Thomas Nixon Carver.

Principles of political economy online

. (page 6 of 48)
Online LibraryThomas Nixon CarverPrinciples of political economy → online text (page 6 of 48)
Font size
QR-code for this ebook

and he is in this, as in many other cases, led by an invisible hand to promote
an end which was no part of his intention. ... By pursuing his own interest
he frequently promotes that of society more effectually than when he really
intends to promote it. "Wealth of Nations," Book IV, Chapter II.


Tendency of government officers to increase their own power
and importance. There is, however, a natural tendency in all
human beings to wish to magnify their own power and im-
portance. This tendency seems to be peculiarly strong in that
kind of person who manages to get elected to public office.
Modesty is not the outstanding characteristic of the average
candidate who seeks office, though he may feign it pretty well.
The more the government undertakes, the greater becomes the
power and importance of the officeholder. There is, therefore,
a strong tendency on the part of all successful candidates to
extend the functions of government. The arguments in 'favor
of this policy as used by the elected are sometimes so subtle
as to deceive the very elect. They are always made as though
in the interest of the people, though they are really in the
interest of the officeholding class. It is a means of exalting
the position of the vote getter. It therefore behooves the
average citizen who has no hope of public office to study
very critically all arguments in favoring the extension of the
functions of the government.

The incompetent. There is, however, the question of the
people who are not competent to pursue intelligently either
their own interest or the public interest. The feeble-minded,
the insane, and the immature who have no natural guardians
must of course have their interests looked after and cared for
by the government. With them it is not a question of the
conflict or harmony of their interests with those of the public ;
it is a question of their competence to pursue even their own
interests intelligently.

The individual's wisdom is not increased suddenly when
he is put into public office. Is anyone really competent to
pursue his own interest intelligently? This question is some-
times asked by those who advocate government activity in
behalf of all classes of people. This is not a very convincing
argument, for the reason that it goes too far. If no one is
competent to look after his own interests, how can he possibly


be competent to look after the interests of the rest of man-
kind ? The officeholder is merely a man or a woman like the
rest of us. If we are not able to look after ourselves, neither
is he or she able to look after himself or herself, much less
to look after the rest of us.

Because of such considerations as these the wisdom of
mankind has for centuries moved toward the conclusion that
government should confine itself mainly to the control of the
field where individual interests come in conflict, leaving mature
people of sound mind to govern themselves wherever and
whenever their interests are harmonious. There are occasional
reactionary tendencies toward more government interference,
but these are usually encouraged by those whose expertness
lies in the direction of vote getting rather than by those
whose expertness consists in the power to do the useful and
necessary things.



It was suggested in a former chapter that the prosperity of
a nation depended more upon the economizing and utilizing
of its fund of human energy than upon any other factor, and
that in consequence the most destructive forms of waste were
those which wasted or dissipated portions of that fund. When
a man's energy is going to waste, his life is going to waste,
and he becomes a drain upon, rather than an addition to, the
national strength. The following outline indicates some of the
more familiar ways in which men go to waste :

f Th 'rll / I nv l untai "ity (the unemployed)
L Voluntarily (the leisure class)

The ineffectively f Through lack of training

< Through lack of opportunity
^ Through lack of initiative

f In vice
Wasting their own energy 4 _ ,. .

L In dissipation





The harmfully


Wasting the energy
of other people

By crime

By fraud

By luxury

By bad investing

By false teaching

For some of these forms of waste, law and government alone
can furnish the remedy. Whenever force or compulsion is
necessary and, at the same time, effective, government can
and should use the force of positive law, supported by penal-
ties. But there are many forms of waste which cannot be


remedied by force or compulsion, at least not without causing
greater waste of other kinds. To try to control by law such
things as laziness, private vices, luxury, false teaching, and
many other wasteful and harmful tendencies would require an
intolerable amount of espionage and repression. The waste
from this source might easily overbalance the waste from the
bad habits which the law was trying to control. In all such
cases we must fall back upon morals and religion to induce
self-restraint and the voluntary adoption of sound habits.

Can morality be taught? There are two conflicting theories
as to the results of moral teaching. One is that such results
are generally negligible because moral habits are the result of
economic and social surroundings ; the other is that man's
moral nature may be so developed by teaching and example as
to render it proof against bad economic and social conditions,
that these conditions are more likely to be the result than
the cause of the moral habits of the people. The truth seems
to be found in a combination of these two theories. We are
undoubtedly influenced by our surroundings, but we can also
by sheer force of character not only resist but even overcome
and change our surroundings.

