THE SOCIALISTS OF THE CHAIR.
The Socialists of the Chair have done themselves injustice and sown
their course with embarrassing misconceptions by adopting too hastily an
infelicitous name. It is more descriptive than most political nicknames,
and therefore more liable to mislead. It was first used in 1872 in a
pamphlet by Oppenheim, then one of the leaders of the National Liberals,
to ridicule a group of young professors of political economy who had
begun to show a certain undefined sympathy with the socialist agitations
of Lassalle and Von Schweitzer, and to write of the wrongs of the
labouring classes and the evils of the existing industrial system with a
flow of emotion which was thought to befit their years better than their
position. A few months later these young professors called together at
Eisenach a Congress of all who shared their general attitude towards
that class of questions. In opening this Congress--which was attended by
almost every economist of note in Germany, and by a number of the
weightiest and most distinguished Liberal politicians--Professor
Schmoller employed the name "Socialists of the Chair" to describe
himself and those present, without adding a single qualifying remark,
just as if it had been their natural and chosen designation. The
nickname was no doubt accepted so readily, partly from a desire to take
the edge off the sneer it was meant to convey, but partly also from the
nobler feeling which makes men stand by a truth that is out of favour.
Not that they approved of the contentions of social democracy out and
out, but they believed there was more basis of truth in them than
persons in authority were inclined to allow, and besides that the truth
they contained was of special and even pressing importance. They held,
as Schmoller said, that "Social Democracy was itself a consequence of
the sins of modern Liberalism." They went entirely with the Social
Democrats in maintaining both that a grave social crisis had arisen, and
that it had been largely brought about by an irrational devotion on the
part of the Liberals to the economic doctrine of _laissez-faire_. But
they went further with them. They believed that the salvation of modern
society was to come, not indeed from the particular scheme of
reconstruction advocated by the Social Democrats, but still from
applications in one form or another of their fundamental principle, the
principle of association. And it was for that reason--it was for the
purpose of marking the value they set upon the associative principle as
the chief source of healing for the existing ills of the nations--that
they chose to risk misunderstanding and obloquy by accepting the
nickname put upon them by their adversaries. The late Professor Held,
who claims as a merit that he was the first to do so, explains very
clearly what he meant by calling himself a socialist. Socialism may
signify many different things, but, as he uses the word, it denotes not
any definite system of opinions or any particular plan of social reform,
but only a general method which may guide various systems, and may be
employed more or less according to circumstances in directing many
different reforms. He is a socialist because he would give much more
place than obtains at present to the associative principle in the
arrangements of economic life, and because he cannot share in the
admiration many economists express for the purely individualistic basis
on which these arrangements have come to stand. A socialist is simply
the opposite of an individualist. The individualist considers that the
perfection of an industrial economy consists in giving to the principles
of self-interest, private property, and free competition, on which the
present order of things is founded, the amplest scope they are capable
of receiving, and that all existing economic evils are due, not to the
operation of these principles, but only to their obstruction, and will
gradually disappear when self-interest comes to be better understood,
when competition is facilitated by easier inter-communication, and when
the law has ceased from troubling and left industry at rest. The
socialist, in Held's sense, is, on the other hand, one who rejects the
comfortable theory of the natural harmony of individual interests, and
instead of deploring the obstructions which embarrass the operations of
the principles of competition, self-interest, and private property,
thinks that it is precisely in consequence of these obstructions that
industrial society contrives to exist at all. Strip these principles, he
argues, of the restraints put upon them now by custom, by conscience, by
public opinion, by a sense of fairness and kind feeling, and the
inequalities of wealth would be immensely aggravated, and the labouring
classes would be unavoidably ground to misery. Industrial society would
fall into general anarchy, into a _bellum omnium contra omnes_, in which
they that have would have more abundantly, and they that have not would
lose even what they have. Held declines to join in the admiration
bestowed by many scientific economists upon this state of war, in which
the battle is always to the rich. He counts it neither the state of
nature, nor the state of perfection, of economic society, but simply an
unhappy play of selfish and opposing forces, which it ought to be one of
the distinct aims of political economy to mitigate and counteract.
Individualism has already had too free a course, and especially in the
immediate past has enjoyed too sovereign a reign. The work of the world
cannot be carried on by a fortuitous concourse of hostile atoms, moving
continually in a strained state of suspended social war, and therefore,
for the very safety of industrial society, we must needs now change our
tack, give up our individualism, and sail in the line of the more
positive and constructive tendencies of socialism. To Held's thinking
accordingly, socialism and individualism are merely two contrary general
principles, ideals, or methods, which may be employed to regulate the
constitution of economic society, and he declares himself a socialist
because he believes that society suffers at present from an excessive
application of the individualistic principle, and can only be cured by
an extensive employment of the socialistic one.
