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62. Public Enemies27

BY WALT MASON

If you build a line of railway over hills and barren lands,
Giving lucrative employment to about a million hands;

If you cause a score of cities by your right-of-way to rise,
Where there formerly was nothing but some rattlesnakes and flies;
If when bringing kale to others you acquire a little kale,
Then you've surely robbed the peepul and you ought to be in jail.
If by planning and by toiling you have won some wealth and fame,
It will make no odds how squarely you have played your little game;
Your success is proof sufficient that you are a public foe-
You're a soulless malefactor; to the dump you ought to go.
It's a crime for you to prosper when so many others fail;
You have surely robbed the peepul and you ought to be in jail.
Be a chronic politician, deal in superheated air;

Roast the banks and money barons, there is always safety there;
But to sound the note of business is a crime so mean and base.
That a fellow guilty of it ought to go and hide his face.

Change the builder's song triumphant for the politician's wail,
Or we'll think you've robbed the peepul and we'll pack you off to jail.

63. The Dominance of the Entrepreneur View-Point

It requires no great familiarity with the political and economic history of England and the United States in the last hundred years. to reveal the dominance of industrial interests in shaping legislation. The men who have ruled the commercial world and created the industrial systems of these two countries have ostensibly been advocates of the policy of non-interference with industry. But in practice they have drawn the line only at legislation which adversely affects business. They have never lost an opportunity to make a most active use of the machinery of government in furthering their own interests. A casual study of the legislation passed in this country during the decade ending in 1907 will show how potent has been the influence of this class. In general the legislation is in keeping with the interests of the producing classes; in particular it seems to have been shaped largely from the entrepreneur view-point. So dominant has the latter been as almost to preclude a consideration of legislation tending to general social betterment. Perhaps unconsciously, rather than consciously, has a view-point which con

Reprinted in the Commercial and Financial Chronicle, C, 177, from the Journal of Electricity, Power, and Gas (1914).

siders primarily the interests of only a small part of the people written itself into our political activity. But, even then, in a democracy, such as the United States, how has the view-point of a class become so powerful as to shape general legislation?

The answer to the question must find a beginning in the technical changes which characterized the Industrial Revolution. The most significant of these was the replacement of the tool by the machine. A tool is a simple instrument, costing very little, useful for a number of different tasks, and depending for its success upon the skill of the laborer using it. A machine, on the contrary, is a complex of many parts, costing much in labor and accumulated wealth, useful for a highly specialized task, and depending for its success upon the nicety of its own mechanism. Where tools were universally used, the time of the productive process was short, productive establishments were many, and the laborer was quite independent. The cost of the machine, and the very small contribution which a single unit of product can contribute to it, prevent the machine from being used except in the production of a large number of units. But the specialization of the machine requires the use of a large number of machines in the production of a single article. Under machine production the economical industry is likely to be the one which differentiates the productive process into the largest number of separate acts for each of which a machine is used. The modern industrial unit is likely to be large, making use of much capital, and employing many laborers. Because of the peculiar adaptability of the machine to their needs, manufacturing, mining, transportation and industrial establishments have increased to great size, and have come to occupy positions of the highest importance.

This vantage position becomes of all the more importance when we realize the purpose for which the business is being conducted and its relations to other industrial units. In form it is a corporation. There exists no necessary personal relation between the management of the corporation and the stockholders. This means that the investors are demanding dividends; that the management must produce dividends. It is, therefore, natural that the relationship between the corporation's activities and social good is not kept in mind. by those interested in the corporation's success. In the complex arrangement of modern business a social means has become an individual end.

Relative to other businesses it occupies a strategic position. The productive process is a long one with many steps between the production of raw materials and the sale of the finished product. Only a few operations are performed by industrial concerns which make

an extensive use of machinery. But the smaller concerns must secure regular dividends, and are, therefore, dependent upon the favor of the large concern. Unconsciously they come to share the attitude of the men directing larger businesses. The complexity of modern industry has also resulted in creating a number of subsidiary agents who perform general services which are necessities of the productive process. Chief among these are the agencies of credit and investment, banks, stock and produce exchanges, insurance companies, loan and mortgage associations. Since generally these institutions make their large profits from the operations of the entrepreneur class, and in many cases are creatures of mining, manufacturing, and transportation interests, those who control them naturally think in terms of entrepreneur interests. Among other subsidiary interests are those of the legal, advertising, and newspaper professions. Constant association with the entrepreneur class, identity of pecuniary interests, and an unconscious imbibing of managerial habits of thought make the views of the legal class closely akin to those of the industrial magnates. The growth of business has caused the newspaper to undergo a peculiar development. In its early history it was primarily a news-sheet, and was dependent for its success upon the faithfulness of its representation of the interests of the subscribers. Advertising was an incidental feature. Now the element of impersonality is distinctly marked in the news-vending business. The newspaper is owned by a corporation, the stockholders demand that dividends be forthcoming, and the management has no alternative. For that reason the advertisement as a source of revenue has appealed more and more to the business office. Now it is safe to say that a large subscription list is incidental to charging high rates for advertising. So it has come about that, consciously or unconsciously, the business office exercises considerable influence over the editorial and news policy of the paper. This has resulted in making a large part of the press a ready vehicle for the dissemination of information and opinions favorable to "big business."

