ISSUE: Spring 1932
I
The earliest recollection of my childhood, of a controversial nature, is the clash, sometimes posed in my hearing, between predestination and free will. My elders who spoke of it were conscienceful people, and as far as I was, you may be sure, from understanding anything of the point at issue, I was yet worried, as only a child can be, that grown-ups should have this portentous matter to struggle with.
I have continued to be surrounded by conscienceful people, and I find that the old conflict appears in a new guise. The present preoccupation is not with things religious, but with things social. And the new clash that is posed is that between economic determinism on the one hand, and social salvation through volitional action on the other.
The school to which my elders belonged adhered to the free will side; it seemed courageous to hazard Heaven on a confidence in human resolution. Similarly, most of my associates now turn their backs on the comfortable hint of objective economic drift, and put on the whole armor of social righteousness.
More and more I have found myself departing from this article, whether as applied selfishly to my immortal soul or generously to our social future. On the face of it, it seems weak and agnostic to rely upon mere material forces to bring us to a happier social pass. We are constantly exhorted to take arms against a sea of troubles. But I am persuaded that it is the latter which implies the cowardice and the dullness. What appears as human aspiration is really fear and acceptance; what would seem to be social surrender is in fact insight and hope. It is said that sailors in the British navy, in the old days when they were flogged, used to ask for a small bar of lead to bite upon in order to estop their senses as much as they might from the pain they suffered. In much the same way today, afraid that “civilization itself is going to collapse,” men provide themselves anguished diversion in all sorts of plans and parliaments which fly the flag of social reform. Most of our social agitations are nervous habits, born of apprehension.
II
The deflation of social free will begins to appear to the least observant. The more superficial manifestation is in the retirement of political expedients and the forward rush of economic problems. England and America may be thought to present this condition most clearly. It was long before either country would come to admit that there is little which legislatures and office-holders can do in the face of the depression. England experienced continuing difficulties immediately following the war, a decade before us. She first went through alterations of government—liberal, labor, conservative, every struggle sinking her deeper into the mire. Having put her faith, after immemorial habit, in one after another party, she was at length forced to drop this futility, wipe out differences for the nonce, and pool her political talent. The emergency defense fell back to the last ditch, and would stand firm on the gold standard. Here a second delusion was added to the first. Not only must political contrivance, in saving the gold standard, save Britain, but it must save the world, since Lombard Street was the ark of the world’s economic covenant. Trumpets blared, but hardly rose above the surrounding din. In the common danger ranks closed up. Collectivist, individualist, well-disposed opportunist rubbed shoulders and smote together.
Ill-concealed curses muttered against France, last-minute appeals to New York bankers, compassion for Germany, and more compassion for themselves should Germany collapse. Radio broadcasts by a Nationalist prime minister who choked back his sobs. Finally, on September 20, the Cabinet issuing the bitter admission that “His Majesty’s Government have decided, after consultation with the Bank of England, that it has become necessary to suspend for the time being the operation of Subsection 2 of Section 1 of the Gold Standard Act of 1925, which requires the Bank to sell gold at a fixed price.”
Following the suspension there was at first silence. Then came surprised chirps from political leaders who were just now in despair. They found much to be thankful for in the turn that economic affairs had taken, and their applause has continued to go up. It is agreeable to see them pleased, but it is also instructive to notice the about-face which they have executed. The erstwhile stemmers of an invading tide have decided to fall away from their post and become the proud escort of the triumphal procession. The joyful recognition of the compensations which attend the dropping of the gold standard represents, I take it, the abdication, certainly for the time being, of political management.
In the United States the crisis for politics has matured more briefly than in England, but it is here, if, indeed, it has not already passed. In the seven fat years from 1922 to 1929, the aura shed by our supreme economic contentment enveloped our political institutions and personalities. Our economic god seems necessarily to be anthropomorphous. As a nation we were dealt most of the good cards in the deck, and while Coolidge played our hands we attributed our high score to him. The rest of the western world, incredulous at our nationalist obsession, might double our bids, but we redoubled and won. By the time Hoover came on as a campaigner, our artificial economic triumphs lent depth to his shallow thought just as the nation-wide radio hook-ups supplied volume to his weak voice. If we had any disturbing reflections upon our failure to take account of the vexations of other nations, Hoover was the boy to banish them, for he was the emblem of our philanthropy to Europe. He had been our almoner; and Columbia, the lady bountiful, had smiled smugly as he dipped into the overflowing purse.
