THE POWER OF IDEAS
IS THE FULFILLMENT of these ideas a visionary hope? Have they insufficient roots in the motives which govern the evolution of political society? Are the interests which they will thwart stronger and more obvious than those which they will serve?" These questions cut to the heart of one of the most fateful confusions of contemporary economic thinking. It is most significant that Mr. J. M. Keynes should have asked them and correspondingly unfortunate that he should have postponed them virtually to the last page of his General Theory and then stayed not for an answer.
Do ideas have the power to affect the actual course of events merely by virtue of being true? Have we any certainty of an idea being true in such a field as economics until its general adoption proves its effectiveness in action? And what determines the effective adoption of ideas? Is it not after all a matter of the power of vested interest and the opposing power of revolting masses? Such questions express the spirit of the age. The eighteenth century believed in ideas; the nineteenth century in institutions; the twentieth, apparently, in force. Or perhaps it would be closer to the truth to say that the twentieth century is confused. Later criticism of eighteenthcentury ideas has thrown an ironic crosslight on the confidence of that age in its reason. The twentieth century has lost much of the naivete as well as the complacency of preceding generations.
This is true in part because ours has been a period of extreme violence. Economists after all are singularly modest men. In view of the magnitude of the disturbances which have followed the resort to naked force we hesitate to assert that truth will eventually triumph in spite of dictators. "Eventually" is a rather unsatisfactory word, under the circumstances. To rest content with the "eventual" triumph of the truth seems uncomfortably like letting others do the fighting. For how shall the truth be vindicated if its defenders merely sit and wait? Our sense of the necessity we share with all living things to defend ourselves against attack thus leads us to identify the fulfillment of our ideas with the outcome of the physical struggle.
Even Mr. Keynes succumbs to this confusion. For after saying in effect that the fulfillment of ideas is a function of their validity, he goes on to declare that "the world is ruled by little else... both when they are right and when they are wrong," thereby in effect giving away the ground on which his confidence in the vindication of his own ideas was based; and in doing so he exemplifies another major source of our confusion. The eighteenth century could avow a naive confidence in the power of ideas because, as Professor Becker has demonstrated, the philosophers of that age still lived in a heavenly city in which truth was absolute. But the twentieth century is relative. The present climate of opinion is that of a debased, or rather an immature, sort of "pragmatism." Ideas are now quite generally held to be true only if they "work." How they "work" seems in our confusion, to be of no consequence. In the easygoing logic of the age of relativism no distinction is made between different kinds of "work" with the result that we have become more and more committed to ways of thinking which assume that a social theory "works" if it leads to any sort of action. In this spirit even Mr. Keynes remarks that "madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back." Is this evidence of the power of ideas? If so the effect is to put the distinguished work of Mr. J. M. Keynes on precisely the same plane as that of any other academic scribbler, whether right or wrong, and so to make the madmen in authority the final arbiters not only of the fulfillment but therefore even of the truth of our ideas.
There is even some justification in social theory for doing so. The skepticism of which the pragmatic logic was one fruit has also taken note of the linkage between ideas and the communities which entertain them. Apparently every community has its climate of ideas, and so it would seem that every idea does but give voice to some community. So striking is this phenomenon that it has threatened to dominate all our social thinking. Since, as we know, social scientists live in climates of opinion, there seems to be no basis for a distinction between their theories and the group ideologies which they so suspiciously resemble. Thus we find ourselves thinking, more or less explicitly, that the ideas of economists prevail only through the agency of organized communities, and so that of their more or less phrenetic leaders, and finally through the triumph of that leadership over others in the struggle for coercive power, a struggle in which force supplements and qualifies "ideas."
The upshot of this way of thinking in all its forms is not only that one community is very like another but even that one ideas is very like another. This is of course a highly unsatisfactory conclusion, and it has therefore provoked a reaction by which our confusion has been twice confounded, the neomedievalism which not only denounces "pragmatism" as the cause of our cultural disease but proposes to cure it by a return to the simple faith of other days.1 It might be remarked that a plea for faith as a restorative of social health is itself pragmatic in the worst sense, but such a retort, however satisfying, would miss the point at issue. The point is that the confusion of our day is itself an index of intellectual and social progress. Obviously the clock can no more be turned back from the twentieth to the thirteenth century than organic evolution can be reversed, nor would such a reversion be desirable. In spite of the pains which still attend it, our intellectual growth has been genuine. It has been incomplete, and therefore unsatisfactory. But growth is still going on. Implicit in the dilemma of pragmatism and sociological relativism is the distinction between technological and institutional processes, a distinction by which that dilemma and all the confusion to which it has given rise may be entirely resolved.
