has been rife with schemes to improve political conditions. It has
become clear, among other things, that our national growth has carried
with it the development of secondary political agencies, not
contemplated by the framers of our constitutions, agencies which have
become primary in practical matters. These agencies are the "machines"
of political parties, with their hierarchical gradation of bosses from
national to ward rulers, bosses who are in close touch with great
business interests at one extreme, and with those who pander to the
vices of the community (gambling, drink, and prostitution) at the other;
parties with their committees, conventions, primaries, caucuses,
party-funds, societies, meetings, and all sorts of devices for holding
together and exciting masses of men to more or less blind acquiescence.
It is not necessary to point out the advantages which parties have
subserved in concentrating and defining public opinion and
responsibility in large issues; nor to dwell upon their value in
counteracting tendencies which break up and divide men into a multitude
of small groups having little in common with one another. But behind
these advantages a vast number of abuses have sheltered themselves.
Recent legislation and recent discussion have shown a marked tendency
formally to recognize the part actually played by party machinery in the
conduct of the State, and to take measures to make this factor more
responsible in its exercise. Since these measures directly affect the
conditions under which the government as the organ of the general will
does its work of securing the fundamental conditions of equal
opportunity for all, they have a direct moral import. Such questions as
the Australian ballot, the recognition of party emblems and party
groupings of names; laws for direct primary nominations; the registering
of voters for primary as well as for final elections; legal control of
party committees and party conventions; publicity of accounts as to the
reception and use of party funds; forbidding of contributions by
corporations, are thus as distinctly moral questions as are bribery and
ballot-box stuffing.
=5. Reforms in Governmental Machinery.=--Questions that concern the
respective advantages of written versus unwritten constitutions are in
their present state problems of technical political science rather than
of morals. But there are problems, growing out of the fact that for the
most part American constitutions were written and adopted under
conditions radically unlike those of the present, which have a direct
ethical import. As already noted, our constitutions are full of
evidences of distrust of popular cooperative action. They did not and
could not foresee the direction of industrial development, the increased
complexity of social life, nor the expansion of national territory. Many
measures which have proved indispensable have had therefore to be as it
were smuggled in; they have been justified by "legal fictions" and by
interpretations which have stretched the original text to uses undreamed
of. At the same time, the courts, which are the most technical and legal
of our political organs, are supreme masters over the legislative
branch, the most popular and general. The distribution of functions
between the states and the nation is curiously ill-adapted to present
conditions (as the discussions regarding railway regulation indicate);
and the distribution of powers between the state and its municipalities
is hardly less so, resting in theory upon the idea of local
self-government, and in practice doing almost everything possible to
discourage responsible initiative for the conduct of their own affairs
on the part of municipalities.
These conditions have naturally brought forth a large crop of
suggestions for reforms. It is not intended to discuss them here, but
the more important of them, so far as involving moral questions, may be
briefly noted. The proposals termed the initiative and the referendum
and the "recall" (this last intended to enable the people to withdraw
from office any one with whose conduct of affairs they are dissatisfied)
are clearly intended to make the ideal of democratic control more
effective in practice. Proposals for limited or complete woman's
suffrage call attention to the fact that one-half of the citizenship
does the political thinking for the other half, and emphasize the
difficulty under such conditions of getting a comprehensive social
standpoint (which, as we have already seen, is the sympathetic and
reasonable standpoint) from which to judge social issues. Many sporadic
propositions from this and that quarter indicate a desire to revise
constitutions so as to temper their cast-iron quality and increase their
flexible adaptation to the present popular will, and so as to emancipate
local communities from subjection to State legislatures in such a way as
to give them greater autonomy and hence greater responsibility, in the
management of their own corporate affairs. It is not the arguments _pro_
and _con_ that we are here concerned with; but we are interested to
point out that moral issues are involved in the settlement of these
questions. It may, moreover, be noted that dividing lines in the
discussion are generally drawn, consciously or unconsciously, on the
basis of the degree of faith which exists in the democratic principle
and ideal, as against the class idea in some of its many forms.
=6. Constructive Social Legislation.=--The rapid change of economic
methods, the accumulation and concentration of wealth, the aggregation
of capital and labor into distinct bodies of corporations and trusts, on
one side, and federated labor unions, on the other; the development of
collective agencies of production and distribution, have brought to the
focus of public attention a large number of proposals for new
legislation, almost all of which have a direct moral import. These
matters are discussed at length in subsequent chapters (chs.
xxii.-xxv.); and so are passed over here with the reminder that, while
on one side they are questions of the ethics of industry, they are also
questions of the right and wrong use of political power and authority.
We may also note that the theoretical principle at issue, the extension
versus the restriction of governmental agencies, so far as it is not
simply a question of what is expedient under the given circumstances, is
essentially a question of a _generalized_ versus a _partial_
individualism. The democratic movement of emancipation of personal
capacities, of securing to each individual an _effective_ right to count
in the order and movement of society as a whole (that is, in the common
good), has gone far enough to secure to many, more favored than others,
peculiar powers and possessions. It is part of the irony of the
situation that such now oppose efforts to secure equality of opportunity
to _all_ on the ground that these efforts would effect an invasion of
individual liberties and rights: i.e., of privileges based on
inequality. It requires perhaps a peculiarly sympathetic imagination to
see that the question really involved is not one of magnifying the
powers of the State against individuals, but is one of making individual
liberty a more extensive and equitable matter.
=7. The International Problem.=--The development of national States
marks a tremendous step forward in the realization of the principle of a
truly inclusive common good. But it cannot be the final step. Just as
clans, sects, gangs, etc., are intensely sympathetic within and
intensely exclusive and jealous without, so States are still arrayed
against States, with patriotism, loyalty, as an internal virtue, and the
distrust and hatred of divisive hostility as the counterpart vice. The
idea of humanity in the abstract has been attained as a moral ideal. But
the political organization of this conception, its embodiment in law and
administrative agencies, has not been achieved. International law,
arbitration treaties, and even a court like the Hague tribunal, whose
power is sentimental rather than political, mark steps forward. Nothing
could be more absurd, from the historic point of view, than to regard
the conception of an international State of federated humanity, with its
own laws and its own courts and its own rules for adjudicating disputes,
as a mere dream, an illusion of sentimental hope. It is a very slight
step to take forward compared with that which has substituted the
authority of national States for the conflict of isolated clans and
local communities; or with that which has substituted a publicly
administered justice for the regime of private war and retaliation. The
argument for the necessity (short of the attainment of a federated
international State with universal authority and policing of the seas)
of preparing in peace by enlarged armies and navies for the possibility
of war, must be offset at least by recognition that the possession of
irresponsible power is always a direct temptation to its irresponsible
use. The argument that war is necessary to prevent moral degeneration of
individuals may, under present conditions, where every day brings its
fresh challenge to civic initiative, courage, and vigor, be dismissed as
unmitigated nonsense.
Sec. 4. THE MORAL CRITERION OF POLITICAL ACTIVITY
The moral criterion by which to try social institutions and political
measures may be summed up as follows: The test is whether a given custom
or law sets free individual capacities in such a way as to make them
available for the development of the general happiness or the common
good. This formula states the test with the emphasis falling upon the
side of the individual. It may be stated from the side of associated
life as follows: The test is whether the general, the public,
organization and order are promoted in such a way as to equalize
opportunity for all.
=Comparison with the Individualistic Formula.=--The formula of the
individualistic school (in the narrow sense of that term--the
_laissez-faire_ school) reads: The moral end of political institutions
and measures is the maximum possible freedom of the individual
consistent with his not interfering with like freedom on the part of
other individuals. It is quite possible to interpret this formula in
such a way as to make it equivalent to that just given. But it is not
employed in that sense by those who advance it. An illustration will
bring out the difference. Imagine one hundred workingmen banded together
in a desire to improve their standard of living by securing higher
wages, shorter hours, and more sanitary conditions of work. Imagine one
hundred other men who, because they have no families to support, no
children to educate, or because they do not care about their standard of
life, are desirous of replacing the first hundred at lower wages, and
upon conditions generally more favorable to the employer of labor. It is
quite clear that in offering themselves and crowding out the others,
they are not interfering with the _like_ freedom on the part of others.
The men already engaged are "free" to work for lower wages and longer
time, if they want to. But it is equally certain that they are
interfering with the _real_ freedom of the others: that is, with the
effective expression of their _whole_ body of activities.
The formula of "_like_ freedom" artificially isolates some one power,
takes that in the abstract, and then inquires whether _it_ is interfered
with. The one truly moral question is what relation this particular
power, say the power to do a certain work for a certain reward, sustains
to all the other desires, purposes, and interests of the individual. How
are _they_ affected by the way in which some one activity is exercised?
It is in them that the concrete freedom of the man resides. We do not
know whether the freedom of a man is interfered with or is assisted
until we have taken into account his whole system of capacities and
activities. The maximum freedom of one individual consistent with equal
_concrete_ or _total_ freedom of others, would indeed represent a high
moral ideal. But the individualistic formula is condemned by the fact
that it has in mind only an abstract, mechanical, external, and hence
formal freedom.
=Comparison with the Collectivistic Formula.=--There is a rival formula
which may be summed up as the subordination of private or individual
good to the public or general good: the subordination of the good of the
part to the good of the whole. This notion also _may_ be interpreted in
a way which renders it identical with our own criterion. But it is
usually not so intended. It tends to emphasize quantitative and
mechanical considerations. The individualistic formula tends in practice
to emphasize the freedom of the man who has power at the expense of his
neighbor weaker in health, in intellectual ability, in worldly goods,
and in social influence. The collectivistic formula tends to set up a
static social whole and to prevent the variations of individual
initiative which are necessary to progress. An individual variation may
involve opposition, not conformity or subordination, to the existing
social good taken statically; and yet may be the sole means by which the
existing State is to progress. Minorities are not always right; but
every advance in right begins in a minority of one, when some individual
conceives a project which is at variance with the social good as it
_has_ been established.
A true public or social good will accordingly not subordinate individual
variations, but will encourage individual experimentation in new ideas
and new projects, endeavoring only to see that they are put into
execution under conditions which make for securing responsibility for
their consequences. A just social order promotes in all its members
habits of criticizing its attained goods and habits of projecting
schemes of new goods. It does not aim at intellectual and moral
subordination. Every form of social life contains survivals of the past
which need to be reorganized. The struggle of some individuals _against_
the existing subordination of their good to the good of the whole is the
method of the reorganization of the whole in the direction of a more
generally distributed good. Not order, but orderly progress, represents
the social ideal.
LITERATURE
Green, _Principles of Political Obligation_, 1888; Ritchie, _Principles
of State Interference_, 1891, _Natural Rights_, 1895; Lioy, _Philosophy
of Right_, 2 vols., 1901; Willoughby, _An Examination of the Nature of
the State_, 1896; Wilson, _The State_, 1889; Donisthorpe,
_Individualism_, 1889; Giddings, _Democracy and Empire_, 1900; Mulford,
_The Nation_, 1882; Spencer, _Principles of Sociology_, Vol. II., Part
V., 1882, on Political Institutions; Bentham, _Fragment on Government_,
1776; Mill, _Considerations on Representative Government_, 1861, _On
Liberty_, 1859, and _The Subjection of Women_, 1859; Austin,
_Jurisprudence_, 2 vols., 4th ed., 1873; Hadley, _The Relations between
Freedom and Responsibility in the Evolution of Democratic Government_,
1903; Pollock, _Expansion of the Common Law_, 1904; Hall, _Crime in Its
Relations to Social Progress_, 1901; _Philanthropy and Social Progress_,
Seven Essays, 1893; Stephen (J. F.), _Liberty, Equality, Fraternity_,
1873 (a criticism of Mill's _Liberty_); Tufts, _Some Contributions of
Psychology to the Conception of Justice_, Philosophical Review, Vol.
