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 I. On the Danger of a Revolutionary Overturn The Dial. No. 800, Oct., 4, 1919, pp. 296-301 ----------------------------------------------------------------------------- BOLSHEVISM IS A MENACE to the vested rights of property and privilege. Therefore the guardians of the Vested Interests have been thrown into a state of Red trepidation by the continued functioning of Soviet Russia and the continual outbreaks of the same Red distemper elsewhere on the continent of Europe. It is feared, with a nerve-shattering fear, that the same Red distemper of Bolshevism must presently infect the underlying population in America and bring on an overturn of the established order, so soon as the underlying population are in a position to take stock of the situation and make up their mind to a course of action. The situation is an uneasy one, and it contains the elements of much trouble; at least such appears to be the conviction of the Guardians of the established order. Something of the kind is felt to be due, on the grounds of the accomplished facts. So it is feared, with a nerve-shattering fear, that anything like uncolored information as to the facts in the case and anything like a free popular discussion of these facts must logically result in disaster. Hence all this unseemly trepidation. The Guardians of the Vested Interests, official and quasi-official, have allowed their own knowledge of this sinister state of things to unseat their common sense. The run of the facts has jostled them out of the ruts, and they have gone in for a headlong policy of clamor and repression, to cover and suppress matters of fact and to shut off discussion and deliberation. And all the while the Guardians are also feverishly at work on a mobilization of such forces as may hopefully be counted on to "keep the situation in hand" in case the expected should happen. The one manifestly conclusive resolution to which the Guardians of the Vested Interests have come is that the underlying population is to be "kept in hand," in the face of any contingency. Their one settled principle of conduct appears to be, to stick at nothing; in all of which, doubtless, the Guardians mean well. Now, the Guardians of the Vested Interests are presumably wise in discountenancing any open discussion or any free communication of ideas and opinions. It could lead to nothing more comfortable than popular irritation and distrust. The Vested Interests are known to have been actively concerned in the prosecution of the War, and there is no lack of evidence that their spokesmen have been heard in the subsequent counsels of the Peace. And, no doubt, the less that is known and said about the doings of the Vested Interests during the War and after, the better both for the public, tranquility and for the continued growth and profit of the Vested Interests. Yet it is not to be overlooked that facts of such magnitude and of such urgent public concern as the manoeuvres of the Vested Interests during the War and after can not be altogether happily covered over with a conspiracy of silence. Something like a middle course of temperate publicity should have seemed more to the point. It may be unfortunate, but it is none the less unavoidable, that something appreciable is bound to come to light; that is to say, something sinister. It should be plain to all good citizens who have the cause of law and order at heart that in such a case a more genial policy of conciliatory promises and procrastination will be more to the purpose than any noisy recourse to the strong arm and the Star Chamber. A touch of history, and more particularly of contemporary history, would have given the Guardians a touch of sanity. Grown wise in all the ways and means of blamelessly defeating the unblest majority, the gentlemanly government of the British manage affairs of this kind much better. They have learned that bellicose gestures provoke ill will, and that desperate remedies should be held in reserve until needed. Whereas the Guardians of the Vested Interests in America are plainly putting things in train for a capital operation, for which there is no apparent necessity. It should be evident of slight reflection that things have not reached that fateful stage where nothing short of a capital operation can be counted on to save the life of the Vested Interests in America; not yet. And indeed, things need assuredly not reach such a stage if reasonable measures are taken is avoid^ undue alarm and irritation. All that is needed to keep the underlying population of America in a sweet temper is a degree of patient ambiguity and delay, something after the British pattern, and all will yet be well with the vested rights of property and privilege, for some time to come. History teaches that no effectual popular uprising can be set afoot against an outworn institutional iniquity unless it effectually meets the special material [297] requirements of the situation which provokes it; nor on the other hand can an impending popular overturn be staved off without making up one's account with those material conditions which converge to bring it on. The long history of British gentlemanly compromise, collusion, conciliation, and popular defeat, is highly instructive on that head. And it should be evident to any disinterested person, on any slight survey of the pertinent facts, that the situation in America does not now offer such a combination of circumstances as would be required for any effectual overturn of the established order or any forcible dispossession of these Vested Interests that now control the material fortunes of the American people. In short, by force of circumstances, Bolshevism is not a present menace to the Vested Interests in America; provided always that the Guardians of these Vested Interests do not go out of their way to precipitate trouble by such measures as will make Bolshevism of any complexion seem the lesser evil, which is perhaps not a safe proviso, in view of the hysterically Red state of mind of the Guardians. No movement for the dispossession of the Vested Interests in America can hope for even a temporary success unless it is undertaken by an organization which is competent to take over the country's productive industry as a whole, and to administer it from the start on a more efficient plan than that now pursued by the Vested Interests; and there is no such organization in sight or in immediate prospect. The nearest approach to a practicable organization of industrial forces in America, just yet, is the A. F. of L.; which need only be named in order to dispel the illusion that there is anything to hope or fear in the way of a radical move at its hands. The A. F. of L. is itself one of the Vested Interests, as ready as any other to do battle for its own margin of privilege and profit. At the same time it would be a wholly chimerical fancy to believe that such an organization of workmen as the A. F. of L. could take over and manage any appreciable section of the industrial system, even if their single-minded interest in special privileges for themselves did not preclude their making a move in that direction. The Federation is not organized for production but for bargaining. It is not organized on lines that would be workable for the management of any industrial system as a whole or of any special line of production within such a system. It is, in effect, an organization for the strategic defeat of employers and rival organizations, by recourse to enforced unemployment and obstruction; not for the production of goods and services. And it is officered by tacticians, skilled in the ways and means of bargaining with politicians and intimidating employers and employees; not by men who have any special insight into or interest in the ways and means of quantity production and traffic management. They are not, and for their purpose they need not be, technicians in any conclusive sense, and the fact should not be lost sight of that any effectual overturn, of the kind hazily contemplated by the hysterical officials, will always have to be primarily a technical affair. In effect, the Federation is officered by safe and sane politicians, and its rank and file are votaries of "the full dinner-pail." No Guardian need worry about the Federation, and there is no other organization in sight which differs materially from the Federation in those respects which would