THE ECONOMIC PROCESS
I
A Bird's-Eye View
Let me try now and make some sort of general picture of the American
nation as it impresses itself upon me. It is, you will understand, the
vision of a hurried bird of passage, defective and inaccurate at every
point of detail, but perhaps for my present purpose not so very much
the worse for that. The fact that I am transitory and bring a sort of
theorizing naïveté to this review is just what gives me the chance
to remark these obvious things the habituated have forgotten. I have
already tried to render something of the effect of huge unrestrained
growth and material progress that America first gives one, and I
have pointed out that so far America seems to me only to refresh an
old impression, to give starkly and startlingly what is going on
everywhere, what is indeed as much in evidence in Birkenhead or Milan
or London or Calcutta, a huge extension of human power and the scale
of human operations. This growth was elaborated in the physical and
chemical laboratories and the industrial experiments of the eighteenth
and early nineteenth century, and chiefly in Europe. The extension
itself is nothing typically American. Nevertheless America now shows
it best. America is most under the stress and urgency of it, resonates
most readily and loudly to its note.
The long distances of travel, and the sense of isolation between place
and place, the remoteness verging upon inaudibility of Washington in
Chicago, of Chicago in Boston, the vision I have had of America from
observation cars and railroad windows brings home to me more and more
that this huge development of human appliances and resources is here
going on in a community that is still, for all the dense crowds of
New York, the teeming congestion of the East Side, extraordinarily
scattered. America, one recalls, is still an unoccupied country, across
which the latest developments of civilization are rushing. We are
dealing here with a continuous area of land which is, leaving Alaska
out of account altogether, equal to Great Britain, France, the German
Empire, the Austro-Hungarian Empire, Italy, Belgium, Japan, Holland,
Spain and Portugal, Sweden and Norway, Turkey in Europe, Egypt and
the whole Empire of India, and the population spread out over this
vast space is still less than the joint population of the first two
countries named and not a quarter that of India. Moreover, it is not
spread at all evenly. Much of it is in undistributed clots. It is not
upon the soil, barely half of it is in holdings and homes and authentic
communities. It is a population of an extremely modern type. Urban
concentration has already gone far with it; fifteen millions of it are
crowded into and about twenty great cities, other eighteen millions
make up five hundred towns. Between these centres of population run
railways indeed, telegraph wires, telephone connections, tracks of
various sorts, but to the European eye these are mere scratchings on
a virgin surface. An empty wilderness manifests itself through this
thin network of human conveniences, appears in the meshes even at the
railroad side. Essentially America is still an unsettled land, with
only a few incidental good roads in favored places, with no universal
police, with no wayside inns where a civilized man may rest, with
still only the crudest of rural postal deliveries, with long stretches
of swamp and forest and desert by the track side, still unassailed
by industry. This much one sees clearly enough eastward of Chicago.
Westward, I am told, it becomes more and more the fact. In Idaho at
last, comes the untouched and perhaps invincible desert, plain and
continuous through the long hours of travel. Huge areas do not contain
one human being to the square mile, still vaster portions fall short of
two....
And this community, to which material progress is bringing such
enormous powers, and that is knotted so densely here and there, and
is otherwise so attenuated a veil over the huge land surface, is,
as Professor Münsterberg points out, in spite of vast and increasing
masses of immigrants still a curiously homogeneous one, homogeneous
in the spirit of its activities and speaking a common tongue. It is
sustained by certain economic conventions, inspired throughout by
certain habits, certain trends of suggestion, certain phrases and
certain interpretations that collectively make up what one may call the
American Idea. To the process of enlargement and diffusion and increase
and multiplying resources, we must now bring the consideration of the
social and economic process that is going on. What is the form of that
process as one finds it in America? An English Tory will tell you
promptly, "a scramble for dollars." A good American will tell you it is
self realization under equality of opportunity. The English Tory will
probably allege that that amounts to the same thing.
Let us look into that.
II
Liberty of Property
One contrast between America and the old world I had in mind before
ever I crossed the Atlantic, and now it comes before me very
vividly,--returns reinforced by a hundred little things observed and
felt. The contrast consists in the almost complete absence from the
normal American scheme, of certain immemorial factors in the social
structure of our European nations.