XV., p. 361.
FOOTNOTES:
[204] A traveler tells of overhearing children in Australia, when one of
their kin had injured some one in another clan, discuss whether or no
they came within the degree of nearness of relationship which made them
liable to suffer.
[205] Hearn, _The Aryan Household_, p. 431. Hearn is speaking, moreover,
of a later and more advanced condition of society, one lying well within
"civilization."
[206] Those interested in this important history, as every student of
morals may well be, will find easily accessible material in the
following references: Hobhouse, _Morals in Evolution_, ch. iii. of Vol.
I.; Hearn, _The Aryan Household_, ch. xix.; Westermarck, _The Origin and
Development of the Moral Ideas_, Vol. I., pp. 120-185, and parts of ch.
xx.; Sutherland, _Origin and Growth of the Moral Instinct_, chs. xx. and
xxi.; Pollock and Maitland, _History of of English Law_, Vol. II., pp.
447-460 and ch. ix.; Pollock, _Oxford Lectures_ (The King's Peace);
Cherry, _Criminal Law in Ancient Communities_; Maine, _Ancient Law_.
References to anthropological literature, dealing with savage and
barbarian customs, will be found especially in Westermarck and Hobhouse.
[207] For facts regarding the importance and nature of these
conceptions, see Westermarck, _op. cit._, pp. 52-72; Robertson Smith,
_The Religion of the Semites_, pp. 427-435 and 139-149; Jevons,
_Introduction to the History of Religion_; Hobhouse, _op. cit._, Vol.
II., chs. i. and ii.; and in general facts bearing on the relations
between taboos, holiness, and uncleanness; ablutions, purifications by
fire, transference by scapegoats; also the evil power of curses, and the
early conceptions of doom and fate. For a suggestive interpretation of
the underlying facts, see Santayana, _The Life of Reason_, Vol. III.,
chs. iii. and iv.
[208] See Plato, _Laws_, IX., 873. Compare Holmes, _Common Law_. In
mediaeval and early modern Europe, offending objects were "deodand," that
is, devoted to God. They were to be appropriated by the proper civil or
ecclesiastical authority, and used for charity. In theory, this lasted
in England up to 1846. See Tylor, _Primitive Culture_, Vol. I., pp.
286-287; and Pollock and Maitland, _op. cit._, II., pp. 471-472.
[209] _Op. cit._, p. 257.
[210] The very words cause and to blame are closely connected in their
origin. Cf. the Greek [Greek: aitia].
[211] Pollock and Maitland, _op. cit._, II., p. 469; I., 30. For the
history of the idea of accident in English law with reference to
homicide, see also pp. 477-483. Also Stephen, _History of the Criminal
Law in England_, Vol. III., pp. 316-376.
[212] Pollock and Maitland, II., p. 473; see Westermarck, pp. 240-247.
[213] The slowness and indirectness of change throw light upon the
supposed distinction of justice and mercy (see _ante_, p. 415). When the
practical injustice of regarding accidental homicide or killing in
self-defense as murder began to be felt, the theory was still that the
man in justice was guilty, but that he was to be recommended to the
crown for mercy or pardon. This was a mean term in the evolution of our
present notion of justice.
[214] For some of the main historic facts on intellectual disability,
see Westermarck, pp. 264-277.
[215] Popular judgment, we may say, tends to be as grossly utilitarian
in its practice as it is grossly intuitional in its theoretical
standpoint. In assuming the possibility of an almost infallible,
offhand, pat perception of right and wrong, it commits itself
practically to judging in an offhand, analyzed way, on the basis of the
evils which overtly result.
[216] See Pollock and Maitland, Vol. II., p. 561, who quote from
Ihering: "Formulation is the sworn enemy of arbitrariness, the
twin-sister of liberty"; and who add: "As time goes on there is always a
larger room for discretion in the law of procedure: but discretionary
powers can only be safely entrusted to judges whose impartiality is
above suspicion and whose every act is exposed to public and
professional criticism."
[217] A lawyer, asked if the poor were not at a disadvantage in the
legal maintenance of their rights, replied: "_Not any more than they are
in the other relations of life._"
[218] The devices of "equity" as distinct from strict legality are of
course in part intended to secure this result.
[219] Robinson and Beard, _Development of Modern Europe_, Vol. II., p.
207.
[220] "Man the Reformer."
[221] The term "the King's Peace," as the equivalent in England for the
peace and order of the commonwealth, goes back to a time when literally
it meant a private possession. Pollock says that the desire to collect
larger revenues was the chief motive for pushing the royal jurisdiction
against lesser local authorities. Essay on the King's Peace in _Oxford
Essays_.
[222] Says President Hadley: "The fundamental division of powers in the
Constitution of the United States is between voters on the one hand, and
property-owners on the other. The forces of democracy on one side,
divided between the executive and the legislature, are set over against
the forces of property on the other side, with the judiciary as arbiter
between them.... The voter could elect what officers he pleased, so long
as these officers did not try to do certain duties confided by the
Constitution to the property-holders. Democracy was complete as far as
it went, but constitutionally it was bound to stop short of _social_
democracy."
CHAPTER XXII
THE ETHICS OF THE ECONOMIC LIFE
In considering the ethics of the economic life and of property, so far
as this latter topic has not received treatment elsewhere, we give (1) a
general analysis of the ethical questions involved, (2) a more specific
account of the problems raised by the present tendencies of industry,
business, and property; we follow these analyses with (3) a statement of
principles, and (4) a discussion of unsettled problems.
Sec. 1. GENERAL ANALYSIS
Both the economic process and property have three distinct ethical
aspects corresponding respectively to the ethical standpoint of
happiness, character, and social justice. (1) The economic process
supplies men with goods for their bodily wants and with many of the
necessary means for satisfying intellectual, aesthetic, and social needs;
property represents permanence and security in these same values. (2)
Through the difficulties it presents, the work it involves, and the
incitements it offers, the economic process has a powerful influence in
evoking skill, foresight, and scientific control of nature, in forming
character, and stimulating ambition to excel. Property means power,
control, and the conditions for larger freedom. (3) The economic process
has an important social function. Through division of labor,
cooperation, and exchange of goods and services, it affords one of the
fundamental expressions of the organic nature of society in which
members are reciprocally ends to each other. Property, likewise, is not
only a possessing, but a "right," and thus, like all rights, involves
the questions why and how far society should support the individual in
his interests and claims. Let us examine each of these aspects further.
=1. The Economic in Relation to Happiness.=--Subject to the important
qualifications to be made below under this and the succeeding sections,
we note first that the supply of needs and wants by industry and
commerce is ethically a good. A constant increase in production and
consumption is at least a possible factor in a fuller life. Wealth is a
possible condition of weal, even if it is not to be gratuitously
identified with it. Rome is frequently cited as an example of the evil
effects of material wealth. But it was not wealth _per se_, but wealth
(a) gained by conquest, and exploitation, rather than by industry; (b)
controlled by a minority; and (c) used in largesses or in crude
spectacles--rather than democratically distributed and used to minister
to higher wants. The present average income in the United States is
about two hundred dollars a year per capita, too small a sum to permit
comfortable living, sufficient education for children, and the
satisfaction which even a very moderate taste may seek. From this point
of view we may then ask of any industrial process or business method
whether it is an economical and efficient method of production, and
whether it naturally tends to stimulate increased production. To do this
is--so far as it goes--ethically as well as economically desirable.
If wealth is a good, it might seem that property must be judged by the
same standard, since it represents security in the satisfactions which
wealth affords. But there is an important distinction. Wealth means
enjoyment of goods and satisfaction of wants. Property means the title
to the exclusive use or possession of goods. Hence the increase of
property may involve increasing exclusion of part of the community from
wealth, although the owners of the property may be increasing their own
enjoyments. For, as pointed out very forcibly by Hadley in the first
chapter of his _Economics_, the public wealth of a community is by no
means equal to the sum of its private property. If all parks were
divided up into private estates, all schoolhouses controlled by private
owners, all water supplies and highways given into private control, the
sum of private property might be very much increased; but the public
wealth would be decreased. Property is one of the means of dealing with
public wealth. It is important to bear in mind, however, that it is only
one means. Wealth may be (1) privately owned and privately used; (2)
privately owned and publicly or commonly used; (3) publicly owned, but
privately used; (4) publicly owned and publicly or commonly used.
Illustrations of these four methods are, for the first, among
practically all peoples, clothing and tools; of the second, a private
estate opened to public use--as a park; of the third, public lands or
franchises leased to individuals; of the fourth, public highways, parks,
navigable rivers, public libraries. Whether property in any given case
is a means to happiness will depend, then, largely upon whether it
operates chiefly to increase wealth or to diminish it. The view has not
been infrequent that the wealth of the community is the sum of its
private property. From this it is but a step to believe "that the
acquisition of property is the production of wealth, and that he best
serves the common good who, other things equal, diverts the larger share
of the aggregate wealth to his own possession."[223] The ethical
questions as to the relation of property to happiness involve
accordingly the problem of justice and can be more conveniently
considered under that head.
=2. Relation to Character.=--Even in its aspect of satisfying human
wants, quantity of production is not the only consideration. As was
pointed out in the chapters on Happiness, the satisfaction of any and
every want is not necessarily a moral good. It depends upon the nature
of the wants; and as the nature of the wants reflects the nature of the
man who wants, the moral value of the economic process and of the wealth
it provides must depend upon the relation of goods to persons. As
economists we estimate values in terms of external goods or commodities;
as ethical students we estimate values in terms of a certain quality of
life. We must ask first how the satisfaction of wants affects the
consumers.
=Moral Cost of Production.=--Consider next the producers. It is
desirable to have cheap goods, but the price of goods or service is not
measurable solely in terms of other commodities or service; the price of
an article is also, as Thoreau has said, what it costs in terms of human
life. There is cheap production which by this standard is dear. The
introduction of machinery for spinning and weaving cotton cheapened
cotton cloth, but the child labor which was supposedly necessary as a
factor in cheap production, involving disease, physical stunting,
ignorance, and frequently premature exhaustion or death, made the
product too expensive to be tolerated. At least, it was at last
recognized as too expensive in England; apparently the calculation has
to be made over again in every community where a new system of child
labor is introduced. What is true of child labor is true of many other
forms of modern industry--the price in human life makes the product
dear. The minute subdivision of certain parts of industry with the
consequent monotony and mechanical quality of the labor, the accidents
and diseases due to certain occupations, the devices to cheapen goods by
ingredients which injure the health of the consumer, the employment of
women under unsanitary conditions and for excessive hours with
consequent risk to the health of themselves and their offspring--all
these are part of the moral price of the present processes of industry
and commerce.
