Thorstein Veblen The Modern Point of View and the New Order. VI. THE DIVINE RIGHT OF NATIONS The Dial. A Fortnightly (New York) Vol. LXV (June 20 to December 28, 1918) No. 780, Dec., 28, 1918, pp. 605-611 ------------------------------------------------------------------------- [605] The Modern Point of View and the New Order VI. THE DIVINE RIGHT OF NATIONS THIS SINISTER FACT is patent, that the great war has arisen out of a fateful complication of national ambitions. And it is a fact scarcely less patent that this fateful status quo arose out of the ordinary run of that system of law and custom which has governed human intercourse among civilized nations in our time. The underlying principles of this system of law and custom have continued to govern human intercourse under a new order of material circumstances which has come into effect since these principles were first installed. These enlightened principles that go to make up the modern point of view as regards law and morals are of the eighteenth century, whereas the new order in industry is of the twentieth, and between these two dates lies an interval of unexampled change in the material conditions of life. The great war which is now coming to a provisional close is the largest and most atrocious epoch of warfare known to history, and it has, in point of fact, arisen out of the status quo created by these enlightened principles of the modern point of view in working out their consequences on the ground of the new order of industry. The great war arose within that group of nations which have the full use of the industrial arts, which conduct their business and control their industries on the lines of these enlightened principles of the eighteenth century, and whose national ambitions and policies are guided by the preconceptions of national self-determination and self-assertion which these modern civilized peoples have habitually found to be good and valid. The group of belligerents has included primarily the great industrial nations, and the outcome of the war is being decided by the industrial superiority of the advanced industrial peoples. A host of slightly backward peoples backward in the industrial respect have been drawn into this contest of the great powers, but these have taken part only as interested outliers and as auxiliaries to be drawn on at the discretion of the chief belligerents. It has been a contest of technological superiority and industrial resources, and in the end the decision of it rests with the greater aggregation of industrial forces. Frightfulness and warlike abandon and all the beastly devices of the heathen have proved to be unavailing against the great industrial powers. The center of the warlike disturbance has been the same as the center of growth and diffusion of the new order of industry. And in both respects, both as regards participation in the war and as regards their share in the new order of industry, it is not a question of geographical nearness to a geographical center, but of industrial affiliation and technological maturity. The center of disturbance and participation is a center in the technological respect, and in the end the battle goes to those few great industrial peoples who are nearest, technologically speaking, to the apex of growth of the new order. These need be superior in no other respect; the contest is decided on the merits of the industrial arts. And in this connection it may be in place to call to mind again that the state of the industrial arts is always a joint stock of knowledge and proficiency held, exercised, and carried forward by the industrial community at large as a going concern. What the war has vindicated, hitherto, is the great efficiency of the mechanical industry. But the ambitions and animosities which precipitated this contest, and which now stand ready to bring on a relapse, are not of the industrial order, and eminently not of the new order of technology. They have been more nearly bound up with those principles of self-help that have stood over from the recent past, from the time before the new order of industry came into bearing. And there is a curious parallel between the consequences worked out by these principles in the economic system within each of these nations, on the one hand, and in the concert of nations, on the other hand. Within the nation the enlightened principles of self-help and free contract have given rise to vested interests, which control the industrial system for their own use and thereby come in for a legal right to the community's net output of product over cost. Each of these vested interests habitually aims to take over as much as it can of the lucrative traffic that goes on, and to get as much as it can out of the traffic, at the cost of the rest of the community. After the same analogy, and by sanction of the same liberal principles, the civilized nations, each and several, are vested with an inalienable right of "self-determination"; which being interpreted means the self-aggrandizement of each and several at the cost of the rest, by a reasonable use of force and fraud. And there has been, on the whole, no sense of shame or of moral obliquity attaching to the use of so much [606] force and fraud as the traffic would bear, in this national enterprise of self- aggrandizement. Such has been use and wont among the civilized nations. Meantime the new order of industry has come into bearing, with the result that any disturbance which is set afoot by any one of these self-determining nations in pursuing its own ends is sure to derange the conditions of life for all the others, just so far as these others are bound up in the same comprehensive organization of