§ 5. SOCIETY AS AGENCY OF PRODUCTION The advantage claimed for society as an agent of production is not primarily greater efficiency, although it is claimed that the present method is enormously wasteful except where there already is private monopoly. Nor is it in the social service rendered by providing great variety of goods, and of the kinds most wanted. It is rather (1) that in the case of public service enterprises, such as transportation or lighting, fairness to the various shippers, localities, and other users can be secured only through public control or operation. These services are as indispensable to modern life as air or navigation. Only by public agency can discrimination be avoided. (2) That the prizes to be gained are here so enormous that bribery and corruption are inevitable under private management. (3) That the profits arising from the growth of the community belong to the community, and can only be secured if the community owns and operates such agencies of public service as transportation, communication, and in cities water supply and lighting.
(4) That the method of individualistic production is reckless of child life and in general of the health of workmen. Great Britain is already fearing a deterioration in physical stature and capacity. (5) The motive of self-interest, relied upon and fostered by individualism, is anti-social. How can morality be expected to improve when the fundamental agency and method of business and industry is contradictory to morality? (6) More complete socialism maintains that, under modern capitalism, a disproportionate share is sure to fall to the capitalist, and, more than this, to the great capitalist. Modern production is complex and expensive. It requires an enormous plant; the capitalist, not the workman, has the tools, and can therefore charge what he pleases. The small capitalist cannot undertake competition with the great capitalist, for the latter can undersell him until he drives him from business, and can then recoup himself by greater gains. Hence the only way to secure fair distribution is through social ownership of the tools and materials for production.
=Private Interests and Public Welfare.=--Touching these points it may be said that the public conscience is rapidly coming to a decision upon the first five. (1) The public has been exploited, the officials of government have been bribed, and individual members of society discriminated against. The process of competition always involves _væ victis_, but the particular factor which makes this not only hard but unjust, is that in all these cases we have a quasi-public agency (monopoly, franchise, State-aided corporation) used to give private advantage. This must be remedied either by public ownership or public control, unless the ethics of the struggle for existence is accepted.
The corruption which has prevailed under (2) must be met either by public ownership or control, or by so reducing the value of such franchises as to leave "nothing in it" for the "grafter" and his co-operators. Vice--gambling, excessive use of drugs and liquors, prostitution--is no doubt injurious to its victims, and when leagued with public officials and yielding enormous corruption funds to debauch politics, it is a public evil as well. But its victims are limited, and its appearance not attractive to the great majority. The exploitation and corruption practiced by the more generally successful and "respectable" members of society, is far more insidious and wide-reaching. It demoralizes not individuals only, but the standards of society. As to (3) there is no doubt as to the rights of the matter.
Gains due to social growth should be socially shared, not appropriated by a few. The only question is as to the best method of securing these gains. European States and cities have gone much farther than the United States along the line of public agency, and, while there is still dispute as to the balance of advantage in certain cases, there is a growing sentiment that the more intelligent and upright the community, the more it can wisely undertake. The moral principle is that the public must have its due. Whether it pays certain agents a salary as its own officials, or a commission in the form of a moderate dividend, is not so important.[240] But to pay a man or a small group of promoters a million dollars to supply water or lighting or transportation, seems no more moral than to pay such a salary to a mayor or counsel or superintendent of schools. Taxpayers would probably denounce such salaries as robbery.
Such franchises as have for the most part been given in American cities have been licenses to collect high taxes from the citizens for the benefit of a few, and do not differ in principle from paying excessive salaries, except as the element of risk enters. What is needed at present in the United States is a larger number of experiments in various methods of agency to see which type results in least corruption, fairest distribution, and best service.