Again, weak characters are more largely controlled by their
surroundings than are strong characters. Two men may go
under a cold shower bath. One, being in vigorous health,
comes out feeling refreshed. To him a cold shower is a
favorable rather than an unfavorable condition. The other,
being weak to begin with, comes out with a chill. To him it
was an unfavorable rather than a favorable condition. Yet
it was the same shower bath, with the same temperature etc.
If one were studying jellyfish, one might find that they were
the sport of such circumstances as the winds, the waves, the
tides, and the ocean currents ; but if one were studying sharks,
one might, with equal certainty, find that they were indepen-
dent of all such circumstances. Similarly, if one were study-
ing human jellyfish, one might find them and their moral


habits to be the result of their economic and social surround-
ings ; but if one were studying human sharks, one might
reach just the opposite conclusion. As a matter of fact, those
are the conclusions, in general, which students actually reach
who study two different types of people. When we study
considerable numbers of the unfortunate people who have not
succeeded in life, or who are more or less complete failures,
we generally attribute their failures to bad surroundings or
unfortunate circumstances. When we study men who have
made conspicuous successes, we are likely to attribute their
successes to their own sterling qualities. It would be impossible
to say whether the circumstances under which the former class
grew up were better or worse than those under which the
latter class grew up. In fact, many of our greatest men and
women came out of the worst conditions.

The unemployed. If we begin with the involuntarily idle,
that is, the unemployed, as given in the outline on page 64,
we shall find that many of them are the victims of circumstances
which they lacked the strength to combat successfully. Fre-
quently the hostile circumstances have been such as no one
could stand against. In these cases no moral problem is
involved. They are entitled to all the sympathy and aid which
society can give them. In other cases it was their own weak-
ness or their own injurious habits which made them unemploy-
able. There is no doubt that better moral and religious
teaching would have given them a moral brace and helped
them to succeed. At any rate, the fact that they are now idle
means that they are going to waste and are a drain upon,
rather than a contribution to, the national prosperity, power,
and greatness. Anything which can be done for future genera-
tions to reduce the number of such unemployed people will be
a definite contribution to the strength of the nation. More
moral vigor, sounder habits, and better training are apparently
needed for our economic prosperity, as well as for purely moral
or religious reasons.


The leisure class. When we come to deal with the volun-
tarily idle, that is, with the leisure class, we are on more
certain ground. It is in no sense their misfortune, it is their
fault, that they are idle. The fact that they are voluntarily
rather than involuntarily idle implies that they could do some-
thing useful if they chose, but they do not choose to do so. It
is not opportunity which they need ; it is moral regeneration.

We must be careful, however, not to confuse the person
who does not have to earn his living with the person who is
idle. Many persons of independent means are doing work of
the very highest utility to the nation and to the world. Scien-
tific investigation, experimentation, and invention, historical
and literary study, agricultural and mechanical demonstration,
political reform, and philanthropy, have all been promoted by
men and women who could afford to give their time to such
things. The leisure class, properly so called, includes only
those who do little or nothing that is useful or productive,
but give themselves over to mere self-enjoyment or self-
cultivation. Self-cultivation as preparation for useful work is
itself, of course, useful ; but without some useful object in
view, that is, without a view to making one's self a con-
tributor to the national prosperity and well-being, it is useless.
The person who spends his time in this kind of self-cultivation
is going to waste as truly as though he were spending his
time in eating, drinking, and acquiring adipose tissue, gout,
or diabetes.

Whoever belongs to the leisure class as thus defined is a
drain upon the wealth and prosperity of the nation. The
nation is better off every time such a person leaves the world.
Since he does nothing useful, nothing is lost when he ceases
to exist. When he ceases consuming, his food and clothing
at least are saved. His wealth, of course, remains behind even
after he is gone. He came into the world naked, and when
he leaves the world he takes nothing with him. The more
such people there are in the nation in proportion to the


workers the worse it is for the nation in the long run. The
fewer such people there are, that is, the larger the proportion
of workers, the better off the nation will be in the long run.
The whole nation has to be supported by the labor of those
who work. If all the people work, the task is lightened, or
else the people live better. If only a part of them work, the
burden upon the workers is either heavier or else there is less
produced and consequently less wealth.

Do idle consumers make a market for producers? It is
sometimes argued, however, that a large number of consumers
who are not themselves producers is necessary to make a mar-
ket for the producers. An appearance of reasonableness is
given to this argument by taking the case of a single product,
say potatoes, though any other product would do equally well.
It is undoubtedly a good thing for the potato growers to have
a large number of consumers of potatoes who are not them-
selves growers of potatoes, provided the consumers have some-
thing to give in exchange for potatoes. If the would-be
consumers of potatoes do not have something to give in ex-
change, the growers will gain nothing from them. The more
the consumers have which can be given in exchange, the more
profitable it is likely to be for the potato growers. If the con-
sumers of potatoes are living on accumulated wealth, they will
have less to give in exchange than they would have if, in
addition to their accumulated wealth, they were also produc-
ing or earning something. The more workers there are in
other productive fields besides potato growing, the more other
things there will be to be given in exchange for potatoes.
This is a statement which can be repeated with respect to
each and every industry or occupation, which merely brings
us back to the general statement that the more workers and
the fewer idlers there are in any nation, the more abundant
will goods of all kinds become, and the more rapidly will the
nation advance in prosperity and power. Overproduction of
everything is an impossibility.


