Chapter 17
Baby Industry is Kidnapped
2At the crucial point of the Middle Age, two strongly contrasting figures emerged. One was the RATIONALIZER; the other the BELIEVER. One represented the artist scientist and philosopher; the other was the essence of confused devotion to romance, dogma, and the surface traceries racketed by the fans of the two original abstract leader-types, the philosopher and the prophet.
3 One was LEONARDO DA VINCI; the other, SAVONAROLA.
4 The fans (fanatic followers) of the original prosaic or scientific philosophers had exploited the popular credit accruing to them through their proximity to the SOURCE and thus became the embryo academicians. The fans of the prophets, through like exploitation, became the priesthood, going in for esthetic, intrinsic and moral exploitations.
5 Leonardo, builder of useful instruments, sculptor, painter, author and architect, conceived, amongst his many inventions, the aeroplane. Although the means of its construction were not yet at hand, its conception was none the less rationally and scientifically formulated. Likewise Leonardo foresaw the application of industry to his current activity, architecture. He perceived the necessity of mobility, popular use and the efficiency of centralized manufacture, and he created designs, similar in many ways to the form of the dytnaxion house, that is, hexagonal in contour, triangularly sectional for wedge assembly.
6 Savonarola, a victim of the mental confusion that characterized the old animism, evolved beautifully poetical but futile bon mots, or lashed his flock into a horrific, groaning mesmerization. Whatever he bludgeoned out was imbibed by the priesthood as fuel for the inculcation of a blindly, fearfully obedient spirit in people.
7 We cite Leonardo and Savonarola as opposing types to accentuate the status quo of the Greek streamline at this point in history, but will digress for a space from discussion of them.
8 By the middle of the period 1500--1600, ushered in teleogically by Leonardo, the coordinated management of machines for the reproduction of popularly consumable products had spread from the making of books to the manufacture of all kinds of commodities, particularly such rapidly consumed articles as fabrics for clothing, in the manufacture of which unaccountable ‘‘time’’ was saved.
9 Soon the efficiency of the industrial mechanism produced more than sufficient to satisfy the wants of the people in the locality of the factory. The surplus was offered to people in foreign parts where there were either no factories at all or no identical manufacture, and so commenced the export of industrial products.
10 Transportation was so slow, however, that a long period elapsed before a manufacturer could ‘‘realize’’ on his production. This offered a particular entrepreneuring advantage for the feudal landlord, who was the legal beneficiary of the land-grabbing kings. He was well accustomed to collecting tithes from his tenants in a fiscus (basket, origin of the word fiscal) at the end of each season, with the physical power to dispossess those tenants who had no tenth to contribute, which act was known as ‘‘finance’’ (finis, business).
11 Observing that the industrial factory was far out-distancing, in productivity, the capacity of hand-to-mouth workers in his artsand-crafts land plant and wishing to ‘‘chisel’’ into the new, the feudal landlord volunteered to underwrite the TIME interval required for the business of export, by supplying goods from his land to support the workers during the interval. (Workers in plants must eat.) In return, he asked a commission in kind (profit) from the manufacturer. Kind originally meant heads of cattle, marked off in units to supply the underwriting security. But inasmuch as cattle are alive and reproduce ‘‘after their kind,’’ their number normally multiplied. The feudal landlord claimed—and was conceded—the excess new-born stock. This was the origin of the phenomenon ‘‘interest.’’ The feudal lords were not the first to practice it. The Greeks and Phoenicians originated the idea in agrarian export-import trading. But the feudalists were the first to wed the interest phenomenon to inanimate industrial production. The word ‘‘pecuniary’’ comes from pecus, which is the Greek name for cattle, which the Phoenicians employed as interim collateral. Practically all finance terminology comes from agrarian sources: ‘‘stock’’ or shares of an industry derives from cattle; the farmer owned a ‘‘share’’ of stock meaning a share of cattle, or capital. ‘‘Watering stock’’ originated in the deceptive practice of causing cattle to drink prior to weighing for sale.
