CHAPTER XXVII.
HOSTILITY OF A SYSTEM OF VESTED INTERESTS TO IMPROVEMENT.
"Now, Florence," said the teacher, "with your assistance we will take upthe closing topic in our consideration of the economic system of ourfathers--namely, its hostility to invention and improvement. It has beenour painful duty to point out numerous respects in which our respectedancestors were strangely blind to the true character and effects of theireconomic institutions, but no instance perhaps is more striking thanthis. Far from seeing the necessary antagonism between private capitalismand the march of improvement which is so plain to us, they appear to havesincerely believed that their system was peculiarly favorable to theprogress of invention, and that its advantage in this respect was sogreat as to be an important set-off to its admitted ethical defects. Herethere is decidedly a broad difference in opinion, but fortunately thefacts are so well authenticated that we shall have no difficulty inconcluding which view is correct.
"The subject divides itself into two branches: First, the naturalantagonism of the old system to economic changes; and, second, the effectof the profit principle to minimize if not wholly to nullify the benefitof such economic improvements as were able to overcome that antagonism sofar as to get themselves introduced.--Now, Florence, tell us what therewas about the old economic system, the system of private capitalism,which made it constitutionally opposed to changes in methods."
"It was," replied the girl, "the fact that it consisted of independentvested interests without any principle of coordination or combination,the result being that the economic welfare of every individual or groupwas wholly dependent upon his or its particular vested interest withoutregard to others or to the welfare of the whole body."
"Please bring out your meaning by comparing our modern system in therespect you speak of with private capitalism."
"Our system is a strictly integrated one--that is to say, no one has anyeconomic interest in any part or function of the economic organizationwhich is distinct from his interest in every other part and function. Hisonly interest is in the greatest possible output of the whole. We haveour several occupations, but only that we may work the more efficientlyfor the common fund. We may become very enthusiastic about our specialpursuit, but as a matter of sentiment only, for our economic interestsare no more dependent upon our special occupation than upon any other. Weshare equally in the total product, whatever it is."
"How does the integrated character of the economic system affect ourattitude toward improvements or inventions of any sort in economicprocesses?"
"We welcome them with eagerness. Why should we not? Any improvement ofthis sort must necessarily redound to the advantage of every one in thenation and to every one's advantage equally. If the occupation affectedby the invention happens to be our particular employment we lose nothing,though it should make that occupation wholly superfluous. We might inthat case feel a little sentimental regret over the passing away of oldhabits, but that is all. No one's substantial interests are in any waymore identified with one pursuit than another. All are in the service ofthe nation, and it is the business and interest of the nation to see thatevery one is provided with other work as soon as his former occupationbecomes unnecessary to the general weal, and under no circumstances ishis rate of maintenance affected. From its first production everyimprovement in economic processes is therefore an unalloyed blessing toall. The inventor comes bringing a gift of greater wealth or leisure inhis hand for every one on earth, and it is no wonder that the people'sgratitude makes his reward the most enviable to be won by a publicbenefactor."
"Now, Florence, tell us in what way the multitude of distinct vestedinterests which made up private capitalism operated to produce anantagonism toward economic inventions and improvements."
HOW PROGRESS ANTAGONIZED VESTED INTERESTS.
"As I have said," replied the girl, "everybody's interest was whollyconfined to and bound up with the particular occupation he was engagedin. If he was a capitalist, his capital was embarked in it; if he was anartisan, his capital was the knowledge of some particular craft or partof a craft, and he depended for his livelihood on the demand for the sortof work he had learned how to do. Neither as capitalist or artisan, asemployer or employee, had he any economic interest or dependence outsideof or larger than his special business. Now, the effect of any new idea,invention, or discovery for economic application is to dispense more orless completely with the process formerly used in that department, and sofar to destroy the economic basis of the occupations connected with thatbusiness. Under our system, as I have said, that means no loss toanybody, but simply a shifting of workers, with a net gain in wealth orleisure to all; but then it meant ruin to those involved in the change.The capitalist lost his capital, his plant, his investments more or lesstotally, and the workingmen lost their means of livelihood and werethrown on what you well called the cold charity of the world--a charityusually well below zero; and this loss without any rebate or compensationwhatever from the public at large on account of any general benefit thatmight be received from the invention. It was complete. Consequently, themost beneficent of inventions was cruel as death to those who had beendependent for living or for profit on the particular occupations itaffected. The capitalists grew gray from fear of discoveries which in aday might turn their costly plants to old iron fit only for the junkshop,and the nightmare of the artisan was some machine which should take breadfrom his children's mouths by enabling his employer to dispense with hisservices.