This is all clear enough, but it is simply giving to the word socialism
another new meaning, and creating a fresh source of ambiguity. That term
has already contracted definite associations which it is impossible to
dispel by mere word of mouth, and which constitute a refracting medium
through which the principles of the Socialists of the Chair cannot fail
to be presented in a very misleading form. These writers assume a
special position in two relations--first, as theoretical economists;
and, second, as practical politicians or social reformers; and in both
respects alike the term socialism is peculiarly inappropriate to
describe their views. In regard to the first point, by adopting that
name they have done what they could to "Nicodemus" themselves into a
sect, whereas they might have claimed, if they chose, to be better
exponents of the catholic tradition of the science than those who found
fault with them. This is a claim, however, which they would be shocked
indeed to think of presenting. With a natural partiality for their own
opinions, they exaggerated immensely the extent and also the value of
their divergence from the traditional or, as it is sometimes called, the
classical economics. In the energy of their recoil from the dogmatism
which had for a generation usurped an excessive sway over economic
science, they were carried too far in the opposite direction, but they
had in their own minds the sensation that they were carried a great deal
farther than they really were. They liked to think of their historical
method as constituting a new epoch, and effecting a complete revolution
in political economy, but, as will subsequently appear, that method,
when reduced to its real worth, amounts to no more than an application,
with somewhat distincter purpose and wider reach, of the method which
Smith himself followed. Of this they are in some degree conscious.
Brentano, who belongs to the extreme right of the school, says that
Smith would have been a Socialist of the Chair to-day if he were alive;
and Samter, who belongs to the extreme left, though he is doubtful
regarding Smith, has no hesitation in claiming Mill, whom he looks upon
as standing more outside than inside the school of Smith. Their position
is, therefore, not the new departure which many of them would fain
represent it to be. They are really as natural and as legitimate a line
of descent from Adam Smith as their adversaries the German Manchester
Party who claimed the authority of his name. Perhaps they are even more
so, for in science the true succession lies with those who carry the
principles of the master to a more fruitful development, and not with
those who embalm them as sacred but sterile simulacra.
But it is as practical reformers that the Socialists of the Chair suffer
most injustice from their name. Since the word socialism was first used
by Reybaud fifty years ago, it has always been connected with utopian or
revolutionary ideas. Now the Socialists of the Chair are the very
opposite of revolutionaries both by creed and practice. None of the
various parties which occupy themselves with the social problem in
Germany is so eminently and advisedly practical. Their very historical
method, apart from anything else, makes them so. It gives them a special
aversion to political and social experiments, for it requires as the
first essential of any project of reform that it shall issue naturally
and easily out of--or at least be harmonious with--the historical
conditions of the time and place to which it is to be applied. Roscher,
who may be regarded as the founder of the school, says that reformers
ought to take for their model Time, whose reforms are the surest and
most irresistible of all, but yet so gradual that they cannot be
observed at any given moment. They make, therefore, on the whole a very
sparing use of the socialistic principle they invoke. Certainly the
world, in their eyes, is largely out of joint, but its restoration is to
proceed gently, like Solomon's temple, without sound of hammer. Some of
them of course go farther than others, but they would all still leave us
rent, wages, and profits, the three main stems of individualism. They
struck the idea of taxing speculative profits out of their programme,
and so far from having any socialistic thought of abolishing
inheritance, none of them except Von Scheel would even tax it
exceptionally. Samter stands alone in urging the nationalization of the
land; and Wagner stands alone in desiring the abolition of private
property in ground-rents in towns; the other members cannot agree even
about the expediency of nationalizing the railways. They work of set
purpose for a better distribution of wealth--for what Schmoller calls a
progressive equalization of the excessive and even dangerous differences
of culture that exist at present--but they recoil from all suggestion of
schemes of repartition, and they have no fault to find with inequality
in itself. On the contrary they regard inequality as being not merely
an unavoidable result of men's natural endowments, but an indispensable
instrument of their progress and civilization. Schmoller explains that
their political principles are those of Radical Toryism, as portrayed in
Lord Beaconsfield's novels; and he means that they rest on the same
active sympathy with the ripening aspirations of the labouring classes,
and the same zealous confidence in the authority of the State, and in
these respects are distinguished from modern Liberalism, whose governing
sympathies are with the interests and ideas of the _bourgeoisie_, and
which entertains a positive jealousy of the action of the State. The
actual reforms which the Socialists of the Chair have hitherto promoted
have been in the main copied from our own English legislation--our
Factory Acts, our legalization of Trade Unions, our Savings Banks, our
registration of Friendly Societies, our sanitary legislation, etc.,
etc.--measures which have been passed, with the concurrence of men of
opposite shades of opinion, out of no social theory but from a plain
regard to the obvious necessities of the hour. So that we have been
simply Socialists of the Chair for a generation without knowing it,
doing from a happy political instinct the works which they deduce out of
an elaborate theory of economic politics. Part of their theory, however,
is, that in practical questions they are not to go by theory, and the
consequence is that while they sometimes lay down general principles in
which communism might steal a shelter, they control these principles so
much in their application by considerations of expediency, that the
measures they end in proposing differ little from such as commend
themselves to the common sense and public spirit of middle-class
Englishmen.