But hardly had inauguration bands ceased playing when the New Economic Era of hundred per cent Americanism, high tariffs, debt collection, instalment buying, and financial promotional graft melted, as a congressman has said, into the dreary day of suicide and soup. What to do? The White House, the Capitol, the governors, the party strategists offer little beyond, on the one hand, official assurance that the President is a “great leader,” and, on the other, chattered promises from an opposition whose recent performances are not reassuring. In America as in England, the only positive signs are those of political retreat before the economic onslaught. And much of the strategy of retreat, which appears to proceed from Washington, we have good reason to believe is inspired very directly by business practitioners. A moratorium on international debts and reparations is announced with a flourish—at the moment when it was obvious that if doors had not been formally opened, they would have been informally caved in. Bankers are empowered to pool their resources for the succor of their unfortunate fellows—when, without permission, they must have done so to save their own skins. National bank examiners are instructed to have an eye only to the “intrinsic value” of securities and to blink market quotation — and another evidence is given of the desperate character of attempted remedies.
Again the President is called into the role of almoner, but this time not to ladle out to distressed Europe and Near East, but to dispense charity to sick America. The political theory of laissez-faire is renounced, and so completely and so suddenly that hardly a tear is shed at the parting. Individualism is given over, as Dr. James Hart has said, for a “pragmatic collectivism.” The Engineer, whose technical social acumen promised so much, contents himself with charity. The government which was going to “keep out of private business” wearily takes the farmers on its back, and reaches down a hand to enterprisers, home owners, and— grudgingly—the unemployed.
In Germany, to mention another instance very briefly, Hindenburg is a pathetic figure. In him parliamentary democracy appears to totter before the blast of threatened nationalist dictatorship. Nor is the strength of the National Socialist movement to be attributed to the conscious plans of a hard-bitten leader, but rather, one suspects, to the young people of the country who demand first to have the promise of life restored to them, and who will afterwards, at their leisure, examine into the usefulness of remaining conventional sanctions.
III
Enough has been said to indicate how political contrivance is being routed by economic eventuality. Governments with their fiats are flies on the wheel. And the great incessantly turning wheel itself, what is it? (A large question, to be sure!) It is the principle (forgive my heavy didacticism), the virtually autonomous principle of economic evolution.
This is, of course, an old idea—by Hegel out of Marx. It is economic determinism, “scientific” socialism. In many generous minds and active spirits it evokes incredulity, denial, or a shudder. Its increasing emergence is most patently manifest, I have suggested, in the relative subsidence of political maneuver. But beneath this, all conscious social expedients, those which we call economic included, are found to give ground before the forward push of what appear to be objective economic forces.
It is easy to understand and sympathize with the revolt against this conception. It appears to belittle mankind. It turns our social heroisms to futility. It seems to take away God in the sense that God is the great intelligence which rewards and punishes our human actions. It lifts out the spirit, leaving only an imponderable mechanics. Our life span is so short, and time is so long—are we not at least to be allowed the compensation of striving? If we are not to struggle, and to judge, as best we may, of the goodness or badness of our efforts, does not social consciousness itself vanish? Are we simply to give over to the inexorable? And if we embrace this materialism, do not we and all our doings become one with the ceaseless dropping and matting of palm fronds in the primordial forest, or with the grinding of the rocks under the creeping glacier?
Recoil as we may, acceptance of this notion moves on apace. It comes in the recognition, in the current phase, that social movement is centripetal, not centrifugal. We see that we are being swept together, as by giant hands. The first evidence of this, and one which will communicate itself to the whole of social life, is the impulse toward economic consolidation. This shows itself in so many forms, and is so persistent, that we must surely call it a principle. In the social realm it is our magnetic pole. If we are to hail this principle, it means the destruction of many forms which free will has taken, and continues to try to take. Much which we conceive we have accomplished by individual action, and which we have sought to make permanent by erection into “rights,” will be knocked over and crushed.
