It surprises me as a newcomer to this circle that entrepreneurs have been apparently forced onto the defensive by an image of the entrepreneur whose characteristics come from attacks of labor and clichés of the intellectuals. I am surprised because instead I had expected offensive anger, which arises as a reaction out of self-awareness of entrepreneurial achievement. I would have expected this as the immediately obvious reaction, because the achievement that allowed the now-burgeoning [German] economy to grow out of the ruins of the war’s end is remarkable in any case, even if we do not wish to romanticize it as a miracle.
But then I would have also expected it because the traditional image of the entrepreneur, which is undesirable and painful to you, emerged from past situations that are outdated today. In light of the trends we can observe in Western economy and society, and above all in the American world, that image is obsolete. Consequently, it would make sense, if, by way of introduction, I mention particular phenomena with which the outdated image would be contrasted.
By making this kind of contrast, this image would of course not disappear from today’s social practice tomorrow, since images of this kind have a social momentum that maintains them for a long time beyond the situation that once favored them; but perhaps the confrontation will cast a friendlier light on the difficulties that appear to bring pressure to bear on entrepreneurs today. The debates we have followed concerning the entrepreneurial image get their peculiar characteristics from the identification, taken for granted, of the entrepreneur with the industrial entrepreneur.
The tendency to enact and accept this identification stems from a relatively natural worldview commonly accepted today according to which there is an industrial society whose great social problem is the conflict of interests and consequent power struggle between entrepreneurs and workers.
The Emergence of the Post-Industrial Society
An industrial society of this kind never existed. At the time the notion of it was fashioned, especially by Karl Marx, the industrial sector of society was relatively modest. This notion could only become socially dominant because the new industrial sector along with its social problems was projected speculatively into the future, as if it would absorb the future, as if it would absorb society in its entirety. The notion could be maintained, furthermore, because in fact the industrial sector grew at the cost of the older agrarian economy and, in relation to agrarian economy, it is still growing today.
Yet around the turn of the century it became noticeable, and in the development of the American economy in the last three decades it has become clear beyond any doubt, that what is growing there may indeed be called industrial society; but it is only in part the industrial sector in the old sense of the production of goods by industrial methods of production.
What is growing more strongly today are services, in the broadest sense of the term, including public services. If the notion of an industrial society defined by the social conflict between workers and entrepreneurs was not empirically applicable at the time it was created because the society was still predominantly an agrarian economy, it also becomes ever less applicable as each day passes, because we observe the service sector to be growing.
This is not to say that we have to abandon the term industrial society. On the contrary, it is thoroughly justified, since the powerful transformations in the structure of Western society are based on the foundation of wealth created by technological productivity and the rationalization of forms of production. Without industry in the narrower sense of the production of material goods, there would be no growth in services.
But we have to be clear about the fact that the structure of industrial society, which is growing here, has outgrown in unexpected directions the notion of a society of entrepreneurs and workers. Think of the fact that in America almost half the total wage income of labor comes not from the industrial sector of society but from the service sector.2
New Kinds of Entrepreneurs
But now for the issue of the entrepreneur. The industrial entrepreneur obviously remains a basic figure in economy and society also in those places where the qualitative transformation has advanced furthest, as in America. But precisely in the American case we can observe how other figures, to whom an entrepreneurial function–in the sense of creative initiatives for the order of society–has to be ascribed, emerge ever more prominently.
Industrial society in the new style promotes entrepreneurial functions among which that of the industrial entrepreneur becomes merely one among many. Besides the capitalists in the old style and the managers of the new, there emerge the statesmanlike labor leaders of the John L. Lewis type; and besides both of these, there arise politicians and their intellectual advisers, with their initiatives.
Finally, not to be omitted from this list, there are the “wealthy man” types–Kennedy, Rockefeller, Harriman–whose inherited wealth frees him for initiatives of a political and social nature. It is remarkable that in public debates this new type of politically active millionaire is not appraised as a capitalist, but as psychologically approaching more the worker or intellectual type who bears no business responsibility.
