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The Columbia University Libraries reserve the right to refuse to accept a copying order If, in Its judgement, fulfillment of the order would Involve violation of the copyright law. Author: Powers, Henry Huntington Title: Wealth and welfare Place: Philadelphia Date: 1899 ^t-f-P^O/T--^ MASTER NEGATIVE # COLUMBIA UNIVERSITY LIBRARIES PRESERVATION DIVISION BIBLIOGRAPHIC MICROFORM TARGET ORIGINAL MATERIAL AS FILMED - EXISTING BIBLIOGRAPHIC RECORD 113 PL 73 I cPowers, Henry Huntington^ 1859-1936. Wealth and welfare: a study in subjective economics; the nature and scope of economic inquiry cPhiladelphia, American academy of political and social science, 18993 95 p. (On cover: Publications of the American academy of political and social science, no, 248) V*/ RESTRICTIONS ON USE: TECHNICAL MICROFORM DATA FILM SIZE: ^^ rn m REDUCTION RATIO: /2'- i IMAGE PLACEMENT: lA C IIA) IB IIB DATE FILMED: ^A/9^ TRACKING # : /^J// 00^ 6 o) INITIALS: 1 O m H 0) nP? 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Hence the inevitable question : Are there no other postulates of the science, no other forces sufficiently important to account for these divergences of fact from theory and sufficiently general to permit of formulation into laws? Reduced to its last analysis, this is the purpose of the historical school, to formulate more principles, take account of more forces and so produce a science approaching more nearly in complexity to the phenomena which it purports to interpret. More recently the impulse to examine premises has mani- fested itself in another form, that of a farther analysis of premises already accepted with a view to their better com- prehension. Impelled by a sense of the unsatisfactoriness of economic inquiry, the inductive economist urges that the old premises were too few. To assume, for example, that men are actuated only by self-interest will not explain all phenomena. Another critic says the premises are too vague, too ambiguous. What is self-interest? Under what forms may it appear? These two lines of inquiry are radically different in method, but they have a common origin and a common object. They seek to find by an inquiry into the premises of the old political economy an explanation of phenomena which seem to contradict or transcend its conclusions. It is this last process, this effort to examine somewhat more thoroughly certain premises of economics, to which I invite attention in the present work. [327] 31" I • » • * 4 Annals of ths American Academy. If we ask in what respect the assumptions of the older science were most inadequate the reply must unhesitatingly be, in the subjective or psychic factors. The excessive simplification of the ** economic man" was suggestive of incompleteness at the outset, but the conception was in reality far more incomplete than it seemed. The few terms used to represent the multitude of psychic phenomena were not analyzed or even satisfactorily defined. As a conse- quence, reader and writer played fast and loose with them, confusing each other and even confusing themselves. This neglect of subjective phenomena, however, was not an oversight. Mill at least distinctly discountenanced any attempt to extend economic inquiry into this field. The two opportunities to do so occurred in connection with con- sumption, which is the goal of economic effort and the source of economic incentives, and value, which is the shadow that coming consumption casts before. Both these avenues of approach he distinctly strove to close up, and that with a peremptoriness which is as significant as it is surprising. Value he declares to be merely ratio in exchange. The inevitable suggestion that a ratio implies some quality or characteristic, which is the basis of com- parison he avoids, and in his well-known statement that there can be no general rise in values he by implication at least declares all inquiry into the nature of this basal fact irrelevant to political economy. On the subject of con- sumption he does not stop with implications. *♦ Political economy," he declares, *'has nothing to do with the consumption of wealth further than as the consideration of it is inseparable from that of production or that of distribution. We know not of any laws of the consumption of wealth as the subject of a distinct science: they can be no other than the laws of human enjoyment." The content of this statement, which is often re-echoed by Mill's applauding disciples, hardly seems to be such as to warrant its peremptoriness and its all but disdainful italics. [328] 1:^ Wealth and Welfare. 5 Suppose that **the laws of the consumption of wealth" are * * no other than the laws of human enjoyment' ' that is surely not disparaging to their importance, nor is it an obvious reason why they are not '*the subject of a science" whether * ' distinct' ' or not is small matter. The implication is strongly that in importance these laws are second to none of those that interest us. If they are not known they are not therefore unknowable. Mill's well-meant effort to limit the field of economic inquiry has but served to point out the very direction where extension was indispensable. ''Value is a ratio," says Walker. Yes, but a ratio with reference to what? When we say that one thing is worth twice as much as another do we mean that it is twice as large or twice as hard or twice as heavy as the other? Evi- dently none of these things. To say that it is twice the other simply, which is what the above definition reduces to, is to evade the question. Twice the other in what respect ? Twice the other in exchangeability, say Mill and his fol- lowers ; twice the other in command of gold. The inser- tion of a third arbitrary term creates a diversion. We now have two ratios instead of one and, busied in comparing the two, we forget that exchangeability is itself based upon this same elusive characteristic of value, and we fancy we have an explanation. Between initial curiosity and final ex- planation there are usually, on long lines of investigation, one or more way stations where inquiry is side-tracked and where even thoughtful minds will for a time rest content as though they had reached their destination. It is clear that the statement, value is a ratio, is both non-explanatory and incorrect. I^ike many other things value may be quanti- tively expressed and may give occasion for comparisons, but these comparisons are not the essence of the thing com- pared. As well might we try to explain weight by calling attention to the fact that some things are heavier than others. This deliberate attempt to confine inquiry to the objec- tive phenomena of economic life was doomed to failure. Its [329] m^m^^ ^5&.I'-S'S^*^""»^»*~*J> ** tauiBmmimiviD^nmmmami 6 Annai^ of thk American Academy. unsatisf actor iness was too apparent The first to break away was Cairnes, whose services as the founder of the sub- jective economics have not been sufficiently recognized. They are confined, illogically enough, to the explanation of cost. What is cost, asks Cairnes; wages, profits and rent? None of these; these are rewards. What then? Cost con- sists of the sacrifices which men undergo to obtain wealth which are classified as labor, abstinence and risk. These are the ultimate, the only true elements of cost. It does not seem to occur to Cairnes that in rejecting Mill's analysis of cost he has introduced an incongruity into an otherwise consistently objective scheme. As Mill's conception of wealth stops with the objective, so much so that he will not even allow that labor which does not issue in objective wealth is productive, so his analysis of cost is not allowed to go beyond the things which are parted with as a condi- tion of securing wealth through production. In a word, the elements of cost must be objective elements, and it is not easy to see what other elements could be found than those mentioned by Mill. Of course such an analysis is most unsatisfactory. It never gets at true cost at all, but stops with a consideration of the exchanges incident to production in which true or ultimate cost is more or less faithfully reflected. But after all, is this enumeration of the proximate objective counterparts of real, /. ^., subjec- tive cost any less satisfactory or ultimate than the corre- sponding objective analysis of value or utility ? Evidently it seemed so to Cairnes. At any rate it was only at this point that he felt impelled to convert the elements of his problem into terms of psychic experience. I will venture the suggestion, however, that Cairnes looked with peculiar complacency on this part of his work and felt with regard to it more than with regard to other parts, the wage fund for instance, that he had reached a finality that was both incontestable and significant. I need refer but briefly to the work of Jevons and the [330] •li Wealth and Wei^fare. 7 Austrians. The fame of their brilliant achievements is too present with us to call for extended remark. Thanks to their investigations, value is seen to be, not a ratio based on an unanalyzed characteristic, but the characteristic itself shown to depend upon the subjective state of man. So completely has this conception taken possession of the eco- nomic consciousness that it strikes us as a startling an- achronism when some one inadvertently asserts that there can not be a general rise in values. Did not the past deter us with its warning we might be tempted in our satisfaction over these achievements to venture the opinion that, ''hap- pily, there is nothing in the laws of value which remains for the present or any future writer to clear up; the theory of the subject is complete. ' ' But let us refrain. The subject of value could not be really explained with- out an analysis of utility. The study of utility involves a study of the enjoyment of wealth. The utility of a good is one aspect of its meaning in terms of subjective experience. Since value is defined in terms of utility, to understand it we must understand utility and the law which determines its variations. It is hyperbole to call the few principles which this incidental study of utility has disclosed **a theory of consumption," as one writer has done; they con- stitute at best but the rudiments of such a theory ; but they make such a theory inevitable. We do know of **laws of the consumption of wealth" and the validity and impor- tance of such laws is admitted. Their amplification and fuller formulation is only a question of time. The economist looks out upon a vast aggregate of mys- terious but presumably purposeful activity. What is it all for? Eventually it becomes clear that men are trying to secure enjoyment and avert discomfort. How do they do it ? In the main by modifying the things that constitute their environment, making useless elements serviceable and noxious elements harmless; that is, by producing wealth. Suppose we undertake to analyze the process and estimate [331] M\ 8 Annals op the American Academy. 1 1 its results. The estimates are made piece by piece, in local activities, each turning out its peculiar product. We are at a loss to express our total. We have sheep and oxen, wheat and corn, tools and furnishings and fabrics, all with their attractions, but so very dissimilar. There is the sug- gestion, too, that a different assortment, or one differently proportioned would have been preferable. How are we to know, since there is the utmost variety of opinion as to the relative importance of these various things? Furthermore, a man who has sheep for his part in the whole transaction deems himself less well remunerated than one who has fabrics. The question calls for settlement, but the mere enumeration of goods throws no light upon it. The bewil- dering total furnishes no other criterion for homogeneous estimate at first than a vague consciousness on our part that they are in general more or less attractive to ourselves. But, observed more closely, this general attractiveness seems to be the common quality we seek. All these goods excite human desire, and that in a measurable degree. Put an obstacle in the way of obtaining one of these articles and men will overcome it and secure the prize. Increase the obstacle beyond a certain point and they will forego the satisfaction of its possession. The maximum obstacle which will be overcome measures the maximum desire which it excites and approximately, the satisfaction which it can confer. Here, then, we have a common term, value. Will not the aggregate value of the articles included in our enumeration tell us the amount of success achieved in the aggregate undertaking? The value of the sheep and the fabrics tells us whether a different distribution of energy would have been preferable or not and how much satisfac- tion each of the participants derived from his participation. In value we seem to have finality. But perplexing facts soon disturb our conclusion. Thus, a poor family disposes of its pet lamb to an indifferent butcher and it becomes mutton on a banker's table. Its [332] i Wealth and Welfare. 9 loss caused the keenest suffering to the family, a suffering out of all proportion to the satisfaction conferred upon the butcher or banker. Doubtless the poor family consented to the bargain in the expectation of securing a more than compensating satisfaction or averting a still greater suffer- ing, but this is not the point. We looked to value to fur- nish us a final criterion which should tell us exactly what a lamb signifies in terms of human welfare and it fails us. The price in this case may have been a subject of no dis- pute, but either value bears no constant relation to price, or if it be its constant subjective counterpart, then something else than value and widely different from it must be the real measure of human satisfaction. All attempts to esti- mate individual or national prosperity in terms of value or price can serve but a relative and subsidiary purpose. Back of value lies the more fundamental fact of utility, of which value is a function, and in which we naturally seek the meaning of goods. But the utility which is the basis of value, though much more exactly corresponding to fundamental interests than anything we have so far considered, is still not quite a finality. The lamb may have been sold to avert a misfor- tune which did not come or which came just the same despite the sacrifice. Or the proceeds may have been spent for deceptive goods which proved unsatisfactory in the using. The utility upon which the bargain was based and values calculated was therefore out of proportion to the satisfaction actually experienced. Something of this dis- parity usually exists between anticipation and realization and must be considered in estimating the one by the other. The utility which we reach as we approach the subject from the side of value is a prospective or estimated utility from which we may proceed to actual utility, the satisfactions of real experience. Here at last is finality. But this finality is the beginning rather than the end of our inquiry. The last stage reached in the development of [333] n u 1 v^j % : "Sf lO Annai^ of ths American Academy. a science is not unfrequently the starting point in its pre- sentation. We have worked our way back from incidentals to fundamentals. The study of these fundamentals is most important in itself. It is the only thing that can give us any ultimate facts regarding human welfare. Technology may tell us how to increase our flocks, but what does such an increase signify? Other things remaining the same it means an increase in satisfactions, but other things will not remain the same, these subjective facts among the rest. How far will they remain the same and what laws govern their variation ? And even were they to remain the same, the meaning of flocks in general is an enigma until they are translated into terms of these same subjective experi- ences. If we are tempted to disparage the importance of such knowledge it is only because we have a certain amount of it which we have derived from experience and which serves our ordinarj'- purposes. We have data by which to estimate subjectively the value of a good dinner. What need have we of science for such purposes? Thus we trans- late into the language of personal experiences the objective wealth about us, how adequately, it will be our purpose later to inquire. No process is more delicate or stands more in need of careful study than this of transmuting wealth into happiness. I am aware that any mention of happiness as the goal of economic activity will excite nervous apprehension in some minds. The effort to be remorselessly scientific has devel- oped a morbid sensitiveness with regard to any studies which smack of meliorism or philanthropy. Thus Nichol- son declares that economic ideals must be strictly excluded from our inquiry. * ' It may perhaps be thought . . , that practically the greatest good of the greatest number will be admitted by everyone as the economic ideal. But . . . maximum freedom is at least as attractive and may lay claim to equal authority. For my own part, I should not care to regard equality of distribution, even if it could [334] Weai^th and Wei«fare. II be shown to be both practicable and productive of maximum hap- piness, as the ultimate goal of human progress. Human energies, activities and ambitions are not to be satisfied with a dull level of placid content. * ' Ideals are as inadmissible for the individual as for society. ' ' To spend a given sum of money, so as to produce the greatest happiness to the spender, can not properly be called economic expenditure ; this refers to value received for value given and not to the happiness which may follow on the completion of the bargain. ' ' The search for happiness has indeed fallen into disrepute with economists of this stamp. The extravagance of these statements is due to a very simple confusion of ideas. The pursuit of happiness is not science, but it may be the subject of a science. Economic inquiry can have no other legitimate ideal than to know the truth, but economic activity may and does have an ideal which economic inquiry must ascertain as the condi- tion of any explanation whatever. The scientist must, indeed, refrain from mingling his idealizations with his investigations, must at least know and clearly state when he is doing the one and when the other, else his work will be hopelessly misleading; but this is a very different thing from trying to study human actions without paying any attention to the ideals and incentives to which these actions owe their existence and direction. Such a study may be descriptive, but it can not be explanatory. The social arrangement which is * ^productive of maximum happiness' * may be one which we "would not care" to approve — this is small matter — but it is a matter of the profoundest impor- tance to know whether such an arrangement regularly is approved in human affairs. Expenditure guided by con- siderations of happiness to the spender may or may not be economic, as we will, but ts expenditure guided by such considerations? Such an inquiry may or may not be [335] "41 12 Annai^ of thk American Academy. WEAI.TH and WEI^EARE. X3 "j 1 included in economics — that is a matter of definition and convenience— but it is in any case fundamental to economic inquiry. The economist may avoid investigation, but he can not avoid assumption in this connection. Some hypo- thesis of economic purpose and incentive, simple or com- plex is indispensable. It must furnish the unit of all measurements, the term in which all results are expressed. The assumption that economic activity is determined by considerations of happiness may of course be challenged. Duty, liberty, equality, etc. , have been urged as competing considerations. It would be premature to try to settle such a question in advance and would anticipate some of the more important results of our inquiry. But in common with all economists I have given the individual pursuit of enjoyment the first place among economic incentives and am persuaded that an inquiry into this subject would be especially remunerative. It may be worth while to give a few reasons for this working hypothesis. In addition to the cases in which persons avowedly seek enjoyment there are certainly many others where the in- centive is the same under another name. Duty, liberty, equality, etc., are surreptitiously urged as incentives on the ground that they affect happiness. Witness the criti- cism just cited. A system "productive of maximum hap- piness" is rejected because, forsooth, *' human activities can not be satisfied with a dead level of placid content. ' ' Pass- ing the surprising statement that we cannot be "satisfied" with "content," we have to ask w^hat it means to be satis- fied. The satisfaction referred to is plainly synonymous with happiness, at least a species under the genus. A system which is productive of maximum happiness is thus rejected because it does not produce happiness of the kind and amount which some other system promises. Only the juggling with synonyms makes such a contradiction in terms possible. The socialistic scheme of Babceuf, which attached the most extravagant importance to equality did [336] so on the ground that ** equality is happiness." In like manner all those social schemes which have emphasized liberty have claimed for it a similar identity with happi- ness, the one self-justifying thing. The confusion is due to an insistence upon different terms of the same series. We might as well dispute about whether it was more neces- sary to always have enough to eat or to always have enough money to buy our dinner. Happiness is thus offset, not against a real alternative, but against a supposed con- dition of happiness which for the moment is mistaken for an end. Such attempts to deny that happiness is the mainspring of voluntary action assume what they deny and accomplish their own refutation. Whether a science of industry or society is possible without this assumption or not, it is certain that the science we have is based on such an assumption. What else do we mean by the assump- tion made by Professor Nicholson along with the rest that men act from self-interest? But the validity of a science of enjoyment does not depend on the universality of this or any other incentive. Whether universal or not it is at least the most common of all the springs of effort. It can not, therefore, be useless to inquire what are the laws of its action. If this does not solve all problems it will solve some. In some cases at least it will tell us the meaning of wealth in terms of human experience, where alone it has meaning. Whether, therefore, the science of enjoyment is to be included in economics or not it is the legitimate and neces- sary outcome of economic investigation. If the earlier phases of inquiry seemed fruitful quite apart from the final phase it was because a certain amount of popular know- ledge stood ready to supplement the incomplete inquiry. People have always had a certain notion of what wealth was and how to get the good out of it. The notion was neither very clear nor very uniform, but it was enough to give a meaning to objective calculations. Why then do we [337] H Annai^ of the American Academy. WEAI.TH and WEIvFARE. 