Novel Economics

THE interest which the modern world takes in analyzing conditions of material existence is certainly not due to any mere enjoyment in intellectual exercise or in metaphysical subtleties. The age is far too serious for that. Nor is this broadening interest in economic questions confined to the people of any one form of government; it spreads impartially both in monarchies and republics. This stir, moreover, is not confined merely to the so-called working classes; for, to go no further for illustration, it is in the educated and titled classes of London that we find the most active propagation of socialism in England. Widespread as is this interest, still its sources lie too deep for easy or dogmatic explanation. Whatever they may be, they are probably connected more with the heart than with the head; they are mingled, one might suppose, with the stir in ethical and religious questions. It, may be said that the marvelous growth of wealth and the profuse extravagance of modern life have accentuated the differences between social classes, and started even sluggish minds to thinking over the causes of material inequality; but this cannot be wholly true, since a century ago the social chasm between classes was even greater than it is now, and yet there was not then this same state of mind we see in those about us. But true it is that, whatever the cause, the heart of man is stirred by a new interest in his fellow-creatures.

The charming naïveté of Bellamy wins admirers, probably, because warm-hearted, impulsive, and helpful people have had their sympathies touched by the bitter sufferings of the poor, and they rebel against the conditions which make such things possible. They are not troubled, however, by the inadequacy of the means to the end. Again, the hold which socialism has on its followers is due far less to the little-understood theories of Marx or Lasalle than to the appeals often made to feelings and passions. In themselves the ideals of socialism are lofty and even noble; in the contemplation of them there goes out a great expenditure of sympathy. It would be pathetic indeed were all this exercise of feeling to be in vain; but we need not think so. This new interest will have its effect, doubtless, in broadening views and deepening insight. It will add its part to the coral reef of social growth, and will help insensibly in the building up of a firmer foothold for human life. Morality and character are essentially the bases of social growth. To the extent that a sense of right becomes more generally diffused and conscience more often consulted will social life find support, and not damage, in the unavoidable interdependence of different classes of society.

Our author, however, sees progress toward a higher intellectual and moral plane by the antecedent operation of material gain alone. “We can only be helpful to others, ” he says, “ in proportion as we are well provided for ourselves. The poor, the weak, and the inferior are always a burden rather than a help to their friends.” Morality cannot exist except by the previous operation of material comfort, — “the material being the basis, the intellectual the means, and the moral qualities the result. ” According to this philosophy, the hard conditions of existence to the Scot or the New Englander, on a thin and barren soil, led to a scanty moral life; while the rich soil, the comfortable existence, of tropical lands yielded a crop of higher morality and larger social growth. Wherefore New England must capitulate to Brazil or Mexico.

In attempting to show that his principle is supported by historical data, the author disappears in the trackless forest of his own speculations, where no historian can possibly follow him. “The most superficial acquaintance with the history of the United States is sufficient to show that our republican institutions are the consequence, and not the cause, of our material prosperity. The republic was born of the social and intellectual character growing out of a long period of previous industrial prosperity, and this prosperity was due to causes long antedating the slightest observable democratic tendency in our political institutions. ” The author, evidently, has overlooked the facts that “republican institutions ” were a fixture in Virginia in 1619; that officers were chosen by the people, and local self-government existed, from the very beginning, in the settlements of Connecticut and Rhode Island. He goes even further by characterizing the French Revolution as a struggle “for material existence only.” It is useless to pause at these errors; for to such a mind history is but putty, to be turned to any shape, as the purpose presents itself. We may then pass on to the author’s economic proposals.

Acknowledging the evils with which society is crowded to-day, and filled with a longing to see the aims of socialism accomplished, to the end that human life may be less unequal and human hearts less scarred by needless suffering, we must bluntly ask by what means the evils can be remedied, and a new order of things be brought into existence. Depraved as we are, but few of us would be unwilling to see poverty exchanged for comfort and the lives about us irradiated by happiness. The task is not in bringing society to want this; we all long for this consummation. The real difficulty, however, — and it is the crux of the whole matter, — is in the means. How can bad people he made better? How can employers be made less selfish? How can the improvident be made provident ? How can people be made to think, and not act on mere impulse? These are serious questions, as important as they are hard to answer. He who will give practical answers to them deserves well of the state. But the quacks who teach that character can be created by public legislation, and who revel in orgies of annual enactments, should at least be given a little less attention.

