maintaining the quality of the service, and to prevent its common purpose being frustrated through

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the undue influence of the motive of pecuniary gain upon the necessities or cupidity of the individual.

Thedifference_between^ndustry_a^ to-day

and^^ profession is, then, simple and unmistakable. The essence of the former is that its only criterion i^ the financial return which it offers to its shareholders. The essence^ the latter, is that, though men enter it for the sake of livelihood, the measure of their success is the service vehich they perform, not the gains which they amass. They may, as in the case of a successful doctor, grow rich; but the meaning of their profession, both for themselves and for the public, is not that they make money but that they make health, or safety, or knowledge, or good government or good law. They depend on it for their income, but they do not consider that any conduct which increases their income is on that account good. And while a boot-manufacturer who retires with half a million is counted to have achieved success, whether the boots which he made were of leather or brown paper, a civil servant who did the same would be impeached.

So, if they are doctors, they recognize that there are certain kinds of conduct which cannot be practised, however large the fee offered for them, because they are unprofessional; if scholars and teachers, that it is wrong to make money by deliberately deceiving the public, as is done by makers of patent medicines, how- ever much the public may clamor to be deceived; if judges or public servants, that they must not increase their incomes by selling justice for money; if soldiers, that the service comes first, and their private inclina-

INDUSTRY AS A PEOFESSION 96

tions, even the reasonable preference of life to death, second. Every country has its traitors, every army its deserters, and every profession its blacklegs. To idealize the professional spirit would be very absurd ; it has its sordid side, and, if it is to be fostered in industry, safe- guards will be needed to check its excesses. But there is all the difference between maintaining a standard which is occasionally abandoned, and affirming as the central truth of existence that there is no standard to maintain. The meaning of a profession is that it makes the traitors the exception, not as they are in industry, the rule. ' It makes them the exception by upholding as the criterion of success the end for which the profession, whatever it may be, is carried on, and subordinating the inclination, appetites and ambitions of individuals to the rules of an organization which has as its object to promote the performance of function.

There is no sharp line between the professions and the industries. A hundred years ago the trade of teach- ing, which to-day is on the whole an honorable public service, was rather a vulgar speculation upon public credulity ; if Mr. Squeers was a caricature, the Oxford of Gibbon and Adam Smith was a solid port-fed reality; no local authority could have performed one-tenth of the duties which are carried out by a modem municipal corporation every day, because there was no body of public servants to perform them, and such as there were took bribes. It is conceivable, at least, that some branches of medicine might have developed on the lines of industrial capitalism, with hospitals as factories.

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doctors hired at competitive wages as their " hands," large dividends paid to shareholders by catering for the rich, and the poor, who do not offer a profitable market, supplied with an inferior service or with no service at all.

The idea that there is some mysterious difference between making munitions of war and firing them, be- tween building schools and teaching in them when built, between providing food and providing health, which makes it at once inevitable and laudable that the former should be carried on with a single eye to pecuniary gain, while the latter are conducted by professional men who expect to be paid for service but who neither watch for windfalls nor raise their fees merely because there are more sick to be cured, more children to be taught, or more enemies to be resisted, is an illusion only less astonishing than that the leaders of industry should welcome the insult as an honor and wear their humilia- tion as a kind of halo. The work of making boots or building a house is in itself no more degrading than that of curing the sick or teaching the ignorant. It is as necessary and therefore as honorable. It should be at least equally bound by rules which have as their object to maintain the standards of professional serv- ice. It should be at least equally free from the vulgar subordination of moral standards to financial interests.

y, If industry is to be organized as a profession, two changes are requisite, one negative and one positive. The firsty is that it should cease to be conducted_J)y the agents of property-owners for the advantage of property-

INDUSTRY AS A PROFESSION 97

ownere^iaDdsjjould be carried ony instead, for the service of the public. The second, is that, subject to rigorous public supervision, the responsibility for the mainte- nance of the service should rest upon the shoulders of those, ^om organizer and scientist toTaborer, by whom, m effect, the work is conducted.

The first change is necessary because the conduct of industry for the public advantage is impossible as long as the ultimate authority over its management is vested in those whose only connection with it, and interest in it, is the pursuit of gain. As industry is at present organized, its profits and its control belong by law to that element in it which has least to do with its suc- cess. Under the joint-stock organization which has become normal in all the more important industries except agriculture, it is managed by the salaried agents of those by whom the property is owned. It is success- ful if it returns ^args^ sums to shareholders, and un- successful if it does not. If an opportunity presents itself to increase dividends by practices which deterio- rate the service or degrade the workers, the officials who administer industry act strictly within their duty if they seize it, for they are the servants of their employers, and their obligation to their employers is to provide dividends not to provide service. But the owners of the property are, qua property-owners functionless, not in the sense, of course, that the tools of which they are proprietors are not useful, but in the sense that since work and ownership are increasingly separated, the ef- ficient use of the tools is not dependent on the main- tenance of the proprietary rights exercised over then^-

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Of course there are many managing directors who both own capital and administer the business. But it is none the less the case that most shareholders in most large industries are normally shareholders and nothing more.