We may be more tolerant toward those who shut their eyes completely to this development, than to those who spy it but admit it grudgingly. I have my own particular imperfect sympathy for the neo-Marxians who have bobbed up during the business depression. Perhaps the grounds of my quarrel with them are insufficient. They assert, faintly or more willingly, that collectivism gains upon individualism, co-operation upon competition. Depending upon their several temperaments and insights, they would modify or look to the extinction of private property in the social means of production, and private profit likewise. They try to snatch some credit to themselves, or maybe it is more generous to say that they try to make their announcement less alarming to the public, by avoiding reference to the history of the idea. I cannot believe that these new prophets are unacquainted with the distinguished ancestry of their thoughts, that they suffer from “the tyranny of the unread.” But you would suppose, to hear them, that no man of the name of Karl Marx ever toiled and suffered in Dean Street, Soho, or that he raised up a talented and devoted following. Their omission is rendered comic by the conspicuous events in Russia. Nor are they to be excused by the fact that they differ with particular parts of the Marxian analysis. Marx bolstered his contention with some reasoning which may be thought more ingenious than accurate, and certain of his forecasts have been invalidated by subsequent events. But the heart of his belief, that social life is dynamic, and that movement is toward the center, loses nothing of its vitality.
On the other hand, it constantly receives fresh demonstration. Dr. Harry W. Laidler’s “Concentration of Control in American Industry” is a handy guide to the consolidations. In his account, as in others, you may witness the purse-net of business being drawn together. A phase of the concentration movement has been the relative gain of large-size establishments. We are told that in 1909 less than one-sixth of the factory workers were employed in establishments of one thousand or more wage-earners, but by 1923 this percentage had increased to nearly one-fourth. In this period the total number of wage-earners advanced by one-third, but the wage-earners employed in factories with one thousand or more doubled. It appears that less than one-half of one per cent of the nation’s factories employ almost a fourth of the factory workers, and less than ten per cent of the factories employ seventy per cent of the factory workers. In 1904, factories with a product worth half a million dollars or more (1914 prices) were responsible for fifty-seven per cent of the manufacturing product, but by 1925 they were responsible for seventy-one per cent. Dr. Willard L. Thorp has shown that the number of mergers in the field of public utilities grew from twenty-two in 1919 to 1,029 in 1926, and he found that after the world war (1919-1928), no fewer than 7,249 firms in mining and manufacturing were merged with or acquired by others. Dr. Gardiner C. Means has reason to believe that in 1927, among non-financial corporations, 200 controlled over forty-five per cent of the total assets, received over forty per cent of corporate income, and controlled more than fifteen per cent of all national wealth. We might carry the story into oil, iron and steel, railroads, telegraph, telephone, radio, automobiles, tobacco, food, equipment of all sorts, finance, and even agriculture. It is estimated that at the beginning of 1930, banks to the number of 250 held resources of $33,400,000,000 out of total bank resources of the United States of $72,000,000,000, which is to say, one per cent of the banks controlled forty-six per cent of the bank resources. According to one investigator, control over one-fourth of the corporate assets of the United States is concentrated in 167 persons in a single financial combination who hold more than 2,450 interlocking directorships. And the depression has certainly accentuated these tendencies. Merger has saved many banks from failure.
To be sure, the pendulum may swing too far, may already have done so. Certain countervailing disadvantages in concentration of control may appear, and necessitate modification and adjustment. But this will be only a temporary slackening of speed. The length of the pendulum is probably greater than most suspect.
IV
Consolidation of business enterprises is the practical form which the drift toward co-operation takes at this stage. It is obvious that we ought to remove the anti-trust acts and other inquisitorial hindrances to the polarization of business. A curious paradox appears. The upholders of these acts, who continue to appeal to laissez-faire, are in reality the unwitting, and the very blundering, apostles of social control. Those who would look forward to control are eager, in the present phase, to have the wind blow where it listeth. In this they follow the Marxian tradition. They view the consolidation movement not as the anti-social acts of certain naughty entrepreneurs, but as an expected and necessary step in an historical process. Roosevelt and the elder La Follette were the economic revivalists, crying up free will and railing against sin. Their shouting was in inverse ratio to their perception.
