An Inquiry into the Nature of Peace and the Terms of Its Perpetuation

In cases where no recapitalisation has been effected for a considerable series of years the yearly earnings of such businesslike coalitions have been known to approach fifty percent on the capitalised value. Commonly, however, when earnings rise to a striking figure, the business will be recapitalised on the basis of its earning-capacity, by issue of a stock dividend, by reincorporation in a new combination with an increased capitalisation, and the like. Such augmentation of capital not unusually has been spoken of by theoretical writers and publicists as an increase of the community's wealth, due to savings; an analysis of any given case is likely to show that its increased capital value represents an increasingly profitable procedure for securing a high price above cost, by stopping the available output short of the productive capacity of the industries involved. Loosely speaking, and within the limits of what the traffic will bear, the gains in such a case are proportioned to the deficiency by which the production or supply under control falls short of productive capacity. So that the capitalisation in the case comes to bear a rough proportion to the material loss which this organisation of sabotage is enabled to inflict on the community at large; and instead of its being a capitalisation of serviceable means of production it may, now and again, come to little else than a capitalisation of chartered sabotage.

Under the new dispensation of peace and security at large this manner of capitalisation and business enterprise might reasonably be expected to gain something in scope and security of operation. Indeed, there are few things within the range of human interest on which an opinion may more confidently be formed beforehand. If the rights of property, in their extent and amplitude, are maintained intact as they are before the law today, the hold which business enterprise on the large scale now has on the affairs and fortunes of the community at large is bound to grow firmer and to be used more unreservedly for private advantage under the new conditions contemplated.

The logical result should be an accelerated rate of accumulation of the country's wealth in the hands of a relatively very small class of wealthy owners, with a relatively inconsiderable semi-dependent middle class of the well-to-do, and with the mass of the population even more nearly destitute than they are today. At the same time it is scarcely to be avoided that this wholly dependent and impecunious mass of the population must be given an appreciably better education than they have today. The argument will return to the difficulties that are liable to arise out of this conjuncture of facts, in the way of discontent and possible disturbance.

Meantime, looking to the promise of the pacific future in the light of the pacific past, certain further consequences, particularly consequences of the economic order, that may reasonably be expected to follow will also merit attention. The experience of the Victorian peace is almost as pointed in its suggestion on this head as if it had been an experiment made ad hoc; but with the reservation that the scale of economic life, after all, was small in the Victorian era, and its pace was slack, compared with what the twentieth century should have to offer under suitable conditions of peace and pecuniary security. In the light of this most instructive modern instance, there should appear to be in prospect a growth of well-bred families resting on invested wealth and so living on unearned incomes; larger incomes and consequently a more imposingly well-bred body of gentlefolk, sustained and vouched for by a more munificent expenditure on superfluities, than the modern world has witnessed hitherto. Doubtless the resulting growth of gentlemen and gentlewomen would be as perfect after their kind as these unexampled opportunities of gentle breeding might be expected to engender; so that even their British precursors on the trail of respectability would fall somewhat into insignificance by comparison, whether in respect of gentlemanly qualities or in point of cost per unit.

The moral, and even more particularly the aesthetic, value of such a line of gentlefolk, and of the culture which they may be expected to place on view,—this cultural side of the case, of course, is what one would prefer to dwell on, and on the spiritual gains that might be expected to accrue to humanity at large from the steady contemplation of this meritorious respectability so displayed at such a cost.

But the prosaic necessity of the argument turns back to the economic and civil bearing of this prospective development, this virtual bifurcation of the pacified nation into a small number of gentlemen who own the community's wealth and consume its net product in the pursuit of gentility, on the one hand, and an unblest mass of the populace who do the community's work on a meager livelihood tapering down toward the subsistence minimum, on the other hand. Evidently, this prospective posture of affairs may seem "fraught with danger to the common weal," as a public spirited citizen might phrase it. Or, as it would be expressed in less eloquent words, it appears to comprise elements that should make for a change. At the same time it should be recalled, and the statement will command assent on slight reflection, that there is no avoiding substantially such a posture of affairs under the promised régime of peace and security, provided only that the price-system stands over intact, and the current rights of property continue to be held inviolate. If the known principles of competitive gain and competitive spending should need enforcement to that effect by an illustrative instance, the familiar history of the Victorian peace is sufficient to quiet all doubts.

