Thomas Nixon Carver.

Principles of political economy online

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of overcoming the tendency to sloth and idleness, it would
follow that if the government should make it impossible for
men to gratify these increased wants, it would merely drive
the people back into sloth and idleness. This could only be
counteracted by other laws compelling them to work, which
would be a kind of slavery.

Legislative control not always effective. One of the last
things that we learn regarding legislation is that it usually
takes a large number of new legislative acts to. correct or
counteract the unlooked-for results of any legislative act.

Another objection to legislative attempts to suppress luxu-
rious consumption is the one pointed out by Adam Smith and
others, to the effect that when their habits of life are fixed, men
and women will frequently give up the necessaries of life be-
fore they will give up luxuries. This applies especially to the



attempts to make luxuries expensive by taxing them. When
they become very expensive, some people will insist on having
them, even if it takes their whole income to buy them and
leaves them nothing for the necessaries of life.

These arguments, it will be noticed, are based upon the in-
efficiency of sumptuary laws rather than upon any more funda-
mental objection to them. In general they seem to produce
results which are worse than the thing they try to cure. Noth-
ing whatever can be said, however, against a voluntary foregoing
of luxuries and a rationalizing of standards of living on the
part of the people themselves. It is one thing for the people
to want the right things ; it is quite a different thing to try to
force them to consume the right things whether they want
them or not. It is one thing for the people voluntarily to give
up luxuries ; it is quite a different thing to compel them by
law to do so, whether they are willing or not.

Control of vice is M sumptuary legislation." In some
extreme cases, however, a luxury becomes so extremely demor-
alizing and dangerous to society as to justify government regu-
lation or suppression. There may be undesirable results of such
legislation, there are pretty sure to be ; but if these undesir-
able results are less undesirable than the thing which is sup-
pressed, there is a net gain. Regulation or suppression of vice
of all kinds is a kind of sumptuary legislation. If the vicious
habit or the vicious form of consumption is sufficiently injurious,
its suppression is justifiable, even though some undesirable
results may follow its suppression.

There are, however, a good many sentimental objections to
sumptuary laws which have no connection with the real objec-
tions. We are all consumers, and if the government begins
regulating consumption, we are each of us likely to come in for
a certain amount of regulation. We are rather impatient of all
kinds of regulation when it is applied to ourselves, though we
may be very patient of the regulation of other people, as we are
patient in the contemplation of other people's troubles. We


are not all of us in the banking or the railroad business, and
do not feel in danger when the government undertakes to
regulate those and other special lines of business.

No essential difference between controlling business and con-
trolling consumption. This consideration has led to quasi-
serious attempts to draw a sharp distinction between the regu-
lation or control of business and the regulation or control of
consumption. But all such distinctions are trivial. Habits
of consumption, as stated above, are quite as important to the
welfare of the nation as methods ef doing business. To at-
tempt to regulate or control either is certain to produce
undesirable results. Nevertheless, where the evils, either of
unregulated consumption or of unregulated business, are great
enough, we must have regulation and take our chances with
the evils and difficulties of regulation. When we forget our
own personal interests and begin to think in terms of the pros-
perity, power, and greatness of the nation, all our sentimental
objection to either form of regulation will disappear, and we
shall begin to weigh the evils of lack of regulation against the
evils of regulation. Whenever the balance turns in favor of
regulation, we shall be ready for it.

The national rather than the personal point of view. If
one will look around and see what is going on, one will dis-
cover that the people who think in terms of nationality rather
than in terms of self -gratification are just as prone to legislate
on matters of consumption as on matters of business. It is
only those who think in terms of their own interest who are
likely to make any distinction. Again, regulation, control, or
suppression of the consumption of alcohol is one of the most
widespread and democratic movements of the world to-day.
Very few of those who favor this kind of legislation gener-
ally none of those who lead in the movement have anything
personal to gain by it. Most of them do not use alcohol and
it does them very little direct harm. The suppression of liquor is
favored in this country mainly by those who have been here long


enough to develop a sense of nationality. It is opposed mainly
by those who have not been here long enough to develop an in-
terest in the future prosperity, power, and greatness of the nation.
Whenever a nation is facing a great crisis in its history,
when its strength and endurance are being put to a severe test,
when, in short, it is fighting for its life as a nation, the people
are forced to think in terms of national life rather than in
terms of individual life. At such times the people find it just
as necessary that the government shall regulate consumption as
that it shall regulate production. They also find that freedom
of speech is not more sacred or inviolable than freedom of run-
ning a business. Military necessity always inaugurates a regime
of regulation and compulsion. War is compulsory business from
beginning to end. When a nation enters upon a great war, it
passes instantly from the realm of gold to the realm of iron,
from a realm in which a price list is followed and voluntary
agreement is the general rule to a realm in which authority is
obeyed and compulsion is the general rule. Compulsion is
likely to apply in all fields of activity, not simply in the field
of production and business management, of transportation and
food distribution, but also in the field of consumption and even
in the field of selling talk for a profit.

