第8章

Illustrativeinstanceswillreadilysuggestthemselves。Manyabusinessmanturnsbypreferencetosomethinglessdubiousthanthedistillingofwhiskeyorthesaleofdeleterioushouseholdremedies。Theyprefernottousedeletriousadulterants，evenwithinthelimitsofthelaw。Theywillratherusewoolthanshoddyatthesameprice。Theofficialsofarailwaycommonlyprefertoavoidwrecksandmanslaughter，evenifthereisnopecuniaryadvantageinchoosingthemorehumanecourse。Morethanthat，itwillbefoundtruethatthemoreprosperousofthecraft，especially，takeprideandpainstomaketheserviceoftheirroadsortheoutputoftheirmillsasefficient，notsimplyasthepecuniaryadvantageoftheconcerndemands，butasthebestpecuniaryresultswilladmit。Instancesareperhapsnotfrequent，buttheyarealsonotaltogetherexceptional，whereaprosperouscaptainofindustrywillgooutofhiswaytoheightentheserviceabilityofhisindustryeventoadegreethatisofdoubtfulpecuniaryexpediencyforhimself。Suchaberrationsare，ofcourse，notlarge；andiftheyarepersistedintoanyveryappreciableextenttheresultis，ofcourse，disastroustotheenterprise。Theenterpriseinsuchacasefallsoutofthecategoryofbusinessmanagementandfallsundertheimputationofphilanthropy。 Thecaptainsofthefirstclassnecessari1yarerelativelyexemptfromtheseunbusinesslikescruples。 Theeconomicprincipleof“chargingwhatthetrafficwillbear“isdiscussedwithgreatcareandelaborationbyR。T。Ely，MonopoliesandTrusts，ch。III，“TheLawofMonopolyPrice。“Cf。，forillustrationofthepracticalworkingofthisprinciple，testimonyofC。M。Schwab，ReportoftheIndustrialCommission，vol。XIII。pp。453-455。 18。“Monopoly“ishereusedinthatloosersensewhichithascolloquially，notinthestrictsenseofanexclusivecontrolofthesupply，asemployed，eg。，byMrElyinthevolumecitedabove。ThisusageisthemoreexcusablesinceMr。Elyfindsthata“monopoly“inthestrictsenseofthedefinitionpracticallydoesnotoccurinfact。Cf。Jenks，TheTrustProblem，ch。IV。 E。g。theprestigevalueofIvorySoap。 Cf。W。D。Scott，TheTheoryofAdvertising；J。L。Mahin，TheCommercialValueofAdvertising，pp。4-6，12-13，15；E。 Fogg-Meade，“ThePlaceofAdvertisinginModernBusiness，“ JournalofPoliticalEconomy，March1901；Sombart，vol。II。ch。 Thewritinganddesigningofadvertisements(letterpress，display，andillustrations)hasgrownintoadistinctcalling；sothattheworkofaskilledwriterofadvertisementscomparesnotunfavorably，inpointoflucrativeness，withthatoftheavowedwritersofpopularfiction。 Thepsychologicalprinciplesofadvertisingmaybeformulatedsomewhatasfollows:Adeclarationoffact，madeintheformandwiththeincidentsoftasteandexpressiontowhichapersonisaccustomed，willbeacceptedasauthenticandwillbeacteduponifoccasionarises，insofarasitdoesnotconflictwithopinionsalreadyaccepted。Theacceptanceofanopinionseemstobealmostentirelyapassivematter。Thepresumptionremainsinfavorofanopinionthathasoncebeenaccepted，andanappreciableburdenofprooffallsonthenegative。Acompetentformulationofopiniononagivenpointisthechieffactoringainingadherentstothatopinion，andareiterationofthestatementisthechieffactorincarryingconviction。Thetruthofsuchaformulationisamatterofsecondaryconsequence，butawideandpatentdeparturefromknownfactgenerallyweakensitspersuasiveeffect。Theaimoftheadvertiseristoarrestattentionandthenpresenthisstatementinsuchamannerthatitiseasilyassimilatedintothehabitsofthoughtofthepersonwhoseconvictionistobeinfluenced。