Hill "■•■■:■ :: @^ W18 Mi 111 m v Cornell University Library HB 172.W18 Classical political economy. Ideal versus 3 1924 013 915 594 WBmBBkm '.*•,■•■■••■■■ 5faui fork Hats ©oUtgj? of Agrirulture At fflnrttf 11 Intupratta Jtliara, N. $. Slibrarg f# Classical Political Economy. IDEAL VERSUS PRACTICAL. — MATERIALISTIC • VERSUS CHRISTIAN. •AN ADDRESS Delivered at Roseland Park, Woodstock, Conn., July 4, 1894, By HON. J. H. WALKER. (Reprinted from the New York Independent.) ' YALE. WILLIAMS. CHICAGO. HARVARD. 1 , GREAT CAPTAINS OF INDUSTRY. ELECTED TO THEIR PLACES. POLITICAL ECONOMY AND PRACTICAL LIFE. ENGLAND NOT A NORMAL NATION. MANUFACTURERS ROB WAGE-WORKERS. ADAM SMITH.^PRODUCTS. WAGES. WORCESTER, MASS.: 1894. Ulf fiS ^3 CLASSICAL POLITICAL ECONOMY. IDEAL VERSUS PEACTICAL — MATBEIALISTIC VERSUS CHEISTIAN. AN. ADDRESS BY J. H. WALKEK. If there is any spot in this country or any occasion upon which the highest views of our duties as citizens ought to be taken, it is here and now. While these annual celebrations of the birthday of the nation cannot boast of being coeval with the day of our nativity, their character and service to our country give Koseland Park and its founder a high place in popular regard. Let me say at the beginning that I yield to no man in approval and admiration for the great work being done by the higher institutions of learning, of several of which I am a trustee. Hitherto ethics have had small place in economics. Believ- ing that ethics and economics are essentially one and indi- visible and that morals control in practical economics and that no word or act of the Great Teacher ever had any higher ethical than economic significance, I therefore speak: There is no more obvious economic truth nor one more thor- oughly illustrated in our history, than that God 'causeth the wrath of man to praise him and the remainder of wrath is restrained. It is the common but perhaps erroneous belief that many of the great lines of transportation and production have been made the prey of unscrupulous individuals for their selfish advantage; and yet a greater service has rarely been done the plain people of any country than these men have done in making it possible to carry a barrel of flour from Chicago to Boston for less than it costs to move it from the car to the tenement across the street. To-day the great ques- tion is. not how these millions of capital invested in trans- portation lines shall be made to serve the people, but how they can be made of enough value to their owners to secure sufficient ability to continue their great and beneficent service. Most of the great captains of industry have devoted their lives to developing the machinery necessary to, and to guiding the methods of, manufacturing, with a devotion and persis- tency,that prevented their living man's allotted time. It was my great good fortune to intimately know, boy and man, George Crompton, who gave his name to the great loom. His working hours were from early morning till long after prudent men were in refreshing sleep, until his great load crushed him to earth in his mature manhood. I also knew L. J. Knowles, a man of the same mold and ending, as also P. L. Moen. of the great Worcester wire works. All finished their lives long before a normal termination in working toward the solution of the problem of giving the masses of to-day the comforts and luxuries that only the rich enjoyed a century ago. More industrious, frugal, public-spirited, benevolent and courteous gentlemen I never knew. In the industrial field they were the peers of Grant, Sherman and Sheridan in military exploits, as of Lincoln and Sumner and Andrew in statesmanship. The country is full of such men, and they have honor among right-thinking men. I remember reading in that most ancient of all books, the Book of Books, that great Book of true economics, " Seest thou a man diligent in business, he shall stand before kings, he shall not stand before mean men." Such men are at the very foundation not only of all mate- rial, but of mental and moral progress. Verily, " Whosoever will be great among you shall be your minister, and whosoever of you will be chief est shall be servant of all." Such men, the fortune gatherers of the country, have actually made it cheaper for the poor man to ride than to walk. Sixty days' wages and ten days' time of the humblest worker, will take him from the Atlantic to the Pacific, when it would take him more than a hundred days to walk, thus saving him thirty days' wages. Five cents in the street cars will take a man miles, leaving him time to earn twice five cents in the time saved in the difference in getting from point to point. These men are not in their places " by letter, but by merit." The manufacturer elects of whom he will buy his raw material, as the seller elects to whom he will sell; the jobber elects of what manufacturer he will buy