Moreover, the relation of production to physical welfare is only one
aspect of its effects upon life and character. We may properly ask of
any process or system whether it quickens intelligence or deadens it,
whether it necessitates the degradation of work to drudgery, and whether
it promotes freedom or hampers it. To answer this last question we shall
have to distinguish formal from real freedom. It might be that a system
favorable to the utmost formal freedom--freedom of contract--would
result in the most entire absence of that real freedom which implies
real alternatives. If the only alternative is, this or starve, the real
freedom is limited.
=Property and Character.=--Viewed on its positive side, property means
an expansion of power and freedom. To seize, master, and possess is an
instinct inbred by the biological process. It is necessary for life; it
is a form of the _Wille zum Leben_ or _Wille zur Macht_ which need not
be despised. But in organized society possession is no longer mere
animal instinct; through expression in a social medium and by a social
person it becomes a _right_ of property. This is a far higher capacity;
like all rights it involves the assertion of personality and of a
rational claim upon fellow members of society for their recognition and
backing. Fichte's doctrine, that property is essential to the effective
exercise of freedom, is a strong statement of its moral importance to
the individual.
Over against these positive values of property are certain evils which
moralists have always recognized, evils both to the property owner and
to society. Avarice, covetousness, hardness toward others, seem to be
the natural effects of the enormous possibilities of power offered by
property, joined with its exclusive character. The prophets of Israel
denounced the rich, and Jesus's image of the difficulty found by the
rich man in entering the kingdom of God--a moral society--has met
general acceptance. Plato's portrayal of the State in which the wealthy
rule sketches the perversion and disobedience of laws, the jealousies
and class hatred, the evasion of taxes for public defense, and gives the
moral outcome:--
"And henceforth they press forward on the path of money-getting,
losing their esteem for virtue as the esteem for wealth grows upon
them. For can you deny that there is such a gulf between wealth
and virtue, that when weighed as it were in the two scales of a
balance one of the two always falls, as the other rises?"[224]
Even apart from questions of just distribution, the moral question
arises as to whether an unlimited power should be given to individuals
in this form, and whether there should be unlimited right of
inheritance. But all these tend to pass over at once into questions of
justice.
=3. Social Aspects.=--The various relations of man to man, political,
friendly, kindred, are developed forms of the interdependence implicit
in the early group life. A group of units, each independent of the
others, would represent mass only, but such a group as is made up of
men, women, and children, sustaining all the relations found in present
human life, represents something vastly more than a mass of individuals.
Every life draws from the rest. Man without friendship, love, pity,
sympathy, communication, cooperation, justice, rights, or duties, would
be deprived of nearly all that gives life its value.
The necessary help from others is obtained in various ways. Parental,
filial, and other kinship ties, friendship and pity, give rise to
certain services, but they are necessarily limited in their sphere and
exact in return a special attitude that would be intolerable if made
universal. The modern man does not want to be cousin to every one, to
give every one his personal friendship, to be in a perpetual attitude of
receiving favors, or of asking and not receiving. Formerly the way of
getting service from men outside these means was by slavery. The
economic relation provides for the mutual exchange of goods and services
on a basis of self-respect and equality. Through its system of contracts
it provides for future as well as present service. It enables each to
obtain the services of all the rest, and in turn to contribute without
incurring any other claims or relations. Nor does it at all diminish the
moral value of these mutual exchanges of goods and services that they
may be paid for. It used to be the theory that in every bargain one
party gained and the other lost. It is now recognized that a normal
transaction benefits both parties. The "cash payment basis," which was
at first denounced as substituting a mechanical nexus for the old
personal tie, is in reality a means for establishing a greater
independence instead of the older personal relation of "master" and
"servant." It enabled a man, as Toynbee puts it, to sell his labor like
any other commodity without selling himself.
But while the economic process has these moral possibilities, the
morality of any given system or practice will depend on how far these
are actually realized.
First of all, we may fairly ask of a process, Does it give to each
member the kind of service needed by him? In economic terms, Does it
produce the kinds of goods which society needs and desires? A method
which provides for this successfully will in so far be providing against
scarcity of some goods and oversupply of others, and thus against one of
the sources of crises, irregularity of work and wages, and ultimately
against suffering and want.
Secondly, if the process is an expression of the mutual dependence and
service of members who as persons all have, as Kant puts it, intrinsic
worth, and who in our political society are recognized as equal, we may
fairly ask how it distributes the results of services rendered. Does
the process tend to a broad and general distribution of goods in return
for services rendered, or to make "the rich richer and the poor poorer?"
Or, from another point of view, we might ask, Does the process tend to
reward members on a moral or equitable basis, or upon a basis which is
non-moral if not immoral or unjust.
Thirdly, the problem of _conflicting services_ presents itself under
several forms. There is, first, the ever-present conflict between
producer and consumer. Higher wages and shorter hours are good for the
carpenter or the weaver, until he pays his rent or buys clothes, when he
is interested in cheaper goods. What principle can be employed to adjust
such a question? Again, service to the consumer may lead a producer to a
price-list implying a minimum of profits. One producer can afford this
because of his larger business, but it will drive his competitor from
the field. Shall he agree to a higher price at which all can do
business, or insist on the lower which benefits the consumer and also
himself? The labor union is a constant embodiment of the problem of
conflicting services. How far shall it serve a limited group, the union,
at the expense of other workers in the same trade--non-unionists? Does
it make a difference whether the union is open to all, or whether the
dues are fixed so high as to limit the membership? Shall the apprentices
be limited to keep up the wage by limiting the supply? If so, is this
fair to the boys or unskilled laborers who would like to enter? And
granting that it is a hardship to these, is it harder or is it kinder to
them than it would be to leave the issue to the natural weeding out or
starving-out procedure of natural selection in case too many enter the
trade? Shall the hours be reduced and wages raised as high as possible,
or is there a "fair" standard--fair to both consumer and laborer? How
far may the union combine with the capitalist to raise prices to the
consumer?
=Private Property and Social Welfare.=--The social value of property is
obviously indirect, just as in law, private rights are regarded as
indirectly based on social welfare. It is society's aim to promote the
worth of its members and to favor the development of their personal
dignity and freedom. Property may, therefore, claim social value in so
far as it serves these ends, unless it interferes with other social
values. The effect of private property has seemed to some disastrous to
community of interest and feeling. Plato, for example, in his ideal
state would permit his guardians no private property. There would, then,
be no quarrels over "meum" and "tuum," no suits or divisions, no petty
meanness or anxieties, no plundering of fellow-citizens, no flattery of
rich by poor. The mediaeval church carried out his theory. Even modern
society preserves a certain trace of its spirit. For the classes that
Plato called guardians--soldiers, judges, clergy, teachers--have
virtually no property, although they are given support by society. It
would probably be generally agreed that it is better for the public that
these classes should not have large possessions. But it is obvious that
private property is not the sole cause of division between individuals
and classes. Where there is a deep-going unity of purpose and feeling,
as in the early Christian community, or in various other companies that
have attempted to practice communism, common ownership of wealth may be
morally valuable as well as practically possible. But without such
unity, mere abolition of property is likely to mean more bitter
divisions, because there is no available method for giving to each the
independence which is necessary to avoid friction and promote happiness.
Granting, however, the general position that some parts of wealth should
be privately owned, we must recognize that a great number of moral
problems remain as to the precise conditions under which society will
find it wise to entrust the control of wealth to private ownership. For
it must be clearly kept in mind that there is no absolute right of
private property. Every right, legal or moral, derives from the social
whole, which in turn, if it is a moral whole, must respect the
individuality of each of its members. On this basis moral problems, such
as the following, must be considered. What kind of public wealth should
be given into absolute control of private individuals or impersonal
corporations? Does the institution in its present form promote the good
of those who have no property as well as of those who have it, or only
of those who own? Would the welfare of society as a whole be promoted by
giving a larger portion of public wealth into private control, or by
retaining a larger proportion than at present under public ownership?
Should there be any limit to the amount of land or other property which
an individual or corporation may own? Are there any cases in which
private ownership operates rather to exclude the mass of society from
the benefits of civilization than to give them a share of those
benefits? Should a man be allowed to transmit all his property to his
heirs, or should it be in part reserved by society?
The preceding analysis has aimed to state some of the problems which
belong necessarily to the economic life. At the present time, however,
the moral issues assume a new and puzzling aspect because of the changes
in economic conditions. It will be necessary to consider briefly these
changed conditions.
Sec. 2. THE PROBLEMS SET BY THE NEW ECONOMIC ORDER
=The Collective and Impersonal Organizations.=--Two changes have come
over a large part of the economic and industrial field. The first is the
change from an individual to a collective basis. The second, which is in
part a consequence of the first, is a change from personal to
impersonal or corporate relations. Corporations are of course composed
of persons, but when organized for economic purposes they tend to become
simply economic purpose incorporate, abstracted from all other human
qualities. Although legally they may be subjects of rights and duties,
they have but one motive, and are thus so abstract as to be morally
impersonal. They tend to become machines for carrying on business,
and, as such, may be as powerful--and as incapable of moral
considerations--as other machines.
=Ethical Readjustment.=--Both these changes require readjustment of our
ethical conceptions. Our conceptions of honesty and justice, of rights
and duties, got their present shaping largely in an industrial and
business order when mine and thine could be easily distinguished; when
it was easy to tell how much a man produced; when the producer sold to
his neighbors, and an employer had also the relations of neighbor to his
workmen; when responsibility could be personally located, and conversely
a man could control the business he owned or make individual contracts;
when each man had his own means of lighting, heating, water supply, and
frequently of transportation, giving no opportunity or necessity for
public service corporations. Such conceptions are inadequate for the
present order. The old honesty could assume that goods belonged to their
makers, and then consider exchanges and contracts. The new honesty will
first have to face a prior question, _Who owns what is collectively
produced_, and are the present "rules of the game" distributing the
returns honestly and fairly? The old justice in the economic field
consisted chiefly in securing to each individual his rights in property
or contracts. The new justice must consider how it can secure for each
individual a standard of living, and such a share in the values of
civilization as shall make possible a full moral life. The old virtue
allowed a man to act more as an individual; the new virtue requires him
to act in concerted effort if he is to achieve results. Individualist
theories cannot interpret collectivist facts.
The changes in the economic and industrial processes by which not only
the associated powers of present human knowledge, skill, and endurance,
but also the combined results of past and future skill and industry are
massed and wielded, depend on several concurrent factors. We shall
notice the social agency, the technique of industry, the technique of
business, the means of fixing value, and the nature of property.
Sec. 3. THE AGENCIES FOR CARRYING ON COMMERCE AND INDUSTRY
=Early Agencies.=--The early agencies for carrying on trade and industry
were not organized purely for economic purposes. The kindred or family
group engaged in certain industries, but this was only part of its
purpose. So in the various territorial groups. The Athenian city-state
owned the mines; the German village had its forest, meadow, and water as
a common possession; and the "common" survived long in English and
American custom, though the cattle pastured on it might be individually
owned. In the United States certain land was reserved for school
purposes, and if retained would now in some cases be yielding an almost
incredible amount for public use; but it has usually been sold to
private individuals. The national government still retains certain land
for forest reserve, but until the recent movement toward municipal
ownership, the civic community had almost ceased to be an economic
factor in England and America, except in the field of roads, canals, and
the postoffice. In both family and territorial or community control of
industry, we have the economic function exercised as only one among
several others. The economic helped to strengthen the other bonds of
unity. On the other hand, the economic motive could not disentangle
itself and stand out in all its naked force. Within either family or
civic group the effects of the acquisitive instincts were limited by the
fact that individuals in their industrial relations were also kin or
neighbors.