In the first place, every European nation except the English is rooted
to the soil by a peasantry, and even in England one still finds
the peasant represented, in most of his features by those sons of
dispossessed serf-peasants, the agricultural laborers. Here in America,
except in the regions where the negro abounds, there is no lower
stratum, no "soil people," to this community at all; your bottom-most
man is a mobile free man who can read, and who has ideas above digging
and pigs and poultry keeping, except incidentally for his own ends.
No one owns to subordination. As a consequence, any position which
involves the acknowledgment of an innate inferiority is difficult to
fill; there is, from the European point of view, an extraordinary
dearth of servants, and this endures in spite of a great peasant
immigration. The servile tradition will not root here now, it dies in
this soil. An enormous importation of European serfs and peasants goes
on, but as they touch this soil their backs begin to stiffen with a new
assertion.
And at the other end of the scale, also, one misses an element. There
is no territorial aristocracy, no aristocracy at all, no throne,
no legitimate and acknowledged representative of that upper social
structure of leisure, power, State responsibility, which in the old
European theory of society was supposed to give significance to the
whole. The American community, one cannot too clearly insist, does not
correspond to an entire European community at all, but only to the
middle masses of it, to the trading and manufacturing class between the
dimensions of the magnate and the clerk and skilled artisan. It is the
central part of the European organism without either the dreaming head
or the subjugated feet. Even the highly feudal slave-holding "county
family" traditions of Virginia and the South pass now out of memory.
So that in a very real sense the past of this American community is in
Europe, and the settled order of the past is left behind there. This
community was, as it were, taken off its roots, clipped of its branches
and brought hither. It began neither serf nor lord, but burgher and
farmer, it followed the normal development of the middle class under
Progress everywhere and became capitalistic. Essentially America is
a middle-class become a community and so its essential problems are
the problems of a modern individualistic society, stark and clear,
unhampered and unilluminated by any feudal traditions either at its
crest or at its base.
It would be interesting and at first only very slightly misleading to
pursue the rough contrast of American and English conditions upon these
lines. It is not difficult to show for example, that the two great
political parties in America represent only one English party, the
middle-class Liberal party, the party of industrialism and freedom.
There are no Tories to represent the feudal system, and no Labor party.
It is history, it is no mere ingenious gloss upon history, that the
Tories, the party of the crown, of the high gentry and control, of
mitigated property and an organic state, vanished from America at the
Revolution. They left the new world to the Whigs and Nonconformists and
to those less constructive, less logical, more popular and liberating
thinkers who became Radicals in England, and Jeffersonians and then
Democrats in America. All Americans are, from the English point of
view, Liberals of one sort or another. You will find a fac-simile
of the Declaration of Independence displayed conspicuously and
triumphantly beside Magna Charter in the London Reform Club, to carry
out this suggestion.
But these fascinating parallelisms will lead away from the chief
argument in hand, which is that the Americans started almost clear
of the medieval heritage, and developed in the utmost--purity if you
like--or simplicity or crudeness, whichever you will, the modern type
of productive social organization. They took the economic conventions
that were modern and progressive at the end of the eighteenth century
and stamped them into the Constitution as if they meant to stamp
them there for all time. In England you can still find feudalism,
medievalism, the Renascence, at every turn. America is pure eighteenth
century--still crystallizing out from a turbid and troubled solution.
To turn from any European state to America is, in these matters anyhow,
to turn from complication to a stark simplicity. The relationship
between employer and employed, between organizer and worker, between
capital and labor, which in England is qualified and mellowed and
disguised and entangled with a thousand traditional attitudes and
subordinations, stands out sharply in a bleak cold rationalism. There
is no feeling that property, privilege, honor, and a grave liability
to official public service ought to go together, none that uncritical
obedience is a virtue in a worker or that subordination carries with
it not only a sense of service but a claim for help. Coming across the
Atlantic has in these matters an effect of coming out of an iridescent
fog into a clear bright air.
