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For the purposes of a genetic inquiry into this modern business situation and its bearing on the sense of workmanship and on the technological phenomena in which that instinct comes to an expression, it is necessary summarily to recall certain current facts pertinent to the case: (a) It is a competitive system; that is to say it is a system of pecuniary rivalry and contention which proceeds on stable institutions of property and contract, under conditions of peace and order. (b) It is a price system, i. e., the competition runs in terms of money, and the money unit is the standard measure of efficiency and achievement; hence competition and efficiency are subject to a rigorous accountancy in terms of a (putatively) stable money unit, which is in all business traffic assumed to be invariable. (c) Technologically this situation is dominated by the mechanical industries; so much so that even the arts of husbandry have latterly taken on much of the character of the mechanic arts. Hence a somewhat thoroughgoing standardisation of processes and products in mechanical terms; which for businesspurposes has with a fair degree of success been made convertible into terms of price, and so made subject to accountancy in terms of price. (d) Hence consumption is also standardised, proximately in mechanical terms of consumable products but finally, through the mechanism of the market, in terms of price, and like other price phenomena consumption also is competitively subject to and enforced by the like accountancy in terms of the money unit. (e) The typical industries, which set the pace for productive work, for competitive gains, and through the standard rates of gain ultimately also for competitive consumption, are industries carried on on a large scale; that is to say they are such as to require a large material equipment, a wide recourse to technological insight and proficiency, and a large draught on the material resources of the community. (f) This material equipment—industrial plant and natural resources—is held in private ownership, with negligible exceptions; the noteworthy exceptions to this rule, as e. g., harbours, highways, and the like, serving chiefly as accessory means of industry and so come in chiefly as a gratuitous supplement to the industrial equipment held in private ownership and used for competitive gain. (g) Technological knowledge and proficiency is in the main held and transmitted pervasively by the community at large, but it is also held in part—more obviously because exceptionally—by specially trained classes and individual workmen. Relatively little, in effect a negligible proportion, of this technological knowledge and skill is in any special sense held by the owners of the industrial equipment, more particularly not by the owners of the typical large-scale industries. That is tosay, the technologically proficient workmen do not in the typical case own or control any appreciable proportion of the material equipment or of the natural resources to which this technological knowledge and skill applies and in the use of which it takes effect. (h) It results that the owners of this large material equipment, including the natural resources, have a discretionary control of the technological proficiency of the community at large, as well as of those special lines of insight and skill that are vested in these specially trained expert men in whom a specialised proficiency is added to the general proficiency that is diffused through the community at large. (i) In effect, therefore, the owners of the necessary material equipment own also the working capacity of the community and the usufruct of the state of the industrial arts. Except for their effective ownership of these elements of productive efficiency their ownership of the material equipment of industry would be of no effect. But the usufruct of this productive capacity of the community and its trained workmen vests in the owners of the material equipment only with the contingent qualification that if the community does this work it must be allowed a livelihood, whereby the gross returns that go in the first instance to these owners suffer abatement by that much. This required livelihood is adjusted to a conventional standard of living which, under the current circumstances of pecuniary emulation, is in great part—perhaps chiefly—a standardised schedule of conspicuous waste.
In what has just been said above, the view is implied that the owners of the material means, who are in great part also the employers of workmen and are sentimentallyspoken of as “captains of industry,” have, in effect and commonly, but a relatively loose grasp of the technological facts, possibilities, and requirements of modern industry, and that by virtue of their business training they are able to make but a scant and uncertain use of such loose ideas as they have on these heads. To anyone imbued with the commonplaces of current economic theory it may seem that exception should dutifully be taken to this view, as being an understatement of the businessmen’s technological merits. In current theoretical formulations the businessman is discussed under the caption of “entrepreneur,” “undertaker,” etc., and his gains are spoken of as “wages of superintendence,” “wages of management,” and the like. He is conceived as an expert workman in charge of the works, a superior foreman of the shop, and his gains are accounted a remuneration for his creative contribution to the process of production, due to his superior insight and initiative in technological matters. This conception of the businessman and his relation to industry has stood over from an earlier period, the period of the small-scale industry of handicraft and petty trade, when it still was true that the owner-employer, in the typical case, kept a personal oversight of his workmen and their work, and so filled the place of master-workman as well as that of buyer and seller of materials and finished goods. And such a characterisation of the businessman and his work will still hold true in the modern situation in so far as he still is occupied with industry conducted on the same small scale and continues to fill the place of a foreman of the shop. But under current conditions—the conditions of the past half century—and more particularly underthe conditions of that large-scale industry that is currently accounted the type of modern industry, the businessman has ceased to be foreman of the shop, and his surveillance of industry has ceased effectually to comprise a technological management of its details; and in corresponding measure this traditional theoretical conception of the businessman has ceased to apply.
