Franklin Henry Giddings.

Democracy and empire; with studies of their psychological, economic, and moral foundations online

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any benefit which it may confer.

Again, while the taxation that simply transfers money from
class to class, as the English poor law administration did,
is always a social burden that makes the poor grow poorer,
because it discourages exertion ; the taxation that encourages
exertion by stimulating powers, providing opportunities, and
improving the common environment, is a social benefit that
tends powerfully to equalize conditions. Common school
education has enabled thousands to rise to the independent
middle class for every one that it has pulled down by taxa-
tion. Almost as much can be said for public libraries. Sani-
tary improvements — such as the supply of pure drinking
water, effective sewerage, efficient street cleaning, the open-
ing of parks and playgrounds, and efficient restrictions upon
overcrowding in tenements — have a similar tendency.

So there is a distinction to be made between the state ac-
tion that simultaneously increases social burdens and dimin-
ishes the power of the people to bear them, and the state action
that diminishes social burdens and develops individual ener-
gies. The latter is not socialistic, but societarian. It recog-
nizes the state and the individual as coordinate powers, and
brings them into cooperation to their mutual advantage, aim-
ing to make society serve its individual members, and to make
individuals better members of society. Socialism recognizes



114 DEMOCRACY AND EMPIRE

only the social aggregate, the mass, and represses the individ-
ual ; while, on the contrary, societarian action, reciprocal ser-
vice between society and its individual members, is a process
of the highest social evolution, and the chief agency in help-
ing the poor to grow richer by their own endeavours.

That this way of regarding state action is becoming daily
more general among the people will hardly be denied. To
this extent, at least, industrial democracy is making headway.
To this extent, at least, the workingman, with others, is par-
ticipating through his rights as a citizen and voter in deter-
mining the conditions under which his labour is performed.

There are two other replies that may be and have been
made to such criticisms of industrial democracy as that by
Professor Sumner, which we have been considering. One of
these is theoretical, the other is practical ; but both are of the
dangerous sort that we often describe as half truths.

The first or theoretical answer, is one that Professor Karl
Pearson has drawn from a study of the relations of natural
selection to socialism. Professor Pearson's own sympathies
are with the socialistic movement. His argument in support
of it is on the whole the ablest and, within the limits of its
legitimate application, the soundest that has anywhere been
offered. Replying to the contention of Mr. Herbert Spencer
and of other pronounced individualists, that natural selection
is necessary for progress, and that industrial stagnation, intel-
lectual mediocrity, and perhaps physical degeneration, would
follow any successful attempt to prevent the supplanting of
the weak by the strong in human communities. Professor
Pearson insists that progress now depends upon a rigorous
limitation of intra-group competition in the interest of a suc-
cessful extra-group competition. The supremacy of England,
for example, does not now depend upon an increasing differ-
ence between the more highly developed and the less highly
developed classes, but rather on England's ability to hold
her own with other great national powers in the struggle
for territory and markets. In this struggle, social cohesion,
rather than individual development, is of the greatest impor-
tance. A civil contest between the cultured and the ignorant,



INDUSTRIAL DEMOCRACY 115

the rich and the poor, might be the fatal weakness that would
give success to her rivals. As Professor Pearson very hap-
pily puts it, a nation would he crushed which proceeded
on the assumption that it is better to have a few pri^ cattle
among innumerable lean kine than to have a decently bred,
and properly fed herd, with no expectations at Smithfield.
Accordingly, while legislation conferring special industrial
privileges upon wage earners in general, and upon women
in particular, is a limitation of intra-group competition, it
is nevertheless justifiable, in Professor Pearson's belief, if it
strengthens social cohesion and so improves the national
chances in the extra-group struggle.

