[Menydh]

Chapter 9
What is a Capitalist Undertaker?


Capitalism¹ is the name given to that economic organization wherein regularly two distinct social groups co-operate -- the owners of the means of production, who at the same time do the work of managing and directing, and the great body of workers who possess nothing but their labour. The co-operation is such, that the representatives of capital are the subjective agents, that is, they decide as to the "how" and the "how much" in the process of production, and they undertake all risks.

Now what are the mainsprings of the whole system? The first, and perhaps the chiefest, is the pursuit of gain or profit. This being the case, there is a tendency for undertakings to grow bigger and bigger. Arising from that, all economic activities are strictly logical. Whereas in the pre-capitalistic period quieta non movere was the watchword and Tradition the guiding star, now it is constant movement. I characterize the whole as "economic rationalism," and this I would term the second mainspring of the capitalistic system.

Economic rationalism expresses itself in three ways. (1) There is a plan, in accordance with which all things are ordered aright. And the plan covers activities in the distant future. (2) Efficiency is the test applied in the choice of all the means of production. (3) Seeing that the "cash nexus" regulates all economic activity, and that everywhere and always a surplus is sought for, exact calculations become necessary in every undertaking.

Everybody knows that a modern business is not merely, say, the production of rails or cotton or electric motors, or the transport of stones or of people. Everybody knows that these are but parts in the organization of the whole. And the characteristics of the undertaker are not that he arranges for the carrying out of the processes named. They are to be found elsewhere, and for the present we may put it roughly that they are a constant buying and selling of the means of production, of labour or of commodities. To vary the phrase somewhat, the undertaker makes contracts concerning exchanges, wherein money is the measure of value.

When do we speak of having accomplished a successful piece of business? Surely when the contract-making has ended well. But what is meant precisely by "well"? It certainly has no reference to the quality or to the quantity of the goods or services given or received; it refers solely and only to the return of the sum of money expended, and to a surplus over and above it (profit). It is the aim of the undertaker so to manipulate the factors over which he has control as to bring about this surplus.

Our next step must be to consider what functions the capitalistic undertaker (the subjective economic factor) has in the sphere of capitalism, seeing that our purpose is to show the capacity of the Jews in this direction. We shall try to discover what special skill is necessary in order to be successful in the competitive struggle. In a word, we shall seek for the type.

To my mind, the best picture of the modern capitalistic undertaker is that which paints him as the combination of two radically different natures in one person. Like Faust, he may say that two souls dwell within his breast; unlike Faust’s, however, the two souls do not wish to be separated, but rather, on the contrary, desire to work harmoniously together. What are these two natures? The one is the undertaker (not in the more limited sense of capitalistic undertaker, but quite generally), and the other is the trader.

By the undertaker I mean a man who has an object in view to which he devotes his life, an object which requires the cooperation of others for its achievement, seeing that its realization is in the world of men. The undertaker must thus be differentiated from the artist or the prophet. Like them he has a mission; unlike them he feels that he must bring it to realization. He is a man, therefore, who peers into the distant future, whose every action is planned and done only in so far as it will help the great whole. As an instance of an undertaker in this (non-capitalistic) sense we may mention an African or a North Pole explorer. The undertaker becomes a capitalistic undertaker when he combines his original activities with those of the trader.

And what is a trader? A man whose whole being is set upon doing profitable business; who appraises all activities and all conditions with a view to their money value, who turns everything into its gold equivalent. The world to such a man is one great market-place, with its supply and demand, its conjunctures -- good and bad -- and its profits and losses. The constant question on his lips is, "What does it cost? What can I make out of it?" His last question would in all probability be, "What is the price of the universe?" The circle of his thoughts is circumscribed by one piece of business, to the successful issue of which he devotes all his energies.

In the combination I have endeavoured to sketch, the undertaker is the constant factor, the trader the variant one. Constant the undertaker must be, for, having set his heart upon some far-distant goal, he is of necessity bound to follow some plan in order to reach it. Change in his policy is contrary to his nature. Constancy is the basis of his character. But the trader is changeable, for his conduct wavers with the conditions of the market. He must be able to vary his policy and his aim from one moment to another if the prevailing conjuncture so demands it. "Busy-ness" marks him out above all else.

This theory of the two souls in one body is intended to clarify our conception of the capitalistic undertaker. But we must analyse the conception still further, this time into its actual component parts.

In the undertaker I perceive the following four types:

(1) The Inventor -- not merely in the technical sense, but in that of the organizer introducing new forms which bring greater economies into production, or transport, or marketing.

(2) The Discoverer -- of new means of selling his commodities, either intensively or extensively. If he finds a new sphere for his activities -- let us say he sells bathing-drawers to Eskimos, or gramophones to Negroes -- we have a case of extensive discovery; if he creates new demands in markets where he already has a footing, we may speak of intensive discovery.

(3) The Conqueror. An undertaker of the right kind is always a conqueror, with the determination and will-power to overcome all the difficulties that beset his path. He must also be able to risk much, to stake his all (that is to say, his fortune, his good name, even his life), if need be, to achieve great results for his undertaking. It may be the adoption of new methods in manufacture, the extension of his business though his credit is unstable, and so on.

(4) The Organizer. Above all else the undertaker must be an organizer; i.e., he must be able so to dispose of large numbers of individuals as to bring about the most successful result; must be able to fit the round man into the round hole and the square man into the square; must be able to give a man just the job for which he is best equipped, so as to obtain the maximum of efficiency. To do this satisfactorily demands many gifts and much skill. For example, the organizer must be able to tell at a glance what a man can do best, and which man among many will best suit his purpose. He must be able to let others do his work -- i.e., to place in positions of trust such persons as will be able to relieve him of responsibility. Finally, he must be able to see to it that the human factors in the work of production are sufficient for the purpose, both quantitatively and qualitatively, and that their relationship to each other is harmonious. In short, the management of his business must be the most efficient possible.