15 need a science of enjoyment at all ? For precisely the same reason that we need a science of production, distribution, etc. On these subjects, too, there is a considerable body of popular knowledge which senses fairly well for practical purposes. But it is deemed expedient to collect, classify and increase this popular knowledge so as to make a science of it. Why not the other? Whether the inquiry be pur- sued for its own sake or as a guide to conduct and in fur- therance of human interests the subject is one of excep- tional interest and importance. But it is not alone as the final term in economic inquiry that the study of enjoyments has a claim upon us; it is the initial term as well. Economic activity moves, not in a line, but in a circle. If wealth culminates in happiness it originates in happiness— that is, in desires born of past experiences. Modifications of production such as those following changes in fashion are inexplicable without a knowledge of what fashion is and what laws control it. Distribution invokes at every step the laws of enjoyment to explain its phenomena. Economics is not only incomplete without a study of enjoyment; it is impossible. The only question is whether the laws of enjoyment shall be consid- ered, formulated and classified like other laws, or be smug- gled in where needed without recognition and with all the imperfection of statement which such a method implies. As regards the subject of enjoyment, it is not a question of science or no science, but of good science or bad science. Without some science of the subject we get nowhere. We are hardly left in doubt as to the conditions upon which a radical improvement in economic science must depend. If the importance of this study is duly recognized we can be relatively indifferent to the name which is applied to it and the order in which it is taken up. But these questions are of enough importance to deserve brief attention. There is a good deal to be said in favor of extending the term economics to include this study. In the first place, if the C338] study of enjoyment is not a part of economics it at least is not a part of anything else. No other science has taken it up in a way to satisfy the requirements of economics. There are therefore no associations to be overcome unless it be with the narrower use of the term economics. But this term displaced the older term, political economy, about at the time when attention was being turned to this study. Its advent may, therefore, appropriately mark the recogni- tion of the new department. To put it in another way, the study of enjoyment is no part of political economy, but it is a part of economics. The use of these terms may thus appropriately continue to distinguish the conservative or reactionary from the progressive writers. In the second place, while other scientists have done nothing with the subject, economists have made notable beginnings at its investigation. This has already established a tentative or provisional association in favor of this designation. I am not sure but the thorough investigation of the subject will lead us to considerations which will suggest the traditional economic discussions but remotely if at all, but even so, the attachment here is greater and the friction less than else- where. The final and far more important reason is that the two sets of phenomena are related to each other in a manner that scarcely admits of separation. They form a sequence or circle which may be studied in sections, but can be compre- hended only as a whole. It is instructive to compare this relation with that which exists between economics and sociology. As in the case we have been considering, many of the most considerable contributions to sociology have been made by economists, and the two sciences are inti- mately associated in academic connections. But all at- tempts to make the one a part of the other have been abandoned. The reason is that though they treat largely the same matter they are logically independent. Sociology is the science of grouping or association, and its interest in [339] i i6 Annals of the American Academy. ;•» ■^ I all phenomena which it considers is to find their relation to the size, tenacity and character of the group. Whether association makes men happier or not is strictly no concern of sociology. Economics, on the other hand, is the science of enjoyment, or if we insist upon a narrower definition, the science of the means of enjoyment. To one or the other of these all definitions of economics reduce. While, therefore, the science of sociology diverges from economics, the science of enjoyment emerges from it. Clearness of thought has everything to gain by distinguishing sociology sharply from economics; it can only lose by implying a fundamental dis- tinction between the study of enjoyments and the study of wealth. When an organic whole is arbitrarily cut into sec- tions it must be with the clearest recognition of the fact that the division is only for convenience and is without prejudice to its organic character. Such a recognition can not be better assured in the case before us than by uniting the two parts of the study under a single name. More important is the question of the order in which the subjective and objective phases of economics should be taken up. For one, I incline strongly to the opinion that the subjective study should come first as being the more fundamental and the logical antecedent of the other inquiry. The chapters which follow will be the best explanation of my position. But it is proper here to note the reason why this is not the traditionally accepted order. As is well known, it is usual to begin with a discussion of wealth, its production, etc. , after which come discussions of distribu- tion and exchange, followed in the later work, by a curious appendix la^belled consumption. It is the location of this appendix which, more than anything else, has left the im- pression that the study of enjoyment should come last. An examination of this division of economics throws light on the question. In it can be found a little of everything except the study of enjoyments. The computation of a German statistician as to the relative expenditure of different [340] ^^^^1 I Wealth and Welfare. 17 classes for rent, food, fuel, etc., has been eagerly util- ized to fill the aching void. In general the department reminds us of the blank advertisements sometimes seen in papers: "This Space is Reserved for "—let us say for Walker's future Adam Smith. The location of consump- tion in economic treatises is, therefore, to be accounted for by (a) the nature of its principal matter which is as objec- tive as any other and such as can be postponed, (d) its nondescript character, unclassified material being usually reserved for an appendix, (c) its emptiness, confessions of ignorance being usually postponed. Imagine any treatise in which chapters on consumption occur so rearranged as to bring these chapters first, an arrangement which would usually involve no logical difficulties, and what an impres- sion it would make of impotence and obscurity at the threshold of the science ! I have said that the earlier writers omitted all considera- tion of consumption as a department of political economy. But they did not therefore treat the subjective problems less fully than modem writers have done. The treatment in either case has been scanty enough. But the point which it most concerns us to note is the order of treatment which they followed. Allusions to subjective phenomena may be found scattered through their writings, but almost always as a preliminary to the discussion of objective problems. The statement that men act from self-interest (that is, in deference to the laws of enjoyment) is not an appendix to but a premise of their inquiries. Whether the recognition was by vague implication or detailed statement this charac- ter of premise was not and, indeed, cannot be modified. In undertaking to analyze and expand this premise we have no power to change its logical relation to the subject Granting that the dependence between the two is mutual it is by no means evenly balanced. The discussion of objec- tive economics involves far greater assumptions in the sub- jective field than that of subjective economics does in the [341] %*i z8 Annai^ of the American Academy. objective. The fact that in the development of the science the logical order is not the chronological order, is not strange but natural. The objective is more tangible than its subjective antecedent and so earlier noticed. But when the subjective has once been analyzed, when once we have found the source of economic activity, we can most easily trace the windings of the stream by beginning at the source and following with the current. -I Chapter II. ECONOMIC OBJECT AND SUBJECT. The most fundamental distinction in a science of enjoy- ments is that between object and subject, or, speaking roughly, between wealth and uses. It will pay us to exam- ine this distinction somewhat carefully. "Everyone has a notion," says John Stuart Mill, "sufficiently correct for ordinary purposes, of what is meant by wealth." It is doubtless true that a man who talks about this and similar subjects with no suspicion of technicality is not greatly misunderstood. But one who announces his intention of treating such subjects from a scientific or philosophical point of view has no such immunity. Past discussion has left a legacy of subtleties and ambiguities. Modem writers cannot proceed at once to the main task as Mill could do. They can at best but abridge the inevitable preliminaries. In many cases we are at no loss to tell whether an article is wealth or not. Articles which are useful and limited in amount make us no trouble. Shoes are useful and not over- abundant, and hence they are wealth. But such an article has antecedents and consequents which must also be classi- fied. One set of antecedents make us no trouble, such as leather, cattle, land, etc., in order of derivation. But back of these, or co-operating with them, is another antecedent, labor, which has been the subject of much dispute, but is [342] Wealth and WeivFare. 19 not usually classed as wealth. Following upon the use of the shoes is a consequent, satisfaction or comfort, which it is agreed not to call wealth. The consensus of opinion is clear, and it at first seems inexcusable that economists should have departed from popular usage in modifying the definition of wealth as the aggregate of those non-human material instruments of human satisfaction which exist in insufficient amount to satisfy all desires. Shoes and their scarce material antecedents are wealth ; their human ante- cedents and their immaterial or psychic consequents are not. Why is not this distinction satisfactory? It seemed so to Mill. It is perfectly possible to use wealth in this sense in eco- nomic discussion, as referring to things usually intervening between the human fact of labor and the human fact of satisfaction, and serving as vehicles of transfer, but if we do this we make it too narrow a base for the foundation of a science of economics. Economics ceases to be the science of wealth and certain most important analogies are obscured. Many transactions which are conspicuously economic do not have to do with wealth as thus defined, involve no material vehicle of the kind previously described. Labor confers satisfaction directly and the satisfaction is recog- nized by payment, but outside of the payment there is no wealth as here defined. The distinction proves embarrass- ing. Mill found it so and faced the difficulty consistently. Labor thus expended was unproductive, and by implication at least, non-economic. What other conclusion was pos- sible to one who did not recognize consumption or the science of satisfactions as having place in economics? But Mill's most unfortunate and misleading consistency has always been a stumbling-block and has usually been repu- diated. The definition of wealth which was satisfactory enough in itself was rejected as soon as any use was made of it. Moreover, though popular usage has never applied the term wealth to labor, laborers and labor power, except by [343] •-Si "M '*t ■•fi '.'ti IWT a aB WW T'*rt[Wl!'W» l ' i lLT~ V ■rg"' ■»g»"'*." j;«wf^'- 22 Annals of the American Academy. In hinng a coolie, a carpenter, a physician, I plainly pur- chase something. Since the individuals are not to be counted as wealth, what can that something be? In the case of the carpenter we can escape the difficulty by seizing upon his material product, but in the other cases we find nothing tangible. But talent, skill, labor capacity, these are much desired qualities. Are these not what we buy? To so classify them is to encounter a difficulty as great as the one we seek to escape. These objects of desire are attributes, qualities, not separable from that with which they are associated Why is the strength of a man less legiti- mately classified as wealth than the strength of a horse or a rope ? Each is prized for the quality that makes it useful, but the only way to get the quality is to get the thing possessing it. In general we accept this necessary connec- tion of quality and thing as a matter of course. We desire objects by reason of certain qualities, but we never think of dissociating the quality from the object for economic purposes except when the object is a human being. Why do we do so in this case? The reason is a very natural but a very illogical one; it is the pressure of humanitarian and social considerations. Scientific analysis finds in personal pride and social defer- ence a serious obstacle to its normal development. There is an intense and justifiable reluctance to allow men to be assimilated to the brutes even for scientific purposes. The reason is that the struggle of the ages has been to prevent his being assimilated to the brutes for practical purposes. The memory of the great struggle, whose results are none too well assured, makes the sentinels watchful and suspi- cious. If comparisons are made between man and brute they are quick to insist that the contrasts are more impor- tant than the resemblances and more apt to be forgotten All this is doubtless true, and for general purposes man's kinship to the brutes must not be made too prominent The man who should address his wife as an animal would [346] Wealth and Welfare. 23 not by any amount of after caressing avoid her resentment, because for general purposes he would be expected to con- sider her in her conjugal rather than in her biological character. But how about special purposes f Would he, as a zoologist, be justified in insisting that women had no place in a zoological classification ? The answer is plain. When certain limited and well-defined relations are under consideration, classification should be based exclusively on these relations. This alone makes science possible. But these special classifications should not, for a moment, pre- judice the general and composite classification on which depends the general status of the individual in practical affairs. When I am told that, zoologically considered, I am much like a dog, it does not follow that I am morally or intellectually like a dog or that I should be housed or fed like a dog. If it did, I should resent it, but as it is, resentment or sensitiveness would be ridiculous. It is just such a sensitiveness which so long provoked opposition to the doctrine of evolution. The idea that man descended from a monkey was resented as an insult to family pedi- gree This feeling has been slowly overcome in this con- nection and, as a result, zoology is a science. In economics, classification is still hampered by precisely similar considerations. Everybody can see that a coolie who pulls a cart is, from a certain economic standpoint, precisely analogous to a horse that does the same. A singer, a physician, etc. , are almost as obviously so. They perform functions which conduce to our happiness and therefore we desire them for a longer or shorter time. We cannot buy them, it is true, but neither can we buy a high- way, a navigable river, a picture from the national gallery, or even a livery horse if the owner chooses to retain him. All these things are withdrawn from the market for good and sufficient reasons, no doubt, but reasons which concern the jurist and are entirely alien to our purpose. So with men ; they could once be bought for any purpose* but it has [347] Taa ar»«*E5w!<^*8^«Ma?*#^Eew»feK*w^s«fiS«*4*«6s^«^^*-' MnM~x'«v 1— T-n V ■•vixmvtimfttwwt^t^*-"^*^ " H ANNAI3 OF THE AMERICAN AcADEMY. Wealth and Wei^fare. 25 been found conducive to social interests to subject them only to the limited and conditional sale, known as hire. How closely this arbitrarily limited sale may approxi- mate to unconditional sale we need not here stop to inquire. The confusion which has attended this discussion strikingly illustrates the results of excluding subjective factors from economic inquiry. The science becomes headless, uncertain as to what it is really after, and its classifications are fickle and unsatisfactory. Once seize the salient fact of economic life, satisfaction sought and expe- rienced, that for which and of which everything economic is, and order comes out of chaos. Looked at from this standpoint how irrelevant such a criterion as materiality appears ! This has to do with philosophy or physics, not with economics. If I can secure satisfaction from an immaterial source in exchange for material goods or Z7r^ versa, what is the question of materiality to me? And after all does the economist want to take the responsibility of deciding what is material or immaterial, or whether any thing is immaterial? Other criteria are equally irrelevant and troublesome. The one thing to be noted is that we are conscious that certain satisfactions are derived from objects, personal or otherwise, which are external to our- selves. Some of these objects are scarce and we thus become eager to secure and control them. If our need of them is permanent we strive to secure permanent control of them; if temporary and partial, the control we seek varies accordingly. We buy or hire a horse according to the nature of our need. We should do the same with men, buying a cook and hiring a physician, were it not that social obstacles, reinforced, it may be, by personal scruples, prevent the unhindered pursuit of what would otherwise be our interest. Analogous obstacles may, in like manner, limit the acquisition of other goods. Their economic character is not thereby changed. C348] Looked at from the standpoint of the individual who is eagerly seeking satisfactions all external sources from which satisfactions may be derived have a common char- acter which is fundamental to our inquiry. It may be that to call them all wealth is as great a violation of the laws of popular speech as any we have criticised. So be it, but if we must do violence to popular usage let it be in the interest of economics rather than in that of physics. If the term wealth, like so many others, is popularly so defined as to be unsuited to this larger use I will not insist upon its redefinition. Terminology is a secondary matter. I only insist that this common character of all objective sources of enjoyment, men and things, shall be recognized, not concessively as a personal whim not worth disputing about, but appreciatively as a fact of fundamental impor- tance in the discussion of the primary problems of economics. At least from the standpoint of enjoyment the analogy between man and things is complete. A man does not differ generically from a horse or a house. All are prized as sources of satisfaction and secured on such terms as may be desirable and possible. All may con- tribute to enjoyment indirectly by producing certain inter- mediaries, or they may be enjoyed directly with no other intermediary than the universal and inevitable vibrations. That is, men, like things, may be either capital or final goods. But while men from this standpoint of enjoyment are sources of satisfaction, things to be enjoyed, human goods, it is obvious that from this same primary standpoint they have another character. They are the users of goods, the ones who do the enjoying. This character is as universal and fundamental as the other, but it should not make us forget the other. It is not, indeed, a characteristic pecu- liar to men. The animals which man employs to further his enjoyment are likewise users of goods who enjoy and seek satisfactions, often quite parallel to those sought by men. [349] ■3 ■^tOff. '~yi~-=^ "^„ir'»^iT^^"«™7"'grT 1 26 Annals op thb American Academy. Nor is .man wholly indifferent to their enjoyment. But while their efforts and experiences presimiably obey the same laws as those which govern our own, it is probable that we have nothing to gain by including it in our study. The entire range of economic objects known to us is thus comprised in two classes, the non-sentient and the sentient, or ignoring animals, the non-human and the human. The former have a single character in fundamental economic relations; they