The sound conclusion from all this is different from that
which Professor Pearson offers. While a too radical indi-
vidualism would remove aU restraints upon intra-group com-
petition, ignoring the perils of the extra-group struggle,
socialism, in view of extra-group competition, would suppress
the competition between individuals and classes. The com-
mon sense of mankind has always seen that either of these ex-
treme policies would be disastrous. A measure of intra-group
competition and natural selection is necessary for progress ;
but social cohesion is no less necessary for success in the
world struggle. A sound social policy therefore always
endeavours to maintain social cohesion with a minimum re-
striction of individual liberty.

The other and practical answer to objections like Professor
Sumner's, made to the programme of industrial democracy,
is found in plans for the radical rearrangement of taxation,
and especially in schemes for the appropriation of land-rent,
for the taxation of franchises, and for progressive taxes on
property. It is evident that, if public revenue were derived
entirely or chiefly from land-rent, from franchises, and from
the estates of millionnaires, the increase of public financial
burdens would not fall as an increasing weight upon that
class, described by Professor Sumner, which is struggling to
an independent position. These schemes, however, raise the
totally different question of their ethical validity.

All values are created by the cooperation of three primary



116 DEMOCEACY AND EMPIRE

factors, namely, nature, society, and the individual. These
three factors, however, enter in greatly varying proportions
into different groups or classes of values. There are products
to which nature contributes much and man little. There are
products which we owe almost wholly to individual inven-
tiveness and industry. And there are products which are
created almost wholly by the law-making authority of the
state. Again, there are products which we owe chiefly to the
cooperation of society with nature, rather than to the coopera-
tion of the individual man with nature. This, of course, is
true of speculative values in land. It is preeminently true
also of the water-front values of great maritime cities ; of the
values of the terminal facilities of great railways ; and of the
values of those narrow strips of land which, in towns and
cities, are occupied by street railway lines.

Values that in the past have thus been created by the co-
operation of nature and the state with the efforts of individual
men have largely passed, by the authority of the state, into
private ownership. But similar values, in vastly greater
amounts, which are being created and which are yet to be
created, have not yet been unconditionally appropriated. Of
the moral right of the state to reserve for public uses pro-
spective values, hereafter to be created by an increasing de-
mand upon limited natural resources or through the enjoy-
ment of privileges that the state itself has instituted ( as, for
example, in creating the corporate form of organization),
there can be no rational doubt in the mind of the ethical
philosopher ; and there is not likely to be much denial in the
practical discussions of a democratic people.

These truths do not yield, as a legitimate deduction, the
doctrine of the single tax — a doctrine which ignores other
truths quite as important — but they afford the practical
principle that the revenues of the state should not be drawn
in large part from accumulated property or from wealth
which is being created chiefly by individual effort, until that
wealth which is being created chiefly by the cooperation of
society with nature has been set apart for public uses.
While we may continue to believe that it is legitimate to tax



INDUSTEIAL DEMOCRACY 117

the property of the individual, if such a tax is necessary, we
ought not to look with approval upon taxes on those articles
of consumption which are the necessaries of life to the poor,
or on the property of the farmer or of the business man, who is
struggling to pay off mortgages and rise to a position of eco-
nomic independence, while enormous values created by the
progress of society and the authority of the state are allowed
to pass without protest into the ownership of multi-million-
naires, to- be enjoyed practically without tribute to the public
revenue.

Such a proposed reservation by the state of values yet to
be created, under conditions which the state names and de-
fines in advance, is, however, a totally different thing from
the confiscation of existing private property, to the accumu-
lation of which the state itself has been a party by authoriz-
ing, encouraging, and protecting individual ownership. A
radically progressive taxation of existing property, as such,
or a general taxation of land at its full rental value without
compensation of present owners, as Mr. George proposed, is
indefensible unless clearly demanded — as a devastating war
might be — by the further progress and general good of man-
kind in coming generations. The question thus raised is
substantially that of the ethical rightfulness of an ultra type
of socialism, which would deal with all members of society
on a practically communistic basis.