trade and industry. Full and free self-determination runs counter to the rule of Live and Let Live. After the same fashion the businesslike maneuvers of the vested interests within the nations, each managing its own affairs with an eye single to its own advantage, derange the ordinary conditions of life for the common man, and violate the rule of Live and Let Live by that much. Self-determination, full and free, necessarily encroaches on the life of all the others. So just now there is talk of disallowing or abridging the inalienable right of free nations by so much as is imperatively demanded for reasonably secure conditions of life among these civilized peoples, and especially so far as is required for the orderly pursuit of profitable business by the many vested interests domiciled in these civilized countries. The project has much in common with the measures which have been entertained for the restraint of any insufferably extortionate vested interests within the national frontiers. In both cases alike, both in the proposed regulation of businesslike excesses at home and in the proposed league of pacific nations, the projected measures of sobriety and tolerance appear to be an infraction of that inalienable right of self-direction that makes up the substantial core of law and custom according to the modern point of view. And in both cases alike the projected measures are designed to go no farther than is unequivocally demanded by the imperative needs of continued life on earth, leaving the benefit of the doubt always on the side of the insufferable vested interests or the mischievous national ambitions, as the case may be, and leaving the impression that it all is a concessive surrender of principles under compulsion of circumstances that will not wait. There is also in both cases alike a well-assured likelihood that the tentative revision of vested interests and of national pretensions is to be no more than an incompetent remedial precaution, a makeshift shelter from the wrath to come. It is evident that in both cases alike we have to do with an incursion of ideas and considerations that are alien to the established liberal principles of human intercourse; but it is also evident that these ideas and considerations have the sanction of that new order of things that runs in terms of tangible performance and enforces its requisitions with cruel and unusual punishments. It is these punishments that are to be evaded or suspended, and immunity is sought by measures of formality rather than by tangible performance. In such a case the keepers of the established order will always look to evasion, and entertain a hope of avoiding casualties and holding the line by cleverly designed masquerade. It is the express purpose of the projected league of pacific nations to keep the sovereign rights of national self-determination intact for all comers; it is to be a league of nations, not a league of peoples. But it should be sufficiently obvious, whether it is avowed or not, that these sovereign rights can be maintained by these means only in a truncated form. Within the framework of any such league or common understanding the nations, each and several, can continue to exercise these rights only on the basis of a mutual agreement to give up so much of their national pretensions as are incompatible with the common good. It involves a concessive surrender of the sovereign right of self-aggrandizement, and perhaps also an extension of the rule of Live and Let Live to cover minor nationalities within the national frontiers a mutual agreement to play fair under the new rules that are to govern the conduct of national enterprise. But hitherto no liberal statesman has been so audacious as to "imagine the king's death" and lay profane hands on the divine right of nations to seek their own advantage at the cost of the rest by such means as the rule of reason shall decide to be permissible. It is only that license is to be hedged about, and all insufferable superfluity of naughtiness is provisionally to be disallowed. There is this evident resemblance and kinship between the vested interests of business and the sovereign rights of nations, but it does not amount to identity. There is always something more to the national sovereignty and the national pretensions, although these precautionary measures that are now under advisement as touches the legitimate bounds of both do run on singularly similar lines and are of a similarly tentative and equivocal nature. In the prudent measures by which statesmen have set themselves to curb the excesses of the greater vested interests their aim has quite consistently been to guard the free income of the lesser vested interests against the unseasonable rapacity of the greater ones, all the while that the underlying community has come into the case only as a fair field of business enterprise at large, within which there is to be maintained a reasonable degree of equal opportunity [607] among these interests, big and little, in whom, one with another, vests the effectual usufruct of the underlying community. So, on the other hand, the great war has brought into a strong light the obvious fact that, given the existing state of the industrial arts, any unseasonable rapacity on the part of the Great Powers in exercising their inalienable right of national self-determination will effectually suppress the similarly inalienable right of self-determination in any minor nationality that gets in the way. All of which is obnoxious to the liberal principle of self-help or to that of equal opportunity. Unhappily, these two guiding principles of the modern point of view have proved to be incompatible with one another