Ch. 5: The Econimic Process


A Bird's-Eye View

Let me try now and make some sort of general picture of the American nation as it impresses itself upon me. It is, you will understand, the vision of a hurried bird of passage, defective and inaccurate at every point of detail, but perhaps for my present purpose not so very much the worse for that. The fact that I am transitory and bring a sort of theorizing na´vetÚ to this review is just what gives me the chance to remark these obvious things the habituated have forgotten. I have already tried to render something of the effect of huge unrestrained growth and material progress that America first gives one, and I have pointed out that so far America seems to me only to refresh an old impression, to give starkly and startlingly what is going on everywhere, what is indeed as much in evidence in Birkenhead or Milan or London or Calcutta, a huge extension of human power and the scale of human operations. This growth was elaborated in the physical and chemical laboratories and the industrial experiments of the eighteenth and early nineteenth century, and chiefly in Europe. The extension itself is nothing typically American. Nevertheless America now shows it best. America is most under the stress and urgency of it, resonates most readily and loudly to its note.

The long distances of travel, and the sense of isolation between place and place, the remoteness verging upon inaudibility of Washington in Chicago, of Chicago in Boston, the vision I have had of America from observation cars and railroad windows brings home to me more and more that this huge development of human appliances and resources is here going on in a community that is still, for all the dense crowds of New York, the teeming congestion of the East Side, extraordinarily scattered. America, one recalls, is still an unoccupied country, across which the latest developments of civilization are rushing. We are dealing here with a continuous area of land which is, leaving Alaska out of account altogether, equal to Great Britain, France, the German Empire, the Austro-Hungarian Empire, Italy, Belgium, Japan, Holland, Spain and Portugal, Sweden and Norway, Turkey in Europe, Egypt and the whole Empire of India, and the population spread out over this vast space is still less than the joint population of the first two countries named and not a quarter that of India. Moreover, it is not spread at all evenly. Much of it is in undistributed clots. It is not upon the soil, barely half of it is in holdings and homes and authentic communities. It is a population of an extremely modern type. Urban concentration has already gone far with it; fifteen millions of it are crowded into and about twenty great cities, other eighteen millions make up five hundred towns. Between these centres of population run railways indeed, telegraph wires, telephone connections, tracks of various sorts, but to the European eye these are mere scratchings on a virgin surface. An empty wilderness manifests itself through this thin network of human conveniences, appears in the meshes even at the railroad side. Essentially America is still an unsettled land, with only a few incidental good roads in favored places, with no universal police, with no wayside inns where a civilized man may rest, with still only the crudest of rural postal deliveries, with long stretches of swamp and forest and desert by the track side, still unassailed by industry. This much one sees clearly enough eastward of Chicago. Westward, I am told, it becomes more and more the fact. In Idaho at last, comes the untouched and perhaps invincible desert, plain and continuous through the long hours of travel. Huge areas do not contain one human being to the square mile, still vaster portions fall short of two....

And this community, to which material progress is bringing such enormous powers, and that is knotted so densely here and there, and is otherwise so attenuated a veil over the huge land surface, is, as Professor MŘnsterberg points out, in spite of vast and increasing masses of immigrants still a curiously homogeneous one, homogeneous in the spirit of its activities and speaking a common tongue. It is sustained by certain economic conventions, inspired throughout by certain habits, certain trends of suggestion, certain phrases and certain interpretations that collectively make up what one may call the American Idea. To the process of enlargement and diffusion and increase and multiplying resources, we must now bring the consideration of the social and economic process that is going on. What is the form of that process as one finds it in America? An English Tory will tell you promptly, "a scramble for dollars." A good American will tell you it is self realization under equality of opportunity. The English Tory will probably allege that that amounts to the same thing.

Let us look into that.


Liberty of Property

One contrast between America and the old world I had in mind before ever I crossed the Atlantic, and now it comes before me very vividly,—returns reinforced by a hundred little things observed and felt. The contrast consists in the almost complete absence from the normal American scheme, of certain immemorial factors in the social structure of our European nations.