Of course, the resulting articulation of classes in the community will not be expected to fall into such simple lines of sheer contrast as this scheme would indicate. The class of gentlefolk, the legally constituted wasters, as they would be rated from the economic point of view, can not be expected personally to take care of so large a consumption of superfluities as this posture of affairs requires at their hands. They would, as the Victorian peace teaches, necessarily have the assistance of a trained corps of experts in unproductive consumption, the first and most immediate of whom would be those whom the genial phrasing of Adam Smith designates "menial servants." Beyond these would come the purveyors of superfluities, properly speaking, and the large, indeed redundant, class of tradespeople of high and low degree,—dependent in fact but with an illusion of semi-dependence; and farther out again the legal and other professional classes of the order of stewards, whose duty it will be to administer the sources of income and receive, apportion and disburse the revenues so devoted to a traceless extinguishment.

There would, in other words, be something of a "substantial middle class," dependent on the wealthy and on their expenditure of wealth, but presumably imbued with the Victorian middle-class illusion that they are of some account in their own right. Under the due legal forms and sanctions this, somewhat voluminous, middle-class population would engage in the traffic which is their perquisite, and would continue to believe, in some passable fashion, that they touch the substance of things at something nearer than the second remove. They would in great part appear to be people of "independent means," and more particularly would they continue in the hope of so appearing and of some time making good the appearance. Hence their fancied, and therefore their sentimental, interest would fall out on the side of the established law and order; and they would accordingly be an element of stability in the commonwealth, and would throw in their weight, and their voice, to safeguard that private property and that fabric of prices and credit through which the "income stream" flows to the owners of preponderant invested wealth.

Judged on the state of the situation as it runs in our time, and allowing for the heightened efficiency of large-scale investment and consolidated management under the prospective conditions of added pecuniary security, it is to be expected that the middle-class population with "independent means" should come in for a somewhat meager livelihood, provided that they work faithfully at their business of managing pecuniary traffic to the advantage of their pecuniary betters,—meager, that is to say, when allowance is made for the conventionally large expenditure on reputable appearances which is necessarily to be included in their standard of living. It lies in the nature of this system of large-scale investment and enterprise that the (pecuniarily) minor agencies engaged on a footing of ostensible independence will come in for only such a share in the aggregate gains of the community as it is expedient for the greater business interests to allow them as an incentive to go on with their work as purveyors of traffic to these greater business interests.

The current, and still more this prospective, case of the quasi-self-directing middle class may fairly be illustrated by the case of the American farmers, of the past and present. The American farmer rejoices to be called "The Independent Farmer." He once was independent, in a meager and toil-worn fashion, in the days before the price-system had brought him and all his works into the compass of the market; but that was some time ago. He now works for the market, ordinarily at something like what is called a "living wage," provided he has "independent means" enough to enable him by steady application to earn a living wage; and of course, the market being controlled by the paramount investment interests in the background, his work, in effect, inures to their benefit; except so much as it may seem necessary to allow him as incentive to go on. Also of course, these paramount investment interests are in turn controlled in all their manoeuvres by the impersonal exigencies of the price-system, which permits no vagaries in violation of the rule that all traffic must show a balance of profit in terms of price.

The Independent Farmer still continues to believe that in some occult sense he still is independent in what he will do and what not; or perhaps rather that he can by shrewd management retain or regain a tolerable measure of such independence, after the fashion of what is held to have been the posture of affairs in the days before the coming of corporation finance; or at least he believes that he ought to have, or to regain or reclaim, some appreciable measure of such independence; which ought then, by help of the "independent means" which he still treasures, to procure him an honest and assured livelihood in return for an honest year's work. Latterly he, that is the common run of the farmers, has been taking note of the fact that he is, as he apprehends it, at a disadvantage in the market; and he is now taking recourse to concerted action for the purpose of what might be called "rigging the market" to his own advantage. In this he overlooks the impregnable position which the party of the second part, the great investment interests, occupy; in fact, he is counting without his host. Hitherto he has not been convinced of his own helplessness. And with a fine fancy he still imagines that his own interest is on the side of the propertied and privileged classes; so that the farmer constituency is the chief pillar of conservative law and order, particularly in all that touches the inviolable rights of property and at every juncture where a division comes on between those who live by investment and those who live by work. In pecuniary effect, the ordinary American farmer, who legally owns a moderate farm of the common sort, belongs among those who work for a livelihood; such a livelihood as the investment interests find it worth while to allow him under the rule of what the traffic will bear; but in point of sentiment and class consciousness he clings to a belated stand on the side of those who draw a profit from his work.

So it is also with the menial servants and the middle-class people of "independent means," who are, however, in a position to see more clearly their dependence on the owners of predominant wealth. And such, with a further accentuation of the anomaly, may reasonably be expected to be the further run of these relations under the promised régime of peace and security. The class of well-kept gentlefolk will scarcely be called on to stand alone, in case of a division between those who live by investment and those who live by work; inasmuch as, for the calculable future, it should seem a reasonable expectation that this very considerable fringe of dependents and pseudo-independents will abide by their time-tried principles of right and honest living, through good days and evil, and cast in their lot unreservedly with that reputable body to whom the control of trade and industry by investment assigns the usufruct of the community's productive powers.