=The Business Enterprise.=--In the business enterprise--partnership,
company, corporation, "trust,"--on the other hand, men are organized
solely for economic purposes. No other interests or ends are regarded.
Corporations organized for this purpose "have no souls," because they
consist of merely the abstract economic interests. While in domestic and
territorial agencies the acquisitive forces were to some degree
beneficially controlled, they were also injuriously hampered. With the
rise of business enterprise as a distinct sphere of human action, the
way was opened for a new force to manifest itself. This brought with it
both advantages and disadvantages for the moral and social life as a
whole. On the one hand, it increased tremendously the possibilities of
economic and industrial efficiency. The size of the enterprise could be
as large or as small as was needed for the most efficient production,
and was not, as in family or community agency, sometimes too small and
sometimes too large. The enterprise could group men according to their
capacity for a particular task, and not, as in the other forms, be
compelled to take a group already constituted by other than economic or
industrial causes. Further, it could without difficulty dispense with
the aged or those otherwise unsuited to its purposes. When, moreover, as
is coming to be increasingly the case, great corporations, each
controlling scores or even hundreds of millions of capital, are linked
together in common control, we have a tremendous force which may be
wielded as a unit. It is easy to assume--indeed it is difficult for
managers not to assume--that the interests of such colossal
organizations are of supreme importance, and that diplomacy, tariffs,
legislation, and courts should be subordinate. The moral dangers
attaching to such corporations formed solely for economic purposes are
obvious, and have found frequent illustration in their actual workings.
Knowing few or none of the restraints which control an individual, the
corporation has treated competitors, employees, and the public in a
purely economic fashion. This insures certain limited species of
honesty, but does not include motives of private sympathy or public
duty.
=The Labor Union.=--Correlative to these corporate combinations of
capital are Labor Unions of various types. They are usually when first
organized more complex in motive, including social and educational ends,
and are more emotional, or even passionate in conduct. With age they
tend to become more purely economic. In the United States they have
sought to secure better wages, to provide benefits or insurance in case
of sickness and death, and to gain better conditions in respect of
hours, of child-labor, and of protection against dangerous machinery,
explosions, and occupational diseases. In Great Britain they have also
been successful in applying the cooperative plan to the purchase of
goods for consumption. The organizations have been most successful among
the skilled trades. For so far as the aim is collective bargaining, it
is evident that the union will be effective in proportion as it controls
the whole supply of labor in the given trade. In the unskilled forms of
labor, especially with a constant flow of immigration, it is difficult,
if not impossible, to maintain organizations comparable with the
organizations of capital. Hence in conflicts it is natural to expect the
moral situations which frequently occur when grossly unequal combatants
are opposed. The stronger has contempt for the weaker and refuses to
"recognize" his existence. The weaker, rendered desperate by the
hopelessness of his case when he contends under rules and with weapons
prescribed by the stronger, refuses to abide by the rules and resorts to
violence--only to find that by this he has set himself in opposition to
all the forces of organized society.
=Group Morality Again.=--The striking feature of the new conditions is
that it means a _reversion to group morality_. That is, it has meant
this so far. Society is struggling to reassert a general moral standard,
but it has not yet found a standard, and has wavered between a rigid
insistence upon outgrown laws on the one hand, and a more or less
emotional and unreasoned sympathy with new demands, upon the other.[225]
Group morality meant impersonal, collective life. It meant loyalty to
one's own group, little regard for others, lack of responsibility, and
lack of a completely social standard. There is, of course, one important
difference. The present collective, impersonal agencies are not so naive
as the old kinship group. They can be used as effective agencies to
secure definite ends, while the manipulators secure all the advantages
of the old solidarity and irresponsibility.
=Members and Management.=--The corporation in its idea is democratic.
For it provides for the union of a number of owners, some of them it may
be small owners, under an elected management. It would seem to be an
admirable device for maintaining concentration of power with
distribution of ownership. But the very size of modern enterprises and
unions prevents direct control by stockholders or members. They may
dislike a given policy, but they are individually helpless. If they
attempt to control, it is almost impossible, except in an extraordinary
crisis, to unite a majority for common action.[226] The directors can
carry on a policy and at the same time claim to be only agents of the
stockholders, and therefore not ultimately responsible. What influence
can the small shareholders in a railway company, or a great industrial
corporation, or labor union, have? They unite with ease upon one point
only: they want dividends or results. When an illegal policy is to be
pursued, or a legislature or jury is to be bribed, or a non-union man is
to be "dealt with," the head officials likewise seek only "results."
They turn over the responsibility to the operating or "legal"
department, or to the "educational committee," and know nothing further.
These departments are "agents" for the stockholders or union, and
therefore, feel quite at ease. The stockholders are sure they never
authorized anything wrong. Some corporations are managed for the
interest of a large number of owners; some, on the other hand, by
ingenious contracts with side corporations formed from an inner circle,
are managed for the benefit of this inner circle. The tendency,
moreover, in the great corporations is toward a situation in which
boards of directors of the great railroad, banking, insurance, and
industrial concerns are made up of the same limited group of men. This
aggregate property may then be wielded as absolutely as though owned by
these individuals. If it is used to carry a political election the
directors, according to New York courts, are not culpable.
=Employer and Employed.=--The same impersonal relation often prevails
between employer and employed. The ultimate employer is the stockholder,
but he delegates power to the director, and he to the president, and he
to the foreman. Each is expected to get results. The employed may
complain about conditions to the president, and be told that he cannot
interfere with the foreman, and to the foreman and be told that such is
the policy of the company. The union may serve as a similar buffer.
Often any individual of the series would act humanely or generously, if
he were acting for himself. He cannot be humane or generous with the
property of others, and hence there is no humanity or generosity in the
whole system. This system seems to have reached its extreme in the
creation of corporations for the express purpose of relieving employers
of any personal responsibility. Companies organized to insure employers
against claims made by employees on account of injuries may be regarded
as a device for distributing the burden. But as the company is
organized, not primarily to pay damages, as are life insurance
companies, but to avoid such payment, it has a powerful motive in
contesting every claim, however just, and in making it so expensive to
prosecute a claim that the victims may prefer not to make the attempt.
The "law's delay" can nearly always be counted upon as a powerful
defense when a poor man is plaintiff and a rich corporation is
defendant.
=Relations to the Public.=--The relations of corporations to the public,
and of the public to corporations, are similarly impersonal and
non-moral. A convenient way of approach to this situation is offered by
the ethical, or rather non-ethical, status of the various mechanical
devices which have come into use in recent years for performing many
economic services. The weighing machines, candy machines, telephones,
are supposed to give a certain service for a penny or a nickel. But if
the machine is out of order, the victim has no recourse. His own
attitude is correspondingly mechanical. He regards himself as dealing,
not with a person, but with a thing. If he can exploit it or "beat" it,
so much the better. Now a corporation, in the attitude which it takes
and evokes, is about half-way between the pure mechanism of a machine
and the completely personal attitude of a moral individual. A man is
overcharged, or has some other difficulty with an official of a railroad
company. It is as hopeless to look for immediate relief as it is in the
case of a slot machine. The conductor is just as much limited by his
orders as the machine by its mechanism. The man may later correspond
with some higher official, and if patience and life both persist long
enough, he will probably recover. But to prevent fraud, the company is
obliged to be more rigorous than a person would be who was dealing with
the case in a personal fashion. Hence the individual with a just
grievance is likely to entertain toward the corporation the feeling that
he is dealing with a machine, not with an ethical being, even as the
company's servants are not permitted to exercise any moral consideration
in dealing with the public. They merely obey orders. Public sentiment,
which would hold an individual teamster responsible for running over a
child, or an individual stage owner responsible for reckless or careless
conduct in carrying his passengers, feels only a blind rage in the case
of a railroad accident. It cannot fix moral responsibility definitely
upon either stockholder or management or employee, and conversely
neither stockholder, nor manager, nor employee[227] feels the moral
restraint which the individual would feel. He is not wholly responsible,
and his share in the collective responsibility is so small as often to
seem entirely negligible.
=Relations to the Law.=--The collective business enterprises, when
incorporated, are regarded as "juristic persons," and so gain the
support of law as well as become subject to its control. If the great
corporation can thus gain the right of an individual, it can enter the
field of free contract with great advantage. Labor unions have not
incorporated, fearing, perhaps, to give the law control over their
funds. They seek a higher standard of living, but private law does not
recognize this as a right. It merely protects contracts, but leaves it
to the individual to make the best contract he can. As most wage-earners
have no contracts, but are liable to dismissal at any time, the unions
have seen little to be gained by incorporation. They have thus missed
contact with the institution in which society seeks to embody, however
tardily, its moral ideas and have been, in a sense, outlaws. They were
such at first by no fault of their own, for the law treated such
combinations as conspiracies. And they are still at two decided
disadvantages. First, the capitalistic or employing corporation acting
as a single juristic person may refuse to buy the labor of a union;
indeed, according to a recent decision, it cannot be forbidden to
discharge its employees because of their membership in a union. As the
corporation may employ scores of thousands, and be practically the only
employer of a particular kind of labor, it can thus enforce a virtual
boycott and prevent the union from selling its labor. It does not need
to use a "blacklist" because the employers are all combined in one
"person." On the other hand, the union is adjudged to act in restraint
of interstate commerce if it boycotts the employing corporation. The
union is here treated as a combination, not as a single person. The
second point in which the employing body has greatly the legal advantage
appears in the case of a strike. Men are allowed to quit work, but this
is not an effective method of exerting pressure unless the employer is
anxious to keep his plant in operation and can employ no one else. If he
can take advantage of an open labor market and hire other workmen, the
only resource of the strikers is to induce these to join their ranks.
But they have been enjoined by the courts, not only from intimidating,
but even from persuading[228] employees to quit work. The method of
procedure in enforcing the injunction, which enables the judge to fix
the offense, eliminate trial by jury, determine the guilt, and impose
any penalty he deems fit, has all the results of criminal process with
none of its limitations, and forms a most effective agency against the
unions. Where persuasion is enjoined it is difficult to see how a union
can exert any effective pressure except in a highly skilled trade, where
it can control all the labor supply. In the field of private rights and
free contract, the labor unions are then at a disadvantage because they
have no rights which are of any value for their purposes, except, under
certain conditions, the right to refuse to work. And since this is, in
most cases, a weapon that injures its wielder far more than his
opponent, it is not effective.
Disappointed in the field of free contract, the labor unions seek to
enlist public agency in behalf of better sanitary conditions and in
prevention of child-labor, long hours for women, unfair contracts, and
the like. Capitalistic corporations frequently resist this change of
venue on the ground that it interferes with free contract or takes away
property without "due process of law," and many laws have been set aside
as unconstitutional on these grounds,[229] several of them no doubt
because so drawn as to appear to be in the interest of a class, rather
than in that of the public. The trend in the direction of asserting
larger public control both under the police power and over corporations
in whose service the public has a direct interest, will be noted later.