Their general theory had been taught in Germany for twenty years before
it was forced into importance by the policy it suggested and the
controversies it excited in connection with the socialist movement which
began in 1863. Wilhelm Roscher, the lately deceased professor of
economics in Leipzig, first propounded the historical method in his
"Grundriss zu Vorlesungen ueber die Staatswirthschaft nach
geschichtlicher Methode," published in 1843, though it deserves to be
noticed that in this work he spoke of the historical method as being
the ordinary inductive method of scientific economists, and
distinguished it from the idealistic method proceeding by deduction from
preconceived ideas, which he said was the method of the socialists. He
had no thought as yet of representing his method as diverging from that
of his predecessors, even in detail, much less as being essentially
different in principle. Then the late Bruno Hildebrand, professor of
political science at Jena, in his work on the "National Economy of the
Present and the Future," published in 1847, proclaimed the historical
method as the harbinger and instrument of a new era in the science, but
he speaks of it only as a restoration of the method of diligent
observation which Adam Smith practised, but which his disciples deserted
for pure abstractions. In 1853, a more elaborate defence and exposition
of the historical method appeared in a work on "Political Economy from
the Standpoint of the Historical Method," by Carl G. A. Knies, professor
of national economics at Heidelberg. But it was never dreamt that the
ideas broached in these works had spread beyond the few solitary
thinkers who issued them. The Free Traders were still seen ruling
everything in the high places of the land in the name of political
economy, and they were everywhere apparently accepted as authorized
interpreters of the mysteries of that, to the ordinary public, somewhat
occult science. They preached the freedom of exchange like a religion
which contained at once all they were required to believe in economic
matters, and all they were required to do. There was ground for
Lassalle's well-known taunt: "Get a starling, Herr Schultze, teach it to
pronounce the word 'exchange,' 'exchange,' 'exchange,' and you have
produced a very good modern economist." The German Manchester Party
certainly gave to the principle of _laissez-faire, laissez-aller_, a
much more unconditional and universal application than any party in this
country thought of according to it. They looked on it as a kind of
orthodoxy which it had come to be almost impious to challenge. It had
been hallowed by the consensus of the primitive fathers of the science,
and it seemed now to be confirmed beyond question experimentally by the
success of the practical legislation in which it had been exemplified
during the previous quarter of a century. The adherents of the new
school never raised a murmur against all this up till the eventful time
of the socialist agitation and the formation of the new German Empire,
and the reason is very plain. On the economic questions which came up
before that period, they were entirely at one with the Free Traders, and
gave a hearty support to their energetic lead. They were, for example,
as strenuously opposed to protective duties and to restrictions upon
liberty of migration, settlement, and trading, as Manchester itself. But
with the socialist agitation of 1863, a new class of economic questions
came to the front--questions respecting the condition of the working
classes, the relations of capital and labour, the distribution of
national wealth, and the like--and on these new questions they could not
join the Free Traders in saying "Hands off!" They did not believe with
the Manchester school that the existing distribution of wealth was the
best of all possible distributions, because it was the distribution
which Nature herself produced. They thought, on the contrary, that
Nature had little to do with the matter; but even if it had more, there
was only too good cause for applying strong corrections by art. They
said it was vain for the Manchester party to deny that a social question
existed, and to maintain that the working classes were as well off as it
was practical for economic arrangements to make them. They declared
there was much truth in the charges which socialists were bringing
against the existing order of things, and that there was a decided call
upon all the powers of society, and, among others, especially upon the
State, to intervene with some remedial measures. A good opportunity for
concerted and successful action seemed to be afforded when the German
Empire was established, and this led to the convening of the Eisenach
Congress in 1872, and the organization of the Society for Social
Politics in the following year.
Men of all shades of opinion were invited to that Congress, provided
they agreed on two points, which were expressly mentioned in the
invitation: 1st, in entertaining an earnest sense of the gravity of the
social crisis which existed; and 2nd, in renouncing the principle of
_laissez-faire_ and all its works. The Congress was attended by 150
members, including many leading politicians and most of the professors
of political economy at the Universities. Roscher, Knies, and Hildebrand
were there, with their younger disciples Schmoller, professor at
Strasburg and author of the "History of the Small Industries"; Lujo
Brentano, professor at Breslau, well known in this country by his book
on "English Gilds" and his larger work on "English Trade Unions";
Professors A. Wagner of Berlin and Schoenberg of Tuebingen. Then there
were men like Max Hirsch and Duncker the publisher, both members of the
Imperial Diet, and the founders of the Hirsch-Duncker Trade Unions; Dr.