under the circumstances of the new order of things. So there has come into view this project of a league by which it is proposed to play fast and loose with the inalienable right of national self-help by setting up some sort of a collusive arrangement between the Powers, looking to a reasonable disallowance of force and fraud in the pursuit of national ambitions. Under the material circumstances of the new order those correctives that were once counted on to keep the run of things within the margin of tolerance have ceased to be a sufficient safeguard. By use and wont, in the liberal scheme of statecraft as well as in the scheme of freely competitive business, implicit faith has hitherto been given to the remedial effect of punitive competition and the punitive correction of excesses by law and custom. It has been a system of adjustment by punitive after thought. All of which may once have been well enough in its time, so long as the rate and scale of the movement of things were slow enough and small enough to be effectually overtaken and set to rights by afterthought. The modern point of view presumes an order of things which is amenable to remedial adjustment after the event. But the new order of industry, and that sweeping equilibrium of material forces that embodies the new order, is not amenable to afterthought. However, ripe statesmen and overripe captains of finance have so secure a grasp of first principles that they are still able to believe quite sincerely in the good old plan of remedial afterthought, and it still commands the affectionate service of the jurists and the diplomatic corps. Meantime the far-reaching, swift-moving, wide-sweeping machine technology has been drawn into the service of national pretensions, as well as of the vested interests that find shelter under the national pretensions, and both the remedial diplomats and the self- determination of nations are on the way to become a tale that was told. The divine right of nations appears to be a blurred after-image of the divine right of kings. It rests on ground more archaic and less open to scrutiny than the natural right of self-direction as it applies in the case of individual persons. It is a highly prized national asset, in the nature of an imponderable; and, very much as is true of the divine right of kings, any spoken doubt of its paramount validity comes near being a sin against the Holy Ghost. As is true of the divine right of kings, so also as regards the divine right of nations, it is extremely difficult to show that it serves the common good in any material way, in any way that can be formulated or verified in terms of tangible performance. Evidently it does not come in under that mechanistic conception that rules the scheme of knowledge and belief wherever and so far as material science and the machine technology have reshaped men's habits of thought. Indeed it is not a technological conception, late or early. It is not statable in terms of mechanical efficiency, or even in terms of price. Hence it is spoken of, often and eloquently, as being "beyond price." It is more nearly akin to magic and religion. It should perhaps best be conceived as an end in itself, or a thing- in-itself again in close analogy with the divine right of kings. But there is no question of its substantial reality and its paramount efficacy for good and ill. The divine that is to say inscrutable and irresponsible right of kings reached its best estate and put on divinity in the stirring times of the era of state- making; when the princes and prelates "tore each other in the slime." It was of a proprietary nature, a vested interest, something in the nature of intangible assets, which embodied the usufruct of the realm, including its population and resources, and which could be turned to account in the pursuit of princely or dynastic advantage at home and abroad. This divine right of princes was disallowed among the more civilized peoples on the transition to modern ways of thinking, and the sovereign rights of the prince were then taken over at least in form and principle by the people at large, and they have continued to be held by them as some sort of imponderable "community property" at least in point of form and profession. The vested interest of the prince or the dynasty in the usufruct of the underlying community is thereby presumed to have become a collective interest vested in people of the nation and giving them a "right of user" in their own persons, knowledge, skill, and resources. The mantle of princely sovereignty has fallen on the common man formally and according to the [608] letter of the legal instruments. In practical effect it has been converted into a cloak to cover the nakedness of a government which does business for the kept classes. In practical effect the shift from the dynastic politics of the era of state-making to the liberal policies based on the enlightened principles of the eighteenth century has been a shift from the pursuit of princely dominion to an imperialistic enterprise for the protection and furtherance of those vested interests that are domiciled within the national frontiers. That such has been the practical outcome is due to the fact that these enlightened principles of the eighteenth century comprise as their chief article the "natural" right of ownership. The later course of events has decided that the ownership of property in sufficiently large blocks will control the country's industrial system and thereby take over the disposal of the community's net output of product over cost on which the vested interests live, and on which, therefore, the kept classes feed. Hence the chief concern of those gentlemanly national