First World War CentennialFirst World War Centennial

Chapter XIII: America and the New Epoch

XIII

EVOLUTION: INDUSTRIAL GOVERNMENT

THE large industrial corporation is to-day by far the most efficient organization, in spite of the inefficiency forced upon it by the political Government. It is still very crude and imperfect in many respects, and especially it is still greatly deficient in the social relations within the organi­zation and toward the general public. If an efficient co-operative government is to be built up from the industrial corporations, the in­dustrial corporation must first become united within itself—that is, the indifference and an­tagonism within the corporation must be over­come, and the same co-operative feeling brought about between the shop force and the adminis­tration which exists and always has existed in most corporations between the office force and the administration. That is, the welfare of the corporation must be made just as much to the interest of the shop force as it is to the interest of the office force. Not that there should be no differences of interest between individual em­ployee and corporation; differences of interest exist and will remain among the office men as well as in the shops. But those hundred thou­sands who only two years ago were thrown out of work by the business depression, were willing to work, but for many months could find no work, and saw their few dollars which they had saved, spent; those who had started paying for a small home and saw all that they had accom­plished gone by the foreclosure of the mortgage, saw their families scattered and thrown upon charity, and all this without any fault of their own—to them existing society cannot appeal as the best possible one; they can hardly be ex­pected to feel interested in the maintenance of a society in which they are treated thus, cannot be patriotic in the defense of these conditions; neither can the other hundred thousands or mil­lions, who have escaped this time, but have the possibility of the same fate hanging over them. Thus the assurance of work when capable of working, the insurance of a living in their ac­customed standard when not capable of work­ing, are the fundamental requisites to secure interest in the maintenance of existing condi­tions without which there can be no real pa­triotism, no real co-operation.

This has nothing to do with the broader question of socialism—that is, of the elimination of capital. Socialism has as many followers in the offices of our corporations as it has in the shops, and in no way precludes co-operation within the corporation; indeed, in some respects the corporation may be considered as the first step toward socialism, and the industrial gov­ernment of the nation by the united corpora­tions as preliminary and crude form of socialistic society.

But assuming the corporation united within itself, the public sentiment sufficiently educated to stop political government from its disorgan­izing activities, nothing would stand in the way then of organizing an efficient system of co-operative industrial production, not by some man's superior organizing power, but in the natural trend of industrial development.

With absorption of smaller corporations by larger ones, and consolidation to still larger corporations, the development proceeds until the industry is organized in one or a small num­ber of very large corporations. There is no competition, but an executive committee of representatives of the corporations or branches of corporations engaged in the same and similar industries co-ordinates and correlates the work of the corporations, decides on production, on prices, policies, etc. Executive committees with their members chosen from different in­dustries take care of the co-operation of these industries, and finally an Industrial Senate as the supreme executive committee co-ordinates, con­trols, and directs all the country's industries—that is, governs the country. Thus, an indus­trial government would be established with an authority greater than the world has ever seen, and still without any mandatory power, not, maintained by a police force, but based on mutual co-operation for everybody's interest. Any corporation which does not wish to join or take part in the national industrial organi­zation is free to stay outside, as long as it con­forms to the universal policy, but if the outsider refuses to co-operate, co-operation is withdrawn from him, also, as "outlaw" or "scab" corpo­ration, to use the expression of labor organiza­tions. That is, the organized industries refuse to do any work for such an outlaw, or have any­thing to do with any work containing the prod­uct of the outlaw corporation. Rapid extinction of such outlaw would obviously be the result, without any legal or mandatory power being necessary. If we realize how excessive capitali­zation of otherwise conservative corporations has been forced, by the necessity of buying up competitors at exaggerated values based on their potential destructiveness as competitors; how corporations have been organized for the mere purpose of holding up existing corporations for an excessive price in selling out—it is obvious that prompt elimination of any body attempt­ing similar action is necessary in the interest of the general industrial welfare of the nation.

There is a certain glamour, to some minds, in the attitude of the one who defies the majority; the "American hero" who goes as strike­breaker to work where the organized employees strike; the individual manufacturer who breaks price agreements and undersells the others, to get the business at prices which conservative producers cannot meet, as they leave no margin of fair profit. But there is practically never any moral issue behind the action of the scab, whether individual or corporation, but it is the sordid attempt of getting an individual advan­tage at the cost of the others. It is the opposite

of co-operation, and no efficient industrial sys­tem can he built up, as long as such attitude has any chance to succeed even temporarily.—How would the officers of such national gov­ernment by the co-operative organization of the industrial corporations be chosen? By popular election? Imagine the chief engineer of a man­ufacturing company elected by the majority vote of all the employees! Or the general man­ager, or the comptroller, or chemist, or bacteri­ologist, the mathematician, or designing engi­neer; it would not be democratic, but it would be chaotic. Not one-tenth of the employees are engineers and therefore capable of judging on the engineering qualifications, and their vote in electing the chief engineer would mean noth­ing; the elected officer almost certainly would be incompetent for his work, and the same applies to every other profession. Thus, where pro­fessional qualification is required by the office, popular election is impossible. But professional qualification is required for practically every officer within the industrial organization; nay, some qualification—professional, physical, or otherwise—is needed for almost every indus­trial position, from the unskilled laborer to the president, and popular election thus is impossi­ble for any industrial position. It would mean something only if every elector can personally satisfy himself that the candidate has the re­quired qualifications, and this is not possible, since no elector can judge on the qualification of every position, and if he could the mere amount of time required to do so would exclude the possibility.