=Conditions of Labor.=--On the fourth point, the necessity of public control to regulate child labor, the labor of women, sanitary conditions, and the use of dangerous machinery, the public conscience is also awakening. Decisions of the courts on the constitutionality of regulating women's labor have been somewhat at variance. But the recently announced decision[241] of the United States Supreme Court in the "Oregon case" seems likely to be decisive of the principle that women may be treated as a class. Freedom of contract cannot be regarded as interfering with the right to establish reasonable precautions for women's health. Woman may be protected "from the greed as well as from the passion of man." The immorality of child labor under modern conditions is also becoming clear. For the public to see child life stunted physically, mentally, and morally by premature labor under the exhausting, deadening, and often demoralizing conditions of modern industry and business, is for the public to consent to wickedness. It cannot leave this matter to the conscience of individual manufacturers and parents, for the conscientious manufacturer is at a disadvantage, and it might with as much morality consent to a parent's starving or poisoning his child as to his injuring it in less violent manner. For a society pretending to be moral to permit little children to be used up or stunted under any plea of cheap production or support of parents, is not above the moral level of those peoples which practice infanticide to prevent economic stress. Indeed, in the case of a country which boasts of its wealth, there is far less justification than for the savage. In the case of provision against accident due to dangerous machinery, the ethical principle is also clear. To throw all the burden of the accidents incident to modern production upon the families of the laborers is entirely unjust. To impose it upon the conscientious manufacturer is no better, for it places him at a disadvantage. This is a necessary--except so far as it can be minimized by safety devices--part of the modern machine process. It ought to be paid for either by all manufacturers, who would then shift it to the consumers in the price of the goods, or by the public as a whole in some form of insurance. European countries have gone much farther than the United States in this direction. The theory that the employer is exempt if a fellow workman contributes in any way to the accident has been applied in the United States in such a way as to free employers, and thus the public, from any share in the burden of a large part of accidents--except as these entail poverty and bring the victim and his family into the dependent class.
Moreover, it is only by public action that fair conditions of labor can be secured in many trades and under many employers. For the single workman has not the slightest chance to make conditions, and the union has no effective means to support its position unless it represents a highly skilled trade and controls completely the supply of labor. It may go without saying that violence is wrong. But it is often ignored that for a _prosperous society to leave the laborer no remedy but violence for an intolerable condition is just as wrong_.
=Motives.=--(5) On the question of motives the collectivist theory is probably over-sanguine as to the gain to be effected by external means.
It is difficult to believe that any change in methods would eliminate selfishness. There is abundant exercise of selfishness in political democracy, and even in families. Further, if it should be settled on other grounds that competition in certain cases performs a social service, it would then be possible for a man to compete with a desire to serve the public, just as truly as it would be possible to compete for selfish motives. That a process causes pain incidentally does not necessarily pervert the motive of the surgeon or parent. It does, of course, throw the burden of proof upon the advocate of the process.
Rivalry need not mean enmity if the rivals are on an equal footing and play fair.
=Exploitation of Labor.=--(6) The question whether all capitalistic production first exploits the laboring class, and then tends to absorb or drive out of business the small capitalist, is not so easy of decision. It seems to be easy to make a plausible statement for each side by statistical evidence. There seems little doubt that the general standard of living for laborers is rising. On the other hand, the number of enormous fortunes seems to rise much faster, and there is an appalling amount of poverty in the great cities. This is sometimes attributed to thriftlessness or to excessively large families. A careful study of an English agricultural community, where the conditions seemed at least as good as the average, showed that a family could not have over two children without sinking below the line of adequate food, shelter, and clothing, to say nothing of medical attendance or other comforts. In the United States there has been such a supply of land available that the stress has not been so intense. Just what the situation will be if the country becomes thickly settled cannot be foretold. Professor J. B. Clark shows that the tendency in a static society would be to give the laborer more and more nearly his share--provided there is free competition for his services. The difficulty is that society is not static and that a laborer cannot shift at will from trade to trade and from place to place.
That sometimes capital exploits labor is merely to say that the buyer sometimes gets the advantage. That capital usually has the advantage in its greater resources may be admitted, but that it _invariably must_ seems an unwarranted deduction. The multiplication of wants widens continually the number of occupations and thus increases the competition for the service of the more skilled. In such cases some, at least, of the sellers should be in a position to make a fair bargain. Indeed, recent socialists do not advocate any such complete assumption by society of all production as is presented in some of the socialistic Utopias. Their principle is "that the State must undertake the production and distribution of social wealth wherever private enterprise is dangerous or less efficient than public enterprise."[242] It is for those who do not believe in public control to prove that in the great enterprises for the production of the necessaries of life, for transportation, banking, mining, and the like, private enterprise is not dangerous. The conduct of many--not all--of these enterprises in recent years, not only in their economic aspects, but in their recklessness of human life, health, and morality, is what makes socialism a practical question. If it is adopted, it will not be for any academic or _a priori_ reasons. It will be because private enterprise fails to serve the public, and its injustice becomes intolerable. If business enterprise, as sometimes threatens, seeks to subordinate political and social institutions, including legislatures and courts, to economic interests, the choice must be between public control and public ownership. And if, whether by the inherent nature of legal doctrine and procedure, or by the superior shrewdness of capital in evading regulation, control is made to appear ineffective, the social conscience will demand ownership. To subordinate the State to commercial interests is as immoral as to make the economic interest supreme in the individual.