governments that have displaced the dynastic states is always and consistently the maintenance of the rights of ownership and investment. However, these pecuniary interests of investment and free income are not all that is covered by the mantle of democratic sovereignty. Nor will it hold true that the common man has no share in the legacy of sovereignty and national enterprise which the enlightened democratic commonwealth has taken over from the departed dynastic regime. The divine right of the prince included certain imponderables, as well as the usufruct of the material resources of the realm. There were the princely dignity and honor, which were no less substantial an object of value and ambition and were no less tenaciously held by the princes of the dynastic regime than the revenues and material "sinews of war" on which the prestige and honor rested. And the common man of the democratic commonwealth has at least come in for a ratable share in these imponderables of prestige and honor that so are comprised under the divine right of the nation. He has an undivided interest in the glamour of national achievement, and he can swell with just pride in contemplating the triumphs of his gentlemanly government over the vested interests domiciled in any foreign land, or with just indignation at any diplomatic setback suffered by the vested interests domiciled in his own. There is also a more tangible, though more petty, advantage gained for the common man in having formally taken over the sovereignty from the dead hand of the dynastic prince. The common man being now vested with the divine right of national sovereignty held in undivided community ownership, it is ceremonially necessary for the gentlemanly stewards of the kept classes to consult the wishes of this their sovereign on any matters of policy that cannot wholly be carried through in a diplomatic corner and under cover of night and cloud. He, collectively, holds an eventual power of veto. And this power of veto has in practice been found to be something of a safeguard against any universal and enduring increase of hardship at the hands of the gentlemen-investors to whom the conduct of the nation's affairs has been "entrusted" a very modest safeguard, it is true, but always of some eventual consequence. There is the difference that in the democratic commonwealth the common man has to be managed rather than driven except for minor groups of common men who live on the lower- common levels, and except for occasional periods of legislative hysteria and judiciary blind-staggers. And it is pleasanter to be managed than to be driven. Chicane is a more humane art than corporal punishment. Imperial England is, after all, a milder-mannered stepmother than Imperial Germany. And always the common man comes in for his ratable share in the glamour of national achievement, in war and peace; and this imponderable gain of the spirit is also something. The value of these collective imponderables of national prestige and collective honor is not to be made light of. These count for very much in the drift and set of national sentiment, and moral issues of national moment are wont to arise out of them. Indeed, they constitute the chief incentive which holds the common man to an unrepining constancy in the service of the "national interests." So that, while the tangible shell of material gain appears to have fallen to the democratic community's kept classes, yet the "psychic income" that springs from national enterprise, the spiritual kernel of national elation, they share with the common man on an equitable footing of community interest. Yet, while the national policies of the democratic commonwealths are managed by liberal statesmen in behalf of the vested interests, they still run on the ancient lines of dynastic statecraft as worked out by the statesmen of the ancient regime; and the common man is still passably content to see the traffic run along on those lines. The things which are considered desirable to be done and the sufficient reasons for doing them still have much of the medieval color. National pretensions, enterprise, rivalry, intrigue, and dissensions among the democratic commonwealths are still such as would have been intelligible to Machiavelli, Frederick the [609] Great, Metternich, Bismarck, or the Elder Statesmen of Japan. Diplomatic intercourse still runs in the same terms of systematized prevarication, and still turns about the same schedule of national pretensions that contented the medieval spirit of these masters of dynastic intrigue. As a matter of course and of common sense the nations still conceive themselves to be rivals, whose national interests are incompatible, and whose divine right it is to gain something at one another's cost, after the fashion of rival bandits or business concerns. They still seek dominion and still conceive themselves to have extraterritorial interests of a proprietary sort. They still hold and still seek vested rights in colonial possessions and in extra- territorial priorities and concessions of divers and dubious kinds. There still are conferences, stipulations, and guarantees between the Powers, touching the "Open Door" in China, or the equitable partition of Africa, which read like a chapter on Honor Among Thieves. All this run of national pretensions, wrangles, dominion, aggrandizement, chicane, and ill-will is nothing more than the old familiar trading-stock of the diplomatic brokers who do business in dynastic force and fraud also called Realpolitik. The democratic nations have taken over in bulk the whole job-lot of vested interests and divine rights that have made the monarch of the old order an unfailing source of