Nor is their economic interest identical, as is some- times assumed, with that of the general public. A society is rich when material goods, including capital, are cheap, and human beings dear: indeed the word " riches " has no other meaning. The interest of those who own the property used in industry, though not, of course, of the managers who administer industry and who themselves are servants, and often very ill-paid servants at that, is that their capital should be dear and human beings cheap. Hence, if the industry is such as to yield a considerable return, or if one unit in the industry, owing to some special advantage, produces more cheaply than its neighbors, while selling at the same price, or if a revival of trade raises prices, or if supplies are controlled by one of the combines which are now the rule in many of the more important in- dustries, the resulting surplus normally passes neither to the managers, nor to the other employees, nor to the public, but to the shareholders. Such an arrangement is preposterous in the literal sense of being the reverse of that which would be established by considerations of equity and common sense, and gives rise (among other things) to what is called " the struggle between labor and capital." The phrase is apposite, since it is as absurd as the relations of which it is intended to be a description. To deplore " ill-feeling " or to advocate

INDUSTRY AS A PEOFESSION 99

" harmony " between " labor and capital " is as rational as to lament the bitterness between carpenters and ham- mers or to promote a mission for restoring amity be- tween mankind and its boots. The only significance of these cliches is that their repetition tends to muffle their inanity, even to the point of persuading sensible men that capital " employs " labor, much as our pagan an- cestors imagined that the other pieces of wood and iron, ■which they deified in their day, sent their crops and won their battles. When men have gone so far as to talk as though their idols have come to life, it is time that some one broke them. Labor consists of persons, capi- tal of things. The only use of things is to be applied to the service of persons. The business of persons is to see that they are there to use, and that no more than need be is paid for using them.

Thus the application to industry of the principle of function involves an alteration of proprietary rights, because those rights do not contribute, as they now are, to the end which industry exists to serve. What gives unity to any activity, what alone can reconcile the con- flicting claims of the different groups engaged in it, is the purpose for which it is carried on. If men have no common goal it is no wonder that they should fall out by the way, nor are they likely to be reconciled by a redistribution of their provisions. If they are not con- tent both to be servants, one or other must be master, and it is idle to suppose that mastership can be held in a state of suspense between the two. There can be a division of functions between different grades of workers, or between worker and consumer, and each can

100 THE ACQUISITIVE SOCIETY

have in his own sphere the authority needed to enable him to fill it. But there cannot be a division of func- tions between the worker and the owner who is owner and nothing else, for what function does such an owner perform ? The provision of capital ? Then pay him the sum needed to secure the use of his capital, but neither pay him more nor admit him to a position of authority over production for which merely as an owner he is not qualified. For this reason, while an equilibrium be- tween worker and manager is possible, because both are workers, that which it is sought to establish between worker and owner is not. It is like the proposal of the Germans to negotiate with Belgium from Brussels. Their proposals may be excellent : but it is not evident why they are where they are, or how, since they do not contribute to production, they come to be put- ting forward proposals at all. As long as they are in territory where they have no business to be, their excellence as individuals will be overlooked in annoyance at the system which puts them where they are.

It is fortunate indeed, if nothing worse than this happens. For one way of solving the problem of the conflict of rights in industry is not to base rights on functions, as we propose, but to base them on force. It is to re-establish in some veiled and decorous form the institution of slavery, by making labor compulsory. In nearly all countries a concerted refusal to work has been made at one time or another a criminal offense. There are to-day parts of the world in which European capi- talists, unchecked by any public opinion or authority

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independent of themselves, are free to impose almost what terms they please upon workmen of ignorant and helpless races. In those districts of America where capi- talism still retains its primitive lawlessness, the same result appears to be produced upon immigrant workmen by the threat of violence.

In such circumstances the conflict of rights whidi finds expression in industrial warfare does not arise, because the rights of one party have been extinguished. The simplicity of the remedy is so attractive that it is not surprising that the Governments of industrial na- tions should coquet from time to time with the policy of compulsory arbitration. After all, it is pleaded, it is only analogous to the action of a supernational au- thority which should use its common force to prevent the outbreak of war. In reality, compulsory arbitra- tion is the opposite of any policy which such an author- ity could pursue either with justice or with hope of success. For it takes for granted the stability of exist- ing relationships and intervenes to adjust incidental dis- putes upon the assumption that their equity is recog- nized and their permanence desired. In industry, how- ever, the equity of existing relationships is precisely the point at issue. A League of Nations which adjusted be- tween a subject race and its oppressors, between Slavs and Magyars, or the inhabitants of what was once Prussian Poland and the Prussian Government, on the assumption that the subordination of Slavs to Magyars and Poles to Prussians was part of an unchangeable order, would rightly be resisted by all those who think liberty more precious than peace. A State which, in the

%km BARBARA STATE C0LIE3E IIBRAR

102 THE ACQUISITIVE SOCIETY

name of peace, should make the concerted cessation of work a legal offense would be guilty of a similar be- trayal of freedom. It would be solving the conflict of rights between those who own and those who work by abolishing the rights of those who work.

So here again, unless we are prepared to re-establish some form of forced labor, we reach an impasse. But it is an impasse only in so long as we regard the pro- prietary rights of those who own the capital used in industry as absolute and an end in themselves. If, in- stead of assuming that all property, merely because it is property, is equally sacred, we ask what is the pur- pose for which capital is used, what is its function, we shall realize that it is not an end but a means to an end, and that its function is to serve and assist (as the economists tell us) the labor of human beings, not the function of human beings to serve those who happen to own it. And from this truth two consequences follow. The first is that since capital is a thing, which ought to be used to help industry as a man may use a bicycle to get more quickly to his work, it ought, when it is employed, to be employed on the cheapest terms pos- sible. The second is that those who own it should no more control production than a man who lets a house controls the meals which shall be cooked in the kitchen, or the man who lets a boat the speed at which the rowers shall pull. In other words, capital should always be got at cost price, which means, unless the State finds it wise, as it very well may, to own the capital used in certain industries, it should be paid the lowest interest

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for which it can be obtained, but should carry no right either to residuary dividends or to the control of in- dustry.

