BOUGHT WITH TH:$ INCOME PROM THE ■ • SAGE ENDOWMENT FUND •THE, GIFT OF , Hentg ^« Sag* X89X iPv^fa.o.s.'a.n. .2..vi\55.m.2i i^ arV13337 Economic morals : Cornell University Library „ 3 1924 031 339 595 olin.anx Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924031339595 ECONOMIC MORALS. FOUR LECTURES. ECONOMIC MORALS. font Xectures. WILFRID RICHMOND. jyiTH A PREFACE BY THE REV. H. S. HOLLAND, M.A., CANON OF 5. FAUL'S. LONDON : W. H. ALLEN & CO., 13, WATERLOO PLACE, PALL MALL, S.W. 1890. LONDON ; PRINTED BY WILLIAM CLOWES AND SONS, LIMITED, STAMFORD STRBBT AND CHAKING CKOSS. CONTENTS. LECTURE I. PASS Law — Economic, Moral, Political . . . i LECTURE n. The Law of Justice, the Foundation of Eco- nomic Society 31 LECTURE IIL The Law of Help, the Rule of Economic Con- duct 60 LECTURE IV. The Economic Ideal, and the Christian Motive Power 94 PREFACE. I VENTURE to commend these Lectures, not as standing above them in the character of a critic, but as sitting below them in the humility of a pupil. There must be many who, like myself, know just enough of political economy to find them- selves hopelessly confused, whenever they are brought in face pf the concrete facts. And yet, face to face with those economic facts we are being inevitably brought, and with the facts in their most urgent, and impressive, and tragic shape. Above all, as clergymen, we find our- selves dragged to meet the facts, to touch and handle them; and "the facts" here, too often, have taken flesh and blood, and breathe, and a;i;e hungry, ^nd have wives and children, who pine, and suffer, ^nd die : and we are Christian PREFACE. ministers, responsible for delivering the Gospel of the Sermon on the Mount. What are we going to do ? Where are we ? The clues that we had with difficulty managed to follow, as the political economist threaded his way through the social maze, in the quiet abstract seclusion of a treatise,, slip out of our fingers under the press and storm of " facts " like these. The few formulae that we had picked up seem very remote, and airy, and ghost-like. They will not "bite" — they do not admit of direct and decisive application. Of course, this is not all due to our own im- potence. The scraps of economic philosophy which most of us have picked up belong to that political economy which, in the days of our youth, was still in the condition of an isolated science. At that stage of its career, it had set itself to be as abstract as possible. It did not profess to admit of direct application to human life. It only dealt with isolated laws acting "in vacuo." It is the favourite phrases of this stage of political economy which have passed into popular lan- guage, and have become current coin in the marjcet-place. It is these which newspapers PREFACE. bandy to and fro, and which we all are apt to bring to the surface when we are trying to appear scientific to ourselves or to others. It is most probably a purely practical crisis — some moment of 'human distress — wl^ich compels us to call upon our slender stock of scientific terms, and to give economic judgments ; and yet, this particular set of phrases, which alone we know, belong to that stage of the science when it was most purely deductive, and, therefore, least capable of giving us practical guidance in direct contact with human facts. But it is this practical guidance which we urgently need ; it is direct contact with facts which is forcing decisions from us ; and for such a purpose, in such condition, these abstract, deductive phrases of the earlier economy, are bound to be sheerly deceptive. The gap be- tween the isolated laws which these catch- phrases signalise, and the actual living world with which we are dealing, is immense. And we have no bridge by which to pass over it. The laws are rigidly true, no doubt, but, in their present isolated condition, they would apply indifferently to Saturn or to the Earth. And PREFACE. yet the Earth differs seriously from Saturn ; and how does the difference affect and qualify the action of these laws? That is our burning question j but, to answer it, involves wide, care- ful, accurate knowledge of a vast body of cir- cumstances. And this is just what we lack ; and just what we are bound to lack, for the leisure to overcome the difificulty is forbidden us. We must, then, apply to an expert who has allowed himself sufficient study to do something in the way of bridging the gap. We need him to show us how these bare economic laws, which have been, for purely scientific reasons, isolated by our abstract reason, can be taken up into contact with our whole manhood, .and can relate themselves to our general body of practical principles, and can fuse themselves with that central moral conscience by which all our actions must alone be guided, and can be seen in har- monious unity with our full human self, and can thus be brought to bear upon the actual world in which our heart, our affections, our will, are equally interested with our reason. We want him to exhibit to us something of the process by which these deductive principles can be. PREFACE. Step by step, clothed in flesh and blood, and so appear as living realities amid the thick of facts, in the actual markets of men. It was this need which Mr. Richmond at- tempted in these Lectures to meet, so far as they went Those whom he spoke to were avowedly Christian ; they were most of them clergymen. The moral conscience which they assumed to be their central practical force was the Christian conscience. The body of general principles which constituted their active life belonged to belief in the Incarnation. It was the Incarnation, therefore, with which they de- sired to see the laws of political economy brought into contact. It was the Christian conscience with which these laws had to exhibit their ability to fuse themselves. Can they do it? Is the fusion possible? What will be the exact state of the laws as they enter within the range of such a context ? That is the problem to which these Lectures apply themselves ; and it is because they ap- peared to many besides myself to be a serious and a successful effort to achieve this result in the ground over which they travelled, that they xii PREFACE. are printed, in the hope that they may bring the same help to others as to us. The special value of these Lectures seemed to me to lie in this : that they got rid of that un- comfortable dualism in which most of us tumble along in economic matters. We live as shuttle- cocks, bandied about between our political economy and our Christian morality. We go a certain distance with the science, and then, when things get ugly and squeeze, we suddenly introduce moral considerations, and human kind- ness, and charity. And then, again, this seems sentimental and weak, and we pull up short and go back to tough economic principle. So we live in miserable double-mindedness. Each counter motive intervenes at purely arbitrary points. When our economy is caught in a tangle, we fly oflF to our morality. When our morality lands us in a social problem, we take refuge in some naked economic law. There is thus no con- sistency in our treatment of facts ; no harmony in our inward convictions. Now, in this work of Mr. Richmond's, this dualism seems to me to cease. The fusion of the double elements which enter into the facts PREFACE. is complete. The science succeeds in being ethical, without ceasing to be scientific. The ethical principle does not appear as outside the economic, entering on the scene merely as a sentiment to check, and to limit, and to correct it ; but it is itself the intelligent and constructive force which builds up, from within, the scientific principles. The economic laws are exhibited, not as arbitrarily limited by moral considerations, but as themselves the issue of moral relations. Such an origin must of itself impose limitations upon those economic conditions which it pro- duces ; but such limitations appear as due to the inner character of the conditions themselves. The moral source from which they spring is still their quickening spirit, and it charges them, therefore, throughout their course, however in- tricate and distant that course may be, with moral responsibilities. If such a fusion can indeed be attained, then we once more recover our natural integrity; we are no longer bi- lingual in economic affairs. Our scientific lan- guage about them is one with our moral. And the conclusions to which our economic science points us are capable of being at once translated PREFACE. into acts, and approved, practically, by the moral judgment Let no one say, then, that we are abandoning- science for sentiment. We believe that science, in economic and social matters, cannot be fully scientific unless it has included all the elements which could go to create a sentiment. We believe that a sentiment is not a sufficient director of action until it has made itself scien- tific, i.e., until it has fused itself with the laws which make the facts what they are. This is the aim, as I understand it, of much that is now being done by political economists of the younger school. And I cannot but believe that these Lectures may show to many people how this may indeed be possible. Those of us who heard them delivered have hopes that a society may usefully be formed of all those who believe it possible to arrive, by combined consideration, at a form of social con- duct which shall be, equally and at once, the issue of economic law, and the fulfilment of the Christian ideal. Henry Scott Holland. NOTE. The following Lectures were delivered at Sion College on four Thursdays in Lent, 1889. They were addressed mainly to Clergy, and are printed in obedience to a wish expressed at the time of their delivery by those who heard them. They have been very slightly altered from the form in which they were delivered. A note on Socialism has been added to the Lectures, and also an Analysis. The Society alluded to by Mr. Scott Holland has now been actually formed, under the name of The Christian Social Union. This Union consists of Churchmen who have the following objects at heart : — xvi NOTE. (i.) To claim for the Christian Law the ulti- mate authority to rule social practice, (ii.) To study in common how to apply the moral truths and principles of Christianity to the social and economic difficulties of the present time, (iii.) To present Christ in practical life as the Living Master and King, the enemy of wrong and selfishness, the power of righteousness and love. Members are expected to pray for the well- being of the Union at Holy Communion, more particularly on or about the following days : — The Feast of the Epiphany. The Feast of the Ascension. The Feast of S. Michael and All Angels. The Secretaries are : Rev. C. G. Fletcher, I 8, Trinity Square, Rev. Cyril Bickersteth, J E.C. FOUR LECTURES ON "ECONOMIC MORALS." LECTURE I. LAW — ECONOMIC, MORAL, POLITICAL. It would at first sight seem to be an ex- ceedingly simple thing to tell a man that in economic matters as in other matters he must do his duty. But it is not in fact a simple thing at all. The object of these lectures is to lay down the principles of economic duty, and to suggest that we clergy ought to consider how these principles can be enforced and applied in the economic life of the present day. It will be sufficiently plain as we go on that the matter needs consideration ; and in fact to-day, in this first lecture, it is impossible even to approach these moral principles themselves. B ''ECONOMIC MORALS." We must first vindicate for moral principle as such its true place in economic life. The place we claim for it is the supreme place. We are bound to maintain that the supreme question to be asked as to economic conduct is, What ought I to do ? May I illustrate the difficulty of finding the answer? Suppose the case of a man who has just inherited a considerable sum of money. We will also suppose him to have become possessed, by inheritance or otherwise, of a somewhat active conscience. Accordingly, the first question which he will ask will be, " What ought I to do with my new fortune ? " Let us supppse him then, in the innocence of his heart, to put this question before the lawyer or man of business with whom the acquisition of his fortune will bring him into contact. He will say, " Now tell me how ought I to invest this money ? " " Well," his man of business will tell him, " there are a great many investments going nowadays against which you should be on your guard. I shall be very happy to advise. With due care it is not difficult to find investments which are perfectly safe and which yet give a fair ECONOMIC DUTY. return." Our conscientious friend will be some- what baffled. It will appear to him that the only principles offered for his guidance are that he should run as little risk as possible and get as much as he can. And these, though very- excellent principles in their way, will scarcely satisfy his conscientious craving — ^they are not principles of duty. He will not pursue that subject. Perhaps he will try another region of duty. He may ask, " Well, now about shops — what are the best people to deal with ? " And I suppose the answer will be, "Well, there is no use giving more than you need ; but I shall be very happy to recommend you to some shops where, without giving an extravagant price, you can be pretty sure of getting good value for your money." There Will seem to be some- thing wanting about this answer too. It will scarcely invite further discussion on the moral ground. Only as he walks home perhaps some dim feeling may rise in his mind that he has not been offered any security, either that he justly deserve? the interest on his investments, or that he justly gives the right price for his goods. Perhaps it may occur to him to try and satisfy , B 2 ''ECONOMIC MORALS." his conscience by consulting the clergyman of his parish. We can imagine how the eyes of that good man will sparkle. " Tell you how to spend your money ? I should think so. I can tell you of a dozen excellent objects. There is my church now " We will draw a veil over what follows. He will leave the presence of this last adviser a poorer if not a wiser man. Perhaps he will have asked to dinner, to con- gratulate him on his good fortune, some friend who has experience and knowledge of the world. He will confide in him, and tell him of his unsuccessful attempts to discover what it is his duty to do. Again we can imagine the answer : " Ah, well, you see people do not look at money matters in that way. You look out for your- self, and leave the other man to see that he does not give you too much interest and that he gets enough for his goods. These things all take care of themselves — they are subject to the laws of Political Economy, don't you know ? " We need not pursue the story ; our imaginary man has done what we wanted of him. He has brought moral law and economic law face to face, and it is of their relations that we have to speak. DIFFERENT SENSES OF ''LA W." Now, in dealing with the relations of moral and economic law, there are four different senses of the word law with which we shall be concerned. First, there is scientific law — a statement of fact as to the sequence of events, the law which states what is. To this is broadly opposed moral law — the law of right or obliga- tion, the law which states what ought to be done. These are the two main meanings of law which it is obviously most important to keep distinct from one another. But there is a third sense of law allied to the moral sense. Of the things which ought to be done there are some which it is thought advisable in human societies to enjoin under penalties. We may call this kind of law political. And lastly, all kinds of law, scientific, moral or political, are, or may be in one sense or another, divine — ordinances of God. Disregarding the affiliations of these different senses of law to one another, it will be convenient to refer to them as four distinct kinds of law — scientific, moral, political, divine. If we look then at the field of economic practice, it is not too much to say that moral law as a ruling power is absent from it. I do not 'ECONOMIC MORALS." mean to say that there is not a great deal that is moral in economic practice. I mean to say that in economic practice men do not habitually refer their conduct to this test — "What is right? what ought I to do?" It is not merely that they do not habitually conform their practice; to the moral law. It is not merely, that is to say, that as in [other regions they do not obey its authority, it is that in this region they do not recognise its authority. Once more, it is not that men explicitly Seriy the authority of the moral law in economic matters, it is that they habitually ignore it. In any of the ordinary details of economic conduct, in buying a coat, in investing a sum of money, men do not think of what it is right or just that they should pay or should receive, they think of getting what they want and giving what they must. The moral law then is not the ruling power in economic practice. What is the ruling power ? What laws obtain in the economic world? Political Economy.'tells us that the laws that obtain are habits of action from the motive of self-interest. The science of Political Economy has observed these habile, as ECONOMIC AND MORAL LAW. .7 generalised from the practice of the economic world. And it adopts as its hypothesis that all men act in economic matters from the motive of self-interest. Political Economists do not profess that this is the only or the universal, motive of economic conduct. They allow that their science is hypothetical, that its conclusions are true in fact only in so far as the action of the motive of self-interest is not modified by the intrusion of other motives. But they maintain that the prevalence of the motive of self-interest is sufficiently great to make the assumption of its universality the most fruitful hypothesis, the hypothesis which leads to results most nearly in accordance with the facts. This, then, is the fundamental economic law — that ' men act from the motive of self-interest. Only observe that law here means law in the scientific sense — a general statement of fact. If therefore, when we set ourselves to make the moral law the ruling power in the economic conduct of men, we are told that the laws of Political Economy are against us, this only means that our obvious duty leads us to go in the teeth, of the established facts of the practice ''ECONOMIC MORALS." of men. This is a very serious thing to do. But we may at least console ourselves with the reflection, that Christianity has never professed to do anything else than go in the teeth of the established facts of the practice of men. Even if, in support of moral principles, we advocate that political laws should be made, which are said to contradict the laws of Political Economy, we shall not consider that the fact of this contradiction is anything against the course we propose. The only question to be considered is whether the political laws in question are likely to serve their moral purpose. So far, then, we find that the moral law and its political corollary are opposed to economic law ; but that they are so only because the economic law states the fact, and the fact is that the au- thority of the moral law is not recognised. They are not two kind of authorities opposed to one another. The moral law only is authoritative. Economic law has no authority. It merely states the facts which it is the proper business of the moral principle to alter. ■ But it may be said. What about divine law? The moral law certainly bears the divine ECONOMIC AND DIVINE LA W. 9 authority ; but economic law states the facts of human practice. Are there any other than the facts of human nature ? And have not the facts of human nature, and those laws which result from them, also a divine authority? Are not the laws of Political Economy laws of God, because they are laws of nature ? This question requires to be answered with some care. There are two kinds of economic law — ultimate and derivative. There are the principles of Political Economy and its con- clusions. Let us first ask whether the principles of Political Economy are laws of nature, and therefore laws of God. Take the principle of Political Economy, that in economic matters men act from the motive of self-interest. If we have this principle stated in the form, that Political Economy assumes perfect competition, and that perfect competition means that in buying and selling every man acts for himself alone, by himself alone, to get the most he can, and give the least he must,* we have no hesitation in denying that that is a law of God or a law of * Walker, § 129. lo " ECONOMIC morals:' nature either. But suppose we have the principle asserted in this form, that every man has a desire for wealth, that is to say, for the means of subsistence and enjoyment, and strives to obtain wealth at the least sacrifice to himself — ^we shall not be iijclined to deny that this is a law of nature, any more than we should deny it to be natural that, if a man is on one side of a room and wants to get to the other side, he should walk across the room rather than round it. The desire for life and for its enjoyment is in fact the root-motive of economic conduct, the universal force of economic life. Yoii may describe this motive as self-interest. If you do so you impart to it the colour of immorality, you assume that the desire of one individual for life and enjoyment is pursued at the cost of, or in indifference to, the life and enjoyment of others. To us who, as Christians, view life to start with as a trust and a gift, life and the enjoyment of life are duties — subordinate duties it may be, but duties nevertheless. And the desire for life, the instinct of self-preservation, which economists describe, in the form in which they most frequently obseirve it, as the motive of self- ECONOMIC AND DIVINE LAW. ii interest, is in itself a right impulse, an impulse of duty, a law of nature and a law of God. But it makes all the difference, both in the moral character of the motive itself, and in the moral complexion of the laws which follow from its operation, whether it is to start with the rudimentary form of duty, or the rudimentary form of self-interest. There is no doubt that Political Economy, in asserting this as the principle of economic life, thinks of it as the principle of self-interest. This principle we shall unhesitatingly deny to be a law of nature and a law of God. But in doing so it is most important that we should claim that there is a principle of action, like the motive of self-interest in all its positive qualities, in all its beneficent operation, unlike it in that negative quality which makes it the principle of mutual war. Our answer then to the question, Are the principles of Political Economy laws of nature, and therefore laws of God? is, that in the moral character which they assume, as they are commonly, and perhaps in great measure cor- rectly stated, they are neither one nor the other ; but that in their true character they are divine. 