Not so much the wealth of this type is objected to in critical remarks, but their lack of experience in money matters–never in their lives would they have had the responsibility of meeting employees’ payroll on payday–and so they have no understanding of the problem of a genuine economic entrepreneur. These are only supposed to be examples of the broad scope of the new phenomenon of the entrepreneurial function, in the sense of a social initiative that has expanded in an industrial society far beyond the original industrial sector.
To the degree that a society becomes an industrial society in the new style, in the measure, then, that its members are drawn with their whole existence into the web of mutual dependencies, new centers of initiative evolve that are responsible for the functioning of the whole. There results a division of responsible conduct in society that has as yet found no generally acceptable linguistic expression.
President Kennedy Causes a Stock Market Crash
We can trace in all its detail the kind of practical importance this new division of entrepreneurial function, and the kinds of conflicts its presence manifests, with the clichés of the older entrepreneur/worker image on the occasion of President Kennedy’s collision with the steel industry in 1962. The steel workers had so moderated their wage demands under White House pressure that they were kept within the framework of increases in productivity.
Shortly after the conclusion of the tariff pact, the steel industry raised its prices against the president’s wishes. The White House reacted with the heavy pressure of state power and forced a rollback of the price hikes. The economy reacted to this with the great stock market crash. Public discussion of these dramatic events articulated in a very basic way the various aspects that are of interest to us.
What Are Labor’s Just Claims in Modern Society?
Above all there was posed the basic issue as to what right labor could have to claim a proportionally equal share of yearly profits from the increases in productivity. This is because the production increases in single industries depend on the society’s overall state of technology–and quite diverse persons and groups contribute to this state: physicists, chemists, technicians, engineers, managers, market analysts, and others.
Why the profits from these entrepreneurial achievements should accrue to labor in this or that firm, or why they should not be translated into price decreases (which would benefit all consumers) is not altogether clear. We could adopt the pungent dictum of a German leader who not long ago observed: A worker has a claim on yearly wage increases, and therefore the entrepreneur has to take care that the productivity of the year increases enough to satisfy the claims for wage increases.
Now this dictum should not be misconstrued as expressing an unusually reactionary attitude. On the contrary, it is a powerful advance in economic thinking that contrasts with the situation at about the turn of the century when a German economist drew upon himself the mistaken contempt of his socialist colleagues for asserting that labor’s wage increases owe less to the valiant class warfare of the unions than to the circumstance that mounting productivity makes the payment of higher wages possible.
If today even labor leaders already have understood that wage hikes derive not from the surplus value that needs to be pried from the hands of exploiting capitalists through the struggle for power but from production increases that result from entrepreneurial achievement, it is the happiest of gains in realism.
The Diffusion of Entrepreneurial Achievement
As the American case of the conflict with the steel industry shows, the realistic understanding has nevertheless not advanced so far that the workers’ claim upon profits from increased productivity was challenged. An understanding of the diffusion of the entrepreneurial achievement in a fully developed industrial society is still lacking. In virtue of this diffusion, increased production in one specific branch of industry is a function of the general state of technology, which in turn is again a function of science, of technology, of organizational initiatives, of the constitutional and economically organized freedom for its unfolding, of the general condition of national education, and of many other factors.
We also lack precise knowledge of why the absorption by wage raises of profits from increases in production endangers the capital formation from which there can flow the additional production increases among whose effects are wage hikes. Running counter to the American president’s agreement to wage hikes as long as they are kept within the framework of productivity increases, the critical press also used the above-mentioned argument that millionaires who live off inherited wealth understand as little about economic processes as their intellectual advisers or the workers. This objection might be invalid, since competent national economists belong among the advisers to the president and they do not exactly keep their opinions to themselves.
The questionable reasonableness of labor’s demands might well be better explained politically, that is to say, by the social dominance of obsolete clichés about greedy entrepreneurs who in any case are in the right against the poor exploited workers. It should have become clear that the president’s collision with the steel industry is of interest less for the event itself than for the public reaction.