are used. The latter have a double char- acter ; they are user and used. From the closely related standpoint of production we again find a double character in economic- objects. They are producer and produced. In popular thought, as is natural, one of these characters is usually emphasized to the exclusion of the other. Man is counted as a producer and goods are counted as products. But man is also pro- duced with cost and under laws which may be definitely assigned. The refinement of this product by technical education is a conspicuous illustration of cold-blooded calcu- lations of economic advantage. Other stages are only more obscurely so. Commodities, too, are productive, albeit in ways peculiar to them. There are, of course, goods which are not economic products as there are economic products which are not goods, but this simply means that the fields of enjoyment and production are not co-extensive and identical. Within the proper field, however, we again find the two classes of objects, the one having the double char- acter of producer and product, and the other the single character of product, producing nothing but enjoyment. In this sense — not a very important sense — not only the men whom Mill enumerates, but all final goods are unpro- ductive. It is a curiously inappropriate word, however, to apply to the last stage on the route to economic finality, the consummation of our desire. We have already seen that the same reciprocal relation holds in exchange, men being both seller and sold— latterly, [350] WEAI^TH and WEI.FARE. 27 of course, with wholesome but economically arbitrary limita- tions. A careful study of distribution, the other problem of secondary economics, will reveal the same double char- acter. This was to be expected. In the nature of the case all phenomena must have the double character of cause and effect (producer and product), and if sentient this involves the farther double character of feeler and felt (en j oyer and enjoyed). Enumerations of wealth must therefore be relative. From the standpoint of the individual who looks out upon the world in quest of enjoyment all available objects have a common character; they are sources of enjoyment. He is as likely to seek control of one as of another. He gives his wares for men (services) or for other wares as suits his purpose, from like motives and with like results. To him all are goods. To another man the relation is in part reversed. He is not the first man's wealth; the first man is his wealth, that is a possible source of enjoyment to him. It will be apparent later why this essential identity of char- acter in all useful objects external to us is not recognized in the use of the term wealth. The popular definition of wealth was not determined by scientific considerations, but it is one which science may be compelled to respect. To minimize the difficulty of innovation I have used the some- what more pliable term goods to designate the objective counterpart of enjoyment in all connections. I recognize the unsatisfactoriness of this use and shall be glad to adopt a better term. The foregoing facts will not be, and indeed cannot be, denied, but my statement of them is likely to be sharply criticised as involving a most objectionable use of terms. Indeed, I have written these paragraphs with the knowledge that it encounters one of the most vigorous and incisive criticisms to be found in economic literature on innovations of terminology, a criticism as directly applicable to the present instance as though it had been inspired by it. I [351] t •■■■■<&■ i 28 Annai^ of the American Academy. refer to Bohm-Bawerk 's discussion of definitions of capital, and particularly to his criticism of the use of the term to include the person of the laborer. As the subject of terminology is sure to come up sooner or later and to trouble us until disposed of, it may be well to tackle it at once. But before quoting the criticism I have mentioned I will say that I desire to innovate as little as possible. I shall not at any time wantonly use words in a new sense. But for reasons which I hope later to make clear I desire to emphasize a neglected identity of character between men and goods. I could afiirm the identity and stop with that, but then my statement would be discounted and the identity would dwindle to a feeble analogy. So I have called them all goods, which says exactly what I mean and is the only adequate means I have for saying it. I shall be thankful for a better word. Now for the criticism. "First of all. if the title is given to all acquisitive instruments it can only be at the cost of refusing it to any narrower group of ac- quisitive instruments which likewise claims it. . . . Even were the question then in other respects an open one, we should on the ground of economy of terms decide against the use of the word capital for the totality of acquisitive instruments. But it is not an open question ; it is already prejudiced by universal usage. . . Capital and labor, capitalism and socialism, interest on capital and wages of labor, are certainly not harmless synonyms ; they express the strongest conceivable social and economical contrasts. "Now what would be the result if people began all at once to call labor capital? In the most favorable circumstances it would be an innovation in terminology with little to recommend it. If all the world were to adapt iself to the innovation, and were to do so in full consciousness that it was an innovation in terminology and nothing more, it would remain perfectly clear that in putting under one common name the real differences that separate labor from what has hitherto been called capital, these differences are not in the least reconciled. As before, everybody would notice these differences, and work without bias at the social problems to which they give rise. Economic theory would not then suffer any material injury beyond the inconvenience of having no name for the chief object of such inquiries ; for of course from the moment that labor [352] WeaIvTh and Welfare. 29 is reckoned capital we must cease to give the name of capital to its social opposite. ♦•This, I say, might be the result under the most favorable cir- cumstances ; unfortunately such a result is most unlikely. It is much more probable that the blending of the names would bring confusion into the matter. . . . How could one resist the tempt- ing opportunity which the new meaning of the word capital would offer? Between capital and labor as these words were used formerly, there was discord, contrast, conflict. Now one single happy word unites all contrasts ; what we thought opposites are really homo- geneous ; labor is capital ; wage and interest are at bottom one. ' ' Then follow illustrations from economic literature of the mischief wrought by such innovations. I have no desire to disparage the considerations here advanced. They must have impressed the mind of every one who has struggled with the vagaries of quasi-economics or who has even carefully revised his own words. The argument would be as conclusive as it is brilliant were its premises sound. But among these premises is an unex- pressed assumption which weakens if it does not vitiate the conclusion. The critic assumes as conditions of a sound terminology («) that the conception adopted must be logically unassailable, (d) that we must economize terms, {c) that the conception must be ** scientifically important," and {d) that it should square with previous usage so far as possible. All this will be admitted. But he tacitly assumes further that the conception adopted should be single and rigid in all uses save as limited by qualifying adjectives. This probably seemed too obvious to require mention. Now, if this delightful simplicity could be had just as well as not its desirability might indeed be conceded. But when goods can not be had for the taking we may sometimes hesitate to purchase even the most desirable. Unfortunately economics cannot have such a one-meaning terminology without accepting some disagreeable alterna- tives. It all comes back to this, that there are not enough words to go round. If it were botany or physics we could [353] 1. .^1 -t^r ^^^^ ^^' -p^',"-'^^.;^. '^, L.A,.-.,.=j». iK|".» adiSi?J 30 Annals of the American Academy. Wealth and Welfare. 31 manufacture as many terms as we needed and ask no word to do double service. But in economics by common consent and almost immutable tradition we cannot. We must use such terms as are furnished by popular speech. It is char- acteristic of popular speech that it makes words do multiple duty, marking the transition from one meaning to another by the connection in which it is used. Even for popular purposes there are not enough words to go round, though only the more prominent distinctions are noted. For scientific purposes the deficiency is far greater. This difficulty becomes the more apparent when we note the true nature of classifications in a science like economics. The phenomena must be classified not once, but separately for each line of inquiry. Such a distinction as that between final and mediate goods can not profitably be the same for all inquiries. From the standpoint of enjoyment it is one thing, from that of distribution another and from that of the exchanger or the money-lender still another. Yet the bulk of the goods in either class, say that of mediate goods, will be the same in all these classifications. So far as popular speech deals with such distinctions it will invariably apply one name to these goods in the different connections, trusting to circumstances to interpret it and putting up with the inevitable ambiguities. The ideal thing for economics would be to have a different word for the class in each connection, a word which should indicate both the class and the connection in which it is considered. But so long as we have to take our cue from popular speech we must get along with less than the ideal thing, with a single word, capital. How shall we use it? We have a number of alternatives. First, we may use it vaguely as it is used in popular speech, neither indicating nor perhaps perceiving the ambiguity involved. This has been common enough in the writings of economists, even of those who have devoted long discussions to its meaning. [354] Second, we may use the single term with distinguishing adjectives to mark its different meanings, as acquisitive capital, productive capital, loan capital, etc. This is a common expedient and effectively prevents misunderstand- ing, or would do so if the qualifiers were well chosen and used with consistency, which is not always the case. But the same considerations which forbid the coining of words for economic purposes militates heavily against this cum- bersome terminology, namely, the demand of an amateur and untechnical public for a facile and attractive style. The adjectives load the exposition and are soon dropped or if retained it is with doubtful advantage. Third, we may use the word in the single sense that suits our special purpose and leave the rest to shift for them- selves. This is approximately Bohm-Bawerk's conclusion. After discussing eleven different conceptions of capital to be found in as many different authors he decides in favor of one of them as the most useful. It is noteworthy that this is the one which precisely coincides with his own highly specialized inquiry into the subject of interest. It is a con- ception which would be entirely unsuited to the discussion of production which most would regard as the more funda- mental economic relation. This he recognizes by using the term productive capital, which he classes as a species under the genus. Whatever may be the relation of productive to acquisitive capital it is not that of species to genus. It is true that it is a smaller class and wholly included in the other, but this is an accident of no logical importance. Aside from this accident the conception, productive capital, is every way the more fundamental of the two. But criticism must be lenient where the choice lies between evils, which is certainly the case here. There is another alternative which is at least worth considering. It is merely to do consciously what popular speech does unconsciously, namely, to use the word in different senses in different connections with all reasonable precautions to [355] %r *1 ■li -5 ! i i^Ksr % ^~i7^= 32 ANNAI.S OF THE AMERICAN ACADEMY. make the meaning clear in each connection and the transi- tions plain. There is no infallibility in such a procedure, but it is convenient and likely to prove quite as accurate in practice as the more cumbersome expedients we have con- sidered. It is a mistake to assume that accuracy inheres in the pre-definition of terms. It is far more a matter of skillful combination with a view to manipulating those associations which words acquire quite without the writer's or lexicog- rapher's consent. If we are definite and conscious in this elastic use of terms they may safely be made even more elastic than in popular speech. In other words, they may be made evenly and symmetrically elastic instead of fortui- tously so. I hesitate to pronounce with confidence as to the merits of an elastically simple as contrasted with a rigidly com- plex terminology. Temperament and literary instincts wnll affect a writer's judgment on such questions. For my own part I hesitate to cumber all allusions to familiar con- ceptions by the introduction of polysyllabic adjectives or to talk much about the "totality of acquisitive instruments. " Nor can I believe that conceptions with such names, if frequently referred to, are "already sufficiently provided for. ' ' I would rather make it as clear as I can by such literary tact as I possess that when I am discussing produc- tion I use the word in one sense and in another connection in another sense and run the risk of being misunderstood. Perhaps it is better after all to be a little misunderstood than to deter the reader by a forbidding technicality. Frankly, however, I do not expect to be seriously misunder- stood. It has seemed to me feasible to indicate an impor- tant identity of character between men and goods as objects of enjoyment by applying the term goods to both. I think my meaning will be clear to all. Nor do I believe any false inferences as regards social problems are likely to result. In any case there is a limit to a writer's responsibility for the heedless use which may be made of his words. That [356] i"* ^fKa:^mT^T^' 'm!f>tr-^'>'V^9m^T''f^f^^'^^fW^^^'*^9*^- Weai^th and Welfare. 33 this enlarged meaning of the word goods should become general or leave permanent associations with the word is neither probable nor desirable. It will serve its temporary purpose and disappear. It remains to be seen whether reasonable care and ingenuity cannot make of our limited terminology a more adaptable and efficient instrument than it has so far been. This particular innovation is a minor matter. Chapter III, IMPORTANT ECONOMIC CONCEPTIONS. The cases are fortunately few in which it will be neces- sary to use words in several senses or in a sense widely different from that which they have in popular speech. But whether used in a new sense or an old sense, in one sense or many senses, there is equal need of definiteness and con- sciousness of our own processes. There is all possible difference between systematic elasticity, and indefiniteness and vagueness. In addition to the important distinction between object and subject, considered in the preceding chapter, a number of important conceptions require analysis before we can safely proceed with our discussion. The group of words, happiness, pleasure, enjoyment, etc., have not been more fortunate than wealth at the hands of careful writers. We saw that philanthropy and class con- flict have had a hand in shaping the definition of wealth. Philosophical controversy has had a hand in defining hap- piness, which is incomparably worse. The first gives us only the tangle of accident ; the second gives us the tangle of planful ingenuity. Is happiness one thing or more than one? Do happiness and pleasure stand for distinct and inconvertible experi- ences, or are they but species under a true genus? Is hap- piness attainable as the result of conscious search, or is it incidental to the pursuit of something else? Into the dis- cussion of these questions we cannot now enter with profit. It is reasonable to hope that our inquiry into the nature of the satisfactions which men derive from their contact with •fa •I 't?'-'tir9;-^M'f'.''*! 34 Annals of the American Academy. Wealth and Welfare. 35 persons and things will throw some light upon these ques- tions, bul: we will not prejudice our inquiry by needless assumptions. For the present all we need to decide is which of these terms we are going to employ and in what sense. The terms happiness and pleasure have become relatively specialized and contrasted with each other. Happiness suggests a relatively permanent state of mind and pleasure a temporary and superficial experience. The one is associ- ated with character and virtue, the other with circumstance and indulgence. The familiar definition of happiness in treatises on ethics as "pleasure resulting from right action" gives technical sharpness to this popular distinction. Whatever may be the validity of this distinction, it plainly is not so fundamental as to require us to recognize it at the outset. Underneath the specific difference there is still a generic unity which is artificially obscured by the popular emphasis upon prominent characteristics. When a man enjoys actions and experiences which most men associate with discomfort, his enjoyment is naturally attributed to a predisposing character on his part. His enjoyment is attributable to himself. But if he enjoys what other men enjoy it does not seem peculiar. Attention is directed to the circumstances which are familiar to all as fugitive condi- tions of enjoyment. Such enjoyment is attributable to cir- cumstances. Of course both explanations ignore that which is common to both and so unemphasized by contrast. No amount of susceptibility in itself creates happiness. Men do not enjoy susceptibility, they enjoy by means of it. Equally, no amount of favoring circumstance can produce enjoyment without some degree of favoring susceptibility. Character enjoyment and circumstance enjoyment are alike dependent on two factors, character and circumstance, which though differing widely in kind and amount, must invari- ably co-operate. This co-operation of character and cir- cumstance, susceptibility and environment, subjective and objective, is fundamental and generic, is precisely the rela- tion we are to consider in the broadest sense. The differ- ences of kind and amount are specific and subordinate. That they may be and often are of the profoundest practical import, I by no means deny and in all relevant connections am eager to affirm, but they are not basal to our inquiry. What is the generic character for which we seek a name ? The one fact which is common to all these experiences is that thej' are experie^ices which an individual^ knowing their character^ would undergo for their own sake. Such a cate- gory would exclude many wholesome experiences, which though conducive to ultimate enjoyment, are not in them- selves enjoyable; it would also include many experiences which are ruinous in their consequences but enjoyable in themselves. The criterion applies to the experience itself, not to some other which precedes or follows it. It applies equally to all agreeable experiences, no matter how concen- trated or diffused. The terms happiness and pleasure do not ordinarily designate any such inclusive category. They are popular names for species under the genus. We cannot profitably use them, therefore, until we come to discuss these specific differences. The term enjoyment, on the other hand, has acquired no such limiting associations, but is comprehen- sive in its suggestions and fitted to designate the aggregate of the experiences we are to study. I shall continue to use it in this sense as I have hitherto done. But this use has one great disadvantage. Enjoyment has no correlative term to express its opposite. We have hap- piness and misery, pleasure and pain, comfort and discom- fort, but no such correlative for enjoyment. Whenever we have no occasion to emphasize this distinction the word may very well stand for both. The term enjoyment would there- fore be applied to all agreeable and disagreeable experiences taken together, while all objects would be called enjoyable which in any way affect enjoyment. But the moment we I A 36 Annals of the American Academy. wish to distinguish between agreeable and disagreeable ex- periences we are embarrassed. I have already expressed my aversion for such clumsy phrases as positive enjoyment and negative enjoyment, whose scientific advantages are more than counterbalanced by their literary defects. Of the various correlatives available for this purpose pleasure and pain seem least objectionable. It will be understood therefore that when used as correlatives pleasure and pain are inclusive terms referring respectively to agreeable and disagreeable experiences in general and with no reference to differences between high and low, sensual and spiritual, character and circumstance. The word consumption has had a most unfortunate experi- ence in economic literature. At least three meanings can be traced, with the usual variations and blendings. It is an open question whether the term has not become radically and incorrigibly misleading, not so much because of its different meanings as because of its inherent unsuitableness for them. Its primary and irrepressible suggestion is that goods are used up. The word was selected at a time when attention was concentrated on goods of which this was con- spicuously true. These goods still have undue prominence in the minds of economists. Of course Walker and others have called attention to the fact that goods are not destroyed by use to anything like an equal extent, some not at all, to which may be added that some goods are actually preserved by using and perish by disuse. But still the incident of the process is more prominent than its essence — thanks to this same ill-chosen word. Sometimes the essence is for- gotten altogether, as in the recent treatise of Nicholson. ' ' On the other hand, sometimes the work of consmnption is per- formed by nature altogether against the wishes of the possessor of the commodity. Thus breakwaters, embankments and docks are wasted by the powers of wind and water ; buildings crumble away under atmospheric influences; useful plants and animals are destroyed by living plagues; whilst in addition to the accumulated effects of Weai^th and Welfare. 