12 '' ECONOMIC MORALS." This consideration determines also the answer to the second question, Are the conclusions of Political Economy laws of nature, and therefore laws of God ? Are they laws of divine command? We have seen that economic life is to be viewed as the result of the working of a desire for life and its enjoyment, which is in part a right and moral force, and is in part distorted into the immoral shape of sheer self-interest. The conclusions of Political Economy therefore describe a system of life which is in part a moral order, a system of mutual help built up by the working of a moral principle : they represent the instinctive operation of a right and true motive, leading men in the pursuit of the fuller enjoyment of life, to find that fuller enjoyment in social combination and the inter- change of good. But the existing system of life, described in the conclusions of Political Economy, is also in part, and in great part, the result of the working of sheer selfishness. In so far as its conclusions bear this latter character, Political Economy issues in laws, i.e. describes facts, opposed at once to the laws of nature and of God. ECONOMIC AND DIVINE LA W. 13 In so far as they bear the former character, it describes facts which, like all facts of divine ordinance, may be viewed as divine commands the divine laws of a moral order. For instance, the " iron law of wages," supposing it to be an established economic law, is a result of the working of selfishness opposed to divine law ; the laws of self-sacrifice and self-subordination, involved in the system of the division of labour, are laws of divine ordinance and command. But the conclusions of Political Economy present us also with the working of a system of ^vn!\a government. In this system there are three features for us to note. First, within certain limits, we see in economic life as it is a reward duly assigned to certain forms of economic virtue. Secondly, within certain limits, we see the punishment duly laid on certain forms of economic sin. And thirdly, here as elsewhere in human life, we see that allowance of evil, apparently without punishment or remedy, which is a challenge to human effort and Christian principle to establish or to restore the rule of God's commands. The position we have reached then is this, we 14 " ECONOMIC MORALS." maintain in the first place that economic laws, being merely statements of fact as to the actual behaviour of men in economic matters, can in no way bar our right to assert the supremacy of moral principles in economic conduct. If the facts are against us, we accept their challenge. If we are met with the plea that the laws of the science of Political Economy are divine laws, we answer that they are or are not divine laws exactly in proportion as the principles on which men act are moral or immoral, and that the results of the working of immoral principles, permitted under the providence of the divine government, have no more right to claim the divine sanction in this than in any other region of moral action. These considerations impose on us the duty of studying economic life from the moral point of view, to disentangle good from evil in the existing system, but they in no way limit our duty to claim for moral principles the right to govern economic conduct and life. I have gone through this somewhat tedious argument because I believe that, in any endeavour to moralise the economic conduct of men, we shall find our first difficulty in a strong , DUTY OF THE CLERGY. 15 belief in the soundness, on the whole, of the present economic system, and we shall make little or no progress unless we see clearly how far and why this confidence in the present system is justified, and how far and why it is altogether wrong. I conceive it then to be our duty to study and preach economic morality. For this purpose we must read economics, as a description of the working of the existing system ; we must con- sider together, with all the light that an inter- change of knowledge and experience can give us, the bearing of moral principles on economic life. And we must overcome what- ever distaste we may have for preaching what we learn to believe are the right principlesof economic conduct. It is difficult to speak temperately of the force with which these duties press upon us. It is enough to say that a very large portion 01 the duties which every man either performs or neglects every day of his life are economic duties; to ask how he is equipped for their performance in any knowledge of moral principles applied to economic conduct ; and to look at the answer in whole'fields of action, as to i6 « ECONOMIC MORALS. which not one man in a thousand evfer dreams of raising the question, whether, what he does is right or wrong, just or unjust. Christian or unchristian. Is the performance of this duty hopeless? To that question I hope to return in the last of this series of lectures, after we have considered some of the moral principles which we have to maintain. But at present the only answer I care to suggest to that question is, that whether it is hopeless or not does not matter in the least. It is quite plainly our duty. If a large and important part of the life and conduct of the men to whom we preach is removed from the control of moral principles, and we know it, we are answerable to God. We are always having our attention directed now to the results of our present economic system in the degradation and want of the poor. It is well indeed that it should be so. Misery and want and degradation, as misery and want and degradation, appeal to us for relief and help. But if beyond relief and help we seek for remedy, then misery and want and degradation appeal to us as the consequence of sin. They are the natural fruit of a system in which justice and SOCIALISM. 17 love are not the ruling principles ; and as to curing them without attacking their moral causes, you might as well stand under an apple- tree in autumn and try to clear the ground of apples by throwing them back into the tree — they would come back about your ears and bring plenty more with them. My orders as to these lectures are to try to show in some way the practical bearing of the principles I have to lay down. And I wish to- day to say something as to the practical bearing on the subject of Socialism, of the principle, that the moral law is supreme in economic conduct. In the programme of this lecture I undertook to speak of law, economic, moral, and political. I have hitherto said little of political law. Socialism brings us to the questions as to political law in economic matters. I suppose the most obvious and general description of modern Socialism is that it is a movement to regulate economic life by legislation. In a more precise and definite sense of the word, Socialism is a movement to substitute a system of collective ownership and control of land and capital for the present individual C 1 8 « ECONOMIC MORALS." ownership and control of the resources of industry.* Now the first point is, I think, to distinguish the principles of Socialism from its theories and its measures. I should put the matter thus : The fundan:;ental principle of Socialism is that which I have maintained to-day, that the dominant consideration in determining any practical economic problem is, What is right and just ? The distinctive feature of modern Socialism is, it appears to me, its appeal to the principles of justice and mutual help as the principles which should regulate economic life. Of the three watchwords of the revolution-r— Liberty, Equality, Brotherhood — ^we have to-day to do with the third, Brotherhood^ — the moral principle of social life. The Socialists demand liberty — liberty of access to the means of production, but they demand this liberty on the ground of justice, and because they maintain that to deny it is to be false to the end of * It is perhaps scarcely necessary to point out that this is distinct from Communism, which would make common property, not merely of the instruments of production, but of all the fruits of personal industry. SOCIALIST PRINCIPLES. 19 mutual help for which society exists. They demand equality, or rather they protest against the inequality of the present distribution of the means of life and enjoyment, but they protest against it because, and in so far as, they hold it to be unjust. Their ideal is human brotherhood — a condition of society in which all men will have the opportunity, and be under the obliga- tion, of contributing to the common stock, and will have their fair and just share of the produce of the common industry. This I should call the first principle of Socialism — the appeal to moral considerations as the dominant con- siderations in economic matters.* The second principle of Socialism, I should say, is the claim that law has the right to control economic conduct in the interest of morality. This principle I have also laid down in this lecture as a corollary from the first, with the limitation only that we must see that the political law is likely to answer its mioral purpose. These, I should say, are the two fundamental * See note, p. 124. C 2 20 « ECONOMIC MORALSP principles of Socialism. And it seems to me that we should not only accept them, but acknowledge that the Socialists have been beforehand with us in the assertion of principles which we ought to have been the first to maintain. Next, they lay down two definite assertions of moral principle in detail — namely, first, all men ought to labour ; secondly, all men ought to enjoy the fruit of their labour. Here, again, I think we ought to say that the principles they assert are or ought to be ours. And so far it seems to me that the only objection to calling these the principles of Christian Socialism is that we ought rather to call them principles of Christianity, unless we prefer to signify, by giving them the name of Christian Socialism, that they are principles as to which the Socialists have done much to teach Christians that they, as Christians, ought to maintain them. Next,, as to the theories and the measures of Socialism. The measures by which they propose to secure that all men should labour, and that all men should enjoy the fruit of their labour, rest on two theories. The SOCIALIST PRINCIPLES. 21 first theory is that rent and interest are not the fruit of the labour of those who enjoy them. The second is that law can be made efficient to bring about a right and just distribution of the fruits of labour. And the measures they ac- cordingly propose are that land and capital should be communised, should become the property and be under the control of the State or of some local authority. Now my business to-day is not to tell you any opinion, which I may have formed, on the com- munisation of land or of capital, either as to its justice or as to its practicability.* My business is only to point out to you how, on the principles I have maintained, we ought to meet the Socialists. And what I have to say is, broadly, this— we ought to meet them half-way and in rather a penitent spirit. We have to meet them first on their own ground, the moral ground, and to acknowledge • that it is ours. They are generally met by a criticism on the supposed system of distribu- tion that would be established to carry out their principles. This kind of criticism is not only * See note, p. 124, 22 "■ECONOMIC MORALS." fruitless and unconvincing, but illogical and wrong. The logical course is to arrive at an agreement on the fundamental principles of the subject. And the right course is not to shirk the acknowledgment that on the funda- mental principles we agree. We agree that the dominant consideration is, What is right and just? We agree, further, that law may and ought to be invoked to enforce what is right, where it can do so efficiently. We agree in their two definitions of what is right and just — ^that all men ought to labour, and that all men ought to enjoy the fruit of their labour. Do we agree in the two theories on which they base their practical measures ? Do we agree that law can efficiently bring about a just distribution? Do we agree that rent and interest are not the fruit of the labour of those who enjoy them ? I will take the latter question first. Are rent and interest the fruit of the labour of those who enjoy them? I will answer this question by another. Have we ever con- sidered — on the principles of justice and right — whether they are so or not ? That for the present is all the answer I am concerned to give to the SOCIALIST PRINCIPLES. 23 question. Until we have considered — on the principles of justice and right — whether rent and interest are the fruit of the labour of those who enjoy them, we are not in the same room with the Socialist. Our opinion may be right, and his conclusion may be wrong. But his is a conclusion, and ours is an opinion. We must accept his^ principles and consider whether they rightly lead to his conclusion. Again, do we agree with the Socialist that law can efficiently bring about a just distribu- tion ? If we do not, it is because we believe, in the words of a popular maxim, that we can not make men virtuous by Act of Parliament. No ! How then ? What means are we taking to make men virtuous in economic matters — ^to make the principles of Christian justice and Christian love dominant in economic life? Where is our assertion and enforcement of moral principles? Where is our application to the temptations and economic sins of to-day of the teaching of the Gospel ? If we believe that law is powerless to produce morality, it is because we believe that the true agent is moral enlightenment. If I do not further press the 24 '' ECONOMIC MORALS?' question, Are we giving to society, to the souls under our charge, the moral enlightenment thpy need on economic matters ? k is because I venture to substitute for it the prior question, Do we possess this moral enlightenment on economic matters ourselves ? If we believe that law is powerless to produce morality unless it is backed up by an adeqate force of moralised public opinion, to moralise public opinion is our business if it is any one's ;' only, to begin with, we must moralise our own minds on economic questions. The consideration then of both these theories of Socialism, that law can moralise, and that rent and interest are unjust, leads to this one result. It is our .duty to study economic morals and to have a judgment and an opinion on economic questions based on moral considerations, and for this purpose I press the need of the combined study of economics and of economic morals. The absence of anything like a clear moral view of the questions which Socialism brings to an issue is the fact on whose importance I desire to dwell. SOCIALIST PRINCIPLES. 25 "Socialism is," in fact, as it is stated to be in a recent Socialist manual, "a criticism, not a construction."* It may often seem to take the form of a construction, but it is in fact a criticism, not a construction. It is a criticism based on an appeal to moral principles. It looks to moral enlightenment as the means of its advance. Its ideal reconstruction of society is an end towards which many at least of its advocates are content to work by a gradual influence on public opinion. And Socialist writers are often, I think, obscure, only because of that indignant impatience which any man feels in controversy, when he cannot succeed in getting his opponent to discuss the matter at issue on the only prin- ciple which- he is able to accept. A man who wishes to discuss economic questions on a moral basis, and whose opponents insist on ignoring the appeal to moral principles, may be pardoned a good deal of impatience. Again, if side by side with the Christian Social- ists, who pursue the Socialist aims from Christian conviction, and are pledged to prosecute them by Christian methods only, we have also anti- * ' Principles of Socialism made Plain,' p. 6. 26 " ECONOMIC MORALS." Christian Socialists-^men who call themselves anti-Christian, while they give utterance to maxims so essentially in harmony with Christianity as these: "For the sake of my fellow-men I act morally, that is socially." Every citizen must learn to say with Louis XIV., " L'6tat c'est moi : " " Socialist principles primarily insist on the moral need that each individual should work for the community according to his powers:"* — we must allow that they have the excuse that Christianity has been backward-) in preaching, in their appli- cation to economic conduct, principles which, whether they are Socialist or not, are cer- tainly Christian, This then is, it seems to me, the main appli- cation of the principle that the moral law is supreme in economics, which is suggested by Socialism. Socialism calls our attention to the fact of our neglect of the principle. I have dwelt upon this at some length, both because I believe that, looking at the matter from a practical point of view, the question * K. Pearson, ' Moral Basis of Socialism.' SOCIALIST PRINCIPLES. 