Engel, director of the statistical bureau at Berlin; Professor von
Holtzendorff, the criminal jurist; and Professor Gneist, historian of
the English Constitution, who was chosen to preside. After an opening
address by Schmoller, three papers were read and amply discussed, one on
Factory Legislation by Brentano, a second on trade Unions and Strikes by
Schmoller, and a third on Labourers' Dwellings by Engel. This Congress
first gave the German public an idea of the strength of the new
movement; and the Free Trade party were completely, and somewhat
bitterly, disenchanted, when they found themselves deserted, not as they
fancied merely by a few effusive young men, but by almost every
economist of established reputation in the country. A sharp controversy
ensued. The newspapers, with scarcely an exception, attacked the
Socialists of the Chair tooth and nail, and leading members of the
Manchester party, such as Treitschke the historian, Bamberger the
Liberal politician, and others, rushed eagerly into the fray. They were
met with spirit by Schmoller, Held, Von Scheel, Brentano, and other
spokesmen of the Eisenach position, and one result of the polemic is,
that some of the misunderstandings which naturally enough clouded that
position at the beginning have been cleared away, and it is now admitted
by both sides that they are really much nearer one another than either
at first supposed. The Socialists of the Chair did not confine their
labours to controversial pamphlets. They published newspapers,
periodicals, elaborate works of economic investigation; they held
meetings, promoted trade unions, insurance societies, savings banks;
they brought the hours of labour, the workmen's houses, the effects of
speculation and crises, all within the sphere of legislative
consideration. The moderation of their proposals of change has
conciliated to a great extent their Manchester opponents. Even
Oppenheim, the inventor of their nickname, laid aside his scoffing, and
seconded some of their measures energetically. Indeed, their chief
adversaries are now the socialists, who cannot forgive them for going
one mile with them and yet refusing to go twain--for adopting their
diagnosis and yet rejecting their prescription. Brentano, who is one of
the most moderate, as well as one of the ablest of them, takes nearly as
grave a view of the state of modern industrial society as the socialists
themselves do; and he says that if the evils from which it suffers could
not be removed otherwise, it would be impossible to avoid much longer a
socialistic experiment. But then he maintains that they can be removed
otherwise, and one of the chief motives of himself and his allies in
their practical work is to put an end to socialistic agitation by curing
the ills which have excited it.
The key to the position of the Socialists of the Chair lies in their
historical method. This method has nothing to do with the question
sometimes discussed whether the proper method of political economy is
the inductive or the deductive. On that question the historical school
of economists are entirely agreed with the classical school. Roscher,
for example, adopts Mill's description of political economy as a
concrete deductive science, whose _a priori_ conclusions, based on laws
of human nature, must be tested by experience, and says that an economic
fact can be said to have received a scientific explanation only when its
inductive and deductive explanations have met and agreed. He makes,
indeed, two qualifying remarks. One is, that it ought to be remembered
that even the deductive explanation is based on observation, on the
self-observation of the person who offers it. This will be admitted by
all. The other is, that every explanation is only provisional, and
liable to be superseded in the course of the progress of knowledge, and
of the historical growth of social and economic structure. This will
also be admitted, and it is no peculiarity of political economy. There
is no science whose conclusions are not modified by the advance of
knowledge; and there are many sciences besides political economy whose
phenomena change their type in lapse of time. Roscher's proviso,
therefore, amounts to nothing more than a caution to economic
investigators to build their explanations scrupulously on the facts, the
whole facts, and nothing but the facts, and to be specially on their
guard against applying to the circumstances of one period or nation
explanations and recommendations which are only just regarding another.
The same disease may have different symptoms in a child from what it has
in a man, and a somewhat different type at the present day from what it
had some centuries ago; and it may therefore require a quite different
treatment. That is a very sound principle and a very self-evident one,
and it contains the whole essence of the historical method, which, so
far as it is a method of investigation at all, is simply that of other
economists applied under a more dominating sense of the complexity and
diversity of the phenomena which are subjected to it. There is
consequently with the historical school more rigour of observation and
less rigour of theory, and this peculiarity leads to practical results
of considerable importance, but it has no just pretensions to assume the
dignity of a new economic method, and it is made to appear much bigger
than it is by looming through the scholastic distinctions in which it is
usually set forth.
