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SUMMARY Fictitious Centralism in large enterprises. In order that each of the threads of an increasingly complicated business enterprise may be kept in hand, they are all actually made to converge at the highest level. But this centralisation is fictitious; for, in reality, it leads to an overburdening of the man at the top, who is thus rendered incapable of performing his proper function—namely, to take decisions. Instead, he becomes the weakest link in the routine. Imperfect delegation, i. e., the delegation of matters for treatment without simultaneous surrender of competence, condemns those in the middle grade to subaltern standing, in which they too are unable to take any decision or assume the responsibility that goes with the taking of decisions. The typical result is that nobody decides, that—to exaggerate slightly—the life of an industrial concern is controlled not by definite volition but by the law of cause and effect. Imperfect delegation is one of the causes of the hypertrophy and sluggishness of the internal bureaucracy of business concerns. The fact of clinging to theoretical powers which in reality are not exercised has, for instance, the result that the modern forms of accounting practice not only fail to give the internal life of a big enterprise the elasticity and commerciality which they quite well could have given it, but, instead, lead to a multiplication of bureaucratic processes. The negative effects of the fictitious centralism which distinguishes the industrial system from the great organisations of the past (e. g. the ancient polis and the feudal state, both of which tended to delegate too many rather than too few functions) are certainly well known, yet it seems impossible to overcome it. This fact is only to be explained in the light of the history of ideas (“Geistesgeschichte”). From his predecessor, the capitalistic entrepreneur, the present‐day manager has taken over the automatic equation of what he does with work, and the consequent justification of his social position in his own eyes and those of society. This attitude, which was alien to most of the leading groups in history, prevents him from extricating himself from the vicious circle which he has got into as the result of fictitious centralism.

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