Frank Albert Fetter.

Source book in economics, selected and ed. for the use of college classes online

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a relationship is sometimes established through banking houses.
The fact that an individual is a director in two companies does
not necessarily point to a close relationship ; but it must be
admitted that it tends to establish a bond of common interest
that might at any time induce and facilitate an actual con-
solidation. . . .

In this maze of interrelationships, ranging from practically

joint control down to personal association in common direc-


torates, is clearly revealed the drift of water-power and public-
utility corporations under the control of a few very powerful
interests. These connections, some stronger and some weaker,
suggest a favorable condition for a very small number of men
to consolidate very large interests whenever they may de-
cide it to their advantage to do so. This interlocking of in-
terests through directors, while not necessarily indicating a
purpose of monopoly, certainly affords an incentive and a
means of combination. . . .

The best development of the resource [page 31]. The
utilization of water-power directly tends to conserve the fuel
supply of the country, without in any way diminishing the
future supply of water-power itself, since water-power is not
decreased by use. The power now (February, 1912) required
to operate the industrial enterprises and public-service utili-
ties of the country (excluding steam railroads) probably
exceeds 30,000,000 horse-power. Approximately 6,000,000
horse-power are now developed by water. It may be con-
servatively estimated that this represents a saving of at least
33,000,000 tons of coal per year. It is certain that several
additional millions of horse-power could be profitably de-
veloped from water, thus affecting a still further conservation
of coal. It is obvious, therefore, that the early and complete
utilization of all commercially available water-power of the
country should be encouraged by every proper means. The
real waste of water-power is its nonuse. The most efficient
utilization of such power, however, tends directly toward
concentration of control, through advantages derived from
''coupling up" of sites and markets, unification of storage, and
relationships with public-service corporations. This has been
already brought out. The problem, therefore, is to reconcile
this necessity of full and early development of water-power
with the proper protection of the public.


[This extract from The Standard of Life and Other Studies by
Mrs. Bernard Bosanquet, New York, the Macmillan Co., 1898, is re-
printed by permission of the publishers. It is taken from the first
part of the tirst essay, which gives the title to the collection.]

If any proof were wanted of how ideas may mold the
lives of men and be the moving spirit of their progress,
we might surely find it in this deeply significant idea of the
Standard of Life. Around it center most of our industrial
problems of to-day, and more or less consciously it is made the
base for all the forward movements of the working-class. And
like all living ideas it is incapable of exact definition ; in other
words, its significance is inexhaustible, for it has not yet be-
come stereotyped into one narrow usage. It may be taken
to include all that is best and highest in human life, or it
may be narrowed down to signify nothing more than the satis-
faction of the crudest cravings of mankind; and its very
elasticity gives it a deeper significance, for by the inter-
pretation which he gives to it you may most surely know the
man for what he is.

But though we cannot define the idea, we can, by considering
its varying usages, and the part which it plays in our own
thought and life, form some estimate of its importance, and
perhaps lay emphasis on elements which are too liable to be

In the first place, we may consider in what sort of sense
we are justified in speaking of a standard in this connection.
Behind the fountains and lions in Trafalgar Square is a stone
wall, and in this stone wall is something so important that
it is hardly ever looked at, . . . certain pieces of metal let
into the stone, and marking off lengths which are named as



inches, feet, yards, and furlongs. This is the standard of
measurement by which is determined what length shall be
called an inch or a foot, and beyond which there is no appeal.
Such a standard is an absolute necessity as one of the funda-
mental ideas upon which civilized intercourse is based; with-
out it there would be nothing to prevent any person from
having his own idea as to what sort of length a yard should
be. . . .

The necessity of a standard is not confined to the common-
place facts of weighing and measuring. The tuning-fork of
the singing master sets a standard to which his pupils must
conform, and without which he would himself fall into uncer-
tainty ; while in the Ten Commandments we have a standard of
morality which has served the human race for countless gen-

How is it with the Standard of Life? It may be objected
that this is something too vague and indefinite to be really
analogous to these; that there is nowhere any definite state-
ment laid down to which we can appeal, and that it is merely
a picturesque way of saying that a man ought not to live like
an animal, or some other rhetorical phrase of the kind.