There are, in theory, five ways by which the control of industry by the agents of private property-owners can be terminated. They may be expropriated without com- pensation. They may voluntarily surrender it. . They may be frozen out by action on the part of the working personnel, which itself undertakes such functions, if any, as they have performed, and makes them super- fluous by conducting production without their assist- ance. \ Their proprietary interest may be limited or at- tenuated to such a degree that they become mere rentiers^ who are guaranteed a fixed payment analogous to that of the debenture-holder, but who receive no profits and bear no responsibility for the organization of industryLs They may be bought out. The first alterna- tive is exemplified by the historical confiscations of the past, such as, for instance, by the seizure of ecclesiastical property by the ruling classes of England, Scotland and most other Protestant states. The second has rarely, if ever, been tried — the nearest approach to it, perhaps, was the famous abdication of August 4th, 1789. The third is the method apparently contemplated by the building guilds which are now in process of formation in Great Britain. The fourth method of treating the capitalist is followed by the co-operative movement. It is also that proposed by the committee of employers and trade-unionists in the building industry over which Mr. Foster presided, and which proposed that employers should be paid a fixed salary, and a fixed rate of inter-

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est on their capital, but that all surplus profits should be pooled and administered by a central body repre- senting employers and workers. The fifth has repeat- edly been practised by municipalities, and somewhat less often by national governments.

Which of these alternative methods of removing in- dustry from the control of the property-owner is adopted is a matter of expediency to be decided in each particu- lar case. " Nationalization," therefore, which is some- times advanced as the only method of extinguishing pro- prietary rights, is merely one species of a considerable genus. It can be used, of course, to produce the desired result. But there are some industries, at any rate, in which nationalization is not necessary in order to bring it about, and since it is at best a cumbrous process, when other methods are possible, other methods should be used, i Nationalization is a means to an end, not an end in itself. Properly conceived its object is not to estab- lish state management of industry, but to remove the dead hand of private ownership, when the private owner has ceased to perform any positive function. It is un- fortunate, therefore, that the abolition of obstructive property rights, which is indispensable, should have been identified with a single formula, which may be applied with advantage in the special circumstances of some industries, but need not necessarily be applied in all. Ownership is not a right, but a bundle of rights, and it is possible to strip them off piecemeal as well as to strike them off simultaneously. The ownership of capital involves, as we have said, three main claims ; the right to interest as the price of capital, the right to

INDUSTRY AS A PEOFESSION 105 .

profits, and the right to control, in virtue of which j managers and workmen are the servants of shareholders. These rights in their fullest degree are not the invariable accompaniment of ownership, nor need they necessarily co-exist. The ingenuity of financiers long ago devised methods of grading stock in such a way that the owner- ship of some carries full control, while that of others does not, that some bear all the risk and are entitled to all the profits, while others are limited in respect to both. All are property, but not all carry proprietary rights of the same degree.

As long as the private ownership of industrial capital remains, the object of reformers should be to attenuate its influence by insisting that it shall be paid not more than a rate of interest fixed in advance, and that it should carry with it no right of control. In such cir- cumstances the position of the ordinary shareholder would approximate to that of the owner of debentures; the property in the industry would be converted into a mortgage on its profits, while the control of its admin- istration and all profits in excess of the minimum would remain to be vested elsewhere. So, of course, would the risks. But risks are of two kinds, those of the in- dividual business and those of the industry. The for- mer are much heavier than the latter, for though a coal mine is a speculative investment, coal mining is not, and as long as each business is managed as a separate unit, the payments made to shareholders must cover both. If the ownership of capital in each industry were unified, which does not mean centralized, those risks which are incidental to individual competition would be elimi-

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nated, and the credit of eaeh unit would be that of the whole.

Such a change in the character of ownership would havethree^dvantages. It would abolish the government of industry by property^ Itjwould end the payment of profits to functionless shareholders by turning them into creditors paid a fixed rate of interest. It would lay the only possible foundations for industrial peace_^ making it possible to convert industry into a profession carried on by all grades of workers for the service of the public, not for the gain of those who own capital. The organization which it would produce will be de- scribed, of course, as impracticable. It is interesting, therefore, to find it is that which experience has led practical men to suggest as a remedy for the disorders of one of the most important of national industries, that of building. The question before the Committee of em- ployers and workmen, which issued last August a Report upon the Building Trade, was " Scientific Management and the Reduction of Costs." ^ These are not phrases which suggest an economic revolution ; but it is some- thing little short of a revolution that the signatories of the report propose. For, as soon as they came to grips with the problem, they found that it was impossible to handle it effectively without reconstituting the general fabric of industrial relationships which is its setting. Why is the service supplied by the industry ineffective ? Partly because the workers do not give their full ener- gies to the performance of their part in production.

* Reprinted in The Industrial Council for the Building In' dtutry.

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Why do they not give their best energies ? Because of " the fear of unemployment, the disinclination of the operatives to make unlimited profit for private em- ployers, the lack of interest evinced by operatives owing to their non-participation in control, ineflSciency both managerial and operative." How are these psycho- logical obstacles to eflBciency to be counteracted? By increased supervision and speeding up, by the allure- ments of a premium bonus system, or the other devices by which men who are too ingenious to have imagina- tion or moral insight would bully or cajole poor human nature into doing what — if only the systems they in- vent would let it! — it desires to do, simple duties and honest work? NTot at all. By turning the build- ing of houses into what teaching now is, and Mr. Squeers thought it could never be, an honorable pro- fession.