The view here spoken for, that the modern businessman is necessarily out of effectual touch with the affairs of technology as such and incompetent to exercise an effectual surveillance of the processes of industry, is not a matter of bias or of vague opinion; it has in fact become a matter of statistical demonstration. Even a cursory survey of the current achievements of these great modern industries as managed by businessmen, taken in contrast with the opportunities offered them, should convince anyone of the technological unfitness of this business management of industry. Indeed, the captains of industry have themselves latterly begun to recognise their own inefficiency in this respect, and even to appreciate that a businessman’s management of industrial processes is not good even for the business purpose—the net pecuniary gain. And it is all the more ineffectual for the purposes of workmanship as distinct from the businessmen’s gains. So, a professional class of “efficiency engineers” is coming into action, whose duty it is to take invoice of the preventable wastes and inefficiencies due to the business management of industry and to present the case in such concrete and obvious terms of price and percentage as the businessmen in charge will be able to comprehend. These men, in a way, take over the functions assigned in economic theoryto the “entrepreneur;” in that they are men of general technological training and insight, who go into their inquiry on the ground of workmanship, take their data in terms of workmanship and convert them into terms of business expediency, somewhat to the same purpose as the like work of conversion was done by the owner-employers under that small-scale system of industrial enterprise from which the current theoretical concept of the “entrepreneur” was derived. It is then the duty of these efficiency engineers to present the results so obtained, for the conviction and guidance of the businessmen in charge, who thereupon, if their business training has left them enough of a sense of workmanship, will give permissive instructions to the expert workmen in direct charge of the industrial processes to put these statistically indicated changes into effect. It is the testimony of these efficiency engineers that relatively few pecuniary captains in command of industrial enterprises have a sufficient comprehension of the technological facts to understand and accept the findings of the technological experts who so argue for the elimination of preventable wastes, even when the issue is presented statistically in terms of price. These men go about their work of ascertaining the efficiency, actual and potential, of any given plant, process, working force, or parcel of material resources, by the methods of precise physical measurement familiar to mechanical engineers, and as an outcome they have no hesitation in speaking of preventable wastes amounting to ten, twenty, fifty, or even ninety per-cent, in the common run of American industries.119
The work of the efficiency engineers being always done in the service of business and with a view to business expediency, their findings bear directly on the business exigencies of the case alone, and give definitive results only in terms of price and profits. How much greater the ascertained discrepancies in the case would appear if these findings could be reduced to terms of serviceability to the community at large, there is no means of forming a secure conjecture. That the discrepancy would in such case prove to be appreciably greater than that shown by the price rating is not doubtful. Under such an appraisal, where the given industrial enterprises would be brought to the test of net serviceability to the community instead of the net gain of the interested businessmen, many industrial enterprises would doubtless show a waste of appreciably more than one hundred per cent of their current output, being rather disserviceable to the community’s material welfare than otherwise.
That the business community is so permeated with incapacity and lack of insight in technological matters is doubtless due proximately to the fact that their attention is habitually directed to the pecuniary issue of industrial enterprise; but more fundamentally and unavoidably it is due to the large volume and intricate complications of the current technological scheme, which will not permit any man to become a competent specialist in an alien and exacting field of endeavour, such as business enterprise, and still acquire and maintain an effectual working acquaintance with the state of the industrial arts. The current technological scheme cannot be mastered as a matter of commonplace information or a by-occupation incidental to another pursuit. Thesame advance to a large and exhaustive technological system, in the machine industry, that has thrown the direction of industrial affairs into the hands of men primarily occupied with pecuniary management has also made it impossible for men so circumstanced at all adequately to exercise the oversight and direction of industry thereby required at their hands. And the ancient principles of self-help and pecuniary gain by virtue of which these men are held to their work of business enterprise make it also impossible for them adequately to surrender the discretionary care of the industrial processes to other hands or to permit the management of industry to proceed on other than these same business principles.
