Work and Wealth:


A Human Valuation

J.A. Hobson







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

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