This homologization of the whole American social mass, not with the
whole English social mass, but with its "modern" classes, its great
middle portion, and of its political sides with the two ingredients of
English Liberalism, goes further than a rough parallel. An Englishman
who, like myself, has been bred and who has lived all his life either
in London, with its predominant West-End, or the southern counties with
their fair large estates and the great country houses, is constantly
being reminded, when he meets manufacturing and business men from
Birmingham or Lancashire, of Americans, and when he meets Americans,
of industrial North-country people. There is more push and less tacit
assumption, more definition, more displayed energy and less restraint,
more action and less subtlety, more enterprise and self-assertion than
there is in the typical Englishman of London and the home counties.
The American carries on the contrast further, it is true, and his
speech is not northernly, but marked by the accent of Hampshire or
East Anglia, and better and clearer than his English equivalent's;
but one feels the two are of the same stuff, nevertheless, and made
by parallel conditions. The liberalism of the eighteenth century, the
material progress of the nineteenth have made them both--out of the
undifferentiated Stuart Englishman. And they are the same in their
attitude towards property and social duty, individualists to the
marrow. But the one grew inside a frame of regal, aristocratic, and
feudal institutions, and has chafed against it, struggled with it,
modified it, strained it, and been modified by it, but has remained
within it; the other broke it and escaped to complete self-development.
The liberalism of the eighteenth century was essentially the rebellion
of the modern industrial organization against the monarchial and
aristocratic State,--against hereditary privilege, against restrictions
upon bargains--whether they were hard bargains or not. Its spirit
was essentially Anarchistic,--the antithesis of Socialism. It was
the anti-State. It aimed not only to liberate men but property from
State control. Its most typical expressions, the Declaration of
Independence, and the French Declaration of the Rights of Man, are
zealously emphatic for the latter interest--for the sacredness of
contracts and possessions. Post Reformation liberalism did to a large
extent let loose property upon mankind. The English Civil War of the
seventeenth century, like the American revolution of the eighteenth,
embodied essentially the triumphant refusal of private property to
submit to taxation without consent. In England the result was tempered
and qualified, security for private property was achieved, but not
cast-iron security; each man who had property became king of that
property, but only a constitutional and conditional king. In America
the victory of private property was complete. Let one instance suffice
to show how decisively it was established that individual property
and credit and money were sacred. Ten years ago the Supreme Court,
trying a case arising out of the General Revenue tax of 1894, decided
that a graduated income-tax, such as the English Parliament might pass
to-morrow, can never be levied upon the United States nation without
a change in the Constitution, which can be effected only by a vote of
two-thirds of both Houses of Congress as an initiative, and this must
be ratified either by the legislatures of three-fourths of the States,
or by special conventions representing three-fourths of the States.
The fundamental law of the States forbids any such invasion of the
individual's ownership. No national income-tax is legal, and there is
practically no power, short of revolution, to alter that....
Could anything be more emphatic? That tall Liberty with its spiky crown
that stands in New York Harbor and casts an electric flare upon the
world, is, indeed, the liberty of Property, and there she stands at the
Zenith....
III
Aggregation and Some Protests
Now the middle-class of the English population and the whole population
of America that matters at all when we discuss ideas, is essentially
an emancipated class, a class that has rebelled against superimposed
privilege and honor, and achieved freedom for its individuals and
their property. Without property its freedom is a featureless and
unsubstantial theory, and so it relies for the reality of life upon
that, upon the possession and acquisition and development of property,
that is to say upon "business." That is the quality of its life.
Everywhere in the modern industrial and commercial class this
deep-lying feeling that the State is something escaped from, has
worked out to the same mental habit of social irresponsibility, and in
America it has worked unimpeded. Patriotism has become a mere national
self-assertion, a sentimentality of flag cheering, with no constructive
duties. Law, social justice, the pride and preservation of the state
as a whole are taken as provided for before the game began, and one
devotes one-self to business. At business all men are held to be equal,
and none is his brother's keeper.
All men are equal at the great game of business. You try for the best
of each bargain and so does your opponent; if you chance to have more
in your hand than he--well, that's your advantage, and you use it.
Presently he may have more than you. You take care he doesn't if you
can, but you play fair--except for the advantage in your hand; you play
fair--and hard.
Now this middle-class equality ultimately destroys itself. Out of this
conflict of equals, and by virtue of the fact that property, like all
sorts of matter, does tend to gravitate towards itself whenever it is
free, there emerge the modern rich and the modern toiler.