count toward a practical move in the direction of a popular overturn, unless a doubtful exception should be claimed for the Railroad Brotherhoods. The A. F. of L. is a business organization with a vested interest of its own; for keeping up prices and keeping down the supply, quite after the usual fashion of management by the other Vested Interests; not for managing productive industry or even for increasing the output of goods produced under any management. At the best, its purpose and ordinary business is to gain a little something for its own members at a more than proportionate cost to the rest of the community; which does not afford either the spiritual or the material ground for a popular overturn. Nor is it the A. F. of L. or the other organizations for "collective bargaining" that come in for the comfortless attentions of the officials and of the many conspiracies in restraint of sobriety. Their nerve-shattering fears center rather on those irresponsible wayfaring men of industry who make up the I. W. W., and on the helpless and hapless alien unbelievers whose contribution to the sum total is loose talk in some foreign tongue. But if there is any assertion to be made without fear of stumbling it will be, that this flotsam of industry is not organized to take over the highly technical duties involved in the administration of the industrial system. But it is these and their like that engage the best attention of the many commissions, committees, clubs, leagues, federations, syndicates, and corporations for the chasing of wild geese under the Red flag. Wherever the mechanical industry has taken decisive effect, as in America and in the two or three industrialized regions of Europe, the community lives from hand to mouth, in such a way that its livelihood depends on the effectual working [298] of its industrial system from day to day. In such a case a serious disturbance and derangement of the balanced process of production is always easily brought on, and it always brings immediate hardship on large sections of the community. Indeed, it is this state of things the ease with which industry can be deranged and hardship can be brought to bear on the people at large that constitutes the chief asset of such partisan organizations as the A. F. of L. It is a state of things which makes sabotage easy and effectual and gives it breadth and scope. But sabotage is not revolution. If it were, then the A. F. of L., the I. W. W., the Chicago Packers, and the U. S. Senate would be counted among the revolutionists. Far-reaching sabotage, that is to say derangement of the industrial system, such as to entail hardship on the community at large or on some particular section of it, is easily brought to bear in any country that is dominated by the mechanical industry. It is commonly resorted to by both parties in any controversy between the businesslike employers and the employees. It is, in fact, an everyday expedient of business, and no serious blame attaches to its ordinary use. Under given circumstances, as, e. g., under the circumstances just now created by the return of peace, such derangement of industry and hindrance of production is an unavoidable expedient of " business as usual." And derangement of the same nature is also commonly resorted to as a means of coercion in any attempted movement of overturn. It is the simple and obvious means of initiating any revolutionary disturbance in any industrial or commercialized country. But under the existing industrial conditions, if it is to achieve even a transient success, any such revolutionary movement of reconstruction must also be in a position from the outset to overcome any degree of initial derangement in industry, whether of its own making or not, and to do constructive work of that particular kind which is called for by the present disposition of industrial forces and by the present close dependence of the community's livelihood on the due systematic working of these industrial forces. To take effect and to hold its own even for the time being, any movement of overturn must from beforehand provide for a sufficiently productive conduct of the industrial system on which the community's material welfare depends, and for a competent distribution of goods and services throughout the community. Otherwise, under existing industrial conditions, nothing more can be accomplished than an ephemeral disturbance and a transient season of accentuated hardship. Even a transient failure to make good in the management of the industrial system must immediately defeat any movement of overturn in any of the advanced industrial countries. At this point the lessons of history fail, because the present industrial system and the manner of close-knit community life enforced by this industrial system have no example in history. This state of things, which so conditions the possibility of any revolutionary overturn, is peculiar to the advanced industrial countries; and the limitations which this state of things imposes are binding within these countries in the same measure in which these peoples are dominated by the system of mechanical industry. In contrast with this state of things, the case of Soviet Russia may be cited to show the difference. As compared with America and much of western Europe, Russia is not an industrialized region, in any decisive sense; although Russia, too, leans on the mechanical industry in a greater degree than is commonly recognized. Indeed, so considerable is the dependence of the Russians on the mechanical industry that it may yet prove to be the decisive factor in the struggle which is now going on between Soviet Russia and the Allied Powers. Now, it is doubtless this continued success of the Soviet administration in Russia that has thrown this ecstatic scare into the Guardians of the Vested Interests in America and in the civilized countries of Europe. There is nothing to be gained by denying that the Russian Soviet has achieved a measure of success; indeed, an astonishing measure of success, considering the extremely adverse circumstances under which the Soviet has been at work. The fact may be deplored, but there it is. The Soviet has plainly been successful, in the material respect, far beyond the reports which have been allowed to pass the scrutiny of the Seven Censors and the Associated Prevarication Bureaux of the Allied Powers. And this continued success of Bolshevism in Russia or such measure of success as it has achieved is doubtless good ground for a reasonable degree of apprehension among good citizens elsewhere; but it does not by any means argue that anything like the same measure of success could be achieved by a revolutionary movement on the same lines " in America, even in the absence of intervention from outside. Soviet Russia has made good to the extent of maintaining itself against very great odds for some two years; and it is even yet a point in doubt whether the Allied Powers will be able to put down the Soviet by use of all the forces at their disposal and with the help of all the reactionary elements in Russia and in the neighboring countries. But the Soviet owes this measure of success to the fact that [299] the Russian people have not yet been industrialized in anything like the same degree as their western neighbors. They have in great measure been able to fall back on an earlier, simpler, less close-knit plan of productive industry; such that any detailed part of this loose-knit Russian community is able, at a pinch, to draw its own livelihood from its own soil by its own work, without that instant and unremitting dependence on materials and wrought goods drawn from foreign ports and distant regions, that is characteristic of the advanced industrial peoples. This old fashioned plan of home production does not involve an "industrial system" in the same exacting sense as the mechanical industry. The Russian industrial system, it is true, also runs on something of a balanced plan of give and take; it leans on the mechanical industry in some considerable degree and draws on foreign trade for many of its necessary articles of use; but for the transient time being, and for an appreciable interval of time, such a homebred industrious population, living close to the soil and supplying its ordinary needs by home-bred handicraft methods, will be able to maintain itself in a fair state of efficiency if not in comfort, even in virtual isolation