It is only in terms of this distinction that the power of ideas can be understood. Ideas, powers, and "work" are of two kinds. That is, ideas must be distinguished from ideologies, power conceived as the flow of cause and effect must be distinguished from authority conceived as a function of the "causes" for which men fight, and the toolefficiency with which an idea "works" as part of the instrumental process (in the laboratory or the shop) must be distinguished from the efficacy with which an ideology "works" upon the memories and sentiments of a community. The power of ideas of the first order is a function of their truth, which in this case is a tool function. Thus the determination of the truth of such an idea as that of the binomial theorem is a definition of its power: it has the power to solve certain equations, this being the only sense in which it works. It does not have the power to move communities of men to action. That power is exercised by ideas of quite another type, the ideologies of which it is futile to inquire whether or not they are "true" in the scientific sense because however efficacious they may be as shibboleths they are not tools and do not work at all in the fashion that tools work.
Both sorts of ideas find their way into the pages of academic scribblers, since even the most academic writer is still a social animal. But the ones from which madmen in authority distill their frenzy are the expression of belief and sentiment which even writers share with their communities. Such ideological figments may indeed derive added authority from their association with scientific truths in the pages of savants, since in our community the name of science is something to conjure with and this is very significant. But it does not mean that an expression such as "Aryan supremacy" derives its (institutional) power from its supposed (scientific) truth.
If any particular social conflict be assumed as "given" and viewed so to speak, as "a going concern," it has in effect been defined as a shock of opposing forces the outcomes of which will be determined solely by the strength of those particular forces. In such a situation it is indeed entrenchment, physical and ideological, that counts and not the power which (in quite another setting) accrues to ideas because they are right. Thus Mr. Keynes was very right indeed in his judgement of the economic consequences of the Treaty of Versailles, as subsequent events have demonstrated, and his ideas on that subject have therefore won virtually complete acceptance among economists and political philosophers; but in the struggle for power at Versailles as he described it in his justly celebrated book those ideas were quite without effect.
If this were the whole story that is, if history consisted only of a series of conflicts, each wholly selfcontained and unaffected by anything save perhaps the outcome of the conflict immediately preceding then no case could be made for the power which ideas might be presumed to exercise by virtue of being right. Every party to every conflict might still boast its favorite social philosophers and economists, but they would be honored not because they were right but only because they were on the right side. Thoughtful men have sometimes wondered whether such is not indeed the case. But to recognize this as the condition which prevails within the limits of any particular struggle in which opposing forces already exist and are even dug in and firing at will, amounts only to saying that ideas are ineffective within the limits of situations in which by definition ideas are ineffective. Anybody can define such a situation. A traveler who is waylaid by a thug (who may have mistaken him for somebody else) is for the moment in such a case, and so is a nation which is waylaid by another nation (led, perhaps, by madmen in authority). It has often been said that although the political and economic ideas of the Danes and the Norwegians were among the most advanced in the world, they were of no effect in saving those peoples from conquest. Once the Nazi Wehrmacht had begun to roll, a frame of reference existed to which all ideas were irrelevant.
But institutional conflict is not the whole story. Nobody seriously and consistently supposes that it is. Historians sometimes talk as though they did, but no historian denies the longrun effect, for example, of the development of science upon modern civilization, although science has never been a participant in any battle nor even the "cause" for which any participant has ever engaged in any struggle. The most obvious weakness of dialectical materialism which interprets history as an unbroken series of class struggles is the supposed consummation of the process. Marx wrote as though the outcome of the final struggle would be determined by the logic of force; but he also wrote as though the analytical correctness of the proletarian case could be established in advance, and his conviction that the bourgeoisie would have occasion to remember his carbuncles was based on the supposition that in his case the (instrumental) logic of (scientific) ideas would prevail over capitalist ideology and entrenched privilege. Thus in effect Marx's own work constituted a denial of dialectical materialism.
