Thorstein Veblen: BOLSHEVISM AND THE VESTED INTERESTS IN AMERICA I. On the Danger of a Revolutionary Overturn p. 296 The Dial. No. 800, Oct., 4, 1919, pp. 296-301 II. On the Circumstances Which Make for a Change p. 339 The Dial. No. 801, Oct., 18, 1919, pp. 339-346 III. A Memorandum on a Practicable Soviet of Technicians p. 373 The Dial. No. 802, Nov., 1, 1919, pp. 373-380 The Dial. A Fortnightly (New York) Vol. LXVII (July 12 to November 29, 1919) ----------------------------------------------------------------------------- BOLSHEVISM AND THE VESTED INTERESTS IN AMERICA II. On the Circumstances Which Make for a Change The Dial. No. 801, Oct., 18, 1919, pp. 339-346 ----------------------------------------------------------------------------- [339] THE STATE OF INDUSTRY, in America and in the other advanced industrial countries, will impose certain exacting conditions on any movement that aims to displace the Vested Interests. These conditions lie in the nature of things; that is to say, in the nature of the existing industrial system; and until they are met in some passable fashion, this industrial system can not be taken over in any effectual or enduring manner. And it is plain that whatever is found to be true in these respects for America will also hold true in much the same degree for the other countries that are dominated by the mechanical industry and the system of absentee ownership. It may also confidently be set down at the outset that such an impartial review of the evidence as is here aimed at will make it appear that there need be no present apprehension of the Vested Interests being unseated by any popular uprising in America, even if the popular irritation should rise very appreciably above its present pitch, and even if certain advocates of "direct action," here and there, should be so ill-advised as to make some rash gesture of revolt. The only present danger is that a boisterous campaign of repression and inquisition on the part of the Guardians of the Vested Interests may stir up some transient flutter of seditious disturbance. To this end, then, it will be necessary to recall, in a summary way, those main facts of the industrial system and of the present businesslike control of this system which come immediately into the case. By way of general premise it is to be noted that the established order of business rests on absentee ownership and is managed with an eye single to the largest obtainable net return in terms of price; that is to say, it is a system of businesslike management on a commercial footing. The underlying population is dependent on the working of this industrial system for its livelihood; and their material interest therefore centers in the output and distribution of consumable goods, not in an increasing volume of earnings for the absentee owners. Hence there is a division of interest between the business community, who do business for the absentee owners, and the underlying population, who work for a living; and in the nature of the case this division of interest between the absentee owners and the underlying population is growing wider and more evident from day to day; which engenders a certain division of sentiment and a degree of mutual distrust. With it all the underlying population are still in a sufficiently deferential frame of mind toward their absentee owners and are quite conscientiously delicate about any abatement of the free income which their owners come in for, according to the rules of the game as it is played. The business concerns which so have the management of industry of this plan of absentee ownership are capitalized on their business capacity, not on their industrial capacity; that is to say, they are capitalized on their capacity to produce earnings, not on their capacity to produce goods. Their capitalization has, in effect, been calculated and fixed on the highest ordinary rate of earnings previously obtained; and on pain of insolvency their businesslike managers are now required to meet fixed income-charges on this capitalization. Therefore, as a proposition of safe and sane business management, prices have to be maintained or advanced. From this businesslike requirement of meeting these fixed overhead charges on the capitalization there result certain customary lines of waste and obstruction, which are unavoidable so long as industry is managed by businesslike methods and for businesslike ends. These ordinary lines of waste and obstruction are necessarily (and blamelessly) included in the businesslike conduct of production. They are many and various in detail, but they may for convenience be classed under four heads: (a) Unemployment of material resources, equipment, and manpower, in whole or in part, deliberately or through ignorance; (b) Salesmanship (includes, e. g., needless multiplication of merchants and shops, wholesale and retail, newspaper advertising and bill-boards, sales- exhibits, sales-agents, fancy packages and labels, adulteration, multiplication of brands and proprietary articles); (c) Production (and sales-cost) of superfluities and spurious goods; (d) Systematic dislocation, sabotage and duplication, due in part to businesslike strategy, in part to businesslike ignorance of industrial requirements (includes, e.g., such things as cross-freights, monopolization of resources, withholding of facilities and information from business rivals whom it is thought wise to- hinder or defeat). There is, of course, no blame, and no sense of blame or shame attaching to all this everyday waste [340] and confusion that goes to make up the workday total of businesslike management. All of it is a legitimate and necessary part of the established order of business enterprise, within the law and within the ethics of the trade. Salesmanship is the most conspicuous, and perhaps the gravest, of these wasteful and industrially futile practices that are involved in the businesslike conduct of industry; it bulks large both in its immediate cost and in its meretricious consequences. It also is altogether