37 slowly-working causes, we have occasional catastrophes through hur- ricanes, floods and earthquakes." And this is not the worst. This conception of consumption is at least definite, if not wholly justified, by the etymology of the word. It means destruction, nothing more nor less, and might be dismissed with no other commentary than that the word, destruction, would have been a better name for it. But this same writer mixes this conception inextricably with the other which economists have been striving to asso- ciate with the unfortunate term, namely enjoyment or use, thus sanctioning the very confusion which it is so impor- tant to avoid. We have small reason to wonder that popular conceptions of economic relations are vague. The deterioration of goods, either through use, accident or causes inherent in their nature, is a matter of impor- tance in economics as in practical affairs, and one which can not be ignored in a consideration of enjoyment. But to describe this process the word deterioration is as unambig- uous as words are apt to be. For that specific kind of deterioration which is incident to use the word consumption is admirably adapted. The deriving of satisfactions from goods is a perfectly distinct process, bearing only a for- tuitous relation to the foregoing. For this process, too, we have a number of terms — use, enjoyment, utilization — none of them ideal, but all of them fairly available. But fate has willed that this process should be known as consumption in all recent discussions. It is not without hesitation that I decide to try to stem this current of vicious tendency, but if such an effort is ever worth while it is so here. All prin- ciples of terminology demand the change. We are dealing with distinct conceptions which need names, and usage, while piling up words on one of them, leaves the other with no distinctive designation. The use of the word consump- tion to indicate the enjoyment of goods by processes often involving no consumption at all, is in defiance of an etymology that is visible on the surface and an extensive i&^-'%#i»*'fe94^^5 •»'#- - - i*^*'^^jg|^^F^^»;i^,''e%^ ^.X^i^^^ ^r. ■^'»^«.%.-'^:t-^.1'^^Sir^S^ -.A \ t_„ . ^--s ^.Aj>-^i ■ ^ffg^jai^jcr'siffsr:' 38 Annai^ of thk American Academy. Wealth and Welfare. 39 counter usage with its powerful current of suggestion. Even within the technical field where this incongruous meaning has grown up, the original and incompatible mean- ing has persisted with most mischievous results. So I will venture to excuse the term from its new duties and confine it to its original use. Except when quoted or in references to quotations from other authors, I will use the word only to indicate the destruction of goods incident to their use. This is not necessarily all the destruction which is simul- taneous with use, since nature destroys on her own account, a destruction for which use is not responsible. Nor does it necessarily involve a net increase of destruction, for con- sumption may displace a destruction which would be more serious than itself, or finally there may be no effect, destruc- tive or preserv^ative, in connection with use, in which case consumption is nil. But it is only to this incident of use that the word refers, a distinctly objective phenomenon as contrasted with enjoyment, which is a subjective phenome- non. The generic term for these unfavorable changes in goods is deterioration, of which consumption and destruc- tion are species, the one incident to use and the other inde- pendent of it. The word use is an excellent example of that elasticity of meaning which we have noticed as the characteristic of popular speech and which in this case at least has proved safe and serviceable in scientific discussion. In such expressions as : What is the use of doing that ? the use of silk is increasing; the muscles are developed by use, the variety and the definiteness of meaning are both apparent. There seems to be no occasion to protest against this free use of the term, but it is desirable to notice the fundamental meaning of the word and its relation to other conceptions which we have considered. All economic processes are reducible to two, getting good out of things, and putting good into things. The first and more fundamental process is use, the second and subsidiary one is production. The good which men are thus busy in getting out and putting into things is usefulness or the power to further our enjoyment, and things which have this good, artificially or naturally, are goods. These goods are of two kinds, final and mediate, the former yielding up their usefulness in the form of enjoyment, the latter passing it on into another good. The former goods are enjoyable, the latter are not, but all are useful. Usefulness is there- fore the capacity to produce enjoyment, directly or indi- rectly; enjoyableness the power to produce it directly. Enjoyableness is therefore a variety of usefulness, the final form into which it passes as the result of its many transfor- mations. Thus we enjoy pictures, but we use paint. The latter does not assume an attractive form which directly contributes to our enjoyment till the painter has used it and produced a picture. The laws of use are therefore closely analogous to the laws of enjoyment, the same laws in fact in wider application. It will be noted that while use is entirely distinct from production in the case of final goods, it is apparently iden- tical with it in the case of mediate goods or capital. We can not use such goods without producing goods, since by hypothesis that is the only thing they are good for. But after all, the identity of the two is merely apparent. When we use flour we produce, but we do not produce flour; we produce bread. Logically and in their bearing upon a par- ticular good the two processes are fundamentally opposed. To pour wine out of a bottle and into a glass is a single process, but for all that there is a difference between pour- ing out and pouring in. While therefore use is intimately associated with production, it is never to be confounded with it. It is one aspect of a process which in its other aspect is either production or enjoyment according to the nature of the good. I have so far avoided the term utility, which is generally regarded as the more scientific synonym for usefulness. So s. # j '4 » ^>*Ms8§S^^^e4i^-^.^i«s^^(,M4*^#^%j I- ? 40 Annals of the American Academy. WEAI.TH AND WEI«FARE. 41 » 4 far the two terms have not been differentiated, because the two conceptions toward which they severally gravitate have not been clearly distinguished. But it is plain that there are two conceptions and that the word utility, which has been applied to both, has been used in a double sense. The first of these is power to further enjoyment, which I have designated as usefulness. The second is apparent or anti- cipated power to further enjoyment, which may be con- veniently called utility. So far as etymology goes this distinction is an arbitrary one, but it is plainly foreshad- owed by recent discussion. In all discussions of value and in the definition of value as marginal utility it is this anti- cipation or estimate of enjoyment which is considered. The distinction is important because anticipation not only differs from realization but it differs from it pretty regularly and in accordance with principles which may be formu- lated, at least in part. In certain connections, however, this approximate parallelism between the two makes the distinction unimportant. When we consider the relation of utility to any other phenomenon it must be sharply dis- tinguished from usefulness. But if we consider the relation of one kind of utility to another, it makes no difference whether we consider actualities or anticipations. What is true of the one will be true of the other, with slight differ- ences of degree. Wherever relations can be discussed equally well as anticipated or realized it will be convenient to use the term utility without emphasis upon the special meaning here defined. Although standing for the less fun- damental of the two conceptions it is the more familiar of the two terms and can be safely used in the more represen- tative sense. Chapter IV. ECONOMICS AND EVOI.UTION. In considering the nature and extent of economic juris- diction we have so far confined our attention to internal problems. We now turn to the problem of foreign relations. These present somewhat perplexing examples of dependence and independence, joint and rival jurisdiction. The most important of these inquiries is that of the relation of eco- nomics to evolution. Economic problems are problems of enjoyment. We have seen that this is the lodestone of all economic impulse, whether recognized or unrecognized, visible or concealed. The problem before us is therefore that of the relation of enjoyment to evolution. The economist has seldom troubled himself with such an inquiry, has often indeed been conspicuously averse to doing so. And strictly speaking, it is hardly a part of eco- nomics. But if he cares more to come to correct conclusions than to be exclusively economic such an inquiry will be profitable. It concerns the main premise of the science and one which has been the subject of persistent fallacies. The study of organic evolution has thrown much light upon the origin, nature and limitations of the impulse to enjoyment, and in assuming it as the starting-point of economic inquiry it is well to know what we are assuming. In revising the premises of our science we have much to gain by a careful study of the laws of evolution, the process to which all the phenomena with which we deal owe their existence. Im- pulses and energies must be understood in their largest relations if they are to be made the basis of sound conclu- sions. This is a very different thing from merely translat- ing economics into the language of biology under the plea of making it an evolutionary science. One of the most persistent obstacles to an understanding of this relation is the assumption that enjoyment (happi- ness) is the purpose of evolution, or in older phrase, the i ^zJWS^m'^ ^'sr^i^'^^^ ^^^x^'^/iT^^*^^-^^ ^^■^^•'i'f^-^'Wi^ ■4j5**„>.— > .7 t.«r.,.f/».-»™»fc*-i ,-4^-^.j^'A?^ i %., 42 Annai^ of the American Academy. WEAIvTH and WEI.FARE. 43 purpose of nature or of creation. The assumption that nature goes about her work knowingly and has an eye to the satisfaction to be gotten out of her work is so instinc- tive and universal that it has governed the development of language so that we can not speak of nature without seem- ing to subscribe to the theory. Such an assumption would be profoundly significant if it were not the obvious result of our limitations rather than of our insight. We naturally explain the unfamiliar by the familiar, the actions of others by our own, the activities of nature by the activities of men. The echo is supposed to be somebody speaking; actions are regarded as malign which would have been malign had we committed them. The process is valid enough, but with the meagre data of individual experience, its conclusions are often false. There are few better tests of culture than the ability to escape from the provincialism of individual experience. In accord with this tendency the savage peoples his little world with ghostly agents; Ulysses, baffled by storms, attributes the hindrance to the anger of Neptune, and the philosopher, noticing adaptations in nature with little attention to the changes that produce them, reverts to the same ready explanation of personal purpose. In all these explanations we can discern the rea- sonings of men too absorbed in their own activities and dis- proportionately conscious of the causes which emanate from their own minds. By a slow but wholesome process, exceedingly wholesome in its reaction on human conduct, nature is exonerated from the motives thus attributed to her specific acts. Storms become impersonal and men build breakwaters instead of altars to Neptune. Disease is attributed to bacteria instead of demons and inoculation takes the place of incantation. The attribution of purpose retreats from the specific to the general. It is there that we encounter it as the assumption that the purpose of evolution is enjoyment, that this is the goal toward which the whole movement has from the first been and still is intentionally directed. I am far from asserting that this assumption is false, but it is certainly premature. We know all too little of the direction of evolution in its various stages and are still too ignorant of what it has accomplished in the way of conscious happiness to warrant so sweeping a conclusion. The most that we can confidently assert is that force is not in equilib- rium, that change is constant, and that for a long time back this change has been in the direction of increasing com- plexity of organic life; that finally, pleasure and pain are familiar experiences to higher organisms and bear to each other an uncertain proportion, whether favorable or unfav- orable, constant or changing in the aggregate we can not say. Avoiding, therefore, any such dangerous working hypothesis as this, we have simply to observe the circum- stances under which enjoyment appears and the r61e which it plays in the evolution of organic life. Why has life developed the power of feeling pleasure and pain ? What function do these experiences perform? The general law of organic evolution is familiar. There is reproduction in geometric ratio, (quite inevitably) over- crowding, struggle for existence and natural selection or survival of the fittest. The result is an increasing adapta- tion of the organism to its environment. If the environ- ment itself were fixed the adaptation would become complete and the species would have an absolute hold on life. But as the environment itself is subject to change, and as the rate and direction of the change in the two cases may not be the same, the evolving organism may run a losing race and eventually be ruled off the field. How is this process affected by the susceptibility to pleasure and pain ? An organism that knows nothing of evolution and is oblivious of remoter consequences will do its best to secure pleasure and avoid pain. But it does not follow that because the organism seeks enjoyment nature will co-operate to that f ¥ 3L I ft t:i^ff-y$m!^Km^.si^ ^fi^S 44 Annai^ op thb American Academy. > si m r i •^i end. Au individual may conceivably enjoy things which are detrimental to him, in which case nature may mark him for extinction instead of furthering his desires. Pleasures are not necessarily profitable experiences and any amount of divergence is possible between the desires of an organism and the necessities of its existence. Yet in the long run pleasures and pains tend to identify themselves with profitable and unprofitable experiences, respectively, or rather, there is a tendency for those experi- ences, and only those experiences which are favorable to existence to become pleasurable. If we introduce into a sheep pasture a plant which is injurious to sheep and dif- ferent from any with which the sheep are familiar, there is likely to be at first a difference of taste regarding it on the part of the sheep. Some will like it and some will not. Eventually, as the result, it may be, of a heavy mortality among the sheep, all will come to dislike and avoid the noxious plant, not so much because of any observation of its consequences as because the plant will have sorted the sheep and eliminated those with unfortunate predilections. Thus conduct unfavorable to life becomes associated with disagreeableness or pain. In the same manner experiences favorable to life become associated with pleasure, not because there is any necessary or predetermined relation of this kind, but because only those species can permanently exist whose members establish such a relation. This seems at first sight to point to the conclusion already referred to that enjoyment is the end of evolution, but such a conclusion is subject to serious qualifications. Aside from the fact that evolution encourages pleasure apparently as a means rather than as an end, there is the farther and more serious fact that pain is developed and used in precisely the same way. The two seem to serve a similar purpose and to be employed by nature in no fixed proportion. Whether she rewards the necessary act or punishes its neglect, it is likely to be performed in either case if the connection is Wealth and Welfare. 45 perceived and the incentive sufficient. Doubtless the one line of incentive is better adapted to certain cases than the other, but we can discern no fixed necessity calling for an increased proportion of pleasure as evolution proceeds. In the second place, evolution does not assure increasing adjustment, only a constant tendency toward it on the part of the organism. Lesson after lesson may be learned and the proper adjustment established between profit and pleas- ure, and still the lessons to be learned may be more numerous and perplexing than before. There may be more perilous pleasures and more ambiguous pains than at an earlier period, all because the environment to which the species is trying to adapt itself, will not stay fixed, but goes on changing under the pressure of forces which have no regard for these adaptations. Finally, changes in the environment may make previous adjustments into misadjustments and thus give the lie to their associated pleasures and pains. A line of action which has long been profitable and so has become uniformly pleasurable by selection, may become by a change of circum- stances unprofitable and dangerous, while still for a long time its pleasurableness persists. This is peculiarly true of the human species in its relatively recent social evolution. Countless centuries of organic evolution have established instincts and pleasures useful in a pre-social state, but inimical to associate life. The most poignant of our miseries are connected with this painful undoing of nature's amaz- ingly perfect work. These social requirements are but an extreme example of what is continually taking place, a change in environment requiring new or even contrary adjustments. If such a change is more rapid than the adaptive changes in the organism, the adjustment between pleasure and pain on the one hand and wholesomeness on the other, becomes less perfect, and for a time we have retrogression, a decrease in enjoyment and a lower general vitality in the species. Periods of retrogressive evolution t '■ , ,*■' "•WQfls^sSsaiSSRSS^Wi^v^^SBi.-i^iiiig ll^.:^f^>iV^^ 46 Annals of thk Amkrican Acadkmy. Wealth and Welfare. 47 or decreasing adaptation seem to be unfavorable to enjoy- ment and the same is apparently true of all periods of exten- sive readjustment. In periods of relative quiescence the species seems to enjoy with less discount the fruits of hard- won adaptation, but even here the good of pain is not absent nor the pleasure of life unmixed. We can not assume that there is any force outside the individual which tends irresistibly to secure a preponderance of pleasures over pains in his experience. We have now to consider what opportunity is granted to the individual by this all-enveloping process to work out his own enjoyment. For the individual knows nothing of evolution and its ends, as evolution knows nothing of him and his. He prefers the enjoyable as uniformly as nature prefers the livable. That his preference must be subordi- nate to hers is plain, for if he chooses the inadmissible he will not live to do much choosing. Nature seems not to have created man with any intention of making him happy or making him miserable, but those whose inclinations and aversions are such as to impel them along the straight and narrow path that leads to life, these persist and perpetuate their type and their inclinations. So far as the foregoing considerations have to do with the problem of survival they are apart from the problem of economics which is concerned with enjoyment rather than with life. To this problem we must now more definitely turn. What bearing has this subordination of enjoyment to vital interests upon our study of the laws of enjoy- ment? In the first place this general subordination of enjoyment to vital interests is in itself the fundamental law of enjoy- ment, one which limits all others. It is thus the main premise of our science. Every tendency to pleasure is sure sooner or later to encounter the inexorable requirements of life and to suffer subordination or annihilation as a result. This inevitable encounter is of interest alike to the study of enjoyment and to the study of life. We have not com- pleted the life history of an enjoyment until we have fol- lowed it to this critical point and discovered what becomes of it. To study subordinate phenomena and ignore their subordination is misleading in both theory and practice. We lose sight of the co-ordinating principle and open the way to all manner of baseless assumptions. In the present connection we also lend countenance to mischievous fallacies in practice. The notion that all enjoyments are matters of taste and that one man's taste is as valid as another's, while not without a certain limited justification, is trouble- somely prominent in popular thought. But what has eco- nomics to say against such a notion if it ignores the ultimate subordination of enjoyment to vital interests, that is, its functional character in the evolution of the species? We need not be disturbed by the temporary moral consequences of scientific inquiry, but we may well have a concern for the moral consequences of unscientific inquiry. This is our main premise: Enjoyment is the servant of life. But is this serviceable pleasure the only enjoyment to which man may attain? Such an assumption would poorly account for the phenomena of life as we now see it. In spite of the inexorableness of nature's processes, there is in them much of alternative, much of elasticity. Some things man must do or forbear doing on pain of death, but there are many more which he may do or not as he likes. Eating is a necessity to which man is impelled somewhat by the promise of pleasure, more by the threat of pain. But gas- tronomy is not a necessity. It is man's deliberate effort to enhance the feeble pleasure of eating. Nature looks on indifferent at man's manipulation of his surplus resources, knowing full well that whether he succeed much or little, suflBcient incentives will remain for the accomplishment of her necessary purpose. Man is equally concerned to lessen the pain which constantly attends upon nature's require- ments. The numberless pitfalls in man's primitive yfe.