Selling talk for a price. Those who make their living by
talking and writing are frequently unable to see any reason
why their business should be regulated by the government.
These are the people who are likely to be the strongest advo-
cates of "freedom of speech" and "freedom of the press"
and, in general, of a laissez-faire policy with respect to their
own business. As consumers are likely to object to the regula-
tion of consumption, and business men to the regulation of
business, so the talkers and writers are likely to object to the
regulation of talking and writing. Nevertheless, those who think
in terms of the national interest are not likely to be influenced
by these distinctions. The censorship of the press, the control
of consumption, and the regulation of business may all be equally


justifiable at such a time. Instead of trying to find reasons
why their own business should receive such consideration from
the government, it would be a profitable exercise for all of us
to ponder a little more upon a certain text regarding those who
are more anxious to extract motes from their brothers' eyes
than beams from their own.

Vice as a selective agent. One of the strongest arguments
against the public regulation of vice or injurious forms of con-
sumption is that vice acts as a fool-killer and helps to rid the
world of those undesirable persons who are unable to withstand
temptation. There is some merit in this argument, and if the
fool-killer worked with more accuracy than it seems to do, so
that no one but the guilty individual ever suffered from his
guilt, the argument in its favor would be very strong. Unfortu-
nately there are not many cases in which the vicious individual
injures no one but himself. He is quite as likely to injure
others as to injure himself. If it were true that the individual
who succumbs to vice never injured anybody else but himself,
it might be argued with a good deal of reason that the best
way to get rid of him would be to allow him to destroy him-
self as rapidly as possible, that by so doing we should in the
course of time build up a strong race of people, who could live
in the presence of temptation without injury. In a certain
primitive state of society, where there was little interdepend-
ence of parts, all this might be true. In a highly complex
society, such as that with which we are acquainted, it is not
true. The individual who succumbs to vice is a menace to the
whole community. The danger is not confined to the innocent
members of his own family, who of course are frequently re-
duced to want and humiliation through no fault of their own.

We must keep certain large and tangible facts always before
us when we are considering questions of this kind. The chauf-
feur who destroys his dependableness through his own vice
may occasionally injure himself, but he is rather more likely
to injure other people. The locomotive engineer who becomes


incapacitated through any kind of vice or bad habit may occa-
sionally destroy himself, but he usually destroys a number of
others in the process. The motorman, the train dispatcher,
the surgeon, the drug clerk, and a multitude of others who are
in responsible positions imperil others quite as much as them-
selves if they ever become irresponsible and undependable
through drunkenness or any other vice.

Any vice which acts so swiftly and so injuriously must seri-
ously endanger the rest of society and must obviously call for
public regulation. This applies not simply to the extremely
injurious forms of consumption known as vice, but to any kind
of injurious or irrational consumption, such as luxury. In a
time of national crisis, when every ounce of productive energy
is needed to meet the situation, he who consumes luxuriously
is causing the waste of productive energy and is thus interfer-
ing with the success of the nation. In time of war, when
armies and navies must be raised, ships and munitions manu-
factured on a vast scale, and food and clothing produced more
abundantly than ever, the question is always one of economizing
productive power. To use up any of this productive power
needlessly in the production of luxuries is to take it out of the
nation's industries and even to threaten national disaster. In
such times the injury which follows from luxurious consump-
tion is so desperate as to justify public regulation. Even
though some injurious results may follow from this regulation,
these can scarcely be any greater than those which follow the
unregulated consumption of luxuries.

In normal times the danger from luxurious consumption is
not so acute, and the need for regulation is therefore not so
great. In this case we may have to consider whether luxuri-
ous consumption is more injurious than the efforts to regulate
it. This consideration, however, applies to all other forms of
regulation and control. There is involved here a question of
balance of profit and loss. It is highly important that on
all questions of regulation we balance the accounts carefully.


There is some cost in the mere extension of government con-
trol and multiplication of government offices. This diverts
men from productive industry into government jobs. Unless
they can save more to the country through their efforts as
government officials than they could produce if they were left
in productive industry, the loss is greater than the profit.
Again, if through too much regulation legitimate industries
are discouraged to a degree that more than offsets any saving
which comes from regulation, there is always a net loss. In the
case of mild luxuries which work no very serious injury to
anybody, the general rule has been not to waste any energy
by multiplying government offices in order to suppress them.
But in times of national crisis the policy with respect even to
mild luxuries may have to be changed. In normal times as
well as in times of crisis the injury from certain extreme forms
of luxury may be so great as to justify permanent control,
regulation, or suppression.