The immediately ensuing stock market crash, the withholding of capital funds from investment, the sudden rise in savings and funds in bonds, as the government clearly grasped, were warning signals that the time for political fumbling under the aegis of obsolete clichés about entrepreneurs and workers had begun to run out, because too large a portion of the populace understands too much about the functioning of industrial society.
Ordinary People Understand Unreasonable Demands
People grasp that at some point irrational interventions have shattering consequences for the whole of society. Furthermore, the critical press again sharpened issues that already have been debated for a long time. There was no dearth of pointed references to the fact that only a third of employed labor is organized into unions, which want to establish a monopoly for themselves relative to production increases. Comparisons between the unions and capitalist robber-barons of the nineteenth century were to be heard once again.
More urgently, the notion that the power of the unions would have to be broken was brought into discussion, just as surely as capitalist excesses were reined in earlier by antitrust legislation. No doubt remained about the fact that the establishment of a profit monopoly in favor of labor in any branch of industry costs other sectors of industrial society that have an equal claim to a share in the increased social product. The revolutionary assertion was even made that there exists claims to a higher dividend.
As confusing as the situation in detail still is, we can state by way of summary: The unions that pursue their politics under the obsolete cliché of class warfare have, in Western industrial society, gone a long way toward being maneuvered, at least in the American phase of its evolution, into the position of parasites who want to appropriate unethical profit-shares at the expense of their social partners.
While the nineteenth-century image of exploitative entrepreneurship has faded, the twentieth-century image of the exploitative worker has gained color. We can, moreover, observe as certain that the monopoly claim of industrial labor to the term social in industrial society has become obsolete as a matter of fact. The great social issue is no longer the class opposition between industrial labor and employers, but the objectively reasonable organization and politics of an industrial society in which industrial labor in the old style occupies an ever-decreasing role.
Beyond this, the factual interdependence of industrial society undermines labor’s claim to be the preeminently valued representative of morality, since the customary old-style means of warfare, especially the strike, under some circumstances harms the workers in other sectors of society much more grievously than the entrepreneurs against whom the strike is directly aimed–as the New York newspaper strike demonstrates so brilliantly [November 1962-March 1963]. Therefore, the industrial entrepreneur no longer stands alone in opposition to labor, as in the old-style disputes, but can sometimes find surprising support in a public opinion fed by the dissatisfaction of a great number of persons who are by no means industrial entrepreneurs in the strict sense of the term.
The Psychology of Demonization
At this point a word of admonition is in order. This analysis could awaken the impression that the worker is being put down as the villain in the piece. Nothing could be further from my intention. It is easy to see why a negative estimation of the worker could arise today. At a time when Western industrial society needs to overcome old clichés and reach a proper self-understanding of its order, the worker is frequently portrayed as a “profiteer.” And these labor-profiteers are always unloved because there is an all-too-human tendency toward paranoia that is exacerbated by situations in which the labor-profiteers may be said to bear responsibility and share guilt. Of course they have contributed no more to the situation than have those who have accused them in such loaded terms.
Be that as it may, profiteers will probably show less zeal in reforming situations in which they enjoy an unjust advantage than would those who suffer under such situations. And it would be counterproductive to demonize such very human behavior, as did Marx when he condemned the entrepreneurs and the bourgeoisie in general. We have to be clear that an interdependent industrial society can only function as a democratic society when the tendency toward demonization of those along side whom we must live is kept under control. This demonization is nothing less than a form of gnostic psychology.
Whenever the psychology of demonization becomes socially dominant, no matter whether it springs from a Marxist or positivist, from a liberal or conservative background or subculture, an industrial society ceases to function as a democracy. Since industrial methods of production cannot be jettisoned, there inevitably arises as an alternative the danger of a dictatorship of the right or the left. I am alluding here to a central problem which unfortunately cannot be gone into at this time.
However, in order to avoid misunderstanding I would like to remark expressly that in the example of the [U.S.] steel industry conflict, the worker appears on the scene in the role of the profiteer; and in addition to the entrepreneur/worker clichés there are yet other obsolete clichés whose dominance enables other groups to live quite comfortably at the expense of foreign labor.
