Chapter XXVI Summary and Conclusion
Throughout this book we have been concerned with a two-fold problem: to apply the principles of justice to the workings of the present distributive system, and to point out the modifications of the system that seemed to promise a larger measure of actual justice. The mechanism of distribution was described in the introductory chapter as apportioning the national product among the four classes that contribute the necessary factors to the process of production, and the first part of the problem was stated as that of ascertaining the size of the share which ought to go to each of these classes.
The Landowner and Rent
We began this inquiry with the landowner and his share of the product, i.e., rent. We found that private ownership of land has prevailed throughout the world with practical universality ever since men began to till the soil in settled communities. The arguments of Henry George against the justice of the institution are invalid because they do not prove that labour is the only title of property, nor that men’s equal rights to the earth are incompatible with private landownership, nor that the so-called social production of land values confers upon the community a right to rent. Private ownership is not only socially preferable to the Socialist and the Single Tax systems of land tenure, but it is, as compared with Socialism certainly, and as compared with the Single Tax probably, among man’s natural rights. On the other hand, the landowner’s right to take rent is no stronger than the capitalist’s right to take interest; and in any case it is inferior to the right of the tenant to a decent livelihood, and of the employé to a living wage.
Nevertheless, the present system of land tenure is not perfect. Its principal defects are: the promotion of certain monopolies, as, anthracite coal, steel, natural gas, petroleum, water power, and lumber; the diversion of excessive gains to landowners, as indicated by the recent great increases in the value of land, and the very large holdings by individuals and corporations; and the exclusion of large masses of men from the land because the owners will not sell it at its present economic value. The remedies for these evils fall mainly under the heads of ownership and taxation. All mineral, timber, gas, oil, grazing, and water-power lands that are now publicly owned, should remain the property of the states and the nation, and be brought into use through a system of leases to private individuals and corporations. Cities should purchase land, and lease it for long periods to persons who wish to erect business buildings and dwellings. By means of taxation the State might appropriate the future increases of land values, subject to the reimbursement of private owners for resulting decreases in value; and it could transfer the taxes on improvements and personal property to land, provided that the process were sufficiently gradual to prevent any substantial decline in land values. In some cases the State might hasten the dissolution of exceptionally large and valuable estates through the imposition of a supertax.
The Capitalist and Interest
The Socialist contention that the labourer has a right to the entire product of industry, and therefore that the capitalist has no right to interest, is invalid unless the former alleged right can be effectuated in a reasonable scheme of distribution; and we know that the contemplated Socialist scheme is impracticable. Nevertheless, the refutation of the Socialist position does not automatically prove that the capitalist has a right to take interest. Of the titles ordinarily alleged in support of such a right, productivity and service are inconclusive, while abstinence is valid only in the case of those capital owners to whom interest was a necessary inducement for saving. Since it is uncertain whether sufficient capital would be provided without interest, and since the legal suppression of interest is impracticable, the State is justified in permitting the practice of taking interest. But this legal permission does not justify the individual interest-receiver. His main and sufficient justification is to be found in the presumptive title which arises out of possession, in the absence of any adverse claimant with a stronger title to this particular share of the product.
The only available methods of lessening the burden of interest are a reduction in the rate, and a wider diffusion of capital through co-operative enterprise. Of these the former presents no definite or considerable reasons for hope, either through the rapid increase of capital or the inevitable extension of the industrial function of government. The second proposal contains great possibilities of betterment in the fields of banking, agriculture, stores, and manufacture. Through co-operation the weaker farmers, merchants, and consumers can do business and obtain goods at lower costs, and save money for investment with greater facility, while the labourers can slowly but surely become capitalists and interest-receivers, as well as employés and wage-receivers.