The historical school sometimes call their method the _realistic_ and
_ethical_ method, to distinguish it from what they are pleased to term
the _idealistic_, and _selfish_ or _materialistic_ method of the earlier
economists. They are _realists_ because they cannot agree with the
majority of economists who have gone before them in believing there is
one, and only one, ideal of the best economic system. There are, says
Roscher, as many different ideals as there are different types of
peoples, and he completely casts aside the notion, which had generally
prevailed before him, that there is a single normal system of economic
arrangements, which is built on the natural laws of economic life, and
to which all nations may at all times with advantage conform. It is
against this notion that the historical school has revolted with so much
energy that they wish to make their opposition to it the flag and
symbol of a schism. They deny that there are any natural laws in
political economy; they deny that there is any economic solution
absolutely valid, or capable of answering in one economic situation
because it has answered in another. Roscher, Knies, and the older
members of the school make most of the latter point; but Hildebrand,
Schoenberg, Schmoller, Brentano, and the younger spirits among them,
direct against the former some of their keenest attacks. They declare it
to be a survival from the exploded metaphysics of the much-abused
_Aufklaerung_ of last century. They argue that just as the economists of
that period took self-interest to be the only economic motive, because
the then dominant psychology--that of the selfish or sensual
school--represented it as the only real motive of human action, of which
the other motives were merely modifications; so did they come to count
the reciprocal action and reaction of the self-interest of different
individuals to be a system of natural forces, working according to
natural laws, because they found the whole intellectual air they
breathed at the time filled with the idea that all error in poetry, art,
ethics, and therefore also economics, had come through departing from
nature, and that the true course in everything lay in giving the
supremacy to the nature of things. We need not stop to discuss this
historical question as to the origin of the idea; it is enough here to
say that the Socialists of the Chair maintain that in economic affairs
it is impossible to make any such distinction between what is natural
and what is not so. Everything results from nature, and everything
results from positive institution too. There is in economics either no
nature at all, or there is nothing else. Human will effects or affects
all; and human will is itself influenced, of course, by human nature and
human condition. Roscher says that it is a mistake to speak of industry
being forced into "unnatural" courses by priests or tyrants, for the
priests and tyrants are part and parcel of the people themselves,
deriving all their resources from the people, and in no respect
Archimedeses standing outside of their own world. The action of the
State in economic affairs is just as natural as the action of the farmer
or the manufacturer; and the latter is as much matter of positive
institution as the former. But while Roscher condemns this distinction,
he does not go the length his disciples have gone, and reject the whole
idea of natural law in the sphere of political economy. On the contrary,
he actually makes use of the expression, "the natural laws of political
economy," and asserts that, when they are once sufficiently known, all
that is then needed to guide economic politics is to obtain exact and
reliable statistics of the situation to which they are to be applied.
Now that statement is exactly the position of the classical school on
the subject. Economic politics is, of course, like all other politics,
an affair of times and nations; but economic science belongs to mankind,
and contains principles which may be accurately enough termed, as
Roscher terms them, natural laws, and which may be applied, as he would
apply them, to the improvement of particular economic situations, on
condition that sufficiently complete and correct statistics are obtained
beforehand of the whole actual circumstances. Economic laws are, of
course, of the nature of ethical laws, and not of physical; but they are
none the less on that account natural laws, and the polemic instituted
by the Socialists of the Chair to expel the notion of natural law from
the entire territory of political economy is unjustifiable. Phenomena
which are the result of human action will always exhibit regularities
while human character remains the same; and, moreover, they often
exhibit undesigned regularities which, not being imposed upon them by
man, must be imposed upon them by Nature. While, therefore, the
Socialists of the Chair have made a certain point against the older
economists by showing the futility and mischief of distinguishing
between what is natural in economics and what is not, they have erred in
seeking to convert that point into an argument against the validity of
economic principles and the existence of economic laws. At the same time
their position constitutes a wholesome protest against the tendency to
exaggerate the completeness or finality of current doctrines, and gives
economic investigation a beneficial direction by setting it upon a more
thorough and all-sided observation of facts.
But when they complain of the earlier economists being so wedded to
abstractions, the fault they chiefly mean to censure is the habit of
solving practical economic problems by the unconditional application of
certain abstract principles. It is the "absolutism of solutions" they
condemn. They think economists were used to act like doctors who had
learnt the principles of medicine by rote and applied them without the
least discrimination of the peculiarities of individual constitutions.
With them the individual peculiarities are everything, and the
principles are too much thrown into the shade. Economic phenomena, they
hold, constitute only one phase of the general life of the particular
nations in which they appear. They are part and parcel of a special
concrete social organism. They are influenced--they are to a great
extent made what they are--by the whole _ethos_ of the people they
pertain to, by their national character, their state of culture, their
habits, customs, laws. Economic problems are consequently always of
necessity problems of the time, and can only be solved for the period
that raises them. Their very nature alters under other skies and in
other ages. They neither appear everywhere in the same shape, nor admit
everywhere of the same answer. They must therefore be treated
historically and empirically, and political economy is always an affair
for the nation and never for the world. The historical school inveigh
against the _cosmopolitanism_ of the current economic theories, and
declare warmly in favour of _nationalism_; according to which every
nation has its own political economy just as it has its own constitution
and its own character. Now here they are right in what they affirm,
wrong in what they deny. They are right in affirming that economic
politics is national, wrong in denying that economic science is
cosmopolitan. In German the word economy denotes the concrete industrial
system as well as the abstract science of industrial systems, and one
therefore readily falls into the error of applying to the latter what is
only true of the former. There may be general principles of engineering,
though every particular project can only be successfully accomplished by
a close regard to its particular conditions. In claiming a cosmopolitan
validity for their principles, economists do not overlook their
essential relativity. On the contrary, they describe their economic
laws as being in reality nothing more than tendencies, which are not
even strictly true as scientific explanations, and are never for a
moment contemplated as unconditional solutions for practical situations.