Reflecting on the German situation, I recall well-known clichés about how healthful in body and soul is agrarian life (on which even the spiritual life of the entire nation is supposed to depend), in the name of which agricultural companies or forms of trade that are no longer profitable are kept alive by subsidies of various kinds at the taxpayers’ expense. If we were to examine the [German] federal budget and its many subsidies, we could assemble lists of profiteers and parasites in which probably every sizable group in German industrial society would be represented.
A Digression: Coping with Material Dynamism
These more general observations nevertheless should also be interpreted less as a critique of evil conditions than as pointers to a fundamental problem in the organization of industrial society. Its material dynamism, which can be summarized under the title of increased productivity, is based on technological progress and the rationalization of production processes.
The more strongly these sources of wealth flow, the more swiftly the structure of the economy is transformed. This tempo of change is the problem facing our Western industrial society, which so far has been satisfactorily solved neither individually by the development of habits of adaptation, nor socially by means of organization.
Reeducating to Accommodate Change
The structural transformations in the course of which forms of business become unprofitable, and expert knowledge and professional experience lose their value, obviously demand a willingness on the part of people to shift into new professions and to acquire the requisite knowledge and the experience for its implementation.
Shifts of this kind are labor achievements of an immensely higher order than those required by professional routines, and they meet a corresponding resistance on the part of those stunned by such demands. Hence the temptation is always great, with the help of state power, to maintain unprofitable methods of production, businesses, and positions whose raison d’être no longer exists.
When the number of those affected is large enough, and they are sufficiently organized to exert political pressure, their efforts will also be successful. This particularly illustrates how government in an industrial society has explicit entrepreneurial functions, since one of its primary functions is to maintain the rationality of economic processes for the common good, and so it must also organize and finance the needed adaptations and retraining programs. Of course in actual cases large enterprises, entrepreneurial associations, and unions participate in this entrepreneurial function.
The Resolution of the U.S. Steel Dispute
From this digression, which is supposed to clarify further the problem of society, let us return to the case of the conflict with the steel industry. How does this most broadly developed sector of Western industrial society cope with the challenges indicated above? Quite clearly not in the best way, as the U. S. Steel industry case shows.
The unions’ politics of wages is formulated in terms of the old clichés and threatens to monopolize the profits resulting from increased productivity for labor, and thereby to endanger the formation of investment capital from whose stock of funds future increases in production are supposed to result.
For reasons of elective politics, the government takes the side of the unions, even though it perhaps does not have the clearest conscience in doing so. The entrepreneurs make serious tactical mistakes and provoke the government’s antagonism by bad public relations. The pressure of obsolete clichés is quite heavy.
Nevertheless, in relation to the passive positions in the situation there are to be reckoned the active ones the occasion has brought to light. The discussion of the case in the press proves that wide circles of those who define public opinion are thoroughly knowledgeable about the conditions under which industrial society operates. They understand exactly that these conditions get disrupted most seriously by union and government politics on the basis of outdated notions. Moreover, it was brought out clearly that misunderstanding the conditions endangers the functioning of democracy and has to lead to a socialist-dirigiste constitution of society.
Finally, the U. S. stock market crash, which went far beyond a shake-out of overvalued corporations (and in its price drops also discounted more solid stocks with good returns)–the end, so to speak, of the free economy–injected a salutary terror into all concerned. The entrepreneurs gained an insight into their lack of facility in handling the situation. The government understood that it had gone too far.
In the following months the President took the trouble in meetings to speak to industrialists in a tone one would have expected instead from a leader of a business association. Meetings took place for the sake of reconciliation; and whenever distrust of the government resurfaced, at least the immediate bitterness was dissipated.
As for the attitudes of the industrial entrepreneurs, the case demonstrated that there are limits that could not be transgressed without endangering their function (the importance of which function is clear) to the detriment of society as a whole.
The Spiritual Basis for American Success
On the basis of this analysis we can pose the question: Why, in spite of all these difficulties and the survival of the obsolete clichés, does the overall process of industrial society function better in America than it does with us in Germany?
