WITNESS OF EPOCH I Interrogating the Face of Change

TO stand first in the earth, paramount thereon, is the part of one people at a time by lot and period. The sign regnant went to and fro in Asia before there was any western civilization, and sometime gilded the dome of Africa. Rome conquered it. For a thousand odd years it was lost; then it rose again in Europe. Now it comes to us. Its migration to this hemisphere is a fundamental event and one mighty for change.

World supremacy is not by golden chance. Such an idea was the bad star of Spain 400 years ago. What was it then seated England in that office of power? Economic facts, perhaps. Rich coal measures at tidewater, skill of trade and banking, argosies, a monopoly of machine craft. Yet she had no ore. There was other coal. The Dutch were great traders and bankers, with many ships, before the English knew the art of international commerce. And as for machine craft, anyone so minded might have beaten her at it. The Germans, when they were ready, did it in thirty years.

The weakness of economic explanations is their suave plausibility. They pass over the historical footnote that says supremacy has in every case indicated a significant contribution to the data of human experience. In the case of Great Britain, was it an errand to the backward peoples of the earth in the guise of trade, or was it to demonstrate the first age of industrialism? It may be too soon to say. But imagine wiping out the fact of British supremacy as if it had never been. Would the world be a different place? Or in the same way erase the fact of Roman supremacy. Certainly life now would be in some ways very different. Yet you cannot say precisely how; you cannot say what would have happened in place of what did.

And now American supremacy regarded as an event: What does that mean?

Here is the beginning of power in new series with new meaning. Never before had people so much power either actual or relative. The fact came suddenly to view, as if it had not been historically prepared, and that is a way of happening peculiar to the things of destiny. Nobody knows what destiny is. If perhaps it is in itself a necessity higher than our own, we do not know what law it obeys. But we may be sure it cannot act where there is nothing to be acted upon. To bring its ends to pass, it must be supposed to require conditions. Therefore, as concerning the cause, whether you conceive it to have been circumstantial or mysterious, you come to the same question. You may ask by what means we have arrived unawares at this place or you may ask what was here to attract this destiny. It is all the same.

What were the conditions?

II

Why Has the Sign of World Supremacy Passed to This Hemisphere?

Other people are asking, most anxiously the people of Europe, because world supremacy in one hand or another had been so long a possession of theirs that they had come to think of it as a natural right. Engineers, bankers, economists, trained observers and various missions under private and public mandate have been sent hither to discover the sources and secrets of American power. What they have found and reported in every case were the effects. Wealth, prosperity, method—these are the functions of American power; works and things are its visible aspects. Wipe them out entirely and they will presently appear again for the same first reason and in the same meaning. No foreign analysis of what is working in this country has discovered either that reason or that meaning.

The German investigators, with no word in their own language for what we mean when we say prosperity, have been deeply impressed by the rationality of our mechanical and methodical procedures; they have already produced a literature on the rationalization of industry, which is now having vogue throughout Europe; and they have, of course, been rationalizing German industry, more or less as the Berlin banker rationalized his clerical department after having seen in the Federal Reserve Bank of New York time-saving equipment and method by means of which one American clerk did the work of twenty German clerks. He imported both the equipment and the method and let out nineteen clerks in every twenty; but when an American asked him if he had raised the pay of the twentieth clerk he was unable to comprehend the meaning of the question. Had the clerks bought the equipment or discovered the method? No. Did the twentieth clerk work any harder than he had worked before? No. Then why should he have more pay? That view, of course, is rational.

The British have identified a more significant effect. They have been seeking the American secret of high wages.

A London newspaper sent a delegation of trades-union people on a voyage of discovery. They visited many works, touched the fur coats and silk garments in the individual lockers of American industry’s women workers, stared at the wage earners’ motor cars parked by hundreds around the factory, talked a good deal about wage-rate systems and the different theories that govern them—and went home no wiser. Their report was a tale of wonder.