#£.l%A*{««^fe ^m^ ,S. fe.»>r'^ '^i#^!*i*>J 48 Annals op the American Academy. ■!^ environment are avoided only by the admonitions of nature, which are more or less painful in their working. Man undertakes extensive modifications, which by removing the pitfalls make the admonitions unnecessary. Thus all the way from the growing of seedless grapes and thornless roses to the blasting of Hell-Gate the pain-destroying pro- cess goes on, nature not forbidding till by an unlucky ven- ture some pain is removed which guards an interest or some pleasure devised which betrays him whom it tempts. Then, again, remorseless nature intervenes with her Draconian penalty. Thus eating is required, gastronomy permitted, gluttony forbidden. Man is thus permitted to achieve for himself a happiness to which the process of evolution is indifferent and which it does not assure. He exploits the neutral territory, not without danger, for to trespass beyond its uncertain bound- aries is death. It remains to note that this neutral territory is perhaps an enlarging one. As man acquires power over nature and masters her secrets he finds new ways of meet- ing her requirements with less of risk and pain. More of marginal resource, more time and strength, are thus avail- able for his chosen purpose. The requirement to eat is as imperative as ever, but a requirement which once took all his time and strength now takes but a small part of it. The rest is free for activities before impossible. Doubtless these activities tend to become essential in turn, if not for physi- ological, at least for social reasons which are not less imper- ative for the perpetuation of the individual living under social conditions, but this takes time, and such pleasures remain often for a long time functionless and self -justifying. Dangerous pleasures, too, are handled with more skill in the light of greater knowledge. Gastronomy has greater possibilities than before without lapsing into gluttony. The range of territory which may be exploited in the interest of enjoyment is thus extended. Though it is constantly encroached upon by the growing requirements of life, it is ^: WBAI.TH AND WKI:\Tnd has but a commonplace opportunity. It s a r .n L^rrience to assume that the first morsels of rrdfnSSer^ave an incalculable u.Uty to a person who never got -hole-mely hungry m hj W- ^■^''rirs tniiftrindte to wholesome and deter T Z^Z^^T^^^^^^^^- ^« -'^^^ ''^- ''-'■ .' rshavTbecoie obsolete or even reversed. There are ciations have become o forbidden pleasures, and ^^^ntry rutrL::CSy Pai-. Th^e more urgent monitory, neutra s self-preservation, are in gen- "I'fSutog those of procreation, are secured by urgent, mciuuiug Tforhidden pleasures and niandatory pleasure- apP^^^^^^^^^^^^^ obligatory pains are in general^^^^ of disturbances in have disaPP^'^'^^'^'^'V^^^^le appearance of new interests, settled adjustments ^-^ ° *^;/PP;3:;'Tssociated with vital Pleasures and ^-^^^^^^/ZilnUt.^^^^^^nyvro&t. interests can -o;b"on^ ous V p^^ ^^^^^^ ^^^ ^ ""^.Td'SCo^fy ngindividuals so as to bring them rr ha^on^y S naU-s requirements. This can be &i ^k^-^r^t-'^^^im. 56 Annals op the American Academy. temporarily accomplished by education, the encouragement or repression of tastes as need may require, but its perma- nent accomplishment must depend, we are constrained to believe, principally upon the efficiency of natural and social selection, a process to which as yet our conscious efforts lend but doubtful assistance. With this process, conscious or unconscious, we are not at present concerned, save in so far as its consideration is inseparable from enjoyment. It is the subject of a distinct study. Neutral pleasures and pains, those not yet drafted into the service of vital interests, or those that have been set free from that service, those indeed which, like eating, are charged with important functions, but have a certain margin of freedom at their disposal, these may be legitimately manipulated in the interest of immediate enjoyment. Of course the enjoyments which economics must consider are not confined to those which vital interests would pronounce legitimate. Prohibited pleasures are feverishly pursued and monitory pains are deadened with opiates, but these manip- ulations are ephemeral. There is not and can not be any permanent tampering with vital interests. These enjoy- ments, whether legitimate or illegitimate, wholesome or unwholesome, are the subject of our present study. Taken in connection with the activities to which they give rise they are the subject of economics. Chapter V. ECONOMICS AND PSYCHOLOGY. The associations connected with the term economics are for the most part objective and concrete, and a proposal to discuss its relations to psychology may suggest a senous innovation. But this innovation is only apparent. Econom- ics has never been a mere study of things like chemistry or physics, but a study of the relation between men and things at first with emphasis upon the latter, but the former have never been ignored. A psychological basis for eco- nomics is altogether indispensable. The only question is whether it shall be a conscious or an unconscious, an accu- rate or an inaccurate one. The relations of economics to psychology may be stated in a few words. It is but an application of the pnnciple which governs all such relations. The sciences are distin- guished, not by the materials they investigate, but by the purpose with which they investigate them. Economics and physics may study the same things, but not with the same purpose. To put it technically, a science is the study of an abstraction, that is, of a particular aspect of phenomena disentangled from all other aspects with which it may be associated. This abstraction once determined, the science may go anywhere and study anything that contributes to its purpose. Thus sociology studies association, psychology studies sensation and enonomics studies enjo^mient. The great majority of the concrete processes studied are the Lme in the three cases, but the sciences are radically dis- tinct The sociologist studies division of labor as affecting the development and perpetuity of social organization. Its [57] .>s.«^iii«S*r-.' 58 Annals of the American Academy. r,0 §3 bearing on happiness is ignored or considered only in its further bearings on association. The economist reverses the order of procedure, formulating all relations from his particular point of view. A similar relation exists between economics and psychology. The latter science, starting with sensations, analyzes psychic processes, the mechanism of feeling and thinking. Of course this is the field in which all enjoyment is located, but enjoyment is not the subject of psychological inquiry. Pleasures and pains are rather con- sidered merely as the constant stimuli inciting to psychic development, a means to psychic ends. Here again eco- nomics, though studying the same phenomena, reverses the relation. It investigates, not the reaction of pleasures and pains upon psychic processes, but the reaction of psychic processes on pleasures and pains. Even ignoring the phy- sical side of economic investigation, the two sciences are wholly distinct despite their intimate association and their constant appeal to each other. The one gives us an analysis of psychic activities and the other an analysis and inventory of enjoyments. But what is needed in this connection is not so much an idea of the relation of economics to psychology in the abstract as of its relation in the concrete, that is, a careful statement of those psychological principles which must be assumed as the premises of economic inquiry. Perhaps we may say that what we need is a sound and adequate eco- nomic psychology. Doubtless it would be profitable to have a complete formulation of psychology as of other sciences with reference to the study of economics. But whatever may be desirable or possible in this connection, no such ambitious attempt is here proposed. It will be sufficient for the purpose of the present inquiry to enumerate some- what systematically some of the more important principles of familiar, perhaps, I may say, popular psychology, princi- ples which are not questioned, but which, as experience proves, are frequently overlooked. Here as elsewhere the [174] Wealth and Welfare. 59 principal task of economics is to note new relations between commonplaces of experience. It is seldom that we discover a novel process, but it is surprising how often sections of our experience are found lodged in separate compartments of the mind to the concealment of the relations between them. If I tax the patience of the reader by enumerating fami lar things, it is only that I may later indicate their unfamiliar sisfnificance. . i*.:^^ The fundamental psychological fact is sensation, resulting from some sort of direct contact with objects, as touch, sieht etc. These sensations have in general the character of pleasures or pains, and as such they are the interpreters of environment and the stimuli which prompt us to adapt ourselves to it. They are the primary or original pleasures and pains from which all others are derived, and no matter what proportions the derived feelings may attain, we never think of them as having quite the same concreteness as these original experiences. We may disparage the pleasures of sense in deference to prevailing sentiment or personal conviction, but we never get over the feeling that they are more real and certain and more definitely ours than their worthier rivals. And this rests on the psychologi^l fact that these primary sensations are more universal and more vivid than secondary or derived sensations. But primary enjoyments once experienced may reappear in a weakened form and in various relations, thus giving rise to secondary enjoyments which, despite their secondary origin and relative faintness, become vastly more important as sources of satisfaction than the primary ones. Simplest of these is memory, the reappearance in weaker fonn of past sensations. Whatever recollection may lose m vividness^ it may gain, perhaps many times over, by repetition, thus becoming an important source of enjoyment. One of the principal objects of economic activity is therefore to stimu- late and develop the memory, and a large class of goods owe their importance to their services in this counecUon. [175] il .1 M& i^ss? ,^%\^-^ 4^ 6o Annai^ of thk American Academy. But memory does not recall past experiences automati- cally and without occasion. A suggestion is necessary to set it going. Something happens like that which happened before and that reminds us, as we say, of other things that happened in the same connection. A part of the original experience being thus reproduced, memory goes on and fills out the whole along the former lines. The recollection of a past experience may thus become the ground for antici- pating a future experience. The sight of an orange not only recalls the pleasure we have had in eating other oranges but it suggests the pleasure we are going to have when we eat this one. Thus we not only re-experience sensations but we pre-experience them, so to speak. This too may happen any number of times, so that in spite of the relative feeble- ness of these pre-experiences their aggregate importance in a given case may far exceed that of the ultimate experience itself. In this sense at least anticipation may be better than realization. The mind thus reaches forward into the future as it reaches backward into the past. In precisely the same way it extends its reach laterally, as it were, quite beyond the original limits of sensation. It learns to read between the lines of the scanty reports brought to it by the senses. Such an inference is involved in the anticipation already men- tioned. The outside of the orange suggests the nature of the inside, which is the thing that excites pleasant anticipa- tions. This process of inference is so natural and universal that we are not always able to separate it from the primary and usually very rudimentary sensations on which it is based. Beginning with simple cases like that just men- tioned we may pass on to cases in which inference is piled upon inference in the utmost complexity. Things thus acquire an enjoyment-character which is entirely unlike and out of all proportion to their original power over the senses. Goods become symbols fraught with vast import, due not to any enjoyableness of their own but to the fact that they [176] Wealth and Welfare. 61 serve as mental stepping-stones to other things. We may get an idea of the scope of suggestion as affecting human enjoyments if we notice its application to human relations. Originally we may assume that persons have a certain enjoyableness based on their concrete character andmdepen- dent of all inferences. They can be made useful m various ways and on the other hand they may become annoying and injurious. According as they amuse and serve us or strike and bite we size up their economic character, their usefulness to us. But observation teaches us to anticipate their action. Instead of waiting till they strike us, we watch to see if they look like striking. Their looks and gestures thus become a new source of comfort and discomfort by reason of the inferential character they thus acquire. A man who never touches us may by such means make us thoroughly uncomfortable for an indefinite time. Having thus learned to notice looks and gestures, and interpreting them of necessity by comparison with our own, we come through inference to another fact of the utmost importance, namely the feelings of others. While we at first became conscious of feelings which are especially directed toward ourselves this is only the startmg-pomt. Sooner or later the various expressions of feelmg become intelligible to us, and we live in a consciousness thronged with the experiences of others. The walls that separate us from our fellows seem, as it were, to grow transparent, and we see what passes beyond them so plainly that at times we forget their very existence. These alien experiences reach us of course, dimmed by transmission and distorted by refraction, but their scope is so vast that their aggregate importance may easily outweigh that of all other feelings direct and indirect. Especially is this true when natural cries and gestures become organized into language, an instrument of precision for the transfer of feelings and thoughts. This generalization of individual experiences by suggestion and inference is aptly designated by the old [177] KS9'-«?'-^- -'"'"' 62 AnnaIvS of thr American Acadkmy. Greek term sympathy or fellow-feeling. Thus on the basis of a few primary feelings suggestion builds the won- derful structure of individual experience, each later addition eclipsing all preceding ones. It is in these later experiences that the developed mind lives and moves and has its being. Even when the pleasures of sense seem prominent they are really valued primarily for the trains of suggestion which they set in motion. The student of these phenomena must not ignore this true perspective. The theory of enjoyment must be more than a theory of eating and other crude pri- mary pleasures. Above all things he must avoid that pro- vincialism of individual taste which is naively expressed in the statement that " a diamond has scarce any value in use.'* In the analysis of these subtle elements of enjoyment and the resulting incentives to action must be sought the princi- pal benefit to be derived from such a study. But the feelings acquired through sympathy are by no means the end of this remarkable evolution. They become in turn the starting-point of a new development. Through the transparent walls which separate mind from mind, we not only look into other people's mental premises, but we perceive they are looking into ours, and that not indifferently but with farther emotions induced by what they see. Sym- pathy, gratitude, admiration, respect, sentiments long asso- ciated with profitable relations and pleasurable to contem- plate, and resentment, suspicion, disapproval, etc., with their opposite character become new and patent factors in deter- mining our enjoyment. These are not simply other people's feelings, but they are feelings specifically focused upon us. It is obvious that these particular feelings generate new feelings in us which become manifest in turn and produce farther reactions and new complications of our own emo- tional environment and so on ad infinitum. It is the purpose of the present chapter to indicate the existence and empha- size the importance of these derived feelings rather than to trace their various forms and enumerate their peculiarities. [178] Wealth and Welfare. 63 An attempt at this fuUer analysis wUl be made later, though it is needless to say that no more than a bare begmnmg is as yet possible. . . As the result of the development of successive faculties we thus find ourselves surrounded by a fourfold environ- ment The first consisting of things is the most concrete, the nearest, the earliest and the least. Next com^ the circle of our own objectified sensations experienced in dupli- cate by the aid of memory and anticipation. Then comes the circle of other people's experiences made visible by sug- gestion and inference. And finally there is the circle of other people's sympathies, or feelings induced m them by their contact with our feelings as revealed by suggestion. These four elements in our environment produce correspond- ing feelings by contact. I do not mean to imply either that these four orders of feeling arise in the order in which I have described them, or that there is any very fiindamental separation between them, least of all that the classification here suggested is the only one, or one suitable for other pur- poses But I think it will hardly be denied that these sources of feeling are realities, or that they may serve a use- ful purpose in guiding our present inquiry . This is all that I assume. Having thus briefly noticed the r61e of suggestion in mul- tiplying and varying our original sensations, we have now to consider certain systematic metamorphoses which facts and feelings undergo under the influence of suggestion. We will again begin with memory, the simplest case. It is a familiar fact that we do not remember accurately. Not only is the second impression less vivid than the first, but it is distinctly different. Some parts of the original experience have fallen out altogether, while others have become exaggerated. It is as though some colors m the ori-inal picture had affected the sensitive plate of memory unduly and others scarcely at all. And as time goes on, along with the general weakening of the picture, there goes [179] i %(i ,j41 1 ^ 64 Annai^ of the American Acabemy. an increase of this process of distortion or retouching as we may better call it, until, despite all sincerity and care, recol- lection often comes to bear but little resemblance to the expe- rience which it purports to reproduce. But a little observation of these caprices of memory shows that there is method in her madness. In the first place the more prominent features of the original experience are longer and better remembered than others. The obliteration of details thus gives them still greater prominence and simplifies the experience. But prominence is a relative term depending quite as much on subjective as on objective conditions. The items that most impress one mind will impress another but slightly. Hence as the process of obliteration, retouching and simplification goes on in different minds it brings about very different results. The simplification thus becomes an assimilation and the stored up residue of our experiences becomes unified and harmonized with our own character. That part of an experience which is at first the principal thing, and later the only thing that we remember, is simply that part to which we are most susceptible. We often won- der that men are so little influenced by experience. The reason is that experience is so much influenced by men. Anticipation, we have seen, is but an inference based on memory. It will of course be affected by these deviations of memory from fact. If we have slowly idealized an expe- rience, that which leads us to anticipate its repetition will in fact suggest not the actual experience, but the idealized experience to our expectant mind. But aside from this inevitable de\dation, anticipation involves new deviations of its own. The thing that recalls the past experience is not quite like anything that was actually connected with it, but has peculiarities of its own. So we shall not expect quite the same experience as we had before, nor yet quite the same as we think we had before, but such a variation of it as com- ports with the changed conditions. Here is a new and liberal element of elasticity in our mental processes. The [180] Wealth and Wei^fare. 65 pressure of temperament again makes itself felt and remodels the yielding material of suggestion pretty much to its mind and each new anticipation becoming in turn a new sugges- tion and the starting-point of a new construction, reality and probability are easily forgotten, and anticipation passes over into unfettered fancy. Here most of all, perhaps, where aU idea of realization is abandoned and imagination becomes an end in itself, do these far-off echoes of experience assume their true importance as a factor in enjoyment. In its more restrained form where it bordersclosely on the concrete it is the guide of the inventor and the scientist, a means to valuable ends, but in its wider range it is such an end in itself, one of the principal objects of human endeavor. What a multi- tude of servants man employs to minister to this supreme pleasure-giving faculty ! It is interesting in passing to note the influence exerted upon human evolution by this metamorphosing process by which all our derived experiences receive the stamp of our individuality. It is clear that the recollection of past expe- riences and inference as to future ones is necessary to enable us to choose between the different alternatives offered to us; but what is the effect of this systematic warping or falsifi- cation of experiences by memory and imagination ? Simply to more completely differentiate them for purposes of choice. As we work over these experiences, sorting out and magni- fying the elements that are in the line of our emotional specialty and eliminating those that are not, they gradually move to one side or the other till choice becomes unhesitat- ing. As idealization thus blackens or whitens the neutral gray of reality, it not only intensifies the differences between experiences, but it intensifies the differences between tem- peraments and so facilitates natural selection as it before facilitated individual choice. The accentuation of choices is the accentuation of character, and upon this, nature's choice of the individual is based. Here is to be found the explanation of the almost universal triumph of the sanguine [181] h W?.jtsf-S;{Sj:4-%.