As regards the relations between capital and labor, it argues an undeveloped state of society that we have no machinery for determining controversy as to what is a fair wage. In the long run, and on the whole, supply and demand may give an approximately fair adjustment, but our present method of fighting it out in doubtful cases is barbaric. The issue is decided often by violence or the no less unmoral motive of pressing want, instead of by the moral test of what is fair. And the great third interest, the consumer, or the public at large, is not represented at all. New Zealand, Canada, and some of the states in the United States have made beginnings. The President undoubtedly commanded general support in his position during the coal strike, when he maintained that the public was morally bound to take some part in the struggle.
Must not society be lacking in resources if its only resource is to permit exploitation, on the one hand, or carry on all industry and business itself, upon the other? To lose the flexibility, variety, and keenness of interest secured by individual or associated enterprise, would certainly be an evil. Early business was conducted largely by kinship organizations. The pendulum has doubtless reached the other extreme in turning over to groups, organized on a purely commercial basis, operations that could be more equitably managed by city or state agency. Most favor public agency in the case of schools. Railroads, gas companies, and other monopolies are still subject to controversy. But that an ideally organized society should permit associations and grouping of a great many kinds as agencies for carrying on its work seems a platform not to be abandoned until proved hopeless.
=Collective Agency is Not Necessarily Social.=--The socialist is inclined to think that if the agency of production were the government or the whole organized society this would give a genuine social agency of control. This by no means follows. Party government and city government in the United States have shown the fallacy of this. But even apart from the possibility of a corrupt boss there is still a wide gap between the collective and the socialized agency. For until the members of society have reached a sufficiently high level of intelligence and character to exercise voluntary control, and to coöperate wisely and efficiently, there must be some central directing agency. And such an agency will be morally external to a large number. It doesn't matter so much what name this agent is called by--i.e., whether he is "capitalist," or "government,"--so long as the control is external. In general, individuals are still without the mutual confidence and public intelligence which would enable them really to socialize the mechanically collective process.
§ 6. THEORIES OF JUST DISTRIBUTION Socialism as theory of distribution does not necessarily imply public operation of production. By graded taxation the proceeds of production might be taken by society and either held, used, or distributed on some supposedly more equitable basis. To give point to any inquiry as to the justice of a proposed distribution, it would be desirable to know what is the present distribution. Unfortunately, no figures are accepted by all students. Spahr's _Present Distribution of Wealth in the United States_ estimates that seven-eighths of the families in the United States own only one-eighth of the wealth, and that one per cent. own more than the remaining ninety-nine per cent. This has been challenged, but any estimate made by the economists shows such enormous disproportion as to make it incredible that the present distribution can be regarded as just on any definition of justice other than "according to the principles of contract and competition." Suppose, then, the question is raised, How can we make a just distribution?
=Criteria Proposed.=--The simplest, and at the same time most mechanical and abstract, method would be to divide all goods equally. This would be to ignore all moral and other differences, as indeed is practically done in the suffrage. If all men are accounted equal in the State, why not in wealth? It may be admitted that, if society were to distribute, it would have to do it on some system which could be objectively administered. To divide wealth according to merit, or according to efforts, or according to needs, would be a far more moral method. But it is difficult to see how, in the case of material goods or their money equivalent, such a division could be made by any being not omniscient as well as absolutely just. If we are to consider distribution as administered by society, we seem reduced to the alternative of the present system or a system of equality.
