seeing it broken up into a number of semi-skilled operations, each capable of performance by a relatively unintelligent man working a highly intelligent machine. But on the whole standardization wins. Even when the nature of things or the caprice of purchasers does not allow uniformity in the final product of an industry, there are often component parts and preliminary processes which admit of complete standardization. So long as the main task of industry is the provision of increasing doses of solid comfort for teeming populations, so long there must be a powerful drive towards the spread of "mass-production"-the outturn of masses of indistinguishable goods by methods involving elaborate specialization of labor and appliances. And to this necessity all devices, actual or suggested, for the government of industry must conform.

§3. Standardization and the Size of the Business Unit. We must now pass on to notice an important result of this specialization and standardization of the work of men and machines. This is that on the whole there is a tendency for production to be conducted on an ever larger and larger scale for the large concern to oust and supplant the small. This result, like all the preceding developments of industry, is conditional on the growth of communications and the widening of markets. It will not pay a man to buy a set of shoemaking tools and set up as a shoemaker unless he sees a prospect of doing the shoemaking for a fair number of his immediate neighbors. But still less will it pay a firm to instal an elaborate machine which is only adapted to performing one-hundredth part of the whole process of

making a pair of boots unless it sees a reasonable prospect of disposing of a very large output. But conversely, once a firm has exhibited the enterprise and acquired the capital necessary to instal a large number of such machines, it will extend its market, even in the face of difficulties of transport and communication, at the expense of a smaller firm which has not been able to make the necessary expenditure: for it will be able to supply a greater variety of goods of a more finished quality at a lower price.

A large firm then can introduce more highly specialized machinery, and keep it occupied more continuously than a small: and the same is true, though probably less important, of highly specialized labor. The resultant tendency towards large-scale production is on the whole general throughout industry, but it operates with very different force in different trades. When the "machine" in question, to use the word in a very broad sense, is a very large and cumbrous and expensive affair which is absolutely essential to the work in question, such as the plant required in a sugar refinery or in steel-rolling mills or the permanent way of a railway, the tendency is irresistible. But in other instances the specialization of processes and machinery may well be accompanied by a specialization of firms. If a small firm tries to compete with a large over the whole range of products turned out by the latter, it will go under: it will not be able to employ continuously, nor therefore to instal, equally efficient machinery. But if it is content to specialize on one small process, say on the manufacture of a particular part of a watch or of a motor cycle, either trusting to the general operations of commerce and advertisement to secure a

market or working by special arrangement with and for a larger firm, it may well be able to maintain itself successfully.

On the whole, however, specialization and standardization undoubtedly increase the advantages of the large firm over the small. We need not stop to examine the application of this principle in detail in trade and transport and agriculture as well as in manufacture: but it is just worth noting, by way of example, that in retail shop-keeping the specialized shop window plays something of the part played by the specialized machine in manufacture. Everyone can tell the difference in effectiveness between the elaborate series of tableaux of hothouse flowers, ladies' blouses and so forth which goes to make up the frontage of a big Department Store in New York or London, and the higgledypiggledy profusion of cheese and candles in the single window of the village shop.

§4. The Division of Brain-Labor and the Size of the Business Unit. It would be a mistake, however, to suppose that the great size of the typical modern firm is to be explained only or chiefly by reference to its advantages in the specialization of machinery and manual labor. In most trades convenience sets a very definite limit to the growth of the individual producing plant; to be efficient a cotton mill or an engineering works must be large, but it need not and should not be gigantic. But the size of the firm is not limited by the size of the plant; and the typical large manufacturing unit of to-day is a firm which owns, not a single gigantic factory, but a number of factories of considerable but not enormous size, possibly situated close

together but quite possible scattered over the face of a whole country or indeed of the whole world.

To understand how this occurs, we must pass on to a further application of the principle of differentiation. It is obvious that the broad advantages of the division of labor-the right employment of special talent and the acquisition of special skill and rapidity in dealing with a limited range of problems and situationsapply at least as forcibly to labor with the mind as to labor with the hands. From top to bottom of modern industry this principle of the specialization of brain work finds endless application. Among the supreme heads of a business-the partners of a private firm or the directors of a joint-stock company-one may devote himself mainly to the technical aspects of a business, another to its commercial and financial policy. Further down in the scale, the works manager of a modern concern, who is responsible for the actual conduct of production in the works, is an entirely different person, differently trained and with a different staff, from the head of the sales department and from the chief accountant. To pass further down again, the commercial traveller would find himself utterly at sea in the accountant's office, or the foreman of the foundry in the pattern shop. Indeed, even within his own narrow kingdom the foreman has, in a few modern businesses, been shorn of much of his undifferentiated glory. The strands of his miscellaneous authority have been sorted out and placed in separate and more specialized hands. It is no longer for him to tell the workman what job to do next-that is done by the Planning and Routing Department, whose written instructions or living emissaries leave him little or no discretion in the

matter. It is no longer for him to tell the workman how the job should be done that again is laid down on an instruction card or communicated direct to the workman by a band of itinerant experts on particular aspects of the work to be performed. In some cases of Scientific Management, all that is left of the general all-round foreman is an expert in discipline-a specialist in the bullying or soothing of men.

It is evident that the elaborate division of brain work is a powerful force operating on the side of the large firm against the small, and tending to increase the average size of firms. This is very clearly seen in trades, such as those engaged in the working up of coal-tar products, where success depends upon the efforts of a host of narrowly specialized research workers, each working on a separate line of enquiry, but in strict co-ordination with one another. "An army of highclass chemists, such as won the success of the chemical works at Ludwigshafen, or those at Elberfeld, is as much beyond the reach of a man of moderate means as is the plant needed for making armor plates." But the same principle can be seen at work over the whole field of industry. The small employer who has to supervise his workmen, to do his own buying and selling, to keep his own accounts, to devise his own methods of hypnotizing the consumer, is clearly at a grave disadvantage compared with the large firm which can put each of these activities in the hands of a specialized staff. To segregate problems of technique from problems of finance, to deal in large figures with buyers and sellers and transport agencies and banks, to be free to shake one's wings and scan wide horizons and har1 Marshall, Trade and Industry, p. 241.