One can trace the process in two or three generations in Lancashire or
the Potteries, or any industrial region of England. One sees first the
early Lancashire industrialism, sees a district of cotton-spinners more
or less equal together, small men all; then come developments, comes
a state of ideally free competition with some men growing large, with
most men dropping into employment, but still with ample chances for an
industrious young man to end as a prosperous master; and so through a
steady growth in the size of the organization to the present opposition
of an employer class in possession of everything, almost inaccessibly
above, and an employed class below. The railways come, and the wealthy
class reaches out to master these new enterprises, capitalistic from
the outset....
America is simply repeating the history of the Lancashire industrialism
on a gigantic scale, and under an enormous variety of forms.
But in England, as the modern Rich rise up, they come into a world of
gentry with a tradition of public service and authority; they learn
one by one and assimilate themselves to the legend of the "governing
class" with a sense of proprietorship which is also, in its humanly
limited way, a sense of duty to the state. They are pseudomorphs after
aristocrats. They receive honors, they inter-marry, they fall (and
their defeated competitors too fall) into the mellowed relationships
of an aristocratic system. That is not a permanent mutual attitude;
it does, however, mask and soften the British outline. Industrialism
becomes quasi-feudal. America, on the other hand, had no effectual
"governing class," there has been no such modification, no clouding
of the issue. Its Rich, to one's superficial inspection, do seem to
lop out, swell up into an immense consumption and power and inanity,
develop no sense of public duties, remain winners of a strange game
they do not criticise, concerned now only to hold and intensify their
winnings. The losers accept no subservience. That material progress,
that secular growth in scale of all modern enterprises, widens the gulf
between Owner and Worker daily. More and more do men realize that this
game of free competition and unrestricted property does not go on for
ever; it is a game that first in this industry and then in that, and
at last in all, can be played out and is being played out. Property
becomes organized, consolidated, concentrated, and secured. This is
the fact to which America is slowly awaking at the present time. The
American community is discovering a secular extinction of opportunity,
and the appearance of powers against which individual enterprise and
competition are hopeless. Enormous sections of the American public are
losing their faith in any personal chance of growing rich and truly
free, and are developing the consciousness of an expropriated class.
This realization has come slowlier in America than in Europe,
because of the enormous undeveloped resources of America. So long as
there was an unlimited extent of unappropriated and unexplored land
westward, so long could tension be relieved by so simple an injunction
as Horace Greeley's, "Go West, young man; go West." And to-day,
albeit that is no longer true of the land, and there are already
far larger concentrations of individual possessions in the United
States of America than anywhere else in the world, yet so vast are
their continental resources that it still remains true that nowhere
in the world is property so widely diffused. Consider the one fact
that America can take in three-quarters of a million of workers in
one year without producing a perceptible fall in wages, and you will
appreciate the scale upon which things are measured here, the scale
by which even Mr. J.D. Rockefeller's billion dollars becomes no more
than a respectable but by no means overwhelming "pile." For all these
concentrations, the western farmers still own their farms, and it is
the rule rather than the exception for a family to possess the freehold
of the house it lives in. But the process of concentration goes on
nevertheless--is going on now perceptibly to the American mind. That
it has not gone so far as in the European instance it is a question of
size, just as the gestation of an elephant takes longer than that of a
mouse. If the process is larger and slower, it is, for the reasons I
have given, plainer, and it will be discussed and dealt with plainly.
That steady trend towards concentration under individualistic rules,
until individual competition becomes disheartened and hopeless, is the
essential form of the economic and social process in America as I see
it now, and it has become the cardinal topic of thought and discussion
in the American mind.
[Illustration: WESTERN FARMERS STILL OWN THEIR FARMS]
This realization has been reached after the most curious hesitation.
There is every reason for this; for it involves the contradiction
of much that seems fundamental in the American idea. It amounts to a
national change of attitude. It is a conscious change of attitude that
is being deliberately made.