Two British engineers produced a sensation with a book on the dynamics of American industry. More mechanical power, keener instruments, better method and mass production at low costs—there was the secret. Let England mind. But here again the mistake of taking effect as cause. Multiple production, now called mass production, is as old as industrial machines; Great Britain had it first. What makes it so astonishing to them as they now see it in the United States is the degree of its development, which is merely an effect. Besides, there is mass production in Great Britain directly copied from us. You may see it. At Oxford is a motor plant where the form of practice, moving chain and all, is as it is in Detroit. An American, who was neither an engineer nor an industrialist, going through this plant, came to the paint job. They seemed particularly proud of it and said to him, “Here we can paint a body in two minutes.”

The American, knowing the output, made a mental calculation and said, “In that case you might easily do the whole job in one stall. Why four stalls here in the middle of your plant, making a bad traffic jam, when you could paint all your bodies in one?”

They said, “Our customers, unfortunately, are not so easily pleased as your own. We have to give them a choice of at least four colors.”

The American said, “Yes. Still, why four stalls when one would do?”

They said, patiently, “Don’t you see?—the man there now is spraying black paint. The next body may call for blue. If he should have to blow all the black paint out of his tube and clean it for blue, that would be wasteful of time and material—what you Americans call inefficient.”

The American said, “Yes. But why not four tubes to one stall?”

They were silent for a minute, and then answered, “Do you know, that idea had never occurred to anyone here.”

The American tried to think of some way to tell them why it would be impossible for such an idea not to occur to someone in an American plant, why it might occur just as easily to the man handling the paint tube as to the superintendent, why the man at the paint tube could not help imparting it once it had occurred to him, and why—— But he gave it all up and said nothing. There was the form and not spirit.

Then a royal British delegation was appointed by His Majesty’s Government to study and report on industrial conditions in the United States. It did a typical British job, full of excellence, and reported, among other discoveries, that:

“The workpeople accept experiments toward reduced costs of production, as they have always found that the result of lower costs has been increased consumption and consequently more employment.”

The British point of view is explicit in the term “workpeople.” It is thereafter implicit in the assumption that when costs are reduced and consumption consequently has been increased, the blessing of it to the workpeople is simply more employment.

Lastly, the League of Nations decides to make a careful study of American industry in contrast with that of Europe in order to see if it will be possible, quoting the words of Monsieur Loucheur, “to transpose certain parts of the American system into the European system.”

As well speak of transposing certain parts of a tree. You might have all the parts, yet without the subtle principle of the living tree, the natural laws of its origin, growth and reproduction, you would have only lumber for your pains. The whole American industrial system is an effect—the mere visibility of invisible powers.

What parts of it, as parts, Europe would like to transpose are not hard to guess. One of the French explorers was André Siegfried, an eminent economist, who wrote a book entitled America Comes of Age. A brilliant book, containing glimpses of deep political insight. The French mentality is political. But as to the American industrial system, touching the same idea that now animates the economic mind of the League of Nations, Monsieur Siegfried says:

“The question that Europeans find most intriguing is whether America will be able to withstand international competition and at the same time maintain her enormous wages and exceptional standard of living. Possibly we are not aware of the immense effort that has been made since the war to adapt American industry to the change in the labor market, by installing the very latest equipment. One is almost tempted to state that Europe, with her intelligence, technical perfection and high civilization, could adopt the same policy and also profit by her lower wages and less pretentious mode of living.”

Which is only to show how far he had missed it—the secret they all come seeking.

They see in the American system low costs of production, high wages, high standards of common living; and they think, “If only we had those low American costs with our low European wages, how profitable that would be!”

III

The False War Myth

What they seek is not obvious. All the truth of it is new and fundamentally strange to Old World traditions and mind habits. But there is one definite and fatuous reason why they miss it. Their characteristic approach is under tyranny of the idea that Americans got rich in the war. Thus all the higher phenomena of American prosperity appear to them to have occurred by chance and to wear an aspect of post-wartime unreality. Even when upon reflection they recognize that other causes must have been acting, still, almost invariably they put that notion first. It has become a morbidity of European thought. For a fairly complete representation of it see any European article on the subject of war debts or on the possibilities of an economic union of Europe against the United States.