from the more advanced industrial centers and from the remoter sources of raw materials. To the ignorant, that is to say, to the wiseacres of commerce, this ability of the Russian people to continue alive and active under the conditions of an exemplary blockade has been a source of incredulous astonishment. It is only as a righting power, and then only for the purposes of an aggressive war, that such a community can count for virtually nothing in a contest with the advanced industrial nations. Such a people makes an unwieldy country to conquer from the outside. Soviet Russia is self-supporting, in a loose and comfortless way, and in this sense it is a very defensible country and may yet prove extremely difficult for the Allied Powers to subdue; but in the nature of the case there need be not the slightest shadow of apprehension that Soviet Russia can successfully take the offensive against any outside people, great or small, which has the use of the advanced mechanical industry. The statesmen of the Allied Powers, who are now carrying on a covert war against Soviet Russia, are in a position to know this state of the case; and not least those American statesmen, who have by popular sentiment been constrained reluctantly to limit and mask their cooperation with the reactionary forces in Finland, Poland, the Ukraine, Siberia, and elsewhere. They have all been at pains diligently to inquire into the state of things in Soviet Russia; although, it is true, they have also been at pains to give out surprisingly little information, that being much of the reason for the Seven Censors. The well-published official and semi-official apprehension of a Bolshevist offensive to be carried on beyond the Soviet frontiers may quite safely be set down as an article of statesmanlike subterfuge. The statesmen know better. What is feared in fact is infection of the Bolshevist spirit beyond the Soviet frontiers, to the detriment of those Vested Interests whose guardians these statesmen are. And en this head the apprehensions of these Elder Statesmen are not altogether groundless; for the Elder Statesmen are also in a position to know, without much inquiry, that there is no single spot or corner in civilized Europe or America where the underlying population would have anything to lose by such an overturn of the established order as would cancel the vested rights of privilege and property, whose guardians they are. But commercialized America is not the same thing as Soviet Russia. By and large, America is an advanced industrial country, bound in the web of a fairly close-knit and inclusive industrial system. The industrial situation, and therefore the conditions of success, are radically different in the two countries in those respects that would make the outcome in any effectual revolt. So that, for better or worse, the main lines that would necessarily have to be followed in working out any practicable revolutionary movement in this country are already laid down by the material conditions of its productive industry. On provocation there might come a flare of riotous disorder, but it would come to nothing, however substantial the provocation might be, so long as the movement does not fall in with those main lines-of management which the state of the industrial system requires in order to insure any sustained success. These main lines of revolutionary strategy are lines of technical organization and industrial management; essentially lines of industrial engineering; such as will fit the organization to take care of the highly technical industrial system that constitutes the indispensable material foundation of any modern civilized community. They will accordingly not only be of a profoundly different order from what may do well enough in the case of such a loose-knit and backward industrial region as Russia, but they will necessarily also be of a kind which has no close parallel in the past history of revolutionary movements. Revolutions in the eighteenth century were military and political; and the Elder Statesmen who now believe themselves to be making history still believe that revolutions can be made and unmade by the same ways and means in the twentieth century. But any substantial [300] or effectual overturn in the twentieth century will necessarily be an industrial overturn; and by the same token, any twentieth-century revolution can be combated or neutralized only by industrial ways and means. The case of America, therefore, considered as a candidate for Bolshevism, will have to be argued on its own merits, and the argument will necessarily turn on the ways and means of productive industry as conditioned by the later growth of technology. It has been argued, and it seems not unreasonable to believe, that the established order of business enterprise, vested rights, and commercialized nationalism, is due presently to go under in a muddle of shame and confusion, because it is no longer a practicable system of industrial management under the conditions created by the later state of the industrial arts. Twentieth-century technology has outgrown the eighteenth-century system of vested rights. The experience of the past few years teaches that the usual management of industry by business methods has become highly inefficient and wasteful, and the indications are many and obvious that any businesslike control of production and distribution is bound to run more and more consistently at cross purposes with the community's livelihood, the farther the industrial arts advance and the wider the industrial system extends. So that it is perhaps not reasonably to be questioned that the Vested Interests in business are riding for a fall. But the end is not yet; although it is to be admitted, regretfully perhaps, that with every further advance in technological knowledge and practice and with every further increase in the volume and complexity of the industrial system, any businesslike control is bound to grow still more incompetent, irrelevant, and impertinent. It would be quite hazardous to guess, just yet, how far off that consummation of commercial imbecility may be. There are those who argue that the existing system of business management is plainly due to go under within two years' time; and there are others who are ready, with equal confidence, to allow it a probable duration of several times that interval; although, it is true, these latter appear, on the whole, to be persons who are less intimately acquainted with the facts in the case. Many men experienced in the larger affairs of industrial business are in doubt as to how long things will hold together. But, one with another, these men who so are looking into the doubtful future are, somewhat apprehensively, willing to admit that there is yet something of a margin to go on; so much so that, barring accident, there should seem to be no warrant for counting at all confidently on a disastrous breakdown of the business system within anything like a two-year period. And, for the reassurance of the apprehensive Guardian of the Vested Interests, it is to be added that should such a break in the situation come while things are standing in their present shape, the outcome could assuredly not' be an effectual overturn of the established order; so long as no practicable plan has been provided for taking over the management from the dead hand of the Vested Interests. Should such a self-made breakdown come at the present juncture, the outcome could, in fact, scarcely be anything more serious than an interval, essentially transient though more or less protracted, of turmoil and famine among the underlying population, together with something of a setback to the industrial system as a whole. There seems no reason to apprehend any substantial disallowance of the vested rights of property to follow from such an essentially ephemeral interlude of dissension. In fact, the tenure of the Vested Interests in America should seem to be reasonably secure, just yet. Something in the nature of riotous discontent and factional disorder is perhaps to be looked for in the near future in this country, and there may even be some rash gesture of revolt on the part of ill-advised malcontents. Circumstances would seem to favor something of the kind. It is conservatively estimated that there is already a season of privation and uncertainty in prospect for the underlying population, which could be averted only at the cost of some