Thorstein Veblen "On the General Principles of a Policy of Reconstruction". Journal of the National Institute of Social Sciences, (Boston, Mass.), Vol. 4 (Apr., 1, 1918), pp. 37-46; [republished in part as "A Policy of Reconstruction", New Republic, Vol. XIV, (Apr., 13, 1918), pp. 318-320.] ----------------------------------------------------------------------------- [37] ON THE GENERAL PRINCIPLES OF A POLICY OF RECONSTRUCTION BY THORSTEIN VEBLEN There are certain cardinal points of orientation that will guide any endeavor to reach a lasting settlement on the return of peace. In the main these are points of common sense, and as such they will doubtless already be present in the mind of all thoughtful persons who interest themselves in these matters. But it can do no harm to put down in set form certain of the elementary propositions that will so give the point of departure and will define the limitations of such measures of reconstruction as may reasonably be expected to go into effect. It is assumed as a major premise that the controlling purpose of any prospective settlement will be the keeping of the peace at large; that the demands of the peace are paramount, whatever other matters of convenience or expediency may be brought in as subsidiaries. As a counterfoil of this premise there immediately follows the further proposition that there can be no return to the 'status quo ante'. The Great War was engendered by that scheme of life that has ruled human relations among civilized peoples in recent times; and a re-establishment of the scheme of relations among these peoples now may confidently be counted on to lead to the same disastrous issue. Therefore the question presents itself: What can be done, by taking thought, to avoid a return to that fateful complication in the conduct of human affairs that has now come to be known as the 'status quo ante?' What manner of change in existing arrangements could be counted on to make sure that civilized mankind will not again run over the same sinister course to the same disastrous outcome in the near future? How far and in what respect will men be content to forsake their accustomed scheme of use and wont and law, as it has stood during these years out of which the Great War has arisen? Some substantial change is imperative, if the peace is to be kept; and, I apprehend, all thoughtful persons are [38] now ready to agree that the peace must be kept, at all costs, and that any plan of reconstruction which does not promise peace and security will not be worth considering. It is imperative to change the scheme of use and wont, of law and order, as it runs between men and between nations, so far as regards those rights and relations out of which dissension habitually arises and about which men go to war. Now, it is an easy generalization, or rather it is a time-worn commonplace, that all such disputes as rise to the dignity of warfare in our time turn always about National Ambition or Business Enterprise, one or the other, or more commonly both together. Within the confines of modern civilization religious wars, e. g., wars undertaken avowedly for pillage, are out of date and are considered to be beneath the dignity of civilized statesmen. What one hears of is the national integrity, national destiny, national honor, or perhaps national opportunity, national expansion, national aggrandizement. These various objects of national ambition have at least the appearance of differing widely from one another; and it would doubtless appear that they are not all equally threatening to a state of peace and security at large. Indeed, many a kindly and thoughtful follower of the gospel of peace and good-will has committed himself to the view that the national integrity, or the national honor, e. g. is to be rated foremost among the things that are to be safeguarded in any eventual peace compact. Probably none but a relatively few among the law-abiding citizens would hesitate to choose war with the national honor intact, rather than peace without it. On the other hand, relatively few would choose to further national aggrandizement at the cost of war. Yet, however much these different objects of national ambition may differ among themselves they have this much in common, that they are matters of political aspiration, and that they afford grievances to be redressed by recourse to arms. It is between nations, and on the ground of national claims and interests, that war is carried on; at least such is the case in the formal sense that it is as a nation only that any people figures as a recognized belligerent under the currently accepted rules of etiquette governing affairs of this kind. It will probably be admitted without argument that whenever a given community divests itself of its national character - as, e. g. Hawaii in 1898 – [39] such a people ceases to be admissible as a qualified belligerent, under the rules of international courtesy; and it will likewise be admitted that whenever any given community makes its way into free recognition as a belligerent, such recognition amounts to a recognition of the belligerent's national character. Of course these formalities are of the nature of diplomatic punctilio, and they do not gravely touch the substance of things; but then, the national integrity, the national honor, etc., also are always matters of formality and diplomatic punctilio, in great part; it will perhaps be admitted that they are of this nature in the main. Such are the formalities of diplomatic and belligerent etiquette. But it does not follow that because a people can enter into the holy state of belligerency only as a nation and only on due observance of the national proprieties, that therefore such a people will necessarily be engaged in warlike enterprise only as a nation, and only on motives of national ambition. The present case of the United States may be taken to show the difference. This country entered on this enterprise only after a punctilious compliance with all the national courtesies in such cases