Industry and Government

I

HAVING been flat on my back for the best part of three months, with nothing to do but think, I have had an unrivaled opportunity to contemplate the chaos which seems to have overtaken the world in which I have lived. Of course, I have neglected my opportunity, but I have done some thinking.

There is an ancient saying that ‘nature abhors a vacuum.’ This is equally true of chaos, so that it is quite safe to assume that the chaos which now surrounds us will in due course be reduced to order; the only important question being what the new forms of government and of life will be under the new order. Those of us who are interested in the preservation of the forms which were handed down to us by our fathers are charged with a particular responsibility during this transition period. Great changes will certainly come and they may come swiftly. If we are not alert and active the forms of government and the way of life which made our past great may be replaced by definitely lower forms; in other words, the processes of degeneration and decay which have destroyed the older civilizations may attack our own in our time.

In support of this view, it is interesting to note the parallel between much that has been done by the present administration during the past year and a half and what was done by the Roman Emperor Diocletian in the third and fourth centuries. As Gibbon observed, his reign marked the beginning of the end of that civilization. While historical parallels of this sort are apt to be misleading because the intervening changes in environment are overlooked, they may be useful when the laws which were defied are laws of nature, as they were in both these cases. We may comfort ourselves, however, with the thought that no free people need perish against its will. Those who are fit to survive will survive.

We have always been a disorderly people, but the chaos which now prevails is a new phenomenon for this nation, and on peril of our souls we must ask and answer the question, What caused it? Superficially, of course, the causes were the World War and the world-wide depression which followed it. But as these causes are not adequate to explain the political phenomena which confront us to-day, we must look deeper. The real causes, I think, are changes in the races composing the nation and in the environment in which we live (due largely to the industrial developments of the last fifty years) which made the structure of our government unsuitable for dealing with the problems with which governments must deal to-day. This proposition may seem highly controversial, but few people will deny that the structure of our government, which was framed nearly a hundred and fifty years ago, has broken down in certain important particulars, and there is evidence that the makeshift methods which are being used to repair the breaks have not been well considered because the problems have not been thought through.

The practical problem which we face to-day is, What changes in our form of government are necessary to adjust it to the new conditions? In order to think about this problem we must start with some hypothesis as to how different forms of government originate, and I therefore make the assumption that the form of government best adapted to any people at any time is the child of race and environment. The word ‘race’ as used here requires explanation, because the ‘common or garden’ meaning of the word has been shattered by the shell fire of the anthropologists and ethnologists. While the man in the street still clings to the belief that an Irishman is different from a Norwegian and that both differ from a German, we may concede that the most important distinctions between racial groups are often due to differences of tradition and of culture so ancient that they have sunk below the threshold of consciousness. The word ‘race’ as here used is intended to include these traditional and cultural characteristics. The word ‘environment’ needs the same kind of stretching, so as to include not merely changes in soil and climate, but mainly those created by man himself operating on his environment in order to make it different.

With these explanations, this hypothesis will prove serviceable in setting up the problem, if in nothing more, and it is my impression that consciously or subconsciously those who have thought deeply about problems of government in the past have acted on substantially this assumption. The alert reader may think of an exception — namely, the group of statesmen who negotiated the Treaty of Versailles. These men, in redrafting the map of Europe, wholly disregarded economic conditions which were then, and are still, decisive in determining the environment under which the new racial groups would have to live. One of the two essential conditions above referred to was wholly disregarded, with the result that Europe was subdivided into groups ostensibly based on racial characteristics which could not support themselves under post-war conditions. This error of judgment is largely responsible for the economic chaos into which Europe was plunged by the Treaty of Versailles. Before order can be restored many of these new units will have to be consolidated so as to produce reasonable stability.

If the attention of this group of men had been concentrated primarily on problems of government, the Treaty of Versailles would be a notable exception to our rule. But it was not. These men were politicians obsessed with problems of European politics, so that the establishment of stable systems of government was not uppermost in their minds. Our good President Wilson, who was a member of the group, seems to have gotten into bad company.

Of course, the form of government which is actually adopted by any people at any time is greatly influenced by the forms of government which they see around them. To-day, for example, democracy, which at the time the framework of our government was set up was spreading rapidly, is much discredited. (There are only three important nations, in fact, in which it can be said that democracy still survives, and in all of them it shows signs of breakdown.) We may assume, therefore, that the changes in the framework of our own government which are inevitable will be affected by what is going on in Russia, Italy, and Germany. But the extent to which a nation is influenced by the actions of other nations depends upon the race and the traditions of that nation. It is quite certain, for example, that we shall not follow the lead of any of these nations, because our whole national tradition is different, but we shall be influenced by what they have done.

My assumption is that the appropriate form of government for a people is determined by two variables, race and environment, and that if these can be stabilized the problem can be solved.