substantial interference with the vested rights of the country's business men, which should seem a highly improbable alternative, in view of that spirit of filial piety with which the public officials guard the prerogatives of business as usual. So, e. g., it is now (September, 1919) confidently expected, or rather computed, that a fuel famine is due in America during the approaching winter, for reasons of sound business management; and it is likewise to be expected that for the like reason the American transportation system is also due to go into a tangle of congestion and idleness about the same time barring providential intervention in the way of unexampled weather conditions. But a season of famine and disorderly conduct does not constitute a revolutionary overturn of the established order; and the Vested Interests are secure in their continued usufruct of the country's industry, just yet. This hopeful posture of things may be shown convincingly enough and with no great "expenditure of argument. To this end it is proposed to pursue the argument somewhat further presently; by [301] describing in outline what are the infirmities of the have to be the character of any organization of an regime of the Vested Interests, which the more sanguine malcontents count on to bring that regime to an inglorious finish in the immediate future; and also to set down, likewise in outline, what would industrial forces which could be counted on effectually to wind up the regime of the Vested Interests and take over the management of the industrial system on a deliberate plan. THORSTEIN VEBLEN. ----------------------------------------------------------------------------- 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. ----------------------------------------------------------------------------- BOLSHEVISM AND THE VESTED INTERESTS IN AMERICA III. A Memorandum on a Practicable Soviet of Technicians The Dial. No. 802, Nov., 1, 1919, pp. 373-380 ----------------------------------------------------------------------------- [373] IT is THE PURPOSE of this memorandum to show, in an objective way, that under, existing circumstances there need be no fear, and no hope, of an effectual revolutionary overturn in America, such as would unsettle the established order and unseat those Vested Interests that now control the country's industrial system. In an earlier paper (THE DIAL, October 4) it has been argued that no effectual move in the direction of such an overturn can be made except on the initiative and under the direction of the country's technicians, taking action in common and on a concerted plan. Notoriously, no move of this nature has been made hitherto, nor is there evidence that anything of the kind has been contemplated by the technicians. They still are consistently loyal, with something more than a hired-man's loyalty, to the established order of commercial profit and absentee ownership. And any adequate plan of concerted action, such as would be required for the enterprise in question, is not a small matter that can be arranged between two days. Any plan of action that small hope to meet the requirements of the case in any passable fashion must necessarily have the benefit of mature deliberation among the technicians who are competent to initiate such an enterprise; it must engage the intelligent co-operation of several thousand technically trained men scattered over the face of the country, in one industry and another; must carry out a passably complete cadastration of the country's industrial forces; must set up practicable organization tables covering the country's industry in some detail, energy-resources, materials, and man power; and it must also engage the aggressive support of the trained men at work in transportation, mining, and the greater mechanical industries. These are initial requirements, indispensable to the initiation of any enterprise of the kind in such an industrial country as America; and so soon as this is called to mind it will be realised that any fear of an effectual move in this direction at present is quite chimerical. So that, in fact, it may be set down without a touch of ambiguity that absentee ownership is secure, just yet. Therefore, to show conclusively and in an objective way how remote any contingency of this nature still is, it is here proposed to set out in a summary fashion the main lines which any such concerted plan of action would have to follow, and what will of necessity be the manner of organization which alone can hope to take over the industrial system, following the eventual abdication or disposession of the Vested Interests and their absentee [374] owners. And, by way of parenthesis, it is always the self-made though reluctant abdication of the Vested Interests and their absentee owners, rather than their forcible dispossession, that is to be looked for as a reasonably probable event in the calculable future. It should, in effect, cause no surprise to find that they will, in a sense, eliminate themselves, by letting go quite involuntarily after the industrial situation gets quite beyond their control. In fact, they have, in the present difficult juncture, already sufficiently shown their unfitness to take care of the country's material welfare, which is after all the only ground on which they can set up a colorable claim to their vested rights. At the same time something like an opening bid for a bargain of abdication has already come in from more than one quarter. So that a discontinuance of the existing system of absentee ownership, on one plan or another, is no longer to be considered a purely speculative novelty; and an objective canvass of the manner of organization that is to be looked to to take the place of the control now exercised by the Vested Interests in the event of their prospective abdication should accordingly have some present interest, even apart from its bearing on the moot question of any forcible disruption of the established system of absentee ownership. As a matter of course, the powers and duties of the incoming directorate will be of a technological nature, in the main if not altogether; inasmuch as the purpose of its coming into control is the care of the community's material welfare by a more competent management of the country's industrial system. It may be added that even in the unexpected event that the contemplated overturn should, in the beginning, meet with armed opposition from the partisans of the old order, it will still be true that the duties of the incoming directorate will be of a technological character, in the main; inasmuch as warlike operations are also now substantially a matter of technology, both in the immediate conduct of hostilities and in the still more urgent work of material support and supply. The incoming industrial order is designed to correct the shortcomings of the old. The duties and powers of the incoming directorate will accordingly converge on those points in the administration of industry where the old order has most signally fallen short; that is to say, on the due allocation of resources and a consequent full and reasonably proportioned employment of the available equipment and man power; on the avoidance of waste and duplication of work; and on an equitable and sufficient supply of goods and services to consumers. Evidently the most immediate and most urgent work to be taken over by the incoming directorate is that for want of which under the old order the industrial system has been working slack and at cross purposes; that is to say the due allocation of available resources, in power, equipment, and materials, among the greater primary industries. For this necessary work of allocation there has been substantially no provision under the old order. To carry on this allocation, the country's transportation system must be placed at the disposal of the same staff that has the work of allocation to do; since, under modern conditions, any such allocation will take effect only by use of the transportation system. But, by the same token, the effectual control of the distribution of goods to consumers will also necessarily fall into the same hands; since the traffic in consumable goods is also a matter of transportation, in the main. On these considerations, which would only be reenforced by a more detailed inquiry into the work to be done, the central directorate will apparently take the shape of a loosely tripartite