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wealth of new and slightly peopled lands the profit maker proceeds with his destructive process from continent to continent. Fur bearing and food animals are killed in season and out of season, to the point of extermination of the species; primeval forests are levelled to the ground; natural pastures are denuded; virgin soils are defertilized; coal and metals, oils and gases-all reserves of potential power—are wasted and exhausted.
To the capitalist profit maker positive evil may be a good. The stimulus of profit making works as potently in building up the vast industry of supplying futile or deleterious patent medicines, medicated wines, and proprietary cures for cancer, consumption, gout, or rheumatism, as in that of feeding the hungry and clothing the naked. The smuggling of opium into China or whiskey into the United States, like the manufacture of cocaine in a foreign factory, or the organization of gambling in another country-both being against the law in the country in which the capitalist happens to reside—are as legitimate sources of gain as the growing of wheat.
The process of distribution developed by the profiteering system might more fitly be described as an elaborate system of interception and blackmail. The open road from the producer to the consumer becomes obstructed by a series of piratical turnpikes set up by persons who have neither made the road nor mended it, but predatorily squatted on a portion of it and set up a trade in wayleaves.
The struggle for pecuniary profit among rival groups of capitalist entrepreneurs may be recognized as having been the most potent cause of international conflicts including, in particular, the culminating conflict of 1914-1918.
This type of condemnation is not unlike the criticism of profit and commercialism which has been made by leading thinkers of the Orient, such as Tagore and Gandhi. Tagore expressed himself as follows to Japan, in deprecation of their adoption of Western commercialism : 15
You had your own industry in Japan; how scrupulously honest and true it was, you can see by its products—by their grace and strength, their conscientiousness in details, where they can hardly be observed. But the tidal wave of falsehood has swept over your land from that part of the world where business is business, and honesty is followed merely as the best policy. Have you never felt shame when you see the trade advertisements, not only plastering the whole town with lies and exaggerations, but invading the green fields, where the peasants do their honest labor, and the hill-tops which greet the first pure light of the morning. This commercialism with its barbarity of ugly decorations is a terrible menace to all humanity. It is making the cult of self seeking exult in its shameless nakedness. It is carrying its own damnation because it is trampling into distortion the humanity upon which it stands. It is strenuously turning out money at the cost of happiness. The vital ambition of the present civilization of Europe is to have the exclusive possession of the devil.
These are strong words of condemnation. From this viewpoint, profit making is a vicious form of buccaneering, tending to make life "mean, nasty, and brutish.” But these words are the story from only one viewpoint. At the other extreme, the defender of capitalism lauds the
15 Nationalism, pp. 85-86, 128-129.
mechanism of profit to the skies. From his standpoint, the profit motive has fostered the great mechanical inventions, and has harnessed the countless discoveries of pure and applied science to the work of creating wealth. It has multiplied the efficiency of labor, and increased the per capita wealth and income of the masses. It has developed our natural resources and has made them contribute to human happiness. It has built beautiful cities and has dotted the country with comfortable homes. It has raised the standard of living and flooded even the common man with comforts and luxuries undreamed of by the people of two or three generations ago. It has developed electrical communication and has made possible the automobile, the railroad, and all other means of quick transportation. It has built better, cleaner, happier working places in which men may toil. It has made education available to every child, the rich and the poor alike. It has increased the length of human life, and has increased the health of the people. It has made us wealthy beyond compare, and has carried civilization to the highest point of achievement.
These are words of extravagant praise. They contrast sharply with the vehement criticism of socialism. Both viewpoints have an underlying element of fact, in that profit has both a good and an evil aspect. But both viewpoints are misleading, because they deal with one aspect alone, to the exclusion of everything else. Profit is neither so vicious as the socialist paints it nor so glorious as the capitalist paints it.
Against these radical and reactionary notions of profit as a background, we may undertake a more critical analysis of the matter. When the profit motive is viewed objectively, the following conclusions appear to be warranted.
