friendly criticism. Great play is made with a sentence of Ricardo’s:[53]
“Utility is not the measure of exchangeable value, though it is
absolutely essential to it.” This non-committal sentence does not carry
us very far, and does not claim to be a definition, but is true as far
as it goes. Ruskin makes hay of Ricardo’s statement next following, that
Labour was, in primitive abstraction at any rate, the sole regulator of
price. Neither he nor Ruskin had reached the modern theory of “marginal
values” which solves so many ancient puzzles and misunderstandings.
Price is fixed where Demand and Supply meet: and it measures two things.
It represents on one side the value in use of the last article produced;
and on the other the cost in labour of the production thereof. Then both
sides are satisfied--the buyer and the seller. But the price does not
represent the utility of the earliest articles produced--the first
loaves of bread would be quite priceless,--nor the cost of the
production of the first few easily grown crops. Both values are “final”
or “marginal.” This simple and permanent plan of determining price,
which nobody can or should alter, is, put shortly, the terrible law of
supply and demand, the very heart of economic theory, about which so
much indignation is wastefully expended. If Ruskin’s penetrating mind
had been devoted to helpful criticism of the gaps left by the
economists, they might have reached this theory much earlier. But Ruskin
wrote in a state of noble rage--a bad state for the scientific temper.
“Nothing in history,” he wrote, “has ever been so disgraceful to human
intellect as the acceptance among us of the common doctrines of
political economy as a science.”[54] This was chiefly because it was
said to be a systematic disobedience to the first principles of its
professed religion, because it taught “the love of money” and “mammon
service”; it was “a science of becoming rich.” Once accept so terrible a
misconception, and all the vials of the prophets’ wrath are not too
profuse. “To this science and to this alone (the professed and organized
pursuit of money) is owing all the evil of modern days. I say all.”[55]
Ruskin wrote in 1865 a letter to the _Daily Telegraph_ in which he says
people cannot get servants by political economy and the law of supply
and demand--as though he had said they cannot be got by physics and the
law of gravitation. To see his real attitude we must add a phrase of
1883: “While I admit there is such a thing as mercantile economy,
distinguished from social, I have always said that neither Mill, Fawcett
nor Bastiat knew the contemptible science they professed to teach.”[56]
This attitude is pure disaster, comparable to the great _odia
theologica_ which have cursed the world. It is not necessary nor wise to
take sides in an utterly baseless controversy. Let us rather examine the
programme of the science.
Prof. Marshall gives the following list of the inquiries chiefly pursued
by economic science[57]:--
“How does economic freedom tend, so far as its influence reaches, to
arrange the demand for wealth and its production, distribution and
exchange? What organization of industry and trade does economic freedom
tend to bring about; what forms of division of labour; what arrangements
of the money market, of wholesale and retail dealing, and what relations
between employer and employed? How does it tend to adjust values, that
is, the prices of material things, whether produced on the spot or
brought from a distance, rents of all kinds, interest on capital and the
earnings of all forms of work, including that of undertaking and
managing business enterprises? How does it affect the course of foreign
trade? Subject to what limitations is the price of anything a measure of
its real utility? What increase of happiness is _prima facie_ likely to
result from a given increase in the wealth of any class of society? How
far is the industrial efficiency of any class impaired by the
insufficiency of its income? How far would an increase of the income of
any class, if once effected, be likely to sustain itself through its
effects in increasing their efficiency and earning power?
“How far does, as a matter of fact, the influence of economic freedom
reach, or how far has it reached at any particular time, in any place,
in any rank of society, or in any particular branch of industry? What
other influences are most powerful there? and how is the action of all
these influences combined? In particular, how far does not economic
freedom tend of its own action to build up combinations and monopolies,
and what are their effects? How are the various classes of society
likely to be affected by its action in the long run? What will be the
intermediate effects while its ultimate results are being worked out;
and, account being taken of the time over which they will spread, what
is the relative importance of these two classes of ultimate and
intermediate effects? What will be the incidence of any system of taxes?
What burdens will it impose on the community, and what revenue will it
afford to the State?”