" We believe," they write, " that the great task of our Industrial Council is to develop an entirely new system of industrial control by the members of the in- dustry itself — the actual producers, whether by hand or brain, and to bring them into co-operation with the State as the central representative of the community whom they are organized to serve." Instead of unlimited profits, so " indispensable as an incentive to efficiency," the employer is to be paid a salary for his services aa manager, and a rate of interest on his capital which is to be both fixed and (unless he fails to earn it through his own inefiiciency) guaranteed ; anything in excess of it, any " profits " in fact, which in other industries are distributed as dividends to shareholders, he is to sur-

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render to a central fund to be administered by em- ployers and workmen for the benefit of the industry as a whole. Instead of the financial standing of each firm being treated as an inscrutable mystery to the public, with the result that it is sometimes a mystery to itself, there is to be a system of public costing and audit, on the basis of which the industry will assume a collective liability for those firms which are shown to be competently managed. Instead of the workers being dismissed in slack times to struggle along as best they can, they are to be maintained from a fund raised by a levy on employers and administered by the trade unions. There is to be publicity as to costs and profits, open dealing and honest work and mutual helpfulness, in- stead of the competition which the nineteenth century regarded as an efficient substitute for them. " Capital " ^ is not to " employ labor." Labor, which includes mana- j^erial labor, is to employ capital ; and to employ it at the cheapest rate at which, in the circumstances of the tiad£,_JLcan begot. If it employs it so successfully that there is a surplus when it has been fairly paid for its own services, then that surplus is not to be divided among shareholders, for, when they have been paid interest, they have been paid their due ; it is to be used to equip the industry to provide still more effective service in the future.

So here we have the majority of a body of practical men, who care nothing for socialist theories, proposing to establish " organized Public Service in the Building Industry," recommending, in short, that their industry shall be turned into a profession. And they do it, it

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will be observed, by just that functional organization, just that conversion of full proprietary rights into a mortgage secured (as far as efficient firms are con- cerned) on the industry as a whole, just that trans* ference of the control of production from the owner of capital to those whose business is production, which we' saw is necessary if industry is to be organized for the performance of service, not for the pecuniary advan- tage of those who hold proprietary rights. Their Report is of the first importance as offering a policy for attenuating private* property in capital in the im- portant group of industries in which private owner- ship, in one form or another, is likely for some considerable time to continue, and a valuable serv- ice would be rendered by any one who would work out in detail the application of its principle to other trades.

Not, of course, that this is the only way, or in highly capitalized industries the most feasible way, in which the change can be brought about. Had the movement against the control of production by property taken place before the rise of limited companies, in which ownership is separated from management, the transition to the organization of industry as a profession might also have taken place, as the employers and workmen in the building trade propose that it should, by limit- ing the rights of private ownership without abolishing it. But that is not what has actually happened, and therefore the proposals of the building trade are not of universal application. It is possible to retain private ownership in building and in industries like building,

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while changing its character, precisely because in build- ing the employer is normally not merely an owner, but something else as well. He is a manager ; that is, he is a workman. And because he is a workman, whose in- terests, and still more whose professional spirit as a workman may often outweigh his interests and merely financial spirit as an owner, he can form part of the productive organization of the industry, after his rights as an owner have been trimmed and limited.

But that dual position is abnormal, and in the highly organized industries is becoming more abnormal every year. In coal, in cotton, in ship-building, in many branches of engineering the owner of capital is not, as he is in building, an organizer or manager. His con- nection with the industry and interest in it is purely financial. He is an owner and nothing more. And be- cause his interest is merely financial, so that his con- cern is dividends and production only as a means to dividends, he cannot be worked into an organization of industry which vests administration in a body repre- senting all grades of producers, or producers and con- sumers together, for he has no purpose in common with them ; so that while joint councils between workers and managers may succeed, joint councils between workers and owners or agents of owners, like most of the so- called Whitley Councils, will not, because the necessity for the mere owner is itself one of the points in dispute. The master builder, who owns the capital used, can be included, not qua capitalist, but qua builder, if he sur- renders some of the rights of ownership, as the Build- ing Industry Committee proposed that he should. But

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if the shareholder in a colliery or a shipyard abdicates the control and unlimited profits to which, qua capi- talist, he is at present entitled, he abdicates everything that makes him what he is, and has no other standing in the industry. He cannot share, like the master builder, in its management, because he has no qualifi- cations which would enable him to do so. His object is profit; and if industry is to become, as employers and workers in the building trade propose, an " organ- ized public service," then its subordination to the share- holder whose object is profit, is, as they clearly see, precisely what must be eliminated. The master builders propose to give it up. They can do so because tkey have their place in the industry in virtue of their function as workmen. But if the shareholder gave it up, he would have no place at all.

Hence in coal mining, where ownership and manage- ment are sharply separated, the owners will not admit the bare possibility of any system in which the control of the administration of the mines is shared between the management and the miners. " I am authorized to state on behalf of the Mining Association," Lord Gain- ford, the chief witness on behalf of the mine-owners, informed the Coal Commission, " that if the owners are not to be left complete executive control they will de- cline to accept the responsibility for carrying on the industry." ^ So the mine-owners blow away in a sen- tence the whole body of plausible make-believe which rests on the idea that, while private ownership remains

* Coal Industry Commission, Minutes of Evidence, Vol. I, p. 2606.

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unaltered, industrial harmony can be produced by the magic formula of joint control. And they are right. The representatives of workmen and shareholders, in mining and in other industries, can meet and negotiate and discuss. But joint administration of the share- holders' property by a body representing shareholders and workmen is impossible, because there is no purpose in common between them. For the only purpose which could unite all persons engaged in industry, and over- rule their particular and divergent interests, is the provision of service. And the object of shareholders, the whole significance and metier of industry to them, is not the provision of service but the provision of dividends.

In industries where management is divorced from ownership, as in most of the highly organized trades it is to-day, there is no obvious halfway house, therefore, between the retention of the present system and the com- plete extrusion of the capitalist from the control of pro- duction. The change in the character of ownership, which is necessary in order that coal or textiles and ship-building may be organized as professions for the service of the public, cannot easily spring from within. ] The stroke needed to liberate them from the control of i the property-owner must come from without. In theory ' it might be struck by action on the part of organized workers, who would abolish residuary profits and the right of control by the mere procedure of refusing to ^work as long as they were maintained, on the historical analogy offered by peasants who have destroyed preda-

INDUSTRY AS A PROFESSION 113

tory property in the past by declining to pay its dues and admit its government, in which case Parliament would intervene only to register the community's assent to the fait accompli. In practice, however, the condi- tions of modern industry being what they are, that course, apart from its other disadvantages, is so un- likely to be attempted, or, if attempted, to succeed, that it can be neglected. The alternative to it is that the change in the character of property should be affected by legislation in virtue of which the rights of ownership in an industry are bought out simultaneously.