*»f'*«^ s:*S:,a ^ 66 Annals of the American Academy temperament. Whatever may be said for pessimism, nature is irrevocably against it. She does not proceed against the philosophy but against the philosopher, and exterminates the one by exterminating the other. A prudent optimism is as certain to be the dominant philosophy of all time as confident energy is certain to be the condition of sur\^ival for individuals and societies. No matter whether it is true or not, a philosophy cannot live unless it is livable ; and in the last resort what else is the criterion of truth ? Human experience pronounces as true those impressions which prove to be permanently compatible with the necessities of existence. Beyond this we know nothing. It is as impos- sible that a race should be permanently and pre-eminently pessimistic as that it should be permanenUy and pre-emi- nently unhappy. The work of suggestion in the field of sympathy is not more infallible than in that just considered. Our knowl- edge of other people's feelings at the best is derived from inference based on their action and expression, and these are necessarily interpreted by reference to our own habits of action and expression. Comparison of many observations eventually shows us that we have our bias in all these infer- ences, but it is only by inference that we can discover what that bias is. Examples are common enough of the miscon- ception of other people's feelings by a sympathy which is so largely under the control of temperament. Manifestations of pain are attributed by one observer to sensitiveness, which to another suggests cowardice. A sensitive person suffers more from seeing a horse whipped than the horse does from the whipping, while the little girl who shed tears of sympathy when her brother whipped the broomstick which he was astride, suggests the possibilities of sympa- thetic misrepresentation. Here as elsewhere, temperament projects itself upon environment and so derives from that environment pleasures and pains which are fashioned to its own susceptibility. Here again the individual adjusts [182] Wealth and Welfare. 67 himself, not to realities, but to imaginations, and so puts himself and his imaginations continually to the test of liva- bleness. Perhaps the foregoing mention of psychological processes will answer our purpose. It remains for us to consider cer- tain principles which govern the growth of our feelings and which have a far more direct and important bearing on present economic and social problems than anything so far noted. The first may be described metaphorically as the transplanting of emotional interests. It resembles the action of those plants which, putting out runners from an original centre, strike root at a new point. For a time the new plant draws its nourishment from the old, but eventu- ally it becomes independent and self-supporting and the runner dies away. The plant thus lives for itself and for- gets its origin. Something like this is continually happening m our psychological development. It must not be forgotten that psychological development is but a phase of that general development which is governed in all its details by the neces- sities of existence. Whatever new faculties or experiences are permanently acquired in the course of our development must in the long run be useful faculties and experiences. We continually speak of a certain small number of things as * * necessaries, ' ' implying that the great mass of goods which we strive for, and the activities to which they minister, are superfluities serving no other purpose than our delectation. But nature tolerates no such burden of superfluities. That which does not help, hinders and eventually kills. We have an all too-rudimentary notion of the necessities of life under modern conditions. When a person speaks of higher prod- ucts of culture as necessities, it is usually taken as a mere extravagance. But it is a literal truth. There is no per- manent demand of culture which does not become a physi- cal necessity of existence, either for the individual or his posterity Food and clothing may maintain existence for [183] 1/ m hi •^^'^mii'»*^-''^ *$i*-!%»;s»tt». /-«*/' I?' i L.I 68 ANNAI.S OF THE AMERICAN ACADEMY. brief periods and for individuals, but for societies and in the long run they will not. It requires but a superficial obser- vation of society to show that a man's choice of neckties and his manners at table are factors in determining whether or not he shall perpetuate his kind. Bearing in mind this dependence of all progress on the primary vital interests another step will bring us to impor- tant conclusions. It is plain that human progress as seen in the development of civilization, is merely an increasing control of the means of existence. Beginning with the few pri- mary needs man fixes his attention upon the things that immediately interest him and seeks to control them. Even- tually he discovers that other things lie back of these which it is desirable to control. Instead of fighting for a deer the savage learns that he is less likely to go hungry if he fights for the hunting-ground on which the deer is taken. Other conditions again are discovered back of these which he seeks to control for his advantage. Instead of living from hand to mouth he lays by much goods for many years; he takes note of the most remote and indirect forces which can be made to contribute to his ends. Activities are continued for many years, which have so remote a bearing on the ele- mentary needs with which he started, that they seem to be arbitrary and unnecessary. So intricate does this network of activities become that not only the man himself, but even the careful observer loses sight of its controlling purpose. What makes men do all these things ? Necessity, undoubt- edly, in the long run, but that is not the reason which appeals to the individual mind. This objective development of civilization is possible only on condition of a like develop- ment of perception and feeling which follows it step by step. In what does this subjective development consist ? The first and natural answer is that it consists in the development of foresight. If man plans farther ahead it is because he sees farther ahead. If he reaches out to con- trol more forces it is because he perceives more relations. [184] i n Wealth and Welfare. r.f Thus it comes that beyond the circle of enjoyable goods and activities we slowly become aware of other circles of goods and activities which interest us, not because they are enjoyable, but because they are useful. The first group of goods and activities are final, so far as anything outside ourselves can be; the others are mediate. Hence grows up the great distinction between final and mediate goods and activities which plays so large a r61e in economic discussion. The psychic development which we are considering is gene- rally conceived as an enlarged perception of usefulness which is continually extending our interest to another and remoter circle of means. It is generally assumed, however, implicitly if not explicitly, that the division between the useful and the enjoyable is sharp and fixed, and that we have entirely different feelings toward the two. Industrial progress thus appears as an ever-enlarging care and effort for a fixed good, surely a questionable advantage. Whether or not such a progress would be advantageous or possible it is certainly not the kind of progress that we have had. In nothing have we grown any faster than m enjoyments themselves. We do not simply discover new means for securing old pleasures; we discover new pleasures. Where do these new enjoyments come from? Precisely where the first enjoyments came from. That which makes for life eventually becomes enjoyable. If we discover a new and remoter force which can be turned to account, it must eventually also become enjoyable if of permanent advantage. When we see its usefulness we prize it as a means; when we feel its usefulness we prize it as an end. The sentiment of usefulness is nothing but the offshoot of enjoyableness which has not yet struck root. But it is a psychological law as inexorable as gravitation that that which is long the object of our attention and effort eventually becomes the object of our feeling The widening circle of interest is closely fol- lowed by the widening circle of enjoyment. How impossible would be all this vast and labyrinthine development of [185] --v'-'t-^S'^^"^ pv^.'^^^^^ti^^^^sli^^^''*^^'^^'*^ i>l I 1 K 70 Annai^ of the American Academy. activities if men had no pleasure in it all, if they had only the meagre stimulus of primitive satisfactions to impel them to patience and ingenuity ! Of course nobody supposes this to be the case. It is known that civilization has enlarged the circle of enjoyments while it has enlarged the circle of activities. But it is still supposed that the latter has been enlarged much farther and faster than the former. This is a psychological impossibility. Men can carry their activities only a little way beyond the pleasure line and that but feebly and fitfully. No activity is firmly established or approximates to its fullest efl&ciency until it acquires emotional independence and becomes self-justifying and self-remunerating. The reason why the growth of economic activities has been traced so much farther and so much better than the growth of economic impulses is to be found in the tendency so often noted to observe the objective and overlook the subjective. Action is visible and feeling is concealed; the one is tangible and the other intangible. Thus while our analysis of the one is up to date our analysis of the other omits those later additions which have not yet forced themselves into prominence and which are nevertheless indispensable to an understanding of modem activities. No factor in economic life has been more con- stantly or perniciously disregarded than the tendency of economic activities to become self-remunerating. I need but allude to the prevalent theories of capital formation in illustration of my point. Theories which ignore the main- springs of human action are in turn made the basis of schemes of social reconstruction, socialistic and anti-socialistic, which are travesties on economic psychology. The application of this principle to some of the more important economic prob- lems here suggested will be the subject of a later chapter. For the present it is sufficient to note that we learn to like the things with which we busy ourselves profitably. The farmer comes to dote on his cows, the gardener on his garden, the student on his books. The mind, at first busying itself [186] Wealth and Wei^fare. TT / * with these things in the interest of enjoyments elsewhere, eventually comes to transfer its emotional headquarters to the new centre, gradually withdrawing all inter^ts from the old station and grouping them about the new. The student who at first devoted himself to books in order that he might earn his bread at last denies himself bread in order that he may buy books. Now let us suppose that the object of interest is a person. The psychological principle involved is precisely the same, but the nature of the object introduces some interesting and confusing variations. There is the same slow learning to like the same transfer of the emotional headquarters, but the new emotional centre is sentient, having its own inde- pendent interests. This puts us out of all our reckonmgs. Let us see if we can get our bearings. When a man devotes himself fondly to his garden, delighting in each additional touch of perfection that he can give it, his purpose is clearly to please himself, for there is no such thing as pleasing the garden. But a pr«:isety similar devotion to a person we call altruistic, or an effort to please another. The reason is that the person being sen- tient, and thought of as such, his feeling - .the matter of supr;me concern to others. If a man is to enjoy his garden he must cultivate the agreeable plants to uxunance and keep down the disagreeable ones. If he is to enjoy h^s neighbor he must do the same, cultivate that which pleases him and repress that which does not. But in this case he has to deal with a different kind of plants, namely, the feel- ings of the other person. This brings us to what is perhaps the most important application of the principle we h^e been considering. A man's treatment of his neighbor wiU depend upon the relative maturity of the relation between them This relation seems to be at the outset one of interest or profit. He finds that his neighbor can be useful or trouble- some and tries to influence his conduct accordlngl5^ The neiehbor is a means to his enjoyment, but not an object of [187] !j~ ,' i-- fi'""^' 72 Annals of thk American Academy. I enjoyment. His feelings are a force to be reckored with, but not an object of concern otherwise. But the inevitable transfer takes place and the means becomes an end. Atten- tion to the actions and feelings of others, as mere factors contributing to other ends, has at last developed a new sen- sitiveness and made these feelings an immediate condition of enjoyment. The old purpose of our solicitude may be forgotten, and in the enjoyment of the feelings which dis- pose men to serve us we may cease to care to be served. The egoist, who regards other people's feelings as capital, becomes the altruist who regards other people's feelings as final goods. With the growth of our sympathies, that is, our susceptibility to other people's feelings, otu: gardening becomes more and more a problem of growing the right kind of feelings which we may enjoy by suggestion or sym- pathy. It is constantly objected to this explanation of altruism, which recognizes its fundamental dependence upon the laws of enjoyment, that altruistic action is not directed by any conscious purpose of self-enjoyment. Of course not, neither is good gardening. There is no line of action that can be pursued with profit if the energies of the mind are constantly diverted to sordid self-consciousness or morbid self-introspection. The law of all successful effort is that it should be directed outward to an object on which attention is focused and which is conceived as an end. This is no pecu- liarity of altruistic action. As long ago as the days of Sis- mondi it was observed to be the ground of the immense advantage of peasant proprietorship in agriculture. To the hired laborer and the tenant at will the land is an object of interest; to the peasant proprietor it is an object of affection. The attitude of the true gardener is a model of altruism. Our excursion into the field of social psychology may profitably be extended a step farther. We have observed the enormous extension of individual experience through suggestion or sympathy. Not only other people's temporary feelings, but their more permanent inclinations. Their [188] Wealth and Welfare. 73 thoughts and judgments are forced into our consciousness, welcome or unwelcome, to the utter disregard of that psychic privacy which we call our individuaUty. With this openmg of our private premises to the great currents of public traffic our own little individual and independent doings, if there are «uch, dwindle into insignificance. The point now to be noticed is that this overwhelming invasion brings with it an all-mastering control. It is not chaotic, but orderly. If our own few thoughts are lost in the throng, they move with the throng. If the most of our thoughts are other people's thoughts, the few that we originate wiU be like other peo- ple's thoughts. The result of sympathetic suggestion is, therefore, not merely to amplify our experiences, but to assimilate our experiences to the prevailing type. The impulses of the individual, therefore, tend inevitably to be like those of the society to which he belongs, and especially like those of the group or industrial class with which he is more closely identified. If this group control of individual experiences does not enable us to predict with confidence the action of every individual, it enables us to predict with absolute certainty the feelings and actions of the group as a whole, of which he is a representative. In the study, there- fore, of both enjoyments and incentives we have to do with group phenomena far more than with individual phenomena. Individual peculiarities are but the surface play on the current of social life. All this is no secret, and the dominance of class feeling and incentive has usually been tacitly assumed in economic discussion. But here as elsewhere tacit assumption does not seem to be sufficient to insure consistent application. Over- sights are common enough and not without serious conse- quences. Perhaps no single inquiry would be more remun- erative in its contribution to the vexed problems of modem industry than that as to the real scope and influence of the social instincts in the economic field. The tremendous r61e played by the anarchist, the capitalist and the speculator [189] -si 74 Annals of the American Academy. lif with modem equipments has made society nervously appre- hensive as to its dependence on individuals, and has instituted anxious inquiry as to the adequacy of the guarantees which protect society from individual caprice. In the formation and management of capital, the allotment of individual shares in the product of joint industry and the organization of collective enjoyment everywhere the question is raised. No question can be more important, and society must grate- fully recognize any dispassionate statement of the inadequacy of its safeguards and all helpful suggestions with regard to their extension and improvement. But the inevitable ten- dency to over-emphasize the objective and the concrete in all observations and analyses of society is here conspicuously manifest. There is great danger that the real forces of social control should be overlooked or disparaged and that forces should be invoked which are more tangible but less efl&cient and less compatible with the conditions of individual develop- ment. It can hardly be doubted, indeed it is seldom denied, that the development of industry is and should be toward greater co-ordination as well as toward greater socialization or subserviency to the general weal. But there is the pro- foundest difference of opinion as to how that co-ordination should be effected and that subserviency secured. Without anticipating later discussions of particular problems it may suffice to suggest in closing this chapter that the psychic forces are probably more efficient and far-reaching than is usually supposed and that they are destined to play an increasing part in the development of organized industry. The latter part of this inquiry would be equally relevant to a discussion of the relation between economics and sociol- ogy, two sciences which are intimately associated as regards their subject-matter but wholly distinct as regards their object. The discussion in this and the following chapter will suffice incidentally to make that relation plain. [190] Wealth and Welfare. 75 Chapter VI. ECONOMICS and ethics. In contrast with the general unity and consistency of earlier economic thought, the past half century has been a period of protest, discord and reconstruction. The com- placency with which Mill regarded the work of his distin- guished predecessors seems to have been the exception among later economists, whose varied criticisms reflect the popular dissatisfaction with the ''dismal science." The effort at a critical period to reduce Ricardo's abstractions to rules of thumb for practical guidance was a predestined failure, but the result which only demonstrated their abstract- ness seemed to demonstrate their falsity. In the confusion which has followed we may distinguish two main movements or tendencies, the historical and the ethical. The first has been so frequently and thoroughly discussed that we may pass directly to the second which has been less satisfactorily examined. Whatever be the merits of * ' ethical economics ' ' there can be no doubt as to its popularity. There seems to be a gene- ral impression that instead of being a dismal science, ethical economics is a sort of gospel, bringing a message of good will to men. Under the influence of this welcome belief enthusiasm for economics has grown apace. Chairs have been endowed and lecture rooms crowded, not wholly for this reason to be sure, but there has been a marked prefer- ence for the more benevolent aspects of the science. How much the science will ultimately profit by this popularity is hard to say, but for the present it is in unwonted favor. It will be well for us to examine the movement more closely to determine, if possible, first, what the present ethical tendency really means, and second, what the relation of economics to ethics must ultimately be. [191] »,<,-f t'.