Against other corporations the general public or the unsuccessful
competitor has sought legal aid in legislation against "trusts," but
this has mainly proved to be futile. It has merely induced a change in
form of organization. Nor has it been easy as yet for the law to
exercise any effective control over the business corporation on any of
the three principles invoked--namely: to prevent monopoly, to secure the
public interest in the case of public service corporations, and to
assert police power. For penalties by fine frequently fail to reach the
guilty persons, and it is difficult to fix any personal responsibility.
Juries are unwilling to convict subordinate officials of acts which
they believe to have been required by the policy of the higher
officials, while, on the other hand, the higher officials are seldom
directly cognizant of criminal acts. Gradually, however, we may believe
that the law will find a way to make both capital and labor
organizations respect the public welfare, and to give them support in
their desirable ends. The cooperative principle cannot be outlawed; it
must be more fully socialized.
Sec. 4. THE METHODS OF PRODUCTION, EXCHANGE, AND VALUATION
=The Machine.=--The technique of production has shown a similar progress
from individual to collective method. The earlier method was that of
handicraft. The present method in most occupations, aside from
agriculture, is that of the machine. But the great economic advantage of
the machine is not only in the substitution of mechanical power for
muscle; it is also in the substitution of collective for individual
work. It is the machine which makes possible on a tremendously effective
basis the division of labor and its social organization. The
extraordinary increase in wealth during the past century depends upon
these two factors. The machine itself moreover, in its enormous
expansion, is not only a social tool, but a social product. The
invention and discovery which gave rise to the new processes in industry
of every sort were largely the outcome of scientific researches carried
on at public expense to a great extent by men other than those who
finally utilize their results. They become in turn the instruments for
the production of wealth, which is thus doubly social in origin.
This machine process has an important bearing upon the factors of
character mentioned in our analysis. It standardizes efficiency; it
calls for extraordinary increase of speed; it requires great
specialization of function and often calls for no knowledge of the whole
process. On the other hand, it gives a certain sense of power to
control and direct highly complicated machinery. In the more skilled
trades there is more time and resource for intellectual, aesthetic, or
social satisfactions. The association of workmen favors discussion of
common interests, sympathy, and cooperation; this may evoke a readiness
to sacrifice individual to group welfare, which is quite analogous to
patriotic sentiment at its best, even if it is liable to such violent
expressions as characterize patriotic sentiment at its worst. The
association of workmen is one of the most significant features of modern
industry.
=Capital and Credit.=--The technique of exchange of services and goods
has undergone a transformation from an individual and limited to a
collective and almost unlimited method. The earlier form of exchange and
barter limited the conduct of business to a small area, and the simpler
form of personal service involved either slavery or some personal
control which was almost as direct. With the use of money it became
possible to make available a far greater area for exchange and to
accumulate capital which represented the past labors of vast numbers of
individuals. With the further discovery of the possibilities of a credit
system which business enterprise now employs, it is possible to utilize
in any enterprise not merely the results of the labor of the past, but
the anticipated income of the future. A corporation, as organized at
present, issues obligations in the form of bonds and stock which
represent no value as yet produced, but only the values of labor or
privilege anticipated. The whole technique, therefore, of capital and
credit means a collective business enterprise. It masses the work and
the abilities of thousands and hundreds of thousands in the past and the
future, and wields the product as an almost irresistible agency to
achieve new enterprises or to drive from the field rival enterprises.
=Basis of Valuation.=--The whole basis for value and prices has also
been changed. The old basis, employed for the most part through the
Middle Ages in fixing the value of labor or goods, was the amount of
labor and material which had been expended. The modern basis is that of
supply and demand. This proceeds on the theory that it is human wants
which after all give value to any product. I may have expended time and
labor upon a book or carving, or in the cultivation of a new vegetable,
or in the manufacture of an article for apparel, but if no one cares to
read the book or look at the carving, if the vegetable is one that no
one can eat, or the garment is one that no one will wear, it has no
value. Starting then from this, we can see how the two elements in
valuation--namely, demand and supply--are affected by social factors.
The demand for an article depends upon the market: i.e., upon how many
buyers there are, and what wants they have. Modern methods of
communication and transportation have made the market for goods as large
as the civilized world. Education is constantly awakening new wants. The
facilities for communication, for travel, and for education are
constantly leading one part of the world to imitate the standards or
fashions set by other parts. We have, therefore, a social standard for
valuation which is constantly extending in area and in intensity.
The other factor in valuation, namely, the supply, is likewise being
affected in an increasing degree by social forces. With many, if not
with most, of the commodities which are of greatest importance, it has
been found that there is less profit in an unrestricted supply than in a
supply regulated in the interest of the producers. The great coal mines,
the iron industries, the manufacturers of clothing, find it more
profitable to combine and produce a limited amount. The great
corporations and trusts have usually signalized their acquisition of a
monopoly or an approximate control of any great field of production by
shutting down part of the factories formerly engaged. The supply of
labor is likewise limited by the policies of labor unions in limiting
the number of apprentices allowed, or by other means of keeping the
union small. Tariffs, whether in the interest of capital or of labor,
are a social control of the supply. Franchises, whether of steam
railroads, street transportation, gas, electric lighting, or other
public utilities so-called, are all of them in the nature of monopolies
granted to a certain group of individuals. Their value is dependent upon
the general need of these utilities, coupled with the public limitation
of supply. In many cases the services are so indispensable to the
community that the servant does not need to give special care or thought
to the rendering of especially efficient service. The increase in
population makes the franchises enormously profitable without any
corresponding increase of risk or effort on the part of the utility
company.
But the most striking illustration of the creation of values by society
is seen in the case of land. That an acre of land in one part of the
country is worth fifty dollars, and in another part two hundred thousand
dollars,[230] is not due to any difference in the soil, nor for the most
part to any labor or skill or other quality of the owner. It is due to
the fact that in the one case there is no social demand, whereas, in the
other, the land is in the heart of a city. In certain cases, no doubt,
the owner of city real estate may help by his enterprise to build up the
city, but even if so this is incidental. The absentee owner profits as
much by the growth of the city as the foremost contributor to that
growth. The owner need not even improve the property by a building. This
enormous increase in land values has been called the "unearned
increment." In America it is due very largely to features of natural
location and transportation. It has seemed to some writers, such as
Henry George, not only a conspicuous injustice, but the root of all
economic evil. It is, no doubt, in many cases, a conspicuous form of
"easy money," but the principle is not different from that which is
involved in nearly all departments of modern industry. The wealth of
modern society is really a gigantic pool. No individual knows how much
he creates; it is a social product. To estimate what any one should
receive by an attempted estimate of what he has individually contributed
is absolutely impossible.
Sec. 5. THE FACTORS WHICH AID ETHICAL RECONSTRUCTION
The two distinctive features of the modern economic situation, its
collective character and its impersonal character, are themselves
capable of supplying valuable aid toward understanding the ethical
problems and in making the reconstruction required. For _the very
magnitude of modern operations and properties serves to bring out more
clearly the principles involved_. _The impersonal character allows
economic forces pure and simple to be seen in their moral bearings._
Publicity becomes a necessity. Just as the factories are compelled to
have better light, air, and sanitation than the sweat shops, so public
attention is aroused and the conscience stimulated by practices of great
corporations, although these practices may be in principle precisely the
same as those of private persons which escape moral reprobation. In some
cases, no doubt, the very magnitude of the operation does actually
change the principle. A "lift" on the road from an oldtime stage-driver,
or a "special bargain" at a country store was not likely to disturb the
balance of competition as a system of free passes or secret rebates may
in modern business. But in other cases what the modern organizations
have done is simply to exhibit the workings of competition or other
economic forces _on a larger scale_. An illustration of this is seen in
the familiar fact that a law passed to correct some corporate practice
is often found to apply to many practices not contemplated by the makers
of the law.
The effect of getting a principle out into the open and at work on a
large scale is to make public judgment clear and reprobation of bad
practices more effective. The impersonal factor likewise contributes
powerfully to make condemnation easy. Criticism is unhampered by the
considerations which complicate the situation when the conduct of an
individual is in question. The individual may be a good neighbor, or a
good fellow, or have had bad luck. But no one hesitates to express his
opinion of a corporation, and the average jury is not biased in its
favor, whatever may be true of the bench. Even the plea that the
corporation includes widows and orphans among its shareholders, which is
occasionally put forth to avert interference with corporate practices,
usually falls on unsympathetic ears. A higher standard will be demanded
for business conduct, a more rigid regard for public service will be
exacted, a more moderate return for invested capital in public service,
and a more liberal treatment of employees will be insisted upon from
corporations than from private individuals. Nor does the organization of
labor escape the same law. When an agent of a union has been detected in
calling a strike for private gain, public sentiment has been as severe
in condemnation as in the case of corporate officials who have profited
at the expense of stockholders.
=Summary.=--We may summarize some of the chief points brought out by our
analysis. Modern technique has increased enormously the productivity of
labor, but has increased its dangers to health and life, and to some
extent diminished its educating and moralizing values. The impersonal
agencies give vast power, but make responsibility difficult to locate.
The collective agencies and the social contributions make the economic
process a great social pool. Men put in manual labor, skill, capital.
Some of it they have inherited from their kin; some they have inherited
from the inventors and scientists who have devised tools and processes;
some they have wrought themselves. This pooling of effort is possible
because of good government and institutions which were created by
statesmen, patriots, and reformers, and are maintained by similar
agencies. The pool is immensely productive. But no one can say just how
much his contribution earns. Shall every one keep what he can get? Shall
all share alike? Or shall there be other rules for division--either made
and enforced by society or made by the individual and enforced by his
own conscience? Are our present rules adequate to such a situation as
that of the present? These are some of the difficult questions that
modern conditions are pressing upon the man who thinks.
LITERATURE
Besides the classic treatises of Adam Smith, J. S. Mill, and Karl Marx,
which are important for the relation of the economic to the whole social
order during the past century, the following recent works in the general
field give especial prominence to the ethical problems involved:
Marshall, _Principles of Economics_, 1898; Hadley, _Economics_, 1896;
Clark, _Essentials of Economic Theory as Applied to Modern Problems of
Industry and Public Policy_, 1907; George, _Progress and Poverty_, 1879;
Schmoller, _Grundriss der allgemeinen Staatswirtschaftslehre_, 1900-04;
Bonar, _Philosophy and Political Economy_, 1893; Hobson, _The Social
Problem_, 1901; Brooks, _The Social Unrest_, 1903.
ON MODERN BUSINESS AND INDUSTRY: Veblen, _The Theory of Business
Enterprise_, 1904; Taylor, _The Modern Factory System_, 1891; Hobson,
_Evolution of Modern Capitalism_, 1894; Toynbee, _The Industrial
Revolution_, 1890; Adams and Sumner, _Labor Problems_, 1905; S. and B.
Webb, _History of Trade Unionism_, 1894, _Problems of Modern Industry_,
1898, and _Industrial Democracy_, 1902; Mitchell, _Organized Labor_,
1903; Ely, _The Labor Movement in America_, 1886; Hollander and Barnett,
_Studies in American Trades Unionism_, 1907; Henderson, _Social
Elements_, 1898, chs. vii.-x.
FOOTNOTES:
[223] Veblen, _Theory of Business Enterprise_, p. 291.
[224] _Republic_, 550. Davies and Vaughan.
[225] E.g., in a strike there is sometimes a toleration by public
sentiment of a certain amount of violence where it is believed that
there is no legal remedy for unfair conditions.
