HOSTILITY OF A SYSTEM OF VESTED INTERESTS TO IMPROVEMENT.
"Now, Florence," said the teacher, "with your assistance we will take up
the closing topic in our consideration of the economic system of our
fathers--namely, its hostility to invention and improvement. It has been
our painful duty to point out numerous respects in which our respected
ancestors were strangely blind to the true character and effects of their
economic institutions, but no instance perhaps is more striking than
this. Far from seeing the necessary antagonism between private capitalism
and the march of improvement which is so plain to us, they appear to have
sincerely believed that their system was peculiarly favorable to the
progress of invention, and that its advantage in this respect was so
great as to be an important set-off to its admitted ethical defects. Here
there is decidedly a broad difference in opinion, but fortunately the
facts are so well authenticated that we shall have no difficulty in
concluding which view is correct.
"The subject divides itself into two branches: First, the natural
antagonism of the old system to economic changes; and, second, the effect
of the profit principle to minimize if not wholly to nullify the benefit
of such economic improvements as were able to overcome that antagonism so
far as to get themselves introduced.--Now, Florence, tell us what there
was about the old economic system, the system of private capitalism,
which made it constitutionally opposed to changes in methods."
"It was," replied the girl, "the fact that it consisted of independent
vested interests without any principle of coordination or combination,
the result being that the economic welfare of every individual or group
was wholly dependent upon his or its particular vested interest without
regard to others or to the welfare of the whole body."
"Please bring out your meaning by comparing our modern system in the
respect you speak of with private capitalism."
"Our system is a strictly integrated one--that is to say, no one has any
economic interest in any part or function of the economic organization
which is distinct from his interest in every other part and function. His
only interest is in the greatest possible output of the whole. We have
our several occupations, but only that we may work the more efficiently
for the common fund. We may become very enthusiastic about our special
pursuit, but as a matter of sentiment only, for our economic interests
are no more dependent upon our special occupation than upon any other. We
share equally in the total product, whatever it is."
"How does the integrated character of the economic system affect our
attitude toward improvements or inventions of any sort in economic
processes?"
"We welcome them with eagerness. Why should we not? Any improvement of
this sort must necessarily redound to the advantage of every one in the
nation and to every one's advantage equally. If the occupation affected
by the invention happens to be our particular employment we lose nothing,
though it should make that occupation wholly superfluous. We might in
that case feel a little sentimental regret over the passing away of old
habits, but that is all. No one's substantial interests are in any way
more identified with one pursuit than another. All are in the service of
the nation, and it is the business and interest of the nation to see that
every one is provided with other work as soon as his former occupation
becomes unnecessary to the general weal, and under no circumstances is
his rate of maintenance affected. From its first production every
improvement in economic processes is therefore an unalloyed blessing to
all. The inventor comes bringing a gift of greater wealth or leisure in
his hand for every one on earth, and it is no wonder that the people's
gratitude makes his reward the most enviable to be won by a public
benefactor."
"Now, Florence, tell us in what way the multitude of distinct vested
interests which made up private capitalism operated to produce an
antagonism toward economic inventions and improvements."
HOW PROGRESS ANTAGONIZED VESTED INTERESTS.
"As I have said," replied the girl, "everybody's interest was wholly
confined to and bound up with the particular occupation he was engaged
in. If he was a capitalist, his capital was embarked in it; if he was an
artisan, his capital was the knowledge of some particular craft or part
of a craft, and he depended for his livelihood on the demand for the sort
of work he had learned how to do. Neither as capitalist or artisan, as
employer or employee, had he any economic interest or dependence outside
of or larger than his special business. Now, the effect of any new idea,
invention, or discovery for economic application is to dispense more or
less completely with the process formerly used in that department, and so
far to destroy the economic basis of the occupations connected with that
business. Under our system, as I have said, that means no loss to
anybody, but simply a shifting of workers, with a net gain in wealth or
leisure to all; but then it meant ruin to those involved in the change.
The capitalist lost his capital, his plant, his investments more or less
totally, and the workingmen lost their means of livelihood and were
thrown on what you well called the cold charity of the world--a charity
usually well below zero; and this loss without any rebate or compensation
whatever from the public at large on account of any general benefit that
might be received from the invention. It was complete. Consequently, the
most beneficent of inventions was cruel as death to those who had been
dependent for living or for profit on the particular occupations it
affected. The capitalists grew gray from fear of discoveries which in a
day might turn their costly plants to old iron fit only for the junkshop,
and the nightmare of the artisan was some machine which should take bread
from his children's mouths by enabling his employer to dispense with his
services.
