4.The head of a large business can reserve all his strength for the broadest and most fundamental problems of his trade: he must indeed assure himself that his managers, clerks and foremen are the right men for their work, and are doing their work well;but beyond this he need not trouble himself much about details.
He can keep his mind fresh and clear for thinking out the most difficult and vital problems of his business..for studying the broader movements of the markets, the yet undeveloped results of current events at home and abroad; and for contriving how to improve the organization of the internal and external relations of his business.
For much of this work the small employer has not the time if he has the ability; he cannot take so broad a survey of his trade, or look so far ahead; he must often be content to follow the lead of others.And he must spend much of his time on work that is below him; for if he is to succeed at all, his mind must be in some respects of a high quality, and must have a good deal of originating and organizing force; and yet he must do much routine work.
On the other hand the small employer has advantages of his own.The master's eye is everywhere; there is no shirking by his foremen or workmen, no divided responsibility, no sending half-understood messages backwards and forwards from one department to another.He saves much of the book-keeping, and nearly all of the cumbrous system of checks that are necessary in the business of a large firm; and the gain from this source is of very great importance in trades which use the more valuable metals and other expensive materials.
And though he must always remain at a great disadvantage in getting information and in making experiments, yet in this matter the general course of progress is on his side.For external economies are constantly growing in importance relatively to internal in all matters of trade-knowledge: newspapers, and trade and technical publications of all kinds are perpetually scouting for him and bringing him much of the knowledge he wants-knowledge which a little while ago would have been beyond the reach of anyone who could not afford to have well-paid agents in many distant I places.Again, it is to his interest also that the secrecy of business is on the whole diminishing, and that the most important improvements in method seldom remain secret for long after they have passed from the experimental stage.It is to his advantage that changes in manufacture depend less on mere rules of thumb and more on broad developments of scientific principle; and that many of these are made by students in the pursuit of knowledge for its own sake, and are promptly published in the general interest.Although therefore the small manufacturer can seldom be in the front of the race of progress, he need not be far from it, if he has the time and the ability for availing himself of the modern facilities for obtaining knowledge.But it is true that he must be exceptionally strong if he can do this without neglecting the minor but necessary details of the business.
5.In agriculture and other trades in which a man gains no very great new economies by increasing the scale of his production, it often happens that a business remains of about the same size for many years, if not for many generations.But it is otherwise in trades in which a large business can command very important advantages, which are beyond the reach of a small business.A new man, working his way up in such a trade, has to set his energy and flexibility, his industry and care for small details, against the broader economies of his rivals with their larger capital, their higher specialization of machinery and labour, and their larger trade connection.If then he can double his production, and sell at anything like his old rate, he will have more than doubled his profits.This will raise his credit with bankers and other shrewd lenders; and will enable him to increase his business further, and to attain yet further economies, and yet higher profits: and this again will increase his business and so on.It seems at first that no point is marked out at which he need stop.And it is true that, if, as his business increased, his faculties adapted themselves to his larger sphere, as they had done to his smaller; if he retained his originality, and versatility and power of initiation, his perseverance, his tact and his good luck for very many years together; he might then gather into his hands the whole volume of production in his branch of trade for his district.And if his goods were not very difficult of transport, nor of marketing, he might extend this district very wide, and attain something like a limited monopoly; that is, of a monopoly limited by the consideration that a very high price would bring rival producers into the field.
But long before this end is reached, his progress is likely to be arrested by the decay, if not of his faculties, yet of his liking for energetic work.The rise of his firm may be prolonged if he can hand down his business to a successor almost as energetic as himself.(10*) But the continued very rapid growth of his firm requires the presence of two conditions which are seldom combined in the same industry.There are many trades in which an individual producer could secure much increased "internal"economies by a great increase of his output; and there are many in which he could market that output easily; yet there are few in which he could do both.And this is not an accidental, but almost a necessary result.
For in most of those trades in which the economies of production on a large scale are of first-rate importance, marketing is difficult.There are, no doubt, important exceptions.A producer may, for instance, obtain access to the whole of a large market in the case of goods which are so simple and uniform that they can be sold wholesale in vast quantities.