[226] Recent elections in the great insurance companies have shown this.
[227] "J. O. Fagan," in the _Atlantic Monthly_ (1908), has called
attention to the influence of the union in shielding individuals from
the penalties of carelessness.
[228] Recent Illinois decisions (216 Ill., 358 f., and especially 232
Ill., 431-440) uphold sweeping injunctions against persuasion, no matter
how peaceable. "Lawful competition, which may injure the business of a
person, even though successfully directed to driving him out of
business, is not actionable." But for a union to hire laborers away from
an employer by money or transportation is not "lawful competition." The
object is assumed by the court to be malicious, i.e., the injury of the
employer. The court does not entertain the possibility that to obtain an
eight-hour day is as lawful an aim for the labor union as to acquire
property is for an employer. The decision shows clearly the difference
in legal attitude toward pressure exerted by business corporations for
the familiar end of acquisition, and that exerted by the union for the
novel end of a standard of living. The court regards the injury to
others as incidental in the former, but as primary and therefore as
malicious in the latter. It may be that future generations will regard
this judicial psychology somewhat as we regard some of the cases cited
above, ch. xxi. Other courts have not always taken this view, and have
permitted persuasion unless it is employed in such a manner or under
such circumstances as to "operate on fears rather than upon their
judgments or their sympathies" (17., _N. Y. Supp._, 264). For other
cases, _Am. and Eng. Decisions in Equity_, 1905, p. 565 f.; also _Eddy
on Combinations_.
[229] The list appended was bulletined at the Chicago Industrial Exhibit
of 1906, and reprinted in _Charities and The Commons_.
"What 'Freedom of Contract' has Meant to Labor:
1. Denial of eight-hour law for women in Illinois.
2. Denial of eight-hour law for city labor or for mechanics and ordinary
laborers.
3. Denial of ten-hour law for bakers.
4. Inability to prohibit tenement labor.
5. Inability to prevent by law employer from requiring employee as
condition of securing work, to assume all risk from injury while at
work.
6. Inability to prohibit employer selling goods to employees at greater
profit than to non-employees.
7. Inability to prohibit mine owners screening coal which is mined by
weight before crediting same to employees as basis of wages.
8. Inability to legislate against employer using coercion to prevent
employee becoming a member of a labor union.
9. Inability to restrict employer in making deductions from wages of
employees.
10. Inability to compel by law payment of wages at regular intervals.
12. Inability to provide by law that laborers on public works shall be
paid prevailing rate of wages.
13. Inability to compel by law payment of extra compensation for
overtime.
14. Inability to prevent by law employer from holding back part of
wages.
15. Inability to compel payment of wages in cash; so that employer may
pay in truck or scrip not redeemable in lawful money.
16. Inability to forbid alien labor on municipal contracts.
17. Inability to secure by law union label on city printing."
Labor representatives speak of "the ironic manner in which the courts
guarantee to workers: The right to be maimed and killed without
liability to the employer; the right to be discharged for belonging to a
union; the right to work as many hours as employers please and under any
considerations which they may impose." The "irony" is, of course, not
intended by the courts. It is the irony inherent in a situation when
rules designed to secure justice become futile, if not a positive cause
of injustice, because of changed conditions.
[230] In Greater New York. An acre on Manhattan Island is of course
worth much more. The Report of the New York Tax Department for 1907 is
very suggestive.
CHAPTER XXIII
SOME PRINCIPLES IN THE ECONOMIC ORDER
Certain problems suggested by the foregoing analysis are unsettled, for
the issues are so involved, and in some cases, both the facts and their
interpretations are so much in controversy, that we cannot yet formulate
sure moral judgments. On the other hand, certain principles emerge with
a good degree of clearness. We state some of the more obvious.
=1. Wealth and Property are Subordinate in Importance to
Personality.=--The life is more than meat. Most agree to this, stated
abstractly, but many fail to make the application. They may sacrifice
their own health, or human sympathy, or family life; or they may consent
to this actively or passively as employers, or consumers, or citizens,
in the case of others. A civilization which loses life in providing the
means to live is not highly moral. A society which can afford luxuries
for some cannot easily justify unhealthful conditions of production, or
lack of general education. An individual who gratifies a single appetite
at the expense of vitality and efficiency is immoral. A society which
considers wealth or property as ultimate, whether under a conception of
"natural rights" or otherwise, is setting the means above the end, and
is therefore unmoral or immoral.
=2. Wealth Should Depend on Activity.=--The highest aspect of life on
its individual side is found in active and resolute achievement, in the
embodying of purpose in action. Thought, discovery, creation, mark a
higher value than the satisfaction of wants, or the amassing of goods.
If the latter is to be a help it must stimulate activity, not deaden it.
Inherited wealth without any accompanying incitement from education or
class feeling or public opinion would be a questionable institution from
this point of view. Veblen in his _Theory of the Leisure Class_ points
out various forms of degeneration that may attend upon leisure, when
leisure means not merely release from mechanical labor in the interest
of more intellectual activity, but a relinquishing of all serious labor.
As the race has made its ascent in the presence of an environment which
has constantly selected the more active persons, society in its
institutions and consciously directed processes may well plan to keep
this balance between activity and reward. Modern charity has adopted
this principle. We fear to pauperize by giving aid to the poor unless we
can provide some form of self-help. But in its treatment of the rich,
society is not solicitous. Our provisions for inheritance of property
undoubtedly pauperize a certain proportion of those who inherit. Whether
this can be prevented without interfering with motives to activity on
the part of those who acquire the property, or whether the rich thus
pauperized are not as well worth saving to society as the poor, will
undoubtedly become more pressing problems as the number of inheritors
increases, and society recognizes that it may have a duty to its idle
rich as well as to its idle poor.
=3. Public Service Should Go Along with Wealth.=--Note that we do not
say, "wealth should be proportionate to public service." This would take
us at once into the controversy between the individualist and the
socialist which we shall consider later among the unsettled problems.
The individualist, as represented, for example, by Herbert Spencer,
would say that except for the young, the aged, or the sick, reward
should be proportioned to merit. The socialist, on the other hand, is
more inclined to say, "From each according to his ability, to each
according to his needs." In either case, it is assumed that there
should be public service. Leaving for later consideration the question
whether we can fix any quantitative rule, let us notice at this time why
some service is a fundamental moral principle.
Such service in the form of some economically useful contribution,
whether to the production and distribution of goods, to the public
order, to education, to the satisfaction of aesthetic and religious
wants, might be demanded as a matter of common honesty. This would be to
treat it as a just claim made by society upon each of its members. There
is, of course, no legal claim. The law is far from adopting as a
universal maxim, "If any man will not work, neither let him eat."
Vagrancy is not a term applied to all idlers. It is sufficient for the
law if some of a man's ancestors obtained possession and title by
service, or force, or gift. Modern law, in its zeal to strengthen the
institution of property, releases all the owner's posterity forever from
the necessity of any useful service. The old theology used to carry the
conception of inherited or imputed sin and merit to extremes which
modern individualism rejects. But the law--at least in the United
States--permits a perpetual descent of inherited property; i.e., of
inherited permission to receive from society without rendering any
personal return. Theologically and morally, however, the man of to-day
repudiates any conception which would reduce him to a shadow of another.
He wishes to stand on his own feet, to be rewarded or blamed according
to his own acts, not because of a deed of some one else. To follow out
this principle in the economic sphere would require that every man who
receives aught from others should feel in duty bound to render some
service. Merely "to have been born" is hardly sufficient in a democratic
society, however munificent a contribution to the social weal the French
aristocrat may have felt this to be.
But it is only one aspect of the case to say that society may claim
service as a just due. There is another aspect--what this service means
to the person himself. It is his opportunity to fulfill his function in
the social organism. Now a person is as large as his purpose and will.
The person, therefore, who identifies his purposes with the welfare of
the public is thereby identifying himself with the whole social body. He
is no longer himself alone; he is a social power. Not only the leader of
society, but every efficient servant makes himself an organ through
which society itself acts and moves forward. This is perhaps most
conspicuous in the case of the great inventors or organizers of industry
and society. By serving civilization they have become its bearers and
have thus shared its highest pulses. But it is true of every laborer. As
he is an active contributor he becomes creative, not merely receptive.
=4. The Change from Individual to Collective Methods, of Industry and
Business Demands a Change from Individual to Collective Types of
Morality.=--Moral action is either to accomplish some positive good or
to hinder some wrong or evil. But under present conditions the
individual by himself is practically helpless and useless for either
purpose. It was formerly possible for a man to set a high standard and
live up to it, irrespective of the practice or cooperation of others.
When a seller's market was limited to his acquaintance or a limited
territory, it might well be that honesty or even fair dealing was the
best policy. But with the changes that have come in business conditions
the worse practices, like a baser coinage, tend to drive out the morally
better. This may not apply so thoroughly to the relations between seller
and buyer, but it applies to many aspects of trade. A merchant may
desire to pay his women clerks wages on which they can support life
without selling their souls. But if his rival across the street pays
only half the wage necessary for subsistence, it is evident the former
is in so far at a disadvantage. Extend the same policy. Let the former
have his goods made under good conditions and the latter have no scruple
against "sweating"; let the former pay taxes on an honest estimate and
the latter "see" the assessor, or threaten to move out of town if he is
assessed for more than a figure named by himself; let the former ask
only for a fair chance, while the latter secures legislation that favors
his own interests, or gets specifications for bids worded so that they
will exclude his opponents, or in selling to public bodies "fixes" the
councils or school committees, or obtains illegal favors in
transportation. Let this continue, and how long will the former stay in
the field? Even as regards quality of goods, where it would seem more
plausible that honest dealing might succeed, experience has shown that
this depends on whether the frauds can be easily detected. In the case
of drugs and goods where the adulterations cannot be readily discovered,
there is nothing to offset the more economical procedure of the
fraudulent dealer. The fact that it is so difficult to procure pure
drugs and pure food would seem to be most plausibly due to the fatal
competition of the adulterated article.
Or, suppose a person has a little property invested in some one of the
various corporations which offer the most convenient method for placing
small sums as well as large. This railroad defies the government by
owning coal mines as well as transporting the product; that public
service corporation has obtained its franchise by bribery; this
corporation is an employer of child labor; that finds it less expensive
to pay a few damage suits--those it cannot fight successfully--than to
adopt devices which will protect employees. Does a man, or even an
institution, act morally if he invests in such corporations in which he
finds himself helpless as an individual stockholder? And if he sells his
stock at the market price to invest the money elsewhere, is it not
still the price of fraud or blood? If, finally, he buys insurance for
his family's support, recent investigation has shown that he may have
been contributing unawares to bribery of legislatures, and to the
support of political theories to which he may be morally opposed. The
individual cannot be moral in independence. The modern business
collectivism forces a collective morality. Just as the individual cannot
resist the combination, so individual morality must give place to a more
robust or social type.
=5. To Meet the Change to Corporate Agency and Ownership, Ways Must be
Found to Restore Personal Control and Responsibility.=--Freedom and
responsibility must go hand in hand. The "moral liability limited"
theory cannot be accepted in the simple form in which it now obtains. If
society holds stockholders responsible, they will soon cease to elect
managers merely on an economic basis and will demand morality. If
directors are held personally responsible for their "legal department,"
or union officials for their committees, directors and officials will
find means to know what their subordinates are doing. "Crime is always
personal," and it is not usual for subordinates to commit crimes for the
corporation against the explicit wishes of the higher officials. In
certain lines the parties concerned have voluntarily sought to restore a
more personal relation.[231] It has been found profitable to engage
foremen who can get on smoothly with workmen. It has proved to be good
economy to treat men, whether they sell labor or buy it, with respect
and fairness.