Something has already been said of the prospective breeding of pedigreed gentlefolk under the projected régime of peace. Pedigree, for the purpose in hand, is a pecuniary attribute and is, of course, a product of funded wealth, more or less ancient. Virtually ancient pedigree can be procured by well-advised expenditure on the conspicuous amenities; that is to say pedigree effectually competent as a background of current gentility. Gentlefolk of such syncopated pedigree may have to walk circumspectly, of course; but their being in this manner put on their good behavior should tend to heighten their effectual serviceability as gentlefolk, by inducing a single-mindedness of gentility beyond what can fairly be expected of those who are already secure in their tenure.

Except conventionally, there is no hereditary difference between the standard gentlefolk and, say, their "menial servants," or the general population of the farms and the industrial towns. This is a well-established commonplace among ethnological students; which has, of course, nothing to say with respect to the conventionally distinct lines of descent of the "Best Families." These Best Families are nowise distinguishable from the common run in point of hereditary traits; the difference that makes the gentleman and the gentlewoman being wholly a matter of habituation during the individual's life-time. It is something of a distasteful necessity to call attention to this total absence of native difference between the well-born and the common, but it is a necessity of the argument in hand, and the recalling of it may, therefore, be overlooked for once in a way. There is no harm and no annoyance intended. The point of it all is that, on the premises which this state of the case affords, the body of gentlefolk created by such an accumulation of invested wealth will have no less of an effectual cultural value than they would have had if their virtually ancient pedigree had been actual.

At this point, again, the experience of the Victorian peace and the functioning of its gentlefolk come in to indicate what may fairly be hoped for in this way under this prospective régime of peace at large. But with the difference that the scale of things is to be larger, the pace swifter, and the volume and dispersion of this prospective leisure class somewhat wider. The work of this leisure class—and there is neither paradox nor inconsistency in the phrase—should be patterned on the lines worked out by their prototypes of the Victorian time, but with some appreciable accentuation in the direction of what chiefly characterised the leisure class of that era of tranquility. The characteristic feature to which attention naturally turns at this suggestion is the tranquility that has marked that body of gentlefolk and their code of clean and honest living. Another word than "tranquility" might be hit upon to designate this characteristic animus, but any other word that should at all adequately serve the turn would carry a less felicitous suggestion of those upper-class virtues that have constituted the substantial worth of the Victorian gentleman. The conscious worth of these gentlefolk has been a beautifully complete achievement. It has been an achievement of "faith without works," of course; but, needless to say, that is as it should be, also of course. The place of gentlefolk in the economy of Nature is tracelessly to consume the community's net product, and in doing so to set a standard of decent expenditure for the others emulatively to work up to as near as may be. It is scarcely conceivable that this could have been done in a more unobtrusively efficient manner, or with a more austerely virtuous conviction of well-doing, than by the gentlefolk bred of the Victorian peace. So also, in turn, it is not to be believed that the prospective breed of gentlefolk derivable from the net product of the pacific nations under the promised régime of peace at large will prove in any degree less effective for the like ends. More will be required of them in the way of a traceless consumption of superfluities and an unexampled expensive standard of living. But this situation that so faces them may be construed as a larger opportunity, quite as well as a more difficult task.

A theoretical exposition of the place and cultural value of a leisure class in modern life would scarcely be in place here; and it has also been set out in some detail elsewhere.10 For the purpose in hand it may be sufficient to recall that the canons of taste and the standards of valuation worked out and inculcated by leisure-class life have in all ages run, with unbroken consistency, to pecuniary waste and personal futility. In its economic bearing, and particularly in its immediate bearing on the material well-being of the community at large, the leadership of the leisure class can scarcely be called by a less derogatory epithet than "untoward." But that is not the whole of the case, and the other side should be heard. The leisure-class life of tranquility, running detached as it does above the turmoil out of which the material of their sustenance is derived, enables a growth of all those virtues that mark, or make, the gentleman; and that affect the life of the underlying community throughout, pervasively, by imitation; leading to a standardisation of the everyday proprieties on a presumably, higher level of urbanity and integrity than might be expected to result in the absence of this prescriptive model.