outrage and desolation. In the hands of those Elder Statesmen who once did business under the signature of the dynasty, the traffic in statecraft yielded nothing better than a mess of superfluous affliction; and there is no reason to apprehend that a continuation of the same traffic under the management of the younger statesmen who now do business in the name of the democratic commonwealth is likely to bring anything more comfortable, even though the legal instruments in the case may carry the rubber-stamp OK of the common man. The same items will foot up to the same sum; and in either case the net gain is always something appreciably less than nothing. These national interests are part of the medieval system of ends, ways and means, as it stood, complete and useless, at that juncture when the democratic commonwealth took over the divine rights of the crown. It is a case of aimless survival, on the whole, due partly to the inertia of habit and tradition, partly to the solicitous advocacy of these national interests by those classes the trading and office-holding classes who stand to gain something by the pursuit of them at the cost of the rest. By tenacious tradition out of the barbarian past these peoples have continued to be rival nations living in a state of habitual enmity and distrust, for no better reason than that they have not taken thought and changed their mind. After some slackening of national animosities and some disposition to neglect national pretensions during the earlier decades of the great era of liberalism the democratic nations have been gradually shifting back to a more truculent attitude and a more crafty and more rapacious management in all international relations. This aggressive chauvinistic policy has been called Imperialism. The movement has visibly kept pace, more or less closely, with the increasing range and volume of commerce and foreign investments during the same period. And to further this business enterprise there has been an ever increasing resort to military power. It is reasonably believed that traders and investors in foreign parts are able to derive a larger profit from their business when they have the backing of a powerful and aggressive national government; particularly in their dealings with helpless and backward peoples, and more particularly if their own national government is sufficiently unscrupulous and overbearing which may confidently be counted on so long as these governments are administered by the gentlemanly delegates of the vested interests and the kept classes. As regards the intrinsic value which is popularly attached to the imponderable national possessions, in the way of honor and prestige, there is little to be said beyond the stale reflection that there is no disputing about tastes. It all is at least a profitable illusion, for the use of those who are in a position to profit by it, such as the crown and the officeholders. But the people of the civilized nations believe themselves to have also a material interest of some sort in enlarging the national dominions and in extending the foreign trade of their business men and safeguarding the foreign claims of their vested interests. And the Americans, like many others, harbor the singular delusion that they can derive a collective benefit from obstructing the country's trade at the national frontiers by means of a tariff barrier, and so defeating their own industry by that much. It is a survival out of the barbarian past, out of the time when the dynastic politicians were occupied with isolating the nation and making it self-sufficient, as an "engine of warlike enterprise for the pursuit of dynastic ambitions and the greater discomfort of their neighbors. In an increasing degree, as the new order of industry has come into bearing, any such policy of industrial isolation and self-sufficiency has become more difficult and more injurious; for a free range and unhindered specialization is of the essence of the new industrial order. [610] The experience of the war has shown conclusively that no one country can hereafter supply its own needs either in raw materials or in finished goods. Both the winning and the losing side have shown that. The new industrial order necessarily overlaps the national frontiers, even in the case of a nation possessed of so extensive and varied natural resources as America. So that in spite of all the singularly ingenious obstruction of the American tariff the Americans still continue to draw on foreign sources for most or all of their tea, coffee, sugar, tropical and semi-tropical fruits, vegetable oils, vegetable gums and pigments, cordage fibers, silks, rubber, and a bewildering multitude of minor articles of daily use. Even so peculiarly American an industry as chewing- gum is wholly dependent on foreign raw material, and quite unavoidably so. The most that can be accomplished by any tariff under these circumstances is more or less obstruction. Isolation and self-sufficiency are already far out of the question. But there are certain vested interests which find their profit in maintaining a tariff barrier as a means of keeping the price up and keeping the supply down; and the common man still faithfully believes that the profits which these vested interests derive in this way from increasing the cost of his livelihood and decreasing the net productivity of his industry will benefit him in some mysterious way.. He is persuaded that high prices and a scant supply of goods at a high labor-cost is a desirable state of things. This is incredible, but there is no denying the fact. He knows, of course, that the profits of business go to the business men, the vested interests, and to no one