In either case, though the procedure is different, the result of the change, once it is accomplished, is the same. Private property in capital, in the sense of the right to profits and control, is abolished. What remains of it is, at most, a mortgage in favor of the previous proprietors, a dead leaf which is preserved, though the sap of industry no longer feeds it, as long as it is not thought worth while to strike it off. And since the capital needed to maintain and equip a modern industry could not be provided by any one group of workers, even were it desirable on other grounds that they should step completely into the position of the pres- ent owners, the complex of rights which constitutes ownership remains to be shared between them and what- ever organ may act on behalf of the general community. The former, for example, may be the heir of the present owners as far as the control of the routine and adminis- tration of industry is concerned : the latter may suc- ceed to their right to dispose of residuary profits. The elements composing property, have, in fact, to be dis-

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entangled: and the fact that to-day, under the common name of ownership, several different powers are vested in identical hands, must not be allowed to obscure the probability that, once private property in capital has been abolished, it may be expedient to re-allocate those powers in detail as well as to transfer them en bloc.

The essence of a profession is, as we have suggested, thaFits members organize themselves for the perform- ance of function. It is essential therefore, if industry is to be professionalized, that the abolition of functionless property should not be interpreted to imply a continu- ance under public ownership of the absence of respon- sibility on the part of the personnel of industry, which is the normal accompaniment of private ownership working through the wage-system. It is the more im- portant to emphasize that point, because such an impli- cation has sometimes been conveyed in the past by some of those who have presented the case for some such change in the character of ownership as has been urged above. The name consecrated by custom to the trans- formation of property by public and external action is nationalization. But nationalization is a word which

is neither very felicitous nor free from ambiguity. Properly used, it means merely ownership^ by a body representing the nation. But it has come in practice to be used as equivalent^to^ ^particular method ^fad- ministration, under which officials employed by the State step^nto the position of the j)resent_directors_of industry, and exercise all the power which tjhej jexer- cised. So those who desire to maintain the system under which industry is carried on, not as a profession

INDUSTRY AS A PROFESSION 115

serving the public, but for the advantage of share- holders, attack nationalization on the ground that state management is necessarily inefficient, and tremble with apprehension whenever they post a letter in a letter-box; and those who desire to change it reply that state serv- ices are efficient and praise God whenever they use a telephone; as though either private or public adminis- tration had certain peculiar and unalterable character- istics, instead of depending for its quality, like an army or railway company or school, and all other undertak- ings, public and private alike, not on whether those who conduct it are private officials or state officials, but on whether they are properly trained for their work and can command the good will and confidence of their subordinates.

The arguments on both sides are ingenious, but in reality nearly all of them are beside the point. The merits of nationalization do not stand or fall with the efficiency or inefficiency of existing state departments as administrators of industry. For nationalization, which means public ownership, is compatible with sev- eral different types of management. The constitution of the industry may be " unitary," as is (for example) that of the post-office. Or it may be " federal," as was that designed by Mr. Justice Sankey for the Coal In* dustry. Administration may be centralized or decen- tralized. T^ authorities to whom it is intrusted may be composed of representatives of the consumers, or of representatives of professional associations, or of_8tate officials, or of all three in severaj^ different proportions. Executive work may be placed in the hands of civil

116 THE ACQUISITIVE SOCIETY

servants, trained, recruited and promoted as in the existing state departments, or a new service may be created with a procedure and standards of its own. It may be subject to Treasury control, or it may be finan- cially autonomous. The problem is, in fact, of a familiar, though diflScult, order. It is one of constitu- tion-making.

It is commonly assumed by controversialists that the organization and management of a nationalized in- dustry must, for some undefined reason, be similar to that of the post-oflBce. One might as reasonably suggest that the pattern exemplar of private enterprise must be the Steel Corporation or the Imperial Tobacco Com- pany. The administrative systems obtaining in a so- ciety which has nationalized its foundation industries will, in fact, be as various as in one that resigns them to private ownership; and to discuss their relative ad- vantages without defining what particular type of each is the subject of reference is to-day as unhelpful as to approach a modern political problem in terms of the Aristotelian classification of constitutions. The highly abstract dialectics as to " enterprise," " initiative," " bureaucracy," " red tape," " democratic control," " state management," which fill the press of countries occupied with industrial problems, really belong to the dark ages of economic thought. The first task of the student, whatever his personal conclusions, is, it may be suggested, to contribute what he can to the restoration of sanity by insisting that instead of the argument being conducted with the counters of a highly inflated and rapidly depreciating verbal currency, the exact situation,

INDUSTRY AS A PROFESSION 117

in so far as is possible, shall be stated as it is; uncer- tainties (of which there are many) shall be treated as uncertain, and the precise meaning of alternative pro- posals shall be strictly defined. Not the least of the merits of Mr. Justice Sankey's report was that, by stat- ing in great detail the type of organization which he recommended for the Coal Industry, he imparted a new precision and reality into the whole discussion. Whether his conclusions are accepted or not, it is from the basis of clearly defined proposals such as his that the future discussion of these problems must proceed. It may not find a solution. It will at least do something to create the temper in which alone a reasonable solution can be sought.

