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CHAPTER IV: OFFICIAL CONSERVATISM - Yves Guyot, Where and Why Public Ownership has Failed 
Where and Why Public Ownership has Failed, trans. H.F. Baker (London: Macmillan, 1914).
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Industrial Progress Due to Individuals Not to Governments.—Official Conservatism.—Dread of Innovation.—Departmental Drinking Water.—The Grinding Stones of the Bureau of Public Charities.—Telephones.—Private and Public Management.—Causes of the Backwardness of the Electric Industry in Great Britain.—Tools in the Workshops of the Ministry of War.—Labor Economy.—Work for the Workers and Not for the Service.
Industrial progress is due to individuals, not to governments. No state discovered gravitation, and, if humanity had waited for governments to apply steam and electricity to our daily needs, we should have neither railways, telephones, nor telegraphs.
The official is naturally a conservative, and every innovation frightens him, because he is never sure how it will turn out. If he is progressive he is thwarted by the inertia of the organization of which he is a member. Should we go so far as to imagine the administrative group to which he belongs as being other than inhibitive and inert other groups would still have to be considered. In any case, it is always necessary to obtain appropriations or special authority beforehand in order to establish any public undertaking. By insisting upon changes he must assume some risk, even if it is only a burden of responsibility, and, as the personal hazards to be run are great, and the personal profit contingent or insignificant, things are generally left as they are.
This administrative lethargy is found even in those government or municipal enterprises which ought to be most progressive.
For example, the ministry of Public Works in France is entrusted with the supervision of the Paris water works. When I became minister in 1889 I found, to my great astonishment, that the minister and the employees of the bureau had nothing to drink but the water of the Seine. According to the Matin, of March 20, 1906, the minister of the Interior, whose department includes that of Sanitation, was drinking Seine water at that date. The Bureau of Public Charities of Paris is still using grinding stones; it is considering transforming them into cylinders. Such facts as these, however, never hinder public officials from making complimentary speeches and reports extolling the foresight, solicitude and competence of the government.
The Swiss Federal railways have always been opposed to the creation of new lines which might involve competition. In fact, the department has demanded that every new franchise be submitted to it. Its decision was unfavorable to the Loetschberg and Moutiers-Longeau line, which is to bring the canton of Bern into direct connection with the Simplon tunnel. Although the canton of Bern has been able to overcome this opposition, weaker cantons may not be able to do so.
I have already outlined the rivalry of the Prussian railways and the waterways.
The different state departments cherish a certain esprit de corps, and each considers as an attempt made against itself any proposition, however useful, which might interfere with its own development.
In his book entitled Public Ownership of Telephones on the Continent of Europe,1 A. N. Holcombe states that, except in Germany and Switzerland, the telephone has been introduced by private enterprise throughout all Europe. To-day, except in Denmark and Spain, this practice has been given up. A government having centralized the administration of the telegraph could not consistently permit the telephone to remain in the hands of private interests. When the telephone first appeared it was universally opposed by the conservative departments in charge of the public telegraph service. They saw in it a competitor whose influence must be counteracted. Later, as soon as it was perceived that the new utility would survive such treatment, nearly every government decided to absorb it.
When the telephone in its turn had become a government service it also systematically opposed the development of all other electrical industries, especially those using currents at high frequency, in order to protect their weaker current systems. Technical progress would assuredly have been more rapid under a system of competition. On the whole, Mr. Holcombe is favorably impressed with the organization of the German telephone service, but he states that in 1902 the telephones were four times more numerous in the United States than in Germany.
In Great Britain, in 1880, the telephone was legally declared to be a telegraph, and ultimately it became a monopoly under the postmaster-general. In 1911 there were only 644,000 telephones in use in the United Kingdom, while if the proportion had been the same as that of the United States it would have had 3,000,000.1
At the annual dinner of the Institute of Electrical Engineers, February 2, 1911, its president, S. Z. Ferranti, said:
“We shall never know what the municipalization of electrical undertakings has cost us. It has retarded progress and is largely responsible for the backwardness of the electrical industry in Great Britain.”2
In reporting the 1913 budget of the French ministry of War the Secretary, M. Benzet, writes:
“I have observed that the equipment is everywhere inferior to that of corresponding private undertakings, and, when I ask the superintendents, ‘Why do you not make use of such or such an up-to-date machine in general use abroad as well as in France; or else, as those you have are good enough machines although they are fewer, why not multiply them since they yield such excellent results?’ I invariably receive the same answer: ‘We cannot waste our time over the question of equipment because, as a matter of fact, that question never comes up in army and navy institutions.’