-4*. *»-^.'i < wi*^ie& !;!#*?= i* , 1, Wejalth and Wklfark. 77 76 Annai^ op the American Academy. L3i It is plain at the outset that the movement has little more than a verbal unity. Ethics is a good word to conjure with, the more so because it so often carries with it little more than a suggestion of good things generally. It is natural, there- fore, that this nebulous term should stand for very different tendencies. In trying to distinguish these tendencies we shall get little help from the direct statements of the writers of this school. The tendencies in question are diffused through their writings rather than formulated, and distinct tendencies are usually unconsciously blended into a seeming unity. As my purpose is to distinguish principles rather than to find who is responsible for them, these paragraphs are written with little reference to individual writers. The most conspicuous form of ethical economics we may perhaps call hortatory economics. It is developed in con- nection with efforts to reform or perfect the industrial order. Starting with some sort of a conception of what order is, the reformer urges that these things ought not so to be. The laborer should receive a larger part of what he pro- duces. The disinherited should have access to the soil; the burden of taxation should be more equitably distributed; monopolies should be restrained or abolished, etc. And these things are to be accomplished, not by the natural working of forces now in operation, but by direct inter\^en- tion under the impulse of an aroused conscience. The whole impulse implies a relative emphasis upon the con- scious and ethical factors in social evolution, the unconscious and egoistic factors being even assumed at times to endanger the social organism and deprave individual character. To arouse the necessary moral activity exhortation and denun- ciation alternate in the reformer's program. Economic analysis occupies but a second place, no matter how elaborate and voluminous its form. I sincerely regret that economists have so often treated the persons referred to with scant respect. The result has not been favorable either to science or to reform. The economic [192] I agitator has his place in the economy of society quite as much as the economic investigator, and he easily surpasses him in generous impulses, if not in general ability and knowledge of practical affairs. But he is not a scientist. On this point all experience is a unit. From the Gracchi to Henry George the economic agitator has made no perma- nent contribution to the science. He has done well when he has borrowed judiciously and avoided misrepresentation and absurdity. Doubtless the same man can be both sci- entist and reformer in a limited way, but he plays the two r61es best who mixes them least and forgets the one when he is playing the other. In the nature of the case this is all but impossible. The two activities are backed by different impulses, and in their fuller development they are essen- tially incompatible. The man who becomes possessed of definite purposes which fill his mind and control his action and engage his sympathies, which persist against all oppo- sition and through all delay and beyond all disappointments, bending all forces to their accomplishment, such a man can not divest himself of these purposes as of a garment and forget what manner of man he was. Men do not do it, too often do not even try. That which dominates their action dominates their thinking. They sort over facts in the interest of their purpose and size them up according to their special serviceableness. Especially welcome or unwelcome discoveries will set them hunting after confirmations and counter-weights, and so rob their investigations of all sym- metry and proportion. Valuable finds will be ignored because they do not ''help along the cause.'' This will be true at the best when the study is of tangible things and realities are stubbornly obtrusive, but in the study of psychic phenomena, where fancy so easily counterfeits reality, a man can usually come to any conclusion he wishes if he only wishes it enough. Only those conclusions have a presumption of truth which are reached without consult- ing our preferences. [193] I.f 78 Annai^ of the American Academy. It -. w ^^^^ Doubtless quite as bad a case can be made out against the scientist from the other standpoint. He is made of no better stuff to start with, and is also a victim of specialization. There is, also, much in his occupation which tends to lessen sympathy between himself and the reformer. It is his ungra- cious task to expose fallacies and destroy illusions, to declare a dozen brilliant schemes impracticable for every modest proposal that he can commend. As the mouthpiece of nature, he seems to those who are trying to stampede society toward progress the most stubborn of all obstructionists. His respect for the ponderous inertia of nature, against which radical and reactionary alike storm in vain, is mistaken for unsympathy and temperamental conservatism. Doubtless these charges have some foundation. Scientists have tem- peraments like the rest of mankind, and are apt to acquiesce somewhat in the r61e which is persistently thrust upon them. While no man who lives in intimacy with nattu-e talks of the good old times, on the one hand, or hopes for a speedy millennium, on the other, it would be strange if the scientist did not at times identify himself with one side or the other under the pressure of persistent attack. But this is a side issue. I am not undertaking to defend or criticise a profession or class, but merely to distinguish between functions. I know that these functions are not thus distinguished in practice, that the differentiation is only approximate and that it can never be complete. But that does not mean that there is no point in the distinction. The indispensable condition of sound inquiry is that the process of observing things should be distinguished from the process of fixing things. The more a man desires a conclusion the less it is worth when he gets it. Reform and propaganda are not science, no matter how valuable they may be. All this has been said many times before, but as often forgotten, which is my reason for saying it again. I have a suspicion that the new popularity of economics is due iii no small degree to the breaking down of this [194! WEAI.TH AND WELFARE. 79 distinction. Pseudo-systems, introducing plausible programs of reform, have attractions which are quite extra-scientific. The picture of present conditions, which may seem ''dismal" by itself, serves so much the better to heighten by contrast the attractiveness of the substitute proposed. What is desired is not diagnosis, but remedy, and the sooner a man is done with the first and hastens to the second the better he will suit. Only slowly does careful diagnosis reveal its worth. It is hardly necessary to add that this hortatory economics is not an ethical economics. Ethics is not a moralizing science, but a science of morals. If economics is to be made an ethical science it must be, not by pleading the cause of morals, but by investigating the nature of morals. He has little real faith in science who does not trust to the ultimate efficacy of simple reve- lation. Before inquiring how far economics can or should be made an ethical science in this strict sense we may notice another subordinate phase of the ethical movement. The science of Smith and Ricardo was individualistic. The one believed that individual self-interest would work out an equilibrium conducive to the general good; the other, without assuming that the egoistic impulses were beneficent, accepted them as a matter of course. Their conclusions were unfavorable to interference with the natural order in the name of justice and benevolence. Their personal moral code was above criticism, but they assigned to social or group action and feeling a relatively small function. But the conclusions ot science have been modified by the logic of events. Egoistic competition has not yet brought the beneficent equilibrium that WPS predicted, nor is it certain that it ever will. In any case men have grown tired of waiting for the slow result, and conscious social forces have been turned loose upon the scene of the disorder. Whatever may be the ulti- mate results, they seem to have mended matters for the present In the light of recent experience economics seems [195] n nnnl ^e?? ■,SfE?",;j!f3"?sos*e^'™™3e-'«" r- ' -1 80 Annals of the American Academy. to assign a larger function to moral factors in the industrial organization of society. But this again does not mean that the science has become ethical, it merely recognizes the fact that society has become more ethical in its recent economic policy, and that social consciousness and social conscience have modified, and presumably must always modify, the interplay of individual and egoistic factors. This once admitted it is plain that economics has a new subject for analysis. It is not enough to recognize moral forces merely as * * disturbing factors ' ' in the industrial order. Such a recognition is a subtle begging of the ques- tion as regards both their importance and legitimacy. There are no disturbing factors but merely contributing factors of various degrees of importance. If some of these are so unimportant that they may be safely ignored, this cannot be said of the ethical factors. It is of the utmost importance to determine how far and in what respect they influence economic relations. In this particular there has been more change in the theory than in the practice of economists. The earlier writers, even when professing to deal with self- interest as contrasted with moral sentiments, seldom confined themselves to this part of their subject. There has been a tendency on the part of modem writers to consider more systematically what was before considered incidentally, to make the altruistic impulses co-ordinate if not co-extensive with the egoistic as economic incentives. Whatever may be the result of this analysis there can be no question of its propriety. It is as legitimate to study the economic results of ethical forces as to study the economical results of chemical forces. The only question is, are we confining ourselves to economic results, that is, to the bearing of these forces on human enjoyment, or if we will, on the means to human enjoyment ? In this sense and in this sense only economics may and must become ethical. This need not prejudice its scientific character nor yet trespass upon the domain of other sciences. [196] i Wealth and Welfare. 81 But while economics is no substitute for ethics and has no desire to trespass on its domain, an understanding of the nature of ethical forces and a brief r6sum6 of ethical princi- ples is necessary to the investigation we have just considered. If we are to investigate the economic results of ethical forces we must know an ethical force when we see it, no matter in what connection or under what disguise. It is important also that we should know the fundamental relation of the ethical to other economic forces. Duty is one thing and pleasure another thing, but not necessarily an unrelated thing. Do they differ as black does firom white, or as youth does from old age? Our conception not only of the relation of ethics to economics but of the conditions of social progress will be modified by our answer to this question. The necessity involved in our own discussion is a sufficient ex- cuse for this brief discussion of ethical principles. If it involves an incipient theory of ethics, it is as far from pre- tensions to completeness or technical character as is the discussion of psychology in the preceding chapter. It will satisfy all requirements if it facilitates our fiirther inquiry and should be judged in that connection. We have seen that in the evolution of an organism profit- able experiences become pleasurable and unprofitable ex- periences painful by the action of natural selection. This assures the necessary choices on the part of the individual and is the real advantage of sentient life. The longer an organism lives under fixed conditions the more definite the association between pleasure and profit becomes through the continual elimination of individuals whose predilections are unwholesome. Life thus intrenches itself behind in- stincts that steadily tend to become impregnable. But when conditions change, established pleasures and pains become a delusion and a snare. The old preferences, deeply seated in the organic constitutions, are perpetuated by heredity with characteristic pertinacity and resist the process of readjustment which the new conditions require. [197] ■ -^1 I ^1 ' ^1 t Si i m V 82 Annals of the American Academy. Eventually, of course, the old preferences give way, new- tastes are acquired and the organism is again reconciled with nature, imless perad venture, the readjustment was more than it could effect in which case the species disappears. Illustrations abound not only in geologic records, but in the migrations of species effected by human agency, organisms being brought under new climatic conditions or into contact with new enemies. Everywhere the alternative is, change or perish. If nothing more is needed than to learn new arts under the lead of old inclinations, it may be quickly accomplished, but if inclinations themselves have to be changed it is apt to be exceedingly slow. The American shrikes have learned to deal with the English sparrow in a few years, their previous inclinations being quite appropriate. But the cat though domesticated for thousands of years with constant repression of its primitive instincts, has still a vigorous and wholly unnecessary appetite for canary-birds, while the dog with a domestication, perhaps ten times as long and far more repressive, still shows at times an atavistic inclination to kill sheep. It is with one of these changes of condition and indeed with the most far reaching and complex of them all that our present inquiry has to do. This change we may call socializa- tion or the change from the solitary or individual to the so- cial state. Combination for purposes of mutual protection and assistance is only one of many ways in which a species may attain pre-eminence, but if specialization takes this direction the organism must undergo a pretty thorough re- construction. For one thing, its predatory instincts and even its instincts of independent self-gratification must be re- strained, for a fundamental condition of association is mutual forbearance, forbearance from direct injury to fellow mem- bers and forbearance from such pursuit of self-interest as may involve this injury. Of course this forbearance is never complete and perhaps it never can be, for it is not yet clear how far socialization can be advantageously carried — [198] ti Wealth and Wblfare. 83 this is a side question— but the farther socialization goes the more this forbearance is required. In some respects this restraint of impulses is more difficult than a direct elimination. To maintain an instinct in full vigor and yet restrict its action within prescribed limits presents peculiar difficulties. But the positive requirements are far more complex than the negative. Forbearance is but an incident to co-opera- tion, which is the real object of association. There is no advantage in a mass of individuals unless they co-operate, that is, pool their issues and act as a unit, at least in some connection affecting their vital interests. This might con- ceivably come about by cool calculation, by a social contract or voluntary partnership in which individuals co-operated in the hope of private gain. As a matter of fact it is not effected in that way, nor can it be until a condition of intel- ligence has been reached, which is only possible as the result of long association. It is effected at the outset precisely as other changes of condition are effected, by a growth of new inclinations supplementing, restraining or supplanting those that preceded them. Although men do not associate in the first instance because they like each other, they must learn to like each other before they can be very firmly associated. They must learn to do, and so must learn to like to do what is profitable for the group, if there is to be any group or any profit in having one. No clan ever held together by virtue of a simple agreement to avenge one another's inju- ries and enforce one another's rights. Such common action must be the result of an instinct which makes the group feel and resent an injury to one of its members, as though it were an injury to all. In the preceding chapter we have noticed the psycholog- ical process by which the chief of these group instincts is developed. Suggestion and inference combine to lay the foundation of sympathy by which we become conscious as it were of other people's feelings, and so become subject [199] A I #1 dill '. ^'1 84 Annals of the American Academy. i 1 5 ,t 9 I ^ 1 ** to their impulses and participants in their interests. The social instincts resulting from sympathy are perhaps the highest and the most efficient of all those that contribute to the maintenance of society. There seems to be no reason to believe that these highest social instincts cannot be indefi- nitely developed and be made to include any number of social relations in the circle of their influence, but their development is a slow and difficult task, and one by no means perfectly accomplished. Ever and anon the interests of the group come into conflict with inclinations which were established before there was any group, and these inclinations, though now false guides even of individual well-being, long dispute the ascendency of the altruistic instincts. But that an increase in these instincts is the condition of advancing association among men none will deny, whatever their explanation of altruism may be. In- dividual experiences must become group experiences and individual consciousness, group consciousness. So and only so does individual action become group action. Whether or not men can ever learn to love their neighbors as themselves, appreciating their pleasures and pains as though they were their own, it is quite certain that they have not yet reached that point. Indications are not want- ing that the social development now in progress is of com- paratively recent origin, and that the socializing process is going on rapidly and under high pressure. It would seem that nature had only recently discovered what immense pos- sibilities there are along this line of development, and that she is pushing along rather precipitately to occupy the new territory. But social development, we have seen, requires the building of new instincts, the development of new and difficult perceptions. But instincts grow slowly and social exigencies may come on apace. Obviously the demand for the social instincts will be in excess of the supply. During the last two or three centuries, for instance, the frontier of socialization has been advanced theoretically out of all [200] ImsfcJ-^j 'Alj q&->.jJii»8 »«»■■• ■Jtiiv.-a.Trifc..^ ■ ..■ag-il Wealth and Welfare. 