II

The scientists report that man has evolved, like the other animals, under the pressure of his environment, and over the long periods of time which science takes as its base we should not dare to question this. But quite recently man has discovered how to make radical, and rapid, changes in his environment, so that to-day he may be said to have taken his evolution into his own hands with science as his tool. That he has handled the job amateurishly is only natural, considering that it is so new. But we hold our breath at the question whether, unaided, he can avoid disaster. Our fathers assumed that the processes of evolution were guided by the Almighty, but now, if it be true — as many seem to believe — that God has absconded, we must achieve our own salvation or perish. The assumption is debatable, to say the least, and before we finish we shall have more to say about it.

The speed with which man has altered his environment during the last century has been amazing, and is apparently accelerating. This is notably true of the nations in the temperate zones, and the people of this country undoubtedly hold the record for the speed with which they have changed their environment since they landed here three centuries ago. They have done it several times, but in spite of this the forms of government, both state and federal, which we now have are substantially what they were a hundred and fifty years ago. Changes, of course, have been made, but they have not been of the magnitude or of the character which the changes that have occurred during that period, both in the race and in the environment of this nation, require. The fact is that we have changed both variables in our equation, and therefore the answer, but we have failed to recognize it. This failure has produced the result which we see.

Our failure, I think, is clear. When the framework of our government was set up, it was designed to fit a handful of farmers, fishermen, and traders, assumed to be of the same stock, of the same economic status, and of the same high intelligence. The assumption was not accurate. It applied only to the Northern colonies. The environment in the South was different. These states were dominated by large landowners of the aristocratic type who later became large slave-owners. But, as de Tocqueville points out, the ideas which prevailed in the assembly which framed the new Federal Constitution were the ideas of New England men, so that this difference was disregarded. At the time it seemed a minor oversight, but in fifty years it had split the nation into two social systems so divergent that in 1861 they produced the Civil War. Except for this cloud no bigger than a man’s hand, the problem of designing a form of government fitted to this race and this environment was remarkably simple. In fact, the only serious difficulty experienced by those who framed the Federal Constitution was to induce the rampant individualists who formed the nation to act sanely in their own interests. The great Patrick Henry of Virginia even went so far as to declare that the new constitution was ’the most fatal plan which could possibly be conceived for enslaving a free people.’¹ That the constitution was finally ratified indicates clearly that it was framed by men of genius.

But in the period which has elapsed since the framework of our government was set up both the race and the environment have changed beyond all recognition. No man on earth can say to-day what ‘the race’ is that inhabits the United States. It is not a race, but a conglomeration of unassimilated racial groups with different traditions and different racial characteristics.

There are plenty of examples of the problems raised by these racial differences, of which two will suffice.

For two generations the Irish clansman, with five hundred years of training in conspiracy behind him, has been true to his race and his traditions. Both have great virtues, but they are not ours. As a result, many of our large cities have been managed by Irish bosses under a system of conspiracy and corruption operated with a degree of skill of which the Anglo-Saxon is wholly incapable. More recently, under prohibition, men of the Corsican bandit type have reverted to their old racial tradition and obtained amazing wealth and power as racketeers, bootleggers, and kidnappers. Our whole system of criminal law and administration seems to have been designed for the protection of this group of outlaws.

These examples indicate some of the consequences of advertising our country as a refuge for the poor and the oppressed of all nations. It was a great and glorious ideal, but now we must face the music. Our idealism has brought us face to face with a sociological problem of the first magnitude — namely, to see whether there is any common denominator for all these groups. We do not even know whether what we seek is the least common denominator or the greatest, or some compromise between the two. Failure to attack this question promptly and solve it successfully may easily result in the collapse of this experiment in industrial democracy.

It is quite safe to assume that rapid changes will be made in both our industrial and our governmental systems within the next generation, so that any study designed to promote a rational solution of this great sociological problem must be prosecuted with speed or it will fail of its purpose. As I look about me I do not see any group which seems to be doing the sort of work essential to a solution of this problem. There are hundreds, if not thousands, of sociologists, some inside the universities, some outside them, but, broadly speaking, they are either of the scientific type that spends its life in examining the hind leg of a flea or of the emotional and sentimental type that lacks the firmness of character and the powers of action essential to the solution of the problems which now confront us. Neither type can give us the answer to our problem. The time is too short for minute scientific research, and emotion is a dangerous guide in a field beset with pitfalls. What is needed is a group of far abler and far bolder men who are willing to take the risk of making sweeping generalizations based on insufficient knowledge. The risks are very great, but those who aspire to leadership in an emergency must be prepared to take them.

III

Urgent as these sociological problems are, the other variable in our equation — environment — raises even more difficult problems, the solution of which is even more urgent. Both variables must be stabilized before the equation can be solved, but the practical statesman will probably attack the economic problems of environment first.