Some are willing to grant, however, that it would be better
economically if everyone would work than it would be if some
wasted their time in idleness. After admitting this, it will be
asked, nevertheless, Has not a man a right to remain idle if
he has accumulated enough to support himself without further
work ? Assuming that he has earned his accumulation and
has not secured it by inheriting it, by marrying it, or by a
fortunate speculation in land, there is something to be said
for this contention. But he who does less well than he can,
does ill. One who is still capable of doing useful work, and
chooses not to do it, is certainly doing less well for his
country than he might, even though he did well when he
accumulated wealth.

Should men be allowed to accumulate wealth? But why
rely upon morals and religion to prevent this form of waste
or ill-doing ? Why not prevent men from living in idleness
by forbidding them to accumulate wealth or by taking it away
from them by law if they do so ? Here is a dilemma which no
kind of compulsion can remove. If men are not allowed to
accumulate wealth, they will then be encouraged to consume
their incomes as they go along. Wasteful or luxurious con-
sumption is quite as wasteful as idleness. Here, then, is the
dilemma. If men whose incomes are larger than is neces-
sary to support them and their families in that degree of
comfort which will maintain their efficiency at its maximum
are not allowed to accumulate, they will consume more than
is necessary ; that is, they will consume wastefully. If they
are allowed to accumulate a part of their incomes, some of
them will be able to accumulate so much that either they or
their children may live without work. It is deemed better and
more economical to allow them to accumulate, and then appeal
to them on moral and religious grounds not to waste their lives
in idleness or useless self amusement, but to use both their
time and their wealth productively, than to take away their
accumulations and thus encourage them to consume wastefully.


Let us assume, by way of illustration, that two men, A and
B, have equal incomes, and that their incomes are more than
sufficient to maintain them and their families in efficient com-
fort. A consumes his entire income and never accumulates
anything, while B consumes only a part of his income, invest-
ing the remainder in productive enterprises of various kinds.
The overconsumption of A and his family accomplishes noth-
ing. What they consume over and above that which is neces-
sary for efficient comfort is wasted as far as the rest of the
country is concerned, and might just as well have been burned
or thrown into the sea if that would have given them any
amusement or satisfaction. B's surplus, however, has gone
into the expansion of industries and the increase of the pro-
ductive power of the country. Up to this point B has done
much better than A. Now let us assume that after a period
of years B decides that he has worked long enough, and that
he will spend the rest of his life in sheer idleness or self-
amusement. A, having accumulated nothing, cannot retire, but
is compelled to go on working as long as he is able. From
this point on, A is doing better than B. During their whole
lives it is difficult to say which does the better, but the odds
are slightly in favor of B. If, however, B can be persuaded
not to remain idle, but to continue doing something useful,
even if he does give up his earlier business, the advantage
is decidedly with B.

The kind of talent that goes to waste. There is one aspect
of the problem of the leisure class which makes it especially
important. That is the quality of the people of whom it is
made up. If this class were made up of the ignorant, the
weak, and the incompetent, the loss would not be so great.
That part of the leisure class which is commonly referred
to as the tramp, or hobo, class may be thus described. There
is a certain amount of waste involved here ; but as long as
they do not become a positive nuisance by their lawlessness
and vagrancy, the waste is not so very great. Even if they


were all at work, they would not be worth much ; consequently
the mere fact that they are idle does not of itself occasion
much loss. Their criminality is of course another matter.

That which is commonly known as the leisure class, how-
ever, differs from the vagrant class in at least one important
particular. It is made up in the main of men and women
of more than average native capacity. The man, for example,
who has been able to accumulate a fortune out of his own
earnings, or by his own business foresight and capacity, is
pretty certain to be a man of considerable productive capacity.
If he chooses to use that capacity in productive enterprises,
he can add materially to the wealth and prosperity of the
whole community. If he chooses not to use it, the loss to
the community is correspondingly great. These considera-
tions present a problem of the very greatest magnitude. The
greater the productive capacity of the individual, the more
desirable it is, from the standpoint of national prosperity, that
he shall use that capacity. On the other hand, the greater
his capacity, the more likely he is to accumulate a fortune ;
and, consequently, if he is not controlled by high moral and
religious motives, the more likely he is to retire from busi-
ness and live in idleness. If he were a man of low productive
capacity, it would not be so great a loss if he were to retire ;
but such a man will seldom be able to accumulate a sufficient
fortune to be able to retire.