12 Money had, of course, been in use for trading long before the birth of industry. The Phoenicians, by ship, and the Arabs, by caravan, had early developed this perquisite of trade. The demand for monei increased infinitely under the impetus of industry, its increasing productivity, and the specialization of production. When goods were shipped to foreign destinations, where a strange language was spoken, there was little possibility of credit of buyer by seller. Very often the produce of the buyers land was not desired in exchange for the exported goods. So it became necessary to devise currencies as an abstraction of trade, in order that payment might be made for goods purchased by the foreign customer in some temporary medium subsequently and universally convertible by the shipper in acquisition of other types of product, or produce in other places.
13 It was a natural sequence of events for the feudal landlord to become a capital-furnisher. He had, through necessity and tradition, specialized in trading with precious stones and minerals originally extracted from the land, or from tombs of wealthy dead where they had been laid away with the bodies because of their ‘‘eternal’’ quality, and the possibility of their being needed by the deceased to pay his way in heaven, an acknowledged strange country.
14 To keep abreast of the ever-accelerating amplification of industry, with its high manifolding mechanical ability, as well as the rapidly multiplying requirements of money for trade, the capital-furnishers made overtures to the priesthood. The priesthood was already
15 surreptitiously anxious to speculate the vast riches that the church had accrued through exploitation of the people’s fear and as the successor to the pagan temple riches and vast surreptitious tomb robbing on their own part. The moneylenders found it expedient to make their headquarters, like current theatre-ticket speculators, near the churches (out of which they had been fired at the inception of Christianity).
16 Together the feudalists and brotherhoods systematically and piratically explored the tombs of the Pharaohs and the habitats of ignorant wild people in the vicinity of sources of precious stones and metals. This necessitated the establishment of the dignifiedly entitled ‘‘foreign trading posts,’’ where managers could be counted on (through fear-bullying by the financiers) to handle local credit ‘‘situations.’’ Often this exploration-buccaneering was done directly by the priesthood, whose outposts are still to be found in all pioneered lands. The greatest vandalism was probably done by the cross-bearers. In the foreign trading posts, the ‘‘managers’’ of the moneylenders’ affairs came, in due course, to handle credit by a bookkeeping abstraction in lieu of coincidental shipments of gold and other specie for every transaction. This expedient was occasioned by the increase in high seas piracy, a hi-jacking racket intramurally underwritten by the same feudalists who underwrote the export-import trade of goods. Efficiency was developed through the seasonal balancing of trade by an occasional or periodic transfer of actual goods or bullion.
17 So bountifully prosperous did the industrial phenomenon become to the landed feudalist and to church racketeers that they were tempted to finance ever greater and more able equipment for the manufacturers. In a relatively short time, therefore, the industrial equation, which started with and was first managed by the artist, inventor and mechanic, came under the control of exploiters, by reason of their financing of equipment, debt manipulations and foreclosures. The industrial managers (leader craftsmen), being of the longing type, were imbued with pleasure in the mere act of production of goods for people and, as such, were readily exploitable.
18 The moneylenders (disguised agents of the feudalists and church) represented the quintescence of materialism and non-science. They hesitated fearfully, however, to accredit machinery due to their lack of knowledge of its potential mechanical ability. Unable to speak the language of the scientific industrialist, they could not check for themselves, except in a ludicrous trial-and-demonstration manner (for instance, by thumping, kicking, listening to and smelling a piece of machinery)—the potential adequacy of the ever more complicated equipment which, in their greed, they wished to patronize.
19 To meet the situation, they created and subsidized richly a business manager who was authorized to watch over the industrial enterprises in their stead. To be doubly safe, they utilized their temporal power to influence, through patronage, code-makers (lawyers) to the end that rules of state or precedence might be enacted for the protection of their investments.
20 As their wealth rapidly increased, the feudal rulers and moneylenders yearned to enjoy the amplifying profits and earnings of their investments. Satisfaction of vanity being their prime source of enjoyment, they desired to travel and display their riches before other feudalists. Travel necessitated their absence as watch-dogs over the source of their earnings. So they created corporations or abstract legal entities, the management of which could be entrusted to several men or directors. The feudalist’s cupidity trusted no one man.