executive council, with power to act in matters of industrial administration; the council to include technicians whose qualifications enable them to be called Resource Engineers, together with similarly competent spokesmen of the transportation system and of the distributive traffic in finished products and services. With a view to efficiency and expedition, this executive council will presumably not be a numerous body; although its staff of intelligence and advice may be expected to be fairly large, and it will be guided by current consultation with the accredited spokesmen (deputies, commissioners, executives, or whatever they may be called) of the several main subdivisions of productive industry, transportation, and distributive traffic. Armed with these powers and working in due consultation with a sufficient ramification of subcenters and local councils, this industrial directorate should be in a position to avoid virtually all unemployment of serviceable equipment and man power on the one hand, and all local or seasonal scarcity on the other hand. The main line of duties indicated by the character of the work incumbent on the directorate, as well as the main line of qualifications in its personnel, both executive and advisory, is such as will call for the services of Production Engineers, to use a term which is coming into use. But it is also evident that in its continued work of planning and advisement the directorate will require the services of an appreciable number of consulting economists; men who are qualified to be called Production Economists. [375] The profession now includes men with the requisite qualifications, although it cannot be said that the gild of economists is made up of such men in the main. Quite blamelessly, the economists have, by tradition and by force of commercial pressure, habitually gone in for a theoretical inquiry into the ways and means of salesmanship, financial traffic, and the distribution of income and property, rather than a study of the industrial system considered as a ways and means of producing goods and services. Yet there now are, after all, especially among the younger generation, an appreciable number, perhaps an adequate number, of economists who have learned that "business" is not "industry" and that investment is not production. And, here as always, the best is good enough, perforce. "Consulting economists" of this order are a necessary adjunct to the personnel of the central directorate, because the technical training that goes to make a resource engineer, or a production engineer, or indeed a competent industrial expert in any line of specialization, is not of a kind to give him the requisite sure and facile insight into the play of economic forces at large; and as a matter of notorious fact, very few of the technicians have gone at all far afield to acquaint themselves with anything more to the point in this connection than the half-forgotten commonplaces of the old order. The "consulting economist" is accordingly necessary to cover an otherwise uncovered joint in the new articulation of things. His place in the scheme is analogous to the part which legal counsel now plays in the manoeuvers of diplomatists and statesmen; and the discretionary personnel of the incoming directorate are to be, in effect, something in the way of industrial statesmen under the new order. There is also a certain general reservation to be made with regard to personnel, which may conveniently be spoken of at this point. To avoid persistent confusion and prospective defeat, it will be necessary to exclude from all positions of trust and executive, responsibility all persons who have been trained for business or who have had experience in business undertakings of the larger sort. This will apply generally, throughout the administrative scheme, although it will apply more imperatively as regards the responsible personnel of the directorate, central and subordinate, together with their staff of intelligence and advice, where-ever judgment and insight are essential. What is wanted is training in the ways and means of productive industry, not in the ways and means of salesmanship and profitable investment. By force of habit, men trained to a businesslike view of what is right and real will be irretrievably biassed against any plan of production and distribution that is not drawn in terms of commercial profit and loss and does not provide a margin of free income to go to absentee owners. The personal exceptions to the rule are apparently very few. But this one point is after all of relatively minor consequence. What is more to the point in the same connection is that the commercial bias induced by their training in businesslike ways of thinking leaves them incapable of anything like an effectual insight into the use of resources or the needs and aims of productive industry, in any other terms than those of commercial profit and loss. Their units and standards of valuation and accountancy are units and standards of price, and of private gain in terms of price; whereas for any scheme of productive industry which runs, not on salesmanship and earnings, but on tangible performance and tangible benefit to the community at large, the valuations and accountancy of salesmanship and earnings are misleading. With the best and most benevolent intentions, men sp trained will unavoidably make their appraisals of production and their disposition of productive forces in the only practical terms with which they are familiar, the terms of commercial accountancy; which is the same as saying, the accountancy of absentee ownership and free income; all of which it is the abiding purpose of the projected plan to displace. For the purposes of this projected new order of production, therefore, the experienced and capable business men are at the best to be rated as well-intentioned deaf-mute blind men. Their wisest judgment and sincerest endeavors become meaningless and misguided so soon as the controlling purpose of industry shifts from the footing of profits on absentee investment to that of a serviceable output of goods. All this abjuration of business principles and businesslike sagacity may appear to be a taking of precautions about a vacant formality; but it is as well to recall that by trained propensity and tradition the business men, great and small, are after all, each in their degree, lieutenants of those Vested Interests which the projected organization of industry is designed to displace, schooled in their tactics and marching under their banners. The experience of the war administration and its management of industry by help of the business men during the past few years goes to show what manner of industrial wisdom is to be looked for where capable and well-intentioned business men are called in to direct industry with a view to maximum production and economy. For its [376] responsible personnel the administration has uniformly drawn on experienced business men, preferably men of successful experience in Big Business; that is to say, trained men with a shrewd eye to the main chance. And the tale of its adventures, so far as a businesslike reticence has allowed them to become known, is an amazing comedy of errors; which runs to substantially the same issue whether it is told of one or another of the many departments, boards, councils, commissions, and administrations, that have had this work to do. Notoriously, this choice of personnel has with singular uniformity proved to be of doubtful advisability, not to choose a harsher epithet. The policies pursued, doubtless with the best and most sagacious intentions of which this businesslike personnel have been capable, have uniformly resulted in the safeguarding of investments and the allocation of commercial profits; all the while that the avowed aim of it all, and doubtless the conscientious purpose of the businesslike administrators, has been quantity production of essential goods. The more that comes to light, the more visible becomes the difference between the avowed purpose and the tangible performance. Tangible performance in the way of productive industry is precisely what the business men do not know how to propose, but it is also that on which the possible success of any projected plan of overturn will always rest. Yet it is also to be remarked that even the reluctant and blindfold endeavors of these businesslike administrators to break away from