Private industry

“ The undertaking by the State or the Municipality, or other units of social life, of various departments of industry, such as the railways, telegraphs, post-offices, is a definite assertion that, in the supply of the common services rendered by these industries, the competition of private interests cannot be relied upon to work for the public good. ”

“ Assuming, however, that there is no nationalization of an industry, but that it continues on a reformed basis of private ownership, it is important to discuss under what circumstances the Government ought to intervene in regard to any question affecting the administration and control of that industry, or, indeed, of all industries in general. ”

“ There is no guarantee that, if other guardians of capital were appointed, the public would be better served.416 Modern industry has long ago proved the administrative superiority of private enterprise in commercial transactions; and all social functions that admit of it will gradually pass into private management, always excepting the great theoretic functions in which combined action will ever be necessary. ”

“ What is needed now is not the multiplication of government reports, but corporate industry, the formation of land companies, development companies, irrigation companies, any kind of corporation that will call out private capital from its hiding places, offer employment to millions and start the wheels moving again. ”

“ While the several industries become, in point of fact, more and more dependent upon one another, in point of law, they remain wholly independent. The means of production in every single industry are private property ”

“ Only after we have mastered the principles upon which American industry is based, shall we be in a position to solve the problems which arise directly from the nature of our economic organization.
46. INDUSTRIAL REFORM.—Our industrial life is so clearly based upon certain fundamental institutions, such as private property, free contract, and free competition, that an industrial "system" is said to exist. Certain great evils, notably poverty, have accompanied the development of this system. ”

“ A third group of functions embraces the direct participation in industry by the Government itself, as the post-office, gas, electric, and water works, canals, roads, sewers, parks, etc. In other countries, when the functions of government are more extended than in the United States, it conducts railroads, telegraph and telephone systems, tenements, pawn shops, theaters, industrial insurance, or various other activities. The line which divides public from private enterprise varies greatly in different countries. ”

“ This view of the development challenge underlines in each and every case our basic economy policies, particularly those governing the role of private enterprise in the economy. There have been questions raised as to the role of private enterprise. ”

“ But let the service that Capital and Management are capable of rendering industry once be lost to sight, and industry itself will be ruined, and with it the well-being of Labor and the Community as well. What is needed is, not the ruination of Capital and Management, but that each be given its rightful place in a system of the government of industry which will make for the good of all the parties to production. ”

“ Obviously, what is most needed is recognition of the fact that industry is not a matter which concerns only one party, but that it is of vital concern to all four: to Capital, to Labor, to Management, and to the Community, and that no one of the four is entitled to a monopoly of control. ”

“ The world has progressed, or retrogressed, as the most powerful interests at any time adjusted the institutions and customs governing wealth production to their own advantage. As the controlling interests in our present scheme are the business interests, it is the business man, not the workman, who directs industry and determines its policy as well as the general policy of the nation in which it operates. ”

“ Large corporations, which can afford the best machinery; which control abundant capital, and which can plan with scrupulous economy all the details of producing and selling an important product or service, are actually able to reduce the cost of production to a minimum; and in the cases of certain American corporations such results have actually been achieved. The new organization of American industry has created an economic mechanism which is capable of being wonderfully and indefinitely serviceable to the American people. ”

“ Here, too, is joint venture on the part of the Community just as much as on the part of Labor, Capital, or Management. What is 99 per cent. of the expenditure of government in normal times but outlays in the nature of investment in industry: investment in property and services of one kind or another, which alone makes possible the vast co-operation and co-ordination of effort which is the very life-blood of industry? The vaster industrial organization becomes, the more it depends, in a multitude of directions, upon the investments of the Community. ”

“ Capital can do nothing without Labor. Labor can do nothing without Capital. Neither Labor nor Capital can co-operate effectively in industry save under the guiding genius of Management, and Management, however great its genius, can do nothing apart from the opportunities and privileges the Community affords.
If all four parties are necessary to industry, and equally necessary to one another, then, surely, all four should have some voice in the control of industry, and with regard to the conditions under which their services to industry are rendered. ”

“ This idea may be more clear, perhaps, if we imagine a large corporation, not only making woolen cloth, but owning sheep-ranches, where the raw materials are produced; the shops where all machinery is made; and who even produce on their own property all the food, clothing, shelter, and consumption of the laborers employed by them. A line of division may be passed through the returns in all these branches of the industry, separating what is wages from what is profit. ”

“ The independent workman with his own tools was superseded by the factory, the small producer has given way in turn to the trust. With the introduction of expensive machinery it became necessary to organize capital on a large scale. Corporations with limited liability were organized for the manufacture of goods, the exploitation of mines, the building of railroads, and the carrying on of trade. As methods of production improved industry became more and more concentrated, and finally huge trusts took over the operation of combined plants. ”

“ Management, instead of being regarded as the servant of Capital exclusively, ought to be in a position to regard itself, as in fact it is, one of the necessary parties to industry, and as such entitled to a voice in matters which pertain to its administrative functions ”