=1. The Individualistic Theory.=--It is indeed supposed by some that the individualistic or competitive system distributes on a moral basis: viz., according to merit. This claim would have to meet the following criticisms: (1) The first abstraction which this individualistic principle of reward usually makes it that it gives a man credit for all he achieves, or charges him with all his failures, without recognizing the threefold origin of these achievements or failures. Heredity, society, personal choice, have each had some share in the result. But, in considering the ethics of competition upon this maxim, there is evidently no attempt to discriminate between these several sources. The man born with industrial genius, presented by society with the knowledge of all that has been done in the past, and equipped by society with all the methods and tools society can devise, certainly has an advantage over the man of moderate talents and no education. To claim that the first should be justly rewarded for his superiority would imply that the reception of one gift constitutes a just claim for another.
(2) Secondly, the theory as applied to our present system is guilty of a further abstraction in assuming that the chief, if not the only, way to deserve reward is by individualistic shrewdness and energy.
(3) It measures desert by service rendered without taking any account of motive or even of intent. The captain of industry performs an important service to society; therefore, it is argued, he should be rewarded accordingly, quite irrespective of the question whether he was aiming at social welfare or at selfish gain. It may even be plausibly argued that to reward men financially for good motives would be bribing men to be honest. It is true that financial rewards will not make good citizens, but this is irrelevant. The point is that whatever other reasons,--expediency, difficulty of estimating intent and motive,--may be urged for abstracting from everything but the result, the one reason which cannot be urged is, such abstraction is just. A person has rights only because he is a social person. But to call a man a social person because he incidentally produces useful results, is to say that purpose and will are negligible elements of personality.[243] =2. Equal Division.=--The system of equal division is liable to the following criticism. In their economic services men are not equal. They are unequal not merely in talent and ability; not merely in the value of their work; they are unequal in their disposition. To treat idle and industrious, useless and useful, slow and quick alike is not equality, but inequality. It is to be guilty of as palpable an abstraction as to say that all men are equally free because they are not subject to physical constraint. Real equality will try to treat like conditions alike, and unlike character, efforts, or services differently.
There is, moreover, a psychological objection which would weigh against an equal division even if such were regarded as just. The average man perhaps prefers an economic order in which there are prizes and blanks to an order in which every man draws out the same. He prefers an exciting game to a sure but tame return of his investment. He may call for a "square deal," but we must remember that a "square deal" in the great American game from which the metaphor is taken is not designed to make the game less one of chance. It is designed to give full scope to luck and nerve. A game in which every player was sure to win, but also sure to win just what he had put in, would be equitable, but it would not be a game. An equal distribution might rob life of its excitement and its passion. Possibly the very strain of the process develops some elements of character which it would be unfortunate to lose.
Is there no alternative possible for society except an equality which is external only, and therefore unequal, or an inequality which charges a man with all the accrued benefits or evils of his ancestry? Must we either recognize no moral differences in men, or else be more merciless than the old orthodox doctrine of hereditary or imputed guilt? The theological doctrine merely made a man suffer for his ancestors' sins; the doctrine of unlimited individualism would damn him not only for his ancestors' sins and defects, but for the injustice suffered by his ancestors at the hands of others. The analysis of the sources of a man's ability may give a clue to a third possibility, and it is along this line that the social conscience of to-day is feeling its way.
=3. A Working Programme.=--A man's power is due (1) to physical heredity; (2) to social heredity, including care, education, and the stock of inventions, information, and institutions which enables him to be more efficient than the savage; and finally (3) to his own efforts.
Individualism may properly claim this third factor. It is just to treat men unequally so far as their efforts are unequal. It is socially desirable to give as much incentive as possible to the full development of every one's powers. But the _very same reason demands that in the first two respects we treat men as equally as possible_. For it is for the good of the social body to get the most out of its members, and it can get the most out of them only by giving them the best start possible. In physical heredity the greater part is, as yet, wholly outside control, but there is an important factor which is in the sphere of moral action, namely, the physical condition of the parents, particularly of the mother. Conditions of food, labor, and housing should be such that every child may be physically well born. In the various elements included under social heredity society has a freer hand. Not a _free_ hand, for physical and mental incapacity limit the amount of social accumulation which can be communicated, but we are only beginning to appreciate how much of the deficiency formerly acquiesced in as hopeless may be prevented or remedied by proper food, hygiene, and medical care. _Completely_ equal education, likewise, cannot be given; not in kind, for not all children have like interests and society does not want to train all for the same task; nor in quantity, for some will have neither the ability nor the disposition to do the more advanced work. But as, little by little, labor becomes in larger degree scientific, the ratio of opportunities for better trained men will increase, and as education becomes less exclusively academic, and more an active preparation for all kinds of work, the interests of larger and larger numbers of children will be awakened. Such a programme as this is one of the meanings of the phrase "_equal opportunity_," which voices the demand widely felt for some larger conception of economic and social justice than now obtains. It would make formal freedom, formal "equality" before the law, less an empty mockery by giving to every child some of the power and knowledge which are the necessary conditions of real freedom.