"Owing to this division of the economic field into a set of vested
personal and group interests wholly without coherency or integrating
idea, each standing or falling by and for itself, every step in the
advance of the arts and sciences was gained only at the cost of an amount
of loss and ruin to particular portions of the community such as would be
wrought by a blight or pestilence. The march of invention was white with
the bleaching bones of innumerable hecatombs of victims. The spinning
jenny replaced the spinning wheel, and famine stalked through English
villages. The railroad supplanted the stagecoach, and a thousand hill
towns died while as many sprang up in the valleys, and the farmers of the
East were pauperized by the new agriculture of the West. Petroleum
succeeded whale-oil, and a hundred seaports withered. Coal and iron were
found in the South, and the grass grew in the streets of the Northern
centers of iron-making. Electricity succeeded steam, and billions of
railroad property were wiped out. But what is the use of lengthening a
list which might be made interminable? The rule was always the same:
every important invention brought uncompensated disaster to some portion
of the people. Armies of bankrupts, hosts of workers forced into
vagabondage, a sea of suffering of every sort, made up the price which
our ancestors paid for every step of progress.
"Afterward, when the victims had been buried or put out of the way, it
was customary with our fathers to celebrate these industrial triumphs,
and on such occasions a common quotation in the mouths of the orators was
a line of verse to the effect that--
"Peace hath her victories not less renowned than those of war.
The orators were not wont to dwell on the fact that these victories of
what they so oddly called peace were usually purchased at a cost in human
life and suffering quite as great as--yes, often greater than--those of
so-called war. We have all read of Tamerlane's pyramid at Damascus made
of seventy thousand skulls of his victims. It may be said that if the
victims of the various inventions connected with the introduction of
steam had consented to contribute their skulls to a monument in honor of
Stevenson or Arkwright it would dwarf Tamerlane's into insignificance.
Tamerlane was a beast, and Arkwright was a genius sent to help men, yet
the hideous juggle of the old-time economic system made the benefactor
the cause of as much human suffering as the brutal conqueror. It was bad
enough when men stoned and crucified those who came to help them, but
private capitalism did them a worse outrage still in turning the gifts
they brought into curses."
"And did the workers and the capitalists whose interests were threatened
by the progress of invention take practical means of resisting that
progress and suppressing the inventions and the inventors?"
"They did all they could in that way. If the working-men had been strong
enough they would have put an absolute veto on inventions of any sort
tending to diminish the demand for crude hand labor in their respective
crafts. As it was, they did all it was possible for them to accomplish in
that direction by trades-union dictation and mob violence; nor can any
one blame the poor fellows for resisting to the utmost improvements which
improved them out of the means of livelihood. A machine gun would have
been scarcely more deadly if turned upon the workingmen of that day than
a labor-saving machine. In those bitter times a man thrown out of the
employment he had fitted himself for might about as well have been shot,
and if he were not able to get any other work, as so many were not, he
would have been altogether better off had he been killed in battle with
the drum and fife to cheer him and the hope of a pension for his family.
Only, of course, it was the system of private capitalism and not the
labor-saving machine which the workingmen should have attacked, for with
a rational economic system the machine would have been wholly
beneficent."
"How did the capitalists resist inventions?"
"Chiefly by negative means, though much more effective ones than the mob
violence which the workingmen used. The initiative in everything belonged
to the capitalists. No inventor could introduce an invention, however
excellent, unless he could get capitalists to take it up, and this
usually they would not do unless the inventor relinquished to them most
of his hopes of profit from the discovery. A much more important
hindrance to the introduction of inventions resulted from the fact that
those who would be interested in taking them up were those already
carrying on the business the invention applied to, and their interest was
in most cases to suppress an innovation which threatened to make obsolete
the machinery and methods in which their capital was invested. The
capitalist had to be fully assured not only that the invention was a good
one in itself, but that it would be so profitable to himself personally
as to make up for all the damage to his existing capital before he would
touch it. When inventions wholly did away with processes which had been
the basis of profit-charging it was often suicidal for the capitalist to
adopt them. If they could not suppress such inventions in any other way,
it was their custom to buy them up and pigeonhole them. After the
Revolution there were found enough of these patents which had been bought
up and pigeonholed in self-protection by the capitalists to have kept the
world in novelties for ten years if nothing more had been discovered. One
of the most tragical chapters in the history of the old order is made up
of the difficulties, rebuffs, and lifelong disappointments which
inventors had to contend with before they could get their discoveries
introduced, and the frauds by which in most cases they were swindled out
of the profits of them by the capitalists through whom their introduction
was obtained. These stories seem, indeed, well-nigh incredible nowadays,
when the nation is alert and eager to foster and encourage every stirring
of the inventive spirit, and every one with any sort of new idea can
command the offices of the administration without cost to safeguard his
claim to priority and to furnish him all possible facilities of
information, material, and appliances to perfect his conception."
