Higher Education and Business Standards

Last summer, when we reached California for a year's sojourn, we had the good fortune to secure a house with a splendid garden. A few weeks ago, after the early warm days of a California February had opened up the first blossoms of the season, our little five-year-old discovered that the garden furnished a fine outlet for her enterprise, and she soon produced two gorgeous--I will not say beautiful--bouquets. Barring a certain doubt about her mother's approval, she was well satisfied with her achievement, she felt a sense of completeness in what she had done--and well she might, for she had not left a visible bud.

There is a strong tendency to go at business the way Helen went at the garden. She knew what to do with bouquets; raw material for making them was within her reach; what more natural than to turn it, in the most obvious and simple way, into the product for which it was designed. From her standpoint such a procedure was entirely correct--she was making bouquets for herself and her friends; every one in her circle would share the benefit of her industry.

Whenever in the past business enterprise has proceeded from a similar viewpoint, we have stood aside and let it proceed; it was not our garden; we were quite willing to take the role of disinterested spectators. Recently we have discovered that it is our garden; we have learned that we are not disinterested; we now see that business plays a large part in the life of every one of us. That being the case, we assume the right to question its processes, its underlying policies, and its results. We are gradually coming to think of business in terms of an integrated and unified national life. We desire the national life to be both wholesome and secure.

What the public really wants from business, then, is a contribution to national welfare, and it has become convinced that, by taking thought, it can make the contribution more certain and more uniform than it has been in the past. Many business men share this view; with varying zeal they are trying to work out standards of organization that will insure the kind of regard for general welfare which the public has come to demand.

This is the new idea in business; it has already taken deep root; but it needs to be further developed. We have the difficult task of reducing an idea to a practical working plan. How shall we go about it? Fortunately the idea itself contains a hint for further procedure. A new attitude in business must be coupled with a new attitude in public policy.

When my enterprising child made an onslaught on the garden it would have been easy enough to punish her; but it is doubtful if mere punishment gets very far in a case of that sort. Unless we can teach the child to enjoy the garden without destroying it, the restraining influence of punishment will be no stronger than the memory of its pain or the fear of its repetition. This memory of the past and fear of the future usually wage a most unequal contest with the vivid and alluring temptation of the present.

But should not the child be restrained? As far as necessary to protect the garden, and perhaps also to make her conscious of an authority in the world outside of her own will, yes--but that is not the main task. The main task is to educate her, to develop an understanding of the garden, to get her in the frame of mind in which she will derive her greatest enjoyment when she cultivates it and sees it grow, and when she restricts her picking to a reasonable share of what the garden produces.

In the actual case before us, the child was after quick and easy results, the only kind she could comprehend; she was unable to look upon the garden as a living thing whose life and health must be preserved to-day in order that it may yield returns to-morrow and next week. Analyzed with adult understanding, her essential fault was a failure to get beyond immediate results and to view the garden from a long-time angle. We ought not to expect her to do this now, but we do expect her to do it when she is grown up. We expect in time so to educate her that she will be able to think of the garden in terms of permanence and growth and to make an effective use of it from that standpoint; and this same education in long-time effectiveness is what we want in business.

Business standards must be discussed from the standpoint of efficiency, but efficiency needs to be interpreted. We may as well admit at the start that the efficiency ideal is not entirely in good repute at this moment.[1] If I may import an expression from England, we have been somewhat "fed up" with efficiency during the recent past and the ration has been rather too much for our digestion.

[1] At the time this was written, in the spring of 1916, it will be recalled, the German war machine for nearly two years had been demonstrating its efficiency; the Allies had not yet matched it, and we did not like the work that efficiency was doing.

Away back in the eighties, before the dominance of business in American society had been questioned, efficiency, as the term was then understood, had a place among the elect; it was the intimate associate of business success. Then came the muck-raker, and with him came also anti-trust cases and insurance investigations. We turned our attention to labor outbreaks, to graft prosecutions, and to land steals. We talked about "malefactors of great wealth." We even became interested in Schedule K. And so, during the first decade of the new century a whole train of revelations, incidents, and phrases tempered our regard for business and brought many business practices under the ban of law and hostile sentiment. Efficiency was in bad company and suffered in reputation.