The position in which the laborer is placed forces him to think largely in acquisitive terms. He sees in organization and in political activity a means for individual betterment. But wages for his labor he must receive regularly. In many cases the time-period in terms of which his thought processes run is no longer than a month, in many cases it extends only till Saturday night. So far as his own labor is concerned, especially if he is skilled, the laborer is relatively immobile. It is too much to expect him to vote in favor of a radical change in the industrial organization. His immediate interests are

so inseparably bound up with those of his employer that to a large extent the latter's political views are his.

Through a very elaborate differentiation of functions and an equally elaborate integration of parts, modern industrialism presents the appearance of a vast, intricate, and extremely delicate machine. Its financial operations are carried on through the instrumentality of credit. So long as confidence holds out, the system moves along smoothly. But so soon as men lose confidence a train of activities is set in motion which may result in the destruction, at least temporarily, of the acquisitive powers of many classes. The very delicacy of this mechanism creates a fear of disturbing the present arrangements. The business man feels that his interests are bound up with those of the large industrial and financial concerns, and for that reason he opposes innovation. The necessity for winning immediate profits deters him from favoring radical schemes.

The stratification of society rests ultimately upon a pecuniary basis. The higher classes enjoy a prestige that causes the lower classes to imitate them in dress, in code of morals, in habit of thought, in political opinion. The position of men in the entrepreneur class is very high. Their opinions upon all questions, particularly political questions, in which they have a peculiar interest, are likely to filter down through the various social strata which make up the state, and become a part of common-sense political philosophy. In the political system the legislator can better keep himself in office by favoring the local interests of his district than by working for legislation for the general good. To the continuance of his political life the business man who occupies a strategic position industrially, and who can make a substantial campaign contribution can contribute much.

Other social currents, more subtle and harder to detect, also contribute to the dominance of the entrepreneur viewpoint. Machinery has awed the human mind with a sense of its power and its strength. As a result to the modern mind the idea of size is almost. identical with the idea of importance. To the superficial mind the large industrial establishment which employs many men is thought of as the cause of its laborers being employed. It appears that the factory or mill is an institution of Providence from which flows the blessings which the laborers' families realize through an expenditure of the wages paid out by it. We know that the coming of the machine multiplied individual productive powers, increased the size of economic incomes, and raised the general standard of living.

Without going to the trouble of making nice distinctions one instinctively associates machine industry with progress and regards industries in which machinery is extensively used as really important, and looks upon those in which it is not so extensively used as oldfashioned, and of little social value.

Machinery, too, favors the concentration of population, while non-mechanical industries favor its dispersion. This concentration brings into play all the sentimental forces which play about place, locality, and the city greatly to the advantage of local landowners. The manufacturing interests which make the city possible thus come to be regarded as necessary means to the realization of civic ends. The importance of these industries has in public thought been still further increased by what may be called the impersonality of capital. The investment of capital tends to separate itself from the personal business inclinations of its owner. To the extent that industry depends upon capital for success, the state or municipality can not secure the industry simply by an appeal to the personal tastes and local prejudices of the owner. Special privileges have to be offered. Thus the competition of local units results in a state of public opinion favorable to the interests of industries carried on on a large scale.

Of course other forces are at work in moulding political opinion. Many other attitudes are mixing themselves into the complex nexus of the attitude of the public towards industry. Into these currents of opinion it is not our purpose to go. It may be that they will be crushed before the powerful blow of entrepreneur views. Or it may be that they will blend themselves with that viewpoint, modify it, and render it less acquisitive and more considerate of social inOnly time can tell.

terests.

64. The Futility of Utopian Legislation2

BY ELIHU ROOT

When proposals are made to change our fundamental institutions there are certain general conditions that should be observed.

The first is that free government is impossible except through prescribed and established governmental institutions, which work out the ends of government through many separate human agents, each doing his part in obedience to law. Popular will cannot execute itself directly except through a mob. Popular will cannot get

28 Adapted from Experiments in Government and the Essentials of the Constitution, 11-22. Copyright by the Princeton University Press (1913).

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