PREFACE
The goods and services that constitute our national income
are valued severally and collectively with a fair amount of accuracy in terms
of money. For a gold standard, though by no means perfect for the work of
monetary measurement, is stable and has a single definite meaning to all
men. By means of it we can estimate the rates of growth or decline in our
industry, as an aggregate or in its several departments, and the quantities
of output and consumption of the various products. We can compare the growth
of our national wealth with that of other nations.
But how far can these measurements of concrete wealth furnish reliable information
regarding the vital values, the human welfare, which all economic processes
are designed to yield? Though it will be generally admitted that every increase
of economic wealth is in some measure conducive to welfare, every decrease
to illfare, nobody will pretend even approximately to declare what that measure
is, or to lay down any explicit rules relating wealth to welfare, either
for an individual or a nation. Indeed, even the general assumption that every
growth of wealth enhances welfare cannot be admitted without qualification.
An injurious excess of income is possible for an individual, perhaps for
a nation, and the national welfare which an increased volume of wealth seems
capable of yielding might be more than cancelled by a distribution which
bestowed upon a few an increased share of the larger wealth, or by an aggravation
of the toil of the producers.
Such obvious considerations drive us to seek some intelligible and consistent
method of human valuation for economic goods and processes. To find a standard
of human welfare as stable and as generally acceptable as the monetary standard
is manifestly impossible. Indeed, the difficulties attending any sort of
calculus of vital values might appear insuperable, were it not for one reflection.
Every statesman, social reformer, philanthropist, every public-spirited citizen,
does possess and apply to the conduct of affairs some such standard or criterion
as we are seeking. Some notion or idea, more or less clear and explicit,
of the general welfare, crossed and blurred no doubt by other interests and
passions, is an operative and directive influence in his policy. Moreover,
though idiosyncrasies will everywhere affect this operative ideal, there
will be found among persons of widely different minds and dispositions a
substantial body of agreement in their meaning of human welfare. The common
social environment partly evokes, partly imposes, this agreement. In fact,
all co-operative work for social progress implies the existence of some such
standard as we are seeking. The complex image of human values which it contains
is always slowly changing, and varies somewhat among different sorts and
conditions of men. But for the interpretation of economic goods and processes
it has, at any time, a real validity. For it is anchored to certain solid
foundations of human nature, the needs and functions to which, alike in the
individual and in the society, we give the term 'organic.' Only by considering
the organic nature of man and of human society can we trace an intelligible
order in the evolution of industry. The wants of man, and therefore the economic
operations serving them must be treated as organic processes. This term,
borrowed from biology, must be extended so as to cover the entire physical
and spiritual structure of human society, for no other term is so well fitted
to describe the nature of the federal unity which society presents. The standard
of values thus set up is the current estimate of 'organic welfare.'
The justification of these terms and of this mode of human valuation is
to be found in their application to the task before us. These tools will
be found to do the work better than any others that are available.
In seeking to translate economic values into human by reference to such
a standard of organic welfare, I take as the aptest material for experiment
the aggregate of goods and services that constitute the real income of the
British nation. In order to reduce that income to terms of human welfare,
I first examine separately the economic costs of production and the economic
utilities of consumption which meet in this concrete wealth, analysing them
into human cost and human utility, the debit and credit sides of the account
of welfare. Analysis of the productive processes will, of course, disclose
the fact that not all 'economic' costs have human costs attached to them,
but that human utilities of varying value inhere in many sorts of productive
work. Surveying the different orders of productive energy, from the finest
arts to the lowest modes of routine toil, we discover that any two bodies
of economic wealth, possessing the same pecuniary value, may differ enormously
in the quantity of human cost they carry. For that cost will depend upon
the nature of the work, the nature of the workers, and the distribution of
the work among the workers. This line of enquiry opens out, in form at any
rate, a complete criticism of current English industry, from the humanist
standpoint. A similar analysis applied on the consumption side resolves the
economic utility of the goods and services into human utility. Here again
out of economic utilities much human cost emerges, just as out of economic
costs much human utility. Equal quantities of income yield in their consumption
widely diverse quantities of human utility or welfare.
Piecing together the two sides of our enquiry into the production and consumption
of the income, we perceive, as might be expected, that a sound human economy
conforms to the organic law of distribution, 'from each according to his
power, to each according to his needs,' and that, precisely so far as the
current processes of economic distribution of work and of its product contravene
this organic law, waste accrues and illfare displaces welfare. The economic
distinction between costs and unearned surplus1 furnishes in effect a faithful
measure of the extent and forms of divergence between the economic and the
human 'law' of distribution. For when this surplus income is traced, backward
to the human costs involved in its production, forward to the human injuries
inflicted by the excessive and bad consumption it sustains, it is seen to
be the direct efficient cause of all the human defects in our economic system.
Growing in magnitude with the development of the modern arts of industry
and commerce, it is the concrete embodiment of the social-economic problem.
The absorption and utilisation of the surplus for the betterment of the working-classes
and the enrichment of public life are essential conditions for the humanisation
of industry. The first half of the book is occupied with the general exposition
and illustration of this method of human valuation. The second part applies
the humanist principles thus established, to the discussion of some of the
great practical issues of social-economic reconstruction in the fields of
business and politics. The medley of overlapping conflicts between capital
and labour, producer and consumer, competition and combination, the individual
and society, is sifted so as to discover lines of industrial reformation
based upon a conception of organic harmony. The reconstruction of the business,
so as adequately to represent in its operation the respective interests of
capital, ability, labour and the consumer, is seen to be the first desideratum
of reform. Here, as in the wider oppositions between business and business,
trade and trade, nation and nation (misconceived as economic units), the
more rational standpoint of a humanist valuation suggests modes of reconcilement
following an evolution of economic structure in which the corporate or co-operative
spirit finds clearer and stronger expression. The most debated question,
how far ordinary human nature can yield economic motives to social service
strong and reliable enough to enable society to dispense with some of the
incentives of competitive greed, hitherto deemed indispensable supports to
industry, is discussed in several of the later chapters. The practicable
limits of industrial reformation are found to depend upon the reality and
importance assigned to 'the social will' as a power operative for industrial
purposes, in other words upon the strength of the spiritual unity of society.
A final chapter is given to a discussion of the limitations of the scientific
and quantitative methods in the interpretation and direction of social-economic
life. It is contended that the art of social as of individual conduct must
always defy exact scientific guidance, the methods of science being incompetent
closely to predict or direct the creative element in organic processes.
The processes of human valuation and judgment, therefore, whether applied
to industry or to other activities and achievements, must ultimately belong
to the art rather than to the science of society, the statesman and the citizen
absorbing and assimilating the history of the past which science presents
in its facts and laws, but using his free constructive faculty to make the
history of the future. The failures of the individual statesman or citizen
in the performance of this artistic work are due to the fact that a larger
artist, whose performance the most enlightened individual can but slightly
apprehend, viz., society itself, takes an over-ruling part in the process.
This brief presentation of the argument, dwelling unavoidably upon intellectual
method, may possibly have failed to convey the intensely practical purpose
which I have kept in mind throughout the preparation of the book. That purpose
is to present a full and formal exposure of the inhumanity and vital waste
of modern industry by the close application of the best-approved formulas
of individual and social welfare, and to indicate the most hopeful measures
of remedy for a society sufficiently intelligent, courageous and self-governing
to apply them.
Such a work evidently presents a large front for hostile criticism. Its
scope has often compelled a rigorous compression in the discussion of important
controversial topics, and has precluded all entrance upon the more detailed
issues in the policy of reconstruction. But I venture to hope that many readers,
who may disagree with the particular valuations and interpretations offered
in these chapters, will be led to accept the broader outlines of the method
of human valuation here proposed, and will recognize the importance of a
better application of this method in the solutions of the practical problems
of economic reform.
J. A. HOBSON.
HAMPSTEAD,
January, 1914.
NOTES:
1. This distinction is elaborated in my work, The Industrial System.
CHAPTER I: THE HUMAN STANDARD OF VALUE
§I. In an age when human problems of a distinctively
economic character, relating to wages, hours of labour, housing, employment,
taxation, insurance and kindred subjects, are pressing for separate consideration
and solution, it is particularly important to enforce the need of a general
survey of our economic system from the standpoint of human values. Social
students, of course, are justified by considerations of intellectual economy
in isolating these several problems for certain purposes of detailed enquiry.
But the broader human setting, demanded for the judgment or the policy of
a statesman or reformer, can never be obtained by this separatist treatment.
For the interactions which relate these issues to one another are numerous
and intimate. Taking as the most familiar example the groups of questions
relating to the working-classes, we recognise at once how the wages, hours,
regularity of employment and other considerations of labour, overlap and
intertwine, while, again, the questions relating to conditions of living,
such as housing, food, drink, education, recreation, facilities of transit,
have similar interrelations as factors in a standard of comfort. Nor is it
less evident that conditions of labour and conditions of living, taken severally
and in the aggregate, interact in ways that affect the efficiency and well-being
of the people.
The special and separate studies of these various problems must then, in
order to be socially serviceable, be subject to the guidance and direction
of some general conception which shall have regard to all sorts of economic
factors and operations, assessing them by reference to some single standard
of the humanly desirable. This general survey and the application of this
single standard of valuation are necessary alike to a scientific interpretation
of the economic or industrial world and to a conscious art of social-economic
progress. They must exert a control over the division of intellectual labour
on the one hand, and over the utilisation of such labour for social policy
upon the other. The notion that, by setting groups of students to work at
gathering, testing, measuring and tabulating crude facts, relating, say,
to infant mortality, expenditure on drink, or wages in women's industries,
valuable truths of wide application will somehow be spontaneously generated,
and that by a purely inductive process there will come to light general laws
authoritative for social policy, is entirely destitute of foundation. The
humblest grubber among 'facts' must approach them with some equipment of
questions, hypotheses, and methods of classification, all of which imply
the acceptance of principles derived from a wider field of thought. The same
holds again of the next higher grade of students, the intellectual middlemen
who utilise the 'facts' got by the detailed workers 'at the face.' They too
must bring wider principles to correlate and to interpret the results got
by the humbler workers. So at each stage of the inductive process, laws and
standards derived from a higher intellectual stage are brought to bear.
Even if such studies were prompted entirely by a disinterested desire for
knowledge, it is evident that their success implies the inspiration and application
of some general ideas, which in relation to these studies are a priori. But
regarding these studies as designed primarily to assist the art of social
policy, we must recognise that the inner prompting motive of every question
that is put at each stage of such enquiries, the inner regulative principle
of the division of labour and of the correlation of the results, is the desire
to realise some more or less clear conception of general human well-being.
It must, of course, be admitted that this procedure rests upon a sort of
paradox. The general conception of human well-being is itself vague and unsubstantial,
until it has acquired and assimilated the very sorts of knowledge the collection
of which it is here assumed to be able to direct. This paradox, however,
is familiar to all who reflect upon the progress of knowledge in any department
and for any purpose. I only name it here in order to anticipate the objection
of those disposed to question the validity of assuming any sort of standard
of human welfare, and to insist upon testing each economic issue upon what
they call 'its own merits.' The application of a general survey and a general
standard of values is none the less a logically valid and a practically useful
procedure, because the new facts which its application discloses afford more
fulness and exactitude to the survey, while the standard is itself made clearer
and more effective thereby.
Assuming it to be admitted, then, that a human valuation of economic processes
is possible and desirable, both for the enlargement of knowledge and for
purposes of social policy, the questions next arise, 'How shall we conceive
and describe the standard of human valuation, and how shall we apply it to
the interpretation of the present economic system?'
§2. Before facing these questions, however, it will be well to have
before our minds a clear outline picture of this economic system which we
seek to value. It consists of two complex operations, constantly interacting,
known as Production and Consumption of wealth. By wealth is understood all
sorts of vendible goods and services. So far as material wealth is concerned,
it is 'produced' by a series of processes which convert raw materials into
finished goods of various sorts and sizes and dispose them in such quantities
as are required, for the satisfaction of consumers or as instruments in some
further process of production. Similarly, in the case of professional, official,
domestic, industrial, commercial, and other personal services, which also
rank as wealth,1 a variety of productive processes go to prepare them and
to place them at the disposal of consumers. The processes of production may
thus be classified as extractive, manufacturing, artistic, transport, commercial,
professional, domestic. Thus it is seen that the work of 'distribution' and
'exchange,'2 sometimes distinguished from the work of production, is here
included in that category.
Now, the first difficulty confronting us in our search for a human valuation
of this economic system consists in the obscurity in which half this system
lies. For though there is everywhere a formal recognition that consumption
is the end or goal of industry, there is no admission that the arts of consumption
are equally important with the arts of production and are deserving of as
much attention by students or reformers of our 'economic system.' On the
contrary, so absorbing are the productive processes in their claims upon
the physical and mental energies of mankind, that the economic system, alike
for practitioners and theorists, has almost come to be identified with these
processes. This depreciation and neglect of consumption no doubt has been
natural enough. So much more conscious energy of thought and feeling, and
so much more expenditure of time and effort have gone into the discovery,
development and practice of the productive arts. Their practice has involved
so much more publicity, so much wider and more varied intercourse, and therefore
so much more organisation. Consumption, on the other hand, has been so much
more passive in its character, so private and individual in the acts which
comprise it, so little associated with sequences of thought or purpose, that
it has hardly come to be regarded as an art. Hence, even in the more elaborate
civilisations where much detailed skill and attention are devoted to the
use and enjoyment of goods and services, the neglect of consumptive processes
by economic science remains almost unimpaired. The arts of production remain
so much more exacting in their demands upon our attention.
The early influence of this dominance of the productive standpoint in economic
science has had effects upon the terminology and structure of that science
which are serious obstacles to the human interpretation of industry. unconsciously,
but consistently, the early structure of the science was built with exclusive
regard to the industrial or productive processes. The art out of which the
science grew was concerned with the progress of agriculture, manufacture,
and commerce, or with problems of money, taxation, and population, regarded
mainly or wholly from the productive standpoint. The underlying assumption
everywhere was the question, 'How will this or that policy affect the quantity
of wealth produced in the country?' always with an important corollary to
the effect, 'How will it affect the quantity of wealth, passing as rents,
profits, interest, or wages to the several classes of the nation?' But nowhere
was there any direct consideration of the arts of consumption, with one particularly
instructive exception. The only bit of attention paid by our early classical
economists to processes of consumption was to distinguish 'productive' from
'unproductive' consumption, that is, to suggest a valuation of consumption
based entirely upon its subordination to future purposes of production. Their
condemnation of luxurious expenditure and waste, alike in the wealthy and
the working-classes, was not primarily directed against the loss of real
enjoyment, or human well-being, or the moral degradation involved in such
abuse of spending power, but against the damage to the further processes
of making wealth by reducing the rate of saving or by impairing the working
efficiency of labour. Though occasional considerations of a more distinctively
humane or moral character entered into the tirades against luxury, or the
dietetic advice offered by these economic teachers, the main trend of their
reflections on the use of wealth was quite evidently dominated by considerations
of increased production. This tendency further impressed itself upon the
central concept of economic science, that of value, which was treated by
these early makers of Political Economy exclusively from the productive standpoint
of 'costs.' When, however, later theorists, beginning with Jevons in this
country, sought to convert the formal goal of consumption into the real goal,
by substituting 'utility' for 'cost' as the determinant of value, it might
have been supposed that they would have been impelled, passing through the
gateway of utility into consumption, to open up that hitherto neglected country.
But no such thing has happened. While an elaborate division of intellectual
labour has been applied, both to the study of the objective structure of
industry and to the psychology of the various agents of production, no corresponding
studies of consumption have been made. When the products of industry pass
over the retail counter, economic science almost entirely loses count of
them. They pass from sight into the mysterious maw of 'the Consumer.' it
has never occurred to the economist that it is just as important to have
a clear and close knowledge of what happens to products when they have become
consumer's goods, as it is to trace their history in the productive stages.
It would, of course, be untrue to say that modern economists completely ignore
methods and motives of consumption. Their studies of value and of markets
compel them to direct equal attention to forces regulating Supply and Demand,
and many of them assign a formal superiority to the demand for final commodities
which issues from Consumers, as the regulator of the whole industrial system.
But while this has evoked some interesting enquiries into quantities and
modes of consumption, the main interest of these enquiries has lain, not
in the light they shed upon the use and enjoyment got from consumption, but
in the effects of that consumption upon demand as a factor in problems of
price and of production. In a word, the economic arts of consumption still
run in subordination to the arts of production, and the very nature of the
interest taken in them attests their secondary place. Half of the field of
economic survey important from the standpoint of human welfare thus stands
unexplored or ill-explored.
§3. A necessary result of this identification of economic subject-matter
with the productive apparatus, has been to impose upon the study of economics
a distinctively mechanical character. The network of businesses and trades
and processes, which constitutes industry, may indeed, by an interpretative
effort of imagination, be resolved into the myriads of thoughts, desires
and relations which are its spiritual texture. Every business, with its varied
machinery and plant, its buildings, materials, etc., is the embodiment of
conscious human effort, and the personnel of management and operatives represent
a live current of volition and intelligence, directing and cooperating with
it. A business, thus regarded, is a distinctively spiritual fabric. Nor is
this true only of those industries employed in fashioning material goods.
The complicated arrangements of communications and of commerce with their
ganglia of markets, by which goods pass from one process to another and are
gathered, sorted and distributed in regulated channels throughout the world
of workers and consumers, represent an even more delicate adjustment of psychical
activities. Economic science tends, undoubtedly, to become less material
in its outlook and treatment, and to give more attention to the psychological
supports of the industrial system. Not only have we many special studies
of such economic questions as saving and investment, business administration
and other critical operations of will and judgment, but in such works as
those of M. Tarde in France, and Mr. Wicksteed in this country, we find attempts
at a systematic psychological interpretation of industry. Economics, indeed,
according to the latter writer, is a branch of the science of 'preferences,'
the application of intelligent human volition to the satisfaction of economic
wants.
And yet the science remains distinctively mechanical and unfitted for the
performance of any human interpretation of industry. This is due to the failure
of our psychological economists to tear themselves free from the traditions
of a Political Economy which in its very structure has made man subservient
to marketable wealth. The accepted conception of the Art of Political Economy
is that it is directed to the production of wealth whose value is attested
by the purely quantitative calculus of money' and the Science of Political
Economy is virtually confined to discovering and formulating the laws for
the production of such wealth. The basic concepts of Value, Cost, and Utility,
are subjected to this governing presupposition. Their primary significance
is a monetary one. The value of any stock of wealth is signified in money,
the cost of its production, the utility of its consumption, are registered
in monetary terms. The psychological researches which take place into processes
of thought and desire are not regarded as having significance on their own
account, but merely as means or instruments in the working of industrial
processes. The study of motives, interests, and ideas in the process of invention,
or in the organisation and operation of some productive work, treats these
thoughts and feelings not in their full bearing upon human life, its progress
or happiness, but in exclusive relation to the monetary end to which they
are directed.
§4. It is no concern of ours to criticise this attitude in the sense
of condemnation. But it is important to realise that no progress of psychological
analysis will enable economic science to supply a human valuation of industry
so long as all the human functions involved in economic processes are measured,
assessed, and valued, according to their bearing upon the production of a
'wealth' which has no directly assignable relation to human welfare, but
is estimated by a purely monetary measure. The net effect of this conception
of the economic system as an elaborate arrangement of material and spiritual
factors, contributing to the production and distribution of a stream of various
goods valued by a monetary standard, is to leave upon the mind the impress
of a distinctively mechanical apparatus. No one, for example, can read the
masterly work of Mr. Wicksteed3 without recognising that his delicate, elaborate
measurements and balances of motives and preferences, while involving and
implying actions that no one but man can perform, treat not only industry,
but humanity itself as a psychological mechanism.
This distinctively mechanical character is inherent in the structure of
an economic science based upon the subserviency of all human activities to
a purely quantitative conception of wealth, and a purely monetary standard
of value. This character of economic science is, of course, by no means disabling
for all purposes. On the contrary, it furnishes valid instruments for the
interpretation of many important groups of phenomena in the business world,
and for the solution of certain problems where purely quantitative standards
and methods are applicable. Indeed, the increasing devotion of economists
to problems of money, price, and other definitely monetary questions, may
be taken as a half-instinctive recognition of the real inadequacy of current
economics for any very useful solution of those more vital problems into
which closely human considerations enter as governing factors. As we proceed,
we shall realise in more detail the nature of the incapacity of current economics
to furnish any rules for settling issues that relate to wages, hours of labour,
State interference with private industry, private property, and other human
problems which are in first appearance 'economic.'
Three defects appear, then, to disqualify current economic science for the
work of human valuation. First, an exaggerated stress upon production, reflected
in the terminology and method of the science, with a corresponding neglect
of consumption. Secondly, a standard of values which has no consistent relation
to human welfare. Thirdly, a mechanical conception of the economic system,
due to the treatment of every human action as a means to the production of
non-humanly valued wealth.
§5. These warning-posts may help us to discover and to formulate an
intellectual procedure more suited to our needs. A human valuation of industry
will give equal attention to Production and Consumption, will express Cost
and Utility in terms of human effort and satisfaction, and will substitute
for the monetary standard of wealth a standard of human well-being. This
assertion of vital value as the standard and criterion is, of course, no
novelty. It has underlain all the more comprehensive criticisms of orthodox
political economy by moralists and social reformers. By far the most brilliant
and effective of these criticisms, that of John Ruskin, was expressly formulated
in terms of vital value. The defects which he found in the current economic
science were substantially the same as those which we have noted. His famous
declaration that 'There is no wealth but life,' and his insistence that all
concrete wealth or money income must be estimated in relation to the vital
cost of its production and the vital utility of its consumption, is the evidently
accurate standpoint for a human valuation of industry. This vital criterion
he brought to bear with great skill, alike upon the processes of production
and consumption, disposing the immense discrepancies between monetary costs
and human costs, monetary wealth and vital wealth. No one ever had a more
vivid and comprehensive view of the essentially organic nature of the harmony
of various productive activities needed for a wholesome life, and of the
related harmony of uses and satisfactions on the consumptive side. His mind
seized with incomparable force of vision the cardinal truth of human economics,
viz., that every piece of concrete wealth must be valued in terms of the
vital costs of its production and the vital uses of its consumption, and
his most effective assault upon current economic theory was based upon its
complete inadequacy to afford such information. But, though most of his later
writings were suffused with this conception of wealth and with the double
process of analysis which it involved, nowhere was that analysis systematically
applied. There were brilliant excursions into the domain of labour, distinguishing
the nobler and the baser sorts, those which are truly 'recreative' and those
which degrade and impoverish life. There was the famous distinction between
'wealth' and 'illth,' according to the essential qualities of the goods and
the sorts of persons into whose hands they pass for consumption. In the most
systematic of his works, Munera Pulveris, he, indeed, appears at the outset
to have his mind closely set upon the exact performance of the required analysis.
For, defining the scope of his work, he says, 'The essential work of the
political economist is to determine what are in reality useful or life-giving
things, and by what degrees and kind of labour they are attainable and distributable.'4
Then follows a clear and logical distinction between value and cost. 'Value
is the life-giving power of anything; cost the quantity of labour required
to produce it.' Had he proceeded to estimate 'Wealth' with equal regard to
its value and its labour-cost, the latter expressed in vital terms, the scientific
character of his analysis would have been preserved. But unfortunately he
allowed himself to be overweighted by a sense of value which stresses 'human
utility' of consumption, so that, while the 'utility' side of the equation
is worked out with admirable skill, the 'cost' or labour side is slighted,
and the organic relation between the two is lost sight of. The confusion
wrought in the minds of readers by the failure to find in any of his works
a full application of his principle has been responsible for an unjust disparagement
of the truly scientific service rendered by Ruskin towards the foundation
of social-economics. From a Pisgah height his mind's eye swept in quick penetrative
glances over the promised land, but he did not occupy it, or furnish any
clear survey.
§6. Our purpose here is in part to perform the task indicated by Ruskin,
viz. to apply to industry the vital standard of valuation, or at any rate
to improve the instruments of vital survey. But only, in part. For our task
is in scope less comprehensive than that to which Ruskin applied himself.
Though his teaching sprang originally from two related roots of emotional
valuation distinctively economic in their bearings, the love of the finer
sorts of human work called Art, and the reprobation of the degrading conditions
of the work most of his countrymen were called upon to do, it expanded into
a wider meaning of 'economy' which included not merely economic activities
and economic goods, but all sorts of vital activities and goods. A criticism
of current Political Economy, on the ground that it did not treat its accepted
subject-matter in a vital manner, thus developed into a constructive Political
Economy which not merely humanised the method but expanded the area of the
science and art, so as to make it in effect a comprehensive science and art
of human welfare.
Now it has always been an open question whether the makers of Political
Economy were intellectually justified in severing marketable from non-marketable
goods and services, and framing a separate science upon studies of the former.
That marketable goods are not always separable from non-marketable, and that
the economic activities of man are always inter-related with non-economic
activities, are accepted truths. Ruskin's perception of the intimacy of these
relations between commercial and non-commercial functions and products led
him to break down. the barriers set up by Economic Science, in the furtherance
of an art which should set up as its goal 'the multiplication of human life
at its highest standard.'
Now this enlargement may be quite legitimate. But it was evidently responsible
in large measure for the failure of Ruskin to drive home the criticism directed
against the current economic teaching. It was one thing to attack Political
Economists for failing to take due account of human values in their treatment
of processes relating to marketable wealth. It was, however, quite another
to insist that the barrier between Political Economy and other social sciences
and arts should be torn down, and that all phenomena of vital import should
become the objects of its study. Had Ruskin been able to keep to the narrower
scope, doubtless he would not have been Ruskin, but his attack on current
economic theory and practice would have been vastly more effective.
This brief excursion into Ruskin's work has been necessary, first in order
to make proper acknowledgement of the sound scientific instinct of this great
pioneer of social thought, and, secondly, to make it clear that, while accepting
his standard of valuation, we do not propose applying it outside the range
of economic phenomena in the ordinary acceptation of that term. While admitting
the overlapping and interaction of economic and other human functions, we
shall accept the ordinary definition of the boundaries of economic studies,
and shall seek to make our human survey and apply our human valuation within
these limits. The extra-economic implications which the unity of life will
disclose cannot, indeed, be ignored, but they will be treated as supplementary
to the main purpose, that of valuing the processes directly connected with
the getting and spending of money incomes.
§7. In setting up a vital standard of valuation, we are likely to be
met with the objections that life is too vague, too changing, too incomprehensible
for any standard, and that life is not valuable in itself but because of
certain qualities which it may possess. Our standard must be conceived in
terms of a life that is good or desirable. This consideration might evidently
lead us far afield. If we are to undertake a valuation of life as a preliminary
to valuing industry, it is likely that we may never approach the second undertaking.
The best escape from this predicament is to start from some generally accepted
concept which indicates, even if it does not express fully, the desirable
in life. Such a term I take to be 'organic welfare.' Though in form a mere
synonym for good life, it is by usage both more restricted and more precise.
It perhaps appears to thrust into the forefront of consideration the physical
basis of life. But the organic concept, when liberally interpreted and applied,
carries no such restrictive implication, and its distinctively biological
association should not rule it out from the work of wider valuation here
required. As a provisional statement of our standard of valuation, 'organic
welfare' has two advantages. In the first place, it supplies an admittedly
sound method of estimating those physical costs and utilities with which
the major part of industry and of its product is associated. Even in the
most advanced civilisation of to-day, economic processes are primarily physical
in the efforts they evoke and in the needs they satisfy; the expenditure
and recoupment of physical energy constitute the first and most prominent
aspect of industry. In tracing the origins of human industry, we shall find
this rooted in what appear as half-instinctive animal functions for the satisfaction
of 'organic' needs, individual or racial. The primitive direction of productive
effort is evidently 'organic.'
Again, the 'organic' point of view avoids two grave errors common to the
more mechanical treatment of an economic science which has subordinated man
to commercial wealth. It insists upon regarding the productive effort which
goes into any work of production and the satisfaction which proceeds from
the consumption of any product, not as a separate cost and a separate utility,
but in their total bearing upon the life of the producer or consumer. The
mechanical separatism of the ordinary economic view follows from a treatment
in which the labour bestowed on a product is only a 'cost' in the same sense
as the raw materials and tools employed in making it, all alike purchased
as separate commodities at a market in which they figure as fractions of
a Supply. Similarly with the ordinary economic treatment of consumption.
Each consumable is regarded as yielding a quality of utility or satisfaction
valued on its own account, whereas in reality its consumable value depends
upon the ways in which it affects the entire organic process of consumption.
Every speeding-up of a machine-process, or every reduction of the hours of
labour, affects for good or evil both the economic and the human efficiency
of the whole man: every rise or fall of remuneration for his labour similarly
reacts upon the standard of life. Nor is this all. Current economic science
has not only treated each cost and each utility as a separate item or unit
of economic power, it has treated each man as two men, producer and consumer.
The acquiescence in the economic tendency towards a constantly increasing
specialisation of man as producer, a constantly increasing generalisation
of man as consumer, is only intelligible upon the supposition that the arts
of production and consumption have no relation to one another.5 The standpoint
of organic welfare reduces to its natural limits this useful distinction
of producer and consumer, and enables us to trace the true interactions of
the two processes. In a word, it obliges us to value every act of production
or consumption with regard to its aggregate effect upon the life and character
of the agent.
§8. Finally, a 'social' interpretation of industry is not possible
except by treating society as an organic structure. Whether society be regarded
as an 'organism' with a life conceived as comprising and regulating the life
of its individuals, in the same manner as a biological organism that of its
cells, or as an 'organisation' contrived by individuals entirely for the
furtherance of their private ends, it must be treated as a vital structure
capable of working well or working ill. I say vital structure, not spiritual
structure, for I hold the tendency to interpret social organisation exclusively
in terms of ethical ends, and as existing simply for 'the realisation of
an ethical order,' to be unwarranted. The men who form or constitute a Society,
or who enter any sort of social organisation, enter body and soul, they carry
into it the inseparable character of the organic life, with all the physical
and spiritual activities and purposes it contains. Particular modes of social
organisation, as, for example, a Church, may be treated as directed primarily
to spiritual ends, though even there the separation is not finally valid.
But society in the broader sense, even though conceived not as an 'organism'
but merely as an organisation, must be regarded as existing for various sorts
of human purposes. For the impulses to form societies are rooted in broad
instincts of gregariousness and of sexual and racial feeling, which are best
described as organic, and, though these instincts become spiritualised and
rationalised with the progress of the human mind, they never cease to carry
a biological import.
Even though one takes, therefore, the extremely individualistic view of
Society, regarding it as nothing more than a set of arrangements for furthering
the life of individual men and women, entirely a means or instrument for
achieving the ends of 'personality,' our human valuation of industry will
require consideration of its reactions upon the structure and working of
these social arrangements.
But this organic treatment of Society is, of course, still more essential,
if we consider society not merely as a number of men and women with social
instincts and social aspects of their individual lives, but as a group-life
with a collective body, a collective consciousness and will, and capable
of realising a collective vital end. The disposition to convert sociology
into a study, on the one hand, of social feelings in the individual man,
on the other of social institutions that are only forms through which these
feelings express themselves, is to my mind a wholly inadequate conception
of the science of Society. The study of the social value of individual men
no more constitutes sociology than the study of cell life constitutes human
physiology. A recognition of the independent value of the good life of a
society is essential to any science or art of Society.
To a Greek or a Roman, the idea that the city existed merely for the production
of good citizens, and without an end or self of its own, would never have
seemed plausible. Nor to any Christian, familiar with the idea and the sentiment
of the Church as a society of religious men and women, would it occur that
such Society had no life or purpose other than that contained in its individual
members. Society must then be conceived, not as a set of social relations,
but as a collective organism, with life, will, purpose, meaning of its own,
as distinguished from the life, will, purpose, meaning, of the individual
members of it. To those who boggle at the extension of the biological term
'organism' to society, asking awkward questions as to the whereabouts of
the social sensorium, and the integument of a society, Or whether a political,
a religious, an industrial Society do not conflict and overlap, I would reply
that these difficulties are such as arise whenever an extension of boundaries
occurs in the intellectual world. The concept 'organism' as applied to the
life of animals and vegetables, is not wholly appropriate to describe the
life of a society, but it is more appropriate than any other concept, and
some concept must be applied. If some qualification is desired, no objection
can be raised against the term super-organism except its length. What is
necessary is that some term should be used to assist the mind in realising
clearly that all life proceeds by the cooperation of units working, not each
for its separate self, but for a whole, and attaining their separate well-being
in the proper functioning of that whole. As the structure of the organic
cell, the organ, and the organism illustrate this cooperative and composite
life, so with the larger groupings which we call societies. An animal organism
is a society of cells.
§9. So far as the difficulty arising from the narrowly biological use
of the term organism is concerned, that is rapidly disappearing before the
advance of psychology. For modern biology is coming more and more to realise
its early error in seeking to confine itself to the study of life as a merely
physical phenomenon. Biology and psychology are constantly drawing into closer
relations, with the result that a new science of psycho-biology is already
coming into being. In building, thus far, upon a foundation of organic concepts,
one is no longer properly exposed to the suspicion of ignoring or disparaging
the psychical phenomena which constitute man's spiritual nature.
As biology, thus treating the entire organic nature of man, becomes an individual
psycho-physics, so must sociology, treating the wider organic nature of man,
become a collective psychophysics. While then the respective importance of
the welfare of the individual and of society may still be difficult to define,
the admission of society as a psycho-physical structure, with human ends
of its own, will involve its proper recognition in the appraisement of every
sort of human value. Our task, that of devising a method of valuation of
industry, will evidently demand that economic processes shall be considered,
not only in their bearing upon individual lives, but in their bearing upon
the welfare of society. Indeed, it is difficult to see how any reasonable
person can confront the grave practical problems presented by the industrial
societies of to-day, such as those contained in individual, class, sex, national
differentiation of economic functions, without realising that the hypothesis
of humanity as itself a collective organism can alone furnish any hope of
their rational solution.
The significance of the organic conception in any human valuation of industrial
acts or products is evident. It requires us to value each act or product
both from the standpoint of the individual and of the society to which he
belongs, and it furnishes a harmony of the two areas of interest. The baffling
problems everywhere presented to thought by the apparent contradiction of
the unity and the diversity of nature, the whole and the parts, the general
and the particular, find their clearest practical solution in the fact and
consciousness of man's social nature, his recognition that in feeling and
in action he is both an individual and a member of a number of social groups,
expanding in a series of concentric circles from family and city to humanity,
and in dimmer outline to some larger cosmic organism.
For our economic valuation, the harmony of this narrower and wider treatment
of human nature is of profound and obvious importance. It will require us,
in considering the vital costs and satisfactions involved in the production
and consumption of goods, to have regard to their effects, not only upon
the individuals who produce and consume the goods, but upon the city, nation,
or other society to which they belong. Human welfare will be not merely the
welfare of human beings taken as an aggregate, but of society regarded as
an organic unity. The most delicate economic and spiritual issues of adjustment
will be found to relate to the provisions for harmonising the order and the
growth of the narrower and the wider organisms. While, then, biology has
in the past been too arrogant in pressing distinctively physical implications
of the term 'organism' into the dawning science of sociology, and in distorting
the true conception of social evolution by enforcing narrow interpretations
of selection and survival, this is no ground for refusing to utilise the
terminology which, better than any other, expresses the relations of parts
to wholes in every sort of living substance.
The contradictions of Production and Consumption, Cost and Utility, Physical
and Spiritual Welfare, Individual and Social Welfare, all find their likeliest
mode of reconcilement and of harmony in the treatment of society as an organism.
NOTES:
1. Labour employed in productive work of industry is usually
excluded from the category of national 'wealth,' though it is sometimes regarded
as 'personal wealth'.
But there is no sufficient reason for this exclusion. Any increase of the
efficiency of the labour of a nation is evidently as much an increase of
its total vendible resources as an increase in its instrumental capital would
be.
2. Exchange is simply an ordinary branch of production, mainly consisting
of wholesale and retail trade. Distribution has, of course, another and an
important economic signification, being applied to the laws determining the
apportionment of the product.
3. The Common-sense of Political Economy.
4. Munera Pulveris, §XL.
5. How potent a source of intellectual confusion this separation of producer
and consumer is, may be best illustrated from the commonly accepted treatment
of the theory of taxation, which regards 'consumers' as a different class
of beings from 'producers' for purposes of incidence of taxes.
NOTE. There are doubtless those who will remain dissatisfied with this insistence upon the extension of organism and the conception of the humanly desirable in terms of 'organic' welfare. They would insist that the conscious personality of an individual or of a society transcends organism, as the latter does mechanism, and that our standard and measure of welfare should be expressed in psychical terms of personality. This point of view has recently been concisely and powerfully restated by Dr. Haldane (Mechanism, Life and Personality). But though there is much to say for treating personality as the intrinsic quality of our humanist standard, I decided against the course on a balance of intellectual expediency, preferring to retain the clearness and force of the organic concept while spiritualising it to meet the requirements of ascending life.
CHAPTER II: THE HUMAN ORIGINS OF
INDUSTRY
§1. Although it is no part of my purpose to endeavour
to set forth the facts and laws of the historical evolution of modern industry,
it will be useful to make some brief allusion to the origins of industry
and property, so as to give concrete meaning to the stress laid upon organic
processes in our interpretation. For just in proportion as it is realised
that industry has all its earliest roots in the primary organic needs of
man, will assent more easily be given to the proposal to adhere to the organic
conception of welfare in valuing modern economic processes.
It is not easy to ascertain where the activities which we term industrial
first emerge in the evolution of organic life. Every organism selects, appropriates,
and assimilates matter from its environment, in order to provide for growth
or waste of tissue and energy given out in the general course of its vital
processes, including the activities of procuring food, protection against
organic or inorganic dangers, and the generation, rearing, and protection
of offspring. Nutrition and function are the terms usually applied to describe
the primary balance of the vital processes of intaking and outputting energy.
The organism feeds itself in order to work. It seems at first as if we had
here laid down in the origins of organic life a natural economy of production
and consumption. But do the organic processes of feeding, choosing, appropriating,
and assimilating food, constitute consumption, and do the other activities
for which food is utilised constitute production? Reflection will show that
there is very little intellectual service in pressing sharply this distinction.
The active life of an organism consists in a round of nutritive, protective,
generative processes, each of which, from the standpoint of individual and
species, may be regarded alike as productive and consumptive. A plant drives
its suckers into the soil in search of the foods it needs, disposes its leaves
to utilise the light and air or for protection against the wind, assimilates
its organic food by the use of its stock of chlorophyl, distributes it throughout
its system for maintenance and growth, and directs that growth so as to safeguard
its own existence and to provide itself with favourable opportunities of
fertilisation by insect or other agencies. If due account be taken both of
the cellular life within the individual and of the specific life of this
plant organism, the whole of the processes or activities appears to be nutritive,
each act of nutrition being associated with some other function in the evolution
of the cell, the organism, the species. It would be as plausible to assert
that every other function, protective, generative, or other, was undertaken
for the nutrition of the individual or the species, as to assert the opposite.
But, without entering into the delicate metaphysics of this question, we
may confidently affirm that in this elementary organic life nutrition and
function cannot be regarded as mutually exclusive processes, while the economic
contrasts of production and consumption, work and enjoyment, cost and utility,
have no clear application. If we approach a stage nearer to human life, we
begin to find, in the life of either the lower or higher animals, some organic
activities to which the term industry appears applicable. The long, arduous,
complex and painful output of energy, consciously put forth by many animals
in the search for food, sometimes in the storage of food, in the provision
of shelter, in some instances in the use of tools or weapons, in processes
of cooperation and division of labour for migration, protection, or combat,
certainly approaches what we recognise as industry. It involves a painstaking
interference with the material environment for the purposive attainment of
some distinct object consciously regarded as desirable, which is of the essence
of industry. It may, however, be objected that such processes, though resembling
human industry in the intricacy and technical skill involved, are not really
purposive in the rational sense, but are merely instinctive, and that, as
such, they ought to be distinguished from the rational conduct of human industry.
Thus, it is contended that, though the efforts given out by many animals
in procuring food, protection against enemies, or provision of shelter, formally
correspond with familiar processes of human industry, the direction of instinct
makes the application of this term improper. But, as we proceed further into
our psychological analysis of human work, we shall find so large an element
of admitted instinct in many forms of it as to preclude us from admitting
that 'rational' direction is essential to industry. It is, therefore, permissible
for us to give a provisional recognition to such animal activities as containing
some, at any rate, of the essential characteristics of 'work' or 'industry'.
Indeed, the evident resemblance of these regular activities of animals in
seeking food, shelter and protection, to the activities of primitive man
applied to the same definitely organic satisfactions, would preclude us from
denying to the lower animals what we must admit in the case of men. For,
even in primitive men, possessing a certain use of tools and weapons, and
a higher degree of cunning in dealing with their environment, the drive and
direction of organic instincts and impulses, as distinguished from reflection
and reason, appear to be hardly less dominant than in their animal kindred.
Unless we arbitrarily reserve the concepts work and industry for a higher
stage of social evolution, in which some measure of settled life with tribal
and personal property and calculated provision for future wants have emerged,
it will be well to seek the roots of the elaborated industrial system which
we wish to interpret in these rudimentary and mainly instinctive activities
of animals and savage men.
§2. In examining these organic activities lying at the basis of human
industry, we shall light at the outset upon one fact of extreme significance,
viz. that to each of these organically useful efforts Nature has attached
some definite physical, or psycho-physical, enjoyment. Hunting, fighting,
mating, the care and protection of the young, indeed all actions which possess
what is called 'survival value' or biological utility, are endowed with a
pleasure bonus as a bribe for their performance. Nature endows most organically
useful efforts with concurrent enjoyment.
But, though in these 'organic functions' many animals give out a great deal
of 'laborious' effort, commingled with elements of play or of incipient art,
as in the dancing, singing and decorative operations of birds, to none of
them is the word 'industry' fully applicable. We do not seem to enter the
definitely economic sphere until we find animals sufficiently reasonable
to interfere in a conscious way with their environment, for tolerably distant
ends. For, though much industrial production and consumption will continue
to be either instinctive or automatic in their operation, a growing element
of conscious purpose will become essential to the ordered conduct of all
industrial processes. The conscious conception of more distant ends and the
growing willingness to make present sacrifices for their attainment are the
plainest badges of this industrial progress. When a being is aware of these
purposes he has entered a rational economy.
As this more rational economy proceeds, the marks which distinguish it from
a purely instinctive organic economy become evident. The instinctive economy
allows little scope for individuality of life, the dominant drive of its
'implicit' purpose is specific, i.e., subserving the maintenance and evolution
of the species. The spirit of the hive in bee-life is the fullest expression
of this subservience of the individual life to the corporate life and of
the present generation to the series of generations constituting the specific
life. But everywhere the dominion of instinct implies the absorption of the
individual life in promoting the ends of the species: successful parenthood
is the primary work of the individual.
It might almost be said that the dawn of reason is the dawn of selfishness.
For rational economy involves a conscious realisation of the individual self,
with ends of its own to be secured and with opportunities for securing them.
The earliest conception of this separate self and its ends will naturally
tend to be in terms of merely or mainly physical satisfaction. Thus the displacement
of the instinctive by the rational economy is evidently a critical era, attended
with grave risks due to the tendency towards an over-assertion of the individual
self and a consequent weakening of the forces making for specific life. Man,
the newly conscious individual, may perversely choose to squander organic
resources 'intended' by nature for the race upon his own personal pleasures
and needs. He may refuse to make as a matter of rational choice those personal
efforts and sacrifices for family and race which no animal, subject to the
drive of instinct, is able to 'think' of refusing. Such may be an effect
of the release from the life of organic instincts. The increasing supply
of foods and other sources of physical satisfaction he may apply to build
up for himself a life of super-brutal hedonism.1 For, when reason first begins
to assert supremacy, it is apt to become thrall to the purely animal self.
Only as this animal self becomes spiritualised and socialised, does the social
race-life reassert its sway upon the higher plane of human consciousness.
§3. But it is of importance to realise that a first effect of reason,
operating to direct the purposive activities, is to liberate the 'self' from
the dominion of the specific life, and to enable it to seek and obtain separate
personal satisfactions. For with this power comes the fact and the sense
of 'personal property' which play so large a part in industry.
Early industry and early property are largely directed by the requirements
of this dawning sense of personality. Though the origins of industry are
doubtless found in the promptings of organic utility, they are not of a narrowly
'utilitarian' character. We do not find the earliest industries of man closely
confined to the satisfaction of what might seem the most urgent of his organic
needs, food, shelter, protection against enemies. The elements of play and
ornament are so prevalent in early industries as to suggest the theory, which
some anthropologists press far, that adornment for personal glory is the
dominant origin of industry and property. So, for example, Bücher2 contends
that the earliest really industrial activities were a painting and tatooing
of the body, and a manufacture of clothing and of other personal apparatus
for purely ornamental purposes.
Even the taming of domestic animals was, he held, first undertaken for amusement
or for the worship of the gods. The strong attraction of most savage or backward
peoples in our day towards articles of ornament and play which afford expression
to naive personal pride, appears to support this view. Primitive man certainly
does not evolve towards industrial civilisation by a logically sane economy
of satisfying first his most vitally important material needs, and then building
on this foundation a superstructure of conveniences, comforts and luxuries,
with the various industries appertaining thereto. This economic man is nowhere
found. Actual man, as many anthropologists depict him, appears to begin with
the luxuries and dispenses with the conveniences.
This non-utilitarian view of the origins of industry has, however, been
driven to excess. There remains a large element of truth in the proverb 'Necessity
is the mother of invention.' The earliest weapons and tools, adapted from
sticks and stones and other raw material, were probably forced on the dawning
intelligence of man by the hard facts of his struggle with hostile nature
and his search for food. Fighting, hunting, mating, were presumably his first
pursuits and the early arts or industries, at any rate on the male side,
would be subsidiary to these pursuits. Any organised process or handling
of matter which would make him a better fighter, hunter, suitor, would be
likely to emerge as a craft or industry. This explains the apparent blend
of utilitarian and non-utilitarian origins. In point of fact, most of the
so-called ornamental activities and products have their evident biological
uses. They are not mere playthings. The adornment of the human body, the
use of tatoos and masks, drums and gongs and other play-products, are partly,
no doubt, for mere glory of self-assertion, itself an instinctive craving,
but also for courtship, for recognition and for frightening enemies. While,
then, it remains true that the sportive and artistic impulses are conspicuous
in the early crafts, it is a mistake to disparage the organic utility of
these processes. After man has made provision for the present necessities
of the body, his superfluous energy naturally tends, either to preparatory
play, the practice or imitation of biologically useful actions, or else to
explorative, constructive, and decorative work in handling such materials
as present themselves. This curiosity about his surroundings, and the instinctive
desire to construct and arrange them for his convenience, or for the dawning
aesthetic satisfaction of his senses, or to impress the female of his race,
these instincts undeniably coalesce with the drive of physical necessity
to force man to apply his mind to the discovery and practice of the early
arts and crafts.
But, though these distinctively male modes of manipulating the environment
thus possess a utilitarian aspect, they do not furnish the beginnings of
the chief industries which figure in civilised life. The beginnings of manufacture
and of agriculture, as regular occupations, are commonly ascribed to women
and to slaves. Those who conceive of the earliest human societies as matriarchal
or gynaecocentric, the women forming fixed centres of order in the home and
village, owning the children and the property attached to the home, regard
women both as the inventors and the practitioners of the early handicrafts,
including the cultivation of the soil. The beginnings of the arts of pottery,
basket-making, building, clothes-making, as well as digging, planting, milling
and other processes of preparing food, were doubtless women's work in the
first instance, though they were probably raised to the position of regular
industries when slavery became common. It is, however, noteworthy that, even
in those early handicrafts devoted to the most practical needs of life, the
decorative instinct generally finds expression. Not only the weapons of the
men, but the pots and pans and other domestic utensils of the women, carry
carvings or mouldings, which testify to the play or art impulses. Leisure
and pleasure thus appear as ingredients in the earliest industries.
To whatever source, then, we trace the origins of industry, to the use of
weapons, snares and other male apparatus for the fight and hunt, to the instincts
of play, imitation and adornment as modes of self-expression and of pride,
or to the more distinctively utilitarian work of women and of slaves around
the home, we find play or pleasure mingled with the work.
This profoundly interesting truth is attested by the long surviving presence
of the song and other rhythmic activities in many forms of associated labour,
as well as in the dancing which in primitive societies was an almost invariable
accompaniment of all important enterprises, war, hunting and harvesting,
and which still survives among us in the Harvest home. Though in slave industries
this lighter element doubtless dwindled very low, it seldom died out entirely,
as the song of the galley-rowers, or of the Southern negroes in the cotton-fields,
testifies. Where the handicrafts throve among free men in Europe, everywhere
the motives of play, personal pride and prowess, find liberal expression
in industry.
§4. This slight and necessarily speculative sketch of the origin of
industry is designed to enforce two facts. In the first place, we can trace
in every rudimentary industry the promptings of vital utility, laying the
foundations of an economy of efforts and satisfactions which furthers the
organic development of the individual and the race. In the second place,
we everywhere find what we call distinctively economic motives and activities
almost inextricably intertwined, or even fused, with other motives and activities,
sportive, artistic, religious, social and political. To trace the history
of the process by which in modern civilisation economic or industrial activities
have separated themselves from other activities, assuming more and more dominance,
until the industrial System and the Business Man have become the most potent
facts of life, would lie beyond our scope. Nor is it at all necessary. What
is important for us to realise, however, is that this process of industrialisation,
through which the civilised peoples have been passing, is beyond all question
the most powerful instrument of education. It appears to have done more to
rationalise and to socialise men than all the higher and more spiritual institutions
of man, so far as such comparisons are possible. It has rationalised man
chiefly by compelling him to exercise foresight and forethought, to subdue
his will and train his active faculties to the performance of long and intrinsically
disagreeable tasks, in order to realise some more and more distant object
of desire, and by obliging him to recognise the rigorous laws of causation
in his calculations. It has socialised him by weaving an ever more elaborate
tissue of common interests between him and a growing number of his fellow
men, and by compelling him to engage in closer co-operation with them for
the attainment of his ends. Though this socialisation is far more advanced
in objective fact than in thought and feeling, it remains true that the direct
and indirect association of larger and more various bodies or men in modern
industry and commerce is the first condition and the strongest stimulus to
the expansion and intensification of the social will.
It is this orderly rational system of industry, employing, as it does, the
organic powers of man for the satisfaction of his organic needs, that we
seek to submit to valuation.
The immense variety and complexity of the arts and crafts of which such
a system of human industry consists, the long interval of time which often
intervenes between acts of production and of consumption, the differences
of personality between those who perform the efforts of production and those
who utilise or enjoy the fruits of those efforts in consumption, immensely
remote as they appear from the simple organic economy of primitive man, do
not escape an ultimate dependence upon organic laws and conditions. A human
valuation, therefore, must insist upon expressing them in terms of organic
welfare, individual and social. As human activities and enjoyments ascend
in the process we term civilisation, we shall expect to find this organic
life becoming more psychical, in the sense that their modes are more 'reasonable'
and the emotions that attach to them are more spiritual, i.e., less directly
driven by animal instincts. So too we shall expect industrial progress to
contribute to a growing adjustment between the individual and the social
economy, restoring under the form of reasonable social service to the more
highly individualised members of a modern society an increasing measure of
that subservience to the organic welfare of mankind which instinct was able
to secure upon a lower plane of conscious life.
NOTES:
1. 'Ein wenig besser würd er leben
Hättst du ihm nicht den Schein des Himmels Licht gegeben
Er nennt's Vernunft und braucht's allein
Nur thierischer als jedes Thier zu sein.'
2. Industrial Evolution (Bell & Co.).
CHAPTER III: REAL INCOME: COST AND UTILITY
§1. Approaching on its concrete side the economic system
the human values of which we seek to ascertain, we find it to consist in
a series of productive processes bringing various goods and services into
marketable shape, accompanied by a series of consumptive processes in which
these goods and services are used, wasted, or otherwise disposed of by those
who buy them for personal uses. The former set of processes, as we have recognised,
occupy a place of so much greater prominence and publicity as virtually to
absorb the science of industry or 'economics', leaving to the processes of
consumption an obscure and entirely subordinate position. Our organic or
human valuation starts with a protest against this assumption of inequality
in the arts of production and consumption. Its interpretation of economic
processes will be disposed to lay as much stress upon the history of the
various commodities after they leave the shop-counter and pass into the possession
of consumers as before. The human good and evil associated with economic
'wealth' must, viewed from the organic standpoint, depend as much upon the
nature of its consumption as upon the nature of its production.
This consideration will determine our method of applying the human standard
of values. Accepting at the outset the convenient distinction between the
processes of production and consumption, we shall approach the economic system
at the point where the two processes meet, that is to say where wealth emerges
from the productive processes as income, in order to pass as such into the
possession of persons entitled to consume it.
To make the enquiry simpler and more easily intelligible, we will ignore
for the present all the extra-national or cosmopolitan conditions of modern
industry, and assume that we are dealing with a closed national system producing,
distributing, and consuming the two thousand million pounds' worth of goods
and services roughly estimated to constitute the current annual income of
the British nation.
§2. Now the habit of regarding wealth and income in terms of money
is so deep-seated and persistent as to make it difficult for ordinary 'business'
men to realise these words in any other than a monetary sense. The ordinary
mind has to break through a certain barrier of thought and feeling in order
even to present to itself the significance of 'real' wages or 'real' income,
as distinguished from money wages and money income. This dominion of the
monetary standard is illustrated by the almost instinctive thrill of elation
that is felt when we are informed that the income of the nation has risen
from about £1,200,000,000 in 1870 to £2,000,000,000 in 1912.1 So
accustomed are we to regard money as the measure of the desirable, that we
feel that this rise of money income must imply a corresponding rise in national
welfare. It requires some effort of mind to realise even the two obviously
important factors of the increase of population and the shift of prices,
which, when once realised, so evidently affect the bearing of the money income
upon the national welfare. Year after year trade reports and other official
documents, in comparing the relative economic position of the various nations
or the fluctuations of trade within a single nation, habitually encourage
this misleading influence of the financial standard by publishing crude,
uncorrected monetary values as if they were indicative of industrial facts,
and statesmen take such figures as valid evidence on which to base a policy.
As regards the particular object of our enquiry, this obsession of the general
ind by the monetary standard makes it impossible for us even to assume that
all our leaders attach a clear and consistent meaning to the term 'real'
income. It is not quite easy at first to grasp the central and essential
fact that every receipt of any sort of income, whether as wages, rent, salary,
interest, profit, fees or otherwise, involves the coming into being of a
bit of 'real' income in the shape of some material goods or some saleable
service.2 This fact once grasped, however, it becomes evident that the £2,000,000,000,
said to be the nation's income, is merely the monetary representative of
goods and services which are the net product of the economic activity of
the year, the quantity of wealth produced over and above that which has gone
to maintain the existing material fabric of industry. The aggregate amount
of 'wealth produced' is, of course, considerably greater, for a large quantity
of the productive power must continually be employed in repairing the wear
and tear sustained by the material instruments of production, the land, buildings,
machinery and tools and other forms of 'fixed' capital, and in replacing
the raw materials and other forms of 'circulating' capital which have passed
out of the productive processes into consumable goods. The net 'real' income
consists of the goods and services produced over and above this provision
for the maintenance of the material structure of the system.
There is, however, an important qualification to this mode of reckoning
the net real income of the nation which needs mention. While the portion
of the current product which goes to replace this wear and tear of land and
capital is not included in the goods and services represented by the £2,000,000,000
and classed as real net income, the wear and tear or maintenance fund of
labour is included in it. When consideration is taken of the distribution
of what is often termed the national dividend between the respective owners
of the factors of production, this anomaly is seldom borne in mind. In estimating
the income of labour the replacement fund is counted; in estimating the income
of land and capital it is not counted. But, illogical as this discrimination
is, usage has so universally accepted it that it will be best for us in a
work not chiefly concerned with the problems of objective distribution to
give a provisional acceptance to it.
The real net income, or national dividend, corresponding to the £2,000,000,000,
consists of the goods and services at the disposal of the recipients of this
money income. By applying each sovereign as they received it in rent, wages,
interest, profit, fees, etc., to purchase consumable goods or services, they
might consume the whole of it during the current year. In that event, though
provision would have been made for the bare upkeep of capital, no provision
would have been made for its enlargement or improvement with a view to the
future increase of production. In point of fact, that provision is made by
applying a considerable portion of the net money income, say £300,000,000,
to demand, not consumable goods or services, but more instruments and materials
of production. As this process goes on continuously, it implies that some
3/20 of the total industrial activity of the nation is engaged in making
not consumable but new capital goods.3 This saving process has an important
psychology of its own to which we shall give some attention later on. At
present it need only be considered as a reduction in the net income of consumable
goods and services at the disposal of a progressive community for current
use and enjoyment. This wealth, actually available for current use, the food,
clothing, shelter and other domestic necessaries and conveniences, the travel,
information, education, recreation, professional, official and domestic services,
the various sorts of material and non-material comforts and luxuries, constituting
the current net real income of consumer's goods, is the primary object of
our valuation. The new machines, tools, buildings, materials and other forms
of capital, expressing the £300,000,000 of savings, though entering
our analysis upon the costs side equally with goods used for immediate consumption,
do not figure directly on the consumption side, but only indirectly in the
future consumables which they assist to produce.
§3. But as regards the application of our analysis, it makes no real
difference whether we take the narrower connotation of the national dividend
which includes only consumable goods, or the broader one which includes savings.
It will no doubt easily be admitted that a merely pecuniary statement of
the 'value' of this dividend conveys no reliable information as to the human
or vital welfare it involves. Making due allowance for all temporal or local
variations of price, the statement that the national income has doubled in
the last century, or even that the income per head of the population has
doubled, affords no positive proof that any increase has been made in the
national welfare, much less how much increase. Unless, however, we adopt
an attitude of general scepticism towards the economic structure of 'civilisation',
we may admit, with Professor Pigou,4 a presumption that a growth of the national
dividend faster than the growth of population implies some increase of welfare.
But even that presumption must be qualified by the reflection that it really
rests upon a view of marketable wealth which has exclusive regard to its
supposed utility in consumption without any corresponding consideration of
the cost of its production. A pecuniary statement of the national dividend
which contained no information as to the nature of the goods and services
comprising it, may be repudiated out of hand as useless for our purpose.
For upon such a statement £1 'worth' of 'trade gin' has precisely the
same value as £1 'worth' of 'best books' or of wholesome bread, £1
worth of handmade lace sweated out of peasant women at the cost of their
eyesight has precisely the same weight in the money income of the nation
as £1 worth of carpentry or of medical attendance.
§4. If we are to estimate the human value of a given national income,
it is evident that we must secure answers to three questions. We must first
learn what the concrete goods and services are which constitute the 'real'
income, and then we must trace these concrete goods and services backwards
through the processes of their production and forward through the processes
of their consumption, in order to learn the human costs and utilities which
attach to each. The amount of human wealth or 'illth' which each of these
concrete 'goods' contains has, strictly speaking, no assignable relation
to the money ticket put upon it when it is sold. That sum of human value
can only be worked out in terms of the actual processes of production and
consumption through which the 'goods' pass. Some students of current political
economy may perhaps be disposed to cavil at this criticism, insisting that
on the average things must be sold in proportion to the painful or otherwise
distasteful efforts of producing them, or in proportion to the pleasant or
otherwise serviceable modes of their consumption. On the average, they will
contend, a rational calculus of pleasure and pain underlies the operations
of the economic system. This position, however, I claim to undermine by showing,
first that this 'rational' calculus rests upon assumptions of free choice
and competition which are unwarrantable, and secondly, that this rational
calculus of current pleasures and pains, so far as it is operative, is not
a valid criterion of human welfare as conceived in the terms of organic welfare.
Our task, it must be realised, is not that of reducing monetary values, or
the concrete goods to which they refer, to terms of average current desirability,
but to terms of that desirability corrected so as to conform to the best-approved
standard of the desirable. In a word, the defects of average current estimates
and desires, in part causes, in part effects of a defective industrial economy,
must themselves be valued and discounted in terms of our human ideals of
individual and social life.
§5. With this organic standard, the nature and validity of which will
become clearer with use, let us set about our task of finding methods for
assessing in terms of human value the stocks of concrete goods and services
which are the real net income of the nation. The human, as distinguished
from the money and the 'real' dividend, will consist of the amount of vital
or organic welfare conveyed in the producing and consuming processes for
which this concrete income stands. What we require then is to apply some
sort of calculus of human cost and human utility to these processes. Now
we are confronted at the outset by the position of an economic science which
conceives production entirely in terms of 'cost', consumption entirely in
terms of 'utility'. Indeed, the economic doctrine of value hinges almost
entirely upon this antithesis. For it is mainly owing to its 'costs' that
a limit of scarcity is set on each 'supply,' while it is the 'utility' accorded
by consumers that gives economic force and meaning to 'demand'. Hence production
is conceived as a process which rolls up costs into commodities, consumption
as a process that unrolls them into utilities.
Now an organic interpretation of industry cannot accept this mode of conceiving
the productive and consumptive functions. Considerations of the organic origins
of industry lend no support to the assumption that production is all 'cost'
and no 'utility,' consumption all 'utility' and no 'cost'. On the contrary,
in our human analysis of economic processes we shall rather expect to find
costs and utilities, alike in their sense of pains and pleasures and of organic
losses and organic gains, commingled in various degrees in all productive
and consumptive processes.
Our aim will be to set out, as well as we can, reliable rules for examining
the productive and consumptive history of the various sorts of concrete marketable
goods so as to discover the human elements of cost and utility contained
in each, and by a computation of these positives and negatives to reach some
estimate of the aggregate human value contained in the several sorts of commodities
which form the concrete income of the nation and in this income as a whole.
Only by some such process is it possible to reach a knowledge of the real
wealth of nations.
We may state the problem provisionally in three questions:
1. What are the concrete goods and services which constitute the real national
income?
2. How are these goods produced?
3. How are they consumed?
But in truth the consideration of the so-called 'concrete' nature of these
goods is as irrelevant to our analysis as that of the money ticket placed
on them. For from the standpoint of welfare these goods are nothing but the
activities of those who produce and consume them, or, if it be preferred,
the human processes of production and consumption. The human meaning of any
given stock of wheat in our national supply will consist of the efforts of
body and mind, the thought and desire and directed skill, put into the several
processes of preparing the soil, sowing, tending, reaping and marketing the
wheat, undergone by the farmer in Manitoba or in Norfolk, the merchant, shipper,
miller, baker who convey it from the farm and convert it into bread, and
finally the activities of mastication, digestion and assimilation with the
accompanying satisfaction as it passes into the physical system of the consumer.
And so with every other sort of concrete marketable goods or services. From
the standpoint of human value, they are wholly resolvable into the physical
and mental activities and feelings of the human beings who produce and consume
them. It is the balance of the desirable over the undesirable in these several
activities and feelings that constitutes the human value of any stock of
marketable goods. The standard of desirability will be the conception of
the organic wellbeing of the society to which the individuals whose activities
and feelings are concerned belong.
Or the several stages of interpretation may be expressed as follows. A given
money income must first be resolved into the concrete goods which it expresses:
those goods must then be resolved into the various efforts of production
and satisfactions of consumption, estimated according to the current ideas
and desires of the individuals who experience them. these current individual
estates of the desirable must be adjusted by reference to an ideal standard
of the socially desirable. The extent of this latter process of adjustment
will, of course, depend upon how far the actual current ideas and feelings
of individuals are kept in essential harmony with the true standard of social
well-being by the natural evolution of an organic society.
§6. Our task in seeking to devise a method for the human interpretation
or valuation of industry consists then in confronting the goods which form
the net consumable income of the community, and in finding answers to the
two related questions:
What are the net human costs involved in their production?
What are the net human utilities involved in their consumption?
A simple sum in subtraction should then give us the result we seek -- so
far as any such quantitative calculus is valid and feasible.5
Now though economists, of course, are well aware that many of the processes
of production contain elements of pleasure and utility to the producers,
while some of the processes of consumption contain elements of pain and cost
to the consumers, they have, rightly from their standpoint, ignored these
qualifications in their general formulae, and have represented 'goods' from
the producer's side as consisting entirely of accumulated costs, while from
the consumer's side they constitute pure utility. Though our brief preliminary
survey of the origins of industry indicates that no such sharp distinction
between production and consumption can ultimately be maintained, and that
throughout the whole continuous career of goods from cradle to grave the
activities bestowed on them are composites of pleasure and pain, cost and
utility, organic gain and organic loss, socially desirable and socially undesirable,
it will be expedient to take our start from the commonly-accepted economic
position, and to give separate consideration to the human values underlying
processes of production on the one hand, processes of consumption on the
other.
The general lines along which such an investigation must proceed are unmistakable.
In order to express business 'costs' in terms of human cost, we require
to know three things:
1. The quality and kind of the various human efforts involved in the business
'cost'.
2. The capacities of the human beings who give out these efforts.
3. The distribution of the effort among those who give it out.
Corresponding strictly to this analysis of 'costs' of Production will be
the analysis of 'utility' of Consumption. There we shall want to know:
1. The quality and kind of the satisfaction or utility yielded by the 'economic
utility' that is sold to consumers.
2. The capacities of the consumers who get this 'economic utility'.
3. The distribution of the economic utility among the consuming public.
The humanist criticism of industry is condensed into this analysis. The
humanist requires that the effort expended on any sort of production shall
be such as to contain a minimum of painful or injurious or otherwise undesirable
activity. His complaint is that industry, as actually organised and operated
under a system which treats all forms of productive human effort as marketable
goods, does not secure this human economy. The humanist requires that the
persons set to give out undesirable effort, 'human cost', shall be those
best capable of sustaining this loss. Weak women or children, for example,
shall not be set to do work heavy or dangerous in its incidence, when strong
men are available who could do it easily and safely. The humanist requires
that undesirable or humanly costly work shall not merely be confined to classes
of persons capable of performing it most easily and safely, but that the
distribution of such effort shall, as regards length of time and intensity
of pace, be such as to reduce the human cost per unit of product to a minimum.
The humanist criticism of industry upon the Costs side consists. pointing
out that there is no adequately reliable or normal in tendency for the business
economy of costs to conform to this three-fold human economy.
Similarly, turning to the consumption side, the humanist points out: 1.
That many of the 'goods' sold to consumers are inherently destitute of human
utility, or, worse, are repositories of disutility; and that money values
is no true key to human utility. 2. That the amount of utility or welfare
to be got out of any goods depends upon the character, the natural or acquired
capacity, of the particular consumers or classes of consumers into whose
hands they fall. 3. That a true economy of consumption, therefore, involves
their distribution among consumers in proportion to their capacity to use
them for purposes of welfare. It is contended that the went working of our
industrial system, on its distributive and consumptive side, makes no reliable
provision for securing that the maximum of human utility shall attach to
the consumption of the national income.
§7. To test in detail the exact validity of this humanist criticism
would require us to examine the costs and the utility, economic and human,
represented in each item of all the various supplies of goods and services
which constitute the national income. This is manifestly impracticable. Nor
is it necessary for our purpose, which is to establish a sound method of
valuation rather than to endeavour to form an exact computation of the values
it discloses. With this object in view it will be sufficient to direct our
enquiry to the accepted classes or grades of human activities figuring as
economic costs, and the corresponding classes or grades of human utilities
affected by consumption.
Let us begin with the 'costs' side.
Accepting the general categories of costs of production, as rent, interest
and profit, salaries and fees, wages (for all other business 'costs', as
for instance, cost of material, machinery, fuel, can be resolved into these),
let us consider what is the nature of the human costs for which these payments
are made, in the chief orders of industry, and how these human costs are
related to the economic costs.
At the outset of this enquiry, however, it will be convenient to eliminate
one economic 'cost' of considerable magnitude from our consideration, viz.
economic rent. For, although Nature, or the earth, may in a study of objective
industry be regarded as a productive agent, yielding materials, physical
energy, and special utilities, this work involves no human effort, and therefore
is represented by no human cost. This statement, of course, by no means implies
that human foresight and activities play no part in the effective supply
of land and other natural resources. Such resources, hitherto existing outside
the industrial system, are continually being discovered, brought within reach
and developed by human skill and effort, while new or improved uses are continually
being obtained from natural resources already within reach. In such processes
of discovery and development much capital, ability, and labour, are constantly
engaged, the costs of which must be defrayed. Moreover, in certain uses of
land for agricultural and other purposes, provision must be made for wear
and tear or replacement. But all such costs or expenses are really payments
for the capital and labour employed On this work of development or upkeep.
They are not payments for the use of natural resources. They are not economic
rent. That business cost has no human cost attached to it. From the standpoint
of the manager of a particular business the payment of rent is necessary
to enable him to get the use of the land or other natural agent he requires.
Where private property in land exists, the payment of such rent is legally
necessary. Where the maintenance of such legal rights has enabled land values
to exchange freely with other forms of wealth, a moral expediency may be
claimed for the payment of rent. But no human cost corresponds to it. In
the organic interpretation of industry, it figures as waste. While, therefore,
due account must be taken of this division of wealth or human utilities in
any final survey of our social economy, it may be dismissed from our immediate
consideration.
§ 8. In order to get a clear understanding of industry regarded from
the standpoint of human costs, it will be convenient to fasten our attention
first on the structure and working of the single businesses which are the
productive units of the system. For the business is a closer, more compact,
and more intelligible structure than the trades, markets, or other larger
divisions of industry. We shall, therefore, endeavour to analyse the combinations
of human effort as they are expressed in the various types of business, so
as to discover and to estimate the human costs that are involved.
Though the term Business, as we use it here, must be extended so as to include
all sorts of centres of economic activity not commonly included, such as
a school, a doctor's practice, a theatre, it will be best to take for our
leading case an ordinary manufacturing business. Here are gathered into close
cooperation a large number of human and non-human factors of production.
The centre of the little system is the manager, employer, or director, whose
ideas, desires, and purposes govern and regulate the movements of the various
forms of capital and labour. This man has got together on his premises a
quantity of machinery and other plant which express a complicated growth
of invention running far back into the past and derived from great numbers
of human brains. These machines and plant embodying these inventive ideas
were made by past labour of various kinds. This manager or director, in planting
the Business, chose what seemed the best apparatus for the purposes he had
in mind. He induced a number of investors or capitalists to lend the money
which enabled him to obtain this apparatus, and to hire the various sorts
of labour power required to operate it. This labour power itself is the product
of the energies of man in the past, the direct ancestry of the labourers
who produced the beings that give forth the labour-power, the past generations
of men whose growing knowledge and practice yielded the training and the
habits of industry and of cooperation essential for the productiveness of
labour in the modern arts of industry.
Here are evidently many different sorts of human effort, some of them physical,
others intellectual, some pleasurable, others painful, some beneficial, others
detrimental, to the individuals who give out the effort, or to society.
All of these productive energies rank in Political Economy as 'costs', and
as such are remunerated out of the product. Which of these are human 'costs'
and in what sense and what degree? Such are the questions that lie immediately
before us, if we are seeking to reduce our £2,000,000,000 to terms of
human well-being.
§9. In this conversion of economic into human costs we can best begin
by considering the fundamental distinction between creation and imitation,
enforced with so much penetration by the French sociologist, M. Tarde. It
is not in its primary significance a doctrine of costs, but a division of
productive energy into two classes. All social progress, indeed all social
changes upwards or downwards, according to this theory, comes about in the
following way. Some unusually powerful, original, or enterprising person,
assisted often by good fortune, makes what is called a discovery, some true
and useful way of doing things or of thinking about things, or even of saying
things. This new truth, new phrase, new dodge, is capable of being recognised
as interesting or useful, not only by its discoverer, but by the many who
had not the wit or the courage or the luck to discover it for themselves.
By suggestion, infection, contagion, or conscious imitation, or by any combination
of those forces and habits that constitute the social nature of man, the
novelty becomes adopted and applied by an ever-growing number of persons,
over a widening area, until it becomes an accepted practice or convention
of the whole society. Every new religious or moral idea or sentiment, every
scientific law, every invention in the arts of industry, every development
of a new taste, thus proceeds from one or more special centres of original
discovery, and spreads by a well-nigh automatic process of expansion or imitation.
§10. Now this distinction between creation and imitation, as propounded
and applied by M. Tarde, is doubtless open to serious objections. The psychology
of imitation is shallow, for under this single term is covered what are in
reality many different actions, while the whole conception of imitation as
a process is too mechanical. To some of these defects we shall refer presently.
But though, regarded as an explanation of the processes of human progress,
the antithesis of creation and imitation does not satisfy, it furnishes an
exceedingly useful starting point towards a psychological analysis of economic
processes. For in the evolution of industry it is quite evident that improvements
do come about in this manner. A comparatively small number of original or
curious minds invent new uses or new ways of doing things that are better
than the old, or they recognise the value of new ideas which others failed
to recognise, and they have the energy and enterprise to put the new ideas
into operation. Many of the inventions are not good enough or big enough;
only by a considerable number of little increments of novelty will a new
machine, or a new process, emerge into economic vitality, or, in business
language, become profitable. But where an invention or improvement has once
emerged, Station multiplies it and it passes into general use.6
A comparatively small number of creative or inventive minds thus undoubtedly
play an exceedingly important part in the development of industry. The brief
acts of thinking of a Watt, a Stevenson, a Siemens or an Edison, appear to
be incomparably more productive in effect than the routine life-toil of the
many thousands of workers who simply repeat hour by hour, day by day, year
by year, some simple single process they have learned. It is true that invention
is too narrow a term properly to express the distinction we are examining
between that work which expresses the creative energy of man and that which
is essentially imitative. For if a successful invention furnishes machinery
or methods which thus multiply the productivity of human labour, the skilful
organisation and administration of a business, the work done by the employer,
has the same sort of effect. An able employer who directs his business with
knowledge and foresight, gathering together just the right men, materials
and machinery, producing the right goods at the right time, and marketing
them properly, seems by his personal ability greatly to enlarge the valuable
output of the entire business. In a big business he seems to be as productive
as a thousand men.
§11. So a broad distinction is built up between Ability and common
Labour, the creative and the merely imitative work of man. From this distinction
has been drawn an ingenious defence of the current inequalities in distribution
of wealth. Since all the progress of modern industry is really attributable
to the ability and enterprise of a small group of inventing, organising and
enterprising people, common labour being in itself no more skilful, no more
productive than before, there can, it is maintained, be neither justice nor
reason in the claims of labour to a larger share of that huge increase of
wealth due to the ability of the few.
I do not propose just now to examine the validity of this contention. What
criticism I have to offer will emerge in the course of my closer examination
of the nature of industrial work. At present I will only ask readers to observe
that the doctrine assumes that payment for industrial services must or ought
to be determined by the productivity of those services, not by their 'cost'.
Now, our immediate enquiry, we must remember, is into human costs. And the
distinction between creative and imitative work is particularly instructive
in its bearing upon human costs. For if we grade the various sorts of human
effort that contribute to the production of wealth according to the amount
of creative and imitative character they seem to possess, some valuable light
will be thrown upon the distribution of human costs among the various classes
of producers.
Leaving out of consideration Land, which, as a factor in production, involves
no output of human effort, we shall find that the provision and application
of all the other factors, ability, capital and labour, involve some human
effort both of a creative and an imitative type and contain some elements
of 'cost'.