In so inquiring, I would make clarity of awareness within the community as the key to America’s success–an awareness concerning what is necessary for industrial society to function. This clarity of awareness has to be sufficiently widespread socially to react sensitively and with social effectiveness whenever these conditions appear to be seriously threatened.
To answer this question, I need to go into points not adequately articulated in the previous discussion, namely, the economic order’s function in the framework of spiritual order; and that the spiritual order of Anglo-Saxon and especially American society is different from that of the Germans.
Issues of spiritual order and their national differences are extraordinarily complex; I can provide no more than a hint here or there. Even these suggestions can amount to no more than appeals to historical knowledge out of which the bare necessities need to be enlarged.
In order to discuss issues of spiritual order reasonably, we need fixed concepts to serve as coordinates for the judgment about any actually given order. So we must inquire: What are the sources from which the order of Western and American society are nourished? What are the disruptive forces that are at work throughout the West but operate much more devastatingly with us than they do in America?
The Sources of Order: Power, Reason, and Revelation
Because the external victory over the organizational power of National Socialism did not eliminate the widely pervasive destruction of spiritual order that became manifest to anyone: After the defeat it continues to last, and it generates the feeling of a spiritual vacuum even though the economic and social order functions after a fashion.
In a recently published book, Das deutsche Risko (Stuttgart, 1962), Ruediger Altmann wrote of the “grotesque triviality” of the Federal Republic, and by this he meant the lack of any conception of political order. In what does such a conception consist? Thus we pose the issue of the source of Western order.
Order in the Western world goes back to antiquity. On the occasion of Justinian’s great work on law, its sources were explicitly established as power, reason, and revelation. The ruler has to fulfill three functions: He must be imperator and so be able to defend and preserve the empire by military power; he must be religiosissimus juris and so administrator of the philosophical-rational order of law; and he has to be the defensor fidei, the defender of the revealed truth.
These three sources are alive throughout the Middle Ages as imperium, studium, and sacerdotium. In his historical treatment of the nineteenth century, Ernest Renan could say that the foundation of Western culture are Hellenistic philosophy, the Jewish-Christian religion, and Roman legal and administrative order.
Power, reason, and revelation have remained the primary sources of order until our day. Nevertheless, science has entered in as a secondary source, which is to be characterized as specifically Western, for only in the West have reason and revelation so de-divinized and de-demonized the world that the relatively independent structure of things could become visible and be objects of investigation.
Four Sources of Disturbance
And now about the sources of disturbances. They too have a long prehistory which nonetheless ought not to preoccupy us here. They start to flow more clearly since the beginning of modernity, even if their destructive power only becomes fully effective in the eighteenth century. I shall call them the “anti-” complexes because they are aimed against one or another of the sources of order. Four of these can be clearly distinguished: the anti-philosophical, the anti-church, the anti-Christian, and the anti-world complexes.
The anti-philosophical complex begins to be influential with the Reformation, since the anti-Aristotelian animus of the reformers, directed against the intellectual armature of Catholic theology, was in principle anti-philosophical. For outside of the philosophy that emerged with the Greeks as the discovery of the order of reason and of being, philosophizing of any kind does not exist.
Along with Aristotelian philosophy, philosophy itself as the use of reason for thinking through the order of man, society, and the world was thrown overboard. Down to our own day, this was a blow from which philosophizing has not recovered. Especially since the eighteenth century the anti-philosophical complex has gotten rigidly institutionalized and becomes socially dominant in ideologies of the following types: progressivism, positivism, and Marxism.
The Anti-Church Vacuum
The second complex is the anti-church one. It is quite understandable as soon as one considers the wars of religion of the sixteenth century in France, and of the seventeenth century in England and Germany. The aftermath of these catastrophes was the demand for the separation of church and state, so that the public life of nations might never again be able to be rocked by the scandal of warring churches.
This demand, which moves at the level of institutions, would not in itself have had to lead to anything but a more precise securing of the temporal realm of social order over against the spiritual, as was already arranged in the Gelasian distinction of temporal and spiritual powers, with their mutual delimitation. Nevertheless it had unintended consequences, because when the churches renounced their role in relation to intellectual and social problems of the age, a vacuum arose in the realm of the spiritual order into which there could stream the intellectual and social mass movements of the ideological type.
