LITERATURE

LITERATUREBesides 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, andIndustrial 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.

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, andIndustrial 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 theAtlantic 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.; alsoEddy on Combinations.[229]The list appended was bulletined at the Chicago Industrial Exhibit of 1906, and reprinted inCharities 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.

[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 theAtlantic 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.; alsoEddy on Combinations.

[229]The list appended was bulletined at the Chicago Industrial Exhibit of 1906, and reprinted inCharities 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.

[229]The list appended was bulletined at the Chicago Industrial Exhibit of 1906, and reprinted inCharities 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.

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 hisTheory of the Leisure Classpoints 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 æsthetic 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 coöperation 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 wagenecessary 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 marketprice 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 naïve admission that this has been neglected. Labor unions are coming to seethe 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 spreadof 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.

LITERATUREIn 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.

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 theAtlantic Monthlyfor June, 1907, "The Personal Factor in the Labor Problem."[232]Sin and Society.[233]See Florence Kelley,Some Ethical Gains through Legislation.

[231]Hayes Robbins in theAtlantic Monthlyfor June, 1907, "The Personal Factor in the Labor Problem."

[232]Sin and Society.

[233]See Florence Kelley,Some Ethical Gains through Legislation.

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 asindividualism. The most convenient term for the second position would besocialism.

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.

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 thedemocraticindividualists and the "survival of the fittest" individualists. The democratic individualists—Adam Smith, Bentham, Mill[235]—believed that individualism would promote the welfare ofallmembers 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 toprivate 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 isselection 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 orState 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.

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 evolutionof 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.

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 undertwo 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. Freecontract 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 reënforced 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, theamountof advantage each gets is notnecessarily 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 socialand 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 thatfree 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 giftedfew. 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, coöperation 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 amoralexistence, 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 andmodern methods it cannot be made to serve a democratic conception of justice, but inevitably passes over into a struggle for preëminence, 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]

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