For the purpose of this analysis I propose to classify productive activities
under the following heads: Art, Invention, Professional Service, Organisation,
Management, Labour, Saving. The warranty for this classification will emerge
in the course of the analysis.
NOTES:
1. I have taken the estimate of the total income of the
nation made by Mr. Flux in his Reports of the First Census of Production
for the United Kingdom (1907) as the basis for the round figures adopted
here for aggregate income and for savings.
As a matter of fact Mr. Flux assigns to savings a slightly higher figure
and proportion of income than that taken here. But since for our purpose
nothing depends upon the exactitude of the figures (and indeed Mr. Flux claims
no such exactitude for his) it is more convenient for us to take the round
figures of our text, though probably in both instances, i.e., aggregate income
and savings, they are somewhat below the true figures for 1912.
2. There is no commoner stumbling-block to the beginner in the study of Political
Economy than the fact that the income of a rich man, amounting to say £10,000,
when paid away to persons who sell him goods or personal services, seems
to count 'over again' as incomes of these persons. Why, they are disposed
to ask, should the private secretary who receives £400 out of this £10,000
be required to pay an income-tax upon a sum which (as they say) has already
paid its share as part of the £10,000? Nothing but a grasp of the fact
that the secretary produces a 'real' income of 'services' corresponding to
this £400 which he receives clears up the misunderstanding.
3. About half of this passes under the head of over-seas investments into
the industrial systems of other nations, though the interest upon this foreign
capital is available for consumption in this country.
4. Wealth and Welfare, Chap. I.
5. The exceedingly important question of the limits to the validity of such
a quantitative calculus is discussed in the concluding chapter.
6. Tarde applies the same term 'imitation' to two different sorts of act.
The business man or employer who recognises some improved machine or method
and copies it is an imitator. Every improvement thus starting from a centre
of discovery becomes diffused throughout a trade.
But the term 'imitation' is also applied to the regular work of the routine
operator, who is constantly engaged in repeating some single process. Now,
regarded as psychological and as economic facts, these two imitations are
distinct.
The former is the adoption of a discovery involving an act of recognition
and of judgment -- not a purely automatic imitation -- at any rate until
it has become a common form in the trade. The employer who copies or adopts
an improvement performs a single act -- he incorporates this improvement
in the technique of his mill or shop -- once for all. When, however, it is
said of a machine-worker that his work is imitative, something different
is meant. He is continually repeating himself, each act of repetition involving
less consciousness in the adaptation of means to end.
CHAPTER IV: THE CREATIVE FACTOR IN PRODUCTION
§1. The most distinctively creative kind of human work
is called art. In motive and in performance it is the freest expression of
personality in work. The artist in what are termed the fine arts, e.g., as
painter, poet, sculptor, musician, desires to give formal expression to some
beautiful, true or otherwise desirable conception, in order either to secure
for himself its fuller realisation or the satisfaction of communicating it
to others. It is not, however, necessary for our purpose to enter upon the
exact psychology of art motives or processes. Indeed, we are not concerned
with the whole range of artistic activity. So far as the artist works simply
and entirely for his own satisfaction, in order to express himself to himself,
he cannot be deemed to be contributing to the economic income of the nation.
For us the artist is the producer of a marketable commodity, and we are concerned
to discover the 'economic' and the 'human' costs which he incurs in this
capacity.
Now so far as the painter, poet, or musician works as pure artist, exercising
freely his creative faculty, his economic 'costs' consist merely of his 'keep',
the material and intellectual consumption necessary to support him and to
feed his art. The net human costs of the creative work are nil. For though
all creative work may involve some pains of travail, those pains are more
than compensated by the joy that a child is born. Even if we distinguish
the creative conception from the process of artistic execution, which may
involve much laborious effort not interesting or desirable in itself, we
must still remember that these labours are sustained and endowed with pleasurable
significance as means to a clearly desired end, so that the whole activity
becomes in a real sense a labour of love. In other words, the human costs
are outweighed by the human utility even in the processes of production,
so that the pure practice of art is a net increase of life. The artist, who,
following freely his own creative bent, produces pictures, plays or novels
which bring him in great gains, is thus in the position of being paid handsomely
for work which is in itself a pleasure to perform and which he would do just
as well if he were only paid his human 'keep'. The wasteful social economy
of the ordinary process of remunerating successful artists needs no discussion.
For the true art faculty resembles those processes by which Nature works
in the organic world for the increase of commodities whose comparative scarcity
secures for them a market value. A poet who 'does but sing because he must,'
and yet is paid heavily for doing so, is evidently getting the best of both
worlds. Our present point, however, is that the 'economic cost' which his
publisher incurs in royalties upon the sales of his poem is attended by no
net 'human cost' at all, but by a positive fund of 'human utility'. And this
holds of all truly creative work: the performance involves an increase of
life, not that loss which is the essence of all human cost.
§2. I have spoken of the pure 'artist'. The artistic producer who sells
his freedom to the moneyed public may incur the heaviest of human costs,
the degradation of his highest quality. The temptation to incur these moral
and intellectual damages is great in any nation where the dominant standard
of personal success is money income and expenditure. But perhaps there is
a false simplicity in the romantic view of artistic genius, which assumes
that the artist and his work are necessarily degraded by inducements to work
for a public, instead of working for himself alone. It may, indeed, be held
that an artist who is so self-centred as to have no conscious consideration
of the artistic needs and capabilities of his fellow-men, is so essentially
inhuman as to be incapable of great work. The use of an art-gift for communion
with others, involving some measure of conscious social direction, seems
involved in the humanity of the artist. Even when that direction takes the
shape of market-prices, it does not necessarily incur the violent censure
bestowed by romantic persons. When a sound public taste operates, this direction
may be justified. The portraits which Mr G. F. Watts painted reluctantly
for money need not be considered a waste of his powers. The nature, again,
of many creative minds seems to require the application of an external stimulus
to break down a certain barrier of sterile self-absorption or of diffidence,
which would rob humanity of many of the fruits of genius. At any rate it
need not be assumed that working for a public, or even for a market, is essentially
injurious. Where the taste which operates through the demand is definitely
base, and where the practice and the consciousness of having sold one's soul
for money are plainly realised, no doubt can exist. But where public sympathy
and appreciation, even exercised through the market, induce the artist to
subordinate some of his private tastes and proclivities to the performance
of work which, though of secondary interest to himself, has a sound social
value, the pressure of demand may produce a larger body of real wealth at
no real human cost to the producer. Very different, of course, are the instances
urged with so much passionate insistence by Ruskin, where depraved public
tastes, springing directly from luxury and idleness, debauch the natural
talents of artists, and poison the very founts of the creative power of a
nation. Corruptio optimi pessima. The production of base forms of art, in
painting, music, the drama, literature, the plastic arts, must necessary
entail the highest human costs, the largest loss of human welfare, individual
and social. For such an artist poisons not only his own soul but the social
soul, adulterating the food designed to nourish the highest faculties of
man.
There is, however, a sense in which it is true that every pressure of social
direction or demand upon the artist impairs the creative character of his
work. For such social demand rests upon a similarity of taste among the members
of a public, and its satisfaction requires the artist to repeat himself.
An artist, endowed by the State or some other body, might express himself
in unique masterpieces, as was the case with the great artists of antiquity
or of the renaissance who were fortunate in their private or public patrons.
But art, supported by numerous private purchasers, whose social standards
mould their tastes to tolerably close conformity, must stoop to qualify creation
by much imitative repetition. This often involves a large human cost, imposing
an injurious specialisation, mannerisms or mechanical routine. This is particularly
true of arts where a refractory material gives great importance to technique,
and where the practice of this technique necessarily restricts the spontaneity
of execution.
§3. The descent from Artist to the more or less mechanical producer
of art-products is marked by many grades. There is the grade which does not
pretend to any free exercise of the creative faculty, confining itself to
interpretation or execution. This in music and in certain other fine arts
is signified by adopting the French term 'artiste'. But some of this interpretative
work affords large scope for truly creative work. A traditional or written
drama, a score of music, or other necessarily imperfect and half-mechanical
register of some great creative work, requires a constant process of re-creation
by a sympathetic spirit. In such arts there is a genuinely creative cooperation
between the original composer and his interpreters, the latter enjoying some
real liberty of personal expression and giving merit to the performance by
this union of reproductive and creative achievement. The great actor or musician
may thus even come to use the work of the playwright or the composer as so
much material for his own creative expression. He may even carry this to
an excess, ousting his predecessor and parasitically utilising his reputation
for the display of his own artistic qualities or defects. In painting and
sculpture, of course, we come to a mode of skilled imitation, that of the
copyist, where the free creative element is confined to far narrower limits.
The main skill here is that of technical imitation, not of interpretation.
As we descend from the higher grades of distinctively creative art to these
interpretative and more or less imitative grades, it will be evident that
larger human 'costs' of production are apt to emerge. All imitation or repetition,
either of oneself or of another, is not inhuman. There is a rhythm in the
processes of organic life which even requires some repetition. But this repetition
is never precise, for organic history does not exactly repeat itself. The
attempt, therefore, to induce a person to perform an intricate process many
times and at short intervals with great exactitude, is against humanity.
It involves some physical and moral injury, a human cost. We shall consider
the more serious effects of this procedure when we come to consider that
work of industry most widely removed from art. In considering, however, the
sub-artistic workers it will not be right to rate the human costs too high.
A good deal of scope for personal satisfaction remains in many of these kinds
of work. The sense of skill in overcoming difficulties, evoked wherever any
intricate work is done by brain and hand, yields a vital joy. This the executant
artist, even though mainly a copyist, experiences in no mean measure. It
sustains a fine vitality, and, what is significant for our particular enquiry,
it involves low human cost, unless the pace and strain of repetition are
carried to excess. Wherever any reasonable scope for individual expression
or achievement remains, though the main body of the product may be rigorously
prescribed by close imitation, or ordered by mechanical contrivance, the
art spirit lives and the human costs are low. The photographer, or even the
skilled performer on the pianola, retains a larger measure of the nature
and the satisfaction of the artist than a merely cursory consideration of
his occupation would suggest.
A considerable and growing proportion of productive energy is given out
in these various levels of artistic or creative work, and the proportion
of the national income represented by this product is growing with fair rapidity
in every modern civilised community.
§4. From the fine arts we proceed by an easy transition to the processes
of discovery and invention which play so important a role in progressive
industry and are leading channels of creative activity. The process of discovering
a new relation between phenomena, establishing a new fact or a new law, has
much in common with artistic creation. The scientific imagination is creative
through its use of the existing material of knowledge to frame hypotheses.
Indeed, the disinterested play of the mind in the explanation of facts by
bringing them within the range of scientific laws, or, conversely, in extending
the range of known laws to new groups of facts, is a process of adventure
containing novelties of insight and of outlook akin to artistic production.
Those philosophers, indeed, who hold that the laws of science are nothing
other than the patterns which man imposes upon the phantasmagoria of experience
for his own private ends, would make the whole of scientific discovery merely
an art, differing from the fine arts in having utility rather than beauty
for its goal. But we need not press this interpretation in order to perceive
the similarity of all disinterested pursuit of knowledge to the fine arts.
When a mathematician speaks of a beautiful solution to a problem, he is not
using the language of hyperbole, but attesting to the presence of an aesthetic
emotion attendant on the mode in which a truth is reached and stated. Modern
physics is full of discoveries containing some such artistic quality, e.g.,
the grouping of the elements in the proportions of their atomic weight which
Mendelieff established, or Sir W. Ramsay's recent discovery of the relations
between helium and its chemical kindred. But one need not labour the analogy
between artist and scientist. For our main enquiry is into human costs, and
it will be admitted that the zest of the scientific student and the joy of
discovery are emotions as vital and as valuable in themselves as the emotions
of the artist. So far, then, as the scientist comes within our purview as
a productive agent, his activity must rank with the artist's, as yielding
more human utility than cost. It may, however, be contended that the man
of science seldom, as such, enters into the field of industrial productivity,
save when he adds to his scientific work the rile of inventor. With the advent
of the inventor the attainment of knowledge is bent to some purpose of industrial
utility. But though some definitely gainful purpose may lurk in the inventor's
mind, it does not commonly impose upon his work the distinctive costs of
labour. For invention, however narrowly utilitarian in its objects and results,
still remains in the realm of creation, still yields the satisfaction of
a production that is interesting and elevating in itself. It seems to matter
little whether the inventive process is a large bold speculative handling
of some problem in which the inventor is a pioneer, or whether he is engaged
upon the narrower task of bringing the past inventions of many greater minds
up to the level of industrial utility by some small new economy. The process
of invention carries the quality of interesting novelty which from our standpoint
is the badge of creative work. We shall, doubtless, be reminded at this point
that history shows the path of the inventor to be almost as hard as that
of the transgressor, strewn with toil and disappointments. But though a great
invention, like a great work of art, often conceals an arduous and painful
gestation under the appearance of a spontaneous generation, too much must
not be made of such a cost.
The training of a creative faculty, though like all training it involves
an exercise and a discipline not pleasing in themselves, can, indeed, scarcely
be regarded in our sense as a cost of labour. It is a furtherance and not
a repression of personality: the practice it involves, the technique it imparts
are not merely mechanical aptitudes, and they always carry in them the conscious
hope of creative achievement. The education of artistic or inventive faculty
involves no real wear and tear of human vitality beyond that physical waste
which every prolonged occupation involves. Invention itself involves no cost.
In none of these operations is the characteristic of labour present, the
giving-out of some single sort of energy by constant repetition of identical
acts in a narrow groove of endeavour. Such acts of labour are indeed inimical
to invention: the act of invention comes commonly in times of leisure. It
is the product more of play than of work, and the element of instinct, perhaps
even of chance, is often a factor of success.
§5. M. Tarde, in his abrupt contrast between creation and imitation
or labour, has dogmatised upon the rarity of the creative faculty, and certain
other sociologists and politicians have busily engaged themselves in sowing
fears lest the greed of organised labour or the rashness of socialistic legislation
should, by robbing genius and ability of its proper rewards, tamper with
the springs of industrial progress. Now, the important question of the economic
reward of ability and genius may be deferred until we have ascertained more
clearly what part these creative qualities play in all the different modes
of productive energy. But the assumption that artistic and inventive faculty
is exceedingly rare, because it has so seldom been displayed, must be boldly
challenged. The studies of modern psychologists and educationalists refute
it. On the contrary, there is reason to believe that human nature is exceedingly
rich in all sorts of variations from the normal, and that very many of these
variations have valuable uses, provided that suitable conditions for their
discovery, training and application are present.
The notion that genius, like murder, will 'out' is a false sentimentalism.
Some men of genius do, indeed, make their way in spite of adverse circumstances,
forcing themselves out of the obscurity of their surroundings: they 'break
their birth's invidious bar, and breast the blows of circumstance, and grasp
the skirts of happy chance.' That is to say some sorts of genius are united
with qualities of audacity, persistence, and luck, which enable them to win
'through'. But how many men of genius do not possess these faculties and
therefore do not emerge, it is from the nature of the case impossible to
learn. But it is probable that much genius, talent, and ability, capable
of yielding fine social service, is lost. Indeed it is probable that many
of the finest human variations, involving unusual delicacy of feeling and
perhaps of physique, will by natural necessity be incapacitated for making
their way and forcing recognition amid uncongenial surroundings.
It is likely that far more human genius is lost than is saved, even in the
more civilised nations of to-day. For what are the conditions of the successful
utilisation of genius, and for what proportion of the population are they
securely attained?
Leisure is a first condition for all free and fruitful play of the mind.
Very few inventions have come from workers compelled to keep their noses
to the grindstone, and unable to let their eyes and thoughts play freely
round the nature of their work. This is why slavery contributed so very little
to the development of the industrial arts: this is why so comparatively few
inventions of importance have been made by hired labourers in this and other
countries. The strongest economic plea for a shorter and a lighter working-day
is that it will liberate for invention and industrial progress the latent
creative energy of countless workers that is stifled under.the conditions
of a long day's monotonous toil.
Education is the next condition. The great mass of the population in this
country have no such opportunity of education as is needed to discover, stimulate,
and nourish the creative faculties in art, science, and industrial invention.
One need not overrate what even the best education can do for human talent
of the creative order. Indeed, the education of the schools may sometimes
rather injure than improve the finest faculties. But education can do one
incomparable service to native genius or talent. By putting the sensitive
mind of a young man or woman in contact with the innumerable waves of thought
astir in the intellectual atmosphere around, it supplies the first essential
of all creative activity, the fruitful union of two thoughts. Until all the
new minds brought into the world are placed in such free contact with every
fertilising current of thought and feeling, and enjoy free, full opportunities
of knowing the best that has been thought and said in all departments of
human knowledge, we cannot tell how much creative faculty perishes for lack
of necessary nutriment.
§6. From artistic and inventive work which is essentially creative,
enjoyable, vitally serviceable and costless, we proceed to review the regular
skilled mental work of the professional and administrative classes.
The bulk of the productive energy classed as Ability comes under these heads.
It is evident that in most of this work the creative quality is blended
in various degrees with imitation or routine. We pass from the more miraculous,
interesting, and rapid modes of productive achievement to a lower level,
where the expenditure of time and effort is greater and where the terms 'practice'
and 'practitioner' themselves attest the more confined nature of the activities.
There can be no doubt that the practice of law or medicine, even in its highest
walks, involves a good deal of toilsome and almost mechanical routine, though
the most successful practitioners generally shift the bulk of this burden
on to the lower grades of the profession.
The practice called 'devilling' in the law illustrates my meaning. But every
profession has its lower grades of routine workers, assistants, dispensers,
nurses, clerks and others, whose sphere of liberty is closely circumscribed,
and whose work, although involving some qualities of personal skill and responsibility,
mainly consists in carrying out orders.
This consideration of the subsidiary professional services brings to light,
however, a certain defect in the use of the antithesis between creation and
imitation, regarded as an index of humanly desirable and humanly undesirable
work.
Mere repetition or close routine is not the distinctive character of much
of this work. The work of a private secretary, clerk, or other subordinate
to a professional man or a high official, may contain much variety and novelty
in detail or even in kind. The same may be true of the work of a valet or
other personal attendant. It applies to all work which consists in carrying
out another's orders. There may be plenty of variety and scope for skill
in such work; in its initial stage, as conceived by the chief or employer,
it may contain elements of creative energy. But the subordinate does not
reap these elements of personal interest because the initiation of the process
does not rest with him. The essentials of the work are imposed upon him by
the intellect and will of another: neither the design nor the mode of execution
is his own. Though, therefore, his work may not consist in mere routine,
but may be widely varied, the fact that it is not properly 'his' work, the
expression of 'his' personality, deprives it of all qualities of creation
or achievement, save such fragments as adhere to the details that are 'left
to him.' Such work may, indeed, be described as imitative, in that it consists
in executing a design prescribed to him by another. But if the term imitation
be required, as it is, to designate the sort of labour which consists in
constant repetition of a single act or process, it would be better to mark
this distinction between free agent and subordinate in a different way. The
subordination of the secretary or the clerk involves the human cost of a
surrender of his personal judgment and initiative. To the extent that he
does this, he becomes an instrument of another's will. The extent to which
this involves a human cost will vary greatly with the particular conditions,
technical or personal. Where such subordination belongs to genuine education
or apprenticeship, or where close sympathy and mutual understanding happen
to exist between superior and subordinate, so that the mind of one is the
mind of both, no human cost at all but a human utility may emerge. Or, in
other cases, the technical nature of the work may involve the necessity of
leaving to the subordinate a good deal of discretion and a correspondingly
large field for personal expression. But where the subordinate becomes the
mere tool of his master, a heavy cost is entailed. That cost is heavier indeed
than in ordinary manual routine labour, because it involves more directly
the subordination of the mind and will of the worker. Part of the distaste
for domestic and other closely personal service is due to the closer bondage
of the whole personality that is involved in the relation. It is not so much
that the work is intrinsically dull or unpleasant as that it encroaches upon
personality and inhibits initiative and achievement.
§7. The work of the highest, most honoured and best remunerated members
of the professions retains essentially the quality of personal achievement.
It consists of a number of detached and usually brief acts of intellectual
skill, the formation of a judgment upon the meaning or merits of a complicated
case, the presentation of that judgment in advice or argument, the bringing
intellectual and moral influences to bear upon some line of conduct.
In some instances, as in the argument of a difficult case in court, or the
conduct of a complicated Bill in Parliament, prolonged and arduous exertion,
both mental and physical, may be involved. Even where the separate acts require
no prolonged output of energy, a professional career, comprising long series
of such acts, may strain or exhaust the mental and physical resources even
of a strong man. Though each case will be different, and will call for qualities
of personal skill and judgment, interesting and agreeable in their exercise,
all will fall within the limits of a special line of practice, and this specialism
will wear upon the nervous system, bringing the activity under an economy
of costs. The temptations of a busy and successful professional career insidiously
sap the interest and joy which attend the earlier struggle, unless a man
has the rare wisdom and the strength of will to limit his amount of work
and income.
What is said here of the competitive professions is in large measure applicable
to the official grades of the public services. The higher sorts of official
work continually involve qualities of judgment and imagination, and there
is little mere repetition. As one descends to the lower official levels,
the routine or repetitive element increases, until one reaches a sort of
official, the liberty, initiative, skill, and interest of whose work hardly
exceeds that of the ordinary machine-feeder in a factory. In all such distinctively
routine work there is a heavy mental and even physical cost. But there is
this distinction between the case of the official and of the professional
man. The former is not subject to the constant drive of the competitive system
and is usually relieved from the sense of insecurity and anxiety which wears
upon the mind of most professional men.
§8. The psychology of the entrepreneur or business man is one of great
interest and complexity. If we take the ordinary activities of the manager
of a well-established business in a staple trade, they do not seem to involve
much in the way of high intellectual skill, imagination, or exploit -- but
merely a limited amount of special trade knowledge, ordinary intelligence,
and common sense. He has to perform a number of little acts of calculation
and decision. What we call his character, viz., honesty, reliability, sense
of responsibility, really counts for more than intellect: there is little
demand for constructive or creative imagination, or for high enterprise.
The conduct of such a business, even on the part of its manager, though not
destitute of interesting incident, involves a good deal of dull routine and
even drudgery which carries a distinct 'cost' in mental wear and tear.
The subordinate officials in such business are, of course, subjected to
a closer routine, though never to a merely mechanical repetition, and their
working life is less affected by hopes and fears relating to the profits
or loss on the half-year's working.
But a large proportion of business men work under very different conditions
from these.
Most industries to-day are subjected to rapid changes in regard to instruments
and methods of work, markets for materials and for finished products, wages
and conditions of employment. A keen eye for novelties, a rapid judgment,
long-sighted calculation, commanding character, courage in undertaking risks
-- these are leading notes in the modern business life.
The business man who constructs, enlarges, and conducts a modern competitive
business, performs a good many functions which call for various mental and
moral qualities. He must plan the structure of his business-determine its
size, the sizes and sorts of premises and plant he will require, the place
which he can best occupy; he must get reliable managers and assistants, and
a good supply of skilled labour of various kinds. He must watch markets and
be a master of the arts of buying and selling: he must have tact in managing
employees and a quick eye for improvements in methods of production and of
marketing: he must be a practical financier, and must follow the course of
current history so far as it affects trade prospects.
If we take the most generalised type of modern business man, the financier
who directs the flow of capital into its various channels, or the capitalist
who lives by managing his investments, we find the business ability in its
most refined form. For these men are the general directors of economic energy,
operating through joint stock enterprise.
The human costs of this work of speculation and direction are difficult
to assess. Such terms as labour and industry are alien from the atmosphere
of these high economic functions. At the same time the strain of excitement,
and, at certain seasons, of prolonged intellectual effort and attention,
the sense of responsibility for critical decisions, involve a heavy nervous
wear and tear. Probably the heaviest human cost, however, is a certain moral
callousness and recklessness involved in the financial struggle. For the
paper symbols of industrial power, which financiers handle, are so abstract
in nature and so remote from the human fates which they direct, that the
chain of causation linking stocks and shares with human work and human life
is seldom realised. How should the temporary holder of a block of shares
in Peruvian rubber concern himself with the conditions of forced labour in
the Amazon forests, or the group formed to float a foreign government loan
consider the human meaning of the naval policy it is intended to finance?
Except in so far as they affect the values of their holdings and the price
at which they can market the shares, the human significance of the business
or political enterprises which are concrete entities behind finance, has
no meaning for them. These men and their economic activities are further
removed from human costs and utilities than any other sort of business men.
In view of the immense human consequences which follow from their conduct
this aloofness is a demoralising condition.
So occult and so suspect are many of the operations of financiers as somewhat
to obscure the importance of the actual economic services they render to
our industrial system. General finance is the governor of the economic engine:
it distributes economic power among the various industries, allocating the
capital of the saving classes to road-making, irrigation, mining, the equipment
of new cities, the establishment of staple manufactures, and the supply of
financial resources for various purposes of government. The finest business
instincts, the most rapid, accurate, and complex powers of inference and
prophecy, the best balance of audacity and caution, the largest and best-informed
imagination, are needed for this work of general finance. It is intensely
interesting, and exerts a fascination which is traceable to a combination
of appeals. The chief field for high economic adventure, it evokes most fully
the combative qualities of force and cunning; it is full of hazard and fluctuation,
with large, rapid gains and losses: it neither requires nor permits close
personal contact with the troublesome or sordid details of industrial or
commercial life.
Such is the work of the financier and the skilled investor, who found capitalistic
enterprises and deal in their stocks and shares over the whole area of the
industrial world. It is the most intellectual and, in one sense, the most
'moral' of business activities, involving at once the finest arts of calculation
and the fullest faith in human nature.
For finance is most closely linked with credit, and credit is only the business
name for faith. When people talk of finance as if it were riddled with dishonesty,
facts give them the lie. The normal honesty of finance is proved by the fact
that larger and larger numbers of men and women in every country of the civilised
world are coming to entrust their savings more and more to men who are personal
strangers, for investment in distant countries and in businesses the exact
nature of which is unknown to them, and over which they cannot hope to exercise
an appreciable control. The working of the machinery of modern investment
by which millions of men in England, France, and Germany have sent their
savings to make railways in S. America, or to open up mines in S. Africa,
or to build dams in Egypt, is the largest tangible result of modern education
that can be adduced. It implies the intellectual and moral cooperation of
larger numbers of distinct personalities across wider local and national
barriers than bas ever occurred before in the history of the world.
§9. A reasonable faith in the future and a willingness to run some
risk are complementary motives in this growth of financial investment. They
are, however, by no means confined to operations of finance. All industry
involves faith and risk-taking. Every producer who acts as a free agent conceives
some good object which be thinks attainable by his work. He may be mistaken,
either in conceiving wrongly, or in failing to carry out his plan. His failure
may be due to want of skill or knowledge, or to adverse circumstances. In
primitive societies, where a man produces mostly for his own use, the risk
is less. For he may be supposed to know what he wants, how much, and when
he wants it. But when he makes for others, i.e., for a market, the risks
are greater. For he will not know so much about the wants of other persons
as about his own. It might seem as if small local markets, in which the producer
dealt exclusively with neighbours, would carry the least risk, and that the
risk would expand with each expansion of the market area. But this is not
commonly the case. As a rule, there is less risk for the producer serving
a large market, the individual members of which he does not know, than a
small market of his neighbours. For the fluctuations of aggregate demand
will be smaller in the larger market, and though he will know less about
the individual contributions to its supply and its demand, his risk of failing
to effect a sale, when he desires to do so, will usually be less. This at
any rate applies to most standard trades.
Since effective access to large markets implies a fairly large business,
the economy of risk becomes one of the economies of capitalism, and its calculation
a chief branch of the employer's skill. The watching of the market so as
to reduce the waste of misdirected production is the most delicate of the
intellectual activities of most managers. It takes him outside the scope
of his own business and the present process of production, to consider the
whole condition of the trade in the present and the probable future. These
calculations and acts of judgment issuing from the brain of business managers
are the psychical aspect of the whole structure of markets and of the trade
and traffic arrangements which give such unity and order as are visible in
what is termed the industrial system.
Thus, not merely on the financial but on the commercial side, industry is
perceived to be a great fabric of beliefs and desires. Though, as we shall
recognise, in dealing with labour, and with saving, risk-taking is by no
means confined to employers and entrepreneurs, its wider operations belong
to the speculative skill which comes under the general head of ability of
management. In the psychological interpretation of industry this function
of the entrepreneur is of quite crucial significance, cooperating everywhere
with the more abstract calculations of financiers in directing the amounts,
kinds, and directions, of the various currents of industrial energy which
move in the business world. Since it involves a constant use of the constructive
imagination in the interpretation of the play of changing motives in many
minds, and the forecasting of future conditions which can never be a mere
repetition of the past, the 'creative' faculty obtains here its highest expression.
It is not for nothing that the great modern master either of finance or industry
is accredited with some quality of imaginative power akin to that of the
artist. This, however, must in not a few instances imply, not merely the
genius of the prophet, but that of the skilled manipulator of economic material
and opportunity, who helps to secure the due fulfilment of the prophecies
upon which he stakes his faith.
CHAPTER V: THE HUMAN COSTS OF
LABOUR
§1. The classical Political Economy of this country
gave to Labour a role of supreme importance in the production of wealth.
From Adam Smith, Ricardo, and other authoritative exponents of the new 'science'
many passages can be cited to support the thesis that labourers are the only
producers. Nor does it appear that in these utterances Labour was usually
intended to include the services of organisation and management or other
intellectual activities. Wealth is baldly attributed to Labour in the sense
that the manual labour, which extracts raw materials from the earth, shapes
and composes them, and carries them from one place to another, alone counts
as a cost of production. It is natural enough that the scientific socialism
of Europe should have accepted and enforced this doctrine. Though the more
intelligent socialists and 'labour men' admit the necessary work of superintendence
and other mental work as useful and productive, the materialism prevalent
in the business world tends to relegate to a quite secondary place all the
higher forms of intellectual and moral activity.
It was upon the whole, indeed, a sound instinct which thus led the early
theorists to use language which attributed to manual labour the real burden
of the 'costs' of production. For closer investigation attests the force
of the distinction between the productive energy given out by the intellectual,
the directing, and administrative classes on the one hand, and by the labouring-classes
on the other. Moreover, the social as well as the economic cleavage is so
distinctive a feature of our life that it would be inconvenient to ignore
it. The cleavage will be found to correspond pretty accurately to the distinction
between the creative and the imitative functions which we provisionally adopted
for a starting point in our analysis.
For most of the productive energy given out by the artistic, inventive,
professional, official, and managerial classes, which have passed under our
survey, is seen to be in large measure creative, varied, interesting, and
pleasurable.
Now in the labour of the wage-earning classes these qualities are generally
lacking. Alike in motives and in methods, the contrast is clearly marked.
The mind of the artist or the inventor, even of the professional man or the
administrator, is occupied with the work in hand, as an object of interest
and of desirable achievement. The nature of the work and the conditions of
remuneration conduce to fix his immediate thoughts and feelings on the performance
of his work. With the labourer it is different. The conditions of most labour
are such that the labourer finds little scope for thought and emotional interest
in the work itself. Its due performance is hardly an end to him, but only
a means to a livelihood consisting in the consumable commodities got in payment
for his labour.
But the vital distinction is in the nature and method of the work done.
Whereas the artistic or inventive, or even the professional man, is constantly
doing something new, the labourer continually repeats the same act or set
of acts, in order to produce a number of similar products. The success of
most labour consists in the exactitude and pace with which this repetition
can be carried on. The machine-tender is the typical instance. To feed the
same machinery with the same quantity of the same material at the same pace,
so as to turn out an endless number of precisely similar articles, is the
absolute antithesis of art. It is often said that the man who feeds such
a machine tends to become as automatic as the machine itself. This, however,
is but a half-truth. If the tender could become as automatic as the machine
he tended, if he could completely mechanise a little section of his faculties,
it might go easier with him. But the main trend of life in the man fights
against the mechanising tendency of his work, and this struggle entails a
heavy cost. For his machine imposes a repetition of the same muscular and
nervous action upon a being whose muscles and nervous resources are continually
changing. The machine, fed constantly with the same supply of fuel, geared
up to a single constant pace of movement, forced by unchanging structure
to the performance of the same operation, friction and error reduced to an
almost negligible minimum, works through the longest day with a uniform expenditure
of power. The machine-tender is an organism, fed at somewhat irregular intervals
with different amounts and sorts of food, the assimilation of which is also
discontinuous, and incapable of maintaining intact and constant in its quantity
the muscular and nervous tissue and the accompanying contractions which constitute
the physical supply of 'work'. This organism has also many other structures
and functions, physical and mental, whose activities and needs get in the
way of the automatic activity of machine-tending. Thus the worker cannot
succeed in becoming altogether a machine-tending automaton. He will not always
exactly repeat himself, and his attempt to do so involves two sets of organic
costs or wastes, due to the fact that, though his labour tries to make him
a specialised mechanism, he remains a generalised organism.
So far as labour consists in specialised routine, absorbing the main current
of productive energy, it is the enemy of organic health. It is hostile in
two ways, first, in denying to man opportunity for the exercise of his other
productive faculties, secondly, in overtaxing and degrading by servile repetition
the single faculty that is employed.
As the artist presents the supreme example of creative work, with a minimum
of human costs and a maximum of human utility, so the machine-tender presents
the supreme example of imitative work, with a maximum of human costs and
a minimum of human utility.
§2. Some particular consideration of these costs of machine-tending
will be the best approach to a more general survey of the human costs of
labour.
The indictment of the dominion of machinery by Ruskin, Morris, and other
humanist reformers, was primarily based upon the degradation of the worker's
manhood by denying him the conditions of good work. 'It is a sad account,'
said Ruskin, 'for a man to give of himself that he has spent his life in
opening a valve, and never made anything but the eighteenth part of a pin.'
But, important as is this charge of degraded and joyless work, we must begin
our analysis of the costs of mechanical or factory labour at a lower level.
From the great body of the factory labour which goes to the provision of
our national income, the first great human cost that emerges is the burden
of injurious fatigue which results from muscular or nervous overstrain, and
from the other physical and moral injuries which are the natural accompaniments
of this overstrain.
Modern physiology and pathology have done much to give plain meanings to
these costs. Physical fatigue is not of necessity an injury to the body,
nor is all feeling of fatigue a pain. The ideally correct conduct of the
organism may, indeed, appear to preserve an exact and a continuous balance
between the anabolic and the catabolic, the nutrition of cell life and the
expenditure in function. Sir Michael Foster gives the following classical
description of this process.1
'Did we possess some optic aid which should overcome the grossness of our
vision, so that we might watch the dance of atoms in this double process
of making and unmaking in the human body, we should see the commonplace living
things which are brought by the blood, and which we call the food, caught
up into and made part of the molecular whorls of the living muscle, linked
together for awhile in the intricate figures of the dance of life; and then
we should see how, loosing hands, they slipped back into the blood, as dead,
inert, used-up matter. In every tiny block of muscle there is a part which
is really alive, there are parts which are becoming alive, there are parts
which have been alive but are now dying or dead; there is an upward rush
from the lifeless to the living, a downward rush from the living to the dead.
This is always going on, whether the muscle be quiet and at rest, or whether
it be active and moving. Some of the capital of living material is always
being spent, changed into dead waste, some of the new food is always being
raised into living capital.
'Thus nutritive materials are carried by the blood to the tissues, and the
dead materials of used-up and broken-up tissues are carried away for destruction
or ejection. Under normal conditions of healthy activity this metabolic balance
is preserved by the alternation of work and repose, the tissue and energy
built up out of food during periods of rest forming a fund for expenditure
during periods of work, while the same periods of rest enable the destructive
and evacuative processes to get rid of any accumulation of dead tissue due
to the previous period of work. Abnormally intense or unduly prolonged activity
of any portion of the body uses up tissue so fast that its dead material
cannot be got rid of at the proper pace. It accumulates in the blood or in
the kidneys, liver or lungs, and operates as a poison throughout the whole
system. Over-fatigue thus means poisoning the organism.
'The poisons are more and more heaped-up, poisoning the muscles, poisoning
the brain, poisoning the heart, poisoning at last the blood itself, starting
in the intricate machinery of the body new poisons in addition to themselves.
The hunted hare, run to death, dies not because he is choked for want of
breath, nor because his heart stands still, its store of energy having given
out, but because a poisoned blood poisons his brain, poisons his whole body.'2
The Italian biologist Mosso has demonstrated that the depressing effect
of fatigue is not confined to the local centre where it is produced, but
is carried to all parts of the body. When the blood of a dog fatigued by
continued running is injected into the vessels of a sound dog, the latter
exhibits all the signs of fatigue. The inability of the system to dispose
of the used-up tissue, which thus accumulates and poisons the system, is
one injurious factor in fatigue. Another is the undue depletion of the stores
of glycogen and oxygen, which the organism provides for the output of muscular
activity. Glycogen is a compound of carbon, hydrogen, and oxygen made by
muscle tissue out of the sugar or dextrine supplied to it by the blood. 'The
stored glycogen of the muscles keeps uniting chemically with the oxygen of
the blood. The glycogen is broken down into a simpler chemical form, giving
off the gas carbon dioxide and other acid wastes, and releasing heat and
mechanical energy in the process. With the released energy contraction of
the muscles takes place and hence ultimately the industrial labour which
is our special theme.'3
'Glycogen is, as it were, stored for use. It is always being replenished,
always being depleted.... But when the muscle is active and contracts energetically,
there is a run upon our glycogen. It is used up faster than it is built in
muscle. The glycogen is spent so rapidly that there is not time for the blood-stream
to bring back to the tissue the potential material for its repair.'4 Though
the liver furnishes an extra store of glycogen, this too may be depleted
by undue muscular activity.
'Thus we have reached the other fundamental factor in fatigue -- the consumption
of the energy-yielding substance itself. Not only does tissue manufacture
poison for itself in the very act of living, casting off chemical wastes
into the circling bloodstream; not only are these wastes poured into the
blood faster with increased exertion, clogging the muscle more and more with
its own noxious products; but, finally, there is a depletion of the very
material from which energy is obtained. The catabolic process is in excess
of the anabolic. In exhaustion, the organism is forced literally to "use
itself up."'5
§3. So much for the physiological meaning of muscular fatigue. Closely
associated with muscular fatigue is nervous fatigue. For every voluntary
muscular action receives its stimulus from a nervous centre. Though the nature
of this nervous energy, accumulated in the central nervous system and distributed
in stimuli, is not well understood, its economy is gravely disturbed by conduct
involving heavy muscular fatigue, as well as by work of a mental kind involving
heavy drains on its resources. A process of building up, storage, and dissipation
of nerve tissue and energy-yielding material, corresponding to that which
we have traced for muscle tissue, must be accepted as taking place. Fatigue
of the nervous system will thus be attended by a similar accumulation of
poisonous waste products, and an excessive consumption of substances needed
for the maintenance of nervous activity.
Though physiologists are not agreed as to how and when fatigue acts on the
nervous cells, there is no question of the reality and of the importance
of this injury of excessive work to 'the administrative instrument of the
individual' which 'directs' controls and harmonises the work of the parts
of the organic machine and gives unity to the whole.'
Still confining our attention to purely physical conditions, we learn that
work done in a state of muscular fatigue involves an increase of nervous
effort.
'Mosso showed that a much stronger electric stimulus is required to make
a wearied muscle contract than one which is rested. He devised an apparatus,
the ponometer, which records the curve of nervous effort required to accomplish
muscular action as fatigue increases. He showed that the nerve centres are
compelled to supply an ever stronger stimulus to fatigued muscles.'6
Professor Treves at Turin throws further light upon the relations between
the muscular and the nervous economy. It is well known that in muscular activity
there is an opening period during which efficiency, or practical response
to nervous stimulus, increases. Before fatigue begins to set in, the muscle
appears to gain strength, its working power being actually augmented. This
period of maximum efficiency continues for an appreciable time, then fatigue
advances more and more until muscular contraction refuses any longer to respond
to even a heightened nervous stimulus. This, of course, is also an epitome
of the course of organic life itself, its rise towards maturity, its level
of maximum power and its decline.
Now training or practice can notoriously affect this natural economy. The
muscular system, or some part of it, can by practice accommodate itself to
increasing quantities of fatigue-poisons, and can draw from the general organic
fund a larger quantity of material for repair of local muscular tissue and
energy. But it has long been recognised that some real dangers attach to
this excessive specialisation of muscular activities. The pathological nature
of over-training in athletics has its plain counterpart in industry. This,
according to Professor Treves, lies in the failure of the supply of nervous
energy to rise in proportion to the requirements for this higher pressure
upon the muscular tissues.
'According to my experience, it has not been found that training has as
favourable an effect upon [nervous] energy as upon muscular strength....
This fact explains why muscular training cannot go beyond certain limits
and why athletes are often broken down by the consequences of over-exertion.
And this fact teaches also the practical necessity of preventing women, children,
and even adult men from becoming subjected to labour, which, indeed, a gradual
muscular training may make possible, but at the price of an excessive loss
of nervous energy which is not betrayed by any obvious or immediate symptoms,
either objective or subjective.'7
A series of experiments has been directed to the more detailed study of
the relations between activity and repose. Their general result is to prove
that muscular work, done after fatigue has set in, not only costs more nervous
effort but accomplishes less work. The ergograph, an instrument for measuring
work, yields ample testimony to the recuperative effect of rest taken before
exhaustion is reached, on the one hand, and the rapid rate of decline in
achievement when activity is continued after the fatigue point has been reached.
§4. To this account of the physical costs of excessive work in muscular
and nervous waste must be added the greater liability to accidents and the
greater susceptibility to industrial and non-industrial diseases which fatigue
entails.
The statistics of industry in various countries prove that fatigue is a
very important factor in industrial accidents. Though fatigue is not always
proportionate to duration of work, the number of hours worked without intermission
is usually a valid index of fatigue. After a long stunt of work the attention
of the worker and his muscular control are both weakened. We find, therefore,
a marked similarity in the curves relating accidents to hours of labour,
accidents increasing progressively up to the end of the morning's work, and
again in the late afternoon as the day's work draws to its close. Recent
German statistics show that the highest rate of accidents is during the fourth
and fifth hours of morning work.
<fig 1>
<fig 2>
That over-fatigue connected with industry is responsible
for large numbers of nervous disorders is, of course, generally admitted.
The growing prevalence of cardiac neurosis and of neurasthenia in general
among working-people is attested by many medical authorities, especially
in occupations where long strains of attention are involved. But the general
enfeeblement and loss of resistance power to disease germs of all kinds are
even more injurious consequences of over-exertion. Many experiments attest
the fact that fatigue reduces the power of the blood to resist bacteria and
their toxic products.
§5. So far I have dwelt exclusively upon the physiological nature and
effects of fatigue as costs of labour. But due account must also be taken
of the psychical or conscious costs. Much work in its initial stage contains
elements of pleasurable exercise of some human organ or faculty, and even
when this pleasure has worn off a considerable period of indifference may
ensue. Though boredom may set in before any strain of fatigue, the earlier
period of ennui may not entail a heavy cost. But, when fatigue advances,
the irksomeness brings a growing feeling of painful effort, and a long bout
of fatigue produces as its concomitant a period of grave conscious irritation
of nerves with a subsequent period of painful collapse. Where the conditions
of work are such as to involve a daily repetition of this pain, its accumulative
effect constitutes one of the heaviest of human costs, a lowering of mentality
and of moral resistance closely corresponding to the decline of physical
resistance. Drink and other sensational excesses are the normal reactions
of this lowered morale. Thus fatigue ranks as a main determinant of the 'character'
of the working-classes and has a social significance in its bearing upon
order and progress not less important than its influence upon the individual
organism.
§6. I have dwelt in some detail upon these phenomena of fatigue, because
they exhibit most clearly the defects of the working life which carry heaviest
human costs. These defects are excessive duration of labour, excessive specialisation,
excessive repetition, excessive strain and excessive speed. Though separate
for purposes of analysis, these factors closely interact. Mere duration of
labour does not necessarily involve fatigue, provided it carries the elements
of interest, variety, and achievement. The degree of specialisation or subdivision
of labour counts on the whole more heavily. But even a high degree of specialisation
is alleviated, where it contains many little changes of action or position,
and affords scope for the satisfaction attending expert skill. It is the
constant repetition of an identical action at a prescribed pace that brings
the heaviest burden of monotony.
It is upon this combination of conditions that the first count against the
dominion of machinery is based. The brief physiological consideration we
have brought to bear upon the problem of fatigue gives clearer significance
to monotony as a 'cost'. It implies, not merely a dull and distasteful occupation,
but one which, taxing continually the same muscles and the same nerve-centres,
increases the poison of fatigue. Hand labour of a narrow order, or machine-tending
however light, entails this heavy cost, if maintained over a long period
of time.
But where monotonous repetition is closely directed by the action of a machine,
as regards its manner and its pace, there is a special nervous cost. For
a hand-worker, however dull or heavy is the work, retains some slight power
of varying the pace and perhaps of changing his position or mode of work.
A worker who either feeds a machine or adjusts his movements in obedience
to those of a machine, as for instance a cutter in the clothing trade or
in shoemaking, has no such liberty. The special cost here entailed is that
of trying to make an organism conform in its movements to a mechanism. Now
a human being, or any other organism, has certain natural rhythms of movement
for work, related to the rhythms of heart and lungs and other organic processes,
and there are natural limits also to the pace at which he Can efficiently,
or even possibly, continue working. A machine also has rhythms and a maximum
efficiency pace. But the rhythms of a machine are determined by its mechanical
construction and the apparatus which furnishes its power: they are continuously
uniform, and are capable of being speeded up beyond the capacity of the human
tender.
A human rhythm is really labour-saving, in as much as it eases the strain
to work in accordance with a natural swing. To set a man to follow the rhythm
of a machine not only loses this economy, but entails an extra effort of
conformity. The tendency to speed up a machine, so as to get the most out
of it, is liable to take out of the machine-tender even more than he is capable
of recognising in the way of nervous strain. Where considerable muscular
activity is also required in following a high pace set by a machine, an appalling
burden of human costs may be accumulated in a factory day.
When to such direct human costs of labour are added the risks of industrial
accident or of industrial diseases, the physical injuries involved in bad
atmosphere, heat, noise and other incidental pains and inconveniences which
beset many branches of industry, we begin to realise with more distinctness
the meaning of 'costs of labour' in the human as distinguished from the economic
sense.
Later on we shall turn to consider how far the economic or monetary 'costs'
correspond with these human costs.
Our present task, however, is to conduct a brief survey of general industry
in order to form some idea of the magnitude of these human costs in the leading
branches of production, and to consider how far they are offset or qualified
by factors of human interest or utility, such as we found widely prevalent
in the work of the artistic, official, and administrative classes.
NOTES:
1. Weariness, the Rede Lecture, Cambridge, 1893.
2. Foster. Op. cit.
3. Goldmarck, Fatigue and Efficiency, p. 22.
4. Goldmarck, p. 22.
5. Ibid, p. 23.
6. Goldmarck, p. 33.
7. Goldmarck, p. 37.
CHAPTER VI: THE REIGN OF THE MACHINE
§1. If it were true that all the labour of the wage-earning
classes which went to produce the real national income were, or tended to
become, monotonous and highly specialised machine tending, the workers constantly
engaged in close repetition of some single narrow automatic process, contributing
to some final composite product whose form and utility had no real meaning
for them, the tale of human costs would be appalling.
Fortunately this is not the whole truth about labour. Even the charge against
machinery of mechanising the worker is frequently overstated. The only productive
work that is entirely automatic is done by machines. For the main trend of
the development of industrial machinery has been to set non-human tools and
power to undertake work which man could not execute with the required regularity,
exactitude, or pace, by reason of certain organic deficiencies. While, then,
the sub-divided labour in most staple industries is mostly of a narrowly
prescribed and routine character, it is hardly ever so completely uniform
and repetitive as that done by a machine. Purely routine work, demanding
no human skill or judgment is nearly always undertaken by machinery, except
where human labour can be bought so cheap that it does not pay to invent
and apply machinery so as to secure some slightly increased regularity or
pace of output. Where, then, as in most modern factories, human labour cooperates
with, tends and feeds machinery, this human labour is of a less purely repetitive
character than the work done by the machines. Some portions of the labour,
at any rate, contain elements of skill or judgment, and are not entirely
uniform.
We can in fact distinguish many kinds and grades of human cooperation with
machinery. In some of them man is the habitual servant, in others the habitual
master of the machine; in others, again, the relation is more indirect or
incidental. Though an increasing number of the processes in the making and
moving of most forms of material goods involves the use of machinery and
power, they do not involve, as is sometimes supposed, the employment of a
growing proportion of the workers in the merely routine labour of tending
the machines. Such a supposition, indeed, is inconsistent with the primary
economy of machinery, the so-called labour-saving property. It might, indeed,
be the case that the machine economy was accompanied by so vast an increase
of demand for machine-made goods, that the quantity of labour required for
tending the machines was greater than that formerly required for making by
hand the smaller quantity. In some trades this is no doubt so, as for instance
in the printing trade, and in some branches of textile industry where the
home market is largely supplemented by export trade. But the displacement
of machine-tenders by automatic machines is advancing in many of the highly-developed
machine industries. The modern flour or paper mill, for instance, performs
nearly all its feeding processes by mechanical means while in the textile
trade automatic spindles and looms have reduced the number and changed the
character of the work of minders. More and more of this work means bringing
human elements of skill and judgment and responsibility to bear in adjusting
or correcting the irregularities or errors in the operations of machinery.
Machines are liable to run down, become clogged, break, or otherwise 'go
wrong'. These errors they can often be made to announce by automatic signals,
but human care is needed for their correction. This work, however monotonous
and fatiguing to muscles or nerves, is not and cannot be entirely repetitive.
In many other processes where the machine is said to do the work, human
skill and practice are required to set and to regulate the operations of
the machine. The use of automatic lathes is an instance of cooperation in
which some scope for human judgment remains. The metal and engineering trades
are full of such instances. Though machinery is an exceedingly important
and in many processes a governing factor, it cannot be said to reduce the
labour that works with it to its own automatic level. On the contrary, it
may be taken as generally true that, in the processes where machinery has
reached its most complex development, an increased share of the labour employed
in close connection with the machinery is that of the skilled engineer or
fitter rather than of the mere tender. The heaviest and the most costly labour
in these trades is usually found in the processes where it has not been found
practicable or economical to apply machinery. Indeed, the general tendency,
especially noticed in America, in the metal trades, has been to substitute
for a large employment of skilled hand labour of a narrowly specialised order,
a small employment of more skilled and responsible supervisors of machinery
and a large employment of low-skilled manual labour in the less mechanical
departments, such as furnace work and other operations preparatory to the
machine processes.
§2. Though accurate statistics are not available, it appears that in
this country the proportion of the working population employed in manufactures
is not increasing, and it is more than probable that an exact analysis of
the nature of the work of our factories and workshops would show that the
proportion engaged in direct attendance on machinery was steadily falling.
For even in manufacture, the department of industry where machine processes
have made most advance, there are many processes where hand labour is still
required, in sorting and preparing materials for machinery, in performing
minor processes of trimming or decoration, in putting together parts or in
packing, etc. Where female labour is employed, a very large proportion of
it will be found to be engaged in such processes outside the direct dominion
of machinery. Though most of the distinctively human 'costs' of machine processes,
the long hours, high pace, monotony of muscles and nerve strain, are usually
present in such work, it is not absolutely mechanical, some slight elements
of skill and volitional direction being present.
There are other restrictions upon the purely repetitive or routine character
of manufacture. There is much work which no machine can be invented to do
because of certain inherent elements of irregularity. Most of these are related
to the organic nature of some of the materials used. Where expensive animal
or vegetable products require treatment, their natural inequalities often
render a purely mechanical operation impossible or wasteful. The killing,
cutting, and canning processes in the meat trade, the picking, preparation
and packing of fruit, many processes in the tanning and leather trade. the
finer sorts of cabinetmaking, are examples of this unadaptability of organic
materials to purely mechanical treatment. Where very valuable inorganic materials
are used in making high-grade products, similar limitations in the machine
economy exist. The finest jewellery and watch-making still require the skill
and judgment of the practised human hand and eye. Some of the irregularities
in such processes are, indeed, so small and so uninteresting as to afford
little, if any, abatement of human costs; but they remove the labour from
the direct control of a machine.
A more important irregularity which restricts machinery in manufacture exists
where the personal needs or taste of the consumer help to determine the nature
of the process and the product. Here again we are confronted by the antagonism
of mechanism and organism. For the true demand of consumers is the highest
expression of the uniqueness which distinguishes the organic. As no two consumers
are exactly identical in size, shape, physical or mental capacities, tastes
and needs, the goods required for their consumption should exhibit similar
differences. Machine economy cannot properly meet this requirement. It can
only deal with consumers so far as their human nature is common: it cannot
supply the needs of their individuality. So far as they are willing to sink
their differences, consenting to consume large quantities of goods of identical
shapes, sizes and qualities, the machine can supply them. But since no two
consumers are really identical in needs and tastes, or remain quite constant
in their needs and tastes, the fundamental assumption of routine-economy
is opposed to the human facts.
Consumers who refuse to sink their individuality and are 'particular' in
the sort of clothes they wear, the sort of houses and furniture and other
goods they will consent to buy, exercise a power antagonistic to routine
labour. They demand that producers shall put out the technical skill, the
care, taste and judgment required to satisfy their feelings as consumers.
That is to say, they demand the labour not of the routine-worker but of the
craftsman, work which, though not creative in the full free artistic sense,
contains distinct elements of human interest and initiative.
§3. The presence and the possibilities of this individuality of labour,
flowing from the educated individuality of consumers, are a most important
influence in the lightening of the human costs of labour. At present no doubt
a very small proportion of the material goods turned out by the industrial
system contains any appreciable element of this individuality of workmanship.
It may, indeed, well appear that our recent course during the development
of the machine economy has been a retrograde one. In the beginnings of industry
it appeared as if there were more scope for the producer's self-expression,
more joy of work, more interest in the product, even though destined for
the commonest uses. The guilds in the Middle Ages preserved not a little
of this happier spirit of craftsmanship. To those who brood upon these visions
of the past, our modern industrial development has often seemed a crude substitution
of quantity of goods for quality, the character of labour deteriorating in
the process. With the element of truth in such a judgment is mingled much
falsehood. There has never been an age or a country where the great bulk
of labour was not toilsome, painful, monotonous, and uninteresting, often
degrading in its conditions. Bad as things are, when regarded from the standpoint
of a human ideal, they are better for the majority of the workers in this
and in other advanced industrial countries than ever in the past, so far
as we can reconstruct and understand that past. Machinery has rendered a
great human service by taking over large masses of heavy, dull, and degrading
work. When fully developed and harnessed to the social service of man, it
should prove to be the great liberator of his free productive tastes and
faculties, performing for him the routine processes of industry so that he
may have time and energy to devote himself to activities more interesting
and varied.
The uniqueness of the individual consumer has only begun to make its impression
upon industry. For it needs liberty and education for a man to recognise
this property of organic uniqueness and to insist on realising it. The first
movements of conscious tastes in a nation or a class are largely imitative,
taking shape in fashions sufficiently wide-spread and uniform to lend themselves
to routine mechanical production. The self-assertion of the individual is
a slower fruit of culture. But, as it grows, it will offer a continually
stronger opposition to the dominion of mechanical production. It will do
this in two ways. In the first place, it will cause a larger proportion of
demand to be directed to the classes of products, such as intellectual, aesthetic,
and personal services, which are by their nature less susceptible of mechanical
production. In the second place, weakening the traditional and the imitative
factors in taste and demand, it will cause consumption, even of the higher
forms of material commodities, to be a more accurate expression of the changing
needs and tastes of the individual, stamping upon the processes of production
the same impress of individuality.
But though the direct control of machinery over human labour is obstructed
in the earlier extractive processes by the refractory uneven nature of materials,
and in the final processes by the nature and particular requirements of consumers,
its influence extends far beyond the middle processes of manufacture where
its prominence is greatest. Power-driven machinery plays a larger part in
agriculture every year: mining is the first of machine industries in the
sense that it employs the largest amount of horsepower per man; the transport
trade by sea and land is mechanised even in its minor local branches; the
great public services, supplying light, water, and other common wants, are
among the largest users of power-driven machinery; the greatest of our material
industries which still depends mainly upon hand labour, the building and
road-making group, is constantly increasing its dependence on machinery for
its heavier carrying work and for the preparation of the metal, stone and
woodwork it employs. When we add the growth of new large manufactures, such
as chemicals and electrical apparatus, the enormous expansion of the paper
and printing trades under the new mechanical conditions, the recent transference
of the processes of the preparation of foods and drinks and laundry work
from the private house to the factory, we shall recognise that the net influence
of machinery, as determining the character of human labour, is still advancing
with considerable rapidity.
§4. It is not easy to answer the two related questions, 'How far is
machinery the master, how far the servant, of the workers who cooperate with
it?' 'How far does machinery aggravate, how far lighten the human costs of
labour?' Even when we compare the work of the classes most subservient to
machinery, the feeders and tenders in our factories, with the domestic or
earlier factory processes under hand labour, it is by no means self-evident
that the net burden of the human costs has been enhanced. For, though the
spinning and weaving work before the industrial revolution had certain slight
elements of freedom and variety now absent, many of the hygienic conditions
were far worse, the hours of labour were usually longer, and the large employment
of old folk and tender children, in work nearly as unvaried as that enjoined
by modern machinery, enslaved the entire life of the home and family to the
narrow and precarious conditions of a small local trade. The real liberty
of the worker, as regards his work, or its disposal in the market, was hardly
greater than in the modern factory.
In most of the great branches of production, machinery is rather an adjunct
to labour than a director. The labourer in charge of the machine tends more
to the type of the engineer than to that of the feeder or mere minder. Though
the mining, metal, chemical, paper, food and drink manufactures contain large
quantities of machinery, a large proportion of those who have to deal with
the machines are skilled manual labourers. So in the transport trade, though
the displacement of the old-time sailor by the engineer and stoker, of the
horse-driver by the engine-driver and the motor-man, sometimes appears to
involve a degradation of labour, the issue is a doubtful one, if all the
pros and cons are taken into due account. As regards the employment of machinery
in the building and contracting trades, as in the mining, its first and obvious
effect has been to relieve human labour from much of the heaviest muscular
toil. Though most of such labour involves too slight elements of interest
or skill greatly to alleviate the physical fatigue, it cannot be said that
machinery has increased the burden.
CHAPTER VII: THE DISTRIBUTION OF
HUMAN COSTS
§1. In endeavouring to estimate the human costs of
labour in terms of physical wear and tear and the conscious pains and penalties
entailed by the conditions under which many industrial processes are carried
on, we have hitherto considered these costs as borne by workers, irrespective
of age, sex, or other discriminations. But it is self-evident that a given
strain upon muscles or nerves over a period of time will vary greatly, both
in the organic cost and in the conscious pain which it entails, according
to the strength and endurance, nervous structure, physical and moral sensitiveness,
of the different sorts of workers. Indeed, a given output of productive energy
will evidently entail a different human cost in every person called upon
to give it out: for every difference of strength, skill, capacity and character
must to some extent affect the organic burden of the task.
In endeavouring, therefore, to relate the human to the economic costs of
production of any quantity of material wealth or services, it would be necessary
to consider how far the conditions of employment tend to economise human
costs by distributing the burden proportionately to the power to bear it.
The human wastes or excessive costs, entailed by conditions of employment
which impose unequal burdens upon workers with equal capacity to bear them,
or which distribute the burden unequally in time over the same set of workers,
alternating slack periods with periods of excessive over-time, are obvious.
Unfortunately the operation of our industrial system has not hitherto taken
these into sufficient account. Though the physical, moral and social injuries,
due to alternating periods of over and under work, are generally admitted,
the full costs of such irregularity, human and even economic, are far from
being adequately realised. While some attempts at 'decasualisation' are being
made, the larger and more wasteful irregularities of seasonal and cyclical
fluctuations are still regarded as irremediable. By the workers themselves
and even by social reformers, the injury inflicted upon wages and the standard
of living by irregularity of employment is appreciated far more adequately
than the related injury inflicted on the physique and morale of the worker
by sandwiching periods of over-exertion between intervals of idleness.
This brief survey, however, is no place for a discussion of the causes and
remedies of irregular employment. It must suffice to note that over a large
number of the fields of industry the excesses and defects of such irregularity
prevail to an extent which adds greatly to the total human cost of the products.
So far as our nation is concerned, there is no reason to hold that this waste
is increasing. Evidence of hours of labour and of unemployment, indeed, appear
to indicate that it is somewhat diminishing. But the unequal time-distribution
of human costs must continue to rank as a great enhancement of the aggregate
of such costs.
§2. But not less injurious than the unequal treatment of equals, is
the equal treatment of unequals. The bad human economy of working immature
children is a lesson which even the most 'civilised' nations have been exceedingly
slow to learn. The bad human economy of working old persons of declining
vigour, when able-bodied adult labour is available, is so far from being
generally recognised that employers are actually commended on the ground
of humanity for keeping at labour their aged employees, when younger and
stronger workers are available. Fortunately, the larger provision for retiring
pensions attests the growing recognition of this aggravation of the human
costs of industry. In both cases alike, the employment of the young and of
the old, the error arises from a short-sighted view of the interests of the
single person or his single family, instead of a far-sighted view of the
welfare of the community. It is often a source of immediate gain to a working-class
family to put the children out to wage-earning as early as possible, and
to keep old people working as long as they can get work to do. It does not
pay the nation, even in the economic sense, that either of these things should
be done. The case of child-labour is, of course, the more serious, in that
it evidently entails not merely a wasteful strain upon feeble organisms,
but an even heavier future cost in stunted growth and impaired efficiency
throughout an entire life.
When the play of current economic forces places upon women work which men
could perform more easily, or creates women's industries with conditions
of labour involving excessive strains upon the organism, the double human
costs are even heavier. For if excessive fatigue or nervous strain affects
a woman as worker, the injurious costs are likely to be continued and enhanced
through her capacity for motherhood. To use up or damage its women by setting
them to hard wage labour in mill and workshop is probably the greatest human
waste a nation could practise or permit. For some of the prevailing tendencies
of modern industrialism appear to be more 'costly' in their bearing upon
women than on men. In regard to factory work, and all other industrial work
involving a long continuous muscular or nervous strain, or, as in shop labour
with its long hours of standing, medical authorities are unanimous in holding
that women suffer more than men.1 'If a like amount of physical toil and
effort be imposed on women, they suffer to a larger degree,' states Sir W.
MacCormac.2 Statistics of employment from various countries agree in showing
that the amount of morbidity, as measured by the number of days lost by illness,
is greater among working-women than among working-men, and that the mortality
of working-women is greater than that of workingmen, notwithstanding the
fact that the average life of a female is longer than that of a male. Long
hours and speeding-up of machinery thus evidently inflict graver organic
costs on women than on men. Where piecework is in vogue, it furnishes a stronger
stimulus to over-strain in women, because the general lowness of their wage
gives a larger importance to each addition.
§3. Thus in comparing the human costs of producing a given quantity
of goods, due account must be taken of the distribution of the output of
productive energy among workers of different sexes, and ages. The earlier
tendency of the factory system in this country, the existing tendency in
some countries, has been to impose a growing of monotonous and fatiguing
labour upon women and children. At certain stages in the development of industrial
machinery, this has been held to be a 'profitable' economy, and in many processes
of hand labour subsidiary to the factory system it still survives. Though
legislation and other influences have done much to check the worst injuries
of child employment in factories and workshops in more civilised communities,
a great amount of human cost is still incurred under this head. Child half-timers
are still used in considerable numbers in textile factories, while the vast
expansion of distributive work has sucked into premature wage-earning immense
numbers of boys who ought to be at school. It is probable that the net tendency
of British industry in recent years has been towards a slow reduction of
the more injurious and 'costly' forms of female employment. Though an enormous
number of females are engaged in work the hours and hygienic conditions of
which escape legal regulation, probably a growing proportion of employed
women come under an economy of shorter hours. The drudgery of domestic service
engages a less number of women, while the opening of a larger variety of
employments both in manufacture and in commerce has somewhat improved their
power to resist the excessive pressure of machine-conditions. The recent
organised attack upon the 'sweated industries', however, reveals the fact
that at the lower level of many trades a great mass of oppressive and injurious
labour is extorted from working-women. Certain forms of new mechanical labour,
not involving heavy muscular fatigue, but taxing severely the nervous system,
are occupying a large number of women. The type-writer and the telephone
have not yet been brought into conformity with the demands of health. Though
machinery is generally bringing in its wake restrictions on hours of labour,
the normal work-day of factory, office and shop still imposes a gravely excessive
strain upon women employees. No small proportion of this excessive cost of
women's work, however, is attributable to legal, professional, or conventional
restrictions, which, precluding women from entering many skilled and lucrative
employments, compel them to compete in low-skilled and overstocked labour-markets.
The social waste of such sex discrimination is two-fold. Even in trades and
professions for which men have usually a greater aptitude than women, some
women can perform the work better and more easily than some men, and, if
they are denied equal opportunity of access, the work is done worse or at
a greater human cost. The refusal to admit women into the learned professions
upon equal terms with men undoubtedly involves a loss to society of some
of the finest service of the human intellect, while it entrusts some of the
skilled and responsible work, thus denied to women, to relatively ignorant
and incompetent men. The other human cost is perhaps even heavier. For the
excessive competition, to which women are thus exposed in the occupations
left to them, depresses the remuneration in most instances below the true
level of physical efficiency, induces or compels excessive hours of labour,
breaks down the health of women-workers and injures their life.
§4. This general survey shows that the human 'costs' of labour are
closely associated in most cases with that subdivision and specialisation
of activities which takes its extreme form in machine tending and which conforms
most closely to mere 'repetition' as distinguished from the creative branches
of production. But this identification of 'repetition' and human costs cannot
be pressed into a general law. For reflection shows that repetition or routine
does not always carry cost, and that on the other hand some labour which
has considerable variety is very costly. Healthy organic life permits, indeed
requires, a certain admixture of routine or repetition with its more creative
functions. A certain amount of regular rhythmic exercise of the same muscles
and nerve-centres yields vital utility and satisfaction. In some sports this
exercise may be carried so far as to involve considerable elements of fatigue
and endurance which are offset during their occurrence by the sense of personal
prowess and the interest of achievement, This sentimental zest of endurance
may notoriously be carried to extremes, injurious to the physical organism.
Moreover, a certain amount of narrow physical routine often furnishes a relief
element for the tired nerves or brain. Digging or knitting, though intolerable
as a constant employment, may furnish by their very physical routine an organic
benefit when applied as a recreation. The same, indeed, is true of most other
not too taxing forms of manual or mental routine labour, especially if they
contain some obvious utility. Some slight element of skill seems needed for
certain natures, but a bare uninteresting repetition commonly suffices.
Such considerations dispose of the assumption that all repetition or routine
in productive work is necessarily indicative of human cost and carries no
organic utility or satisfaction. It is only when repetition is extended so
as to engage too large a share of the time and energy of a human being that
it involves a cost.
So, on the other hand, it is not the case that all labour containing variety
and opportunity for skill is costless and organically good. Take for a notable
example agricultural labour. Irregularity of soil and weather, the changes
and chances of animal and vegetable life, the performance of many different
processes, remove such work from the category of exact routine. Yet most
of the labour connected with agriculture is, under the actual conditions
of its performance, heavy, dull and joyless. In each process there is usually
enough repetition and monotony to inflict fatigue, and the accumulation of
separate fatigues in a long day's work, unalleviated by adequate personal
interest in the process or its product, makes a heavy burden of cost.
The same holds of other departments of industry where some inherent elements
of skill and interest are found. The total burden of effort given out in
a long day's work, continued week after week, year after year, under the
conditions of wagedom, greatly outweighs these technical advantages. Duration
and compulsion cancel most, though not all, of the superiority of such work
over machine tending, or clerking. A little labour in any of the handicrafts,
in machine-running, the management of motor-cars or boats, in gardening and
other modes of agriculture, serves as a pleasant pastime when undertaken
as a voluntary and occasional employment. Make it regular, continuous, compulsory,
and the enjoyment soon vanishes. The very elements of interest for the casual
amateur often constitute the heaviest cost for the worker who lives by doing
this and nothing else. Take motor driving for an example. The quick exercise
of nerve and muscle, the keenness of eye, wrist and attention, required to
drive easily, quickly and safely, amid traffic or in a tangle of roads, gives
nerve and interest to driving as a recreation. But this multiplication of
little strains and risks, accumulating in a long day's work, and undertaken
day after day, in all conditions of health, disposition and weather, soon
passes from an agreeable and stimulating exercise into a toilsome drudgery.
Consideration of the work in the distributive trades, wholesale and retail,
which absorb an ever-growing proportion of our wage-earners, is most instructive
for understanding the respective parts played by specialisation, duration,
and compulsion in the human costs. Machinery has little direct control over
the work of these clerks, warehousemen, shop-assistants, typists, etc.: their
work contains constant little elements of variety in detail, and a moderate
amount of it imposes no fatigue. But the scope afforded for personal skill
or achievement is insufficient; most of it is unmeaning and uninteresting
so far as useful results are concerned; it involves constant obedience to
the orders of another; and it is unduly prolonged.
§5. We are now in a position to sum up the results of our general analysis
of the human costs of labour, in which Tarde's distinction between creation
and imitation or repetition was our starting point. So far as the merely
or mainly physical costs are concerned, the muscular and nervous strain and
fatigue, excessive repetition is a true description of the chief cause. Machine
tending at a high pace for a long working-day is in itself the most 'costly'
type of labour, and, in so far as a machine controls the sort and pace of
work done by a human being, these 'costs' accumulate. But most work is not
so directly controlled by machinery, and yet is so highly specialised that
the routine constantly over-taxes with fatigue the muscles, nerves and attention.
The duration and pace of such labour are usually such as to heap up heavy
costs of physical wear and tear and of physical discomforts.
But the antithesis of creation and imitation or repetition has a different
significance for the interpretation of physical costs. There it is not so
much the absence of novelty involved in repetition, as the absence of personal
liberty and spontaneity that counts most heavily. There are, in fact, few
sorts of necessary productive labour which a man is not prepared to do for
himself, with some measure of personal satisfaction, if he has within his
own control the performance of this task and the result. But when another's
will and purpose supersede his own, prescribing actions to be done under
conditions of time, place and manner, determined by that other, this servitude
to another's will is always irksome and may be degrading. The human cost
of most domestic service lies largely here. The work itself has more detailed
variety and interest than most, and where the housewife herself does it,
it often furnishes a net fund of human satisfaction. But the moral and intellectual
costs of a hired servant, compelled to obey the arbitrary and capricious
orders of a mistress, and to suppress her own will, tastes and inclinations
in the execution of her task, are often very heavy. In a smaller degree this
applies to all wage-earners engaged in any work where scope for their free
volition is technically feasible. To substitute another's will for one's
own, in matters where one has a will, is always a human cost. That cost,
however, need not be great. When a worker is a unit of labour in some great
business, his actions conforming to rules which, however troublesome, belong
to the system, the consciousness of loss of liberty is far less than when
the changing will of a personal employer operating amid the details of his
work is the instrument of discipline. A shop-girl in a large business has
a feeling of greater independence than a domestic servant, a factory-hand
than a shop-girl, while the low wage of homeworkers is in part attributable
to the removal of the worker from the mediate domination of the employer's
will.
§6. In assessing the psychical elements of cost, it is well to distinguish
those related to a loss of liberty, or an encroachment upon personality,
from those which are the conscious results or counterparts of the physical
strains. For the enlargement of certain of these psychical costs is an exceedingly
important factor in what is called 'industrial unrest'. This irksomeness
of narrowly specialised labour and of the 'enslaving' conditions of the ordinary
working life grows with the growth of intelligence and sensibility among
the working-classes. Under the older order, of accepted class distinctions
and economic status, implicit obedience to the employer's will carried no
conscious moral cost. A new sense of personal dignity and value has now arisen
in the better educated grades of workers which interferes with arbitrary
modes of discipline. When they are called upon to do work in a way which
appears to them foolish, injurious, or inequitable, a sense of resentment
is aroused which smoulders through the working week as a moral cost. With
every widening of education there comes, moreover, a discontent not merely
with the particular conditions of the labour, but with the whole system,
or set of conditions, which addicts so large a proportion of their working
hours and energies to the dull heavy task by which they earn their living.
So too the narrow limitation in the choice of work which the local specialisation
of industry involves, becomes a growing grievance. The 'conditions of labour'
for themselves and others, taken as a whole, are realised as an invasion
and a degradation of their humanity, offering neither stimulus nor opportunity
for a man to throw 'himself' into his work. For the work only calls for a
fragment of that 'self' and always the same fragment. So it is true that
not only is labour divided but the labourer. And it is manifest that, so
far as his organic human nature is concerned, its unused portions are destined
to idleness, atrophy, and decay.
This analysis of the conditions may seldom be fully realised in the consciousness
of the worker. But education has gone far enough to make them real factors
of working-class discontent. They constitute a large motive in the working-class
movement which we may call the revolt of the producer against the excessive
human costs of his production.
This is the great and serious indictment against the economy of division
of labour. Associated with it is the charge that the worker in one of these
routine subdivided processes has no appreciation of the utility or social
meaning of his labour. He does not himself make anything that is an object
of interest to him. His contribution to the long series of productive processes
that go to turn out a commodity may be very valuable. But, as he cannot from
his little angle perceive the cooperative unity of the productive series,
it means nothing to his intelligence or heart.
So not only does the performance of his task afford him no satisfaction,
but its end or object is a matter of indifference to him. There is this vital
difference between the carpenter who makes a cupboard or a door, fits it
into its place and sees that it is good, and the bricklayer's labourer who
merely mixes mortar and carries bricks upon a hod. A man who is not interested
in his work, and does not recognise in it either beauty or utility, is degraded
by that work, whether he knows it or not. When he comes to a clear consciousness
of that degradation, the spiritual cost is greatly enhanced. It is true that
specialisation in labour is socially useful, and that, if that specialisation
does not encroach too largely upon the energy and personality of the individual
worker, he is not injured but helped by the contribution to social wealth
which his special work enables him to make. Larger enlightenment as to the
real meaning and value of his work, and the sense of social service which
should follow, may indeed be expected to reduce considerably the irksomeness
of its present incidence. But it can do so only upon two conditions. In the
first place, the duration and strain upon his physical and moral nature must
be diminished. Secondly, the general conditions both of labour and of its
remuneration must be such as to lead him to recognise that the discipline
which it enjoins is conducive to a larger liberty, viz., that of willing
cooperation with his fellows in the production of social welfare. As yet
the attainment of these conditions has not kept pace with the new desires
and aspirations which have grown so rapidly among the rank and file of workers
in the advanced industrial countries. Hence a new burden of spiritual costs,
expressing an increased divergence between conscious aspirations and the
normal conditions of the worker's lot. The education of the town worker,
the association with his fellows in large workshops, the life of the streets,
the education of the school, the newspaper, the library, the club, have made
him increasingly sensitive to the narrowness and degradation of excessive
routine in joyless labour.
NOTES:
1. Cf. Goldmarck, Part II, pp. 126.
2. Report of the Select Committee of the House of Lords on Early Closing
in Shops, 1901.