As a result of this tension between the churches—the traditional staunch defenders of spiritual order—and the movements outside the churches that had to be ready for the burning problems of the time, the anti-church complex fatefully strengthened not only the anti-philosophical complex of the ideologies mentioned above, but also the anti-Christian complex closely connected with the antiphilosophical one.
The Special German Problem: Pietism
The fourth, anti-world, complex is the one that is peculiarly characteristic of Germany. While it, along with the others, is also to be found throughout the entire Western world, it has unfolded in an especially intense way and been effective in destroying order in Germany.
In the eighteenth century it becomes virulent as the attitude of Pietist subjects toward a regime understood as an authoritative ruling body. The formula of the “sacredness” of the ruling body comes from Kant through appeal to Rom. 13:1. For these Pietist subjects the governing body appears in the ambiguous light of a power imposed by God, which has to set limits to the evil in the world and which at the same time shares so intensely in this evil that by the nineteenth century the sentence “Power is evil [die Macht ist böse]” could become the credo in every bourgeois home.
There are many concrete attitudes in which this anti-world orientation gets expressed. They start with the Pietist one of existence in expectation of redemption, which requires one to withdraw from the filth of the world and especially of politics. They extend to the contemporary one of ideological indifferentism that may be formulated: “If I shouldn’t get involved in stupid politics, then I won’t get involved at all. [Wenn ich keine dumme Politik machen darf, dann mache ich gar keine].”
German Education and the Camp Commandant
Pietism and Indifferentism share the lack of a sense of duty to shape a life in this world–an irresponsibility that should be seen, not in the rosy light of an ennobling inwardness and the domain of “beautiful souls,” but in the harsher light of laziness when it comes to thinking and fear when it comes to work. For responsible living in the world, work is inescapable.
I would point in particular to the institutionalization of the anti-world complex in the system of the German university that goes back to Wilhelm von Humboldt’s idea of cultural formation (Bildung).1 Whatever the differing opinions about the merits and achievements of his system in the past, we won’t argue about that now. However, we wish to point out that Humboldt expressly expounded the antithesis between the political citizen of the ancient polis and the apolitical citizens of the constitutional government of his time.
In his educational ideal he decided for the second type. Only if the citizen is not politically active can he fully unfold his personality through cultural formation; and this liberal Bildungsideal has been implemented in the organization of the university, in its business of research and teaching.
This remarkable idea, according to which cultural formation swims like a kind of cream–some today would say scum–on the surface of the nation, and by its swimming on the surface in a mysterious way engenders order in the substance of the nation, is also supposed to ground its claim to validity through its accomplishments at the same time.
In this peculiar idea there is scarcely a trace of the Platonic conception of education as the art of periagoge–as movement toward the goal of the spiritual order of man and of society. By contrast, if you draw out the implications of Humboldt’s idea you eventually produce a political-spiritual vacuum in which unfortunate things like National Socialism could spawn.
It presages the concentration camp’s commandant who, after his loyal and dutiful fulfillment of his day’s work, goes home in the evening and, since he is an educated person, enjoys Mozart. Of course Humboldt was not responsible for the consequences he could not foresee; instead those who defend themselves against the reform of an obsolete system after its effects have not merely been suggested, but become gruesome reality, are to be blamed.
The Christian Core That Protected England
No politics is as perilous as that of apolitical educational idealists. Let us examine the English-American order. In England and America, too, everything is not rosy. There too the “anti-” complexes have engaged in their work of destruction. But the substantive order, which was more deeply ingrained in the institutions, was maintained much better than it was under German circumstances.
Once again only brief points, especially regarding the early connection of the idea of national existence with the idea of a Christian community, are possible. Already in the fifteenth century, while the wars surrounding the consolidation of the dynasty were being waged in England, Sir John Fortescue was concerned in his De Laudibus and Governance of England about the puzzling nature of the emergent nation, and he qualified it as a regional corpus mysticum. Then later on, thanks to Henry VIII’s politics of supremacy, the Reformation of the sixteenth century took on more of a schismatic character than a theological reformation, so that the antiphilosophical complex could not develop fully.
