Chapter 3

This concentration on one's affairs therefore grows into a sort of practical system in which each member of the business community is looking after some function or activity to the exclusion of other things. And so the world's work is carried on to the best advantage, each function being filled by those particular men who have become relatively expert therein. From this system arises a business habit or method not always understood by the young and inexperienced, by the non-business person. We refer to the practice in trade of leaving to each individual, to each enterprise, to each organization, the responsibility for looking out for its own interests when having dealings with others. _Caveat emptor_--let the buyer beware--expresses an extreme development of this, and in its common signification, that each side is to be permitted and expected to take any advantage of the other side that it may be able to secure, it describes a state of warfare rather than of business. In buying and selling, in aiming to obtain the most favorable terms for each line of his activity, in meeting conditions of competition, in all these relations, the business man is endeavoring to better himself and may doubtless be tempted here and there to forget the interests of the other party to the transaction. But to yield to such temptation would merely be to abuse a principle which on the whole is sanctioned by the requirements of economic efficiency. This principle is that the nearest approximation to effective justice in business transactions is reached when on each side the parties devote themselves to their respective interests and points of view. If _A_ has a house for sale and _B_ is a prospective buyer, the essence of the possible transaction between the two is that _A_'s idea of the value of the property is different from _B_'s idea of that value; or at any rate that _A_ sees less value in it to him than does _B_ to _B_. This is of course typical of all business transactions--the seller desires the money above the commodity, the buyer prefers the commodity to the money. The seller and the buyer each dwells naturally upon his own idea of value. This is altogether desirable, not to say indispensable, and is characteristic of every relation of business, wherever two men buy and sell, employ one another, or have other dealings together. The situation is somewhat the same as in a law suit where the duty of the attorney for the plaintiff is to make every point that fairly can be made for the plaintiff, while the attorney on the other side must correspondingly make every point that can properly be made for the defendant. Each side is supposed to look after the interest of that side. Similarly, in a business organization, say a railroad, when some new project is under consideration it will be submitted to the engineer, to the chemist, to the attorney, to the practical transportation man, and in each of these departments it is expected that the wisdom born of experience in the particular function will be brought to bear. The engineer speaks with authority on engineering questions, the lawyer on legal questions, the transportation man on the practical working out of the project; and, normally, the criticisms and contribution of each are confined to his own function. In short, the régime of economic self-interest results in leaving to each the responsibility which he is most competent to assume, that in which he is most expert, which thereby receives the best attention that generally speaking it could have. Nor are correctives lacking for the abuses which may enter in through an overdevelopment of self-interest. _Caveat emptor_ becomes discredited as an unmodified basis of human action. The golden rule is increasingly seen to constitute a foundation demanded by economics as well as by ethics. The trend to-day is away from indifference to the interests of those with whom we deal. The successful merchant will not attempt to make a profit through sales which he knows would not benefit the purchaser, for that would not measure up to the test, Will it pay? The value of a business depends largely on its goodwill and too much money and effort are spent in advertising and other means of building up a clientèle to make men conceive it to be to their interest to deal sharply with their customers.

In the efforts of scientists to seek out and establish new methods, new principles, the success of an experiment is to be determined, I suppose, by the test, Will it work? Does it yield effective results? Similarly, in economics, the science of mankind in its production, distribution and consumption of material things, the test of utility and efficiency is, Will it pay? that being the standard of workableness in the application of that science.

We have attempted, therefore, in this analysis of money-making to apply this test, because the practice or habit or influence that pays is that which is in accord so far with the principles underlying this branch of social science. We have seen, according to this standard, that it is the duty of all to adopt money-making as a conscious aim; that the money is to be economically used, the final object being net profit, that balance or remainder which is carried forward as created capital. Inability to increase a fixed income does not absolve one from the duty of doing one's part in the creation of capital through thrift and saving. The business enterprise, moreover, is required by economic necessity to aim at money-making--meaning, however, profits in the long run rather than immediate or temporary gains. Such permanent returns can only be sought through adherence to ethical principles and although this aim at profits becomes the power plant which drives the business machine, the latter gives its energies and attention more directly to the rendering of service.

Concentration upon service tends to make a man relatively efficient therein, but argues a relative unfamiliarity with the field of others, from which we infer the advisability of confining one's activity to the thing he has learned to do best. As an example of this, he should avoid placing his surplus capital or savings in outside enterprises where they will partake of risks that are unknown to him, nor should he attempt to employ his savings at all with the purpose of making money, unless, indeed, he can use them as capital in his own business. The focusing of attention on one's own function also implies and explains the custom of placing upon participants in a business transaction the responsibility each for his own side, a custom which is economically justified but which must be kept within proper limits, as is fully recognized by the business men who are successful and who therefore become models or examples for the guidance of other men, influencing the latter towards high ideals.

We have found, on the other hand, that apart from men in charge of business enterprise, the burden of providing thus for man's welfare and development is assumed by very few, the vast majority, whether in professional or business employment, treating it with neglect and contempt. They think, perhaps, that they are aiming at higher things, or that their efforts would not sufficiently count, or they do not give the matter any sturdy thought; while the underlying motive, often unconscious, is simply an unwillingness to practice self-restraint. It is self-indulgence, we must conclude, that is to be overcome if we are to meet this responsibility in a manly way, visualizing it with sufficient clearness to see that thrift, the creation of capital for one's self and for the race, comes into no necessary conflict with any other proper aim in life, but on the contrary constitutes a fundamental duty to society, to the state, to one's family, to his own future, to his self-respect.