his goods, and so the retailer of the jobber, and the consumer of the retailer. The man in any ofjthese positions who best serves the seekers for such service, or fails to do so, remains in the place he has gotten,or is deposed from it. We see this being done every day of our lives, as recorded in Bradstreet's and Dun's reports. We see these elections and depositions from the high offices of great service to the people being made every day, and yet such is the practical effect upon young men of the teaching of political economy in our colleges that such men are held in little esteem by the average graduate. Only in political economy is the college man supposed to touch what should be matters of every- day experience: and yet at this, his only point of contact with every-day life the teaching is all awry. It assumes that all action upon the instinct of preference for one's own family, developing into preference and sacrifice for one's tribe, and broadening into patriotism, is an evidence of narrow-mindedness; that the choice of one man, family, tribe and nation " for reproof, for correction, for instruction in righteousness," that through it the truth might be illustrated to and enforced on all men, which seems to have been the order of things since the morn- ing stars first sang together, was all wrong. The conferring of special advantages on twelve men in intimate association, instead of reaching many by constant change, lays the Great Teacher open to criticism. The partiality shown in spending so much more time at the delightful home of Mary, Martha and Lazarus than at other firesides, showed a shocking lack of breadth of thought and disinterested action. That he should think one who "provided not first for his own house- hold was worse than an infidel," is exceedingly trying to the broad-mindedness and cosmopolitan action recommended by teachers of " classical political economy." Many professors of the " dismal science,", notably those of Yale. Williams, Chicago and Harvard, are agreed that such practical doing is favoritism in Jehovah and all wrong for us. They are equally agreed upon and teach, in sharp contrast to these ancient ways, that it is a restriction upon that personal liberty of the citizen guaranteed to every man by the Consti- tution, and immoral, for any government to put any restric- tion whatever upon the free exchange of any article of com- merce between any citizen of this country and citizens of another country, for the purpose of educating our own citi- zens in the art of producing any article whatever, or of main- taining a scale of wages in any occupation above those of any other country for the same occupation. Thejr have not dis- covered that there are different wage levels in countries of the same economic development. They have not discovered that the same number of units of product per. day are pro- duced to each worker in one country and in another country, with a widely varying scale of wages to the worker in the two countries. They have not yet learned that the total of all the products in a country is divided in proportion to the ratio that the wages or income of each person is to the total of all the wages and income of the country, and hence high money wages are desirable. While there is nothing in the whole range of science upon the absolute truth and accuracy of which so much depends as upon the so-called " Science of Political Economy," yet upon its fundamental principles and practice there is practically no agreement among those claiming to have discovered its fundamental principles. After a hundred years their main occupation is for each to labor to destroy the postulates of the others; but none of them seems to trouble himself with the facts of actual experience. In truth, saving the one agree- ment among a portion of them, who claim that absolute " free trade " between individuals in one country with individuals in another country rests upon precisely the same moral and economic grounds as trade between citizens of the same country, and that any interference in such trade in favor of the home producers is uneconomic and essentially robbery, there seems to be no agreement among those taking the one side, or the other side, of any question in economics. Vibrat- ing to all sides of every question they are all in a position to deny, and do deny, any responsibility for any statements made by fellow-economists as to the logical results of their teach- ings, as I have reason to know. Each professor for himself alone, arrays in order a number of so-called " maxims of economics," each one of which contradicts more or less of the others, and most of which are contradicted by the experience of the men in every country of the world who are engaged in the doing of the things about which he is teaching, and calls them the " Science of Political Economy." The fact that the great body of all