Such then, is the subject matter of economic science spread out in some
detail. But behind all these there are practical questions which give
the chief motive to our interest in the subject; and though not within
the actual range of the science, it will be of interest to us to hear
the same authority state them. They vary very much from time to time.
The earlier economists were occupied with the need of removing
restrictions on free commerce, and government regulation generally, and
they glorified economic freedom. We ask with Marshall:
“How should we act so as to increase the good and diminish the evil
influences of economic freedom, both in its ultimate results, and in
the course of its progress? If the first are good and the latter evil,
but those who suffer the evil do not reap the good, how far is it right
that they should suffer for the benefit of others?”
“Taking it for granted that a more equal distribution of wealth is to be
desired, how far would this justify changes in the institution of
property, or limitations of free enterprise, even when they would be
likely to diminish the aggregate of wealth? In other words, how far
should an increase in the income of the poorer classes and a diminution
of their work be aimed at, even if it involved some lessening of
national material wealth? How far could this be done without injustice,
and without slackening the energies of the leaders of progress? How
ought the burdens of taxation to be distributed among the different
classes of society?”
“Ought we to rest content with the existing forms of division of labour?
Is it necessary that large numbers of the people should be exclusively
occupied with work that has no elevating character? Is it possible to
educate gradually among the great mass of workers a new capacity for the
higher kinds of work, and in particular for undertaking co-operatively
the management of the businesses in which they are themselves employed?”
“What are the proper relations of individual and collective action in a
stage of civilization such as ours? How far ought voluntary association
in its various forms, old and new, to be left to supply collective
action for those purposes for which such action has special advantages?
What business affairs should be undertaken by society itself acting
through the Government, imperial or local? Have we, for instance,
carried as far as we should the plan of collective ownership and use of
open spaces, or works of art, of the means of instruction and amusement,
as well as of those material requisites of a civilized life, the supply
of which requires united action, such as gas and water and railways?”
“When Government does not itself directly intervene, how far should it
allow individuals and corporations to conduct their own affairs as they
please? How far should it regulate the management of railways and other
concerns which are to some extent in a position of monopoly, and again,
of land and other things the quantity of which cannot be increased by
man? Is it necessary to retain in their full force all the existing
rights of property, or have the original necessities for which they were
meant to provide, in some measure passed away?”
“Are the prevailing methods of using wealth entirely justifiable? What
scope is there for the moral pressure of social opinion in constraining
and directing individual action in those economic relations in which the
rigidity and violence of Government interference would be likely to do
more harm than good?
“In what respect do the duties of one nation to another in economic
matters differ from those of members of the same nation to one another?”
In fact, we have to deal with the problems of Socialism, of
Co-operation, of Municipal action, of Luxury and of Trade Wars. He might
have added Pauperism and Old Age Pensions, Standard Wages and Hours, and
Nationalization of various kinds of property. There is a strong and
audible echo of Ruskin’s aims about these practical problems; and one
does not yet see why we cannot make room in our own minds both for
economic science and the Ruskinian Economy to which these issues belong.
There are passages, too, in Mill, which Ruskin himself might have
written, which look beyond Production and Distribution to the larger
needs and joys of man. He is considering the stationary state of capital
and wealth, when economic progress has ceased, when people are not
always growing more numerous and more wealthy, a state dreaded by the
older economists, and ever to be held at arm’s length. But Mill says he
thinks it would be better than our present condition. “I confess I am
not charmed with the ideal of life held out by those who think that the
normal state of human beings is that of struggling to get on, that the
trampling, crushing, elbowing and treading on each other’s heels, which
form the existing type of social life, are the most desirable lot of
humankind, or anything but the disagreeable symptoms of one of the
phases of industrial progress. The northern and middle states of America
are a specimen of this stage of civilization in very favourable
circumstances, having apparently got rid of all social injustices and
inequalities, that affect persons of Caucasian race and of the male sex,
while the proportion of population to capital and land is such as to
ensure abundance to every able-bodied member of the community who does
not forfeit it by misconduct. They have the six points of Chartism, and
they have no poverty; and all that these advantages do for them is that
the life of the whole of one sex is devoted to dollar-hunting, and of
the other to breeding dollar-hunters. The best state for human nature is
that in which, while no one is poor, no one desires to be richer, nor
has any reason to fear being thrust back by the efforts of others to
push themselves forward.”[58]
That is Ruskin without the eloquence; that is his advice to stay in the
station in which we have been placed, and not be always trying to get
out of it. A little more from Mill:
“I know not why it should be matter of congratulation that persons who
are already richer than any one needs to be, should have doubled their
means of consuming things which give little or no pleasure except as
representative of wealth, or that numbers should pass over, every year,
from the middle classes into a richer class, or from the class of the
occupied rich to that of the unoccupied.”