In the first place, every European nation except the English is rooted to the soil by a peasantry, and even in England one still finds the peasant represented, in most of his features by those sons of dispossessed serf-peasants, the agricultural laborers. Here in America, except in the regions where the negro abounds, there is no lower stratum, no "soil people," to this community at all; your bottom-most man is a mobile free man who can read, and who has ideas above digging and pigs and poultry keeping, except incidentally for his own ends. No one owns to subordination. As a consequence, any position which involves the acknowledgment of an innate inferiority is difficult to fill; there is, from the European point of view, an extraordinary dearth of servants, and this endures in spite of a great peasant immigration. The servile tradition will not root here now, it dies in this soil. An enormous importation of European serfs and peasants goes on, but as they touch this soil their backs begin to stiffen with a new assertion.

And at the other end of the scale, also, one misses an element. There is no territorial aristocracy, no aristocracy at all, no throne, no legitimate and acknowledged representative of that upper social structure of leisure, power, State responsibility, which in the old European theory of society was supposed to give significance to the whole. The American community, one cannot too clearly insist, does not correspond to an entire European community at all, but only to the middle masses of it, to the trading and manufacturing class between the dimensions of the magnate and the clerk and skilled artisan. It is the central part of the European organism without either the dreaming head or the subjugated feet. Even the highly feudal slave-holding "county family" traditions of Virginia and the South pass now out of memory. So that in a very real sense the past of this American community is in Europe, and the settled order of the past is left behind there. This community was, as it were, taken off its roots, clipped of its branches and brought hither. It began neither serf nor lord, but burgher and farmer, it followed the normal development of the middle class under Progress everywhere and became capitalistic. Essentially America is a middle-class become a community and so its essential problems are the problems of a modern individualistic society, stark and clear, unhampered and unilluminated by any feudal traditions either at its crest or at its base.

It would be interesting and at first only very slightly misleading to pursue the rough contrast of American and English conditions upon these lines. It is not difficult to show for example, that the two great political parties in America represent only one English party, the middle-class Liberal party, the party of industrialism and freedom. There are no Tories to represent the feudal system, and no Labor party. It is history, it is no mere ingenious gloss upon history, that the Tories, the party of the crown, of the high gentry and control, of mitigated property and an organic state, vanished from America at the Revolution. They left the new world to the Whigs and Nonconformists and to those less constructive, less logical, more popular and liberating thinkers who became Radicals in England, and Jeffersonians and then Democrats in America. All Americans are, from the English point of view, Liberals of one sort or another. You will find a fac-simile of the Declaration of Independence displayed conspicuously and triumphantly beside Magna Charter in the London Reform Club, to carry out this suggestion.

But these fascinating parallelisms will lead away from the chief argument in hand, which is that the Americans started almost clear of the medieval heritage, and developed in the utmost—purity if you like—or simplicity or crudeness, whichever you will, the modern type of productive social organization. They took the economic conventions that were modern and progressive at the end of the eighteenth century and stamped them into the Constitution as if they meant to stamp them there for all time. In England you can still find feudalism, medievalism, the Renascence, at every turn. America is pure eighteenth century—still crystallizing out from a turbid and troubled solution.

To turn from any European state to America is, in these matters anyhow, to turn from complication to a stark simplicity. The relationship between employer and employed, between organizer and worker, between capital and labor, which in England is qualified and mellowed and disguised and entangled with a thousand traditional attitudes and subordinations, stands out sharply in a bleak cold rationalism. There is no feeling that property, privilege, honor, and a grave liability to official public service ought to go together, none that uncritical obedience is a virtue in a worker or that subordination carries with it not only a sense of service but a claim for help. Coming across the Atlantic has in these matters an effect of coming out of an iridescent fog into a clear bright air.

