The nineteenth century had for its watchwords “individual enterprise and free competition”. But the natural end of all competition is the triumph of one competitor. It was in America that the phenomena of Big Business first appeared and demonstrated the force of this truism; at a score of points triumphant organizations capable of crushing out new competitors and crippling and restraining new initiatives that threatened their predominance appeared. In Europe there was little governmental resistance to industrial alliances and concentrations in restraint of competition, and they speedily developed upon a scale that transcended political frontiers, but in the United States of America there was a genuine effort to prevent enterprises developing on a monopolistic scale. The conspicuous leader of this preventive effort was the first President Roosevelt (1858-1919) and its chief fruit the Sherman Anti-Trust Act (1890), which proved a rich mine for lawyers in the subsequent decades.
These great consolidations, which closed the phase of free competition, were so far effective in controlling trade and arresting new developments that Hilary Hooker, in his Studies in Business Coagulation During the First Period of General Prosperity, is able to cite rather more than two thousand instances, ranging from radium and new fruits and foodstuffs to gramophones, automobiles, reconstructed households, artificial moonlight for the roadways by the countryside, and comfortable and economical railway plant, in which ample supplies or beneficial improvements were successfully kept off the market in the interests of established profit-making systems. After 1900 C.E. again there was a world-wide cessation of daily newspaper initiative and a consequent systole of free speech. Distribution, paper supply and news services had fallen into the hands of powerful groups able and willing to crush out any new types of periodical, or any inimical schools of public suggestion. They set about stereotyping the public mind.
These same profit-making systems in possession also played a large part in arresting competition from countries in which they were less completely in control, by subsidized political action for the maintenance of protective tariffs. Long before the world break-down became manifest, the experience of the ordinary consumer so far belied the sanguine theory that free competition was a mode of endless progress, that he was still living in a house, wearing clothes, using appliances, travelling about in conveyances, and being fed with phrases and ideas that by the standard of the known and worked-out inventions of the time should have been discarded on an average, Hooker computes, from a quarter to half a century before. There was labour unemployed and abundant material available to remedy all this, but its utilization was held up by the rent-exacting and profit-earning systems already in possession.
This lag in modernization added greatly to the effects of increased productive efficiency in the disengagement of those vast masses of destitute unemployed and unemploying people which began to appear almost everywhere, like the morbid secretion of a diseased body, as the twentieth century passed on into its third decade.
6. The Paradox of Over-Production and Its Relation to War
This so-called “paradox of over-production” which figures so largely in the loose discussions of the “post-war” period was in its essence a very simple affair indeed. Just as the inevitable end of a process of free competition was a consolidation of successful competitors and an arrest of enterprise, so the inevitable end of a search for profit in production was a steady reduction of costs through increased efficiency — that is to say, a steady decrease of the ratio of employment to output. These things lie so much on the surface of the process that it is almost incredible to us that, wilfully or not, our ancestors disregarded them. Equally inevitable was it that these necessary contractions of enterprise and employment should lead to an increase in the proportion of unemployable people. Geographical expansion and a rising standard of life among both the employed and possessing classes, together with the stimulating effect of a steady influx of gold, masked and tempered for half a century this squeezing-out of an increasing fraction of the species from its general economic life. There were nevertheless fluctuations, “cycles of trade” as they were called, when the clogging machinery threatened to stall and was then relieved and went on again. But by the opening of the twentieth century, the fact that the method of running human affairs as an open competition for profit, was in its nature a terminating method, was forcing itself upon the attention even of those who profited most by it and had the most excuse for disregarding it, and who, as a class, knew nothing of the Marxian analysis.
We know now that the primary task of world administration is to arrest this squeezing out of human beings from active economic life, by the continual extension of new collective enterprises, but such ideas had still to be broached at that time. The common folk, wiser in their instincts than the political economists in their intellectualism, were disposed to approve of waste and extravagance because money was “circulated” and workers “found employment”. And the reader will not be able to understand the world-wide tolerance of growing armaments and war preparations during this period unless he realizes the immediate need inherent in the system for unremunerative public expenditure. Somewhere the energy economized had to come out. The world of private finance would not tolerate great rehousing, great educational and socially constructive enterprises, on the part of the relatively feeble governments of the time. All that had to be reserved for the profit accumulator. And so the ever-increasing productivity of the race found its vent in its ancient traditions of warfare, which admitted the withdrawal of a large proportion of the male population from employment for a year or so and secreted that vast accumulation of forts, battleships, guns, submarines, explosives, barracks and the like, which still amazes us. Without this cancer growth of armies and navies, the paradox of over-production latent in competitive private enterprise would probably have revealed itself in an overwhelming mass of unemployment before even the end of the nineteenth century. A social revolution might have occurred then.
Militarism, however, alleviated these revolutionary stresses, by providing vast profit-yielding channels of waste. And it also strengthened the forces of social repression. The means of destruction accumulated on a scale that well-nigh kept pace with the increase in the potential wealth of mankind. The progressive enslavement of the race to military tyranny was an inseparable aspect, therefore, of free competition for profits. The latter system conditioned and produced the former. It needed the former so as to have ballast to throw out to destruction and death whenever it began to sink. The militarist phase of the early twentieth century and the paradox of over-production are correlated facets of the same reality, the reality of the planless hypertrophy of the social body.
It is interesting to note how this morbid accumulation of energy in belligerence and its failure to find vent in other directions became more and more evident in the physiognomy of the world as the twentieth century progressed. The gatherings of mankind became blotched with uniforms. Those admirable albums of coloured pictures, Historical Scenes in a Hundred Volumes, which are now placed in all our schools and show-places and supplied freely to any home in which there are children, display very interestingly the advent, predominance and disappearance of military preoccupations in the everyday life of our ancestors. These pictures are all either reproductions of actual paintings, engravings or photographs, or, in the case of the earlier volumes, they are elaborate reconditionings to the more realistic methods of our time of such illustrations as were available. Military operations have always attracted the picture-maker at all times, and there are plentiful pictures of battles from every age, from the little cricket-field battle of the Middle Ages to the hundred mile fights of the last Great War, but our interest here is not with battles but with the general facies of social life. Even in the war-torn seventeenth century the general stream of life went on without any manifest soldiering. War was a special occupation.