What is involved here is not only the distinction of the technological from the institutional aspects of the social pattern but the difference between an instantaneous cross section and the longrun process of social change. In the former, virtually by definition, institutionally and ideologically entrenched authority prevails. It is in the long run that technologically correct ideas get in their work, in modern Western society so effectively that our world is indeed ruled by little else, as Mr. Keynes clearly implied by speaking of their "gradual encroachment." The power which ideas exert by virtue of being correct is a function not of mind over matter but of technology over institutions in the longrun process of social change.
As the experience of Western society demonstrates, this power is manifested in two ways: by the changes which technological development effects in the physical medium with resulting institutional obsolescence and eventual change, and by changes which scientific enlightenment effects directly in the ways of thinking by which institutions are ideologically sustained.
The former is the more obvious because it is the more spectacular. This is what people have in mind when they say that social problems are never solved, only forgotten. Perhaps the most tragic irony of institutional conflict is the fact that neither party to any social struggle can possibly prevail unchanged, since the struggle is itself a symptom of ensuing change. The present world struggle is clearly of this character on both its fronts. These disorders are due to the strain to which the institutional framework of Western society has been subjected by the industrial revolution. For several centuries past the process of industrialization has been increasing the scale of industrial operations until it has become virtually world wide, with the result that a very extreme contrast has developed between the physical range of machine technology and the parochialism of certain institutions.
These are, of course, the state and property. To some degree the entire institutional pattern is involved in any general change; but such an institution as the family is less vitally affected than others by the present crisis because machine technology has long since passed the confines of the family, leaving it quite different from what is was but still more or less intact as a residential rather than an industrial unit. But no such easy transition has been possible in the case of the state and property because although both have already undergone profound modifications, both still retain organizational structures which offer the sharpest possible contrast to the global scale of industry. Great as the difference is between the national state and the feudal principality, the former still retains something of the latter. It is still in essence limited in area, a jurisdictional subdivision of a technologically integrated world. Property also has undergone profound modification. The remark has often been made in recent decades that while statecraft remains parochial finance has become international. But the internationalism even of finance is subject to sharp limitations which correspond to those of the national state. Even the most farflung financial operations rest on a foundation of ownership, and since ownership assumes political sovereignty it is still national in scale. Furthermore ownership is still a limiting conception. It draws a line between one owner (or set of owners) and another, and also between owners and nonowners, and in these respects it contrasts with the universal pervasiveness of technology.
The strain to which these two institutions are thus subjected is one continuous strain. It is this circumstance which has led to the general recognition of the present war as revolutionary in character. As a great many people already see, neither property nor the national state is going to emerge from the present convulsion quite unchanged; and this is true irrespective of the immediate outcome of the struggle since it is a consequence not of the declared intentions of any party to the struggle but rather of conditions to which all industrial communities are subject.
Most conspicuous are the revolutionary changes which are imposed by military necessity in the conduct of the war. Many instances have come to light of trade agreements, patent restrictions, and even of control of essential materials, by which favorably placed firms have limited production especially on the part of actual or potential competitors. Indeed, the solution of this problem has obviously been far from complete. There are many indications, such as the concentration of war orders among the largest firms, which even suggest that war accentuates the concentration of control of industry. But war necessarily imposes limitations upon business autonomy of even the largest corporations. In principle at least the rights of property are suspended wherever they conflict with military necessity, including the necessities which result from drastic curtailment of the production of civilian consumers' goods.
These changes are sufficiently marked to elicit anguished cries for the restoration of such property rights immediately following the conclusion of the war; but the problem which war thus throws into sharp relief exists at all times. For many years it has been apparent to all students of economics, government, history, and related fields, that the growth of financial power had come to constitute a challenge to the state itself. Even in the field of foreign relations, presumably the exclusive domain of government, great corporations and international cartels have drawn boundaries, allocated spheres of interest, and generally divided the world among themselves, sometimes with the assistance of departments of state which they have been able to call upon to do their bidding, and sometimes in defiance of the contrary policies even of their own governments, not to mention the political establishments of the lesser "sovereign states" which they have traded back and forth like business assets. In war the military requirements of distant strategic materials and of defense of lines of approach inevitably supersede the bargains of the business men, but war only reveals the fashion in which technological development has set property and government at cross purposes at all times.