made and provided, and on due allegation of specific national grievance to be redressed. But it has been an open secret from beforehand, and it has been made abundantly plain by the American administration since then, that the substantial motive of this enterprise has no color of national ambition. The national grievances alleged in the formal declaration were grave enough, no doubt; the record of them comprises an inordinate destruction of life and property and a remarkable series of crimes and atrocities; and yet it can fairly be said that the redressing of these national grievances is not of the essence of the contract which the country has undertaken. The abiding purpose of America in the war is to bring about a settled state of peace and security. If all this is accomplished, then any national establishment may come to have little more than a decorative use; as a political agency it will be in a fair way to become obsolete through disuse What would be needed to put things in train for such an outcome would be that the pacific peoples pool their political issues; somewhat after the fashion in which they are now beginning to learn that it is expedient to pool their issues and their forces in the conduct of the war. It will probably not be questioned that this [40] pooling of forces and issues for the conduct of the war is likely to go much farther than it has done hitherto, in case the war continues for an appreciable length of time; and the suggestion is ready to hand that the international pool so entered into under pressure of the war had best be designed on such lines that it may also eventually serve to keep the peace. This would mean a further pooling of national issues in those respects in which national issues are apt to bring on dissension; which means issues of national ambition and issues of business enterprise under national auspices. But national ambition, in the way of territorial aggrandizement or warlike dominion, is a dead issue in America - it has been weighed and found wanting; so that, in effect, all that still remains in question is the issue between national business enterprise and free trade. Now, in the new era, and for the sake of peace and international good-will, will the American citizens be content to forego preferential advantages at the nation's cost - for such of their compatriots as are interested in tariff-protected industries, or are engaged in the foreign trade, or derive an income from investments and concessions in foreign parts? It is to be admitted that this is still a matter of grave doubt. And it may be an over-sanguine hope, but there should at least be something of a chance that the nation may yet, under pressure of sore apprehension, bring itself also to pool these issues of business traffic along with the rest of what goes to nourish political intrigue. At any rate, in that direction lies the best assurance of peace and security at large. And if America gives a lead in the direction of such a disclaimer of national discrimination, the lead so given should reasonably be expected to go far to persuade the other pacific nations into a collusive disclaimer of the same kind. The upshot of all this would be, of course, that the national establishment would in great part cease to function, whether as an engine of vacant political intrigue or as a handmaid of private commercial enterprise. If such an arrangement can be achieved, or in the degree in which such a result can be approached, the hazard of dissension will be removed from among those pacific nations whose international concerns so would come within the jurisdiction of that league of pacific peoples that is held in prospect by the wiser statesmen of our time. [41] But all this covers only one half, perhaps the smaller and less precarious half, of the precarious situation that will face the American people on the return of peace - more particularly if the peace at large is once established on that stable footing to which all good men hopefully look forward. Let no man be deceived into believing that the removal of international friction will of itself bring in an era of tranquility at home. So soon as all apprehension of national danger is at an end, and preoccupation with international strategy has ceased to divert men's attention, the table will be cleared for a single-minded deliberation on the state of the country at home. And there is already visible such a cleavage of interests, sentiment and ambitions as may reasonably be taken to argue for a stormy reckoning ahead. Considered as a going concern, collectively engaged in the traffic of human living, the American commonwealth is perhaps not ready to go into the hands of a receiver; perhaps a liquidation had best be avoided, although the widely apprehended need of a deliberate reconstruction might be taken to argue that in the mind of many thoughtful persons something like a liquidation is felt to be nearly due. There is, at the best, a wide-spread apprehension that the affairs of this going concern are in something of a precarious case. The case may not be so grave; but the derangement of conditions caused by the war, as well as the degree in which the public attention now centers on public questions, mark the present as the appointed time to take stock and adopt any necessary change in the domestic policy. In assuming or accepting the assumption that there is need of some reconstruction, it is assumed that the system of use and wont under which the community now lives and does its work is not altogether suited to current circumstances. It is more or less out of date. This also carries the further assumption that the evil to be remedied is of a systematic character and that merely palliative measures will no longer serve. This involves the proposition that some realignment of the working parts is necessary even at the cost of deranging any vested rights and interests that may stand in the way. Indeed, any degree of closer attention to the problem and purpose involved m proposed reconstruction