This reminds one of the well-known passage where Ruskin speaks of those
who try “to advance in life without knowing what life means, who mean
only that they are to get more horses and more footmen and more fortune
and more public honours and--not more personal soul.”[59]
As some injustice has been done to Mill, particularly by us the pupils
and friends of his eloquent antagonist, I will quote a little more from
him to show that though the laws of Nature were represented by him as
hard, he was himself as Ruskinian as any of us. He suggests a limitation
of the right of bequest, so that no one should receive by gift or
inheritance more than a moderate independence, so that there might be “a
well paid and affluent body of labourers; no enormous fortunes, except
what were earned and accumulated during a single lifetime; but a much
larger body sufficiently at leisure to cultivate freely the graces of
life.” Just so does Ruskin tell us that a man who dies rich dies
disgraced. Mill proceeds to express his dread of greater density of
population, because it crowds out solitude, so needful for depth of
character, and takes away wild natural beauty. The whole passage might
have come from Brantwood.
As to machinery, Mill goes on in the very spirit of _Fors Clavigera_:
“Hitherto it is questionable if all the mechanical inventions yet made
have lightened the day’s toil of any human being. They have enabled a
greater population to live the same life of drudgery and imprisonment,
and an increased number of manufacturers and others to make large
fortunes.” I am afraid that with posterity John Stuart Mill may suffer
in reputation from being the object of so much invective, embedded in
peerless English, and written under a mighty spirit of prophesying.
_Fors Clavigera_ and _Unto This Last_ will be read much longer than
Mill’s _Principles_, and future ages may describe him as a cold-blooded
Philistine, when really he was among the best and wisest of men. Certain
Stoics and Epicureans, of whom all we know is that they encountered
Paul, have hardly had justice from the ordinary English reader of the
Acts. Mill obtained the verdict of contemporaries: but the future is the
charmer’s.
In some ways these two protagonists, both of them among the princes of
our race, were strangely alike in their history. Mill, born in 1806, was
the elder by thirteen years. Both children were extraordinarily
precocious, Mill with his Greek at two, Ruskin with his pencil and his
poetry at seven. At sixteen Mill was writing in _The Traveller_ in
defence of his father and of Ricardo. From eighteen to twenty he
contributed to the _Westminster Review_ and other journals articles on
the Game Laws, the Corn Laws, the Law of Libel and on a Paper Currency,
and reviews of books on Economics. At this age Ruskin’s poetry was
appearing in _Friendship’s Garland_, and at twenty-four he came out with
the first volume of _Modern Painters_, with a fully developed style made
in heaven, and an originality in his art criticism which made him a
public man at once. Each of them, after a long and famous literary life,
gave the world an autobiography it would not willingly lose.
They were both only sons, brought up with unusual solicitude, close
parental control and remarkably severe if loving discipline. Their
attachment to and regard for their parents was a great power with both,
all their lives. The gravity, earnestness, and deep sense of
responsibility taught in childhood never left either of them.
Both passed through the fires which try faith; and there are reasons for
believing in both cases that what might have been a happy marriage was
frustrated by want of conventional orthodoxy. So that they both suffered
for the cause of truth in the hardest of all ways. Each of them had
only six or seven years of married life, and neither left any children.
Strangely enough, also, Mill was forty-one when his _Principles of
Political Economy_ was written, and Ruskin at forty-one brought out his
papers in the _Cornhill_, under the title of _Unto This Last_, which are
his counterblast to Mill.