27 on what principles you are going to meet the Socialists is of far more importance than any other question in relation to Socialism, and because I think Socialism forces home our obvious neglect of duty in the matter of economic morals. Social principles — the prin- ciples which make a man say, I act morally, that means I act socially — belong to Christianity ; we have no right to leave any man the slightest excuse for ignoring the connexion. Here are great economic evils undenied ; we have left it to others to step in and say, "These evils must be the result of moral causes: let us look at the matter from the moral point of view." The principle of the supremacy of the moral law in economics has another bearing on the question of Socialism, on which I should like to say something in conclusion. We have seen that the economic force is the individual desire for life and enjoyment — a desire by no means necessarily identical with the motive of self- interest. We know that the moral force — the only moral force in the world — is the individual will. The force of social opinion and social 28 " ECONOMIC MORALS." action of every kind is made up of the forces of individual minds and individual wills. Social- ism is opposed to individualism, in the sense that it is opposed to a system of life governed by individual self-interest. There is a danger that, in going along with the Socialist movement of opinion, we may lose sight of this essential truth, that a moral state of things is produced by the free choice of moralised individual wills. I touch on this danger with some reluctance. It is plain that, in our horror of the misery we see before us, we must not remedy pahi at the expense of morality. It is also plain that we shall fail if we attempt to remedy injustice at the expense of the essential character of morality. We cannot remedy immorality at the expense of morality. But the assertion of such a danger is often an excuse for letting things alone, and the danger is very easily exaggerated. We are at the present day abnormally free from restraint in economic matters. We pride ourselves on having got rid of restraints on commerce. The restraints which we threw off were restraints in the interest of a particular SOCIALIST PRINCIPLES. 29 branch of industry or a particular class of the community. But there was a time when the re- straint of law upon industry meant the restraint of morality — a restraint in the interest of all. We are free from all restraint, and it is not easy for us to imagine that moral freedom would survive under moral regulation, though it does so in other regions of moral action. We are inclined, therefore, to have an exaggerated fear lest any degree of regulation should weaken the moral initiative of individual wills, and choke the springs of morality itself. I do not attempt to say at what point the line should be drawn. It is plain, I think, that there is a real danger in this direction, and it is equally plain that we are specially likely to exaggerate the danger. But the consideration of this danger leads us back to the main duty on which I have already dwelt. Regulation of economic conduct by law in the interest of morality should keep pace with the advance of public conscience and public opinion in economic morals. No one will deny that the standard of public conscience and public opinion as to economic duty is, to say 30 ''ECONOMIC MORALS." the least of it, ■ lamentably low. It is so low that I doubt whether we are fit to consider how far legal regulation of economic conduct may go, with safety to the essentially voluntary character of morality, and at what point it must stop, until we have gained for ourselves, and diffused through the community at large, a fuller idea of the economic duties of the individual man, a higher conception of the economic aims and moral possibilities of Christian society. ( 31 ) LECTURE II. THE LAW OF JUSTICE, THE FOUNDATION OF ECONOMIC SOCIETY. The principle with which we dealt in the last lecture was this, that the Moral Law is supreme in Economics as in other departments of human conduct. This principle is, it seems to me, established, directly the different senses of the word law are cleared from any confusion one with another. Its truth will, perhaps, be more obviously apparent as we proceed to ask in relation to Economics, What is the Moral Law ? In proceeding to follow out the answer to this question, we must shortly recur to the con- tentions, which we saw to be inyolyed in the assertion of the supremacy of the Moral Law^ Political Economy, we saw, asserted as a 32 "ECONOMIC MORALS." general though not a universal fact, that men act in economic matters from the motive of self- interest. We contended in the first place that the true motive of economic life is an individual desire for life and its enjoyment which does not neces- sarily take the immoral form of self-interest. Self-interest is the individual desire for the enjoyment of life, acting in disregard of the similar desire in others. The true desire for life, acting from individual wills as centres of moral force, seeks a common satisfaction of human needs. It takes shape in the organi- sation of an economic society, which has this common satisfaction for its end. It is thus a rudimentary form of duty. We contend, first, that this is the true economic force — in the sense that it ought to be the universal economic force — the universal motive of economic life and con- duct, the only operative principle in economic society. This is our ideal. But in the second place we contend that, as a matter of fact, this true or ideal principle is to a certain extent operative in the actual economic society of to-day. To show to what WHAT IS THE MORAL LAW? 33 extent it is operative would require a far fuller moral analysis of economic facts than I am able to give. This moral analysis of the facts of our present economic life and system is one of the duties which I maintained that we have to undertake. But, meanwhile, we assert that our present economic society may, in one aspect of it, be truly represented as an organisation for the common satisfaction of the needs of life, and that in so far as it is such an organisation, it is so in virtue of the instinctive or conscious operation in it of what we have called the true or ideal economic motive. Now, if these contentions are true, we have next to ask, How does the result come about ? If the true desire for the enjoyment of life ought to act, and in part does act, as a force working for the organisation of a moral society, how is this result achieved ? How does the motive work? What are the laws of the or- ganisation ? I will ask you to observe that in endeavouring to answer this question we shall refer to the working of the true motive, partly as it would be seen in an ideal state of economic society, D 34 '' ECONOMIC morals:' partly as it is actually to be seen in the present condition of economic society ; and that for the purpose which we have now in view — the purpose of following the moral law in economics out into detailed principles— it will not be necessary to distinguish, as we go along, how far we are referring to ideal, and how far to fact. My business to-day then is to assert that the first law of the moral organisation of economic society is the Law of Justice. This law comes into moral operation as follows : — The desire for life and enjoyment is in itself a form of duty. I have resolved if possible in these lectures to avoid the use of the man- on-a-desert-island illustration with which we are familiar to boredom in economic literature. But if we can imagine a man alone in his own world, that man, we should say, had still a duty to God, and that duty would in the main resolve itself into this, the duty of living and enjoying life as far as" he could. His temptations would be the temptations to suicide, and to a careless and despondent sloth. , But, as a matter of fact, this rudimentary moral THE MORAL FOUNDATION. 35 motive comes into operation in men who are not each alone in their own world ; and those elementary needs, which are the dictates of the desire and duty of the enjoyment of life, lead to combination between man and man, for the common furtherance of pleasure, and the common defence against pain and death. The supposed solitary man would have to devote labour and thought and prudence to the satis- faction of his needs. Men combine their labour for the common purpose of increasing the material conditions of happiness. The moral instinct for sympathy and fellow- ship assists this tendency to combination, and the desire for life becomes a higher form of duty as the desire for a common life. It might, there- fore, seem that we should regard the law of fellowship, or help, or love, as the fundamental law of social life. The reasons why we do not do so will appear as we go on.* * It is, perhaps, needless to observe that in thus following the moral development of the individual desire for life into principles of duty, we are not professing to sketch a historical order of growth from individual to social life. Historically, as well as ideally, it would, I suppose, be rather true that the individual is developed D 2 26 " ECONOMIC MORA LS." . The combination of labour, for the common furtherance of the enjoyment of life, will take shape in the beginning of the organisation of a particular form of combined labour, that namely with which we are familiar under the name of the division of labour. As men combine their forces they will naturally also' distribute them to different tasks. Without this distribution indeed society would be an agglutination rather than an organisation. It will be obvious that this step in the formation of economic society carries with it a further development of the desire of life into a fresh form of duty — the devotion of life to a definite task for the common good. But, further, division of labour leads us to the special principle with which we are con- cerned to-day, for division of labour, produces exchange. And division of labour, by producing exchange, brings us to the point at which an actual economic society comes into exis- tence. Exchange is the relation of men to one another in which the social character from the society than that the society is developed from individuals. We are merely using this method to exhibit the order and interdependence of moral principles. THE MORAL FOUNDATION. 37 of economic life appears. Exchange is the social fact of economics. We may see work- ing in the division of labour, which produces exchange, a deeper principle of combination, but this is latent. Combination of labour appears in the shape of division of labour. An economic society begins to exist at the point where its members begin to exchange with one another ; and the character of this exchange therefore is the fundamental principle of economic society. The moral foundation of society may be said to be that moral principle, obedience to which satisfies the first need of society. And this first need of society is justice. Justice is in this sense the foundation of society. It may be said that the principle of love, or help, or fellowship, is rather the foundation of society. But it will, I think, appear here as elsewhere, that these principles are not distinct from one another, so that one should underlie the other ; rather the principle of love is dis- covered to be the vital power of the principle of justice itself. The truth of the assertion, that justice is the 38 " ECONOMIC MORALS!' foundation of society, will be better shown if we compare this assertion with the common state- ment, that property is the foundation of society. It might very naturally be maintained that property, rather than justice, is the foundation of society, on the , ground that property is the condition, sine qud non, of any exchaiige, whether just or not. There cannot be society without exchange ; there can be exchange, without justice ; there cannot be exchange without property — would be the propositions which would formulate this course of reasoning. But there is one other proposition needed : in this view it is obvious that there can be property "without justice. And when men invoke the principle that property is the foundation of society, it is not of property without justice that they mean us to think. They appeal by implication to property justly possessed. We mean by property, commodities secured by law, in the possession and at the disposal of indi- vidual members or groups of members of a society. But we assume, in this definition, that law assigns to men what justly belongs to them.^ That is the purpose and intention of law. The JUSTICE AND PROPERTY. 39 sacredness of property is a sacredness which belongs to it, because of the assumption that the assignments of law are governed by justice. The principle of justice, then, underlies the principle of property. It is quite true that it is of great importance to preserve a reverence for the actual assignments of law. But it is of even more importance to remember that this reverence is due to law as the pronouncement of justice. There are two reasons, and two only, why we obey the law : because we shall be punished if we don't, and because it is just. Primd facie law ought always to be obeyed, because it is the authoritative voice of justice, and it ought to be obeyed, even where it conflicts with our ideas of justice in detail, for the sake of the general reverence, which in its moral character is its due. This is a principle of great practical importance. It is so in relation to property, where it will take the form you ought to leave to every man that which the law assigns to him as justly his. But when we state it in this form, we see at once, that property rests upon justice, and that it is a mistake to put 40 "ECONOMIC MORALS." the duty of respecting property in the form of an assertion, that property is the founda- tion of society. The foundations of society are moral. Justice is the foundation of society and of all its institutions, property included. It is, indeed, in the abstract quite conceivable that a state of society might arise, so obviously repugnant to any man's sense of justice, that the only answer provoked by the assertion that property is the foundation of society would be — so much the worse for property. The assertion of the right of property, in the form of the principle that property is the foundation of society, seems to arise from the supposition, that society is developed by the voluntary combination of a number of indi- viduals, and that the individual is prior to the society. In truth, property is a social fact and a social creation. It is truer to say, without society no property, than, without property -no society. And the true assertion of the right of property, and of the duty of respecting it, would seem to arise out of the definition of property, as that share of the common produce which is assigned to a man by law as his just due. If we JUSTICE THE FOUNDATION. 41 go behind this definition, and endeavour to put on moral grounds the principle usually expressed in the statement, that property is the sine gud non of exchange, we should say that property is essential to the moral being'of society, inasmuch as it is necessary to just exchange. Except in so far as exchange can be made to mean just exchange, we shall aim at eliminating exchange from the life of society ; we may not succeed, it may be impossible, but we shall try, and we shall have every right to try. And on both these grounds, that property is the result and condition of just exchange, we should say that justice is the foundation of the right of property. A man has a right to his property, because he holds it in order that just exchange may take place, or because he holds it as the result of just exchange. In either case, justice is the foundation of the right of property. And it is for the sake of reverence to the principle of justice, that we should demand a scrupulous respect for the actual rights of property to-day. I have dwelt on the fundamental character of the principle of justice, both because of its con- nection with the controversies about socialism, 42 '' ECONOMIC morals: on which we touched last week, and because of its essential importance. The aim of Socialists is to limit individual property. If this aim is wrong, it is wrong because it is unjust. When you say to Socialists, Your schemes are an attack on property, you mean either that they are an attack on people's possessing what they do as a matter of fact possess, or on their possessing what they ought to possess. If you only mean the former, your further assertion that property is the foundation of society does not increase their respect for property: it only diminishes their respect for society. The principle is essen- tially important, because the question, Which is the foundation of society, property or justice? is one of the most obvious forms in which- we meet the alternative between two views of economic society, as the result of the working of a moral or of an immoral force — of the mere self-interest of the individual, or of the social desire for life, I do not think it has been amiss to deal with this question as to the fundamental relation of the law of justice to the life of society, before defining more expressly what we mean by the INTERCHANGE OF GOOD. 43 law of justice. The question naturally meets us on the threshold of the subject. Its con- sideration serves as an introduction to the definition of justice, and while it can be thus considered . in the abstract, every stage in the definition will serve to reinforce the conclusion at which we have arrived. When we say, then, that just exchange is fundamental to the life of society, what do we mean by justice? I. In the first place justice is the inter- change of good. The first answer to the question, What is due from man to man in exchange — what ought to be given in exchange for what? is this. It follows, from the motive which gives rise to the system of exchange, that exchange ought to be the interchange of good. The object and purpose of our combina- tion in an economic society is the common good. The object and purpose of any particular ex- change is the gain of both parties to the ex- change. Neither party would enter on the transaction except on the hypothesis that he was to be the gainer by it. The result of the whole system of division of labour is an 44 "ECONOMIC MORALS." enormous gain to society. The object of ex- change is to divide this gain among the members of the society. We are all the richer because we combine to distribute our forces, and exchange the produce of our separate labour. We live a thousand lives in one. And in each individual exchange it is equally clear that division of labour has increased the product ; each brings to the other a portion of the common gain. We have combined, and combin- , ation is a multiplying power. Three forces have gone to produce the combined result : your force, and my force, and our combination. And com- bination is not only a power productive of material good. It is itself a moral and spiritual good. It enlarges our horizon. It gives sym- pathy and fellowship. It gives a higher and more ennobling purpose to life. I may seem to be dwelling at unnecessary length on a principle which is axiomatic and undisputed ; but in the first place I would point out that the opposite principle, that in exchange each man gains by his neighbour's loss, has been very fertile of mischief in questions of inter- national economics, and has not altogether JNTERCHAlfGE OF GOOD. 43 ceased to be fertile of mischief. I would say, in the second place, that the very word exchange calls up the recollection of a place not a hundred miles from here, where a considerable number of bargains are struck, quite confessedly on the principle of one] man gaining by another's loss, not merely of one man getting more than his share of the common good to be divided, but of one man gaining by another's loss. We~ clergy receive a good many financial circulars offering us admirable opportunities for playing this profitable game, though we are probably, all of us, aware that if we join in the game it will be somebody else who will gain by our loss. And I suppose that some of those who live in part, at least, by this kind of gain are members of some of our congregations. I need not say that I do not mean that all dealing in stocks is of this character, but every one knows that a great deal of it is ; and, as long as this is so, it is not super- fluous to insist on the principle, that there is no such thing in the moral universe of God as a just exchange by which both parties are not the gainers. But the principle needs also to be in- sisted on, because it affects the temper in which 46 "ECONOMIC MORALS:' we regard and take part in the exchanges of ordinary life. And the true temper is, that we approach the man with whom we are going to make a bargain, in the spirit of one who is about to receive, and is expecting to receive a good. The man with whom we are going to make an exchange comes to us in this character, as the embodiment and personification of the benefit of combination. The question in most bargains is not whether both parties shall be the gainers, but what proportion of the gain shall fall to each. But it makes a great difference in the solution of this question, if each party to the exchange approaches the other, not merely with the idea of seeing how much he can get out of him, but with the recognition that they are dividing a common profit. Before we have done with the definition of justice, we shall return to this first principle, which is embodied in it, that all exchange is rightly an interchange of good. 2. But what is the standard, according to which it is determined what proportion of the gain of combination shall fall to each party in the exchange ? I answer. Justice is the interchange MUTUAL AGREEMENT. 