Economics - Introductory View Of The Subject
( Originally Published Early 1900's )
WHEN we enter upon the study of a new subject it is sometimes best to begin by divesting our minds of all preconceived notions respecting it, and to make our first examination of it from the most wide-reaching point of view. Let us then commence our study of Political Economy by comparing certain processes now going forward on the surface of this continent with the corresponding ones of four centuries ago.
If at so distant an epoch we had been able to survey the whole area now covered by the United States we should have seen no form of human activity except the pursuits of savage life. The principal occupation of the inhabitants would have been making war upon each other, and hunting wild animals for food. The soil and the forests would have been in their natural state, and neither ocean nor river would have borne any vessel larger than a canoe.
Let us next suppose such a survey to be made at the present time by a being gifted with intelligence but not acquainted with the minds of men. This intelligent being would now see a network of railways covering the greater part of the country. Steamers would be ploughing the rivers, cities would be building, immense quantities of material of all kinds would be seen carried from place to place by locomotives, trains would be running in every direction, stores of goods would be piled in warehouses, and the prairies would be covered with fields of wheat which at certain seasons would be found undergoing the process of reaping, threshing, and transportation to the sea-board.
It would be evident that this new activity was totally different in kind from anything which had before been going on. In past geological ages the rocks had been ploughed by glaciers, new mountains had arisen, rivers had changed their courses, new lakes had formed and old ones had sunk. But the intelligent being could form no idea why this new kind of activity had arisen until he became aware that it was all the work of other intelligent beings called men. Having learned this, let us suppose him to descend to the earth and seek out some one of the men engaged in the activity in order to learn its cause. He first finds the engineer of a locomotive making its way across the country. Why do you run this locomotive ?" he inquires. The answer would be, "I run it in order to earn money." "But what do you want of money?" "I want to buy food, clothing, and shelter for myself and my family." Seeking out a farmer harvesting wheat on the prairie, he would get nearly the same answer. Go where he would, every one would tell him that he was working for himself, and that the object of all his labor was to secure an increase or a better sup-ply of certain articles necessary to his well-being, the most important of which would serve for food, clothing, shelter, pleasure, and education. Every one he met would ostensibly have only his own interest in view.
But further examination would show that, notwithstanding this apparent universal selfishness, all were engaged in working for the good of others. Suppose our intelligent being to alight on the plains of Texas and there find a body of men herding cattle. He sees that they kill the cattle and give their hides to other men to be carried to the sea-coast. Here others put them on board a ship on which they are conveyed to England. In England another set of men tan the hides, and yet others make them into boots and shoes. Wishing to see what becomes of the boots and shoes, he traces them to the feet of a miner in Cornwall. The miner daily goes deep under ground to take out tin. Tracing this tin to its destination, he finds it worked by countless hands, follows it across' the Atlantic to New York, into a freight-car, into a tinsmith's shop, finally seeing it end its long journey in the form of utensils for the use of the herdsman in Texas.
"How did you know that that Cornwall miner wanted a pair of boots ?" he says to the herdsman. " How did you know that herdsman in Texas wanted a tin dipper ?" he says to the miner. To his astonishment he finds each in entire ignorance of what becomes of his property after it leaves his hand. The herds-man does not know that his hides were even taken to the sea-shore; the man who put them on board ship did not even know where the ship was going ; and not a man on the ship knew who purchased the hides in England. At Cornwall the miner did not know what became of his tin. In a word, nearly every one would be found ignorant of the final destination of the things he was making.
By continuing his investigations our intelligent being will be led to the following conclusions :
1. The operations which he has been studying are those of a single harmonious system.
2. The object of this system is to supply each individual man with certain objects brought to him from all parts of the world and necessary to his existence, health, and pleasure.
3. The harmonious working of the system leads to its being thought of as one great piece of mechanism.
4. But this mechanism has no directing head to move it. Its operations are kept up by an infinity of internal forces, each of which operates only within a very limited sphere.
We shall call this mechanism the social organism.
Moving Force of the Social Organism. We are now led to inquire into the general nature of the force which moves the organism. The matter may be summed up in the following fundamental proposition :
The one force which keeps every part of the social organism in activity is the desire of each individual man to enjoy certain results of the labor of others, which he can command only by himself laboring for others.
The more highly developed the man is, the greater the number and variety of the wants which he requires to be sup-plied by the social organism. In the lower scale even of civilized society, it suffices if he can gain the food requisite to maintain his strength, and such clothing and shelter as will protect him from the elements. But as he ascends in the scale he wants more palatable food, finer clothes, and a larger house. After enjoying these, his house must be embellished with every ornament that can please the eye, and furnished with every appliance that can give bodily ease. If he can command yet more from the social organism, the whole world must be searched to find food and drink for his table, and the clothing required to keep his body at the most agreeable temperature. Finally, after commanding everything which even the most cultivated man can desire, he will accumulate property merely for the love of possessing it, for the power which it gives him, and for the good to his fellow-man which he may be able to do by its means.