Nationalization, then, is not an end, but a means to an end, and when the question of ownership has been settled the question of administration remains for solu- tion. As a means it is likely to be indispensable in those industries in which the rights of private proprietors cannot easily be modified without the action of the State, just as the purchase of land by county councils is a necessary step to the establishment of small holders, when landowners will not voluntarily part with their property for the purpose. But the object in purchasing land is to establish small holders, not to set up farms administered by state officials; and the object of na- tionalizing mining or railways or the manufacture of steel should not be to establish any particular form of state management, but to release those who do construc- tive work from the control of those whose sole interest is pecuniary gain, in order that they may be free to

118 THE ACQUISITIVE SOCIETY

apply their energies to the true purpose of industry, which is the provision of service, not the provision of dividends. When the transference of property !has taken place, it will probably be found that the neces- sary provision for the government of industry will in- volve not merely the freedom of the producers to pro- duce, but the creation of machinery through which the consumer, for whom he produces, can express his wishes and criticize the way in which they are met, as at pres- ent he normally cannot. But that is the second stage in the process of reorganizing industry for the per- formance of function, not the first. The first is to free it from subordination to the pecuniary interests of the ovsmer of property, because they are the magnetic pole which sets all the compasses wrong, and which causes industry, however swiftly it may progress, to progress in the wrong direction.

'Not does this change in the character of property involve a breach with the existing order so sharp as to be impracticable. The phraseology of political contro- versy continues to reproduce the conventional antith- eses of the early nineteenth century ; " private enter- prise " and " public ownership " are still contrasted with each other as light with darkness or darkness with light. But, in reality, behind the formal shell of the traditional legal system the elements of a new body of relationship have already been prepared, and find piece- meal application through policies devised, not by socialists, but by men who repeat the formulae of in- dividualism, at the very moment when they are under- mining it. The Esch-Cummins Act in America, the

INDUSTRY AS A PROFESSION 119

Act establishing a Ministry of Transport in England, Sir Arthur Duckham's scheme for the organization of the coal mines, the proposals with regard to the coal in- dustry of the British Government itself, appear to have the common characteristic of retaining private owner- ship in name, while attenuating it in fact, by placing its operators under the supervision, accompanied some- times by a financial guarantee, of a public authority. Schemes of this general character appear, indeed, to be the first instinctive reaction produced by the discovery that private enterprise is no longer functioning effec- tively ; it is probable that they possess certain merits of a technical order analogous to those associated with the amalgamation of competing firms into a single combina- tion. It is questionable, however, whether the com- promise which they represent is permanently tenable. What, after all, it may be asked, are the advantages of private ownership when it has been pared down to the point which policies of this order propose? May not the " owner " whose rights they are designed to protect not unreasonably reply to their authors, " Thank you for nothing " ? Individual enterprise has its merits : so also, perhaps, has public ownership. But, by the time these schemes have done with it, not much remains of " the simple and obvious system of natural liberty," while their inventors are precluded from appealing to the motives which are emphasized by advocates of na- tionalization. It is one thing to be an entrepreneur with a world of adventure and unlimited profits — if they can be achieved — before one. It is quite another to be a director of a railway company or coal corpora-

120 THE ACQUISITIVE SOCIETY

tion with a minimum rate of profit guaranteed by the State, and a maximum rate of profit which cannot be exceeded. Hybrids are apt to be sterile. It may be questioned whether, in drawing the teeth of private capitalism, this type of compromise does not draw out most of its virtues as well. ^ So, when a certain stage of economic development has been reached, private ownership, by the admission of its defenders, can no longer be tolerated in the only form in which it is free to display the characteristic, and quite genuine, advantages for the sake of which it used to be defended. And, as step by step it is whittled down by tacit concessions to the practical necessity of protecting the consumer, or eliminating waste, or meet- ing the claims of the workers, public ownership becomes, not only on social grounds, but for reasons of economic eflBciency, the alternative to a type of private ownership which appears to carry with it few rights of ownership and to be singularly devoid of privacy. Inevitably and •gnfortunately the change must be gradual. But it ^ouldbe continuous. When, as in the last few years, the State has acquired the ownership of great masses of industrial capital, it should retain it, instead of sur- rendering it to private capitalists, who protest at once that it will be managed so inefficiently that it will not pay and managed so efficiently that it will undersell them. When estates are being broken up and sold, as they are at present, public bodies should enter the market and acquire them. Most important of all, the ridiculous barrier, inherited from an age in which municipal corporations were corrupt oligarchies, which

INDUSTRY AS A PROFESSION 121

at present prevents England's Local Authorities from acquiring property in land and industrial capital, ex- cept for purposes specified by Act of Parliament, should be abolished, and they should be free to undertake such services as the citizens may desire. The objection to public ownership, in so far as it is intelligent, is in reality largely an objection to over-centralization. But the remedy for over-centralization, is not the mainte- nance of functionless property in private hands, but the decentralized ownership of public property, and when Birmingham and Manchester and Leeds are the little republics which they should be, there is no reason to anticipate that they will tremble at a whisper from Whitehall.

These things should be done steadily and contin- uously quite apart from the special cases like that of the mines and railways, where the private ownership of capital is stated by the experts to have been responsible for intolerable waste, or the manufacture of ornaments and alcoholic liquor, which are politically and socially too dangerous to be left in private hands. They should be done not in order to establish a single form of bureau- cratic management, but in order to release the industry from the domination of proprietary interests, which, whatever the form of management, are not merely troublesome in detail but vicious in principle, because they divert it from the performance of function to the acquisition of gain. If at the same time private owner- ship is shaken, as recently it has been, by action on the part of particular groups of workers, so much the better. There are more ways of killing a cat than

122 THE ACQUISITIVE SOCIETY

drowning it in cream, and it is all the more likely to choose the cream if they are explained to it. But the two methods are complementary, not alternative, and the attempt to found rival schools on an imaginary in- compatibility between them is a bad case of the odiwm sociologicum which afflicts reformers.

vin

THE "VICIOUS CIRCLE"

What form of management should replace the admin- istration of industry by the agents of shareholders? What is most likely to hold it to its main purpose, and to be least at the mercy of predatory interests and func- tionless supernumeraries, and of the alternations of sullen dissatisfaction and spasmodic revolt which at present distract it? Whatever the system upon which industry is administered, one thing is certain. Its eco- nomic processes and results must be public, because only if they are public can it be known whether the service of industry is vigilant, effective and honorable, whether its purpose is being realized and its function carried out. The defense of secrecy in business resembles the defense of adulteration on the ground that it is a legit- imate weapon of competition; indeed it has even less justification than that famous doctrine, for the condition of effective competition is publicity, and one motive for secrecy is to prevent it.