“ The government has pursued a moderate program of economic reform and privatization, resulting in a gradual lifting of state controls over economic activity and a shifting of assets into the private sector. Nevertheless, government control over key sectors of the economy remains strong. ”

“ Will the present standards of management, skill, workmanship and factory discipline be improved? Will the consumers benefit? Will people save? i. e. Will sufficient fresh capital be forthcoming for the further developments of industry? ”

“ And as we have seen, the intention of the industrial reformers is to introduce public management into the heart of the American industrial system; that is, into the operation of railroads and public service corporations, and in this way to bring about by incessant official interference that harmony between public and private interest which must be the object of a national economic system. ”

“ It implies three things: that proprietary rights shall be maintained when they are accompanied by the performance of service and abolished when they are not; that the producers shall stand in direct relation to the community for whom production is carried on; that the obligation for the maintenance of the service shall rest upon the professional organization of those who perform it. Contents: Rights and functions; The acquisitive society; The nemesis of industrialism; Property and creative work; The functional society; Industry as a profession ”

“ The state shall coordinate and regulate state-owned economy, co-operative economy, the individual economy of peasants and handicraftsmen, private capitalist economy and state capitalist economy, in their spheres of operations, supply of raw materials, marketing, labour conditions, technical equipment, policies of public and general finance, etc. ”

“ The nearest associated ideas are found in governmental services through a post office department or the management of a system of transportation. Most advocates of the method overlook the fact that in such government administration of partial industries the law of competition is still operative between these enterprises and the universal industry of the people. ”

“ We hear much about quasi-public corporations, and public opinion has gone a long way in taking away from the owner of public-service corporations the right to manage his own property, to name his own rates or prices, to decide about his methods, and has imposed on him the responsibility of providing safe and adequate public service from his private means, but so far has exerted little influence upon the men who have to make the quasi-public corporation of use to the public. ”

“ The argument supposes the corporation to have been originated for the management of an individual concern, to be founded upon contract between individuals, having private trade and private profit for its great end and principal object. ”

“ The industries which the State either limits or controls in the interest either of a body of workers or of the consuming public may be regarded as passing from a private competitive condition to a public non-competitive condition. If therefore we wish to ascertain how far and in what directions social control of modern production will proceed, we shall examine those industries which already exhibit the collective character. ”

“ There are three classes of establishments by which industry is carried on—those that are the property of an individual, those which belong to partnerships or firms of unlimited liability, and those belonging to corporations of limited liability. The usefulness of the individual system is of course limited to small undertakings, where but little capital and credit are necessary; this form of organization still dominates the field in agriculture, in the small retail trade, and in the repairing industries. ”

“ Thus it proposes that the control of industry should be in the hands of the producers, and not, as at present, in the hands of consumers through capitalists catering for their custom, or through co-operative societies of consumers, or through the State acting on behalf of citizens who are consumers. ”

“ It is often suggested that if the state assumed control of industry the blight of business could be removed. But in the transfer we would not necessarily gain opportunity to enjoy the adventure which industry holds out. ”

“ His object is profit; and if industry is to become, as employers and workers in the building trade propose, an "organized public service," then its subordination to the shareholder whose object is profit, is, as they clearly see, precisely what must be eliminated. ”

“ The answer to all these questions is that the Government and the Municipalities have proved that they can manage vast and intricate businesses, and can manage them more cheaply, more efficiently, and more to the advantage and satisfaction of the public than the same class of business has ever been managed by private firms. ”

“ Who is to say how private enterprise would come out if it tried its hand at State work? Those who have had most experience of joint-stock companies and their management, will probably be least inclined to believe in the innate superiority of private enterprise over State management. ”

“ Where an industry producing articles of common consumption or materials necessary to industries producing articles of common consumption cannot be at once publicly owned, State control over such industries should be retained. ”

“ The Federal Government is called upon to buy or hire unsalable ships, to build canals which will not pay, to furnish capital for all sorts of experiments, and to provide capital for enterprises of which private individuals will win the profits. ”

“ The role of government corporations in the realm of economic development lies essentially in undertaking ventures in new and untried fields where the risks involved may inhibit private enterprise.
In this sense, therefore, government corporations play a pivotal role in the attainment of our development objectives, particularly in the areas of production and industrial development and social amelioration. ”

“ The corporation employing thousands of men and supplying millions of people with some necessary service or commodity may reduce the cost of production only for its own profit. The state may use its great authority chiefly for the benefit of special interests. ”

“ In industry each factory is to be free to control its own methods of production by means of elected managers. The different factories in a given industry are to be federated into a National Guild which will deal with marketing and the general interests of the industry as a whole. ”

“ Capital has been accumulated by great corporations, known as “trusts,” which occupy gigantic buildings and use larger and more costly machinery than was ever before known. Even private life is affected in manifold ways by recent inventions. ”