Moreover Roscher, in defining his task as an economist, virtually takes
up the cosmopolitan standpoint and virtually rejects the national. He
says a political economist has to explain what is or has been, and not
to show what ought to be; he quotes the saying of Dunoyer, _Je n'impose
rien, je ne propose meme rien, j'expose_; and states that what he has to
do is to unfold the anatomy and physiology of social and national
economy. He is a scientific man, and not an economic politician, and
naturally assumes the position of science, which is cosmopolitan, and
not that of politics, which is national and even opportunist.
I pass now to a perhaps more important point, from which it will be seen
that the Socialists of the Chair are far from thinking that political
economy has nothing to do with what ought to be. Next to the _realistic_
school, the name they prefer to describe themselves by is the _ethical_
school. By this they mean two things, and some of them lay the stress on
the one and some on the other. They mean, first, to repudiate the idea
of self-interest being the sole economic motive or force. They do not
deny it to be a leading motive in industrial transactions, and they do
not, like some of the earlier socialists, aim at its extinction or
replacement by a social or generous principle of action. But they
maintain that the course of industry never has been and never will be
left to its guidance alone. Many other social forces, national
character, ideas, customs--the whole inherited _ethos_ of the
people--individual peculiarities, love of power, sense of fair dealing,
public opinion, conscience, local ties, family connections, civil
legislation--all exercise upon industrial affairs as real an influence
as personal interest, and, furthermore, they exercise an influence of
precisely the same kind. They all operate ethically, through human will,
judgment, motives, and in this respect one of them has no advantage over
another. It cannot be said, except in a very limited sense, that
self-interest is an essential and abiding economic force and the others
only accidental and passing. For while customs perish, custom remains;
opinions come and go, but opinion abides; and though any particular act
of the State's intervention may be abolished, State intervention itself
cannot possibly be dispensed with. It is all a matter of more or less,
of here or there. The State is not the intruder in industry it is
represented to be. It is planted in the heart of the industrial organism
from the beginning, and constitutes in fact part of the nature of things
from which it is sought to distinguish it. It is not unnatural for us to
wear clothes because we happen to be born naked, for Nature has given us
a principle which guides us to adapt our dress to our climate and
circumstances. Reason is as natural as passion, and the economists who
repel the State's intrusion and think they are thus leaving industry to
take its natural course, commit the same absurdity as the moralist who
recommends men to live according to Nature, and explains living
according to Nature to mean the gratification as much as possible of his
desires, and his abandonment as much as possible of rational and, as he
conceives, artificial plan. The State cannot observe an absolute
neutrality if it would. Non-intervention is only a particular kind of
intervention. There must be laws of property, succession, and the like,
and the influence of these spreads over the whole industrial system, and
affects both the character of its production and the incidence of its
distribution of wealth.
But, second, by calling their method the _ethical_ method, the
historical school desire to repudiate the idea that in dealing with
economic phenomena they are dealing with things which are morally
indifferent, like the phenomena of physics, and that science has nothing
to do with them but to explain them. They have certainly reason to
complain that the operation of the laws of political economy is
sometimes represented as if it were morally as neutral as the operation
of the law of gravitation, and it is in this conception that they think
the materialism of the dominant economic school to be practically most
offensively exhibited. Economic phenomena are not morally indifferent;
they are ethical in their very being, and ought to be treated as such.
Take, for example, the labour contract. To treat it as a simple exchange
between equals is absurd. The labourer must sell his labour or starve,
and may be obliged to take such terms for it as leave him without the
means of enjoying the rights which society awards him, and discharging
the duties which society claims from him. Look on him as a ware, if you
will, but remember he is a ware that has life, that has connections,
responsibilities, expectations, domestic, social, political. To get his
bread he might sell his freedom, but society will not permit him; he may
sell his health, he may sell his character, for society permits that; he
may go to sea in rotten ships, and be sent to work in unwholesome
workshops; he may be herded in farm bothies where the commonest
decencies of life cannot be observed; and he may suck the strength out
of posterity by putting his children to premature toil to eke out his
precarious living. Transactions which have such direct bearings on
freedom, on health, on morals, on the permanent well-being of the
nation, can never be morally indifferent. They are necessarily within
the sphere of ends and ideals. Their ethical side is one of their most
important ones, and the science that deals with them is therefore
ethical. For the same reason they come within the province of the State,
which is the normal guardian of the general and permanent interests,
moral and economic, of the community. The State does not stand to
industry like a watchman who guards from the outside property in which
he has himself no personal concern. It has a positive industrial office.
It is, says Schmoller, the great educational institute of the human
race, and there is no sense in suspiciously seeking to reduce its action
in industrial affairs to a minimum. His theory of the State is that of
the _Cultur-Staat_, in distinction from the _Polizei-Staat_, and the
_Rechts-Staat_. The State can no longer be regarded as merely an
omnipotent instrument for the maintenance of tranquillity and order in
the name of Heaven; nor even as a constitutional organ of the collective
national authority for securing to all individuals and classes in the
nation, without exception, the rights and privileges which they are
legally recognised to possess; but it must be henceforth looked upon as
a positive agency for the spread of universal culture within its
geographical territory.