Furthermore the problem is by no means limited to matters of jurisdiction or even of the conflict of special interests with the national interest. It has been a commonplace for many decades that all the wars of modern times have been economic in origin. This has sometimes been said of all conflict throughout the whole course of history; but whereas the latter generalization refers only to the supposition that it is always food for which men fight, it is the economic organization of capitalist society which has activated the wars of modern times. The struggle is no longer for food or even for "room." On the contrary, it is a struggle for markets. As such it is a consequence of the fundamental defect of the capitalist system: deficiency of consumer purchasing power. The failure of capitalism to distribute enough purchasing power to absorb the product of industry at full employment subjects every industrial nation to the continual threat of "overproduction." Since the export trade offers an immediate relief to this artificial surfeit, the industrial powers have all sought foreign markets. Their efforts in this regard have been competitive and have inevitably brought them into conflict. Indeed it is in this sense alone with reference to their "access to foreign markets" that any industrial nation has had any real ground for complaining of being "hemmed in," as all neutral commentators now agree. Furthermore the purchasing power problem is no less acute in foreign than in domestic trade. Not only is the purchasing power of nonindustrial peoples even less than that of industrial communities; the maintenance of an export balance (by historic fallacy known as "favorable") obliges the exporting powers perpetually to refuse payment (lest foreign goods compete with domestic production). Thus it turns out in the end that the exports have been largely given away (at the expense, of course, not of the exporters but of the purchasers of foreign bonds). These exigencies also lead inevitably to trouble.
The present cycle of wars is the consequence of all these troubles, and its termination is contingent upon the correction of the unbalance between industrial capacity and the distribution of consumer purchasing power for which the capitalist system is responsible. A realization of this truth is now gradually dawning upon Western society. That the wars of modern times have been actuated by a struggle for markets is now recognized as a fact by a great many people who do not yet appreciate the significance of this fact, and its significance is fully recognized by the smaller number who have begun to understand the chronic deficiency of purchasing power which has resulted from the obsession of Western society with the accumulation of "capital," and who are therefore unanimous in their conviction that the indefinite prolongation of the present cycle of wars can be prevented only by a solution of this problem. Nevertheless it is not with the power of these ideas that the present analysis is concerned. What is now under discussion is the power of the scientific and technological ideas from which the industrial process itself results. The point is that the world crises is itself a manifestation of the power of ideas, inasmuch as it is a consequence of industrial development.
Not only have science and technology subjected the institutions of Western society to intolerable strain; it is industrial necessity which likewise defines the conditions under which alone the strain can be relieved. This does not mean that much (indeed, most) of the institutional content of the past will not be retained in the future. Such has always been the case and doubtless will continue to be. It does not even mean that science and technology will necessarily prevail. Perhaps the world will "choose" authority rather than plenty. But it does mean that if institutions are retained under which industry cannot operate, industrial technology will be destroyed. This seems unlikely. More than ever during the period of strain the world seems to be committed to the truth of science and the efficiency of the machine. War itself employs technical expedients and reinforces the power of scientific ideas while loosening the ties of ancient institutions. The probability is that these ideas will prevail in the end, and when they do the future worldstate and economy of abundance will reveal their pattern.
Meantime the power of ideas is exerted in quite another way. Whereas changes in the physical setting which result from technological development might be said to have a negative effect upon institutional situations as a result of which issues are not so much solved as forgotten, such a development as the growing recognition of the marketseeking character of capitalist imperialism exemplifies the positive effect of movements of thought upon the ways of thinking of which community action is an expression. The expansion of knowledge is itself an aspect of the technological process, and as such it is subject to certain rules or "laws" of which all technical development is a manifestation. One is that it proceeds at a selfdetermined rate. While the advancement of knowledge, or of technology generally, can be impeded locally or momentarily, what determines the rate of its overall development is its own substance. Another closely related principle is that of inexorable growth. Granted a given state of knowledge, no other power can prevent the developments from taking place which are implicit in that state. As Galileo understood, no institutional power, political or ecclesiastical, could long prevent the world in which Copernicus and Lippershey had done their work from identifying the moons of Jupiter.