legitimate and indispensable in any industrial business that deals with customers, in buying or selling; which comes near saying, in all business that has to do with the production or distribution of goods or services. Indeed, salesmanship is, in a way, the whole end and substance of business enterprise; and except so far as it is managed with a constant view to profitable bargains, the production of goods is not a business proposition. It is the elimination of profitable transactions of purchase and sale that is hoped for by any current movement looking to an overturn, and it is the same elimination of profitable bargaining that is feared, with a nerve- shattering fear, by the Guardians of the established order. Salesmanship is also the most indispensable and most meritorious of those qualities that go to make a safe and sane business man. It is doubtless within the mark to say that, at an average, one-half the price paid for goods and services by consumers is to be set down to the account of salesmanship that is, to sales-cost and to the net gains of salesmanship. But in many notable lines of merchandise the sales-cost will ordinarily foot up to some ten or twenty times the production-cost proper, and to not less than one hundred times the necessary cost of distribution. All this is not a matter for shame or distaste. In fact, just now more than ever, there is a clamorous and visibly growing insistence on the paramount merit and importance of salesmanship as the main stay of commerce and industry, and a strenuous demand for more extensive and more thorough training in salesmanship of a larger number of young men at the public expense to enable a shrewdly limited output of good to be sold at more profitable prices at the public cost. So also there is a visibly increasing expenditure on all manner of advertising; and the spokesmen of this enterprise in conspicuous waste are "pointing with pride" to the fact that the American business community have already spent upward of $600,000,000 on bill-boards alone within the past year, not to speak of much larger sums spent on newspapers and other printed matter for the same purpose and the common man pays the cost. At the same time advertising and manoeuvres of salesmanlike spell-binding appear to be the only resource to which the country's business men know how to turn for relief from that tangle of difficulties into which the outbreak of a businesslike peace has precipitated the commercialized world. Increased sales- cost is to remedy the evils of underproduction. In this connection it may be worth while to recall, without heat or faultfinding, that all the costly publicity that goes into sales-costs is in the nature of prevarication, when it is not good broad mendacity; and quite unnecessarily so. And all the while the proportion of sales-costs to production-costs goes on increasing, and the cost of living grows continually greater for the underlying population, and business necessities continue to enlarge the necessary expenditure on ways and means of salesmanship. It is reasonable to believe that this state of things, which has been coming on gradually for some time past, will in time come to be understood and appreciated by the underlying population, at least in some degree. And it is likewise reasonable to believe that so soon as the underlying population come to realize that all this wasteful traffic of salesmanship is using up their productive forces, with nothing better to show for it than an increased cost of living, they will be driven to make some move to abate the nuisance. And just so far as this state of things is now beginning to be understood, its logical outcome is a growing distrust of the business men and all their works and words. But the underlying population is still very credulous about anything that is said or done in the name of Business, and there need be no apprehension of a mutinous outbreak, just yet. But at the same time it is evident that any plan of management which could contrive to dispense with all this expenditure on salesmanship, or that could materially reduce sales-costs, would have that much of a free margin to go on, and therefore that much of an added chance of success; and so also it is evident that any other than a businesslike management could so contrive, inasmuch as sales-costs are incurred solely for purposes of business, not for purposes of industry; they are incurred for the sake of private gain, not for the sake of productive work. But there is in fact no present promise of a breakdown of business, due to the continued increase of sales-costs; although sales-costs are bound to go on increasing so long as the country's industry continues to be managed on anything like the present plan. In fact, salesmanship is the chief factor in that ever- increasing cost of living, which is in its turn the chief ground of prosperity among [341] the business community and the chief source of perennial hardship and discontent among the underlying population. Still it is worth noting that the eventual elimination of salesmanship and sales-cost would lighten the burden of workday production for the underlying population by some fifty per cent. There is that much of a visible inducement to disallow that system of absentee ownership on which modern business enterprise rests; and for what it may be worth it is to be admitted that there is therefore that much of a drift in the existing state of things toward a revolutionary overturn looking to the unseating of the Vested Interests. But at the same time the elimination of salesmanship and all its voluminous apparatus and traffic would also cut down the capitalized income of the business community by something like one-half; and that contingency is not to be contemplated, not to say with equanimity, by the Guardians; and it is after all in the hands of these Guardians that the fortunes of the community rest. Such a move is a moral impossibility, just yet. Closely related to the wasteful practices of salesmanship as commonly understood, if