Granting, as the fundamental principle of democracy, that every citizen has the same right, the same voice and vote in the Government—and no nation like ours can continue success­ful without conceding this fundamental prin­ciple—it means that popular vote by majority must decide all general questions, all matters of policy which are of interest to every citizen, which every citizen can discuss and judge, such as the questions whether women should vote as well as men, whether our nation is ready and willing to police our entire continent and force its unruly Spanish-American republics to keep order and peace; but majority vote cannot decide professional questions or questions of fact, such as whether vaccination is necessary to protect us against smallpox epidemics, whether battle-ships or submarines are more effective, or whether some water-power can be developed economically or not.

Indeed, even the most radical exponent of unlimited majority voting realizes this. He may claim that everything should be done and de­cided by the majority vote, may in city gov­ernment demand that every administrative de­tail be brought to decision by majority vote, that e very city employee from the mayor to the unskilled laborer be elected; but if he himself is sick, he does not go before the political body and ask to elect a physician for him—but he himself chooses a physician in whose profes­sional qualifications he has confidence. Or if his child is sick he would not think of asking the organization to vote whether it is measles or scarlet fever, but he takes the decision of a single physician in preference to any majority vote.

Should the industrial officials, then, be ap­pointed? But who appoints the appointer? Within certain limits, however, in offices re­quiring professional qualifications, appointment gives better results. In a medium-sized town, for instance, the administration may employ a thousand people. If they all were elected not a single elector could devote enough time to find out the qualifications of every candidate for every place—even if he were capable pro­fessionally to judge on it. The result could be imagined. But the mayor can devote enough time to select, by investigation and consulta­tion with competent men in each profession, reasonably competent men as heads of depart­ments; they, in the same manner, can select and appoint subheads, and so on, and a reason­able administrative efficiency could be secured—if the mayor is not prejudiced or led by motives other than administrative efficiency.

But herein lies the weak point of the method of choosing officers by appointment: it is so easy to abuse it for selfish purposes, for private or particularistic interests, to select from a narrow circle of personal or political friends, to abuse it for paying political or private debts. Per­sonal inclination, if not prejudice of the ap­pointing officer, has too large influence, and, at the best, gradually the method of appointment leads into control of the offices by a clique, a political machine, or group.

Thus neither majority election nor appoint­ment is capable of giving efficient qualified offi­cers, such as are necessary in the complex structure of modern industrial civilization.

There remains a third method—to have the officer elect himself for the office, or, as we usually say, "rise from the ranks." It is the method which has been so successful in the modern industrial corporations, especially in the office force, and has given it the efficient, centralized, and at the same time flexible and progressive organization. It means that largely every employee makes his own job. If he can do larger work than his position requires, he does it, as a matter of course, and is allowed to do it, as it improves the efficiency of the depart­ments in which he works, and thereby the rep­utation of his superior officers. Thereby he is virtually in a higher position, and the recogni­tion thereof, by title and pay, follows as a mat­ter of course. Thus we see in progressive in­dustrial corporations people rise to higher and higher positions, beyond those at whose side they started, not by election, not by appoint­ment or "pull," but by their own work, intelli­gence, and ability. Thus we also see, especially in those industrial corporations which require a considerable number of skilled or professional men, positions created or rather creating them­selves, and men taking up work useful to the corporation which was not done before, or not done in the same manner, and that in the office as well as in the shops, and in every such corpo­ration we can find men in offices which were created for them—often will cease when they drop out. This is not always realized by the outsider, and it applies not only to a few excep­tional men, but to very many in all ranks. It gives a chance for initiative and individual development within the corporation, which is now found very rarely outside, and is one of the most important factors of progress.

Thus more and more positions are filled, not by appointment by a superior officer, but by the man starting to do the work, doing it more and more, and so virtually electing himself into the position—and the final appointment then merely legalizes the established fact.

Naturally, this is not always the case, but equally often some man who shows qualifica­tions superior to those required for his position is tried in some entirely different higher posi­tion where these qualifications are desired.

Thus, to-day there is no place where the chances are so good for every man to reach the highest power, to rise to the highest position which he is capable of filling, as in the large in­dustrial corporation.

Naturally, we must realize, as stated before, that the corporate organizations are still crude and imperfect, and that there are many chances to "get lost," to get into "dead-alley positions" and stay there forever, but this is getting less and less with the increasing development of the industrial corporation. Increased efforts are made to guard against it, as it is uneconomical for the corporation to use men in positions in­ferior to those which they could fill. Thus re­search laboratories have been established for men showing that they could do valuable re­search work; new lines of manufacture started because men happened to be specially interested and capable in that direction, departments di­vided or consolidated to suit the personalities of employees—that is, to use them at their best efficiency—and the industrial corporation is far from the inflexible, rigid machine which it ap­pears to the outsider, who is not familiar with its working; it is this flexibility which gives it the economic power and strength.

In the national Government by the co-operative organization of corporations, there could thus be no election of officers, nor ap­pointment, but the offices would fill them­selves by men rising into them, following the best practice of our present corporations. The men interested in engineering would naturally

drift into engineering positions, those with administrative ability into administrative po­sitions; those with knowledge and experience beyond the individual industry, into the field of correlation between the industries; the most capable organizers finally into the industrial senate. The whole organism would be essen­tially self-governing, consisting of a number of groups and sub-groups, and further sub-groups within the latter, each self-governing within its own activities, supreme within its own field of activity, subordinate in any other activity to the group into which the other activity be­longs, and correlated with any co-ordinate group through joint committees or through the larger group of which both are parts.

There is nothing new in such organization, but it is in existence to-day in many larger corporations, is the outgrowth of economic laws working on the individualistic tempera­ment of our nation. It is essentially demo­cratic in character; there is no autocratic au­thority, but every member of the organization has a directive power within his field of activity. I have seen large contracts decided or modified by the opinion of a workman in the shops, who had to state whether a particular operation could be done easily or was difficult.