will bring out the fact that the prime object is to reach such a revision of vested rights [42] and economic relations as will result in a more tolerable scheme of life and work. That is what reconstruction means it is a revision of vested rights, for the common good. What is to be avoided at all costs is the 'status quo ante.' An illustrative case may serve to show what is intended by the phrase "vested rights," in the more comprehensive sense. In modern industry, as conducted by the methods of big business, it is one of the vested rights of the owner or employer freely to engage workmen on any terms on which they can be got, and to discharge them at discretion. It is another of his vested rights freely to employ as many or as few men as may suit his purpose, which is a quest of profits, and to work his own industrial plant more or less nearly up to its capacity, or not at all, as may suit his own purpose, in his quest of profits. On the other hand, among the vested rights of the workmen, or at least claimed as such, is their right to a job; so also an alleged right to discriminate as to what other men are to be associated with them on the job; also a right to quit work when they choose, i.e., to strike at discretion. But taken in the large and seen from the point of view of the interest of the community, these vested rights and interests of the two parties in controversy will figure up to something that may be called a right to exercise an unlimited sabotage, in order to gain a private end, regardless of the community's urgent need of having the work go on without interruption and at full capacity. The slowing down or stoppage of the industrial process at any point or on any plea by those who control the equipment or the personnel of industry works mischief to the community by that much, and falls short of that service which the community has a right to expect. In such a case, it is evident, the vested interests so working at cross purposes are thereby cheating the community of the full benefit of the modern state of the industrial arts; and it is plain that such a case of interests working at cross purposes is a fit subject of revision; such revision as will bring the industrial process to the highest practicable efficiency and reduce the sum of ill-will among the persons engaged to the lowest practicable dimensions. It should also be plain that the revision must be made primarily with a view to set up a condition of things that shall bring as much as may be of [43] usefulness and content, and with only a secondary regard to the present vested interests of any one of the persons concerned. This case of conflict between employer and employees, between the owner of plant and the owner of workmanlike skill and power, may serve to show what is here intended by incompatible or mismated vested interests. It is not here intended to find fault with cither party to such a conflict. It is unreservedly assumed that they are all honorable men and all within their rights, as these rights have been allowed to stand hitherto. It is because the existing arrangement, quite legitimately and dispassionately, works out in a running campaign of sabotage, that the whole matter is to come up for a revision and realignment in which vested interests are to be set aside, under a higher necessity than the received specifications of use and wont and law. It is not that the conduct of the persons concerned is to be adjudged immoral, illegitimate or improper; it is only that it, and the kind and degree of discretion which it involves, have in the course of time become insufferable, and are to be disallowed on the ground of urgent expediency. It is also no part of the present argument to indicate what ought, as a matter of expediency, to be done toward the elimination of "labor troubles." That will require knowledge, wisdom, patience and charity of a higher order. The points and passages in the conduct of industrial affairs at which vested interests work at cross purposes among themselves or at cross purposes with the common good, are many and various, and it could serve no purpose to attempt an enumeration of them here. There are few lines of industry or trade where nothing of the sort occurs. The inefficiency of current railway enterprise, e. g. f as seen from the point of view of ma1 usefulness, has forced itself on the attention of the Administration under pressure of the war situation; so has the privately owned production and distribution of coal and the handling and distribution of food products. Shipping is coming under the same charge of costly incompetency, and the oil, steel, copper, and timber supply are only less obviously getting into the same general category of public utilities legitimately mishandled for private gain. But to enumerate instances of such cross purposes between vested interests and the common good would scarcely be fruitful [44] of anything but irritation. It may be more to the purpose to indicate what are the characteristics of the modern industries by virtue of which their business-like management comes to work at cross purposes with the needs of the community or of given classes in the community, and then to look for something like a systematic remedial treatment which might hopefully be turned to account - in case some person or persons endowed with insight and convictions were also charged with power to act. It is believed that this working at cross purposes commonly and in a way necessarily, though not always, will rise to disquieting proportions when and in so far as the industrial process concerned has taken on such a character of routine, automatic articulation, or mechanical correlation, as to admit of its being controlled from a distance by such means of accountancy as are at the disposal of a modern business office. In many, perhaps in most cases this will imply an industrial plant of some appreciable size, with a correspondingly large force of employees; but much the same" outcome may also be had where that is not the