For over a thousand years the history of the world has been made by two great forces—the church and the state—the church basing its power on idealism and moral forces, the state depending almost entirely upon military power. At times these two forces have seemed for a while to cooperate, and then to become antagonistic. Today they are absolutely distinct, working in different fields, with but little ground in common, and a rival claims the middle of the stage, for during the last century there has come into the world another force, which has concerned itself but little with our religious activities, and interested itself in our political activities only in so far as it could make the political forces serve its ends. I speak of the modern business system, based on the tremendously increased productive capacity of the race due to the advance of the arts and sciences. The rapid expansion of this new power has thrown all our economic mechanism out of gear, and because it failed to maintain a social purpose, which is common to both of the other forces, produces cross-currents and antagonisms in the community which, are extremely detrimental to society as a whole.
One hundred years ago, each family—certainly each community—produced nearly everything needed for the simple life then led. The village blacksmith and the local mill served the community, which existed substantially as a self-contained unit. With the growth of the transportation system and grand scale production many of the functions of the local artisans were taken over by the factory, just as the flour mills of Minneapolis supplanted the local mills, which went out of existence. In the same manner other large centralized industries by superior service drove out of existence small local industries. By reason of improved machinery and a better technology the centralized industries were able to render this superior service, at the same time securing large profits for themselves. Unfortunately for the country at large, those who later came into control of these industries did not see that the logical basis of their profits was service. When, therefore, the community as a whole had come to depend upon them exclusively, they realized their opportunity for larger profits still, and so changed their methods as to give profits first place, often times ignoring almost entirely the subject of service. It is this change of object in the business and industrial system, which took place about the close of the nineteenth century, that is the source of much of the woe that has recently come upon the world. Unless the industrial and business system can rapidly recover a sense of service and grant it the first place, it is hard to see what the next few years may bring forth. The great war through which we have just passed has done away with political autocracy, apparently forever, but it has done nothing whatever in this country to modify the autocratic methods of the business system, which is a law unto itself and which now accepts no definite social responsibility. This force is controlled by and operated in the interest of ownership, with, in many cases, but little consideration for the interests of those upon whose labor it depends, or for that of the community. We should not be surprised, therefore, that the workman who is most directly affected by this policy is demanding a larger part in the control of industry, especially as the war has taught him, in common with most of us, that the method of operating an industry is more important to the community than the particular ownership of that industry. The result of this knowledge is that the workers throughout the world are striving everywhere to seize the reins of power.
Unfortunately for the world at large, these workers as a rule have no clearer conception of the social responsibility than those already in control. Moreover, having had no experience in operating grand scale industry and business, it is more than likely that their attempt to do so will result disastrously to the community. The industrial system as a whole is thus threatened with a change of control which we can scarcely contemplate with equanimity. We naturally ask if there is any possible relief from the confusion with which we are threatened. We think there is, but not by any of the methods generally advocated by “intellectuals” who are not closely in touch with the moving forces.
One class believes that the answer comes in government ownership and government control of industries. The experience of the world so far does not, however, give much encouragement along these lines, for in some quarters where public utilities have to a large extent been run by the government, it is frankly admitted that the government is being run by the business system, which leaves us just where we were, unless we can get a social purpose into that system, in which case the need for government ownership would disappear.
Is such a thing possible? Unless it can be shown that a business system which has a social purpose is distinctly more beneficial to those who control than one which has not a social purpose, I frankly confess that there does not seem to be any permanent answer in sight. On the other hand, if it can be shown conclusively that a business system operated by democratic methods (and the test of such a system is that it acts without coercion and offers each man the full reward of his labor) is more beneficial to those who lead than the present autocratic system, we have a basis on which to build a modern economic state, and one which we can establish without a revolution, or even a serious jar to our present industrial and business system. In fact, so far as I have been able to put into operation the methods I am advocating, we have very materially reduced the friction and inequalities of the present methods much to the benefit of both employer and employee. In 1908 I wrote a paper for the American Society of Mechanical Engineers, on “training workmen” in which I used the following expression: “The general policy of the past has been to drive; but the era of force must give way to that of knowledge, and the policy of the future will be to teach and to lead, to the advantage of all concerned.”
This sentiment met with much hearty support, but inasmuch as no mechanism had at that time come into general use for operating industry in that manner, the sentiment remained for most people simply a fine sentiment. At that time the organization of which I am the head had already made some advance in the technology of such a system of management, and since that time we have continued to develop our methods along the same lines, as shown in the previous chapters of the book. Throughout this little book we have attempted to make clear that those who know what to do and how to do it can most profitably be employed in teaching and training others. In other words, that they can earn their greatest reward by rendering service to their fellows as well as to their employers. It has only been recently that we have been able to get owners and managers interested in this policy, for all the cost systems of the past have recorded such teachers as non-producers and hence an expense that should not be allowed. Now, however, with a proper cost-keeping system supplemented by a man-record chart system, we see that they are really our most effective producers. We have attempted in this book to show an example of the mechanism by which we have put into operation our methods, and some of the results that have been obtained by them, the most important of which is that under such a system no “blind guides” can permanently hold positions of authority, and that leadership automatically gravitates to those who know what to do and how to do it. Moreover, we have yet to find a single place where these methods are not applicable, and where they have not produced better results than the old autocratic system. Moreover, they produce harmony between employer and employee and are welcomed by both. In other words, we have proved in many places that the doctrine of service which has been preached in the churches as religion is not only good economics and eminently practical, but because of the increased production of goods obtained by it, promises to lead us safely through the maze of confusion into which we seem to be headed, and to give us that industrial democracy which alone can afford a basis for industrial peace.