CHAPTER VIII: HUMAN COSTS IN THE
SUPPLY OF CAPITAL
§1. So far, in discussing the human 'costs' of production,
we have confined our attention to the activities of body and mind directly
operative in producing marketable goods or services, grading them from the
creative and generally 'costless' work of the artist and inventor to the
repetitive and 'costly' work of the routine manual labourer. We now proceed
to examine the human costs involved in the processes of providing the capital
which cooperates with labour in the various productive operations. The economic
'costs', for which payment is made out of the product to capital, are two,
risk-taking and saving. What are the human costs involved in these economic
costs?
To clear the ground for this enquiry it will be well to begin by making
plain the sense in which risk-taking and saving are 'productive' activities.
Neither of them is 'work' in the ordinary organic sense of the application
of muscle or nervous energy to the production of wealth. Both would rather
be considered as activities of the human will and judgment which increase
the efficiency of the directly productive operations. Their productivity
may thus be regarded as indirect. But it is none the less real and important
on that account. For unless there was postponement of some consumption which
might have taken place, and the application of the non-consumptive goods,
which this postponement enabled to come into existence, to uses involving
risks of loss, 'work' would be very unproductive in comparison with what
it is.
Risk-taking, the giving up of a present certain utility or satisfaction
for the chance of a larger but less certain satisfaction in the future, is,
we know, the essence of business enterprise. Such enterprise by no means
always entails a human cost. In industry, as in all human functions, experiments,
involving risk, are frequently a source of vital interest and of conscious
satisfaction. There are two roots of this satisfaction, the staking of one's
judgment and skill in forecasting and determining future events, and the
actual joy of hazard. The former is a common trait of intelligent personality,
the latter a powerful, though less general motive, involving a 'sporting'
interest in life. The spirit of adventure applied to business, enhances the
conscious values. Whether it be motived by some physical restlessness or
by some element of faith, it must be accounted an organic good, alike as
means and end. If all the risk-taking involved in current industry were of
this nature, it would not then figure in our bill of human costs, but on
the other side of the account. But where the conditions of actual business
impose elements of risk that are either in kind or magnitude compulsory,
not voluntary, not only does no satisfaction attend the taking of these risks,
but considerable loss and suffering may accrue. Risks that are either great
in themselves or great in relation to the capacity to bear them are frequently
required by the conditions of modern business enterprise. The men who undergo
these risks do not deliberately or with express intention stake their faith
and foresight on a game of gain or loss, or even enter into the risks with
the gambler's zest. They undergo these risks because they cannot help themselves,
and the anxiety attendant on these risks is often one of the heaviest psychical
and physical costs of the business man.
§2. In analysing risk-taking as a special cost of capital, I must guard
against one misunderstanding. Risk-taking, of both sorts, humanly good and
humanly bad, is not of course by any means confined to administration of
capital. Everyone who, either by choice or by the necessity of his situation,
devotes his personal energies to making any product for the market, or to
improving some personal capacity with a view to its productive use, incurs
risks. In some cases the risks may not indeed entail real human waste, as
where the artist or inventor speculates with his creative faculty. Or the
professional man, preparing for his career, may willingly and with zest enter
a competition in which prizes are few. Men equipped with vigorous intellect
and determination will get out of the struggle for professional or commercial
success a satisfaction of which the risk of failure is a necessary condition.
But for most men a small quantum of hazard suffices. A little risk may stimulate
but a larger risk will depress efficiency. A doctor, a lawyer, an engineer
is willing to put his natural and acquired ability against those of his fellows
in a fair field where the chances of success are reasonably large. But when
the risks are so numerous and so incalculable as they are to-day in most
professional careers, the anxiety they cause must be accounted a heavy human
cost. The same applies to the career of most modern business men. It also
constitutes a new and growing cost of labour.
For though it may be true that the actual risks of a working life, personal
or economic, are no greater than in former times, the emotional and intellectual
realisation of these risks is growing. Education enables and compels the
intelligent workman to understand the precarious nature of his livelihood,
and his growing sensibility accumulates in 'worry'. This is certainly one
of the main sources of 'industrial unrest'.
But though risk-taking thus enters as a human cost into the life of other
owners of productive powers, we do right to accord it special attention in
relation to the supply of capital. For in the provision of all forms of capital,
and in the payment for its use, risk-taking is an element of primary importance,
and, though in theory separable from the act of abstinence, postponement,
or waiting, which comes into prominence as the direct psychical cost of saving,
it is not separable in industrial practice.
§3. Let us first examine the economic costs involved in the provision
of industrial capital. That process consists in making, or causing to be
made, non-consumable goods, which are useful for assisting the future production
of consumable goods, instead of making, or causing to be made, directly consumable
goods. We need not discuss at length the shallow criticism pressed by some
socialists to the effect that since labour makes all goods whether non-consumable
or consumable, the only economic and human cost of providing these forms
of capital is the productive energy of labour. For the decision and effort
of mind or will, which determines that non-consumables shall be made instead
of consumables, proceeds not from the labour employed in making them, but
from the owners of income who decide to save instead of spending. This decision
to save instead of spending is the economic force which causes so much of
the productive power of labour to occupy itself in making non-consumables.
It is of the first importance that the ordinary business man, to whom 'saving'
is apt to mean putting money in a bank, or buying shares, shall realise the
concrete significance of his action. What he is really doing is causing to
be made and to be maintained some addition to the existing fabric of material
instruments for furthering the future production of commodities. This is
not, as it may at first appear, a single act of choice, the determination
to use a portion of one's income, say £100, in paying men to make steel
rails or to put up a factory chimney, instead of paying them to make clothes,
furniture, or wine for one's current consumption. The effort of postponement,
or the preference of uncertain future for certain present consumables, necessary
for supplying capital, if it is an effort, is a continuous one lasting all
the time the capital is in use. The critic who asks, why a single 'act of
abstinence' which is past and done with should be rewarded by a perpetual
payment of annual interest, fails to realise that, so far as saving involves
a serviceable action of the saver, it goes on all the time that the saver
lies out of the full present enjoyment of his property, i.e., as long as
his savings continue to function as productive instruments.
This view, of course, by no means begs the question whether there is of
necessity and always some human cost or sacrifice involved in such a process
of saving. It is, indeed, clear that a good deal of capital may be supplied
without any human costs either in postponement of current satisfaction or
in risk-taking. The squirrel stores nuts by an organic instinct of economy
against the winter, as the bear stores fat. The thrifty housewife lays up
provisions by a calculation hardly less instinctive against the probable
requirements of the family in the near future. The balancing of future against
present satisfaction, involved in such processes, cannot be considered as
involving any human cost, but rather some slight balance of utility. I am
certainly in no sense the loser in that I do not lay out all my income the
same day that i receive it in purchasing immediate satisfaction. Why I am
not the loser is evident. The first 5 per cent of my income I can perhaps
spend advantageously at once upon necessaries and comforts which contribute
immediately to my welfare. But if I know the sum has got to last me for six
months, it will evidently pay me in organic welfare to spread nearly all
the rest in a series of expenditures over the whole period, so that I may
have these necessaries and comforts all the time. If my income is no more
than just sufficient to keep me in full health, i.e., in providing vital
'necessaries', organic welfare demands a quite even expenditure, entailing
the proper quantity of postponement. If there is anything over for expenditure
on unnecessaries, this will not be quite evenly spread over the six months.
For any comforts it affords appear to bring more pleasure if enjoyed now
than in three or six months' time.1 And, besides, there is the question of
uncertainty of life, upon the one hand, and the risk of being unable to get
bold of the future comforts when I may want them. This depreciation of future
as compared with present satisfaction and these risks will properly induce
me to grade downwards the expenditure on comforts during the period in question.
But in this laying out of my income, so as to secure for myself the maximum
of satisfaction and utility,2 there is no human cost or sacrifice. On the
contrary, any failure to 'save' or 'postpone' might be attended by a heavy
cost. Many a savage has died of starvation because he has gorged to repletion
instead of storing food to tide him over till he gets possession of a new
supply. Thus this simplest economy of saving, the spreading of consumption
over a period of time, is evidently costless.
§4. Now, though the saving which consists in keeping stores of consumables
for future consumption does not furnish what would be called capital, and
so does not come directly within the scope of our particular enquiry into
'costs of capital,' it gives a useful test for the economy of saving under
modern capitalism. The modern saver does not, indeed, usually keep in his
possession for future consumption a store of consumable goods. It would be
inconvenient to store them, many of them are by nature perishable and so
incapable of storage. Besides, modern industry affords him a way of making
industrial society store them for him, or, more strictly, makes it produce
a constant supply of fresh consumables to which he can get access. Nay, it
provides still better for his needs, for it enables him, by postponing some
present consumption to which he is entitled, not merely to take out of the
constant social supply the full equivalent of his postponed consumption at
any time he chooses, but to receive an additional small regular claim upon
other consumptive or productive goods, called interest.
This extra payment was regarded by the classical economists as a cost or
price paid for an effort of abstinence. More recent economists have usually
chosen to substitute for abstinence 'waiting' or some equally colourless
term. But abstinence is better, for it does suggest a painful effort involving
some human cost, some play of motives naturally adverse to saving which requires
to be overcome by a positive economic payment. Thus, not merely the economic,
but the moral or human necessity of interest is best asserted.
This abstinence or postponement of possible present consumption of commodities
is admittedly the condition or even the cause of the supply of the productive
instruments which increase the production of future wealth and incidentally
furnish the fund out of which the interest is paid. For our present purpose,
then, it makes no difference whether we look at the primitive saving which
stored consumables for future use, or the modern saving which causes productive
instruments to be created, applied and maintained. The question whether there
are human costs of saving, and what they are, is in the last resort the same
in both cases.
Out of any individual, or social, income a certain amount or proportion
of saving evidently may be 'costless' in the human sense. That is to say,
the person or society that saves it sustains no organic loss or injury by
doing so, though he may sometimes think or feel he does. If he does so think
or feel, society must set a counter-weight against this false imaginary loss,
in the shape of interest. But, as we have already noted, there is a good
deal of saving which represents the calculated outlay over a period of time,
which the owner of an income will make in his own interest. In such cases
there is no human cost, and if an economic cost (interest) is defrayed, it
has no human correlative. From the standpoint of human distribution of wealth
it involves a waste.
The organic utility to individuals of hoarding, in order, by distributing
consumption over a longer period of time, to get from it a larger aggregate
of goods, will thus furnish a considerable quantity of instrumental capital
to modern industry. For, only by putting the postponed consumption into the
form of instrumental capital, can the savers establish the lien they want
upon the future output of consumables. If all the required capital could
be got by this simple play of motives, the savers balancing more useful future
units of consumption against less useful present units, with due allowance
for risks connected with postponement, the supply of capital would be humanly
'costless.' Though some element of risk, inherent in the proceeding, would,
taken by itself, carry a cost, the superior utility attaching to the postponed
units of consumption, as compared with that which the same number of units
would afford when added to the consumption already provided, would offset
that cost, so that the arrangement, as a whole, would be costless.
§5. Though the method of our analysis has obliged us to approach this
problem of saving as part of our enquiry into processes of production, because
it is the means by which a productive factor, viz. capital, is supplied,
it appertains directly to the process of consumption, or outlay of income
on consumables. As the current expenditure of any member of industrial society
will be distributed among a number of different purchases, contributing by
natural, conventional, or purely personal connections, towards a standard
of consumption endowed with maximum utility (or what the consumer takes for
such), so will it be with the distribution of expenditure over points of
time. Let us elevate into a clear conscious policy of calculation what is
in large measure a blind instinctive conduct, and the organic relation between
the two 'economies' is apparent. It involves an intricate balancing of larger
future utilities, weighted by risks, against smaller present utilities not
so weighted. To take the simplest instance. If, out of an income of £600
coming in this year, I decide to consume £500 in the current expenditure
of the year and to put aside £100 for consumption in five years' time
(when I purpose to work only half-time and earn only half my present income),
I shall have estimated that the luxuries which i could buy this year by the
sixth hundred pounds expenditure are slightly less agreeable or 'useful'
to me than the comforts purchasable by the fourth hundred pounds as visualised
five years off, with an allowance for the chance that i may then be dead,
or that I may have come into a legacy which renders this postponement of
consumption unnecessary. In a word, this economic ego must be conceived as
operating by a plan of outlay which, in regard to the disposal of the current
income, has a longitude and latitude of survey and valuation. Just as the
different ingredients of present consumption make a complex organic whole
with delicately proportioned parts, the size and form of each dictated by
the unified conception of the current standard of comfort, so the disposition
of the income over a series of points of time in which present values of
each several consumable and of the whole standard are compared with future
values, involves the similar application of a plan for the realisation of
my economic ideal. Though a fully rational conception and calculus, either
for the composition of current expenditure or for prospective outlays, is
very rare, some half-conscious, half-instinctive calculus of the sort must
be accredited to everybody.3 So far as it is rightly conducted by their reasoning
or just instinct, it means that, out of all or most of the members of an
industrial society, some humanly costless saving could be got, some contribution
towards the socially desirable fund of capital.
§6. As, then, we have seen that a certain proportion of the various
current activities, which are directly productive in the shape of skilled
and unskilled labour of brain and hand, are either humanly costless or carry
some positive fund of human utility, so is it also with the processes of
saving and risk-taking, which go to the supply and maintenance of capital.
It is not difficult to conceive a society in which all the saving needed
for the normal development of industry might be costless. In a primitive
society, based chiefly on agriculture and simple handicrafts, one might find
the bulk of the working population earning a secure and sufficient livelihood,
but with no margin of savings for instrumental capital. The comparatively
small amount of such capital as was needed might be furnished mainly or entirely
from the surplus incomes of a landowning or a governing class, extracted
as rent or taxes. Of course, if, as would commonly occur, such rents or taxes
were extorted from the peasantry by starving them or by imposing a burden
of excessive toil, the human costs of such saving would be very heavy. But
where a class of feudal lords drew moderate rents and fines from their tenants,
or where a governing caste, such as the Incas in ancient Peru, applied to
useful public works a large share of what would be called the 'economic rent'
of the country, taken in taxation, such saving need entail no human cost.
Nor is such costless provision of capital necessarily confined to a society
living under simple industrial conditions in which comparatively little saving
can be utilised. Even in an advanced industrial society the large incessant
increments of capital might be provided costlessly. For if the national dividend
were not only very large but so well or equably distributed, as income, that
all classes had more than enough to satisfy their current organic needs,
such a society would, by a virtually automatic economy, secrete stores of
capital to meet the future needs of a growing population or a rising standard
of consumption, as every animal organism naturally lays up stores of fat,
muscle and physical energy, for future use.
A well-ordered socialistic state, were such possible, would certainly apply
the industrial forces at its disposal, so as to secure an adequate supply
of costless capital. After making proper provision out of current industry
for the physical and moral health of the whole population, and for normal
progress in personal efficiency of work and life, it would apply the surplus
of industrial energy to improving the capital fabric of industry so as to
provide for the production of increasing wealth, leisure, and other opportunities
in the future. The calculation, as to what proportion of current industrial
energy should be thus applied to preparing future economic goods to ripen
for utility at various distances of time, would of course be a delicate operation.
But so far as it were correctly carried out, it would be socially costless.
For on the hypothesis that adequate provision for current needs of individual
stability and progress had been a first charge on the industrial dividend,
the postponement of any additional consumption involved in social saving
could not rightly be regarded as involving any net human cost. For, if, instead
of the surplus being saved, it had been paid out to individual members of
society for current consumption, it would ex hypothesi be unproductive of
organic welfare, being applied in an injurious and wasteful attempt to force
the pace of advances in the current standard of living. Applying the organic
metaphor, one would say that it was a natural function of an organised society
to secrete capital in due quantity for its future life.
§7. But how far can it be held that an industrial society like ours
is so organised as 'naturally' to secrete the 'right' quantity of capital,
to provide it in a costless way, and to distribute it economically among
its various uses? A full answer to these questions must be deferred until
our analysis of the consumption side of the national dividend enables us
to assess the human utility of the productive work to which capital is applied.
At present we must assume the utility of the £300,000,000 of savings
applied out of the aggregate national income to the enlargement of industry,
and confine ourselves to enquiring what proportion of this amount is likely
to be 'costless' and how to estimate the 'human costs' attached to the other
part. It is, of course, quite evident that such answer as can be given is
of a general and speculative nature, with no pretence at quantitative exactitude.
In considering savings with an eye to discovering the human costs. It will
be well to classify these savings under three heads. First will come what
may be termed the automatic saving of the surplus income of the rich, that
which, remaining over, after all wants, inclusive of luxuries, are satiated,
accumulates for investment. The proportion of new capital proceeding from
this source will vary with the amount and regularity of such income, its
distribution among the rich, and their attitude of mind towards the expenditure
of their incomes. The automatic or spontaneous character of this saving is
due to the fact that no close relation exists between progress in industry
and the evolution of a personal standard of consumption. Sudden rapid advances
of income are not usually accompanied by a corresponding pressure of new
personal wants tending immediately to absorb in increasing expenditure each
increase of income. Though no limit can be set upon the expenses of a luxurious
standard of consumption and the vagaries of personal extravagance, expensive
habits take time for their establishment, and in a progressive industrial
society where skilful, or lucky, business men are making fortunes rapidly,
their acquisitive power will be apt to run far ahead of their consumptive
practice. Moreover, the absorption in the practice of making money evidently
retards the full acquisition of habits of lavish expenditure, giving full
scope to the development neither of tastes nor of opportunities. This will
be particularly true of incomes growing not by regular increments but by
sudden rushes. Extreme instances abound in the recent history of America.
Where the quick skilful seizure of new sudden opportunities, conjoined with
a general development of national resources at an abnormally rapid pace,
enables a Jay Gould or a John D. Rockefeller to amass millions within a few
years, a wide natural divergence is created between income and expenditure.
Enormous masses of unspent income thus roll up into capital which again continually
grows by the accumulation of the unspent interest it earns. Though the number
of persons in this position of financial magnitude is very few, a considerable
class of successful business men in America and in every advanced European
country comes into the same category as regards capacity of saving. While
their personal and family expenditure may be continually rising, it will
tend to keep in safe adjustment to what may be termed a conservative estimate
of their income. The occasional great trading coups, the enormous profits
of a commercial or financial boom, will not even tend to be assimilated in
expenditure.
Wherever the economic circumstances of a country are such as to throw a
large proportion of the growing wealth into the hands of a class of busy
rising men, by a series of great windfalls or more or less incalculable increments,
the new capital flowing from these superfluous incomes will be large. Moreover,
so far as it is automatic, it will have little if any regard to rate of interest,
and thus to 'social demand', so far as interest can be considered a just
index of social demand.4
Even when the element of fluctuating or fortuitous increase of income is
not present, a fairly rapid advance of income, particularly where it is 'earned'
and therefore carries no presumption of indefinite continuance, will ordinarily
leave a considerable margin of automatic saving. This will be larger where
the standard of living is already established on a high level. For though
certain curious psychological traits seem to show an extraordinary concentration
of personal interest in the extravagances which give personal distinction
in 'society', the low pressure of organic utility, or the emergence of positive
disutility inherent in many of these forms of luxury, must be considered
to exercise some check. Putting the matter simply, one would say that real
primary human needs are more readily assimilated in a standard of consumption
than purely conventional or positively injurious modes of expenditure. So,
making every allowance for the depravity of tastes and the zest for competitive
extravagance, it will remain true that the classes with large incomes will
tend to contribute to capital a large amount of surplus income by a process
of automatic accumulation.
For such saving there is neither an economic nor a human cost involved:
the interest it receives is in the economic sense as much a 'surplus' as
the rent of land. Not merely is there no human cost, there is a positive
human utility in such saving, for it is an instinctive rejection of the injurious
effort to incorporate this surplus in a current expenditure already adequate
to satisfy all felt wants, good or bad.
It is likely that a large and a growing proportion of the total volume of
saving in England and in the Western world is of this order. For though it
may not be generally true that the rich are growing richer and the poor poorer,
it is probably true that both a larger quantity and a larger proportion of
the national income are in the hands of rich and well-to-do business men
whose means have been advanCing faster than their expenditure.
§8. So much for the automatic saving of the rich. We have next to take
into account the admittedly large contribution of the classes who in respect
of income are 'middle'. This comprises the great majority of families engaged
in the directive work of manufacture and commerce, and almost the whole of
the upper grades of the professional and official classes in such a country
as ours, as well as a considerable number of persons of moderate 'independent'
means. A certain amount of conscious 'thrift' is traditional in these classes.
It is by no means automatic, but involves for the most part some conscious
sacrifice of current satisfaction in favour of a greater estimated future
satisfaction to the saver or his family. The motives which influence such
saving, alike in its amount and its application as capital, are complex and
various. But the sacrifice ascribed to such saving cannot be assumed to involve
any economic cost, in the sense that it requires the payment of economic
interest to evoke it. Still less can it be assumed to involve a human cost.
A good deal of this middle-class saving, though less automatic than the savings
of the rich, is a calculated postponement of some expenditure which might
purchase present comforts or luxuries, in order to make provision for the
purchase of necessaries or conveniences at some future time. In a word, it
is of the nature of the 'stocking' saving, which the better-to-do peasants
have always practised before the opportunities of profitable and fairly safe
investment were open to them. Though utilised to earn interest, the saving
would be made just the same if no objective interest were attainable, provided
it were tolerably secure against pillage or destruction. Risk counts for
more than interest in such saving, and the bulk of the so-called interest
which such savings demand, as a condition of loan or investment, is not true
interest but insurance. But in practice inseparable from such saving is that
undertaken with the direct object of earning interest upon the capital. A
great deal of middle-class saving, and some saving of the rich class would
not take place without the hope of receiving interest. If no interest were
attainable, though some saving might take place, in order to provide against
the possibility of a total collapse of current earning power and a consequent
deprivation of the necessaries of life, there would be little disposition
to give up any present free expenditure on comforts in order to provide for
future comforts which might not be wanted, or which, in consequence of loss
of savings, might not be procurable. A positive bonus in the shape of interest
seems necessary to evoke this latter saving. The operation of this bonus
as an inducement is, however, very complex. It might appear at first sight
obvious that, the larger the bonus in the shape of rate of interest, the
greater the aggregate of saving it would evoke. So far as non-automatic saving
is motived by a general desire to be better off in the future, in order to
attain a standard of consumption and of social consideration which denote
success and satisfy personal ambition, or in order to bequeath a large estate
to one's family, higher interest will tend to evoke a corresponding increase
of saving in those whose current incomes enable them to save considerable
sums without encroaching upon their established standard of comfort. Young
or middle-aged men, of an aspiring nature and with rising incomes, will undoubtedly
save more if they see a handsome return on their investments. But, as most
men will realise more clearly and feel more keenly these future economic
and social gains if the full fruits of such savings will be reaped by themselves,
not by their heirs, ageing men will be likely to respond less freely to this
motive. Present comfort, security, and power, will mean more to them than
a future liberality of living which they can only hope to enjoy for a few
years, if at all. The amount, therefore, of the acceleration of saving achieved
by a rise of interest will depend a good deal upon the relative importance
this general desire to be better off possesses as an inducement to save.
That relative importance again will depend a good deal upon whether the economic
and social conditions of the community place considerable numbers of younger
business or professional men in a position of rising incomes and of considerable
saving power, or, on the contrary, confine such surpluses chiefly to older
men.
If, instead of taking as our motive a general desire to be better off, we
take a desire to save in order to make some limited specific provision, as
for example to buy an annuity of £100, the effect of a higher rate of
interest upon volume of saving is likely to be different. Though it may serve
to quicken in some degree the pace at which the sum required will be amassed,
it will reduce the absolute amount of saving. For when interest is higher,
the capital sum required to yield an annuity of £100 a year will be
less than before. Against this, however, must be set the fact that, when
a definite sum is needed in order to pay off some debt, or to furnish a sufficiency
for retirement, a high rate of interest may be required in order to make
this saving possible or certain. If a man cannot save enough to attain such
definite object, he will not save at all, for an insufficient amount will
be held futile; whereas, if a rise of interest gives him a good prospect
of saving the required amount, he will put forth the effort.
§9. But making due allowance for counteracting motives, it is tolerably
certain that a rise of interest, showing any signs of continuance, will stimulate
an increase of 'motived' saving, though by no means a proportionate increase.
Thus it will appear that, so far as this large section of middle-class saving
is concerned, some definite measurable economic costs, in the sense of deprivation
of current consumption, are involved, requiring compensation in the shape
of interest. But the question which concerns us is whether there are human
costs corresponding to and involved in these economic costs. In answering
this question, it is not enough to point to the admitted fact that this saving
involves the failure to satisfy some current desire for increased consumption.
It has to be considered whether the sacrifice of current 'satisfaction' is
really a sacrifice of welfare, either from the standpoint of the saver, or
of the society of which he is a member. For we have not taken the view that
the personal transient desires and valuations of consumers are a final criterion,
either of personal or social welfare. If then the saving evoked by paying
interest merely means that certain fairly well-to-do folks abstain from comforts
or luxuries, which, though agreeable and innocent, carry no organic benefit,
there is no human cost, or even if there is some slight cost, it may be offset
by the individual or social benefit resulting from the postponement of consumption.
A large proportion of motived middle-class saving undoubtedly falls within
this category. But by no means all. A good deal of lower middle-class saving
eats into certain factors of humanly serviceable expenditure, particularly
expenditure in education of the young. Frequently it injures the free life
of the home by the constant pressure of niggling economies, which, though
not perhaps injurious in the particular privations they impose, leave no
margin for the small pleasures and amenities which have a vital value. Even
though we assume that such saving brings, in the ownership of property and
the interest it yields, a full vital compensation to the individual who saves,
it by no means follows that it is socially justified, when a true criterion
of social welfare is applied. Take for instance the saving which is diverted
from expenditure on education, precluding the children from getting a university
or professional training and turning them on the world to earn a living,
less effectively equipped than they might have been. Society may be a heavy
loser by its policy of evoking such thrift by means of interest, for it obtains
a certain amount of material capital in place of the more valuable intellectual
or moral capital which the money, expended upon education, might have yielded.
Even regarded from the standpoint of future economic productivity, the stimulation
of this sort of saving is likely to be injurious.
§10. Far graver importance attaches to this consideration when we approach
the savings of the working-classes. The contribution made from this source
to the flow of fresh capital, the £300,000,000 per annum, is evidently
attended by heavy human costs. Very little of it can be regarded as the considered
reasonable outlay over a long period of time of income not needed for current
organically useful consumption. Most of it involves a stinting of the prime
necessaries or conveniences of life, or of some rise in present expenditure
which would promote the health or efficiency of the family. Almost the only
saving made by ordinary wage-earners not attended by this human sacrifice
is that applied by young workers, who having only themselves to keep, can
afford to set aside some portion of their pay in full employment so as to
furnish a future home, and to insure against a few special emergencies involving
loss of earning power or expenses connected with death or sickness. Even
such personally serviceable insurances the married worker can seldom properly
afford. Though the narrower view of the economy of a self-sufficing family
may appear to justify savings made out of a wage the entire present expenditure
of which can be applied to purposes of organically useful consumption, the
wider social standpoint does not endorse this policy. For a workman to pinch
on housing, clothing, the education of his children, or upon wholesome recreation,
in order to avoid worse pinching in some unforeseen but probable emergency,
may be sound individual economy. But, unless society is unable from other
resources at its disposal to provide against these emergencies of working-class
life, it is an unsound social economy, involving a heavy net cost of social
welfare. The issue is a very vital one. It may be stated in this concrete
form. Most of the savings effected in this country out of a family income
of 30/ or less per week, and much of the savings made out of a larger income
when the worker's family is young, involve a sort of abstinence which is
fraught with heavy net costs in the social economy. No part of the economically
necessary fund of annual capital ought to be drawn from this sort of saving.
It is literally a coining of human life into instrumental capital, and the
degradation of the term 'thrift' in its application to such saving is a damning
commentary upon the false standard of social valuation which endorses and
approves the sacrifice. The great risks of loss which actually attend such
saving, and the heavy expenses of the machinery of its collection and administration,
aggravate the waste. If we ascribe £50,000,0005 out of the £300,000,000
to this class of savings, a proper social book-keeping would put the human
costs of this working-class abstinence as a large offset to the net utility
of the other £250,000,000. The forethought, endurance, and other real
or supposed benefits to the character of the workers imputed to this 'thrift'
can no more be regarded as a compensation for such social injury, than can
the discipline and fortitude of soldiers be regarded as a testimony to the
net human economy of war.
NOTES:
1. Observe that this appearance is illusory. The maximum
of organic utility would probably involve an even expenditure of all the
elements of income without allowance for my preference of present over future.
2. It may be urged that, even in respect of necessaries, there will be some
discount for future as compared with present consumption. But in any class
of civilised men, whose income is paid at long intervals, this discount will
be very small and may be ignored.
3. For a discussion of the nature and limitations of this calculus see Chapter
XXI.
4. 'So ingrained is the habit of accumulation among the prosperous classes
of modern society, that it seems to proceed irrespective of the rate of interest.'
Taussig, Principles of Economics, Vol. II, p. 27.
5. This is most likely a gravely excessive estimate. Probably £30,000,000
or 1/10 of the national saving would be nearer the mark. Moreover, a large
proportion of working-class savings is not destined to purposes of permanent
investment but to provision for some early probable emergency, e.g., burial
or unemployment which will cancel the saving. There exist no approximately
reliable estimates of the amount of capital belonging to the working-classes.
The usually accepted figure includes under the head of Post Office Savings
Bank and Building Societies a large but unknown quantity of middle-class
savings.
CHAPTER IX: HUMAN UTILITY OF
CONSUMPTION
§1. When we turn to the other side of the account,
the human utility which this £2,000,000,000 of goods and services represents,
we enter a country which, as we have already recognised, Political Economy
has hardly begun to explore. For though the trend of a large modern school
of economists has been to find in consumption the vis motrix of all economic
processes, and to bring close study to bear upon the pressure of consumers'
wants as they operate through demand in the markets of commodities, this
volte face in the theory of values does not render much assistance to our
human valuation. For their analysis of demands does not help us to interpret
expenditure in terms of human utility. As an instrument for such a purpose
it is doubly defective. For, in the first place, it is concerned entirely
with the actual felt wants and preferences which in fact determine purchases.
In the second place, it takes for granted the existing distribution of incomes
or consuming power, tracing the operation of this power of demand upon the
actual economy of economic processes. Now these limitations, quite necessary
for the purely economic interpretation, are not suited to our requirements.
The current standard of valuations and of choice cannot be taken as an adequate
standard of individual or social welfare. Felt wants, and demands based on
them, form no doubt some index of welfare, but an insufficient one.
A considerable proportion of the goods and services included in the real
income which we are analysing must from our standpoint be classed not as
wealth, but as 'illth', to adopt Ruskin's term. What proportion we should
place in the category will of course depend upon the degree to which we hold
that the actual evolution of the arts of consumption has been distorted from
its 'natural' course. But everyone will admit that many sorts of marketable
goods and services are injurious alike to the individuals who consume them
and to society. A large proportion of the stimulants and drugs which absorb
a growing share of income in many civilised communities, bad literature,
art and recreations, the services of prostitutes and flunkeys, are conspicuous
instances. Not merely does no human utility correspond to the economic utility
ascribed to such goods, but there is a large positive disutility. The aggregate
human value of a growing national income may easily be reduced by any increase
in the proportion of expenditure upon such classes of goods, and tendencies
of distribution which lead to such proportionate increase may even invalidate
the assumption that social welfare upon the whole grows with the growth of
the national dividend. We shall presently consider some of the factors in
our social structure which bring about the development of definitely bad
demands and bad products to satisfy them.
But just as we must write to the debit side of our human account a great
many articles which figure on the credit side in ordinary economic book-keeping,
so we shall be compelled to revise the comparative values attached to those
articles which contain actual powers of human utility. A valuation which
sets an equal value upon each part of a supply because it sells for the same
sum cannot serve the purposes of a human valuation. For the amount of human
utility, individual or social, attaching to the consumption of any stock
of goods or services, must evidently depend in large degree upon who gets
them and how much each consumer gets, that is to say upon their distribution.
The same goods figure as necessaries of life or as waste according to who
gets them. Some quarters of the same wheat supply furnish life and working
energy to labourers, other quarters pass unconsumed into the dustbins of
the rich.
There is, moreover, a third consideration which counts in the process of
converting economic into human values. As in the distribution of productive
energy human economy requires an adjustment to the individual capacity of
production, so in the distribution of consumptive utilities a corresponding
regard must be paid to the natural or acquired capacity of the individual
consumer. Some persons have greater natural capacity than others for the
use or enjoyment of certain classes of goods, material or immaterial. An
absolutely equal distribution of bread, or any other necessity of life, on
a per caput basis, would evidently be a wasteful economy. What applies to
the prime physical wants will apply more largely to the goods which supply
'higher' wants. For, as one ascends from the purely animal to the spiritual
wants, the divergences in capacity of utilisation will grow. This does not
necessarily imply very wide differences in the aggregate quantity of wealth
which can be usefully consumed by different persons, because deficiencies
in some tastes or capacities may be compensated by development of others.
Moreover, the widest personal differences will usually lie outside the range
of economic satisfaction. Yet even among economic consumers there will be
considerable differences in the amount of organic service or satisfaction
that different persons can get out of the same amount of goods. A noble work
of art, as Ruskin insisted, has no value for primitive peasants without cultivated
tastes. The finest library of serious literature has little value to-day
in an ordinary English industrial town. But it is needless to multiply examples
to illustrate the truth that the vital value got from any stock of consumable
wealth must depend upon the capacity of those into whose hands it passes
to make a good use of it. In other words, it depends upon how far the consumer
has acquired the art of consumption. Nor is this merely a question of developing
and cultivating sound tastes in a class or a people. It is often a matter
of knowledge how to extract and utilise the utility which goods contain.
It is sometimes pointed out that over 90 per cent of the heating power of
coal burned in domestic fires is wasted. Improved grates, or the substitution
of some central heating system, might stop a considerable portion of this
waste, securing an increase of heating power and of its vital value out of
each ton burned.
§2. Until we know then 'What are the concrete goods represented by
the £2,000,000,000 income? How are they apportioned among different
classes of the consuming public? How far are those who get these goods qualified
to get the vital value out of them?' we cannot compute, even in general terms,
the aggregate human utility they carry.
Our calculus of the human utility of consumption will thus in form and method
closely correspond with our calculus of the human cost of production. Taking
as the subject-matter of our analysis the goods and services constituting
the real income of the nation, our analysis of production endeavoured to
apply two criteria, one relating to the Arts of Production actually employed,
the other to the Distribution of the productive efforts involved in the employment
of these arts. Similarly, our analysis of consumption rests upon the application
of like criteria to the Arts of Consumption and the Distribution of consuming
power.
In the productive analysis, considerations of the methods of industry, in
relation to the quantity of creative and imitative, interesting and repellent
work, the use of machinery and subdivided labour, the elements of forethought,
risk-taking, and organisation, length of the work-day, regularity of employment,
apportionment of routine industry among the grades and classes of producers,
are found to be the main determinants of the sum of human costs. A similar
analysis, applied to the consideration of the standards and methods of consumption
prevailing among the different grades and classes of consumers, and to the
distribution of consuming power among these classes as to amount and regularity,
will yield a sum of human utility.
But in approaching the arts of consumption, we find they have not developed
in the same way as the arts of production.
Starting from primitive society with the practically self-sufficing family
group, where everybody took a hand in the different sorts of work and a share
in the consumption of the different products, we find ourselves carried along
a career of continual differentiation of labour not attended by any corresponding
differentiation of consumption. Industry passes into large cooperative forms
outside the single family, with constantly finer division of labour. But
consumption is still chiefly carried on within the limit of the single family,1
and, so far from being specialised, it becomes more generalised. This contrast
of man as producer and consumer is of the first importance. Modern industrial
evolution shows a man becoming narrower and more specialised on his producing
side, wider and more various on his consuming side. As worker, he is confined
to the constant repetition of some section of a process in the production
of a single class of article. As consumer, he is in direct contact with thousands
of different sorts of workers in all parts of the world, and by his various
consumption applies a direct stimulus which vibrates through the whole industrial
system. As producer he is 'the one', as consumer 'the many'.
This diverging tendency in the economic evolution of man has important human
implications which will concern us later. At present it concerns us in its
bearing upon the arts of consumption.
§3. The great complex unit of productive activities which engaged our
attention was the Business. Productive economy, the amount of human cost
involved in the production of a given quantity of goods, depended, as we
saw, upon the structure and working of this Business. What is the consumptive
unit that corresponds to the Business? It is the Family, or Home, regarded
on its economic side. There is an economy of consumption in the family standard
of life as important for social welfare as the economy of production in the
Business. As the former stands towards costs of Production, so the other
stands towards utility of Consumption. As the economy of Production chiefly
consists in minimising cost, so the economy of Consumption should consist
in maximising utility. But the standard of consumption has in modern times
not been subjected to the same forces as have operated upon production. Though
in the beginning, as we saw, both were natural, organic and related processes,
the modern rationalisation of industry has not been accompanied by a corresponding
rationalisation of consumption. Inventors and transformers of industry have
not had their counterpart in consumption. A hundred times the quantity of
thought and effort has gone into the recent evolution of a single industry,
such as cotton or chemicals, that has gone into the improvement of consumption.
It is not difficult to understand the reasons of the great conservatism of
the consumptive arts. In primitive societies, where each family is a self-sufficing
economic unit, or where division of labour is on the simplest lines, the
industrial arts are almost as conservative as the methods of consumption.
The adoption of a new way of working is nearly as difficult as the adoption
of a new want. Custom rules both with an almost equal sway, though even at
this stage its hold upon the organic feelings will be somewhat stronger on
the consuming side, especially in matters of food and of family or tribal
ritual. It will be a little easier to use a new sort of snare, or to change
the shape of a pot or basket, than to take to a new headgear or a new way
of cooking meat. But when the industrial arts have advanced a certain way,
two forces combine to break the bond of custom and to encourage experiments
and improved methods. While consumption continues to be carried on in a number
of simple actions involving no considerable effort or conscious attention,
industry has passed into a related series of processes of considerable duration
and involving many separate acts of conscious effort and attention. The production
of an article will thus present a far larger number of opportunities for
change than its consumption, and there will be a greater likelihood that
advantageous changes will be tried and adopted. A new idea of saving labour,
the chance discovery of some new material, will be approved more readily
than any suggestion for some new food or an unaccustomed article of clothing.
For, in the former case, the reasoning faculty is of necessity alive and
operative to some degree, and the gain of the change can be realised experimentally,
while in the latter case, the reasoning faculty is hardly awake, and any
novelty of consumption is apt to have an initial barrier of natural aversion
to overcome.
But there is another reason for the easier progress of the productive costs.
In proportion as work passes into the shape of an organised business, administered
by an employer for profit, the control of any of its processes by primitive
custom or taboo tends to disappear. For the rationalism involved in the profitable
conduct of the business compels the employer to break any traditional barriers
obstructing the adoption of profitable reforms. Though there are doubtless
many reforms of the consumptive arts as humanly economical and profitable
as any of the great industrial reforms, there is not the same concentrated
motive of large immediately realised gains to urge their claims on any body
of consumers. Not only are the gains from an improvement in production more
immediate, more concrete and more impressive, but the risks and inconveniences
of the change are largely borne by others than the reformer, viz., his employees,
or his shareholders. The consumer, on the other hand, has himself to bear
all risks and inconveniences involved in the abandonment of an old article
or method of consumption, or the adoption of a new one. Finally, it must
be remembered that the actual risks attending an innovation are greater for
the consumer. For the modern producer is a skilled specialist in the particular
art of production in which he is engaged, the consumer is an unskilled amateur
in a more general art, possessing little knowledge and no effective power
of organising for his self-defence.
§4. The fact that the monetary profit of producers is the principal
determinant of most changes in the nature of consumables and the standards
of consumption is one of the most serious sources of danger in the evolution
of a healthy social economy. The present excessive control by the producer
injures and distorts the art of consumption in three ways. 1. It imposes,
maintains and fosters definitely injurious forms of consumption, the articles
of 'illth'. 2. It degrades or diminishes by adulteration, or by the substitute
of inferior materials or workmanship, the utility of many articles of consumption
used to satisfy a genuine need. 3. It stimulates the satisfaction of some
human wants and depresses the satisfaction of others, nOt according to their
true utility, but according to the more or less profitable character of the
several trades which supply these wants.
The prevalence of many of the most costly social evils of our time, war,
drink, gambling, prostitution, overcrowding, is largely attributable to the
fact that their material or trade appliances are sources of great private
profit. Such trades are the great enemies of progress in the art of life,
and the rescue of the consuming public from their grip is one of the weightiest
problems of our time. Two methods of defence are suggested. One is the education
and cooperation of consumers. But while education may do much to check the
consumption of certain classes of 'illth', it can hardly enable the consumer
to cope with the superior skill of the specialist producer by defeating the
arts of adulteration and deterioration which are so profitable. Consumers'
Leagues can perhaps do something to check adulteration and sweating, by the
employment of skilled agents. But it will remain very difficult for any such
private action to defeat the ever-changing devices of the less scrupulous
firms in profitable trades. The recognition of these defects of private action
causes an increased demand for public protection, by means of legislative
and administrative acts of prohibition and inspection. The struggle of the
State to stamp out or to regulate the trades which supply injurious or adulterated
foods, drinks, and drugs, to stop gambling, prostitution, insanitary housing,
and other definitely vicious businesses, is one of the greatest of modern
social experiments. Though the protection of the consumer is in many cases
joined with other considerations of public order, it is the inherent weakness
of the consumer, when confronted by the resources of an organised group of
producers, that is the primary motive of this State policy. How far the State
protection is, or can be made effective, is a question too large for discussion
here. It must suffice to observe that the conviction that the private interests
of producers will continue to defeat all attempts at State regulation in
socially 'dangerous trades' furnishes to socialism an argument on which there
is a tendency to lay an ever greater stress.
§5. These reflections are necessary as preliminary to the consideration
of the statics and dynamics of consumption in any nation or class. For they
represent the most important class of disturbing influences in the evolution
of standards of consumption.
Now in considering the proper mode of estimating the human utility contained
in our £1,700,000,000 worth of 'consumables', we must consider, first,
the validity of the standards of consumption in which they are incorporated.
If we have grounds for believing that actual standards of consumption are
moulded by the free pressure of healthy organic needs, evolving in a natural
and rational order towards a higher human life, there will be a presumption
favourable to the attribution of a high measure of human utility to the aggregate
income. In this enquiry we may, therefore, best start by considering the
evolution of wants and modes of satisfying them, as reactions of the half-instinctive,
half-rational demands of man upon his environment. Human animals, placed
in a given environment (with some power of moving into another slightly different
one or of altering slightly that in which they are) develop standards of
work and of consumption along the lines of 'survival value'. The earliest
stages in the evolution of both standards, consumption and industry, must
be directed by the conditions of the physical struggle for life. The modern
historical treatment of origins applies this principle in the analysis of
physical environments, in which Le Play and Buckle have done such valuable
pioneer work, and which such thinkers as Professor Geddes have carried further
in their schemes of regional survey.
Though the fundamental assumption which seems to underlie this method, at
any rate in its fulness, viz., that there is only one sort of mankind and
that all the differences which emerge in history, whether of 'racial' character
or of institutions, are products of environment, is open to question,2 the
dominant part played by physical environment in determining the evolution
of economic wants and satisfactions, is not disputed.
Like other animals, men must apply themselves to obtain out of the immediate
physical environment the means of maintenance -- the food, shelter and weapons,
the primitive tools, which enable them to work and live at all. If we consider
separately the consumptive side of this economy, we seem to grasp the idea
of an evolution of a standard of consumption, moulded by the instinctive
selection of means to satisfy organic needs of the individual and the species.
The sorts of food will be those obtained by experiments upon the flora and
fauna of the country, guided mainly by 'instinct', though some early conscious
cunning of selection and of cultivation will serve to improve and increase
the supplies. The clothing will consist of furs or plaited fibres got from
the same natural supplies. The shelter will consist of an easy adaptation
of trees, caves or other protective provisions of nature. Even the early
tools, weapons and domestic utensils, though admitting some more rational
processes of selection and adaptation, will remain half-instinctive efforts
to meet strong definite needs. So long as we are within this narrow range
of primary animal wants, there is perhaps little scope for grave errors and
wastes in standards of consumption. Doubtless mistakes of omission are possible,
e.g., a tribe may fail to utilise some abundant natural supply of food which
it is capable of assimilating. But such omissions will probably be rare,
at any rate in cases where population comes to press upon the food supply,
so evoking experiments in all natural resources. Grave errors of commission,
e.g., the adoption of poisonous ingredients into the supply of food or other
necessaries, will be impossible, so long as we are dealing with factors of
consumption which have a definite survival value. This seems to apply, whether
we attribute some instinctive wisdom or some more rational process of selection
as the evolutionary motive. In either case we have substantial guarantees
for the organic utility of most articles which enter the primitive standard
of consumption. This view is, of course, quite consistent with the admission
that in the detailed operation of this economy there will be a large accumulation
of minor errors and wastes. The most accurate instinct affords no security
against such losses: indeed the very strength of an animal instinct entails
an inability of adaptation to eccentricities or irregularities of environment.
No one can doubt this who watches the busy bee or the laborious ant pursuing
their respective industries.
§6. If man had always lived either in a stationary or a very slowly
changing environment, he would have remained a creature motived almost wholly
by specific instincts along a fairly accurate economy of prescribed organic
needs. The substitution of reason for a large part of these specific instincts
was evoked by the necessity of adaptation to changes and chances of environment
so large, swift or complex, that specific instincts were unfitted to cope
with them. Hence the need for a general 'instinct, of high adaptive capacity,
endowed with a power of central control operative through the brain. The
net biological economy of this evolution of a central conscious 'control',
in order to secure a better adjustment between organism and environment,
carries us to a further admission regarding the organic value of the basic
elements in a standard of consumption.
By the use of his brain man not merely selects from an indefinitely changing
environment foods and other articles conducive to survival, but adapts the
changing environment to his vital purposes. He alters the physical environment,
so as to make it yield a larger quantity and variety of present and future
goods, and he combines these goods into harmonious groups contributing to
a 'standard' of consumption. In this adaptive and progressive economy, evolving
new needs and new modes of satisfying old needs, shall we expect to find
the same degree of accuracy, the same immunity from serious error as in the
narrower statical economy of 'instinctive' animalism?
In the processes of adapting external nature for the provision of present,
still more of future, goods, in discovering new wants and methods of satisfying
them, and in assimilating the new wants in a standard of consumption, there
will necessarily be larger scope for error. But so long as the inventive
and progressive mind of man confines the changes, alike of industry and of
consumption, to the sphere of simple material commodities having a close
and important bearing upon physical survival, the limits of error and of
waste must continue to be narrow. All such progress will require experimentation,
and experiment implies a possibility of error. But at this early stage in
the evolution of wants, any want, or any mode of supplying a want, which
is definitely bad, will be curbed or stamped out by the conditions of the
struggle for life. A tribe that tries hastily to incorporate a tasty poison
in its diet must very soon succumb, as many modern instances of races exposed
to the attraction of 'firewater' testify. Thus far it may be admitted that
organic utility will assert its supremacy as a regulative force, not only
in the rejection of the bad, but in the selection of the good. The low standard
of consumption of a prosperous caveman or of a primitive pastoral family
must conform to an economy of high utility. Not only would all his ingredients
of food, clothes, shelter, firing and utensils, be closely conducive to physical
survival, but they would be closely complementary to one another. This complementary
structure of the standard of consumption follows from the organic nature
of man. Unless all his organic needs are continuously met he perishes. While,
therefore, he may know nothing of the distinctions which science later will
discover in the necessary constituents of food, he must have worked out empirically
a diet which will give him some sufficiently correct combination of proteids,
carbohydrates and fats, and in the forms in which he can assimilate them.
So also with his clothes, if he wears them. No savage could possibly adopt,
for ordinary wear, costumes so wasteful and so inconvenient as flourish in
civilised societies. Similarly with housing and utensils. And not only must
the articles belonging to each group of wants be complementary, but the groups
will themselves be complementary. The firing will have relation to the times
and sorts of feeding: clothing and shelter will be allied in the protection
they afford against weather and enemies: tools and weapons will be even more
closely related.
Thus in the earlier evolution of wants, when changes, alike of ways of living
and ways of work, are few and slow and have a close bearing on survival,
a standard of consumption will have a very high organic value.
§7. But when man passes into a more progressive era, and a definite
and fairly rapid process of civilisation begins, the brain continually devising
new wants and satisfactions, we seem to lose the earlier guarantees of organic
utility. When the standard of consumption incorporates increasing elements,
not of necessaries but of material conveniences, comforts and luxuries, and
adds to the satisfaction of physical desires that of psychical desires, how
far may it not trespass outside the true economy of welfare? So long as the
requirements of physical survival dominate the standard, it matters little
whether animal instinct or some more rational procedure maintains the standard.
But when these requirements lose control, and a standard of civilised human
life contains ever larger and more numerous elements which carry little or
no 'survival value', the possibilities of error and of disutility appear
to multiply.
If civilisation, with its novel modes of living, be regarded as an essentially
artificial process, in which considerations of organic welfare exercise no
regulative influence, there seems no limit to the amount of disutility or
illfare which may attach to the consumption of our national income. This
appears, indeed, to be the view of some of our social critics. Even those
who do not go so far as Mr. Edward Carpenter in diagnosing civilisation as
a disease, yet assign to it a very wide departure from the true path of human
progress. Indeed, it would be idle to deny that this income, not only in
the terms of its distribution but also in its consumption, contains very
large factors of waste and disutility, and that the higher, later elements
carry larger possibilities of waste than the earlier.
But this admission must not lead us to conceive of the so-called 'artificial'
factors in a standard of consumption as the products, either of chance, or
of some normal perversity in the development of tastes which foists upon
consumption elements destitute of human value.
For there are two possibilities to bear in mind. The first is that even
in the higher, less material, more 'artificial' ingredients of consumption,
the test of 'survival value' may still in some measure apply. A too comfortable
or luxurious mode of life may impair vitality, lessen the desire or capacity
of parenthood, or may introduce some inheritable defect injurious to the
stock. Such results may follow, not merely from bad physical habits, but
from what are commonly accounted good intellectual habits. For it is believed
that the high cerebration of an intellectual life is inimical to human fertility.
Again, so far as sexual attractions determine marriage and parenthood, modes
of living which either impair or overlay the points of attraction will continue
to be eliminated by natural selection. Habits of living, which damage either
manliness or womanliness will thus continue to be curbed by Nature.
But Nature may possess another safeguard of a more general efficacy. For
any intelligible theory of evolution, either of an individual organism or
a species, involves the presence and operation of some central power which,
working either through particular instincts, as in lower animals, or largely
through a coordinating 'reason', as in man, not only conserves but develops.
This organic purpose, or directive power, cannot be regarded as confined
to mere physical survival, either of the individual or the species. It must
also be considered as aiming at development, a fuller life for individual
and species. Now the evolution of human wants and standards of consumption
must be regarded as an aspect of this wider process of development. Whatever
measure, then, of control be accorded to the central directive power in organic
development, must operate to determine economic wants and economic standards
of life. If such directive action were infallible, securing, through the
central cerebral control, a completely economical policy of conservation
and development, no problems of a distinctively social or moral character
would arise. The existence of error, waste, sin, attests the fallibility
of this directive power. Aiming to keep the individual and the species to
lines of conduct that are psycho-physically beneficial, its directions are
either falsified or set aside by the force of some particular impulse or
emotion, usurping or defying the central authority. The liability to such
error and waste appears to grow pari passu with organic development. As reasoning
man with his more complex life has more chances of going wrong than lower
animals guided by instincts along a narrow life, so with each advance in
the complexity of human life these chances of error multiply. The explanation
of this expanding scope for error is not that reason is an inferior instrument
to instinct. Even in matters of 'life and death', with which. animal nature
is primarily concerned, reason must be accounted in the main an improvement
upon instinct. For though a particular instinct works more easily and accurately
in an absolutely uniform environment, reason deals more successfully with
eccentricities and changes. Its essential quality is this superior adaptiveness.
Therefore, in handling an environment, which not only is various and ever
changing by its own nature, but is made more various and more changing by
the interference of man, the human reason must work more successfully even
for purposes of physical survival than any array of instincts could. In the
struggle for a sufficient regular supply of food, or in the war against microbes,
the rationalism of modern science and industry performs 'survival' work for
which the exactitude of animal instinct is essentially unfitted.
The view then that error and waste necessarily increase with the development
of human society is not based upon any inferiority of reason to instinct.
It is due to the fact that, as humanity evolves further, a smaller proportion
of its total energy is needed for mere survival, and a larger proportion
is free for purposes of specific and individual progress. Now, the natural
economy for survival, whether working by instinct or by reason, is far more
rigorously enforced than the economy for progress. So long as the arts of
industry are so crude as to absorb almost all the available work of man in
provision for survival, the scope for waste is rigorously circumscribed.
But as industry develops to a stage that yields a considerable 'surplus'
beyond the needs for mere survival, the possibility of waste increases. For,
then, it becomes possible for individuals, or groups within a community,
to divert to purposes of excessive personal enjoyment the surplus of productive
power which, 'economically' directed by Nature or Reason, would have served
to raise the general level of well-being.
The widest aspect of this phenomenon does not concern us here. It will be
the subject of later commentary. We are here concerned only to explain why
it is likely that, as wealth grows, waste also will grow, and why the higher
standards of comfort in a nation or a class will contain a larger proportion
of socially wasteful or injurious goods. Nature's guarantee of the sound
organic use of the basic constituents of a standard of consumption does not
extend with the same force to the conveniences, comforts and luxuries built
upon this basis. Though one need not assume that no organically sound instinct
of selection or rejection operates in the adoption of new comforts or luxuries,
that natural safeguard must certainly be accounted weaker and less reliable.
As we study presently the actual modes by which the higher ingredients are
adopted into a class standard, we shall see that this assumption is borne
out by experience, and that considerations of organic welfare play a rapidly
diminishing part in determining the spread of most of the higher forms of
material and intellectual consumption.
NOTES:
1. Collective or cooperative consumption outside the home
or family is of course increasing. Not only have we municipal supplies for
pub1ic use, e.g., schools, libraries, museums, parks, baths, lighting, etc.,
but many forms of private expenditure of income on educational, recreative,
philanthrophic and other cooperative modes of consumption.
2. For the fullest and most recent exposition of this theory see Mr. J. M.
Robertson's The Evolution of States (Watts & Co.).
CHAPTER X: CLASS STANDARDS OF
CONSUMPTION
§1. We may now apply these general considerations regarding
the evolution of wants to class and individual standards of consumption.
In a concrete class standard of consumption we may conveniently distinguish
three determinant factors: 1st. The primary organic factor, the elements
in consumption imposed by general or particular conditions of physical environment,
such as soil, climate, in relation to physical needs. 2nd. The industrial
factor, the modifications in organic needs due directly or indirectly to
conditions of work. 3rd. The conventional factor, those elements in a standard
of consumption not based directly upon considerations of physical or economic
environment but imposed by social custom.
So far as the first factor is concerned, we are for the most part in the
region of material necessaries in which, as we have already seen, the organic
securities for human utility are strongest. Where any population has for
many generations been settled in a locality, it must adapt itself in two
ways to the physical conditions of that locality. Its chief constituents
of food, clothing, shelter, etc., must be accommodated to all the more permanent
and important conditions of soil, climate, situation and of the flora and
fauna of the country. A tropical people cannot be great meat-eaters or addicted
to strong drinks, though the materials for both habits may be abundant. An
arctic people, on the other hand, must find in animal fats a principal food,
and in the skins of animals a principal article of clothing. In a country
where earthquakes frequently occur, the materials and structure of the houses
must be light. In the same country the people of the mountains, the valleys,
the plains, the sea-shores, will be found with necessary differences in their
fundamental standard of consumption. It is, indeed, self-evident that physical
environment must exercise an important selective and rejective power represented
in the material standard of consumption. So far as man can modify and alter
the physical environment, as by drainage, forestry, or the destruction of
noxious animals or bacteria, he may to that extent release his standard of
consumption for this regional control.
Primitive man, again, and even most men in comparatively advanced civilisations,
are confined for the chief materials of food, shelter and other necessaries,
to the resources of their country or locality. They must accommodate their
digestions and their tastes to the foods that can be raised conveniently
and in sufficient quantities in the neighbourhood: they must build their
houses and make their domestic and other utensils out of the material products
within easy reach. The early evolution of a standard of necessary consumption,
working under this close economy of trial and error, appears to guarantee
a free, natural, instinctive selection of organically sound consumables.
The primary physical characteristics of a country, also of course, affect
with varying degrees of urgency those elements in a standard of consumption
not directly endowed with strong survival value, those which we call conveniences,
comforts, luxuries. The modes and materials of bodily adornment, the styles
of domestic and other architecture, religious ceremonies, forms of recreation,
will evidently be determined in a direct manner by climatic and other physical
considerations.
Recent civilisation, with its rapid extensive spread of communications,
and its equally rapid and various expansion of the arts of industry, has
brought about an interference with this natural economy which has dangers
as well as advantages. The swift expansion of commerce brings great quantities
of foods and other consumables from remote countries, and places them at
the disposal of populations under conditions which give no adequate security
for organic utility of consumption. Under an economy of natural selection
exotics are by right suspect, at any rate until time has tried them. The
incorporation of articles such as tea and tobacco in our popular consumption
has taken place under conditions which afford no proper guarantee of their
individual utility, or against the bad reactions they may cause in the whole
complex standards of consumption.
The back stroke of this commercial expansion is seen in such occurrences
as the deforestation of great tracts of country and the alteration of the
climatic character, with its effects upon the lives of the inhabitants.
But though certain errors and wastes attend these processes of commercialism
and industrialism, they must not be exaggerated. There is no reason to hold
that mankind in general has been so deeply and firmly specialised in needs
and satisfactions by local physical conditions that he cannot advantageously
avail himself of the material products of a wider environment. Though the
digestive and assimilative apparatus may not be so adaptable as the brain,
there is no ground for holding that conformity during many generations to
a particular form of diet precludes the easy adoption of exotic elements
often containing better food-properties in more assimilable forms. A Chinese
population, habituated to rice, can quickly respond in higher physical efficiency
to a wheat diet, nor is the fact that bananas are a tropical fruit detrimental
to their value as food for Londoners.
How far the purely empirical way in which foods and other elements in a
necessary standard have been evolved can be advantageously corrected or supplemented
by scientific tests, is a question remaining for discussion after the other
factors in standards of consumption have been brought under inspection.
§2. Industrial conditions, themselves of course largely determined
by physical environment, affect class and individual consumption in very
obvious ways. Each occupation imposes on the worker, and indirectly upon
all the members of his family, certain methods of living. Physiological laws
prescribe many of those methods. A particular sort of output of muscular
or nervous energy demands a particular sort of diet to replace the expenditure.
The proper diet of an agricultural labourer, a mill operative and a miner,
will have certain recognised differences. Muscular and mental, active and
sedentary, monotonous and interesting work, will involve different amounts
and sorts of nourishment, and different expenditures for leisure occupations.
These differences will extend both to the necessaries and the higher elements
in standards of consumption. Industrial requirements will stamp themselves
with more or less force and exactitude upon each occupation. An analysis
of budgets would show that the standard of the clergyman was not that of
the merchant or even of the doctor, and that the same family income would
be differently applied. The stockbroker will not live like the mill-owner,
nor the journalist like the shopkeeper. So right through the various grades
of workers. The skilled mechanic, the factory hand, the railway man, the
clerk, the shop-assistant, the labourer, will all have their respective standards,
moulded or modified by the conditions of their work: their needs and tastes
for food, clothing, recreation, etc., will be affected in subtle ways by
that work.
'Productive' consumption is the term given by classical political economy
to that portion of consumption applied so as to maintain or improve the efficiency
of labour-power in the worker and his family. Necessaries alone were held
absolutely productive, conveniences and comforts were dubious, luxuries were
unproductive. Regarded even from the commercial standpoint, it was a shallow
analysis, confined to a present utilisation of immediately useful commodities,
and ignoring the reactions upon future productivity of a rise in education
and refinement. It belonged to an age before the economy of high wages or
the moral stimuli of hope and an intelligent outlook upon life had won any
considerable recognition as 'productive' stimuli.
But from the standpoint of our analysis the defect of this treatment is
a deeper one. For us the distinction between productive and unproductive
consumption is as fundamental as in the older economic theory. The difference
lies in the conception of the 'product' that is to give a meaning to 'productive'.
Productive consumption, according to the older economic theory, was measured
by the yield of economic productivity, according to our theory by the yield
of vital welfare. The two not merely are not identical, they may often be
conflicting values.
A diet productive of great muscular energy for a navvy, foundryman or drayman,
may produce a coarse type of animalism which precludes the formation of a
higher nervous structure and the finer qualities of character that are its
spiritual counterpart. The industrial conditions of many productive employments
are notoriously such as to impair the physique and the muscle of the workers
engaged in them, and there is no ground for assuming that the habits of consumption,
conducing to increased productivity in such trades, carry any net freight
of human utility.
Nor is it only in manual labour that the industrial influences moulding
a standard of consumption may damage its human quality. Much sedentary intellectual
work involves similarly injurious reactions upon modes of living. The physical
abuses of athleticism, stimulants and drugs, are very prevalent results of
disordered competition in intellectual employments. But, as bad elements
in standards of expenditure, the intellectual excesses, the fatuous or degrading
forms of literature, drama, art, music, which this life generates, are perhaps
even more injurious. One of the heaviest human costs of an over-intellectual
life today is its 'culture'.
§3. When we come to 'conventional' elements in standards of comfort,
we enter a region which appears to admit an indefinite amount of waste and
error.
The very term 'conventional', set as it is in opposition to 'natural', indeed,
suggests an absence of organic utility. We hear of 'conventional necessaries'
even in the lowest levels of working-class expenditure. I presume that the
expenditure in beer, tobacco, upon sprees or funerals, or upon decorative
clothing, would be placed in this category.
From the purely economic standpoint such expenditure has been accounted
either waste, or, even worse, 'disutility'.
It is often argued that a labouring family on 21s. per week could be kept
in physical efficiency, if every penny were expended economically in obtaining
'organic value'. This is the ideal of a certain order of advocates of thrift
and temperance. Whole generations of economists have accumulated easy virtue
by preaching this rigorous economy for the working-classes. It has always
seemed possible to squeeze out of the standard of any working-class enough
of the conventional or superfluous to justify the opinion that most of the
misery of the poor is their own fault, in the sense that, if they made a
completely rational use of their wages, they could support themselves in
decency. The amount spent by the workers on drink alone would, it is often
contended, make ample provision against most of the worst emergencies of
working-class life.
Now there are several comments to be made on this attitude towards conventional
expenditure. 1. As one ascends above the primary organic needs, the evolution
of desires becomes less reliable and more complicated: the element of will
and choice and therefore of choosing badly, becomes larger. Some condiments
are useful for assisting the digestion of primary foods, but it is easier
to make mistakes in condiments than in staple foods. So with all the higher
and more complex wants. As one rises above the prime requisites and conveniences,
organic instincts, or tastes directly dependent on them, play a diminishing
part as faithful directors of consumption. This natural guidance does not
indeed disappear. The evolution of a human being with finer nervous structure,
and with higher intellectual and moral needs and desires related to that
structure, is a fairly continuous process. The finest and best-balanced natures
thus carry into their more complex modes of satisfaction a true psycho-physical
standard of utility. But it is already admitted that the liability to go
wrong is far greater in those modes of expenditure which are not directly
contributory to survival. This is the case, whether individual tastes or
some accepted convention determines the expenditure.
This is so generally recognised that it is likely that the organic utility
of personal tastes on the one hand, custom and convention on the other, has
been unduly disparaged. The temper of economists in assessing values has
been too short-sighted and too inelastic. A good deal of personal expenditure
that is wasteful or worse when taken on its separate merits may be justified
as a rude experimental process by which a person learns wisdom and finds
his soul. What is true of certain freakish personal conduct is probably true
also of those conventional practices, in which whole societies or classes
conduct their collective experiments in the art of living.
A too rigorous economy, whether directed by instinct or reason, which should
rule with minute exactitude the expenditure of individuals or societies,
in order to extract from all expenditure of income the maximum of seen utilities,
would be bound to sin against that law of progress which demands an adequate
provision for these experimental processes in life which, taken by themselves,
appear so wasteful.
Social psychology brings a more liberal and sympathetic understanding to
bear upon some of the practices which to a shortsighted economist appear
mere wasteful extravagance, destitute of utility and displacing some immediately
serviceable consumption. Let me take some notable examples from current working-class
expenditure. The lavish expenditure upon bank-holidays, in which large classes
of wage-earners 'blow' a large proportion of any surplus they possess beyond
the subsistence wage, is the subject of caustic criticism by thrifty middle-class
folk. But may not this holiday spirit, with a certain abandon it contains,
be regarded as a 'natural' and even wholesome reaction against the cramping
pressure of routine industrialism and the normal rigour of a close domestic
economy? It may not, indeed, be an ideally good mode of reaction, may even
contain elements of positive detriment, and yet may be the vent for valuable
organic instincts seeking after those qualities of freedom, joy and personal
distinction that are essential to a life worth living.1
Or take the gravest of all defects of working-class expenditure, the drink-bill.
This craving, hostile as it is to the physical and moral life of man, is
not understood, and therefore cannot be effectively eradicated, unless due
account is taken of certain emotional implications. The yielding to drink
is not mere brutality. Brutes do not drink. It is in some part the response
to an instinct to escape from the imprisonment in a narrow cramping environment
which affords no scope for aspiration and achievement. It may indeed be said
that the drinker does not aspire and does not achieve. He is doubtless the
victim of an illusion. But it is a certain dim sense of a higher freer life
that lures him on. 'Elevation' is what is sought.
'Kings may be blessed but Tam was glorious
O'er a' the ills o' life victorious.'
Or take still another item of working-class expenditure
frequently condemned as a typical example of extravagance, the relatively
large expense of funerals. Is this to be dismissed offhand as mere wanton
waste? A more human interpretation will find in it other elements of meaning.
In the ordinary life of 'the common people' there is little scope for that
personal distinction which among the upper classes finds expression in so
many ways. The quiet working-man or woman has never for a brief hour through
a long lifetime stood out among his fellows, or gathered round him the sympathetic
attention of his neighbours. Is it wholly unintelligible or regrettable that
those who care for him should wish to give this narrow, thwarted, obscure
personality a moment of dignity and glory? The sum of life is added up in
this pomp of reckoning, and the family is gathered into a focus of neighbourly
attention and good-feeling, the outward emblems of honour are displayed,
and a whole range of human emotions finds expression. Such excess as exists
must be understood as a natural fruit of those aspiring qualities of personality
which, thwarted in their natural and healthy growth by narrowness of opportunity,
crave this traditional outlet.
In fact, the more closely we study the conventional factors in consumption,
the less are we able to dismiss them out of hand as mere extravagance or
waste. Some organic impulse, half physical, half psychical, nearly always
enters into even the least desirable elements. A margin of expenditure, either
conventional or expressing individual caprice,2 which serves to evoke pleasure,
to stir interest, and above all to satisfy a sense of personal dignity, even
though at the expense of some more obvious and immediate utilities, may be
justified by considerations of individual and social progress.
§4. Such considerations must not, however, be pressed very far in the
defence even of the most firmly-rooted elements of conventional consumption.
For, though the deeper organic forces which work through 'natural selection'
must eliminate the worst or most injurious modes of expenditure from the
permanent standard of a race or class, it may leave elements fraught with
grave danger. For neither the animal nor the spiritual nature of man is equipped
with a selective apparatus for testing accurately for purposes of organic
welfare the innumerable fresh applicants for 'consumption' which appear as
the evolution of wants, on the one hand, and of industries upon the other,
becomes more complex and more rapid. An extreme instance will enforce my
meaning. To take a Red Indian or a Bantu from a natural and social environment
relatively simple and staple, and to plunge him suddenly into the swirl of
a modern Western city life is to court physical and moral disaster. Why?
Because the pressures of animal desires or the emotions of pride and curiosity,
which were related by effective 'taboos' in the primitive life from which
he is drawn, now work their will unchecked. For the 'taboos' of civilised
society are both ill-adapted to the emotional texture of his nature, and
in their novelty and complexity are not adequately comprehended. But even
for those born and bred in the environment of a rapidly changing civilisation
there are evidently great hazards. Not only individual but widely collective
experiments in novelties of consumption will often be injurious. This may
be explained in the first instance as due to the perversion or defective
working of the 'instincts' originally designed to protect and promote the
life of the individual and the species. An animal living upon what may be
termed unmodified nature is possessed of instincts which make poisonous plants
or animals repellent to its taste. A man living in a highly modified environment
finds such shreds of instinctive tastes as he possesses inadequate to the
risk of rejecting the fabricated foods brought from remote quarters of the
earth to tempt his appetite. If this holds of articles of food, where errors
may be mortal and where some protection, however insufficient, is still furnished
by the palate and the stomach, still more does it hold of the 'higher' tastes
comparatively recently implanted in civilised man. 'Bad tastes' thus may
introduce the use of books or art that disturb the mind without informing
it, recreations that distract and dissipate our powers without recreating
and restoring them. Nor does the 'social organism' furnish reliable checks
which shall stop the spread of individual errors into conventional consumption.
§5. The question of individual errors and wastes in the process of
evolving standards of consumption must not detain us. For though it rightly
falls within the scope of a fully elaborated valuation of consumption, it
must not be allowed to intrude into our more modest endeavour to discuss
the several grades of wants which comprise a class standard of consumption.
The relative size of the wastes or defects of the conventional factors in
a class standard will not indeed depend upon the mere addition of the perversion
of the separate choices of its individuals. For a convention is not produced
by a mere coincidence of separate actions of individual desire.
It may be well here to revert to the distinction which we found convenient
to employ in our analysis of the human value of different forms of work,
viz., the distinction between creation and imitation. Here it will take shape
in an enquiry as to the ways in which new wants are discovered and pass into
conventional use. Let us take for an example the case of a medicine which
has become a recognised remedy for a disease. Among animals or 'primitive'
man the habit of eating a curative herb may be regarded as due to an organic
instinct common to each member of the herd or group. Such consumption, however,
would not really fall within the category of our 'conventional consumption'.
It would in effect be confined to a limited number of articles containing
strong elements of 'survival value', in a pre-economic period, though, as
soon as tribal society began to evolve the medicine man, his prescriptions
would add many elements of waste and error. But the consumables whose origin
we are now considering must be regarded as involving invention or discovery,
and conscious imitation or adoption by the group. Unless we suppose that
the chewing of cinchona bark had a backing of instinctive adaptation, and
so passed by tradition into later ages of Indian life, we must hold that
the first beginnings of the use of quinine as a cure for intermittent fevers
in South America were due either to chance or to early empiricism in treatment.
Some person, probably enjoying distinction in his tribe, tried cinchona bark
and recovered of his fever, others tried it upon this example and got benefit,
and so the fame of the remedy spread first from a single centre, and afterwards
from a number of other personal centres by conscious imitation. Or, similarly,
take the adoption of some article of diet, such as sugar or tobacco, which
is an element not of prime physical utility but of comfort or pleasure. The
first men who chewed the sugar-cane, or tried the fumes of the herba nicotina,
must be deemed to have done so 'by accident'. Liking the result, they repeated
the experiment by design, and this personal habit become the customary habit
of the group, moulded by a tradition continuously supported by a repetition
of the feeling which attended the first chance experience.
Such accretions to a standard of consumption may be regarded as possessing
guarantees of utility or safeguards against strong positive disutility in
their method of adoption. They have grown into the conventional standard
'on their merits'. Those 'merits' may indeed be variously estimated from
the 'organic' standpoint. Quinine has a high organic virtue, sugar perhaps
an even wider but less vital virtue, while the virtue of tobacco may be purely
superficial and compensated by considerable organic demerits. But both discovery
and propagation have been in all these cases 'natural' and 'reasonable' processes,
in the plain ordinary acceptation of these terms. Some actual utility has
been discovered and recognised, and new articles thus incorporated in a standard
of consumption, either for regular or special use, have at any rate satisfied
a preliminary test of organic welfare.
If all new habits of consumption arose in this fashion, and the preliminary
test could be considered thoroughly reliable, the economy of the evolution
of standards of consumption would be a safe and sound one. This hypothesis
in its very form indicates the several lines of error discernible in the
actual evolution of class standards. A falsification of the standard, involving
the ad mission of wasteful or positively noxious consumables, may arise,
either in the initial stage of invention, or in the process of imitative
adoption. This will occur wherever the initial or the imitative process is
vitiated by an extraneous motive. A very small proportion of medicines in
customary use among primitive peoples have the organic validity of quinine.
Most of them are 'charms', invented by medicine men, not as the result either
of a chance or planned experiment, but as the work of an imagination operating
upon the lines of an empirical psychology, in which the relation of the actual
or known properties of the medicine towards the disease play no appreciable
part. So a whole magical pharmacopoeia will be erected upon a basis of totemist
and animist beliefs, mingled with circumstantial misconceptions and gratuitous
fabrications, and containing no organic utility. Each addition or variant
will begin as an artificial invention and will be adopted for reasons of
prestige, authority or fear, carrying none of that organic confirmation which
secured its position for quinine. The limit of error in such cases will be
that the medicine must not frequently cause a serious and immediate aggravation
of the suffering of the patient. The patent or 'conventional' medicines among
civilised peoples must be considered in the main as containing a falsification
of standard of the same kind, though different in degree. As the primitive
medicine man, called upon to cure a fever or a drought, is primarily motived
by the desire to maintain or enhance his personal or caste prestige, while
the adoption of his specific into a convention is due to a wholly irrational
authority or to a wholly accidental success, so is it with a large proportion
of modern remedies. Even in the orthodox branches of the medical profession
the process of converting vague empiricism into scientific experiment has
gone such a little way as to furnish no guarantee for the full organic efficacy
of many of the treatments upon which the patient public spends an increasing
share of its income. But as regards the profession there is at any rate some
basis of confidence in the disinterested application of science to the discovery
of genuine organic utility.
In the patent medicine trade there is very little. Here we have a condition
very little better than that of the power of the witch-doctor in primitive
society. The maxim 'caveat emptor' carries virtually no security, for the
guidance of the palate is ruled out, while the test of experience, except
for purgation or for some equally simple and immediate result, is nearly
worthless.
§6. When the invention and propagation of a mode of consumption have
passed into the hands of a trade, the guarantees of organic utility, the
checks against organic injury, are at their weakest. For neither process
is directed, either by instinct or reason, along serviceable channels. Where
the commercial motive takes the initiative, there can be no adequate security
that the articles which pass as new elements into a standard of consumption
shall be wealth, not illth. Where an invention is stimulated to meet a genuinely
'long-felt need', the generality and duration of that need may be a fair
guarantee of utility. But this is not the case where the supply precedes
and evokes the demand, the more usual case under developed commercialism.
Neither in the action of the inventor, nor in the spread of the new habit
of consumption, is there any safe gauge of utility. The inventor, or commercial
initiator, is only concerned with the question, Can I make and sell a sufficient
quantity of this article at a profit? In order to do so, it is true, he must
persuade enough buyers that they 'want' the article and 'want' it more than
some other articles on which they otherwise might spend their money. To unreflecting
persons this, no doubt, appears a sufficient test of utility. But is it?