it should not rather be counted in as an extension of salesmanship, is that persistent unemployment of men, equipment, and material resources, by which the output of goods and services is kept down to the "requirements of the market," with a view to maintaining prices at a "reasonably profitable level." Such unemployment, deliberate and habitual, is one of the ordinary expedients employed in the businesslike management of industry. There is always more or less of it in ordinary times. "Reasonable earnings" could not be assured without it; because "what the traffic will bear" in the way of an output of goods is by no means the same as the productive capacity of the industrial system; still less is it the same as the total consumptive needs of the community; in fact, it does not visibly tend to coincide with either. It is more particularly in times of popular distress, such as the present year, when the current output of goods is not nearly sufficient to cover the consumptive needs of the community, that considerations of business strategy call for a wise unemployment of the country's productive forces. At the same time, such businesslike unemployment of equipment and man power is the most obvious cause of popular distress. All this is well known to the Guardians of the Vested Interests, and their knowledge of it is, quite reasonably, a source of uneasiness to them. But they see no help for it; and indeed there is no help for it within the framework of "business as usual," since it is the essence of business as usual. So also, the Guardians are aware that this businesslike sabotage on productive industry is a fruitful source of discontent and distrust among the underlying population who suffer the inconvenience of it all; and they are beset with the abiding fear that the underlying population may shortly be provoked into disallowing those Vested Interests for whose benefit this deliberate and habitual sabotage on production is carried on. It is felt that here again is a sufficient reason why the businesslike management of industry should! be discontinued; which is the same as saying that here again is a visibly sufficient reason for such a revolutionary overturn as will close out the Old Order of absentee ownership and capitalized income. It is also evident that any plan which shall contrive to dispense with this deliberate and habitual unemployment of men and equipment will have that much more of a margin to go on, both in respect of practical efficiency and in respect of popular tolerance; and evidently, too, any other than a businesslike management of industry can so contrive, as a matter of course; inasmuch as any such unbusinesslike administration as, e.g., the Soviet will be relieved of the businesslike manager's blackest bug-bear, "a reasonably profitable level of prices." But for all that, those shudderingly sanguine persons who are looking for a dissolution of the system of absentee ownership within two years' time are not counting on salesmanlike waste and businesslike sabotage to bring on the collapse, so much as they count on the item listed under (d) above the systematic dislocation and all-round defeat of productive industry which is due in part to shrewd manoeuvres of businesslike strategy, in part to the habitual ignorance of business men touching the systematic requirements of the industrial system as a whole. The shrewd worldly wisdom of the businesslike managers, looking consistently to the main chance, works in harmoniously with their trained ignorance on matters of technology, to bring about what amounts to effectual team-work for the defeat of the country's industrial system as a going concern. Yet doubtless this sinister hope of a collapse within two years is too sanguine. Doubtless the underlying population can be counted on solidly to put up with what they are so well used to, just yet; more particularly so long as they are not in the habit of thinking about these things at all. Nor does it seem reasonable to believe that this all-pervading waste and confusion of industrial forces will of itself bring the business organization to a collapse within so short a time. It is true, the industrial system is continually growing, in volume and complication; and with [342] every new extension of its scope and range, and with every added increment of technological practice that goes into effect, there comes a new and urgent opportunity for the business men in control to extend and speed up their strategy of mutual obstruction and defeat; it is all in the day's work. As the industrial system grows larger and more closely interwoven it offers continually larger and more enticing opportunities for such businesslike manoeuvres as will effectually derange the system at the same time that they bring the desired tactical defeat on some business rival; whereby the successful business strategist is enabled to get a little something for nothing at a constantly increasing cost to the community at large. With every increment of growth and maturity the country's industrial system becomes more delicately balanced, more intricately bound in a web of industrial give and take, more sensitive to far-reaching derangement by any local dislocation, more widely and instantly responsive to any failure of the due correlation at any point; and by the same move the captains of industry, to whose care the interests of absentee ownership are entrusted, are enabled, or rather they are driven by the necessities of competitive business, to plan their strategy of mutual defeat and derangement on larger and more intricate lines, with an ever wider reach and a more massive mobilization of forces. From which follows an ever increasing insecurity of work and output from day to day and an increased assurance of general loss and .disability in the long run; incidentally coupled with increased hardship for the underlying population, which comes in all along as a subsidiary matter of course, unfortunate but unavoidable. It is this visibly growing failure of the present businesslike