With these views, the Socialists of the Chair could not fail to take an
active concern with the class of topics thrown up by the socialist
movement, and exciting still so much attention in Germany under the name
of the social question. They neither state that question nor answer it
like the socialists, but their first offence, and the fountain of all
their subsequent offending, in the judgment of their Manchester
antagonists, consisted in their acknowledgment that there was a social
question at all. Not that the Manchester party denied the existence of
evils in the present state of industry, but they looked upon these evils
as resulting from obstructions to the freedom of competition which time,
and time alone, would eventually remove, and from moral causes with
which economists had no proper business. The Socialists of the Chair,
however, could not dismiss their responsibility for those evils so
easily. They owned at once that a social crisis had arisen or was near
at hand. The effect of the general adoption of the large system of
production had been to diminish the numbers of the middle classes, to
reduce the great bulk of the lower classes permanently to the position
of wage-labourers, and to introduce some grave elements of peril and
distress into the condition of the wage-labourers themselves. They are
doubtless better fed, better lodged, better clad, than they were say in
the middle and end of last century, when not one in a hundred of them
had shoes to his feet, when seven out of eight on the Continent were
still bondsmen, and when three out of every four in England had to eke
out their wages by parochial relief. But, in spite of these advantages,
their life has now less hope and less security than it had then.
Industry on the great scale has multiplied the vicissitudes of trade,
and rendered the labourer much more liable to be thrown out of work. It
has diminished the avenues to comparative independence and dignity which
were open to the journeyman under the _regime_ of the small industries.
And while thus condemned to live by wages alone all his days, he could
entertain no reasonable hope--at least before the formation of trade
unions--that his wages could be kept up within reach of the measure of
his wants, as these wants were being progressively expanded by the
general advance of culture. Moreover, the twinge of the case lies here,
that while the course which industrial development is taking seems to be
banishing hope and security more and more from the labourer's life, the
progress of general civilization is making these benefits more and more
imperatively demanded. The working classes have been growing steadily in
the scale of moral being. They have acquired complete personal freedom,
legal equality, political rights, general education, a class
consciousness; and they have come to cherish a very natural and
legitimate aspiration that they shall go on progressively sharing in the
increasing blessings of civilization. Brentano says that modern public
opinion concedes this claim of the working man as a right to which he is
entitled, but that modern industrial conditions have been unable as yet
to secure him in the possession of it; hence the Social Question. Now
some persons may be ready enough to admit this claim as a thing which it
is eminently desirable to see realized, who will yet demur to the
representation of it as a right, which puts society under a
corresponding obligation. But this idea is a peculiarity belonging to
the whole way of thinking of the Socialists of the Chair upon these
subjects. Some of them indeed take even higher ground. Schmoller, for
example, declares that the working classes suffer positive wrong in the
present distribution of national wealth, considered from the standpoint
of distributive justice; but his associates as a rule do not agree with
him in applying this abstract standard to the case. Wagner also stands
somewhat out of the ranks of his fellows by throwing the responsibility
of the existing evils directly and definitely upon the State. According
to his view, there can never be anything which may be legitimately
called a Social Question, unless the evils complained of are clearly the
consequences of existing legislation, but he holds that that is so in
the present case. He considers that a mischievous turn has been given to
the distribution of wealth by legalizing industrial freedom without at
the same time imposing certain restrictions upon private property, the
rate of interest, and the speculations of the Stock Exchange. The State
has, therefore, caused the Social Question; and the State is bound to
settle it. The other Socialists of the Chair, however, do not bring the
obligation so dead home to the civil authority alone. The duty rests on
society, and, of course, so far on the State also, which is the chief
organ of society; but it is not to State-help alone, nor to self-help
alone, that the Socialists of the Chair ask working men to look; but it
is to what they term the self-help of society. Society has granted to
the labouring classes the rights of freedom and equality, and has,
therefore, come bound to give them, as far as it legitimately can, the
amplest facilities for practically enjoying these rights. To give a man
an estate mortgaged above its rental is only to mock him; to confer the
status of freedom upon working men merely to leave them overwhelmed in
an unequal struggle with capital is to make their freedom a dead letter.
Personal and civil independence require, as their indispensable
accompaniment, a certain measure of economic independence likewise, and
consequently to bestow the former as an inalienable right, and yet take
no concern to make the latter a possibility, is only to discharge
one-half of an obligation voluntarily undertaken, and to deceive
expectations reasonably entertained. No doubt this independence is a
thing which working men must in the main win for themselves, and day
after day, by labour, by providence, by association; but it is
nevertheless an important point to remember, with Brentano, that it
forms an essential part of an ideal which society has already
acknowledged to be legitimate, and which it is therefore bound to second
every effort to realize. The Social Question, conceived in the light of
these considerations, may accordingly be said to arise from the fact
that a certain material or economic independence has become more
necessary for the working man, and less possible. It is more necessary,
because, with the sanction of modern opinion, he has awoke to a new
sense of personal dignity, and it is less possible, in consequence of
circumstances already mentioned, attendant upon the development of
modern industry. It is not, as Lord Macaulay maintained, that the evils
of man's life are the same now as formerly, and that nothing has changed
but the intelligence which has become conscious of them. The new time
has brought new evils and less right or disposition to submit to them.