This slow reluctant process of disillusionment with individualism is
interestingly traceable through the main political innovations of the
last twenty years. There was the discovery in the east that the supply
of land was not limitless, and we had the Single Tax movement, and
the epoch of the first Mr. Henry George. He explained fervently of
course, how individualistic, how profoundly American he was--but land
was not to be monopolized. Then came the discovery in the west that
there were limits to borrowing and that gold appreciated against the
debtor, and so we have the Populist movement and extraordinary schemes
for destroying the monopolization of gold and credit. Mr. Bryan led
that and nearly captured the country, but only in last May's issue of
the _Century Magazine_ I found him explaining (expounding meanwhile a
largely socialistic programme) that he too is an Individualist of the
purest water. And then the attack shifted to the destruction of free
competition by the trusts. The small business went on sufferance, 'not
knowing from week to week when its hour to sell out or fight might
come. The Trusts have crushed competition, raised prices against the
consumer, and served him often quite abominably. The curious reader
may find in Mr. Upton Sinclair's essentially veracious _Jungle_ the
possibilities of individualistic enterprise in the matter of food and
decency. The States have been agitated by a big disorganized Anti-Trust
movement for some years, it becomes of the gravest political importance
at every election, and the sustained study of the affairs and methods
of that most typical and prominent of trust organizations, the Standard
Oil Company, by Miss Tarbell and a host of followers, is bringing to
light more and more clearly the defencelessness of the common person,
and his hopelessness, however enterprising, as a competitor against
those great business aggregations. His faith in all his reliances and
securities fades in the new light that grows about him, he sees his
little investments, his insurance policy, his once open and impartial
route to market by steamboat and rail, all passing into the grip of the
great property accumulators. The aggregation of property has created
powers that are stronger than state legislatures and more persistent
than any public opinion can be, that have no awe and no sentiment for
legislation, that are prepared to disregard it or evade it whenever
they can.
And these aggregations are taking on immortality and declining to
disintegrate when their founders die. The Astor property, the Jay
Gould property, the Marshall Field property, for example, do not
break up, become undying centres for the concentration of wealth, and
it is doubtful if there is any power to hinder such a development of
perpetual fortunes. In England when Thelussen left his investments to
accumulate, a simple little act of Parliament set his will aside. But
Congress is not sovereign, there is no national sovereign power in
America, and Property in America, it would seem, is absolutely free to
do these things. So you have President Roosevelt in a recent oration
attacking the man with the Muck Rake (who gathered vile dross for the
love of it), and threatening the limitation of inheritance. But he too,
quite as much as Mr. Bryan, assures the public that he is a fervent
individualist.
So in this American community, whose distinctive conception is its
emphatic assertion of the freedom of individual property, whose very
symbol is that spike-crowned Liberty gripping a torch in New York
Harbor, there has been and is going on a successive repudiation of that
freedom in almost every department of ownable things by considerable
masses of thinking people, a denial of the soundness of individual
property in land, an organized attempt against the accumulation of
gold and credit, by a systematic watering of the currency, a revolt
against the aggregatory outcome of untrammelled business competition, a
systematic interference with the freedom of railways and carriers to do
business as they please, and a protest from the most representative of
Americans against hereditary wealth....
That, in general terms, is the economic and social process as one sees
it in America now, a process of systematically concentrating wealth on
the part of an energetic minority, and of a great insurgence of alarm,
of waves of indignation and protest and threat on the part of that
vague indefinite public that Mr. Roosevelt calls the "nation."
And this goes on side by side with a process of material progress
that partly masks its quality, that keeps the standard of life from
falling and prevents any sense of impoverishment among the mass of
the losers in the economic struggle. Through this material progress
there is a constant substitution of larger, cleaner, more efficient
possibilities, and more and more wholesale and far-sighted methods of
organization for the dark, confused, untidy individualistic expedients
of the Victorian time. An epoch which was coaly and mechanical,
commercial and adventurous after the earlier fashion is giving place,
almost automatically, to one that will be electrical and scientific,
artistic and creative. The material progress due to a secular increase
in knowledge, and the economic progress interfere and combine with and
complicate one another, the former constantly changes the forms and
appliances of the latter, changes the weapons and conditions, and may
ultimately change the spirit and conceptions of the struggle. The
latter now clogs and arrests the former. So in its broad features, as
a conflict between the birth strength of a splendid civilization and a
hampering commercialism, I see America.