The Business Man and Profits
Just remuneration for the active agents of production, whether they be directors of industry or employés, depends fundamentally upon five canons of distribution; namely, needs, efforts and sacrifices, productivity, scarcity, and human welfare. In the light of these principles it is evident that business men who use fair methods in competitive conditions, have a right to all the profits that they can obtain. On the other hand, no business man has a strict right to a minimum living profit, since that would imply an obligation on the part of consumers to support superfluous and inefficient directors of industry. Those who possess a monopoly of their products or commodities have no right to more than the prevailing or competitive rate of interest on their capital, though they have the same right as competitive business men to any surplus gains that may be due to superior efficiency. The principal unfair methods of competition; that is, discriminative underselling, exclusive-selling contracts, and discrimination in transportation, are all unjust.
The remedies for unjust profits are to be found mainly in the action of government. The State should either own and operate all natural monopolies, or so regulate their charges that the owners would obtain only the competitive rate of interest on the actual investment, and only such surplus gains as are clearly due to superior efficiency. It should prevent artificial monopolies from practising extortion toward either consumers or competitors. Should the method of dissolution prove inadequate to this end, the State ought to fix maximum prices. Inasmuch as overcapitalisation has frequently enabled monopolistic concerns to obtain unjust profits, and always presents a strong temptation in this direction, it should be legally prohibited. A considerable part of the excessive profits already accumulated can be subjected to a better distribution by progressive income and inheritance taxes. Finally, the possessors of large fortunes and incomes could help to bring about a more equitable distribution by voluntarily complying with the Christian duty of bestowing their superfluous goods upon needy persons and objects.
The Labourer and Wages
None of the theories of fair wages that have been examined under the heads of “the prevailing rate,” “exchange-equivalence,” or “productivity” is in full harmony with the principles of justice. The minimum of wage justice can, however, be described with sufficient definiteness and certainty. The adult male labourer has a right to a wage sufficient to provide himself and family with a decent livelihood, and the adult female has a right to remuneration that will enable her to live decently as a self supporting individual. At the basis of this right are three ethical principles: all persons are equal in their inherent claims upon the bounty of nature; this general right of access to the earth becomes concretely valid through the expenditure of useful labour; and those persons who are in control of the goods and opportunities of the earth are morally bound to permit access thereto on reasonable terms by all who are willing to work. In the case of the labourer, this right of reasonable access can be effectuated only through a living wage. The obligation of paying this wage falls upon the employer because of his function in the industrial organism. And the labourer’s right to a living wage is morally superior to the employer’s right to interest on his capital. Labourers who put forth unusual efforts or make unusual sacrifices have a right to a proportionate excess over living wages, and those who are exceptionally productive or exceptionally scarce have a right to the extra compensation that goes to them under the operation of competition. Labourers who are receiving the “equitable minimum” described in the last sentence have a right to still higher wages at the expense of the capitalist and the consumer, if they can secure them through the processes of competition; for the additional amount is an ethically unassigned or ownerless property which may be taken by either labourer, capitalist, or consumer, provided that there is no artificial limitation of supply.
The methods of increasing wages are mainly three: a minimum wage by law, labour unions, and co-operative enterprise. The first has been fairly well approved by experience, and is in no wise contrary to the principles of either ethics, politics, or economics. The second has likewise been vindicated in practice, though it is of only small efficacy in the case of those workers who are receiving less than living wages. The third would enable labourers to supplement their wage incomes by interest incomes, and would render our industrial system more stable by giving the workers an influential voice in the conditions of employment, and laying the foundation of that contentment and conservatism which arise naturally out of the possession of property.
As a matter of convenience, the foregoing paragraphs may be further summarised in the following abridgment: The landowner has a right to all the economic rent, modified by the right of his tenants and employés to a decent livelihood, and by the right of the State to levy taxes which do not substantially lower the value of the land. The capitalist has a right to the prevailing rate of interest, modified by the right of his employés to the “equitable minimum” of wages. The business man in competitive conditions has a right to all the profits that he can obtain, but corporations possessing a monopoly have no right to unusual gains except those due to unusual efficiency. The labourer has a right to living wages, and to as much more as he can get by competition with the other agents of production and with his fellow labourers.