The managers of some of the great public service corporations have also
recently shown a disposition to recognize some public obligations, with
the naive admission that this has been neglected. Labor unions are
coming to see the need of conciliating public opinion if they are to
gain their contests.
=6. To Meet the Impersonal Agencies Society Must Require Greater
Publicity and Express Its Moral Standards More Fully in Law.=--Publicity
is not a cure for bad practices, but it is a powerful deterrent agency
so long as the offenders care for public opinion and not solely for the
approval of their own class. Professor Ross[232] maintains that in the
United States classes are still so loosely formed that general approval
is desired by the leaders. Hence he urges that it is possible to enforce
moral standards by the "grilling of sinners." But to make this
"grilling" a moral process society needs much more accurate information
and a more impartial basis for selecting its sinners than present
agencies afford. The public press is itself in many respects one of the
most conspicuous examples of the purely economic motive. The newspaper
or magazine must interest readers and not displease advertisers. The
news is selected, or colored, or worked up to suit particular classes.
If a speaker says what the reporter does not regard as interesting he is
likely to find himself reported as saying something more striking.
Publicity bureaus are able to point with pride to the amount of matter,
favorable to certain interests, which they place before the public as
news. The particular interests singled out for "exposure" are likely to
be determined more by the anticipated effects on circulation or
advertising than by the merits of the case. It is scarcely more
satisfactory to leave all the education of public opinion to commercial
control than to leave all elementary education to private interests.
Publicity--scientific investigation and public discussion--is indeed
indispensable, and its greatest value is probably not in the
exhilarating discharge of righteous indignation, but in the positive
elevation of standards, by giving completer knowledge and showing the
fruits of certain practices. A large proportion of the public will wish
to do the right thing if they can see it clearly, and can have public
support, so that right action will not mean suicide.
But the logical way to meet the impersonal character of modern economic
agencies is by the moral consciousness embodied in an impersonal agency,
the law. The law is not to be regarded chiefly as an agency for
punishing criminals. It, in the first place, defines a standard; and, in
the next place, _it helps the morally disposed to maintain this standard
by freeing him from unscrupulous competition_. It is a general principle
that to resort to the law is an ethical gain only when the getting
something done is more important than to get it done from the right
motive. This evidently applies to acts of corporate bodies. We do not
care for their motives. We are not concerned to save their souls. We are
concerned only for results--just the place where we have seen that the
personal responsibility breaks down. The value of good motives and moral
purpose is in this case located in those who strive to secure and
execute progressive legislation for the public good, and in the personal
spirit with which this is accepted and carried out by officials.[233]
=7. Every Member of Society Should Share in Its Wealth and in the Values
Made Possible by It.=--The quantitative basis of division and the method
for giving each a share belong to the unsettled problems. But the worth
and dignity of every human being of moral capacity is fundamental in
nearly every moral system of modern times. It is implicit in the
Christian doctrine of the worth of the soul, in the Kantian doctrine of
personality, in the Benthamic dictum, "every man to count as one." It is
imbedded in our democratic theory and institutions. With the leveling
and equalizing of physical and mental power brought about by modern
inventions and the spread of intelligence, no State is permanently safe
except on a foundation of justice. And justice cannot be fundamentally
in contradiction with the essence of democracy. This means that wealth
must be produced, distributed, and owned justly: that is, so as to
promote the individuality of every member of society, while at the same
time he must always function as a member, not as an individual. In
defining justice some will place freedom first; others, a standard of
living. Some will seek fairness by distributing to each an actual share
of the goods; others, by giving to each a fair chance to get his share
of goods. Others again have held that if no moral purpose is proposed
and each seeks to get what he can for himself, the result will be a just
distribution because of the beneficent effects of competition. Still
others have considered that if the economic process has once been
established on the basis of contracts rather than status or slavery,
justice may be regarded as the maintenance of these contracts, whatever
the effect in actual benefits. These views will be considered under the
next topic as unsettled problems.
LITERATURE
In addition to the works cited at the close of the last chapter,
Giddings, _The Costs of Progress_, in Democracy and Empire, 1901;
Bosanquet (Mrs. B.), _The Standard of Life_, 1898; Bosanquet, B.,
_Aspects of the Social Problem_, 1895; Stephen, _Social Rights and
Duties_, 1896; Tufts, _Some Contributions of Psychology toward the
Conception of Justice_, Philosophical Review, xv., 1906, pp. 361-79;
Woods, _Democracy, a New Unfolding of Human Power_, in Studies in
Philosophy and Psychology (Garman Commemorative Volume), 1906.
FOOTNOTES:
[231] Hayes Robbins in the _Atlantic Monthly_ for June, 1907, "The
Personal Factor in the Labor Problem."
[232] _Sin and Society._
[233] See Florence Kelley, _Some Ethical Gains through Legislation_.
CHAPTER XXIV
UNSETTLED PROBLEMS IN THE ECONOMIC ORDER
Under this head we propose to consider one general and three special
problems on which society is at present at work, framing new moral
standards to meet new conditions. Many of the questions involved in the
new order marshal themselves under a single antithesis. Will the moral
values of wealth be most fully secured and justly distributed by leaving
to individuals the greatest possible freedom and holding them morally
responsible, or by social agency and control? The first theory is known
as _individualism_. The most convenient term for the second position
would be _socialism_.
Socialism, however, is, for many, an epithet rather than a scientific
conception. It is supposed to mean necessarily the abolition of all
private enterprise or private property. In its extreme form it might
mean this, as individualism in its extreme form would mean anarchy. But
as a practical ethical proposition we have before us neither the
abolition of public agency and control--extreme individualism--nor the
abolition of private agency and control. We have the problem of getting
the proper amount of each in order that the highest morality may
prevail. Each theory professes to desire the fullest development and
freedom of the individual. The individualist seeks it through formal
freedom and would limit public agency to a minimum. The socialist is
willing to permit limitations on formal freedom in order to secure the
"real" freedom which he regards as more important and substantial.
Between the extremes, and borrowing from each, is a somewhat indefinite
programme known as the demand for equal opportunity. Let us consider
each in a brief statement and then in a more thorough analysis.
Sec. 1. GENERAL STATEMENT OF THE POSITIONS OF INDIVIDUALISM AND OF
PUBLIC AGENCY AND CONTROL
=1. Individualism.=--Individualism[234] believes that each man can
secure his own welfare better than any one else can secure it for him.
It further holds that society is made up of individuals, and hence, if
each is provided for, the welfare of the whole is secured. Such goods as
are social can be secured by voluntary association. Believing that the
course of civilization has been "from status to contract," it makes free
contract its central principle. It should be the chief business of
organized society to maintain and safeguard this freedom. It locates the
important feature of freedom precisely in the act of assent, rather than
in any consideration of whether the after consequences of the assent are
good or bad; nor does it ask what motives (force and fraud aside)
brought about the assent, or whether there was any other alternative. In
other words, it regards formal freedom as fundamental. If not in itself
all that can be desired, it is the first step, and the only one which
law need recognize. The individual may be trusted to take other steps,
if protected in this. The only restriction upon individual freedom
should be that it must not interfere with the equal freedom of others.
In the economic sphere this restriction would mean, "must not interfere
by force." The theory does not regard economic pressure by competition
as interference. Hence it favors free competition. Leaving out of
account benevolence, it holds that in business each should be allowed,
or even recommended, to seek his own advantage. But when the question as
to the justice of the distribution reached by this method is raised, a
division appears between the _democratic_ individualists and the
"_survival of the fittest_" individualists. The democratic
individualists--Adam Smith, Bentham, Mill[235]--believed that
individualism would promote the welfare of _all_ members of society. The
"survival of the fittest" school maintains that the welfare of the race
or of civilization depends on the sifting and selecting process known as
the "struggle for existence." If the "fittest" are thus selected and
survive, it matters not so much what is the lot of the rest. We must
choose between progress through aristocratic selection and degeneration
through democratic leveling.
=2. Theory of Public Agency and Control.=--Socialism (using the word in
a broad sense) holds that society should secure to all its members the
goods of life. It holds that an unrestrained liberty of struggle for
existence may secure the survival of the strongest, but not necessarily
of the morally best. The individualist's theory emphasizes formal
freedom. "Seek first freedom and all other things will be added." The
socialist view emphasizes the content. It would have all members of
society share in education, wealth, and all the goods of life. In this
it agrees with democratic individualism. But it considers this
impossible on the basis of individual effort. To hold that society as a
whole can do nothing for the individual either ignores social goods or
supposes the social will, so powerful for democracy in the political
sphere, to be helpless and futile in the economic world. To assume that
all the control of economic distribution--the great field of
justice--may be left to individual freedom and agency, is as archaic as
to leave the collection of taxes, the administration of provinces, and
the education of citizens to private enterprise. It regards the
unregulated struggle for existence as economically wasteful and morally
vicious, both in its inequality of distribution and in the motives of
egoism on which it relies. Individualism, on the other hand, so far as
it is intelligent and does not lump socialism with anarchy and all other
criticisms on the established order, regards socialism as ignoring the
supreme importance of active personal effort, and the value of freedom
as the keynote to progress.
=3. Equal Opportunity.=--An intermediate view has for its maxim, "equal
opportunity." It holds with individualism that the active personality is
to be stimulated and made a prime end. But because it believes that not
merely a few but all persons should be treated as ends, it finds
individualism condemned. For it holds that an unregulated struggle for
existence does not secure the end individualism professes to seek. When
individuals start in the race handicapped by differences in birth,
education, family, business, friends, and inherited wealth, _there is no
selection of ability_; there is _selection of the privileged_. Hence it
would borrow so much from socialism as to give each individual a "fair
start." This would include public schools, and an undefined amount of
provision for sanitation, and for governmental regulation of the
stronger.
It is manifest, however, that this theory of the "square deal" is a name
for a general aim rather than for a definite programme. For a "square
deal," or equality of opportunity, might be interpreted to call for a
great variety of concrete schemes, ranging all the way from an
elementary education up to public ownership of all the tools for
production, and to abolition of the right to bequeath or inherit
property. The peoples of America, Europe, and Australasia are at present
working out policies which combine in various degrees the
individualistic and the socialistic views. Most have public schools.
Some have provision for old age and accident through either mutual or
State systems of insurance and pensions. Let us analyze the moral
aspects of the two opposing theories more thoroughly. It is obvious that
the third view is only one of a number of mediating positions.
Sec. 2. INDIVIDUALISM OR FREE CONTRACT ANALYZED: ITS VALUES
=Efficiency in Production.=--Individualism can make out a strong case in
respect to several of the ethical qualities which are demanded: viz.,
efficiency in production of goods, stimulation of active and forceful
character, promotion of freedom and responsibility, encouragement to
wide diversification of occupation and thus of services, and, finally,
the supply to society of the kinds of goods which society wants. It
would be absurd to credit the enormous increase in production of wealth
during the past century to individualism alone, ignoring the
contributions of science and education which have been mainly made under
social auspices. It would be as absurd to credit all the gains of the
century in civilization and freedom to individualism as it would be to
charge all the wretchedness and iniquity of the century to this same
policy. But, setting aside extravagant claims, it can scarcely be
doubted that Adam Smith's contentions for greater individual freedom
have been justified as regards the tests named. Granting that the great
increase in amount and variety of production, and in means of
communication and distribution, has been primarily due to two agencies,
the machine and association, it remains true that individualism has
permitted and favored association and has stimulated invention.