the men, in every normal nation in the world and in every colony that has in it the elements of a nation, who are the only persons in the world in a position to know, declare these pretended maxims to be no maxims, gives these empirical practitioners not the slight- est pause. How unstable, illusory and nebulous this "science" is, is best illustrated by the reply of one of the most learned and popular presidents of a New England University, who had been a professor of political economy in different col- leges for several years and in one of our largest universities. He had just published a work on political economy of which I did not know. Upon my remarking to him that I thought the writings upon and the teaching of so-called political economy were not creditable to the "college graduates of the nineteenth century; that each writer simply "hashed up" preceding writers, each quoting what others had said upon it to prove every statement made by himself; that no one seemed to notice what men were doing in production, and never appealed to the great body of acknowledged facts of daily experience contained in census and labor records and reports of those engaged in producing the things their teach- ing concerned; and that scarcely a man among them had had the public spirit and self-sacrifice to patiently pursue the methods of Bacon and Darwin as to facts, he replied: "You are mistaken as to my present views. I do not hold to a single opinion of two years ago and that you credit me with." The great body of this so-called science has been the de- spair or contempt of the best minds of our country: Webster Clay, Lincoln, Horace Greeley, Wm. H. Seward, and all the framers of the Constitution. Only Calhoun, McDuffie, Jeffer- son Davis and the like reveled in its Elysian fields and acted on its postulates. These professors have no place for anv ro'ofvfz 1 '- 6r Wh ° departs from the accepted formulas of tJ^JXSS a8Sertio . ns absolutely destitute of truth and to U a d™ p™ 7 ■ qU ° tl ,, ng eq ?- a l ly soundless assertions of one to a dozen previous dogmatists. The damage done by teaching error can onlv be realized when we remember that all truth is in harmony Each iart more than a burlesque on human affairs K 1S llttle George Gunton has discovered that the world is round and proves it in his "Problems of Social Economics," and yet these professors go right on teaching that "the world is flat." George Gunton has discovered that the world revolves on its axis and proves it in his " Wealth and Progress," and yet these. prof essors still insist that "the sun do move." They will hardly admit George Gunton into their libraries, and he is only a subject for ridicule in their classrooms and in Eng- lish circles. The faith of these English political economists', in the superior practical value of their own imaginings and the imaginings of their predecessors, is only less than their con- tempt for the motives, actions and experience of the great body of men whose motives, doings and experience constitute the sum of the true political economy, which science they pretend to expound. Immense masses of facts as to labor, manufacturing, trading and consumption of commodities by all peoples, still he practically unused. Each succeeding writer proves the truth of his a priori propositions by quot- ing the ipse dixit of earlier writers, and not by appealing to the- admitted facts of actual experience, testified to by the men who are now doing the things of which he writes, and who deny his statements concerning themselves and their doings. A man who never had to do with horses would not mistake ■the fact that it would be an impertinence to tell a practical horseman that he knew nothing about handling a horse. No one would think of a man for a medical professor who never had seen or had any practice with disease. No college pro- fessor, other than a teacher of political economy, would think for a moment of telling his fellow-graduate manufacturer of cloth or boots and shoes, leather, etc., that he did not know the conditions necessary to successfully compete, with his neighbor next door or across the ocean. All facts pertaining to each and every other department of human knowledge are welcomed, carefully classified and each consigned to its appropriate place as added treasure, to be brought forth each in its appropriate place. The exact opposite is true of this "science." Any student who undertakes to observe and reconcile with his teaching in political economy, in factory or market-place, such facts as he can learn of college gradu- ates in factory or store as students of medicine do in the hospital and as students of law do in law offices and the courts, is subjected to ridicule in the classroom by his profes- sor and fellow-students. ....,, Spain, Italy, France, Germany, and, above all, the United States, high or low as their economic conditions