It is these principles which impose narrow limits upon all the undertakings of the propagandists. Any idea can be successfully disseminated, and its propagation will be an instrument of power, only so long as it is not susceptible to verification. In the case of matters of fact, such as the outcome of military campaigns, the limits are narrow. In other cases the propaganda itself consists of folklore rather than matters of fact. Such ideas have indeed persisted over vast periods of time. But on this account the present strength of folk belief derives from immemorial tradition, not from the machinations of any propaganda bureau. Bureaus of public enlightenment create and disseminate quasifolklore such as belief in the quasidivine character of an "inspired" leader; but the effectiveness of such concoctions is limited by the body of genuine tradition with which they inevitably collide at various points and by eventual verification which may be all the more disastrous by virtue of the revulsion of feeling which results when a community discovers that it has been duped.
The power of propaganda is greatly exaggerated, especially by its opponents. Citizens of democratic countries, knowing the use that is made of propaganda by totalitarian regimes, are therefore prone to attribute the whole body of public sentiment by which those regimes are sustained to the success of their campaigns of organized deceit. In similar fashion opponents of capitalism, knowing that newspapers suppress information harmful to their advertisers, therefore attribute the very existence of the capitalist system to "the kept press"; and in the same spirit men of substance commonly attribute an "upsurge" of economic and political reform to the demagogic cajolery of some politician who has not scrupled to "set class against class" in furtherance of personal ambition. But in every case it is not the power of propaganda which is responsible for these momentous consequences but rather an underlying truth, in each case one which the commentator finds so unpalatable that he seeks to represent it to himself and if possible to others as a villainous creation of scheming propagandists. Certainly the democratic "upsurge" of the 1930's was a public reaction to the fact of economic collapse. What has baulked the growth of radicalism in America has been the high standard of living which has prevailed, hitherto at least, and in comparison with other countries. And as the German people well know, the intolerable conditions by which they were afflicted (for whatever cause) during the 1920's and early '30's were not the product of the imagination of any propaganda bureau.
The dependence of successful propaganda upon underlying truth leads to the recognition of a third principle. The advancement of knowledge follows certain more or less clearly marked channels. Veblen emphasized the importance of the flow of scientific thinking from mathematics and astronomy through physics and chemistry to the biological sciences and so eventually to the moral and social sciences, as of course many others had already done. Immanuel Kant, writing under the influence of Rousseau, predicted a Copernican revolution which, he thought was the certain outcome of the incidence of science; and however much his conception of the nature of this revolution may have been distorted by his metaphysics, there can be no doubt that he was right both about the general direction and about the magnitude of the expected change.
Various reasons can be given for the direction which the advancement of science has followed. To some degree, no doubt, scientific investigation (and technological development generally) has followed the line of least institutional resistance. The logical abstractions of mathematics and the motions of the stars and planets have been permitted subjects long before the human body. But it is also true that technological pressure has been exerted along the same lines. As Dewey has pointed out, the "retarded and immature state of social subjects"' is explained by the fact that "only recently has there been sufficient understanding of physical relations (including the biological under this caption) to provide the necessary intellectual instrumentalities for effective intellectual attack upon social phenomena." Since the instrumentalities of science are genetically indissociable from the tools and expedients of the industrial arts, this means that scientific ways of thinking have gradually pervaded the whole field of human interest and inquiry just as machine technology has pervaded all the activities of life; and this fact also can be stated as a principle. By virtue of the fashion in which it moves from one field to another making use of one technical instrumentality after another, science gradually pervades every department of life and all the strata of society.
