The Shape of Things to Come

Book the First
Today and Tomorrow: the Age of Frustration Dawns

5. The Way in Which Competition and Monetary Inefficiency Strained the Old Order

H.G. Wells

IN THE twentieth century of the Christian era there was still no common currency by which to measure and carry on the world’s economic exchanges. Those transactions were not merely apprehended inexactly because of this; they were falsified, and it did not seem possible that there would ever be an effective simplification. It is true that during what is known as the First Period of General Prosperity, from 1850 C.E. until 1914, there was a kind of working world system of currency and credit, centring upon the City of London and based on the gold pound; but this was a purely accidental growth, made workable by successive gold discoveries which prevented too disastrous a fall in prices as productive efficiency increased, and by the circumstances that gave the insular English a lead in the development of steam transport on land and sea and real incentives towards a practical propaganda of world free trade.

That first gleam of cosmopolitan sunlight waned as it had waxed, without any contemporary apprehension of the real forces at work, much less any attempt to seize upon them and organize them in permanence. The financial ascendency and initiative of the City of London crumbled away after the war and nothing appeared to take its place. In any case, this quasi-cosmopolitan system based on the gold sovereign, and owing its modicum of success to continual increments in the available gold, would have wilted as the world’s gold supplies gave out, but the strangulation of the world’s industry after the war was greatly accelerated by the gold hoarding of the Americans and French.

And during all that phase of opportunity there was no substantial effort to take hold of the land, sea and natural resources of the planet and bring them from a state of fragmentary, chaotic and wasteful exploitation into a general scheme. There remained sixty-odd “sovereign” governments, each claiming a supreme control of all the natural wealth of the areas within its frontiers, and under these governments, under conditions that varied with each, there were private corporations and individuals with a right to deal more or less freely with the fragment upon which they had established a grip. Everywhere the guiding principle in the exploitation of the minerals, sunshine and power resources of the globe was the profit of single or associated private individuals, and the patchwork governments of the time interfered in the profit scramble only in favour of their nationals against their foreign rivals. Yet for nearly a hundred years, because of the fortunate influx of gold and inventions, this profit-seeking system, linked to the metallic monetary system, sufficed to sustain a very great expansion and enlargement of human life, and it was hard to convince the mass of men, and still harder to convince the prosperous manufacturers, traders, miners, cultivators and financiers who dominated public affairs, that this was not a permanent system and that the world already needed very essential modifications of its economic methods. A considerable measure of breakdown, a phase of display, fear and distress, was necessary before they could be disillusioned.

The nineteenth century had for its watchwords “individual enterprise and free competition”. But the natural end of all competition is the triumph of one competitor. It was in America that the phenomena of Big Business first appeared and demonstrated the force of this truism; at a score of points triumphant organizations capable of crushing out new competitors and crippling and restraining new initiatives that threatened their predominance appeared. In Europe there was little governmental resistance to industrial alliances and concentrations in restraint of competition, and they speedily developed upon a scale that transcended political frontiers, but in the United States of America there was a genuine effort to prevent enterprises developing on a monopolistic scale. The conspicuous leader of this preventive effort was the first President Roosevelt (1858-1919) and its chief fruit the Sherman Anti-Trust Act (1890), which proved a rich mine for lawyers in the subsequent decades.

These great consolidations, which closed the phase of free competition, were so far effective in controlling trade and arresting new developments that Hilary Hooker, in his Studies in Business Coagulation During the First Period of General Prosperity, is able to cite rather more than two thousand instances, ranging from radium and new fruits and foodstuffs to gramophones, automobiles, reconstructed households, artificial moonlight for the roadways by the countryside, and comfortable and economical railway plant, in which ample supplies or beneficial improvements were successfully kept off the market in the interests of established profit-making systems. After 1900 C.E. again there was a world-wide cessation of daily newspaper initiative and a consequent systole of free speech. Distribution, paper supply and news services had fallen into the hands of powerful groups able and willing to crush out any new types of periodical, or any inimical schools of public suggestion. They set about stereotyping the public mind.

These same profit-making systems in possession also played a large part in arresting competition from countries in which they were less completely in control, by subsidized political action for the maintenance of protective tariffs. Long before the world break-down became manifest, the experience of the ordinary consumer so far belied the sanguine theory that free competition was a mode of endless progress, that he was still living in a house, wearing clothes, using appliances, travelling about in conveyances, and being fed with phrases and ideas that by the standard of the known and worked-out inventions of the time should have been discarded on an average, Hooker computes, from a quarter to half a century before. There was labour unemployed and abundant material available to remedy all this, but its utilization was held up by the rent-exacting and profit-earning systems already in possession.

This lag in modernization added greatly to the effects of increased productive efficiency in the disengagement of those vast masses of destitute unemployed and unemploying people which began to appear almost everywhere, like the morbid secretion of a diseased body, as the twentieth century passed on into its third decade.

The Shape of Things to Come - Contents    |     Book 1 - 6. The Paradox of Over-Production and Its Relation to War

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