47 of good according to the standard of mutual agreement. This principle is, I think, the most important point in the definition of justice. If we consider that exchange is an incident in the combination of our forces for the common good, it will follow naturally that for the deter- mination of just exchanges, the appeal should lie to a common standard. Now the organ of this common standard of justice .is in the con- science or moral judgment of each party to the exchange. Mutual agreement, therefore, is the only means for applying that common standard which the nature of the' transaction itself demands. What we practically rely upon, as a just dis- position in our neighbours, is the disposition to give what has been or would be mutually agreed upon as due ; and it seems to me that the stan- dard of just action, of giving men their due, which it is our duty to set. before people, is the standard implied in this question. Do you in- stinctively refer the question of justice in all your dealings to the standard of what has been or would be agreed upon by the other party to 48 « ECONOMIC MORALS." the bargain ? A one-sided bargain will not pro- duce a just result ; it will not do so, however just your judgment may be. As a matter of fact, we are all liable in our dealings with one another %o give short measure, because we give our own measure, without even a mental re- ference to what our neighbour's measure would be. But the result would not be justice, even if we did not give short measure ; it belongs to a just bargain that the standard should be agree- ment. The agreement may be only implicit. The reference td the judgment of the other person concerned may have to be made in thought rather than in fact ; but the point on which we have to insist is, that the standard of what is due should be felt by each to be that which would be agreed upon by both. The disposition to act on this principle is, as I have said, what we speak of as a just disposition ; it is when this principle fails to act that we invoke the law, appealing to a general mutual agreement to accept its decision as just. The injustice which we most resent is the violation of this principle, when a man makes an agreement with us, knowing that we made it in one sense. MUTUAL AGREEMENT. 49 and he made it, and means to keep it, in another. The main moral difficulties in acting on this principle, arise out of inequalities in knowledge and character between the persons concerned. Knowledge is power indeed, in the adjustment of a bargain, but knowledge is surely also re- sponsibility. If we consider that the other party to a bargain is not qualified by knowledge and understanding of the conditions of the case, to meet us on common ground, it is the more necessary that, in the court of our own conscience, an advocate should appear on his behalf, and that our knowledge should be used to arrive at the result of that common agreement, which is in fact impossible. Caveat emptor is not a moral maxim. There may be cases again in which we take the view, that the other party to the bargain is morally disqualified to meet us on common ground, that he is too obstinate or wrong-headed to make agreement possible — and here we may observe that it is always conceivable that there is obstinacy and wrong-headedness on both sides, so that this is a very dangerous principle to applyj— but in cases where this view must be taken, we E 50 " ECONOMIC morals:' must at least secure that we so act that when our neighbour comes to a better mind, and looks back on the transaction, he will see that he was not the loser by a one-sided settlement. But whenever it is by any means possible the just man will make an open bargain.. Justice loves the light, and is at home in it. Distrust the demand for secrecy. There are barriers enough of ignorance and prejudice and wrong, which arise out of ignorance, between the classes of our industrial community, between producer and consumer, between employer and workman, between man and man,' who as man and man have to settle the bargains of life between them. Justice, because it consists in mutual agreement, is for the breaking down of the baririers of ignor- ance, is for the letting in of light. EVery step that is taken towards a greater mutual knowledge of class and class, towards the spread of infor- mation as to the real conditions under which the industries are conducted, whose produce puts within our yeach the necessaries or the "un- necessaries" of our lives, every step towards knowledge is a step towards justice. Men will tell you that bargains are actually struck under MUTUAL AGREEMENT. t,\ conditions which make the application of these principles visionary or impossible, that the laws of competition are inexorably stern, and that there is no escaping them. I venture to tell you once more that you should not be frightened by this bugbear of economic law. A law is a group of facts — the facts are human deeds, acts of moral choice, obediences to this motive or to that, moral or immoral, as the case may be. Law means the strong tendency of custom and habit, which has to be broken through. Do your best to forward the letting in of light, and you will strengthen every will that is set towards the end of moralising the dealings of a single man with his fellows. Even now the law of wrong is not so iron as it looks, and thos^ who know most of the actual workings of our economic life to-day know best what the efforts of individual men, single and combined, can do, and do, to make righteousness" and justice a living power in the world. At any rate, I have to say that the very essence of social life is this interchange of good according to the standard of mutual agreement. This is the justice which is the foundation of society E 2 52 '' ECONOMIC morals:' I pass to the last point in the definition of justice. It might seem that the standard of mutual agreement is indecisive. What is the security of agreement .'' and what is the security that the agreement will be just? We find the answer by referring back to the moral conditions under which we saw that exchange arose. We saw that the desire of life led to combination, that the individual moral unit acts under a social • instinct. It is to this social mind in the in- dividual that we appeal under the name of conscience. We believe it to be the reflex of the nature and mind of God, whose will for the social good of men is thus imprinted on the primal nature of men. And so for ourselves, at least, and for those whom we teach, we say that the security for the agreement of conscience vs^ith conscience lies in the fact, that conscience is the means of the progressive revelation of the Divine law of right.. And for ourselves and for those that are without alike we construe this to mean, that this is the substantial truth of justice — the interchange of good according to the mutual agreement of con- science with conscience, each conscience being THE ORGAN OF SOCIAL GOOD. J3 the organ of the moral progress of that same social instinct in the desire for life, which is the organising power of economic society. The security for agreement lies in the fact that this social instinct is present in every man, and that his conscience, which is appealed to in every case, is the organ and expression of moral, that is of social good. The whole moral order of economic life exists, so far as it exists, because this social instinct is at work. Justice is the realisation of its desire by mutual agreement. The highest statement would be that justice is interchange of good, according to the standard of mutual agreement as to what best forwards the purposes of love. Does it seem to be a descent from transcendental heights, to say that, after all, the best means of bringing about a just decision of any question is to get both parties into the frame of mind in which they want to do what is right, and to bring them together ? It is not a descent or a degradation of j ustice. Rather it is an ascent through justice to the higher principle of love, or a descent, if you will, to what is only not the foundation of society, because it is the rock on which the 54 "ECONOMIC MORALS." foundation rests, or shall we rather say it is the i-ock of which the foundation is built. The vital principle in justice is conscience in each man as the organ of the interests of others, and of the social good. It is in discerning this that we see the law of justice pass into that law of help or love, which we have next to consider. Out of the Divine will of social good we have come forth. On the sure foundation of justice we have raised the only building which the lines of the foundation will allow — the social edifice of mutual help and love. I am afraid I have dwelt on the principle at such length to-day that, while I may have left you very little satisfied as to its application, I cannot draw much longer on your patience in order to show how it may be applied. It will be plain at least that the application requires a great deal of that common consideration of these subjects for which I pleaded in the last lecture. On the general question of the application of this principle of justice to economic practice-, I desire to say one word. Political economists seem to me to be more and more disposed to get rid of all quasi-mechanical solutions of PRICES AND WAGES. 55 economic problems, such as the wage-fund and similar views of wages, and to be resolving them into questions of supply and demand* — that is into questions of exchange, in which each party to the exchange bargains for the best terms he can get. This way of viewing economic pro- blems, which I believe to be the true one, obviously leaves room for principles, such as I have to-day maintained, to come into play — principles which immediately affect the question as to what terms either party, to a bargain will be content to make with the other. Of the most important problem of all, the wage question, I shall naturally be speaking at length in my next lecture. Meanwhile I wish to refer to a particular illustration of these prin- ciples of justice, and especially of the second clause in the definition, the principle of mutual agreement. The particular question I mean is the bear- ing of low prices on low wages. This is a part of the whole wages question, of which I shall treat in the next lecture. But without reference to further and wider considerations, it may be * Jevon's ' Theory of Political Economy,' Preface, p. li. 56 '' ECONOMIC MORALS." considered on its merits ; and it will furnish an illustration of the principle of mutual agreement as essential to justice. The matter can be put very shortly. When you buy a cheap commodity, the exchange appears to be between you and the retail trades- man. It is, in fact, between you and the work- man who,>at however many removes of exchange, makes the commodity. The complication of modern industry separates consumer from pro- ducer. The consumer does not see what, in paying a low price, he is paying to the producer. I do not mean to say that none of the inter- mediate links in the process of production and exchange do not deserve to be taken into account ; but I wish, for simplicity's sake, to concentrate attention on the two extremes — the finally subordinate workman and the consumer. Between these two our present system seems to place a barrier of ignorance, which makes the application of the principle of mutual agreement impossible. Can this impossibility be over- come ? My point is — if it cannot, we cannot be just. It might appear that it was not necessary to overcome it. It might be said. Why not PRICES AND WAGES. 57 accept the fact that the process of exchange is, in fact, a series of exchanges, and apply the principle of just exchange by mutual agreement to each stage in the process by itself? There are two answers to this. (i) In the first place, the retail tradesman does not, in fact, accept the responsibility. You may think he ought to, but he doesn't. He throws the onus on you, the consumer. He says, " There is no good the public complaining of sweating and low wages as long as they like low prices." (2) In the second place, there is no practical doubt that the really ultimate force in causing low prices is in the demand of the consumer for cheap commodities. You will be told that it is the competition of sellers which brings prices down. Quite true; it is the competition of sellers for the custom of a public who buy everything as cheap as they can get it. If I say that the practical conclusion for our- selves, and for those whom we teach, is — Do not buy at starvation prices, and do not buy without knowing that a fair share of the price you pay goes to the man whom I have called the finally 58 '' ECONOMIC MORALS." subordinate workman — that leaves the question, How are we to know ? still unanswered. How are we to know ? That is the question. It is we, the consumers, who cause low prices, and consequently low wages. It is plainly our duty to set about remedying a state of things, under which we are responsible for all sorts of results of which we never dream. But the only possible remedy, is some machinery which shall enable us to know. I am treating this question as an illustration of the principle of mutual agreement. It is a most direct illus- tration. We cannot be just to these men with- out coming face to face with them — ^without knowing that which we do not know, what we are paying them. How are we to know ? But I have a better illustration to offer you than an unsolved problem. There is an attempt about to be made to set to work at solving it. This attempt illustrates the principle exactly. It is proposed that a certain number of con3umers should agree together only to deal with those shops whose prices, as they would be satisfied by their own official enquiries, would pay fair wages to the workmen engaged in the industry. A CONSUMERS' LEAGUE. 59 This scheme is exactly in the stage to answer our purpose. It is not in working order. Its proposed principles are explained in a penny pamphlet by Miss Clementina Black, Secretary of the Women's Trades Union Provident League. It invites the adherence of those who, accepting the general principle of the responsibility of the at present ignorant consumer, are willing to join in considering the best method for replacing ignorance by knowledge — knowledge which is the condition of justice. I could not speak on the subject of buying cheap without mentioning a plan which illustrates the principle of justice I have maintained in rela- tion to low prices by an attempt to carry it into practice. It appears to me that the Consumers' League affords an admirable opportunity for enabling people to face the problems of economic morals in a practical way. C 60 ) LECTURE III. ' THE LAW OF HELP, THE RULE OF ECONOMIC CONDUCT. The greater part of the last lecture was taken up with the enunciation of somewhat abstract principles. Such an enunciation is always wearisome when it is not relieved by illustra- tions. But any illustration which brought the principles of justice and mutual agreement into evidence would also have brought forward the need for the further principles, to which I have now to show that the principles of justice lead. To-day I will begin at once with an illustration — a concrete case — and I will try, in the analysis of this concrete case, both to sum up the principles at which we have already arrived,, and to show how they lead to the further principles, which I have to-day to lay down, and for whose application I have to plead that A CONCRETE CASE. 6i the facts, as they may be seen in this or any other concrete case, imperatively call. To make our illustration serve its purpose the better, we will take it as near home as may be. We will suppose — it is not an extravagant supposition — a conscientious cleric. We will suppose that he 'goes to a clerical tailor to buy a coat. He goes, in the first place, full of the principle which we laid down in the first lecture, that he has not merely got to get the best coat he can for the least money, but that the transac- tion should be governed by moral considerations. And, in the second place, he has made up his mind, in accordance with the principle we laid down last Thursday, that he wishes to pay to all persons concerned in producing the coat such a price as he and they, if they came face to face, would agree upon as just — would agree upon, i.e., as enabling each to give to the other that help in life, that social gain, which it is the object of the system of combination and divi- sion of labour to secure, which it is the object of the system of exchange to distribute and divide. Well, our cleric will look at the pattern of a 62 " ECONOMIC MORALSP cloth. He will ask the price of a coat to be made of it. He will express a naive surprise at the lowness of the price. He will be told, perhaps, that it is due to the firm having large dealings in materials. Being a conscientious cleric, he will reflect that there is probably a good deal of truth in this, especially in the case of a tailor who is not called upon to give his customers variety of colour or pattern. But still he will like to feel secure that the lowness of the price of the coat is not in part secured by "sweating" or underpaid labour. And so he will go on, assuming all the airs of innocence he can, to ask a few questions. " Do you make your clothes in your own workshops ? " He will be told "Yes." "By-the-by, where are your workshops ? " He will oe told, " Close by, in such and suth a street." "I wonder if I might go over them some day?" He will be told "No, Messrs. So-and-So don't allow that. It would interfere with the work." This again he will feel to be a reasonable objection. If crowds of conscientious clerics were always passing through Messrs. So-and-So's workshops it would interfere with the work, especially if A CONCRETE CASE. their presence were taken to indicate a ques- tion whether the wages were too low, or the hours too long, or the ventilation not sufficiently- good. It is at this point that some such plan as the Consumers' League would recur to the mind of our cleric. If he, or someone in his stead, could go and say, I am the secretary of such and such a society, whose members will put you on their list and deal with you, if they are satisfied with your system of industry, and not otherwise — he would feel that the answer would probably be different. But if he now sets to work to forward the scheme of the Consumers' League, or any other scheme which aims at securing the same end — the end, namely, of bringing the conscience of the consumer to bear on the rate of wages and the conditions of industry — ^he will meet with all sorts of objections. He will be told, for instance. You are trying to establish a new standard of value. The present standard of value is competition. Com- petition is pretty firmly established ; you are not likely to oust it. Let us examine what this 64 " ECONOMIC MORALS:' means in the particular case of the clerical coat, and what the objection amounts to. It means this. Clerics, however conscientious, may be poor. Some of them unfortunately are. They want to be able to pay a price of some kind for a good many things. They have other calls upon their resources besides coats. And in order that they may be able to meet their other needs, they do not want to give more than they need for coats, I may observe in passing that if they have made up their minds to pay just prices, what they will say will be — not, I do not want to give more than I need for my coat, but I do not want to give more than I otight for my coat. And this it is their duty to say. It is wrong for a man to waste his resources by careless expenditure. Life and all its resources are a stewardship and a trust, to be administered for a purpose ; and he must make them meet the purpose. Under a moral system, therefore — under the guidance of moral principles — there will always be a force at work in the consumer, to keep prices down to the; just rate, as well as a force to keep them up to the just rate. I say this because it is some- COMPETITION AT WORK. 6S times assumed that, when we enter on the dangerous and uncertain ground of moral con- siderations, we lose sight of the economic virtues of independence and prudence, and thrift, and that the moral man would pay as much as he could for his coat. There is a force of duty forbidding a man to pay more than he ought for what he needs, though there may be a higher principle of duty telling him to do without it, rather than pay less than he ought for it But, as it stands, what the cleric does say (we will leave him without either conscience or coat for the present) is that since he has many needs to meet out of a limited income, he does not want to give more than he need for his coat. This is the fact with which the clerical tailor has to deal. The effectual demand for coats increases, the lower the price at which they are offered. The problem for the tailor, there- fore is : How can I offer coats at the lowest price ? Now he has got to make the price of the clothes he sells keep himself and pay the expenses of producing them. There are two parts of the F 66 " ECONOMIC MORALSP expenses of producing the .coats, as to which, with the permission of any Christian Socialists who may be present, I will decline to go to the root of the matter. The tailor has to pay rent — part of it house-rent, which is indirectly payment of labour — ^part of it ground-rent, rent proper, as to which I am not going to consider whether he ought not pay it, say to the municipality, and receive it back in remission of taxes, or other social benefits. He also either pays to others or takes care to receive himself, interest on the capital — ^borrowed or his own — which is invested in his industry. I am not going to consider the justice of this payment either. These two burning questions we set aside in the first lecture when we set out on this exposition of principles — the principles on which these ques- tions will have to be decided. We shall allude to both rent and interest later in this analysis, but we shall not consider the fundamental question about them.