The great political work of Richard Hooker in the Elizabethan Age could thus still be conceived in terms of the Laws of Ecclesiastical Polity in which each person is simultaneously a member of both the civil and the ecclesiastical bodies. Again, and at about the same time, the Puritans injected into English politics a strong dose of Hebraicism in which the nation was imagined on the model of the Chosen People.
At the end of the wars of religion and the beginning of the Settlement , therefore, stands Locke’s Two Treatises of Civil Government, which, to be sure, shreds the Ecclesiastical Polity but still conceives the nation as the community whose political business has to concentrate on the temporalia of existence.
Finally, the disruption of the nation in the eighteenth century was met by John Wesley’s Second Reformation, the after-effects of which are still discernible both in England and in America in the fact that, in spite of their monstrous power, the ideologies have remained on the periphery that surrounds a core of Christian and rational moral knowledge.
What is the Basis for Rational Political Debate?
These hints may have clarified the importance of spiritual order for the functioning of industrial society. The relationships are more favorable in America than elsewhere because its rational knowledge of order is less prone to disturbance by the “anti-” complexes and the ideologies, even though these disruptive factors play a role that is not to be underestimated. As a result, a more lucid public awareness of the conditions under which an industrial society can work in a democratic form can be brought about through rational discussion. I would like to conclude by summarizing and underlining the chief points among these conditions.
At the heart of the problem stands the increased prosperity for all of society’s members through increased technological productivity and the rationalization of the labor process. For technical business reasons, these increases are necessarily connected with the growth in the mutual dependency of all sectors of society upon labor with rationalized expertise in other relevant sectors.
The phenomenon that so aroused Karl Marx, namely, the dependence of the industrial worker in his material existence upon the functioning of a business in which he possesses no ownership rights and over which he has no control, has turned into the general phenomenon of interdependence without the particular problems of business being thereby resolved.
Modern industrial society is a total enterprise that disperses entrepreneurial initiatives among persons and associations, industrial entrepreneurship in the stricter sense and unions, public and private bureaucracies, managers, services for recruiting, information and communication, commercial organizations, school systems, the organization of research by universities, economic enterprises and also government, laws governing social and economic orders, and many similar institutions. In this sense we have been speaking about a democratization of the entrepreneurial function.
The total enterprise called industrial society, precisely because of this diffusion of the entrepreneurial function, has the property of being, as a whole, an enterprise without entrepreneurs. This could exist only if all entrepreneurial initiatives required for the material capacity to perform were brought about freely and cooperatively. Moreover, this is only possible if the institutions required for cooperation–information, communication, consultation, and the balance of interests–are organized adequately.
Protecting Democratic Society From Gnostic Sectarians
It is also possible only if no one seriously rejects cooperation, even in cases of great differences in opinion. Above all, it is possible only if fundamental mutual trust based on common spiritual order is not radically destroyed by ideologies and the gnostic psychology of demonization.
It is completely obvious that to function in a democratic form, industrial society demands a very high measure not just of entrepreneurial initiative but of disciplined cooperation. It is not a social milieu in which strident ideas, eccentrics, and “masters in their own houses” can be tolerated in positions of responsibility.
If cooperation in a democratic form is rejected, and it comes to serious disturbances of the enterprise, in the wake of which larger sectors of society are threatened in their material existence, or feel themselves threatened, the danger arises that the enterprise gets surrendered to one entrepreneur–whether this entrepreneur is set up by gnostic sectarians of the Communist type, or by the preemptive movements of the authoritarian right.
Both the possibility and the danger are something of which America is lucidly aware, as I have said. This awareness is kept alive, not on the intellectual level of sheer knowledge, but as a living pathos of responsibility for the achievement of the experiment of a democratic industrial society in America.