may be, are normal nations. Their manufactures approximate a proper proportion to their raw material. The lack of intelligent patriotic "fortune-winners" in Italy and Spam leaves their ground fallow. The plain people in every nation have a light to demand of the men of their own country who^ ar e the edu- cators, legislators, administrators manufacturers, etc their utmost effort in production, and that in production the scate of their wages and income shall be high enough to allow them to buy and consume all the products of their own labor, with no idle hands. To exchange given products for the products yielded more abundantly to the same number of hours' toil in other lands, is Christian. To exchange products denied to their deserving producers to enrich employers only, is as cruel as it is wicked. Let it never be true of our country. It certainly is not true of it now. Of England it is true. To that end she lives. England is abnormal. She is but a " half nation," finding her other half in many nations. She is not a nation. She is a great work- shop and traders' club. Make the Greater New York City and Long Island an independent nation, and the same eco- nomics that would then enrich New York have for the last fifty years enriched England and impoverished Ireland and many other countries. It has piled up wealth in England abnor- mally, to the injury of other peoples, and starved to death the Irish people, reducing Ireland's population from eight mil- lions to some over four millions. Her maxims of political economy are reduced to one, viz.: " Laissez-faire ." finding its logical sequence in human slavery. She argues the question of opium with China in the dulcet tones of her artillery. Plotting with our domestic free traders to destroy our Union that she might find her " other half " in the sweat, the very life-blood, the cries and agony of human slavery in the southern Confederacy, was entirely consistent with the teach- ings of her political economists and with their twin brother economists in some American colleges. Only to the voice of England do some of our eastern colleges give heed. Our great captains of industry, marshaling millions of better paid men than any others on the face of the earth, in their eyes are bastards and no sons, alien to the plaudit they have honestly won of " Well done, good and faithful servants." Their com- mon name is robber barons. They are called three-card monte men by one of Harvard's most accomplished sons, and American sharks by the southern gentlemen most popular with Harvard. These strains are caught up and echoed in our ears by the lay disciples of these professors. Out of their teachings have come all the economic fallacies of the day, with all their attendant evils. Plain men, more logical and less wise than these teachers of economics to enrich English- men, have evolved fiat money, communism,, profit-sharing, cooperation, single-taxism, Bellamyism, as its legitimate fruitage. Nothing shocks these teachers of political economy any more than seeing enacted before their very eyes the story of the five talents and the one talent. The waste in the breaking of alabaster boxes of to-day oppresses their iust spirits even more than it did the objecting disciple u e J- a } 1 - fl S lt the , law of compensation in all economics embodied m the words: "For whosoever hath, to him shall be given, and he shall have more abundance; but whosoever to have » tak6n eVen that wMcb he seem eth n,3, e industria J 'stagnation, disorder and suffering and pe- fflvn ^ a rZ 0f ^? pi T ent ' £7 en 8 peator than th °s* oi the Civil War, are wholly chargeable to these teachers. They are "of the tree they planted." They seem to teach that all employers first make four deductions, raw material, rent, interest and profit, indifferently tossing the larger or smaller remainder to labor for wages; when every thoughtful, intelli- gent employer of labor knows that no deductions whatever are made or can be made before laborers are paid; that every worker is the absolute producer and owner of a given fraction of the wealth he helps to produce, the value and price of which fraction is immediately ascertained, and paid to him by his employer in " wages." They are believed to teach that " labor produces all wealth," and that the receivers of wages and salaries are robbed by the sums that manufacturers accumulate. Of course, they make some incoherent talk of employers' " compensation for effort put forth." There is no excuse for their not knowing that it has .been proven a thousand times over, by records, reports, and reliable trade and manufacturing statistics, open to all, that the whole body of manufacturers taken together make no "profits" in the sense in which they use the word, and do not average to make five per cent, on the capital invested, while railroads make not over six per cent, and banks not over