It is true, no doubt, that many of us do not know where to
look for our standard, and should be puzzled if suddenly called
upon to define it. But this is partly again because it is so
important a matter that those who have any standard at all
have no need to refer elsewhere; it has become a part of
their very lives, and consciously or unconsciously they
measure their every action by it. What else does it mean
when we say, "I can't live in that street, it is too dirty and
disreputable," or, "1 wouldn't turn out a piece of work in
that disgraceful state, " or "I could n 't bring myself to such
a low trick as that," or, "I 'd be ashamed to let my chil-
dren run the streets in that condition"? Or when, again,
we so order our lives that the ease and pleasure in them
shall not become disproportionate to the amount of toil and
exertion 1 We are simply measuring certain facts by a stand-


ard which we have within us of decent living, good work,
honesty, family pride, and strenuousness ; and it would not be
difficult for any thoughtful man to make clear to himself just
what the sort of life was which he had taken as a standard.
And he would then find that just so far as he fell below that
standard he would consider his life unsatisfactory and a

The great difference between the Standard of Life and
other standards seems at first sight to be, that while physical
standards are the same for all, the Standard of Life varies
for each of us. But this is largely only appearance, and due
to our narrow way of regarding the standard. When we
take it in a larger sense, we begin to see that the difficulty
is not so much that for each of us it is different, but that for
all of us it is progressive.

For instance, one way of narrowing the idea is to use it
as if it could be expressed in money terms alone, and to speak
of the standard of any class as represented by 20s., 30s., or
40s., a week, as the case may be. . . .

Another way of simplifying the question is to divide the
community up into social classes, and assign a different stand-
ard to each class; and for this view there is a certain justi-
fication if we look rather to the probable origin of class
distinctions than to the facts as they stand at present. For
it seems likely that class distinctions have their origin in
differences of function, and that our Standard of Life differs
in detail according to the particular function we have to
fulfil in the community. In other words, according to the
occupations which they follow men's standards will vary in
kind, without our being necessarily able to say that this or the
other is the higher or lower. If for the present we leave out
of sight the lowest class of all, the Eesiduum (which is the
Residuum just because it is made up of men and women who
have lost their standard), then we shall find that in certain
fundamental respects the standard is the same for all Eng-
lishmen to-day. For instance, in cleanliness, morality, and


sufficiency of food, we differ no doubt from person to per-
son; but we could not fairly say that on the whole it is
characteristic of any one class to be cleanlier, more moral, or
to eat more than any other. But as soon as we get away
from these elementary facts, great divergences begin to ap-
pear, and those differences begin to show themselves which
seem to coincide with what we are apt to call class distinc-
tions. The most obvious differences between classes, those
which at once attract the attention to the exclusion of un-
derlying identities, consist in their different standards in such
matters as dress, education, housing, and recreation. Certain
classes appear to attach more importance to these, and at any
rate spend much more money upon them; and we incline,
perhaps somewhat hastily, to assume that the more expensive
standard must be higher.

The attempt to understand these differences in the standard
brings us into contact with some of the most perplexing prob-
lems of sociology. The first which stares us in the face is one
which has baffled so many young inquirers that it may fairly
be called the pons asinorum of social reform. Why are there
different classes in the community ? Why do we not all belong
to one class, with one Standard of Life and equal means of
attaining it? This is one of the first questions we begin
to ask upon emerging from the sublime indifference of child-
hood to all social arrangements, and one which nobody seems
prepared to answer for us. Fortunately for our present pur-
pose no comprehensive answer is needed; it will be sufficient
to note briefly one or two of the considerations involved in
our social inequalities.

And first, as to the connection between class distinctions
and difference of social function. History does not tell us
whether there was ever a time in which all men were equal,
but we do seem to find that, broadly speaking, the differentia-
tion of society into classes has followed the lines of its dif-
ferentiation into different functions or employments. Leav-
ing out the disturbing influence of conquest, we see that


the general lines of division between classes coincide with
the general lines of division between function in the coramun-
ity. One strong instance of this we find in the feudal system,
under which the distinctions between classes and employ-
ments were strongly marked, and which is defined as mean-
ing "property held as a reward or in consideration of special
services." The propertied class was then, theoretically at
least, the class which rendered special service to the State;
and, speaking broadly, both the property and responsibility
were hereditary.

Again, it is worth noticing that our so-called "middle
class" is a comparatively modern growth, and corresponds to
a development of the professions and of the organizing
branches of industry.

But the most marked illustration of the coincidence of class
and employment is to be seen where we find the social arrange-
ment known as caste. The essence of caste, apart from its
religious significance, is, that certain functions are committed
to certain classes, and that these functions are to a greater
or less extent hereditary, so that members of the same family
continue to follow the same occupation from generation to

We may say then, that in the past at any rate difference of
class has largely depended upon difference of function or

Now if we could find a society in which every one followed
the same employment, and in which there was also no dis-
tinction of classes, we should have a striking corroboration of
the view that the two depend upon each other. A society with
literally no difference of employment would perhaps be an
impossibility, but we get as near to it as we can in the modern
state of Bulgaria. The people of Bulgaria are essentially a
race of peasant proprietors, and form a society which is almost
homogeneous. The one exceptional class is that of the State
officials, the civil service ; but this service is itself recruited
from the peasant class and shares its characteristics. "With


this one exception there seems to be no opening whatever for
educated people, and the question has been seriously raised,
whether it is of any use to educate, beyond the most element-
ary stage, boys who have nothing before them but the career
of the professional politician or the meager life of the peasant.
What that life is we may gather from . . . Dicey 's "The
Peasant State." . . .

