Far-reaching changes have taken place, of late, in the type of men who have held the reins of control over industry. During its early years the economic machinery was constructed by men who had worked at their trades; men who had begun at the bottom and climbed into a place of authority; men who had a first-hand knowledge of the processes underlying their industries. Latterly, however, with bankers and other professional manipulators in control of economic life, the engineers, with their intimate knowledge of forces and processes have been pushed into the background, and the actual work of direction has been shifted from producers to money makers.

Again, the present economic system, built for the profit of the builder rather than for the welfare of the community, represents, not the science of organization for production and use, but the science of organization for exploitation and profiteering.

These are some of the reasons why the economic life of the modern world has grown at haphazard. Each industrial director put his own ideas into his business, and as it grew in response to them, the various businesses differed as much in shape, size and character as did the early factory buildings.

The time seems to have arrived when a new working plan of economic life may be adopted. The faults and failures of the old are glaring and the clamor for the new is reasonable and insistent.

The construction of factory buildings has been evolved into a science.

Why cannot the same thing be done with the whole scheme of economic organization? Men no longer erect factory buildings according to personal whim or to the chance ideas of some budding architect. Instead they consult scientists in factory construction who have devoted years to the study and to the practical supervision of the detail of factory building. Can less be demanded of the community which hopes to build its economic life soundly and solidly?

A modern steel plant, like that at Gary, Indiana, is carefully planned before a sod is turned. The organization of the works is thought out, sketched, drawn in detail, blue-printed, so that each group of workers that partic.i.p.ates in the construction is given a blue print that specifies what is to be done, and where and how. When all of the tasks are completed a steel plant has been called into being. But suppose that each of the eighty gangs of workers, busy on the plant, had followed the lines of its fancy or of its own special interest! The result would resemble the helter-skelter of modern economic society.

7. _Effective Economic Units_

Economic life has been haphazard in the past. In the future it will be one of the most scientifically built of all human inst.i.tutions. It is so vital a part of the social life, and it yields itself so readily to structural co-ordination that the best structural minds will turn to it perforce, as the logical field for their activities.

The economic structure of the future, to be sound, must be built of effective working units. It is as impossible to build a live social system with dead component elements as it is to build a live body with dead cells.

At least for the time being, an intricate and complicated structure is needed to handle the problem of livelihood. As time goes on, the nature of the economic system may be greatly modified, and its structure simplified correspondingly. While the complicated economic structure remains, however, the problem will be one of co-relating the activities of vast numbers of economic units, and of prevailing on them to function with less friction and greater harmony.

Like every social structure, the economic system will be built up of lesser social groups, beginning with the simplest local body of farmers, miners or mill workers, and continuing on, by successive stages of organization to the largest and most highly complex groups in the community.

The nature of each of the units that enters into the economic structure must vary with the locality, with the industry, and so on, hence it will prove to be impossible to lay down any arbitrary rules concerning their organization. It is possible, however, to suggest certain characteristics that must be present in effective working units:

1. _The economic unit, which is to be built into the new society as stones are built into a wall, must bear a very close relation to the present working forms of economic life._

Ultimately, the economic units of which society is composed will differ completely from those now existing. It is quite out of the question, however, to build a new economic structure and new economic units at the same time. Habit and convention are too strong. Innovation is too terrifying and too problematical. The life of local economic units will be carried on to-morrow very much as it is carried on to-day by the ma.s.ses of the people. The most workable economic superstructure, for a new society, will be built upon an answer to the question: "How is work done now?" This method of approach takes the basic economic activities of the ma.s.ses of the people for granted and seeks to build them into a sounder type of super-organization than that now existing.

2. _The economic unit, whatever its size and function, must be sufficiently h.o.m.ogeneous and coherent so that it will retain its unity even in the face of severe stresses and strains._ That is, it must be in a state of relatively stable equilibrium.

3. _The economic unit must be autonomous--self-governing, self-motivating, and in a sense, self-sufficing._

4. _The organization and management of the unit must make possible an efficiency in production that will supply human needs and furnish the means of providing some comforts for the population._

5. _Units must be so organized that they will work effectively with other units in the same industry and in related industries._

Whether plans are being made for the rebuilding of existing economic inst.i.tutions or for the establishment of new ones, these general rules hold good. They have as their objective, a workable social system that will turn the wealth of nature's storehouse into usable forms, and that will procure the distribution of the good things of life, in an equitable manner, among the groups that have a.s.sisted in their production.

8. _Cla.s.ses of Economic Units_

Those who are concerned with the establishment of a working basis for economic society must bear constantly in mind the purpose of economic organization--to provide livelihood on the most effective possible terms. The economic system is not called on to perform any other function.

Economic function would seem to be most effectively aided by some organization of the economic units that would provide a structurally sound skeleton for the whole economic mechanism. The needs of particular localities, the requirements of larger groups within one industry, the economic relations of continental areas, and finally the world organization of industries must be provided for. In order to meet this situation, it would seem desirable to think in terms of several different grades or cla.s.ses of economic units. As a working basis, four are suggested:

1. _The local unit, which would be some particular phase of the economic process that normally functions as a whole._

This unit is now a working part of the present economic order, and whether it is a colliery in Wales, a division of the P.L.M. Railroad in France, a mill in Bombay, or a farming community in Saskatchewan, it would continue the process of turning out goods and services under the new economic regime as it does under the present one.

2. _District units composed of a number of neighboring local units in the same industry or in closely related and co-operative industries._

The district is an aggregation of conveniently situated local units, and is organized as a ready means of increasing the efficiency of the groups concerned. It might cover the tobacco factories of Havana, the coal mining industry of the Pennsylvania anthracite fields or the dock working activities of Belfast.

