第23章 Chapter 4(4)

for in the matter of profitable business there is no reasonable limit short of the maximum. In business, the best price is always good enough; but, so also, nothing short of the best price is good enough. Buy cheap and sell dear.

Intangibles of this kind, which represent a "conscientious withdrawal of efficiency," an effectual control of the rate or volume of output, are altogether the most common of immaterial assets, and they make up altogether the largest class of intangibles and the most considerable body of immaterial wealth owned. Land values are of much the same nature as these corporate assets which represent capitalised restriction of output, in that the land values, too, rest mostly on the owner's ability to withhold his property from productive use, and so to drive a profitable bargain. Rent is also a case of charging what the traffic will bear; and rental values should properly be classed with these intangible assets of the larger corporations, which are due to their effectual control of the rate and volume of production. And apart from the rental values of land, which are also in the nature of monopoly values, it is doubtful if the total material wealth in any of the civilised countries will nearly equal the total amount of this immaterial wealth that is owned by the country's business men and the investors for whom they do business. Which evidently comes to much the same as saying that something more than one-half of the net product of the country's industry goes to those persons in whom the existing state of law and custom vests a plenary power to hinder production.

It is doubtful if the total of this immaterial wealth exceeds the total material wealth in the advanced industrial countries;

although it is at least highly probable that such is the case, particularly in the richer and more enlightened of these countries; as, e. g., in America or the United Kingdom, where the principles of self-help and free bargain have consistently had the benefit of a liberal -- that is a broad -- construction and an unbending application. The evidence in the case is not to be had in such unambiguous shape as to carry conviction, for the distinction between tangible assets and intangible is not consistently maintained or made a matter of record. So, e.g., it is not unusual to find that corporation bonds -- railroad or industrial -- which secure their owner a free income and are carried as an overhead charge by the corporation, are at the same time a lien on the corporation's real property; which in turn is likely to be of less value than the corporation's total liabilities. Evidently the case is sufficiently confusing, considered as a problem in the economic theory of capital, but it offers no particular difficulty when considered as a proposition in corporation finance.

There is another curious question that will also have to be left as a moot question, in the absence of more specific information than that which is yet available; more a question of idle curiosity, perhaps, than of substantial consequence. How nearly is it likely that the total gains which accrue to these prosperous business concerns and their investors from their conscientious withdrawal of efficiency will equal the total loss suffered by the community as a whole from the incidental reduction of the output? Net production is kept down in order to get a profitable price for the output; but it is not certain whether the net production has to be lowered by as much or more than the resulting increased gain which this businesslike strategy brings to the businesslike strategists. The strategic curtailment of net production below productive capacity is net loss to the community as a whole, including both the business men and their customers; the gains which go to these business concerns in this way are net loss to the community as a whole, exclusive of the business concerns and their investors. The resulting question is, therefore, not whether the rest of the community loses as much as the business men gain, -- that goes without saying, since the gains of the business men in the case are paid over to them by the rest of the community in the enhanced (or maintained) price of the products, but rather it is a question whether the rest of the community, the common man, loses twice as much as the business concerns and their investors gain.

The whole case has some analogy with the phenomena of blackmail, ransom, and any similar enterprise that aims to get something for nothing; although it is carefully to be noted that its analogy with these illegitimate forms of gainful enterprise must, of course, not be taken to cast any shadow of suspicion on the legitimacy of all the businesslike sabotage that underlies this immaterial corporate capital and its earning-capacity. In the case of blackmail, ransom, and such like illegal traffic in extortion, it is known that the net loss suffered by the loser and the gainer together exceeds the net gain which accrues to the beneficiary, by as much as the cost of enforcement plus the incidental inconvenience to both parties to the transaction. At the same time, the beneficiary's subsequent employment and consumption of his "ill-gotten gains," as they are sometimes called, whether he consumes them in riotous living or in the further pursuit of the same profitable line of traffic, -- all this, it is believed, does not in any degree benefit the rest of the community. As seen in the perspective of the common good, such enterprise in extortion is believed to be quite wastefully disserviceable.

Now, this analogy may be taken for what it is worth;