This homologization of the whole American social mass, not with the whole English social mass, but with its "modern" classes, its great middle portion, and of its political sides with the two ingredients of English Liberalism, goes further than a rough parallel. An Englishman who, like myself, has been bred and who has lived all his life either in London, with its predominant West-End, or the southern counties with their fair large estates and the great country houses, is constantly being reminded, when he meets manufacturing and business men from Birmingham or Lancashire, of Americans, and when he meets Americans, of industrial North-country people. There is more push and less tacit assumption, more definition, more displayed energy and less restraint, more action and less subtlety, more enterprise and self-assertion than there is in the typical Englishman of London and the home counties. The American carries on the contrast further, it is true, and his speech is not northernly, but marked by the accent of Hampshire or East Anglia, and better and clearer than his English equivalent's; but one feels the two are of the same stuff, nevertheless, and made by parallel conditions. The liberalism of the eighteenth century, the material progress of the nineteenth have made them both—out of the undifferentiated Stuart Englishman. And they are the same in their attitude towards property and social duty, individualists to the marrow. But the one grew inside a frame of regal, aristocratic, and feudal institutions, and has chafed against it, struggled with it, modified it, strained it, and been modified by it, but has remained within it; the other broke it and escaped to complete self-development.

The liberalism of the eighteenth century was essentially the rebellion of the modern industrial organization against the monarchial and aristocratic State,—against hereditary privilege, against restrictions upon bargains—whether they were hard bargains or not. Its spirit was essentially Anarchistic,—the antithesis of Socialism. It was the anti-State. It aimed not only to liberate men but property from State control. Its most typical expressions, the Declaration of Independence, and the French Declaration of the Rights of Man, are zealously emphatic for the latter interest—for the sacredness of contracts and possessions. Post Reformation liberalism did to a large extent let loose property upon mankind. The English Civil War of the seventeenth century, like the American revolution of the eighteenth, embodied essentially the triumphant refusal of private property to submit to taxation without consent. In England the result was tempered and qualified, security for private property was achieved, but not cast-iron security; each man who had property became king of that property, but only a constitutional and conditional king. In America the victory of private property was complete. Let one instance suffice to show how decisively it was established that individual property and credit and money were sacred. Ten years ago the Supreme Court, trying a case arising out of the General Revenue tax of 1894, decided that a graduated income-tax, such as the English Parliament might pass to-morrow, can never be levied upon the United States nation without a change in the Constitution, which can be effected only by a vote of two-thirds of both Houses of Congress as an initiative, and this must be ratified either by the legislatures of three-fourths of the States, or by special conventions representing three-fourths of the States. The fundamental law of the States forbids any such invasion of the individual's ownership. No national income-tax is legal, and there is practically no power, short of revolution, to alter that....

Could anything be more emphatic? That tall Liberty with its spiky crown that stands in New York Harbor and casts an electric flare upon the world, is, indeed, the liberty of Property, and there she stands at the Zenith....


Aggregation and Some Protests

Now the middle-class of the English population and the whole population of America that matters at all when we discuss ideas, is essentially an emancipated class, a class that has rebelled against superimposed privilege and honor, and achieved freedom for its individuals and their property. Without property its freedom is a featureless and unsubstantial theory, and so it relies for the reality of life upon that, upon the possession and acquisition and development of property, that is to say upon "business." That is the quality of its life.

Everywhere in the modern industrial and commercial class this deep-lying feeling that the State is something escaped from, has worked out to the same mental habit of social irresponsibility, and in America it has worked unimpeded. Patriotism has become a mere national self-assertion, a sentimentality of flag cheering, with no constructive duties. Law, social justice, the pride and preservation of the state as a whole are taken as provided for before the game began, and one devotes one-self to business. At business all men are held to be equal, and none is his brother's keeper.

All men are equal at the great game of business. You try for the best of each bargain and so does your opponent; if you chance to have more in your hand than he—well, that's your advantage, and you use it. Presently he may have more than you. You take care he doesn't if you can, but you play fair—except for the advantage in your hand; you play fair—and hard.