I have assumed it to be a fundamental principle that environment is one of the essential elements which must be considered in determining a satisfactory form of government. But it is notable that in this country the changes in environment have been left wholly in the hands of industrialists and business men who as a group paid little or no attention to the effect of what they were doing upon the life of the nation. They were absorbed in making money, and not in evolving a philosophy of government, although they were in fact the governing class. The result has been that during my life changes have been made in the conditions under which this people lives of so radical a nature that they presupposed corresponding changes in our form of government. But these have not been made, because the modifications of our way of life have been made by industrialists and business men who never thought of the social effect of what they were doing. Obviously, changes in forms of government must follow closely on changes in economic conditions or the government will suffer the fate of other rigid structures. The situation in which we find ourselves to-day is certainly due in part to disregard of a natural law.

This reckless method of conducting our affairs cannot continue. Under our system of free competition the industrialist and the business man, backed by their immense organized research, are the only sources of accurate information as to what changes are likely to occur during the next twenty or thirty years, and yet we all know that in America these men have been so over-specialized that they are incapable of providing us with the information needed to form a sound judgment on the broad social and governmental problems on which the future of the nation depends. They do not regard such problems as having any direct relation to their business, although they are the foundation on which all business rests.

Under the conditions which we face it is clear that one of two things must happen. Either the leaders of industry and business must be trained on broader lines so that they can, and will, generalize in the fields of sociology and government, or their business will be taken out of their hands, for it is inconceivable that with the rapid changes which are certain to take place during the next generation the people of this country will allow their lives to remain at the mercy of a group of specialists who are largely unconscious of their existence. In fact, the second alternative is already in process of adoption. To-day the controlling decisions in many industries are made by politicians and not by business men. This is a perfectly logical result of what has gone on during the last generation, and it will certainly go further unless something is done to prevent it — and done promptly. If the industrialists and the business men of this country cannot be convinced of this fact, and if the rising generation is not trained to deal with it, some form of state capitalism or socialism in this country is inevitable. In other words, business must shortly become a profession in the highest sense, or business as we have known it in this country will cease to exist.

There is convincing evidence, some of which has been referred to, that in this country men in the professional and administrative classes have not been properly educated for the work which is now required of them. On the principle that ‘he who has broken the head must find the plaster,’ our educational system should step into the breach. We are said to be suffering from overproduction. If this is true, the remedy is not to limit production and destroy the abundance which plagues us, but to teach men how to use it. Clearly this is a problem of education, and on our ability to divert a part, of the immense surplus energy of the nation into this field the future of our civilization may well depend.

IV

For one who can lay no claim to scholarship and who was never trained for the teaching profession it is pure impertinence to make any suggestion as to what should be done first. But fools rush in where professors fear to tread, sometimes with beneficial results. I venture to suggest, therefore, that one of the most urgent needs of the moment is to give the men in our colleges and in our professional schools a realistic picture of the social and governmental problems which confront us before they graduate. So far as appears from the results, this is not now being successfully done. Certainly the young men who graduate in immense numbers from our colleges every year display a uniform and remarkable ignorance in this vital field. We need not try to teach students the answers to all these complicated problems. In fact we cannot, because we do not know them. But it is our duty to present the problems to all students in such a way that they will have no doubt that the problems exist and must be solved.

As an example of how this might be done during the coming year, take the legislation passed by the Congress which met on March 9, 1933, known as the ‘legislation of the hundred days.’ This will provide sufficient material for a full course of the most dramatic character. The legislation was hastily improvised to meet a situation for which the nation was totally unprepared. During the last half century, and particularly during the last fifteen years, amazing progress had been made in production, distribution, and administration by business men in many fields. But the equally vital problems of sociology and of government had received practically no attention. In fact, the problems had not even been defined, so that there was no obvious alternative to the hit-or-miss method which the President proposed and Congress adopted. The emergency was real; the patience of the nation, as well as its savings, had been exhausted.

This legislation covers a wide field and raises many questions of the gravest moment. For example, the National Industrial Recovery Act takes away from the states their constitutional rights to control social conditions within their borders by giving the federal government the right to fix minimum wages, maximum hours, and the conditions of employment by federal statute. Then we have the Agricultural Adjustment Act, which, as now operated, aims to make one class richer at the expense of another and to create wealth by destroying it. If to this we add the adventures in manipulating the currency which arc enjoined by this legislation, we get a glimpse of the crop of new problems which have been raised.

Everyone who knows the young people in our colleges and our graduate schools intimately must recognize their feeling that their courses are academic — that is, divorced from life — and must sympathize with it. Such courses as we suggest above certainly would not be open to this criticism.

Finally, even at the risk of producing a condition of complete revolt in the average academic mind, I venture to indicate some of the general principles which should form the background in teaching courses of this character.