Each of them found it necessary in later life to recant some of their
earlier teaching, and each faithfully did so. Mill gave up the Wages
Fund Theory he had learnt from his father, and Ruskin scatters the later
editions of his earlier works with notes denouncing the dogmatic
evangelicalism which runs through them, which he had learnt from his
mother.
So, in tragic conflict, these two men are before us. Not that Mill ever
replied. He died in 1872, and during his lifetime he could afford to
ignore the eccentricities of an unstable genius, at whom all sober
people smiled in pity. But now I would fain even for Mill’s sake
reconcile them. You have true tragedy, not when right meets wrong, the
noble the ignoble, but when two principles, both noble, are brought into
a conflict they cannot avoid--Mill, the Liberal, the rationalist, with
his watchwords of equality, liberty and a free chance for all--and
Ruskin the Conservative, the indignant enemy of mechanical progress,
speaking ever of order and obedience, reverence and graded ranks:--Mill,
a servant of present humanity, with but a faint critical hold on the
Unseen; Ruskin, emotional and inspired, who not seldom would fain call
down fire from heaven on Mill’s newly enfranchised citizens, because
they blasphemed.
So that I conclude that scholastic Economics is a reliable, useful
scientific enquiry, forming a basis for the very same practical aims
which Ruskin has set us striving for, and written by men who loved their
fellows and were conspicuous examples of uprightness and benevolence,
truth-keeping and friends of their kind.
We know how unscrupulous men of business used their conclusions,
particularly those conclusions which have not stood the test of
criticism, as a sort of textbook of oppression, as giving a scientific
necessity for starvation, and so excusing hardness of heart. That this
was so, must be Ruskin’s excuse for declaring war upon the economists.
But it was a war wholly unnecessary; it clouded his prophecy with
confused issues, and it laid the Master himself among the wounded.
It will be necessary, in order properly to express the scope of
Political Economy, to examine more fully its definition of the two
factors whose action and reaction upon one another form the subject
matter of the science. These two factors are Man and Wealth. What is Man
as an economic being? What is the “economic man”?
He is assumed by Mill and others[60] as a being who considers his own
side of a bargain only, who in all contracts will do the best he can for
himself, and who, in the use of his capital, and the direction of his
labour, is influenced by an intelligent and passionless eye to his own
interests. He has no regard for custom, or public opinion, or
compassion, or resentment, or personal partiality, or class prejudice.
Mill does not pretend that this person actually exists; but that the
tendency of things is as though he did exist; and that it is most easy
to assume his existence, and after that recognize the qualifications
which other parts of human nature require us to put in, just as in
mechanics we calculate what would happen if surfaces were smooth, and
then allow for friction afterwards.
Ruskin’s criticisms are not always fair. He writes:
“Political Economy, being a science of wealth, must be a science
respecting human capacities and dispositions. But moral considerations
have nothing to do with political economy (says Mill). Therefore, moral
considerations have nothing to do with human capacities and
dispositions.”[61]
Perhaps the logical fallacy is not very obvious, but it is there. Human
capacities and dispositions touch moral considerations on one side, and
they touch political economy on the other. But these two need not
therefore be connected. Because a man has two relations, as a citizen
and as a father, and because the state does not bring up his children,
and the two relations are separate, we must not argue that the man has
nothing to do with his family, because the state, with which he is also
connected, has nothing to do with it. All this wrong criticism was
produced by the obvious remark of Mill, that the ethical character of a
taste for diamonds is not the economist’s affair.
It is only as a first approximation, then, that economics postulates the
monster known as the economic man; cold, calculating, well informed,
shrewd, selfish with the unthinking uniformity of a machine. It is
perhaps clearer to say that it can take account only of such motives as
are sufficiently regular and predictable to be worth so much in money.
Some unselfish actions are of that kind, such as a man’s service to his
children, or if he be a Highlander to his third cousin; and we can
predict certain of his regular subscriptions. The Law of Supply and
Demand applies to ministers and missionaries and hospital nurses, though
their payment is all from charitable gifts. To some extent the Charity
Fund is a steady sum in any nation. It could be predicted that when the
national War Fund was absorbing large sums, other charities,
particularly London charities, would suffer; and such has been the case.