85 i proportion to man's efiective power of occupancy, that is to the developed sympathies among men. The result is a vast amount of pseudo-society, whose paper constitutions and ornamental codes are in melancholy contrast with the actual modus Vivendi which exists among its members. He would be a most unsophisticated man who should take altogether seriously the '' Wberty, Equality, Fraternity" of the French Republic, or the pledge of unqualified altruism in the constitution of the ordinary church. These are but ex- amples of the disparity everywhere to be found between exist- ing social instincts and the service which is required of them, a disparity which is at least as old as history, though that is not so very old. Compare the sufficiency, the more than sufficiency of the instincts of self-preservation or of pro- creation, products of the age-long evolution of the indi- vidual, with the chronic insufficiency of honesty and S}'m- pathy, the incipient products of social evolution. The supreme fact in the historic consciousness of the race is this disproportion and the burden of the effi^rt to stretch these inadequate instincts to their impossible task. In the long run we may expect the necessary instincts to be forthcoming. If altruistic action continues to be profit- able, it will eventually become pleasurable and spontaneous; indeed, to a considerable extent it has become so already. Maternal altruism, the oldest of all, has long been so rein- forced by enjoyment that it has acted with the promptness and spontaneity of instinct, while persons are not rare who have an aversion for unsocial acts and to whom it is a pleasure to do most of the things which common interests require. A thousand selective agencies in society tend to give such indi- viduals an advantage in the struggle for existence, and there is little reason to doubt that if social requirements were not continually extended we should eventually become, within the established limits, spontaneously and ungrudgingly altruistic. But until this happens, which may be a very long time, other incentives have to be provided to secure the [201] IttAl 86 Annai^ of the American Academy. Wealth and Wei^fare. 87 social action needed. The gap is bridged with provis- ional instincts which are replaced as the more efficient ones are developed. Such a provisional incentive is fear of the group. If an individual injures a number of his fellows they will all resent it, not from sympathy for one another, but from common antipathy for him. For such a combined hostility he will have a wholesome fear. The same is likely to hap- pen if he injures one person in a way that suggests to others that he is likely to injure them. Slowly certain kinds of conduct become associated with personal danger and apart from sympathy or esprit de corps, they arouse general oppo- sition. Nobody thinks that this fear of the group is a finality in social evolution, or feels very safe so long as this is his only protection, but in the absence of other incentives it renders valuable service. When, instead of a fortuitous concert of action on the part of persons independently offended, there grows up a preconcerted action with reference to intimidating evil-doers, we have government, one phase but only one phase of social control. Quite analagous to this is the hope of social favor and reward. It is perfectly clear that many of the services ren- dered by the individual to the group are the result of a vir- tual bargain between the two parties. In the case of a mercenary soldier this relation is avowed; in many other cases the bargain is a tacit one, but none the less real. The donor of real estate for benevolent purposes, who expects a rise in the value of his adjacent property, the patron of charities who enjoys an increase of trade or remunerative employment in consequence, the politician who expects his good deeds to be remembered on election day, all these work for a consideration which differs from the soldier's pay only in being imconfessed and indeterminate in amount. A step farther brings us to cases less easy to recognize, but essen- tially the same, the consideration being honor, fame, the [202] esteem and admiration of society, a laurel wreath or a grave in Westminster Abbey. There are rewards which are not convertible into money and which in turn can hardly be obtained for money, but they are not the less real or direct for being less tangible. No matter why people enjoy these things; it is enough that they do enjoy them and that they constitute high and attractive goods only attainable in exchange for services rendered to society. It is plain that we have here to do with a very large and important class of incentives, adapted to different stages of development and graduated to the services which they are used to secure. It may be questioned whether we are at liberty to call them provisional, so exalted are the passions which they evoke, and so permanent the apparent need of them in human society. But while they are doubtless per- manently required at the shifting frontier of socialization a moment's reflection will convince us that they are never accepted as finalities in human judgment or securely trusted as guarantees of social service. The mercenary soldier has long been under the ban and for a hundred years reliance has been placed only in patriotic sentiments as the condition of military efficiency. The result has certainly justified the change. Interested charity, too, is tabooed, plainly because experience has demonstrated that it is less genuine and reliable. Even the passion for glory and public esteem is increasingly disparaged as a motive of public service. In all these cases the individual has one object and society another, and he serves society only to induce society to serve him. Such arrangements may be indefinitely better than none, but they can not have the reliability of those in which the two interests are merged in one, in which the individual identifies himself with society, feels what it feels, resents injuries to it as though they were injuries to himself and enjoys what it enjoys as though he and it were one. This is the goal toward which all social forces, selective and educational, are constantly impelling the individual, a [203] r A t -a ',') BS Annals of the American Academy. Wealth and Welfare. 89 requirement that is steadily advanced to one function after another. All arrangements that stop short of this emotional identification of interests are in practice regarded as pro- visional or stop-gap arrangements, and are in fact constantly and imperceptibly displaced. The case is complicated but not essentially altered if we include the religious incentives. Spiritual beings, more or less vividly conceived, may be added to the personal environ- ment of the individual or constitute such an environment by themselves. They may be served from fear or through hope of reward or finally, as we say, from love, that is, the individual identifies in feeling his interests with theirs. If their interests are in turn conceived as identical with those of society religion becomes a strong social force. But what- ever its social bearing, it is universally admitted that the fear of punishment and the hope of reward are only provisional motives and that religion only attains its normal develop- ment when the third stage is reached and the necessary acts become spontaneous and pleasurable. Still more complicated cases occur where the individual pays allegiance to abstract principles which have acquired a semi-personal concreteness to his mind. These cases offer interesting subjects for sociological analysis but present no new principle of interest to our subject. Chief among these provisional instincts is the so-called moral sense or sentiment of duty. The importance of this sentiment to human society and the ceaseless effort required of us all to strengthen it and increase its prestige make us disinclined to recognize its function as temporary or to seem- ingly disparage it in any way. But the exaltation of the moral instincts is based on prudential rather than on scientific considerations. An ideal society would know no duties, and there is no better indication of the successful establish- ment of social relations than the diminishing sense of duty in the given connection. The very mystery which has always surrounded this strange impulse which seems to [204] attract us toward the unattractive is in itself a proof that we never have that feeling of finality with regard to duty which we always feel toward enjoyment. Nobody ever ponders over the problem of why men do what they enjoy doing, but the mystery of duty has ever been a fascinating inquiry. Most of the subtle questions which this inquiry has raised we may disregard. We are not concerned with the origin of these experiences, biologically or teleologically, be they duties or pleasures. We have to do with a single question, the relation of ethics to economics, of duty to enjoyment. The traditional relation between the two is that of opposi- tion. Duties are pitted against pleasures as competing claims upon the individual. But this implies no fundamental difference between the two. Pleasures are quite as sharply pitted against one another, however similar in character. The opposition in this case is merely a matter of definition. We do not call an act a duty which is also a pleasure, nor is the moral sense ever invoked imless there is a counter inclination to be overcome. This means that duty is always opposed to a pleasure, but its relation to pleasure is wholly undetermined by this consideration. The first thing to be noted as defining the field of morals is that duty has to do only with social relations, that is, relations between the individual and other beings, natural or super- natural, real or imaginary. There is no evidence that beings not influenced by association have any moral sense or any use for any. It is true that when this sense is developed it may be reflected back on to egoistic relations. It is possible to talk about duties to one's self. Half the time such expressions are pure egoistic diplomacy. If self-interest can be successfully passed off under the guise of duty it greatly facilitates our purpose. In other cases, however, the expression indicates a real, but indirect, social relation. Society has an interest in the preservation and development of its members, and so far as that preservation and develop- ment mtist depend on their own efforts they are not at [205] 3J 90 Annai^ of the American Academy. liberty to sacrifice themselves, even if their own enjoyment would incline them to do so. Their duty may be to spend their effort on themselves, though again there is no point in calling it a duty if it coincides with their inclination. Such complications but momentarily embarrass our conclusion. A truly isolated being could have no duties. The only possible deterrent which he could feel regarding a given act would be that it was not enjoyable or that it was not profitable, that is, would not in the end increase his enjoyment. Duty is an aspect of social or inter-personal relations. In the second place, whatever may be the ultimate nature of the moral instincts, they appear in consciousness as a kind of satisfaction or discomfort. I do not refer to the expectation of reward or punishment in the concrete. This is, by common consent, a different matter. But to contem- plate doing something inimical to the interests of others pro- duces an uneasiness or discomfort which may become an excruciating agony. Precisely the opposite occurs when we contemplate doing something which is favorable to those interests. We experience a satisfaction which varies with the act and our own intelligence and susceptibility. It is not difiBcult to discern in these feelings of satisfaction and discomfort a consciousness of the social consequences of our action. In some cases we are conscious of the pleasure or pain which our action inflicts on particular persons, a simple case of sympathetic suggestion. More often we are unable to trace the effect of our action on particular persons, we cannot see that it affects anybody, but we are conscious that it is one of those acts that society approves or disap- proves in its capacity of guardian of individual interests, and we are conscious of the social smile or frown. Or, again, we may conceive of the guardianship of these inter- ests as vested in a supernatural being, whose attitude toward us has a like control over our feelings. Such a being, to be sure, appeals less vividly to the ordinary imagi- nation than the more tangible beings with which we are [206] Wealth and Welfare. 9^ surrounded, but when he is thought of as omniscient, one from whom not even our thoughts can be hid, his intangible, but per\^asive oversight powerfully affects the imagination. Finally, an abstract principle of conduct may acquire a quasi-personal ascendency over our minds. We are endowed with a sense of symmetry and consistency, an inevitable result of race experience and symmetrical organization, which often becomes an exacting demand upon us to fill out the schedule which we have adopted or vividly imagined. In one or the other of these perceptions may be found the germs of all those moral sentiments which exercise so won- derful a control over human action. This control is less surprising, however, when we consider the systematic effort of society to organize these sentiments for the effective gov- ernment of its members. For each stage of altruistic devel- opment it has appropriate recognition and suitable rewards and penalties. The altruism that is spontaneous and un- grudging is everywhere admitted to be the highest, but, significantly enough, the altruism which has always- been lauded and proclaimed as peculiarly meritorious is the altru- ism that hesitates and struggles and wins uncertain and costly victories over a still powerful and resistant egoism. It is not because this weak-kneed altruism is specially valu- able or specially noble, for it is neither, but primarily because it is weak-kneed and most needs encouragement. It does not lessen the value of society's rewards that they are distributed on strictly business principles. Nature will not permanently tolerate any other principle of distribution. Among socie- ties as elsewhere the most business-like competitor distances all rivals. I do not mean that society is conscious of these things. Unconsciousness is often a condition of successful obedience to nature's behests. If the foregoing analysis is correct, we have here to do with merely a special phase of the great problem of enjoy- ment. Altruistic action, like any other action which experi- ence proves useful, eventually becomes pleasurable and [207] jijti I I 1 li I!! 92 Annai^ op this American Academy. spontaneous, as a matter of course. But it does not becx>me so at once. For a long time group interests urge their claims on unwilling ears and contend against powerful counter currents of feeling. If w. waited for altruistic action until it was a matter of pleasure in itself, there would never be any such action, for pleasurableness can only result from long experience. During this apprenticeship in the art of altruistic action, the provisional incentives of fear and hope of outside reward, awe of society, reverence for a higher being or attachment to principle render their indispensable service. Duty is the abstract representative of altruistic interests, enforcing its behests by subtle appeals to our feel- ing in many connections. In its aim it is a unit, but in its means it is manifold. Duty can never be dispensed with so long as the possibilities of group action remain unexhausted, nor will any of the incentives used to enforce the claims of duty be outgrown. But while duty is a permanent thing, duties are not. Duty has not done its work until the acts which it urges us to perform become self-enforcing and duties have been metamorphosed into pleasures. To determine the relation of duty to enjoyment is to de- termine apparently the relation of ethics to economics. But the former relation, we have seen, is essentially that of species to genus. The conclusion seems natural, therefore, that ethics is but a branch of economics. But such an absorption is resisted not only by the moralist but by the sociologist. For we are confronted by the fact that the moral instincts are quite as much phenomena of association as they are phenomena of enjoyment. Is ethics a branch of economics or of sociology, or is it an independent science ? We need to recall again the principle already noted as governing the classification of the sciences. A science is defined, not by the things it investigates but by the purpose with which it investigates them. These three sciences all study a certain group of phenomena. Indeed it so happens that the phenomena of morals lie wholly within the field [208] Weai^th and Wei«fare. 93 investigated by the other two, that is, within that portion of their fields where they overlap. Does this mean that ethics belongs to either or both ? Not necessarily. Sociology is a study of association, economics of enjoyment, ethics of duty. Are these terms in any sense synonyms ? As regards the first two there can be no doubt. Association and en- joyment have much practical connection but they are wholly distinct. Enjoyment may contribute to association and association to enjoyment but they are different things and form the basis of distinct sciences. Is duty or the moral sense synonymous with association? Obviously not. The moral instincts are a product of as- sociation and in turn are an indispensable means to associa- tion, but to confound them with association involves a complete confusion of ideas. If, therefore, sociology is to be defined as the study of association, a conclusion to which we are being irresistibly forced, it is logically distinct from ethics or the inquiry into the nature and origin of the moral instincts. If the sociologist interprets his task to include the explanation of all the impulses which contribute to association or result firom it he will no doubt include ethics in his inquiry, but whatever may be the practical reasons for such a study the fact remains that moral instincts are individual sentiments and societies are composite structures. Ethics is rather tributary to than included in sociology. Coming now to enjoyments we ask: Are the moral instincts resolvable into pleasures and pains ? The answer must be that they are. While there can be no objection to an inves- tigation of these particular enjoyments, there is no possible way in which such an inquiry can be made other than as a part of the science which undertakes the investigation of enjoyments in general. If in deference to the logic of events (rather than to any other logic) , this larger science is known as economics, then ethics is a part of economics This is not a matter of opinion, but a simple matter of defi nition. It is not disturbed by any theories of morals or [209] -■/I 94 Annals of the American Academy. biology. No matter what the origin of the moral instincts their character as pleasures and pains is not a matter of dis- pute. The pangs of conscience and satisfactions of righteous- ness are quite as literal expressions as the pleasures of sin or the pams of death. It is accident rather than logical dependence which has seemed to make ethics more socio- logical than economic in its affinities. In default of a recognized science of sociology, ethics naturally developed a considerable sociology by itself. On the other hand the play of ethical or altruistic forces in economic life has been notonously neglected. Studies have started at independent centres and have followed along lines of least resistance determined by the taste and training of the investigator the academic or social requirements, etc. This will doubtless long continue to be the method of development. Practical situations and exigencies have little concern for the classifi- cation of the sciences, perhaps justly so, though these questions of classification are not without their bearing on observation and analysis. But classifications are after all but matters of convenience, and logical considerations are not the only factors of convenience. When logic favors one classification or method of research and instruction and concrete historical and social factors favor another the bal- ance of advantage, for a time at least, may easily be with the latter. The most perfect of classifications is that which offers the most convenient pigeon-holes for the thoughts of men who are the heirs of tradition and the products of history. Our logic must not dogmatize. In the foregoing chapters I have tried to define and locate the subject of our inquirj^ Economics has been defined as the science of enjoyment. Although this definition is really m harmony with the unconscious procedure of economic writers, it is an innovation to lift this unconscious procedure into consciousness and demand due recognition of the neg- lected parts of the subject. It has therefore seemed neces- sary to discuss this definition somewhat in detail, as weU as [210] Weai^th and Welfare. 95 that of other important terms, whose uncertain and incon- sistent use has been a natural result of the half-hearted recognition of factors that were none the less indispensable. A second important preliminaiy was to determine the setting of the subject, that is, its relation to kindred sub- jects. The phenomena of enjoyment are intimately associ- ated with other phenomena, or what purport to be other phenomena, and they cannot be fully understood if this relationship is ignored. It is true that within the field bounded by these larger relations there are lesser relations among enjoyments themselves which we may study in away separately, but after all these lesser relations find their explanation in the larger relations with which they are environed. The strict subordination of enjoyment to vital interests and the subordination in turn of ethical impulses to the laws of enjoyment give a new interest to our inquiry and a new significance to economic conclusions. H. H. Powers. Berlin. om^mMMm' :lK^tiiiii THE ACADEMY AND ITS WORK. The American Academy of Pouticai, and Social Science was formed in Philadelphia, December 4, 18S9, for the purpose of promoting the political and social sciences, and was incorporated February 14, 1891. 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Public Ledger, Philadelphia. ** Persons who are interested in political and social science will find the AMHAI3 of the American Academy extremely serviceable." New York Herald. *'The Annate of the American Academy of Political and Social Science, published in Philadelphia, perhaps the paost learned economic magazine in the country. '^ Independent, New York. _ "'The American Academy of Political and Social Science is an institu- tion which is doing good work in the fields of Sociology, Comparative Con- stitutional and Administrative Law, Finance, etc., and deserves to be widely known in Europe.'* Herald, Rome, Italy. ** The Annals of the American Academy is issued bi-monthly, and its contents are solid and substantial. This is the most scholarly of all the pub- lications of this sort which are published in the United States." Boston Herald. ** The publications of the American Academy of Political and Social Science are always of value. The papers and monographs range over a wide field, and are marked by great care and thoroughness." Guardian, Manchester, England, *' One of the potent influences that have prompted the advancement of scientific knowledge in the United States, in these closing years of the nine- teenth century, is the American Academy of Political and Social Science. Its publications are exerting a powerful and wholesome influence on Ameri- can thought.'* Commercial Gazette, Cincinnati. Pifsms inigftstid in thi siudv of poliitcaU iconomic and social questions an gUgibli for numbersbip. Thi ANSAI3 of the /Icadsmy is smt to all tmmbers fru mf $hargi. Thi annual mimhirshipfa is S^,.og ; lifs-numbinhip /##, $iOQ. Amtrican Academy of Political and Social Science, STATION B. PHILADELPHIA. I •• 4 Tfl #1 1 \'n P^-- ...-.^ * Deceased. PROF. LESTER F. WARD, Washington, D. C. ^ f 0044255217 ^113 P873 COLUMBIA UNIVERSITY LIBRARIES This book is due on the date indicated below, or at the expiration of a definite period after the date of borrowing, as provided by the library rules or by special arrangement with the Librarism in charge. DATE BORROWED DATE DUE DATE BORROWED DATE DUE ' c2a(»4e)Mioo DllS P873 Powers, H. H. Wealth and welfare ^W iji i /n5Hooai3i 1^ FEB 16 1994 APR T 7 1947 \-^1 NDOF TITLE