management to come up to the industrial necessities of the case ; its unfitness to take anything like reasonable care of the needed correlation of industrial forces within the system; its continual working at cross purposes in the allocation of energy resources, materials, and man power it is this fact, that any businesslike management of necessity runs at cross purposes with the larger technical realities of the industrial system, that chiefly goes to persuade apprehensive persons that the regime of business enterprise is fast approaching the limit of tolerance. So it is held by many that this existing system of absentee ownership must presently break down and precipitate the abdication of the Vested Interests, under conviction of total imbecility. The theory on which these apprehensive persons proceed appears to be substantially sound, so far as it goes, but they reach an unguardedly desperate conclusion because they overlook one of the main facts of the case. There is no reasonable exception to be taken to the statement that the country's industrial system is forever growing more extensive and more complex; that it is continually taking on more of the character of a close-knit, interwoven, systematic whole; a delicately balanced moving equilibrium of working parts, no one of which can do its work by itself at all, and none of which can do its share of the work well except in close correlation with all the rest. At the same time it is also true that, in the commercialized nature of things, the businesslike management of industry is forever playing fast and loose with this delicately balanced moving equilibrium of forces, on which the livelihood of the underlying population depends from day to day; more particularly is this true for that large-scale business enterprise that rests on absentee ownership and makes up the country's greater Vested Interests. But to all this it is to be added, as a corrective and a main factor in the case, that this system of mechanical industry is an extremely efficient contrivance for the production of goods and services, even when, as usual, the business men, for business reasons, will allow it to work only under a large handicap of unemployment and obstructive tactics. Hitherto the margin for error, that is to say for wasteful strategy and obstructive ignorance, has been very wide; so wide that it has saved the life of the Vested Interests; and it is accordingly by no means confidently to be believed that all these ampler opportunities for swift and wide-reaching derangement will enable the strategy of business enterprise to bring on a disastrous collapse, just yet. It is true, if the country's productive industry were competently organized as a systematic whole, and were then managed by competent technicians with an eye single to maximum production of goods and services; instead of, as now, being manhandled by ignorant business men with an eye single to maximum profits; the resulting output of goods and services would doubtless exceed the current output by several hundred per cent. But then, none of all that is necessary to save the established order of things. All that is required is a decent modicum of efficiency, very far short of the theoretical maximum production. In effect, the community is in the habit of getting along contentedly on something appreciably less than one-half the output which its industrial equipment would turn out if it were working uninterruptedly at full capacity; even when, as usual, something like one-half of the actual output is consumed in wasteful superfluities. The margin for waste and error is very wide, fortunately; and, in effect, a more patient and more inclusive survey of the facts in the case would suffice to show that the [343] tenure of the Vested Interests is reasonably secure just yet; at least in so far as it turns on considerations of this nature. There is, of course, the chance, and it is by no means a remote chance, that the rapidly increasing volume and complexity of the industrial system may presently bring the country's industry into such a ticklish state of unstable equilibrium that even a reasonable modicum of willful derangement can no longer be tolerated, even for the most urgent and most legitimate reasons of businesslike strategy and vested rights. In time, such an outcome is presumably due to be looked for. There is, indeed, no lack of evidence that the advanced industrial countries are approaching such a state of things, America among the rest. The margin for error and wasteful strategy is, in effect, being continually narrowed by the further advance of the industrial arts. With every further advance in the way of specialization and standardization, in point of kind, quantity, quality, and time, the tolerance of the system as a whole under any strategic maladjustment grows continually narrower. How soon the limit of tolerance for willful derangement is due to be reached, would be a hazardous topic of speculation. There is now a fair prospect that the coming winter may throw some light on that dark question; but this is not saying that the end is in sight. What is here insisted on is that that sinister eventuality lies yet in the future, although it may be in the calculable future, So also it is well to keep in mind that even a fairly disastrous collapse of the existing system of businesslike management need by no means prove fatal to the Vested Interests, just yet; not so long as there is no competent organization ready to take their place and administer the country's industry on a more reasonable plan. It is necessarily a question of alternatives. In all this argument that runs on perennial dislocation and cross purposes, it is assumed that the existing businesslike management of industry is of a competitive nature, and necessarily moves on lines of competitive strategy. As a subsidiary premise it is, of course, also assumed that the captains of industry who have the direction of this competitive strategy are ordinarily sufficiently ill informed on technological