The purchaser must be made to feel or think that the article is 'good' for
him at the time when it is brought before his notice. For this purpose it
must be endowed with some speciously attractive property, or recommended
as possessing such a property. A cheap mercerised cotton cloth, manufactured
to simulate silk, sells by its inherent superficial attraction. A new line
in drapery 'pushed' into use by the repeated statement, false at the beginning,
that 'it is worn', illustrates the second method. In a word, the arts of
the manufacturer and of the vendor, which have no direct relation whatever
to intrinsic utility, overcome and subjugate the uncertain, untrained or
'artificially' perverted taste of the consumer. Thus it arises that in a
commercial society every standard of class comfort is certain to contain
large ingredients of useless or noxious consumption, articles, not only bad
in themselves, but often poisoning or distorting the whole standard. The
arts of adulteration and of advertising are of course responsible for many
of the worst instances. A skilled combination of the two processes has succeeded
in cancelling the human value of a very large proportion of the new increments
of money income in the lower middle and the working-classes, where a growing
susceptibility to new desires is accompanied by no intelligent checks upon
the play of interested suggestion as to the modes of satisfying these desires.
Where specious fabrication and strong skilled suggestion cooperate to plant
new ingredients in a standard of consumption, there is thus no security as
to the amount of utility or disutility attaching to the 'real income' represented
by these 'goods'. But this vitiation of standards is not equally applicable
to all grades of consumption, or to all classes of consumers. Some kinds
of goods will be easier to falsify or to adulterate than others, some classes
of consumers will be easier to 'impose upon' than others. These considerations
will set limits upon the amount of waste and 'illth' contained in the goods
and services which comprise our real income.
First, as to the arts of falsification. Several laws of limitation here
emerge. Some materials, such as gold and rubber, have no easily procurable
and cheaper substitutes for certain uses. Other goods are in some considerable
degree protected from imitation and adulteration by the survival of reliable
tests and tastes, touch and sight, in large numbers of consumers. This applies
to simpler sorts of goods whose consumption is deepest in the standard and
has a strong basis of vital utility. It will be more difficult to adulterate
bread or plain sugar to any large extent than sauces or sweets. It will be
easier to fake photographs than to pass off plaice for soles. But it cannot
be asserted as a general truth that the necessaries are better defended against
encroachments of adulteration and other modes of deception than conveniences,
and conveniences than luxuries. Indeed, there are two considerations that
tell the other way. A manufacturer or merchant who can palm off a cheaper
substitute for some common necessary of life, or some well-established convenience,
has a double temptation to do so. For, in the first place, the magnitude
and reliability of the demand make the falsification unusually profitable.
In the second place, so far as a large proportion of articles are concerned,
he can rely upon the fact that most consumption of necessaries lies below
the margin of clear attention and criticism. Except in the case of certain
prime articles of diet, it is probable that a consumer is more likely to
detect some change of quality in the latest luxury added to his standard
than in the habitual articles of daily use, such as his shoe-leather or his
soap. In fact, so well recognised is this protection afforded to the seller
by the unconsciousness which habit brings to the consumer, that, in catering
for quite new habits, such as cereal breakfast foods or cigarettes, the manufacturer
waits until the original attractions of his goods have stamped themselves
firmly in customary use, before he dares to lower the quality or reduce the
quantity.
These considerations make it unlikely that we can discover a clear law expressing
the injury of commercialism in terms of the greater or less organic urgency
of the wants ministered to by the different orders of commodities. It will
even be difficult to ascertain whether the arts of adulteration or false
substitution play more havoc among the necessaries than among the luxuries
of life. In neither is there any adequate safeguard for the organic worth
of the articles bought and sold, though in both there must be held to be
a certain presumption favourable to some organic satisfaction attending the
immediate act of consumption. If a 'law' of falsification can be found at
all, it is more likely to emerge from a comparative study not of necessaries,
conveniences, comforts and luxuries, in a class standard, but of the various
sorts of satisfactions classified in relation to the needs which underlie
them. Where goods are consumed as soon as they are bought, and by some process
involving a strong appeal to the senses, there is less chance for vulgar
fraud than where consumption is gradual or postponed, and is not attended
by any moment of vivid realisation. Other things equal, one might expect
more easily to sell shoddy clothing than similarly damaged food: the adulteration
of a jerry-built house is less easily detected, or less adequately reprobated,
than that of a jerry-built suit of clothes.
Along similar lines we might, in considering non-material consumption, urge
that there are more safeguards for utility in the expenditure upon books
or music-hall performances than upon education or church membership. And
in a sense this is true. If I buy a book or attend a concert, I am surer
to get what I regard as a quid pro quo for my expenditure than in the case
of a prolonged process involving many small consecutive acts.
So far as this is true, it means that relics of organic guidance are more
truly operative in some kinds of satisfaction than in others, and furnish
some better check upon the deception which commercialism may seek to practise.
But, of course, our valuation of such checks will depend upon how far we
can accept them as reliable tests, not of some short-range immediate satisfaction,
but of the wider individual and social welfare. The fact that so many notoriously
bad habits can be acquired by reason of an immediate 'organic' attractiveness
that is a false clue to the larger welfare, must put us on our guard against
accepting any easy law based on the test of 'natural' tastes.
§7. But, in considering the degradation of standards of consumption,
it is well to bring some closer analysis to bear upon the processes of suggestion
and adoption that are comprised in 'imitation'. In analysing the forms of
wealth, the goods and services, which are the real income of the nation,
in terms of their production, we recognised that, other things equal, the
human cost of any body of that wealth varied directly with the amount of
routine or purely imitative work put into it, and inversely with the amount
of creative or individual work. That judgment, however, we felt bound to
qualify by the consideration that a certain proportion of routine work, though
in itself perhaps distasteful and uninteresting, had an organic value both
for the individual and for society. How far can we apply an analogous judgment
to the same body of Wealth on its consumption side? Can we assume that the
utility of consumption of any given body of wealth varies directly with the
amount of free personal expression which its use connotes, and inversely
with the routine or conventional character it bears? Evidently not. The same
analysis does not apply. The chief reason for the difference has already
been indicated, by pointing out that, in a modern industrial society, each
man, as producer, is highly specialised, as consumer highly generalised.
The high human costs of routine work were, we saw, a direct result of this
specialising process. A little routine work of several sorts, regularly practised,
would involve no organic cost, and might indeed yield a fund of positive
utility as a wholesome régime of exercise, provided it was not carried
so far as to encroach upon the fund of energy needed for the performance
of other special work, creative and interesting.
Indeed, the usual economic justification of the excessive division of labour
existing at present in advanced industrial societies is that it is essential
to yield that large body of objective wealth which, by its distribution,
enriches and gives variety to the consumption of all members of the society.
The producer is sacrificed to the consumer, the damage done to each man in
his former capacity being more than compensated by the benefits conferred
upon him in his latter capacity.
The full validity of this doctrine will be considered when we gather together
the two sides of our analysis and consider the inter-relations between production
and consumption as an aspect of the problem of human values. At present we
may begin by accepting variety of consumption as a condition in itself favourable
to the maximisation of human welfare. This assumption is not, however, quite
self-evident. The routine factors in a standard of consumption (and a standard
qua standard consists of routine), so far as they are laid down under the
direction of an instinctive or a rational evolution of wants, must be regarded
as containing a minimum of waste or disutility. Since they are also the foundation
and the indispensable condition for all the 'higher' forms of material or
non-material consumption in which the conscious personality of individuals
finds expression, they may be held to contain per unit a maximum of human
value. From this standpoint there would seem to emerge a law of the economy
of consumption, to the effect that the maximum of social welfare would be
got from a distribution of wealth which absorbed the entire product in this
routine satisfaction of the common needs of life. This economy need not be
conceived merely in terms of a uniform standard of material satisfactions.
A wider interpretation of life and of necessaries might extend it so as to
cover many higher grades of satisfaction, all the 'joys that are in widest
commonalty spread.' The natural evolution of such an economy of consumption
might, it is arguable, yield the greatest quantity of social welfare.
§8. But a high uniform level of welfare throughout society does not
exhaust the demands of human welfare. It evidently overstresses the life
of the social as against the individual organism, imposing a regimen of equality
which absorbs the many into the one. Now, desirous to hold the balance fair
between the claims of individual personality and of society, we cannot acquiesce
in an ideal of economical consumption which makes no direct provision for
the former. So far, however, as the consumption of an individual is of a
routine character, expressing only the needs of a human nature held in common
with his fellows, it does not really express his individuality at all. The
realisation of the unique values of his personality, and the conscious satisfaction
that proceeds from this individual expression, can only be got by activities
which lie beyond the scope of custom and convention. Though this issue has
most important bearings that are outside the economic field, it is also vitally
connected with the use of economic goods. For, unless a due proportion of
the general income (the aggregate of goods and services) is placed at the
free disposal of individuals in such forms as to nourish and stimulate the
wholesome and joyous expansion of their powers, that social progress which
first manifests itself in the free experimental and creative actions of individuals
whose natures vary in some fine and serviceable way from the common life,
will be thwarted. This brings us to a better understanding of the nature
and origin of the human injury and waste contained in large sections of that
conventional consumption which plays so large and so depressing a part in
every class standard of comfort. Where the production of an economic society
has grown so far as to yield a considerable and a growing surplus beyond
that required for survival purposes, this surplus is liable to several abuses.
Instead of being applied as food and stimulus to the physical and spiritual
growth of individual and social life, it may be squandered, either upon excessive
satisfaction of existing routine wants in any class or classes, or in the
stimulation and satisfaction of more routine wants and the evolution of a
complex conventional standard of consumption, containing in its new factors
a diminishing amount of human utility or even an increasing amount of human
costs. If the industrial structure is such that particular groups of business
men can make private gains by stimulating new wasteful modes of conventional
consumption, this process, as we have seen, is greatly facilitated.
But, after all, the business motive is not in itself an adequate explanation.
Business firms suggest new wants, but the susceptibility to such suggestions,
the active imitation by which a new article passes into the conventional
consumption of a group or class, requires closer consideration. Falsification
of a standard can seldom be understood as a mere perversion of the free choice
of individuals. A convention is not produced by a mere coincidence of separate
choices. Imitation plays an important part in the contagion and infection
of example. In endeavouring to assess the human utility of the consumption
of wealth we see the play of several imitative forces. Current Prestige,
Tradition, Authority, Fashion, Respectability supplement or often displace
the play of individual taste, good or bad, in moulding a class and family
standard of consumption. The psychology and sociology of these distinctively
imitative forces which form or change standards are exceedingly obscure.
The merely gregarious instinct may lead to the spread in a class or group
of any novelty which attracts attention and is not offensive. Where supported
by any element of personal prestige, such novelty, irrespective of its real
virtues or uses, may spread and become embedded in a standard of consumption.
The beginnings of every fashion largely belong to this order of imitation.
Some prestige is usually needed fairly to launch a new fashion; once launched
it spreads mainly by 'gregariousness', the instinct to be, or look, or act,
like other people. The limits of error, disutility or inconvenience, which
can be set upon a novelty of fashion, appear to depend mainly upon the initial
force of prestige. The King might introduce into London society a really
inconvenient high hat, though the Queen perhaps could not carry a full revival
of the crinoline.
Fashions change but they leave deposits of conventional expenditure behind.
What is at first fashionable often remains as respectable and lives long
in the conventional habits of a class. Every class standard is encrusted
with little elements of dead fashion.
§9. But this formative influence of Prestige itself demands fuller
consideration. For it not merely implants elements of expenditure in the
standard of consumption, but infects the standard itself.
A true standard would rest on a basis of organic utility, expenditure being
apportioned so as to promote the soundest, fullest human life. But all conventional
consumption is determined largely by valuations imposed by the class possessing
most prestige. It is, of course, a commonplace that fashions in dress, and
in certain external modes of consumption, descend by snobbish imitation from
high life through the different social strata, each class copying the class
above. It is a matter of far more vital importance that religion, ethics,
art, literature and the whole range of intellectual activities, manners,
amusements, take their shapes and values largely by the same process of infiltration
from above.
This is not the case everywhere. In many nations the distinctions of caste,
class, locality or occupation, are so strong as to preclude the passage of
habits of material consumption, manners, tastes and ideas, from one social
stratum to another. The exclusive possession of a code of life, of language,
thought and feelings by a caste or class, is itself a matter of pride, and
often of legal protection. This holds not only of most Asiatic civilisations
but, though less rigorously, of those European countries which have not been
fully subjected to the dissolving forces of industrialism.
But in such countries as England and the United States, where the industrial
arts are rapidly evolving new products and stimulating new tastes, and where
at the same time the social strata present a continuous gradation with much
movement from one stratum to another, the process of Station by prestige
is very rapid and general.
The actual expenditure of the income of every class in these countries is
very largely determined, not by organic needs, but by imitation of the conventional
consumption of the class immediately above in income or in social esteem.
That conventional consumption in its turn is formed by imitation of the class
above. The aristocracy, plutocracy, or class with most power or prestige,
thus makes the standards for the other classes.
Now, even if it were a real aristocracy, a company of the best, it by no
means follows that a standard of living good for them would be equally good
for other social grades. But there would be at least a strong presumption
in its favour. To copy good examples, even if the copying is defective, is
an elevating practice, and in as much as the essentials of humanity are found
alike in all, thoughtless imitation of one's betters might raise one's own
standard. If in a society the men of light and leading occupied this place
because they had discovered a genius for the art of noble living, the swift
unconscious imitation of their mode of life, the morals and manners of this
aristocracy, would surely be the finest schooling for the whole people: the
models of the good, the true, the beautiful, which they afforded, would inform
each lower grade, according to its capacity.
But where the whole forces of prestige and imitation are set on a sham aristocracy,
copying as closely as possible their modes of consumption, their ways of
thought and feeling, their valuations and ideals, incalculable damage and
waste may ensue. For the defects in the standard of the upper few will, by
imitation, be magnified as well as multiplied in the lower standards of the
many. Let me illustrate.
If gambling is bad for the upper classes, its imitation becomes progressively
worse as it descends, poisoning the life and consuming a larger proportion
of the diminishing margin of the income of each class. If the inconvenience
of decorative dress is bad for rich women, who live a life of ease and leisure,
its imitation by the active housewives of the middle, and the women-workers
of the lower classes, inflicts a graver disutility. For the waste of income
is more injurious and the physical impediments to liberty of movement are
more onerous. It is the immeasurable importance of this prestige of the upper
class, percolating through all lower social grades, and imposing, not merely
elements of conventional consumption, but standards and ideas of life which
affect the whole mode of living, that requires us to give closer consideration
to the life of the leisure class.
§10. Here we can find valuable aid in a remarkable book entitled The
Theory of the Leisure Class, by Mr. Veblen, an American sociologist.
Regarded as a scientific study, which it rightly claims to be, this book
has two considerable defects, one of manner, one of matter. Its analysis
is conducted with a half-humorous parade of pompous terminology apt to wear
upon the temper of the reader. Its exaggerated stress upon a single strain
of personality, as a dominant influence in the formation of habits and the
direction of conduct, is a more serious blemish in a work of profound and
penetrating power. But for our present purpose, that of discovering the elements
of waste in national consumption, it is of first-rate importance.
Mr. Veblen's main line of argument may be summarised as follows. In primitive
society war and the chase will be the chief means by which men may satisfy
that craving for personal distinction and importance which is the most enduring
and importunate of psychical desires. Personal process, mainly physical,
displayed in fight or hunt, will secure leadership or ascendency in tribal
life. So those trophies which attest such prowess, the skulls or scalps of
enemies, the skins of slain animals, or the live possession of tame animals,
will be the most highly-prized forms of property. When the capture and enslavement
of enemies has taken the place of promiscuous slaughter, the size and variety
of his retinue of slaves for personal service, concubinage, or merely decorative
show, attest the greatness of the warrior-chief. When the industrial arts
are sufficiently developed, slaves will be set to produce such other forms
of property, enlarged housing, quantities of showy garments, cultivated fields,
herds of cattle, as afford conspicuous evidence of the personal prowess of
the chief. Glory, far more than utility or comfort, continues to be the dominant
motive.
As civilisation begins to make way, the notion of what constitutes personal
process begins to be modified. Though physical force may still remain a chief
ingredient, skill and cunning, wisdom in counsel, capacity for command and
law-making, come to be recognised as also giving prestige. As not only the
strong man by his strength, but the cunning man by his cunning, can get that
wealth or property which are the insignia of prowess, property will however
still be valued by its owner mainly for the prestige it affords him among
his fellows. It will still for the most part take shape in external forms
of adornment or magnificence. As it develops into the culminating form of
the oriental court, the element of display will remain the paramount consideration,
to which even the sense-enjoyments of the owner will be secondary.
The effect of this early linking of property to personal prowess will be
that in the general mind of man the possession of property is honorific.
It secures for its owner a presumption of personal greatness. Therefore,
its possession must be kept in full and constant evidence, especially where
inheritance destroys the direct presumption of the personal prowess of the
actual owner. Hence the two essential features of the mode of living of the
dominant class or caste, ostentatious waste and conspicuous leisure. For
thus the prestige of property is best enforced. Gorgeous palaces with luxurious
grounds, magnificent banquets and entertainments, extravagant refinements
of sensual luxury, adornments of fabrics, jewels and articles of laborious
skill, magnificent tombs and other monuments -- the elaborate parade of waste,
in order to fasten on the common imagination the sense of wonder and of admiration
of the person who could afford so lavish a waste! The family of the rich
man is chiefly valued as an instrument for making this display effective.
His wife or wives must do no work, not even copy his parasitic activities;
they must stand as open monuments of conspicuous leisure, their personal
adornments, their retinues of servants, the entire elaborate ritual of their
futile lives, must be devoted to showing how much their possessor can afford
to caste. Such was the life of the aristocracy in olden and medieval days!
It has passed in most essentials, by tradition and imitation, to the life
of the upper class in modern civilised nations. The modes and conceptions
of personal prowess and prestige have indeed shifted. The man of business
has dethroned the warrior or the political chieftain. The typical great man
of our time is the great entrepreneur, the financier who directs the flow
of capital and rules prices on change, the railway or shipping magnate who
plans a combine, the able and astute merchant, who controls a market, the
manufacturer who conducts a great productive business, the organiser of a
successful departmental store. The personal qualities and activities involved
in these tasks are very different from those possessed by barbarian chieftains
or oriental despots. Add to such men the surviving landed aristocracy of
rent receivers, and a considerable number of families that live on dividends,
taking no real part in the administration of industry, and we have a synopsis
of the class which to day wields prestige. Though the elaboration of modern
arts of pleasure directs a great part of the expenditure of this, our upper
class, the traditional habits of ostentatious waste and conspicuous leisure
as modes of glory are still paramount motives. Most rich people value riches
less for the pleasures they afford than for the social consideration, the
personal distinction, they procure. The craving to realise superiority over
others, as attested by their servility or imitation, the power of money to
make others do your will, the sense of freedom to realise every passing caprice,
these remain the chief value of riches, and mould the valuations of life
for the bulk of the well-to-do.
Such are the inevitable effects of easily-gotten and excessive wealth upon
the possessors. So far as they operate, they induce futile extravagance in
expenditure. Instead of making for utility, they make for disutility of consumption.
Such is the gist of this analysis of the leisured life.
§11. Expenditure which is to be effectively ostentatious, so as to
impress its magnificence upon the largest number of other people, cannot
be directed to the satisfaction of a real personal want, even a bad want.
Futility is of its essence. The very type of this expenditure is a display
of fireworks: there is no other way of consuming so large a quantity of wealth
in so short a time with such sensational publicity and with no enduring effect
whatever. This private extravagance may perhaps be paralleled in public expenditure
by the squandering of millions upon war-ships which are not needed, will
never be used, and will be obsolete within a few years of their construction.
The defects which every sane social critic finds in the modes of living
of the rich, their frivolity, triviality and futility, are illustrations
of Mr. Veblen's thesis. Perhaps the largest complex of forms of futile waste,
waste of money and of time, is contained in the performance of what, with
curious aptness of phrase, are termed 'social duties', the idle round of
visits, entertainments and functions which constitutes the 'society life'.
I speak of the aptness of the term 'social duties'. This is no paradox, but
merely the finest instance of that perversion of values and valuations which
is inherent in the situation. For it is essential to the accuracy of this
analysis that the rich members of society should regard their most futile
activities as 'duties', and their small section of humanity as 'society'.
Of the expenditure which is laid out on the satisfaction of material wants,
the waste or disutility will often be considerable. But Nature is strong
enough to enforce some sense and moderation in the satisfaction of primary
organic desires. While, therefore, there is much luxury and waste in the
material standard of comfort of the rich, we do quite wrong to find in food
and clothing and other material consumption our chief instances of luxury
and waste. It is in the non-material expenditure that the proportion of waste
or disutility is largest. The great moral law, corruptio optimi pessima,
requires that this be so. If we seek the largest sources of injurious waste
in the standard of the well-to-do classes, we shall find them in the expenditure
upon recreation, education and charity.
NOTES:
1. On the side of Consumption as of Production a progressive
society that has not abandoned itself to excessive rationalism will recognise
the desirability of keeping a scope for 'bonne chance' and 'hazard'. Cf Tarde.
I., p. 130.
2. Though the term 'conventional' appears formally to preclude the play of
individual taste or judgment, it is in fact only in such expenditures that
these qualities obtain scope for expression. For though convention prescribes
the general mode of such expenditure, it leaves a far larger scope for personal
choice and capricious variation than in the more necessary elements of expenditure.
CHAPTER XI: SPORT, CULTURE AND
CHARITY
§1. It is no mere chance that makes sport the special
field for the attainment and display of personal prestige among the well-to-do
classes. Primitive man in his early struggle for life had to put all his
powers of body and mind, all his strength and cunning, into the quick, sure,
and distant discovery of beasts or other men who would destroy him. He must
pursue and kill them, or successfully avoid them. He must seek out animal
or vegetable foods, tracking them by signs and snares, rapid of foot, keen
of eye and scent, quick, strong, and accurate of grasp. To run and spring,
to climb and swim and strike and throw were necessary human accomplishments.
They had a high survival value. Nature had to evolve and maintain a man who
had the capacity to do these things well, and who was willing to undergo
the necessary toil and pain of acquiring and exercising these arts and crafts.
To ride, to shoot, to manage boats, were occupations of prime utility. Successful
mating was also necessary for survival, and so the arts of courtship, dancing,
music, decoration, and various displays of grace and vigour were evolved.
The simple activities that were elaborated into these arts of hunting, fighting,
mating, were instinctive, and strong feelings of pleasure were attached to
them, as Nature's lure. When reason, or conscious cunning, came to cooperate
with instinct, complicating and refining the useful arts, the specific pleasures
of instinctive satisfaction were accompanied by a general sense of personal
elation or pride. Now, in man, as in other animals, practice was needed for
the successful performance of these useful activities. This practice takes
the form of play, a more or less realistic simulation of the practices of
fighting, hunting, courtship, in which, however, considerable scope exists
for variations and surprises, the survival value of which is real, though
indirect. Since these forms of play appeal to and exercise the same activities
as are involved in the serious affairs of life, the same sorts of satisfaction
are attached to them. The natural meaning of play is that it is a preparation
for work, i.e., for the arduous, painful, and often dangerous tasks involved
in 'the struggle of life,' and the pleasure of play is the inducement to
the acquisition of this useful skill.
§2. If this be so, it may be possible for some men to suck the pleasure
from the play without performing the useful work for which it is a preparation.
The play instincts can be made to yield a desirable life of interest and
pleasure to any class of men who are enabled to get others to perform their
share of useful work, and thus to provide them with the time, energy and
material means for the elaboration of the play side of life. Such is the
physical explanation of the sportsman. The play which Nature designed as
means to life, he takes as an end, and lives 'a sporting life'. Some of his
sports bear on the surface few signs of biological play about them. The manual
and mental dexterity of such indoor games as bridge and billiards, appear
quite unrelated to the arduous pursuits of mountaineering or big-game hunting.
Between these two lie the great majority of active sports, such as shooting,
racing, and the various games of ball. No one who analyses carefully the
feelings of pleasure got from a boundary hit, a run with the ball, a neck-to-neck
race, or any other athletic achievement, can doubt their nature.
Fighting, hunting, fishing, climbing, exploring, reduced to sports, contain
just as much 'realism' as is needed to evoke the pleasurable excitement which
sustained these skilful efforts when they belonged to the struggle for life.
Some of the imitations may be so close to reality as to recall in almost
its full intensity the primal thrill, as in tiger-stalking, in boxing, or
rock climbing. In ball-games the fictitious circumstances call for more imagination,
though the pleasure of the actual stroke is chiefly a race memory of a blow
struck at an enemy or of a blow warded off. No one can doubt the nature of
the fierce pleasure of the football scrimmage with its mortal make-believe.
Although in many sports some element of physical risk is needed to sustain
the realism, it is usually reduced to trifling dimensions. This is also true
of the painful endurance incidental to the primitive struggle. The modern
sportsman or explorer commonly devises ways of economising both his personal
risk and his personal effort. Beaters find the animal or bird for him to
shoot; native porters and guides carry food for him, and ease his path. His
object is to secure the maximum pleasure of achievement with the minimum
risk and effort. Perhaps the most highly-elaborated example is the playful
revival of the migratory and exploring instincts, from the picnic to the
world-tour, with the complex apparatus of pleasure-travel which occupies
so large a part in the life of the well-to-do classes. The luxurious life
of travel in which the motor-car, the train de luxe, or the yacht carries
men and women from the gorgeous hotel of one beauty spot to that of another,
is made pleasurable or tolerable by waking up the dim shadow of some wandering
ancestor, whose hunting or pastoral habits required some satisfaction to
evoke the life-preserving effort. Camping-out and caravanning are somewhat
more realistic reproductions, bringing in more of the gregarious or corporate
instinct of the tribe.
How subtle are the artifices by which human cunning seeks to exploit the
past is best illustrated, however, in the purely spectatorial or sympathetic
surroundings of sport. To play football is one remove from battle, to watch
the game is two removes, to watch the "tape" or follow the scores
in the newspapers is three removes. Yet millions of little thrills of satisfaction
are got from this simulation of a simulated fight. Blended in various degrees
with other zests, of hazard, of petty cunning, and avarice, where betting
enters into sport, the sporting interest ranks highest of all in the scale
of values among the able-bodied males of all classes in English-speaking
peoples.
Added to the pleasure from the output of strength or skill in sport is the
general sentiment of exultation, the sense of glory. To what must that be
attributed? Not to the magnitude of the strength or skill. A navvy may display
greater strength or endurance in his work, a trapper or a common fisherman
a finer skill in catching his prey. But the true glory of sportsmanship is
denied them. Why? Because their work is useful, and they are doing it for
a living. The glory of the successful sportsman is due to the fact that his
deeds are futile. And this conspicuous futility is at the root of the matter.
The fact that he can give time, energy, and money to sport testifies to his
possession of independent means. He can afford to be an idler, and the more
obviously useless and expensive the sport, the higher the prestige attaching
to it. His personal glory of strength, endurance, or skill is set in this
aureole of parasitism. The crucial test of this interpretation is very simple.
Let it turn out that a Marathon winner, who seemed to be a gentleman, was
really a professional, what a drop in his personal prestige! The professional
is a man who has to earn a living, his reputation as a sportsman is damaged
by that fact. Can there be any more convincing proof that the high prestige
of sport is due to the evidence of financial prowess which it affords?
The hunting and the fighting instincts evidently underlie the pleasure of
nearly all the exclusively male sports. Doubtless other instinctive satisfactions
enter in, such as the gregarious instinct with its conscious elaboration
of esprit de corps. Whenever any game or sport brings the sexes into relation
with one another, the mating instincts are evidently involved. The crossing
of war with sex in the theory and practice of chivalry was a conscious and
artistic blending of these pleasure motives.
But this treatment of sport as a frivolous pursuit of pleasure ignores one
important aspect. Sport, it will be urged, after all has health for its permanent
utility. It is exercise for the body and diversion for the mind. It wards
off the natural consequences of the purely parasitic life, which a private
income renders possible, by providing work-substitutes. The primal law, 'in
the sweat of thy face shalt thou eat bread,' is gracefully evaded by games
that include a gentle perspiration. Golf may take the place of spade-labour
to win appetite and digestion; bridge will save the brain from absolute stagnation.
So Nature's self-protective cunning elaborates these modes of sham-work.
§3. The social condemnation of a sporting-life is two-fold. In the
first place, it diverts into lower forms of activity the zests and interests
intended to promote a life of work and art. The sporting-life and standards
choke the finer arts. The sportsman and the gamester are baser artists choosing
the lower instead of the higher modes of self-realisation in manual and intellectual
skill. This maintenance of barbarian standards of values by the classes possessing
social prestige is a great obstacle to the development of science, art, and
literature. In the second place, sport spoils the spontaneity and liberty
of play, which is a necessity of every healthy life. It spoils it for the
sportsman by reason of its artificiality and its excess. For the sporting-life
does not satisfy those who practise it. It carries the Nemesis of boredom.
The sense of triviality and of futility gradually eats through, and the make-believe
realism, when confronted with the serious values of life, shows its emptiness.
A heavier social damage is the economic cost which the expensive futility
imposes. For sport involves the largest diversion of unearned income into
unproductive expenditure. Not only does it dedicate to extravagant waste
a larger share of the land, the labour, and the enterprise of men than any
other human error, unless it be war itself, but it steals the play-time of
the many to make the over-leisure of the few. If the parasitic power which
sustains the sporting-life were taken away, the world would not be duller
or more serious. On the contrary, play would be more abundant, freer, more
varied, and less artificial in its modes.
The identification of a sportsman with a gentleman has carried great weight
in the unconscious settling of social values, and in England has been subtly
serviceable as a sentimental safeguard against the attacks upon the economic
supports not only of landlordism but of other wealth which has covered itself
with the trappings of sport.
The relative prestige of other occupations is determined to a considerable
extent by their association with the sporting-life or with the original activities
which sport reproduces. Not only the idle landowner, but the yeoman, and
in a less degree the tenant farmer, enjoy a social consideration beyond the
measure of their pecuniary standing, by virtue of the opportunities for hunting
and other sport which they enjoy. Part of the reputation of the military
and the naval services is explained by the survival of the barbarian feeling
that a life of hazard and rapine contains finer opportunities for physical
prowess than a life of productive activity. Though a good deal of this prestige
belongs to the glory of 'command' and extends even to a great employer of
labour, the glamour of the soldier's, hunter's, sportsman's life hangs in
a less degree about all whose occupations, however servile, keep them in
close contact with these barbarian activities. A publican, a professional
cricketer, a stud-groom, a gamekeeper, enjoy among their companions a dignity
derived from their association with the sporting-life.
§4. If physical recreations thus carry prestige, so in a less degree
and in certain grades of society do intellectual recreations. Once a sportsman
alone had a claim to be regarded as a gentleman. Only in comparatively modern
times did the association of 'a scholar and a gentleman' seem plausible.
Even now prowess of the mind can seldom compete in glory with prowess of
the body. The valuation of achievements current in our public-schools persists,
though with some abatement, among all sorts and conditions of men. But as
mental skill becomes more and more the means of attaining that financial
power which is the modern instrument of personal glory, it rises in social
esteem. As manners, address, mental ability and knowledge more and more determine
personal success, intellectual studies become increasingly reputable.
It might appear at the first sight that the highest reputation would attach
to those abilities and studies which had the highest mediate utility for
money-making. But here the barbarian standard retains a deflecting influence.
To possess money which you have not made still continues to be far more honorific
than to make money. For money-making, unless it be by loot or gambling, involves
addiction to a business life instead of the life of a leisured gentleman.
So it comes to pass that studies are valued more highly as decorative accomplishments
than as utilities. A man who can have afforded to expend long years in acquiring
skill or knowledge which has no practical use, thereby announces most dramatically
his possession, or his father's possession, of an income enabling him to
lead the life of an independent gentleman. The scale of culture-values is
largely directed by this consideration. Thus not only the choice of subjects
but the mode of treatment in the education of the children of the well-to-do
is, generally speaking, in inverse ratio to their presumed utility. The place
of honour accorded to dead languages is, of course, the most patent example.
Great as the merits of Greek and Latin may be for purposes of intellectual
and emotional training, their predominance is not mainly determined by their
merits, but by the traditional repute which has made them the chosen instruments
for a parade of 'useless' culture. Though some attempt is made in recent
times to extract from the teaching of the 'classics' the finer qualities
of the 'humanities' which they contain, this has involved a revolt against
the pure 'scholarship' which sought to exclude even such refined utilities
and to confine the study of the classics to a graceful, skilful handling
of linguistic forms and a purely superficial treatment of the thought and
knowledge contained in the chosen literature. It is significant that even
to-day 'culture' primarily continues to imply knowledge of languages and
literature as accomplishments, and that, though mathematics and natural sciences
enter more largely into the academic curriculum, they continue to rank lower
as studies in the education of our wealthy classes.
Most convincing in its testimony to the formation of intellectual values
is the treatment of history and modern English literature. Although for all
purposes of culture and utility, it might have been supposed that the study
of the thought, art, and events of our own nation and our own times, would
be of prime importance, virtually no place is given to these subjects. History
and literature, so far as they figure at all, are treated not in relation
to the life of to day, but as dead matter. Other subjects of strictly vital
utility, such as physiology and hygiene, psychology and sociology, find no
place whatever in the general education of our schools and universities,
occupying a timid position as 'special' subjects in certain professional
courses.
Pedagogues sometimes pretend that this exclusion of 'utility' tests for
the subjects and the treatment in our system of education rests upon sound
educational principles, in that, ignoring the short-range utilities which
a commercial or other 'practical' training desiderates, they contribute to
a deeper and a purer training of the intellectual faculties. But having regard
to the part played by tradition and ecclesiastical authority in the establishment
of present-day educational systems, it cannot be admitted that they have
made a serious case for the appraisement of studies according to their human
values. Probably our higher education, properly tested, would be found to
contain a far larger waste of intellectual 'efficiency' than our factory
system of economic efficiency. And this waste is primarily due to the acceptance
and survival of barbarian standards of culture, imperfectly adjusted to the
modern conditions of life, and chiefly sustained by the desire to employ
the mind for decorative and recreative, rather than for productive or creative
purposes. Art, literature and science suffer immeasurable losses from this
misgovernment of intellectual life. The net result is that the vast majority
of the sons and daughters even of our well-to-do classes grow up with an
exceedingly faulty equipment of useful knowledge, no trained ability to use
their intellects or judgments freely and effectively, and with no strong
desire to attempt to do so. They thus remain or become the dupes of shallow
traditions, or equally shallow novelties, under the guise of scientific,
philosophic, economic or political principles which they have neither the
energy of mind nor the desire to test, but which they permit to direct their
lives and conduct in matters of supreme importance to themselves and others.
As education is coming to take a larger place as an organised occupation,
and more time, money and energy are claimed for it, the necessity of a revaluation
of intellectual values on a sane basis of humanism becomes more exigent than
ever. For there is a danger of a new bastard culture springing up, the product
of a blending of the barbarian culture, descending by imitation of the upper
classes, with a too narrowly utilitarian standard improvised to convert working-class
children into cheap clerks and shopmen. Our high-schools and local universities
are already victims to this mésalliance between 'culture' and 'business',
and the treatment of not a few studies, history and economics in particular,
is subject to novel risks.
§5. Dilettantism is the intellectual equivalent of sport. What is the
moral equivalent? The sporting-life has an ethics of its own, the essence
of which lies in eschewing obligations with legal or other compulsory external
sanctions, in favour of a voluntary code embodying the mutual feelings of
members of a superior caste. In an aristocracy of true sportsmen honesty
and sexual 'morality' are despised as bourgeois virtues, while justice is
too compulsory and too equalitarian for acceptance. Honour takes the place
of honesty, good form of morals, fair-play and charity of justice. It is
the code of the barbarian superman or chieftain, qualified, softened and
complicated to suit the conditions of the modern play-life. Courage and endurance,
fidelity, generosity and mercy are his virtues: temperance, modesty, humility,
gratitude, have no proper place in such a code, which is indeed based upon
a free exercise of the physical functions for personal pleasure and glory.
The hazard belonging to a sporting life makes for superstition. Nobody is
more crudely superstitious than the gambler, and everybody to whom life is
primarily a game conceives of it as proceeding by rules which may be evaded
or tampered with. This aspect of the sporting character gave the priestly
caste its chief opportunity to get power. So pietism was grafted on the sportsman
and the fighting-man, and religion kept a hold on the ruling and possessing
classes, adapting its moral teaching to his case. The wide divergence of
British Christianity from the teaching of the gospels finds its chief explanation
in this necessity of adaptation. Its doctrines and its discipline had to
be moulded so as to fit the character and conduct of powerful men, who not
only would repudiate its inner spiritual teaching, but whose lust, pride,
cruelty and treachery, the natural outcome of their animal life, were constantly
leading them to violate the very code of honour they professed. As industry
and property, peace and order, became more settled and wide-spread, there
came up from below a powerful commercial class, whose economic and social
requirements evolved a morality in which the so-called puritan virtues of
industry, thrift, honesty, temperance, sexual purity, prevailed, and a Christianity
designed primarily to evoke and to sustain them. Just as the intellectual
culture of the aristocracy came to clash with the utilitarian education of
the bourgeois and to produce the confusing compromise which at present prevails,
so with the differing ethics of the same two classes. The incursion of the
wealthy tradesman into 'high life' and of the landed gentry into the 'city'
has visibly broken down the older standards both of morals and of manners.
The prestige of the sporting virtues has played havoc with the simplicity
and austerity of the puritan morals and creeds, though it may fairly be maintained
that the saner utilities of the latter have tempered to a perceptible degree
the morals and manners of the sportsman. Luxuries and frivolities of a more
varied order have largely displaced the older sporting-life, introducing
into it some elements of more intellectual skill and interest, though it
remains primarily devoted to the pursuit of pleasurable sensuous futilities.
But, though the modes of the leisure life are shifting, the definitely parasitic
attitude and career which it embodies remain unchanged. The sense of justice
and of humanity among its members is as defective as ever. This truth is
sometimes concealed by the change in social areas that is taking place. Class
honour and comradeship have a somewhat wider scope as the range of effective
intercourse expands, and classes which formerly were wide apart come partially
to fuse with one another, or are brought within the range of sympathy, as
regards their more sympathetic members. So intercourse upon a fairly equal
basis can take place in such a country as England between most persons who
have reached a certain level of refinement of living. This certainly implies
some transfusion of moral standards, the union of common sentiments regarding
industry and property with the downward spread of a modified conception of
a sporting life. Indeed, imitation has gone a certain way towards infecting
all the stabler grades of the working-classes with this blend of barbarian
and puritan valuations. While the larger pecuniary means and leisure which
they possess has introduced into their standard of life sporting habits largely
imitative of the fully leisured aristocracy, it has implanted habits of 'respectability'
as the contribution of the bourgeois type immediately above them in the social
scale.
§6. But when we dip down below the bourgeois and the regular working-classes
which he has drilled in industry, we find a lower leisure class whose valuations
and ways of living form a most instructive parody of the upper leisure class.
Both in country and town life these types appear. They include 'gypsies',
tramps, poachers and other vagabonds, who have never been enlisted in the
army of industry, or have deserted in favour of a 'free' life of hazard,
beggary and plunder. In towns natural proclivities or misfortune account
for considerable groups of casual workers, professional or amateur thieves
and prostitutes, street-sellers, corner-men, kept husbands, and other parasites
who are a burden on the working-classes. Alike in country and in town, these
men practise, so far as circumstances allow, the same habits and exhibit
the same character as the leisure class at the top. The fighting, sporting,
roving, generous, reckless, wasteful traits are all discernible, the same
unaffected contempt for the worker, the same class camaraderie, often with
a special code of honour, the same sex license and joviality of manners.
Even their intelligence and humour, their very modes of speech, are the half-imitative,
half-original replica of high life as it shows in the race-course, in the
club smoke-room, or the flash music hall. Often the parasites and hangers-on
to upper-class sports and recreations, these form a large and growing class
of our population, and their withdrawal from all industry that can be termed
productive, coupled with the debased mode of consumption which they practise,
count heavily in the aggregate of social waste.
§7. As the opportunities of leisure and of some surplus income beyond
the current accepted standard of class comfort become more general, this
sympathetic imitation of recreations, education and morals, undoubtedly makes
for a national standardisation of life, though the enormous discrepancies
in economic resources greatly limit the efficacy of such a tendency to unity.
But the apparent gain in humanity thus suggested is largely counterworked
by the stronger sense of national and especially of racial cleavage which
has come with modern world intercourse. If class barriers of conduct, education
and feeling are somewhat weakening in the foremost European nations, a clearer
and intenser realisation of national and racial barriers takes their place.
Every modification of class exclusiveness, and of economic plunder, upon
the smaller scale, is compensated by this wider racial exclusiveness, with
its accompanying parasitism. The civilised Western world is coming more consciously
to mould its practical policy, political and economic, and its sentiments
and theories, upon a white exploitation of the lower and the backward peoples.
Imperialism is displacing, or at present is crossing, class supremacy, and
is evolving an intellectualism and a morals accommodated to the needs of
this new social cleavage. It is moving towards a not distant epoch in which
Western white nations may, as regards their means of livelihood, be mainly
dependent upon the labour of regimented lower peoples in various distant
portions of the globe, all or most members of the dominant peoples enjoying
a life of comparative pleasure and leisure and a collective sense of personal
superiority as the rulers of the earth.
That standards of recreation, education and morals, thus formed and transformed,
are likely to contain enormous 'wastes' in their direct and indirect bearing
upon economic life, is obvious. How far this waste is to be imputed to imitation
of the prestige-possessing habits of 'the leisured class', how far to 'original
sin' or the errors or excesses natural to all sorts and conditions of men,
it is not possible to ascertain. But it will be evident that in these higher
satisfactions, to which an increasing 'surplus' of wealth, leisure and energy
can be devoted, will be found the largest wastes. For the conventional expenditure
embedded in these strata of the various class standards will be largely directed
by motives which are very loosely related to any real standard of organic
welfare. One need not exaggerate this expenditure of time or money, or deem
it wholly unproductive. It may even be conceded that few of the pursuits
of pleasure are wholly destitute of benefit, nor are prestige and the imitation
it engenders wholly valueless. But such practices contain much that is obsolete,
incongruous or indigestible, much that is actively injurious, both to the
individual and to society. Regarded from the standpoint of pecuniary expenditure,
the misdirection of the surplus income into empty or depraved modes of recreation,
culture, religion and charity is the largest of all economic wastes. Could
it be set forth in veracious accounts, its enormity would impress all reflective
minds. How small the total yield of human welfare or even of current pleasurable
satisfaction from the idle travel, racing, hunting, motoring, golfing, yachting,
betting and gambling, in comparison with the human gain from the work and
arts of which they are the futile substitutes! Consider the damage to agriculture,
the sheer loss of human energy, the selfishness, sensuality and brutality
incidental to many sports, the empty-mindedness, obtuseness of intelligence
and insensate pride, the shutting of the senses and the emotions to most
of the finer and nobler scenes in the spectacle of nature and the drama of
humanity, that are the natural and necessary consequences of 'a sporting
life.' Or could one accurately analyse the costs of dilettantism, sham culture,
with its monstrous perversions of productive energy in the fields of pedagogy,
art, science, and literature, in a descending scale of frivolousness or depravity,
as they seize by imitation the awakening mind of ever larger strata of our
populations! But even worse than sham intellectualism is the sham morality
which tricks itself out in pietistic formulas and charitable practices, so
as to evade obedience to the plain laws of human brotherhood and social justice
in this world.
The widest and deepest implications of this parasitic life of luxury and
leisure, the substitution of recreation for art and exercise, of dilettantism
for the life of thought, of pietism, and charity for human fellowship, lie
beyond the scope of our formal enquiry. We are concerned with them primarily
as affecting economic production and consumption. Sport, dilettantism and
charity are for us characteristic products of mal-distribution seizing that
surplus-income which is the economic nutriment of social progress, and applying
it to evolve a complicated life of futile frivolities for a small leisured
class who damage by their contagious example and incitement the standards
of the working members of the society in which they exercise dominion.
CHAPTER XII: THE HUMAN LAW OF
DISTRIBUTION
§1. In seeking at once to establish and apply to industry
a standard of human value, we have taken for our concrete subject-matter
the aggregate of marketable goods and services that constitute the real income
of the nation. This real wealth, distributed in income among the various
members of the community, we subjected to a double analysis, tracing it backwards
through the processes of its production, forward into its consumption. Some
of the activities of its production we recognised as being in themselves
interesting, pleasant, educative or otherwise organically useful: others
we found to be uninteresting, painful, depressing or otherwise organically
costly. A similar divergence of human value appeared in the consumption of
those forms of wealth. Some sorts and quantities of consumption were found
conducive to the maintenance and furtherance of healthy life, both pleasant
and profitable. Other sorts and qualities of consumption were found wasteful
or injurious to the life of the consumers and of the community.
The general result of this double analysis may be summarised in the following
tabular form.
WEALTH
PRODUCTION
Human utility -- Art & Exercise; Labour
Human cost -- Toil; Mal-production
CONSUMPTION
Human utility -- Needs; Abundance
Human cost -- Satiety; Mal-consumption
In the ordinary economic account 'costs' appear entirely
on the Production side of the account, 'utility' entirely on the Consumption
side. Production is regarded not as good or desirable in itself, but only
as a means towards an end, Consumption. On the other hand, all parts of Consumption
are regarded as in themselves desirable and good, and are assessed as Utilities
according to the worth which current desires, expressed in purchasing power,
set upon them.
Our human valuation refuses to regard work as a mere means to consumption.
It finds life and welfare in the healthy functioning of productive activities,
as well as in the processes of repair and growth which form sound consumption.
If all production could be reduced to Art and Exercise, the creative and
the re-creative functions, all consumption to the satisfaction of physical
and spiritual needs, we should appear to have reached an ideal economy, in
which there would be no human costs and a maximum amount of human utility.
The conditions of a complete individual life would seem to be attained. But
we are not concerned with a society in which completeness of the individual
life is the sole end, but with a society in which the desires, purposes and
welfare of the individuals are comprised in the achievement of a common life.
For this reason I have included under the head of Utility on the Productive
side of our account, not only the Art and Exercise which are directly conducive
to individual well-being, but a quantum of Labour which represents the economic
measure of the inter-dependency, or solidarity, of the so-called individuals.
Such labour is the so-called 'sacrifice' required of 'individuals' in the
interest of the society to which they belong. To the individualist it appears
a distortion of the free full development of his nature, an interference
with his perfect life. But it is, of course, neither sacrifice nor distortion.
For the so-called individual is nowise, except in physical structure,1 completely
divided from his fellows. He is a social being and this social nature demands
recognition and expression in economic processes. It requires him to engage
in some special work which has for its direct end the welfare of society,
in addition to the work of using his own powers for his own personal ends.
How far this routine labour for society can be taken into his conception
of his human nature, and so become a source of personal satisfaction, is
a question we shall discuss later on. At present it will suffice to recognise
that each man's fair contribution to the routine labour of the world, though
irksome to him, is not injurious but serviceable to his 'human' nature. Thus
interpreted, it stands on the utility, not on the cost, side of the account.
It must be distinguished from its excess, which we here term 'toil', and
from work, which whether from an abuse of the creative faculty or of social
control, is bad and degrading in its nature and is here termed mal-production.
A similar distinction between the narrowly personal and the broader social
interpretation of welfare is applicable on the consumption side. It is clearly
not enough that the income which is to furnish consumption should suffice
only to make provision for the satisfaction of the material and spiritual
needs of the individual or even of his family. The expenditure of every man
should contain a margin -- which I here call 'abundance' -- from which he
may contribute voluntarily to the good of others. There will be public needs
or emergencies, which are not properly covered by State services but remain
a call upon the public spirit of persons of discernment and humanity. There
are also the calls of hospitality and comradeship, and the wider claim of
charity, the willing help to those in need, a charity that is spontaneous,
not organised, that degrades neither him who gives nor him who receives,
because it is the natural expression of a spirit of human brotherhood. For
the sting alike of condescension and of degradation would be removed from
charity, when both parties feel that such acts of giving are an agreeable
expression of a spirit of fellowship. From the consumption which is thus
applied to the satisfaction of sound personal needs, or which overflows in
'abundance' to meet the needs of others, we distinguish sharply that excessive
quantity of consumption, which in our Table ranks as 'Satiety', and those
base modes of consumption which in their poisonous reactions on personal
and social welfare strictly correspond to the base forms of production.
§ 2. Such are the general lines of demarcation between the strictly
business and the human valuation of the productive and consumptive processes.
We now perceive how close is the resemblance of the laws of human valuation
as applied to the two sides of the equation of Wealth. This similarity is,
of course, no chance coincidence: it inheres in the organic nature of society
and of individual life. But, in order to proceed with our main purpose, the
expression of the economic income in terms of human income, we must bring
the two sides of the enquiry into closer union. We can thus get a fair survey
of the current life of industry from the standpoint of wealth and waste,
health and disease. So far as our national income, the £2,000,000,000
of goods and services, are produced by activities, which in their nature
and distribution can be classed as Art, Exercise and Social Labour, and are
consumed in ways conducive to the satisfaction of individual and social Needs,
our industrial society is sound.
Probably the greater part of our income is thus made and spent. The necessity
of attending more closely to the defects than to the successes of the present
system must not lead us to disparage the latter.
If industry were in fact the irrational, unjust and utterly inhuman anarchy
it is sometimes represented to be, it would not hold together for twenty-four
hours. Not merely is the individual business in its normal state a finely
adjusted, accurately-working complex of human skill, industry and cooperative
good-will, but the larger and less centralised structures, which we call
trades and markets, show a wonderful intricacy of order in their form and
working. To feed the thousands of mills and workshops of England with a fairly
regular supply of countless materials drawn from the wide world, to feed
the millions of mouths of our people with their regular supply of daily food,
are notable achievements of industrial order. In concentrating, as we must,
our chief thought upon the disorder of the system, the places where it fails,
and the damage of such failure, we gain nothing by exaggerating the industrial
maladies and their social injuries.
The proportions of order and disorder, health and disease, human cost and
human utility, in the working of our industrial system are best ascertained
by turning once more to our concrete mass of wealth, our income, and enquiring
into the quantitative method of its distribution.
In examining the human costs involved in a given output of labour-power
(and of other productive energy) we recognised that very much depended upon
the conditions of that output, and particularly upon the length and intensity
of the working-day and working-week.
Similarly, in examining the human utility got from the consumption of a
given quantity of goods, we recognised that it will depend upon the sort
and the number of persons who receive it for consumption.
So from both sides of the question we approach the central issue of the
distribution of Wealth.
If the £2,000,000,000 of goods were found to be so distributed in the
modes of their production as to involve no burden of toil and no injury upon
the producers, while they were so distributed in income as to involve no
waste or damage in consumption, the human utility it represented would reach
a maximum and cost would be zero.
If, on the other hand, the same goods were largely produced by ill-nourished
labourers, working long hours under bad hygienic conditions, and using capital
largely furnished by the painful and injurious saving of the poor, while
the distribution of the goods was such as to assign the bulk of them to a
small affluent class, the masses living on a bare subsistence level, the
human utility of such a system would be very small, its human cost very great.
Judged indeed from any right standard of civilisation, an industrial society
of the latter sort might represent a minus quantity of human welfare.
There might even be two nations of equal population and economic income,
equally prosperous from the standpoint of statistics of commerce, which nevertheless,
by reason of the different apportionment of work and income, stood poles
asunder in every true count of human prosperity.
§3. Now the Human Law of Distribution, in its application to industry,
aims, as we have seen, to distribute Wealth, in relation to its production
on the one hand and its consumption on the other, so as to secure the minimum
of Human Costs and the maximum of Human Utility. No bare rule of absolute
equality, based upon the doctrine of equal rights, equal powers or equal
needs, will conduce to this result. The notion that the claims of justice
or humanity would be met by requiring from all persons an equal contribution
to the general output of productive energy is manifestly foolish and impracticable.
To require the same output of energy from a strong as from a weak man, from
an old as from a young, from a woman as from a man, to ignore those actual
differences of age, sex, health, strength and skill, would be rejected at
once as a preposterous application of human equality. If such an equal output
were required, it could only be obtained by an average task which would unduly
tax the powers of the weak, and would waste much of the powers of the strong.
A similar human economy holds of the provision of capital through saving.
To impose saving upon working folk whose income barely maintains the family
efficiency, when other folk possess surplus-incomes out of which the socially
necessary capital can be provided, is a manifestly wasteful policy. Those
who have no true power to save should not be called upon to undergo this
'cost': all saving should come proportionately out of higher incomes where
it involves no human sacrifice. Alike, as regards labour and capital, the
true social economy is expressed in the principle that each should contribute
in accordance with his ability.
It should be similarly evident that exact equality of incomes in money or
in goods for all persons is not less wasteful, or less socially injurious.
I cannot profess to understand by what reasoning some so-called Socialists
defend an ideal order in which every member of society, man, woman and child,
should have an absolutely equal share of the general income. The needs of
people, their capacity to get utility out of incomes by consuming it, are
no more equal than their powers of production. Neither in respect of food,
or clothing, or the general material standard of comfort, can any such equality
of needs be alleged. To say that a big strong man, giving out a correspondingly
large output of energy, needs exactly the same supply of food as a small
weakly man, whose output is a third as great, would be as ridiculous as to
pretend that a fifty-horse power engine needed no more fuel than a ten-horse
power one. Nor will the differences in one set of needs be closely compensated
in another. Mankind is not equal in the sense that all persons have the same
number of faculties developed, or capable of development, to the same extent,
and demanding the same aggregate amount of nutriment. To maintain certain
orders of productive efficiency will demand a much larger consumption than
to maintain others. Because differences of income and expenditure exist at
present which are manifestly unjust and injurious, that is no reason for
insisting that all differences are unwarrantable. Equality of opportunity
does not imply equality but some inequality of incomes. For opportunity does
not consist in the mere presence of something which a man can use, irrespective
of his own desires and capacities. A banquet does not present the same amount
of opportunity to a full man as to a hungry man, to an invalid as to a robust
digestion. £1,000, spent in library equipment for university students,
represents far more effective opportunity than the same sum spent on library
equipment in a community where few can read or care to read any book worth
reading. Equality of opportunity involves the distribution of income according
to capacity to use it, and to assume an absolute equality of such capacity
is absurd.
It may no doubt be urged that it is difficult to measure individual needs
and capacities so as to apply the true organic mode of distribution. This
is true and any practical rules for adjusting income, or for distribution
of the product, according to needs, will be likely to involve some waste.
But that is no reason for adopting a principle of distribution which must
involve great waste. However difficult it may be to discover and estimate
differences of needs in individuals or classes of men, to ignore all differences
insures a maximum of waste. For, assuming, as it does, a single average or
standard man, to which type no actual man conforms, it involves a necessary
waste in each particular case. Everyone, in a word, would under this mechanical
interpretation of equality possess either a larger or a smaller income than
he could use. Such a doctrine, though sometimes preached by persons who call
themselves socialists, is really a survival of the eighteenth-century doctrine
of individual rights, grafted on to a theory of the uniformity of human nature
that is contradicted by the entire trend of science.
This levelling doctrine only serves to buttress the existing forms of inequality,
by presenting in the guise of reform a spurious equality, the folly and the
waste of which are obvious even to the least reflecting of mankind.
§4. Distribution of income according to needs, or ability to use it,
does not, indeed, depend for its practical validity upon the application
of exact and direct measurements of needs. The limits of any sort of direct
measurement even of material needs appear in any discussion of the science
of dietetics. But inexact though such science is, it can furnish certain
valid reasons for different standards of food in different occupations, and
for other discriminations relating to race, age, sex and vigour. What holds
of food will also hold of housing, leisure, modes of recreation and intellectual
consumption. Nor must it be forgotten that, for expenditure, the family is
the true unit. The size and age of the family is certainly a relevant factor
in estimating needs, and in any distribution on a needs basis must be taken
into account.
Public bodies, and less commonly private forms, in fixing salaries and wages,are
consciously guided by such considerations. The idea is to ascertain the sum
which will maintain a worker, with or without a family, in accordance with
economic efficiency, and having regard to the accepted conventions of the
class from which he will be drawn. Having determined this 'proper' salary
or wage, they seek to get the best man for the work. It is true that the
conventional factor looms so big in this process as often to obscure the
natural economy. When it is determined by a municipality that its Town Clerk
ought ot have £1500 a year and its dustman 22s. a week, it appears a
palpable straining of language to suggest that differences of 'needs' correspond
to this descrepancy of pay. For, though it is true that in the existing state
of the market for legal ability and experience the town may not be able to
get a really good town clerk for less, that state of the legal market is
itself the result of artificial restrictions in opportunity of education
and of competition, which have no natural basis and which a society versed
in sound social economy will alter. But the fact that the existing interpretation
of needs is frequently artificial and exaggerated must not lead us to ignore
the element of truth embodied in it. The wages of policemen, the real wages
of soldiers and sailors, are determined with conscious relation to the needs
of able-bodied men engaged in hard physical work, and with some regard to
the existence of a wife and family. But I need not labour the point of the
difference between the salary and the 'commodity' view of labour. The acceptance
among all thoughtful employers of 'the economy of high wages' applied within
reasonable limits is itself the plainest testimony to the actuality of the
'needs' basis of income. That unless you pay a man enough to satisfy his
needs, you cannot get from him his full power of work, is a proposition which
would meet with universal acceptance.
But it will commonly be added that the safest way of measuring needs is
by means of output. This output, measured by work-time, or by piece, or by
a combination of the two, still remains the general basis of payment. How
far is this conformable to our theory of human distribution, according to
needs? That there is some conformity will, I think, be easily perceived.
If one docker unloads twice as much grain or timber as another docker in
the same time, or if one hewer working under the same conditions 'gets' twice
as much coal as another, there is a reasonable presumption that the larger
actual quantity of labour has taken a good deal more 'out of him'.
Putting the comparison on its barest physical basis, there has been a larger
expenditure of tissue and of energy, which must be replaced by a larger consumption
of food. A strong man doing much work may not be exerting himself more than
a weak man doing little work. But all the same there is some proportion between
the respective values of their output of physical energy and their intake
of food. This, of course, is a purely Physiological application of our law
of human distribution. It applies both to sorts of work and to individual
cases in the same sort of work, and constitutes an 'organic' basis for difference
of 'class' wages and individual wages. We urge that it is applicable to other
factors of consumption than food, and throughout the whole area of production
and consumption. But applied as a practical principle for determining distinctions
of class or grade payment, and still more for individual payment within a
class, it has a very limited validity. Rigorously applied it is the pure
'commodity' view of labour, the antithesis of the 'salary' view which best
expresses the 'needs' economy. But, though output cannot be taken as an accurate
measure of 'needs' for the purpose of remuneration, it clearly ought to be
taken into account. The practical reformer will indeed rightly insist that
it must be taken into account. For he will point out that output is a question
not merely of physiological but still more of moral stimulus. A strong man
will not put out more productive energy than his weaker fellow unless he
knows he is to get more pay; a skilful man cannot be relied upon to use his
full skill unless he personally gains by doing so. If the sense of social
service were stronger than it is, a bonus for extra strength or skill might
be unnecessary. But as human nature actually stands, this stimulus to do
a 'best' that is better than the average, must be regarded as a moral 'need'
to be counted for purposes of remuneration along with the physiological needs.
Too much need not be made of this distinctively selfish factor. In many sorts
of work, indeed, it may not be large enough to claim recognition in remuneration.
But where it is important, the application of our needs economy of distribution
must provide for it. This admission does not in the least invalidate our
organic law. For the moral nature of a man is as 'natural' as his physical
nature. Both are amenable to education, and with education will come changes
which will have their just reactions upon the policy of remuneration.
§5. The organic law of distribution in regarding needs will, therefore,
take as full an account as it can both of the unity and the diversity of
human nature. The recognition of 'common' humanity will carry an adequate
provision of food, shelter, health, education and other prime necessaries
of life, so as to yield equal satisfaction of such requirements to all members
of the community. This minimum standard of life will be substantially the
same for all adult persons, and for all families of equal size and age. Upon
this standard of human uniformity will be erected certain differences of
distribution, adjusted to the specific needs of any class or group whose
work or physical conditions marks it out as different from others. The present
inequalities of income, so largely based upon conventional or traditional
claims, would find little or no support under this application of the organic
law. Indeed, it seems unlikely that any specific requirements of industrial
or professional life would bulk so largely in interpreting human needs as
to warrant any wide discrimination of incomes. There seems no reason to maintain
that a lawyer's or a doctor's family would require, or could advantageously
spend, a larger income than a bricklayer's, in a society where equality of
educational and other opportunities obtained. But, if there were any sorts
of work which, by reason of the special calls they made upon human faculties,
or of the special conditions they imposed, required an expenditure out of
the common, the organic law of distribution according to needs would make
provision for the same as an addition to the standard minimum. So likewise
the hours of labour would be varied from a standard working-day to meet the
case of work unusually intense or wearing in its incidence. To what extent
society would find it necessary to recognise individual differences of efficiency
within each grade as a ground for particular remuneration -- and how far
such claims would represent, not payment according to true needs but power
to extort a personal rent -- is a question which can only be answered by
experience. It may, however, be regarded as certain that the high individual
rents which prevail at present in skilled manual and menial work, could not
be maintained. For these high rates depend upon conditions of supply and
of demand which would not then exist. The enormous fees which specialists
of repute in the law or medicine can obtain depend, partly, upon the inequality
of educational and social opportunities that limits the supply of able men
in these professions; partly, upon other inequalities of income that enable
certain persons to afford to pay such fees. Equality of opportunity and even
an approximate equalisation of income would destroy both these sources of
high rents of ability. What applies in the professions would apply in every
trade. Individual 'rents' of ability might survive, but they must be brought
within a narrow compass.
While, then, the selfishness of individual man might give a slight twist
to the application of the social policy of distribution according to needs,
it would not impair its substantial validity and practicability.
Thus we see this law of distribution, operative as a purely physical economy
in the apportionment of energy for mechanical work, operative as a biological
economy through the whole range of organic life, is strictly applicable as
a principle of social economy. Its proper application to social industry
would enable that system to function economically, so as to produce the maximum
of human utility with the minimum of human cost.
§6. If we can get an industrial order, in which every person is induced
to discover and apply to the service of society his best abilities of body
and mind, while he receives from society what is required to sustain and
to develop those abilities, and so to live the best and fullest life of which
he is capable, we have evidently reached a formally sound solution of the
social problem on its economic side. We are now in a position to approach
the actual processes of economic distribution that prevail to-day, so as
to consider how far they conform to this sound principle of human industry.
We are not justified at the outset in assuming that any wide discrepancy
will be admitted. On the contrary, in many quarters there survives a firm
conviction that our actual system of industry does work in substantial conformity
with the human law of distribution.
The so-called laissez-faire theory of industrialism based its claims to
utility and equity upon an assertion of the virtual identity of the economic
and the human distribution. If every owner of capital or labour or any other
factor of production were free to apply his factor in any industry and any
place he chose, he would choose that industry and that place where the highest
remuneration for its employment was attainable. But since all remuneration
for the factors of production is derived from the product itself, which is
distributed among the owners of the several factors, it follows that the
highest remuneration must always imply the most productive use. Thus, by
securing complete mobility of capital and labour, we ensure both a maximum
production and an equitable distribution. 'Led as by an invisible hand',
every owner of capital, labour or other productive power, disposed of his
factor in a manner at once most serviceable to the production of the general
body of wealth and most profitable to himself. The application of this theory,
of course, assumed that everybody knew or could get to know what employment
he would be likely to find most profitable for his capital or labour, and
would use that knowledge. It was, moreover, held that the actual conditions
of industry and commerce did and must substantially conform to this hypothesis
of mobility. Any circumstances, indeed, which contravened it by obstructing
the mobility and liberty of employment were treated as exceptional. Such
exceptions were monopolies, the exclusive owners of which forbade freedom
of entry or of competition to outside capital and labour, and secured higher
rates of profit than prevailed in other businesses. The harmony of perfect
individualism demanded that all such monopolies, together with protective
duties and other barriers to complete liberty of commerce and of industry,
should be removed. All productive power would then flow like water through
the various industrial channels, maintaining a uniform level of efficient
employment, the product being distributed in accordance with the several
costs of its production and being absorbed in the processes of productive
consumption that were required to maintain the current volume of productive
power or to enhance it.
There was a little difficulty in the case of rents of land. Though differential
rents, measuring the superior productivity of various grades of land as compared
with the least productive land in use, were necessary payments to landowners,
they could not rank as costs and could not be productively consumed. So likewise
with the scarcity rents, paid even for the least productive lands where the
supply for certain uses was restricted. Both scarcity and differential rents
were classed as surplus. But though the magnitude of this exceptional element
might seem to have been a fatal flaw in the individualist harmony, a characteristic
mode of escape was found in the doctrine of parsimony which prevailed. Though
economic rents could not be productively consumed by their recipients, they
furnished a natural fund of savings, so providing the growing volume of new
capital which was necessary to set labour to productive work. So, by a somewhat
liberal interpretation, it was contended that 'the simple system of natural
liberty', even operating on a basis of private ownership of land, drew from
each man the best and fullest use of his productive powers, and paid him
what was economically necessary to maintain and to evoke those powers. Early
critics of this theory, of course, pointed out that the interpretation of
distribution 'according to needs' was defective from the standpoint of humanity,
since the only needs taken into account were efficiency for productive work,
the nourishment and stimulus to produce a larger quantity of marketable goods,
not the attainment of the highest standard of human well-being. But to most
economists of that day such a criticism seemed unmeaning, so dominant in
their minds was the conception of economic wealth as the index and the instrument
of human welfare.
§7. It is commonly asserted and assumed that this laissez-faire theory
is dead, and that the attainment of a harmony of social welfare, by the free
intelligent play of individual self-interest in the direction of economic
forces, has been displaced by some theory of conscious cooperative or corporate
direction in which the State takes a leading part. But at this very time,
when the policy of every civilised nation is engaged more and more in checking
monopolies and industrial privileges upon the one hand, and in placing restraints
upon the havoc of unfettered competition on the other, a distinct and powerful
revival of an economic theory of production and distribution undistinguishable
in its essentials from the crude 18th century laissez-faire has set in. Largely
influenced by the desire to apply mathematics, so as to secure a place for
economics as an 'exact' science, many English and American economists have
committed themselves to a 'marginalist' doctrine, which for its efficiency
rests upon assumptions of infinite divisibility of the factors of production,
and frictionless mobility of their flow into all the channels of industry
and commerce. These assumptions granted, capital and labour flow into all
employments until the last drop in each is equally productive, the products
of the 'marginal' or final drops exchanging on a basis of absolute equality
and earning for their owners an equal payment. Among English economists Mr.
Wicksteed has set out this doctrine in all its economic applications most
fully. He shows how by a delicate balance of preferences 'at the margins'
i.e., in reference to the last portion of each supply of or demand for anything
that is bought or sold, there must be brought about an exact equivalence
of utility, of worth, and of remuneration, for the marginal increments in
all employment. 'So far as the economic forces work without friction, they
secure to everyone the equivalent of his industrial significance at the part
of the industrial organism at which he is placed.'2 Elsewhere3 he asseverates
that, as regards the workers in any employment, this means that 'they are
already getting as much as their work is worth,' and that if they are to
get more, this 'more' can only be got either out of 'communal funds,' or
by making their work worth more. The same application of the marginalist
doctrine is made by Professor Chapman. 'The theory, then, merely declares
that each person will tend to receive as his wage his value -- that is, the
value of this marginal product-no more and no less. In order to get more
than he actually does get, he must become more valuable, -- work harder,
for instance -- that is, he must add more to the product in which he participated.'4
This is precisely the old 'laissez-faire, laissez-aller' teaching, fortified
by the conception that some special virtue attaches to the equalising process
which goes on 'at the margin' of each employment of the factors of production.
The 'law of distribution' which emerges is that every owner of any factor
of production 'tends to receive as remuneration' exactly what it is 'worth'.
Now this 'law' is doubly defective. Its first defect arises from the fact
that economic science assigns no other meaning to the 'worth' or 'value'
of anything than what it actually gets in the market. To say, therefore,
that anybody 'gets what he is worth', is merely an identical proposition,
and conveys no knowledge. The second defect is the reliance upon a 'tendency'
which falsely represents the normal facts and forces. It is false in three
respects. It assumes in the first place an infinite divisibility of the several
factors, necessary to secure the accurate balance of 'preferences' at the
margins. It next assumes perfect mobility or freedom of access for all capital
and labour into all avenues of employment. Finally, it assumes a statical
condition of industry, so that the adjustment of the factors on a basis of
equal productivity and equal remuneration at the margins may remain undisturbed.
All three assumptions are unwarranted. Very few sorts of real capital or
labour approach the ideal of infinite divisibility which marginalism requires.
An individual worker, sometimes a group, is usually the minimal 'drop' of
labour, and capital is only infinitely divisible when it is expressed in
terms of money, instead of plants, machines or other concrete units. Still
less is it the case that capital or labour flows or 'tends' to flow with
perfect accuracy and liberty of movement into every channel of employment
where it is required, so as to afford equality of remuneration at the several
margins. Lastly, in most industrial societies the constant changes taking
place, in volume and in methods of industry, entail a corresponding diversity
in the productivity and the remuneration of the capital and labour employed
in the various industries 'at the margin.'5
§8. This slightly technical disquisition is rendered necessary by the
wide acceptance which 'marginalism' has won in academic circles. Its expositors
are able to deduce from it practical precepts very acceptable to those politicians
and business men who wish to show the injustice, the damage and the final
futility of all attempts of the labouring classes, by the organised pressure
of trade unionism or by politics, to get higher wages or other expensive
improvements of the conditions of their employment. For if 'marginalism'
can prove that, as Professor Chapman holds, 'in order to get more than he
actually does get, he must become more valuable-work harder, for example,'
it has evidently re-created the defences against the attacks of the workers
upon the fortresses of capital which were formerly supplied by the wage-fund
theory in its most rigorous form. If wages can only rise on condition of
the workers working harder or better, no divergence of interests exists between
capital and labour, no injustice is done to any class of labour, however
low its 'worth' may be, and no remedy exists for poverty except through improved
efficiency of the workers. If our political economists can bring this gospel
of marginalism home to the hearts and heads of the working-classes, they
will set aside all their foolish attempt to get higher wages out of rents
and property and will set themselves to producing by harder, more skilful
and more careful labour an enlarged product, the whole or part of which may
come to them by the inevitable operation of the economic law of equal distribution
at the margin!
It is right to add that an attempt is sometimes made to bring marginalism
into a measure of conformity with the notorious fact that large discrepancies
exist in the rates of remuneration for capital or labour or both in various
industries, by treating these inequalities as brief temporary expedients
for promoting the 'free flows' of productive power from less socially productive
into more socially productive channels, and for stimulating improvements
in the arts of industry. Abnormal gains, of the nature of prizes or bonuses,
are thus obtainable by individual employment, or by groups of employers,
who are pioneers in some new industry or in the introduction of some new
invention or other economy. But these rewards of special merit, it is argued,
are not lasting, but disappear so soon as they have performed their socially
serviceable function of drawing into the favoured employments the increased
quantity of new productive power which will restore the equality of productivity
and remuneration 'at the margins'.
Now, even were it possible to accept this rehabilitation of laissez-faire
theory, accepting this equalising 'tendency' as predominant and normal, and
classifying all opposing tendencies as mere friction, it would not supply
a law of distribution that would satisfy the conditions of our 'human' law.
It would afford no security of distribution according to 'needs', or human
capacity of utilising wealth for the promotion of the highest standard of
individual and social welfare. It would remain an ideally good distribution
only in the sense that it would so apportion the product as to furnish to
all producers a stimulus which would evoke their best productive powers,
so contributing to maximise the aggregate production of marketable goods.
Only so far as man was regarded as an economic being, concerned merely in
the nourishment and improvement of his marketable wealth-producing faculties,
would it be a sound economy.
Just as in the case of the older, cruder 'freedom of competition', it rests
upon the fundamental assumption that all the product, the real income of
the community, will be absorbed in 'productive consumption', defraying the
bare 'costs' of maintaining and improving the productive powers of capital,
labour and ability, for the further production of objective economic goods
and services. It would remain open to the objection that it assumed an identity
of economic wealth and human welfare which is inadmissible, and that it refused
to provide that subordination of economic production and consumption to the
larger conception of human welfare which sound principles of humanity require.
Though all work might be most productively applied, it might still contain
excessive elements of human cost, and though all products were productively
consumed many of the finer needs of individual men and of society might still
remain without satisfaction.
§9. But the full divergence between the operation of the actual economic
law of distribution and the human law can best be discovered by unmasking
the fundamental falsehood of all forms of the laissez-faire or competitive
economy, viz., the assumption that the national income tends to be distributed
in a just economy of costs. Is there in fact any operative law which distributes
or 'tends' to distribute the £2,000,000,000 worth of goods that form
our income, so that all, or even most of it, acts as a necessarY food and
stimulus to evoke the full and best productive work of those who receive
it? Or, if there are failures in this economical distribution, are they so
few, so small, and so ephemeral, that they may reasonably be treated as 'friction',
or as that admixture of error or waste which is unavoidable in all human
arrangements?
Now it is of course true that the national income must continually provide
for the subsistence of the labour, ability and capital, required to maintain
the existing structure of industry and the current output of goods and services.
The brain-workers and the hand-workers of every sort and grade, from artist
and inventor to routine labourer, must be continuously supplied with the
material and non-material consumables sufficient to enable them to replace
in their own persons, or through their offspring, the physical and psychical
wear and tear involved in their work. The fertility of the soil, the raw
materials, fuel, buildings, tools and machines, requisite in the various
productive processes, must similarly be maintained out of the current output.
These bare costs of subsistence, the wages, salaries and depreciation funds
necessary to replace the wear and tear of the human and material agents of
production, are a first charge upon the national dividend. To refuse the
payments which provide this subsistence would be suicidal on the part of
the administrators of the income. They rank, from the standpoint of society6
as costs of production. If the product which results from the productive
use of these factors exceeds what is necessary to defray these costs, the
surplus may be employed in either of two ways. It may be distributed among
the productive classes in extra-payments so as to evoke by a set of economically-adjusted
stimuli such enlarged or improved efficiency as will provide for a larger
or a better product in the future. In a society of a progressive order where
the numbers or the wholesome needs, or both, are on the increase, no surplus,
however large, can be excessive for such provision. A socially sound and
just distribution of the surplus would be one which absorbed it entirely
in what may be called the 'costs of growth'. This, however, does not by any
means imply that the whole of the surplus must advantageously be distributed
directly among the individual owners of labour, ability or saving power,
in order to evoke from them the maximum extension of their several productive
powers. A good deal of the surplus may, indeed, be thus applied in higher
individual incomes of producers. But the State, politically organised society,
must look to the 'surplus' for its costs, not only of upkeep but of progress.