The royal delegation appointed to study industrial conditions in the United States could not avoid the thought that we had been war-made. It wrote:

“The war gave an impetus to the expansion of manufacture in all branches of industry and left the United States a creditor nation in relation to Europe.” Immediately it was obliged to add: “Since 1922 there has been a rapid increase in the volume of manufacture in most branches of industry.”

It is true, the war stimulated industry in the United States, necessarily; it stimulated industry also in Great Britain, France, Germany—everywhere—to the utmost. That after the war there was not a farther expansion in Europe, such as occurred in the United States, is the crucial fact. Conditions were similar on both sides. Inflated wages, high costs, people wanting more things than they had ever wanted before, and from the war an industrial capacity much greater than had ever existed in peacetime. The problem was the same there as it was here—whether to cheapen goods or cheapen labor.

One way is to satisfy more wants; the other way is to limit them. We cheapened the goods simply by increasing the productivity of labor, and found not only that what had been regarded as an excess of industrial capacity could be employed but that more and more was needed.

In July, 1926, the Monthly Labor Review, published by the United States Department of Labor, said: “We are at the present time experiencing the most remarkable advance in productive efficiency in the history of the modern industrial system.” That means the cheapening of goods; it means low costs and high wages. The aim is prosperity.

This advance in productive efficiency was the direct cause of that rapid increase in the volume of manufacture since 1922 referred to by the royal delegation. The war stimulus had nothing whatever to do with it; neither had gold anything to do with it, nor the fact that we had become a creditor nation in relation to Europe.

It is not entirely from selling itself a political propaganda against debt payment that the European mind becomes fixed upon the thought that it was the war made Americans rich. The European mind’s traditional way of regarding wealth, conceiving it to be a product whereas we conceive it to be a factor, would hinder its understanding. As we think of wealth it is not a sum, variable only by addition and subtraction, nor is it extent of possession. It is a body of great means, containing a principle of proliferation that causes it to increase by division.

We think much less about wealth as such than about prosperity, and they are not the same. The measure of prosperity is not what people possess; it is what they consume. The per capita wealth of Robinson Crusoe’s kingdom was very great. Two men possessed everything. Yet their state of prosperity was low, because without the engines and tools to multiply the power of their hands they could not produce more than enough to satisfy the wants of simple necessity. All the gold in the world, all the foreign investments in the world, plus unlimited sources of raw materials, would not have increased their prosperity in the least.

So in the foreign doctrine that the United States got rich in the war one must recognize both malice of fable and disability of view.

The facts are these: Above their own exertions in the war, the American people, out of their own resources, produced and loaned to the Allies goods to the value of $10,000,000,000. Then in the first ten years after the war, the American people, though their own wants were rising, nevertheless produced and loaned to European and other foreign countries goods to the value of $15,000,000,000 more. For these goods we hold receipts in the form of paper promises to repay. Whether in fact we shall ever be repaid, or if so, how, we do not know. That is not the topic. The question is how the United States could have got rich, how its prosperity could have been increased at all, by lending away to other people in the course of twelve years some $25,000,000,000 worth of consumable goods.

If we were receiving any of them back, or the material equivalent, it might be supposed that we were now enjoying a postponed power of consumption. But we are not. We are still lending away more than we are getting back. All we have to show for the goods we have loaned away to Europe are bonds—some of them of very dubious value. We cannot eat or wear foreign bonds, we cannot ride them, we cannot use them as T-beams or turbine blades, and they have no fuel value. Among all the absurdities of economic thought, this is perhaps the one most weird, that a nation may achieve prosperity by exporting more goods than it imports.

IV

Facts That Cannot Explain Themselves

No material part of the spectacle of American prosperity is owing to the war; it is in spite of the war, in spite of our having loaned away, perhaps forever, enormous quantities of goods that we have not ceased to want for ourselves. It may be that we owe to the experience of war a sense of power that might otherwise have come a little more slowly, a lesson in solidarity, a clarification of the national mind, a new faith in our own values; but it is no such business of the spirit people mean when they say it was the war gave Americans first place in the world.