Concluding Observations
No doubt many of those who have taken up this volume with the expectation of finding therein a satisfactory formula of distributive justice, and who have patiently followed the discussion to the end, are disappointed and dissatisfied at the final conclusions. Both the particular applications of the rules of justice and the proposals for reform, must have seemed complex and indefinite. They are not nearly so simple and definite as the principles of Socialism or the Single Tax. And yet, there is no escape from these limitations. Neither the principles of industrial justice nor the constitution of our socio-economic system is simple. Therefore, it is impossible to give our ethical conclusions anything like mathematical accuracy. The only claim that is made for the discussion is that the moral judgments are fairly reasonable, and the proposed remedies fairly efficacious. When both have been realised in practice, the next step in the direction of wider distributive justice will be much clearer than it is to-day.
Although the attainment of greater justice in distribution is the primary and most urgent need of our time, it is not the only one that is of great importance. No conceivable method of distributing the present national product would provide every family with the means of supporting an automobile, or any equivalent symbol of comfort. Indeed, there are indications that the present amount of product per capita cannot long be maintained without better conservation of our natural resources, the abandonment of our national habits of wastefulness, more scientific methods of soil cultivation, and vastly greater efficiency on the part of both capital and labour. Nor is this all. Neither just distribution, nor increased production, nor both combined, will insure a stable and satisfactory social order without a considerable change in human hearts and ideals. The rich must cease to put their faith in material things, and rise to a simpler and saner plane of living; the middle classes and the poor must give up their envy and snobbish imitation of the false and degrading standards of the opulent classes; and all must learn the elementary lesson that the path to achievements worth while leads through the field of hard and honest labour, not of lucky “deals” or gouging of the neighbour, and that the only life worth living is that in which one’s cherished wants are few, simple, and noble. For the adoption and pursuit of these ideals the most necessary requisite is a revival of genuine religion.
Footnotes
1 The most notable exponents of this view were: Von Maurer, “Einleitung zur Geschichte der Mark,” 1854; Viollet, “Bibliotheque de l’école des chartres,” 1872; Maine, “Village Communities in the East and the West,” 1872; and De Laveleye, “De la propriété et ses formes primitives,” 1874, of which an English translation appeared in 1878 under the title, “Primitive Property.”
2 Chief among these writers are: Fustel de Coulanges in an article in “Revue des Questions Historiques,” April, 1889; translated by Margaret Ashley, and published with an introductory chapter by W. J. Ashley under the title, “The Origin of Property in Land,” 1891; G. Von Below, “Beilage zur Allgemeine Zeitung: Das kurze Leben einer vielgenannten Theorie,” 1903; F. Seebohm, “The Village Community,” 1883. Cf. Whittaker, “Ownership, Tenure, and Taxation of Land,” 1914, ch. ii; Cathrein, “Das Privatgrundeigenthum und seine Gegner,” 1909; and Pesch, “Lehrbuch der Nationaloekonomie,” I, 183-188.
3 Quoted in Whittaker, op. cit., pp. 27, 28.
4 Idem, p. 29.
5 Cf. P. W. Joyce, “A Social History of Ancient Ireland,” 1903; and Letourneau, “Property: Its Origin and Development,” 1896.
6 Whittaker, op. cit., pp. 30, 31.
7 Leviticus xxv, 23-28.
8 “Socialism: Utopian and Scientific,” p. 45; Chicago, 1900.
9 “A summary of the Principles of Socialism,” p. 23; London, 1899.
10 “Socialism: A Reply to the Pope’s Encyclical,” p. 4; London, 1899.
11 “Progress and Poverty,” book vii, ch. i.
12 “La Propriété Privée,” par L. Garriguet, I, 62; Paris, 1903.
13 Cf. Ardant, “Papes et Paysans,” pp. 41, sq.
14 “Social Statics,” chap, ix; 1850. Spencer’s retractation, in a later edition of this work, of his earlier views on the right of property in land does not affect the truth of the description quoted in the passage above.
