2233. The facts just mentioned put us in the way of making a more general classification in which the preceding classification would be included and to which we shall have frequent occasion to refer in explaining social phenomena hereafter (Ss 2313f). [2] Suppose we put in one category, which we may call S, individuals whose incomes are essentially variable and depend upon the person's wide-awakeness in discovering sources of gain. In that group, generally speaking and disregarding exceptions, will be found those promoters of enterprise--those entrepreneurs--whom we were considering some pages back; and with them will be stockholders in industrial and commercial corporations (but not bondholders, who will more fittingly be placed in our group next following). Then will come owners of real estate in cities where building speculation is rife; and also landowners--on a similar condition that there be speculation in the lands about them; and then stock-exchange speculators and bankers who make money on governmental, industrial, and commercial loans. We might further add all persons depending upon such people--lawyers, engineers, politicians, working-people, clerks--and deriving advantage from their operations. In a word, we are putting together all persons who directly or indirectly speculate and in one way or another manage to increase their incomes by ingeniously taking advantage of circumstances.
2234. And let us put into another category, which we may call R, persons who have fixed or virtually fixed incomes not depending to any great extent on ingenious combinations that may be conceived by an active mind. In this category, roughly, will be found persons who have savings and have deposited them in savings-banks or invested them in life-annuities; then people living on incomes from government bonds, certificates of the funded debt, corporation bonds, or other securities with fixed interest-rates; then owners of real estate and lands in places where there is no speculation; then farmers, working-people, clerks, depending upon such persons and in no way depending upon speculators. In a word, we so group together here all persons who neither directly nor indirectly depend on speculation and who have incomes that are fixed, or virtually fixed, or at least are but slightly variable. [3]
2235. Just to be rid of the inconvenience of using mere letters of the alphabet, suppose we use the term "speculators" for members of category S and the French term rentiers for members of category R. [4] Now we can repeat of the two groups of persons more or less what we said above (S 2231) of mere owners of savings and entrepreneurs, and we shall find analogous conflicts, economic and social, between them. In the speculator group Class I residues predominate, in the rentier group, Class II residues. That that should be the case is readily understandable. A person of pronounced capacity for economic combinations is not satisfied with a fixed income, often a very small one. He wants to earn more, and if he finds a favourable opportunity, he moves into the S category. The two groups perform functions of differing utility in society. The S group is primarily responsible for change, for economic and social progress. The R group, instead, is a powerful element in stability, and in many cases counteracts the dangers attending the adventurous capers of the S's. A society in which R's almost exclusively predominate remains stationary and, as it were, crystallized. A society in which S's predominate lacks stability, lives in a state of shaky equilibrium that may be upset by a slight accident from within or from without.
Members of the R group must not be mistaken for "conservatives," nor members of the S group for "progressives," innovators, revolutionaries (Ss 226, 228 - 44). They may have points in common with such, but there is no identity. There are evolutions, revolutions, innovations, that the R's support, especially movements tending to restore to the ruling classes certain residues of group-persistence that had been banished by the S's. A revolution may be made against the S's--a revolution of that type founded the Roman Empire, and such, to some extent, was the revolution known as the Protestant Reformation. Then too, for the very reason that sentiments of group-persistence are dominant in them, the R's may be so blinded by sentiment as to act against their own interests. They readily allow themselves to be duped by anyone who takes them on the side of sentiment, and time and time again they have been the artisans of their own ruin (S 1873). If the old feudal lords, who were endowed with R traits in a very conspicuous degree, had not allowed themselves to be swept off their feet by a sum of sentiments in which religious enthusiasm was only one element, they would have seen at once that the Crusades were to be their ruin. In the eighteenth century, had the French nobility living on income, and that part of the French bourgeoisie which was in the same situation, not succumbed to the lure of humanitarian sentiments, they would not have prepared the ground for the Revolution that was to be their undoing. Not a few among the victims of the guillotine had for long years been continually, patiently, artfully grinding the blade that was to cut off their heads. In our day those among the R's who are known as "intellectuals" are following in the footprints of the French nobles of the eighteenth century and are working with all their might to encompass the ruin of their own class (S 2254).
Nor are the categories R and S to be confused with groupings that might be made according to economic occupation (Ss 1726-27). There again we find points of contact, but not full coincidence. A retail merchant often belongs to the R group, and a wholesale merchant too, but the wholesaler will more likely belong to the S group. Sometimes one same enterprise may change in character. An individual of the S type founds an industry as a result of fortunate speculations. When it yields or seems to be yielding a good return, he changes it into a corporation, retires from business, and passes over into the R group. A large number of stockholders in the new concern are also R's--the ones who bought stock when they thought they were buying a sure thing. If they are not mistaken, the business changes in character, moving over from the S type to the R type. But in many cases the best speculation the founder ever made was in changing his business to a corporation. It is soon in jeopardy, with the R's standing in line to pay for the broken crockery. There is no better business in this world than the business of fleecing the lambs--of exploiting the inexperience, the ingenuousness, the passions, of the R's. In our societies the fortunes of many many wealthy individuals have no other foundations. [5]
2236. The differing relative proportions in which S types and R types are combined in the governing class correspond to differing types of civilization; and such proportions are among the principal traits that have to be considered in social heterogeneity. [6] Going back, for instance, to the protectionist cycle examined above (Ss 2209 f.), we may say that in modern democratic countries industrial protection increases the proportion of S's in the governing class. That increase in turn serves to intensify protection, and the process would go on indefinitely if counter-forces did not come into play to check it (S 2221)
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