It is the fashion nowadays in dealing with problems of government (and also with the problems of daily life) to assume and to emphasize liberty and freedom. We act as if there were no limitations on our individual freedom, and our governors and legislators act upon the same assumption. They assume that they, or at least those who elected them to office, arc sovereign and therefore free. Nothing could be further from the truth. In fact, their freedom of action is severely limited. In the first place, it is limited by the plan of the cosmos, known to our fathers as the will of God. Of course, our knowledge of this plan is very meagre. Most of it is intuitive, but we do know by experience that there are certain things which both men and nations may not do on pain of death. Some of these laws are expressed in the ancient teachings of religion. For example, we know that ‘in the sweat of thy face shalt thou eat bread’ or thou shalt degenerate. This law is stated in the Bible, and verified by the experience of mankind, but it is commonly disregarded.

The laws of the cosmos, or the will of God, are the eternal and changeless truths which circumscribe our freedom. Within is another frame fashioned by the particular environment in which each people lives. This also may not be broken, and, to make matters worse, this frame is constantly becoming narrower. All history is a record of the gradual surrender of the freedom of the individual in order that he may be free. It sometimes seems as if the narrower the frame the greater the freedom. This is one of the paradoxes of the Scheme of Things.

Clearly the shape and size of this inner frame differ for each people and with each generation. In this country during the last hundred years it has changed very rapidly. But both those who created the changes — the industrialists and business men — and our state and federal governments have practically disregarded them; the business men because they believed that the doctrine of laissez faire was akin to a law of nature, and the legislators because, under our democratic forms of government, they were too ignorant to grasp what was going on. This was a fatal error. In fact, the freedom of the nineteenth century became the slavery of the twentieth. Neither the laws of the cosmos nor the demands of the particular environment of the time and place can be ignored. If they are ignored for any long period of time the nation will ultimately vanish and be replaced by one more obedient to these laws.

The great thinkers of the past who have generalized in problems of government may seem to have been unconscious of these restricting frames. The reason is obvious. First, they were profoundly religious men for whom the laws of the cosmos were bred in the bone, so that they were a part of their subconscious mind; second, they lived in a relatively static world, so that the changes of environment were so slow as to be almost imperceptible. We face a wholly new problem because the religious convictions of the nation have become very nebulous, and our environment changes with bewildering speed. For this reason it seems to me that no attempt to generalize about the social and governmental problems which face us stands much chance of success unless some such formula as I suggested at the outset is kept vividly in mind. For those who came before us these assumptions were implicit. But for us they must be explicit or they will vanish.

V

Even if our colleges should succeed in teaching their undergraduates what the social and governmental problems are which clamor loudly for solution, and the methods of generalization which have been developed by science and are essential to their solution, there still remains the danger that our industrial and economic system will break down before those of them who go into business can reach positions of command. It will take them fifteen or twenty years, and if business is carried on during this long period substantially as it has been during the last fifty years, disaster will have overtaken us before these reënforcements have reached the field of battle.

For this reason it seems to me that our educational institutions must make the attempt to teach the technique of generalization to the group of business men between the ages of thirty and forty who are about to step into positions of high command or who already hold such positions. In establishing these age limits we need not underrate the older men. Their achievements have been amazing; in fact, we are overwhelmed with the bounty which they have provided. But now we face new conditions demanding action for which the older men were not trained. Our educational institutions can afford to admit that they cannot teach old dogs new tricks, because that is not necessary. Many if not all of the men between thirty and forty are still teachable, and, being thoroughly familiar with the techniques of modern business, they are, in fact, the best possible material on which to work. It would be relatively easy, moreover, to get together a group of young business and industrial executives of ages ranging from thirty to forty who are already thinking about these matters. There are many such men, but those with whom I have talked are not thinking to any purpose; they are merely chasing their tails. The result is discouragement and sometimes a tendency to recklessness. If a group of forty or fifty men, like the men whom the American Telephone and Telegraph Company used to send to my summer course at the Harvard Business School, could be induced to meet at various universities on a weekend once a month, so that they would be together for at least forty-eight hours, something important might be accomplished. In any event, I think the experiment should be tried.

The chief difficulty, one may suspect, will prove to be with the universities and not with the business men. Teachers of very rare illumination will be needed in order to penetrate the clouds which now envelop us. But we must do the best we can. The time in which we live is most inspiring because we can contrast and compare the old order with the new. All that we have to fear is the rigidity of mind in the old dominant class which has turned most great shifts of the social centre of gravity into revolutions. In this crisis, as always, the most important thing to teach is an attitude of mind. Men cannot teach what they do not know, and the number of professors in this country with flexible and powerful minds is probably small. But those who have these qualities should be brought into action at once, while we recruit the force from men in other walks of life.