* All we have to observe here is that the tailor will not pay more interest or rent than he need. He has to make all his expenses of production as low as he can, in order to make * See note, p. 124. COMPETITION AT WORK. 67 his price low. Otherwise, other tailors will offer coats to unconscientious clerics at a lower price than he, and get their custom away from him. Now, leaving interest and rent aside, all the rest of the expenses of production come under the head of wages of one kind or another. And this is true, whatever the system of production may be. The tailor will himself be entitled to wages as distributive agent or shopkeeper. He may also be entitled to wages as organiser of industry if he employs workmen himself. Or he may receive wages only as distributive agent, and employ an employer of workmen. In this case the sub-employer will have his wages and the workmen in any case will have theirs. This sub-employment is commonly called sweating. Some of those who have paid attention to the subject are inclined to say that intervention of the middleman is not essential to sweating ; that his intervention may often be a useful and necessary step in the organization of industry ; that he is often quite as hardly worked and nearly as badly paid as his subordinates ; and that the essence of sweating is not the employ- F 2 68 " ECONOMIC MORALS!' ment of a middleman, or any other particular feature in the organisation of industry, but simply the securing of low prices by starvation wages. Whether this be the essence of sweating or not, the securing of low prices by unjust wages is our point at present. Now, whatever the system of the organisation of industry may be, all these wage-earners, from the top to the bottom, give certain services in return for wages, i.e. for the means of living in a certain degree of comfort or discomfort, and competition fixes these wages. The employer^, who wants to keep the price down ioxjhis employers, and ultimately for the consumer, c/ffers the lowest wages he can, and if any one refuses these some one else is ready to step in and take them. I have got to show throughout this system of industry, that it is possible for the two people concerned in the bargain to agree what are the wages to be received and paid, com- petition notwithstanding. We saw in the last lecture that the distance, the number of removes of exchange, between the consumer and the finally subordinate workman made it difficult for the MODIFYING AGENCIES. 69 conscience of the consumer to affect the rate of wages. The insertion of any additional link in the chain of exchanges may increase the diffi- culty of moralising the system. The more complicated an evil is, the more difficult as a rule it is to deal with. But the question is : Can we make out Aprirndfacie case for the possibility of moralising a system of industry, in which com- petition appears to rule ? Can we make out a case for the possibility of getting the principle of mutual agreement to work? What signs are there, in the economic world as it is, of agencies which modify the action of sheer and mere competition ? I find the answer to this question in three classes of facts. (i) First there is a class of facts which involve the explicit assertion of our principle of mutual agreement. These facts are of two kinds. The whole co-operative movement is an assertion of this principle. Omitting the so-called co-opera- tion of co-operative stores, which is a co-opera- tion between consumers to do without the shopkeeper or distributive agent, and to put a salaried official in his place — a co-operation 70 " ECONOMIC MORALS." which does not guard against the oppression of the producer, by bringing producer and con- sumer into combination and agreement with one another — omitting this kind of co-operation, which is not really co-operation at all, but a kind of trades-union of customers, we may say that co-operation means the assertion of the two principles that all the members of the industrial system have a common interest, and that they can agree on an equitable distribution of the common produce. Another set of facts, which as obviously invoke the assertion of the principle of mutual agree- ment, are the facts of arbitration and boards of conciliation. Arbitration is jthe appeal to the decision of a judge, as to the division of produce between two parties to production. The judge is to weigh against one another two views as to what is justly due to either side. The whole process supposes that there is a just decision to be found, and that when it is found both sides will agree to it, although the dispute has reached a point at which agreement is more likely to result from the suggestion of a third party. The function of the arbitrator is to MODIFYING AGENCIES. 71 suggest a basis for mutual agreement. Boards of conciliation are simply permanent organs for mutual agreement, in which each party to the industry is represented, and the object is that a mutual agreement should be constantly reviewed and kept in working order. But arbitration and conciliation suggest my second class of facts, the facts which historically give rise to arbitration and conciliation. (2) The facts of combination give rise to arbitration and conciliation. Workmen, who were not satisfied that their wages were their just share of the produce of industry, observed that the rate of wages was fixed by a practical, if an informal, agreement among employers of labour. They learned their lesson ; they com- bined among themselves. What do we mean by they " combined " in the case of masters or men ? We mean they agreed not to compete with one another beyond a certain point Masters agree not to outbid one another by offering more than a given rate of wages for a particular kind of work ; workmen agree not to outbid one another by offering to do the work for less than a certain rate of wages. Here, 72 ''ECONOMIC morals:' then, is a large class of cases in which, on the face of it, mere competition does not' settle the terms of a particular bargain. By means of combination it has beein proved to be possible ta over-ride mere competition, and to fix such terms for the bargain as seem otherwise good. It might be fairly maintained that the general aim of such combinations has been to secure what was viewed as a just result. But even if the result were only to substitute, for the standard of what each man singly must give or could get, the standard of what the combination must give or could get, it would still be plain that here is evidence of the possibility of resisting the mere automatic action of competition. And a contest for the best you can get for your class is a moral advance on a contest for the best you can get for yourself. There still remains a type of combination not so generally known, but in certain cases actually existing in fact, a combination between em- ployers not to pay less than a certain minimum rate of wages. And as ^11 combinations are made up of individuals, so outside all combina- tions there are individuals who make use of that IMPERFECT COMPETITION. 73 liberty, which they practically prove that the system of competition does in some measure allow, and pay the rate of wages which they think right. But as co-operation and arbitration arose from trades-union disputes, so trades-union disputes take their rise in what we should call, not so much a group of facts, as one aspect of the whole mass of facts which make up our industrial life. (3) It may be broadly said that in each of the great mass of exchanges which result from the division of labour — omitting only the bargain between retail tradesman and customer, and it is partly true of that also — one party to the ex- change may be called the employer, and the other the employed. And it may be broadly said that in each of these exchanges of service for wages, the employer gets rather the best of the bargain. I make a guarded statement. For my present purpose I do not need to take into account the typical capitalist or successful employer. We shall see that there is a special account to be given of him. The least successful employer will answer my purpose. Is it not true that even 74 " ECONOMIC MORALS." the head of a sweating-gang — himself hard- worked and ill-paid — is a distinct shade better off than the members of the gang over which he presides ? If it is true in his case, even in the smallest measure, it is true broadly that the employer of labour gets the best of his bargain with the labourer. This is, indeed, so obvious a fact that it may be said to constitute the economic problem. And now note the signifi- cance of this fact. If competition were perfect, this would not be the case. The most obvious fact of our general economic system after all is this — that competition does not work. It is the working of imperfect competition which pro- duces the facts that most of all challenge inquiry, the evils that most of all demand a remedy. Perfect competitioii would work as follows. If wages fall, from any reason, below the normal rate, the employers of labour have an increased amount of capital to devote to production. In applying this increase of capital to production, they compete with one another for the services of more workmen, and this competition drives wages up. The workmen will be ready, when this increased demand for labour arises, to ask IMPERFECT COMPETITION. 75 for an increase of wages corresponding to the incrcEised demand for labour. Under our present imperfect competition — I quote, in substance, from Walker* — ^what actually happens ? The employer of labour is assumed to be driven, by enlightened self-interest, to apply his increased capital to increased production. As a matter of fact, he very often does nothing of the kind. He takes a better house ; he gets a carriage and pair ; he takes a holiday in Switzerland or in America; he comes to his office an hour later in the morning, and goes home an hour earlier in the afternoon. What has been taken from wages does not return to wages. It goes in luxury, i.e., in unproductive consumption. It is wasted and lost. On the other hand, such part of it as does go to the increase of production does not find the labourer equally able to claim a higher wage. The lowering of wages has produced the degra- dation of labour. The fresh demand for labour calls for the emergence of a certain number of unskilled labourers into the ranks of skilled labourers. But the men who have so easily * §§ 373 to 378. 76 "ECONOMIC MORALS." sunk cannot so easily rise. They have become less efficient simply through the reduction of their wages. WorSe fed, worse clothed, worse housed, they cannot answer to the demand. We do not need to be told, what Mr. Walker tells his American readers, that this picture of the degraded labourer is not a fanciful one — " that there are in Europe great bodies of population which have come, in just this way, to be pauper- ised and brutalised, weakened and diseased by under-feeding and foul air, hopeless and lost to all self-respect, so that they can scarcely be said to desire any better condition, and still bringing children into the world to fill their miserable places in garrets and cellars, and, in time, in the wards of the workhouse." This is a very significant statement of facts. But please note what is its exact significance for us in our present argument. We are asking whether it is possible for other forces than pure competition to determine the distribution of produce. Wq find before our eyes a striking object lesson, to show that other forces than mere competition do determine the distribution of produce. The degraded labourer is an DISTURBING FORCES. 77 extreme instance to us of the general principle that, in the division of produce between em- ployer and employed, the employer has the advantage, because the competition between those who have reached a certain stage of comfort acts in a very different way from competition between those who have not reached that stage of comfort. What is the disturbing influence which pre- vents the operation of perfect competition ? It is luxury on the one side and imprudence on the other. The force which intervenes is the force of immorality of one kind or degree or another. Where there is room for the action of the forces of immorality, there is room also for the action of the forces of morality. So far I have treated this review of the actual working of these forces in our industrial system, as if my only object in making it were to show that there is room for the consciences of men to work towards the establishment of just wages, by bringing to bear the principle of mutual agreement. We have now to make a fresh use of the same facts. We have to ask this question about them. 78 ''ECONOMIC MORALS." Is our principle of justice, the principle of mutual agreement, adequE^te to remedy the evils which they disclose? Do they not point to the im- possibility of the two parties to the exchange meeting on equal terms, on common ground, in consequence of the difference in the standard of comfort to which they have attained ? Do they not call for the action of some other principle ? We have kept our cleric waiting for a long while without either his conscience or his coat. Let us restore to him his conscience, and see how he finds himself in face of the facts disclosed by that analysis of the process of industry which his retail purchase suggested. We have seen his attention called to the fact that even supposing that he gets his Consumers' League to work, there will lie a whole region of industry outside its scope, where unconscientious clerics, if we can conceive the existence of such enormities, will continue to live on and be clothed by starved labour. But when he comes to look at the working of the Consumers' League principle,' he will find, within its scope, facts which challenge a new principle. DISTRIBUTION OF COMFORTS. 79 Some kind friend, I need not say, will point out to him that, if he gives more for his coat, he will have to buy fewer boots and books, let us say, and then what will become of the poor boot-makers and book-sellers ? He will be equal to this argument. He will reply that, while he buys fewer boots and fewer books, the man whose wages he has caused to rise will be able to buy more boots and more books. The same number of boots and books will be bought The only difference will be that the comforts of life will be rather more evenly distributed than they were before. He may be told that the needs of the wage-earning class are different to his own, that while one kind of workmen will be thrown out of work, it will be another kind who will get the benefit, and that the transfer of labour from one industry to another will be productive of hardship. He will reply that he sees no prospect of his principles coming into play with such rapidity or on so vast a scale as to cause a serious dislocation of industry. The change of demand will be sufficiently gradual to allow of a gradual transfer of workmen from one trade to another. 8o , « ECONOMIC MORALS." But his attention will be called, by this objec- tion, to the broad difference in the standard of luxury and comfort with which different classes of society are or have to be content. How am I to agree with another man as to our respective shares of the product of industry when I, directly or indirectly the employer of labour, live a life whose needs and comforts are altogether incom- mensurable with those of the man whose labour I employ ? All the facts disclosed in the survey of the system of industry, to which the attempt to moralise an individual retail purchase has led us, help, in one way or another, to enforce this difficulty— the difficulty arising out of the exis- tence of different stages in the standard of comfort, ranging' from luxury to degradation. Every difference in the standard of comfort involves a difference in the needs that are felt — in the form taken by that desire for life and its fuller enjoyment, which we have recognised as the universal economic force. And every differ- ence in the needs that are felt involves, on the one hand, a difference in the kind of motive, and in the urgency of the motive to take part in the UNEQUAL DISTRIBUTION. 8i process of production — i.e., in the sense in which competition affects the action of the individual ; and on the other hand a difference in the satisfac- tion which goes to make up the reward for taking a share in production — ?>.,in the shareof the fruits of industry, which have to be justly divided. We have omitted the consideration of the claim of those who receive interest on capital. But the moral basis of this claim — ^waiving the question whether it could be made out — would be the claim to the continued fruits of past industry. Now, if this claim of interest were denied, there would still remain the difficulty of dealing with what is virtually the same thing, the enjoyment of the increasing fruits of .past industry which are reaped in every rank of industry, from the highest to the lowest, and place the man who reaps them in every case in a position of advantage. We have also omitted the consideration of the claim of those who receive rent — who receive, i.e., the margin of difference between the least and the most productive application of labour' to land, as the storehouse of natural resources. But there are other storehouses of G 82 "ECONOMIC morals;' natural resources in the intelligence and char- acter of men. Among employers and employed alike, there are those who represent the lowest level of capacity applied to production. And those who can apply a higher degree of capacity receive a gain which is more or less of the nature of rent — and, like rent, puts its receivers into a position of advantage towards those with whom they compete or those with whom they agree for a share in the product of industry. This gain not only resembles rent in representing the difference between lower and higher productive power in natural resources — like rent, also, |t often repre- sents an increase in the productive power in natural resources to a large extent due, not to any effort of the individual owner of the re- sources, but to the general industrial advance of the community to which he belongs. In the rent of brains, as in the rent of land, there is such a thing as unearned increment. As to the employers of labour, it is maintained by some economists that, as it stands, it is those who are the least capable — those who, taking one year with another, and allowing for failures, may be said to receive no wages of management — ^who UNEQhAL DISTRIBUTION. 