their lifelong rule of reasonable earnings, appear to have resulted in a very appreciably increased industrial output per unit of man power and equipment employed. That such was the outcome under the war administration is presumably due in great part to the fact that the business men in charge were unable to exercise so strict a control over the working force of technicians and skilled operatives during that period of stress. And here the argument comes in touch with one of the substantial reasons why there need be no present fear of a revolutionary overturn. By settled habit, the American population are quite unable to see their way to entrust any appreciable responsibility to any other than business men; at the same time that such a move of overturn can hope to succeed only if it excludes the business men from all positions of responsibility. This sentimental deference of the American people to the sagacity of its business men is massive, profound, and alert. So much so that it will take harsh and protracted experience to remove it, pr to divert it sufficiently for the purposes of any revolutionary diversion. And more particularly, popular sentiment in this country will not tolerate the assumption of responsibility by the technicians, who are in the popular apprehension conceived to be a somewhat fantastic brotherhood of over-specialized cranks, not to be trusted out of sight except under the restraining hand of safe and sane business men. Nor are the technicians themselves in the habit of taking a greatly different view of their own case. They still feel themselves, in the nature of things, to fall into place as employees of those enterprising business men who are, in the nature of things, elected to get something for nothing. Absentee ownership is secure, just yet. In time, with sufficient provocation, this popular frame of mind may change, of course; but it is in any case a matter of an appreciable lapse of time. Even such a scant and bare outline of generalities as has been hastily sketched above will serve to show that any effectual overturn of the established order is not a matter to be undertaken out of hand, or to be manoeuvred into shape by makeshifts after the initial move has been made. There is no chance without deliberate preparations from beforehand. There are two main lines of preparations that will have to be taken care of by anybody of men who may contemplate such a move: (a) An inquiry into existing conditions and into the available ways and means; and (b) the setting up of practicable organization tables and a survey of the available personnel. And bound up with this work of preparation, and conditioning it, provision must also be made for the growth of such a spirit of teamwork as will be ready to undertake and undergo this critical adventure. All of which will take time. It will be necessary to investigate and to set out in a convincing way what are the various kinds and lines of waste that are necessarily involved in the present businesslike control of industry; what are the abiding causes of these wasteful and obstructive practices; and what economies of management and production will become practicable on the elimination of the present businesslike control. This will call for diligent team-work on the part of a suitable group of economists and engineers, who will have to be drawn together by self-selection on the basis of a common interest in productive efficiency, economical use of resources, and an equitable distribution of the consumable output. Hitherto no such self-selection of competent persons has visibly taken place, and the beginnings of a plan for team-work in carrying on such an inquiry are yet to be made. In the course of this contemplated inquiry and on the basis afforded by its findings there is no [377] less serious work to be done in the way of deliberation and advisement, among the members of the group in question and in consultation with outside technological men who know what can best be done with the means in hand, and whose interest in things drives them to dip into the same gainless adventure. This will involve the setting up of organization tables to cover the efficient use of the available resources and equipment, as well as to re-organize the traffic involved in the distribution of the output. By way of an illustrative instance, to show by an example something of what the scope and method of this inquiry and advisement will presumably be like, it may be remarked that under the new order the existing competitive commercial traffic engaged in the distribution of goods to consumers will presumably fall away, in the main, for want of a commercial incentive. It is well known, in a general way, that the present organization of this traffic, by wholesale and retail merchandising, involves a very large and very costly duplication of work, equipment, stock, and personnel, several hundred per cent more than would be required by an economically efficient management of the traffic on a reasonable plan. In looking for a way out of the present extremely wasteful merchandising traffic, and in working out organization tables for an equitable and efficient distribution of goods to consumers, the experts in the case will, it is believed, be greatly helped out by detailed information on such existing organizations as, e.g., the distributing system of the Chicago Packers, the chain stores, and the mail-order houses. These are commercial organizations, of course, and as such they are managed with a view to the commercial gain of their owners and managers; but they are at the same time designed to avoid the ordinary wastes of the ordinary retail distribution, for the benefit of their absentee owners. There are not a few object-lessons of economy of this practical character to be found among the Vested Interests; so much so that the economies which result from them are among the valuable capitalized assets of these business concerns. This contemplated inquiry will, of course, also be useful in the way of publicity; to show, concretely and convincingly, what are the inherent defects of the present businesslike control of industry, why these defects are inseparable from a businesslike control under existing circumstances, and what may fairly be expected of an industrial management which takes no account of absentee ownership. The ways and means of publicity to be employed is a question that plainly cannot profitably be discussed beforehand, so long as the whole question of the contemplated inquiry itself has little more than a speculative interest; and much the same will have to be said as to the scope and detail of the inquiry, which will have to be determined in great part by the interest and qualifications of the men who are to carry it on. Nothing but provisional generalities could at all confidently be sketched into its program until the work is in hand. The contemplated eventual shift to a new and more practicable system of industrial production and distribution has been here spoken of as a "revolutionary overturn" of the established order. This flagitious form of words is here used chiefly because the Guardians of the established order are plainly apprehensive of something sinister that can be called by no gentle name, rather than with the intention of suggesting that extreme and subversive measures alone can now save the life of the underlying population from the increasingly disserviceable rule of the Vested Interests. The move which is here discussed in a speculative way under this sinister form of words, as a contingency to be guarded against by fair means and foul, need, in effect, be nothing spectacular; assuredly it need involve no clash of arms or fluttering of banners, unless, as is beginning to seem likely, the Guardians of the old order should find that sort of thing expedient. In its elements, the move will be of the simplest and most matter-of-fact character; although there will doubtless be many intricate adjustments to be made in detail. In principle, all that is necessarily involved is a disallowance of absentee ownership; that is to say, the disestablishment of an institution which has, in the course of time and change, proved to be noxious to the common good. The rest will follow quite simply from the cancelment of this outworn and footless vested right. By absentee ownership, as the term applies in this connection, is here to be understood the ownership of an