It seems clear, then, that without going so far as to say
that differences of employment are the cause of class distinc-
tion, or vice versa, we are safe in assuming that there is some
close connection between them, and that a society which lacks
the one is likely to be deficient in the other.

Perhaps the most important characteristic in which we
differ from more ancient forms of society lies in the fact
that functions and employments are no longer hereditary in
any strict sense of the term. It will of course always remain
natural, that other things being equal, a father should teach
his son his own trade ; and thus there will always be a tendency
for families to continue in the same employment. But there
is no longer any artificial barrier erected by tradition and cus-
tom, and it is possible for any boy on leaving school, if his
intelligence is not below the average, to choose among a dozen
different occupations. This possibility of choice, i.e.; of
adapting the occupation of the boy to his individual disposi-
tion and capacity, instead of forcing him into the same groove
as his ancestors, is of the utmost importance. Plato laid stress
upon it in his conception of the ideal State, which was to be
organized as a system of classes, based upon difference of func-
tion, wherein each man was to do that which he was best
fitted by nature to do.

There is probably no way in which it can be ensured beyond
fail, that a man shall do what he is best fitted to do ; some spend
their lives in looking for their vocation and die without find-
ing it. But it is clear that all will have a better chance in a
complex society offering many different openings, than in a


simpler one such as Bulgaria, where all members are more on
a level, and where there is little variety offered. We find a
similar contrast between developed countries with fully dif-
ferentiated occupations, and new countries where there is as
yet little demand for anything but manual labor. In the latter
there is no career for the weakly or intellectual ; those whose
nature and disposition might have found full satisfaction, are
in a double sense "out of place" in a primitive society.

And together with this opening up of employments to all
tlie members of a community we find the simultaneous process
going on of the breaking down of class barriers. . . .

This means of course an immense widening to the scope of
ambition. Professor Cunningham points out ("Growth of
English Industry and Commerce," page 410) that the old
Burgess society "had this striking characteristic, that the
ordinary object of ambition was not so much that of rising out
of one's grade, but of standing well in that grade; the citizen
did not aim at being a knight, but at being warden and master
of his guild, or alderman and mayor of his town. For good or
evil we have but little sympathy with these humble ambitions ;
every one desires to rise in the world himself, and the phil-
anthropic construct social ladders by which the poorest child
may rise to the highest ranks, as was done by ecclesiastics m
the Middle Ages."

That this breaking down of artificial barriers must in the
long run be for good, we can hardly doubt. Man is naturally
progressive, both in his wants and in his aspirations ; and by
the very law of his being, must always — if only left to himself
— be seeking after new interests, new plans, new ambitions.
But if no interests are there, if the means to carry out his plans
are wanting, if his ambitions are thwarted and held in check
by custom and tradition, he will never break through the lower
circle of desires and satisfactions, which we share with the
brutes, and progress will be impossible.

In this progressiveness of the human being we find one rea-


son for those differences in the Standard of Life which we are
trying to understand. Not all have yet worked out their
freedom from the lower range of desires-, for these, satisfac-
tion of the appetites means only renewed opportunity for
the repeated satisfaction of the appetites. Of those again who
have set their hopes on pressing forward, who see before them
a universe of desirable things to be mastered, some have out-
stripped others and lead the way. In their advance lies the
chief hope for those behind : the sight of better things attain-
able is the chief spur to men to raise their own standard, to
seek for themselves and their children advantages for which
they would otherwise care nothing.

Another reason for differences in the standard, and one still
more in the nature of things than the former, is to be found
in the different conditions under which varying kinds of work
must be carried on. The scholar eats much less than the
artisan who goes through great physical exertion, but he needs
instead greater warmth and quiet; just as their tools must
always be different, steel and iron for the one and books for
the other, so also their standards must differ in kind as regards
the surroundings in which they live. That one or the other
may cost more in terms of money is a matter of accident, and
may indeed tell hardly upon the one who is generally supposed
to be in a better position. The young clerk, who earns no more
than the artisan, but must wear a black coat ; and the gover-
ness, whose scanty earnings must provide evening dress, know
well enough that the difference in the standard is not in their
favor ; but the obligation to ' ' dress according ' ' is one which is
fully recognized by the working-class, and will always be ac-
cepted as a reason why John the clerk should contribute less
to the family expenses than Tom the carpenter.

