tory shows that in modern competitive industry the
motive of personal gain is most wastefully applied. On the one hand,
the great mass of intelligent workers have no opportunity of securing
an adequate reward for any special application of intelligence in
mechanical invention or other improvement of industrial arts. Few
great modern inventors have made money out of their inventions. On the
other hand, the _entrepreneur_, with just enough business cunning to
recognise the market value of an improvement, reaps a material reward
which is often enormously in excess of what is economically required
to induce him to apply his "business" qualities to the undertaking.

(4) The same charges of weakened individual interest, want of
plasticity and enterprise, routine torpidity, are in a measure
applicable to every large business as compared with a smaller. Adam
Smith considered them fatal barriers to the growth of joint-stock
enterprise outside a certain narrowly-defined range. But the economies
of the large business were found to outweigh these considerations. So
a well-ordered state-industry may be the most economical in spite of
diminished elasticity and enterprise.

But while these considerations qualify the force of the contention
that state-control would give no scope for industrial progress, they
do not refute it. The justification of the assumption by the State of
various functions, military, judicial, industrial, is that a safe
orderly routine in the conduct of these affairs is rightly purchased
by a loss of elasticity and a diminished pace of progress. The arts
of war and of justice would probably make more advance under private
enterprise than under public administration, and there is no reason to
deny that postal and railway services are slower to adopt improvements
when they pass under government control.

It may be generally admitted that, as the large modern industries pass
from the condition of huge private monopolies to public departments,
the routine character will grow in them, and they will become less
experimental and more mechanical. It is the nature of machines to be
mechanical, and the perfection of machine-industries, as of single
machines, will be the perfection of routine. Just in proportion as the
machine has established its dominancy over the various industries, so
will they increase in size, diminish in flexibility, and grow ripe for
admission, as routine businesses, into the ranks of state-industry