Whenthisiseffectuallydoneareversaloftheconvictionsoestablishedisamatterofconsiderabledifficulty。Thetenacityofaviewonceacceptedinthiswayisevidenced，forinstance，bytheendlessnumberandvarietyoftestimonialstothemeritsofwell-advertisedbutnotoriouslyworthlesshouseholdremediesandthelike。 SoacuteanobserverasMrSombartisstillabletoholdtheopinionthat“aufSchwindelistdauerudnochnieeinUnternehmenbegrundetworden“(Kopitalismus，vol。II。p。376)。MrSombarthasnotmadeacquaintancewiththeadventuresofElijahtheRestorer，norisheconversantwithAmericanpatent-medicineenterprise。 WithMr。Sombart’sviewmaybecontrastedthatofMrL。F。Ward，anobserverofequallylargeoutlookandacumen: “Thelawofmindasitoperatesinsocietyasanaidtocompetitionandintheinterestoftheindividualisessentiallyimmoral。Itrestsprimarilyontheprincipleofdeception。Itisanextensiontootherhumanbeingsofthemethodappliedtotheanimalworldbywhichthelatterwassubjectedtoman。Thismethodwasthatoftheambushandthesnare。Itsrulingprinciplewascunning。Itsobjectwastodeceive，circumvent，ensnare，andcapture。Lowanimalcunningwassucceededbymorerefinedkindsofcunning。Themoreimportantofthesegobythenamesofbusinessshrewdness，strategy，anddiplomacy，noneofwhichdifferfromordinarycunninginanythingbutthedegreeofadroitnessbywhichthevictimisoutwitted。Inthiswaysociallifeiscompletelyhoneycombedwithdeception。““ThePsychologicBasisofSocialEconomics，“Ann。ofAm。Acad。， Advertisingandotherlikeexpedientsforthesaleofgoodsaimatchangesinthe“substitutionvalues“ofthegoodsinquestion，notatanenhancementoftheaggregateutilitiesoftheavailableoutputofgoods。 Cf。Jenks，TheTrustProblem，pp。21-28；ReportoftheIndustrialCommission，vol。 Cf。Bohm-Bawerk，PositiveTheoryofCapital，bk。onthevalueofalternativeandcomplementarygoods。 Wherecompetitivesellingmakesupalargeproportionoftheaggregatefinalcostofthemarketedproduct，thisfactislikelytoshowitselfinanexceptionallylargeproportionofgood-willinthecapitalizationoftheconcernsengagedinthegivenlineofbusiness；as，e。g。，theAmericanChicleCompany。 Cf。Ed。Hahn，DieWirtschaftderWeltamAusgangdesXIX Jahrhunderts-“InunseremheutigenWirtsehaftslebenistderGewinndurchdenZuwachsderProduktion，mitdemfruhereJahrhunderterechneten，ganzundgarzuruckgedrangt，eristunwesentlichgeworden。“ Itmight，therefore，befeasibletosetupatheorytotheeffectthatwagesarecompetitivelyproportionedtothevendibilityoftheproduct；butthereisnocogentgroundforsayingthatthewagesinanydepartmentofindustry，underabusinessregime，areproportionedtotheutilitywhichtheoutputhastoanyoneelsethantheemployerwhosellsit。Whenitisfurthertakenintoaccountthatthevendibilityoftheproductinverymanylinesofproductiondependschieflyonthewastefulnessofthegoods(cf。TheoryoftheLeisureClass，ch。V)，thedivergencebetweentheusefulnessoftheworkandthewagespaidforitseemswideenoughtothrowthewholequestionofanequivalencebetweenworkandpayoutoftheoreticalconsideration。Cf。，however，Clark，TheDistributionofWealth，especiallych。VII。andXXII。 TheTheoryofBusinessEnterprisebyThorsteinVeblen1904 BusinessPrinciplesThephysicalbasisofmodernbusinesstrafficisthemachineprocess，asdescribedinChapterII。Itisessentiallyamodernfact，-lateandyetinitsearlystagesofgrowth，especiallyasregardsitswidersweepintheorganizationoftheindustrialsystem。Thespiritualgroundofbusinessenterprise，ontheotherhand，isgivenbytheinstitutionofownership。