Explanation turns next to the catalogue of Amerca’s natural advantages. Item: The extent and variety of our resources in raw materials. Item: Our self-containment in essential food staples. Item: The size of our jealously protected domestic market, with its apparently insatiable capacity to absorb goods. Item: Enormous quantities of cheap mechanical power. And so on.

But what all this amounts to is simply description. It may be that for world supremacy to pass from Europe to America it was necessary that we should possess these advantages: it is none the less certain that merely the fact of our possessing them was not the cause of that event. Try but a few simple reductions.

Raw materials?

Access to sources of raw material has presented no problem to Europe in the past, nor does it present any problem now. Those who are urging an economic union of Europe against America already are boasting that Europe, with her vast colonial possessions, is superior to the United States in such resources, and this is undoubtedly true. Moreover, there is the fact that the United States is the world’s heaviest buyer of raw materials. We are, for example, Great Britain’s largest rubber customer.

Our self-containment in food staples?

Europe for more than half a century has deliberately pursued the policy of exchanging manufactured goods for food, that is to say, skilled labor for peasant labor—as a paying proposition. Besides, the market for food staples is an international market; the price is a world price.

The capacity of our domestic market?

This is, of course, very important. No country in Europe knows the capacity of its own market, for the simple reason that not one has ever systematically or intensively explored it. Only now, in the American example, are the industries of Europe beginning to regard the possibility of really exploiting domestic trade.

Our supply of power?

That we use much more mechanical energy per capita than any other people is not owing to the extent of our power resources, nor to the fact that our power is cheap. We do not use it because it is cheap; it is cheap because we use it. Europe has not utilized her resources to anywhere near the same degree. Nor is it that our engineering and technical skill is superior. England knows better than to waste energy by millions of horsepower burning her coal in open grates.

In any case, the physical, geographical and political conditions were all previously known. Why should foreign countries be sending missions to the United States to confirm such facts as may be read out of the almanacs and yearbooks of any modern language? We have no hidden natural resources, no secret sciences, no inventions that are not for sale. It is supposed that in the extremes of mechanical skill we are inferior, and this may well be true. In technical knowledge we are not superior. There is nothing we make that other people may not make also, as well or perhaps better. We have nothing in the way of industrial method that is not published in trade journals and magazines of technology. Anyone is free to copy our methods. The League of Nations is welcome to transpose the American system into the European system by part or whole; we make no mystery of it. We have no new ideas among us, abstract or concrete, but we give them immediate circulation in print.

The American book lies open. It explains everything and is itself unexplained. Who expounds the meaning that underlies the text?

What is new in the world is without a name. It is not a system, not a method, not yet a formulated philosophy. Out of it is proceeding a new reality. American prosperity is its light and witness.

Do we understand it ourselves? Our relation to it is functional, not contemplative. Take certain premises in the interrogative case, as for example:

American business is unlike business anywhere else; it is unlike itself as it was only a few years ago. Wherein is this difference and what are its principles?

Formerly the American business man, like any other, was content with money profit alone; the degree of his profit was the degree of his contentment. That is no longer true. What has happened to him?

We were once facing all those evils of laborism, such as limitation of output, demarcation of jobs, puerile jurisdictional tyrannies, that still hinder the prosperity of Great Britain; there was a babel of counsel, no one knew the way out. Yet we escaped. How?

We had capitalism here in its dangerous forms. But now, as we know labor without laborism, so we know capital without capitalism. How is that?

We have gone much further than other people with standardization and mass production, and yet what was predicted as an inevitable consequence of this method when it should have been carried to the American extreme—namely, that it would reduce human beings to the mindless condition of automatons—has not happened. So far otherwise, what strikes the foreign observer deeply—even the English, who most of all dread losing their individualism to machine craft—is the individualistic character of American wage earners. What does that signify?

Why is the conflict of man with himself and with his environment more creative here than in countries that are older in culture, richer in experience and had first possession of the transforming power of machines?

The American’s own first impulse is to recite facts from the open book that tells what we are doing and how we are doing it and yet contains no account of itself.