SHOOTING NIAGARA 217

But the effects of these operations did not stop there. For by
directing money into enterprises designed not so much for stable
long-term production as for quick capital appreciation the new
financier tended to make industrial employment even more
precarious than it had been before. Mushroom companies
sprang up in all directions to initiate or develop industrial
processes which could have little or no enduring fiiture. This
directly affected the working man and his social background.
More than ever his job and home became dependent on circum-
stances beyond his control. As an individual he became more
and more helpless.

The stimulus to joint stock manufacturing and trading
afforded by the principle of limited liability had another fatal
consequence on the life of the working man. Under laissez-faire
individualism it at least paid to be efficient. The workman who
by his skill and industry furthered the interests of his employer
had a reasonable chance of promotion, for he was too valuabe
to lose. But when the control of business passed out of the hands
of the private employer using his own capital into that of the
financial company representing an intangible mass of absentee
shareholders without active knowledge of its affairs, the in-
dustrious workman found it increasingly difficult to better
himself, His efficiency and steadfastness had no value to
directors whose only aim was to sell the concern that employed
him at an inflated value. In any case he was less likely to be noticed
by managers whose stake in the business was confined to salaries
paid them by the shareholders and who were riot personally inter-
ested in its success. Thus the conscientious workman was
increasingly discouraged. The man with ambition and intelli-
gence, instead of identifying himself with the industrial system
of which he was part, was driven to rebel against it. Instead of
becoming a small capitalist, he became a socialist.

Adam Smith had always maintained that manufacturing
by joint-stock companies must prove injurious to the public
interest. He argued that efficiency and consequently wealth
resulted from every man attending scrupulously to his own self-
interest. Such attention could not be successfully delegated. A
laige joint-stock company, financed by distant and "amateur"
shareholders and managed by salaried nominees, was bound to be
less efficient than a small concern directed by the man who would
be the sole beneficiary if it succeeded and the chief loser if it failed.