“Businessprinciples“arecorollariesunderthemainpropositionofownership；theyareprinciplesofproperty，-pecuniaryprinciples。Theseprinciplesareofolderdatethanthemachineindustry，althoughtheirfulldevelopmentbelongswithinthemachineera。Asthemachineprocessconditionsthegrowthandscopeofindustry，andasitsdisciplineinculcateshabitsofthoughtsuitabletotheindustrialtechnology，sotheexigenciesofownershipconditionthegrowthandaimsofbusiness，andthedisciplineofownershipanditsmanagementinculcatesviewsandprinciples(habitsofthought)suitabletotheworkofbusinesstraffic。 Thedisciplineofthemachineprocessenforcesastandardizationofconductandofknowledgeintermsofquantitativeprecision，andinculcatesahabitofapprehendingandexplainingfactsintermsofmaterialcauseandeffect。Itinvolvesavaluationoffacts，things，relations，andevenpersonalcapacity，intermsofforce。Itsmetaphysicsismaterialismanditspointofviewisthatofcausalsequence。(1*) Suchahabitofmindconducestoindustrialefficiency，andthewideprevalenceofsuchahabitisindispensabletoahighdegreeofindustrialefficiencyundermodernconditions。Thishabitofmindprevailsmostwidelyandwithleastfalteringinthosecommunitiesthathaveachievedgreatthingsinthemachineindustry，beingbothacauseandaneffectofthemachineprocess。 Othernormsofstandardization，moreorlessalientothisone，andothergroundsforthevaluationoffacts，haveprevailedelsewhere，aswellasintheearlierphasesoftheWesternculture。Muchofthisolderstandardizationstillstandsover，invaryingdegreesofvigorordecay，inthatcurrentschemeofknowledgeandconductthatnowcharacterizestheWesternculture。 Manyoftheseancientnormsofthoughtwhichhavecomedownfromthedisciplineofremoteandrelativelyprimitivephasesoftheculturalpastarestillstrongintheaffectionsofmen，althoughmostofthemhavelostgreatlyintheirpowerofconstraint。Theynolongerbindmen’sconvictionsastheyoncedid。Theyarelosingtheiraxiomaticcharacter。Theyarenolongerself-evidentorself-legitimatingtomoderncommonsense，astheyonceweretothecommonsenseofanearliertime。 Theseancientnormsdifferfromthemodernnormsgivenbythemachineinthattheyrestonconventional，ultimatelysentimentalgrounds；theyareofaputativenature。Suchare，e。g。，theprinciplesof(primitive)bloodrelationship，clansolidarity，paternaldescent，Leviticalcleanness，divineguidance，allegiance，nationality。Intheirtimeandunderthecircumstanceswhichfavoredtheirgrowththesewere，allandseveral，powerfulfactorsincontrollinghumanconductandshapingthecourseofevents。Intheirtimeeachoftheseinstitutionalnormsservedasadefinitivegroundofauthenticationforsuchfactsasfellunderitsparticularscope，andthescopeofeachwasverywideinthedayofitsbestvigor。 Astimehasbroughtchangeofcircumstances，thefactsoflifehavegraduallyescapedfromtheconstraintoftheseancientprinciples；sothatthedominionwhichtheynowholdoverthelifeofcivilizedmenisrelativelyslightandshifty。 Itisamongthesetransmittedinstitutionalhabitsofthoughtthattheownershipofpropertybelongs。Itrestsonthelikegeneralbasisofuseandwont。Thebindingrelationofpropertytoitsownerisofaconventional，putativecharacter。Butwhiletheseotherconventionalnormscitedaboveareintheirdecline，thisyoungeroneoftheinheritedinstitutionsstandsforthwithoutapologyandshowsnoapprehensionofbeingcrowdedintothebackgroundofsentimentalreminiscence。