higher value than it had when the securities were floated. The effective recapitalization carried out by the market quotations acts, for the present purpose, to the same effect upon the value of both of the items considered, this effect being to leave a margin of the property previously covered by the securities uncovered and available as collateral on which to float a new extension of credit, in the form of mortgage loan or interest-bearing security. In the common run of business procedure this available margin, between the current (higher) capitalized value of the property (collateral) and the current (lower) capitalized value of the securities resting upon it is promptly covered by a fresh credit extension
131The perfected system of business principles rests on the historical basis of free institutions, and so presumes a protracted historical growth of these institutions; but a highly efficient, though less perfect, business system was worked out in a relatively short time by the South and Central European peoples in early modern times on the basis of a less consummate system of rights. - Cf. Ehrenberg, Zeitalter der Fugger; Sombart, Kapitalismus, vol. II. ch. VIII, XIV, XV.
132See Chapter IV, above.
133Cf. Keane, Man, Past and Present, ch. XIV; W.Z. Ripley, Races of Europe; Lapouge, L'Aryen; Montelius, Les temps prehistoriques en Bubde, etc.; Andreas Hansen, Menneskesloegtens Aelde.
134If, e.g., he takes to myth making and personifies the machine or the process and imputes and benevolence to the mechanical applications, after the manner of current nursery tales and pulpit oratory, he is sure to go wrong.
135Such expressions as "good and ill," "merit and demerit," "law and order," when applied to technological facts or to the outcome of material seience, are evidently only metaphorical expressions, borrowed from older usage and serviceable only as figures of speech.
136Tarde, Psychologic Economique, vol. I. pp. 122-131, offers a characterization of the psychology of modern work, contrasting, among other things, the work of the machine workman with that of the handicraftsman in respect of its psychological requirements and effects. It may be taken as a temperate formulation of the cent commonplaces on this topic, and seems to be fairly wide of the mark.
137For something more than a hundred years past this change in the habits of thought of the workman has been commonly spoken of as a deterioration or numbing of his intelligence. But that seems too sweeping a characterization of the change brought on by habituation to machine work. It is safe to say that such habituation brings a change in the workman's habits of thought, - in the direction, method, and content of his thinking, - heightening his intelligence for some purposes and lowering it for certain others. No doubt, on the whole, the machine's discipline lowers the intelligence of the workman for such purposes as were rated high as marks of intelligence before the coming of the machine, but it appears likewise to heighten his intelligence for such purposes as have been brought to the front by the machine. If he is by nature scantily endowed with the aptitudes that would make him think effectively in terms of the machine process, if he has intellectual capacity for other things and not for this, then the mining of the machine may fairly be said to lower his intelligence, since it hiders the full development of the only capacities of which he is possessed. The resulting difference in intellectual training is a difference in kind and direction, not necessarily in degree. Cf. Schmoller, Grundriss der Volkswirtschaftslehre, vol. I. secs. 85-86, 132; Hobson, Evolution of Modern Capitalism, ch. IX. secs. 4 and 5; Cooke Taylor, Modern Factory System, pp. 434-435; Sidney and Beatrice Webb, Industrial Democrocy, e.g. pp. 327 et seq.; K. Th. Reinhold, Arbeit und Werkzeug, ch. X. (particularly pp. 190-198) and ch. XI (particularly pp. 221-240).
138Cf. J.C. Sutherland, "The Engineering Mind" Popular Science Monthly, January 1903, pp. 254-256.
139Cf. "Industrial and Pecuniary Employments" especially pp. 198-218.
140As G.F. Steffen has described it: "Those who hire out their labor power or their capital or their land to the entrepreneurs are as a rule not absolutely passive as seen from the point of view of business enterprise. They are not simply inanimate implements in the hands of the entrepreneurs. They are, enterprising implements, (foretagaade verktyg) who surrender their undertaking functions only to the extent designated in the contract with the entrepreneur." - Ekonomisk Tidskrift, vol. V. p. 256.
141Cf., on the other hand, Reinhold, Arbeit und Werkzeug, ch. XII and XIV, where double dealing is confused with workmanship, very much after the manner familiar to readers of expositions of the "wages of superintendence," but more broadly and ingeniously than usual.
142Individual exceptions are, of course, to be found in all classes, but there is, after all, a more or less consistent, prevalent class attitude. As is well known, clergymen, lawyers, soldiers, civil servants, and the like, are popularly held to be of a conservative, if not reactionary temper. This vulgar apprehension may be faulty in detail, and especially it may be too sweeping in its generalizations; but there are, after all, few persons not belonging to these classes who will not immediately recognize that this vulgar appraisement of them rests on substantial grounds, even though the appraisement may need qualification. So, also, a conservative animus is seen to pervade all classes more generally in earlier times or on more archaic levels of culture than our own. At the same time, in those early days and in the more archaic cultural regions, the structure of conventionally accepted truths and the body of accredited spiritual or extra-material facts are more comprehensive and rigid, and the thinking on all topics is more consistently held to tests of authenticity as contrasted with tests of sense perception. On the whole, the number and variety of things that are fundamentally and eternally true and good increase as one goes outward from the modern West-European cultural centres into the earlier barbarian past or into the remoter barbarian present.
143 See Chapter II above.
144Cf. Theory of the Leisure Class, especially ch. IV and V.
145As, e.g., Mr W.G.S. Adams cogently points out in a recent number of the Journal of Political Ecomnomy (December 1902).
146As Mr. Webb shows (Industrial Democracy, 1902, pp. xxivxxxvi).
147The historical explanation of this House of Lords reversal of trade-union practice is probably to be found in the conservative, or rather reactionary, trend given to British sentiment by the imperialist policy of the last two or three decades, accentuated by the experiences of the Boer War. The Boer War seems to mark a turning-point in the growth of sentiment and institutions. Since the seventies the imperialist interest, that is to say, the dynastic interest, has been coming into the foreground among the interests that engage the attention of the British community. It seems now to have definitively gained the first place, and may be expected in the immediate future to dominate British policy both at home and abroad. Concomitantly, it may be remarked, the British community has been slowing down, if not losing ground, in industrial animus, technological efficiency, and scientific spirit. Cf. Hobson, Imperialism, part