15 “Progress and Poverty,” loc. cit.
16 “Open Letter to Pope Leo XIII,” page 25 of Vierth’s edition.
17 “Progress and Poverty,” loc. cit.
18 “Progress and Poverty,” loc. cit.
19 “Open Letter to Pope Leo XIII,” loc. cit.
20 Whittaker, op. cit., p. 32.
21 “Open Letter,” loc. cit.
22 “Progress and Poverty,” book vii, ch. i.
23 Cf. chapter entitled “Compensation” in “A Perplexed Philosopher.”
24 Cf. “Principles of Political Economy,” 1891, p. 130.
25 “Progress and Poverty.”
26 “Progress and Poverty,” book vii, ch. iii.
27 Cf. Chapter xi.
28 Ensor, “Modern Socialism,” p. xxxi, N. Y., 1904.
29 Idem, pp. 213-216.
30 Cited by Spargo, “The Substance of Socialism,” p. 88, N. Y., 1909.
31 Idem, p. 90.
32 “Progress and Poverty,” book viii, ch. ii.
33 Cf. Walker, “Land and Its Rent”; and Seligman, “Essays in Taxation.”
34 The marriage rights of criminals, degenerates, and other socially dangerous persons, are passed over here as not pertinent to the present discussion. For the same reason nothing is said of the perfectly valid social argument in favour of the individual right of marriage.
35 Cf. Vermeersch, “Quaestiones de Justitia,” no. 204.
36 The argument in the text is obviously empirical, drawn from consequences. There is, however, a putatively intrinsic or metaphysical argument which is sometimes urged against the justice of the Single Tax system. It runs thus: since the fruits of a thing belong to the owner of the thing, “res fructificat domino,” rent, which is the economically imputed fruit of land, necessarily and as a matter of natural right should go to the owner of the land. As will be shown later, the formula at the basis of this contention is not a metaphysical principle at all, but a conclusion from experience. Like every other formula or principle of property rights, it must find its ultimate basis in human welfare.
37 Liberatore, “Principles of Political Economy,” pp. 130, 134.
38 Cf. Vermeersch, op. cit., no. 210; Ryan, “Alleged Socialism of the Church Fathers.”
39 “In IV Sent.,” d. 15, q. 2, n. 5; and “Reportata parisiensia,” d. 15, q. 4, n. 7-12.
40 “De Justitia et Jure,” tr. 2, d. 18 and 20.
41 “De Justitia et Jure,” c. 5, n. 3.
42 “De Legibus,” l. 2, c. 14, n. 13 and 16.
43 “In Summa,” 1ma 2ae, d. 157, n. 17.
44 “De Justitia et Jure,” d. 4, a. 1.
45 “Summa Theologica,” 2a 2ae, q. 57, a. 2 and 3.
46 “De Justitia et Jure,” d. 6, s. 1, n. 6.
47 The assumption that perfect competition is even roughly approximated in relation to men who operate their own land, and that they generally obtain an adequate return for their labour in addition to the sum that they might have obtained through hiring out their land, may appear rather violent in view of the estimate that the average farmer in the United States gets only $402 annually in payment for the labour of himself and family. See article on “The Farmer’s Income” in the American Economic Review, March, 1916. However, this income is mostly in the form of food, fuel, and shelter, which would cost very much more in the city; consequently it is probably equivalent to an urban income of $600. Its value is still further enhanced by the farmer’s independent position, and by his expectation of profiting by the future increase of land values. Hence it would seem that the rent and interest allowance of $322 might fairly be regarded as a surplus in excess of the necessary payment for labour.
48 Chapter xxii.
49 “Report of the Commissioner of Corporations on the Petroleum Industry,” Part I, p. 8.