For whatever part we may assign to the State in aiding industrial production,
all will agree that much of its work, in the protection and improvement of
the conditions of life, is essential to the stability and progress of industry,
and involves 'costs' which can only be met by a participation in the industrial
dividend. It may even be urged that the claims of the State to maintenance
and progress are equal to the claims of individuals upon the surplus. For
it is evident that industrial progress demands that both individual and social
stimuli and nutriment of progress must be provided from the surplus by some
considered adjustment of their several claims. A surplus, thus properly apportioned
in extra-subsistence wages and other payments to producers and in public
income, would be productively expended and would thus contribute to the maximum
promotion of human welfare.7
§10. But though in such a society as ours a certain part of the surplus
is thus 'productively' applied, and is represented in industrial and human
progress, a large part is not so expended in 'costs of progress'. A large
quantity of 'surplus' is everywhere diverted into unproductive channels.
The income which should go to raise the efficiency of labour, to evoke more
saving, and to improve the public services, is largely taken by private owners
of some factor of production who are in a position to extort from society
a payment which evokes no increase of productive efficacy, but is sheer waste.
This power to extort superfluous and unearned income is at the root of every
social-economic malady. Indeed, it often goes beyond the diversion of surplus
from productive into unproductive channels. It often encroaches upon costs
of maintenance. For the vital statistics of large classes of labour show
that the food, housing and other elements of real wages, are insufficient
for the upkeep of a normal working life and for the rearing of a healthy
and efficient offspring. This means that surplus is actually eating into
'costs', in that the costs of maintenance, which sound business administration
automatically secures for the capital employed, are not secured for the labour.
The reason why this policy, which from the social standpoint is suicidal,
can nevertheless be practised, is obvious. For the capital 'belongs to' the
business, in a sense in which the labour does not. A sweating economy which
'lets down' the instruments of capital is of necessity unprofitable to the
individual firms: a similar sweating economy applied to the instruments of
labour need not be unprofitable. To the nation as a whole, indeed, regarded
merely as a goods-producing body, any such withholding of the true costs
of maintenance must be unprofitable. But there are businesses, or trades,
where 'sweated' labour may be profitable to the employers or the owners of
capital. There are many more where such a wage-policy, though not really
profitable, appears so, and is actually practised as 'sound business'. How
large a proportion of the 14,000,000 wage-earners whose incomes are paid
out of our £2,000,000,000 come under this category of 'sweated' workers,
we cannot here profitably discuss. But, apart from the great bulk of casual
workers in all less skilled trades, there are large strata of skilled and
trained adult-labour in the staple trades of the country which are not paid
a full subsistence wage. Such are the large bodies of women employed in factories
and workshops and in retail trade, at wages varying between eight and fourteen
shillings. Indeed, it may safely be asserted that the average wage of an
adult working-woman in this country, not in domestic service, is a sweating
wage, definitely below true economic maintenance, and still more below the
decent human requirements of life. The same statement also holds of the wage
of agricultural labour in most districts of the middle and southern counties
of England. In such employments the true economic 'costs' of maintenance
are not provided out of the present distribution of the national income.
Of a far wider range of labour is it true that the true wages of progressive
efficiency, which we have seen are vital to the economic progress of the
nation, are withheld. Though this deprivation does not form the whole case
for labour as stated from the 'human' standpoint, it constitutes the heaviest
economic count against the current distribution of wealth. The full physical
and spiritual nutriment, the material comforts, the education, leisure, recreation,
mobility and broad experience of life, requisite for an alert, resourceful,
intelligent, responsible, progressive working-class, are not provided either
by the present wage-system, or by the growing supplements which the communal
action of the State and the municipality are making to the individual incomes
of the workers. Out of the £2,000,000,000 a wholly insufficient sum
is distributed in wages of progressive efficiency for labour.
In certain other respects also the current 'costs' distribution is exceedingly
defective. The saving which goes to provide for the enlargement of the capital
structure of industry is very wastefully provided. A large proportion of
such savings as are contributed out of working-class incomes involves an
encroachment upon their costs of progressive efficiency, and represents,
from the standpoint both of the individual family and of society, bad economy.
Moreover, the methods of collection and of application of such capital are
so wasteful and so insecure as to render working-class thrift a byword in
the annals of business administration.
§11. But these deficiencies in the economy of 'costs' can only be understood
by a study of that large section of the national income which in its distribution
furnishes no food or stimulus whatever to any form of productive energy.
Even in the idealist laissez-faire economics we saw that rent of land was
distinguished from the wages, interest and profits, which constituted the
'costs of production', and was described as 'surplus'. It was recognised
that, where land was required for any productive purpose, its owners would
receive in payment for its use any portion of the product, or its selling
value, which remained over after the competitively determined 'costs' of
capital and labour had been defrayed. The payment was economically necessary
because suitable land for most industrial uses was scarce, and the amount
of the payment would depend upon how much was left when capital and labour
had received their share. For the landlord would take all the surplus. There
are those who still insist that the owners of land are everywhere in this
position of residuary legatees. Land, they think, is always relatively scarce,
capital and labour always and everywhere relatively abundant. Free competition
then between the owners of the relatively abundant factors will keep down
the price for them to bare 'costs', leaving a maximum amount of surplus which
the so-called land 'monopolists' will receive as rent. This surplus evokes
no productivity from the soil or its owners; its payment does nothing to
stimulate any art of industry. But, if the landowner did not take it, and
it was kept by farmers as profits, or by labourers as wages, it would be
just as wasteful from the productive standpoint, as if it passed as rent,
for, upon the hypothesis of such economists, the full competitive wages and
profits are the only payment entitled to count as cost, and no addition to
such payments would increase the productivity of capital or labour.
§12. Now though there have been times and countries in which rent of
land was the only considerable surplus, this is not the case in any developed
industrial community to day. Other factors of production, capital, ability,
or even in some instances labour, share with land the power to extort scarcity
prices.
The hypothetical abundance, mobility and freedom of competition, which should
prevail among all owners of capital, ability and labour, keeping down all
their remuneration to a common minimum, are everywhere falsified by industrial
facts. At various points in industry capital or managerial ability is found
strongly entrenched against the competition of outsiders, and able to set
limits upon internal competition. Wherever this condition is found, the owners
of the capital or the ability so advantageously placed are able to obtain
a 'surplus', which, in its origin and its economic nature and effects, nowise
differs from the economic rents of land. The fluidity and complete freedom
which appear to attach to the term capital, so long as we treat it in its
abstract financial character, disappear as soon as for capital we substitute
certain skilfully made machinery constructed under patent rights and operated
by more or less secret processes, turning out, with the assistance of carefully
trained. and organised labour, goods which enjoy a half-superstitious fame
and special facilities of market. An examination of the capitalist system
will disclose in every field of industry numerous instances of businesses
or groups of businesses, sometimes constituting whole trades, which by reason
of some advantage in obtaining raw materials, transport or marketing facilities,
public contracts, legal privilege or protection, by using some superior process
of manufacture, skill in advertising, established reputation, financial backing,
or by sheer magnitude of operations, are screened from the full force of
free competition, and are earning interest and profits far exceeding the
minimum. Some such businesses or groups of businesses possess a virtual monopoly
of the market, and can control output and prices, so as to secure abnormal
dividends. Such control is, to be sure, never absolute, its control of prices
being subject to two checks, the restriction of demand which attends every
rise of prices, and the increasing probability of competition springing up
if profits are too high. But qualified monopolies, earning dividends far
larger than are economically necessary to support the required capital, are
everywhere in evidence. Trusts, cartels, pools, combines, conferences, and
trade agreements of various potency and stringency, pervade the more highly
organised industries, substituting the principle of combination for that
of competition. In all major branches of the transport trade by land and
sea, in large sections of the mining industry, in the iron and steel industry
and in many branches of machine-making, in many of the specialised textile
trades, in the chemical and other manufactures where special scientific knowledge
counts, in many departments of wholesale and retail distribution, and, last
not least, in banking, finance and insurance, freedom of investment and of
competition have virtually disappeared. To assume that fresh streams of capital,
labour and business ability, have liberty to enter these fields of enterprise,
and by their equal competition with the businesses already in possession
so to increase the output, lower selling prices and keep interest and profits
at a bare 'costs' level, is a childish travesty of the known condition of
these trades. To affirm that such mobility and liberty of competition is
the sole normal 'tendency', and that the monopolistic and combinative forces
merely represent friction, is so grave a falsification of the facts as to
put out of court the whole method of economic interpretation which is based
thereon. Concrete capital has none of the qualities assigned to the abstract
capital of these economists. It is neither infinitely divisible, nor absolutely
mobile, nor accurately directed, nor legally and economically 'free' to dispose
itself in any part of the industrial system where the current interest or
profit exceeds the average. Over large tracts of industry combination is
more normal and more potent than competition, and where this is not the case,
the most competitive trades will be found honeycombed with obstructive clots,
businesses enjoying special advantages and earning correspondingly high profits.
§13. Because certain qualities of business ability are requisite, to
wit astuteness, keenness of judgment, calculating power, determination, capacity
for organisation and executive ability, it is sometimes claimed that the
high rates of profit which accrue from such businesses as we have indicated
are really the creation, not of monopoly or combination, but of the talents
of these entrepreneurs. But even though it be admitted that some such ability
is essential to produce or to maintain a successful combination, can the
entire profits of such a combination be imputed to this ability or regarded
as its natural and proper reward? Take the common instance of the 'forestaller',
who stops the supply of some commodity on its way to a market, secures the
whole supply at competitive prices from the various contributors, and then
sells it at a monopoly price fixed by himself. Are the profits of this corner
a product of ability and a reward of ability, and not a 'surplus' representing
an artificially contrived scarcity value? Or take the case of a contracting
firm, which persuades all the other firms in a position to compete to come
into an arrangement as to a minimum tender. Are the extra profits due to
such an arrangement to be regarded as wages of ability, because some tact
was needed to work the thing? But suppose we granted the whole contention,
and agreed that the extra dividends paid to shareholders in favoured or protected
businesses were really produced by the ability of the entrepreneur or manager,
what then? It is not proved that these extra profits are 'costs', not 'surplus'.
On the contrary, the fact that they can be taken as extra dividends or bonuses
by the owners of the capital, instead of passing in 'wages of ability' to
the entrepreneur, is proof positive that they are surplus. For if they were
a subsistence wage of ability, or even a 'prize', essential to evoke some
special output of skill or energy, they could not be thus diverted from the
entrepreneur to the shareholders. In fact, there is no reason to suppose
that any very rare or conspicuous ability is evinced in working a successful
pool or combine, or even in organising a successful business. Still less
is there reason to suppose that the profits attending such an enterprise
are in any way proportionate to the skill or energy of the entrepreneur.
Everyone is aware that the contrary is the case. Indeed, so far as scientific,
professional, and business ability is industrially useful and has a claim
to income, enquiry shows that there is no better security for mobility, freedom
of competition and equality of payment, than in the case of capital. Inequalities
of economic conditions between various classes of our population, involving
inequalities of nurture and of education, and of every other sort of 'opportunity'
relevant to the discovery, training, equipment and success of 'natural ability',
set up a series of almost impenetrable barriers to the free flow of natural
ability throughout the industrial system, and give rise to an elaborate hierarchy
of restricted employments where the rates of remuneration represent, not
any inherent services of ability, but the degree of the restriction in relation
to the importance of the work. All such advantages of opportunity are reflected
in rates of payment for 'ability' which carry elements of 'surplus.' Though
some portion of the higher remuneration paid to successful professional workers
may be regarded as interest upon the capital-outlay of their education and
training, there is no reason to hold that the extra payment is adjusted to
the costs of this outlay. Still less can any such argument avail in the case
of high business profits. Though ability and expensive training may be favouring
conditions to such financial success, restricted competition must be accounted
the principal direct determinant of all such extra payments.
§14. There remains one final demurrer to our doctrine of the unproductive
'surplus'. If you take into consideration, it is urged, all the unsuccessful
as well as the successful businesses, you will find that the average return
for capital and for business ability is low enough, not in fact more than
represents a bare 'costs' economy. Similarly with the high incomes earned
by the few successful men in the professions and in other walks of life.
Set the failures fairly against the successes and there is no net 'surplus'
to take account of.
But this contention is one more abuse of the method of averages. To the
charge that one man is overpaid, it is no answer that another is underpaid.
To the statement that surplus emerges in the payment for some orders of capital
or ability it is no answer to say that other capital and ability does not
even get its true 'costs' or subsistence wages. The force of this rebuttal
is still further strengthened when it is realised to what extent the success
of those who succeed is directly responsible for the failure of those who
fail. For the economic strength of those whose superior advantages have secured
for them a position of control will necessarily operate to make the competition
of outsiders difficult and their failure probable. Indeed, a portion of the
gains which combination yields will often be consciously applied to kill
the competition of outsiders, or to restrict their trade to the less profitable
or the more precarious forms of enterprise. But even where this business
policy is not adopted, the very fact that strong firms and 'combines' control
many markets, must, by limiting the area of free competition, intensify the
competition within that area and so cause the failures to be numerous.
The contention, that the excessive profits of successful firms are balanced
and in some way cancelled by the losses of those that fail, is also contradicted
by the psychology of the case. If it could be shown that the chance of winning
these high gains was in fact a necessary inducement to the winners to stake
their capital and business capacity in an inherently risky line of enterprise,
there might be some force in this plea. But to the men who achieve these
successes business is not a simple game of hazard in which they have merely
the same chance as the others. Success is commonly achieved by force, strategy
and the possession of known advantages, and is used to strengthen these advantages
and so to increase continuously the 'pull' by which they accumulate their
gains and ruin their would-be competitors. Although tight forms of monopoly
are very rare, loose or partial restrictions upon competition are very numerous
and often very profitable. All these extra gains, issuing from various forms
of natural or contrived scarcity in all sorts of industries, are rightly
classed as unproductive surplus. Many of them are as constant and as certain
as the economic rents of land, arise in the same way from a limitation of
some productive factor, and are 'unearned' income in the same sense of that
term. Other of these gains are more fluctuating, proceeding from less stable
forms of privilege or combination, but while they exist they equally belong
to unproductive 'surplus.'8
§15. The distinction between that portion of the social income which
goes as necessary payments to support and evoke the energies of body and
mind of wealth-producers, i.e., costs of production, and that which goes
as unproductive 'surplus' to those who, possessing some necessary instrument
of production that is relatively scarce, can exact a scarcity price, is fundamental
in a valuation of industry. For this surplus not only represents sheer economic
waste, regarded from the social standpoint, but it can be shown to be directly
responsible, as an efficient cause, for most of those particular maladies
in our current processes of production and consumption which impede the economic
and the human progress of the nation.
For if our analysis of this surplus is correct, it consists in the seizure
of a large portion of the fruits of individual and social productive energies,
required for the full support and further stimulation of these energies and
for the wider human life which they are designed to serve, and their assignment
to persons who have not helped to make them, do not need them, and cannot
use them. The payment of surplus takes large sections of the income, needed
to raise the economic and human efficiency of the working-classes, or to
enable society to enlarge the scope and to improve the quality of the public
services, and disposes them in ways that are not merely wasteful but injurious.
In effect, all the excessive human costs of production and all the defective
human utilities of consumption, which our separate analysis of the two processes
disclosed, find their concrete and condensed expression in this 'surplus'.
The chief injuries it causes may be summarised as follows:
(1). Flowing abundantly as 'unearned' income into the possession of 'wealthy'
individuals and classes, it thereby causes large quantities of the national
income to be consumed with little or no benefit. For much, if not most, of
this surplus, being devoted to luxury, waste, extravagance and 'illth', furnishes
by its expenditure not human utility but human 'cost', not an enhancement
but a diminution of the sum of human welfare.
(2) By enabling its recipients to disobey the sound biological and moral
precept, 'in the sweat of thy face thou shalt eat bread,' it calls into being
and sustains a leisured or unemployed class whose existence represents a
loss of productive energy and of wealth-production to the nation.
(3) The evil prestige and attraction of the life of sensational frivolity
this idle class is disposed to lead tends by suggestion to sap the wholesome
respect for work in the standards of the rest of the community, and to encourage
by servile imitation injurious or wasteful methods of expenditure.
(4) The economic necessity of producing this surplus imposes excessive toil
upon the productive classes, being directly responsible for the long hours
and speeding-up which constitute the heaviest burden of human costs. The
direction which the expenditure of the surplus gives to capital and labour
degrades the character of large bodies of workers by setting them to futile,
frivolous, vicious or servile tasks.
(5) The disturbing irregularity of the trades which supply the capricious
and ever-shifting consumption, upon which the 'surplus' is so largely spent,
imposes upon the workers a great cost in the shape of irregularity of employment,
and a considerable burden of costly saving by way of insurance against this
irregularity.
(6) By stamping with the badge of irrationality and inequity the general
process of apportionment of income, the surplus impairs that spirit of human
confidence and that consciousness of human solidarity of interests which
are the best stimuli of individual and social progress.
The surplus element in private income thus represents the human loss from
defects in the current distribution of wealth, not only the loss from wasteful
and injurious consumption but from wasteful and injurious production, an
exaggeration of human costs and a diminution of human utilities. The primary
object of all social-economic reforms should be to dissipate this surplus
and to secure its apportionment partly as useful income for individual producers,
partly as useful income for society, so that, instead of poisoning the social
organism as it does now, it may supply fuller nourishment and stimulus to
the life of that organism and its cells.
Thus directed, partly into higher wages of efficiency for workers, partly
into further income for the enrichment of the common life, the 'surplus'
will in effect cease to be surplus, being completely absorbed in satisfying
the human requirements of individuals and society. For not only will it furnish
the expenditure required to bring the standard of consumption of all grades
of workers up to the level of a full satisfaction of human needs, but it
will establish an entirely new conception of public income. For it will be
recognised that the public revenue, taken either by taxation or as profits
of public industry, is earned by public work precisely as the revenue of
individuals is earned by private work, and is required for public consumption
just as private income is required for private consumption. Thus the whole
of what now figures as a wasteful 'surplus' would be applied in productive
consumption.
The scope of the operation of this organic law, of course, widely transcends
this special application to the distribution of economic income. It is the
general law of order and of progress in all departments of organic activity.
But for our task, that of a human valuation of industry, its worth is supreme.
For in the application of the organic law of distribution all the great antagonisms
which loom so big as social Problems, Luxury and Poverty, Toil and idleness,
The individual and Society, Authority and Liberty, find their solution.9
NOTES:
1. Even there he is not separated in physical functions.
The sexual, philoprogenitive, and the gregarious instincts, which are rooted
in physical structure, negate physical individualism. So does the structure
of his brain, which in solitude decays or becomes diseased.
2. The Common-sense of Political Economy, p. 698.
3. p. 345.
4. Work and Wages, Vol. I, p. 14.
5. Professor Pigou (Wealth and Welfare, p. 176), though adopting the
general position of marginalism, makes a concession, as to its applicability,
which is a virtual admission of its futility. For by showing that only in
'industries of constant returns' are 'supply price' and 'marginal supply
price' equal, and that in industries of 'decreasing' or of 'increasing' returns
there exists a tendency to exceed or to fall short of 'the marginal net product
yielded in industries in general,' he virtually endorses the criticism that
'marginalism' assumes a statical condition of industry. For only in a statical
condition would all industries be found conforming to constant returns: the
operation of increasing or diminishing returns means nothing else than that
changes in volume or methods of production are raising or lowering productivity
and remuneration above or below the equal level which 'marginalism' desiderates.
6. From the standpoint of the individual business firm 'costs of production'
may include many higher rates of payments, necessary under the actual conditions
of competitive industry to secure the use of the required agents.
7. For it must be kept in mind that the 'productive expenditure' to which
reference is here made refer ultimately to a standard not of market but of
human values.
8. Economists, following the classical distinction made by Adam Smith in
the case of land values, may break up the surplus into various species of
scarcity rents on the one hand and differential rents on the other. A scarcity
or 'specific' rent will occur when the whole supply of some factor of production,
e.g., all the land available for some particular use, or all the capital
employed in some trade, is in a position to take a payment higher than is
obtainable where more land or capital is available for this particular use
than is required to turn out the supply of goods that is actually sold. The
worst hop land in use in England obtains a positive rent, the worst equipped
ships in the Atlantic combine obtain a surplus-profit: better acres of hop
land, better-equipped ships obtain a differential rent or profit in addition.
Both specific gain and differential gain are surplus, and the basis of each
is a scarcity of supply and a restraint of competition.
9. For a detailed and more technical defence of the fundamentally important
distinction between 'costs' and 'surplus' and for a closer analysis of the
sources of 'unproductive surplus,' readers may be referred to the author's
earlier work, The Industrial System: an enquiry into earned and unearned
income. (Longman's 2nd and revised edition, 1909).
CHAPTER XIII: THE HUMAN CLAIMS OF
LABOUR
§1. The validity of the human law of distribution is
well tested by considering the light it sheds upon the modern claims of Labour
and the Movement which is endeavouring to realise these claims. For the significance
of the Labour Movement will continue to be misunderstood so long as it is
regarded as a mere demand for a larger quantity of wages and of leisure,
important as these objects are. The real demand of Labour is at once more
radical and more human. It is a demand that Labour shall no longer be bought
and sold as a dead commodity subject to the fluctuations of Demand and Supply
in the market, but that its remuneration shall be regulated on the basis
of the human needs of a family living in a civilised country.
At present most sorts of labourers are paid according to the quantity of
labour-power they give out, and according to the market-price set upon a
unit of each several sort of labour-power. This means that the actual weekly
earnings of some grades of labourer are much higher than those of other grades,
not because the work takes more out of them, or because it involves a higher
standard of living, but because some natural, some fortuitous, or some organised
scarcity of supply exists in the former grades, while there is abundance
of supply in the latter.1 Moreover, the weekly earnings for any of these
sorts of labour will vary from week to week, from month to month, or year
to year, with the variations of Supply and Demand in the Labour Market. The
income of the working family will thus vary for reasons utterly beyond its
control, though its requirements for economic and human efficiency show no
such variation. Thus there is no security for any class standard of living.
Within each class or grade of labour there will be variations of the individual
family wage, based on the amount of labour-power actually given out in the
week. A less effective worker, even though he puts out as much effort, will
earn less money than a more effective. This seems necessary, reasonable and
even just, so long as we accept the ordinary view that labour should be bought
and sold like any other commodity.
But once accept the view that to buy labour-power, like other commodities,
at a price determined purely by relations of Supply and Demand, is a policy
dangerous to the life and well-being of the individual whose labour-power
is thus bought and sold, to those of his family and of society, your attitude
towards the labour-movement in general, and even to certain demands which
at first sight seem unreasonable, will undergo a great change.
The fundamental assumption of the Labour Movement, in its demands for reformed
remuneration, is that the private human needs of a working family should
be regularly and securely met out of weekly pay. The life and health of the
family, and that sense of security which is essential to sound character
and regular habits, to the exercise of reasonable foresight, and the formation
and execution of reasonable plans, all hinge upon this central demand for
a sufficiency and regularity of weekly income based upon the human needs
of a family.
§2. This explains alike the working-class objections to piecework,
the demand for a minimum wage, and the policy of limitation of individual
output. For piece-work, even more than time-work, is based upon a total ignoring
of the human conditions which affect the giving out of labour-power. It is
the plainest and most logical assertion of the commodity view of labour,
the most complete denial that the human needs of the worker have any claim
to determine what he should be paid.
So firmly-rooted in the breast of the ordinary non-working man, and of many
working-men, is the notion that a man, who has produced twice as large an
output as another man, ought, as a simple matter of right or justice, to
receive a payment twice as large, that it is very difficult to dislodge it.
It represents the greatest triumph of the business point of view over humanity.
If a man has done twice as much, of course be ought to receive twice as much!
It seems an ethical truism. And yet I venture to affirm that it has nothing
ethical in it. It has assumed this moral guise because of a deep distrust
of human nature which it expresses. How will you get a man to do his best
unless you pay him according to the amount he does? It is this purely practical
consideration that has imposed upon the piece-work system the appearance
of axiomatic justice.
It is not difficult to strip off the spurious ethics of the principle. You
say that piece-wages or payment by result is right because it induces men
to do their best. But what do we mean by 'doing their best.'? A weak man
may hew one ton of coals while a strong man may hew two. Has not the former
'done his best' equally with the latter? The strength of a strong man, the
natural or even the acquired skill of a skilful man, cannot be assumed as
a personal merit which deserves reward in the terms of payment. If there
is merit anywhere, it is in the effort, not in the achievement or product,
and piece-wages measure only the latter.
No! there is nothing inherently just in the piece-wage system. Its real
defence is that it is the most practical way of getting men to work as hard
as they can: it is a check on skulking and sugaring. It assumes that no other
effective motive can be made operative in business except quantity of payment.
§3. As Ruskin and many others have remarked, the lie is given to this
assumption in an increasing number of kinds of work where the highest qualities
of human power, the finest sorts of mental skill and responsibility, are
involved. Public servants of all grades, from Cabinet Masters and Judges
down to municipal dustmen, are paid by salaries, not by piece-wages. The
same is true of the more remunerative and more responsible work in private
businesses. No Government, no private firm, buys the services of its most
valuable employees at the lowest market-price, or attempts to apply to them
a piece-work scale. It would not pay them to do so, and they know it. Nor
is this merely because some sorts of work do not easily admit of being measured
by the piece. It would be possible to pay Judges, as counsel are paid, by
the case. Cabinet Ministers might be paid on piece-wages for Laws measured
by the number or length of their clauses. The chief reason for adopting payment
by fixed salary is that it is reckoned a wise mode of securing good individual
services. It is recognised that each piece of work will be better done, if
the workers set about it in a thoroughly disinterested manner, concentrated
in their thoughts and feelings entirely on the work itself, and not entangled
in the consideration of what they are to get out of it. This is supposed
to be the difference between the professional man and the tradesman, that
the former performs a function and incidentally receives a fee, while the
latter, by the very acts of buying and selling that constitute his business,
keeps his mind set upon the profit from each several transaction.
But the fixed and guaranteed salary for public servants has another ground.
It may profit a business firm to practise an economy of sweating, to drive
its employees and consume their health and strength by a few years' excessive
toil, to take on new casual workers for brief spurts of trade, to sack employees
ruthlessly, as soon as trade begins to flag, or their individual powers of
work are impaired by age. A piece-work system, with no guarantee of employment
or of weekly wage, may be a sound business economy for a private firm. It
cannot be a sound economy for a State or a Municipality.
For a large and increasing share of the work and the expenditure of most
States and Municipalities is applied in trying to mend or alleviate damages
or dangers to the health, security, intelligence, and character of the workers
and their families, arising from insufficiency of work and wages or other
defects of private industrialism. It would obviously be bad public economy
to break down the lives and homes of public employees by underpaying or overworking
them, or by dismissing and leaving them to starve when work was slack. For
what was saved in the wage-bill of the particular department, would be squandered
in poor-law, police, hospitals, old-age pensions, invalidity and employment
relief. Nor is that all. A mass of ill-paid, ill-housed workers, alternately
overworked and out of work, stands as a chief barrier in every one of those
paths of social progress and national development which modern statecraft
sets itself to follow. The low wage of unskilled labour is to-day a source
of infinite waste of the forces of national education. Still keeping our
argument upon the narrowest lines of economy, we plainly realise that the
financial resources, upon which the State can draw for all her services,
depend in the last resort upon the general economic efficiency of the working
population, and that a system of public employment which was, however indirectly,
detrimental to this health, longevity and intelligence, would rank as bad
business from the public standpoint.
It is possible that in this country the salary mode of payment is gaining
ground. Apart from the public services, national and municipal, which now
employ some 7 per cent of the total employed population, the great transport
and the distributive industries are almost entirely run upon the salary basis.
These departments of industry are constantly increasing, not only in absolute
size, but in the proportion of the total employment they afford. To them
must be added the large class of domestic service. Such great salaried services
cannot, indeed, be claimed as triumphs for the organic principle of distribution,
or payment according to needs. For the most part they are very unsatisfactory
modifications of the piece-wage or commodity view of labour. For, except
for the small higher grades of officials, they mostly retain the two chief
defects of the ordinary wage-system, a payment of weekly income not based
on a proper computation of human needs, and a lack of adequate security of
tenure. Over a large part of the field of industry and commerce where weekly
fixed salaries are paid, there exists a flagrant disregard for all considerations
of human subsistence. Some of the worse, though not the worst, forms of 'sweating'
are found in shops, workshops and factories where women are employed on weekly
salaries.
None the less, it remains true that the salary is a more rational form of
payment for labour than the time or piece wage, and that, as the humanisation
of industry proceeds, it will more and more displace the wage-system. For
where salaries are paid, the consideration of needs or subsistence does tend
always to qualify the mere commodity view of labour.
Piece-wage or time-wage ignores the worker as a human being and the supporter
of a family: it ignores him as a personality and regards him merely as an
instrument for giving out units of productive power to be paid for on the
same terms as the units of mechanical power used in working machinery.
§4. The Labour Movement insists that the personal and human factor
is fundamental as a condition in the labour bargain. If labour is treated
as a mere commodity, its price affords no security of life to the labourer.
It may not find a customer at all, and so he starves and with him his family,
the future supply of labour. Or, left to the fluctuations of the market,
it may sell at a price which is insufficient for his maintenance. The fluctuations
of price in all other markets involve only the pecuniary profit or loss of
those who sell, fluctuations of the price of labour involve the existence
and well-being of human families and of the nation. Hence the attack of organised
labour on this whole conception of the labour-market, and the demand that
the remuneration of labour shall not be left to the higgling of a market.
The chief fight is for a secure weekly income, or for conditions of employment
which lead up to this. A minimum or a living wage is the usual name given
to this demand. Complaint is made of the vagueness of the demand. But this
vagueness does not make the demand unreasonable. A living wage indeed is
elastic as life itself: it expands and will continue to expand, with the
development of life for the workers. But what in effect is meant at the present
by a living or subsistence wage is such a regular weekly sum as suffices
to maintain the ordinary working family in health and economic efficiency.
It is contended that no purchase of labour should be permitted which entails
the degradation of that standard. When a minimum rate of piece-wages is demanded,
the implicit understanding is that it is such as will yield under normal
conditions the ordinary weekly subsistence or standard wage. Since piece-wages
are so firmly established in many trades that it is impracticable to demand
their immediate abolition, the actual struggle between employees and employers
is as to whether these piece-wages shall be allowed to fluctuate indefinitely,
being dragged at the heels of the prices of commodities, or whether an absolute
limit shall be set upon their fall. The employer says, 'When trade is good
and prices and profits high, labour will share the prosperity in high rates
of wage and large weekly earnings: so, when trade is bad and prices and profits
low, labour must share this adversity and take low. pay, Organised labour
replies, 'No, there is no parity between the power of capital and of labour
to bear depressions: capital is strong and can bear up against low profits
without perishing, labour is weak and cannot bear up against low wages. We
will only sell our labour-power on condition that a lower limit is set upon
its price, such a limit as will enable the labourer to keep body and soul
together, and to maintain that efficiency which constitutes his working capital.
This minimum wage should be regarded as a fixed cost in your production.
At present the prices of your goods oscillate without any assigned limit.
You accept low contracts for work, and then adduce this low price as a reason
for reducing wages. Let a minimum wage once be adopted in the trade, and
contract prices cannot be accepted on so low a level. The minimum wage will
thus help to steady selling prices and to regulate employment and output.'
Both the economics and the social ethics of this labour contention are in
substance sound. So long as the price of labour is left to higgling in a
competitive market, there is nothing to prevent the wages falling to the
lowest level at which a sufficient number of workers can be induced to consent
to work, and that level may involve a reduction of the standard of living
in their families below the true subsistence point. The fixing of wages by
so-called free competition affords no security for a family wage of efficiency
or even of subsistence. There should be no mistake upon this essential matter.
The doctrine of 'economy of high wages' has no such general efficacy as is
sometimes suggested. Though in many cases high wages are essential to maintain
and evoke the energy and efficiency required, in other cases they are not.
From the standpoint of the immediate profits of employers 'sweating' often
pays. But from the standpoint of society it never pays.
Therefore, the policy of the organised workers, in seeking to enforce the
doctrine of a minimum wage, is not only a policy of self-preservation for
the working-classes but a salutary social policy. It is for this reason that
the State intervenes in favour of the practice, establishing Trade Boards
to enforce its application in so-called 'sweated trades', and acknowledges,
in theory at any rate, its validity in all public employments and public
contracts.
§5. Although this minimum wage is tolerably remote from the ideal of
a fixed weekly salary in most trades, it is a true step in this direction.
The most controverted item in trade-union policy, the limitation of individual
output, is also partly actuated by the same motive. Few things make the ordinary
business man more indignant than the trade-union regulations in certain trades
which restrain stronger or quicker workers from putting forth their full
productive energy. They denounce alike its dishonesty and its bad economy.
It is based, they say, upon the 'lump of labour' fallacy, the false notion
that there exists an absolutely limited amount of employment, or work to
be done, and that if the stronger or quicker men do more than their share,
the others will go short. This refusal to allow each man to do his best,
like the related refusal to get the full work out of new labour-saving machinery,
appears monstrously perverse and wicked. But, though partly animated by short-sighted
economic views, this policy is not entirely to be thus explained. The levelling
down of the output of all workers to a standard has partly for its object
the establishment of greater evenness of income among the workers in a trade.
At any given time in a given mill, or factory town, the actual amount of
available employment is limited, and for the time it is true that by limitation
of individual output a larger number of workers are employed, and a larger
number of working families are provided with a normal wage, than would have
been the case if a certain number of men were encouraged to an unrestricted
energy and unlimited overtime. In the long run, it may be better to encourage
full individual liberty of output, even in the interest of the aggregate
of employment, but the restraints to which i here allude become more intelligible
when they are regarded as attempts to enforce a common class weekly wage
by means of an even distribution of employment.
A minimum piece-wage, based on a moderate computation of the weekly output
per worker, and accompanied by a substantial security of full regular employment,
would in effect place the piece-worker in the position of a salaried employee.
But, of course, a minimum piece-wage, however high, does not go far to this
end, unless security of tenure at fairly full employment is obtained. The
problem of un- and under-employment and of irregular employment is now beginning
to be recognised in its full social gravity. A weekly wage of bare efficiency
with regular employment is socially far superior to a higher average wage
accompanied by great irregularity of work. The former admits stability of
modes of living and ready money payments: it conduces to steadiness of character
and provision for the future without anxiety. Rapid and considerable fluctuations
of wages, even with full employment, are damaging to character and stability
of standards: but irregularity of employment is the most destructive agency
to the character, the standard of comfort, the health and sanity of wage-earners.
The knowledge that he is liable at any time, from commercial or natural causes
that lie entirely outside his control, to lose the opportunity to work and
earn his livelihood, takes out of a man that confidence in the fundamental
rationality of life which is essential to soundness of character. Religion,
ethics, education, can have little hold upon workers exposed to such powerful
illustrations of the unreason and injustice of industry and of society.
The regularisation of industry, so as to afford substantial guarantees of
full regular employment, thus ranks with the minimum wage as the most substantial
contribution towards the substitution of salary for wages, which the organic
law of Distribution requires. The State is beginning to cooperate with the
Labour Movement for the attainment of this social object, stimulating employers
to organise their industries so as to furnish a more even volume of employment.
§6. This interpretation of the Labour Movement as a half-conscious
manifold endeavour to rescue the remuneration of Labour from the risks and
defects of the competitive labour market, and to establish it on an economy
of human needs, is not fully understood without some further reference to
the action of organised society. The Labour Movement, in its endeavour to
get a better distribution of the income, is not confined to trying to secure
a satisfactory minimum or standard wage, fortified by greater security of
work and personal insurance against unemployment. It seeks also to supplement
its wages by cooperative and public provisions.
The cooperative movement is an attempt to convert into real wages some of
the profits of employers and shareholders in manufacturing and commercial
businesses, so enlarging the proportion of the real income of the nation
which goes to the remuneration of labour. But the growing attachment of the
Labour Organisations to politics is equally motived by the endeavour to secure
from the State, not merely legal supports for higher wages and improved conditions
of employment, but actual supplements to wages in the shape of contributions
from the public services to their standard of living. Free education, old-age
pensions, and public subsidies towards insurance are a direct contribution
from the State to the higher standard of life which modern civilised society
demands. Health, education, recreation, and provision against emergencies,
are coming more and more to be recognised as proper objects of governmental
action, and other important services, such as transport, credit, art, music
and literature, are far on the way to becoming communal supplies. Although
these modes of social provision may be chiefly motived by considerations
of public health and other common goods, they nevertheless must rank as contributions
to the standard of comfort and well-being of the working-class families who
are the special beneficiaries. Relieving, as they do in many instances, the
private incomes of the workers from expenditure which otherwise the family
would find it to its private interest to incur, these growing public services
form a genuine and a considerable contribution to the available real income
of the working-classes. So far as by taxation direct or indirect the cost
of such public services can be considered a burden upon, or a deduction from
the wage-income of the workers, it forms, of course, no net addition to their
share, but is only a public control over methods of expenditure. But inasmuch
as the distinct tendency of modern taxation is towards an increasing taxation
of the incomes and property of the non-working classes, these public services
rank as supplementary income, paid in kind, and tending to equalise the standard
of living of individual workers and grades of workers. The criticism sometimes
directed against this State socialism, upon the ground that it tends to weaken
the force of wage-bargaining and transfers to the shoulders of 'society'
costs which employers would otherwise have to bear in the shape of higher
money wages, would have considerable force, if the old laissez-faire principle
of 'free contract' were allowed otherwise to work unimpeded. But this, as
we see, is not the case. The growing policy of minimum and standard rates,
supported by public opinion and, where necessary, by public law, and hardening
into a policy of fixed salaries, is nowise inconsistent with a simultaneous
development of communal supplies of goods and services which usually lie
a little above the normal standard of comfort of those who are the chief
beneficiaries.
The growing political activities of a labour movement which once eschewed
State aids not merely attest the general growth of conscious democracy but
imply a recognition of the direct contribution which the State is making
towards a general distribution of the national income in accordance with
an economy of human needs.
NOTES:
1. The width of variations in the weekly earnings, involving in most instances a nearly corresponding variety of family income, may be illustrated by the following estimate compiled by Mr. Webb, from a careful analysis of official wage returns. New Statesman, May 10, 1913.
<fig 3>
CHAPTER XIV: SCIENTIFIC MANAGEMENT
§1. No humanist treatment of modern industry can ignore
the recent advances of scientific methods into the regulation both of standards
of production and standards of consumption. In both arts alike the crude
empiricism of the past is giving place to a more ordered, conscious rationalism.
As is only natural, the advance of science is more rapid in the productive
arts.
In recent years many scattered attempts have been made to apply physiology
and psychology to economic processes. Business men by scientific observation
and experiment have brought criticism to bear upon the traditional and empirical
modes of organising and conducting businesses. The more or less hand-to-mouth
methods which were possible in small businesses where the manager was owner,
and could keep a close personal supervision of his employees and all their
work, were found increasingly unsuitable to modern types of large capitalist
business. It was necessary to devise regular methods for correlating the
work of the different departments, and for enabling a single central purpose
to operate by complex delegation through several grades of subordinate officials
with automatic checks and registers. More accurate methods of book-keeping,
especially of cost-taking, were devised; experiments were made in bonuses,
profit-sharing, fines, pace-making and various modifications of the wage-systems
applied to evoke more energy, skill, or care from the workers and officials;
hours of labour and shift-systems were subjected to measured tests. Still
more recently the detailed technology of manual and mental labour has been
made material of physiological and psychological investigation. Scientific
Management has become a conscious art. Business colleges in America and germany
give courses of instruction in this art, and a new profession has arisen
of expert advisers who are called in as specialists to diagnose the deficiencies
or wastes of industrial or financial power in particular businesses and to
prescribe remedies.
Economic progress, regarded from the standpoint of the business man, consists
in getting a given quantity of saleable goods turned out at a lower cost
of production. That cost of production consists of the salaries and wages
paid to various grades of employees for mental and manual labour, cost of
materials and power, standing expenses for maintenance of plant and premises,
including replacement and insurance, and interest upon capital. Anything
that reduces any one of these costs, without a corresponding increase of
another, is profitable from the standpoint of the individual employer, or
of all employers in the trade, if it be generally adopted, or of the consuming
public, if it wholly or partly goes to them in lower selling prices. Where
the reduction of costs simply takes the shape of reduced wages for the same
work, however, it causes no net increase of concrete wealth, but merely distributes
the same amount (or less by reason of reduced efficiency of labour) in a
different manner. Such a reduction cannot then be regarded as economic progress,
from the national standpoint.
But every other reduction of cost carries with it prima facie evidence of
a net increase of concrete wealth. Inventions of machinery, improved chemical
or other treatment of materials, better business organisation and subdivision
of labour, improved skill and energy in employees, better book-keeping, credit,
marketing arrangements, -- all such technical improvements promote the increase
of concrete wealth. In all these ways many great advances have been made
in various industries. But, alike in invention and in organisation, too much
has been left to chance, or to the pressure of some emergency, too little
is the result of ordered thought. Business has been conducted too much in
the spirit of an art, too little in that of applied science. The modern tendency
is to introduce the exacter methods of science. The modern large manufacturing
or mining enterprise employs expert engineers and chemists, not only to test
and control the operation of existing processes, but to invent new and cheaper
ways of carrying out a process, to discover new products and new uses for
by-products. It employs expert accountants to overhaul its book-keeping and
finance and to suggest improvements. Initiative and economy are to be studied,
evoked and applied along every path.
§2. But until lately the detailed organisation of labour and its utilisation
for particular technical processes had received little attention in the great
routine industries. Even such technical instruction as has been given to
beginners in such trades as building, engineering, weaving, shoemaking, etc.,
has usually taken for granted the existing tools, the accepted methods of
using them and the material to which they are applied. To make each sort
of job the subject-matter of a close analysis and of elaborate experiment,
so as to ascertain how it could be done most quickly and accurately and with
the least expenditure of needless energy, comes as a novel contribution of
business enterprise. To get the right man to use the right tools in the right
way is a fair account of the object of Scientific Management. At present
a man enters a particular trade partly by uninstructed choice, partly by
chance, seldom because he is known by himself and his employer to have a
natural or acquired aptitude for it. He handles the tools that are traditional
and are in general use, copying the ways in which others use them, receiving
chance tips or suggestions from a comrade or a foreman, and learning from
personal experience how to do the particular work in a way which appears
to be least troublesome, dangerous, or exhausting. Both mode of work and
pace are those of prevailing usage, more or less affected by machinery or
other technical conditions.
The scientific manager discovers enormous wastes in this way of working.
Part of the waste he finds due to improper tools and improper modes of working,
arising from mere ignorance; part he attributes to systematic or habitual
slacking, more or less conscious and intentional on the part of the workers.
The natural disposition of the worker to "take it easy" is supplemented
by a belief that by working too hard he deprives some other worker of a job.
Scientific Management, therefore, sets itself to work out by experiment the
exact tool or machine appropriate to each action, the most economical and
effective way by which a worker can work the tool or machine, and the best
method of selecting workers for each job and of stimulating them to perform
each action with the greatest accuracy and celerity. By means of strictly
quantitative tests it works out standard tools, standard methods of work
and standard tests for the selection, organisation, stimulation, and supervision
of the workman.
In his exposition of this economy1 Mr. Taylor takes as his simplest illustration
of choice of tools the 'art' of shovelling. Left to himself, or working with
a gang, the shoveller will use a shovel whose weight, size, and shape have
never been considered in relation to the particular material it has to move
or the sort of man who has to use it. 'By first selecting two or three first-class
shovellers, and paying them extra wages for doing trustworthy work, and then
gradually varying the shovel load and having all the conditions accompanying
the work carefully observed for several weeks by men who were accustomed
to experimenting, it was found that a first-class man would do the biggest
day's work with a shovel load of about 21 pounds.'2 As a result of this discovery,
instead of allowing each shoveller to choose his own shovel, the company
provided eight or ten different kinds of shovels accommodated to the weight
of different materials and to other special conditions. Again, thousands
of stop-watch observations were made to discover how quickly a labourer,
provided with his proper shovel, could push the shovel into the materials
and draw it out properly loaded. A similar study was made of 'the time required
to swing the shovel backward and then throw the load for a given horizontal
distance, accompanied by a given height.' With the knowledge thus obtained
it was possible for the man directing shovellers, first to teach them the
exact method of using their strength to the best advantage, and then to assign
the daily task by which they could earn the bonus paid for the successful
performance of this task. For, though the skilled director can prescribe
the right tool and the right method, he cannot get the required result without
the willing cooperation of the individual worker. For this purpose a bonus
is applied, the size of which is itself a subject of scientific experiment.
The relation of this bonus to the ordinary day or piece wage will vary with
the various types of work and workers. In the Bethlehem Steel Works it was
found that the best effect in stimulating energy was got by a bonus of about
60 per cent, beyond the wages usually paid. 'This increase in wages tends
to make them not only thrifty but better men in every way; they live rather
better, begin to save money, become more sober, and work more steadily. When,
on the other hand, they receive much more than a 60 per cent increase of
wages, many of them will work irregularly and tend to become more or less
shiftless, extravagant, and dissipated. Our experiments showed, in other
words, that it does not do for most men to get rich too fast.'3
Considering that it was claimed that the result of this new plan of work
was to raise the average daily output per man from 16 to 59 tons, and to
secure an annual saving in the labour-bill amounting to between $75,000 and
$80,000, it would have been interesting to follow the effects of a rapid
advance of wealth upon the dividend-receivers who gained so disproportionate
a share of the advantages of the new economy.
§3. So far as the selection and adaptation of tools to the special
conditions of the work are concerned, there exists no opposition between
the business and the human economy. If a shoveller can shovel more material
without greater exertion by using a particular shovel, the system which ensures
his using this shovel is beneficial to everybody, assuming that he gets some
share of the value of the increased output. When we turn from a simple tool
to more elaborate machinery, it becomes evident that quantitative testing
is capable of achieving enormous technical economies. Mr. Taylor describes
the gains in the output of metal-cutting machines made by means of such economies.
'Its pulling power at the various speeds, its feeding capacity, and its proper
speeds were determined by means of the slide-rules, and changes were then
made in the countershaft and driving pulleys so as to run it to its proper
speed. Tools, made of highspeed steel and of the proper shapes, were properly
dressed, treated and ground. A large special slide-rule was then made, by
means of which the exact speeds and feeds were indicated at which each kind
of work could be done in the shortest possible time in this particular lathe.
After preparing in this way so that the workman should work according to
the new method, one after another, pieces of work were finished in the lathe,
corresponding to the work which had been done in our preliminary trials,
and the gain in time made through running the machine according to scientific
principles ranged from two and one-half times the speed in the slowest instance
to nine times the speed in the highest.'4
This illustration, however, makes it evident that when we pass from technical
improvements of tools to improved methods of working, we open possibilities
of opposition between the business and the human interest. An improvement
in the shape or contour of the 'cutting edge' for a particular material is
an unqualified gain. So is a discovery as to the ways in which hardness or
softness of metals affects the cutting rate. But when it is a question of
evoking from the workman a higher pace of movement to meet the requirements
of the speeded-up machine, no such consistency of interests can be assumed.
The fact that by selection, instruction, and minute supervision, workmen
can be got to work successfully at the higher speed, and regard themselves
as sufficiently compensated by a bonus of 35 per cent, does not settle the
question of human values. So far as the selective process simply chooses
the men most easily capable of working at a higher speed and of eliminating
those who could not easily or possibly adapt themselves to it, no net increase
of human cost is involved. But so far as the bonus and the 'athletic' spirit
which it is used to evoke,5 induce workmen to give out an amount of muscular
or nervous energy injurious to them in the long run, the human cost may greatly
outweigh both the social value of the increased output and the utility to
them of higher wages. How crucial is this question of speeding-up the human
labour is well illustrated by the experiments in bricklaying, by means of
which the bricklayers engaged on straight work, were raised from an average
of 120 bricks per man per hour to 350. By alterations of apparatus Mr. Gilbreth
dispenses with certain movements which bricklayers formerly considered necessary,
while saving time in the actual process of laying by using both hands at
the same time, bricks being picked up with the left hand at the same instant
that a trowel of mortar is seized with the right.
'It is highly likely that many times during all of these years individual bricklayers have recognised the possibility of eliminating each of these unnecessary motions. But even if, in the past, he did invent each one of Mr. Gilbreth's improvements, no bricklayer could alone increase his speed through their adoption, because it will be remembered that in all cases several bricklayers work together in a row and that the walls all around a building must grow at the same rate of speed. No one bricklayer, then, can work much faster than the one next to him. Nor has any workman the authority to make other men cooperate with him to do faster work. It is only through enforced standardisation of methods, enforced adoption of the best implements and working conditions, and enforced cooperation that this faster work can be assured. And the duty of enforcing the adoption of standards and of enforcing this cooperation rests with the management alone. The management must supply continually one or more teachers to show each new man the new and simpler motions, and the slower men must be constantly watched and helped until they have risen to their proper speed. All of those who, after teaching, either will not or cannot work in accordance with the new methods and at the higher speed, must be discharged by the management. The management must also recognise the broad fact that workmen will not submit to this more rigid standardisation and will not work extra hard, unless they receive extra pay for doing it.'6
This makes it clear that, though part of the larger output,
or increased speed, is got by improved arrangements or methods of work that
need not tax the workers, powers, part of it does involve their working "extra
hard." Not only a better direction but a larger amount of energy is
required of them, with an increase of wear and tear and of fatigue. It is
an unsettled point of great importance, how much of the enlarged output can
be imputed to the former, how much to the latter. Even more important is
the allusion in the passage just quoted to 'the rigid standardisation' to
which workmen will not submit, unless they are well paid to do so. For this
rigid standardisation of the work involves a corresponding mechanisation
of the workmen. Men who formerly exercised a certain amount of personal choice
in the details of their work, as regards action and time, must abandon this
freedom and follow exactly the movements prescribed to them by the taskmaster
with a chart and a stop-watch. He will prescribe the particular task for
each, the tool he shall use, the way he shall use it, the intervals of work
and rest, and will take close note of every failure to conform. The liberty,
initiative, judgment, and responsibility of the individual workman are reduced
to a minimum.
This is admitted by the advocates of Scientific Management, though in a
qualified manner. One of the elements of success is said to be: 'An almost
equal division of the work and responsibility between the workman and the
management. All day long the management work almost side by side with the
men, helping, encouraging and smoothing the way for them, while in the past
they stood on one side, gave the men but little help, and threw on to them
the entire responsibility as to methods, implements, speed, and harmonious
cooperation.'7 But in the broader discussion of the difference between the
ordinary business method and Scientific Management, in relation to the numerous
little problems that arise in every kind of work, we are told that, 'the
underlying philosophy of this (ordinary) management necessarily leaves the
solution of all these problems in the hands of each individual workman, while
the philosophy of Scientific Management places their solution in the hands
of the management.'8 Elsewhere9 it is stated that Scientific Management 'involves
the establishment of many rules, laws, and formulae which replace the judgment
of the individual workman.'
§4. Now in endeavouring to apply to this policy of Scientific Management
a standard of human welfare, we are confronted by three questions: --
(1) What is the effect of this policy upon the human costs of labour?
(2) How far will any increase of human costs of labour be offset by the
greater human utility of the higher wages they receive?
(3) How far is any balance of human costs, which is imposed on special classes
of producers, compensated by the increased wealth at the disposal of society
at large?
There is some tendency among the advocates of Scientific Management to burke
a full discussion of these issues by asserting that their policy is only
a fuller and more rational application of that principle of division of labour
which is by general consent the economic foundation of modern civilised society.
If some sacrifice of individual freedom in industrial work is involved, it
is assumed to be more than compensated by gains to society in which every
individual, as a member of society, has his proper share.
But we cannot consent thus to rush the issue. For it may turn out that the
new method, though but a stricter and finer application of the old, carries
this economy so far that the increased human costs imposed upon the producer
grow faster than the human gains which the increased productivity confers
either upon him or upon society at large. In other words, the human indictment
brought by the mid-Victorian humanists against the factory system of their
day and rejected on a general survey of the economic situation, might be
validated by the increased standardisation and specialisation of labour under
scientific management. For though the division of labour under modern capitalism
in all its branches has narrowed the range of productive activity for the
great bulk of workers, a survey of those activities shows that within their
narrowing range there may and does survive a certain scope for skill, judgment,
and initiative, a certain limited amount of liberty in detailed modes of
workmanship. Moreover, the conditions of most organised work form a certain
education in discipline and responsibility. It is only a small proportion
of the workers who are converted into mere servants of the machine. Though
large classes are engaged in monotonous routine, the paces and the detailed
movements are not rigidly enforced upon them. Different workmen will be doing
the same work in a slightly different way.
Now the standardisation under the new method is expressly designed so as
to extirpate these little personal equations of liberty and to reduce the
labour of the ordinary employee to an automatic perfection of routine. It
is, indeed, contended by Mr. Taylor that the knowledge of each man that he
is working at his highest personal efficiency will be a satisfaction to him,
that the attention he must pay to the detailed orders of the taskmaster will
evoke intelligence and responsibility, and that his initiative in the way
of suggesting improvements, which has hitherto been prized as an element
of liberty and a source of industrial progress, can be conserved under scientific
management. But a careful examination of the illustrations of the method
compels our rejection of these claims. The knowledge of a routine worker
that he is speeded up to his highest pitch by a method whose efficiency is
prescribed by others, does not yield a sense of personal efficiency. Mere
meticulous obedience is not a proper training in the discipline of a 'person',
and a workman operating under these conditions will not have the practical
liberty for those little experiments in trial and error on his own account
which makes his suggestions of improvement fruitful.
Mr. Taylor, however, carries his defence so far as to deny all narrowing
effects of subdivision of labour on the worker. Admitting that the workmen
frequently say when they first come under the system, 'Why, I am not allowed
to think or move without someone interfering or doing it for me,' he seems
to think the following answer satisfactory: --
'The same criticism and objection, however, can be raised against any other modern subdivision of labour. It does not follow, for example, that the modern surgeon is any more narrow or wooden a man than the early settler in this country. The frontiersman, however, had to be not only a surgeon, but also an architect, house-builder, lumber-man, farmer, soldier, and doctor, and he had to settle his lawsuits with a gun. You would hardly say that the life of the modern surgeon is any more narrowing or that he is more of a wooden man than the frontiersman. The many problems to be met and solved by the surgeon are just as intricate and difficult and as developing and broadening in their way as were those of the frontiersman.'10
Now as to this we can only reply, first that it is untrue
that the surgeon's life on its productive side (the issue under discussion)
is as broad and as varied as that of the frontiersman. In the second place,
even if we accepted the view that a narrow field of activity admitted of
as much variety and interest as a wider field, provided liberty of action
were equal in the two, that view is quite inapplicable to the case at issue.
For there all liberty of action in the subdivided field of labour is excluded.
§5. So far, then, as initiative, interest, variation, experiment, and
personal responsibility are factors of human value, qualifying the human
costs of labour, it seems evident that Scientific Management involves a loss
or injury to the workers. Are there, however, any personal considerations,
apart from wages, that may be taken as an offset? Suppose that workers can
be found of a dully docile character with a large supply of brute muscular
energy, will any harm be done them by utilising them to carry pig-iron or
to shovel earth under "scientific" supervision? Mr. Taylor has
an interesting passage bearing on this question: 'Now one of the very first
requirements for a man who is fit to handle pig-iron as a regular occupation
is that he shall be so stupid and so phlegmatic that he more nearly resembles
in his mental make-up the ox than any other type.'11 These ox-like men, it
may be held, do not really suffer any injury, undergo any human cost, by
having no opportunity furnished them for exercising faculties and activities
of mind which they do not possess and are unlikely to acquire. If then, in
every grade of workers, there are to be found enough men who appear destined
by nature for a rigidly mechanical task conducted under servile conditions,
it may be thoroughly sound social economy to put them to perform all labour
of such kind as is required for the supply of human needs.
This is a problem of applied psychology, or of psycho-physiology. Professor
Münsterberg, in a recent volume,12 makes a contribution towards its
solution, and towards a finer art of Scientific Management than that which
has been evolved by business men. For since all industry primarily involves
the voluntary ordered application of human faculties to manual and mental
actions, the psychologist must be in a position to give important advice
in all economic operations. For he alone is qualified by scientific tests
to discover and estimate the various mental capacities which count for success
in industry, to ascertain how they cooperate and conflict, and how they may
be best applied to the performance of the various operations in each process.
Attention, memory, ideas, imagination, feeling, volition, suggestibility,
ability to learn, ability to discriminate, judgment, space-sense, time-sense,
and other mental qualities, enter in varying measures as factors of industrial
ability. Economic psychology may, it is contended, increase the efficiency
of industry in three ways.
'We ask how we can find the men whose mental qualities make them best fitted
for the work they have to do; secondly, under what psychological conditions
we can secure the greatest and most satisfactory output of work from every
man; and finally, how we can produce most completely the influences on human
minds which are desired in the interests of business. In other words, we
ask how to find the best possible man, how to produce the best possible work,
and how to secure the best possible effects.'13
The first of these services, fitting the man to the job, involves a double
psychological enquiry, first into the vocational needs, and secondly into
the personal ability of each applicant to meet these needs. We must examine
the task to learn what combination of mental qualities in the employee is
required to do it well, and we must examine each applicant for such work
to learn whether he possesses the requisite qualities.
Two illustrations will serve to indicate what is meant. The problem of selecting
fit motor-men for electric railways was brought to Professor Münsterberg's
attention. To drive fast and at the same time avoid accidents were the requirements
of the companies. Fitness for this purpose he found to centre in a single
mental process: --
'I found this to be a particular complicated act of attention by which the manifoldness of objects, the pedestrians, the carriages, and the automobiles, are continuously observed with reference to their rapidity and direction in the quickly-changing panorama of the streets. Moving figures come from the right and from the left towards and across the track, and are embedded in a stream of men and vehicles which moves parallel to the track. In the face of such manifoldness there are men whose impulses are almost inhibited and who instinctively desire to wait for the movement of the nearest objects; they would evidently be unfit for service, as they would drive the electric car far too slowly. There are others who, even with the car at full speed, can adjust themselves for a time to the complex moving situation, but whose attention soon lapses, and while they are fixating a rather distant carriage, may overlook a pedestrian who carelessly crosses the track immediately in front of this car. In short, we have a great variety of mental types of this characteristic unified variety which may be understood as a particular combination of attention and imagination.'14
An apparatus was devised, representing the psychological
conditions involved in the actual problem, not a mere miniature, but an adaptation
which should call out and test the same mental qualities. A number of actual
motor-men were then carefully examined in the working of this apparatus so
as to test the amounts of speed and accuracy and the relation between the
two. Quantitative estimates were thus reached of fitness in working the apparatus,
values being assigned respectively to speed and accuracy. In this way a psychological
standard of fitness was attained, such as would be available for selecting
applicants for the motor service. So in ship-service, where everything may
turn upon prompt and accurate handling of a sudden complicated emergency.
Ship officers are found whom a sudden danger paralyses, or keeps vacillating
until it is too late. Others, feeling only the urgency of prompt action,
jump to a too hasty decision. The desirable type is 'the men who in the unexpected
situation quickly review the totality of the factors in their relative importance
and with almost instinctive certainty immediately come to the same decision
to which they would have arrived after great thought.'15 Here again it was
possible to conduct a series of experiments, testing the mental processes
and measuring the degrees of rapidity, correctness, and constancy.
Other tests can be applied for the qualities desirable in such work as the
telephone service, in which memory, attention, intelligence, exactitude,
and rapidity are involved. Sometimes the mental qualities can be separately
tested, sometimes their inter-relation is such as to require a simultaneous
testing.
§6. It is equally obvious that a good deal can be done to increase
the productive efficiency of those who have been selected for any work, by
methods of teaching that involve psychological guidance. In learning such
processes as typewriting and telegraphy, for instance, much can be achieved
by technical adjustments of movement such as we have already described, and
by considered adaptations of machine and materials to suit human faculties.
But methods of improving memory and securing a more regular and accurate
attention, of increasing, the rapidity of repeated actions with the least
nervous wear and tear, of educating delicacy of touch and sight for specific
purposes, the utilisation of rhythmic tendencies, the proper balance of intervals
of work and rest, the influence of imitation and social cooperation in gang
labour, and finally the effects of different quantities and modes of remuneration
in evoking and maintaining the various factors of efficiency -- all such
considerations offer a fruitful field for psychological investigation.
Hence psychology, it is urged, can contribute greatly to productivity by
finding the best man for each job and adjusting his mental equipment to conditions
of work which in their turn can be modified to fit his powers. But, regarding
production as designed to satisfy human demands, psychology can be utilised
also to assist in getting the right quantities and qualities of goods to
the right persons. Commercial organisation exists for this purpose. It does
study the wants and demands of consumers. But it might do so with more 'science'.
Professor Münsterberg makes an exceedingly interesting study of the
arts of advertising and of selling over the counter, to illustrate how much
might be done by substituting experimental laws for instinctive and traditional
practices. One comment upon this application of his science, however, is
called for. Though the social-economic view would oblige the psychologist
to approach the subject specifically from the standpoint of the consumer
and the psychology of satisfactions in his standard of comfort, Professor
Münsterberg virtually confines himself to the psychology of commerce
and of marketing regarded from the standpoint of the manufacturer or merchant.
Thus psychology can be made to devise and prescribe economies of human power
in industry, which, like the technical improvements of Scientific Management,
would seem to increase greatly the productivity of industry, turning out
larger quantities, and perhaps better qualities, of goods, with the same
amount of labour.
§7. What would be the human valuation of these processes of scientific
economy? Assuming that this economy fructifies in an enlarging volume of
wealth, it would appear to be accompanied by an increase of welfare, unless
the human costs of labour were correspondingly increased, or the distribution
of the larger volume of wealth were made so much more unequal that it furnished
a smaller volume of utility in its consumption. Neither of these qualifications
is, indeed, excluded by the terms of the economy. For each stroke of Scientific
Management is primarily justified as a profit-making device, advantageous
to the capitalist-employer in a particular business. It enables him to turn
out goods at a lower labour-cost and so to make a larger margin of profit
on their sale. If we suppose this economy to be of wide or general adoption,
it would be equivalent to an all-round increase in the technical efficiency
of labour. Unless we suppose the aggregate quantity of production to be a
fixed quantity (a supposition not in accordance with experience), it would
seem to follow that at least as large a quantity of this more efficient labour
would be employed in turning out an increased volume of goods. In that event,
it would be possible that the workers, as well as the capitalist employers,
should enjoy a higher rate of remuneration. Whether they would do so, however,
and to what extent, seems quite uncertain. For though the payment of a considerable
bonus in addition to current wages was necessary in the experiments described
by Mr. Taylor, in order to evoke from a particular group of workers submission
to the new terms of work, it does not follow that, once adopted by all employers
in the trade, the method would entail or even permit a continuance of this
higher pay. For the pioneer firm admittedly pays the bonus partly in order
to overcome the pains and scruples of workers subjected to a speeding-up
system. If it did not pay a bonus, the workers would quit this employment
for some other that was open to them. But if no other employment upon the
old terms were open, this part of the bonus might be unnecessary as an inducement.
Even that part of the bonus which seems to be directed to stimulate the ambition
and energy of the individual worker, and to break up the habitual slackness
of the group and its regulation stroke, would seem to stand on a precarious
footing, when the new method of work was once well established and itself
became a habit. Only that part, if any, of the bonus, or higher wage, which
was necessary to replace the greater muscular or nervous wear and tear of
the speeded-up and more automatic work, would necessarily survive. It would
stand as a necessary cost of production. If, however, as Mr. Taylor and Professor
Münsterberg appear to hold, the scientific management need entail no
such additional wear and tear, there seems no ground for holding that, after
the method became general, any bonus to the workers would be necessary. And
if it were unnecessary, it would not, indeed under competitive terms could
not, be paid. On this hypothesis, the additional wealth created by the improved
efficiency of the system might go entirely to capital. Indeed, so far as
the determination were left to individual bargaining, this result would appear
almost inevitable. For the greater average efficiency of labour would be
equivalent to a larger supply of labour (though it might also mean a better
quality), and since no immediate or corresponding increase of demand for
labour need accrue, the price per unit of labour would fall. This would mean
that the labourer would get no higher payment for his higher productivity.
Even if the increasing rate and amount of profits brought increased saving
and larger masses of competing capital, it would still seem doubtful whether
the aggregate demand for labour would be found to keep pace with the growth
of the supply which scientific management plus psychological selection would
yield.
Though, therefore, the aggregate product increased, it remains doubtful
whether any considerable share of the increase must or would go to labour.
But suppose that organisation of labour or social intervention were able
to secure some considerable rise of real wages from the enlarged product,
so that as consumers the workers were better off, the human value of the
process is not yet established. Two related questions still remain for settlement.
First, that already tentatively raised, the question whether the workers
may not suffer more from increased human costs of production under the new
scientific régime than they gain in human utilities of consumption.
Some of the 'science' in its application would indeed appear to be wholly
beneficial. The improved methods of selecting and of training labour, so
as to get the best man for each job, and to enable him to do his work in
the best way, is pure gain, provided that best way does not unduly strain
his energy or dull his mind. Other elements of applied psychology are more
doubtful in their net effect. The practices of scientific advertising and
of suggestive selling have very little proved utility and are nearly as likely
to be applied to force the wrong articles on the wrong purchasers as to distribute
wealth along the lines of its maximum utility for consumption. The persons
engaged for a livelihood in palming off goods on a public irrespective of
any intrinsic merits they contain, pay a heavy toll in character for the
work they are called upon to do.
§8. But, turning to the main problem, there remains the issue of the
increased mechanisation, or standardisation, of the worker under Scientific
Management. Admitting that a certain amount of subdivision of labour, and
of diminishing variety, interest and initiative, accruing therefrom, is justified
in a human sense by the benefits of enhanced production, is there any limit
to this economy, and if there be, is that limit transgressed under Scientific
Management? The question does not admit perhaps of any general or certain
answer. Suppose it be admitted, as I think it must, that every application
of this Scientific Management does squeeze out of the labour-day some human
interest, some call upon initiative, reason, judgment, responsibility, surviving
under previous conditions even in the most routine and subdivided toil, must
we necessarily regard this loss as a heavy increased human cost of labour?
Surely it depends upon the particular labour in question. In some, perhaps
most, branches of heavy routine toil, the shreds of human interest, the calls
on personality, are usually so trifling that it seems absurd to take them
into much account. The work of carrying pig-iron, or of shovelling continually
the same material, contains so little scope for the play of initiative, responsibility,
etc., that any such regimentation as is described can hardly be said to damage
the quality of the work or the character of the worker as affected by his
work. If a higher efficiency and a larger output can enable a smaller number
of workmen to be kept on labour of so low a grade, there ought to be a net
social gain. But there is another compensation possible for any loss of liberty,
or increase of monotony, involved in Scientific Management. If it be accompanied
by a shortening of the hours of labour, the damage inflicted by the rigour
of mechanical discipline may be compensated by a larger leisure. This compensation,
of course, is reduced or even nullified, if the greater intensity of labour
in the shorter day takes more out of the man, as often happens, than was
taken out before. But, assuming that this is not the case, and that for a
longer dull routine work-day is substituted a shorter but even more mechanical
day, a net gain for labour is still possible. I am disposed to hold that
a good case might be made out for Scientific Management as regards those
orders of routine labour which, as ordinarily carried on, contain very little
interest or humanity. Even then, however, there is a danger that deserves
attention. If this regimentation can reduce the cost per unit of dull, heavy
muscular toil, as is likely, it may prevent the discovery and application
of wholly mechanical substitutes for this work.
But the human economy is far more doubtful in the case of labour which,
though subdivided and mainly of a routine character, still contains a margin
for the display of skill, initiative and judgment. To remove these qualities
altogether from such work and to vest them, as is proposed, not even in the
overseers, but in a little clique of scientific experts, would mean the conversion
of large bodies of skilled, intelligent workers into automatic drudges. The
life and character of these men would suffer as an inevitable reaction of
this drudgery, and it is doubtful whether a somewhat shortened work-day and
somewhat higher wages would compensate such damage. While we may recognise
the general desirability of division and specialisation of labour, some detailed
liberty and flexibility should be left to the worker.
§9. Indeed, were the full rigour of Scientific Management to be applied
throughout the staple industries, not only would the human costs of labour
appear to be enhanced, but progress in the industrial arts itself would probably
be damaged. For the whole strain of progress would be thrown upon the Scientific
Management and the consulting psychologist. The large assistance given to
technical invention by the observation and experiments of intelligent workmen,
the constant flow of suggestion for detailed improvements, would cease. The
elements of creative work still surviving in most routine labour would disappear.
On the one hand, there would be small bodies of efficient taskmasters carefully
administering the orders of expert managers, on the other, large masses of
physically efficient but mentally inert executive machines. Though the productivity
of existing industrial processes might be greatly increased by this economy,
the future of industrial progress might be imperilled. For not only would
the arts of invention and improvement be confined to the few, but the mechanisation
of the great mass of workmen would render them less capable of adapting their
labour to any other method than that to which they had been drilled. Again,
such automatism in the workers would react injuriously upon their character
as consumers, damaging their capacity to get full human gain out of any higher
remuneration that they might obtain. It would also injure them as citizens,
disabling them from taking an intelligent part in the arts of political self-government.
For industrial servitude is inimical to political liberty. It would become
even more difficult than now for a majority of men, accustomed in their work-day
to mechanical obedience, to stand up in their capacity of citizens against
their industrial rulers when, as often happens upon critical occasions, political
interests correspond with economic cleavages.
I would not dogmatise upon the necessity of these human disadvantages of
Scientific Management. The more rigorous routine of the work-day might be
adequately compensated by shorter hours, higher wages, increased opportunities
for education, recreation, and home life. But there can be no security for
adequate compensations of these orders under a scientific management directed
primarily by private profit-making motives. For there is no guarantee that
the larger profits to a business firm do not entail a damage to its employees,
not offset by the bonus which they may obtain. Nor have we the required security
that any social gain in the way of increased product and lower prices may
not be cancelled by the human injury inflicted upon large bodies of workers
and citizens by the more mechanical and servile conditions of their labour.
§10. A little reflection will make it clear that the complete success
of such a business economy would involve a corresponding 'science' on the
side of consumption. The standardised worker ought also to be a standardised
consumer. For the regular reliable conformity of work must involve a similar
conformity in diet and in other habits of life. If the 'scientific manager'
were the full owner of his workmen, it would evidently be a function of his
science to work out experimentally, with the assistance of the bio-psychologist,
the cheapest and best way of living for each particular trade and type of
worker. He would discover and prescribe the precise combination of foods,
the most hygienic clothing and housing, the most appropriate recreations
and the 'best books' for each class, with a view to the productive efficiency
of its members. He would encourage by bonuses eugenic, and discourage by
fines dysgenesic marriages among his employees. So far as intelligent employers
are in a position to determine or to influence the expenditure of the wages
they pay and the general conduct of the lives of their employees outside
the working hours, they are disposed to practice this policy. Where they
are the owners of the town or village in which the workers find it most convenient
to live, they can often do so with considerable effect. Philanthropic motives
are often combined with business motives, and the combination may often be
genuinely conducive to the human welfare of the community. Temperance, sanitation,
and hygiene, educational and recreative opportunities may be made available.
Certain regulations, chiefly of a prohibitory nature, regarding the use of
alcohol, betting, or marriage, are imposed by some employers as conditions
of employment. Such interferences outside the hours of labour are, however,
exceptional and are generally justified on special grounds of economic safety
and efficiency.
§11. But an altogether wider issue is opened up in the claims, not
of the particular employer but of industrial society to impose or evoke standards
of consumption scientifically adjusted to the various grades of industrial
efficiency. If we regard a nation as an economic society, putting out productive
energy in wealth-creation, it becomes evident that science has much to say,
and can have more, regarding the expenditure of incomes and the consequent
consumption of wealth. The science of scientific management, with all its
psycho-physical apparatus for measuring results, can be applied to standards
of living for individuals and families. The beginnings of this idea are found
in the distinction which figured so largely in the classical Political Economy
between productive and unproductive consumption. The discussions of Arthur
Young, Eden and others, regarding the respective merits of wheat and oatmeal,
beer and tea, as ingredients of working-class diet, were directed avowedly
by this conception of economy. A good food was one that yielded more muscular
energy or endurance per penny of expenditure. The more enlightened doctrine
known as 'the economy of high wages' was early recommended by philanthropists
like Robert Owen, or business men like Mr. Brassey, on the score of experiments
relating to the larger output of labour-power which higher wages with better
feeding rendered possible. But there was no 'science' worth mention in these
crude experiments. Only within recent years, with the advance of organic
chemistry and physiology, has the 'science' of dietetics begun to emerge,
analysing the various foods and assigning them their values as producers
of tissue and of energy. We are now told the quantities of proteids, carbohydrates
and fats contained in various foods, and dietaries based upon these analyses
are prescribed for different sorts of workers, and for different ages of
members of a family. At present the science does not pretend to any large
amount of accuracy, indeed wide divergences still exist in its very foundations.
But there is no reason to doubt that further analysis and experimentation
may be able to reach food standards which on the consumption side will correspond
to the economy of standard methods of work under scientific management. It
may be quite possible to lay down with considerable exactitude the amounts
and combinations and intervals of food for coal-miners, weavers, clerks,
motor-men, etc., together with estimates of the amount of expenditure required
to maintain the different forms of industrial efficiency. The productive
value of other elements of the wage-earner's expenditure will not indeed
admit of so much exactitude, partly because his own 'utility' obtained from
such expenditure will not easily be separable from that of his family. But
though family expenditure cannot thus be regarded as exclusively directed
by productive considerations, the physical efficiency which is its chief
test may be regarded primarily as an industrial asset. Indeed, this view
is implicit in most talk of standards of comfort and in most discussions
of a 'minimum' or 'living' or 'subsistence' wage. It means such wage as,
economically expended, will enable a wage-earner to rear an average family
in that measure and kind of efficiency required to do work of a sort similar
to that by which he earns the wage. No doubt this notion is tempered by some
slight considerations of education and of betterment. But productive efficiency
is always the basic factor. Food and housing, by far the most important elements
in working-class expenditure, are clearly in process of being standardised
by hygienics in the service of a science of productive consumption.
§12. Two other sciences, by which society may seek to standardise the
lives of workers, are eugenics and education. In both of these the humanists
may have a fierce battle to fight against the dominion of the industrialists.
Eugenics, if it can get recognition as a social art, will regulate marriage
for the purposes of good stock. But good for what? Perhaps for industry and
war, if some specialists should have their way. So too with education. Primary
education has already been ear-marked in our towns for the production of
cheap clerks, and technical and professional training under various guises
invade our citadels of higher learning. All is part of the same great claim
of society to economise and standardise the body and the mind of its citizen,
primarily in order that he may do more efficiently the social or routine
services it requires of him.