The Law of Labor. Nature does not directly furnish man with the objects of desire now under consideration. She supplies only the raw material by which these objects may be obtained through the instrumentality of human exertion. Through such exertion, bodily and mental, the wool of the sheep becomes clothing for man, the stone in the quarry be-comes the foundation for his house, the clay in the fields becomes the material for its walls, the wood of the forest is transformed into chairs and tables, and the material of the soil becomes food. His desires being unlimited, while his means, that is, his labor, is limited to a few hours daily, he seeks to economize the latter so as to secure the greatest number of objects of desire. Hence a second fundamental proposition
Mankind continually endeavors to satisfy each separate want with the least possible expenditure of labor.
On this simple law of human action is founded the science of political economy. The law is not a mere hypothesis, but a truth which is nearly universal so far as civilized men are concerned. Among partially civilized communities, whose desires are limited, the laws of political economy do not necessarily find any application.
Origin of the Social Feature in the Want-supplying Mechanism¨. If each man had to depend on himself for all his means of enjoyment, he would, as compared with his actual condition, be as good as helpless. It is only by exchanging services with his fellow-man that the great mass of objects of desire can be attained. How important an element of civilization this is any one will see by looking around him and remarking how few even of the necessaries of life he would be able to command if they were not supplied him by his fellow-man. How many of us could make our own bread or clothes, or build ourselves the rudest kind of a house?
Indeed, from the point of view of political economy, the great difference between civilized and savage communities is that in the latter each individual for the most part works for himself, while in the former each one labors for all the others.
Let us see how far we may carry the conception of society as an organism. An organism is something which is not designed, but grows, and in which the acting forces seem to reside in all the molecules which make up the organism. For example, in the human body every corpuscle of the blood and every nervous fibre is endowed with certain activities which enable it to perform its own functions, and to minister to the good of the whole body. So in society. The molecules are individual men. The forces which bring about the great movements of commerce have their origin in individual desiresójust as the nutrition of the body has its origin in the minute molecules of blood. As the will of a man does not determine how his blood shall circulate, nor how nutrition shall go on, so there is no one authority in the world who wills in what way men shall employ their labor or render services to each other. Leaving out individual cases, this is wholly a matter of private agreement between man and man, or between one body of men and another. We may compare the ignorance of the workman as to who shall enjoy the products of his labor with the lack of knowledge on the part of each corpuscle of the blood as to the effect of its nutritive power.
Although we may consider society as an organism, we must not carry the analogy with living organisms too far. There is one very important point in which society or the social organism differs from a plant or animal. We think of every plant and animal as having an individuality of its own, distinct from the conglomeration of organs which form it. Moreover, we cannot add to or subtract from the parts of the plant or animal without detracting from its character. A man cannot have three legs, and if he has only one he is imperfect. But there is no such completeness in the social organism. We can add new men to any extent, or we may divide a country into two without changing the character of the organism. In other words, it has no such attribute as individuality. By assigning such an attribute to it, and giving it a name, we may be led into confusion of thought. The people of each country and of each city may be considered to form a separate organism, but at the same time steam transportation has brought most of the world into such close communication that we may consider all these little organisms as parts of a great one, including the whole human race.
The more closely and intelligently we look into the operations of human society the more we shall marvel at the perfection of its working. No man could ever have contrived such a system; and had it been contrived, no men or combination of men could direct its work, any more than they could send the blood through the body of an animal. To the thinking man it forms one of the most interesting objects of study. There is nothing in the wonders of the heavens or the mysteries of chemical combination better fitted to kindle our curiosity, and to gratify our desire to understand what is going on around us, than the study of the social organism.
We shall proceed in this study on a plan not unlike that which the physician follows in acquiring a knowledge of the human body. But as a preliminary step we shall have to enter upon some considerations of scientific method not necessary to the work of the physician. The reason of this is that our object of study is farther removed from the immediate sphere of sense than is that of the medical student. The latter studies the bodies of animals by actual dissection and by observation with his eye and with the microscope. But the economist can-not dissect society and make its component parts visible in the same way. The dissection is indeed to be performed, but only in imagination, by describing the different parts of which society is made up, and bringing in, not the real men who surround us, but abstract and generalized forms of these men, which bear the same relation to living men that a mental image does to a real object. To compensate for this substitution of mental sight for eyesight, we need scientific method. The order of our studies will not be materially different from that of the medical student. Our first consideration is the anatomy of the organism, the forces which move it, and the manner in which the various parts are combined into a single harmonious whole. Having got a clear idea of what the organism is, we have then to go into many details respecting the laws according to which it operates. Finally, we shall have to apply our knowledge of these laws so as to form intelligent conclusions respecting the effect of governmental action upon the interests of society at large.