50 P. 138.
51 Cf. Ely, “Monopolies and Trusts,” pp. 59, sq.
52 P. 133.
53 Pp. 68, 69.
54 “Final Report of the U. S. Industrial Commission,” p. 463; Bliss, “New Encyclopedia of Social Reform,” pp. 245, 770; Van Hise, “Concentration and Control,” pp. 32, 33.
55 Idem, pp. 46, 47; cf. “Final Report of Industrial Commission,” pp. 463-465.
56 “Report of the Commissioner of Corporations on the Steel Industry,” Part I, p. 60.
57 Cf. Hobson, “The Industrial System,” pp. 192-197.
58 Pp. 15, 16, 29-31.
59 Cf. “Progress and Poverty,” books III and IV.
60 Cf. Walker, “Land and Its Rent,” pp. 168-182, Boston, 1883.
61 Page 158.
62 Page 160.
63 Page 158; footnote.
64 “Privilege and Democracy,” p. 307.
65 Page 160.
66 Op. cit., pages 160, 158.
67 Professor Nearing in “The Annals of the American Academy of Political and Social Science,” March, 1915.
68 Thirteenth Census, Bulletin on “Farms and Farm Property,” page 1.
69 The Public, Nov. 26, 1915. For an account of increases in the principal European cities, see Camille-Husymans, “La plus-value immobilière dans les communes belges”; Gand, 1909.
70 “Report of the Commissioner of Corporations on the Lumber Industry,” Part I, pp. 214-216.
71 King, op. cit., p. 158.
72 Thirteenth Census, Vol. I, p. 1295.
73 Hobson, “The Evolution of Modern Capitalism,” p. 4; London, 1907.
74 Harper’s Monthly Magazine, Jan., 1910.
75 Watkins, “The Growth of Large Fortunes,” p. 75; N. Y., 1907.
76 Idem, p. 93.
77 Youngman, “The Economic Causes of Great Fortunes,” p. 45; N. Y., 1909.
78 Howe, op. cit., pp. 125, 126.
79 Cf. Commons, “The Distribution of Wealth,” pp. 252, 257; N. Y., 1893.
80 “Report of the Commissioner of Corporations on the Steel Industry,” Part I, p. 314.
81 “Summary of Report of the Commissioner of Corporations on the Lumber Industry,” pp. 3-8.
82 From articles in “The Single Tax Review,” vol. 9, nos. 5, 6.
83 “In a growing city, an advantageous site will command a price more than in proportion to its present rent, because it is expected that the rent will increase still further as the years go on.” Taussig, “Principles of Economics,” II, 98; N. Y., 1911.
84 “Summary of Report of the Commissioner of Corporations on the Timber Industry in the United States,” p. 3.
85 “Report of the Commissioner of Corporations on Water Power Development in the United States,” pp. 193-195.
86 Idem, pp. 4, 5.
87 “Abstract of the Thirteenth Census,” p. 552.
88 Cf. Marsh, “Land Value Taxation in American Cities,” p. 95.
89 Municipal purchase and ownership of land have been advocated by such a conservative authority as the Rev. Heinrich Pesch, S.J. “Lehrbuch der Nationaloekonomie,” I, 203.
90 As we shall see in a later chapter, the confiscation and injustice would be smaller if the State should simultaneously abolish interest. In any case, the decline in land value resulting from complete confiscation of rent should be made up to the private owner by public compensation.
91 “Principles of Political Economy,” book V, ch. 2, sect. v.
92 “Progressive Taxation in Theory and Practice,” 1908, p. 130.