This economic standardisation, as we recognise, is not identical in motives
or in operation as it bears respectively upon the productive and consumptive
functions. On its productive side it is regulated by considerations of private
business profits. Its primary aim is to get men to work in such a way as
to produce the largest margin between the wage necessary to evoke full efficiency
under 'scientific management' and the market value of the output. Indirectly,
it is claimed, this policy redounds to the advantage of industrial society
in an increase of the body of consumable wealth, some considerable share
of which will pass into the general store. On its consumptive side the scientific
standardisation works differently. It is plied more directly as a social-economic
art, working out for the family, as well as for the individual workman, a
standard of living, physical, intellectual, and moral, conducive to the interests
of society regarded as an economic or wealth-producing entity.16 But though
society, in thus seeking to secure standards of economic efficiency for its
family units, is not directly concerned in furthering the profit-seeking
ends of private business firms, indirectly it is doing so. For, so long as
expenditure of income, or family budgets, are estimated strictly in accordance
with the economic efficiency they yield to the present and prospective working
members, the process is in reality supplementary to the science of business
management. For the better birth, better rearing, better health and education
which it furnishes, will all eventually be translated into larger quantity
and better quality of labour-power for scientific management to handle in
its various profit-making processes.
Now the thoughtful members of the working-classes have always half-instinctively
regarded with some suspicion the endeavours of social reformers to make them
use cheaper foods yielding more nutriment for the money, temperance movements
to keep down their conventional necessaries, and technical education to make
their labour-power more productive. For they have doubted whether the cheaper
living or the increased productivity would necessarily come home to them
in improved conditions of life. Nor has their suspicion been wholly groundless.
Though in the long run, it might seem to follow that as consumers and even
perhaps, though less surely, as wage-earners, they would get some gain from
the more economical use of their labour-powers, the bulk of the visible gains
might very well pass into the hands of the employing classes in higher profits
or salaries of management.
This consideration opens the deeper criticism which humanism and Sociology
are entitled and required to press upon the policy of the industrial economists.
Every improvement in the technique of the arts of industry or of consumption
may be considered as conducive to economic progress, yielding an increase
of marketable wealth. But, if such improvements increase the human costs
of production, or diminish the human utilities of consumption, as may happen
if they consist largely in the standardising of productive and consumptive
processes, they may bring no increase, possibly may bring a decrease, of
human welfare. Proposals for scientific management or for standardised dietaries
are not indeed to be condemned, upon the general application of such criticism.
For it is agreed that such standardisation within certain limits is socially
advantageous. The question, therefore, is partly one of degree, partly as
to the security there exists that the economic gains of the improved economy
shall be properly apportioned.
§13. But the final test would not consist in determining whether increased
costs and diminished utilities did or did not offset the prima facie advantages
of the economic improvements. The art of social welfare, humanism, will insist
upon considering the reactions of the standardisation of work and consumption
upon other faculties and functions than the economic, and in considering
prospective as well as present gains. A scientific rigour in economy of work
and of expenditure, which should remove, both from the industry and the lives
of the great masses of a population, all opportunities for initiative, experiment,
risk-taking and the display of personality, might reduce the human value
of life for the average man, and so impair the worth of the society. Humanism,
therefore, while approving the application of science to the arts of production
and consumption, insists that it shall be shown to be the servant not the
master of humanity. Such proof is sought, because the assumption, so often
made, that all such economic progress must be humanly profitable, is seen
to be unwarranted.
A 'scientific' view of human industry would establish the following lines
of investigation.
(1) The productive ability of each producer would be considered in relation
to its technical efficiency, i.e., the best way for him to do his job.
(2) His special productive function would be considered in its reactions
(a) upon his general standard of life on its economic side, i.e., in relation
to his productive and consumptive functions; (b) upon his individual human
life.
(3) The standard of consumption of each consumer would be considered in
relation to its technical efficiency (a) for purposes of production; (b)
for purposes of individual welfare.
(4) Industry as a social function would be subjected to criticism from the
wider standpoint of social welfare, i.e., as one element contributing to
the life of a nation.
Finally, an analysis of the human worth of existing industry on its productive
and consumptive sides would not suffice. For such an analysis merely accepts
the existing system of industry and enquires into the best human methods
of working it.
But humanist criticism must, of course, go behind this acceptance. The problem
of industry which it will envisage will be one that takes as its data the
existing resources of the nation, natural and human, and considers how these
resources may, in accordance with present knowledge, be best applied for
the provision of organic welfare according to the best accepted interpretation
of that term. However difficult it may be to secure, to justify and to apply
that standpoint, this is the form in which the economic problem must present
itself to the statesman, the publicist, and the social reformer, so far as
they are clear-sighted, rational and disinterested in their work.
So regarded, each individual would be considered as a complex of activities
and wants, whose specialised work for society must be harmonised with that
freedom and exercise of his non-specialised functions needed to enable him
to realise himself as a human personality. Due consideration would be given
to the interplay of his productive and consumptive functions within his economic
life. His economic life must, however, be kept in due subordination to his
wider human life, consisting, as the latter does, mainly of non-economic
functions.
Finally, his economic and human life as a personality must be harmonised
with the economic and human life of the society of which he is a member.
Such are the main implications of what might be termed the human scientific
calculus of industrial values.
NOTES:
1. The Principles of Scientific Management (Harper
& Bros.).
2. Op. cit., p. 65.
3. The Principles of Scientific Management, p. 74.
4. The Principles of Scientific Management, p. 100.
5. 'While one who is not experienced at making his men really enthusiastic
in their work cannot appreciate how athletic contests will interest the men,
it is the real secret of the success of our best superintendents. It not
only reduces costs, but it makes for organisation and thus saves foremen's
time.' F. G. Gilbreth, Bricklaying System, p. 13.
6. The Principles of Scientific Management, p. 83.
7. Taylor, p. 85.
8. Op. cit., p. 103.
9. Op. cit., p. 37.
10. Taylor , p. 1 26.
11. Taylor, p. 59.
12. Psychology and Industrial Efficiency.
13. Op. cit., p. 23.
14. Op. cit., p. 66.
15. Op. cit., p. 85.
16. This rationalisation of life for distinctively economic purposes, alike
on its productive and expenditure side, has been carried further by the Jews
than by any other people, i.e., their religion, politics, eugenics and education
have been directed more exclusively and more rationalistically towards the
business arts in which they excel, those of the financier, undertaker, trader,
than in the case of other peoples. See Sombart, The Jews and Modern Capitalism,
Chs. IX and X.
CHAPTER XV: THE DISTRIBUTION OF WEALTH
§1. Leisure, regarded as an economic good, comes under
the general law of distribution of wealth. But the notorious defects of its
distribution, and their human consequences, are such as to claim for it a
separate place in our enquiry. Modern industrialism by its large unearned
surplus has greatly increased the size of the leisure classes. For wherever
such surplus goes, there is the possibility and probability of a life of
leisure. In our study of Consumption we traced the part played by conspicuous
leisure as an element of pride and power in the economy of the rich. In Great
Britain the size of this leisure class is by no means measured by the number
of those who stand in the census as 'unoccupied.' In the top stratum of the
business world we find considerable numbers of the directing and managerial
class who are seldom or ever 'busy.' Their office hours are short and irregular,
their week-ends extend from Friday to Tuesday, their holidays are long and
frequent.
Most of their leisure is accompanied by profuse consumption, involving thus
from the standpoint of society a double waste, a waste of time and of substance.
Where does all this leisure come from? The answer to this question seems
tolerably simple. It has often been observed that labour-saving machinery
and other devices for abridging human toil have done very little to lighten
or shorten the work-day for the workers. What then has become of the labour
that is saved? Most of it has gone to enlarge the leisure of the leisured
class, or perhaps we should say, of the leisured classes. For we saw that
there existed a lower as well as an upper leisure class, a necessary product
of the same mal-distribution of resources as sustains the latter. For an
industrial system that grinds out unproductive surplus breaks down the physical
and moral efficiency of large numbers of actual or potential workers as a
by-product of the overdriving and underfeeding process. The reckless breeding
of the class thus broken down furnishes a horde of weaklings, shirkers and
nomads, unassimilated, unassimilable by the industrial system. These beings,
kept alive by charity and poor-laws, have grown with modern industrialism
and constitute the class known as 'unemployables.' They are often described
as a 'standing menace to civilisation,' and are in fact the most pitiable
product of the mal-distribution of wealth.
§2. But the irregularities of modern production and consumption are
also responsible for a vast amount of involuntary and injurious leisure among
the genuine working-classes. That leisure is commonly termed 'unemployment.'
it is not true leisure, in the sense of time for recreation or enjoyment,
though it might become so. For the most part it is at present wasteful and
demoralising idleness.
A certain amount of unemployment is of course unavoidable in any organisation
of industry. There will be some leakage of time between jobs and unpredictable
irregularities of weather and climate will involve some idleness. Expansions
and contractions of special trades, changes in methods of production and
of consumption, the necessary elasticity of economic life, will continue
to account for the temporary displacement of groups of workers. There is,
of course, no social wastage in this process, if it is properly safeguarded.
But hitherto it has been a great source of individual and social waste. Society
is only beginning to realise the duty, or indeed the possibility, of taking
active steps to reduce the quantity of this unemployment and to utilise what
is unavoidable for the benefit of the unemployed and of society. The cultivation
of these spare plots of time in the normal life of the workers may become
a highly serviceable art.
If all unemployment could be spread evenly over the working year, taken
out in a shortening of the ordinary working-day and in the provision of periodic
and sufficient holidays, an immense addition would be made to the sum of
industrial welfare. Thus, without any reduction in the aggregate of labour-time,
a sensible reduction in the human cost of labour might be achieved, if law,
custom, or organised labour policy made it impossible for employers to vary
violently or suddenly the volume of employment and to sandwich periods of
over-time with periods of short-time. These baneful irregularities of employment
appear inevitable so long as they remain permissible, as do sweating wages
and other bad conditions of labour. When they are no longer permissible,
the organised intelligence of the trade will adjust itself to the new conditions,
generally with little or no loss, often with positive gain.
If there are trades upon which season, fashion, or other uncontrollable
factors impose great irregularity of employment, a sound social policy will
have close regard to the nature of this irregularity. Where an essentially
irregular trade is engaged in supplying some necessary or convenience of
life, as, for instance, in gas-works and certain branches of transport, alternative
trades may be found whose fluctuations tend to vary inversely with those
of the former trades, and which can furnish work suitable in kind and place
to those who are out.
Statistics of employment show that the aggregate of employment during any
given year does not vary much. It would vary less, if every man engaged in
an essentially irregular trade had an alternative, in which he was qualified
to earn a living when employment in the other trade was short. For there
is little truth in the contention that specialisation for most manual trades
is carried so far that an alternative or subsidiary employment spoils a worker
for efficiency in his prime trade. If there are any necessary trades for
whose unavoidable unemployment no such effective provision can be made, society
must either saddle the trade with the obligation of keeping the 'reserve'
of labour while it stands in waiting, or it must itself undertake the administration
of the trade as one which cannot safely be left in private hands. In the
case of fashion or luxury trades, which furnish many instances of greatest
irregularity, legal prohibition of over-time will often operate most beneficially.
Where much unemployment still remains, a high contribution to an unemployed
insurance fund would stimulate advantageous readjustments. Finally, if there
are trades incapable of bearing the true costs of maintenance of the labour
they employ, it would still be right to place on them the obligation to do
so, for their destruction will be a gain not a loss to a society that understands
its human interests.
But the main problem of leisure would still remain unsolved. For the normal
burden of industrial toil, imposed by our present economic system upon most
workers, is excessive. That excess consists primarily in duration of the
work-day, though aggravated in many cases by intensity or pace of working.
great numbers of workers, especially among women, are employed in occupations
where neither law, custom, nor trade organisation, imposes any limits. No
factory day affects the employees in shops or offices or most warehouses,
or in most transport trades, or in domestic service departments of employment
which absorb a rapidly increasing number and proportion of the employed population.
There are vast numbers of domestic workshops and home trades in which men
and women are employed, where all hours are worked. No legal restrictions
of hours are set upon adult male labour in manufacturing and other industrial
work in most of the metal and other trades which are exclusively or predominantly
men's employments, though in trades where women also are employed restrictions
are often imposed which in fact extend to men the factory day.
But there is a generally recognised feeling that the length of the factory
day is gravely excessive, that 10 1/2, or even 9 hours per diem, under modern
conditions of speeded-up machinery and nervous tension, involve too heavy
a human cost.
§3. It is this growing volume of feeling that has crystallised in the
demand for an eight-hours day. This is no immoderate demand. A regular contribution
of eight hours' working energy of hand, or brain, or nerves, to some narrow
routine process, is as much as, or more than, the ordinary man or woman can
afford, in the wholesome interest of his personality, to give up to society.
For we have recognised quite clearly that a specialisation of function, a
division of labour, growing ever finer, is required of the individual in
the interests of society. He must make this apparent sacrifice of his private
tastes, feelings and interests, for the good of the society of which he is
a member. It is not, as we perceive, a real sacrifice, unless the demand
made upon him is excessive, for the good of the society he serves is his
good, and what he gives out comes back to him in participation of the common
life. But, when the task imposed is too long or too hard, the sacrifice becomes
an injury, the encroachment upon the human life of the worker inflicts grave
damage, which damage again reacts upon society.
The stress of the Labour Movement upon the urgency of shortening the work-day
to-day is extremely significant. It testifies to two advances in the actual
condition of the labouring classes. In the first place, it indicates that
some substantial progress has been made towards a higher level of material
standard of consumption. For workers on the lower levels of poverty dare
not ask for reduced hours of labour, involving, as may well occur, a reduction
of pay. Workers struggling for a bare physical subsistence cannot afford
to purchase leisure.
Of course I know that even the better-to-do workers who voice a demand for
an eight-hours day are not ready to proclaim their willingness to pay for
it in diminished wages. Nor need they in all cases. Where the shorter day
is attended by improved efficiency or increased intensity of labour, or merely
by better organisation of the business, there may be nothing to pay. More
leisure has been squeezed out of the working-day. There are many cases where
this can be done, for the working-day in many instances is wastefully prolonged.
But, though in certain trades a ten-hours day may be reduced to nine, or
even eight, without any reduction of output, this is not the case in other
trades, nor even in the former trades could the process be carried far without
a loss of output. In a great many employments a short working-day will involve
a larger economic cost of labour, and where, as is usual in competitive trade,
this larger cost cannot be made good out of profits, labour will have to
buy this leisure, in part at any rate, by reduced wages. For even if he can
get it shifted on to the consumer in the shape of higher prices, as consumer
he will in his turn have to bear a part of it.
Where the demand for shorter hours is genuine, and is not a mere cover for
extended over-time, to be paid for at a higher rate, it must be taken as
indicative of the workers, willingness to take part of his share of industrial
progress in leisure instead of wages.
§4. But leisure, as an economic asset, is not a mere question of hours.
A shorter work-day might be dearly bought at the cost of an intensification
of labour which left body and mind exhausted at the end of each day. The
opposition of workers to a policy of speeding-up, or the use of pace-setters,
is usually a sane act of self-defence, and not the fractious obstruction
to industrial progress it is sometimes represented. No considerations of
human endurance limit the pace at which machinery driven by mechanical power
may be worked. Unless, therefore, restraints are put by law, custom or bargaining,
upon the speed of machines, or the number which a worker is called upon to
serve, competition may impose a work-day which, though not unduly long in
hours, habitually exhausts the ordinary worker. It is not always realised
how great a change took place when the weaver, the shoemaker, the smith,
passed from the workshops, where the pace and other conditions of work were
mostly regulated by their voluntary action, to the steam-driven factory.
The shoemaker and the tailor under the old conditions had time, energy and
liberty for thought while carrying on their work: they could slacken, break
off or speed up, their work, according to their inclination. The clicker
or heeler in a shoe factory, the cutter-out in a clothing factory, have no
such measure of freedom. This is, of course, a normal effect of modern industrialism.
Closer and more continuous attention is demanded during the working hours.
Thus the real question of leisure is a question of spare human energy rather
than of spare hours. The shorter working-day is chiefly needed as a condition
favourable to spare energy. Though therefore, an eight-hours day may not
unreasonably be taken as a proximate reform, for labour in general, there
is no reason why the work-day in all occupations should be cut to this or
any other exact measure. Such arithmetical equality would evidently work
out most inequitably, as between trade and trade, or process and process
in the same trade. In many large departments of industry, the transport and
distributive trades in particular, numerous interstices of leisure are inserted
in a day's work, easing the burden of the day, and sometimes affording opportunity
for recreation and intercourse. In the more arduous processes of manufacture,
mining, or in clerical and other routine brain work, there is little or no
scope for such relaxation.
But while such considerations evidently affect the detailed policy of the
shorter day in its pressure on the several occupations, they do not affect
the general policy.
There can be no doubt that an excessive and injurious amount of specialised
labour is exacted from the workers by the ordinary industrial conditions
of to-day in nearly all industrial processes.
§5. The first plea for a shorter day is one which our analysis has
made self-evident.
It will greatly reduce the human cost of production in most processes. For,
as we recognise, the strain of muscular and nervous fatigue, both conscious
and unconscious, gathers force and grows with great rapidity during the later
hours of the workday, Though the curve representing the variations of the
human cost will of course differ in every sort of work and for different
workers, their age, sex, strength, health and other personal conditions affecting
it, the last hours of each shift will contain a disproportionate amount of
fatigue, pain and other 'costs,' while the quality and quantity of the work
done in these last hours will be inferior.
If out of any stock of material goods, we were able to separate the product
of the last hour's work from that of the earlier hours in the work-day, and
could subject it to the analysis of human cost and utility, which we have
endeavoured to apply to the general income, what should we find? This last
increment of the product would contain a heavier burden of human cost of
production than any of the earlier increments. Again, turning to the consumption
side, what should we find? This last increment must be considered as furnishing
the smallest amount of human utility in its consumption. Indeed, if we are
right in holding that a considerable fraction of each supply, even of what
are commonly classed as material necessaries of life, such as foods, clothings,
etc., is wastefully or even detrimentally consumed by the well-to-do, there
is reason to hold that this last increment of product, involving the largest
human cost in its production, contains no utility but some amount of human
disutility in its consumption.
If this analysis be true, the last hour's work may be doubly wasteful from
the standpoint of human welfare.
Of the £2,000,000,000 which constitutes our income it may very likely
be the case that £200,000,000 of it represents wealth, which, from the
human standpoint, is 'illth,' alike in the mode of its production and of
its consumption. If it had not been produced at all, the nation might have
been far better off, for by abstaining from the production of this sham wealth,
it would have produced a substantial amount of leisure.
It is of course true that the particular groups of producers, who by their
last hour's labour made these goods, may not have been losers by doing so;
their heavy toil may have been compensated by the enhanced wage which they
could not otherwise have got, and the loss of which would have injured their
standard of life. It is, indeed, the operation of competition upon wages
that actually forces into existence this sham-wealth. Drawn out of over-wrought
workers by the unequal conditions of the wage-bargain, it passes into wasteful
consumption by the back-stroke of the same law of distribution, which pays
it away as 'surplus' or 'unearned' wealth.
It is only the clear consideration of its production and consumption from
the social standpoint that exhibits the waste of the last hour's product.
But from the standpoint of the individual worker the economy of a shorter
work-day has a double significance. We have seen that it more than proportionately
diminishes his personal cost, by cancelling the last and most costly portion
of his work-day. But it also increases the human utility which he can get
out of his wages. A day of exhausting toil entails the expenditure of a large
portion of his wage in mere replacement of physical wear and tear, or incites
to expenditure on physical excesses, while the leisure hours are hours of
idleness and torpor. A reduction of the work-day will, by the larger leisure
and spare energy it secures, reduce the expenditure upon mere wear and tear,
and increase the expenditure upon the higher and more varied strata of the
standard of comfort. More leisure will in general so alter the mode of living
as to enable the worker to get more and better utility out of the expenditure
of his wages. Take an extreme case. A man who toils all day long at some
exhausting work, and goes home at night too tired for anything but food and
sleep, so as to enable him to continue the same round to-morrow, though he
may earn good wages from this toil, can get little out of them. If he were
induced to work less and leave himself some time and energy for relaxation
and enjoyment, he would get a larger utility out of less money income.
The matter, however, does not need labouring. It is evident that many modes
of consumption depend in part, for the pleasure and gain they yield, upon
the amount of time given to the consuming processes. It would be mere foolishness
for a tired worker to spend money upon improving books which he had not the
time and energy to digest. Shorten his hours, leave him more energy, such
expenditure may be extremely profitable. Even the enjoyment and good of his
meals will be increased, if he has more time and energy for wholesome processes
of digestion and for the exercise which facilitates digestion. And what is
true of his food will hold also of most other items in his standard of consumption.
No consumption is purely passive: to get the best utility or enjoyment out
of any sort of wealth, time and energy are requisite. The greater part of
a workman's income goes to the upkeep of his home and family. Does the normal
work-day in our strenuous age permit the bread-winner to get the full enjoyment
out of home and family? He belongs perhaps to a club or a cooperative society.
Can he make the most of these opportunities of education and of comradeship,
if his daily toil leaves him little margin of vitality? Most of the growing
public expenditure which the modern State or City lays out upon the amenities
of social life, the apparatus of libraries, museums, parks, music and recreation,
is half wasted because industry has trenched too much upon humanity.
§6. More leisure means an increased fund of utility or welfare got
out of the income at the disposal of each worker.
This introduces us to the fuller economy of leisure regarded aS the opportunity
of opportunities -- the condition of all effective social reconstruction
and progress.
Consider it first in relation to industrial welfare. We have seen how society
enforces its claims upon the worker by division of labour and specialisation
of functions. This specialisation is usually justified by the variety of
consumption which it yields. But will not this more complex and refined consumption
in large part be wasted or perverted to base ends, if the producer becomes
ever narrower in his productive function?
The Organic Law presses here insistently. It would be going too far, doubtless,
to assert that he who can produce one thing can only consume one thing. But
everyone familiar with the finer arts of Consumption will admit that a consumer
who is utterly unskilled in the production of these goods cannot extract
from their consumption the full enjoyment or utility which they contain.
A true connoisseur of pictures must, in training and in study, be a good
deal of an artist: the exquisite gourmet must be something of a cook.
In other words, our industrial civilisation offers a dangerous paradox,
if it merely presents man exposed to two opposed forces, tending on the one
hand to greater narrowness of production, on the other, to greater width
and complexity of consumption. To solve this paradox is the first service
of the large new fund of leisure which, for the first time in history, the
new economies of industry render available not for a little class but for
whole peoples.
The first use of leisure, then, is that it supplies a counterpoise to specialisation
by the opportunity it gives for the exercise of the neglected faculties,
the cultivation of neglected tastes. As the specialisation grows closer,
this urgency increases. More leisure is required for the routine worker to
keep him human.
In the first place, it must afford him relaxation or recreation by occupations
in which the spontaneity, the liberty, the elements of novelty, increasingly
precluded from his work-day, shall find expression. It must liberate him
from automatism, and afford him opportunity for the creative and interesting
work required to preserve in him humanity.
An eight-hours day would mean that thousands of men, who at present leave
the factory or furnace, the office or the shop, in a state of physical and
mental lassitude, would take a turn at gardening, or home carpentry, would
read some serious and stimulating book, or take part in some invigorating
game.
Thus each man would not merely get more out of each item of his economic
consumption, but he would add to the net sum of his humanity, and incidentally
of his economic utility, by cultivating those neglected faculties of production
which yield him a positive fund of interest and human benefit.
§7. So far I have set forth the economy of leisure from the standpoint
of physical and moral health: the order and harmony of human powers. This,
however, is in the main a statical economy. Now, Order is chiefly valuable
as the means of Progress, Health as the means of Growth. The dynamic economy
of Progress demands leisure even more insistently.
Everyone will formally admit that Education is impossible without leisure.
It is often pointed out that the Greek word which has been converted into
our word 'School' means Leisure. One might, therefore, suppose that the utmost
care would be taken to get the fullest use out of the leisure which child-life
affords, and to ensure that throughout life there should remain a sufficient
supply of this raw material of progress -- the surplus energy beyond the
bare needs of existence needed for organic growth.
The prodigal waste of this sacred store of leisure for child-life in the
processes of our Elementary Education is only too familiar to all of us.
Mr. Stephen Reynolds1 hardly overstates the case when he says, 'it gives
to the children about three years, worth of second-rate education in exchange
for eight or nine years of their life.'2
I believe that the trained educationalist of the next generation, examining
the expensive education given even in the best equipped of our secondary
schools and our universities, in the light of a more rational conception
of human progress, will find at least as large a waste of opportunity in
these seats of learning as in our elementary schools. Not until educational
standards and methods are better adjusted to true conditions of the vital
progress of individuals and of societies, will the chief significance of
leisure be realised.
§8. But the value of leisure is by no means exhausted by these considerations.
The finest fruits of human life come not by observation. To lay out all our
spare time and energy to the very best advantage by a scrupulous seizure
of opportunities is in reality a false economy. Industrialism has undoubtedly
done much both to discipline and to educate the powers of man. But it has
preached too arrogantly the gospel of economy and industry. It is not good
for any man to account for his time either to himself or to another, with
too great exactitude, or to seek to make a mosaic of his days. The Smilesian
philosophy of thrift and industry imparts more calculation into life than
is good for man. We should not be so terribly afraid of idleness. Dr. Watts
held that 'Satan finds some mischief still for idle hands to do.' But far
saner is Wordsworth's view, 'that we can feed this mind of ours in a wise
passiveness,' and Thoreau's demand for a 'broad margin of life.'
We are not yet sufficiently advanced in psychology to know much of the processes
within the mind by which novel thoughts and feelings seem to enter of their
own accord, starting new impulses to action, or by which the unchecked imagination
works along some rapid line of intuition. But that such seasons of vacancy
and reverie are essential to many of the finest processes of the intellect
and heart, is indisputable. To deny this to any man is to deprive him of
a part of his rightful heritage of human opportunity. The inventor, the poet,
the artist, are readily allowed such free disposal of time. Everyone allows
that genius must have ample periods of incubation. But the implication that
common men ought to have their faces kept to the grindstone is quite false.
Everybody wants leisure for his soul to move about in and to grow, not by
some closely prescribed plan of education, but by free experimentation of
its secret powers. A very slender harvest of happy thoughts and feelings
will justify much apparent idleness.
In the narrower investigation of methods of industry which we essayed, we
realised the critical part played by leisure in the art of invention. The
lack of leisure for the great majority of workers is assuredly a waste of
inventive power. We think our society prolific in inventions, especially
in the age we are living in, but it is likely that the pace of progress through
industrial inventions would be greatly quickened if the proper play-time
of the mind were not denied to the great majority of men and women.
Biologists and psychologists have made many interesting enquiries into the
motives that prompt animals and human beings to play. The forms of play,
the rhythm or patterns into which the organic cooperations of muscular and
nervous tensions and discharges cast themselves, are found to have some direct
relation to the serious pursuits of adult life, the protection against enemies,
the pursuit of prey and other food, courtship, mating and the care of the
young, and the corporate movements necessary for the protection of the horde
or tribe. So interpreted, play is an instinctive education for life. Nature
is full of indirectness, and a great deal of this play is not closely imitative
of any particular sort of useful activity but is directed to general fitness.
This applies particularly to the higher animals who are less exclusively
directed by separate particular instincts and are liable to have to meet
novel and irregular emergencies that call for general adaptability of body
and of mind. The play of higher animals and especially of human young will
thus run largely into forms in which the intellectual and emotional powers
will have large scope, where spontaneous variation and free imagination will
express themselves, and where the more or less routine rhythms of the primitive
dance or song or mock fight will pass into higher forms of individual cunning
and competitive exploit, having as their main biological and social 'meaning'
the practice of an efficient mental and emotional equipment. Play thus considered
is an experimentation of vital powers. Its utility for child-life is commonly
admitted. In fact, there is a grave danger lest the spontaneity and instinctive
direction which nature has implanted should be damaged by the attempts of
educationalists to force the vital utility of play by organising it into
'set games.' Though we need not rudely rule out reasonable regulation from
this, as from any other department of life, it would be well to remember
that play has powerful directive instincts behind it in child-life which
adult notions of economy may gravely misconceive and injure by over-regulation.
Hasty endeavours to displace instinct by reason in child-life are likely
to prove costly to human welfare in the long run. The spontaneous joy of
those activities of childhood that seem most 'wasteful' is probably a far
better index to welfare than any pedagogic calculations.
But because the human utility of play is great for children, it does not
follow that it is small for men and women. Even the physiological and much
more the psychological utility of play lasts through life, though doubtless
in diminishing value. For adult workers mere repose never exhausts the use
of leisure. The biological or the social utility of his play may be much
smaller than in the case of the young. But it will remain considerable. Nor
is this utility chiefly expressed in the relation between play and invention.
The chief justification for leisure does not consist in its contribution
to the arts of industry but rather in raising the banner of revolt against
the tyranny of industry over human life.
§9. We have grown so accustomed to regard business as the absorbing
occupation of man, that which necessarily and rightly claims the major part
of his waking hours, that a society based on any other scale of values seems
inconceivable. Though history has made us familiar with civilisations, such
as those of Athens and of Rome, where a large body of free citizens regarded
politics, art, literature and physical recreations as far more important
occupations, we know that such civilisations rested on a basis of slave labour.
We do not seem to realise that for the first time in history two conditions
are substantially attained which make it technically possible for a whole
people to throw off the dominion of toil. Machinery and Democracy are these
two conditions. If they can be brought into effective coordination, so that
the full economics of machine production can be rendered available for the
people as a whole, the domination of industry over the lives, the thoughts,
and the hearts of men, can be overthrown. This is the great problem of social-economic
reconstruction, to make industry the servant of all men, not the servants
of the few, the masters of the many. Its solution demands, of course, that
after the wholesome organic needs are satisfied, the stimulation of new material
wants shall be kept in check. For if every class continues constantly to
develop new complicated demands, which strain the sinews of industry even
under a socially-ordered machine-economy, taking the whole of its increased
control of Nature in new demands upon Nature for economic satisfaction, the
total burden of industry on Man is nowise lightened. If we are to secure
adequate leisure for all men, and so to displace the tyranny of the business
life by the due assertion of other higher and more varied types of life,
we must manage to check the lust of competitive materialism which industrialism
has implanted in our hearts.
I am aware how difficult it is to translate these handsome aspirations into
practical achievement. To urge the working-classes of this country, or even
considerable sections of the middle-classes engaged in the trades and professions,
to sacrifice some immediately attainable rise in their material and intellectual
standard of comfort, in order thereby to purchase more leisure, will be taken
to indicate a blank ignorance of the actual conditions of their lives. I
shall be reminded that recent statistics of wages in this country show that
about one-third of our working-class families are living upon precarious
weekly incomes amounting to less than 25s. a week, and that this computation
does not take into account a large body of the population living upon casual
earnings indefinitely lower than this sum. Now Mr. Rowntree and other searchers
into working-class expenditure have shown that 24s. will hardly purchase
for an ordinary family in any English town a sufficiency of food, clothing,
housing, fuel and other requisites to maintain its members in full physical
efficiency. It will seem idle to contend that working-people in this case
would do well to prefer a shortening of their working day, however long it
be, to an increase of their wages. None of the considerations I have urged
relating to the better utilisation of their consumption will be held to justify
so obviously wasteful a policy. These workers simply cannot afford to buy
more leisure at so high a price. They dare not sacrifice any fraction of
their current wages to procure a reduction of hours from ten hours to eight,
even if the conditions of their trade otherwise admitted such a change; and
if increasing prosperity in their trade presents them with the option of
obtaining higher wages or shorter hours, their pressing demands for better
food and housing will rightly compel them to choose the former of the two
alternatives.
Nor is this reasoning refuted by dwelling upon the undeniable facts, that
most standards of working-class comfort contain elements of conventional
consumption which might be cut out with positive advantage, and that, apart
from this, a more intelligent housekeeping would enable most of them to do
much better with their actual incomes than they do. For when a due allowance
has been made for such errors or extravagance, the ordinary labourer's wage
in town and in country still remains below the margin of family efficiency.
Of course, in almost every occupation there will be a considerable number
of workers who, having no family dependent on them, will have some means
at their disposal for comforts, luxuries, saving or leisure. But the normal
standard wage for unskilled or low-skilled labour in this country does not
appear to have attained a height at which the purchase of a shorter working
day is sound economy. We must always bear in mind, besides, that the existence
in a trade of even a considerable minority of workers who could afford to
take in increased leisure what they might take in enhanced wages, would not
make this step practicable or desirable. For most trades are now so organised
that a common standard working day is even more essential than a uniform
rate of wages.
These facts enable us to realise why it is that so much elasticity or ambiguity
attends the actual labour movement for a shorter working day. The demand
is seldom framed in such a way as to preclude the common use of over-time,
though such a use of course defeats the aim for leisure, converting it into
an aim for higher wages, the time and a half rate usually paid for over-time.
But, though this open or secret competition between more leisure and more
wages continues to take place in trades where general conditions of labour
are improving, the relative strength of the claim for leisure is advancing.
There comes a point in the improved conditions of each working-class when
the demand for liberty and ease and recreation begins to assert itself with
so much insistence that it outweighs some part of the chronic demand for
higher wages. Though workers are usually reluctant to admit the economic
necessity of making a wage-sacrifice in order to purchase leisure, and will
hardly ever claim a shorter day, if they know it to involve an actual fall
of wages, they will sometimes risk this fall, and more often they will forego
a portion of a contemplated rise of wage, so as to get a shorter day. The
strength and effectiveness of this demand for leisure in comparison with
wages must, of course, vary with the actual standard of comfort that obtains,
the onerousness or irksomeness of the work, the age, sex and intelligence
of the workers, and the variety and sorts of opportunities which increased
leisure will place at their disposal. In the ordinary English feudal village,
or even in the small country town, leisure commonly means torpor qualified
by the public-house. The price of such leisure, in terms of sacrifice of
wage, would be very low, for the utility in the sensational enjoyment of
the leisure would be slight as compared with the substantial addition to
the material standard of family comfort which even a shilling would afford.
On the other hand, to the better-paid mechanic, compositor, or skilled factory
worker, where the family wage was relatively high, and where organised city
life presented many opportunities for the use and enjoyment of leisure, it
might seem well worth while to pay something in cash for the advantage of
a longer evening.
§10. This problem, of course, is merely one illustration of the complicated
issues which arise in any orderly study of the human economics of class and
individual standards of consumption. Even such a merely cursory glance at
this delicate organic problem will serve to expose the fatuity of so much
of the crude dogmatic criticism lavished upon working-class economy by well-to-do
reformers who have not sufficient imagination or discretion to abstain from
applying the standards of valuation appropriate to an income of £1,000
a year to a family living upon £60 a year. The exact income-point where
a West Ham worker can afford to observe the legal requirements against overcrowding
by hiring another room, where he can join a Club with a reasonable chance
of keeping up the subscriptions, where he can afford to keep the boys or
girls at school beyond the legal age-limit, such questions cannot be settled
by general maxims as to the duty of thrift or the advantages of education,
or even the dangers of bad sanitation. It must be remembered that even in
this highly-civilised and Christian land there are still some millions of
people who cannot afford to set aside anything for a rainy day, or to let
their children enjoy the education which the State freely provides, or even
to obey some of the fundamental laws of health. As the family wage rises
beyond a bare minimum of current subsistence, a point will emerge where each
of these and many other sound practices becomes economically feasible: the
particular income-point, of course, will differ with each family according
to its composition, its needs, and the opportunities of meeting them.
What applies so evidently to the narrow incomes of the wage-earners is,
of course, equally applicable to the higher incomes of other classes. The
well-to-do professional man recognises that an annual expenditure of five
or even ten per cent of his income on holidays may be a sound economy, just
as he calculates that he is doing better for his son by spending £1,000
on his professional training than by putting him to business at sixteen with
the same sum for capital. Not only is it impossible to generalise for a whole
people, or for all families in a given trade or of a given income, but there
will be no two cases where a rising income ought to be laid out precisely
in the same way. This is of course nothing else than saying that, as no two
persons, or families, are precisely alike in physical and moral make-up,
in tastes, needs, opportunities, their expenditure cannot rightly be the
same.
Though this belongs to the most obvious of common-places, none is more habitually
ignored. And that neglect is largely due to the fact that the platitudinarian
moralist has always been allowed to have a free run in the region of commentary
on expenditure.
Eulogia of thrift and industry have been as indiscriminate and as unprofitable
as diatribes against luxury and idleness. What is needed is a flow of orderly
investigation into the real needs and capacities of the individuals and groups
who constitute industrial society, not confined to the hard facts which can
be tabulated and plotted in curves but taking count of those softer and more
plastic facts which a closer study of human life will always show as the
main determinants of any art of conduct.
The place of leisure in the organic standard of a group or class or nation
will be one of the most delicate problems in such a study. Its delicacy for
the individual economy may, indeed, be deduced from the expression which
we used at the outset of this treatment, in describing it as 'the opportunity
of opportunities.' In other words, its human utility to any man, and, therefore,
its importance, relative to his wages or any other good he gets from them,
will depend upon the nature of all the opportunities it opens up, and that
in its turn depends upon the entire sum of those conditions which we name
his Nature and his Environment.
The progressive achievement of this economy of leisure is closely linked
with a gradual reorganisation of industry so as to eliminate the large waste
of time and energy which present productive methods involve. With science
and humanity cooperating in the art of social organisation it ought to be
possible to effect such economies as would place all Englishmen in private
possession of the greater part of their waking day for their own purposes
in life. It requires, however, a genuine faith in the organic progress of
Human Nature to urge with confidence the fuller measure of such a reform.
We need at least to assume that the normal tendency will be towards the use,
not the abuse, of more leisure, as of higher wages. That some waste will
be incurred in learning to use leisure, as also in building up each stage
in a rising standard of expenditure, is of course inevitable. Much might
be said about the conditions which facilitate the assimilation both of leisure
and of wages to nourish a higher human life. Race, climate, social traditions
and surroundings, the nature of the work, age, sex and, indeed, many other
conditions, must help to determine how a given shortening of hours, or enhancement
of wages, will affect the standard of life. Some crude distinctions of great
significance have been observed. The Bantu and most other Africans, new to
processes of wage-labour and to the needs of civilised life, will take the
whole of a sudden rise of wages in increased leisure, but that leisure will
be spent almost wholly in idleness. Pushful German traders in tropical countries
commonly complain of the 'verdammte Bedürfnislösigkeit' (accursed
wantlessness) of the inhabitants. This low conservative standard of living
impedes economic processes of exchange. It also precludes the fruitful use
of leisure, the satisfaction of the non-economic needs. Though there is no
reason to hold that any race or type of man is unprogressive, in the sense
that his mind is impervious to new wants and is incapable of inciting him
to new efforts for their satisfaction, the extent and pace of such progress
vary greatly with the economic environment and with the degree of conscious
culture hitherto attained. The stimuli of economic needs and of non-economic
needs will normally proceed together, and in the masses of a working population
will manifest themselves in a simultaneous demand for higher wages and more
leisure. But as wages reach a tolerably high standard of economic comfort,
it might be expected that the relatively stronger pressure of the non-economic
needs would give increasing emphasis to the demand for a shorter and easier
working day. This, indeed, will seem to accord with the general claim which
socialists as well as individualists make for progressive industrialism,
that it shall make larger provision for personal liberty and self-development.
As specialised and regimented industry represents the direct economic service
each must render to society, the demands of expanding personality are held
to require that an increasing proportion of each man's time and energy shall
be put at his disposal.
§11. No abstract considerations indeed, can be adduced to support an
indefinite reduction of the work-day. As a high level of civilisation is
attained in any community, the proportion of energy devoted to material,
as compared with non-material Commodities and services, will doubtless be
reduced. But that does not necessarily imply a corresponding reduction of
economic time and activity. For among economic goods themselves, those which
are wholly or mainly non-material will form an increasing proportion of the
whole. A community like that of great Britain, with a population declining
in its growth, will tend to take a continually increasing share of its real
income in the shape of intellectual, moral, aesthetic, recreative, and other
non-material services. These will absorb an ever-growing share of the productive
energy of the people. This demand for the satisfaction of higher economic
needs will be likely to put a check upon the tendency towards an illimitable
reduction of the work-day. For most of these higher non-material goods do
not admit the application of those economies of capitalist production available
in the making of material goods. Take one example, that of education. Here
is a service which will probably absorb a continually increasing percentage
of the total time and energy devoted to economic services. The same is probably
true of hygienic services. Though portions of these and other activities
may pass from the economic into the non-economic sphere, being undertaken
by individuals as private occupations, for their leisure, as public services
they will certainly furnish employment to an increasing number of employees.
Thus the claims of a growing progressive social organisation will impose
some necessary limits upon the demands of the individual for larger liberty
and leisure.
There is, however, no final conflict between the claims of personal liberty
and the social order. Even though the process of readjustment between the
claims of industry and leisure should incline generally in favour of more
leisure, with the prime purpose of nourishing more fully the private personality
and affording larger scope for home life and recreation, society is not thereby
the loser. For some of the finest and most profitable uses of leisure will
consist of the voluntary rendering of social services of a non-economic order.
I allude in particular to a fuller participation in the active functions
of citizenship, a more intelligent interest in local and national politics,
in local administration and in the numerous forms of voluntary association
which are generally social in the services they render. More leisure is a
prime essential of democratic government. There can be no really operative
system of popular self-government so long as the bulk of the people do not
possess the spare time and energy to equip themselves for effective participation
in politics and to take a regular part in deliberative and administrative
work. This is equally applicable to other modes of corporate activity, the
life of the churches, friendly societies, trade unions, cooperative societies,
clubs, musical and educational associations, which go to make up the social
life and institutions of a country. Leisure, demanded primarily in the interests
of the individual for his personal enjoyment, will thus yield rich nutriment
to the organic life of society, because the individual will find himself
drawn by the social needs and desires embedded in his personality to devote
portions of his leisure to social activities which contribute to the commonwealth
as surely as do the economic tasks imposed upon him in his daily industry.
NOTES:
1. (Times, 23 Dec. 1912.)
2. The best that can be said for this education has recently been said by
Mr. George Peel, who writes of London children (The Future of England,
p. 96):
'They spend 28 hours a week continuously during nine years under fairly
satisfactory conditions of air, warmth and light, engaged in wholesome and
stimulating pursuits. Considering what their homes often are, this itself
must be reckoned an immense benefit.'
CHAPTER XVI: THE RECONSTRUCTION OF INDUSTRY
Part I: CAPITAL AND LABOUR
§1. Since industry is a great cooperative process for
the mutual aid of members of society, it is well that the fact should be
held in the consciousness and will of individuals as clearly as possible.
For this conscious realisation of the meaning of industry will have a helpful
influence on their intelligence and feelings.
Now there are general related tendencies in modern industry which are powerful
obstacles to this realisation of the social meaning of industry.
The first is the growing subdivision of labour with the related expansion
of markets. When a man made a watch or a pair of shoes and sold them to a
neighbour, or known customer, his work had for him a distinct human significance.
For, making the whole of a thing, he realised its nature and utility, while,
seeing the man who wore his watch or shoes, he realised the human value of
his work. Now he performs one of some ninety processes which go to make many
watches, or he trims the heels of innumerable shoes. The other processes
he cannot do, and does not accurately know how they are done. His separate
contribution has no clear utility, and yet it solely occupies his attention.
Not only does he thus lose grasp of the meaning of his work, but he has no
opportunity of realising its consumptive utility. For he cannot know or care
anything about the unknown person in some distant part of the world who shall
wear the boots or watch be helped to make. The social sympathy of cooperative
industry is thus atrophied by the conditions of his work. Division of labour,
in its first intent, thus divides each worker into a section of a producer,
and separates each set of producers from the consumers of their products.
Though, therefore, this division of labour is in itself a finer mode of
cooperation, it is not realised as such by those who are subjected to it.
§2. The second dehumanising and derationalising influence is the stress
which the operations of modern industry lay on competition between trade
and trade, business and business, worker and worker. No graver injury has
been inflicted on the mind of man, in the name of science, than the prepotence
which the early science of Political Economy assigned to the competitive
and combative aspects of industrial life. To represent commerce between individuals
and nations as a 'competitive system', mainly dependent for its successful
operation upon the absorption of each man in seeking his own gain, and in
getting the better of others in his trade, was an error of the first magnitude.
Nor was this error sufficiently corrected by the qualifying theory that from
this pursuit by each of his separate gains the greatest good for all would
somehow emerge. For, by laying the stress upon the competitive aspect of
industry, this teaching stied the growth of intellectual and moral sympathy
between the various human centres of the industrial system, and impaired
the sense of human solidarity which, apart from its spiritual value, is the
mainspring of efficient economic organisation. The presentation of industry
as competition with attendant cooperation, instead of as cooperation with
attendant competition, has greatly contributed to the popular misunderstanding
of commerce, alike upon its domestic and its international scales.1
Competition, if defended as a socially useful method of industry, must,
like division of labour, be proved to contribute to cooperative ends. The
general underlying assumption, that it will do so, we have seen to be false.
Equally unjustified have been the accounts of actual industry which assume
the general prevalence of free competition. At all times the area and liberty
of effective competition between business and business, worker and worker,
have been limited, and tend in recent times to closer limitation.
But if division of labour and competition, apart from a realisation of their
cooperative values, are dehumanising and antisocial, so likewise is the growing
anonymity of modern business. 'Compagnie Anonyme' is the significant French
name for a Joint Stock Company with its unknown shareholders. But this depersonalising
process is everywhere inseparable from the magnitude and intricacy of modern
businesses and modern markets. The capital belonging to a crowd of persons,
who are strangers to one another, is massed into an effective productive
aggregate, and is set to cooperate with masses of labour power whose owners
are divorced from all direct contact, either with the owners of the tools
and material, or with the purchasers of the product. An effective comradeship
among large numbers of workers, distributed over diverse processes and often
severed widely in their places of work, is also difficult to maintain. A
great modern business is in its structure less effectively human than was
the small workshop which it displaced. One effect of this weaker humanity
of the business, especially in the relations between capital and labour,
employer and employee, has been to shift the sentimental attachment of the
worker from his business to his trade-union. He is less a member of a business
firm, serving some directly productive function, than a member of a labour-group
extending over the area of a local or even a national trade.
§3. This consideration brings to the front the antagonism between capital
and labour which has in modern times assumed ever graver dimensions and clearer
consciousness. In considering the industrial system as an effective economic
harmony it is not easy to determine whether the cooperative or the competitive
forces are gaining ground. On the one hand, the competition between businesses
in the same trade is in all great staple trades giving place to combinations,
which not only unite the formerly conflicting businesses, but weld into close
unity the capital of various related trades. Trusts, cartels, pools, conferences
and various experiments in federal compacts, for regulating output and selling
prices, are everywhere engaged in substituting industrial peace for war.
Direct and conscious harmony thus grows among formerly antagonistic capitalists
and employers. The organisation of labour in the several trades, on the basis
of a standard wage upheld by collective bargaining, marks a similar though
less close harmony on the side of labour.
But these advances towards conscious harmony among hitherto competing capitalists
and labourers have been attended by a widening and intensification of the
conscious antagonism between capital and labour within the several trades.
Indeed, there are signs of a growing extension of combination for definitely
hostile purposes, a ranging of capital on the one side, labour on the other,
animated by a broad class consciousness which is new in the history of industry.
In fact, it has all along been inevitable that the combinatory forces, which
appeared to make for social solidarity in industry, should be brought up
at what appears to be an impenetrable barrier, the class hostility between
the owners of instruments of production and the workers. For this hostility
is inherent in the distribution which evokes an Unproductive Surplus. So
long as economic advantages permit some groups of capitalists, landowners
and owners of organising power, to take for themselves large masses of unearned
income, which might have gone to improve the conditions of the workers, had
they been able to divert it into wages, no false platitudes about the harmony
of capital and labour will secure industrial peace.
For that harmony, as we have seen, only extends to the portion of the product
distributed as costs. Now, the enormously increased productivity of modern
industry has resulted in an increase of the size and relative importance
of the surplus, and the large proportion of that surplus which is distributed
unproductively in 'unearned' income represents a growing element of discord.
This real divergence of economic interests between capital and labour is
not then to be bridged by an economy of costs based upon the fact that, since
each factor needs the other, it is interested in its proper remuneration.
The complaints of the existing system made by the workers not merely testify
to a growing realisation of their economic weakness and a growing sensitiveness
to the inequitable modes of distribution. They are founded on the belief
that upon the whole distribution is becoming more inequitable and more wasteful.
For though the absolute share of the workers and the standard of real wages
have been rising in most countries,2 that rise has not been commensurate
with the aggregate increase of wealth. In other words, a larger proportion
of the total is passing into unproductive surplus, the factor of discord,
a smaller into costs, the factor of harmony. If this is true, it implies
inevitably a worsening of the relations between capital and labour. For,
so long as the owners of strong or scarce factors of production are rewarded
according to their strength or scarcity, no peace is possible. The absorption
of the unassimilated mass of wealth in a higher standard of life for the
workers and an enlargement and improvement of the public services is essential
to secure the substance and the sense of social harmony in industry.
§4. Leaving out for the moment the claim of the State for public services,
this socially sound distribution of the product could only be achieved by
a recasting of the governmental structure of the Business, the Trade and
industry. Towards this governmental reform many different experiments are
afoot. Various modifications of the ordinary wage-system, by way of bonuses
upon individual and departmental efficiency of labour, are tried. More direct
attempts to harmonise the interests of capital and labour within the business
take shape in schemes of profit-sharing, which are sometimes carried further
into the closer form of co-partnership, by which the workers own a share
of the capital and, by virtue of this ownership may be admitted to a share
of the administration.
Regarded as methods of harmonising capital and labour in the business structure,
most of these schemes appear to be of dubious worth, when we apply the proper
test, viz., the ability to divert into wages a portion of the unproductive
surplus. For, though the stimulus of a 'bonus' or a so-called3 share of profit
may increase the absolute wage of the workers in the business, if at the
same time it proportionately increases the dividend or profit, it does nothing
to reduce either the aggregate or the proportion of unproductive surplus.
Moreover, if the increased productivity of labour under such a stimulus is
attended by enhanced intensification of effort in muscle or in nerve, with
accompanying exhaustion, the total utility of the process to the worker may
be a negative quantity, when the increased human cost of production has been
set against the utility of the higher income, less advantageously consumed
by reason of the exhaustion. Again, though many of these schemes expressly
induce the workers to become small shareholders in the business, by applying
the 'bonus' or 'profit' to the purchase of shares, nowhere has this ownership
by the workers been permitted to go so far as to give them any determinant
voice in the administration of the business. Finally, many of these schemes
by express intention, nearly all of them in actual tendency, weaken the attachment
of the workers in these businesses to their fellow-workers in other businesses
belonging to the trade. So, whatever power proceeds from collective bargaining,
for raising wages and improving the other conditions of employment, is diminished
by these attempts to harmonise the capital and labour within the area of
the single business.
It is significant that nearly all the businesses where co-partnership shows
signs of enduring success are legal monopolies, or are otherwise protected
from free competition, so that the prices for the commodities or services
they sell contain a considerable element of surplus. A fraction of this surplus
is diverted from unproductive into productive purposes by a subsidy to wages.
In the case of gas-works, the most conspicuous example, this process is furthered
by the fact that legal restrictions upon dividends make what at first sight
appears a policy of generosity to labour, costless to capital.
§5. This criticism of the defects of these private experiments in industrial
peace is reinforced by the experience of cooperative movements. Of the completely
self-governing workshop or other business in which the whole body of the
workers are sole owners of the whole capital they employ, there have been
too few examples to enable any conclusion to be drawn. But nearly all the
cases where the actual full administration of a business has been in the
hands of those employed have been signal failures, save in rare instances
where the possession of some skill or situation endowed with a scarcity value
has assisted them. Experiments in the self-governing workshop make it evident
that direct government by the workers in their capacity of producers is technically
worse than government by the owners of the capital. The selection and the
remuneration of ability of management are always found defective, and the
employees are often unwilling to submit to proper discipline, even when they
have elected the persons who shall exercise it. A few successful experiments
conducted in favourable circumstances, i.e., where a special market is available,
or where only a section of the employees wield the power of administration,
afford no considerable grounds of hope for this mode of cooperative settlement.
Thus there seems no ground for holding that any really satisfactory settlement
of the conflicts between capital and labour can be got by private arrangements
of a profit-sharing or a cooperative character.
Part II: PRODUCER AND CONSUMER
§6. Before considering more definitely 'socialistic'
remedies, it is best, however, to open out the other conflict of interest,
between producer and consumer. It is, of course, often held, even by those
who recognise some reality in the opposition between capital and labour,
that the supposed opposition between producer and consumer has no real foundation.
When producers compete, the gains of such competition in lower prices, better
quality, etc., drop into the consumer's lap. Even where producers combine,
or a single business holds the market, it is supposed that the monopolist
will generally find it most profitable to furnish a sound article at a moderate
price.
But this natural harmony between producer and consumer is subject to precisely
the same qualification as that between capital and labour. Producer and consumer
are necessary to one another, there is community of interests up to a limit.
But beyond that limit there is an equally natural conflict. It is true that
where producers compete freely prices are cut down for the consumer. But
it is by no means true that he tends to get the cheapest goods which current
arts of production render possible. For the expenses of competition, which
are enormous, are defrayed by him in the price he pays. Nor does free competition
secure quality of product. It stimulates the arts of adulteration and deceit,
and sets the cunning of the skilled producer against the simplicity of the
unskilled purchaser. While, therefore, it may be urged that where competition
of producers is effective, comparatively little 'surplus' passes into their
hands, the waste of industrial power through the maintenance of excessive
machinery of production and of distribution is a grave social loss.
Still less can it be admitted, that where combination has displaced competition,
the consumer's interests are safe. On the contrary, it is recognised by all
economists that where any effective monopoly is established, the selling
prices to consumers will always be such as to secure a surplus profit to
the producer. Prices may not always be as high as, or higher than, they would
have been if a wasteful competition were maintained, but they will always
be such as to extract a higher profit than is needed for the remuneration
of capital and ability. Where the articles sold are necessaries or prime
conveniences of life, and do not admit of effective substitutes, the prices
will be indefinitely higher than under competition, and the conflict between
producer and consumer more acute. Since under modern capitalism an ever-increasing
number of 'routine' requirements, covering the chief necessaries of large
populations, are passing under some form or other of effective combination,
it is clear that the problem of industrial peace must come to concern itself
more and more with the conflicts of producer and consumer. At present the
consumer, at any rate in England, largely realises this conflict as a by-product
of the struggle between capital and labour. Though the strikes and lock-outs,
which express that struggle, disastrously affect his welfare, he is told
that they are not his business, and he has no right to interfere. Where a
settlement has taken place between capital and labour on a basis of higher
wages or shorter hours, he finds the cost of this settlement is usually passed
on to him in higher rates or prices.
As joint-agreements between employers, federations and trade unions become
more common and more effective, as methods of conciliation and arbitration
receive legal sanction and assistance, as wage-boards extend to new fields
of industry, the falsehood and the social wrong which underlie the maxim
'caveat emptor' become more manifest. The consumer will become increasingly
more impotent to protect himself against the depredations of organised groups
of producers. Indeed, experience proves that even where combinations are
subject to the sanction and control of the State, which theoretically is
dedicated to the service of the public as a whole, and might at least be
expected to hold the balance even between producer and consumer, producers,
interests are preferred. In the present policy of state control of Railways,
and in the various schemes for the extension of Wage Board legislation, there
is no proper recognition of the interests of the consumer. An ill-devised
lopsided Socialism is springing up, the likely result of which appears to
be to set up groups of selected and preferred employments, whose higher wage-bill
will in reality be defrayed not out of rents, surplus profits or any other
unearned income, but in large measure out of the reduction of real wages
which arbitrary rises of consumers, prices will impose upon other wage-earners.
A flagrant instance of this defective social policy is supplied by the recent
arrangement by which the railways of this country have been empowered by
government to raise the wages of their employees by reducing the real wages
of the general body of the wage-earners, who are called upon to bear a large
part of the cost in the higher prices of commodities which follows upon the
rise of railway rates.
§7. Now, admitting, as we must, that a real divergence of interests
between producers and consumers may and must arise in the ordinary course
of industry, what remedy is possible?
There is one large working-class movement which seems expressly designed
for the protection of the consuming public. I allude of course to the great
Cooperative Movement on the Rochdale plan, in which the supreme control is
vested in the consumers and their representatives. How far does this scheme
represent a true reconcilement of producers' and consumers, interests? A
very little investigation will show that, however excellent the other services
it renders to the working-classes, its conduct of business affords no complete
harmony of the interests of the several factors.
For its entire structure and working are motived by the intention to absorb
in real wages (by means of dividends on purchases) the 'profits' to which
in ordinary trade most of the unproductive surplus seems to adhere. By dispensing
with the profits of various grades of middlemen, by reducing the expenses
of management, by saving most of the costs of advertising and other incidental
costs of distribution, much surplus is diverted into real wages. But, regarding
this scheme from the standpoint which immediately concerns us, as a reconcilement
of capital and labour within the business, we find an obvious defect. There
is nothing in the theory, or commonly in the practice, of the cooperative
store or workshop, to evoke from the employees any special interest in its
successful conduct. If they are members, they do indeed get in this capacity
a gain equal to that enjoyed by other members not employed in the business.
But, as employees, they have no voice in the administration and no share
in the gains. Where, as in the Scottish Wholesale, a profit-sharing scheme
is attached, this scheme is exposed to the same criticism that we have applied
to other profit-sharing schemes. There is no security afforded by this cooperative
form of business for the full reconcilement of the claims of capital and
labour within the business. But, after all, it might be objected, that does
not really matter. For, if the worker in a cooperative mill or store is also
a cooperative consumer, he will, as such, enjoy a collective gain as great
as he could hope to gain if he were assigned a special lien upon the surplus
that emerged from the successful conduct of the particular business in which
he worked. It will be his intelligent interest, as consumer, to help to elect
and to maintain an effective administration in all the various productive
and distributive businesses from which are derived the half-yearly dividend
on purchases which he receives.
Now if the working-classes of the nation made all their purchases through
cooperative stores, and if these stores, in their turn, bought what they
sell exclusively from cooperative productive businesses, and if all working-class
consumers were employed in these cooperative businesses, a solution of the
social problem on cooperative lines might be plausible. For any surplus made
at any stage would flow in the ordinary course of events into consumers'
dividends, forming an addition to the real wages which they earned as producers.
Nor need it matter that the cooperative consumers were not full owners of
all the capital they needed to employ, provided they could borrow it in a
free market. If the agricultural and mining lands, whose produce they required,
did not belong to them, there would indeed remain a large leakage in the
shape of economic rent. But the nature of the so-called land monopoly is
not such as to prevent the cooperative consumers from taking in real wages
the great bulk of the surplus which otherwise would have gone to capitalists
and entrepreneurs in unearned income.
Unfortunately, large and important as is this Cooperative Movement, it falls
far short of the full conditions here laid down. The majority of the wage-earners
are not members of Cooperative Stores: those who are members only purchase
certain sorts of goods at the store: owing to the slighter development of
productive cooperation, a large proportion of the goods sold in the stores
are bought in the ordinary markets: comparatively few of the cooperative
consumers are employed in cooperative businesses. There are large tracts
of industry, such as agriculture, mining, transport, building,4 metal-working
and machine-making, which the Cooperative Movement has hardly touched, nor
are there signs of any rapid extension in these fields of enterprise. In
point of fact, cooperation has almost entirely confined itself to trades
and industries where competition is normally free, and where the object of
cooperation has rather been to save and secure as 'divi' certain ordinary
expenses of competitive businesses than to invade the strongholds of highly
profitable capitalism where unearned surpluses are large. While, then, a
considerable proportion of the total working-class income is expended upon
articles bought in the stores5 and valuable economies are affected, only
a small proportion of the eleven millions paid in dividends and interest
to consumers can be taken to represent unproductive surplus absorbed into
wages. While, therefore, the advance of the Cooperative Movement in recent
years, alike in membership, in volume of trade and in profits, has been rapid,
a careful examination of the field of cooperative progress does not indicate
any solution of the main problem of distribution along these lines. The areas
of really profitable private enterprise are to all appearance unassailable
by the Cooperative Movement.
§8. But we find within the Cooperative Movement some experiences which
shed light upon the problem of business administration. If the truly social
nature of the 'business' is to be expressed in its government, the Rochdale
plan, upon which the main cooperative structure has been erected, contributes
an element of really vital importance. It asserts that a business exists,
not to furnish profit to the capitalist employer or wages to the workers,
but commodities to consumers. The consumer, being the end and furnishing
by his purchase-power the stimulus, should hold the reins of government.
He is the owner, he shall rule, he shall receive the whole gain. This is
a complete reversal of the ordinary idea of the business world, to which
a business exists to secure profits to business men, the worker and the market
(consumer) being mere instruments in profit-making. Hardly less does it counterwork
the ordinary ideas and feelings of the working-man, for whom the business
exists merely as a means of remunerative employment, and whose sole idea
of reform is to secure in higher wages and improved conditions of labour
as much of the profits as possible. To neither does it for one moment seem
reasonable that the consumer should interfere in the administration of the
business, or take any share in its gains, save such as must come to him in
the ordinary course of trade.
Thus the success of the Rochdale plan is a dramatic assertion of a revolutionary
idea in the organisation of business. It is proved that large numbers of
routine businesses can be conducted by and for consumers. But it cannot be
assumed that this concentration of the meaning, the utility and the government
of industry in the consumer, has complete validity. It may be called consumers,
socialism, as distinguished from the sort of producers, socialism which prevails
among trade unionists. As the latter aims at controlling businesses in order
to divert directly into wages all surplus profit, so the former aims at controlling
businesses in order to divert the same fund into consumers' dividends. Now,
if the producers and the consumers of the goods produced in any business
were the same, it might seem a matter of indifference in which capacity they
took the gain. But they are not. The workers in a particular mill or store
buy for their own use a very minute fraction of the goods there produced.
Even if the workers, by means of their unions or their cooperative societies,
could capture the whole industrial machinery, it would still remain a matter
of importance how far they paid themselves in higher wages, how far in consumers,
dividends. For unless their claims as producers and as consumers were properly
adjusted in the control of the several businesses, there would be little
or nothing to distribute.
Few thoughtful cooperators will claim finality and all-sufficiency for the
cooperative idea as embodied in the present movement.
The persistent struggles in the movement itself to temper the absolutism
of the consumer by the assertion of cooperative employees to a higher rate
of pay than obtains in the outside labour market and to a share of the profits,
is an interesting commentary on the problem of social administration of the
business. It is widely felt that the view that a business exists in order
to supply utilities to consumers is defective as a principle of business
government. The claim of the owners of the factors of production employed
in the business to some voice in the conduct of that business is not lightly
to be set aside by asserting that the factors of production are mere means
to the consumer's end. If the consumers themselves own the share-capital
or borrow other capital at market rates with good security, the issue of
the control of capital need not arise. But the labour employed in a cooperative
business has a human interest in the conduct of the business separate from
that of the consumers. In virtue of this human interest, these workers impugn
the doctrine that the business exists solely for the consumers, and insist
that their human interest shall be adequately represented in the conduct
of the business and the distribution of its gains.
§9. Those who have followed and accept the general principles of our
analysis of industry into human costs of production and human utilities of
consumption will be disposed a priori to accept the view that, in the equitable
control of every business, the interests of the worker as well as of the
consumers should be represented. Regarded from the social standpoint, it
is as important that good conditions of employment shall prevail in a business,
as that good articles shall be furnished cheaply to consumers. Nor, as we
recognise, can we assume that an enlightened business government by consumers,
any more than by capitalists, will necessarily secure these good conditions
for employees. Definite and not inconsiderable instances of sweating inside
the cooperative movement itself testify to the reality of this need. But
it is urged not merely on grounds of equity, as a protection against possible
abuses of power by consumers or their representatives, but on grounds of
sound economy. For if it be admitted that the employees in a cooperative
business have a special human interest, it is idle to argue that it is socially
advantageous to leave this interest without representation in the conduct
of the business.
The cooperation which assigns all power and all gain to the consumer is
in fact vitiated by the same social fallacy as the syndicalism which would
assign the same monopoly to the employee, or as the capitalism which does
assign it to the profit-monger. Equity and economy alike demand that the
interests of all three shall be adequately represented. Social remuneration
in its application to the business unit must proceed upon this fundamental
principle. A business consists of capital, labour, and the market. To place
unlimited control in the hands of any of those factors is wasteful and dangerous.
The human defects of uncontrolled capitalism have been made sufficiently
apparent. Any adequate experiment in uncontrolled trade-unionism or in syndicalism
would disclose similar abuses. The idea of the miners running the mine, or
the factory-hands the factory, the railway workers the railway, is not so
much unsound in the sense that they must fail to run it properly. For though
unlikely, it is at least conceivable that they might have enough intelligence
and character to buy competent managers and carry out their detailed instructions.
Its fundamental vice consists in ignoring the factor of the market, and in
building up a number of separate industrial structures in which the consumers,
interests are unrepresented. It may appear plausible to argue that the control
of each process of production should be left to the producers who may be
presumed to know it best. But it becomes evident, even to the syndicalist,
that no business could be conducted upon this policy unmodified. No house-building
could proceed, if the plasterers, the bricklayers, the carpenters, had each
full power to determine when they would work, at what pace they would work,
and what remuneration they should exact. There must be a definite arrangement
between the groups of workers in the several processes within each business,
which will qualify the control of plastering by the plasterers, bricklaying
by the bricklayers, by a wider control that represents the common. Interests
of the business. Not merely does the syndicalist idea recognise this cooperation
of the processes within a business, but it extends the cooperative character
of the control to the trade as a whole. Under syndicalism the building trade
would not be broken into a number of businesses in each of which would be
made a separate arrangement between the carpenters, bricklayers, etc., employed
in it. The arrangements as to hours and pace and remuneration, etc., would
be determined by representatives of the various crafts on a trade basis.
and would be the same for all businesses and all jobs. But the organisation
of producers could not stop there. Each trade could no more be entirely self-governing
than each business or each process in a business. The trade-organisation
of the miners could not, having regard to the interests and needs of other
trades, be safely entrusted with the absolute control of mining, or the railway
workers with the absolute control of the railways. There must be some power
to prevent the miners reducing their amount of work and their output to an
extent which will cripple the other trades which need coal, and to compel
the railway workers to afford reasonable facilities of transport on reasonable
terms to shippers and travellers. For, otherwise, there would be substituted
for the conflict of capital and labour within each business or each trade,
a conflict of trades, each striving to do as little and to get as much as
possible out of the aggregate wealth. Nor can it be assumed that the intelligent
self-interest or social sympathy of the miners, or railwaymen, or other trades,
would be adequate safeguards against such abuses. This is evident when we
bear in mind the central concrete problem before us, the social distribution
and utilisation of the surplus. For it will be technically possible for any
strongly-placed special group of workers, such as the miners or railway workers,
to take to themselves, in remuneration or in leisure, an excessive proportion
of this surplus, leaving very little for any other group of workers. The
guild-feeling, upon which syndicalism mainly relies, not merely supplies
no safeguard against this abuse of power, but would almost certainly evoke
it, unless a potent control, representing industry in general, were established
over the individual trades or guilds. Experience of cases where local trade-unions
are occasionally placed in a position of tyranny shows that they will play
for their own hand with a disregard to the interests of their fellow-workers
in other trades as callous as is displayed by any trust of capitalists. Assuming,
then, that it were possible for guild-societies to develop to the point that
the workers in each trade were in possession of all the instruments of production,
and were able to conduct the processes efficiently, the problem of distributing
the 'surplus' among the several trades or guilds, in the shape of pay or
leisure, would still remain unsolved. Among the groups of producers, in a
word, there would remain divergencies of interest, which would be incapable,
upon a producers' policy, of solution. Syndicalists, confronted with this
phase of their problem, plunge into vague assurances that the process of
agreement which had taken place between the workers in the several processes
and the several businesses in a trade, could be extended to the workers grouped
in the larger trade-units, and that the real solidarity of working-class
interests would somehow instinctively express itself in equitable and durable
arrangements. But the moment one passes from the region of phrases to that
of concrete facts the difficulties thicken. An elected council of national
workers would have to devise some practicable method of comparing units of
railway service with units of mining, bricklaying, doctoring, acting, waiting,
etc., so as to apply to each productive process the support and stimulus
needed to induce the workers engaged in it to do their share of work and
to receive their share of wealth. No mere time basis for such competition
would be practicable. It would be necessary to induce a body of labour and
capital to apply itself to each process of each occupation, sufficient in
quantity and in efficiency to supply the requirements of the working community
as a whole, and to devise a mode of remuneration, or distribution of products,
which would satisfy this requirement.
It is quite evident that all this adjustment of the claims and needs of
individuals within a process in a business, of businesses in a trade, of
trades in industry, would need an elaborate hierachy of representative government,
with a supreme legislature and executive, whose will must over-rule the will
of the national or local groups within the several trades, as to the quantity
and method of work to be done in each concrete process, and as to the remuneration
of each sort of work. In other words, society, as a whole, would have imposed
its final control upon each group of workers, diminishing to that extent
their power to determine the conditions under which they would work, and
their effective separate ownership of the instruments of production. The
ideal of the self-governing mine, or factory, or railway would thus be over-ridden
by the superior ideal of a self-governing society. But that self-government
by society, the supreme legislation of industry, could not perform its work
by confining its attention to the various productive processes, and the businesses
and trades in which they were conducted. It would be compelled to study the
wants and will of the consumers, or, if it be preferred, of the workers in
their capacity of consumers. For, only by the study of the consumer, or the
market, could the work of adjusting the application of productive power at
the different productive points, and the process of remuneration by which
that distribution was achieved, possibly be accomplished. Thus, although
the whole body of this syndicalist legislature might have been elected to
represent the interests of separate groups of producers, or trades, it would
be compelled to give equal attention to the wants and the will of the consuming
public. But it would discover that, just in proportion as it was accurately
representative of the separate interests of groups of producers, to that
extent was it disqualified for safe-guarding the interests of the consuming
public, which in each concrete problem would be liable to cut across the
interests of special groups of producers. In other words, it would be impossible
properly to regulate the railway service without direct regard to the interests
of the travelling and trading public as a whole, to regulate the mining industry
without regard to the local, seasonal and other needs of coal consumers.
But these consumers, interests could not be properly considered in a legislature
chosen entirely by separate groups of producers, with the object of promoting
the special interests of these groups. The impossibility of syndicalism thus
turns upon ignoring in the control of business the will of the consumer.
§10. Thus we are compelled to recognise that in a sound social organisation
of the industrial system, and of each part of it, the business, the trade,
(or the group of trades) and the consumer or market must be introduced as
integral factors of government. We cannot content ourselves with the view
that a producer, or any composite body of producers, is necessarily impelled
by its self-interest to safeguard the interests of the consumer. Nor can
the consumer safeguard his interests adequately through the guidance or stimulus
he brings to bear through his separate individual acts of demand. He is incapable
of protecting himself properly, even when producers are not combined but
are competing. When they are combined he is helpless. The cleavages of immediate
economic interest between the worker and the consumer are so numerous that
no abstract identity of interests in a community where all consumers were
also workers, all parasites being excluded, would suffice to secure the requisite
economy and harmony. This economy and harmony can only be secured by giving
the consumer a direct voice in the government of industry.
Syndicalism is in large measure a reaction against forms of state socialism
which are vitiated by a defect similar to that which we find in the Rochdale
cooperative plan. So far as the public services are honestly and efficiently
administered by public officials, the public which these officials represent
is primarily the citizen in his capacity of consumer. The municipal services
are run, either to give him cheap transport or lighting of sound standard
quality, or else to enable him to get police, street-cleaning or some other
service which he could not otherwise have got. But this bureaucratic socialism
is apt to neglect or to ignore the interests of its employees, and to deny
them any influence in determining the conditions of their employment, other
than that which they can bring to bear as citizen-consumers. Thus are found
cases where public departments, or the contractors they employ, are allowed
to pay wages so low or to offer such irregular employment, as to contribute
to that inefficiency and destitution for which the same public is subsequently
called upon to make financial and administrative provision. This is an inevitable
defect of a one-sided or consumers, socialism. Nor is it likely to be remedied
by any general perfunctory recognition of the duty of the public employer
to observe standard conditions. For in most cases public employment will,
by virtue of its monopolistic character, contain features that have no precise
analogy in the outside business world, so that some separate method of determining
the application of standard conditions is necessary. Unless that method admits
direct representation of the interests of the employees, there can be no
sufficient security that these interests shall receive proper consideration.
This is not a demand that the employees shall 'interfere' with the public
management, or 'dictate' the terms of their employment. On the contrary,
it is clear that the official managers must, in the ordinary course of business,
secure the execution of their orders. But, considering that their standpoint
must always be biassed towards a special interpretation of the public interest
in the sense of efficiency and economy of a particular output, this narrower
public interest must be checked by reference to a wider public interest in
which the human costs of production shall be represented. An accumulating
weight of recent experience in various countries makes it evident that state-socialism
must fail unless adequate provision is made for safe-guarding the interest
of particular groups of public employees. This safeguard cannot, of course,
be given by any mere concession of the right of combination and of collective
bargaining. For while collective bargaining may enable the employees to secure
fair terms where they are dealing with competing private businesses, it cannot
where the sole employer is the State or Municipality. The latter is technically
able to impose its terms upon any group of workers who are specialised for
the work it offers. Recognition of the Union, and an admission by the management
of the right of union-officials to consultation and discussion of conditions
of employment, do not really furnish any basis of settlement, though they
may often ease a difficulty and remove misunderstanding. What is required
is a statutory right of appeal to a public authority, outside of and independent
of the particular department, competent to take that wider view of public
interest from which the departmental public official is, by the necessity
of his situation, precluded. That claim of the public employee is frequently
misunderstood. It does not arise from any real or pretended opposition of
interests between the public and a group of its employees, and a claim on
the part of the latter that the public shall make some concession or sacrifice
to their particular group interest. There is no such real opposition of interests.
The valid claim for an appeal from the arbitrary decisions of the public
departmental managers is based upon the fact that the latter are disqualified
for a full impartial view of the public interest, so far as that public interest
is affected by the conditions of employment of the employees under them.
The fact that the employees are often likely to make unreasonable demands
and to claim in wages, hours and other conditions, an excessive share of
the public revenue, does not affect the validity of this contention. For
practical convenience official departmentalism exists. But this departmentalism
involves a business management essentially defective from the standpoint
of public welfare, inasmuch as it tends to depreciate or overlook the interest
which the public has in the total welfare of that section of the public which
is in its direct employment.
§11. Of course, in treating the issue of a public business as if it
consisted simply in reconciling the immediate interests of the consuming
public with those of the public employees, we have intentionally excluded
another view which may often be more important. State socialism may be run
primarily in the interests, neither of the citizen-consumer nor of the employer,
but of the bureaucracy, who here occupy the place of the capitalist-managers
under private enterprise. The official may be held to be naturally disposed
to magnify his office and to abuse any power which can be made to subserve
his personal or class interests. Practical permanency of tenure of his office,
and the special knowledge which it brings, enable him, with safety, either
to neglect his public duties, or to encroach upon the liberties of citizens,
according as he is lethargic or self-assertive. He may squander the resources
of the public upon ill-considered projects, or in serving the private interests
of his friends. Or, he may practice a tyrannical or a niggardly policy towards
his employees, not through a narrow interpretation of public economy, but
from sheer carelessness or from defective sympathy. These charges against
officialism are too familiar to need expansion here. However carefully the
public service is recruited, such abuses will be liable frequently to occur,
and the structure of government should be such as to supply effective checks
and remedies.