It is significant that, in recent years, this question has been
a good deal discussed, not only in works on economic policy,
but also in constructive works on ethical theory. This is
simply one phase of a large movement of thought which
democracy has provoked. With the political and economic
rise of the masses, ethical philosophy has advanced from a
narrow and dogmatic individualism to a comprehensive view,
in which society and the individual are seen as correlative
terms, neither of which could exist apart from the other.
Thus, there is a deeper reason for a serious discussion of so-
cialism in a modern treatise on ethics than would be afforded
by the mere fact that socialism has a great popular following
and threatens to become a practical issue. The moralist is



118 DEMOCRACY AND EMPIRE

confronted by the question whether the philosophical ground
of ethical truth itself does not afford philosophical standing
to some sort of socialism also.

Out of an examination of socialism from the ethical side
much good should come; Unfortunately, the true nature of
the inquiry is not always perceived and remembered. The
ethical problems of socialism are not always distinctly marked
off from the sociological and economic problems; and too
often, therefore, the real core of the ethical problem is not
reached. A great deal of recent economic literature, ema-
nating from the extreme left wing of the historical school,
which takes a curious pride in advertising its ratiocinative
limitations, has made a sorry confusion of the " is " and the
"ought," of what Marshall happily calls the indicative and
the imperative moods of thought ; and this confusion, unhap-
pily, the ethical writers haye not avoided.

The first question that ought to be raised in regard to
socialism is the sociological question — a question of the
" is." Is society a product of that universal evolution which
brought man himself into existence, and conditions aU his
thoughts and doings ? If so, we may be very sure that there
are certain general laws to which social evolution has con-
formed in the past, and to which it will conform in the
future. If it be held that conscious motives, deliberately
formed purposes, play an increasingly large part in social
affairs, no true sociologist should object ; if it be claimed that
the human will is a free metaphysical entity, no true sociolo-
gist, as such, should demur; because, in any case, it must
remain true that, if deliberate purposes are reasoned pur-
poses, reasoning beings, exposed to like conditions, must
tend, in proportion to the accuracy of their reasoning, to
reach like conclusions. There are uniformities among pur-
poses, and social phenomena conform to law in the indicative
mood, varying with the variation of cosmic conditions. All
this does not, indeed, prove the antecedent impossibility of
socialism ; but it does prove the antecedent absurdity of any
scheme of socialism, or of any prediction as to a socialistic
future which is based on such knowledge of social psychology



INDUSTRIAL DEMOCRACY 119

as we possess at present. Any scheme of socialism based on
the psychology of the individual is nonsense ; and as yet we
have almost no psychology but that of the individual. For
the construction of the psychology of men in masses, in social
groups, in organic relations, scientific ground has barely been
broken.

But while at present we can make no general prediction
as to a socialistic future, we can predict that conscientious
men will antagonize any socialistic propagandism that seems
to them ethically wrong. Ethical teachers ought, therefore,
to state with all possible distinctness the ethical problems
involved in the socialistic propositions now before the public,
and give us, if they can, a reasoned solution.

These problems may apparently be reduced to two : First,
if not all men are converted in thought and feeling to social-
ism, can a majority have any ethical right to compel a minor-
ity to surrender individual initiative and submit to dictation
of occupation? Second, what is an ethical distribution of
product among the workers that create it?

Doubtless not a few students of political science will say
that the first question has been answered affirmatively to
weariness ; but in this assumption they are mistaken. The
reasoned answers founded on purely ethical data, are
negative answers, of which the brilliant example is Mill's
"Liberty." The affirmative answers are either mere asser-
tions, enlivened by diatribes against natural rights, or they
are not strictly ethical. The argument of the long row of
great works from Hobbes's " Leviathan " to Mulford's " The
Nation " is essentially political or essentially theological. The
utilitarianism of Bentham might be made the basis of an
elaborate and ingenious, if not convincing, argument for the
unlimited power of majorities; but Bentham himself and
most of his disciples have drawn chiefly negative conclusions.
The argument from the denial of natural rights is no argu-
ment at all. If individuals have no natural rights, majorities
have none. Plato and Aristotle laid the foundations for a
rationalistic argument from purely ethical premises, showing
that majorities may rightfully do more than enforce contracts



120 DEMOCRACY AND EMPIRE

and keep the peace ; but the modern restatement and comple-
tion of that argument remains to be made.