Now this middle-class equality ultimately destroys itself. Out of this conflict of equals, and by virtue of the fact that property, like all sorts of matter, does tend to gravitate towards itself whenever it is free, there emerge the modern rich and the modern toiler.

One can trace the process in two or three generations in Lancashire or the Potteries, or any industrial region of England. One sees first the early Lancashire industrialism, sees a district of cotton-spinners more or less equal together, small men all; then come developments, comes a state of ideally free competition with some men growing large, with most men dropping into employment, but still with ample chances for an industrious young man to end as a prosperous master; and so through a steady growth in the size of the organization to the present opposition of an employer class in possession of everything, almost inaccessibly above, and an employed class below. The railways come, and the wealthy class reaches out to master these new enterprises, capitalistic from the outset....

America is simply repeating the history of the Lancashire industrialism on a gigantic scale, and under an enormous variety of forms.

But in England, as the modern Rich rise up, they come into a world of gentry with a tradition of public service and authority; they learn one by one and assimilate themselves to the legend of the "governing class" with a sense of proprietorship which is also, in its humanly limited way, a sense of duty to the state. They are pseudomorphs after aristocrats. They receive honors, they inter-marry, they fall (and their defeated competitors too fall) into the mellowed relationships of an aristocratic system. That is not a permanent mutual attitude; it does, however, mask and soften the British outline. Industrialism becomes quasi-feudal. America, on the other hand, had no effectual "governing class," there has been no such modification, no clouding of the issue. Its Rich, to one's superficial inspection, do seem to lop out, swell up into an immense consumption and power and inanity, develop no sense of public duties, remain winners of a strange game they do not criticise, concerned now only to hold and intensify their winnings. The losers accept no subservience. That material progress, that secular growth in scale of all modern enterprises, widens the gulf between Owner and Worker daily. More and more do men realize that this game of free competition and unrestricted property does not go on for ever; it is a game that first in this industry and then in that, and at last in all, can be played out and is being played out. Property becomes organized, consolidated, concentrated, and secured. This is the fact to which America is slowly awaking at the present time. The American community is discovering a secular extinction of opportunity, and the appearance of powers against which individual enterprise and competition are hopeless. Enormous sections of the American public are losing their faith in any personal chance of growing rich and truly free, and are developing the consciousness of an expropriated class.

This realization has come slowlier in America than in Europe, because of the enormous undeveloped resources of America. So long as there was an unlimited extent of unappropriated and unexplored land westward, so long could tension be relieved by so simple an injunction as Horace Greeley's, "Go West, young man; go West." And to-day, albeit that is no longer true of the land, and there are already far larger concentrations of individual possessions in the United States of America than anywhere else in the world, yet so vast are their continental resources that it still remains true that nowhere in the world is property so widely diffused. Consider the one fact that America can take in three-quarters of a million of workers in one year without producing a perceptible fall in wages, and you will appreciate the scale upon which things are measured here, the scale by which even Mr. J.D. Rockefeller's billion dollars becomes no more than a respectable but by no means overwhelming "pile." For all these concentrations, the western farmers still own their farms, and it is the rule rather than the exception for a family to possess the freehold of the house it lives in. But the process of concentration goes on nevertheless—is going on now perceptibly to the American mind. That it has not gone so far as in the European instance it is a question of size, just as the gestation of an elephant takes longer than that of a mouse. If the process is larger and slower, it is, for the reasons I have given, plainer, and it will be discussed and dealt with plainly. That steady trend towards concentration under individualistic rules, until individual competition becomes disheartened and hopeless, is the essential form of the economic and social process in America as I see it now, and it has become the cardinal topic of thought and discussion in the American mind.

This realization has been reached after the most curious hesitation. There is every reason for this; for it involves the contradiction of much that seems fundamental in the American idea. It amounts to a national change of attitude. It is a conscious change of attitude that is being deliberately made.