83 really fix the wages of labour, and that the more capable by their superior capacity can, with the payment of the same rate of wages for labour, receive a varying margin of wages of manage- ment. In any case it can scarcely be denied that this is a true account of the higher wages of management and profits of employers. The application of , the same principle to different grades in the wages of labour has not been worked out. But it is, at least, not difficult to see that such agencies as Trades Unionism only draft off a certain number of workmen from the ranks of the degraded to swell the ranks of those who, however involun- tarily, help to degrade the ones that are left behind. Take those that are left, the mass of degraded labourers, as the sign of the working of a tendency in our industrial system — the tendency to leave those who, without materially changing their standard of life, can afford to invest money or not, to let land or not, to em- ploy labour or not, to intermit labour or not, in a position of advantage over those who, at what- ever terms, in order to live at all, must have the use of the stored results of past labour, must G 2 84 " ECONOMIC MORALS" have the use of land, must have work, and must go on working — or die. This is the state of things which our principle of justice, our principle of mutual agreement will not meet — the parties are not in a position to agree — ^they cannot meet on common ground. But the principles of justice will lead the way to further principles, in the light of which we may face these facts. We defined justice as an interchange of good according to the standard of mutual agreement, conscience being the organ of social good. Conscience, the organ of agreement, is the organ of social good. It is here that a new principle takes rise — the principle of help or love. The due which each man, it turns out, has to give to the other is a share in a social life — in the life of a society whose members are bound to seek each other's good. In speaking of justice, T did not allude to equality as a standard for deter- mining a just distribution. The word would have led at once into the heart of our difficulties of to-day. If justice demands equal distribution, justice resolves itself into the law which equalises the inequalities of life — the law of love. THE LA W OF HELP. 85 I have spent a good deal of time to-day in making way for the application of the law of love in Economics, because I felt that I need not spend much time in dwelling on the law itself. With the terms of any definition of the law of love we are all sufficiently familiar ; the only thing needed is to make way for its application in economic conduct and to indicate how it may be applied. The principle of love, then, seems to me to take shape first as the law of help. We have seen, in the analysis of justice, that the recogni- tion of a common standard of right arises out of the recognition of a common good, in the common pursuit of which men combine in the system of division of labour. Now, in the recognition of a common standard is involved recognition of the truth that, in exchange, each man is the guardian of the other's good. You are bound to see to it that your neighbour gets the good which is his due out of his bargain with you. If he fails of getting it, you are responsible. You are your brother's keeper. You are bound to love your neighbour as yourself, that is, to identify his interest with 86 « ECONOMIC MORALS:' yours, to make it yours — your good, your end. Secondly, you are bound to see that in the give or take of life, your neighbouf gets this good, if necessary, at some sacrifice to your- selfi 1 need not labour this point to you. But I may observe that you may find that the combination of the ideas of sacrifice and trade will raise a smile. People will think you mean that your tailor ought to give you your coat, or pay you for taking it. What you do mean is that if he finds he can only avoid losing custom by starving his workmen, he will prefer to lose custom ; that a butcher whose meat has hiing too long will lose by it rather than sell it ; that a brewer, whose income is partly derived from an excessive number of public houses in a particular district, will sacrifice a certain amount of his income in order to diminish the number of public houses ; and generally that a trader should prefer to be ruined rather than do injustice or harm, just as a soldier should prefer to die rather than to betray his post to the enemy. But, if I may venture to offer any advice, I would suggest a sparing use of this last illustration of the soldier (it THE LA W OF SACRIFICE. 87 is Mr. Ruskin's) and a multiplication of instances drawn from trade. There is no lack of instances of opportunities for sacrifice. When you have given a sufficient number of instances, you may perhaps safely fall back upon an assertion of principles, such as that Christians have to follow an example of sacrifice, and that unless every- body engaged in any branch of commerce is to be morally and spiritually excommunicated, unless a commercial nation is bound to be an un- christian nation, it is natural to expect, as you have shown to be the case in fact, that trade and commerce should give occasion for making sacrifices. Lastly, the principle of love means that the readiness to make sacrifices is no mere occasional accident of the economic conduct of a Christian, but the natural outcome of that spirit of devotion to the good of others which is the principle of life — ^the only fulfilment and satisfaction of that root desire for life and its enjoyment, to which we traced the motive power of Economic life. It is the normal account to be given of any calling or career, that it is a form of public service ; it is the normal rule by which to be guided in the 88 " ECONOMIC MORALS." work of your calling, or in any part of your life, that you live to find your happiness in promoting the good of others, and that the good of others is paramount to your own. These are the prin- ciples, then, for whose application I have tried to show that the facts of Economic Life cry aloud. I have called the Law of Love or Help the rule of economic conduct, because a rule of conduct deals with facts as they, are, and facts as they are call for this principle of help to be applied. The Law of Help has a right to claim to be the rule of conduct, because mutual help is undeniably the raison d'itre of the whole economic machinery. The fact is that we may any of us be — and that most of us, in some one or other of the rela- tions of economic life, actually are — monopolists, capitalists, employers of labour. The most striking , instance of this is in the recent development of , Trades-Unionism in America. Strictly speaking, according to economic theory, workmen employ their employers just as much as the employers employ the workmen. It may seem a mere paradox to talk of workmen giving capitalists IVffO WIELDS MONOPOLY? 89 and managers of industry employment for their capital or their abilities. But the Knights of Labour have carried the organisation of work- men to a point at which it becomes a serious danger, to be gravely considered by economists, that the employed, as a class, may dictate con- ditions to the employers, as a class ; that the advantage may be shifted from the employing to the labouring class, and that the result may be a reduction of profits, such as would im- pair the productive capability of the community. With us the advantage is with the employer ; but any member of the industrial community may wield this advantage, and whoever does so comes under the obligation of the Law of Help. As to the methods of applying the Law of Help, I have indicated some in the course of the argu- ment of this lecture to-day. All forms of co- operation assert this law explicitly, and, there- fore, apart from the good they do in producing just and happy settlements within the range of their own action, they do a further service of in- calculable value by envisaging, embodying, and representing the true purpose and law of economic life. go ''ECONOMIC MORALS" As to Trades-Unions, it might at first sight seem not to be the best way of acting on an unselfish principle, to step forward to claim your full share of the goods of this life. But I have already pointed out that it is our duty not to waste our resources, and I am prepared to main- tain that it is a distinct duty to the society to which we belong, to claim for ourselves and our fellows such a just share of the fruits of our work as shall enable us to live useful lives. I am prepared further to say that where, as in the case of Women's Trades-Unions, outside help is needed, it is our duty to give what help we can towards the organisation of unions ; e.g., in the case of the Shop- Assistants' Union, to encourage women to join it, for their own usefulness' sake, for their fellows' sake, and in order to preventwomen's cheap labour being used to depress the wages of men. As to strikes, they are, as has been said, of the nature of industrial insurrections or industrial wars — morally and economically evil in them- selves and in their immediate results ; to be justified morally and economically by their ultimate results. Before I pass to three special points of METHODS OF HELP. 91 application, I wish to point out the general rela- tion of that help, of whose law I speak, to what is commonly understood by help to the poor-^ almsgiving. I may put it in this way — I contend that our universal duty is to do for the mass of degraded labour what a Charity Organisation Committee will do for individual labourers, who have fallen upon evil days through no fault of their own — viz., help them to rise. Only I would not limit the help to those who have fallen through no fault of their own. All direct almsgiving, I sup- pose, should be subject to this end. Our general aim is to work towards the equalisation of the standard of comfort between the lower and higher griades of society. This is the very practical but sufficiently ideal shape which the law of love has to take, in application to the facts of economic life which we have reviewed. First then, as an instance of the application of this principle, I think it should affect our whole attitude to a certain class of proposed political measures for the good of the poor. I allude to such measures as free education, provision of sanitary dwellings by county councils, etc. ; and what I mean to lay down is that the broad facts of economic life, in the existence of a class of 92 '' ECONOMIC MORALS." degraded labour, constitute 2i j>rimd facie ca.se in favour of such measures. It is from this point of view I think that the discussions of such questions must be approached. Secondly, we have yet to say our say, I suppose, on the question of wages directly. Now we know that some employers refuse to go below a certain rate of wages. In the end they may believe they gain, but there are men most certainly who would act thus, whether they gained by it or not. We want to give these men the support of the consumers. They will not be ready to come forward ; they are the kind of men who are reluctant to come to the front with good deeds. We may thank God for them, and we may ask them to lend the help of their declared adhesion to the principle on which they act, towards the creation of a force of opinion among consumers, employers, and workmen alike, which shall favour the raising of the lower grades of labour to a position, in which we can begin to talk of doing them justice. The principle then which we have to lay down as to wages is — at all costs pay such wages as will best contribute to raise the lower grades of labour to a higher standard of comfort. THE CRIME OF LUXURY. 93 Lastly, we have arrived at some apprehension of the crime of luxury, very necessary for our own guidance, and for the guidance of those whom we teach. We may define luxury as unproductive or unhelpful consumption. All consumption is only indirectly productive or helpful, in so far as it enables us to do our work and help our fellows the better. This may seem rather a stern test by which to try that purchase of a picture or a book, or that tour in Switzerland or the lakes, or even that pound of tobacco ; but I confess I see no way to escape from this test, and I believe its application will prove a gain in every way. All luxurj', as waste, is wrong in itself, but it is most criminally wrong, as narrowing our resources, and so increasing our tendency to press for low prices, and therefore low wages — as a way of abusing the position of advantage in which we are placed by the stage of comfort at which we live. The luxuries not only of the rich, but also of each class that stands^higher than others in the scale of comfort, are purchased at the cost of a lower standard of comfort in those who belong to the lower class, and finally at the cost of the degradation of the lowest class. ( 94 ) LECTURE IV. THE ECONOMIC IDEAL, AND THE CHRISTIAN MOTIVE POWER. The principles we have thus far laid down are these. First, duty is the force of economic life : i.e., we have maintained that the whole region of economic practice and conduct is not exempted, by any supposed authority of economic, that is, of scientific law, from the one supreme authority of all human practice and conduct, the authority of the moral law — that body of principles as to what is right, as to what ought to be done, which are embedded in the structure of society, set forth under Divine sanction by the Christian revelation, accepted and re-uttered by the indi- vidual conscience. And we have maintained that the voice of this moral law is to be heard and its force to be felt, in the original motive — THE IDEAL. 95 the desire for life and its enjoyment — which works through the whole economic machinery, through all those social arrangements by which men satisfy each other's needs and their own. This was our first principle — the supremacy of duty and the actual working of duty as the root force in economic life. Secondly, justice is the foundation of eco- nomic society. The desire for life, we found, works as a social force. It leads to combina- tion and division of labour for the satisfaction of the common needs. And this social character of economic life appears first in exchange, in the give and take between man and man of the fruits of combined and divided labour. The moral principle as to exchange is that it must be just. Since exchange arises out of a combination of forces for a common good, it must be an interchange of good, by which each party must gain ; the standard of the exchange must be the common standard of mutual agree- ment ; conscience in each man being the organ of that principle of social good which exchange exists to realise. And we found that our common notions of justice in the give and take of life 96 '' ECONOMIC MORALS." iembody and correspond with this idea of justice, and warrant us in maintaining it as the foun- dation principle of social life, in the economic as well as in every other aspect of the life of society. Thirdly, that love is the law of economic con- duct. When we come to look atthe actual world of exchange, in which this principle of mutual agreement has to be applied, we find a general rule that the two parties to an exchange are not on equal terms. This inequality is broadly pictured by the contrast between a life of luxury, that is, of unproductive consumption, at one end of the scale, and a life of economic degradation atthe other. In the mutual agreement which is to rule exchange the individual consciences as the organs of social good have to arrive at the agreement. And where there is no common basis for agreement, conscience and the principle of social good demand of the party who occupies a position of advantage, in a superior standard of comfort, obedience to a new law, the law of help; help rendered, if need be, at the cost of sacrifice ; this life of help and sacrifice being the final realisation of that desire for life and its enjoy- THE IDEAL. 97 ment, which we accepted as the primary economic force. And we saw that there were not wanting facts to show the law of help to be actually at work in the economic life of to-day. Now the upshot of these principles is an economic ideal — a moral ideal of what economic life and conduct should be. How do we propose to realise this ideal in fact ? That is our question to-day. The first point which it is important to notice is this. We want to realise our ideal in fact. We want to introduce it into a certain actual condition of society. It is of great importance to start with that we . have a true view of the- facts, that we see rightly what is the actual condition of society. The facts are exceedingly- complex, and are therefore very easily misrepre- sented. In the course of enunciating the principles- which lead to our ideal, we have necessarily had to indicate a view of the facts — a view differing from the ordinary presentation of the facts of economic life. In summarising, just now, the principles with which we have already dealt, I have in each case indicated that the ac- H 98 '' ECONOMIC morals:' ceptance of the principle carries with it a certain view of the facts, of its present working and application. Political Economy has imbued our minds with a warped view of the facts. The facts of economic life are complex. Political Economy- has isolated one aspect of the facts, and dwelt upon it, ignoring, for its own scientific purpose ignoring, the others. But what is the result on the general mind? An abstract science pre- sents a clear and consistent view of the facts with which it deals, in that aspect with which it deals with them. The force with which it presents this view of the facts tends to drive other views of them out of the field of vision. The science becomes a kind of systematic prejudice. From this prejudice we have to escape, and economists have for some years now been attempting to escape from the narrow view of economic life, pre- sented by their science in its abstract shape. But Political Economy as a force governing common opinion, colouring our views of life, remains the Political Economy of old — the abstract science, forcing on men's minds, by the THE ECONOMIC MAN. 99 clearness of its own presentation, its own narrow view of economic facts. We need, to counteract this, a systematic survey of the facts from the moral point of view. Failing this, the best we can do to-day is to exemplify this systematic prejudice of Political Economy in its view of the facts of life, against which we have to be on our guard. Our question to-day is : how we are going to make a man come up to our economic ideal — the ideal of economic morals ? Let us prepare the way by a glance at the ideal man of the abstract science of Political Economy — the economic man. The system described by the science is the system of competition. This system works through the force of a certain motive or character in the units which make up the system. The economic man is the unit of competition. Let us recall exactly what competition means.