Allow me to close with an expression of such pathos–with a statement from a speech by David E. Lilienthal, former chairman of the Tennessee Valley Authority and, later, director of the Atomic Energy Commission, a man about whom no one would dispute the rank of a great entrepreneur:
“We are overspending our emotional energy on binges about Russia, India, China, the moon–everything except what happens here where we live . . . . The hopes of the world for the protection and the continuation of human culture, in short, of a civilized world, will not be determined by what happens in India, or China, or Russia, or Africa, nor indeed in Western Europe. It will be determined by what happens in our country.”
The Thing to Remember
From the clichés current among us [in Germany]–such as the one that declares the opposition between entrepreneurs and workers–it is evident that we do not yet grasp the emergence of new forms of society. This knowledge is already further advanced in America because their modern industrial society is more developed. Its service sector has gained in importance at the expense of the manufacturing sector. It has been recognized that the economy does not arise just from industry. And “entrepreneur” includes whoever seizes social initiative in any form, whether as businessman, as labor leader, as intellectual or as politician.
The practical importance of this new division of the entrepreneurial function in America already allows the actual social issues of our day to emerge with some clarity [in Germany]. In America, for instance, people no longer assert that the main social issue consists of the adaptation of wages to a firm’s increases in production. Instead it resides in the issue of how the result of the total economy’s productivity can be deployed in the most useful possible way for the future of the entire society.
Inexhaustible union demands can meet with the same resistance on the part of all socially responsible people, just as did eighty years ago the unrestrained striving for profits. A strike gets condemned because of its consequences for the whole society, not just in relation to its effects on those involved. Labor’s monopolizing of the word social thereby disappears. Be that as it may, shifts in the agricultural, industrial, and service sectors are not yet adequately grasped.
The process of industrial society is understood better in America than in Germany because the consciousness of the conditions under which this kind of society operates in a democratic form is clearer there. The criterion for the difference lies in questions of spiritual order, especially their distinctive historical origins. The original spiritual order of the West proceeds through separate developments, of which the important ones for us here are the Anglo-Saxon and the German. In the end, the different presuppositions in the particular countries for the new appearance of industrial society arise from these separate developments.
Corresponding to the differing spiritual presuppositions, the way change is brought about in the industrial society of each country is different–in English countries, doubtless, more from the society; in Germany, more from the state. In Germany the indispensable participation of the citizen in important political and economic processes is thereby made more difficult [by the dominance of government]. Yet a highly developed industrial society can only function if all its members understand how to cooperate, remain disciplined, and if each person tolerates and develops entrepreneurial initiative for the welfare of the democratic state in accordance with his own capacities.
1. Translated for this edition from the German by Manuel Brieske, this essay originally appeared as “Demokratie und Industriegesellschaft,” in Die Unternehmerische Verantwortung in Unserer Gesellschaftsordung, publications of the Walter-Raymond-Stiftung, vol. 4 (Cologne: Westdeutscher Verlag, 1964).
2. If we apply our current terms with their old connotations to the new social realities, defective assessments of the situation result. Think, for instance, about the comparisons constantly drawn between the Soviet Union’s Gross National Product and that of America. They are undertaken without consideration of the fact that the indices are incomparable because they express qualitatively diverse structures of economy and society. It has practically become a sport to draw comparisons that have to be misleading if they focus on old-style industrial production.
This holds true especially for steel production, whose standing in the structure of the American economy is completely different from what it is in the Russian economy. It can be even more misleading to focus on the comparative figures of increased productivity, which are supposed to show that the Russian economy has caught up with American production in a short period. With the help of such comparisons, the differences in the structure of the economy and in the basis for wealth can only be obscured. One might not be reminded by these comparisons that in the Soviet Union as a whole there are not so many motor vehicles in use as America manufactures in one year.
This excerpt is from Published Essays: 1953-65 (Collected Works of Eric Voegelin 11) (Columbia, MO: University of Missouri Press, 2000)
Also see “The Comparative Politics of Eric Voegelin,” “Democracy in New Europe,” “Democracy and Industrial Society,” “Industrial Society in Search for Reason,” and “A Prescient Lecture: Voegelin’s ‘Democracy and Industrial Society.”