Those who conduct industry at the present time and who are most emphatic that, as the Duke of Wellington said of the unreformed House of Commons, they " have never read or heard of any measure up to the present moment which can in any degree satisfy the mind " that the method of conducting it can in any way be im- proved, are also those apparently who, with some honor-

123

y

124 THE ACQUISITIVE SOCIETY

able exceptions, are most reluctant that the full facts about it should be known. And it is crucial that they should be known. It is crucial not only because, in the present ignorance of the real economic situation, all industrial disagreements tend inevitably to be battles in the dark, in which " ignorant armies clash by night," but because, unless there is complete publicity as to profits and costs, it is impossible to form any judgment either of the reasonableness of the prices which are charged or of the claims to rernuneration of the different parties engaged in production. For balance sheets, with their opportunities for concealing profits, give no clear light upon the first, and no light at all upon the second. And so, when the facts come out, the public is aghast at revelations which show that industry is conducted with bewildering financial extravagance. If the full facts had been published, as they should have been, quarter by quarter, these revelations would probably not have been made at all, because publicity itself would have been an antiseptic and there would have been noth- ing sensational to reveal.

The events of the last few years are a lesson which should need no repetition. The Government, surprised at the price charged for making shells at a time when its soldiers were ordered by Headquarters not to fire more than a few rounds per day, whatever the need for retaliation, because there were not more than a few to fire, establishes a costing department to analyze the estimates submitted by manufacturers and to compare them, item by item, with the costs in its own factories. It finds that, through the mere pooling of knowledge,

THE "VICIOUS CIKCLE" 125

'* some of the reductions made in the price of shells and similar munitions," as the Chartered Accountant em- ployed by the Department tells us, " have been as high as 50% of the original price." The household con- sumer grumbles at the price of coal. For once in a way, amid a storm of indignation from influential per- sons engaged in the industry, the facts are published. And what do they show? That, after 2/6 has been added to the already high price of coal because the poorer mines are alleged not to be paying their way, 21% of the output examined by the Commission was produced at a profit of 1/- to 3/- per ton, 32% at a profit of 3/- to 5/-, 13% at a profit of 5/- to 7/-, and 14% at a profit of 7/- per ton and over, while the profits of distributors in London alone amount in the aggregate to over $3,200,000, and the co-operative movement, which aims not at profit, but at service, distributes household coal at a cost of from 2/- to 4/- less per ton than is charged by the coal trade ! *

" But these are exceptions." They may be. It is possible that in the industries, in which, as the recent Committee on Trusts has told us, " powerful Combina- tions or Consolidations of one kind or another are in a position effectively to control output and prices," not only costs are cut to the bare minimum but profits are inconsiderable. But then why insist on this humiliating tradition of secrecy with regard to them, when every one who uses their products, and every one who renders hon- est service to production, stands to gain by publicity? If industry is to become a profession, whatever its man-

* Coal Industry Commission, Minutes of Evidence, pp. 9261-9.

126 THE ACQUISITIVE SOCIETY

agement, the first of its professional rules should be, as Sir John Mann told the Coal Commission, that " all cards should be placed on the table." If it were the duty of a Public Department to publish quarterly exact returns as to costs of production and profits in all the firms throughout an industry, the gain in mere produc- tive efficiency, which should appeal to our enthusiasts for output, would be considerable ; for the organization whose costs were least would become the standard with which all other types of organization would be com- pared. The gain in morale, which is also, absurd though it may seem, a condition of efficiency, would be incalculable. For industry would be conducted in the light of day. Its costs, necessary or unnecessary, the distribution of the return to it, reasonable or capricious, would be a matter of common knowledge. It would be held to its purpose by the mere impossibility of per- suading those who make its products or those who con- sume them to acquiesce, as they acquiesce now, in ex- penditure which is meaningless because it has contrib- uted nothing to the service which the industry exists to perform.

The organization of industry as a profession does not

involve only the abolition of functionless property, and

the maintenance of publicity as the indispensable con-

"^ dition of a standard of professional honor. It implies

, also that those who perform its work should undertake

J^hat its work is performed effectively. It means that

they should not merely be held to the service of the

public by fear of personal inconvenience or penalties,

but that they should treat the discharge of professional

THE "VICIOUS CIRCLE" 127

responsibilities as an obligation attaching not only to a small elite of intellectuals, managers or " bosses," who perform the technical work of " business management," but as implied by the mere entry into the industry and as resting on the corporate consent and initiative of the j rank and file of workers. It is precisely, indeed, in the •^ degree to which that obligation is interpreted as attach- ing to all workers, and not merely to a select class, that the difference between the existing industrial order, collectivism and the organization of industry as a pro- fession resides. The first involves the utilization of human beings for the purpose of private gain; the second their utilization for the purpose of public service; the third the association in the service of the public of their professional pride, solidarity and organi- zation.