Luxurious consumption does not increase the demand for
labor. There can be no doubt, however, that luxurious con-
sumption is in itself an injury to the public, and particularly
to the laboring classes, however inexpedient it might be for
the government to use its power of compulsion to prohibit
luxury. There is an ancient and nauseous fallacy to the effect
that the extravagance of the rich gives employment to the
poor. Nothing could be any farther from the truth. The
extravagance of the* rich gives much less employment to the
poor than the accumulation and investment by the rich in
various kinds of productive industry. The individual who buys
extravagantly does of course set labor to work producing
the objects of extravagance, but the individual who invests
largely also sets labor to work producing the buildings, tools,
etc. in which he invests. In addition to this he adds definitely
to the productive power of the community. Furthermore, labor
must be hired to make use of the buildings and the tools, and
there is a larger social product out of which to pay their wages.


Comparatively speaking, therefore, the extravagance of the
rich takes away from the employment of the poor. From that
point of view extravagant consumption is a social injury.

Leisure versus luxury. If, as suggested above, there were
no ulterior results from the suppression of extravagance, the
state would be fully justified in suppressing it ; but if the sup-
pression of extravagance merely produced leisure and idleness,
instead of extravagance, more harm than good would be done.
We must conclude, therefore, that where a form of consumption
has become so definitely vicious and injurious to the rest of soci-
ety as to produce more harm than would probably be produced
by compulsory suppression, then suppression must be justified.
But where, even though it be harmful, it is not more harmful
than other results which would probably follow from its sup-
pression, then suppression is not justifiable. It must be
remembered, however, that laws suppressing vice are in a
sense sumptuary laws. The only difference between these and
other sumptuary laws lies in the fact that the forms of con-
sumption which they attempt to regulate or suppress meet
with such general disapproval as to make their suppression
popular, whereas in other cases the forms of consumption are
not universally condemned and therefore their suppression is
not generally approved.

Rationing the people. That school of social philosophers
who hold that all forms of competition are inherently evil, and
that therefore government compulsion and regimentation should
be made use of to stop competition, would, if they were con-
sistent, desire to begin with sumptuary regulations. As stated
in a previous chapter, there are three main forms of economic
competition, competitive production, competitive bargain-
ing, and competitive consumption, and of these three com-
petitive consumption is infinitely worse than either of the
others. By an authoritative standardization of wearing apparel,
food, and other forms of consumption we should tend to
eliminate this worst form of competition. That would involve,


of course, the organization of society on a semimilitary basis,
though the object need not be military conflict. It would
mean the prescribing of a satisfactory uniform for all members
of the community, and also of a uniform diet or ration.
Houses, furniture, and other consumable goods would also have
to be standardized and prescribed by government regulations.

There is no doubt whatever that if the people would accept
this kind of regimentation and work cheerfully under it, we
should prevent the waste of a vast amount of energy and
avoid many petty jealousies and heartburnings. Academic
costume, whatever may be said against it on other grounds,
has the advantage of saving academicians a great deal of per-
plexity over the question, " Wherewithal shall we be clothed ? "
The costumes and vestments of certain religious orders answer
the same purpose. There are also many religious sects, of
which the Quakers of the old school were a good illustration,
which succeeded in saving their people from that destructive
form of competition which strives, first, to outshine one's
neighbors in matters of dress and, second, not to be outshone
by one's neighbors.

In a time of great national crisis we have many illustrations
of what people may accomplish in the way of economy and
effort by putting the whole nation on a fixed ration and also
by prescribing the manner of dress of each class of the nation.
If the people would submit cheerfully to similar regulations in
time of peace, all the vast energy which in time of war is
devoted to the work of destruction could then be turned to
the work of production, and industrial progress could proceed
at a stupendous rate. It is not impossible that at some time
in the future there may be a real effort on the part of certain
ambitious nations to economize their energy in this way in order
that they may increase their strength rapidly in preparation
for Armageddon.


Competitive and cheap standards of living. It has generally
been taken for granted that the cheap standard of living would
drive out a dear standard. It is asserted that people who are
willing to live and multiply on a very small income will always
tend to displace those who are unwilling to live and multiply
except on a liberal income. If sheep and cattle are allowed to
multiply and wander at will over the western ranges, it is plain
that the sheep will drive out the cattle, not because they are
superior in value or in fighting power, but merely because
they are able to nibble closer to the ground and to live where
cattle would starve. A similar law appears to operate through-
out the human as well as the animal world. Those who can
live on the least seem at times to be able to drive out all
others by eating them out of house and home.