This doctrine has been preached in – the churches for nearly two thousand years, and for a while it seemed as if the Catholic Church of the middle ages would make it the controlling factor in the world ; but the breaking up of the Church of the middle ages into sects, and the advance of that intellectualism which placed more importance upon words and dogma than upon deeds, gave a setback to the idea which has lasted for centuries. Now, when a great catastrophe has made us aware of the futility of such methods, we are beginning to realize that the present business system needs only the simple methods of the Salvation Army to restore it to health. It is absolutely sound at the bottom.
The attempt to run the world by words and phrases for the benefit of those who had the power to assemble those words and phrases involved us in a great war, and the continued application of these methods seems to be leading us into deeper and deeper economic confusion. “We are therefore compelled to recognize that the methods of the past are no longer possible, and that the methods of the future must be simpler and more direct. It should be perfectly evident that with the increasing complexity of the modern business system (on which modern civilization depends) successful operation can be attained only by following the lead of those who understand practically the controlling forces, and are willing to recognize their social responsibility in operating them. Any attempt to operate the modern business system by people who do not understand the driving forces is sure to reduce its effectiveness, and any attempt to operate it in the interest of a class is not much longer possible.
For instance, under present conditions the attempt to drive the workman to do that which he does not understand results in failure, even if he is willing to be driven, which he no longer is; for he has learned that real democracy is something more than the privilege of expressing an opinion. We are thus forced into the new economic condition, and, whether we like it or not, will soon realize that only those who
know what to do and how to do it will have a sufficient following to make their efforts worth while. In other words, the conditions under which the great industrial and business system must operate to keep our complicated system of modern civilization going successfully, can be directed only by real leaders—men who understand the operation of the moving forces, and whose prime object is to render such service as the community needs.
In order to secure such leaders they must have full reward for the service they render.
This rules out the dollar-a-year man, whose qualifications too often were not that he knew how to do the job, but that he was patriotic and could afford to give his services for nothing. In spite of such a crude way of selecting men to handle problems vital to the life of the nation, many did good work during the war. The laws of the United States, however, forbid a man to work for the government for nothing, and both those who served at a dollar a year, and those who accepted that service, violated the spirit of the law, which was aimed to sustain the democratic practice of rewarding a man according to the service he rendered.
Any other practice is undemocratic.
In 1847, Mr. Lincoln wrote: “To secure to each laborer the whole product of his labor, or as nearly as possible, is a worthy object of any good government. But then the question arises, how can a government best effect this? Upon this the habits of our whole species fall into three great classes—useful labor, useless labor, and idleness. Of these, the first only is meritorious, and to it all the products of labor rightfully belong ; but the two latter, while they exist, are heavy pensioners upon the first, robbing it of a large portion of its just rights. The only remedy for this is to, so far as possible, drive useless labor and idleness out of existence.”
Attempts are always being made to eliminate the idleness of workmen and useless labor by the refusal of compensation. Unfortunately, however, there has been no organized attempt as yet to force capital to be useful by refusing compensation to idle capital, or to that expended uselessly. Capital which is expended in such a manner as to be non-productive, and capital which is not used, can receive interest only by obtaining the same from capital which was productive or from the efforts of workmen, in either of which cases it gets a reward which it did not earn, and which necessarily comes from capital or labor which did earn it. Reward according to service rendered is the only foundation on which our industrial and business system can permanently stand. It is a violation of this principle which has been made the occasion for socialism, communism, and Bolshevism. All we need to defeat these “isms” is to re-establish our industrial and business system firmly on the principles advocated by Abraham Lincoln in 1847, and we shall establish an economic democracy that is stronger than any autocracy.
Moreover, it conforms absolutely to the teachings of all the churches, for Christ, who was the first to understand the commanding power of service, thus stands revealed as the first great Economist, for economic democracy is simply applied Christianity. This was also clearly understood by the great leaders of the Church of the middle ages, whose failure to establish it as a general practice was largely due to the rise of an intellectualism which disdained practicality. Now, however, when a great catastrophe has shown us the error of our ways, and convinced us that the world is controlled by deeds rather than words, we see the road to Universal Peace only through the change of Christianity from a weekly intellectual diversion to a daily practical reality.