matters to go wrong, industrially speaking, even with the most pacific and benevolent intentions. They are laymen in all that concerns the technical demands of industrial production. This latter, and minor, assumption therefore need not be argued; it is sufficiently notorious. On the other hand, the first assumption spoken of above, that current business enterprise is of a competitive nature, is likely to be questioned by many who believe themselves to be familiar with the facts in the case. It is argued, by one and another, that the country's business concerns have entered into consolidations, coalitions, understandings and working arrangements among themselves syndicates, trusts, pools, combinations, interlocking directorates, gentlemen's agreements, employers' unions to such an extent as virtually to cover the field of that large-scale business that sets the pace and governs the movements of the rest; and that where combination takes effect in this way, competition ceases. So also it will be argued that where there has been no formal coalition of interests the business men in charge will still commonly act in collusion, with much the same result. The suggestion is also ready to hand that in so far as business like sabotage of this competitive order is still to be met with, it can all be corrected by such a further consolidation of interests as will do away with all occasion for competitive cross purposes within the industrial system. It is not easy to see just how far that line of argument would lead; but to make it effective and to cover the case it would plainly have to result in so wide a coalition of interests and pooling of management as would, in effect, eliminate all occasion for businesslike management within the system, and leave the underlying population quite unreservedly at the disposal of the resulting coalition of interests an outcome which is presumably not contemplated. And even so, the argument takes account of only one strand in that three-ply rope that goes to fashion the fatal noose. The remaining two are stout enough, and they have not been touched. It is true, economists and others who have canvassed this matter of competition have commonly given their attention to this one line of competition alone between rival commercial interests because this competition is conceived to be natural and normal and to serve the common good. But there remains (a) the competition between those business men who buy cheap and sell dear and the underlying population from and to whom they buy cheap and sell dear, and (b) the competition between the captains of industry and those absentee owners in whose name and with whose funds the captains do business. In the typical case, modern business enterprise takes the corporate form, is organized on credit, and therefore rests on absentee ownership; from which it follows that in all large-scale business the owners are not the same persons as the managers, nor does the interest of the manager commonly coincide with that of his absentee owners, particularly in the modern "big business." So it follows that even a coalition of Vested [344] Interests which should be virtually all-inclusive, would still have to make up its account with "what the traffic will bear," that is to say what will bring the largest net income in terms of price; that is to say, the coalition would still be under the competitive necessity of buying cheap and selling dear, to the best of its ability and with the use of all the facilities which its dominant position in the market would give. The coalition, therefore, would still be under the necessity of shrewdly limiting the output of goods and services to such a rate and volume as will maintain or advance prices; and also to vary its manipulation of prices and supply from place to place and from time to time, to turn an honest penny; which leaves the case very near the point of beginning. But then, such a remedy for these infelicities of the competitive system will probably be admitted to be chimerical, without argument. But what is more to the point is the fact, known even when it is not avowed, that the consolidations which have been effected hitherto have not eliminated competition, nor have they changed the character of the competitive strategy employed, although they have altered its scale and methods. What can be said is that the underlying corporations of the holding companies, e.g., are no longer competitors among themselves on the ancient footing. But strategic dislocation and cross purposes continue to be the order of the day in the businesslike management of industry; and the volume of habitual unemployment, whether of equipment or of man power, continues undiminished and m> ashamed which is after all a major count in the case. It is well to recognize what the business men among themselves always recognize as a matter of course, that business is in the last analysis always carried on for the private advantage of the individual business men who carry it on. And these enterprising persons, being business men, will always be competitors for gain among themselves, however much and well they may combine for a common purpose as against the rest of the community. The end and aim of any gainful enterprise carried through in common is always the division of the joint gains, and in this division the joint participants always figure, as competitors. The syndicates, coalitions, corporations, consolidations of interests, so entered into in the pursuit of gain are, in effect, in the nature of conspiracies between business men each seeking his own advantage at the cost of any whom it may concern. There is no ulterior solidarity of interests among the participants in such a joint enterprise. By way of illustration, what is set forth in the voluminous testimony taken in the Colton case, before the California courts, having to do with the affairs of the Southern Pacific and its subsidiaries, will show in what fashion the businesslike incentives of associated individuals may be expected to work out