"Owing to this division of the economic field into a set of vestedpersonal and group interests wholly without coherency or integratingidea, each standing or falling by and for itself, every step in theadvance of the arts and sciences was gained only at the cost of an amountof loss and ruin to particular portions of the community such as would bewrought by a blight or pestilence. The march of invention was white withthe bleaching bones of innumerable hecatombs of victims. The spinningjenny replaced the spinning wheel, and famine stalked through Englishvillages. The railroad supplanted the stagecoach, and a thousand hilltowns died while as many sprang up in the valleys, and the farmers of theEast were pauperized by the new agriculture of the West. Petroleumsucceeded whale-oil, and a hundred seaports withered. Coal and iron werefound in the South, and the grass grew in the streets of the Northerncenters of iron-making. Electricity succeeded steam, and billions ofrailroad property were wiped out. But what is the use of lengthening alist which might be made interminable? The rule was always the same:every important invention brought uncompensated disaster to some portionof the people. Armies of bankrupts, hosts of workers forced intovagabondage, a sea of suffering of every sort, made up the price whichour ancestors paid for every step of progress.
"Afterward, when the victims had been buried or put out of the way, itwas customary with our fathers to celebrate these industrial triumphs,and on such occasions a common quotation in the mouths of the orators wasa line of verse to the effect that--
"Peace hath her victories not less renowned than those of war.
The orators were not wont to dwell on the fact that these victories ofwhat they so oddly called peace were usually purchased at a cost in humanlife and suffering quite as great as--yes, often greater than--those ofso-called war. We have all read of Tamerlane's pyramid at Damascus madeof seventy thousand skulls of his victims. It may be said that if thevictims of the various inventions connected with the introduction ofsteam had consented to contribute their skulls to a monument in honor ofStevenson or Arkwright it would dwarf Tamerlane's into insignificance.Tamerlane was a beast, and Arkwright was a genius sent to help men, yetthe hideous juggle of the old-time economic system made the benefactorthe cause of as much human suffering as the brutal conqueror. It was badenough when men stoned and crucified those who came to help them, butprivate capitalism did them a worse outrage still in turning the giftsthey brought into curses."
"And did the workers and the capitalists whose interests were threatenedby the progress of invention tak
e practical means of resisting thatprogress and suppressing the inventions and the inventors?"
"They did all they could in that way. If the working-men had been strongenough they would have put an absolute veto on inventions of any sorttending to diminish the demand for crude hand labor in their respectivecrafts. As it was, they did all it was possible for them to accomplish inthat direction by trades-union dictation and mob violence; nor can anyone blame the poor fellows for resisting to the utmost improvements whichimproved them out of the means of livelihood. A machine gun would havebeen scarcely more deadly if turned upon the workingmen of that day thana labor-saving machine. In those bitter times a man thrown out of theemployment he had fitted himself for might about as well have been shot,and if he were not able to get any other work, as so many were not, hewould have been altogether better off had he been killed in battle withthe drum and fife to cheer him and the hope of a pension for his family.Only, of course, it was the system of private capitalism and not thelabor-saving machine which the workingmen should have attacked, for witha rational economic system the machine would have been whollybeneficent."
"How did the capitalists resist inventions?"
"Chiefly by negative means, though much more effective ones than the mobviolence which the workingmen used. The initiative in everything belongedto the capitalists. No inventor could introduce an invention, howeverexcellent, unless he could get capitalists to take it up, and thisusually they would not do unless the inventor relinquished to them mostof his hopes of profit from the discovery. A much more importanthindrance to the introduction of inventions resulted from the fact thatthose who would be interested in taking them up were those alreadycarrying on the business the invention applied to, and their interest wasin most cases to suppress an innovation which threatened to make obsoletethe machinery and methods in which their capital was invested. Thecapitalist had to be fully assured not only that the invention was a goodone in itself, but that it would be so profitable to himself personallyas to make up for all the damage to his existing capital before he wouldtouch it. When inventions wholly did away with processes which had beenthe basis of profit-charging it was often suicidal for the capitalist toadopt them. If they could not suppress such inventions in any other way,it was their custom to buy them up and pigeonhole them. After theRevolution there were found enough of these patents which had been boughtup and pigeonholed in self-protection by the capitalists to have kept theworld in novelties for ten years if nothing more had been discovered. Oneof the most tragical chapters in the history of the old order is made upof the difficulties, rebuffs, and lifelong disappointments whichinventors had to contend with before they could get their discoveriesintroduced, and the frauds by which in most cases they were swindled outof the profits of them by the capitalists through whom their introductionwas obtained. These stories seem, indeed, well-nigh incredible nowadays,when the nation is alert and eager to foster and encourage every stirringof the inventive spirit, and every one with any sort of new idea cancommand the offices of the administration without cost to safeguard hisclaim to priority and to furnish him all possible facilities ofinformation, material, and appliances to perfect his conception."