Society has already gone a long way along the line of giving an equal share in education. It is moving rapidly toward broader conceptions of education for all occupations--farming, mechanics, arts, trade, business--as well as for the "learned professions." It is making a beginning toward giving children (see the Report of the New York Tenement House Commission) a chance to be born and grow up with at least a living minimum of light and air. Libraries and dispensaries and public health officials are bringing the science and literature of the world in increasing measure into the lives of all. When by the better organization of the courts the poor man has real, and not merely formal equality before the law, and thereby justice itself is made more accessible to all, another long step will be taken toward a juster order. How far society can go is yet to be solved. But is it not at least a working hypothesis for experiment, that society should try to give to all its members the gains due to the social progress of the past? How far the maxim of equal opportunity will logically lead it is impossible to say. Fortunately, the moral problem is to work out new ideals, not merely to administer old ones. Other possibilities of larger justice are noticed under § 8 below.
§ 7. OWNERSHIP AND USE OF PROPERTY The public wealth may be controlled and used in four ways: It may be (1) Privately owned and used; (2) Privately owned and publicly used; (3) Publicly held, but privately used; (4) Publicly held and commonly used.
The individualist would have all wealth, or as much as possible, under one of the first two forms. The tendency in the United States until very recently has been to divest the public of all ownership. The socialist, while favoring private ownership and use of the more strictly personal articles, favors the public holding of much which is now privately owned--notably the land, or the instruments of production--as versus the holding of these by private or corporate persons. Or, again, it may be maintained that while individuals should be allowed to accumulate as much property as they can, they should not be allowed to transmit it entirely to their heirs.
=Value of Private Property.=--The individualist may properly point to the psychological and historical significance of private property, which has been stated in a preceding chapter (p. 490). He may say that the evils there mentioned as attendant upon private property do not belong to the property in itself, but to the exaggerated love of it. He may admit that the present emphasis of attention upon the ownership of wealth, rather than upon intellectual or æsthetic or social interests, is not the highest type of human endeavor. But he urges that the positive values of property are such that the present policy of placing no check upon property should be maintained. In addition to the indirect social value through the power and freedom given to its owners, it may be claimed that the countless educational, charitable, and philanthropic agencies sustained by voluntary gifts from private property, are both the best method of accomplishing certain socially valuable work, and have an important reflex value in promoting the active social interest of those who carry them on. Nor is the force of this entirely broken by the counter claim that this would justify keeping half the population in poverty in order to give the other half the satisfaction of charity. No system short of absolute communism can abolish the need of friendly help.
=Defects and Dangers in the Present System.=--The first question which arises is: If property is so valuable morally, how many are profiting by it under the present system, and how many are without its beneficent effects? Is the number of property-owners increasing or diminishing? In one of the morally most valuable forms of property, the number of those who profit is certainly decreasing relatively: _viz._, in the owning of homes. The building of private residences has practically ceased in New York and many other cities except for the very rich. With the increasing value of land the owning of homes is bound to become more and more rare.
Only the large capitalist can put up the apartment house. In the ownership of shops and industries the number of owners has relatively decreased, that of clerks has increased. The wage-workers in cities are largely propertyless. The management of industries through corporations while theoretically affording opportunity for property has yet, as Judge Grosscup has pointed out forcibly, been such as to discourage the small investor, and to prompt to the consumption of wages as fast as received.
The objection to individualism on this ground would then be as before, that it is not individual enough.
