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needy; a dubious expedient。 Profits (including interest) are 
justified as a reasonable remuneration for productive work done; 
and for the labor…saving use of property derived from the owner's 
past labor。 The efforts of masters and workmen alike are 
conceived to be bent on turning out the largest and most 
serviceable output of goods; and prices are competitively 
determined by the labor…cost of the goods。 
    Like other men Adam Smith did not see into the future beyond 
what was calculable on the data given by his own historical 
present; and in his time that later and greater era of investment 
and financial enterprise which has made industry subsidiary to 
business was only beginning to get under way and only obscurely 
so。 So that he was still able to think of commercial enterprise 
as a middle…man's traffic in merchandise; subsidiary to a 
small…scale industry on the order of handicraft; and due to an 
assumed propensity in men 〃to truck; barter; and exchange one 
thing for another。〃 And so much as he could not help seeing of 
the new order of business enterprise which was coming in was not 
rated by him as a sane outgrowth of that system of Natural 
Liberty for which he spoke and about which his best affections 
gathered。 In all this he was at one with his thoughtful 
contemporaries。 
    That generation of public…spirited men went; perforce; on the 
scant data afforded by their own historical present; the economic 
situation as they saw it in the perspective and with the 
preconceptions of their own time; and to them it was accordingly 
plain that when all unreasonable restrictions are taken away; 
〃the obvious and simple system of natural liberty establishes 
itself of its own accord。〃 To this 〃natural〃 plan of free 
workmanship and free trade all restraint or retardation by 
collusion among business men was wholly obnoxious; and all 
collusive control of industry or of the market was accordingly 
execrated as unnatural and subversive。 It is true; there were 
even then some appreciable beginnings of coercion and retardation 
 lowering of wages and limitation of output  by collusion 
between owners and employers who should by nature have been 
competitive producers of an unrestrained output of goods and 
services according to the principles of that modern point of view 
which animated Adam Smith and his generation; but coercion and 
unearned gain by a combination of ownership; of the now familiar 
corporate type; was virtually unknown in his time。 So Adam Smith 
saw and denounced the dangers of unfair combination between 
〃masters〃 for the exploitation of their workmen; but the modern 
use of credit and corporation finance for the collective control 
of the labor market and the goods market of course does not come 
within his horizon and does not engage his attention。 
    So also Adam Smith knows and denounces the use of protective 
tariffs for private gain。 That means of pilfering was familiar 
enough in his time。 But he spends little indignation on the 
equally nefarious use of the national establishment for 
safe…guarding and augmenting the profits of traders; 
concessionaires; investors and creditors in foreign parts at the 
cost of the home community。 That method of taxing the common man 
for the benefit of the vested interests has also grown to more 
formidable proportions since his time。 The constituent principles 
of the modern point of view; as accepted advisedly or by 
oversight by Adam Smith and his generation; supply all the 
legitimation required for this larcenous use of the national 
establishment; but the means of communication were still too 
scant; and the larger use of credit was too nearly untried; as 
contrasted with what has at a later date gone to make the 
commercial ground and incentive of imperialist politics。 
Therefore the imperialist policies of public enterprise for 
private gain also do not come greatly within the range of Adam 
Smith's vision of the future; nor does the 〃obvious and simple 
system〃 on which he and his generation of thoughtful men take 
their stand comprise anything like explicit declarations for or 
against this later…matured chicane of the gentlemen…investors who 
have been managing the affairs of the civilised nations。 
 
    Adam Smith's work and life…time falls in with the high tide 
of eighteenth…century insight and understanding; and it marks an 
epoch of spiritual achievement and stabilisation in civil 
institutions; as well as in those principles of conduct that have 
governed economic rights and relations since that date。 But it 
marks also the beginning of a new order in the state of the 
industrial arts as well as in those material sciences which come 
directly in touch with the industrial arts and which take their 
logical bent from the same range of tangible experience。 So it 
happens that this modern point of view reached a stable and 
symmetrical finality about the same date when the New Order of 
experience and insight was beginning to bend men's habits of 
thought into lines that run at cross purposes with this same 
stabilised point of view。 It is in the ways and means of industry 
and in the material sciences that the new order of knowledge and 
belief first comes into evidence; because it is in this domain of 
workday facts that men's experience began about that time to take 
a decisive turn at variance with the received canons。 A 
mechanistic conception of things began to displace those 
essentially romantic notions of untrammeled initiative and 
rationality that governed the intellectual life of the era of 
enlightenment which was then drawing to a close。 
    It is logically due to follow that the same general 
principles of knowledge and validity will presently undergo a 
revision of the same character where they have to do with those 
imponderable facts of human conduct and those conventions of law 
and custom that govern the duties and obligations of men in 
society。 Here and now as elsewhere and in other times the 
stubborn teaching that comes of men's experience with the 
tangible facts of industry should confidently be counted on to 
make the outcome; so as to bring on a corresponding revision of 
what is right and good in that world of make…believe that always 
underlies any established system of law and custom。 The material 
exigencies of the state of industry are unavoidable; and in great 
part unbending; and the economic conditions which follow 
immediately from these exigencies imposed by the ways and means 
of industry are only less uncompromising than the mechanical 
facts of industry itself。 And the men who live under the rule of 
these economic exigencies are constrained to make their peace 
with them; to enter into such working arrangements with one 
another as these unbending conditions of the state of the 
industrial arts will tolerate; and to cast their system of 
imponderables on lines which can be understood by the same men 
who understand the industrial arts and the system of material 
science which underlies the industrial arts。 So that; in due 
course; the accredited schedule of legal and moral rights; 
perquisites and obligations will also presently be brought into 
passable consistency with the ways and means whereby the 
community gets its living。 
    But it is also logically to be expected that any revision of 
the established rights; obligations; perquisites and vested 
interests will trail along behind the change which has taken 
effect in the material circumstances of the community and in the 
community's knowledge and belief with regard to these material 
circumstances; since any such revision of ancient rights and 
perquisites will necessarily be consequent upon and conditioned 
by that change; and since the axioms of law and custom that 
underlie any established schedule of rights and perquisites are 
always of the nature of make…believe; and the make…believe is 
necessarily built up out of conceptions derived from the 
accustomed range of knowledge and belief。 
    Out…worn axioms of this make…believe order become 
superstitions when the scope and method of workday knowledge has 
outgrown that particular range of preconceptions out of which 
these make…believe axioms are constructed; which comes to saying 
that the underlying principles of the system of law and morals 
are therewith caught in a process of obsolescence;  
〃depreciation by supersession and disuse。〃 By a figure of speech 
it might be said that the community's intangible assets embodied 
in this particular range of imponderables have shrunk by that 
much; through the decay of these imponderables that are no longer 
seasonable; and through their displacement by other figments of 
the human brain;  a consensus of brains trained into closer 
consonance with the latter…day material conditions of life。 
Something of this kind; something in the way of depreciation by 
displacement; appears now to be overtaking that system of 
imponderables that has been handed down into current law and 
custom out of that range of ideas and ideals that had the vogue 
before the coming of the machine industry and the material 
sciences

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