Many students of economics probably will say that the sec-
ond question has been sufficiently answered. Here, again,
the assumption is erroneous. In the distribution of wealth,
are ethical requirements satisfied when each receives accord-
ing to his performance ? Not necessarily. Justice may then
be satisfied ; but ethical requirement may include more than
justice in our modern sense of the word. Men have potential
as well as actual abilities ; and to give them more than they
now earn, as a means of developing a greater earning power for
the future, may be an ethical obligation. There is then no
necessary conflict between the individualistic principle, " To
each according to his work," and the communistic principle,
" To each according to his needs." Normal needs are of re-
pair or restoration of the energies and utilities expended in
useful performance, and of upbuilding and development for
future useful performance. In a normal, well-balanced state
of things need and performance must correspond.

But in socialistic literature distribution according to needs
easily degenerates into distribution according to desires.
Then, with the aid of the minor premise, conveniently as-
sumed for the purpose, that men are equal in desires, the
conclusion may be drawn, as by Mr. Edward Bellamy, that so-
cialism cannot stop short of equality of incomes. It is at this
point that clean-cut thinking by ethical teachers is wanted.
Modes of human equality there are which must be recognized
as among the most important of all social facts — equality of
political status, equality of civil rights, equality in the en-
joyment of public utilities. Much may be said, also, for a
certain approximation toward economic equality ; for all ex-
tremes of inequality are among the gravest of social dangers.
But the equality that is necessary or desirable in society must
not be confounded with that absolute equality of incomes
which communism demands. It is possible that a strong
argument could be made in support of the proposition that
an ethical distribution of wealth would be one that should
afEord equality of satisfaction, throughout society, of the



INDUSTRIAL DEMOCRACY 121

desires that are ethically commendable. But is it biologically
and psychologically possible for men to be equal in desires
that are ethically commendable ? Men will never be equal
physically. Will they, then, be equal in perception^ in rea-
soning, in imagination, in sympathy ? Will they equally find
pleasure in the beautiful and the good ? Or will deficiency
in one set of faculties be exactly balanced by the superiority
of some other set? If not, equality of income must inevi-
tably create a class of sybarites and debauchees. There has
been no more curious psychological phenomenon in recent
times than has been the wholesale hypnotizing of clever liter-
ary people by Mr. Bellamy's dazzling vision. When they
come out of the daze and begin to assume their literary self-
direction, they may be trusted to discover that equality of
income and equality of satisfaction of legitimate desires are
two different things.

Thus far we have considered the practical fulfilment of
Lassalle's predictions, and have examined the economic and
moral character of some tendencies of industrial democracy.
It is evident that industrial democracy is an established fact,
and that its enterprises have approached the margin of
expedient political activity. But it has some further char-
acteristics not foreseen by Lassalle, and some that stand in
striking contradiction to his predictions.

One of these we have already noticed, namely, the failure
of industrial democracy to abolish indirect taxation. More
remarkable than this, however, has been the failure of the
wage-earning class to convert all its own members, and its
still more conspicuous failure to convert society in general,
to the notion that political activity is the only, or, under all
circumstances, the best method of ameliorating the life con-
ditions of the fourth estate. Most happy has this failure
been for the working classes themselves and for the entire
community.