"Considering," said the teacher, "that these facts as to the resistanceoffered by vested interests to the march of improvement must have beeneven more obvious to our ancestors than to us, how do you account for thebelief they seem to have sincerely held that private capitalism as asystem was favorable to invention?"
"Doubtless," replied the girl, "it was because they saw that whenever aninvention was introduced it was under the patronage of capitalists. Thiswas, of course, necessarily so because all economic initiative wasconfined to the capitalists. Our forefathers, observing that inventionswhen introduced at all were introduced through the machinery of privatecapitalism, overlooked the fact that usually it was only after exhaustingits power as an obstruction to invention that capital lent itself to itsadvancement. They were in this respect like children who, seeing thewater pouring over the edge of a dam and coming over nowhere else, shouldconclude that the dam was an agency for aiding the flow of the riverinstead of being an obstruction which let it over only when it could bekept back no longer."
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"Our lesson," said the teacher, "relates in strictness only to theeconomic results of the old order, but at times the theme suggestsaspects of former social conditions too important to pass withoutmention. We have seen how obstructive was the system of vested interestswhich underlaid private capitalism to the introduction of improvementsand inventions in the economic field. But there was another field inwhich the same influence was exerted with effects really far moreimportant and disastrous.--Tell us, Florence, something of the manner inwhich the vested interest system tended to resist the advance of newideas in the field of thought, of morals, science, and religion."
"Previous to the great Revolution," the girl replied, "the highesteducation not being universal as with us, but limited to a small body,the members of this body, known as the learned and professional classes,necessarily became the moral and intellectual teachers and leaders of thenation. They molded the thoughts of the people, set them their standards,and through the control of their minds dominated their material interestsand determined the course of civilization. No such power is nowmonopolized by any class, because the high level of general educationwould make it impossible for any class of mere men to lead the peopleblindly. Seeing, however, that such a power was exercised in that day andlimited to so small a class, it was a most vital point that this classshould be qualified to discharge so responsible a duty in a spirit ofdevotion to the general weal unbiased by distracting motives. But underthe system of private capitalism, which made every person and groupeconomically dependent upon and exclusively concerned in the prosperityof the occupation followed by himself and his group, this ideal wasimpossible of attainment. The learned class, the teachers, the preachers,writers, and professional men were only tradesmen after all, just likethe shoemakers and the carpenters, and their welfare was absolutely boundup with the demand for the particular sets of ideas and doctrines theyrepresented and the particular sorts of professional services they gottheir living by rendering. Each man's line of teaching or preaching washis vested interest--the means of his livelihood. That being so, themembers of the learned and professional class were bound to be affectedby innovations in their departments precisely as shoemakers or carpentersby inventions affecting their trades. It necessarily followed that whenany new idea was suggested in religion, in medicine, in science, ineconomics, in sociology, and indeed in almost any field of thought, thefirst question which the learned body having charge of that field andmaking a living out of it would ask itself was not whether the idea wasgood and true and would tend to the general welfare, but how it wouldimmediately and directly affect the set of doctrines, traditions, andinstitutions, with the prestige of which their own personal interestswere identified. If it was a new religious conception that had beensuggested, the clergyman considered, first of all, how it would affecthis sect and his personal standing in it. If it were a new medical idea,the doctor asked first how it would affect the practice of the school hewas identified with. If it was a new economic or social theory, then allthose whose professional capital was their reputation as teachers in thatbranch questioned first how the new idea agreed with the doctrines andtraditions constituting their stock in trade. Now, as any new idea,almost as a matter of course, must operate to discredit previous ideas inthe same field, it followed that the economic self-interest of thelearned classes would instinctively and almost invariably be opposed toreform or advance of thought in their fields.
"Being human, they were scarcely more to be blamed for involuntarilyregarding new ideas in their specialties with aversion than the weaver orthe brickmaker for resisting the introduction of inventions calculated totake the bread out of his mouth. And yet consider what a tremendous,almost insurmountable, obstacle to human progress was present
ed by thefact that the intellectual leaders of the nations and the molders of thepeople's thoughts, by their economic dependence upon vested interests inestablished ideas, were biased against progress by the strongest motivesof self-interest. When we give due thought to the significance of thisfact, we shall find ourselves wondering no longer at the slow rate ofhuman advance in the past, but rather that there should have been anyadvance at all."