in the partition of benefits within a given coalition. And not only is there no abiding solidarity of interests between the several participants in such a joint enterprise, so far as regards the final division of the spoils, but it is also true that the business interest of the manager in charge of such a syndicate of absentee ownership will not coincide with the collective interest of the coalition as a going concern. As an illustrative instance may be cited the testimony of the great president of the two Great Northern railways, taken before a Congressional commission, wherein it is explained somewhat fully that for something like a quarter-century the two great roads under his management had never come in for reasonable earnings on their invested capital. And it is a matter of common notoriety, although it was charitably not brought out in the hearings of the commission, that during his incumbency as manager of the two great railway systems this enterprising railway president had by thrift and management increased his own private possessions from $20 to something variously estimated at $150,000,000 to $200,000,000; while his two chief associates in this adventure had retired from the management on a similarly comfortable footing; so notably comfortable, indeed, as to have merited a couple of very decent peerages under the British crown. In effect, there still is an open call for shrewd personal strategy at the cost of any whom it may concern; all the while that there is also a very appreciable measure of collision among the Vested Interests, at the cost of any whom it may concern. Business is still competitive business, competitive pursuit of private gain; as how should it not be? seeing that the incentive to all business is after all private gain at the cost of any whom it may concern. By reason of doctrinal consistency and loyalty to tradition, the certified economists have habitually described business enterprise as a rational arrangement for administering the country's industrial system and assuring a full and equitable distribution of consumable goods to the consumers. There need be no quarrel with that view. But it is only fair to enter the reservation that, considered as an arrangement for administering the country's industrial system, business enterprise based on absentee ownership has the defects of its qualities; and these defects of this good old plan are now [345] calling attention to themselves. Hitherto, and ever since the mechanical industry first came into the dominant place in this industrial system, the defects of this businesslike management of industry have continually been encroaching more and more on its qualities. It took its rise as a system of management by the owners of the industrial equipment, and it has in its riper years grown into a system of absentee ownership managed by quasi-responsible financial agents. Having begun as an industrial community which centered about an open market, it has matured into a community of Vested Interests whose vested right it is to keep up prices by a short supply in a closed market. There is no extravagance in saying that, by and large, this arrangement for controlling the production and distribution of goods and services through the agency of absentee ownership has now come to be, in the main, a blundering muddle of defects. For the purpose in hand, that is to say with a view to the probable chance of any revolutionary overturn, this may serve as a fair characterization of the regime of the Vested Interests; whose continued rule is now believed by their Guardians to be threatened by a popular uprising in the nature of Bolshevism. Now, as to the country's industrial system which is manhandled on this businesslike plan; it is a comprehensive and balanced scheme of technological administration. Industry of this modern sort mechanical, specialized, standardized, running to quantity production, drawn on a large scale is highly productive; provided always that the necessary conditions of its working are met in some passable fashion. These necessary conditions of productive industry are of a well-defined technical character, and they are growing more and more exacting with every farther advance in the industrial arts. This mechanical industry draws always more and more largely and urgently on the natural sources of mechanical power, and it necessarily makes use of an ever increasingly wide and varied range of materials, drawn from all latitudes and all geographical regions, in spite of obstructive national frontiers and patriotic animosities; for the mechanical technology is impersonal and dispassionate, and its end is very simply to serve human needs, without fear or favor or respect of persons, prerogatives, or politics. It makes up an industrial system of an unexampled character a mechanically balanced and interlocking system of work to be done, the prime requisite of whose working is a painstaking and intelligent co-ordination of the processes at work, and an equally painstaking allocation of mechanical power and materials. The foundation and driving force of it all is a massive body by technological knowledge, of a highly impersonal and altogether unbusinesslike nature, running in close contact with the material exactingly specialized, endlessly detailed, reaching out into all domains of empirical fact. Such is the system of productive work which has grown out of the Industrial Revolution, and on the full and free run of which the material welfare of all the civilized peoples now depends from day to day. Any defect or hindrance in its technical administration, any intrusion of non-technical considerations, any failure or obstruction at any point, unavoidably results in a disproportionate set-back to the balanced whole and brings a disproportionate burden of privation on all these peoples whose sciences, on which it draws freely at every turn as a going concern. There is no third party qualified lo make a colorable bid, or able to make good the system. It follows that those gifted, trained, and