The political activity of the working classes has provoked
a vast deal of private activity, which has taken the forms
both of cooperative self-help by wage earners, and philan-



122 DEMOCRACY AND EMPIRE

thropic effort by employers and ethically minded individuals
generally, irrespective of their industrial relations. Efforts
to equalize the terms of bargaining, and to improve the con-
ditions under which men live and labour, have very clearly
shown to all observers endowed with moral sensitiveness that
the labour question is fundamentally a moral no less than an
economic problem. It has ceased to be necessary to argue
that writers who ridicule as unscientific any recognition of an
ethical element in concrete industrial problems are themselves
of all men most unscientific. They are the ones who know
why water must find its level as a theoretical truth, but who
always fail to tell us why it never does find its level in fact.

The answer to the labour question, therefore, must in part
be sought among facts and principles of the moral order.
Often it has been through a disregard of all considerations
of fairness and humanity that the relative immobility of
labour, as compared with capital, has been taken advantage of
by employers to the detriment of wage earners. It will be in
part through the subordination of selfishness by moral con-
siderations that better relations between laboxir and capital
will be promoted.

One or the other of two rules can be adopted by every
employer in dealing with his help. Either he can say : " I
will buy labour at the lowest prices at which the men who
are nearest starvation will consent to work ; " or he can say,
" I will pay my help the highest wages that I can afford."
Both of these rules are perfectly consistent with the law of
supply and demand. But in their moral quality and their
consequences they are as opposite as the poles. One leads
to irreconcilable antagonisms ; the other affords the ground
for arbitration, profit-sharing, or any cooperative expedient
promising good results. The former rule, systematically
applied for a series of years throughout the entire commu-
nity, means a progressive degradation of labour, and ultimately
the righteous destruction of employers' profits. The latter
rule means progressive elevation and increasing prosperity.
Under the former, the labourer becomes discouraged, and his
standard of living is lowered. The consequence of this is



INDUSTEIAL DBMOCKACT 123

impaired efficiency and a diminished production of wealth.
In a lessened demand for labour and a further reduction of
wages the cycle of causation is completed. This is what
took place in England during the first half of the* present
century under the teaching that unmitigated selfishness was
economic morality. In the United States it has more than
once occurred, — in the Hocking Valley of Ohio, in the min-
ing regions of Pennsylvania and of Illinois. Under the
other rule, of paying the highest wages that can be afforded,
the labourer is encouraged and stimulated, his standard of
living is raised, he creates more wealth for conversion into
capital, and accumulating capital, by increasing the demand
for labour, tends further to raise the rate of wages.

Out of these purely ethical considerations largely, though
not without reenforcement from considerations of expediency,
have developed most of the schemes of arbitration, concilia-
tion, and profit sharing. These have multiplied rapidly
in the United States and elsewhere within the last twenty-
five years, and many of them have met with substantial success.
Experience, it is true, has demonstrated that it is impossible
to find any one plan of voluntary adjustment of the relations
■of employer and employee which is suitable to all circum-
stances. Yet, in general, the spirit of conciliation and the
numerous devices of profit sharing are flexible enough to
meet rather varied conditions, and it is probable that their
methods are to undergo yet further development.

Nevertheless, the maxim, which the experience of all ages
has verified, that the best help is self-help, holds true of the
details of industrial organization no less than of that general
control which the working classes have been able to exercise
over the industrial situation through their political activity.
However much they of the fourth estate may accomplish
through legislation and governmental agencies, they can never
put themselves on a plane of perfect equality with employers
in any other way than by becoming themselves employers.
This truth is fully recognized by all intelligent leaders of the
labour movement, and the only fundamental difference of be-
lief which divides them is upon the question whether work-



124 DEMOCEACY AKD EMPIRE

ingmen can more certainly accomplish this aim through the
organization of voluntary cooperation or through the perfec-
tion of a socialistic organization of industry, in which their
elected government agents would act as industrial managers.
The complete centralization of governmental management
within the area of its establishment, even if the socialism
were of the so-called municipal or decentralized type, would
put the weaker, more ignorant elements of the working popu-
lation so completely at the mercy of the politically adroit that



Online LibraryFranklin Henry GiddingsDemocracy and empire; with studies of their psychological, economic, and moral foundations → online text (page 10 of 29)