This slow reluctant process of disillusionment with individualism is interestingly traceable through the main political innovations of the last twenty years. There was the discovery in the east that the supply of land was not limitless, and we had the Single Tax movement, and the epoch of the first Mr. Henry George. He explained fervently of course, how individualistic, how profoundly American he was—but land was not to be monopolized. Then came the discovery in the west that there were limits to borrowing and that gold appreciated against the debtor, and so we have the Populist movement and extraordinary schemes for destroying the monopolization of gold and credit. Mr. Bryan led that and nearly captured the country, but only in last May's issue of the Century Magazine I found him explaining (expounding meanwhile a largely socialistic programme) that he too is an Individualist of the purest water. And then the attack shifted to the destruction of free competition by the trusts. The small business went on sufferance, 'not knowing from week to week when its hour to sell out or fight might come. The Trusts have crushed competition, raised prices against the consumer, and served him often quite abominably. The curious reader may find in Mr. Upton Sinclair's essentially veracious Jungle the possibilities of individualistic enterprise in the matter of food and decency. The States have been agitated by a big disorganized Anti-Trust movement for some years, it becomes of the gravest political importance at every election, and the sustained study of the affairs and methods of that most typical and prominent of trust organizations, the Standard Oil Company, by Miss Tarbell and a host of followers, is bringing to light more and more clearly the defencelessness of the common person, and his hopelessness, however enterprising, as a competitor against those great business aggregations. His faith in all his reliances and securities fades in the new light that grows about him, he sees his little investments, his insurance policy, his once open and impartial route to market by steamboat and rail, all passing into the grip of the great property accumulators. The aggregation of property has created powers that are stronger than state legislatures and more persistent than any public opinion can be, that have no awe and no sentiment for legislation, that are prepared to disregard it or evade it whenever they can.

And these aggregations are taking on immortality and declining to disintegrate when their founders die. The Astor property, the Jay Gould property, the Marshall Field property, for example, do not break up, become undying centres for the concentration of wealth, and it is doubtful if there is any power to hinder such a development of perpetual fortunes. In England when Thelussen left his investments to accumulate, a simple little act of Parliament set his will aside. But Congress is not sovereign, there is no national sovereign power in America, and Property in America, it would seem, is absolutely free to do these things. So you have President Roosevelt in a recent oration attacking the man with the Muck Rake (who gathered vile dross for the love of it), and threatening the limitation of inheritance. But he too, quite as much as Mr. Bryan, assures the public that he is a fervent individualist.

So in this American community, whose distinctive conception is its emphatic assertion of the freedom of individual property, whose very symbol is that spike-crowned Liberty gripping a torch in New York Harbor, there has been and is going on a successive repudiation of that freedom in almost every department of ownable things by considerable masses of thinking people, a denial of the soundness of individual property in land, an organized attempt against the accumulation of gold and credit, by a systematic watering of the currency, a revolt against the aggregatory outcome of untrammelled business competition, a systematic interference with the freedom of railways and carriers to do business as they please, and a protest from the most representative of Americans against hereditary wealth....

That, in general terms, is the economic and social process as one sees it in America now, a process of systematically concentrating wealth on the part of an energetic minority, and of a great insurgence of alarm, of waves of indignation and protest and threat on the part of that vague indefinite public that Mr. Roosevelt calls the "nation."

And this goes on side by side with a process of material progress that partly masks its quality, that keeps the standard of life from falling and prevents any sense of impoverishment among the mass of the losers in the economic struggle. Through this material progress there is a constant substitution of larger, cleaner, more efficient possibilities, and more and more wholesale and far-sighted methods of organization for the dark, confused, untidy individualistic expedients of the Victorian time. An epoch which was coaly and mechanical, commercial and adventurous after the earlier fashion is giving place, almost automatically, to one that will be electrical and scientific, artistic and creative. The material progress due to a secular increase in knowledge, and the economic progress interfere and combine with and complicate one another, the former constantly changes the forms and appliances of the latter, changes the weapons and conditions, and may ultimately change the spirit and conceptions of the struggle. The latter now clogs and arrests the former. So in its broad features, as a conflict between the birth strength of a splendid civilization and a hampering commercialism, I see America.

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