"Considering," said the teacher, "that these facts as to the resistance
offered by vested interests to the march of improvement must have been
even more obvious to our ancestors than to us, how do you account for the
belief they seem to have sincerely held that private capitalism as a
system was favorable to invention?"
"Doubtless," replied the girl, "it was because they saw that whenever an
invention was introduced it was under the patronage of capitalists. This
was, of course, necessarily so because all economic initiative was
confined to the capitalists. Our forefathers, observing that inventions
when introduced at all were introduced through the machinery of private
capitalism, overlooked the fact that usually it was only after exhausting
its power as an obstruction to invention that capital lent itself to its
advancement. They were in this respect like children who, seeing the
water pouring over the edge of a dam and coming over nowhere else, should
conclude that the dam was an agency for aiding the flow of the river
instead of being an obstruction which let it over only when it could be
kept back no longer."
* * * * *
"Our lesson," said the teacher, "relates in strictness only to the
economic results of the old order, but at times the theme suggests
aspects of former social conditions too important to pass without
mention. We have seen how obstructive was the system of vested interests
which underlaid private capitalism to the introduction of improvements
and inventions in the economic field. But there was another field in
which the same influence was exerted with effects really far more
important and disastrous.--Tell us, Florence, something of the manner in
which the vested interest system tended to resist the advance of new
ideas in the field of thought, of morals, science, and religion."
"Previous to the great Revolution," the girl replied, "the highest
education not being universal as with us, but limited to a small body,
the members of this body, known as the learned and professional classes,
necessarily became the moral and intellectual teachers and leaders of the
nation. They molded the thoughts of the people, set them their standards,
and through the control of their minds dominated their material interests
and determined the course of civilization. No such power is now
monopolized by any class, because the high level of general education
would make it impossible for any class of mere men to lead the people
blindly. Seeing, however, that such a power was exercised in that day and
limited to so small a class, it was a most vital point that this class
should be qualified to discharge so responsible a duty in a spirit of
devotion to the general weal unbiased by distracting motives. But under
the system of private capitalism, which made every person and group
economically dependent upon and exclusively concerned in the prosperity
of the occupation followed by himself and his group, this ideal was
impossible of attainment. The learned class, the teachers, the preachers,
writers, and professional men were only tradesmen after all, just like
the shoemakers and the carpenters, and their welfare was absolutely bound
up with the demand for the particular sets of ideas and doctrines they
represented and the particular sorts of professional services they got
their living by rendering. Each man's line of teaching or preaching was
his vested interest--the means of his livelihood. That being so, the
members of the learned and professional class were bound to be affected
by innovations in their departments precisely as shoemakers or carpenters
by inventions affecting their trades. It necessarily followed that when
any new idea was suggested in religion, in medicine, in science, in
economics, in sociology, and indeed in almost any field of thought, the
first question which the learned body having charge of that field and
making a living out of it would ask itself was not whether the idea was
good and true and would tend to the general welfare, but how it would
immediately and directly affect the set of doctrines, traditions, and
institutions, with the prestige of which their own personal interests
were identified. If it was a new religious conception that had been
suggested, the clergyman considered, first of all, how it would affect
his sect and his personal standing in it. If it were a new medical idea,
the doctor asked first how it would affect the practice of the school he
was identified with. If it was a new economic or social theory, then all
those whose professional capital was their reputation as teachers in that
branch questioned first how the new idea agreed with the doctrines and
traditions constituting their stock in trade. Now, as any new idea,
almost as a matter of course, must operate to discredit previous ideas in
the same field, it followed that the economic self-interest of the
learned classes would instinctively and almost invariably be opposed to
reform or advance of thought in their fields.
"Being human, they were scarcely more to be blamed for involuntarily
regarding new ideas in their specialties with aversion than the weaver or
the brickmaker for resisting the introduction of inventions calculated to
take the bread out of his mouth. And yet consider what a tremendous,
almost insurmountable, obstacle to human progress was presented by the
fact that the intellectual leaders of the nations and the molders of the
people's thoughts, by their economic dependence upon vested interests in
established ideas, were biased against progress by the strongest motives
of self-interest. When we give due thought to the significance of this
fact, we shall find ourselves wondering no longer at the slow rate of
human advance in the past, but rather that there should have been any
advance at all."