experienced technicians who now are in possession of the requisite technological information and experience are the first and instantly indispensable factor in the everyday work of carrying on the country's productive industry. They now constitute the General Staff of the industrial system, in fact; whatever law and custom may formally say in protest. The "captains of industry" may still vaingloriously claim that distinction, and law and custom still countenances their claim; but the captains have no technological value, in fact. Therefore any question of a revolutionary overturn, in America or in any other of the advanced industrial countries, resolves itself in practical fact into a question of what the guild of technicians will do. In effect it is a question whether the discretion and responsibility in the management of technicians, who speak for the industrial system productive industry has come within the sweep of the country's industry shall pass from the financiers, who speak for the Vested Interests, to the its pretensions if it should make a bid. So long as the vested rights of absentee ownership remain intact, the financial powers that is to say the Vested Interests will continue to dispose of the country's industrial forces for their own profit; and so soon, or so far, as these vested rights give way, the control of the people's material welfare will pass into the hands of the technicians. There is no third party. The chances of anything like a Soviet in America, therefore, are the chances of a Soviet of technicians. And, to the due comfort of the Guardians of the Vested Interests and the good citizens who make up their background, it can be shown that [346] anything like a Soviet of Technicians is at the most a remote contingency in America. It is true, so long as no such change of base is ma*de, what is confidently to be looked for is a regime of continued and increasing shame and confusion, hardship and dissension, unemployment and privation, waste and insecurity of person and property such as the rule of the Vested Interests in business has already made increasingly familiar to all the civilized peoples. But the vested rights of absentee ownership are still embedded in the sentiments of the underlying population, and still continue to be the Palladium of the Republic; and the assertion is still quite safe that anything like a Soviet of Technicians is not a present menace to the Vested Interests in America. By settled habit the technicians, the engineers and industrial experts, are a harmless and docile sort, well fed on the whole, and somewhat placidly content with the "full dinner-pail" which the lieutenants of the Vested Interests habitually allow them. It is true, they constitute the indispensable General Staff of that industrial system which feeds the Vested Interests; but, hitherto at least, they have had nothing to say in the planning and direction of this industrial system, except as employees in the pay of the financiers. They have, hitherto been quite unreflectingly content to work piecemeal, without much of an understanding among themselves, unreservedly doing job-work for the Vested Interests; and they have without much reflection lent themselves and their technical powers freely to the obstructive tactics of the captains of industry; all the while that the training which makes them technicians is but a specialized extension of that joint stock of technological knowledge that has been carried forward out of the past by the community at large. But it remains true that they and their dear-bought knowledge of ways and means dear-bought on the part of the underlying community are the pillars of that house of industry in which the Vested Interests continue to live. Without their continued and unremitting supervision and direction the industrial system would cease to be a working system at all; whereas it is not easy to see how the elimination of the existing businesslike control could bring anything but relief and heightened efficiency to this working system. The technicians are indispensable to productive industry of this mechanical sort; the Vested Interests and their absentee owners are not. The technicians are indispensable to the Vested Interests and their absentee owners, as -a working force without which there would be no industrial output to control or divide; whereas the Vested Interests and their absentee owners are of no material consequence to the technicians and their work, except as an extraneous interference and obstruction. It follows that the material welfare of all the advanced industrial peoples rests in the hands of these technicians, if they will only see it that way, take counsel together, constitute themselves the self-directing General Staff of the country's industry, and dispense with the interference of the lieutenants of the absentee owners. Already they are strategically in a position to take the lead and impose their own terms of leadership, so soon as they, or a decisive number of them, shall reach a common understanding to that effect and agree on a plan of action. But there is assuredly no present promise of the technicians' turning their insight and common sense to such a use. There need be no present apprehension. The technicians are a "safe and sane" lot, on the whole; and they are pretty well commercialized, particularly the older generation, who speak with authority and conviction, and to whom the younger generation of engineers defer, on the whole, with such a degree of filial piety as should go far to reassure all good citizens. And herein lies the present security of the Vested Interests, as well as the fatuity of any present alarm about Bolshevism and the like; for the whole-hearted cooperation of the technicians would be as indispensable to any effectual movement of overturn as their unwavering service in the employ of the Vested Interests in indispensable to the maintenance of the established order. THORSTEIN VEBLEN. -----------------------------------------------------------------------------