Of the 17 cases now to my knowledge in process, there is good reason to suppose that 15 will be partial or complete successes and 2 probably failures. An analysis of the causes of failure shows a noticeable concentration about two factors the personality of the consulting engineers and the personality of the management. Several failures are due to the inexperience and incompetence of the so-called "experts put on the job; others to their lack of adaptability to new conditions or to the personality of the owners; and still others to an unwillingness on the part of the expert to familiarize himself personally with the shop operations. In at least two cases the experts spoiled their chances of success by indulgence in impractical and expensive experiments. In one instance the wholesale importation of outside men (made necessary, it is true, by the unwillingness of the management to provide men from its own staff) was a large contributing factor. On the other hand, even more cases of failure are due to the management itself. Chief among these has been the spasmodic way in which owners, without due investigation or realization of what the development of scientific management meant, have rushed into it only to begin to vacillate before the engineers had had time to produce any substantial results. This has been the case particularly where the owners have gone into scientific management in response to advertising or other forms of solicitation. In a considerable proportion of the failures there has been marked dissension in the management, notably in certain instances where the foremen have for a long time enjoyed practical control of the business. This condition is fostered also by absentee control, or control by financiers or lawyers unacquainted with the practice of industrial management and therefore unable to adjust the inevitable difficulties which arise between subordinate officials and experts in almost every case. There must be mentioned also a few cases where the sheer incompetency of the management made success under any system impossible. In a fairly large proportion of instances failure was due to the financial inability of the owners to carry through the development they had begun. Occasionally this has been due to lack of foresight, but in the majority of cases to the supervening of a period of severe business depression such as occurred in 1907 and in 1913-14. In one or two instances this has been complicated by the cessation of sales for the product manufactured, due either to a change of public taste, as in the case of a factory making bicycle roller bearings, or the failure of the selling organization, as happened in a garment factory. In but one instance to my knowledge has the threat of labor difficulties been even partially responsible for failure, and here the situation was so complicated with financial troubles (in 1907) and an unsympathetic management that it is difficult now to determine precisely what weight should be given to this factor. As may be expected, these causes of failure have in practically every case operated in combinations of two or three or more. The striking fact deducible from the investigation is that, with one possible exception, the failures have been due entirely to the experts or the managers and owners or both, and never to difficulty with workmen and this independently of whether the workers were organized or not. VI. GENERAL INFLUENCE OF THE MOVEMENT A discussion of scientific management would not be complete without some reference to the influence of the movement outside of its recognized application. It is safe to say that scientific management shares with the modern movement of cost statistics the credit for the wide-spread interest in the improvement of methods and details in factories of every type. Cost sys tems are easier to develop and apply than production systems. They have, therefore, had many more exponents and are far more generally found. Their showings, however, have had the direct result of pointing out the necessity for production systems to eliminate waste made evident by cost statistics; and the two movements have, therefore, gone hand in hand, altho "production engineering" just now is belatedly coming into its own. A brief perusal of the many factory and technological magazines and journals, and of the proceedings of the numerous meetings of manufacturers' associations, gives the clearest evidence of the large share of attention factory managers and owners are now giving to modern production systems. It is also to be noted that since the attention of railroads was so forcibly called at the famous Eastern Rate Case hearings in 1911 to the work on the Santa Fe, they have been considering with a great deal of seriousness, tho with little or reluctant acknowledgment, the kind of detailed analysis, supervision, and development from a new point of view which was then shown to be possible and profitable. This tendency will doubtless gain in momentum as the railroads recover from the strain of public criticism brought out at that time. It will be aided also by the development of more refined and minute cost methods which are only just beginning to make themselves felt. That the systems ultimately developed by the railroads will be similar in appearance to those now found in factories operated under scientific management it would be rash to assert. But it is safe to say that the application of similar principles to their particular problems is being made to some extent and will be carried to far greater lengths in the reasonably near future. Certain of the fundamental principles of scientific management, such as the economy of motion, energy, and time, and the detailed control and coördination of the work of organization, have made an effective and practical appeal to the professions. This is evidenced by the movements for greater efficiency in education, legal administration, and even in the conduct of social service, churches, and religious organizations. And, finally, must be noted the radical change which the wide-spread publicity given the scientific management movement has brought over the popular conception of efficiency. Heretofore the policy of doing one's every-day work in the most perfect way has been considered a matter of aesthetic satisfaction, an artistic pleasure, and therefore to be pursued only in accordance with the dictates of one's " temperament." Now, however, the conservation of personal effort is interpreted as an important phase of the broader movement for the conservation of all resources. It is considered economically advantageous, and, therefore, a personal and social duty. The general acceptance of this attitude will prove, in the long run, I think, the greatest social benefit that will have flowed from the work of Mr. Taylor and his associates. C. BERTRAND THOMPSON. SCHOOL OF BUSINESS ADMINISTRATION, HARVARD UNIVERSITY. MONOPOLY OR COMPETITION AS THE BASIS OF A GOVERNMENT TRUST POLICY 1 SUMMARY The problem must be attacked on grounds of theory, 308.-Maximum satisfaction and the law of the equalization of marginal return, 311. Monopoly and competition not antagonistic, but supplementary, 315. -The endeavor to suppress combinations misdirected and futile, 318. - Competition leads to overcapitalization, i. e., excessive capital investment, in certain industries, 321. Existing Kartells do not represent advantageous monopolistic organization, 322. — Criticism of the American trust legislation of 1914, 324. THE question of government regulation of trusts, long an unsolved problem of American economic policy, has received renewed attention since President Wilson's inauguration, and is now leading to new trust legislation. I take pleasure, therefore, in complying with the request of the editor of this Journal for an expression of opinion upon the latest phase in the campaign against trusts in the United States. In accordance with his desire, I shall connect my discussion with the articles by Professor Durand which appeared in recent numbers of the Quarterly Journal. I do this the more willingly because the point of view from which Professor Durand proceeds to discuss the problem is the same as that which I have found necessary to adopt in preparing a third edition of my book, Kartelle und Trusts. Professor Durand emphasizes what has already been pointed out by others, and in my opinion is undeniably correct, that the whole Kartell and trust problem resolves itself into the general problem of the benefits and evils of free competi 1 Translated by H. R. Tosdal. |