(1) The profit motive is continually changing. It means something quite different today from what it meant a generation ago. It is not a fixed, inborn instinct, but a changeable, acquired habit. It is not an unalterable predisposition in human nature, but an alterable custom in human institutions. The profit motive is not the same yesterday, today, tomorrow, and forever, but is an evolutionary product. The loose notion that human nature is selfish, and therefore that profit is foredoomed always to be a set lure of greed and avarice is altogether out of keeping with the concepts established by modern psychology, history, and anthropology. These fields of science point to the conclusion that such a phenomenon as the profit motive is whatever the customs, institutions, and folkways of a particular time happen to make it. New customs and institutions will remake it into new manifestations and expressions. People become accustomed to seeking profit by following the business practices and customs of a given day and age. When these practices and customs develop and evolve, people become accustomed to seeking profit in wholly new ways. The profit motive is not a stereotyped, absolute motive written in human nature but is a plastic, modifiable motive written in contemporary institutions.
(2) The area within which the profit motive is primary has been considerably narrowed in recent years. Public education, public health service, community recreation, are expanding fields in which the chief incentive is not private gain but some degree of social gain. Scientific research and laboratory experiment rest in large measure upon intellectual curiosity and the creative spirit. The conservation of natural resources is a movement which tends to restrict the profit motive. Government ownership and municipal ownership of business enterprises tend to narrow the profit area. Regulation of public utilities by public service commissions curbs the acquisitive dispositions in that field. Consumer's coöperation has for one of its chief aims the elimination of the profit motive. A suggestive example of the displacement of acquisitive motive was the attitude toward military service in the World War. The rank and file of the troops were not in the service because they hoped for any acquisitive gain or private profit. The "make money" motive was not their dominating incentive. Of course, this is not to deny that many of the private interests at home leaned in the direction of profiteering, but it is to emphasize the incentives to duty of the military men themselves. These illustrations are sufficient to suggest that the profit motive is largely institutional in nature. By changing institutions, we can change motives. The profit motive can be narrowed in area, and social motives can be enlarged in area.
(3) The profit motive is in process of being reshaped by certain definite forces at the present period. These may be classified as voluntary and involuntary forces of change. The voluntary forces consist of the new codes of ethics, new trade customs, new conceptions of business as a profession, and new notions of business honor. Voluntarily, the various trades and industries are developing standards of business practice. These standards are an evidence of the desire of the profit maker himself to square his pursuit of profit with the well being of the community at large. Codes of ethics have been established. The, underlying assumption of such codes is that profit making can have and should have beneficial results for the public as well as for private business. Advertising, for instance, has as an industry repudiated false and misleading representation of goods. Dishonesty has been rejected as a method of profit making, and the rejection has been made from within the business. Another tendency, closely allied to new codes and standards, is toward making business a true profession. This is, in large part, due to the influence of higher education upon business thought. Schools of business, liberal colleges, engineering schools, have imbued thousands of men entering the business field with the traditions and ideals of the professions. The profit motive in the hands of a man who views his business as a profession is wholly different from the profit motive in the hands of a man who views his business as rampant commercialism. Still another factor in voluntary reform of the profit motive has been the importance of good will in business. Business which does
not create good will toward the concern is unprofitable. The surest and truest way to create good will is to offer to the public goods of high quality and service of genuine benefit. The way to make profit is to make good will, and the way to make good will is to make good commodities and render good service. In all these ways, the profit motive is being reconstructed. New standards of business practice, new codes of business ethies, new conceptions of business as a profession, new realization of the necessity of good will, are making a new phenomenon out of the profit motive. Much of the old buccaneering and chicanery disappears.
The new order calls forth new modes of behavior, spontaneously, at the initiative of the business men themselves.