Lest there should remain some doubt as to whether it is
a loss to society when a man of great capacity for usefulness
stops working, let us consider the case of a great surgeon.
The author has such a man in mind. He is so skillful and
so capable that his services are sought by large numbers of
people. He could have retired years ago and lived in elegant
leisure on his accumulated wealth. Had he chosen to do so,
some hundreds of people would have been deprived of the
benefit of his skill. Had he been a man of mediocre ability,
it would not have mattered much ; but a man of mediocre


ability could not have accumulated enough to be able to stop
working. The fact that this brilliant surgeon is so much
needed is the very thing which would have made it possible,
if he had been a man of perverted morals, to stop working;
but that is the very reason why he should not stop. There
seems to be no solution of the problem, except sound moral
standards which will keep such men busy. If they lack such
sound moral standards, even compulsion would not call forth
their best efforts. That which has been said of our great surgeon
may be repeated of any great man in any useful occupation.

The ineffectively employed. By the ineffectively employed
are meant all those who, through lack of training, lack of oppor-
tunity, or sheer lack of initiative, are now doing less useful
work than they might have been doing had they had the proper
training, opportunity, and initiative. These include men who
are doing unskilled work who might have been doing skilled
work, men doing skilled manual work who might have been
doing expert mental work, or men doing routine mental work
who might have been doing work requiring inventiveness, origi-
nality, and enterprise. This is primarily an educational rather
than a moral problem. The question of morals and religion
enters into the problem to a certain extent, however. No mat-
ter how many and excellent are the schools and other educa-
tional opportunities, unless students are inspired with a high
purpose to make use of the opportunities which are furnished,
these opportunties alone will not solve the problem. Large
numbers will remain unskilled, ignorant, and in a low state of
productivity. The individual who remains less useful to the
nation than he might be is not only doing himself an injury
but is also injuring the nation. He who does less well than
he can does ill.

Vice as waste of energy. One very good definition of a
vice is that it is a habit which wastes or dissipates human
energy. It should, perhaps, be distinguished from crime in that
vice wastes one's own energy, whereas crime wastes not only


one's own but that of other people besides. No community
which wastes in either way a large proportion of its energy can
hope to prosper as much as a community which does not. The
use of drugs which merely produce excitation or irritation of the
nerves, overindulgence in any kind of excitement beyond what
is necessary for recreation, or even excessive devotion to sport,
may become a vice in this sense as truly as excessive eating or
drinking. Crime and fraud seem to call for the use of the
compulsory power of the state rather than for moral suasion.
Luxury. Luxurious consumption can be controlled by au-
thority and compulsion to a certain extent, but not wholly ;
that is to say, there are certain clear and undebatable forms
of luxurious consumption, such as the use of alcohol and
opium, which the government can safely prohibit, but much
must be left to the discretion of the individual. There is a
time-worn argument to the effect that luxurious expenditure
gives employment to labor and thus benefits the poor. This
is similar in principle to the theory that the destruction of
property, say the burning of a building or the breaking of a
window, gives employment to labor. The stupidity of this argu-
ment was never more clearly shown than by Frederic Bastiat
in his famous work entitled " Sophisms of Political Economy."
He pictures a shopkeeper who is about to chastise a scapegrace
son who has broken a pane of glass. Some sympathetic by-
standers argue that the boy is really a public benefactor in
that he has made work for the glazier, who will then have six
francs, the cost of a new pane, to spend, and that the butcher,
the baker, and others will share in the benefit.

" Assuming that it becomes necessary to spend six francs in repairing the
damage, if you mean to say that the accident brings in six francs to the
glazier, and to that extent encourages his trade, I grant it fairly and frankly,
and admit that you reason justly.

" The glazier arrives, does his work, pockets his money, rubs his hands,
and blesses the scapegrace son. That is what we see.

" But if, by way of deduction, you come to conclude, as is too often done,
that it is a good thing to break windows, that it makes money circulate, and


that encouragement to trade in general is the result, I am obliged to cry,
halt ! Your theory stops at what we see, and takes no account of what we
don't see.

" We don't see that since our burgess has been obliged to spend his six
francs on one thing, he can no longer spend them on another.

" We don't see that if he had not this pane to replace, he would have
replaced, for example, his shoes, which are down at the heels ; or have
placed a new book on his shelf. In short, he would have employed his
six francs in a way in which he cannot employ them now. Let us see then
how the account stands with trade in general. The pane being broken,
the glazier's trade is benefited to the extent of six francs. That is what
we see.

" If the pane had not been broken, the shoemaker's or some other trade
would have been encouraged to the extent of six francs. That is what we

Online LibraryThomas Nixon CarverPrinciples of political economy → online text (page 6 of 48)