nnection with industrial
enterprise--the connection of ownership and direction--contains in some
forms of enterprise a large element of what has been called "the wages
of management"; in other forms this element may be almost entirely
absent. So too with the element of "interest" and with the other
elements which may enter into it. Throughout this inquiry the term
"profits" will be used to indicate this mixed form of income.

The second supposition supplies an answer to a question that must be
faced in any attempt to formulate a policy of wage settlement for
industrial peace in the United States. That question is whether it shall
be taken for granted that the desire for private profit will continue to
govern the performance of the tasks of industrial direction. The wage
policy that is developed in the course of this book is based on the
assumption that the large majority, if not all, of the industries which
would be included in it, were it adopted, will remain privately owned
and operated. At the same time, it is by no means outside of current
possibilities that certain of our greatest industries may change over
into some form of public ownership; and that this ownership would be
accompanied either by direct public operation, or very considerable
public regulation of their operation. Therefore, we are led to ask
whether a wage policy conceived on the assumption of private ownership
and control would be applicable to industries under public ownership.

The answer will be different according to circumstances. If the regime
of public ownership should become general, as is contemplated in the
orthodox socialist theory, it is likely that, then, an attempt would be
made to rest wage policy on principles fundamentally different than any
that would be practicable under a regime of private enterprise. On the
other hand, if public ownership should be extended only to a very few
though important industries such as the railroads and coal mines, it is
almost certain that the principles underlying the settlement of wages in
the publicly owned industries would have to be the same as those applied
in the privately owned. The general policy of operation might differ,
however, in other respects. Thus, a policy of wage settlement formulated
on the assumption of private ownership would not become unsuitable in
the event that some industries became publicly owned.

The relations between those who carry out the actual work of direction
in