It is the conflict of these two tendencies which, in the thinking of the
Socialists of the Chair, constitutes the social crisis of the present
day. Some of them, indeed, describe it in somewhat too abstract formulae,
which exercise an embarrassing influence on their speculations. For
example, Von Scheel says the Social Question is the effect of the felt
contradiction between the ideal of personal freedom and equality which
hangs before the present age, and the increasing inequality of wealth
which results from existing economic arrangements; and he proposes as
the general principle of solution, that men should now abandon the
exclusive devotion which modern Liberalism has paid to the principle of
freedom, and substitute in its room an adhesion to freedom _plus_
equality. But then equality may mean a great many different things, and
Von Scheel leaves us with no precise clue to the particular scope he
would give his principle in its application. He certainly seems to
desire more than a mere equality of right, and to aim at some sort or
degree of equality of fact, but what or how he informs us not; just as
Schmoller, while propounding the dogma of distributive justice, condemns
the communistic principle of distribution of wealth as being a purely
animal principle, and offers us no other incorporation of his dogma. In
spite of their antipathy to abstractions, many of the Socialists of the
Chair indulge considerably in barren generalities, which could serve
them nothing in practice, even if they did not make it a point to square
their practice by the historical conditions of the hour.
Brentano strikes on the whole the most practical keynote, both in his
conception of what the social question is and of how it is to be met.
What is needed, he thinks, very much is to give to modern industry an
organization as suitable to it as the old guilds were to the industry of
earlier times, and this is to be done in great part by adaptations of
that model. He makes comparatively little demand on the power of the
State, while of course agreeing with the rest of his school in the
latitude they give to the lawfulness of its intervention in industrial
matters. He would ask it to bestow a legal status on trade unions and
friendly societies, to appoint courts of conciliation, to regulate the
hours of labour, to institute factory inspection, and to take action of
some sort on the daily more urgent subject of labourers' dwellings. But
the elevation of the labouring classes must be wrought mainly by their
own well-guided and long-continued efforts, and the first step is gained
when they have resolved earnestly to begin. The pith of the problem
turns on the matter of wages, and, so far at any rate, it has already
been solved almost as well as is practicable by the English trade
unions, which have proved to the world that they are always able to
convert the question of wages from the question how little the labourer
can afford to take, into the question how much the employer is able to
give--_i.e._, from the minimum to the maximum which the state of the
market allows. That is, of course, a very important change, and it is
interesting to know that F. A. Lange, the able and distinguished
historian of Materialism, who had written on the labour question with
strong socialist sympathies, stated to Brentano that his account of the
English trade unions had converted him entirely from his belief that a
socialistic experiment was necessary. Brentano admits that the effect of
trade unions is partial only; that they really divide the labouring
class into two different strata--those who belong to the trade unions
being raised to a higher platform, and those who do not being left as
they were in the gall of bitterness. But then, he observes, great gain
has been made when at least a large section of the working class has
been brought more securely within the pale of advancing culture, and it
is only in this gradual way--section by section--that the elevation of
the whole body can be eventually accomplished. The trade union has
imported into the life of the working man something of the element of
hope which it wanted, and a systematic scheme of working-class insurance
is now needed to introduce the element of security. Brentano has
published an excellent little work on that subject; and here again he
asks no material help from the State. The working class must insure
themselves against all the risks of their life by association, just as
they must keep up the rate of their wages by association; and for the
same reasons--first, because they are able to do so under existing
economic conditions, and second, because it is only so the end can be
gained consistently with the modern moral conditions of their
life--_i.e._, with the maintenance of their personal freedom, equality,
and independence. Brentano thinks that the sound principle of
working-class insurance is that every trade union ought to become the
insurance society for its trade, because every trade has its own special
risks and therefore requires its own insurance premium, and because
malingering, feigned sickness, claims for loss of employment through
personal fault, and the like, cannot possibly be checked except by the
fund being administered by the local lodges of the trade to which the
subscribers belong. The insurance fund might be kept separate from the
other funds of the union, but he sees no reason why it should not be
combined with them, as it would only constitute a new obstacle to
ill-considered strikes, and as striking in itself will, he expects, in
course of time, give way to some system of arbitration. Brentano makes
no suggestion regarding the mass of the working class who belong to no
trade union. They cannot be dealt with in the same way, or so
effectively. But this is quite in keeping with the general principle of
the Socialists of the Chair--in which they differ _toto caelo_ from the
socialists--that society is not to be ameliorated by rigidly applying to
every bit of it the same plan, but only by a thousand modifications and
remedies adapted to its thousand varieties of circumstances and
situations.