CHAPTER I INTRODUCTION A. Problems at Issue The material in this introductory survey is presented with four purposes in mind. It should be studied in the light of these purposes. 1. It is desirable that we should from the outset think of industrial society as something which has structure, and as something which actually operates. In a few hours' study we cannot acquire a full understanding of all that this statement involves. We can, however, get an appreciation of what to look for as the course develops. 2. We should from the outset see, if only dimly, the relation of the structure and operations-the relation of the functioning structure. of industrial society to the great social fact of the "scarcity" of economic goods. 3. Since comparison is an aid to understanding, we should early get a working knowledge of the structure and operations of industrial societies other than our own. We should be careful not to regard this as critical knowledge. Much study should preface criticism and the passing of judgments. 4. We must know the content of a few terms which will appear repeatedly in our readings and discussions. Fortunately the number of such terms is not unduly large. The study of the functioning structure of industrial society centers about man's efforts to gratify his wants. Nature does not spontaneously and gratuitously satisfy our wants. Our wants are many, insistent, and apparently capable of indefinite expansion. We "struggle with nature" in our effort to gratify these wants. It follows that these things are of great significance: (a) our wants, (b) means-of-gratifying-these-wants, i.e., goods, and (c) the processes by which these goods are secured and applied to our wants. We may leave the analysis of wants to psychology. Goods may be classified, from our present point of view, as follows: (a) Free Goods, which are not discussed in economics since they constitute no significant problem from that point of view; 3 (b) Economic Goods, which are "scarce," relative to the demand for them. It has become customary to refer to material economic goods as wealth and to non-material economic goods as services. The structure and operations of the society in which these (economic) goods are brought into existence and applied to our wants are the subject-matter of this course. The material of the preceding paragraph may be presented diagrammatically thus: We shall be studying primarily the "mechanisms and devices"not, however, as separate, isolated units, but in their relationships. It is not worth while, at this stage of our study, to attempt any scientific classification of these mechanisms and devices. It will suffice for the present if we realize that the following (among others) are devices of the sort mentioned: capital, exchange, specialization, private property, competition, contract, inheritance, wages, rent, interest, profits, money, money economy, banks, insurance companies, laws regulating business operations. As we proceed, it will be seen that there is nothing immutable about these devices. Most of them are, historically speaking, quite new. No one can wisely predict when, if ever, they will be supplanted by others. Taken as an everchanging whole, they constitute in their interrelationships and ramifications that curious complex called industrial society. Various figures of speech have been applied to present-day industrial society. To some of us it is an organism, species undesignated; to others it is a human being; to others, a complex of forces; to others, a machine. Clearly none of these or of other illustrations is completely applicable to all the phases and manifestations of modern society. One illustration will serve certain purposes, another will be better adapted to different aims. If we make use of the machine illustration, attention may profitably be given to four aspects of the matter: (a) There is the question of the adequacy of the individual wheels, rods, and other parts, considered merely as parts. Sometimes it is convenient to think of these parts in terms of persons; at other times and for other purposes it serves better to speak of business units, such as a factory, retail store, a United States Steel Corporation, as the parts of the machine. (b) Then, too, we must consider the effectiveness with which these parts are co-ordinated or organized into the machine as a whole. A machine of excellent individual parts may be loose-jointed, ramshackle, inefficient. Conversely, a machine of beautiful appearance with all adjustments perfectly made may be practically worthless if the component elements cannot bear strain in action. (c) Next, is there adequate power? Is it efficiently applied? Even a groaning, poorly built machine may do much work, if it can meet the strain and if power suffices. (d) Finally, if the power suffices, is the machine properly guided in its course? The parts of the industrial machine of today are far short of perfection, but they are reasonably sound and competent. If we think of them as persons, as human stock, we find ourselves in general agreement that the race is improving this notwithstanding the arguments of those who see in modern strain, intensity, and discouragement arising from unequal opportunity efficient causes of race deterioration. If the "parts" mean to us industrial units-businesses we are likely to agree that within the given business unit there is a relatively high degree of efficient organization and relatively little waste "relatively," that is, to what has gone before and to the situation that exists in the case of the co-ordination of these parts into the machine as a whole. Anyone who believes this is certain to believe that in our society some force is operating to select reasonably efficient managers as heads of these industrial units and that some force impels these efficient managers to continuously efficient activity. The co-ordination of the parts of the industrial machine is far from satisfactory, from the point of view of the interests of society. There are countless cases where the gears mesh improperly, where connections are poorly made. The joints rattle or are not sufficiently flexible. There is lost motion. Processes have been added as an afterthought or with little thought at all. Worse still, it requires no skilled social mechanic to find cases of parts actually working at cross-purposes of power being simultaneously applied in opposite directions. The "wastes of competition" and the achievements of "the predacious" even during normal times make a formidable catalogue, and there are periods-depressions we call them-when the machine is in a pitiable state. It is not surprising that some persons (with perhaps too great confidence in their powers both of analysis and of construction) would tear down the whole structure |