=Initiative and Responsibility.=--Moreover, the general policy of
turning over to individuals the power and responsibility to regulate
their own acts, is in accord with one great feature of moral
development. The evolution of moral personality, as traced in our early
chapters, shows the individual at first living as a member of a kinship
group which determines his economic as well as his religious and social
life, and permits him neither to strike out independently, nor, on the
other hand, to suffer want so long as the group has supplies. Individual
initiative and responsibility have steadily increased, and the economic
development has undoubtedly strengthened the development of religious,
political, and moral freedom. It is the combination of these which gives
the person of to-day the worth and dignity belonging to autonomy,
self-government, and democracy.
=Regulation of Production.=--Further, it may be said that supply and
demand, individualism's method of regulating prices and the kinds of
goods produced, not only accords with a principle of freedom, but also
gets those goods made which society most needs or wants. If goods of a
certain kind are scarce, the high price stimulates production. While it
permits crises, panics, and hardship, it at least throws the burden of
avoiding hardship upon the foresight of a great many: namely, all
producers, rather than upon a few persons who might be designated for
the purpose. In thus providing a method to find out what society wants
and how much, it is performing a social service, and, as we have pointed
out, it is none the less a service because the goods are to be paid for;
it is all the more so because they can be paid for. So far, then,
individualism has a strong case.
Sec. 3. CRITICISMS UPON INDIVIDUALISM
There is undoubtedly great waste in some of its methods, e.g., its
advertising and its competitions, but the most serious objections to
individualism are not to be found here; they arise in connection with
the other ethical criteria of economic morality. They fall chiefly
under two heads. (1) Does individualism provide for real as well as
formal freedom? (2) Does it distribute the benefits widely or to the
few? Does it distribute them justly or unjustly?
=It Does Not Secure Real Freedom.=--The distinction between real and
formal[236] freedom has been forced into prominence by several causes.
The division of labor trains a man for a specific kind of work. If there
is no opening in this he is unable to find work. The continual invention
of improved machinery is constantly displacing particular sets of
workers and rendering their special training worthless. A business panic
causes immediate discharge of thousands of laborers. A "trust" closes
several of its shops, and workmen who have purchased homes must lose
their jobs or their investments, or perhaps both. The employer is no
less limited in his conduct by the methods of competing firms; but it is
the wage-workers who have felt this lack of real freedom most keenly.
Theoretically, no one is forced to labor. Every one is free to choose
whether he will work, and what work he will do. But in effect, freedom
of choice depends for its value upon what the alternative is. If the
choice is, do this or--starve--the freedom is not worth much. Formal
freedom excludes constraint by the direct control or will of others. It
excludes violence or fear of violence. But subjection to the stress or
fear of want, or to the limits imposed by ignorance, is just as fatal to
freedom. Hunger is as coercive as violence; ignorance fetters as
hopelessly as force. Whether a man has any choice of occupation,
employment, residence, or wage, depends on his physical strength,
education, family ties, and accumulated resources, and on the pressure
of present need. To speak of free contract where there is gross
inequality between the parties, is to use a mere form of words. Free
contract in this case means simply the right of the stronger to exploit
the weaker.
=Individualism and Justice.=--Individualists, as stated, belong to two
very different schools, which we may call the democratic and
aristocratic, or perhaps more correctly, if we may coin a word,
"oligocratic." Democratic individualism would have every man count as
one. It would distribute benefits widely. It holds that since society is
made up of individuals all social goods will be secured if each
individual seeks and finds his own. Aristocratic individualism[237] has
been reenforced by the Darwinian theory of the struggle for existence as
a condition for "survival of the fittest," by race prejudice, and by
imperialism. It holds that civilization is for the few "best," not
necessarily for the many. Progress lies through the selection of the few
efficient, masterful, aggressive individuals, races, or nations.
Individualism is a policy which favors these few. It is Nature's method
of dealing. It is of course regrettable that there should be weak,
backward, ineffective individuals or races, but their exploitation
serves the advance of the rest, and benevolence or charity may mitigate
the most painful results.
The older economists of democratic individualism could properly claim
two respects in which economic justice was furthered by economic
processes under free management and exchange. The social body is in
truth made up of members, and the old policy had been to tie up the
members to make the body grow. It did promote justice to remove needless
and excessive restrictions. In the second place, it is true, as the
economists insisted, that in a free exchange each party profits if he
gets what he wants. There is mutual benefit, and so far as this goes
there is an element of justice. But while the benefit may be mutual, the
_amount_ of advantage each gets is not necessarily the same, and if the
party who has greater shrewdness or resources takes advantage of a great
need on the part of the other, the result may be a very unequal
division. Exchanges of a birthright for a mess of pottage will be
common. Very well, says the individualist, Esau will know better next
time--or if he doesn't, he is an object for charity. But the trouble is
that even if Esau does "know better" he is in even poorer condition next
time to make a bargain if his birthright is gone; besides, if starvation
or misery for himself or his family is his only alternative, what good
will it do him to "know better"? Can the result, then, be just or fair?
This depends on how we define "just" and "fair." If we take a purely
formal view and make formal freedom of contract the only criterion, then
any price is fair which both parties agree to. The law for the most part
takes this view, assuming absence of force or fraud. But this leaves out
of account everything except the bare formal act of assent. It is too
abstract a conception of personality on which to base a definition of
justice. To get the true organic relation of mutual service and benefit
by a system of individualism we must have the two parties to the bargain
equal. _But in a large part of the exchange of business and services the
two parties are not equal._ One has greater shrewdness, better
education, more knowledge of the market, more accumulated resources,
and, therefore, less pressing need than the other. The moral
consciousness will call prices or contracts unfair where the stronger
takes advantage of the weaker's necessities, even if the law does not.
=Competition.=--The fact of competition is depended upon by the
individualist to obviate the disadvantages of the weaker party. If A is
ignorant of the market, B may impose upon him; but if C and D are
competing with B for A's goods or services, A will soon find out what
they are "worth." That is, he will get for them a social and not a
purely individual valuation. There is doubtless such a gain to A. But in
considering competition as removing the objections to the unfairness
possible in bargaining, we must bear in mind two things. First,
competition cuts both ways. It helps A when several compete for his
goods or labor; but, on the other hand, it may ruin one of the
competitors. If A is a laborer, it is a good thing if X, Y, and Z,
employers, compete for his services. But if the boot is on the other
foot, if B, C, and D also are laborers and compete with A for a place,
we have the conditions which may lead to the sweat-shop. Whether there
is any better way to avoid unequal distribution will be considered
later. The second and seemingly fatal objection to competition as a
means to justice, is that _free competition under an individualistic
system tends to destroy itself_. For the enormous powers which the new
forms of economic agency and technique give to the individual who can
wield them, enable him to crush competitors. The process has been
repeated over and over within the past few years in various fields. The
only way in which a semblance of competition has been maintained in
railroad business has been by appeal to the courts. This is an appeal to
maintain individualism by checking individualism, and as might be
expected from such a contradictory procedure, has accomplished little.
Nor can it be maintained that the evils may be obviated, as Spencer
holds, by private restraints on excessive competition. As already
pointed out, if one of a body of competitors is unscrupulous, the rest
are necessarily at a disadvantage. Under present conditions
individualism cannot guarantee, and in many cases cannot permit, just
distribution and a true organic society.
The other school of individualists is not disturbed by inequality of
goods. It frankly accedes to the logic of unrestrained competition. It
stakes its case upon the importance for social welfare of the
exceptionally gifted few. It is important to have their services. It
can have them only on terms which they set, as they will not work unless
there is sufficient motive. It is, on this view, perfectly just that all
the enormous increase of wealth due to modern methods should go to the
few leaders, for their ability has produced it all. "The able minority
of men who direct the labor of the majority are the true producers of
that amount of wealth by which the annual total output, in any given
community, exceeds what would have been produced by the laborers if left
to their own devices, whether working as isolated units or in small
self-organized groups, and controlled by no knowledge or faculties but
such as are possessed in common by any one who can handle a spade or lay
one brick upon another."[238]
Either from the standpoint of natural rights or from that of
utilitarianism it is proper, according to this school, that all the
increasing wealth of society, now and in all future time, should go to
the few. For, on the one view, it belongs to the few since they have
produced it; and, on the other, it must be given them if society is to
have their services. It is possible they may not claim it all for their
exclusive possession. They may be pleased to distribute some of it in
gifts. But this is for them to say. The logical method for carrying out
this programme would require an absolute abandonment by the people as a
whole, or by their representatives, or the courts, of any attempt to
control economic conditions. The courts would be limited to enforcing
contracts and would cease to recognize considerations of public interest
except in so far as these were accepted by the able minority. All such
legislation as imposes any check upon the freedom of the individual is
mischievous. Under this head would presumably come regulation of child
labor, of hours, of sanitary conditions, of charges by railroads, gas
companies, and other public service corporations. Graded income or
inheritance taxes are also to be condemned from this standpoint. It
should in fairness be added that while its upholders do not allege as
their main argument that individualism is for the interest of the many,
they hold, nevertheless, that the many are really better off under
individualism than under socialism. For since all the increase in wealth
is due to the able few whom individualism produces, and since some of
this increase, in cases where the few compete for the custom or labor of
the many, may fall to the share of the many or else be given them
outright by the more generous, it appears that the only hope for the
many lies through the few.
The general naturalistic theory has been discussed in Chapter XVIII.
Here it is only necessary to point out that it is a misreading of
evolution to suppose unregulated competition to be its highest category
of progress, and that it is a misinterpretation of ethics to assume that
might is right. With the dawn of higher forms of life, cooperation and
sympathy prove stronger forces for progress than ruthless competition.
The "struggle" for any existence that has a claim to moral recognition
must be a struggle for more than physical existence or survival of
force. It must be a struggle for a _moral_ existence, an existence of
rational and social beings on terms of mutual sympathy and service as
well as of full individuality. Any claim for an economic process, if it
is to be a moral claim, must make its appeal on moral grounds and to
moral beings. If it recognizes only a few as having worth, then it can
appeal only to these. These few have no moral right to complain if the
many, whom they do not recognize, refuse to recognize them.
=Summary of the Ethics of Individualism.=--Individualism provides well
for production of quantity and kinds required of goods and services; for
activity and formal freedom. Under present conditions of organization
and modern methods it cannot be made to serve a democratic conception
of justice, but inevitably passes over into a struggle for preeminence,
in which the strong and less scrupulous will have the advantage. It can
be treated as just only if justice is defined as what is according to
contract (formal freedom); or if the welfare of certain classes or
individual members of society is regarded as of subordinate importance;
or, finally, if it is held that this welfare is to be obtained only
incidentally, as gift, not directly through social action. The criticism
on individualism is then that under a collective system like that of the
present, it does scant justice to most individuals. It leaves the many
out from all active participation in progress or morality.[239]
LITERATURE