The diiference in administrative machinery between the second and third might not be considerable. Both involve the drastic limitation or transference to the public of the proprietary rights of the existing owners of industrial capital. Both would necessitate machinery for bringing the opinion of the consumers to bear upon the service supplied them by the industry. The differ- ence consists in the manner in which the obligations of the producer to the public are conceived. He may either be the executant of orders transmitted to him by its agents; or he may, through his organization, himself take a positive part in determining what those orders should be. In the former case he is responsible for his own work, but not for anything else. If he hews his stint of coal, it is no business of his whether the pit is a

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failure; if he puts in the normal number of rivets, he disclaims all further interest in the price or the sea- worthiness of the ship. In the latter his function em- braces something more than the performance of the specialized piece of work allotted to him. It includes , also a responsibility for the success of the undertaking as a whole. And since responsibility is impossible with- out power, his position would involve at least so much power as is needed to secure that he can affect in prac- tice the conduct of the industry. It is this collective lia- bility for the maintenance of a certain quality of serv- ice which is, indeed, the distinguishing feature of a profession. It is compatible with several different kinds of government, or indeed, when the unit of production is not a group, but an individual, with hardly any govern- ment at all. What it does involve is that the individual, merely by entering the profession should have com- mitted himself to certain obligations in respect of its conduct, and that the professional organization, what- ever it may be, should have sufficient power to enable it to maintain them.

The demand for the participation of the workers in the control of industry is usually advanced in the name of the producer, as a plea for economic freedom or in- dustrial democracy. " Political freedom," writes the Final Report of the United States Commission of In- dustrial Relations, which was presented in 1916, "can exist only where there is industrial freedom. . . . There are now within the body of our Republic indus- trial communities which are virtually Principalities, oppressive to those dependent upon them for a livelihood

THE "VICIOUS CIRCLE" 129

and a dreadful menace to the peace and welfare of the nation." The vanity of Englishmen may soften the shadows and heighten the lights. But the concentration of authority is too deeply rooted in the very essence of Capitalism for differences in the degree of the arbitrari- ness with which it is exercised to be other than trivial. The control of a large works does, in fact, confer a kind of private jurisdiction in matters concerning the life and livelihood of the workers, which, as the United States' Commission suggests, may properly be described as " industrial feudalism." It is not easy to understand how the traditional liberties of Englishmen are com- patible with an organization of industry which, except in so far as it has been qualified by law or trade union- ism, permits populations almost as large as those of some famous cities of the past to be controlled in their rising up and lying down, in their work, economic op- portunities, and social life by the decisions of a Com- mittee of half-a-dozen Directors.

The most conservative thinkers recognize that the present organization of industry is intolerable in the sacrifice of liberty which it entails upon the producer. But each effort which he makes to emancipate himself is met by a protest that if the existing system is incom- patible with freedom, it at least secures efficient service, and that efficient service is threatened by movements which aim at placing a greater measure of industrial control in the hands of the workers. The attempt to drive a wedge between the producer and the consumer is obviously the cue of all the interests which are con- scious that by themselves they are unable to hold back

130 THE ACQUISITIVE SOCIETY

the flood. It is natural, therefore, that during the last few months they should have concentrated their efforts upon representing that every advance in the demands and in the power of any particular group of workers is a new imposition upon the general body of the public. Eminent persons, who are not obviously producing more than they consume, explain to the working classes that unless they produce more they must consume less. Highly syndicated combinations warn the public against the menace of predatory syndicalism. The owners of mines and minerals, in their new role as pro- tectors of the poor, lament the " selfishness " of the miners, as though nothing but pure philanthropy had hitherto caused profits and royalties to be reluctantly accepted by themselves.

The assumption upon which this body of argument rests is simple. It is that the existing organization of industry is the safeguard of productive efficiency, and that from every attempt to alter it the workers them- selves lose more as consumers than they can gain as producers. The world has been drained of its wealth v/ and demands abundance of goods. • The workers de- [ mand a larger income, greater leisure, and a more se- ' cure and dignified status. These two demands, it is argued, are contradictory. Eor how can the consumer be supplied with cheap goods, if, as a worker, he insists on higher wages and shorter hours ? And how can the worker secure these conditions, if as a consumer, he demands cheap goods? So industry, it is thought, moves in a vicious circle of shorter hours and higher wages and less production, which in time must mean

THE "VICIOUS CIRCLE" 131

longer hours and lower wages; and every one receives less, because every one demands more.

The picture is plausible, but it is fallacious. It is fallacious not merely in its crude assumption that a rise in wages necessarily involves an increase in costs, but for another and more fundamental reason. In real- ity the cause of economic confusion is not that the demands of producer and consumer meet in blunt op- position; for, if they did, their incompatibility, when they were incompatible, would be obvious, and neither could deny his responsibility to the other, however much he might seek to evade it It is that they do not, but that, as industry is organized to-day, what the worker foregoes the general body of consumers does not neces- sarily gain, and what the consumer pays the general body of workers does not necessarily receive. If the circle is vicious, its vice is not that it is closed, but that it is always half open, so that part of production leaks away in consumption which adds nothing to pro- ductive energies, and that the producer, because he knows this, does not fully use even the productive energy which he commands.

It is the consciousness of this leak which sets every one at cross purposes. 'No conceivable system of indus- trial organization can secure industrial peace, if by " peace " is meant a complete absence of disagreement. What could be secured would be that disagreements should not flare up into a beacon of class warfare. If every member of a group puts something into a common pool on condition of taking something out, they may still quarrel about the size of the shares, as children quarrel

132 THE ACQUISITIVE SOCIETY

over cake ; but if the total is known and the claims ad- mitted, that is aU they can quarrel about, and, since they all stand on the same footing, any one who holds out for more than his fellows must show some good reason why he should get it. But in industry the claims are not all admitted, for those who put nothing in de- mand to take something out ; both the total to be divided and the proportion in which the division takes place are sedulously concealed; and those who preside over the distribution of the pool and control what is paid out of it have a direct interest in securing as large a share as possible for themselves and in allotting as small a share as possible to others. If one contributor takes less, so far from it being evident that the gain will go to some one who has put something in and has as good a right