NOTES:
1. Adam Smith, by opening his Wealth of Nations with
a dissertation upon the economy of division of labour, without explaining
that this economy rests upon a prior conception of cooperation, unwittingly
assisted to set English Political Economy upon a wrong foundation.
2. Even this measure of working-class progress has been checked during the
last decade. Recent statistics show that in Great Britain and in most other
Western civilised countries, the rise of prices since 1896 and still more
since 1905 has not been attended by a corresponding rise of wages, though
profits and rate of interest have risen at least equally with prices.
3. The ordinary profit-sharing scheme is vitiated, alike in theory and in
practice, by the erroneous attribution of the concept 'profit' to that which
is 'shared.' This is recognised at once when the experiment is properly described.
For the ordinary profit-sharing scheme begins by laying down a normal rate
of wages and of profits, based upon current facts of commerce. The provision
for this standard wage and standard profit constitutes a first charge upon
the takings of the business. Under normal conditions this would absorb the
whole. But the workers are now told that, if they produce an additional income,
they shall have in extra wages half of it. Now the whole of this additional
income is due to the increased efficiency of labour under the new stimulus.
For if any more capital than before is required, provision for its payment
at the normal rate is made before account is taken of the so-called profit
that is shared. No more ability or effort of superintendence is required;
in fact it is usually contended that the greater care taken by the workers
renders less supervision necessary. Thus 'profit' is a misnomer for what
is 'shared.' For this so-called 'profit' is entirely produced by greater
intensity, skill or care on the part of labour. The fact that labour gets
only half, and that only after the whole of what should be called the deferred
'wage-fund' has served to meet any deficiency in the sum required to pay
the normal dividends, explains why most of these schemes fail after a short
trial. The proportion of the extra-product (evoked entirely by the increased
stimulus applied to labour), that is actually paid to labour, is too small
to maintain the efficiency of the stimulus. When these profit-sharing schemes
succeed, the success is nearly always traceable to the fact that in the original
agreement, the benevolent employer has fixed his rate of interest or salary,
or both, upon a lower scale than is current in the trade, so that the stimulus
to labour is effective.
4. Building Societies are only in a very restricted sense cooperative.
5. In 1909 the aggregate sales at the Retail Stores amounted to £70,423,359,
or about 10% of the working-class income, and the profit (including interest
paid on shares) was £10,851,739.
CHAPTER XVII: THE NATION AND THE WORLD
§1. We have examined the chief defects in the structure
of a business and a trade, regarded in the light of instruments of human
welfare, and we have considered some of the remedies, applied sometimes for
purposes of distinctively industrial economy, sometimes as devices of social
therapeutics.
There remains, however, one other mode of economic antagonism deserving
of consideration. Until modern times a nation was to all intents and purposes
not only a political but an economic area, in the sense that almost all trade
and other economic relations were confined within the national limit. The
small dimensions of foreign, as compared with domestic trade, and the nature
of that trade, confined to articles not produced at home, had little tendency
to generate a feeling of international rivalry. Foreign trade was almost
wholly complementary and not competitive. With the modern changes, which
have altered this condition and made nations appear to be hostile competitors
in world commerce, we are all familiar. The development of capitalist production
to a common level and along similar lines in a number of Western nations,
the tendency towards an increase of output of manufactured goods at a price
exceeding the demands of the existing markets, the consequent invasion of
the markets of each industrial country by the goods of other countries, and
the growing competition of the groups of traders in each nation to secure
and develop new markets in the backward countries, with the assistance of
the physical and military forces of their respective governments, have imposed
upon the popular mind a powerful impression of economic opposition between
nations. No falser and more disastrous delusion prevails in our time. The
only facts which seem to give support to it are the Tariffs, Commercial Treaties
and the occasional uses of political pressure and military force by States
for the benefit of financiers, investors, traders or settlers belonging to
their nationality. This intervention of governments for the supposed advantage
of their citizens has had the unfortunate effect of presenting nations in
the wholly false position of rival business firms. Groups of private manufacturers,
traders and financiers, using their government to secure their private profitable
ends, have thus produced grave conflicts of international policy. The worst
instrument of this antagonism, because the most obvious and the most vexatious,
is the protective Tariff, and the most singular proof of its derationalising
efficacy is found in the conduct of our recent fiscal controversy. The fiercest
fight in all that controversy has raged round the relative size, growth and
profitable character of the foreign trade of Great Britain, Germany, America,
etc. These States are actually treated, not merely by Protectionists but
by many Free Traders, as if they were great trading firms, engaged in struggling
against one another for the exclusive possession of some limited economic
territory, the success of one being attended by a loss to the others. Now,
Great Britain, Germany and America are not economic entities at all; they
are not engaged in world commerce, either as competitors or as cooperators;
the respective advances or declines made by certain groups of merchants within
their confines in overseas trade have no net national significance at all.
Finally, overseas trade, by itself, furnishes no index of the collective
prosperity of each nation.
§2. The whole presentation of the case under the head of Nations is
irrelevant and deceptive, conveying, as it is designed to do, the false suggestion
that Englishmen, grouped together as a people, are somehow competing with
germans grouped together as another nation, and Americans as a third nation.
Now no such collective competition exists at all. So far as trade involves
competition, that competition takes place, not between nations, but between
trading firms, and it is much keener and more persistent between trading
firms belonging to the same nation than between those belonging to different
nations. Birmingham or Sheffield firms compete with one another for machinery
and metal contracts far more fiercely than they compete with Germans or Americans
in the same trade, and so it is in every other industry. The production of
import and export figures, and of balances of trade, under national headings,
is a mischievous pandering to the most dangerous delusion of the age.
It has done more than anything else to hide the great and beneficent truth,
that the harmony and solidarity of economic interests among mankind have
at last definitely transcended national limits, and are rapidly binding members
of different nations in an ever-growing network of cooperation. Within the
last generation a more solid and abiding foundation for this cooperation
than ordinary exchange of goods has been laid in the shape of international
finance. Though certain dangerous abuses have attended its beginnings, this
cooperation of the citizens of various countries in business enterprises
in all parts of the world is the most potent of forces making for peace and
progress. More rapidly than is commonly conceived, it is bringing into existence
a single economic world-state with an order and a government which are hardly
the less authoritative because, as yet, they possess a slender political
support. That economic world-state consists of all that huge area of industrially
developed countries in regular and steady intercourse, linked to one another
by systems of railroads and steamship routes, by postal and telegraphic services,
administered by common arrangements, by regular commerce, common markets
and reliable modes of monetary payment, and by partnerships of capital and
labour in common business transactions.
§3. The actuality of this world-system has preceded its conscious realisation.
But the growing fact is educating the idea and the accompanying sentiment
in the minds of the more enlightened members of all civilised nations. We
hear more of internationalism from the side of labour. But, in point of fact,
the corporate unity of labour lags far behind that of capital. For the mobility
of capital is much greater, and its distribution is far better organised.
But, as the financial machinery for the collection and distribution of industrial
power over the whole economic world is further perfected and unified, it
will be attended by a loosening of those local and national bonds which have
hitherto limited the free movement of labour. As the centre of gravity in
the economic system shifts from land, which is immovable, to money, the most
mobile of economic factors, so the old local attachment which kept most labour
fastened to some small plot of the earth, its native village, will yield
place to liberty of movement accommodated to the needs and opportunities
of modern profitable business. Within the limits of each country the increased
mobility has long been evident: it has helped to break up parochialism and
provincialism of ideas and feelings, and to evolve a stronger sense of national
unity. But there is to be no halting at the limits of the nation. Already
large forces of international labour exist. Not merely do vast numbers of
workers migrate with increased ease from Belgium into France, from Russia
into the United States, from Germany into South America, for settlement in
these countries, but large bodies of wage-earners are being organised as
a cosmopolitan labour force following the currents of industrial development
about the world. So far as unskilled labour is concerned, large tracts of
China, India and the Straits Settlements, form a recruiting ground in Asia;
while Italy and Austro-Hungary furnish a large European contingent. But not
less significant are the higher ranks of cosmopolitan labour, the British
and American managers, overseers and workmen in the engineering, railroad,
electrical and mining industries, who to-day are moving so freely over the
newly developing countries of three continents, placing their business and
technical ability at the service of the economic world. The new movements
in the economic development of Asia and of South America will enormously
accelerate this free flow of business ability and technical skill from the
more advanced Western nations over the relatively backward countries, and
will also bring into closer cooperation at a larger number of points the
capital and management of Western peoples.
My object in referring to these concrete economic movements of our time is
to illustrate the powerful tendencies which are counteracting the old false
realisation of industry in terms of human competition and antagonism, and
are making for a conscious recognition of its cooperative and harmonious
character.
CHAPTER XVIII: SOCIAL HARMONY IN
ECONOMIC LIFE
§1. A brief summary of the actual tendencies towards
harmony and discord at present visible in the economic world may be conveniently
presented here.
We see among the fundamental industries the transformation of the structure
of the single business; large numbers of little rivulets of savings from
innumerable separate personal sources merging to form a single body of effective
capital; large numbers of workers closely welded into a single body of effective
labour-power; both operating in normal harmony under the direction of a common
central management, and engaged in the continuous work of turning out a product,
the price of which forms the common income alike for capitalists and workers.
So far as that portion of the dividend is concerned which forms the economically
necessary costs of these masses of capital and labour, there exists a harmony
of interests between the two groups of claimants, which is more clearly recognised
with every improvement of the general standard of intelligence and information.
In most businesses that common area of interest covers by far the larger
part of the business dividend. Where a surplus emerges in excess of these
economic costs, an initial discord arises between the claims of the capital
and labour. But this discord may be resolved in two ways, in each of which
important experiments, attended by a growing measure of success, are being
carried on. Large patches of the area of discord are being reclaimed to order
by the modern State, whose policy is more and more directed to absorbing
by taxation, and applying to the use of the community, great shares of these
business surpluses, as they emerge in incomes and inherited properties. As
regards the surplus which is not so absorbed, the grouped forces of capital
and labour within the business are constantly engaged in seeking to discover
pacific and equitable modes of division which shall reconcile, or at least
mitigate, the remaining opposition. Though this remains at present the sharpest
field of conflict, pacific forces are making more gain than perhaps appears
upon the surface. Some of those industries, where such discords have been
most rife and most wasteful, have been taken over by the State or the Municipality.
In these cases such quarrels as may still arise in connection with the claims
of labour admit of settlement by other means than economic force. In others,
the State intervenes on behalf of public order by assisting to promote processes
of arbitration or conciliation. In others, again, the organisation of the
forces of capital on the one hand, labour on the other, over the whole range
of businesses comprising a national trade, has tended to make actual conflicts
rarer, and presents a machinery capable of application to pacific settlements.
Grave as are the defects in the working of this machinery of Joint Boards,
Sliding Scales, Conciliation and the like, and terrible as are the injuries
these defects cause, they ought not to blind us to a recognition of the fact
that the number of actual conflicts between capital and labour is constantly
diminishing.
§2. This truth is better realised when we turn from the structure of
the business to that of the trade or market. There, though keen and even
cut-throat competition still survives, the tendency is more and more, especially
in the great staple industries where large aggregates of capital and labour
are employed, towards cooperation, combination and trade agreements. If,
for the moment, we ignore the dangers which such combinations often threaten
to consumers, and regard them from the standpoint of trade structure, we
cannot fail to recognise the enormous advance they represent in the cause
of industrial harmony. For whatever the degree of unity attained by such
a Trust, Cartel, Conference, Trade Agreement, Federation, it means pro tanto
a saving of the energy of capital and labour formerly expended upon conflict,
and a concentration of the thoughts and purposes of business men upon the
best performance of the useful functions of production which constitute the
social value of their trade. So long as a trade remains in a distinctively
competitive condition, an enormous part of the actual energy is consumed
not in production but in warfare. The thoughts and wills of the controllers
of the several businesses are deflected from the economical fulfilment of
their social function to conscious rivalry. Neither the capital nor the labour
in each several business enjoys a reasonable measure of security; and not
only the profits but the wages of each firm are jeopardised by the success
of a stronger competing firm. The growing displacement of this condition
of a trade by the principle and practice of combination is perhaps the most
conspicuous movement towards industrial peace. I am aware that, in itself,
this concentration and combination of businesses within a trade afford no
sure settlement for the differences between capital and labour. They may
even aggravate those differences in several ways. For, in the first place,
such combinations are expressly and chiefly designed to produce a larger
quantity of surplus profits, thus stimulating conflict by offering a larger
object of attack to labour. In the second place, such combinations, if at
all complete, may prove more clearly than in any other way the superiority
of organised capital over organised labour in the determination of wages
and conditions of labour. Finally, private ownership of natural resources,
producing for its owners economic rent, remains an unsolved antagonism. Though
the extent to which the 'surplus', which monopolistic, protected or otherwise
well-placed businesses obtain, as open or concealed 'rent', is not capable
of exact estimate, many, if not most, profitable businesses derive some of
their surplus from the possession or control of natural resources. Such natural
resources are to all intents and purposes capital, so far as relates to issues
of conflict between capital and labour. The amount and possibly the proportion
of surplus (taking the whole industrial world into consideration) which is
plain or disguised rent, is probably upon the increase. Even in Great Britain,
though aggregate rents do not keep pace with profits and other incomes derived
from business capital, they probably form an increasing proportion of that
income which, according to our definition, ranks as 'unproductive surplus.'
Though these rents, like other 'unproductive surplus,' could be advantageously
diverted into wages on the one hand, public revenue upon the other, they
are kept on the side of capital by the full force of combination.
Thus the labour in any trade may be confronted by a larger body of wealth
which it would like to secure for higher wages, while at the same time it
finds itself less able to achieve this object.
§3. Equally sharp may be the antagonism of interests set up between
such a combine and the general body of consumers, by means of the control
of prices which the former possesses. For the large surplus, which we see
to be an object of desire to the workers in a combination or trust, represents
to the Consumer an excess of prices. So it comes to pass that the consumer,
unable to combine in his economic capacity, as the workers do in their trade
unions, combines as citizen and calls upon the government to safeguard him
against monopolies. His first instinctive demand is, that such combinations
shall be declared illegal bodies, acting in restraint of trade, and broken
up. But nothing proves more plainly the inherent strength of the cohesive
unifying tendencies than the completeness of the failure to achieve this
object. When business men desire to combine, it is impossible to force them
to compete. The alternatives are, either to leave the consuming public to
the tender mercies of a monopoly, which, from mere considerations of profit,
may not be able to raise its prices beyond a certain limit, or else to impose
legal regulations, or, finally, to buy out the business, transferring it
from a private into a public monopoly.
Wherever the modern State is driven to confront this problem, it is compelled,
in proportion as public opinion is articulate and politically organised,
to fasten an increasing measure of public control upon such powerful combinations,
and to take over into the sphere of State enterprises those which cannot
effectively be controlled. In such ways does modern society seek to heal
the new discords generated by the very processes employed by the several
businesses and trades in their search after an internal harmony.
But the largest forms of capitalistic enterprise will tend more and more
to transcend the limits of any single state, not only in their composition
but in the powers they exercise upon subsidiary industries, and upon the
general body of consumers throughout the industrial world.1 The privately
organised apparatus of economic machinery, which constitutes the fabric of
this economic world-state, has been described as a striking example of the
expansion of industrial solidarity and harmony. But here again the possibilities,
nay, certainties, of new discord between capital and labour, producer and
consumer, cannot be ignored. Hence the great social problems of the future
will to a less and less extent lie within the political competence of single
states or be soluble by the separate action of the governments of those states.
The vast currents of international capital and labour cannot flow without
great disturbances of order and of economic interests often affecting several
nations. The safe, successful, profitable, pursuit of large foreign enterprises
by the capital and labour of persons belonging to many nationalities, will
more and more involve common political action.
§4. We are already beginning to recognise that our State is disabled
for the fully satisfactory solution of some of the most pressing of our social
problems. The immigration of foreign labour complicates our treatment of
sweated industries. The improvement of conditions of labour in our trades
may be rendered more difficult by the admission of sweated imports, or our
feelings may be shocked by the influx of the products of slave labour. The
policy of taxing interests and profits may be thwarted by our inability to
trace the incomes derived from foreign investment and trade. A financial
crisis in America or germany may deplete our gold reserve and work havoc
on our credit. As these movements gather force and frequency, the impotence
of any single State to exercise an effective control over the primary economic
interests of its people will grow more apparent. The gravest social-economic
problems will be found insoluble except by international arrangement. An
era of free conferences and of more or less loose agreements between States
will lay the foundation for what in time must amount to international regulation
of industry. In other words, the economic internationalism, which I have
traced, will weave for itself the necessary apparel of political institutions.
The true germ of world-federation is perhaps to be traced to-day less clearly
at the Hague than at Bern, where the representatives of the leading industrial
nations have already met to set the seal of their respective governments
upon undertakings to promote common policies of legislation in such matters
as the regulation of night labour for women, and the disuse of poisonous
ingredients in the match trade. In such agreements, as in the better-known
Postal Union (which also has its offices at Bern), one finds the earliest
contributions made by modern industrialism to the federal government of the
world.
These facts I cite, partly to enforce the thesis that the tendencies of
modern industry which make for harmony and cooperation are gaining, both
in the smaller and the larger areas, over those which make for discord and
for competition. This growing harmony of fact must tend to evoke a corresponding
harmony of thought and feeling. But here we are retarded by a set of psychological
obstacles which pervert or disguise the truth. I have alluded to the damage
due to the false representation of nations as rival traders, contending for
a limited market upon terms which signify that the gain of one is the loss
of another. But the whole intellectual and moral atmosphere is thick with
similar mistakes of fact and fallacies of reasoning, chiefly sustained by
false phrases which evoke false images and arouse injurious desires and passions.
Ordinary business language is filled with selfish, separatist and combative
phrases, representing trade as a warfare, in which every man must fight for
his own hand, must force his wares upon the public, outwit or bludgeon his
competitors, conquer new markets, beat down the prices of the goods he buys,
or in finance become a 'bull' or a 'bear.' In certain large departments of
the business world there still remains so much disorder, insecurity and competition
as to afford support to these combative views and feelings. But they are
no longer representative of the main normal activities of industry, and they
ought and must by degrees be displaced by views and feelings accommodated
to the more organic conception. It is an important task of economic science
to enforce conceptions of the operation of economic laws which will support
these newer and sounder views and feelings. For only with this growing recognition
of the social harmony represented by industry can the social will be nourished
that is necessary to support and further it. So long as the ordinary business
man or worker has his eyes, his mind, his heart and will, glued to the tiny
patch of industry to which his own directly personal effort is applied, the
pulse of humanity beats feebly through the system of industry. But let the
ordinary education of every man and woman impose clear images of this economic
order as a great human cooperation in which each bears an essential part,
as producer, consumer and citizen, the quickened intelligence and sympathy
will respond, so that the blind processes of cooperation will become infused
and strengthened by the current of a conscious will.
NOTES:
1. The foremost example of such organisation in a great staple industry is the International Iron & Steel Association, formed in July 1911 by representatives of Austria, Belgium, Canada, France, Germany, Great Britain, Hungary, Russia, Spain, United States. The objects of this organisation were to regulate production, so as to control profitable prices and to prevent undercutting in times of depression. (Cf. Chiozza-Money, Things that Matter, Ch. XI).
CHAPTER XIX: INDIVIDUAL MOTIVES TO SOCIAL SERVICE
§1. Our examination of the existing industrial system
discloses certain discords of interest and desire between the owners of the
several factors of production, on the one hand, between producers and consumers
on the other. Among the owners of factors of production the sharpest antagonisms
are those between the capitalist employer and the wage-earner, and between
the landowner and the owners of all other factors. Except as regards the
ownership of land, these antagonisms are not absolute but qualified. The
interests of capital and labour, of producer and consumer, march together
up to a certain point. There they diverge. These discords of interest materialise
in what we term 'the surplus,' that portion of the product which, though
not essential to the performance of the economic process, passes to capital,
labour or the consumer, according to the economic strength which natural
or artificial conditions assign to each. The humanisation and rationalisation
of industry depend, as we recognise, upon reforming the structure of businesses
and industries, so as to resolve these discords, to evoke the most effective
cooperation, in fact and will, between the several parties, and to distribute
the whole product, costs and surplus, among them upon terms which secure
for it the largest aggregate utility in consumption. The operation of industry
upon this truly and consciously cooperative basis, would, it is contended,
evoke increased productive powers, by bringing into play those instincts
of mutual aid that are largely inhibited by present methods, and by distributing
the increased product so as to evoke the highest personal efficiency of life
and character.
But it would be foolish to ignore the doubts and objections which are raised
against the spiritual assumption upon which this ideal of human industry
is based. It is often urged that man is by nature so strongly endowed with
selfish and combative feelings, so feebly with social and cooperative, that
he will not work efficiently under the reformed economic structures that
are proposed. He must be allowed free scope to play for his own hand, to
exercise his fighting instincts, to triumph over his competitors, and to
appropriate the prizes of hazard and adventure, the spoils attesting personal
force and prowess, or else he will withhold the finest and most useful modes
of his economic energy.
The distinctively spiritual issue thus raised is exceedingly momentous.
Suppose that the business life can be set upon what appears to be a sound
and equitable basis, is human nature capable of responding satisfactorily
to such an environment? Putting it more concretely, are the actual powers
of human sympathy and cooperation capable of being organised into an effective
social will? This issue is seen to underlie all the doubts and difficulties
that beset the proposals to apply our organic Law of Distribution for purposes
of practical reform. All proposals by organised public effort to abolish
destitution give rise to fears lest by so doing we should sap the incentives
to personal effort, and so impair the character of the poor. Among such critics
there is entertained no corresponding hope or conviction that such a policy
may, by the better and securer conditions of life and employment it affords,
sow the seeds of civic feeling and of social solidarity among large sections
of our population whose life hitherto had been little else than a sordid
and unmeaning struggle. Proposals to secure for public use by process of
taxation larger shares of surplus wealth are met by similar apprehensions
lest such encroachments upon private property should impair the application
of high qualities of business and professional ability. The growing tendency
of States and Municipalities to engage in various business operations is
strongly and persistently attacked upon the ground that sufficient public
spirit cannot be evoked to secure the able, honest management and efficient
working of such public concerns.
Finally, the whole basic policy of the Minimum Wage and the Maximum Working-day
is assailed on the same ground as a levelling down process which will reduce
the net productivity of industry and stop all economic progress.
§2. To such criticism two replies are possible, each valid within its
limits. The first consists in showing that the existing business arrangements
are extremely ill-adapted for offering the best and most economically effective
stimuli to individual productivity. They are not well-directed to discover,
apply, and improve the best and most profitable sorts of human ability and
labour. In other words, the actual system for utilising selfishness for industrial
purposes is wofully defective: nine-tenths of the power remains unextracted
or runs to waste.
Those who rely upon this criticism base their reform policy upon the provision
of better economic opportunities and better personal stimuli to individuals.
But such reforms will not suffice. What is needed above all is a social soul
to inhabit the social body in our industrial system. A conscious coordinating
principle -- an industrial government, in which the consent of the governed
shall be represented in their several wills and consciousness as well as
in some central organic control -- is to be desiderated. Now is this condition
of thought and of desire really attainable? Can we really suppose that any
sort of education is likely to arouse and maintain in the rank-and-file of
employees either in the public services or in the great private industries
a sense of public duty and a realisation of the larger industrial harmony,
which will compensate in any appreciable measure for the dulness and drudgery
of their particular job, and furnish an effective check upon shirking or
slacking? Suppose that a salary basis of payment, a shortened work-day and
security of tenure, with adequate insurance against economic mishaps, had
been obtained in all regular occupations, would the quickened sense of cooperation
yield a productive energy adequate to the requirements?
To this question it must, I think, be frankly answered, that we cannot tell.
We have no sufficient data for a confident reply. The general reply of business
men and of economists would, I think, be in the negative. It would be urged
that the greater part of the routine work of industry will always remain
so dull and tiresome, the sense of public duty so weak and intermittent,
that the fixed salary basis of remuneration will not prove an adequate incentive
for the required amount of human effort.
The experience of existing social services would be adduced in support of
this judgment. Public employees, it is complained, work with less energy
than private employees; there is more slacking and scamping and more malingering;
the 'government stroke' has become a by-word. The dignity of social service
does not evoke any clear response in the breast of the employee. Such is
the complaint. It is probably not ill-founded. The great mass of public employees
are certainly not animated by much conscious pride and satisfaction in rendering
social service. But, before registering a final judgment upon such evidence,
certain qualifying considerations must be taken into account.
The attitude of a worker towards his work will be strongly affected by the
prevailing attitude of those around him. So long as the general economic
environment is one in which the interests of employer and employed are represented
as antagonistic, similar ideas and sentiments will continue to affect the
feelings of public servants. They will not realise that they are working
for themselves in working for society of which they are members: they will
treat the department for which they work rather as an alien or a hostile
body, bent upon getting as much out of them and giving as little as possible.
It is just here that we touch the most sensitive spot in the psychology of
government, the best recognised defect of bureaucracy. The higher officials,
who control and manage public businesses, evoke in the rank-and-file of the
public employees very much the same sentiments of estrangement or opposition
that prevail in most private businesses between employer and employee. For
in point of fact, the temper and mental attitude of higher officials are
those of a master in his own business, not those of a public servant. That
affects their dealings not only with the rank-and-file in their department,
but with the outside public. In a so-called democracy, where the highest
as well as the lowest officers of state are paid by the people to do work
for the people, no method of effective popular control over the official
services has yet been devised. The absence of any such control is clearly
recognised by all high officials, and it powerfully influences their mind
and their behaviour. Uncontrolled, or insufficiently controlled power, of
course, affects differently different types of men. It induces slackness
and the adoption of a slow conservative routine in those of torpid disposition.
Men of arbitrary temper will be led to despotic treatment of their staff.
Men of brains and enterprise will be free to embark upon expensive enterprises,
to the gain or loss of their paymasters. But in no case does the actual situation
favour the permeation of the public service by a full sense of social cooperation
and joint responsibility. High officials may and often do exhibit great energy
and disinterested zeal in the public service. But the sense of mastery, both
in relation to the lower grades of employee and to the public, is always
discernible. They have this power and they know it. Until, therefore, the
sense of public service can be made a reality among the higher public officers,
no true test of the efficacy of the general will is to be obtained. This
reformation of Bureaucracy is the chief crux of modern democracy. For unless
some mode is found of expelling from the higher public servants the pride
of caste, and of keeping them in sympathetic contact with the general current
of popular feeling, the mass of the subordinate employees will not respond
to the social claim upon their economic energies.
Finally, the familiar criticism of the inefficiency of public employees
in this country does not take proper account of conditions of employment.
For while the top grade of officials is paid more handsomely and enjoys more
dignity and security than in other countries, the lower grades are often
subject to conditions of pay, hours and tenure, not appreciably better than
those prevailing in the ordinary labour-market. Until these conditions are
improved, it may reasonably be contended that the dignity of public service
cannot be expected to furnish an effective economic motive.
If, however, increased security of life and livelihood could be obtained
for the people, with such improvement of our educational system as provided
adequate opportunities for enabling the children of the poorer classes to
enter all grades of the public services, the beginnings of a great change
in the spirit of those services might be attained. For, if the wide gaps
of dignity and of emoluments, which divide at present the higher from the
lower grades, could be reduced, while at the same time effective publicity
and criticism could be brought to bear upon all departments of public work,
the 'bureaucratic state' might be transformed into something more nearly
approaching a self-governing society.
§3. The cool practical business men will, however, probably insist
that none of these devices for improving education and for stimulating public
spirit will enable a public department to get out of its employees so large
an output of productive energy as can be secured by the stimuli of private
profit-seeking enterprise. And this may possibly be true. But those who have
accepted the general lines of our analysis will recognise that such an admission
is not fatal to the case for salaried employment and public service. For
the private business is primarily concerned with one side of the human equation,
the product, and is able in large measure to ignore the human costs involved
in getting it. But the State, as representing the human welfare of its members,
must take the costs into account as well. An intelligent Society would regard
it as a foolish policy to attempt to get out of its employees the amount
of daily toil imposed under the conditions of most profit-making businesses.
While, therefore, it is true that a public service, run upon an adequate
basis of fixed salary and short work-day, would stand condemned, if the output
of effective energy per man fell greatly below that furnished under the drive
of ordinary capitalism, a slight reduction of that output might be welcomed
as involving an actual gain in human welfare. The diminished utility of the
product might be more than compensated in terms of human welfare by the diminished
human cost of the productive process.
It is not, therefore, incumbent upon the advocates of a new industrial order,
based upon a closer application of the organic law, to show that such an
order will yield at least as large an output of economic energy and economic
product as can be got out of the mixed competition and combination which
prevail at present. Applying this standard of human valuation, they are entitled
to set off against any reduction of purely economic stimuli that may ensue
from their reforms, not only the relief in human costs which accompanies
such reduction but the enlargement of other human gains.
For, though in this endeavour to value industrial activities and products
in terms of human welfare, we have for the most part confined ourselves to
the human costs and utilities directly connected with the processes of economic
production and consumption, we cannot ignore the wider meaning of these processes.
Man lives not by bread, or economic goods, alone, but by 'admiration, hope
and love.' Though the various non-economic goods and activities do not directly
enter into our human valuation of industry, we cannot neglect the interactions
between the economic and the other human interests involved in the organic
nature of man and of society.
§4. The wider problem of human economy, the employment of all human
powers for human welfare, must in fact involve a continual readjustment between
the respective claims of the economic and the non-economic activities upon
our lives. Most thoughtful critics of our age complain that this adjustment
is defective in that business bulks too largely in our lives. They consider
that our modern command over the resources of nature for the satisfaction
of our wants ought to issue not so much in the larger supply of old, and
the constant addition of new economic wants, as in the increased liberation
of human powers for other modes of energy and satisfaction. There exist whole
countries even in our time, such as China, where population lies so thick
upon the earth, and where the arts of industry remain so primitive, that
virtually the whole vital energy of the people must be absorbed in the economic
processes. This is not our case. With our improving arts of industry and
our dwindling growth of population, we can afford to give an increasing share
of our interests and energies to the cultivation and enjoyment of intellectual
and moral goods. The gradual realisation of this human economy is the best
measure of our civilisation. Our greatest impediment in this progress is
the superstitious and excessive value put by all classes of our people upon
industry and property. This is almost identical with a charge of materialism,
for economic values centre round material forms of property. 'Getting and
spending we lay waste our powers.' This is a literal statement of our bad
economy. Until we can, as a nation, throw off the dominion of the economic
spirit, we cannot win the spiritual liberty needed for the ascent of man.
So long as we stand, for full six-sevenths of our time and more, with hands
and eyes, intelligence and will, dedicated to the service of industrialism,
we cannot see, much less realise, better ideals of humanity. Absorbed in
earning a livelihood, we have no time or energy to live.
Such sentences as these, I am well aware, have become commonplaces, and
such wisdom as they contain has so become almost impotent. This drawing of
the fangs of truth by reducing it to truisms is one of the most serious obstacles
to intellectual and moral progress. From the time of Wordsworth to the present
day our wisest teachers have demanded that industry and property shall be
put in their right places as servants, not masters, of men, and that our
conquest over nature shall be attended by a liberation of all sorts and conditions
of men from the tyranny of matter. In no adequate degree has this liberation
been achieved. The iron of industrialism has entered so deeply into our souls
that we are loth to use our liberty. Why is this so?
Man is a spiritual as well as a material being. His ascent in civilisation
implies an increasing satisfaction of his spiritual needs. In this higher
life economic processes and market values play a diminishing part. How comes
it, then, that the vast economies of modern industry have done so little
to release us from the bondage of the economic system? Why have industry
and property retained so dominant a grasp upon our thoughts and feelings,
continually checking our aspirations to the higher life, continually encroaching
on the time and energy which by rights would seem to belong to that life?
§5. The true answer to these questions is not difficult to find. We
have sketched a growing order, harmony and unity, of industrial life, concerned
with the regular supply of economic needs for mankind. Were such an order
effectively achieved, in accordance with the rational and equitable application
of our human law of distribution, the economy of industrial processes would
be accompanied by a corresponding economy of thought and emotion among the
human beings engaged in this common cooperation. This social economy demands,
as we have seen, the substitution of social welfare for private profit as
the directing motive throughout industry. But it does not imply a completely
socialistic system in which each productive process is under the direct and
exclusive control of Society. For that assertion of absolute unity would
contain a denial of the manifoldness of desire and purpose involved in the
very concept cooperation. Scope must remain, in the interests of society
itself, for the legitimate play of individuality. The well-ordered society
will utilise the energies of egoism in fruitful fields of individual activity.
The human ego will always seek a directly personal self-expression in the
free exercise of artistic instincts and other creative or adventurous activities
that yield the glory of achievement.
These primarily self-regarding impulses are made socially profitable by
allowing them free expression in these fields. The attempt to regulate and
direct these impulses and their productive activities would be disastrous.
This play of unfettered personality in the fine arts, in literature, in the
unsettled and experimental section of each profession and each trade, must
be conserved, not as an inherent right of individuals but as a sound social
economy. For the distinction between these free creative activities and the
ordinary run of routine work in the trade and professions is fundamental.
It is not that the former, the free unorganised activities, are not as truly
social as the latter in their ultimate significance and worth. But their
social value is best secured by leaving them to the stimuli of personal interests.
The creative activities, including all work which pleasure, interest, surprise
or personal pride, cause to be desired upon its own account, need no social
compulsion to evoke them. Their product is the free gift which the individual
makes to the commonwealth out of the riches of his active personality. As
their cost to him is more than compensated by the pleasures of creation,
he will contribute them freely to the service of mankind. But even if a coarser
streak of selfishness causes the creative artist, poet, inventor, discoverer,
to claim some large share of the marketable value of his product for himself,
it will better serve society to pay him his price, than to attempt to 'organise'
creation on a public basis. Such sufficient material rewards of genius or
high talent, if they are really necessary to evoke the creative activity,
must rightly be considered 'costs' rather than 'surplus.' There will remain
a margin of such unfettered private enterprise, not only in the fine arts
and the learned professions, where the creative mind seems most in evidence,
but at the growing point of every living industry. For the distinction between
creation and imitation or routine, as we have seen, cannot be applied in
a wholesale way to entire trades and occupations. Budding and experimental
industries, involving large application of inventive and constructive energy,
appealing to new and uncertain tastes, carrying heavy risks of capital and
reputation, are better left to individual enterprise. The same industries,
settled on established lines, with smaller risks and smaller opportunities
of useful change, will properly pass under direct social control. It is hardly
conceivable that the development of the motor-car and the aeroplane could
have been so rapid, if these industries had been at the outset claimed as
State monopolies and official experts had alone been set to operate them.
The injurious retardation of electric lighting and transport in this country
by the legal shackles imposed upon them has been a striking testimony to
the social harm done by premature application of social control to an industry
in its early experimental stage.
On the other hand, it is equally foolish to exclude from effective social
regulation or state organisation entire professions, such as teaching, law,
or medicine, on the ground that they are essentially 'creative.' For they
are not. The very name profession implies the adoption of prescribed and
accepted methods for dealing with large ordinary classes of cases, that is
to say routine procedure. Though, as we recognise, such procedure may never
reach the same degree of mechanical routine as prevails in ordinary processes
of manufacture, the common factors may be so predominant as to bring them
properly under the same public regimen. Though, for example, class-teaching
will always carry some element of originality and personal skill, a true
regard for public interests establishes close public control of curriculum
and method in those branches of instruction in which it is convenient to
give the same teaching to large numbers of children at the same time. In
education, as in medicine and in every other skilled calling, there are grades
of practice rightly classed as regular or routine. Where it is important
for members of the public to be able to obtain such services, in reliable
qualities upon known and reasonable terms, effective social control of them
must be secured. For, otherwise, a power of private tyranny or of extortion
or neglect is vested in the producers of such services. The inadequate public
control over the medical and legal services in this country is raising a
crop of grave practical problems for early solution.
So in every industry or occupation the relatively routine work requires
direct social organisation while the preponderantly creative work should
be left to 'private' enterprise. The former class contains the great bulk
of those industries which, concentrated in large businesses for the profitable
supply of the prime needs and conveniences of ordinary men and women, breed
combinations and monopolies. Whereas in the creative industries there exists
a natural harmony of interests between producer and consumer that will secure
to society the best fruits of individual effort, this is not the case in
the routine industries. There the operation of the human law of distribution
can only be secured by direct social organisation. Only thus can excessive
private surplus, involving a tyranny over labour on the one hand, the consumer
on the other, be prevented. In no other way can the main organs of industry
be infused with the human feelings of solidarity and cooperation essential
to the stability and progress of social industries.
§6. For to this vital point we must return. The substitution of direct
social control for the private profit-seeking motive in the normal processes
of our industries is essential to any sound scheme of social reconstruction.
For not otherwise can we get the social meaning of industry represented consciously
in the cooperative will of the human factors of production. It is not too
much to say that the pace of civilisation for nations, of moral progress
for individuals, depends upon this radical reconstruction of common industry.
For the existing structure of ordinary business life inhibits the realisation
of its social meaning by the stress it lays upon the discordant and the separatist
interests. The struggle to keep or to improve one's hold upon some place
in the industrial system, to win a livelihood, to make some gain that involves
a loss to someone else, derationalises the intelligence and demoralises the
character of all of us.
This derationalisation and demoralisation are seen to be rooted in the defective
structure and working of industrialism itself.
If industry were fairly apportioned among all, according to the capability
of each, if Property were allotted to each according to his needs, by some
natural process of distribution as regular and certain as the process of
the planets, persons would not need to think or feel very keenly about such
things as Industry and Property: their intellects and hearts would be free
for other interests and activities.
But the insecurity, irregularity and injustice of economic distribution
keep Industry and Property continually in the foreground of the personal
consciousness.
Here comes into terrible relief the moral significance of the unearned Surplus
the term which gathers all the bad origins of Property into the focus of
a single concept.
At present much industry is conducted, much Property is acquired, by modes
which are unjust, irrational and socially injurious. Legal privilege, economic
force, natural or contrived scarcity, luck, personal favour, inheritance
-- such are the means by which large quantities of property come to be possessed
by persons who have not contributed any considerable productive effort to
their making.
Such property stands in the eye of the law, and in the popular regard, upon
precisely the same footing as that owned by those who have earned it by the
sweat of their brow, or the effort of their brain. The failure of so many
thoughtful men and women to appreciate the vital bearing of the issue of
origins upon the validity of property is the supreme evidence of the injurious
reactions of the present property system upon the human mind. The crucial
moral fallacy which it evokes is the contention, seriously put forth by certain
social philosophers, as well as by social reformers, that property acquired
in the ways I have just indicated is validated in reason and morality by
the good uses to which it may be put by its owners. Mr. Carnegie and Mr.
Rockefeller have seriously propounded the theory that certain individuals
are endowed by nature or by circumstances with the opportunity and power
of accumulating great wealth, but that their wealth, though legally their
private property, is rightly to be regarded by them as a 'social trust' to
be administered by them for the benefit of their fellow-men. It seems to
them a matter of indifference that this wealth is 'unearned,' provided that
it is productively expended. So fragments of profits, earned by sweating
labour or by rack renting tenants, are spent on pensions, public hospitals
or housing reform. Fractions of the excessive prices the consuming public
pays to privileged transport companies or 'protected' manufacturers are given
back in parks or universities. Great inheritances, passing on the death of
rich bankers, contractors or company promoters, drop heavy tears of charity
to soften the fate of those who have failed in the business struggle. Fortunes,
gained by setting nation against nation, are applied to promote the cause
of international peace. This humor is inevitable. Unearned property can find
no social uses more exigent than the application of charitable remedies to
the very diseases to which it owes its origin. So everywhere we find the
beneficiaries of economic force, luck, favour and privilege, trying to pour
balm and oil into the wounds which they have made. The effect of the process,
and what may be called its unconscious intention, is to defend the irrationality
and injustice of these unearned properties by buying off clear scrutiny into
their origins. Sometimes, indeed, the intention attains a measure of clear
consciousness, as in the cases where rich men or firms regard the subscriptions
given to public purposes as sound business expenditure, applying one fraction
of their gross profits to a propitiation fund as they apply another to an
insurance fund.
§7. The radical defect of this doctrine and practice of the 'social
trust' is its false severance of origin from use. The organic law of industry
has joined origin and use, work and wealth, production and consumption. It
affirms a natural and necessary relation between getting and spending. A
man who puts no effort into getting, a rent-receiver, cannot put well-directed
effort into spending. He is by natural proclivity a wastrel. A man who is
purely selfish in his getting, as the sweater, gambler, or monopolist, cannot
be social in his spending. The recipient of unearned income is impelled by
the conditions of his being to a life of idleness and luxury: this is the
life he is fitted for. He is unfitted for the administration of a social
trust.
These obvious truths, so fatally neglected, are no vague maxims of revolutionary
ethics, but are firmly rooted in physical and moral fact. We have seen that
there is throughout organic life a quantitative and qualitative relation
between function and nutrition, each being the condition of the other. He
who does not eat cannot work; he who does not work cannot eat. It is true
that the latter law works less directly and less immediately than the former.
Parasitism, individual or social, continues to exist to many walks of life.
But it never thrives, it always tends to degeneration, atrophy and decay.
Normally, and in the long run, it remains true that 'Whosoever will not work,
neither can he eat.' If then the recipiency of unearned wealth, parasitism,
disables the recipient from putting his 'property' to sound personal uses,
is it likely that he can put it to sound social uses? Though abnormal instances
may seem, here as elsewhere, to contravene the natural law, it remains true
that the power of individual earning, not merely involves no power of social
spending, but negates that power. It might even be contended that there will
be a natural disposition in the recipient of unearned wealth to spend that
wealth in precisely those ways in which it injures most the society he seeks
to serve. This is probably the case. It is more socially injurious for the
millionaire to spend his surplus wealth in charity than in luxury. For by
spending it on luxury, he chiefly injures himself and his immediate circle,
but by spending it in charity he inflicts a graver injury upon society. For
every act of charity, applied to heal suffering arising from defective arrangements
of society, serves to weaken the personal springs of social reform, alike
by the 'miraculous' relief it brings to the individual 'case' that is relieved,
and by the softening influence it exercises on the hearts and heads of those
who witness it. It substitutes the idea and the desire of individual reform
for those of social reform, and so weakens the capacity for collective self-help
in society. The most striking testimony to the justice of this analysis is
furnished by the tendency of 'model millionaires' to direct all their charity
to wholesale and what they deem social purposes, rather than to individual
cases. In order to avoid the errors of indiscriminate charity, they fasten
their munificence upon society in the shape of universities, hospitals, parks,
libraries and other general benefits. Realising quite clearly, as they think,
that the character of an individual is weakened and demoralised by a charitable
donation which enables him to get what otherwise he could only have got by
his personal exertion, they proceed to weaken and demoralise whole cities
and entire nations, by doing for these social bodies what they are quite
capable of doing for themselves by their own collective exertions. These
public gifts of millionaires debauch the character of cities and states more
effectively than the private gifts of unreflecting donors the character of
individuals. For, whereas many, if not most, of the private recipients of
charity are victims of misfortune or of lack of opportunity, and are not
fully responsible for the evil plight in which they stand, this is not the
case with an organised self-governing community, a City or a State. Such
a society is able, out of its own resources, if it chooses to secure and
use them, to supply for itself all its own legitimate needs. It has a far
larger self-sufficiency for meeting all ordinary emergencies and for following
an economy of self-development and progress, than has the individual citizen.
For it can supply its needs out of the social income which its collective
life is constantly assisting to produce, out of that very surplus which,
wrongly allowed to flow, unearned, into the coffers of rich individuals,
is the very fund used for this debasing public charity.
§8. The clear recognition of these truths is closely germane to our
central consideration in this chapter, viz., the question whether there can
be evoked in the common consciousness a flow of true social or cooperative
feeling strong and steady enough to evoke from individual citizens a sufficient
voluntary efficiency in production. No absolutely convincing answer to the
question is at present possible. But, if any such experiment is to be tried
hopefully, it can only be done by setting Property upon an intelligible moral
and social basis, so that it passes into the possession of him to whom it
is really 'proper', in the sense that he has put something of himself into
its making. Only by resolving unearned into earned income, so that all Property
is duly earned either by individuals or by societies, can an ethical basis
be laid for social industry. So long as property appears to come miraculously
or capriciously, irrespective of efforts or requirements, and so long as
it is withheld as irrationally, it is idle to preach 'the dignity of labour'
or to inculcate sentiments of individual self-help.
When all Property is visibly justified, alike in origin and use, the rights
of property will for the first time be respected, for they will be for the
first time respectable. To steal, to cheat, to sweat, to cadge or beg, will
be considered shameful, not because the law forbids, but because such acts
will be felt by all to be assaults upon the personality of another. For the
first time in history, also, the tax-dodger, the contractor who puts up his
price for public works, the sinecurist, the jobber, the protectionist and
other parasites upon the public purse, will receive the general reprobation
due to robbery. For when the State is recognised as having rights of property
identical in origin and use with those of individual citizens, that property
will claim and may receive a similar respect. Property, in a word, becomes
a really sacred institution when the human law of distribution is applied
to the whole income, surplus as well as costs. Such inequalities in income
as survive will be plainly justified as the counterpart of inequality of
efforts and of needs. The wide contrasts of rich and poor, of luxury and
penury, of idleness and toil, will no longer stagger the reason and offend
the heart.
So the standard of sentimental values which affects the conventional modes
of living of all classes -- largely by snobbish imitation and rivalry --
will be transformed.
Ostentatious waste and conspicuous leisure, with all their injurious reactions
upon our Education, Recreation, Morals, and AEsthetics, will tend to disappear.
The illusory factor of Prestige will be undermined, so that the valuations,
both of productive activities and of consumption, will shift towards a natural,
or rational, standard.
§9. Not merely will the wide gulf which severs mental from manual workers
disappear, but all the elaborate scale of values for different sorts of intellectual
and manual work would undergo a radical revision.
The effect of setting on a human basis the industry of the country would,
of course, react upon all other departments of life, Religion, Family and
Civic Morality, Politics, Literature, Art and Science. For though economics
alone cannot mould or interpret history, the distinctively economic institutions
of Industry and Property have always exercised a powerful, sometimes a dominant
influence, upon other institutions. The reformation of economic life must,
therefore, produce equally beneficent effects upon all other departments
-- transforming their standards and feeding the streams of their activities
with new thoughts and feelings, drawn no longer from the minds of a little
class or a few original natures, but from the whole tide of human life flowing
freely along every channel of individual and social endeavour.
The security and rationality of the economic order will give to all that
confidence in man, and that faith in his future, which are the prime conditions
of safe and rapid progress. For the brutal and crushing pressure of the economic
problem in its coarsest shape -- how to secure a material basis of livelihood
-- has of necessity hitherto absorbed nearly all the energy of man, so that
his powers of body soul and spirit have been mainly spent on an unsatisfactory
and precarious solution of this personal economic problem. Religion, politics,
the disinterested pursuits of truth or beauty, have had to live upon the
leavings of the economic life.
An economic reformation which, by applying the human law of distribution,
absorbs the unproductive surplus, would thus furnish a social environment
which was stronger and better in the nourishment and education it afforded
to man. Every organ of society would function more effectively, supplying
richer opportunities for healthy all-round self-development to all. So far
as the economic activities can be taken into separate consideration, it is
evident that this justly-ordered environment would do much to raise the physical,
and more to raise the moral efficiency of the individual as a wealth-producer
and consumer. But its most important contribution to the value and the growth
of human welfare would lie in other fields of personality than the distinctively
economic, in the liberation, realisation and improved condition of other
intellectual and spiritual energies at present thwarted by or subordinated
to industrialism.
CHAPTER XX: THE SOCIAL WILL AS AN ECONOMIC FORCE
§1. To secure by education and reflection such a revaluation
of human activities, aims and achievements, as will set economic processes
and products in a definitely lower place than that which they occupy at present,
is, I think, essential to safe and rapid progress. For the early steps towards
a better industrial order will very likely involve some economic sacrifice,
in the sense of a reduced output of personal energy and of wealth-production
on the part of the average member of society. Although this loss may be more
than compensated by the elimination of large wastes of competition and by
improved organisation, we are not warranted in assuming that this will at
once take place.
We need not assume it. For even if we do not, our analysis has shown that
an economic system, thus working at a lower rate of human costs, and turning
out a smaller quantity of goods, may nevertheless yield a larger quantity
of human welfare, by a better distribution of work and product. But the great
gain, of course, will consist in the increased amount of time, interest and
energy, available for the cultivation of other human arts outside the economic
field. Upon the capacity to utilise these enlarged opportunities the actual
pace of human progress in the art of living will depend. At present this
capacity may seem small. The increased opportunities of leisure, travel,
recreation, culture, and comradeship, which have come in widely different
degrees to all classes, have often been put to disappointing uses. But a
great deal of such waste is evidently attributable to that prevailing vice
of thought and feeling which the domination of industrialism has stamped
upon our minds, the crude desires for physical sensations and external display.
Not until a far larger measure of release from our economic bonds has been
acquired, shall we enjoy the detachment of mind requisite for the larger
processes of revaluation and realisation.
§2. One word remains, however, to be said upon the all-important subject
of motives and incentives. We have seen that, in so far as it is possible
to displace the competitive system of industry, with its stimulation of individual
greed and combativeness, by a more consciously cooperative system, the will
of the individual engaged upon industrial processes will be affected in some
measure by the social meaning of the work he is doing, and will desire to
forward it. The efficacy of this social will is not, however, adequately
realised so long as it is regarded merely as a feeling for the public good
originating from a number of separate centres of enlightened personality.
The growing recognition on the part of individual workers, that the structure
of society establishes a strong community of interests, will no doubt supply
some incentive to each to do his fair share to the necessary work. But this
personal incentive may not go very far towards overcoming the selfishness
or sluggishness of feebler personalities. If, then, the social will be taken
merely to mean the aggregate of feeling for the public good thus generated
in the separate wills, it may not suffice to support the commonweal. But
if our organic conception of society has any validity, the social will means
more than this addition of separately stimulated individual wills. The individual
soldier may have a patriotic feeling expressing his individual love of his
country, which has a certain fighting value. But, as his attachment to his
profession grows, another feeling of wider origin and more enduring force
fuses with the narrower feeling, enhancing greatly its effectiveness. That
feeling is esprit de corps, a corporate spirit of the service, capable of
overcoming personal defects, the cowardice, apathy or greed of the individual,
and of evoking an enormous volume of united effort. I have no intention of
suggesting that the routine of ordinary industry can yield scope for displays
of this esprit de corps comparable in intensity with the dramatic examples
of great military achievements. But I do affirm that every conscious corporate
life is accompanied and nourished by some common consciousness of will and
purpose which feeds and fortifies the personal centres, stimulating those
that are weaker and raising them to a decent level of effort, reducing dissension,
and imparting conscious unity of action into complex processes of cooperation.
The power of this social will as an economic motive-force ought not to be
ignored. As the processes of industrial cooperation grow closer, more numerous,
more regular in their operation, this cooperation and coordination, representing
a unity of will and purpose far transcending the vision and the purpose even
of the most enlightened and altruistic member, will form a powerful current
of industrial consciousness, influencing and moulding the will and purposes
of individuals.
Such a force, emanating from the social whole, will of necessity not be
clearly comprehensible to the individuals who feel its influence and respond
to it. They are the many, while it flows from their union, which must always
be imperfectly mirrored in the mind of each. Yet this direct social will
only works through its power to stimulate and direct the will of each, so
as to produce a more effective harmony. Vague theory this will seem to some,
utterly remote from the hard facts of life! The problem is how to induce
public or other salaried employees to do a fair day's work, when they might
shirk it without loss of pay. Well, we suggest that when that fair day's
work is not unduly long or onerous, when it is fairly paid, and when each
sees that all the others are called upon to do their proper share, the general
sense of fairness in the arrangement will come to exercise a compelling influence
on each man to keep his output up to a decent level. This power of the social
will has never yet been tested. For a society with arrangements based on
manifest principles of justice and reason has never yet been set in operation.
But though our organic law of distribution may never attain a perfect application,
so far as it is applied it may surely be expected to act in the way here
described, appealing to the springs of honour, equity, comradeship and respect
for public opinion, with a force immeasurably greater than is possible in
a system of industry and property where reason and fair play in the apportionment
of work and its rewards are so imperfectly apparent.
§3. These conditions of organic welfare in the apportionment of work
and wealth do not imply a conception of industrial society in which the individual
and his personal desires and ends are impaired or sacrificed to the interests
of the community. They do imply a growth of the social-economic structure
in which the impulses of mutual aid, which from the earliest times have been
civilising mankind, shall work with a clearer consciousness of their human
value. As the individual perceives more clearly how intimately his personal
efforts and effects are, in process and in product, linked with those of
all the other members of society, that perception must powerfully influence
his feelings. He will come consciously to realise his personal freedom in
actions that are a willing contribution to the common good. This consciousness
will make it more difficult for him to defend in himself or others economic
conduct or institutions in which individual, class or national conflicts
are involved. Thus a better social consciousness and a better economic environment
will react on one another for further mutual betterment. The unity of this
social-industrial life is not a unity of mere fusion in which the individual
virtually disappears, but a federal unity in which the rights and interests
of the individual shall be conserved for him by the federation. The federal
government, however, conserves these individual rights, not, as the individualist
maintains, because it exists for no other purpose than to do so. It conserves
them because it also recognises that an area of individual liberty is conducive
to the health of the collective life. Its federal nature rests on a recognition
alike of individual and social ends, or, speaking more accurately, of social
ends that are directly attained by social action and of those that are realised
in individuals. I regard such a federation as an organic union because none
of the individual rights or interests is absolute in its sanction. Society
in its economic as in its other relations is a federal state not a federation
of states. The rights and interests of society are paramount: they override
all claims of individuals to liberties that contravene them.
§4. So far as industry is concerned, we perceive how this harmony between
individual and social rights and interests is realised in the primary division
of productive activities into Art and Routine. The impulses and desires which
initiate, sustain and direct what we term art, including all the creative
activities in industry, flow freely from the individual nature. We recognise
that productive activities in which these elements are of paramount importance
form an economic field which society, guided by its intelligent self-interest,
will safely and profitably leave to individuals and private enterprise. Industries
which are essentially of a routine character, affording little scope for
creative activities of individuals, must pass under direct social administration.
For free individual initiative and desires will not support them. They can
only be worked under private enterprise on condition that great gains are
procurable for the entrepreneurs and an unfree body of proletarian labour
is available for compulsory service. The routine services of society cannot
properly be secured by appeals to the separate self-interests of individuals.
So administered, they involve the waste of vast unearned gains accruing to
a private caste of masters, the injury and degradation of economic servitude
in the workers, and a growing insecurity and irregularity of service to the
consumers. The only volume of free-will and voluntary enterprise that can
support those routine industries is the free-will and enterprise of Society.
If we can bring ourselves to regard the great normal currents of routine
industry, engaged in supplying the common daily needs, from the standpoint
of a real live Society, we shall recognise that to that Society this industrial
activity and its achievements are full of interest and variety. What to the
individual is dull routine is to Society creative art, the natural employment
of social productive energies for the progressive satisfaction of social
needs. Though the individual will soon flags before demands for work so irksome
and repellent to its nature, the social will gladly responds to work in which
that will finds its free natural expression.
This is the ultimate argument in favour of the socialisation of the routine
industries, viz., the release of the individual will from work that is costly,
repellent and ill-done, in order to enable the social will to find in that
work its healthy, interesting, educative self-realisation. For once conceive
Society as a being capable of thought and feeling, these processes have an
interest for it. They are social art, part of the collective life in which
Society realises itself, just as the individual realises himself in individual
art. Once accept the view of Society not as a mere set of social institutions,
or a network of relations, but as a collective personality, the great routine
industrial processes become the vital functions of this collective being,
interesting to that being alike in their performance and their product. That
subdivision of labour and that apparent contradiction of interests between
producer and consumer which seem designed to feed personal antagonisms and
to thwart individuality, now acquire rational justification as the complex
adaptive play of healthy vital functions in Society.
§5. Labour, thus interpreted, becomes a truly social function, the
orderly half-instinctive half-rational activity by which society helps itself
and satisfies its wants, a common tide of productive energy which pulses
through the veins of humanity, impelling the individual members of society
to perform their part as contributors to the general life. Whether those
individual actions are strictly voluntary, pleasurable and interesting in
themselves to those who perform them, as in the finer arts, or are compulsory
in their main incidence upon the individual, and accompanied by little interest
or social feeling on his part, is a matter of quite secondary importance
as viewed from the social standpoint. As labour is social, so is capital.
The other apparent discrepancy, that between the interests of present and
future, spending and saving, also disappears when we consider the social
significance of saving. For society secretes capital by the same half-instinctive
half-rational process by which it generates, directs and distributes, its
supply of labour. Only by a hypothesis which thus assigns a central industrial
purpose to society can we possibly understand the life of industry and the
complex cooperation it displays.
Take for a single instance the wheat supply of the world -- or the cotton
industry of Lancashire. We see large rhythmic actions, elaborate in their
complicated flows, responsive to innumerable stimuli of world-markets, --
a nervous system of affluent and effluent currents, directed by the desires
and beliefs of innumerable producers and consumers, each consciously actuated
by his own particular motives and yet cooperating towards large social ends.
We can neither grasp, intellectually or emotionally, the human or social
significance of these processes, if we persist in resolving them into the
ideas, feelings and actions of individual persons. The harmony becomes either
fortuitous or purely mystical. But, if we regard Society as having a large
life of its own, the cooperative harmony of individual aims and activities
becomes a corporate organic process. The social life does not suffer from
division of labour and specialisation of function, but gains, as in the animal
organism. The social life is not oppressed, degraded or injured by the routine
of the smaller working lives, any more than the animal organism by the regularity
and repetition of the respiratory, circulating and other routine operations
of its organs and their cells.
§6. "But," it will be objected, "even if we are justified
in pushing the organic analogy so far as to claim the existence of a real
social life with a meaning and end of its own, superior to that of the individual,
as the life of every organism is superior to that of its organs and cells,
that larger social being can only remain a shadowy or hypothetical being
to actual men and women. And it is the aims, ideas, feelings and activities
of these little units that, after all, will always absorb our attention and
occupy our hearts and minds."
Here is the final quintessence of individualism surviving in many professing
socialists, the denial of the existence of a rational moral society. Yet
such a society exists. The earliest beginnings of animal gregariousness,
sexual feelings, and other primary instincts of association, with the mutual
aid they give rise to, are a first testimony to the existence, even at the
opening of the human era, of a real though rudimentary society, physical
and psychical in its nature. Civilisation has its chief meaning in the extension
and growing realisation of this unity of Society, by utilising these secret
threads of social feeling for the weaving of the fabric of social institutions.
Thus, through these instruments of common social life, language, art, science,
industry, politics, religion, society gathers a larger, more solid and various
life. Race, Nationality, Church, the bond of some common interest in a science,
an art, a philanthropic purpose, often present intense examples of genuinely
common life and purpose. These are not mere social contracts of free individuals,
seeking by cooperation to forward their individual ends. Such a conception
of mutual aid is as false for religion, science, art or industry, as for
politics. The statement that 'man is a social animal' cannot merely signify
that among man's equipment of feelings and ideas there exists a feeling and
idea of sympathy with other men. That is only how it looks from the standpoint
of the cell. It means that humanity in all its various aggregations is a
social stuff, and that whatever forms of coalescence it assumes, i.e., a
nation, caste, church, party, etc., there will exist a genuinely organic
unity, a central or general life, strong or weak, but, so far as it goes,
to be considered as distinct from and dominant over the life and aim of its
members.
This central life, though distinguishable from the lives of its members,
as an object of thought and will, is yet only lived in and through the life
of the organs and cells. This is the subtle nature of the organic bond.
We are told indeed that "Society only exists in individuals."
This, however, is only true in the same restricted sense in which it is true
that an animal organism only exists in the life of its cells. There is nothing
but the cells plus their organic cooperation. But I should rather say that
the organism exists in the cooperation of the cells. So I should say that
Society exists in the cooperation of individuals.
This is not a matter of theoretic accuracy of statement, but of immense
practical significance. For the future progress of the arts of social conduct,
especially of industry and politics, must largely depend upon the measure
and manner of acceptance of this view of the nature of Society. It must,
indeed, to the individual mind always remain as a hypothesis, incapable of
full and exact verification. For such verification would imply an absolute
merging of individual personality in the social unity. Such a public spirit
can never absorb and displace private spirits. But the hypothesis may, for
all that, possess both intellectual and emotional validity. Its clear provisional
acceptance will not only explain many of the difficulties and reconcile many
of the discrepancies in those tendencies, industrial and political, which
are generally accepted as making for human progress, but will afford increased
economy of direction and of motive. For once let us realise Society as possessing
a unity and a life of its own, to the furtherance of which each of us contributes
in the pursuance of the particular life we call 'our own,' the so-called
sacrifices we are called upon to make for that larger life will be considered
no longer encroachments on but enlargements of our personality. We shall
come in larger measure to identify our aims and ends willingly with the aims
and ends we impute to society, and every step in that public conduct will
enrich or strengthen that social sympathy which we shall recognise to be
the very life of society flowing in our veins. This is the spirit of social
reform, as distinguished from the concrete measures of reform. Upon the creation
and recognition of this spirit the possibility, the usefulness, the durability
of every one of the institutions and policies, which are evolved by modern
civilisation, depend. It is, therefore, of supreme and critical importance
to obtain the widest possible acceptance of the conception of Society as
a living being to which each of us 'belongs,' a being capable of thinking
and feeling through us for itself, and of desiring, pursuing and attaining
ends which are its ends, and which we are capable of helping to realise.
So long as Society is spoken of and thought of as an abstraction, no social
conduct can be sound or safe. For an abstraction is incapable of calling
forth our reverence, regard or love. And until we attribute to Society such
a form and degree of 'personality' as can evoke in us those interests and
emotions which personality alone can win, the social will will not be able
to perform great works.
The final claim we make for the human valuation of industry presented here
is that it helps to bring into clear relief a set of human problems which,
from the conception of society as a mere arrangement for securing individual
ends, are perceived to be insoluble, but for which reason and emotion alike
demand a satisfactory solution. Only by substituting for the attainment of
individual welfare the ideal and the standard of social welfare, are we able
to obtain a method of analysis and valuation which furnishes satisfactory
solutions to the problems that industry presents.
CHAPTER XXI: PERSONAL AND SOCIAL EFFICIENCY
§1. What light does our human valuation of economic
processes throw upon the conditions of individual and social progress? Our
examination of industry has shown us the ways in which the actual production
and consumption of wealth affect the personal efficiency and welfare of individuals.
The organic law of distribution clearly indicates personal efficiency, alike
for purposes of economic productivity and for the wider art of life, to depend
primarily upon the maintenance of sound relations between the output of economic
activities and the income of economic satisfactions. A healthy system of
industry will demand from each producer an amount and kind of 'costly' labour
accommodated to his natural and acquired powers. By such a distribution of
the socially useful work which is not in itself agreeable to its performers,
the common economic needs of society are supplied with the smallest aggregate
amount of human cost. Similarly, we see how, by a distribution of wealth
according to the needs of each member, i.e., according to his 'power' as
consumer, the largest aggregate amount of human utility is got out of the
wealth distributed.
But this burden of 'costly' work, required of the producer and adjusted
to his powers, is not the only work that he can do. The main object of the
shorter work-day and the better apportionment of 'costly' labour, as we have
already recognised, is to liberate the individual so that he has time and
energy for the voluntary performance of 'productive' activities that are
'costless,' interesting and beneficial to his personal life. Some of these
voluntary activities will be 'economic' in the sense that they may produce
goods or services which have an exchange value. Such is the gardening or
the wood-carving which a man may do in his spare time. Though it may bring
him a direct return of personal gain and satisfaction that is non-economic,
it may also be a supplementary means of income. There is no reason why a
man whose hobby is his garden should not be able to exchange some of the
fruit and flowers, which it has been a pleasure for for him to grow, for
the photographs or the book-bindings on which his neighbours may prefer to
spend a portion of their leisure. Most of the spare energy or leisure, however,
won for the worker by a fair distribution of 'costly' labour, will, of course,
usually be applied to personal employments, to the arts of home life and
of society, which, though highly conducive to personal efficiency, lie outside
the range of 'economics.' Each person would apply this free time and energy
differently, his voluntary work having some natural relation as 'relief'
or 'variety' to the sort of 'costly' or routine labour which earned his livelihood.
Thus on this true equalitarian basis there would arise an immense variety
of freely active personalities. Each person would have what may be called
a personal standard of production, an orderly application of his productive
energies, which, though partly imposed by his status as a member of society
bound to do his share in social work, would largely represent his personal
tastes, choices and interests, selfish or altruistic, according to his temperament.
§2. Turning to the other side of industry, the distribution of wealth
to each according to his needs, i.e., capacities of use, personality would
impress itself similarly upon an immense variety of actual standards of consumption,
or modes of applying income to the satisfaction of desires. There is, however,
an important distinction to be noted between standards of consumption and
of production. Whereas in modern industry the earning of income is normally
an individual art, its consumption is normally a family act. While the family,
except in some agricultural societies, is very rarely a unit of production,
it remains usually a unit of consumption. It would appear, then, that our
human distribution would affect personal efficiency differently upon the
two sides of its application. As producer his standard of production, or
of use of productive activities, would appear to be directed by a balance
between the social requirements of labour and his personal proclivities,
whereas on the side of consumption the balance would be between the social
requirements and the family. Society must secure for the standard of family
comfort such an expenditure as will sustain the working numbers of the family
in full economic efficiency, i.e., a proper economy of what the classical
economists called 'productive consumption' must take place. But, outside
this limit, the particular requirements and conditions, not of the earner
alone, but of the family as a whole, must determine the expenditure that
makes for efficiency. This discrepancy, however, is not really so great as
it appears at first sight. The direct interest of society in the productive
and consumptive life of its individual members lies in their performance
of this proper share of 'costly' or social service and their use of a proper
portion of their income for consumption adjusted to maintain their efficiency
for this social service. The rest of their productive energy, the rest of
their consumptive wealth, lie under their own control for their personal
life. The fact that this personal life may be more narrowly personal on the
productive side, more of a family life on the consumptive side, does not
seriously affect the issue. Indeed, the discrepancy almost wholly disappears
when we look a little closer at the liberties which a better social economy
of production secures for the worker. The better life which a slackening
of the industrial strain will bring to the producer will consist in the cultivation
of interests and activities which, precisely because they are voluntary and
in themselves desired, cannot rightly be classified as either production
or consumption but unite the qualities of both. We have seen that this is
the characteristic of all art, or all work which is good and pleasant in
itself. Any activity that carries a surplus of human utility over human cost
is at once function and nutrition, production and consumption. In a word,
it is an increase of life. So it comes about that the 'human distribution'
feeds personal efficiency equally on its productive and consumptive sides.
A healthy application of productive activities will contribute as much to
individual progress as a healthy standard of consumption.
§3. It remains to recognise that the organic treatment of our problem
does not permit society to adopt a separatist view of the distribution of
work and its product. A distribution of work 'according to the powers' of
workers is conceivable on terms which would cause heavy damage to society
through ignoring the reactions of work upon consumption. It might appear
superficially a sound human economy to place all the burden of the heaviest
and most repellent muscular toil upon classes or races of men whose powerful
bodies and insensitive minds seemed to indicate that they were best fitted
by nature for such work.1 But if the effect of such an economy were, as it
would be, to keep considerable bodies of population in a low grade of animalism,
as represented in coarse modes of living and brutal recreations, this one-sided
view, by neglecting these organic reactions, would injure the personality
of these lower grades of citizens, and through them damage the efficiency
of the society of which they were members. Or, taking an opposite instance,
a Society which enabled classes of artistic or literary folk to escape all
share of 'costly' social labour, so as to cultivate exclusively their individual
activities and tastes, would incur a similar social danger through the presence
of highly stimulating personalities, unchecked by any adequate sense of social
responsibilities, who by their example and influence might undermine the
routine activities which are the feeders of social life.
So far, then, as economic reforms are aiming at personal efficiency, they
must take simultaneously into consideration the effects which each reform
will have upon the production and the consumption of wealth. For example,
a shortening of the workday ought to be accompanied by improved opportunities
of education and of recreation as an integral part of the reform.
§4. Our setting of the problem, which brings into contrast the routine
social production that is 'costly' to individuals and the creative or individual
production which is 'costless,' might seem to involve the view that social
progress, as distinct from individual, would involve an increasing total
burden of routine work under direct social control. Thus an antagonism between
the conscious interests of the individual and the social interests might
appear to remain. For, though a better social will, operating upon the individual,
might dispose him to accept his duty of serving society in the performance
of his share of routine work, it would still be true that such service was
less desirable to him and less nourished his personal life than the free
personal activities upon which it encroached. This opens up an exceedingly
important issue in social economy. It has been assumed that a really enlightened
society will so administer industry that a light day's labour shared among
all will suffice to win the wealth necessary for the support of society and
the satisfaction of the common material needs of its members. Thus an increasing
proportion of human energy will be liberated for the performance of those
activities which are pleasant and interesting to those who engage in them.
A diminishing amount of time and energy will be applied to the mechanical
processes of getting food and other materials from the earth, and of fashioning
them and carrying them about. Thus there will be more time and energy for
the fine arts and crafts, which depend less upon quantity of materials and
more upon the skilled application of personal powers. From the standpoint
of human welfare such an economy is obvious. It means, on the productive
side, a progressive increase of activity that is humanly 'costless' and pleasurable,
a progressive decrease of that which is costly and unpleasurable. On the
consumptive side, it means the substitution of non-material wealth, such
as books, pictures, poetry, science, which are virtually infinite in the
human utility that they are capable of yielding, for material wealth which
is mostly consumed in a single act of appropriation. The higher kind of goods
thus brings a minimum of costs and a maximum of utilities, and that upon
each side of the organic equation.
In most advanced nations of our time this gain in the relative importance
of the arts and professions engaged in artistic, professional, recreative,
educational, scientific and other creative activities, is recognised as being
an evidence and a measure of advancing civilization, and some offset to the
advance of material luxury.
§5. If, however, there is to be a continuous increase in the proportion
of time and energy available for the production and consumption of the higher
grades of non-material economic goods and for other activities of a non-economic
nature, some limitation must take place of the demand and supply of material
economic goods. If in any country, or throughout the industrial world, the
growth of population were such as, in the old phrase, to press 'upon the
means of subsistence,' the amount of productive energy needed for the arts
of agriculture, mining, and the staple branches of manufacture and transport
would be such as to defeat the economy of social progress just indicated.
Even if the population did not advance, but were chiefly engaged in seeking
fuller satisfaction of an increasing number of distinctively physical wants,
the same result would follow. Larger drafts must continually be made upon
the natural resources of the soil, by means of industries subject to what
political economy calls "the law of diminishing returns," and an
increasing proportion of labour must be engaged in these industries. Though
mechanics and the division of labour in the manufactures, and even in agriculture,
temper the tyranny of matter, enabling a given amount of routine toil to
achieve an increasing output of goods, this policy of human liberation is
impeded and may be entirely frustrated by a constant preference among large
populations for a strictly quantitative satisfaction of new material wants.
The root issue of social progress from the economic standpoint is here disclosed.
It is the question of the relative importance of quantity of matter in the
satisfaction of wants. In urging that social progress requires a progressive
diminution of the part played by matter and the industries in which quantity
of matter is a chief determinant factor, I do not merely mean that civilisation
implies an increasing valuation of the intellectual and moral faculties and
of their activities. Most of the fine arts require some matter for their
manipulation and for their instruments; every branch of the intellectual
life needs some material equipment. But in these occupations and in their
products quantity of matter is of an importance that is slight, often wholly
negligible. A fine art, a skilled craft, a machine industry, may each handle
the same sort of material, metal, stone or wood, but the quantity of this
material will have a rapidly increasing importance, as one descends from
the manipulation of the artist to the craftsman and from the craftsman to
the manufacturer.
If, then, we are to secure an economy of social progress in which relatively
less importance is to be given to those industries which are less humanly
desirable, alike in the work they involve and in the satisfaction their products
yield, we must have a society which becomes increasingly qualitative in its
tastes and interests and in its human constitution. A larger proportion of
its real income must take shape in non-material goods, or in material goods
which depend more for the satisfaction they yield upon their quality. In
a word, there must be a tendency to keep life simple in regard to material
consumption.
But when one says that society itself must grow more qualitative in its
constitution, a more difficult consideration emerges.
In the discussion regarding the bearing of the growth of population upon
general welfare too much attention was formerly accorded to the merely quantitative
question. Too little is now accorded. Under the title of eugenics the population
question threatens to become entirely qualitative. Now this is evidently
a mistake. For whatever interpretation we accord to social welfare, some
consideration as to the desirable number and rate of growth of the population
is evidently of importance. Though it may be agreed that vital values in
their spiritual and even in the physical meanings are distinctly qualitative,
and that, as far as possible, a society should set itself to maintain conditions
of sex selection favourable to admittedly finer and healthier types, this
issue of quality must not be detached from the issue of quantity.
As in the economy of the individual life a proper allowance of attention
must be secured for physical wants and for the material production and consumption
they involve, so in a society the size of its physical structure, the number
of cooperating human cells through which it lives, is a consideration that
inheres in the art of social life. Ruskin was surely right in his general
setting of the social question 'How can society consciously order the lives
of its members so as to maintain the largest number of noble and happy human
beings?'2 How much consciousness or calculation can advantageously be brought
to bear upon the regulation of the play of the sexual and related instincts
and desires, is a highly controversial question into which we need not enter
here. But so far as social reform can make good any claim to regulate the
growth of the population, its regulation should clearly have regard to quantity
as well as quality. A large number of physically sound and happy human beings
must be taken as a prime condition of social welfare. It is not easy to defend
the prosperity of a people who shall seem to purchase a fuller and even a
more spiritually complex life for some or all their members by a continuous
reduction of their numbers. Where life is valued and valuable the natural
disposition to extend its values as widely as is consistent with their maintenance
is a natural instinct difficult to impugn. If it be contended that this is
in some sense an admission of the social validity of the tendency to multiply
so as to 'press on the means of subsistence,' I might admit the interpretation,
provided it were understood that 'means of subsistence' included all the
essentials of spiritual as well as of physical life.
I do not, however, wish to dogmatise upon a difficult and exceedingly debateable
matter, but only to insist that a conscious art of social progress can no
more ignore quantity than quality of population in any general calculus of
human welfare.
§6. The greater equalisation of incomes which would follow from the
absorption of unproductive surplus into public income and into remuneration
of labour, would be favourable to the two conditions of social progress here
laid down, a restriction upon the growth of material consumption and a reasonable
regulation of the growth of population. For, as luxury and material waste
are seen largely to arise as instruments for the display of individual prowess
in competitive industry, the removal of that competition from fields which
yield large means for such display would necessarily quench the zest which
it exhibits, as well as stop the sources of such extravagant expenditure.
For when profuse display of material apparatus is no longer possible, the
natural desire for personal distinction, which is the deepest-rooted of all
personal desires, will tend more and more to find expression in those arts
of refined living which are more truly personal in that they cause the more
intellectual and spiritual qualities of personality to shine forth. If, for
the quantitative display of material goods, there can gradually be substituted
a qualitative display of spiritual goods, this change will be attended by
a corresponding change in economic activities. There will be a reduction
in the coarser forms of productive energy making large drafts upon the material
resources of nature, and an increase of the higher forms of energy whose
drafts on these material resources are relatively small.