industrially useful article by any person or persons who are not habitually employed in the industrial use of it. In this connection, office work of a commercial nature is not rated as industrial employment. A corollary of some breadth follows immediately, although it is so obvious an implication of the main proposition that it should scarcely need explicit statement: An owner who is employed in the industrial use of a given parcel of property owned by him, will still be an "absentee owner," within the meaning of the term, in case he is not the only person habitually employed in its use. A further corollary follows, perhaps less obvious at first sight, but no less convincing on closer [378] attention to the sense of the terms employed: Collective ownership, of the corporate form, that is to say ownership by a collectivity instituted ad hoc, also falls away as being unavoidably absentee ownership, within the meaning of the term. It will be noted that all this does not touch joint ownership of property held in undivided interest by a household group and made use of by the members of the household indiscriminately. It is only in so far as the household is possessed of useful property not made use of by its members, or not made use of without hired help, that its ownership of such property falls within the meaning of the term, absentee ownership. To be sufficiently explicit; it may be added that the cancelment of absentee ownership as here understood will apply indiscriminately to all industrially useful objects, whether realty or personality, whether natural resources, equipment, banking capital, or wrought goods in stock. As an immediate consequence of this cancelment of absentee ownership it should seem to be altogether probable that industrially useful articles will presently cease to be used for purposes of ownership, that is to say for purposes of private gain; although there might be no administrative interference with such use. Under the existing state of the industrial arts, neither the natural resources drawn on for power and materials nor the equipment employed in the great and controlling industries are of a nature to lend themselves to any other than absentee ownership; and these industries control the situation, so that private enterprise for gain on a small scale would scarcely find a suitable market. At the same time the inducement to private accumulation of wealth at the cost of the community would virtually fall away, inasmuch as the inducement to such accumulation now is in nearly all cases an ambition to come in for something in the way of absentee ownership. In effect, other incentives are a negligible quantity. Evidently, the secondary effects of such cancelment will go far, in more than one direction, but evidently, too, there could be little profit in endeavoring to follow up these ulterior contingencies in extended speculations here. As to the formalities, of a legal complexion, that would be involved in such a disallowance of absentee ownership, they need also be neither large nor intricate; at least not in their main incidence. It will in all probability take the shape of a cancelment of all corporation securities, as an initial move. Articles of partnership, evidences of debt, and other legal instruments which now give title to property not in hand or not in use by the owner, will be voided by the same act. In all probability this will be sufficient for the purpose. This act of disallowance may be called subversive and revolutionary; but while there is no intention here to offer anything in the way of exculpation, it is necessary to an objective appraisal of the contemplated move to note that the effect of such disallowance would be subversive or revolutionary only in a figurative sense of the words. It would all of it neither subvert nor derange any substantial mechanical contrivance or relation, nor need it materially disturb the relations, either as workman or as consumer of goods and services, of any appreciable number of persons now engaged in productive industry. In fact, the disallowance will touch nothing more substantial than a legal make-believe. This would, of course, be serious enough in its consequences to those classes called the kept classes whose livelihood hangs on the maintenance of this legal make-believe. So, likewise, it would vacate the occupation of the "middleman," which likewise turns on the maintenance of this legal make-believe; which gives "title" to that to which one stands in no material relation. Doubtless, hardship will follow thick and fast, among those classes who are least inured to privation; and doubtless all men will agree that it is a great pity. But this evil is, after all, a side issue, as regards the present argument, which has to do with nothing else than the practicability of the scheme. So it is necessary to note that, however detrimental to the special interests of the absentee owners this move may be, yet it will not in any degree derange or diminish those material facts that constitute the ways and means of productive industry; nor will it in any degree enfeeble or mutilate that joint stock of technical knowledge and practice that constitutes the intellectual working force of the industrial system. It does not directly touch the material facts of industry, for better or worse. In this sense it is a completely idle matter, in its immediate incidence, whatever its secondary consequences may be believed to be. But there is no doubt that a proposal to disallow absentee ownership will shock the moral sensibilities of many persons; more particularly the sensibilities of the absentee owners. To avoid the appearance of willful neglect, therefore, it is necessary to speak also of the "moral aspect." There is no intention here to argue the moral merits of this contemplated disallowance of absentee ownership; or to argue for or against such a move, on moral or other grounds. Absentee ownership is legally sound today. Indeed, as is well known, the [379] Constitution includes a clause which specially safeguards its security. If, and when, the law is changed, in this respect, what so is legal today will of course cease to be legal. There is, in fact, not much more to be said about it; except that, in the last resort, the economic moralities wait on the economic necessities. The economic-moral sense of the American community today runs unequivocally to the effect that absentee ownership is fundamentally and eternally right and good; and it should seem reasonable to believe that it will continue to run to that effect for some time yet. There has lately been some irritation and faultfinding with what is called "profiteering" and there may be more or less uneasy discontent with what is felt to be an unduly disproportionate inequality in the present distribution of income; but apprehensive persons should not lose sight of the main fact that absentee ownership after all is the idol of every true American heart. It is the substance of things hoped for and the reality of things not seen. To achieve (or to inherit) a competency, that is to say to accumulate such wealth as will assure a "decent" livelihood in industrial absentia, is the universal, and universally laudable, ambition of all who have reached years of discretion; but it all means the same thing to get something for nothing, at any cost. Similarly universal is the awestruck deference with which the larger absentee owners are looked up to for guidance and example. These substantial citizens are the ones who have "made good," in the popular apprehension. They are the great and good men whose lives "all remind us we can make our lives sublime, etc." This commercialized frame of mind is a sturdy outgrowth of many generations of consistent training in the pursuit of the main chance; it is second nature, and there need be no fear that it will allow the Americans to see workday facts in any other than its own perspective, just yet. The most tenacious factor in any civilization is a settled popular frame of mind, and to this abiding American frame of mind absentee ownership is the controlling center of all the economic realities. So, having made plain that all this argument on a practicable overturn of the established order has none but a speculative interest, the argument can go on to consider what will be the nature of the initial move of overturn which is to break with the old order of absentee ownership and set