An objection of contrary character is that the possession of property releases its owner from any necessity of active effort or service to the public. It may therefore injure character on both its individual and its social side. Probably the absolute number of those who refrain from any social service because of their property is not very large, and it may be questioned whether the particular persons would be socially very valuable under any system if they are now oblivious to all the moral arguments for such activity and service.
A more serious objection to the individualistic policy is the enormous power allowed to the holders of great properties. It has been estimated that a trust fund recently created for two grandchildren will exceed five billion dollars when handed over. It is easily possible that some of the private fortunes now held may, if undisturbed, amount to far more than the above within another generation. Moreover, the power of such a fortune is not limited to its own absolute purchasing value. By the presence of its owners upon directorates of industrial, transportation, banking, and insurance corporations the resources of many other owners are controlled. A pressure may be exerted upon political affairs compared with which actual contributions to campaign funds are of slight importance. The older theory in America was that the injury to the private character of the owners of wealth would negative the possible dangers to the public, since possession of large wealth would lead to relaxation of energy, or even to dissipation. It was assumed that the father acquired the fortune, the son spent it, and thus scattered it among the many, and the grandson began again at the bottom of the ladder. Now that this theory is no longer tenable, society will be obliged to ask how much power may safely be left to any individual.
It must be recognized that the present management of such natural resources as forests under the régime of private property has been extremely wasteful and threatens serious injury to the United States.
Individual owners cannot be expected to consider the welfare of the country at large, or of future generations; hence the water power is impaired and the timber supply of the future threatened.
Finally it must be remembered that many of the present evils and inequities in ownership are not due necessarily to a system of private property, but rather to special privileges possessed by classes of individuals. These may be survivals of past conquests of arms as in Europe, or derived by special legislation, or due to a perfectly unconscious attitude of public morals which carries over to a new situation the customs of an early day. Mill's famous indictment of present conditions is not in all respects so applicable to America as to the older countries of Europe, but it has too much truth to be omitted in any ethical consideration.
"If the choice were to be made between communism with all its chances, and the present state of society with all its sufferings and injustices, if the institution of private property necessarily carried with it, as a consequence, that the produce of labor should be apportioned as we now see it, almost in an inverse ratio to the labor,--the largest portions to those who have not worked at all, the next largest to those whose work is almost nominal, and so in descending scale, the remuneration dwindling as the work grows harder and more disagreeable, until the most fatiguing and exhausting bodily labor cannot count with certainty on being able to earn even the necessaries of life,--if this, or communism, were the alternative, all the difficulties, great or small, of communism would be but as dust in the balance. But to make the comparison applicable, we must compare communism at its best with the régime of individual property, not as it is, but as it might be made. The principle of private property has never yet had a fair trial in any country." (_Polit. Econ._, Book II., ch. i.)
§ 8. PRESENT TENDENCIES =Individualistic Foundations.=--The general tendency up to very recent time in the United States has been decidedly individualistic, both in the policy concerning the method of holding property, and in the legal balance between vested property rights and the social welfare. Public lands were granted on easy terms to homesteaders; mines as well as soil were practically free to the prospector; school fund lands were in most cases sold for a song instead of being kept for the public. So general has been the attitude that all wealth ought to be in private hands that it has been difficult to convict men who have fraudulently obtained vast tracts of public land. The magnitude of the operation has given "respectability" to the beneficiaries. The taxing power has done little to maintain adjustment. In this, as in many other respects, the policy of the United States has been far more individualistic than that of Great Britain. The latter has graded income and inheritance taxes. In the United States, on the other hand, the Federal taxation bears more heavily on the poor as they are the large body of consumers,--not, of course, in the sense that the individual poor man pays more than the individual rich man, but in the sense that a million of dollars owned by a thousand men pays more than a million owned by one man. Legally, the Constitution of the United States and certain of its amendments gave private rights extraordinary protection, especially when contracts were construed to mean charters, as well as private contracts. The public welfare was conceived to reside almost solely in private rights.[244] =Increased Recognition of Public Welfare.=--Recent policy and legal decisions show a decided change. Reserves of forest lands have been established. Water-supplies, parks, and many other kinds of property have been changed from private to public ownership. The question as to mines has been raised. Graded inheritance taxes have been established in some states, and the question of graded income taxes is likely to be more generally considered unless some other form of taxation based on