The proportion of non-material to material wealth will increase, and there
will be a corresponding increase in the proportion of productive activities
that contain large factors of creative interest. Every enlargement of the
scope for free individual expression through economic demand, even for purely
material goods, will have a necessary effect in curbing the dominion of machinery
and of routine labour. For social arrangements which enable and incite each
consumer to seek a more personal satisfaction of his individual needs will
force producers to study these individual needs and satisfy them. This cannot
be done by mere machine-economy, which rests upon the opposite hypothesis
that large numbers of consumers will consent to sink their individual differences
of need and taste accepting certain routine forms of goods which do not exactly
meet the requirements of any one of them. It is, therefore, reasonable to
expect that a more equal and equitable distribution of income will evoke
in the masses of population, who now consent to consume common 'routine'
goods because they cannot afford to consult their particular tastes and preferences,
a more personal and discriminative demand, which will set strict limits upon
the machine economy and call for a larger application of individual skill
in the various crafts. Or if, valuing more highly as fields for personal
expression the less material elements in their standard of living, they still
consent to utilise routine industry for the satisfaction of their common
physical needs, they will apply an increasing proportion of their interests
and their incomes to the acquisition and enjoyment of those goods, artistic,
intellectual, emotional, which are more ennobling alike in their production
and their consumption.
§7 A final word upon population. Is there not reason to believe and
hope that this sounder distribution of work and wealth will contribute to
a satisfactory solution both of the quantitative and the qualitative population
question? if women were no longer forced by economic pressure into marriages
for which they had no natural inclination, much unfit parentage and much
incompetent nurture would be averted. If they were free to live unmarried,
or to choose the father of their children and the size of their family, the
normal current of those instincts making for the preservation and instinct
of the race, obstructed by artificial barriers of economic circumstances,
would be restored to their natural course. If the support of a young family
were no longer a heavy and injurious strain upon the economic resources of
the parents and their future career a grave anxiety, the human love of children
and the attractions of a complete home life would probably check that rapid
decline of the birth-rate which to many is one of the darkest features of
our present order. It would not, indeed, restore the reckless propagation
of former times which imposed on parents, and chiefly upon the mother, a
burden injurious in its private incidence and detrimental to society. But
while the better economic order would stop compulsory marriages and undesired
and therefore undesirable offspring, it would restore the play of the normal
philoprogenitive instincts. The net effect would seem to be some retardation
of the decline of birth-rate in those types of families where the conditions,
physical and psychical, appear favourable to good nature and good nurture
for children, and a positive elimination of certain types of union unfavourable
to sound offspring. The total effect upon the quantitative issue would of
course depend upon the balance between this freer play of the philoprogenitive
instinct and the other influences, not directly affected by economic causes,
which make for smaller families. But that the quality or character of the
population must be improved by the more natural play of the rejective and
selective influences here indicated can hardly admit of controversy. Indeed,
it may well be urged that the crowning testimony to the validity of the human
law of distribution will consist in the higher quality of human life it will
evoke by liberating and nourishing the natural art of eugenics in society.
NOTES:
1. Ruskin had a curious notion of this sort (cf. Time
and Tide, par. 107, Munera Pulveris, par. 109, Fors Clavigera,
Letter lxxxii), and the recent American 'Scientific Management' appears to
endorse it.
2. Time and Tide, par. 123.
CHAPTER XXII: SOCIAL SCIENCE AND
SOCIAL ART
§1. The task of a human valuation of industry involved
at the outset the arbitrary assumption of a standard of value. That standard
consisted in a conception of human well-being applicable to the various forms
of human life, man as individual, as group or nation, as humanity. Starting
from that conception of the health, physical and spiritual, of the individual
human organism, which is of widest acceptance, we proceeded to apply the
organic metaphor to the larger groupings, so as to build up an intelligible
standard of social well-being. This standard, at once physical and spiritual,
static and progressive, was assumed to be of such a kind as to provide a
harmony of individual welfares when the growing social nature of man was
taken into due account.
With the standard of human well-being we then proceeded to assign values
to the productive and the consumptive processes of which industry consists,
examining them in their bearing upon the welfare of the individuals and the
societies engaging in them.
Now this mode of procedure, the only possible, of course involved an immense
petitio principii. The assumption of any close agreement as to the nature
of individual well-being, still more of social well-being, was logically
quite unwarranted.
Economic values have, indeed, an agreed, exact and measurable meaning, derived
from the nature of the monetary standard in which they are expressed. Now,
no such standard of the human value of economic goods or processes can be
established. Yet we pretended to set up a standard of social value and to
apply a calculus based upon it, claiming to assess the human worth which
underlies the economic costs and utilities that enter into economic values.
Has this procedure proved utterly illicit? I venture to think not. Though
at the outset our standard was only a general phrase committing nobody to
anything, the process of concrete application, in testing the actual forms
of work and wealth which make up industry, gave to it a continual increase
of meaning. While the widest divergence would be found in the formal definitions
of such terms as "human welfare" or "social progress,"
a large and growing body of agreement would emerge, when a sufficient number
of practical issues had been brought-up for consideration. The truth of our
standard and the validity of our calculus are established by this working
test. It is not wonderful that this should be so, for the nature and circumstances
of mankind have so much in common, and the processes of civilisation are
so powerfully assimilating them, as to furnish a continually increasing community
of experience and feeling. It is, of course, this fund of 'common sense'
that constitutes the true criterion. The assumption that 'common sense' is
adequate for a task at once so grave and delicate may, indeed, appear very
disputable. Granting that human experience has so much in common, can it
be claimed that the reasoning and the feeling based on this experience will
be so congruous and so sound as to furnish any reliable guide for conduct?
Surely 'common sense' in its broadest popular sense can go a very little
way towards such a task as a human interpretation of industry.
There is no doubt a good deal of force in this objection. If we are to invoke
'common sense' for the purposes of an interpretation or a valuation, it must
evidently be what is termed an 'enlightened common sense.' And here at once
we are brought into danger lest enlightenment should not supply what is required,
viz., a clearer or more fully conscious mode of common sense, but a distorted
or sophisticated mode. How real this danger is, especially in the conduct
of public affairs, may be recognised from the excessive part played by certain
highly conscious and over-vocal interests of the commercial and intellectual
classes in the art of government. The most pressing task of Civilisation
in the self-governing nations of our time is so to spread the area of effective
enlightenment as to substitute the common sense of the many for that of the
few, and to make it prevail. It is this common sense, more or less enlightened,
that the disinterested statesman takes for the sanction of his reading of
the general will which he endeavours to express in the conduct of public
affairs. That it is never at any time a certain, a perfectly coherent, a
precise criterion, will be readily admitted. But that it is sufficiently
intelligible, sufficiently sound, is the necessary presupposition of all
democratic statecraft. And, so far as it is thus serviceable, it supplies
a valid standard and a valid calculus of social values. Though the reading
of this standard and the application of this calculus will always be subject
to some bias of personal idiosyncrasy, the weight of the general judgment
commonly prevails in the more important processes of social valuation.
But, in pinning our faith to enlightened common sense for an interpretation
or valuation of industry, we must not allow ourselves to be deceived as to
the amount of 'scientific accuracy' which attends such a procedure. While
this standard can and must supply the rules and measurements which we apply
in the processes of detailed analysis and comparison by which we estimate
the costs and utilities and the net human values of the various industrial
activities and products, we must not put into this standard a stability it
does not possess, or into the quantitative methods it uses an authority for
social conduct which they are inherently disqualified from yielding.
§2. The science and art of soCiety have suffered so much from want
of exact and measured information that it is only right and natural for immense
importance to be attached to the collection of masses of ordered and measured
social facts. If a sufficient number of trained investigators could be set
to work to gather, measure, sift and tabulate, the various orders of crude
fact relating to the employment, wages, housing, expenditure, health, thrift,
education, and other concrete conditions of the poorer grades of town and
country dwellers, it seems as if a number of accurate and valid generalisations
would emerge by clear induction upon which could be constructed an absolutely
scientific treatment of poverty. Or, again, to take a narrower and more distinctively
economic issue, that of the shorter working day. If a careful series of observations
and experiments could be made in a number of representative businesses, as
to the effect upon the size, cost and quality of output produced by given
reductions in the hours of labour among various classes of workers, it might
appear as if an accurately graded social economy of the working day could
be attained by calculations.
But though statesmen, philanthropists and reformers are more and more influenced
in their judgments and policies by these measured facts, no safe mechanical
rules for the guidance of their conduct in any social problem can be based
upon them. The facts and figures which appear so hard and so reliable are
often very soft and ineffective tools for the social practitioner. There
are several defects in them regarded as instruments of social progress.
It is hardly ever possible to prove causation by means of them. You may
obtain the most exact statistics of housing conditions and of death-rates
for the population of a group of towns, but you cannot prove to what extent
'back to back' houses affect infant mortality. No figures professing to measure
the causal connection between drink and crime or insanity, income and birth-rate,
or any other two social phenomena, possess the degree of validity they claim.
Why? Because you can never isolate the factors completely in any organic
or social problem, and you can never know how far you have failed to isolate
them. You may, indeed, by varying the conditions of your experiments or observations
sufficiently, obtain practical proof of organic causation, but you can seldom
express this causation in terms of any quantitative accuracy. Still more
is this true of psychological and social problems. A purely descriptive science
of society may attain a considerable degree of quantitative accuracy, but
the laws expressing the causal relations of these measured facts will always
lack the certainty of operation and the measurability of action belonging
to the laws of chemistry and physics.
Now the chief facts with which the statesman and the social reformer are
concerned in forming judgments and policies are these laws of causal relation,
and not the crude measured facts that constitute the raw material of statistics.
This comparative inexactitude or lack of rigidity in the laws of social science
constitutes the.first difficulty in applying the science to the art of social
conduct with the same amount of confidence with which the laws of physics
and chemistry are applied to the mechanical arts. But another difficulty
quite as grave as this want of rigidity in social facts is the instability
of the standard. In all processes of physical measurement it is customary
to make allowances for errors due to what is called 'the personal equation,'
abnormalities of observation in the experimenter. But the standard of human
valuation, the enlightened common sense of a community, applied to interpret
social phenomena in terms of 'utility' or 'welfare,' will evidently be subject
to much wider variations, and the interpretation of this standard by statesmen,
or other individual agents of society, will be subject again to wide errors
of personal bias.
Illustrating from the economic sphere which is our concern, that specialisation
of industrial life which has made three quarters of our population town-dwellers
and is making our nation continually more dependent upon foreign supplies
of food, will have a very different value set on it by the narrower nationalism
which believes the interests and ambitions of nations to be irreconcilable,
and by the wider political outlook which conceives the economic interdependence
of nations as in itself desirable and as the best guarantee of national security.
Or again, a difference of view or sentiment regarding the relative worth
of the personal qualities of enterprise and self-reliance on the one hand,
of plodding industry and sociality upon the other, must materially affect
the values given to such phenomena as emigration, public provision against
unemployment, copartnership, taxation of high incomes or inheritances. Indeed
it is quite manifest that with every difference of the range of sympathy
and imagination the meaning which enlightened common sense will give to social
welfare, and to every fact submitted to this test, will vary.
These considerations may seem at first sight to invalidate the entire purpose
of this book, the endeavour to apply a social calculus for the valuation
of industry. So long as the cost and utility of economic material and process
is expressed in terms of money, you have a fixed standard capable of yielding
exact valuations. Endeavour to resolve this cost and utility into terms of
human welfare or desirability, you appear to have adopted a fluctuating standard
that can give no serviceable information.
§3. The truth, of course, is that a scientific valuation of anything
can only proceed by way of quantitative analysis. A standard of valuation
which should regard qualitative differences as ultimate would not be scientific
at all. It might be aesthetic or hygienic or ethical, according to the nature
of the qualitative differences involved. A strictly scientific valuation
of wealth, or of cost or of utility, or of life itself, must apply a single
standard of measurement to all the various objects it seeks to value, i.e.,
it must reduce all the different objects to terms of this common denominator.
It can measure and value all forms of purchasable goods or services, however
various in nature, through the market processes which reduce them to a single
monetary equivalent. It can measure and value labour-costs of different sorts,
either by a monetary standard or by some measure of fatigue or vital expenditure.
It can measure the utility of various sorts of food or of fuel, by comparing
the quantities of working-power or output which upon an average they yield.
It can ascertain the vital values of different towns and occupations, incomes,
races, in terms of longevity, fertility, susceptibility to diseases, etc.
This method, essential to scientific analysis, rests on an assumption that
£1 worth of bad books is of the same value as £1 worth of good
books. This assumption is true for the purpose to which it is applied, that
of a market valuation. It assumes that a year's life of an imbecile or a
loafer is worth the same as a year's life of a saint or a genius, and so
it is for the purpose of vital statistics.
This is of course universally admitted. Science proceeds by abstraction:
it does not pretend to describe or explain the individuality or particular
qualities of individual cases, but to discover common attributes of structure
or composition or behaviour among numbers of cases, and to explain them in
terms of these common characters.
So far, then, as the so-called value of anything, or any happening, consists
in its uniqueness or idiosyncrasy, this value necessarily evades scientific
analysis. It is only the common properties, the regularities, the conformities,
that count for scientific valuation. Nay, more. So far as science takes account
of individual qualities, it is in the capacity of eccentricities, i.e., it
measures the amount of their variation from the average or normal. It cannot
entertain the notion that there is any sort of difference which is inherently
immeasurable, i.e., that there is difference in kind as well as in degree.1
§4. A scientific analysis treats all differences as differences of
degree. So-called difference of quality or kind it either ignores, or it
seeks to reduce them to and express them in differences of quantity. This
endeavour to reduce qualitative to quantitative difference is the great stumbling-block
in all organic science, but particularly in the departments of psychology
and sociology. The difficulty is best illustrated in the recent extension
of quantitative analysis into economics by the method of marginal preferences.
Not content with the assumption that the particular costs, consumable qualities,
etc., of any two articles selling for £1 each may be disregarded, and
the single property of their market value abstracted for consideration, the
mathematical economists now insist that the study of marginal preferences
discloses important laws of the psychology of individuals and societies.
The whole process of expenditure of income appears to be replete with instances
of the capacity of the human mind to measure and apply a quantitative comparison
to things which seem to be different in kind. It might seem as if my desire
to help the starving population of India in a famine, and my desire to attend
a Queen's Hall concert this evening were feelings, not merely of different
intensity, but of such widely different nature that they could not be accurately
measured against each other. And yet this miracle is said to be actually
performed, when I decide upon due consideration to divide the 7s 6d in my
purse so as to give 5s to the Famine Fund and to buy a 2s 6d ticket for the
concert, instead of the more expensive ticket I should have bought had I
not been lured to the Famine meeting. I might have given the whole 7s 6d
to the Famine Fund, and missed the concert. Why did I not? I must have performed
the very delicate spiritual operation of reducing my humanitarian feeling
to common terms with my love of music, and to have struck a balance which
can only mean that I consider the additional satisfaction I would have got
from giving another 2s 6d to the Famine Fund to be a little less than the
satisfaction I would get from the concert. But this, of course, is a single
crude instance of a far more elaborate process of comparison which underlies
the whole expenditure of my income. After the routine expenditure upon necessaries
and comforts, which may be said to represent my habitual standard of consumption,
has been defrayed, there are various attractive uses to which every other
sovereign and shilling may be put. All sorts of different appeals of pleasure,
duty, pride, press their claims through a thousand different channels. In
order to apportion my expenditure as I do, I must be conceived as reducing
all these claims to some common standard of desirability, and deciding how
much to lay out on this, how much on that. That physical satisfactions can
be compared with one another, by the application of some standard of pleasure
may appear intelligible enough. But that a sense of moral duty can be brought
into direct comparison with a physical pleasure, or that various duties can
be compared in size or strength with one another, would seem almost impossible.
Yet this is done incessantly and quickly, if not easily. Even when it is
claimed that some duties are so paramount that a good man will refuse to
'weigh' any other claim against them, assigning them a value which, he says,
is 'infinite,' the marginal economist will not admit the claim to exemption.
'This only means that to him the total difference between the command of
things in the circle of exchange that he already enjoys, and an indefinite,
or unlimited command of them, does not weigh as heavy in his mind as the
dishonour or the discomfort of the specific thing he is required to do. It
does not mean that his objection is "infinite." it merely means
that it is larger than his estimate of all the satisfaction that he could
derive from unlimited command of articles in the circle of exchange, and
this is a strictly, perhaps narrowly, limited quantity.'2
But though there are men whose honour is so incorruptible as always to 'outweigh'
other considerations, the ethics of bribery make it clear that a weaker sense
of honour can be measured against material satisfaction, and that is all
that seems necessary to support the view that such qualitative distinctions
can 'be reduced to questions of quantity.' Nor is it merely a matter of the
monetary valuation through expenditure of incomes. Precisely the same problem
arises in the disposal of one's time or energy. How much shall be given to
the performance of this or that personal or family duty, to recreation, or
to study? In what proportions shall we combine these activities? If a curtailment
of money or of time is necessary, how much shall be taken from this, how
much from that employment?
But it is needless to multiply examples. When any scientific valuation is
taken, all qualities are abstracted and quantities only are compared and
estimated. As in economics, so in ethics. The moral struggle to resist a
temptation is nearly always set in scientific psychology as a mechanical
problem, for when the ethicist professes to introduce some imponderable 'freedom
of the will' he has to throw overboard his science. A 'conflict of duties,'
as Mr. Wicksteed recognises, implies that 'duty itself is a quantitative
conception.'3
§5. Similarly with the scientific politician who seeks to make full
use of quantitative analysis. He too is compelled to visualise and represent
the psychological operation through which a political judgment is reached
as a mechanical one, conceived in terms of size, weight, strain or intensity.
In his Human Nature in Politics Mr. Graham Wallas gives a very interesting
example of the scientific valuation of a process of political thinking, viz.,
the process by which Mr. Gladstone, in the autumn and winter of 1885-6, must
be conceived to have arrived at his Home Rule policy, 'thinking incessantly
about the matter' and 'preparing myself by study and reflection.'
After describing, with the aid of Lord Morley's Life, the various studies
and courses of reflection employed, the 'calculations' of the state of feeling
in England and Ireland, the examination of various types of federation, as
found in past and current history, the statistical reports upon finance,
law and other concrete issues, considerations of the time and opportunity,
the play of the emotional valuations, 'the irresistible attraction for him
of all the grand and external commonplaces of liberty and self-government,'
Mr. Wallas sees the results of all this acquisition of knowledge and reflection
gathering and being coordinated into a problem in which the factors are quantities
and the solution 'a quantitative solution,' 'a delicate adjustment between
many varying forces.'4 'A large part of this work of complex coordination
was apparently in Mr. Gladstone's case unconscious,' an operation he declares,
'rather of art than of science.' Now, since 'the history of human progress
consists in the gradual and partial substitution of science for art,' it
is desirable to bring out with clearer consciousness, and fortify with greater
accuracy of knowledge, the processes of political thinking. 'Quantitative
method must spread in politics and must transform the vocabulary and the
associations of that mental world into which the young politician enters.
Fortunately, such a change seems at least to be beginning. Every year larger
and more exact collections of detached political facts are being accumulated;
and collections of detached facts, if they are to be used at all in political
reasoning, must be used quantitatively.'5 Since the problems of political
conduct are thus essentially quantitative, they can, in theory at any rate,
be 'solved' by science. 'The final decisions which will be taken either by
the Commons -- or by Parliament in questions of administrative policy and
electoral machinery must therefore involve the balancing of all these and
many more considerations by an essentially quantitative process.'6
§6. Now how far is it true that any political problem is essentially
quantitative and soluble by a quantitative process? it is of course to be
admitted at once that the science of statistics will feed a statesman's mind
with a variety of ordered and measured facts. But will this mind, working
either scientifically or artistically, consciously or subconsciously, go
through a distinctively mechanical process of balancing and measuring and
register a quantitative judgment? A scientific setting of the process must
indeed so present it. But, then, a scientific setting of any process whatsoever
sets it thus in purely quantitative form. The real issue is how far this
scientific setting is competent to interpret and explain the facts, and to
deliver a judgment which shall be authoritative for the conduct of an individual
or a society.
In order to test the scientific claim let us take what seems to be a very
different sort of action from that of the politician or the business man,
that of the artist. Follow the mind of the painter as he plies his art. Each
of his operations too involves considerations of quantity and measurement,
scope and focus, adjustment, coordination, balance, the application of definite
blends of colours: optics, anatomy, and other sciences feed his mind with
exact knowledge. A delicate adjustment of quantities in line and colour is
involved in every part of his artistic operations. But does the operation
consist of these quantitative arrangements and can it be understood or 'appreciated'
by analysing them? Evidently not. Why not? Because in such an analysis or
explanation the essentially qualitative or creative action of the artist,
which gives unity and artistic value to the whole operation, escapes notice.
Science kills in order to dissect. So in the case of every other art. A poem
involves certain ordered arrangements of sound which may be expressed in
quantitative terms of rhythm and prosody. But any attempt to 'resolve' it
into these forms loses its spirit, its unity, its value as a poem. Students
of the drama have sometimes explained or interpreted a tragedy of Sophocles
or Shakespeare in terms of the gradation of intensity of the various emotions
involved, the length of pauses of suspense, the balancing, relief and interlacing
of the plots or episodes, the relative strength or height of the climaxes
and subclimaxes, the growing rapidity of movement towards the catastrophe.
But can it be pretended that this 'mechanics' of the drama can furnish a
standard of appreciation, or supply laws according to which a 'good' drama
may be constructed or appreciated? No. An artistic operation is essentially
organic, creative and qualitative. None of these characters can really be
reduced to quantity. Science by quantitative analysis can only deal with
the skeleton not with the life that informs it.
I think this eternal inability of science adequately to interpret value,
or explain a work of art, will be generally admitted. It is due to the fact
that this work and its value are inherently incapable of being reduced to
quantities. The difference between one picture and another, one poem and
another is a difference of quality. It is of course true that by a merely
linguistic necessity we often speak of a picture as being 'much' finer than
another, and compare the 'greatness' of one poet with that of another. But
we are aware all the time that we are really comparing unlikes, dealing with
qualitative differences. On no other supposition indeed can we understand
the valuation set upon a work of genius as compared with one of talent.
"Oh the little more, how much it is,
And the little less what worlds away."
What then do economists mean when they insist that qualitative
differences, the desires and satisfactions which have such widely diverse
origins and natures, can be weighed and measured against one another, and
that problems of industry are essentially and ultimately quantitative? Our
examination of artistic activities has shown that in each case quantities
are involved, but that in no case do quantities constitute the problem of
action. But how, it may be said, do you dispose of the admitted facts that
by means of monetary valuations these diverse desires and satisfactions are
reduced to a common standard, are compared, and that a course of conduct
is apparently based upon these quantitative considerations?
The answer is that this is an entirely illusory account of the psychical
process by which a man lays out his money, or his time, or his energy. He
does not take the several uses to which he might apply the means at his disposal,
reduce them, in thought or in feeling, to some common term, and so measure
the amount he will expend upon each object that the 'marginal' or 'final'
portion of each use shall be exactly equal in the utility it yields. The
'marginalist'7 is correct in saying that the utility imputed to the last
sovereign I expend on bread during the year must be considered to be neither
greater nor less than that imputed to the last sovereign's worth of tobacco,
or books, holiday or charitable subscriptions. In precisely the same sense
it is true that the last brushful of green and brown and Turkey red expended
on a picture has the same art-value to the painter.
Perhaps the issue can be made clearer by reference to an art usually considered
less 'fine' and more closely affected by quantitative considerations than
painting, the culinary art. The composition of a dish is here expressed in
proportions of its various ingredients, so much flour, so many ounces of
raisins, so many eggs, so much sugar, etc. The marginalist would dwell upon
the crucial fact that the last pennyworth of the flour, raisins, eggs and
sugar, taken severally, had an equal value for the pudding, and that these
marginal or final increments were in some way causal determinants of the
composition of the pudding, because in using the ingredients the cook took
care to use just so much of each, and neither more nor less. And it is quite
true that the delicacy of the culinary art will in fact be displayed in deciding
whether to put in another handful of raisins, another egg, or a spoonful
more sugar. But, from the standpoint of trying to appreciate the virtue or
worth of the dish as a culinary creation, it cannot be admitted that any
special importance or causal determination attaches to the last increments
of the several ingredients. For it is evident that the 'how much' and therefore
the 'margin' of each ingredient is itself determined by the conception of
the tout ensemble in the mind of the creator or inventor.
And this evidently applies to every form of composition embodying some unity
of design or purpose, whether the treatment of a subject in pictorial or
dramatic art, the making of a new dish, the construction of a machine, the
arrangement of a business, or the laying out of a garden or a fortune. So
far as an economical use is made of materials or means of any kind for the
attainment of any end this marginal equivalence is implied. The scientific
analysis of any composite arrangement, mechanical, organic, conscious, involves
this marginal assumption. It is an axiom of all 'economy' whatsoever.
But it explains nothing. Nay, in dealing with any organic being on any plane
of action, it darkens counsel. It does so in several ways. First by assuming
or asserting that the human mind can and does get rid of qualitative differences
by referring them to a quantitative standard: secondly, by assuming or asserting
that organic unity can be broken up into its constituent parts and explained
in terms of these measured parts; thirdly, by assuming or asserting a uniformity
of nature which conflicts with the 'novelties' in which creative energy expresses
itself. All these fallacies are just as much involved in the attempt to explain
the expenditure of an income as a purely quantitative problem, as in the
attempt to explain the art-value of a picture in terms of the respective
quantities of line and colour. In each case the root fallacy is the same,
the illicit substitution of the abstract 'quantity' for the actual stuff,
which is always qualitative and is never identical in any two cases, or at
any two times.
§7. In laying out my income, I do not in fact compare all my several
needs or tastes, and having assigned so much utility or desirability to each,
plan my expenditure so as to spend on each just as much as it is worth, equalising
all expenditure at the margins so as to maximise the aggregate. Even Benjamin
Franklin or Samuel Smiles would not really do this, though they might think
they did, and perhaps draw up schedules to enforce the notion. So far as
I act like a free, rational being, not a creature of blind custom or routine,
I employ all my personal resources of knowledge, taste, affection, energy,
time, and command of material resources, in trying to realise my ideal of
a good or desirable life. In the execution of this design, however it be
regarded, self-realisation or career, I utilise my various resources in a
manner strictly analogous to that in which the artist employs the materials
and instruments of his art. Upon the canvas of time I paint myself, using
all the means at my disposal to realise my ideal. Among these means is my
money income. Its expenditure goes into the execution of my design. So far
as I am justified in separating my expenditure of money from the expenditure
of my time and other resources, and in regarding the design as an 'economic
picture,' I can readily perceive that the unity of my artistic purpose involves
and determines the expenditure of my income in definite proportions upon
the various objects whose 'consumption' contributes to the design. But these
proportions are not determined by a calculation of the separate values of
the various items. For, strictly speaking, they have no separate value, any
more than have the lines or colours in a picture. Only by consideration of
what we may term indifferently the artistic or organic purpose of the whole
can a true appreciation or valuation be attained. The full absurdity of suggesting
that anything is learned, either in the way of valuation or of guidance,
by the quantitative analysis, or the wonderful discovery of equivalence of
value at the margins, will now be apparent. This mathematical analysis can
do no more towards explaining the expenditure of income than explaining the
expenditure of paint. Of course, the expenditure at the margins appears to
produce an equal utility: that truth is obviously contained in the very logic
of the quantitative analysis. But that quantitative analysis, necessarily
ignoring, as it does, the qualitative character which the organic unity of
the whole confers upon its parts, fails to perform the psychological interpretation
claimed for it.
So far as it is true that the last sovereign of my expenditure in bread
equals in utility the last sovereign of my expenditure in books, that fact
proceeds not from a comparison, conscious or unconscious, of these separate
items at this margin, but from the parts assigned respectively to bread and
books in the organic plan of my life. Quantitative analysis, inherently incapable
of comprehending qualitative unity or qualitative differences, can only pretend
to reduce the latter to quantitative differences. What it actually does is
to ignore alike the unity of the whole and the qualitativeness of the parts.
Nor is this all. It is not even true that an application of quantitative
analysis does find exact equivalence of values at the margins. Taking a concrete
instance, it is not true that the last sovereign of my expenditure in books
equals, or even tends exactly to equal, in utility, that of my last sovereign's
expenditure on bread. This would be the case if the future tended precisely
to repeat the past. In that event my experience of the economy of last year's
expenditure would progressively correct any errors, and I should come to
employ my resources with greater economy or exactitude to the attainment
of the same design. But I am not the same this year as last, my environment
is not the same, my resources are not the same, and the plan of life I make
will not be the same. This awkward factor of Novelty, involved in organic
nature, belongs to every creative art, being indeed of the very essence alike
of art and of creation, and impairs to an incalculable extent the quantitative
calculus and its marginal interpretation. An addition of £100 to my
income this year cannot be laid out by calculation so as to increase each
sort of expenditure to an extent which will secure marginal equivalence of
utility. That is to say, I cannot tell what will be the best employment of
my larger income, until I have tried. The larger income will produce nowhere
a strictly proportionate increase of expenditure on a number of several objects.
It would shift my economic plan of life, making a new kind of life, and involving
all sorts of changes in the items, which follow as consequences from the
changed organic plan. This new plan I cannot accurately calculate or forecast.
It will work itself out as I proceed. Its execution involves no doubt elements
of forethought and even calculation, but the central and essential change
will proceed from some novelty of conception, some qualitative change of
purpose. In a word, it is the creative power of man, the artist, inspiration,
faith and that is ever at work, and the art faculties of adventure will lead
him to experiment anew with his resources. As a man gains more intelligence,
undergoes some new critical experience of his outer or his inner life, encounters
some new personal influence, his entire mode of living will change, and innumerable
alterations in the outlay of his income will take place. Some articles of
earlier expenditure will disappear, new articles will take their place, and
the respective importance of many articles remaining in the expenditure will
be shifted. A change of residence from country to town, a 'conversion,' religious
or dietetic, a transfer from an outdoor manual to an indoor sedentary employment,
marriage, or any other critical event, must bring about some such large complex
organic alteration. A comparison of the items of expenditure before and after
will shed interesting light upon the results of the psycho-economic change
of which they afford a quantitative register, but it cannot be regarded as
an explanation of the change of heart or of outlook which is the determinant
act from which these shifts of values flow.
§8. The life of a society presents this same problem on a larger scale.
On the plane of economic conduct which directly concerns us, every one of
the innumerable and incessant alterations in methods of production and consumption
ranks as an organic novelty, and, in so far as it is novel, necessarily baffles
quantitative analysis and scientific prediction. It would, of course, be
incorrect, either in the case of an individual or of a society, to represent
any change as entirely novel. Organic growth itself is largely a quantitative
conception: the changes are proportionate in size to former changes, and
are in definite quantitative relations to one another. The doctrine of continuity
thus enables us to go far in calculating the character of future changes.
So far the scientific interpretation of uniformity of nature carries us.
But quantitative growth, or any other set of quantitative changes, however
calculable, always carries some qualitative and essentially incalculable
elements of change. These are what we signify by novelty. It is their occurrence
in evolution that baffles the clean logic of the geologist, still more of
the biologist, and far more of the psychologist. Whether they show themselves
as 'faults' or 'sports' or 'mutations,' they represent the disability of
past experience to furnish 'laws' for their calculation, and the practical
importance which attaches to these incalculable or qualitative changes is
very considerable. Though they may be comparatively infrequent and may appear
on first inspection almost negligible breaks in the otherwise calculable
continuity of the evolutionary process, their determinant importance is receiving
ever greater recognition. In human conduct, individual or social, these mutations
seem to play a larger part, chiefly by reason of the operation of the so-called
'freedom' of the human will. For whatever philosophic view be held regarding
the determination of the acts of the will, its operation scatters mutations
thickly over the realm of human conduct. Hence it remains true that science
can do so much less in explaining and predicting human history than in any
other department of nature. No doubt here, as elsewhere, science hopes to
apply quantitative analysis of such increasing accuracy as to enable it to
determine and predict a larger number of such mutations. Since there doubtless
exist quantitative conditions for every qualitative change, it may seem theoretically
possible for science some day to catch up with 'the art of creation.' This
supposition, however, assumes that the number of permutations and combinations
in 'nature' is limited, and that, therefore, in some extensive run history
does repeat itself. The final victory of science thus seems to depend upon
the adoption of a cyclical view of the history of the universe. But, for
all present practical purposes of social processes, science is so far removed
from this perfection that the economist and the sociologist are continually
compelled to allow for unpredictable changes of such frequency and of such
determinant importance that their claim to direct 'the general will' and
to mould the conscious policy of a society must be very modestly expressed.
Such laws of causation as they derive from past observation and experiment
must usually be conceived as laws of tendencies, seldom endowed with any
rigorous authority of close determination, and still more seldom with accuracy
of quantitative prediction.
§9. It is sometimes supposed that this hampering effect of the uniqueness,
irregularity, novelty and freedom of the individual and social organisms
can be got rid of by a process of multiplication in which particular eccentricities
will cancel. To economists, in particular, there is a strong temptation to
fall back upon the average man, in the belief that scientific determinism
justifies itself through averages. Now the radical defect of measurement
by averages, as a mode of social valuation, has already been disclosed. The
ascertained fact that the average money income, or even the average real
income, of the British people may have risen 10% within the last decade,
disables itself, by the very process of averaging, from informing us as to
the effect of this increase of national wealth upon national welfare. For
this effect depends upon the distribution of the increase, and the process
of averaging consists in ignoring this vital fact of distribution.
This defect of averages for purposes of interpretation, of course, involves
a consequent defect for purposes of guidance in economic conduct. The calculation
that a given course of national conduct, e.g., the expenditure of so many
millions upon improved transport, will raise the national or average income
by so much, loses all the worth of its superficial exactitude unless we know
how much of the increase is going to the landlord in rising rent, how much
to the labourer in rising wages.
This, of course, involves no repudiation of the true utility of averages,
but only of the spurious accuracy which their forms suggest. The exact statement
that the average income of an English family has risen 10% in the last decade
does imply a reasonable probability that an increase of total national welfare
has taken place.8 But it gives no information as to the amount of that increase,
and is consistent with the fact that there may have been a decrease, owing
to a worsening of the distribution of the growing income, or of the labour
and other costs involved in its production.
§10. So far upon the supposition that welfare is a quantity. It will
occur to statisticians that the information to be got from averages of income
may be justified by nicer discrimination. If, in addition to learning that
the average income of all families has risen 10%, we discovered the different
percentages which had been added to rent, interest, profits and wages, or,
better still, the ratio of increase for the different income levels, we should
surely then, by this extended use of averages, get nearer towards a quantitative
estimate of the increase of welfare that had been achieved!
This must certainly be admitted. By the nicer and more complex application
of these measures, we should approach a more accurate account of welfare,
so far as it is ultimately expressible in terms of quantity. If we discovered
that a proposed course of national policy would not only increase the average
income by 10% but would increase the lower incomes of the population in a
higher ratio, we should seem to have got a scientific warrant for the policy.
But even this degree of scientific authority would be purchased to some extent
by an artificial simplification of the actual problem of social-economy.
To the statesman no problem of actual finance is capable of being set in
such distinctively quantitative terms. Not merely cannot an earthly Chancellor
of the Exchequer know how much can be added to the incomes of the several
classes by the expenditure of so many millions upon transport, or upon any
other single service, but, if he could, he would not be much nearer to the
standard he requires. There are many different ways of raising the revenue
in question and an infinite number of combinations of these ways. The same
holds of expenditure. To take the simplest case; the ten millions that he
raises may be applied to transport, or to education, or to defence, all the
sum or any proportion, to each. Each expenditure claims to be beneficial,
an outlay for public welfare. But the benefit in the several outlays is not
equally presentable in terms of money income, and, so far as definitely economic
gains accrue, they are not equally immediate or equally assured. It is evident
that no amount of possession of statistical knowledge can possibly reduce
the problem entirely, or even mainly, to one of quantitative calculation.
It is equally true that when the problem is solved, its solution will appear
in quantitative shape, i.e., so much money for transport, so much for education,
so much for defence. It will seem to have been worked out by reducing the
three forms of desired benefits to common terms, and then dividing the ten
millions among them so as to secure an equivalence of gains at the margins.
Economists will point out triumphantly the alleged fact that the last £100
spent on education produces a national return of welfare exactly equal to
that obtained by the last £100 spent on gunboats, though his assertion
remains inherently insusceptible of proof. In truth, the Chancellor's mind
does not work in this way. So far as his statecraft is disinterested, or
even allowing for every form of bias, his mind forms an ideal of social progress,
of a happier or better state of things, and allots the outlay of his ten
millions in an endeavour to assist in realising this ideal. Now the ideal
itself is not chiefly a product of quantitative calculus, but of his more
or less informed imagination, and his more or less wholesome sympathies.
His views as to the means of realising this ideal can never be purely scientific,
though science may here be of considerable assistance.
If, treating expenditure more widely as an act of public policy, we consider
it as an operation of the general will of the community, a true act of political
economy, the problem remains essentially the same. When looked at through
scientific spectacles, it is a purely quantitative and mechanically ordered
act, because the scientific method by its very modus operandi ignores the
qualitative factors. So the nation is supposed to balance this gain against
another, and to lay out its revenue so as to get the largest aggregate of
some common homogeneous stuff called 'welfare', in such a way that the last
£100 spent on education is equivalent in its yield of this 'welfare'
to the last £100 spent on the latest super-dreadnaught, or the last
lot of old-age pensions. In truth, the common will no more functions in this
fashion than the personal will of the Chancellor. In each case Statecraft
is an Art, and the financial policy is an artistic or creative work in which
quantities are used but do not direct or dominate.
By this line of argument it may appear as if we had repudiated the entire
utility of a scientific calculus. This, however, is not the case. For though
all the determinant acts of policy or welfare, performed by an individual
or a society, involve organic unity of design, and the qualitative considerations
appertaining thereto, important and indeed necessary assistance is rendered
by the quantitative analysis of past acts expressed in the form of scientific
generalisations. A clearer understanding of the nature and extent of this
cooperation between science and art in the conduct of life enforces this
truth.
§11. Science takes its stand upon a twofold application of the assumption
of the uniformity of Nature, first, that all differences of composition can
be treated as differences of quantity or degree, secondly, that history repeats
itself. Now, just so far as these assumptions fit the facts, Science is valid
for interpretation and for guidance. This explains why astronomy, physics
and chemistry are more 'exact' sciences than biology or psychology, and why
they are able to give more reliable and authoritative rules for the arts
of navigation, engineering and drug-making, than the latter can for medicine,
for breeding or for education. Edward Carpenter has remarked that astronomy
is the most exact of the applied sciences, because we know least about it,
i.e., because we treat its subject-matter almost entirely from the single
quantitative standpoint of space relations. In all arts dealing entirely
or mainly with inorganic matter science occupies a seat of high authority,
because of the high relative uniformity of this matter and the comparative
regularity of its behaviour. In physics or in inorganic chemistry the individual
differences or eccentricities of the material are so trivial that they can
usually be disregarded, and history repeats itself with so much regularity
that quantitative laws apply.
The passage from the inorganic to the organic involves, as we recognise,
a double assertion of the qualitative: first, in respect of the unity and
uniqueness of the organic structure, and secondly, by reason of the novelty
that attends each act of organic change, vital movement, assimilation, growth,
reproduction or decay. The uniqueness of the individual organism and the
novelty of each of its changes are an assertion of the qualitative nature
of the subject-matter. So far as this qualitative nature prevails and counts
for 'conduct,' scientific analysis is impotent for interpretation and advice.
When organic matter attains the character of consciousness and the still
higher character of self-consciousness, the qualitative considerations reach
a maximum, and the interpretation and directive power of science a minimum.
But that minimum must not be disparaged. It is not inconsiderable. The assistance
which scientific laws can render to the finest arts of human conduct is very
important and is capable of constant augmentation. For so far as human nature
is uniform and stable among the units which constitute the life whose conduct
and welfare are in question, the interpretation and direction of science
has validity. To this extent a utilitarian calculus, based upon analysis
of past experience, can aid the statesman or the philanthropist in working
out his design. In the region of industry the extent of this scientific service
will be even greater than in the arts of conduct whose material is more exclusively
organic or psychical. For industry, considered as an art of human welfare,
will consist largely in the orderly and progressive adaptation of inorganic
matter, or of organic matter whose organic differences can be ignored, to
the satisfaction of those needs of mankind in which men are similar. That
is to say, in industry there exists and will remain a great deal of work
and of consumption which is essentially of a uniform or routine character,
requiring to be done by measured rules, and depending for its utility upon
the exclusion of all individuality or quality. This applies, not only to
those industrial processes which we term strictly mechanical, but to a great
many others where quality is a matter of comparative indifference. In the
progressive economy of human welfare mechanical or routine production will
even frequently displace an art in which quality was once displayed. So home-baking,
into which no small degree of culinary skill could go, has given way to machine-baking
in which the element of personal skill plays a diminished part, and on which
the individual taste of the consumer exerts little directive influence. This
may be taken as a typical example of the displacement of qualitative art
by quantitative mechanism. It is, of course, of very wide extension, being,
in fact, commensurate with the application of scientific methods in the world
of industry. Indeed, the sciences of chemistry and physics, botany and biology,
are everywhere invading the 'arts' of industry and imposing 'rules' upon
industrial processes. Even more significant is the application of the still
infantile science of psychology to the arts of business organisation and
enterprise and of marketing. How can psychology assist in the delicate art
of recommending goods to possible purchasers? Only on the supposition that
there is sufficient uniformity and stability in human nature to enable the
measured rules of past experiment upon other men to hold of this man. Only
so far as men are really the same sort of stuff, or so far as any differences
are measurable and calculable. Novelty alone can baffle applied science.
If it were true, as some appear to think, that machinery and routine method
were destined continually to absorb a larger and larger proportion of human
work, and to direct a larger and larger share of human life, economic science
with its quantitative calculus would acquire a continual increase of exactitude,
and a growing capacity for direction in the art of social conduct. But if,
as seems more reasonable, progressive industry must serve to feed a richer
liberty and novelty of individual and social life, the domain of quantitative
calculus, though absolutely enlarging, may be relatively shrinking.
We now seem able to get a more accurate understanding of what a scientific
calculus can do for the assistance of the art of social welfare. It can do
for that art what it can do for every other art, viz., furnish rules for
the regular. So far as the stuff which constitutes or composes human welfare
is uniform, i.e., so far as men are alike in their needs, and the material
for the satisfaction of these needs is similar, it can supply rules of social
economy which will have a high degree of validity. Though no two human organisms
are identical in structure, all human organisms within a wide range of environment
are so similar in the kinds of food, air and other material goods which they
require, that it is sound 'social policy' to ignore their differences and
to treat them as identical in the qualities of their demands and dissimilar
only in the quantities. The practical economy of 'markets' stands upon this
basis, and the quantitative treatment finds its true justification in the
utility of markets. There can be no market for the single or 'singular' consumer.
A market, i.e., a practical instrument for measurement of economic wants,
implies a standardisation of the desires of buyers and sellers. Just so far
as the members of an economic community are thus standardised in their preferences,
are economic laws applicable. Thus, for the scientific interpretation of
such a community, much depends upon the relative strength and importance
of the standardising and the individualising forces. In a society where the
so-called 'arts' of industry and of consumption have alike passed by imitation
or tradition into firm conventions from which the least transgression is
branded as an impiety or a wickedness, economic laws, based upon a sufficient
study of the past and present, will enable one to predict the future with
considerable accuracy. Primitive or backward communities are usually in this
conservative condition. Moreover, as they advance and become economically
progressive, it is observable that the most conservative and most calculable
wants and activities are those relating to the satisfaction of the primary
material needs. Hence it is evident that scientific predictions, based either
upon general considerations of human nature or upon past measurements, will
come nearest to fulfilment, according as they relate to the production and
consumption of those articles most deeply embedded in the standard of living.
Conveniences and comforts are more changeable than necessaries, and luxuries
most changeable of all. Now the marginal or least useful portion of those
supplies, which in the earlier or most useful increments satisfy some prime
need, are often luxuries. The marginal portion of the wheat supply goes for
cakes, or is thrown into the dust-bin as waste bread: the marginal oil goes
into motor rides. Taking expenditure in general, we find the last ten per
cent of every income most incalculable in its outlay, because it represents
those purchases in which custom is weakest and individual taste or opportunity
the strongest. In a word, it is precisely in those economic actions which
express marginal preferences, the pivot of the mechanical calculus, that
we find the maximum of instability and incalculability. For each of these
nice marginal preferences proceeds directly from the changing nature of the
organic personality. Whereas fifty per cent of a man's expenditure may express
the common satisfaction of the fixed physical needs which custom has embedded
in a standard of subsistence, thirty per cent the lighter but fairly stable
comforts belonging to his class, the last twenty per cent is the part in
which he expresses his individual character and his cravings for personal
distinction and variety of enjoyment.
The formal invalidity of the 'marginalist' method has already been disclosed.
The considerations just adduced indicate its practical futility as a means
of guidance for economic art. Neither as a deductive nor as an inductive
science can Economics furnish accurate rules for calculating or directing
future economic events. It can only prophesy within such limits as are set
by the assumptions of the stability of human nature and of its environment.
Its rules or 'laws' will best interpret and predict those economic actions
which are most remote from the margin, i.e., those which are most conservative
or regular. Marginal preferences will therefore be precisely those which
it is precluded from interpreting or predicting by the necessary defect of
the intellectual instrument.
§12. Thus the final futility of the mechanical method of marginalism
lies in its insistence upon applying a quantitative method of interpretation
to the most qualitative portion of the subject-matter, that portion where
the organic conditions of personality and novelty are of paramount significance.
Indeed, it is for this reason that economic science, though able to supply
relevant and important evidence, can never solve conclusively any social-economic
problem, even in that field of action where her authority is most strongly
asserted. A given rise or fall of price can never produce the same effect
upon demand twice running. Why? Because the desires and beliefs of the more
unsettled section of buyers, the 'marginal' buyers, will have changed. Nor
can this alteration in effect upon demand be calculated. Why not? Because
the changes in desires and beliefs are organic qualitative changes. Observations
of past price movements and laws based upon them are not thereby rendered
useless. For these organic changes will often be negligible so far as the
bulk of the market is concerned. But they negate the possibilities of exact
prediction, and often of approximate predictions on the margin.
This is why the 'great' business man often prefers to act by intuition than
by express calculation. He recognises that, so far as the more delicate judgments
are concerned, his 'feeling' of 'how things will go' is more trustworthy
than any estimate. He does not act blindly. He feeds and forties his mind
with facts and figures, until he is steeped in familiarity with the subject
matter. But he does not deliberately balance against one another these measured
forces and commit himself to the resultant. For he is aware that the problem
is not one of mere mechanics, a counting-house proposition, but one involving
for its solution sympathy and imagination.
But the crucial instance of the organic and spiritual nature of a distinctly
economic problem is in the case of credit. The mathematical mechanical treatment
claims to find its supreme justification in the part played by money, the
most abstract of economic phenomena. Credit, in its objective sense, is the
economic plenipotentiary, the absolute representative of economic power.
For he who has credit has the command of land, capital, labour, ability of
every sort, at any time and in any place. Credit is productive power and
purchasing power, for he who possesses it can convert it into any sort of
supply or demand he chooses. It is absolutely quantitative, fluid, divisible
and measurable. Such is credit, treated objectively by economic science.
But credit is also the heart and brains of the industrial system. Subjectively
regarded, it is an essentially spiritual thing, a delicate, sensitive creature
of human beliefs and desires. Its volume and its power for practical work
are affected by this spiritual nature. For its springs are fear, hope, prestige,
superstition, sympathy and understanding. Its true basis is neither gold,
nor goods, but credibility. And that quality of credibility is fluctuating
all the time for every individual, every business, every state. New unpredictable
events are constantly affecting it. No one can therefore say with any assurance
of correctness "a Bank should keep 20% of its resources in reserve or
at call," or put any such rigid limit for the operations of any Bank.
If we do set any such quantitative limit, we should realise that it is only
a rough practical rule, which, if interpreted with automatic rigour, leads
to waste and error in the actual working of finance. For by no plotting of
curves can you reckon the future flow of human credibility, or the application
of a given amount of concrete credit to the ever-changing gains and risks
of human industry. Take the critical case of a collapse of credit and the
run upon a Bank. To predict with even approximate accuracy the course of
such a run, or to check it by calculations, based upon past experience of
similar crises applied to the records of present assets and liabilities,
would be impossible. Why? Chiefly because of the psycho-physical factors,
the play of organic forces. You can calculate with close exactitude the strain
imposed upon a bridge of a given size, material and structure by a given
weight, distribution and pace of traffic. You cannot calculate with equal
exactitude the strain which a given quantity of liabilities, however carefully
analysed and graded, will impose upon a Bank reserve of a given size.
The incalculable element consists of organic novelty, the changes due to
having to deal with matter not dead and homogeneous but living and organised.
The citation of such instances is not designed to prove that monetary and
other statistics are practically useless for the prediction and solution
of social-economic problems. On the contrary, they are exceedingly useful.
But the formal exactitude which they carry in their method can never be conveyed
into the work they are required to assist in doing. The most abundant supply
of the most accurate statistics, utilised by the most approved methods of
economic science, can only afford results of a rude approximate validity,
expressed in tendencies. The practical man in business, in politics, in every
mode of social conduct, will supplement and correct the application of the
scientific rule by the play of private judgment and intuition.
* * *
§13 If this is true as regards all predictions of
future economic happenings, it is till more true of the conscious purposive
guidance of these happenings by the application of a human standard of values.
The practical statesman or social reformer, confronted with a concrete social
problem, e.g., the demand for a state enforcement of a national minimum of
wages, local option for the closure of public houses, or a referendum for
constitutional changes, will find himself 'paying attention' and 'giving
weight' to a number of diverse and opposing considerations. How will the
selection and the 'weighing' of these considerations be brought about? Not
directly and consciously by the application of what may be termed his social
ideal, the image in his soul of the society which seems to him absolutely
the most desirable. The relation of that ultimate ideal to the particular
scheme under consideration, e.g., a national minimum wage, may be too distant
and too dubious to afford valuation and direction. The operative ideal will
be derivative, one of a related set of possible-desirables, limited and practicable
ideals which form the most potent instruments of his statecraft. Such an
operative ideal for an Englishman at the present time might be the vision
of the State, as the collective will, securing by law a clearly conceived
standard of sound efficient life for the ordinary working-class family. This
present practical ideal, derived from a wider conception of the duty of the
State in relation to the individual members of a civilised society, would
itself be a far wider scheme than the particular proposal, that of national
minimum wage, which it was invoked to assess. The statesman, enlightened
by this derivative ideal, would apply it as a test and standard to the particular
proposal. He would consider it, not merely 'upon its own merits' but as incorporated
in the more complex organic plan of his national minimum. This organic plan
and purpose would determine the 'value' he gave to the various 'pros' and
'cons,' as for instance to the consideration how far legal intervention might
weaken the private organisation of workmen in their trade-unions, so damaging
other benefits of trade-unionism, or the consideration how far it was better
to wait and secure a more democratically administered State before entrusting
it with the delicate function of adjusting pecuniary arrangements between
workmen and employers. This plan or purpose of a national minimum, as a possible
desirable, will of course not remain quite stable in his mind, will not be
a rigid standard. It will change somewhat in pattern, and in definiteness
of outline, as some fresh outer or inner experience makes any part of it,
or the whole, seem more or less desirable, or more or less possible, than
formerly.
§14. But the important point to note is that it is this larger organic
plan or vision, the character and changes of which are essentially qualitative,
that furnishes the standard and stamps with their respective 'values' the
various considerations which are said to 'determine' the practical value
of the proposal and its acceptance or rejection. No social-economic proposal,
however distinctively quantitative it appears, can be humanly valued in any
other way. It is for this reason that a mere economist is always disabled
from giving practical advice in any course of conduct. Take two examples.
Political economy can legitimately apply laws of value so as to show that,
under competitive conditions, a nation must produce a larger quantity of
marketable goods under a policy of free imports than under any sort of Tariff.
But that proof in itself can never be sufficient ground for rejecting either
a Tariff for revenue, or even a Tariff for protection. For the Statesman
can never take the maximum of marketable values as his final and sufficient
test. If it could be shown that national security were involved in a protective
system which kept all necessary industries within the national limits, he
might plead 'defence is more than opulence.' Or, if it could be shown that
a protective tariff could be operated so as to distribute a slightly reduced
aggregate of wealth in a manner more conducive to the popular welfare and
that this consideration was not offset by fear of corruption or of impaired
industrial efficiency, or other disadvantages, the Statesman might rightly
adopt a Tariff in the teeth of 'economic laws.'9
Or, take another example, the proposal for an eight hours day, secured by
law. A purely economic enquiry might, by considering the elasticity of labour
in various employments, arrive at the conclusion that a general shortening
of the work-day would involve a present reduction of the product by so much
percentage in different trades, and that it might involve a reduction of
profits and of wages and a probable loss of so much export trade in various
industries. It might even present some tentative estimates as to the effects
of the pressure of this new cost of production in stimulating improved economies
in mines, factories or railways. Such information would be useful and relevant,
but not authoritative upon the judgment of the Statesman. For the social
value of a shorter work-day would depend mainly upon the organic reactions
of increased leisure upon the whole standard of life of the working family,
how it affected his expenditure of his wages, its effect upon his health,
education and recreations, the cultivation of family affection, the better
performance of neighbourly and civic duties, and all that is involved in
more liberty and a larger outlook upon life. It is evident, in the first
place, that these essential considerations lie outside the calculations of
the economist, and, secondly, that the actual value set on each of them will
depend upon and be derived from the whole faith and social vision of the
statesman in question.
This social or human valuation of a so-called economic process or good,
involves then two departures from a quantitative calculus; first, the reduction
of the particular economic factors themselves from financial or other quantitative
terms to vital or subjective terms; secondly, the restoration of this artificially
severed economic process to the larger integrated process of human life from
which it was abstracted by the scientific specialism of the economist. The
economist can find the facts, but he cannot find their human importance or
value, because assigning human value means referring to an extra-economic
standard. It means more than this. It means a reference to an extra-scientific
standard, one whose distinctive character consists in its being the expression
and operation of the organic complex of forces composing the social personality
as mirrored in the conscious or unconscious efforts of the individuals and
of the Society who make the valuations and frame their conduct upon them.
§15. In conclusion it is necessary to enforce an exceedingly important
distinction in the conception of social or human valuation. The term means
two things, the attribution of human or social value by an individual and
by a society. In most of our illustrations we have taken the standpoint of
the Statesman or the reformer, or of some other person, and regarded social
values from his eyes. We have taken his ideal as a social ideal. So it is
in the sense of being his ideal of a society. But it is essential also to
consider society as seeking to realise its own ideal. 'The whole succession
of men during many ages,' said Pascal, 'should be considered as one Man,
ever living and constantly learning.' This is the true organic view of humanity,
regarded either as a single whole or in its several races, nations or communities.
The apophthegm is not primarily of political or of ethical significance,
but a statement of natural history. It is corroborated in a striking manner
by modern biological teaching, with its continuity of the germ-plasm, its
embryonic recapitulation and its specific evolution. But not until natural
history is rescued from the excessive domination of a purely physical biology,
and is read in the language of collective psycho-physics, do we grasp the
full bearing of the organic conception in its application to a society. For
this conception of mankind as working out the human career by the operation
of its original supply of faculties and feelings, in which instinctive physical
motives take an increasing admixture of conscious rational guidance, is the
key to an understanding of the ascent of man. There is no clear evidence
of the continuous ascent of man regarded as individual, at any rate within
'historic' times. There is evidence of the ascent of human society towards
a larger and closer complexity of human relations and a clearer intellectual
and moral consciousness. This means that mankind, as a whole, and its several
societies, is becoming more capable of a human valuation and of a collective
conduct of affairs guided by this conscious process. In politics, regarded
in its wider meaning, this truth has taken shape in the modern conception
of the general will, which in popularly-governed States functions through
public opinion and representative institutions. Following our examination
of the limits of science or 'rationalism' in the processes of valuation and
of conduct on the part of individuals, we shall expect to find some corresponding
limits in collective man. In other words, the general will of a people cannot
be regarded, either in its estimates or its determinations, as a merely or
a mainly calculative process, working out the respective values of existing
circumstances, or proposed changes, in terms of clearly-defined utility.
It does not even with fuller information, wider education and firmer self-control,
tend towards this scientific politics. Collective self-government, like individual
self-government, will always remain essentially an art, its direction and
determinant motives being creative, qualitative, and rooted in the primal
instincts of man.
§16. It is upon this conception of the collective instincts of society
regarded as an organism that a rational faith in democracy is based. The
animal organism, itself a society of cells, is endowed with energy of body
and mind, operating through an equipment of instinctive channels towards
its own survival and development and the survival and development of its
species. Where there is danger lest too much of this energy should be consumed
upon individual ends, too little on specific ends, the social or self-sacrificing
instincts are strengthened in the individual, and are reinforced by the herd
or specific feelings of other individuals, as where plunderers of the common
stock or shirkers in the common tasks are destroyed by the hive or herd.
The instinct for the survival and development of the hive, herd or species,
cannot be satisfactorily explained as belonging only to the psycho-physical
equipment of the individual members. On this basis, viz., that of attributing
a social nature only to the individual members of a society, the acts of
devotion and self-sacrifice, and still more the acts of preparatory skill,
the elaborate performance of deeds that are means to the survival and well-being
of a future generation, become mere haphazard miracles. Take the familiar
example of the Hunting Wasp.
'The larvae of the various Hunting Wasps demand a motionless prey who will not, by defensive movements, endanger the delicate egg and, afterwards, the tiny grub fixed to a part of the prey In addition, it is necessary that this inert prey shall be nevertheless alive; for the grub would not accept a corpse as food. Its victuals must be fresh meat and not preserved provisions. These two antagonistic conditions of immobility and life the Hymenoptera realises by means of paralysis, which destroys movement and leaves the organic principle of life intact. With a skill which our most famous vivisectors would envy, the insect drives its poison sting into the nerve centres, the seat of muscular stimulation. The operator either confines himself to a single stroke of the lancet, or else gives two, or three or more, according to the structure of the particular nervous system and the number and grouping of the nerve centres. The exact anatomy of the victim guides the needle.'10
Such conduct is not made intelligible by any other hypothesis
than that of a collective life of the species, the individual lives being,
in fact, parts of a common specific life towards which they contribute in
a manner similar to that in which the cells, with their particular lives,
contribute to the life of their organism. Only by this application or extension
of the 'organic metaphor' to the relations between members of an existing
generation, and between successive generations, can we construct an intelligible
sequence of causation between these preparatory acts of individual insects
of one generation and the results accruing to other individuals of another
generation.
This 'general will' (may we not call it so?), urging the individuals to
the fulfilment of a purpose which is but slightly theirs, and is not mainly
that of the existing generation, but which embodies the general purpose of
the species or some wider purpose of a still larger organic whole, can only
be realised for thought and feeling as a single current of will implying
and conferring unity of life upon the species or the larger unity.
In 'lower' animal spheres we recognise this fact. But there is a tendency
to hold that man, subject to some such specific urge or instincts in his
primitive stages, has become more and more individualised and has done so
largely by becoming more rational. The gradual displacement of instinct by
reason, it is contended, has made man more self-sufficient, his life more
of the nature of an end, less of a means towards the life of his tribe or
nation, or even towards that of humanity as a whole. Is this so? There are
two issues that open here. In the process of civilisation a man certainly
becomes more individual. He differs in character more from his fellows than
in earlier times; he is able to devote, and does devote, a larger share of
his energies of body and mind to activities which are primarily self-regarding.
Moreover, he tends to rely less exclusively or predominantly upon what would
be called his instincts and more upon his reason.
§17. The 'general will,' which through forms of tribal custom and of
gregarious instinct pulsed so vigorously and so insistently in tribal life,
seems to have weakened with every expansion of social area and with the advancing
complexity of social relations. The economy of human energy allows individuals
to apply a larger share of the life-force that flows through them to what
appear to them their private purposes, a smaller to the protection and development
of the society or species. If we were to assign any final validity to the
opposition of individual and society, this change might be regarded as a
shrinkage of the dominion of the 'general will,' the specific as contrasted
with the individual purpose. But though the narrow intense tribal will may
thus appear to have yielded to a broader, feebler and less imperative form
of national or social will, it by no means follows that this latter works
less effectively for the common good. As man becomes more intelligent and
more reflective, and has fortified himself with larger and more reliable
records and better methods of controlling his environment, the instinctive
operations of the will of groups of tribal animals give place to more conscious,
more rational, purposes.
The change must not indeed be overstressed. The validity of the general
will does not depend upon the degree of conscious rational purpose it has
attained. It remains to-day in the most highly civilised communities what
it was in primitive tribal life, an organic instinct. The rationalisation
of this blind faculty of organic self-protection and advancement has not
yet gone very far. Indeed, it is exceedingly important to recognise that
an organic instinct of conservation and of progress underlies the wisdom
of the people. Those who consider politics a rightful monopoly of the educated
classes doubly err; first, in ignoring the instinctive wisdom of the people,
secondly in claiming for education a higher value for political direction
than it possesses. The political wisdom of the Roman or the germanic peoples
partakes far more of a natural sagacity than of a reasoned process. If this
applies to the great statesman, it is still more applicable to the body of
the people whose consent or active cooperation contributes to the evolution
of a stable and a progressive state. It is impossible to understand or to
explain any long and complex movement in national history by piecing together
the conscious rational designs of the individuals or groups of men who executed
the several moves of which the movement seemed to consist. Such a structure
as the British Constitution, such an episode as the French Revolution, cannot
be otherwise regarded, in its organic unity, than as a product of energies
of common will and purpose, wider, deeper and obscurer in their working than
the particular intelligible motives and aims which appeared on the stage
of parliamentary debates, military campaigns or mob violence. Every student
of the 'spirit' of one of these great national dramas is driven to recognise
some moulding or directing influence, some urge of events, by which they
seem to unfold themselves in a larger and more complex pattern or consistency
than is perceived by any of the agents. There is sometimes a tendency to
give a mystical interpretation to this truth. So Victor Hugo writes of the
French Revolution:
'Être un membre de la Convention, c'était être une vague de l'Ocean. Et ceci était vrai des plus grands. La force d'impulsion venait d'en haut. Il y avait dans la Convention une volonté qui était celle de tous et a'était celle de personne. Cette volonté était une idée, idée indomptable et démesurée qui soufflait dans l'ombre du haut du ciel. Nous appelons cela la Révolution. Quand cette idée passait elle abattait l'un et soulevait l'autre; elle emportait celui-ci en écume et brisait celui-là aux écueils. Cette idée savait où elle allait, et poussait le gouffre devant elle. Imputer la révolution aux hommes, c'est imputer la marée aux flots.'11
The explanation of our colonial empire as the result of
a career of conquest and expansion conducted 'in a fit of absence of mind'
is an exact statement of the truth. For though a few great empire-builders,
such as Warren Hastings, Molesworth, Elgin, Grey and Rhodes, may have played
their parts with some measure of conscious design, the individual channels
of this current of adventurous and constructive energy embodied in the general
process had as little an idea of the imperial edifice as any working bee
of the great symmetrical structure of the hive.
§18. This sense of 'manifest destiny' is surely no illusion. It is
the evolutionary method by which all organic process is achieved, whether
in the growth of an oak tree from its acorn, of a motor car from the earliest
hand-barrow, a musical symphony from a savage tom-tom, or a modern federal
state from the primitive tribal order. In every case a number of what seem
separately motived actions are seen to carry and express the continuity of
some common tendency which brings them under the control of a single collective
design. This wider purpose is seen operating upon the larger organic stage
of conduct in ways closely analogous to the operations of the poet or the
artist in any human fine art. It exhibits the urge of an inner flow of psycho-physical
energy seeking ever finer modes of expression by moulding the materials at
its disposal. As soon as we grasp this idea of the collective artistry of
a species or any other organic group, we recognise how lacking in logical
finality is the accepted antithesis of instinct and reason. The reason of
the organism will appear as a blind instinctive drive to the cell whose conduct
it directs. So the specific purpose will show itself as instinct in the individual
organism, though it may be neither blind nor unconscious to the species taken
as the organic unit. Nay, we may go further and suggest that advancing reason
in the individual animal may consist in a growing sympathy and syn-noesis
with the operations of the wider organism. Must not this be what happens
when what we term reason endorses and reinforces the instinctive actions
of specific preservation and well-being, substituting reflection for impulse,
plans for customs, orderly and changing institutions for blind ordinances
whose authority is gregarious imitation or Superstitious prestige? Are we
wrong when we trace an instinct of obedience to a chief transformed into
a reasoned submission to the law? May not then the whole process of the rationalisation
of man be regarded as a bringing of the individual man into vital communion
of thought and feeling with the thoughts and feelings of the race, of humanity,
perhaps of the larger organic being of the kosmos? For a man only becomes
rational so far as he takes a disinterested view of himself, his fellow-men
and of the world he lives in, and the wider, closer, keener that view the
more rational he becomes. Thus the evolution of the mind of man into a fuller
rationality means the strengthening and clarifying of those relations of
feeling and thought which bind him to his fellows and to his world and which
are rooted in the 'blind' instincts of gregarious, superstitious, curious
man.
§19. The upshot of these considerations is to break down the abruptness
of the contrast between reason and instinct and to recognise in reason itself
the subtlest play of the creative instinct. The 'disinterested' nature of
the search for truth has been a subject of derision among some thinkers,
who see no way by which man the individual can disengage himself from the
selfish motives which seem to rule him and to dispose alike of his emotional
and intellectual energies. In man regarded as individual it is very difficult
to recognise any possibility of a disinterested motive, because all such
motives are ruled out ex hypothesi. But regard the individual man as subject
to the dominant control of some wider life than his, that of race, society,
humanity or kosmos, and the difficulty disappears. He becomes capable of
'disinterested' curiosity, 'disinterested 'love,' self-sacrifices' of various
kinds, because he is a centre of wider interests than those of his own particular
self. The action of a Japanese who throws himself upon the Russian bayonets
at the word of command, of a doctor who inoculates himself with a deadly
poison for the sake of science, the steady lifelong toil of millions of peasants
growing the food supply for unknown millions of town-dwellers, are no longer
'disinterested' when they are looked at from the standpoint of the interests
of humanity as a whole. This collective will and intelligence can never be
considered wholly 'blind' when regarded from the collective standpoint. Every
directive instinct of an organism, at any rate in the animal world, must
be accredited with some related emotion,12 and this emotion, regarded as
a fact in consciousness, must be accredited with some measure of intelligence.
The creature subject to the drive of an emotion must have some idea of what
he is about, though the full psycho-biological 'purpose' of his action may
be hidden from him. This organic standpoint gives an intelligible meaning
to what we may call the 'natural wisdom of the people.' The herd, the tribe,
the nation is endowed with instincts of self-protection and of growth. These
instincts are accompanied by corresponding emotions which, according to the
degree of intelligence they contain, impel it to a right or economical use
of the physical and spiritual environment for survival and 'progress.' The
instinctive and emotional stream of this common life becomes more 'rational'
as the factors of intelligence accompanying the emotions become clearer,
better coordinated and endowed with larger capacity of central direction.
In the evolution of animal organisms this growth of rationality implies,
and is compassed by, a decline of the special instincts with a consequent
weakening of the special emotions attached to them, and the substitution
of a flexible general instinct operating through a centralised nervous system
and coordinating the special organic emotions and activities to serve a more
clearly conceived organic purpose of the individual or the race. Reason,
regarded as a motive power and not as a mere intellectual organ, must be
considered as this general instinct of survival and growth, having its roots
in the apparently separate instincts of hunger, procreation, shelter, pugnacity,
flight, gregariousness, protection of young, curiosity, constructiveness,
acquisitiveness and the like, and utilising the emotions proper to these
several instincts for the economy of some more general plan of life. Reasoning,
as an 'intellectual process,' will probably derive its emotional food and
impetus principally from the emotions carried by the instincts of flight
and pursuit, which involve quick judgment in the use of means, and by the
curiosity and constructiveness which impel the more reflective study and
adaptation of material environment.
It is, however, no purpose of mine to enter into the particulars of this
theory of the natural origins of reason. It is sufficient to recognise; first
that prior to the dawn of 'reason' in organic evolution, the instincts carry
and apply a wisdom of direction of their own; secondly that when reason takes
over much of this directing power it operates by coordinating, not by creating,
motive power.
So when we substitute for the individual organism the herd, the tribe, the
nation, ascending to larger collective wholes, sustained by a clearer consciousness
of unity and a fuller use of central conscious purpose, we follow the same
economy of government. If, as is often urged, a nation, regarded as an organism,
must be classed as a comparatively primitive type, on a level rather with
the sponges or algae than with the higher animals, we shall expect to find
that a very large measure of such 'wisdom' as it possesses will be instinctive
rather than 'rational.' The evolution of a general will, whether operative
by public opinion or governmental institutions, will on such a hypothesis
possess no great degree of centrality or clear consciousness. Good government
in such a society could not be compassed by an oligarchy or even a representative
assembly assuming a measure of detailed and far-sighted policy for which
the collective life was not yet ripe. A large measure of what from the rational
standpoint would rank as 'opportunism' would be the true policy at such a
stage of social evolution, and the wise statesman would keep his ear to the
ground so as to learn the instinctive movements of the popular mind which
would yield the best freight of political wisdom at his disposal. Only as
education and closer and more reliable communications elevated the organic
structure of Society, imparting higher spirituality, more centrality and
clearer consciousness to its life, should we expect any considerable rationalisation
of the general will. Meanwhile arise the temptation and danger of the formal
instruments of government falling into the hands of a little highly self-conscious
group or class, who may seek to impose upon the conduct of the nation its
clearer plans and far-sighted purposes "under the name and pretext of
the commonwealth." The absolute or actual wisdom of their will they
will be apt to represent as embodying the reality of the general will. It
is what they think 'the people' ought to will and therefore what the people
will come to will as soon as they are really capable of willing intelligently!
It is, however, exceedingly important to try and recognise the instinctive
wisdom of the people, in order that a misrepresentative government may be
prevented from ignoring it and substituting the rationalism of some little
conscious class.
This does not mean that a government must always govern and adapt its laws
to the level of the current feelings, desires and aspirations of the average
man, giving him no lead or stimulus to higher rationality. Such a course
would be to ignore that capacity for progress and that susceptibility to
proximate ideals which are themselves implanted in the instincts of mankind.
But it does require that a government shall keep itself in the closest sympathy
with the concrete feelings and ideas of the people, maintaining such contacts
as shall enable its acts of policy to rank as substantially correct interpretations
of the general will, not as the designs of a supreme governing caste or group
of interests, pumped down through some artfully contrived electoral machinery
so as to receive the false formal impress of 'the general will.'
These reflections upon the nature of popular government may appear to have
carried us far afield. But they have been no irrelevant excursion. For upon
our view of the nature and measure of rationality to be imputed to the processes
of reform or progress in national life must depend our view of the part which
can be played by the social sciences which are invoked as the chief instruments
of conscious collective conduct.
Recognising that social progress in all its departments remains always a
collective art, inspired and sustained by creative impulses which owe neither
their origin or their validity to science, we shall regard the social sciences
as servants rather than directors of social progress. We shall be concerned
to ask, What are the proper and particular services such sciences can render?
How can they assist a people in utilising its human and natural resources
for the attainment of the best conditions of human life, individual and social?
This work is written as a partial and illustrative answer to these questions.
Taking industry, that department of social conduct most susceptible of the
quantitative measurement which is the instrument of science, we have endeavored
to construct and apply an organon of human valuation to its activities and
achievements. Recognising that industry, regarded from the individual or
the social standpoint, was an organic activity, involving continual reactions
upon the whole life of the individual and the society, we insisted that the
standard of valuation must be constructed in terms of organic well-being.
In other words, industry, both from its productive and its consumptive side,
must be valued in terms of individual and social health, that term being
selected as the one which best expresses the conditions of conservation and
of progress universally recognised as the essentials of a 'valuable' life.
In the actual interpretation of this organic welfare, we took for our valuer
'enlightened' common-sense. The roots of this common-sense we find laid in
the silent, instinctive organic strivings of mankind. It is the business
of science, or organised knowledge, to direct these strivings so as to enable
them to attain their ends more economically. It does this by interpreting
experience and supplying the interpretation in the shape of 'laws' to enlighten
common-sense and so enable it to choose its paths. For the economy of blind
instincts is only accommodated to simple activities in a stable environment,
and is even then subject to enormous vital wastes. For complicated activities
in a rapidly changing and complex environment, a general instinct of adaptability
of means to ends, involving conscious reflection, is required. Reason is
this general instinct and science is its instrument. Society, as its processes
of evolution become more conscious, will be able to use more profitably the
services of science. Those services consist not in authoritative legislation
for social conduct, for laws based upon experience of the past can have no
full authority to bind the future. Faith and risk-taking, involving large
elements of the incalculable, are inherent in organic processes, and are
the very sap of spiritual interest in life. They can never be brought under
the dominion of a scientific economy.
But the main staple in every art of conduct is repetition and considered
adaptation, resting upon a continuity of conditions. For this part of social
conduct science, when sufficiently equipped, can and will offer authoritative
advice. Throughout all nature the arts of conservation and creation run together.
The art of conservation is the practical function of science: the art of
creation ever remains a region of beckoning liberty, continually annexed
by science, and yet undiminished in its size and ts appeal.
'For all experience is an arch where through
Gleams that untravelled land whose margin fades
For ever and for ever as we move.'
NOTES:
1. It was precisely on this rock that J.S. Mill's utilitarianism
split. He tried to incorporate in the quantitative calculus of Benthamite
pleasure and pain distinctions of the quality or worth of different sorts
of pleasure and pain, and failed to furnish any method of reducing them to
common terms.
2. Wicksteed, Common Sense of Political Economy, p. 405.
3. p. 409.
4. p. 153.
5. p. 156.
6. p. 159.
7. This older doctrine of marginalism, concerned with the comparison of marginal
utilities, or marginal costs, in the application of expenditure of productive
energy, must not be confused with the novel doctrine which we discussed in
Chapter XI in relation to wages. In the newer doctrine any unit of a supply
may be regarded as the marginal unit and every unit as equally productive
or useful. According to the older doctrine each unit has a different cost
or utility.
8. Professor Pigou in his Wealth and Welfare discusses with skill
and precision the measurable influences of an increase of the general dividend
upon general welfare, but omits to take into consideration the 'cost' factors
which enter into 'welfare,' however that term be defined.
9. Protectionists can seldom, if ever, plead successfully either of these
cases. By reducing the community of economic interests between nations Protection
normally increases the chances of war, while lessening the national resources
which are the sinews of war. So, likewise, its normal tendency is to worsen
the distribution of Wealth within the nation.
10. Henri Fabre, The Eng. Review, Dec., 1912, The Modern Theory
of Instincts.
11. Quatre-vingt-treize, Livre III, Chapter XI.
12. Cf. McDougall, Social Psychology.