In conformity to this general process, the economic thinking of Western society has undergone profound modification. The change is much greater than is yet realized by many professional economists. Concepts such as "utility" and "productivity" which only half a century ago circulated freely and were generally regarded as sound intellectual currency are now just as generally viewed with extreme suspicion. The virtual identity of savings with investment is now universally admitted not to be an identity at all. Furthermore, changes, such as these are not expressions of any special interest the growing ascendancy of which they might be thought to register. Just as truly as any mathematical demonstration or physical discovery they are the consequences of a genuinely intellectual process of conceptual clarification and of recognition of matters of fact. The criticism to which the conceptuology of economics has responded has been scientific criticism; and the recognition of such a fact as the nonidentity of savings and investment, though it has been brought about very largely by the cogent demonstrations of Mr. J. M. Keynes, does not on that account owe its truth to his personal ascendancy certainly not to the ascendancy of any class or special interest which he might be conceived to represent.
Nor is the impact of such ideas concentrated upon any particular community or class. The issues by which communities and classes seem to be divided are not resolved by either side winning complete ascendancy over the other. No idea will endure such treatment.
So general and pervasive is the process by which ideas are subjected to the transforming touch of science and technology that the issues by which people are divided are themselves transformed even while the struggle is going on. Neither side is immune to the infection. On both sides the ideological dogmas are undergoing a continuous shift of emphasis and the ideological symbols continuous redefinition, with the result that issues and even alignments themselves are continuously shifting; and since the changes on both sides constitute responses to the common and pervasive influence of scientific and technological development, the process is one in which opposites are perpetually converging. As George Soule has pointed out, all revolution is counterrevolution. In the same sense all wars are fought for causes which are already lost. Thus the present war is a bid for empire, or even world dominance, made at a time when empires are already obsolete and the idea of dominance is fast giving way to the idea of unity and common interest. No issue is ever drawn so sharply as a dead issue. The most violent altercations always occur between Tweedledee and Tweedledum. Economic controversy now seems to be rising to a higher pitch of violence than ever before. Many people now concede the possibility that capitalism may be giving way to some sort of socialism, or that we may be entering a period of struggle a struggle that may be indefinitely prolonged and marked by violence going far beyond anything we have experienced as yet by which the issue will be finally determined. Whereas the economic controversies of the past have been concerned with such trivial issues as the tariff and free silver, it is nothing less than the merits of the capitalist system that are now at issue. But how are those merits stated?
A century and a half ago during the debate over the Constitution the right of property owners to direct the affairs of the community was openly and clearly asserted, and men of substance did not hesitate to advertise their contempt of the propertyless mob. But nothing of that sort is ever heard today. In theory the right to income from investment is perpetual, but in actual practice nobody defends the rights of heirs to be endowed in perpetuity. Even men of the greatest wealth publicly deplore the indefinite perpetuation of their won estates. The principle of estate taxation is universally accepted, and even the eventual extinction of inherited wealth by rates that ultimately become confiscatory has no open opponents. The right to income itself once an absolute of virtually feudal rigidity is now qualified by common consent.
Judging by the controversial literature the vital issues of the present day are those of "free enterprise" and "the profit motive." These principles are indeed hotly defended, and always with the implication that these phrases designate institutions, or aspects of existing institutions, which are in gravest danger of extinction. But do they? The expression "free private enterprise" has been in general use among economists for many years to refer the competitive economy to the analysis of which classical theory has been addressed. Whether any such actuality ever existed is perhaps an open question; but there is no question that the economic actuality of our time has long since been quite different from the free private enterprise of theory. Even those who believe most stoutly that such an economy once existed now mourn its demise.
Nevertheless there is a sense in which free enterprise exists and is worth defending, and it is this actuality which gives plausibility and force to all the pleas for its preservation. Modern industrial society has offered to its subjects a wider range of choices among occupations and greater freedom in the exercise of such a choice than people have ever enjoyed before. The spirit of enterprise which this freedom fosters is very real and very precious, and equally so to all social ranks. The children of industrial society do not find themselves bound to follow the occupations of their fathers. Avenues exist by which they can enter other occupations and even aspire to the professions. The whole community has learned to cherish free enterprise in this sense, and it is on this account that free enterprise affords the best of all possible grounds on which to defend the economic oligarchy under which we live.
