Puslapio vaizdai

have otherwise, on the whole, consistently lived up to the best traditions of commercial sagacity; and a safe and sane legislature has also canvassed the matter and solemnly disallowed any such invidious distinction between earned and unearned incomes. Still, this passing recognition of unearned incomes is scarcely less significant for being unguarded; and the occurrence lends a certain timeliness to any inquiry into the source and nature of that net product of industry out of which any fixed overhead charges of this kind are drawn.

To come to an understanding of the source and origin of this margin of disposable revenue that goes to the earnings of corporate capital, it is necessary to come to an understanding of the industrial system out of which the disposable margin of revenue arises. Productive industry yields a margin of net product over cost, counting cost in terms of man power and material resources; and under the established rule of self-help and free bargaining as it works out in corporation finance, this margin of net product has come to rest upon productive industry as an overhead charge payable to anonymous outsiders who own the corporation securities.

There need be no question of the equity of this arrangement, as between the men at work in the industries and the beneficiaries to whom the overhead charge is payable. At least there is no intention here to question the equity of it, or to defend the arrangement against any question that may be brought. It is also to be remarked that the whole arrangement has this appearance of gratuitous hand

icap and hardship only when it is looked at from the crude ground level of tangible performance. When seen in the dry light of the old and honest principles of self-help and equal opportunity, as understood by the substantial and well-meaning citizens, it all casts no shadow of iniquity or inexpediency.

So, without prejudice to any ulterior question which may be harbored by one and another, the question which is here had in mind is quite simply as to the production of this disposable margin of net product over human cost. And to pass muster today, any attempted answer will be required to meet that exacting and often inconvenient insistence on palpable fact which is of the essence of the new order of knowledge and belief. It is necessary to reach an understanding of these things in terms of tangible performance, in such terms as are germane to that new order of knowledge and belief out of which the perplexity arises, rather than in those terms of equitable imputation that lie at the root of the certified economic doctrines and of corporation finance.

These relevant facts are neither particularly obscure nor particularly elusive; only, they have had little attention in the argument of economists and politicians. Still less in the speculations of the captains of finance. The partition of incomes has always been more easily understood by these practically-minded persons, and it is also a more engrossing subject of argumentation than the production of goods. This would be particularly true for these

economists and politicians, who are imbued with that legalistic spirit which pervades the modern point of view and all its votaries.

But it is known to all, even to the most safely guarded persons who do not come in contact with industry or production, or even with the products of the staple industries, that industry at large will always turn out something in the way of a net margin of product over human cost,- over human effort and necessary consumption. It holds true as far back as the records have anything to say. It is evidently a question of the productivity of the industrial arts. Men at work turn out a net product because they know how and are interested in doing it; and their output is limited by the industrial methods which they have the use of. But the output is limited in such a way that it always exceeds the cost by more or less, barring accident. By and large, throughout past time the industrial arts have been gaining in efficiency, and the ordinary margin of net product over cost has consequently gone on widening. This is much of the meaning of "an advance in the industrial arts."

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In an earlier time, by law and custom, the net margin of product habitually went to a master class, so-called, as the "earnings" or the due emoluments of their mastery over those industrious classes who carried forward and gave effect to the state of the industrial arts as known in their time. By virtue of their mastery and its incorporation in the institutions of the time, they had an equitable, and effectual, vested interest in the net product of the community's industry; and by virtue of the same settled

principles of law and custom it was for them to see to the due consumption of any such net product above cost. In later times, and particularly in modern times and in the civilised countries, those immemorial principles of privilege equitably vested in the master class have fallen into discredit as being not sufficiently grounded in fact; so that mastery and servitude are disallowed and have disappeared from the range of legitimate institutions. The enlightened principles of self-help and personal equality do not tolerate these things. However, they do tolerate free income from investments. Indeed, the most consistent and most reputable votaries of the modern point of view commonly subsist on such in


Ever since these enlightened principles of the modern point of view were first installed in the eighteenth century as the self-evident rule of reason in civilised life, the industrial arts have also continued to gain in productive efficiency, at an everaccelerated rate of gain; so that today the industrial methods of the machine era are highly productive, beyond any earlier state of the industrial arts or anything that is known outside the range of this new order of industry. The output of this industrial system yields a wider margin of net product over cost than has ever been obtainable by any other or earlier known method of work. It consequently affords ground for an uncommonly substantial vested interest in this disposable net margin.

But the industrial system of the new order will work at the high rate of efficiency of which it is capable, only under suitable conditions. It is a com

prehensive system of interdependent working parts, organised on a large scale and with an exacting articulation of parts,- works, mills, railways, shipping, groups and lines of industrial establishments, all working together on a somewhat delicately balanced plan of mutual give and take. No one member or section of this system is a self-sufficient industrial enterprise, even if it is true that no one member is strictly dependent on any other one. Indeed, no one member or section, group or line of industrial establishments, in this industrial universe of the new order, is a productive factor at all, except as it fits into and duly gives and takes its share in the work of the system as a whole. Such exceptions to this rule of interlocking processes as may appear on first examination, are likely to prove exceptions in appearance only. They are chiefly the backward trades and occupations which have not had the benefit of the Industrial Revolution and do not belong under the new, mechanistic order of industry; or they are trades, occupations and works devoted to the consumption of goods or to the maintenance of the rules governing the distribution and consumption of wealth, as, for instance, banking, menial service, police service and the apparatus of the law, the learned professions and the fine arts.

It is also of the essence of this industrial system and its technology that it necessarily involves the industrial community as a whole, its working population and its material resources; and the measure of its successful operation is determined by the effectual team-work of its constituent parts. And the industrial system of the new order is drawn on a large

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