* "Competition signifies the operation of indi- vidual self-interest among the buyers and sellers of any article in any market." (Note that article includes service, labour, etc.). " It implies * Walker, § 129. H 2 loo '' ECONOMIC MORALS. that each man is acting for himself solely, by himself solely, in exchange, to get the most he can from others, and to give the least he must himself, ... In competition, every man is sup- posed to be active and alert, to slip in ahead of every other man and sell his own product first, and sell it at a higher price if possible. Men in this state act as freely and as independently as the minute particles of some fine dry powder abso- lutely destitute of cohesion. . . . Whenever any economic agent does or forbears anything under the influence of any sentiment other than the desire of giving the least and gaining the most he can in exchange, be that sentiment patriotism, or gratitude, or charity, or vanity, leading him to do any other wise than as self-interest would prompt, the rule of competition is departed from." This is the system. The unit, the atom of the system, will be a very charming character. " ' Political * Economy is concerned with man solely as a being who desires to possess wealth, and who is capable of judging of the compara- tive efficacy of means to that end It * Walker, § 21, quoting Mill. THE ECONOMIC MAN. loi makes entire abstraction of every other human passion or motive, except those which may be regarded as perpetually antagonizing principles to the desire of wealth, namely, aversion to labour and the desire of the present enjoyment of costly indulgences. Political Economy con- siders mankind as occupied solely in acquiring and consuming wealth.' We have here," says Prof. Walker, " all the elements of the economic man. He is taken as a being perfectly capable of judging of the comparative efficacy of means to the end of wealth. That is, he will never fail, whoever he may be, or wherever he may live — whether as capitalist or labourer, rich or poor, taught or untaught, to know exactly what course will secure his highest economic interest, that is, bring him the largest amount of wealth. Moreover, that end of wealth he never fails to desire, with a steady, uniform, constant passion. Of every other human passion or motive, Political Economy 'makes entire abstraction.' Love of country, love of honour, love of friends, love of learning, love of art, pity, shame, religion, charity, will never, so far a,s Political Economy cares to take account, " ECONOMIC MORALS." withstand the effort of the economic man to amass wealth. There are, however, two human passions and motives of which Political Economy- takes account, as 'perpetually antagonising principles to the desire for wealth,' namely, ' aversion to labour and desire of the present enjoyment of costly indulgences,' that is, indol- ence and gluttony." We are almost grateful for these touches of human weakness. Do not be disappointed if I remind you that this charming ideal is not supposed to represent any actually existing human being, far less the general mass of mankind. It does not profess to represent facts. But that in no way detracts from its interest for us for our present purpose. This ideal pictures for us the assumptions of economic science. The economic man embodies in one pleasing and compact imagination the principles from which economic conclusions are drawn. When you are told that anything you propose to do is contrary to the laws of political economy, call up before your mind the picture of the economic man. Political Economy means the economic man, and Political Economy, as the only systematic THE A VERA GE MAN. 103 presentation of the facts of economic life, affects insensibly the view we all take of economic facts and economic possibilities. I am afraid, there- fore, we must look a little more closely at the economic man. How does he differ from the average man of real life, the man with whom we shall have to deal in the endeavour to carry out our ideal ? Well, as to the ruling motive of his economic life, the average man is not so purely and deliberately self-interested. In the first place, the average man has to live in other than economic relations. He is a son, a brother, a husband, a father ; he is the citizen of a town, the member of a parish, of a neighbourhood ; he is perhaps a member of the church, of a con- gregation ; he may be even a churchwarden. He lives a number of other lives besides his economic life. We call them other lives, but they are all one life, and he, the same man, passes from one to the other. In none of these lives does the average man live on the principle of acting for himself and by himself alone. He cannot help carrying with him into his economic life something of the unselfish profession which I04 " ECONOMIC MORALS." belongs to the other sphdres of his existence. It is true that, as the main thing we have tp deplore about religion is that we can succeed so terribly well in keeping its influence out of the rest of our lives, so we have to deplore this evil especially as to the region of economic conduct. But nowhere, not even in economic conduct, is our success in making the separation complete. Accordingly, most men carry into their economic life a good deal more than appears of the notion of duty. They .carry into their economic life the general idea that life is a duty, and they specialise this idea, and take some pride, perhaps, in viewing their own profession as a form of public service. They regard them- selves, not as mere exclusive units, grains in the heap of human dust, but as members of a corporate, society, fulfilling a function, bound to fulfil a function, to serve a purpose in the society to which they belong. The motive and spirit of their life, then, is not the purely selfish motive of the economic man. Again, in his economic conduct, the average man is governed a good deal by what economists, in the language of the individualist philosophy of the last century. CUSTOM AND SENTIMENT. 105 Speak of as Custom. In other words, they yield to a certain extent to the force of the collective conscience, and to a considerable extent they yield to it willingly, they acquiesce in the influence to which they yield. Custom is a moral influence in their lives. A lower form of the same influence is represented by the modern term, Public Opinion. It is not always a lower form. Public Opinion is in great measure an expression of the collective conscience, and as such controls iniquity like a law, by the fear of its punishment, exposure and disgrace. But Public Opinion, as an expression of the collective conscience, is also a means of the operation of moral and spiritual influences, capable of lifting the individual man out of the narrow circle of his own selfish interest, and of inspiring him with something of generosity of public spirit, of indignation against wrong, even of self-devotion. Economists recognise another disturbing force for their world of competition in what they ticket, again in eighteenth century language, with the title of Sentiment. Even of the average man it is I think true to say, that what the eco- nomist calls Sentiment, and what we will rather io6 " ECONOMIC morals:' call Conscience and Principle, do enter into the main current of his economic life, though their influence is by no means all-pervading or supreme. And so, when we come to ask what is the moral character of the acts of exchange which make up the economic life of the average man, we find that, though he may know very little of how to carry the principle of justice through his bargains (as little as we saw we did ourselves), he yet professes to give good value for money to the extent of his ability ; and that, where he is oppressive and unjust, he is so to a large extent because he yields blindly to the stupid mechan^ ism of a thoughtless and unprincipled system ; he is unjust in spite of his conscience, and yields to what he has been taught to believe is the working of an automatic law, which it is hopeless to attempt to resist. We do not feel,, that is to say, at work in the actual system of exchange the character of the economic man as the irresistible motive power, the animating spirit of the system, because it is the animating spirit of the individual. Lastly, if we ask as to the recognition and RECOGNITION OF DUTY. 107 fulfilment of the duty of help, we do not find it in the actual world, as in the economic man, conspicuously absent. It is not the kind of help we want. Often it is mischievous almsgiving, reckless and unprincipled. Seldom is it the aim to lift the degraded to higher levels by personal effort and personal sacrifice. Often it is mag- nificent rather than moral. I have made use of a story elsewhere, which I will venture to repeat here, about the man with a wooden leg who stole a pair of boots and gave away the odd boot in charity. Large, even the largest donations and subscriptions sometimes suggest a question, whether they may not be instances of this kind of one-legged charity. The resources out of which men are scrupulous to give may not have been scrupulously gained. They may not know how to give, they may not have learnt to give, with their gift, them- selves. But in the average man there certainly exists a recognition, and some degree of per- formance of the duty of help, on the part of those who are at ease to those who are in need. The facts then are better than the ideal of political economy would lead us to suppose. io8 " ECONOMIC morals:' Are they sufficiently better to vitiate the conclusions of the science as general laws ? We are not concerned with that. They are suffi- ciently better to make us feel that we must form our own impression from individual experience, and from a consideration of the ideal we wish to introduce, as to the possibility of making it a real force in life. They are sufficiently better to make us, whenever we are faced with the impression of economic life derived from political economy, redall the economic man and be thankful that, in the average man with whom we have to do, indolence and gluttony are not the only rebels against an otherwise unques- tioned sway of enlightened and unrelenting self-interest. But, it may be asked, is not the economic world after all ugly enough, though you find some human lineaments remaining in its face ? Is it not broadly true that economic life is less moral than any other region of life, that the assump- tions of economic science are sufficiently true to set to moralising influences a very awkward task ? Is it not true that even the economic man represents a really working influence, if not a UNENLIGHTENED SELFISHNESS. 109 dominant influence, in the economic life of the average man ? Nay, more, there is one kind of disparity between the facts and the economic ideal which we have omitted. The selfishness of the economic man is enlightened — enlightened and beneficent indeed, compared to some forms of the actual selfishness of real life, the selfishness of drunkenness or of luxury. The selfishness of the average man is generally more gross, and only less mischievous because it has less pretension to that refinement and high tone, which the enlightened self-interest of the economic man borrows from the fallacious imagination of economic harmony. Do not let us give up the ground we have gained. People often talk as if indolence and gluttony were the only modifying influences in an economic world, otherwise ruled by pure self-interest. Let us hold to it that this is untrue, and sufficiently untrue, untrue in such a way as to vitiate the conclusion which it is attempted to found on it, viz., that moral influences cannot make their way into economic life. "ECONOMIC MORALS." But we must nono the less face the real facts, and the real facts are such as to make the task of moral reform seem hopeless enough. We have reviewed in our minds the picture of the average man of real life. Let us set side by side with . him the ideal man of economic morals. If you give your thoughts to the subject of economic life and consider it from the moral point of view, there will rise before you now and again, with or without your will, a picture, an ideal of economic society as it might be; the product wholly of a desire for the common enjoyment of the life which is God's gift; founded wholly on the principle of justice, on the division of God's gifts by mutual agreement of conscience with conscience, man with man ; ruled wholly by the spirit of help and love, help which each man would regard it as his privilege to render, at the cost of sacrifices, gladly paid in the spirit of self-devotion to God, and to the common good, and to the individual man who needed help. I am not going to draw such a picture of an ideal economic society. I only wish to call your attention to. one point. The ideal THE TRUE IDEAL. in man of economic morals will not be the man who would be the member of such a society if it arose. He will be the man who will live for the realisation of such principles in economic society as it is. He will be, to start with, a unit of co-operation, not a unit of competition. I have already pointed out that, as the steward of a life which is God's gift, and of resources for which he is bound to render an account, he will seek to satisfy his needs without waste, that he may live his life to good purpose. But he will look upon his life to start with as the life of the member of a great family, a household whose oMovoiLia is wider than that of any political unity. He will be sensitive to the bearing of his action on the members of his family, his trade, of every social unity to which he belongs. And this conception of life will colour his economic conduct. His profession or trade will be to him a form of public service, as his whole life is a service of God, and his enjoyment of it God's glory. In his dealings with his fellows he will be guided by the spirit of justice, by the desire to give quid pro quo, service for 112 « ECONOMIC MORALS." service, life for life, and to find the fair return for what he receives, by finding common ground with the man with whom he has to agree. But, as in his dealings with men he will more and more be brought face to face with the inequalities and wrongs of life, with those who are degraded by the sins of others and their own, so the dominant desire of his life will more and more become this — to do the greatest good he can in his generation, the most to lift men to a higher level of happiness. Personal sacrifices which this task demands will take their natural place in a life whose ruling spirit has become the spirit of self-devotion. I do not know that he will be a happy man in the ordinary sense of the term. He will live in the presence of great sorrows, to which it will be only partially in his power to minister, of great sins against which he may help to range the forces of God in the age- long battle of the world. Can we go farther without applying to him words which belong to his Master, and which will yet be true of him if, indeed, he " have the mind of Christ " ? It is impossible, even slightly, to trace the lines of this ideal without indicating the answer THE MORAL MIRACLE. 113 to the question, How can we propose to realise its fulfilment ? I do not wish, however, to hasten to that conclusion. I have implied that the ideal character will be a growth passing from lower to higher motives. Omit the working of the higher law of sacrifice ; let our ideal man be merely the man who lives on the principle that the desires of life and its enjoyment which work within him are social forces ; make him the member of a society, whose life is a trust and his profession a vocation, and who determines his dealings with men by the test or rule of justice. We need not go any further than this in order to provoke the reply, that to aim at multiplying individuals of this character is to attempt to work a moral miracle. Need I say that I should entirely and gladly accept this description of the task to be accom- plished ? But it may well be said — it will, I think, be said by some : It will take a very long time to do much good by this method. Must you not, in the meanwhile, resort, for the remedy of a great deal of the economic evils of the day, to a more commonplace agency, to the force of law, I 114 '' ECONOMIC morals:' and look to legal measures to redress the in- equalities of life ? * To answer this question I will fall back upon the principles we laid down in the first lecture. We said that it was the function of law to promote moral action. It seems an easy step from this principle to the conclusion — pass moral laws and . moralise society that way. But we must distinguish two different ways in which law affects moral action. It is one part of the function of law to represent the moral ideal attained by the society ; . it is another part of its function to punish violations of this ideal, and to remove from individual offenders the means of repeating them, to deter them by the fear of punishment from such offences, and if it may be to remove from them the will to commit such offences. Now, if you are to resort to the remedy of law, how do you propose to get the laws passed? By converting society to the moral ideal which the law will represent? That will make the moral and the legal change move pari passu, Certainly corresponding legal changes will ac- * See Note, p. 124. FORCE NO REMEDY. 115 company every step in the moral progress of society. But if you propose to get the re- forming laws passed on this principle, that the material benefit of them will extend to a large majority of the population, and that this majority will pass them, and the minority will have to submit to them ; I will venture to suggest that this will not be a moralising process for either the majority or the minority. Not for the majority, in whom you will practically appeal to your old enemy the motive of self-interest ; not for the minority, most of whom, even if they are not in the position of being punished without crime, will scarcely have the motive of selfishness eradicated by the removal of however large a proportion of the occasions for gratifying it. By no means omit to gain all the assistance which law will fairly give to the realisation of the moral ideal of economic life. I have already said that we are so abnormally free from legal control in these matters, that we have an undue prejudice against legal interference, and are very liable to undervalue the assistance which law may give. But by no means forget that the most law I 2 ii6 " ECONOMIC morals:' can do is to assist. It is only the scaffolding ; the true social structure is a moral building. If this could ever be complete, the scaffolding would come down. The triumph of law is to make law unnecessary. We are very far off from this triumph, no doubt ; but, meanwhile, it will not do to confine our attention to the scaffolding. I remember a humourist of twenty years ago speaking of the execrable taste of most of the London statues, dwelling on the regret with which one saw. the scaffolding disappear from a new one, and suggesting that, as we could not make good statues and could really make very ■creditable scaffoldings, monuments to departed ■statesmen should for the future assume the form •of permanent scaffoldings and nothing else. In the particular case in question, this might not liave been a mistake. But it is surely a mistake, because we have realised that law has a place in helping to carry out and realise the moralisatipn of economic life, to let law,, which is the assis- tance, divert our attention from the moral work which is the substantive thing. The parallel may lead to the suggestion that the law, like the .■scaffolding, may have to come before the THE APPEAL OF TRUTH. 117 building. I accept the suggestion, with the remark that there is a prior process, that of digging and laying the foundation. It is to the necessity of this foundation work, of the con- sideration of principles, that I have specially desired to draw attention ; and our foundations of social reform have to be laid in the general application of these principles. But if law can only assist, and the main work is the moral upbuilding of society, individual stone by stone, what are the means by which we may hope to accomplish the object ? The main means of realising our ideal are, I suppose, these : — In the first place, our principles themselves appeal to deeply-seated sympathies in human nature itself. Economic facts present us on the face of them with the spectacle of a wrong. It is a sure road to sympathy to appeal to the instinct of indignation against wrong. Through such indignation men can be wrought to the abhorrence of evils in which they have hitherto acquiesced ; they can be brought even to the reformation of their own lives,, to the recognition of principles which they have hither- 1 1 8 " ECONOMIC MORALS." to ignored. Our economic ideal has first of all the moral power which arises from its con- demnation of wrong. But more than this. The evils which it condemns are so familiar, that there is an attraction and a power in the mere presentation of the possibility of a life for the individual, in which he should acquit himself of his own responsibility for the evils which he should set himself to cure, still more in the hope which attends every step of a man's way, when he sets himself to act on social as opposed to selfish motives. There is an attraction in any principle which appeals to the instinct of fellow- ship, which puts before men the possibility of finding their own happiness in a social, a corporate, a helpful life. And this appeal to the sympathies of human nature, on the part of our ideal, is not only an appeal to the individual ; it is an appeal to that collective conscience before which the individual often stands ashamed. It is an appeal to public opinion, by which economic life is to a large extent regulated, and even the conditions of individual bargains determined, where these conditions are open to the light. THE APPEAL OF TRUTH. 