In this same process of concentration, many of our political preoccupations must go with the economic. The Jeffersonian and Jacksonian cult receives thrusts from many sides. Our vaunted system of checks and balances turns out to be another name for awkardness and ineptitude. Hamilton and his friends had incomparably the greater intellectual reach. Their watchword was concentration—economic and political. Surprising as it sounds at first, Hamilton and Lenin had much in common. Many wonder how Marxism, which sprang from industrial experience, could find a foothold and grow to such sudden proportions in agricultural Russia. Hamilton, in his time and in his way, showed the same sort of imagination in advocating economic nationalism, with stimulation of manufactures and centralization of credit, in young America. Hamilton, politically more hampered than Lenin, would have chosen, had he had his way, to be quite as much the dictator.
We are hearing proposals to group counties and to. merge states in order to secure administrative efficiency. “The sovereign state” begins to sound hollow when it is discovered with what aptitude the state falls into insolvency. It is noteworthy that few if any of the current schemes for “social planning” put any reliance upon the state as economic or political unit. In the unanimous appeal to federal authority and strength, the state is passed over as though it did not exist. The state is rapidly becoming a marker beside the concrete highway—pass it, and a motorcycle policeman in a different kind of uniform chases you.
Precisely the same tendency is to be seen in the nations. Whatever the tradition of national sovereignty may be, the whole world begins to be caught in the tentacles of international business sovereignties. Morgan is the name of a new and greater dynasty. The international bankers and industrialists supplant the diplomats and kings. And if business does not regard national boundaries, neither do the state and war departments. The League of Nations is as much an agency to preserve national entities as to promote international collaboration. In its first office it succeeds poorly. In this assignment it is destined to go the way of the Federal Trade Commission and the Interstate Commerce Commission in their different spheres. Industries conspire and merge, carriers join their managements and ownerships where their tracks are already joined, and the commissions which begin as watch-dogs to keep them separate, end by trailing at their heels as they go off locked arm in arm. Will the League of Nations, as a political insulator, have a different history? If a vigorous and ingenious people covets an undeveloped province “belonging” to another sovereignty, is there not a limit to the time they may be kept out of it? Buffer states wait to be flattened between their neighbors.
If the League of Nations, without acting against Japan’s invasion of Manchuria, yet views it with alarm, is it not because it fears the consequences of Soviet Russia going to the rescue of China? Then would come a national melting against which Geneva would be powerless.
V
Is there a middle ground between passivity and self-confident action? Can we, by taking thought, add a cubit to our social stature? Where many answers are possible, two are plainer than the rest.
One is the reply of those who have been recently engaged in “social planning.” With them the business depression is what I believe students of the drama call the exciting force; just as truly the Russian experiment, though American planners would not acknowledge it, is (again to borrow a phrase) their determining cause. The old chief called Capitalist Enterprise is sick. He has had a fever, and the chills have seized him. The medicine men—some of them, one would think, capable of practicing a better physic—dance about the patient, compassionate and scolding by turns. They hardly go beyond faith in a hocus-pocus. Not that they fail to be deadly serious. Social needs should be made a more direct object of industry. Labor and the consumer should have a louder voice in economic policy. A National Economic Council might whisper these things into the ear of government and of capital, beckoning the suffering public the while. Some of the particulars might be compulsory unemployment insurance, a freeing of engineering skill and scientific research from mere profit objectives, the reduction of competitive advertising. Investors might be encouraged to withhold their resources from promoters who refused to be candid about their enterprises; the Council might foster occupational retraining for those thrown out of work by machinery; railroad terminals might be thrown open to all roads entering a city; retailers might be induced to begin selling by grade.
These prescriptions are so timid as scarcely to promise anything to those who regard the future of the tribe as maybe something different from the restoration of the chief for the time being, who lies ill abed. These specifics would set capitalism on its feet, and keep it there. All must be done with the patience of Job; only persuasion must be used, and that ever so tactfully. And why this planning by permission? Because it does not occur to these medicine men that it would be better to see capitalism carried away of its ailments. They do not propose the one thing needful, the doing away with private property in the means of production. Leave that source of infection undisturbed, and all the creams and cordials are pious hopes, giving only touching evidence of loyalty.
A better answer, to my thinking, is furnished by those whom many would put down as fatalists without stirring of conscience. The writing is on the wall for capitalism. Therefore read it. Do not try to bolster a decaying regime, but assist the exit. Deliberate endeavor has its uses, but these must suit themselves to the knowledge of whither society is drifting. The office of free will is the limited, but none the less grateful, one of preparing the way for the march of collectivism.