In the mere fact, then, of differences of standard, apart
from accidental accompaniments of which we may hope in
time to free ourselves, we have both the condition and conse-
quence of vitality and progress in a nation. And indeed we
find that what really practical reformers are working for is


not to bring about greater uniformity, but to get rid of cer-
tain definite disadvantages to which people of certain classes
or occupations are subjected. . . .
To sum up briefly :

1. Eveiy man (above the lowest residuum) has a Standard
of Life, by which, consciously or unconsciously, he orders his
life, and estimates its success or failure.

2. The standard in England of to-day is the same for all
to a certain extent, and in certain fundamental but less ob-
vious facts; but it is essentially progressive, and in more
obvious ways it varies greatly from class to class, and accord-
ing to differences of occupation.

3. These differences do not involve any essential incapacity
on the part of any class to raise and maintain its own standard,
and therefore every class, as every individual, has both the
right and the duty to fix its standard as high as it can attain,
there being no limits which are more proper for one class than

4. The well-being, moral and economical, of any man or
class will be for the most part determined by the standard
which he accepts, and for this reason we might formulate this
practical ideal for individuals : That every man should aim at
giving his children at least as high a standard as his own, and
as good an opportunity of realizing it. And that this is not
an unnecessary matter to urge, may be witnessed by the fact
that large numbers of our very poor are unskilled laborers
whose fathers were skilled artisans.



[An investigation of the working class standard of living in New
York City, undertaken by the Sage Foundation and by the New York
State Conference of Charities and Correction, was carried on in 1907-
08 under the direction of Robert C. Chapin, professor of economics
in Beloit College. The results were published in The Standard of
Living among Workingmen's Families in New York City, by E. C.
Chapin; Russell Sage Foundation Publications.

A summary of the findings comparing them with data from other
sources, was presented by Professor Chapin, Dec. 29, 1908, at a meet-
ing of the American Economic Association. The paper is divided into
two parts: I. Variations in amount of income. II. Sources of in-
come. These extracts comprise most of the first part of this paper.
(Publications of the American Economic Association, Third Series,
Vol. X, 1909, Papers and discussions of the twenty-first annual meet-
ing, pp. 181-188.)]

Engel's law. Ernst Engel has taught us to look at the ap-
portionment of income among the principal objects of family
expenditure, and to see just how changes of income work out
in changes in the elements of the standard of living — ^what
kinds of things are added as income increases, what are
omitted as income falls. On the basis of returns from 199
Belgian families, gathered in 1855 by Duxpetiaux, Engel made
out his familiar table of percentage expenditures for Saxon
families of three income-grades. He found that the poorest
families, whose income was under $300 of our money, gave for
food 62 per cent, of all that they spent. Families having from
$450 to $600 spent 55 per cent, for food, and those with from
$750 to $1000 spent 50 per cent, for this purpose. Hence he
made his generalizations that, as income increased, a less and
less part of it was needed for food, and that the percentage of



expenditure for food Avas therefore an index of the degree of
prosperity attained. He applied this standard in a later
work to the Avretchcd English peasants whose budgets had been
collected by Eden in 1797, and found that the average of
their food-expenditure was 73 per cent, of their total expendi-

Food and other wants. The generalization regarding the
tendency of the food-percentage to diminish as the income
increases has been verified in many later compilations of
family budgets. The Report of the United States Bureau of
Labor for 1903, for instance, finds a decline in food-expendi-
ture from 47 per cent, among families having incomes between
$400 and $500 to 40 per cent, for families with incomes be-
tween $900 and $1000. Colonel Wright's Massachusetts in-
vestigation of 1875 showed a decline of 64 per cent, for
families having less than $450 a year to 51 per cent, for
families having over $1200 a year.

As the demands of the stomach are more easily met out of
the larger income, what expenditures are increased to corre-
spond? Engel's Saxon tables shows a constant percentage for
housing and for fuel and light, a slight increase for clothing,
and a rise in the percentage allotted to expenditures outside of
immediate physical necessities from 5 to 10 and from 10 to
15 per cent, as we ascend the income scale. This indicates,
that, along with somewhat better provision for food and
shelter, it is possible for the family to indulge in more at-
tractive clothing and household furnishings, and to spend
something for amusement, for reading matter, and for minor
personal indulgences.

Relative saturation point. All reports agree as to the
broadening of the plane of living, with rising income, in re-
gard to expenditure for the satisfaction of these culture
wants. Not all, however, coincide with Engel's data in re-
gard to a constant percentage for rent and for clothing.
Colonel Wright's figures for the United States at large in 1901
show a nearly constant percentage for rent (17 to 18 per cent).


but his Massachusetts report of 1875 shows a decline in the
first three income-groups from 20 to 15.5 and then to 14 per
cent., followed by a rise to 17 per cent, and a drop to 15 per

Online LibraryFrank Albert FetterSource book in economics, selected and ed. for the use of college classes → online text (page 22 of 30)