Integer vitae scelerisque purus, the gentleman of assured station turns a placid countenance to all those petty vexations of breadwinning that touch him not. Serenely and with an impassive fortitude he faces those common vicissitudes of life that are impotent to make or mar his material fortunes and that can neither impair his creature comforts nor put a slur on his good repute. So that without afterthought he deals fairly in all everyday conjunctures of give and take; for they are at the most inconsequential episodes to him, although the like might spell irremediable disaster to his impecunious counterfoil among the common men who have the community's work to do. In short, he is a gentleman, in the best acceptation of the word,—unavoidably, by force of circumstance. As such his example is of invaluable consequence to the underlying community of common folk, in that it keeps before their eyes an object lesson in habitual fortitude and visible integrity such as could scarcely have been created except under such shelter from those disturbances that would go to mar habitual fortitude and integrity. There can be little doubt but the high example of the Victorian gentlefolk has had much to do with stabilising the animus of the British common man on lines of integrity and fair play. What else and more in the way of habitual preconceptions he may, by competitive imitation, owe to the same high source is not immediately in question here.

Recalling once more that the canon of life whereby folk are gentlefolk sums itself up in the requirements of pecuniary waste and personal futility, and that these requirements are indefinitely extensible, at the same time that the management of the community's industry by investment for a profit enables the owners of invested wealth to divert to their own use the community's net product, wherewith to meet these requirements, it follows that the community at large which provides this output of product will be allowed so much as is required by their necessary standard of living,—with an unstable margin of error in the adjustment. This margin of error should tend continually to grow narrower as the businesslike management of industry grows more efficient with experience; but it will also continually be disturbed in the contrary sense by innovations of a technological nature that require continual readjustment. This margin is probably not to be got rid of, though it may be expected to become less considerable under more settled conditions.

It should also not be overlooked that the standard of living here spoken of as necessarily to be allowed the working population by no means coincides with the "physical subsistence minimum," from which in fact it always departs by something appreciable. The necessary standard of living of the working community is in fact made up of two distinguishable factors: the subsistence minimum, and the requirements of decorously wasteful consumption—the "decencies of life." These decencies are no less requisite than the physical necessaries, in point of workday urgency, and their amount is a matter of use and wont. This composite standard of living is a practical minimum, below which consumption will not fall, except by a fluctuating margin of error; the effect being the same, in point of necessary consumption, as if it were all of the nature of a physical subsistence minimum.

Loosely speaking, the arrangement should leave nothing appreciable over, after the requirements of genteel waste and of the workday standard of consumption have been met. From which in turn it should follow that the rest of what is comprised under the general caption of "culture" will find a place only in the interstices of leisure-class expenditure and only at the hands of aberrant members of the class of the gently-bred. The working population should have no effectual margin of time, energy or means for other pursuits than the day's work in the service of the price-system; so that aberrant individuals in this class, who might by native propensity incline, e.g., to pursue the sciences or the fine arts, should have (virtually) no chance to make good. It would be a virtual suppression of such native gifts among the common folk, not a definitive and all-inclusive suppression. The state of the case under the Victorian peace may, again, be taken in illustration of the point; although under the presumably more effectual control to be looked for in the pacific future the margin might reasonably be expected to run somewhat narrower, so that this virtual suppression of cultural talent among the common men should come nearer a complete suppression.

The working of that free initiative that makes the advance of civilisation, and also the greater part of its conservation, would in effect be allowed only in the erratic members of the kept classes; where at the same time it would have to work against the side-draught of conventional usage, which discountenances any pursuit that is not visibly futile according to some accepted manner of futility. Now under the prospective perfect working of the price-system, bearers of the banners of civilisation could effectually be drawn only from the kept classes, the gentlefolk who alone would have the disposal of such free income as is required for work that has no pecuniary value. And numerically the gentlefolk are an inconsiderable fraction of the population. The supply of competently gifted bearers of the community's culture would accordingly be limited to such as could be drawn by self-selection from among this inconsiderable proportion of the community at large.

It may be recalled that in point of heredity, and therefore in point of native fitness for the maintenance and advance of civilisation, there is no difference between the gentlefolk and the populace at large; or at least there is no difference of such a nature as to count in abatement of the proposition set down above. Some slight, but after all inconsequential, difference there may be, but such difference as there is, if any, rather counts against the gentlefolk as keepers of the cultural advance. The gentlefolk are derived from business; the gentleman represents a filial generation of the businessman; and if the class typically is gifted with any peculiar hereditary traits, therefore, they should presumably be such as typically mark the successful businessman—astute, prehensile, unscrupulous. For a generation or two, perhaps to the scriptural third and fourth generation, it is possible that a diluted rapacity and cunning may continue to mark the businessman's well-born descendants; but these are not serviceable traits for the conservation and advancement of the community's cultural heritage. So that no consideration of special hereditary fitness in the well-born need be entertained in this connection.