seven per cent. It has also been conclusively proved that the wage-earners and salaried men receive in increase of wages and lower, prices of the "products" they make, more than their " normal labor " adds to the market value of the things each helps to produce. Labor, as a "productive force," is not perceptibly more effective now than it was two hundred years ago. Personal dexterity in labor manipulation, in the unit of product, has diminished rather than increased. The increased wealth of the world has not come of increasing toilj or skill of the toiler, but by the increased use of capital, which has harnessed nature to human service. All increased wealth comes first in the form of savings to manufacturers from nature. Through the economic forces of society this increased wealth is subse- quently distributed to the community in higher wages, cheaper products, and public improvements as well. That is why the wealth per capita increases so rapidly in those countries that have extensive use of capital, and does not in- crease in those that use hand labor only, as labor there pro- duces the whole product. They are believed to teach that manufacturers receive greater compensation, in proportion to what each contributes to the value and price of the products made, than is received by the wage-workers they employ, when it is obvious to all thoughtful men who honestly study the question, or are employed in directing great bodies of workmen, how very large a percentage of the total product is due to the single directing mind. Labor as labor dormant in the person ot the laborer, and before it is touched by the hand of directing genius, is as worthless in giving value to anything as the sou 6n which it treads, and is worth little more in workers of the lower intelligence when self-directed. It is as the unmined coal or ore, whosllatent value was equally at the hand of the savage as at tWhand of civilized man. Genius makes wealth pos- 10 sible Not one cent of the average profit that has gone into the pockets of manufacturers for forty years has lessened the "real wages" of the workers by the smallest fraction. All and more than these sums called "profits" came out of nature. Not one real invention in mechanical appliance in one hundred, and none in improved arrangements, direction and increased efficiency of plant, are patentable. Taking account of these and of patented inventions, it is sus- ceptible of proof as sure as mathematical demonstration, that, dividing the whole body of workers into tenths, the tenth at the top, excelling in wisdom, in energy, in invention, in courage, in frugality, and risk for larger things, con- sequently get the largest rewards in money, and the opposite tenth at the bottom, who have the least wisdom, are the very "hewers of wood and drawers of water, " and the men at the bottom now get ten times their proportion of the total products of the country, in proportion to what they actually contribute to their production. This is true propor- tionately of the other eight-tenths. And this is as it ought to be, as the good God designed it to be. This is the strong carrying the weak ; the wise, the ignorant; the rich, the poor. The very existence of these people depends upon the labors of their wiser "neighbors." It is the story told of the workers sent into the vineyard at the third, sixth, ninth and elexpnth hours and their compensation, so unequal to the varying hours of labor that it shocks every sensibility of the righteous souls of political economists. Workingmen greatly err in leaving the substance for the shadow, in abandoning wages for cooperation and profit-sharing. The fundamental theory of these political economists, that concerning land, which has in it a larger element of truth than any other, is very largely disputed by every country as a whole and by parts of every country in particular. The morality, the culture, the technique, of the tillers of the soil and of the neighborhood, is a larger element in the economic condition and price of land in any neighborhood than the natural productiveness of the sqil. Where in our country are the richest farm lands, and where are they the most valu- able ? Individual and collective obedience to the Golden Rule by the citizen, fixes even the money value, relatively, of any state or any neighborhood. Verily, Godliness is gain, any- where and everywhere. How marvelous it is that so-called political economists should have treated of man as only an animal of higher instincts and never have studied the effect of conscience in benevolence and morality, in its far-reaching effect in economic phenomena. In Adam Smith's day and for centuries before, wages and the general price of products had proportionately remained together. Adam Smith made the mistake of taking products as the fixed quantity in economics. The value of man, in wages, has steadily gone up, fully