But against what threat does this real economic freedom need to be defended? There is much talk of "regimentation," by which the opponents of social change mean to stigmatize everything to which they are opposed. It is good tactics to give a dog a bad name before kicking him, but the name must be made to stick. The trouble with this characterization is its obvious insincerity. Traffic signals are regimentation; bank examiners are regimentation; the pure food laws are regimentation: all bitterly resented by food adulteraters, embezzling cashiers, and escaping convicts. Regimentation may be defined as overorganization. But this is a universal defect of human character by no means confined to government. Corporations secrete red tape no less copiously than government bureaus. Annoying as overorganization certainly may be, it is not the nemesis of free enterprise. What is implied by the representation of free enterprise and regimentation as opposites is that economic freedom is freedom from supervision. But such is clearly not the case. No freedom of occupational choice exists in a culture in which there is but one occupation, and by contraries the greatest freedom is a function of the widest variety of possible activities. It is of course industrial technology which has broadened the choice of occupation in the modern Western world, not only by creating an immense range of occupations but also by enlarging the facilities of communication and transportation by which actual mobility is continually increased.
So long as technological development continues, no amount of "regimentation" can prevent the emergence of new occupations and the consequent enlargement of the occupational opportunities open to the community. Obviously the organizational pattern will affect the distribution of those opportunities. If we want to know who it is that is most fearful of the threat of "regimentation" to the future of his opportunities, we have only to identify the people who are most concerned about the fate of free enterprise. On this showing it is the discretionary heads of the enterprises collectively known as Big Business who are most fearful for their freedom, perhaps with good cause. No doubt they are very strongly entrenched.
They may indeed be able to defend their position successfully. But it is most significant that they should not do so openly.
What is true of free enterprise is also true of the profit motive. When economists, speaking carefully, refer to profits, they mean not the gross earnings of a business but certain net returns which are by no means universal and are not even a sign of general economic health or even of the acumen of their particular recipient but are rather a consequence of the uncertainties and even unpredictabilities of business life. It is not such gamblers' gains that people have in mind when they speak fondly of the profit motive. We may be a race of inveterate gamblers, but is at least in terms of a game of skill that we idealize the gamble of life. What makes the profit motive precious to the whole community is a much more general conception of profits as the reward of energy and skill, knowledge and judgement. Such qualities are very frequently rewarded, and everybody believes that they should be hence the effectiveness of the appeal.
The profit motive is a controversial issue only on the supposition that virtue is rewarded only in a capitalistic society, that under "socialism" (in any of its forms) vigor and acumen must go unrewarded while a bureaucratic state takes from each according to his ability and gives to each according to his need with a consequent downgrading of all distinction to the common level. This is nonsense, of course. There is nottobegainsaid technological linkage between abilities and needs by which the needs of musicians, generals, and commissars are occupationally determined. It is their occupation, not their agony of soul, which requires that violinists be relieved from heavy manual labor and that professors have access to books; and since the achievement of any sort of occupational or professional competence requires some industry and some brains, it would seem that no community can possibly "eliminate the profit motive" altogether and survive. Certainly no community has ever done so, and no leader of any influence in the modern world advocates doing so.
As in the case of free enterprise, advocacy of the profit motive is disingenuous. The activities in behalf of which the principle of just reward is most commonly invoked quite uniformly turn out on examination to be the most outrageous impositions. Thus it is argued at the present time that owners of plants upon the use of which the success of the war effort ultimately depends must therefore be satisfactorily rewarded lest they should feel disinclined to cooperate in the war effort. What is at issue in such cases is obviously not profits either in the economic or the popular sense but tribute exacted by threat of sabotage. It is such tribute and the threat and even the actuality of capitalist sabotage that is the object of condemnation in the slogan, "Production for use and not for profit." Since all production is for use, and since a given volume of production will go no farther by reason of the motives which induced it, this slogan is intelligible only on the assumption that what it advocates on the ground of usefulness is production and what it condemns is profitmotivated nonproduction.
The issue could be clearly drawn if the familiar slogan were phrased something like this: "Production irrespective of profits." There might then be an alternative slogan, "Profits irrespective of production," which would be a clear and succinct statement of the real concern in behalf of which the profit principle is commonly invoked. But no such slogan exists or could be publicly proclaimed in the present state of civilization.