Now business organization means a good deal more than the skilful choice of men and methods; it means taking into consideration also geographical, ethnological and accidentalcircumstances of all sorts. Let me illustrate my point. The Westinghouse Electric Company is one of the best organized concerns in the United States. When the Company decided to capture the English market it set up a branch in this country, the organization of which was modelled exactly on that of the parent concern. After a few years, what was the result? The financial break-up of the English branch, chiefly because sufficient allowance had not been made for the difference in English conditions.

This leads us to the activities of the trader. A trader has no definite calling; he has only certain well-defined functions in the body economic. But they are of a very varied kind. For example: to provision ships and supply them with men and ammunition, to conquer wild lands in distant parts, to drive the natives from hearth and home and seize their goods and chattels, to load the ships with these latter and bring them home in order to sell them at public auctions to the highest bidder -- all this is a form of trading.

Or, it may be a different form -- as when a dealer obtains a pair of old trousers from a needy man of fashion, to whose house he comes in vain five times in succession, and then palms those same trousers off on a stupid yokel.

Or, again, it may take the form of arbitrage dealing on the Stock Exchange.

Clearly there are differences in these instances, as there were beThe tween trading in modern and in mediaeval times. In the pre-capitalistic period, to trade meant to trade on a big scale, as the "royal merchants" did in the Italian and German cities, and the trader had to be an undertaker (in the general, and not merely in the capitalistic sense). "Each (of the citizens of Genoa) has a tower in his house; if civil war breaks out, the battlements of these towers are the scenes of conflict. They are masters of the sea; they build them ships, called galleys, and roam for plunder in the most distant parts, bringing the spoil back to Genoa. With Pisa they live in continual enmity." "Royal merchants" these, if you like; but not traders in my sense.

I regard those as traders who set out with the intention of doing good business; who combine within themselves two activities " calculation and negotiation. In a word, the trader must be (1) a speculating calculator, and (2) a business man, a negotiator.

As a speculating calculator, he must buy in the cheapest market and sell in the dearest. Which means that he must obtain his labour and his raw material at as low a rate as possible, and not waste anything in the process of manufacture. And when the commodity is ready for sale, he must part with it to the man whose credit is sound, and so forth. For all this he must calculate, and he must speculate. By speculation in this sense I mean the drawing of several conclusions from particular instances -- let us call it the power of economic diagnosis, the complete survey of the market, the evaluation of all its symptoms, the recognition of future possibilities and the choice of that course which will have the greatest utility in the long run.

To this end the dealer must have a hundred eyes, a hundred ears and a hundred feelers in all directions. Here he may have to search out a needy nobleman, or a State bent on war, in order to offer them a loan at the psychological moment; there, to put his hand on a labour group that is willing to work a few pence below the prevailing rate of wages; here he may have to form a right estimate of the chances that a new article is likely to have with the public; there, to appraise the true effect of a political crisis on the Stock Exchange. In every case the trader expresses the result in terms of money. That is where the calculation comes in. "A wonderfullyshrewd calculator" is a term common in the United States for an adept in this direction.

But a discerning eye for a profitable piece of business is not sufficient: the trader must also possess the capacity for doing business. In this, his negotiating powers will come into play, and he will be doing something very much more akin to the work of an arbitrator between two litigants. He will talk to his opponent, urge reasons and counterreasons in order to induce him to embark on a certain course. To negotiate is to fence with intellectual weapons.

Trading, then, means to negotiate concerning the buying and selling of some commodity, be it a share, a loan, or a concern. Trading must be the term applied to the activity of the hawker at the back-door, trying to sell the cook a "fur" collar, or to that of the Jewish old do’ man, who talks for an hour to the bucolic driver to persuade him to purchase a pair of trousers. But it must be equally applied to the activities of a Nathan Rothschild, who negotiated with the representative of the Prussian Government for a loan of a million. The difference is not one of kind, but of extent, for the essence of all trading is negotiation, which need not necessarily be by word of mouth. The shopkeeper who recommends his goods to the public, be his method what you will, is in reality negotiating. What is all advertisement but "dumb show" negotiation? The end in view is always the same -- to convince the possible buyer of the superiority of a particular set of goods. The ideal of the seller is realized when everybody purchases the article he has recommended.

To create interest, to win confidence, to stir up a desire to buy -- such is the end and aim of the successful trader. How he achieves it is of little moment. Sufficient that he uses not outward force but inner forces, his customers coming to him of their own free will. He wins by suggestion, and one of the most effective is to arouse in the heart of the buyer the feeling that to buy at once will be most advantageous. "We shall have snow, boys, said the Finns, for they had Aander (a kind of snowshoe) to sell," we read in the Magnus Barford Saga (1006 A.D.). This is the prototype of all traders and the suggestion of the Finns the prototype of all advertising -- the weapon with which the trader fights. No longer does he dwell in fortified towers, as did his precursor in Genoa in the days of Benjamin of Tudela, nor does he wreck the houses of the natives with his guns if they refuse to "trade" with him, as did the early East India settlers in the 17th century.



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Notes to Chapter 9

1. For a fuller account of the subject of this chapter, see an article of mine, "Der Kapitalistische Untemehmer," in Archiv für soziale Wissenschaft und Soziale Politik, vol. 29.