It must be confessed that there are some facts which seem
to support this conclusion. The American laborers on the
Pacific coast find it very difficult to compete, at least in the
unskilled trades, with the Chinese and the Japanese. On
the Atlantic seaboard employers of labor have been able to
tap various reservoirs of cheap labor, first in northwestern
Europe, later in southern and eastern Europe. These laborers,
having been accustomed to very small incomes, are able and
willing to work and multiply on incomes so small as to drive
out, at once or ultimately, either the American laborers or the
immigrant laborers of a previous immigration. The later immi-
grants drive the earlier immigrants out directly by accepting
lower wages than the earlier immigrants are willing to accept ;
they drive them out indirectly by multiplying rapidly and thus



supplying a new stock of labor where the others would refuse
to multiply. In many farming communities it is found like-
wise that foreign-born farmers, who are willing to live on less
than the American-born farmers, can, if necessary, pay either
a rent or a price for land which would bankrupt the American
farmer with his higher cost of living. Thus the land tends to
pass into the hands of those farmers with the cheap standard
of living. On the Pacific coast, again, the same tendency
shows itself. The Chinese and Japanese farmers and gardeners
are able to buy land and pay for it at a price which an American
farmer with his higher standard of living would find impossible.

A cheap standard does not always drive out a dear standard.
It must be pointed out, however, that not every people with
a low standard of living have high competing power. The
Mexican peons have as cheap a standard of living as the
Chinese coolies, and yet they do not compete successfully even
with Americans, who have a higher standard of living. In
other words, there must be coupled with a cheap standard of
living considerable industrial efficiency. With equal industrial
efficiency, the race with a cheaper standard of living seems to
have the advantage in economic competition. On the other
hand, with an equal standard of living, the race with the
higher industrial efficiency has the same advantage in economic
competition. In fact, we find that even with a more expensive
standard of living, the race whose industrial efficiency expands
in proportion to its cost of living holds its advantage in
economic competition.

Competing power is equal to production minus consumption.
This brings us back to the formula which was used in a pre-
vious chapter to express the value of a man : V= P C. The
value of a man is equal to his production minus his consump-
tion. By his value we mean his value to his race or nation.
That which he adds to the total resources of his nation in ex-
cess of what he extracts from those resources is his net con-
tribution to the strength of the nation. The nation will be


strongest, in the long run, whose average citizen has the highest
value in this sense. That nation will be weakest, in the long
run, whose average citizen has the lowest value in this sense.
But that citizen's value may be increased, not simply by reduc-
ing his consumption but by increasing the difference between
his consumption and his production. Adding to his produc-
tion is just as essential as keeping his consumption within
efficient bounds.

If we seek a formula which will express the competing
power of a whole nation, it must be very closely related to the
formula which expresses the value of one of its citizens. That
formula is CP=PC; that is, the competing power of a
nation is equal to its production minus its consumption. The
nation or the race in which there is the widest margin between
production and consumption will win in economic competition
against all comers. If the American farmer were enough more
efficient as a producer than the foreign-born farmer to com-
pensate for his higher cost of living, he could hold his own
indefinitely in economic competition. It is not, therefore, the
cheap standard of living which invariably wins ; it is the effi-
cient standard of living. A race with an expensive standard of
living, provided every dollar of expense adds something to its
productive efficiency, will always win in competition with a race
with a cheap standard of living. If, however, the expensive
standard is made expensive merely by the demand for luxuries
and means of dissipation, the race is hopelessly handicapped
and must ultimately lose in competition with other races. But
if the cost of living is made high by the demand for strength-
giving food and recreation, for means of mental stimulation,
or for books, instruments of precision, and other means of tech-
nical education, such a standard of living may increase the mar-
gin between production and consumption rather than diminish
it. In that case, not only can the race possessing such a stand-
ard of living hold its own in competition at home, but the
members of that race can go anywhere in the world and hold


their own in competition against the natives. Such a race will
be an expanding, colonizing race ; wherever its members plant
themselves, they will succeed and remain ; whereas, if their
standard of living is merely expensive without being efficient,
they are likely to fail as colonizers. In the West, when such
people fail and return to the East, they are said to be going
back East to live with their wives' folks.

International competition. A race with a high but inefficient
standard of living sometimes finds it necessary to protect itself,
at least within its own boundaries, against the competition of

Online LibraryThomas Nixon CarverPrinciples of political economy → online text (page 40 of 48)