Although Mr. Gunton is not a socialist, he flouts the work of the past, contending for a break with all past economic thinking, and the construction de novo of a new fabric of social philosophy. Here, in truth, we find ourselves sympathizing with him in the regret that former writers have not solved all the knotty questions. To escape these difficulties, he takes refuge in the porches of the “ New School; ” but residence therein makes him less hopeful than we could wish. “ The New School, ” he says, “ has been critical rather than constructive. It has contributed far more to break up the old than to establish a new body of economic doctrine. . . . No approximately adequate explanation of wage phenomena has been furnished, nor any affirmative principle of public policy suggested.” Yet as to the amount of destruction of the old principles Mr. Gunton’s own friends do not agree with him. Adolf Wagner, “the corypheus of German economists ” (as he is styled by Dr. R. T. Ely, who himself may be regarded as the “corybant ” of the American school), after mentioning as parts of the old principles the law of diminishing returns from land, the doctrine of population, the limitation of production by capital, and the wagesfund theory with a few modifications, adds very strongly, “All these old doctrines are maintained by Cohn, as they have been by Röscher, by Schäfle, and myself.” Disavowing these principles, Mr. Gunton is unsupported by the greatest of German economists, who are usually — and wrongly, it seems — spoken of as despisers of the so-called “Old School.” In short, much of the talk about the old and new schools of economics is spoken for Buncombe. The results of the past are not absolute, as they are not in any scientific study. In recent years there has been no break in the continuity of economic thinking, but only progress and movement ; not a building of new foundations, but an improving of the old structure.

There are those, nevertheless, who insist upon a radical departure from all past economic thinking, and Mr. Gunton is one of them. He introduces a new distinction between economic and social wants. The former are the primal wants of “food, clothing, and shelter; ” the latter “are mainly acquired, and . . . arise from the quickening influences of social intercourse; these are luxuries at first, but by frequent repetition finally become necessities of social life.” The moment, however, we consider the means of obtaining satisfaction for wants in both of these classes, the distinction disappears; the same principles govern the means by which we satisfy a want for corn as well as a want for a Roman blanket.

The author’s pivotal doctrine, furthermore. is that “consumption” precedes “production,” paradoxical as that may seem. “To-day’s wants determine to - morrow’s efforts, and yesterday’s actual consumption determines to-day’s actual production. Clearly, then, consumption is not only potentially prior to, but it is actually the cause of production.” The latter statement seems to be an argument for a predetermined wages fund, which the author abhors. If not that, then it is weak. “Demand,” he says, “always means want, consumption, and supply means service, production.” The reasoning in this is far to seek. For if demand is always want, and no more, then capital has no place in production; a beggar will avail as much in production as the owner of buildings and machinery. The absurdity of this is so evident that a critic might be thought to have perverted the author’s meaning. Yet he says further on this point, “If ... a want is accompanied by a willingness to give the necessary effort... to produce it, a greater quantity of the commodity will be produced to-morrow.” That is, a desire, without capital, can produce wealth, effort only being necessary. That an oversight like this should lead to a reductio ad absurdum is to be expected, and before the paragraph closes it is said that the “effective intensity and extent [of desire] are economically measured by and registered in actual consumption. ” He sums up by making consumption “the final regulator of production.” Now, this surely is nothing more than an identical proposition: what men actually get for consumption is the regulator of what they have produced. Verily, men do not consume more than they have produced. And yet the author regards this as a great discovery, saying, “Simple as this truth is, it is far from being generally understood; indeed, the reverse view is commonly held.”

It is not necessary further to discuss the arguments of a writer who does not believe that capital is the result of saving. Naturally, if capital has no function in production, there is little use in hunting for the cause of its existence. The author teaches also that there can be no rise of prices, and that “ wages do not fall.” His reasoning on value and prices, and on wages, is contradictory and confusing. It is therefore a matter of regret that the study of the means for aiding the unfortunate, for lessening the sufferings of poverty, for implanting the desire for better things in men’s hearts, should be associated with defective reasoning, and even with chimerical speculation. There are means for improving our fellow - men which we constantly pass by; and in these means Christian principles will be found to be fundamental.