up a regime of workmanship governed by the country's technicians. As has already been called to mind, repeatedly, the effective management of the industrial system at large is already in the hands of the technicians, so far as regards the work actually done; but it is all under the control of the Vested Interests, representing absentee owners, so far as regards its failure to work. And the failure is, quite reasonably, attracting much attention lately. In this two-cleft, or bi-cameral, administration of industry, the technicians may be said to represent the community at large in its industrial capacity, or in other words the industrial system as a going concern; whereas the business men speak for the commercial interest of the absentee owners, as a body which holds the industrial community in usufruct. It is the part of the technicians, between them, to know the country's available resources, in mechanical power, and equipment; to know and put in practice the joint stock of technological knowledge which is indispensable to industrial production; as well as to know and take care of the community's habitual need and use of consumable goods. They are, in effect, the general staff of production engineers, under whose surveillance the required output of goods and services is produced and distributed to the consumers. Whereas it is the part of the business men to know what rate and volume of production and distribution will best serve the commercial interest of the absentee owners, and to put this commercial knowledge in practice by nicely limiting production and distribution of the output to such a rate and volume as their commercial traffic will bear that is to say, what will yield the largest net income to the absentee owners in terms of price. In this work of sagaciously retarding industry the captains of industry necessarily work at cross purposes, among themselves, since the traffic is of a competitive nature. Accordingly, in this two-cleft arrangement of administrative functions, it is the duty of the technicians to plan the work and to carry it on; and it is the duty of the captains of industry to see that the work will benefit none but the captains and their associated absentee owners, and that it is not pushed beyond the salutary minimum which their commercial traffic will bear. In all that concerns the planning and execution of the work done,* the technicians necessarily take the initiative and exercise the necessary creative surveillance and direction; that being what they, and they alone, are good for; whereas the businesslike deputies of the absentee owners sagaciously exercise a running veto power over the technicians and their productive industry. They are able effectually to exercise this commercially sagacious veto power by the fact that the technicians are, in effect, their employees, hired to do their bidding and fired if they do not; and perhaps no less by this other fact, that the technicians have hitherto been working piecemeal, as [380] scattered individuals under their master's eye; they have hitherto not drawn together on their own ground and taken counsel together as a general staff of industry, to determine what had best be done and what not. So that they have hitherto figured in the conduct of the country's industrial enterprise only as a technological extension of the business men's grasp on the commercial main chance. Yet, immediately and unremittingly, the technicians and their advice and surveillance are essential to any work whatever in those great primary industries on which the country's productive systems turns, and which set the pace for all the rest. And it is obvious that so soon as they shall draw together, in a reasonably inclusive way, and take common counsel as to what had best be done, they are in a position to say what work shall be done and to fix the terms on which it is to be done. In .short, so far as regards the technical requirements of the case, the situation is ready for a self-selected, but inclusive, Soviet of technicians to take over the economic affairs of the country and to allow and disallow what they may agree on; provided always that they live within the requirements of that state of the industrial arts whose keepers they are, and provided that their pretensions continue to have the support of the industrial rank and file; which comes near saying that their Soviet must consistently and effectually take care of the material welfare of the underlying population. Now, this revolutionary posture of the present state of the industrial arts may be undesirable, in some respects, but there is nothing to be gained by denying the fact. So soon but only so soon as the engineers draw together, take common counsel, work out a plan of action, and decide to disallow absentee ownership out of hand, that move will have been made. The obvious and simple means of doing it is a conscientious withdrawal of efficiency; that is to say the general strike, to include so much of the country's staff of technicians as will suffice to incapacitate the industrial system at large by their withdrawal, for such time as may be required to enforce their argument. In its elements, the project is simple and obvious, but its working out will require much painstaking preparation, much more than appears on the face of this bald statement; for it also follows from the present state of the industrial arts and from the character of the industrial system in which modern technology works out, that even a transient failure to make good in the conduct of productive industry will result in a precipitate collapse of the enterprise. By themselves alone, the technicians can, in a few weeks, effectually incapacitate the country's productive industry sufficiently for the purpose. No one who will dispassionately consider the technical character of this industrial system will fail to recognize that fact. But so long as they have not, at least, the tolerant consent of the population at large, backed by the aggressive support of the trained working force engaged in transportation and in the greater primary industries, they will be substantially helpless to set up a practicable working organization on the new footing; which is the same as saying that they will in that case accomplish nothing more to the purpose than a transient period of hardship and dissension. Accordingly, if it be presumed that the production engineers are of a mind to play their part, there will be at least two main lines of subsidiary preparation to be taken care of before any overt move can reasonably be undertaken: (a) An extensive campaign of inquiry and publicity, such as will bring the underlying population to a reasonable understanding of what it is all about; and (b) the working-out of a common understanding and a solidarity of sentiment between the technicians and the working force engaged in transportation and in the greater underlying industries of the system: to which is to be added as being nearly indispensable from the outset, an active adherence to this plan on the part of the trained workmen in the great generality of the mechanical industries. Until these prerequisites are taken care of, any project for the overturn of the established order of absentee ownership will be nugatory. By way of conclusion it may be recalled again that, just yet, the production engineers are a scattering lot of fairly contented subalterns, working piecemeal under orders from the deputies of the absentee owners; the working force of the great mechanical industries, including transportation, are still nearly out of touch and out of sympathy with the technical men, and are bound in rival trade organizations whose sole and self-seeking interest converges on the full dinner-pail; while the underlying population are as nearly uninformed on the state of things as the. Guardians of the Vested Interests, including the commercialized newspapers, can manage to keep them, and they are consequently still in a frame of mind to tolerate no substantial abatement of absentee ownership; and the constituted authorities are competently occupied with maintaining the status quo There is nothing in the situation that should reasonably flutter the sensibilities of the Guardians or of that massive body of well-to-do citizens who make up the rank and file of absentee owners, just yet. THORSTEIN VEBLEN. -----------------------------------------------------------------------------