case, as, e. g., an enterprise in automatic vending machines, a "news company," so-called, or a baggage-transfer concern of the larger sort. The mischief which such a situation gives rise to may be either or both of two distinguishable kinds: disagreement and ill-will between employers and employees, and mischievous waste, expense and disservice imposed on the concern's customers. Not unusually the large and formidable concerns classed as big business will be found censurable on both counts. Again it is necessary to recall that this is not intended as implying that such management is blameworthy, but only that a businesslike management under such circumstances and within its prescriptive rights results in the untoward consequences here spoken of. If this account of the state of things out of which mischief of this character is wont to arise is substantially correct, the description of the circumstances carries its own suggestion as to what should be a promising line of remedial measures. The mischief appears to arise out of, or in concomitance with, the disjunction of ownership and discretion from the personal direction of the work; and it appears to take on an added [45] degree of mischance as soon as the discretionary control vested in ownership comes to be exercised by an employer who has no personal contact with the employees, and who has only a pecuniary acquaintance with the industrial processes employed or with the persons whose needs these processes are presumed to serve - that is to say, as soon as the man or staff in control pass into the class of supernumeraries, in respect to the mechanical work to be done, and retain only a pecuniary interest and habitually exercise only a pecuniary control. Under these circumstances this central or superior control can evidently as well be exercised by some person who has no pecuniary interest in the enterprise, and who is therefore free to manage the industry with a view to its fullest usefulness and to the least practicable generation of ill-will on the side of the employees. Roughly speaking, any industrial process which can, and in so far as it can, be sufficiently well managed from a more or less remote office by methods of accountancy and for financial ends, can also, by the same token, be managed by a disinterested administrative officer without other than formal recourse to accountancy and without other than a secondary view to pecuniary results. All of which patently goes to sum up the needed remedial measures, under two heads: (1) Disallowance of anything like free discretionary control or management on grounds of ownership alone, whether at first hand or delegated, whenever the responsible owner of the concern does not at the same time also personally oversee and physically direct the work in which hi- property is engaged, and in so far as he is not habitually engaged in the work in fellowship with his employees; (2) to take over and administer as a public utility any going concern that is in control of industrial or commercial work which has reached such a state of routine, mechanical systematization, or automatic articulation as to be habitually managed from an office by methods of accountancy. Needless to say that when set out in this bald fashion, such a proposed line of remedial measures will appear to be shockingly subversive of law and order - iniquitous, impracticable, perhaps socialistic. And it is needless to argue its merits as it stands; particularly not to argue its merits within the equities of the existing law and order. Yet it may be as well to [46] recall that any plan of reconstruction which shall hope to be of any slightest use for its main purpose must begin by violating one or another of the equities of the existing law and order. A reconstruction means a revision of the present working system, the present system of vested interests, and of the scheme of equities within which that system is now working at cross purposes with the common good. It is a question of how and how far a disallowance of these existing vested interests is to be carried out. And the two propositions set out above are, therefore, intended to mark the direction which such a remedial disallowance of prescriptive rights will obviously take; not the limit to which such a move will necessarily go. They are intended to indicate the method, not the degree, of correction that appears to be expedient. There is no socialistic inconoclasm in it all, either covert or overt; nor need any slightest animus of moral esteem or disesteem be injected into the argument at any point. It is a simple matter of material expediency, in which one of the prime factors to be considered is the growing prospect of an inordinate popular distrust. And the point of it all is that the present system of managing the country's larger industrial concerns by business methods in behalf of vested interests is proving itself bankrupt under the strain of the war situation; so much so that it is already more than doubtful if the community at large will hereafter be content to leave its larger material interests at the mercy of those business motives, business methods, and business men whose management is now shown to work such waste and confusion as can not be tolerated at a critical time. The system of vested rights and interests is up for revision, reconstruction, realignment, with a view to the material good and the continued tranquillity of the community at large; and there is therefore a call for a workable scope and method of reconstructing the existing scheme of law and order on such lines as will insure popular content. In this bearing, the meaning of "reconstruction" is that America is to be made safe for the common man in his own apprehension as well as in substantial fact. Current events in Russia, for instance, attest that it is a grave mistake to let a growing disparity between vested rights and the current conditions of life overpass the limit of tolerance. -------------------------------------------------------------------------