The state of the industrial arts, therefore, is the indispensable conditioning circumstance which determines the productive capacity of any given community; and this is true in a peculiar degree under this new order of industry, in which the industrial arts have reached an unexampled development. The same decisive factor may also be described as "the community's joint stock of technological knowledge." This common stock of technological knowledge decides what will be the ordinary ways and means of industry, and so it decides what will be the character and volume of the output of product which a given man power is capable of turning out. Evidently no man power and no working population can turn out any annual product without the use of something in the way of technological knowledge, that is to say some state of the industrial arts. The working community is a productive factor only by virtue of, and only up to the limit set by, the state of the industrial arts which it has the use of. The contrast of industrial Japan or of industrial Germany before the middle of the nineteenth century and after the close of the century will serve for illustration; that is to say before and after those peoples had come in for the use of the technology of the machine era. The disposable excess of the yearly product over cost is a matter of the efficiency of the available state of technological knowledge, and of the measure in which the working population is put in a position to make use of it. These, of course, are obvious facts, which it should scarcely be necessary to recite, except that they are habitually overlooked, perhaps because they are obvious.
The Industrial Revolution of the eighteenth century was a revolution in the state of the industrial arts, of course; it was a mutation of character in the common stock of technological knowledge held and used by the industrial population of the civilised countries from that time forward. The shift from the older to the new order of industry was of such a nature as to call for the use of an extensive equipment of mechanical apparatus, progressively more and more extensive as the change to the machine technology went on; and at the same time the disposable margin of product above cost also progressively went on increasing with each further increase of the community's joint stock of technological knowledge.
This body of technological knowledge, the state of the industrial arts, of course has always continued to be held as a joint stock. Indeed this joint stock of technology is the substance of the community's civilisation on the industrial side, and therefore it constitutes the substantial core of that civilisation. Like any other phase or element of the cultural heritage, it is a joint possession of the community, so far as concerns its custody, exercise, increase and transmission; but it has turned out, under the peculiar circumstances that condition the use of this technology among these civilised peoples, that its ownership or usufruct has come to be effectually vested in a relatively small number of persons. Unforeseen and undesigned, the mechanical circumstances of the new order in industry have reversed the practical effects of the common law in respect of self-help, equal opportunity and free bargaining. The mechanics of the case has worked out this result by cutting away the ground on which those principles were based at the time of their acceptance and installation.