This technological infirmity of the businessmen assuredly does not arise from a lack of interest in industry, since it is only out of the net product of industry that the business community’s gains are drawn—except so far as they are substantially gains of accountancy merely, due to an inflation of values. Perhaps no class of men have ever been more keenly alert in their interest in industrial matters than the modern businessmen; and this interest extends not only to the industrial ventures in which they may for the time be pecuniarily “interested,” but also and necessarily to other lines of industry that are more or less closely correlated with the one in which the given businessman’s fortunes are embarked; for under modern market conditions any given line of industrial enterprise is bound in endless relations of give and take with all the rest. But this unremitting attention of businessmen to the affairs of industry is a business attention, and, so far as may be,it touches nothing but the pecuniary phenomena connected with the ownership of industry; so that it comes rather to a training in the art of keeping in touch with the pecuniary run of business affairs while avoiding all undue intimacy with the technological facts of industry,—undue in the sense of being in excess of what may serve the needs of a comprehensive short-term outlook over market relations, and which would therefore divert attention from this main interest and befog the pecuniary logic by which businessmen are governed.
Probably, also, no class of men have ever bent more unremittingly to their work than the modern business community. Within the business community there is properly speaking no leisure class, or at least no idle class. In this respect there is a notable contrast between the business community and the landed interest. What there is to be found in this modern culture in the way of an idle class, considered as an institution, runs back for its origins and its specific traits to a more archaic cultural scheme; it is a survival from an earlier (predatory) phase of the pecuniary culture. In the nature of things an idle life of fashion is an affair of the nobility (gentry), of predatory antecedents and, under current conditions, of predatory-parasitic habits; and as regards those modern rich men who withdraw from the business community and fall into a state ofotium cum dignitate, it is commonly their fortune to be assimilated by a more or less ceremonial induction into the body of this quasi-predatory gentry or nobility and so assume an imitative colouring of archaism.
The business community is hard at work, and there is no place in it for anyone who is unable or unwilling towork at the high tension of the average; and since this close application to pecuniary work is of a competitive nature it leaves no chance for any of the competitors to apply himself at all effectually to other than pecuniary work. This high tension of work is felt to be very meritorious in all modern communities, somewhat in proportion as they are modern; as is necessarily the case in any work that is substantially of an emulative character. It spends itself on salesmanship, not on workmanship in the naïve sense; although the all-pervading preoccupation with pecuniary matters in modern times has led to its being accounted the type of workmanlike endeavour. It concerns itself ultimately with the pecuniary manipulation of the material equipment of industry, though there is much of it that does not bear immediately on that point. The exceptions under this broad proposition are more apparent than real, although there doubtless are exceptions actual as well as apparent. In such a case the business transactions in question are likely to bear on the ownership of certain specific elements of the immaterial technological equipment, as e. g., habits of thought covered by parent-right or mechanical expedients covered by franchise. Beyond these there are elements of “good-will” that are subject of traffic and that consist in preferential advantages in respect of purely pecuniary transactions having to do not with the material equipment but with the right to deal with it and its management, as e. g., in banking, underwriting, insurance, and the phenomena of the money market at large.
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But the mature business situation as it runs today is acomplex affair, large and intricate, wherein the effective relations in which business traffic stands to workmanship and to the community’s immaterial equipment of technological knowledge at large are greatly obscured by their own convolutions and by the institutional arrangements and convictions to which this traffic has given rise. So that the matter is best approached by way of a genetic exposition that shall take as its point of departure that simpler business enterprise of early modern times out of which the larger development of the present has grown by insensible accretions and displacements.
Business enterprise came in the course of time to take over the affairs of industry and so to withdraw these affairs from the tutelage of the gilds. This shifting of the effectual discretion in the management of industrial affairs came on gradually and in varying fashion and degree over a considerable interval of time. But the decisive general circumstance that enforced this move into the modern way of doing was an advance in the scope and method of workmanship.120What threw the fortunes of the industrial community into the hands of the owners of accumulated wealth was essentially a technological change, or rather a complex of technological changes, which so enlarged the requirements in respect of material equipment that the impecunious workmen could no longer carry on their trade except by a working arrangement with the owners of this equipment; wherebythe discretionary control of industry was shifted from the craftsmen’s technological mastery of the ways of industry to the owner’s pecuniary mastery of the material means. In the change that so took place to a larger technological scale much was doubtless due to the extension of trade, itself in great part an outcome of technological changes, directly and indirectly. For the craftsmen and their work the outcome was that recourse must be had to the material equipment owned by those who owned it, and on such terms as would content the owners; whereby the usufruct of the workmen’s proficiency and of the state of the industrial arts fell to the owners of the material equipment, on such terms as might be had.121So it fell to these owners of the material means and of the productsof industry to turn this technological situation to account for their own gain, with as little abatement as might be, and at the same time it became incumbent on them each and several competitively to divert as large a share of the community’s productive efficiency to his own profit as the circumstances would permit.