3. _The divisional units which would be designed to cover a convenient geographic area, and to include all of the economic activities in a particular major industry within that area._

The boundaries of the districts would vary from one industry to another.

The boundaries of the divisions would be uniform for all industries. The whole world would therefore be part.i.tioned into a number of divisions, such, for example, as: North America, South America, South Africa, the Mediterranean Basin, Northern Europe, Northern Asia, Eastern Asia, Southern Asia and Australia. In setting the boundary lines of these divisions, economic h.o.m.ogeneity, geographic unity, the distribution of the world population and the character of existing civilization would all be called into question. Under such a grouping would fall the agricultural workers of Southern Asia, the transport workers of North Europe, the manufacturing workers of North America.

4. _World industrial units, so designed as to include within their scope all of the producers of the world cla.s.sified in accordance with their occupations._

To-day, the outstanding method of cla.s.sifying the people of the world is to take them in relation to their political affiliations. The new grouping would arrange all of the peoples in accordance with their economic activities. A simple form of cla.s.sification would include: agriculture, the extractive industries, manufacturing, transport, trade, housekeeping, and general (miscellaneous) trades. The cla.s.sification might be made far more elaborate, but for clarity of discussion a simple cla.s.sification is of great a.s.sistance. Every person in the world who performed a useful service would belong to one of these great industrial or occupational groups, and the aggregate of the membership of the groups would equal the aggregate of all the producers of the world.

Under this plan, therefore, each individual would have a series of economic affiliations. He might, for example, be a docker on the French Line at Le Havre (local affiliation); a dock worker in the Le Havre district (district affiliation); a transport worker of North Europe (divisional affiliation); a worker in the transport industries of the world (industrial affiliation).

Since each of the producers in the world would have this series of relations, all of the producers would be grouped together in local, in district, in divisional and in world industrial groups, so that the economic life of the world would present the picture of a completed economic structure very similar to the political structure that has been evolving for many centuries, and which has reached its highest forms of development in such new countries as Australia and the United States, where each person is a citizen in a borough, city or town, in a county, in a state and in the whole nation or federation of states.

While political life has been thus organized about the administration of certain public affairs, economic life has remained disorganized, or has been organized largely with an eye to owners' profits. The producers society will be organized in economic terms very much as the present society is organized in political terms. Each producer will be a partic.i.p.ant in the life of economic units, graduated from the local economic unit to the world industry.

9. _The Ideal and the Real_

This is, of course, an idealized picture, subject to an infinitude of modifications, just as an architect's plan for "a bungalow in the woods"

or a city planner's scheme for a model town is idealized and subject to modifications. It is not a working drawing, but a general design which is intended to place the whole subject of economic reorganization on a plane where it can be discussed as a matter of practical social science.

The plan presented here is simplified as far as possible in order that attention may be concentrated on the essential issues that the world faces. Too much time and energy have already gone into contentions over details, when there was no general plan in view. Let no man deceive himself with the delusion that the solution of the world's economic problem is a simple matter, but at the same time, each one who is striving toward a better world may rest with the a.s.surance that there are certain simple and fundamental principles that underlie world economic organization.

Society is structural, and as a structure it must function; the economic world is built up of working units that are compelled, by the nature of modern industry to work co-operatively, but the very nature of the political structure of modern society hampers this co-operative work in many essential directions; federation seems to be the logical answer to the enigma of effective social organization, and it only remains to organize a workable series of economic units and to build them into a world structure--a world structure in terms of production rather than of politics.

The world is sadly muddled. Millions pay for this muddling with their lives; tens of millions pay with bitter suffering. The owners have had their day. The opportunity for the producers has well-nigh come.

The men and women who are responsible for the work that is involved in the economic reorganization of the world must see the whole plan as well as the multiplicity of detail, and must work with the whole plan vividly before their eyes if they are not to be blinded and led astray by the mult.i.tude of will-o'-the-wisps that flit across the path.

IV. ECONOMIC SELF-GOVERNMENT

1. _Maximum Advantage_

Economic society consists of unit groups or organs which are established for the performance of certain functions. Mines and other extractive units take nature's stores from their age-old resting place and prepare them for the railroad, the factory or the home; the transport units convey goods and people; the merchandising units bring together many varieties of goods, and act as a distributing agency for those who will consume the products of mine and factory. The existence of a unit of economic organization is therefore a proof of the presence of some economic function. The whole structure of economic society has developed in response to the economic needs and in accordance with the economic activities of the community in which it exists.

When a part of the economic structure is built, it is expected to function. Mines, when opened, must produce coal; railroads, when completed, must provide transportation. Side by side with the problems involved in the kind of groupings that make up economic society, there is the question of the handling and direction of these groups. No economic inst.i.tution is of value unless it will perform some useful service by turning out an economic good or by affording a benefit that corresponds to some human need.

Each rational person, and every self-directing social group seeks to get the largest possible return in the form of satisfaction for the time and the energy invested in any given enterprise. This law of maximum advantage--which applies with double force to social enterprises, underlies all intelligently directed effort.

Unintelligent effort concerns itself with the principle of minimum outlay--seeking to ascertain the least possible expenditure of energy that will yield a subsistence. This is one of the essential distinctions between the present day society and most of those that have proceeded it. Likewise it is the difference between the more and the less highly civilized portions of the earth at the present time. The individual or the group--operating on a very narrow margin, or on a deficit that involves constant misery and that may at any time spell disaster, tends to slip by with the least possible misery or suffering, or, to put it more technically, tends to expend the least possible amount of energy that is required for survival. The moment the tables are turned, and the individual or the group operates on a surplus which permits the enjoyment of more than the bare necessaries, the law of minimum outlay is supplanted by the law of maximum returns.