THE VESTED INTERESTS & THE NATURE OF PEACE. Thorstein Veblen

their displacement by other figments of the human brain, -- a consensus of brains trained into closer consonance with the latter-day material conditions of life.

      Something of this kind, something in the way of depreciation by displacement, appears now to be overtaking that system of imponderables that has been handed down into current law and custom out of that range of ideas and ideals that had the vogue before the coming of the machine industry and the material sciences.

      Since the underlying principles of the established order are of this make-believe character, that is to say, since they are built up out of the range of conceptions that have habitually been doing duty as the substance of knowledge and belief in the past, it follows in the nature of the case that any reconstruction of institutions will be made only tardily, reluctantly, and sparingly; inasmuch as settled habits of thought are given up tardily, reluctantly and sparingly. And this will particularly be true when the reconstruction of unseasonable institutions runs counter to a settled and honorable code of ancient principles and a stubborn array of vested interests, as in this instance. Such is the promise of the present situation, and such is also the record of the shift that was once before made from medieval to modern times. It should be a case of break or bend.

III. The State of the Industrial Arts

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      The modern point of view, with its constituent principles of equal opportunity, self-help, and free bargaining, was given its definitive formulation in the eighteenth century, as a balanced system of Natural Rights; and it has stood over intact since that time, and has served as the unquestioned and immutable ground of public morals and expediency, on which the advocates of enlightened and liberal policies have always been content to rest in their case. The truths which it holds to be self-evident and indefeasible are conceived to be intrinsically bound up in an over-ruling Order of Nature; in which thoughtful men habitually believed at that time and in which less thoughtful men have continued to believe since then. This eighteenth-century order of nature, in the magic name of which Adam Smith was in the habit of speaking, was conceived on lines of personal initiative and activity. It is an order of things in which men were conceived to be effectually equal in all those respects that are of any decided consequence, -- in intelligence, working capacity, initiative, opportunity, and personal worth; in which the creative factor engaged in industry was the workman, with his personal skill, dexterity and judgment; in which, it was believed, the employer ("master") served his own ends and sought his own gain by consistently serving the needs of creative labor, and thereby serving the common good; in which the traders ("middle-men") made an honest living by supplying goods to consumers at a price determined by labor cost, and so serving the common good.

      This characterisation of the "obvious and simple system" that lies at the root of the liberal ideals may seem too much of a dream to any person who shuns "the scientific use of the imagination"; its imponderables may seem to lack that axiomatic self-sufficiency which one would like to find in the spiritual foundations of a working system of law and custom. Indeed, the best of its imponderables are in a fair way now to drop back into the discard of uncertified make-believe. But in point of historical fact it appears to have stood the test of time and use, so far as appears formally on the face of law and custom.

      For a hundred years and more it has continued to stand as a familiar article of faith and aspiration among the advocates of a

      Liberal policy in civil and economic affairs; and Adam Smith's followers -- the economists and publicists of the Liberal movement -- have spoken for it as being the normal system of economic life, the "natural state of man," from which the course of events has been conceived to depart only under pressure of "disturbing causes," and to which the course of events must be pruned back at all hazards in the event of any threatened advance or departure beyond the "natural" bounds set by this working ideal.

      However, the subsequent course of events has shown no indisposition to depart from this normal system of economic life, this "natural state of man," on the effectual reality of which the modern point of view rests its inviolate principles of law and morals and economic expediency. A new order of things has been taking effect in the state of the industrial arts and in the material sciences that lie nearest to that tangible body of experience out of which the state of the industrial arts is framed. And the new order of industrial ways and means has been progressively going out of touch with the essential requirements of this established scheme of individual self-help and personal initiative, on the realisation and maintenance of which the best endeavors of the Liberals have habitually been spent.

      Under the new order the first requisite of ordinary productive industry is no longer the workman and his manual skill, but rather the mechanical equipment and the standardised processes in which the mechanical equipment is engaged. And this latter-day industrial equipment and process embodies not the manual skill, dexterity and judgment of an individual workman, but rather the accumulated technological wisdom of the community.

      Under the new order of things the mechanical equipment -- the "industrial plant" -- takes the initiative, sets the pace, and turns the workman to account in the carrying-on of those standardised processes of production that embody this mechanistic state of the industrial arts; very much as the individual craftsman in his time held the initiative in industry, set the pace, and made use of his tools according to his own discretion in the exercise of his personal skill, dexterity and judgment, under that now obsolescent industrial order which underlies the eighteenth-century modern point of view, and which still colors the aspirations of Liberal statesmen and economists, as well as the standard economic theories.

      The workman -- and indeed it is still the skilled workman -- is always indispensable to the due working of this mechanistic industrial process, of course; very much as the craftsman's tools, in his time, were indispensable to the work which he had in hand. But the unit of industrial organization and procedure, what may be called the "going concern" in production, is now the outfit of industrial equipment, a works, engaged in a given standardised mechanical process designed to turn out a given output of standardised product; it is the plant, or the shop. And under this new order of industrial methods and values it has already come to be a commonplace of popular "knowledge and belief" that the mechanical equipment is the creative factor in industry, and the "production" of the output is credited to the plant's working capacity and set down to its account as a going concern; whereas the other factors engaged, as e.g., workmen and materials, are counted in as auxiliary factors which are indispensable but subsidiary -- items of production-cost which are incorporated in the running expenses of the plant and its productive process.

      Under the new order the going concern in production is the plant or shop, the works, not the individual workman. The plant embodies a standardised industrial process. The workman is made use of according as the needs of the given mechanical process may require. The time, place, rate, and material conditions of the work in hand are determined immediately by the mechanically standardised process in which the given plant is engaged; and beyond that all these matters are dependent on the exigencies and manoeuvres of business, largely by way of moderating the rate of production and keeping the output reasonably short of maximum capacity. The workman has become subsidiary to the mechanical equipment, and productive industry has become subservient to business, in all those countries which have come in for the latter-day state of the industrial arts, and which so have fallen under the domination of the price system.

      Such is the state of things throughout in those greater industries that are characteristic of the New Order; and these greater industries now set the pace and make the standards of management and valuation for the rest. At the same time these greater industries of the machine era extend their domination beyond their own immediate work, and enforce a standardisation of much the same mechanical character in the community at large; in the ways and means of living as well as in the ways and means of work. The effects of their mechanically standardised production, in the way of goods and services as well as in the similarly standardised traffic through which these goods and services are distributed to the consumers, reach out into the everyday life of all classes; but most immediately and imperatively they reach the working class of the industrial centers. So they largely set the pace