The Coming of the American Behemoth. Michael Joseph Roberto
the work themselves. This was a sure sign that the “actual blending of the two so-called classes means that there will be no more classes in this country. Fraternity has never been very clearly defined,” Carver added, “but this condition, when there is no class consciousness, comes as near being fraternity as we are ever likely to get, if it be not fraternity itself.”6
Carver devoted a chapter of his book to the growing financial power of laborers, basing his claim on statistics cherry-picked from savings deposits, assets of building and loan associations, and the premiums paid to insurance companies by laborers. He also considered “incomplete but rather striking figures regarding the investment of laboring people in the stocks and bonds of corporations.” He brought attention as well to what he called “the new phenomenon of the labor bank.” According to figures from the American Bankers Association, Carver said that total savings deposits had more than doubled between 1914 and 1924, and the total number of depositors “had increased more than three-fold.” Moreover, a study of life insurance policies in 1924 showed that more than two-thirds were held by wage workers. He also provided statistics that he used to argue that more laborers were investing in the stock market.7 As for the rise of labor banks, his entire case was made on the basis of the Brotherhood of Locomotive Engineers, which opened its bank in 1920. This case alone, he claimed, proved that the capitalist revolution developing in America was another great example of the prospect of universal wealth and prosperity now in the making.8 The inequalities that had always been present in capitalism were being eliminated, proving that they “were not essential to the capitalistic system.” Instead, the revolutionary advance of American capitalism was proving that free enterprise worked. “In fact,” Carver said, “where capitalism is given a chance to develop freely, unhampered by social and political obstacles, it tends to eliminate its own inequalities and secure … great abundance for everybody,” more than any other system has ever achieved.9
On this basis, the economic revolution presented the greatest opportunity ever to achieve what Carver believed was “the most revolutionary idea” in all economic discussion, “that of a balanced economic system … in which all factors of production are combined in such proportions as will yield the most satisfactory results, and yield them automatically.” Again reducing complex matters to the simplest terms, Carver served up a case for the dietician who can recommend a balanced diet to an individual simply by knowing “all the elements.” Businessmen did this as a matter of course. They always had to know when to apply basic principles on a routine basis; they had to put together combinations to create a desirable balance by establishing “satisfactory ratios” among all competing elements. This same approach held true in more complex situations where the primary objective was to achieve equilibrium. Balance was always the key factor. The idea of a balanced economy could be carried out systematically across the entire industrial system, “balancing every industry against every other, and every element or factor in every industry against every other.” This, Carver said, should be the common work of the statesman and the economist.10
Carver’s book, when it was published in 1925, contributed to the ballyhoo about capitalist progress. Although there were still problems to overcome, they were not, he claimed, “essential to the capitalistic system.” The worst that could be said about the capitalist system was that it had yet to abolish the inequality of wealth. On this he was defiant. As long as American capitalism continued on its present course free of obstacles or interference, it would eventually “distribute the best things of life more evenly” than any other system in history.11
The main obstacle to this progress was the lack of a solid understanding among most people of what capitalism is and what it does. Without this knowledge, it was easy to draw bad conclusions by judging the system superficially on the basis of its “temporary aspects.” This was a mistake, as Carver explained in the most direct and startling terms:
Strictly speaking, capitalism is not a system at all. It is merely a fact that grows out of the suppression of violence. Wherever violence is repressed, capital comes automatically into existence. Where violence is repressed, the man who has made a thing, or found it before anyone else has gained possession of it, cannot be dispossessed without his consent. No government can repress violence without automatically creating property as a result.12
Carver focused on the importance of “rightful possession” and the role of government to protect those who had possessions from those who possessed nothing. This was the danger posed by socialism and class warfare, he argued, that fueled violence in society. So long as the possessor could not be dispossessed and remained free to do what he wanted with his possession, capitalism would continue to thrive. For Carver, the “germ” of the capitalist system based on private property was in the workings of simple exchange between those who possessed and had something to sell. This, Carver insisted, was what made capitalism natural. There was simply no other way to explain the matter. “Exchange, therefore,” he wrote, “grows up automatically and unavoidably along with property, whenever and wherever violence is repressed.” The purpose of government, therefore, was to make sure that exchange between those who had rightful possession were unhampered by violence. In the process, government protection transformed simple possession into property.13
Carver argued that envy threatened prosperity based on the idea of rightful possession. The envious draw sympathizers, or worse, those who “invent apologies and excuses for them.” There are consequences. When envy peaks, it is “likely to lead to acts of violence either by individuals or classes.” The ensuing “class war,” he said, can destroy civilization if it leads to a government that violently dispossesses the possessors.14 To prevent this from happening in America, government had to restrict immigrant laborers from countries where capitalism was less developed. They arrived seeking better wages and living conditions, but their presence meant a growing number of “thoughtless and thriftless people.” The result would be in all probability a rising propertyless class that could grow large and dangerous. The outcome was ominous:
If it should be able to outvote the class of savers and accumulators, it may gain control of the government and use it as an engine for the dispossession of those who have managed to accumulate. The safety of modern civilization requires that these non-accumulating classes shall be kept few in number.15
Carver was sure that class struggle in America was a thing of the past. American laborers were now plotting “a higher strategy” that corresponded to the great leap forward in production and the trend he saw to their eventual ownership of it! This higher strategy was based on peace and harmony with employers, not struggle and class war. “Labor has got all it can get by violence.” It was time to get things done “by head-work, not fist-work.” In a vague reference to the great strike wave of 1919–1920 and the alleged Red Menace, Carver declared that labor previously had brought great fear to the nation. The time had come to impress the country with its wisdom. Labor had to confidently cultivate its identity as “a preserver and developer” in order to increase production for greater prosperity.16
As a work of capitalist propaganda, Carver’s book said all the things that Big Business would enjoy hearing in public. His main points resonated without threatening its hold over society. His central message—the revolutionary advance in American capitalism will eliminate inequality—was a notable contribution to the ballyhoo of endless prosperity during the New Era. Carver’s rapturous view about the great promise of capitalist progress certainly was music to the ears of the working and middle classes who longed to be capitalists themselves, as well as to those who already were and had the most to gain from it. But the latter—Big Business—had no intention of leveling the capitalist pyramid of wealth. What it sought was to remain strong and secure at the top.
THE ADVENT OF BUSINESS THEORY