119 The mere setting forth of such an ideal tends to create an indefinitely great force of public opinion in its favour, ready to condemn flagrant violations of justice and right, certain to set in motion the nof less potent force of a higher moral tone, imperceptibly to penetrate and pervade the fabric of economic life. Secondly, there is an essential strength in the principles on which we call men to act, in the mere fact that they are social principles. There are many good people at work on the remedying of our present economic evils, by means of an appeal to the economic motive of enlightened self-interest. They work for the furtherance of temperance, prudence, and thrift. The weakness of their method is that their appeal lies to the very motive, whose lower and baser forms pro- duce the evils which they strive to remedy. They appeal from Philip drunk to Philip sober ; but he is Philip all the same, and if his own interest is the best motive you can bring to bear upon him, you are apt to find that Philip sober becomes Philip drunk once more. The transition from a long-sighted to a short-sighted selfishness is easy. Does not the same weakness belong to "ECONOMIC morals:' the appeal to law and compulsion ? Is not the resort to this method an acquiescence once more in the economic view of a hopelessly selfish human nature, a view which, seriously considered, is impossible to a Christian? Is it anything more or less than an appeal to the lower motive, which it is the whole aim of your work to replace by a higher. Teach men in any degree to act on social principles, and they will feel their strength under them, because they are in themselves strong, constructive, up-building. But, above all, my answer to the question as to the means of realising the moral ideal in economic life is this. The ideal, like every ideal of righteousness, appeals to, demands the force of Christian life. It demands and calls into play for its fulfilment the living law of grace. The life of grace is the force by^which alone the Christian ideal can be fulfilled, as in the life of grace itself, in the relations between God and man which it implies, the principles of the moral ideal are themselves fulfilled, exempli- fied, embodied. There is an objection which ,only does not rise to one's lips at this idea. It is that we are bringing in the forces of THE CHRISTIAN FORCE. 121 grace as a Deus ex machind, to escape from a moral paradox. The objection is absurd. Will you pardon an absurd illustration of its absurdity. You know the old story of the lady in a ship- wreck, who, on asking the captain as to the prospect of safety and being told that they must trust in Providence, replied, "Dear me! has it come to that ? " The story is scarcely a caricature of the way in which we often regard the relation of the power, in which we profess that we live at all, to the real moral difficulties of life. The forces of grace are no mere Deus ex machind to carry out an impossible moral programme. The moral ideal whose lines we have drawn would never have dawned on human apprehension, if it had not been realised in the facts of which the word grace is an expression, the facts of the relation of God to man in Christ. The ideal and the force to which we appeal for its fulfilment are essentially one. We alone have the right to say of our ideal, This can be done ; for the ideal and the force that fulfils it, both have a history in fact. The moral miracle is accomplished in Christ, and the Christian Church exists to work moral miracles 122 "ECONOMIC MORALS." or for no purpose at all. We alone dare rise to the full height of the moral ideal, for we alone dare say that in Christ all things are ours. Stewards of the mysteries of God, of the moral revelation and the spiritual force which our Lord launched upon the world, it is our business to see that we understand the moral work, which was destined to be done by the forces committed to our charge, that we and those to whom we minister " receive not the grace of God in vain." In concluding this lecture, I would define the practical conclusions which I wish to enforce as to the possibility of realising this ideal. First this: The realisation of our moral ideal, here or elsewhere, is our dlity, possible or not. It is our primary duty ; other forms of effort towards social reform may be also our duty — I think they are ; but they are subsidiary to this. Secondly, in estimating possibilities, do not forget the economic man. Use him as a safe- guard against acquiescence in low and hopeless views of human nature. He does not represent the facts. INDIVIDUAL EFFORT. 123 Thirdly, on the other hand, remember that he does represent one element in the facts, an element powerful enough to make the complete regeneration of society not the thing that we look for ; for the complete regeneration of society means the complete elimination of selfishness. Lastly, I would say, is there any other subject of morals, on which we preach, in the treatment of which we fail to insist on the infinite value, in results, of individual effort ; the infinite possi- bilities of good to be wrought as the consequence of individual effort ? Do we not say everywhere. It is not the mass that wins the day, it is the force of right principle in the despised, the neglected, the few, the individual ? Are we not bound to say the same here ? 124 " ECONOMIC MORALS." NOTE ON SOCIALISM. In the preceding lectures I have made several allusions to Socialism, sometimes seeming to favour its principles, and sometimes to oppose its conclusions. I do not wish to shirk the responsibility for any degree of adherence to unpopular doctrines. I therefore add a short connected statement of the opinions I have formed on the subject. Modern Socialism may, I think, be defined as an attempt to redress the injustice of our present social system by the legal communisa- tion of land and capital. The appeal to justice we should cordially welcome and forward. Of the appeal to law it is to be observed that it is professedly by an appeal to law in the interests of morality. Two consequences follow from this. NOTE ON SOCIALISM. 123 We are sure to be unduly shy of an appeal to law where we have not been duly open to considerations of morality. On the other hand, law forwards moral interests only where it is the expression of the moral sense of the community. If it is in advance of the average conscience its compulsion will not be effective, and will not serve a moral end. To popularise the appeal to justice, to forward the advance of the average conscience, is, therefore, our main duty, though we should not neglect to enforce by law principles of social duty, whose legal enactment public opinion is ready to support. Is the communisation of land and capital desirable on the grounds of justice? I wish to point out that this question requires more consideration on the moral ground than it has received from Socialists or their opponents. In the general spirit of the protest made by Socialism against the broad injustice of our present economic system, I personally am prepared to acquiesce. But this is a very different thing from becoming a supporter of the communisation of land and capital. 126 " ECONOMIC MORALS." As to the communisation of land. The individual ownership of natural resources in land seems to me to be primd facie unjust. These resources are the result partly of the labour of the individual who is, or is represented by, their owner. But they are also partly the . result of the labour of society at large. In this latter view their ownership is a trust. So long as the owner acts as a trustee, there is no practical injustice. His rent may not be the payment for work which he has done. But if he is not, paid for his work he works for his pay. This spirit used to be, and is still to a large extent, the spirit in which landed proprietors act. There, are now many flagrant cases of the violation of this spirit. There are cases where the revenue received is so large and the contribu- tion of the individual owner or his . predecessor has been so small, that the above theory does not fairly apply. The question therefore seems to me open to consideration. But in this consideration I wish to ask, how are you going to deal with other cases of individual ownership of natural resources, whose value is swelled by the collective labour of the NOTE ON SOCIALISM. 127 community — resources of skill, of vigour, of energy, of brain ? As to the communisation of capital. The Socialist position is generally supported on the ground that interest is essentially unjust. I do not believe this to be the case. I do believe that the broad results of the working of our present system of interest on loans are unjust. But the injustice does not seem to me to come in at the point where we allow a man to continue to receive, and therefore to exchange the continued produce of his own past industry, or of the industry of those who havfe made gift or bequest to him of the fruit of their labour. The question where it does come in is one of those questions for whose consideration, on the principles of justice, I plead. 128 " ECONOMIC morals:' ANALYTICAL CONTENTS. LECTURE I. Law— Economic, Moral, Political, PAGE The Moral Law claims the supreme place in economic life i Difficulty of acting on this principle .... 2 Four different senses of " law " — Scientific ; moral ; political ; divine ....... 5 Moral Law — Does not rule economic conduct . . 5 Scientific Law states the fact, viz., that self-interest rules 6 Their opposition merely means that Christian morality has the world against it 7 So with Political and Scientific Law .... 8 But are not Economic laws Divine laws ? . . . 8 (I.) Are Economic principles Divine laws? e.g. " that men act from self-interest "..... 9 This is the distortion of the Divine law, which is emhodied in the desire for life. We deny that the distorted principle is Divine. We maintain that the original principle is Divine 11 (11.) Are Economic conclusions Divine laws ! . . 12 (a) They are laws of Divine command or not, according as they follow from the true or the distorted principle . 12 (Ji) They are laws of Divine Government in the reward of virtue ; in the punishment of vice ; and often in the allowance of evil ; evil to be remedied ... 13 Recapitulation 13 Urgency of the duty of studying and preaching Economic Morals ......... 15 ANALYTICAL CONTENTS. 129 PAGE Political law in Economics, — Socialism . . , • i? Its principles (I.) The appeal to the Moral Law . . 18 (11.) To Political Law in the Moral interest ... 19 These are Christian principles, as are also two detailed moral principles : (a) All men ought to labour, (b) All men ought to enjoy the fruit of their labour . . 20 Its theories (I.) As to rent and interest. (II.) As to the possible efficacy of law. Its measures : The communisa- tionofland. The communisation of capital . . 21 We accept their principles as ours. We cannot discuss their theories until we have studied and applied their principles ........ 22 Conclusion : The duty of studying Economic Morals . 24 Caution : To keep in view that morality is the end of all political action ; and that morality is the action of the individual will . 27 But this caution, again, cannot be applied till the public conscience is enlightened on and subject to the Moral Law in Economics 29 LECTURE II. The Law of Justice, the Foundation of Economic Society. Principle established in previous lecture : The Supremacy of the Moral Law in Economics. What is the Moral Law? 31 To assert this supremacy involved asserting (1.) An Economic Motive other than self-interest ; a desire for life, which, working from individual wills as centres of moral force, does not in one individual disregard the lives of others, but organises a society for the common satisfaction of the desires of life .... 32 (2.) That in so far as our present individual society is such an organisation, it is so because this higher motive is at work in it • • 3^ K I30 '' ECONOMIC MORALS." PAGE If SO, how does this come about ? (Note that in the answer the higher standard will appear — ^partly (i) as ideal ; partly (2) as fact) 33 How does the motive work ? What are the liws of this organisation? The first law is the Law of Justice . 34 The needs of the desire of life produce combination . 3S And division of labour 36 Combination and division of labour produce exchange. ^ Exchange is the social fact of economics. The character of this exchange is the fundamental principle»of Economic Society 37 Common statement that property is the foundation of society; in fact Justice is the foundation of Society. Property is essential to society in so far as it is essential to just exchjinge . 38 What then is just exchange ? 43 Justice is (i.) The interchange of good — ^both parties to be benefited -43 (11.) Aecording to the standard of mutual agreement — this rule has no exception 46 (III.) Conscience being the organ of the Divine Law of Social Good 52 This is (a) The security of agreement .... 52 {b) The implicit assertion of the higher and deeper principle of love , . . . . . -53 Justice is the foundation — Love the source and end of the Economic Society S3 Illustration, — Buying cheap illustrates especially Clause (II.) in the definition of justice 55 The parties to the exchange are the buyer and the worker 56 The complication of modem industry separates them and makes-mutual agreement difficult .. . . -5^ Objection. — Why not treat the process as a series of exchanges, the buyer being only concerned with the first link in the chain ? 56 Because (i.) Tradesmen do throw the onus on their customers 57 ANALYTICAL CONTENTS. 131 PAGE (2.) It is the buyers* demand which is the really operative force in reducing prices . . . . . -57 Conclusion. — Do not buy (a) at starvation prices; (b) without knowing that the worker gets his or her share .... .^ .... 57 How are we to know? "The Consumers' League" is a hopeful scheme for answering this question . . 58 LECTURE IIL The Law of Help, the Rule of Economic Conduct. The last lecture was abstract 60 In this lecture we will use an instance — (I.) To exemplify the abstract principle of justice, and (II.) To show how it leads to the principle of love . . . . .61 Instance. — A retail purchase 61 (I.) Exemplifying : — The supremacy of the moral law . 61 The principle of mutual agreement . . . . 6l The difficulty of applying the latter .... 62 The " Consumers' League " 63 Objection to "Consumers' League" and "mutual agree- ment." They aim at establishing a new standard of value in place of the competitive one ... 63 Answer (l.) Analysis of the present system by which price is fixed. ....... 64 It is fixed by the pressure of the consumer's needs . . 64 [Note that under the moral system there would be a pressure of the consumer's obligations] ... .64 Acting on the retail tradesman, and through him and any number of middlemen on the finally subordinate work- man, each contributor (rent and interest apart), in- cluding the tradesman himself, receiving wages . . 65 (2) Is there room in this system for any other force than competition to work 1 69 Answer in three classes of facts 69 (a) Co-operation ; Arbitration ; Boards of conciliation ; do actually bring our moral force into play, . . 69 132 " ECONOMIC MORALS." , : J, . FAGB (^) Combinations of masters and men, Trades Unions, &c., do actually modify mere competition. . . • 7' (c) In the division of produce between employer and employed, the employer confessedly has the best of it, i.e. competition confessedly works imperfectly, i.e. is modified by immoral forces. If so, why not by moral forces? 73 (II.) These facts establish our point as to justice . . 77 But the same facts challenge a higher principle, by mani- festing the difference between employer and employed arising out of the difference in the standard of comfort . 7^ The " Consumers' League " system, while tending to reduce this inequality' [objection ' to this system answered], manifests it most plainly as a bar to any real " mutual agreement" ......■• 78 This difficulty further illustrated in the case of interest ; rent ; grades of employers ; grades of workmen , . 8l There is no mutual agreement possible between people with different standards of comfort .... 84 The higher principle required arises out of the principle of justice as the principle of Love, viz. : ... 84 (1) The law of Help 85 (2) At the cost of sacrifice ...... 85 (3) As the proper energy of life ' .... 87 Application of this principle : 88 We are all, more or less, monopolists ; capitalists ; employers of labour. We have the upper hand, and are bound to help people to a higher level, at the cost of sacrifice ........ 89 Examples : (l) Political : Measures to give the degraded labourer a chance ; Education ; sanitary dwellings, &c. ; to raise the standard of comfort ... 91 (2) Industrial : Bearing of the principle on the bargain as to wages ........ 92 (3) Personal : Luxury — unproductive or unhelpful con- sumption 93 ANALYTICAL CONTENTS. i33 LECTURE IV. The Economic Ideal, and the Christian Motive Power. PAGE Principles so far laid down : Duty, the force of Economic Life. Justice, the foundation of Economic Society. Love, the law of Economic Conduct . ... 94 The upshot of these principles — An Economic Ideal . How do we propose to realise it in fact ? . . . -97 Our enunciation of the principles of Economic life has also involved a view of the facts of Economic life . . 97 Political Economy gives rise to a warped view of the facts 9^ Example of this in the ideal man of Economic Science, " The Economic Man " 99 This ideal is not supposed to represent fact, but it colours the general view of Economic facts . . . .102 How does it actually differ from the facts — (o) As to the motive of life, (b) As to the character of exchange. (c) As to the recognition of the duty of help ? . .103 But if the facts are better than the ideal of Political Economy, are they not irreconcilable with the ideal of Economic Morals ? . . • • . • .108 The moral ideal of an Economic Man . . . .110 How are we to bring men to this standard ? . . • "3 Must we not fall back upon the force of law ? . .113 According to the principles of Lecture I., it is the function of law to assist morality : law cannot produce morality 1 14 By no means omit the assistance, and the assistance is perhaps greater than we think, but by no means let the legal scaffolding lead you to do )vithout the moral building "S The main means of accomplishing the ideal are— (i) The force of its appeal to human nature and its power to create public opinion; (a) in the condemnation of wrong ; (i) in the suggestion of social life . . • "7 134 ''ECONOMIC MORALS." PAGE (2) The essential strength of the principles implied as social principles, cp. The essential weakness of self- interest as appealed to by (o) Politico-Economic reform of social life, (b) Legal Remedies . , . .119 (3) Its provocation to Christian life ; its appeal to the living law of Grace, which is the force of the Christian ideal and its fulfilment . . . , . .120 We alone have the right to say of our ideal — This can be done • .- • 121 lOKDOH: riiimiiu' HI wjiliam clowes akd eons, luiitbd, SIAMPOBU BIBEEI ASB CHAKIKQ CKOS8. BY THE SAME AUTHOR. CHRISTIAN ECONOMICS. By the Rev. WILFRID RICHMOND, M.A., Sometime Warden of Trinity College, Glenalmond. Crown Zvo, 6s. CONTENTS, Conscience and Political Economy— Competition, the Law of Life— Justioe, the Law of Exchange— Love, the Law of Distribution — The Blessing of Labour—The Privilege of Monopoly — The Produce of the Past- Wealth— The Economic Body— The Ethics of Division of Labour- Property— " Give me my Price "—Consumption of Wealth— Compe- tition and Co-op«ration— The Practicability of the Principles of Right — Economic Freedom. " This is a remarkable book." — " Mr. Richmond has entered upon spectator, the exposiiion of this subject witn a "A very able and suggestive de- clear view of its importance, and with monstration of the thesis that eco- a very considerable knowledge of the nomics are within the^ sphere of factors of the problem ; and he pos- conscience."^CA»tr^ Times. sesses a power of lucid expression as "We desire to record our very well as of sober thought which has hearty commendation of the tone and enabled him to give us a contribution style of the author's treatment of an ofreal value to the subject of Chtislian importantsubject." — CkurchReview, economics." — Church Bells. RIVINGTONS : WATERLOO PLACE, LONDON.