Simultaneously, those portions of business which are recalcitrant are being whipped into line by certain forms of compulsion. The most potent form of compulsion is the law. Legislation and the decisions of the courts have built up a mass of commandments which business must not transgress in the pursuit of profit. Laws regulating the quality of products, the fairness and unfairness of competition, the terms of contracts, the rights of property, the exploitation of natural resources, the treatment of labor, and multitudinous other aspects of business procedure, have tended more and more to narrow the range of predatory and pernicious activity. Acts which injure the community come under the ban of the State. Profit making by disservice to the public is proscribed. Business crime and business immorality are increasingly under the control of the State. In addition to the law, various private social groups have been able to bring pressure to bear in the direction of better business practices. Labor unions, for instance, have directly or indirectly brought effective pressure to bear in the direction of better treatment of labor. Consumers' organizations have brought effective pressure to bear in the direction of better service to the consumer. Hundreds of such organizations exist, for the purpose of using influence to improve the conduct of business. Faced with such organized power, business has been compelled to adopt improved methods of operation. Business is on the defensive, and concessions are often made grudgingly, but the forces of progress have proved insurmountable.
(4) Profit is not incompatible with service. Profit and service are not antithetical terms. It is true that some profit is gained without rendering any service. But it is just as true that a great body of profit is gained by rendering service. Profit by service is in process of evolution. We are still far short of the ideal. We require much further progress. But we should not blind ourselves to the fact that progress is possible. The narrow notion that, with human nature as it is, progress in profit behavior is impossible, must be relegated to the scrap heap of exploded shibboleths.
(5) Progress in the profit motive depends upon reconstructing the working rules of profit making. The working rules of behavior can be modified to meet the requirements of social need and yet at the same time yield adequate profit to business. Profit by service does not necessarily mean lessened profit. It may mean the same profit, but secured by a different method of conducting business. It may mean more profit, due to the discovery that methods which render service are the very methods which yield maximum profits. Therefore, in proposing that profit behavior be modified so as to meet the tests of service, we are not proposing that profit shall be altered in amount. Profit by service may be less, or it may be the same, or it may be greater, than profit by disservice. The profits of certain kinds of business would be less, but the profits of the new kinds of business which took their places would perhaps be more. The profits of predatory business would suffer, but the profits of useful business would benefit. The total of profit, the aggregate for all concerns might be the same as now, or more than now. The thing to be changed is the technic of making profit, not necessarily the amount of the profit to be made.
What are some of the alterations in profit behavior which might serve the demands of human welfare better, but which would not threaten to undermine the necessary volume of profits themselves? The following are mentioned as suggestive illustrations : Displacing commercial bribery by commercial honesty; remedying excessive inflation and deflation by stabilization of the price level; overcoming unemployment by unemployment insurance, and by control of the business cycle; solving the contrast between producing what pays best and producing what people need most, by giving to the people who need goods most the money incomes wherewith to pay for the goods, through a more democratic distribution of income; superseding the policy of producing as few goods as possible to be sold at as high a price as possible by the policy of quantity production of as many goods as possible at as low a price as possible; substituting for old individualistic chaos the organized cooperation of trade associations; abolishing old methods of suppressing labor and installing new methods of caring for the human element in production, such as personnel administration, and vocational selection; guaranteeing standards of quality instead of permitting shoddy and adulterated goods upon the market. Such a list could be extended at great length. The new policies do not involve less profits but they do involve more welfare. The improved methods of profit behavior do not endanger necessary profits but they do insure social well being. Progress is not a question of throttling and stifling profit; it is a question of stilling one kind of profit, predatory profit, and of stimulating another kind of profit, welfare profit. The warfare is not between profit and
, service, but between two kinds of profit-between profit which exploits the community on the one hand and profit which enriches the community on the other hand. The story of progress is a struggle for the survival of the fittest, and the great contenders are not profit and antiprofit, but sound profit and unsound profit. The profit motive is whatever the outcome of this struggle makes out of it. The new modes of asserting the profit motive can be good for the community and at the same time good for business.