21 With passing years, the efficiency of machinery and its complexity gave promise of earnings greater than any early feudal landlord had dared to dream of, provided a relatively tremendous investment could be made in ‘‘capital’’ equipment. The required investment was larger than any feudalist could or would venture to underwrite singly. So, despite mutual fear and distrust, and coerced by avarice the moneylenders pooled their resources for investment, each receiving ‘‘shares’’ according to his contribution. These ‘‘shares’’ carried votes of director-election proportionate to their prima facie value.
22 Since the principle of mechanics-accrediting involves ever increasingly complex and costly machinery, it is obvious that ever greater and more popular credit of its performance is necessary, thus inevitably bringing the number of participants in the original pooling to thousands of shareholders, through the sequence of friends of friends of friends.
23 The progression perforce carried the sharing outside the bounds of the feudal leader class into the realm of courtiers and petite bourgeoisie. Although this increased sharing appeared to a minor degree during the nineteenth century, it was actually not until the World War that the knowledge and, therefore, the credit of the worker-populace was articulated in industrial sharing. The people had long ‘‘shared’’ the ultimate products and services of industry, but in the 1920’s the workers really took over the numerical majority of ‘‘shares,’’ albeit the holdings were individually minute dollarwise.
24 The inequity of the vote attached to the share suddenly became apparent through wide participation. It would be quite inequitous to have a vote attached to every dollar bill. This vote-per-share enabled small groups of men, through proxies and the law of average, not only to control the election of Boards of Directors and thereby the affairs of a corporation, but, by much surreptitious ability, to affect indirect earnings without direct peculation.
25 This ‘‘milking’’ is effected through continuously interlocking directorates, third and fourth-hand indirect earnings being thus utterly undetectable. Such earnings are based simply on contiguous effects, i.e., the third or fourth-hand effect of some elective operation of one industrial property upon the value of the property of others, the amplification of which serves, in turn, as collateral for credit liquefaction. With such liquid credit a sufficiently large capitalist can agglomerate a 3--1 liquid credit of others ‘‘on call’ for eventual market speculation, into which, of course, he would never enter without pooled assurance of cooperative manipulation for profit.
26 Murphy, being a minor speculator owning one share of TEL. & TEL., can say to himself, ‘‘I have a unique way of voting. If I like a share, I buy and keep it; if not, I sell it! This action is taken on the basis of my crediting or not crediting the industrial activity involved. I don’t care who runs a particular industry so long as when I invest in it, it seems good to me.’’
27 Murphy may buy TEL. & TEL. twenty times a year and sell it as often. He is not interested in the management of the company beyond his attempt to anticipate its solvency or insolvency. Quite evidently, Murphy does not care about the voting power of his shares.
28 This indifference is true of most small shareholders with the exception of a few, who, suffering from an inferiority complex, enjoy a sense of importance when deviling the ‘‘great’’ at annual stockholders’ meetings. This seemingly lax attitude on the part of the great majority yields proxies which, although for a relatively few shares so far as individual holdings are concerned, permit a behind-thescenes control by those privileged to vote the proxies. This is particularly facilitated by wholesale quantities of proxies for shares held by estates, banks and trust companies, which latter often send in such proxies on the ‘‘instruction’’ of the prevailing financial ‘‘big shot’’ of the situation.
29 Inasmuch as the votes not wanted by the small shareholders are used against their interests by secret manipulation on the part of the stealthy watch dogs of doubt-and-fear and all the army of subordinates of the ‘‘big shot’’ chiselers, it is reasonable to expect that this voting appurtenance of common shares will be removed in the evolutionary willy-nillying of democracy. In this connection, Stuart Chase once said that the populace could free industry from Finance-capitals manipulation by the bold stroke of having the government call in every share of common stock extant and supplying in exchange shares with non-voting power, though participant in all other ways. This thoughtful suggestion is one of ‘‘reform’’ and it is probable that the change will be mechanically brought about as later to be outlined.
30 It was by means of abstract devices of laws, votes and highsounding morals that infant industry, of, by and for the people, was kidnapped by cupidity. But science, rich in infinite treasure-trove, is serenely able to pay the ransom.