Such is the fashion in which the power of entrenched privilege is circumscribed by the power of ideas. Certainly vested interests do exist and do exact tribute in their devious ways. But their ways become increasingly devious as the technological realities of the production process are more and more clearly understood while the ceremonial amenities on the basis of which the lords of heaven and earth once openly asserted their prescriptive rights have been reduced to tawdry subterfuge.
The bifurcation of the institution of property is an instance of this process. The dissociation of the function of management and that of receipt of income which has been so much discussed in recent years should not be interpreted to mean that the institution of property is disappearing. Feudal rank continues to persist in the full flower of industrial society, and patronymics still preserve a vestige of the patriarchal family. Doubtless property will display a corresponding longevity. But on the managerial side nothing is more certain, and this certainty is no mere historical inference based on the experience of the recent past. It is a matter of idea. Once the exercise of the managerial function has been identified as such and completely dissociated from the mystic potency of inalienable right, it has no ground to stand on save the technical efficiency with which it may be exercised. No doubt the elaboration of corporate devices was the work of financial legerdemain, and the insincerity with which Big Business has intoned the gospel of service has been sufficiently obvious; but the real irony of the situation lies in the fact that corporate structures themselves provide the machinery of regulation while the gospel of service provides the objective.
Meantime the idea by which excessive inequality of income has been sustained throughout modern times is being gradually undermined. With the advancement of science and the proliferation of machinery, it is gradually dawning upon the industrial community that economic progress is a function of technology, and at the same time the pathetic futility of accumulated moneywealth in the face of economic depression and its complete irrelevance to the prodigious expansion of industrial capacity occasioned by the war is relegating the myth of the creative potency of funds to the limbo of legendary fancies. Gradually but inexorably a state of mind is growing in which the continuous efficient operation of industrial machinery will have replaced the accumulation of funds as the object of general concern and the aim of public policy.
Being a state of mind, this change marks the supreme importance of ideas. But such ideas are the work not of individual thinkers in economics or any other science but rather of a whole community, just as the idea of capital of which capitalist institutions and economic theory have been the embodiment was not the creation of any individual economist but a coinage of the acquisitive society which emerged from medieval feudalism.
To recognize this fact is not to excuse ourselves from individual effort, since the social process is only a summation of the growing enlightenment and the persisting stupidity of individuals. Nor is it to depreciate the intellectual leadership of individual economists or other scientists. Their work is to elaborate and codify, to relate and systematize. Without the work of the classical economists, correlating a quasiempirical conception of value through the instrumentality of the price system with the basic idea of capital, that idea could not have served as the epitome of the economic life of the Western world for something like four centuries. The debt which future centuries may owe to such economists as may arise to elaborate and systematize the economic thinking of our time will be correspondingly great. But the influence of their ideas will be more than personal.
Furthermore, their formulations like those of the founders of classical political economy, will be notable for their simplicity. In recent decades economic orthodoxy has become increasingly recondite, and professional economists have barricaded themselves from criticism behind the formidable complexities of their trade. "Oversimplification" has become a mortal sin. This is scholasticism, the last stage in the decay of "the obvious and simple system" described by Adam Smith. The progress of science is always in the direction of the simplification of what seemed complex before. As Willard Gibbs used to say, "The whole is simpler than the sum of all its parts." Einstein's general theory of relativity, of which we were once told that not more than twenty masterminds in the whole world understood it, in fact reduces confusions and contradictions which physicists had contemplated with hopeless bewilderment for generations to a neat and simple series of equations and is now presented to college freshmen in the elementary course. Economics is no exception to the laws of thought.
In the simplification which the economic thinking of our time is just about to undergo, most of the esoteric formulas of scholastic orthodoxy will be swept away. The world will continue to be twentyfive thousand miles around, and with the growth of industry the variety of the economic activities of its inhabitants will continue to increase. But the meaning of those activities may still be essentially simple and comprehensible once they are stripped of the halftruths of the past and the humbug of the present. And as that meaning emerges, no power can prevent it from effecting a like clarification and simplification of the actuality. Already the possibility of abundance is beginning to haunt the economic thinking of our time as a corollary to the meaning of industrial technology. Once that idea has become clear, the actuality will be on the way.
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Continue on to Addendum I of The Theory of Economic Progress