else; but he is still beset with the picturesque hallucination that any unearned income which goes to those vested interests whose central office is in New Jersey is paid to himself in some underhand way, while the gains of those vested interests that are domiciled in Canada are obviously a grievous net loss to him. The tariff moves in a mysterious way its wonders to perform. To all adult persons of sound mind, and not unduly clouded with the superstitions of the price system, it is an obvious matter of fact that any protective tariff is an obstruction to industry and a means of impoverishment, just so far as it is effective. The arguments to the contrary invariably turn out to be pettifoggers' special pleading for some vested interest or for a warlike national policy, and these arguments convince only those persons who are able to believe that a part is greater than the whole. It also lies in the nature of protective tariffs that they always cost the nation disproportionately much more than they are worth to those vested interests which profit by them. In this respect they are like any other method of businesslike sabotage. Their aim, and presumably their effect, is to keep the price up by keeping the supply down, to hinder competitors, and retard production. As in other instances of businesslike sabotage the net margin of advantage to those who profit by it is greatly less than what it costs the community. Yet it is to be noted that the Americans have prospered, on the whole, under protective tariffs which have been as ingeniously and comprehensively foolish as could well be contrived. There is even some color of reason in the contentions of the protectionists that the more reasonable tariffs have commonly been more depressing to industry than the most imbecile of them. All of which should be disquieting to the advocates of free trade. The defect of the free-trade argument, and the disappointment of free-trade policies, lies in overlooking the fact that in the absence of an obstructive tariff substantially the same amount of obstruction has to be accomplished by other means if business is to prosper. And business prosperity is the only manner of prosperity known or provided for among the civilized nations. It is the only manner of prosperity on which the divine right of the nation gives it a claim. A protective tariff is only an alternative method of businesslike sabotage. If and so far as this method of keeping the supply of goods within salutary bounds is not resorted to, other means of accomplishing the same result must be employed. For so long as investment continues to control industry the welfare of the community is bound up with the prosperity of its business; and business cannot be carried on without reasonably profitable prices; and reasonably profitable prices cannot be maintained without a salutary limitation of the supply which means slowing down production to such a rate and volume as the traffic will bear. A protective tariff is only one means of crippling the country's industrial forces for the good of business. In its absence all that matter will be taken care of by other means. The tariff may perhaps be a little the most flagrant method of sabotage by which the vested interests are enabled to do a reasonably profitable business; but there is nothing more than a difference of degree and not a large difference at that. So long as industry is managed with a view to a profitable price it is quite indispensable to guard against an excessive rate and volume of output. In the absence of all businesslike sabotage the productive capacity of the industrial system would very shortly pass all reasonable bounds, [611] prices would decline disastrously, and overhead charges would not be covered, fixed charges on corporation securities and other credit instruments could not be met, and the whole structure of business enterprise would collapse, as it occasionally has done in times of "overproduction." There is no doing business without a fair price, since the net price over cost is the motive of business. A protective tariff is, in effect, an auxiliary safeguard against overproduction. But the, divine right of national self-direction also covers much else of the same description, besides the privilege of setting up a tariff in restraint of trade. There are many channels of such discrimination, of divers kinds, but always it will be found that these channels are channels of sabotage and that they serve the advantage of some group of vested interests which do business under the shelter of the national pretensions. There are foreign investments and concessions to be procured and safe-guarded for the nation's business men by moral suasion backed with warlike force, and the common man pays the cost; there is discrimination to be exercised and perhaps subsidies and credits to be accorded those of the nation's business men who derive a profit from shipping, for the discomfiture of alien competitors, and the common man pays the cost; there are colonies to be procured and administered at the public expense for the private gain of certain traders, concessionaires, and administrative office- holders, and the common man pays the cost. Back of it all is the nation's, divine right to carry arms, to support a competitive military and naval establishment, which has ceased, under the new order, to have any other material use than to enforce or defend the businesslike right of particular vested interests to get something for nothing in some particular place and in some particular way, and the common man pays the cost and swells with pride. THORSTEIN VEBLEN. -----------------------------------------------------------------------