doubling in value, while the prices of the results of his labor have as steadily gone down. They have grown more and more widely apart in the last fifty years. While the building of Adam Smith's structure upon products instead tlf man— 11 upon prices instead of wages— was immaterial as tofpropor- tions in his day it is the root error from which have sprung endless false beliefs, which in turn have caused innumerable^ ills. In writings and teachings, his successors have blindlv followed his plan. The evidence of patient observation and description of actual facts and conditions israrelv found anv- where in their work. J The English political economy was born and has remained of a middle class atmosphere under middle class industrial conditions and political institutions. It is, therefore in its nature, undemocratic. It takes no account of the masses except as a productive force to be used by manufacturers' like steam and water power. It ignores entirely the im- portance to the nation's civilization of the laborer's social life and character. It is in this respect that this country is unlike England and must have the true political economy. With the Declaration of Independence, which we have met this day to celebrate, a democratic nation with democratic conditions and, therefore, acting on the true and democratic political economy, was born, which recognizes the social life and consumption of the laboring classes as the corner stone upon which the success of wage-workers and capitalists and the prosperity of the nation depends. This is the dis- tinguishing feature between the erroneous English middle class economics and the true economics. The democratic basis of modern productive industry is the characteristic feature of our rapid industrial development and national growth. In this country the social Sfe, which determines the wages of the masses, is the foundation upon which modern industrial activity rests, and high and rising wages has been the corner stone of our national prosperity. This doctrine will be to the statesman of the twentieth century what the teachings of Adam Smith have been to the nineteenth. ' /■ Many of the smaller colleges, and particularly in the west, are Christian in their teaching. Some of the others seem materialistic and heathen. They can find no words too severe for the substance of the Christian economics of New England towns and states, which model all their doings upon and follow the example of the disciples at Jerusalem, when "neither said any of them that aught of the things which he possessed was his own, but they had all things common; for as many as were possessors of lands or houses sold them, and brought the prices of the things that were sold, and laid them down at the Apostles' feet." In the practical economic system of Connecticut and other states as well, every man holds every dollar of his property, his liberty, and even his life, at the will of the people. The state commands her sons to face death even, when the safety or interest of the whole community demands it. The state owns, and enforces her claim upon, every dollar of the prop- erty in the hands of her citizens, even though it be invested in other states. Knowing that capital is as necessary to labor as labor to capital, she encourages her citizens in every just way to accumulate capital, and allows every man the 12 largest liberty in controlling and disposing of so much of his savings as society in its aggregate action does not absolutely need for its immediate use. Believing that it is immaterial in what particular hands the title to capital resides, the people allow those citizens who have demonstrated their capacity to best manage accumulated capital, by saving it, to control it for the public good. She allows so much as she does not immediately need for the poor and needy to remain in their hands, and further allows them to appoint its depos- itories at will under her supervision. When teachers of political economy make it conform to the actual facts of the doings of men, and aim to make it Chris- tian rather than English, they will deserve and have the respect of those whose doings are its substance, and not before. Photomount Pamphlet Binder Gaylord Bros., Inc. Makers Syracuse, N. Y. MT. JAN 21, 1908 HBfHB §1 pip Pf&Fuh ■■-'■:.■■■■'.■■ ■'■■'- '.■'■,>.;■..-...■■:■■■.::■'■■; ■ ■■■ - - 1 -- ■''-'■■■■■• :- ;- V : "' ■■■■ ' ■.■■■'■■■'•■.■■■■■■■■■..■•..■?..•'.■■,'.■ ■■■■ ■■■ • ■ ■■■■ ■■ ■ ■"■■ * " ■■ ■■ ; " : " : - ; >$T; *£-'-•-•• V4S EHi Sffi IP 355sBw £Hfll ■HH ■■■IHI • ■' '■■■■■ •■■■.■■■■■■■-.■-■ '■'- I "■'"■ '-■'■ •■■- ■■ ■' .■■■■' ■■ .v-:----.: .:■.;■.■-.■■-■.■.■';.■■■■■■''■■,'.■■ ■ •■■ ■■....-■-..;■.■:•■..■■ i ■..-.■.-■■ '. ■ ' ' ''■"-'■'''•■■■■'■■'"■ m m IK&Srow ■Bbb» -■■■''■■■' PI '■■■■■• ■;■"■ ' ■ " ■ ■' - ■ ■ fliiilpi TbHpmhMJMp ii4 I it BSasSiBai smsbjr? KSPli? ..-.,■■.. i "'■•'■■.'■■ •.-■ fflfiy HUH m