But efficiency was able to prove an alibi; we were told that the thing which posed as efficiency was not efficiency, but special privilege, and we were again persuaded of the great service a regenerate and socialized efficiency could render. Just at this point came the outbreak in Europe; efficiency was again caught in bad company, and we began to hear such phrases as the "moral breakdown of efficiency," "efficiency, a false ideal," and others of similar import. In an article bearing the title, "Moral Breakdown of Efficiency," published in the "Century" for June, 1915, it was maintained that pursuit of efficiency had led and was still leading civilization on a downward path.

In addition to the reputation of keeping bad company, efficiency has to bear the odium of many foolish and inefficient deeds performed by its self-appointed prophets. The quest for efficiency has called forth in business a new functionary known as the "efficiency expert." Many of these men have done a vast amount of valuable work, but many others have not. While the real expert has been raising the level of business organization, the others have been piling up a large wastage of poor work and lost confidence.

But these are side issues. The main fact stands out above them. We have been steadily adding to the burdens on industrial and commercial equipment; even more have we increased the stresses and the strains on human life. A devastating war is now suddenly taking up the slack, and the slow and painful task of making the world efficient must be hastened in order that society may bear the load. In these circumstances we need not apologize for making efficiency the main support of business standards. Nor need we assume, as does the author just cited, that the efficiency ideal in any way conflicts with the ideal of moral responsibility and service.

Of course, if we reflect, the abstract and impersonal thing which engineers define as the ratio between energy expended and result obtained has no moral quality in itself. Whatever of morality or lack of morality the word "efficiency" calls forth is given to it by the manner in which the terms of the ratio are defined. It is for society to make the definitions. Society may determine the forms and the limitations under which it will have business energy expended, and it may decide what are the social ends toward which it will have business effort contribute. Guided by wise social policy, efficiency and service go hand in hand.

Since business is subject to control by society, it follows that the efficiency factors in a particular business, in a whole industry, or in business generally, must adjust themselves to the decisions that society has made, and they must also take account of decisions that it may make in the future. And these decisions are not all recorded in the law or even in the vague thing we call public opinion. Laws and opinions of particular groups, group morality, individual morality, even inertia, and a long list of more subtle and often capricious reactions are channels through which social purpose finds expression.

It is worth our while to consider how these reactions may affect practical administration. No reflection is needed to see that in proportion as business men fail to take account of forces outside the business, in that proportion they are likely to miscalculate the results of business policies. Striking examples of such miscalculation are found in the experience of Mr. George M. Pullman back in the nineties, and of Mr. Patterson, of the National Cash Register Company, a decade later. Each of these men, with apparent good faith, undertook to surround his laborers with conditions of physical, mental, and moral uplift, and each undertook to do it as an act of paternal bounty. Each of them, as far as we can judge, expected appreciation, gratitude, and increased efficiency. But they failed to take account of the group consciousness of their laborers; they did not know what the laborers were thinking; and because the laborers were thinking something different from what the employers thought, policies intended to arouse gratitude aroused instead resentment and a strike.

But there are many things besides too much paternalism that may result in a strike. Another concern of international dimensions and one whose officers, I can vouch, are men of high character and public spirit, also found itself confronted with a strike in 1910. This was a highly organized business. For years its sales department had tried to seek out the highest grade of talent, and the result was a selling and distributing organization that was the model and the envy of competitors. But questions of employment seem to have gone by default, the general policy being confined to a sincere but vague good-will toward employees and acceptance of things as they were.

The issues of the strike were issues with which we are all familiar. On the workers' side, grievances and no workable machinery for redress; result: organization, concerted group action, force. On the other side, there was a personal readiness to hear grievances, coupled with insistence on the ancient right of the employer to conduct his own business in his own way, without interference from employees or the public.

After weeks of deadlock the strain of a distressing situation, losses from the interruption of business, regard for public opinion and the opinion of friends, combined with their own desire to do the right thing, induced the employers, probably against their best judgment, to recede from their position. An agreement was made providing for increased wages, standardization of piece-work, a preferential shop, and appointment by the firm of a person to hear grievances and to cooperate with a representative of the union in securing redress.