The same phenomenon occurred to a less degree when General Booth was
raising his Darkest England Fund. Here is a charitable motive steady
enough to be measurable.
It is not assumed here, as so constantly asserted by Ruskin, that men
are and must be treated as rogues. The argument of Ruskin was that the
qualifications to be introduced into problems due to the fact that man
is not an economic man, are not like allowances for friction, or other
mechanical matters, but are organic and revolutionary. The right reply
probably is that sometimes this is so, but far more generally not so.
When remarkable instances of unselfishness occur outside the family
circle, where the economist expects and allows for them, they are told
as instances of the unexpected. When the newspaper boys near the Mansion
House are found giving an undisturbed beat to a lame boy who could not
compete with them in running to customers, and refuse to sell a paper
there, the admiring customer concludes his beautiful and kindly story by
asking how many business men round the Mansion House would leave a rival
in possession because of his weakness?
The definition of Wealth must now be considered. Mill defines it as
consisting of “All useful and agreeable things which possess
exchangeable value.”
He decides to include in the wealth of a country such personal
qualities, skill, energy, perseverance, as tend to make the man who
possesses them industrially more valuable. A skilled cotton spinner is a
greater national asset than a labourer; a skilled medical man who can
restore to labourers their industrial efficiency, is also national
wealth, a utility embodied in a person; but a gifted preacher, whose
message may even make a man a less keen producer of wealth than he was
before, would not be an instance of national wealth, unless he made, as
he might, a drunkard or a loafer into a regular wage earner. So the
actor, or the singer, or the orator, unless their work ultimately
produces material goods, is not to be counted wealth in economics. There
is evidently the usual difficulty about drawing the line.
What is more, the most precious parts of character are excluded from
national wealth in the economic sense. Wealth, that is, is taken to mean
property, and not, more generally, the means of true well-being. Again,
the most necessary things are from their abundance not wealth. Air,
sunshine, and water are not wealth where and when they are given
profusely by nature; though they are the most needful supports to life.
But air which has to be pumped in by a ventilating fan has cost
something, and is wealth; sunshine which has passed through a coal
measure and is brought to our firegrates on a winter’s night is wealth,
water turned on at our taps is wealth for which we pay a water-rate. We
may come to import oxygen into our halls and theatres and lecture rooms,
perhaps even into our cellar workrooms, and then it too will have a
price and an economic value.
There is clearly room for much difference of opinion in detail here. And
yet it will be plain to all that the subject matter of a science must be
limited; we must know when our studies begin and end. It is not
demoralization which makes an economist deny holiness to be wealth, it
is a classification of sciences. Holiness is not matter either, nor
electricity, nor gas; it does not come into Physics any more than into
Economics. It comes into Ethics and Theology and practical Politics, and
it is the most important thing in the world. It may be true, as Ruskin
urges, that wealth is not any good to a miser or a spendthrift or a
rogue; that it is often I11th rather than Wealth, if it makes its user
soft and slack and selfish, or proud and cruel. But nevertheless, it is
an object of desire, of human motive; and that is enough for the
economist.
The mistake of the early economists before John S. Mill was in not
recognizing, however, the reaction of man’s possession of wealth upon
his conduct as a producer; how high wages might be remunerative, if they
increased efficiency, and big fortunes wasted if they increased
idleness. We really have to treat two factors, each of which is, in the
language of Mathematics, an implicit function of the other--or, if that
does not make it more clear--each of which acts upon and is acted upon
by the other. The early economists lived in the age when steam engines
and electric telegraphs were great and new achievements, when Chemistry
was being reborn in the atomic theory, and Joule was proving the great
generalization of the conservation of energy. They treated their
subject--man in business--as if he were matter; whereas he has
biological characteristics, and is modifiable and can modify his
environment. Our age, on the contrary, is concerned with the
modification of characteristics under environment. It is the age of
Darwin. Biological evolution is seen to govern the growth of men and
societies; and these, in writings of the dominant school of thinkers
since Herbert Spencer, are seen to follow biological laws of growth. The
Economic man is no exception.