An Inquiry Into The Nature Of Peace And The Terms Of Its Perpetuation

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Class distinctions, except pecuniary distinctions, have fallen away. But
all these modern nations are made up of pecuniary classes, differing
from one another by minute gradations in the marginal cases, but
falling, after all, and in the large, into two broadly and securely
distinguishable pecuniary categories: those who have more and those who
have less. Statisticians have been at pains to ascertain that a
relatively very small numerical minority of the citizens in these modern
nations own all but a relatively very small proportion of the aggregate
wealth in the country. So that it appears quite safe to say that in such
a country as America, e.g., something less than ten percent of the
inhabitants own something more than ninety percent of the country's
wealth. It would scarcely be a wild overstraining of its practical
meaning to say that this population is made up of two classes: those who
own the country's wealth, and those who do not. In strict accuracy, as
before the law, this characterisation will not hold; whereas in
practical effect, it is a sufficiently close approximation. This latter
class, who have substantially no other than a fancied pecuniary interest
in the nation's material fortunes, are the category often spoken of as
The Common Man. It is not necessary, nor is it desired, to find a
corresponding designation for the other category, those who own.

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

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

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

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

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

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

* * * * *

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

* * * * *

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

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

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

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

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

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

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

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

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

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

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

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

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