“And, gentlemen, this fact is only too evident; for, in getting to the bottom of things, I have found we vote appropriations for army and navy establishments without even counting them. We pour out the savings of the entire nation for the national defense to ensure the production of munitions of war, and yet it is only at the close of the fiscal year, if there is any money left, that we even think of equipment.
“Here is industrial inconsistency for you. A nation that pretends to be a manufacturer begins with production and it is not until later that it takes up the question of the efficiency of its indispensable machinery. It is scarcely credible that conditions such as those which I am about to describe can actually be rife at the present day.
“In the existing system of operation, when production is heavy there is a large demand for machinery; but this is also the time when attention to equipment can least be spared, because when production is heavy there is nothing left at the end of the year to devote to equipment.
“On the other hand, when production begins to slacken and, consequently, manual labor is in little demand and it might be possible to employ it in repairs and constructing machinery, then, according to the regulations in vogue for many years, the working force must be reduced.”
The Secretary afterward strove to prove that the “distressing delays” in the work of the army and navy establishments were due in large measure to extreme bureaucratic centralization. He then explained in detail the complete cycle through which a single order of the government must pass, and concluded:
“I was anxious to discover how much time would be required to fill the simplest order. I found that no order could be executed in less than 95 days and in three-quarters of the cases the work would require 155 days. If, by an unfortunate chance, however, there is the smallest modification necessary, eight months, ten months, and even more are required.
“The result, as may be readily seen, is, in the first place, to cause a serious interruption in the service. I have known cases where establishments have had to hold up pressing orders to get the necessary authority from the minister for the funds required to carry out the order and deliver it before it would be too late.
“I have already spoken of the high cost of such work. This is due to the fact that the superintendents, knowing that there will be a considerable delay before they can obtain the necessary authority, seek to make up for lost time as far as possible by shortening the time of delivery.”
As for the administration of the telegraph in France this is what I find in the Dalimier report:
“After much hesitation the department has decided to adopt the installation of a telegraph ‘multiple.’ The first appropriations were made in the 1911 budget, but the preliminary investigations could not have been very thorough, since, despite the stations established since 1903 in the cities above mentioned, and in which the ‘multiple’ system is in operation, it was necessary, in July, 1911, to appoint technical experts to examine these systems with a view to choosing a system adapted to the needs of Paris.”
Protectionists and Socialists are forever harping on the old strain that governments and municipalities “ought to provide work for workers.” The enterprises resulting from such efforts, far from bringing about labor economies, must always increase labor expenses. Among the excuses assigned for shorter hours of work is found the argument that if each worker does only half duty there will be work for two workers. Then, not only must the working hours be short, but there must be no over-production during the time spent by the workmen in factory or shop. We encounter everywhere protestations against piece-work and demands for work by the hour “at which nobody need kill himself.” And not only must each man profit in some measure by the right to be lazy, proclaimed by Lafargue, but if he does not do the work for which he is paid he is accomplishing a duty of high social consequence by leaving work for his comrades.
If the superintendent of the workshop wishes to introduce a machine which could do the work of four workmen he is accused of taking the work from the laborer instead of giving it to him. Consequently he immediately antagonizes all the labor organizations and all the municipal or government employees. He is starving the people. He is neglecting the fundamental duty of government and municipal undertakings. He is a traitor. And, as an official must be a hero in order to face all this wrath, he is generally careful not to provoke it. If he learns that somewhere a machine is doing the work that he succeeds in getting done only by heavy expenditure for labor, he is careful not to ask for it. If he can he will be ignorant that such a machine exists.
The material and moral depression evident in every state and city undertaking is easily explicable with the above facts in mind, and I have frequently received extraordinary confidences on this subject.
The Socialist is accustomed to declare that he and his comrades are not enemies of progress, and, in spite of the facts, he will treat as calumniators those who accuse him of it. He declares that Socialists are not hostile to new processes, nor to new machinery, except when they put the workmen out of work and do more work at less expense. It follows that he accepts the new processes and the new machinery on condition that no economy is involved in their use.1
But then, what is the use?
Howard Economic Studies, Vol. 6.
Communication of Laws Webb to the London Chamber of Commerce, Morning Post, February 18, 1911.
The Electrical Review, February 10, 1911.
See Yves Guyot, Science Economique, 4th edition, page 230.