93 Cf. Taussig, “Principles of Economics,” II, 516: Seligman, “The Shifting and Incidence of Taxation,” p. 223.
94 The “discrimination” objection is put in a somewhat different form by the Rev. Sydney F. Smith, S.J., in an article in The Month, Sept., 1909, entitled “The Theory of Unearned Increment.” His argument is in substance that if the people of a city can claim the increases in land values which their presence and activity have occasioned, the purchasers of food, clothes, books, or concert tickets are equally justified in claiming that, “having added to the value of the shops and music halls, they had acquired a co-proprietary right in the increased value of the owners’ stock, and the owners’ premises.” While this argument is specifically directed against those who maintain that the “social production” of values confers a right thereto, it affects to some extent our thesis that there is a vast difference between value-increases in land and in other goods. Father Smith seems to confuse the origination of value with the increase of value. The presence of consumers is an obvious prerequisite to the existence of any value at all in any kind of goods, but labour and financial outlay on the part of the producers of the goods are an equally indispensable prerequisite. The reason why the value is appropriated by the latter rather than the former is that this is clearly the only rational method of distribution. What we are concerned with here, however, is not this initial or cost-of-production-value of artificial goods, but the increases in value above this level which are brought about by external and social influences. Theoretically, the State could as reasonably take these as the increases in the value of land; practically, such a performance is out of the question, for the simple reason that such increases are spasmodic and exceptional. If Father Smith thinks that “food or clothes, or books, or concert tickets” regularly advance above the cost-of-production-value, he is simply mistaken. Since these and other artificial goods bring to their owners as a rule no socially occasioned increments of value, they and their owners are in quite a different situation from land and the owners of land.
95 Cf. Seligman, “Progressive Taxation in Theory and Practice,” part II, chs. ii and iii; also the classic refutation of the “benefit” theory by John Stuart Mill in “Principles of Political Economy,” book V, ch. ii, sec. 2. The traditional Catholic teaching on the subject is compactly stated by Cardinal de Lugo in “De Justitia et Jure,” disp. 36; cf. Devas, “Political Economy,” p. 594, 2d ed.
96 Cf. Fallon, “Les Plus-Values et l’Impot,” pp. 455, sq.; Paris, 1914; Fillebrown, “A Single Tax Handbook for 1913”; Boston, 1912; Marsh, “Taxation of Land Values in American Cities,” pp. 90-92; New York, 1911; “The Quarterly Journal of Economics,” vols. 22, 24, 25; “The Single Tax Review,” March-April, 1912; “Stimmen aus Maria-Laach,” Oct., 1907.
97 See the references in the second last paragraph.
98 The most comprehensive and reliable account of the special land taxes in Canada is contained in the report prepared for the Committee on Taxation of the City of New York, by Robert Murray Haig, Ph.D., entitled, “The Exemption of Improvements from Taxation in Canada and the United States”; New York, 1915. See also Fallon, op. cit., pp. 452-455.
99 Cf. Fallon, op. cit., pp. 443-452.
100 “The Wealth and Income of the People of the United States,” pp. 158, 143.
101 “Abstract of Bulletins on Wealth, Debt, and Taxation,” p. 16; U. S. Census, 1913.
102 Idem, p. 15.
103 Idem, p. 16; and Bulletin of the Census on “Estimated Valuation of National Wealth,” p. 15.
104 “Special Report of the Twelfth Census on Wealth, Debt, and Taxation,” pp. 12, 13.
105 Haig, “Probable Effects of Exemption of Improvements....”, p. 23.
106 Cf. Seligman, “The Shifting and Incidence of Taxation,” pp. 187, 245, 272, and all of part II; N. Y., 1899; Taussig, “Principles of Economics,” II, 518-549, and chs. 67-69.
107 Cf. Fallon, op. cit., pp. 442, sq.
108 Cf. Vermeersch, “Quaestiones de Justitia,” pp. 94-126; Seligman, “Progressive Taxation in Theory and Practice,” pp. 210, 211; Mill, “Principles of Political Economy,” book V, ch. ii, sec. 3.
109 “Summary of Report of the Commissioner of Corporations on the Lumber Industry in the United States,” p. 8.
110 Probably the most concrete and satisfactory discussion of the increment tax and the project to transfer improvement taxes to land, is that presented in the “Final Report of the Committee on Taxation of the City of New York”; 1916. It contains brief, though complete, statements of all phases of the subject, together with concise arguments on both sides, majority and minority recommendations, a great variety of dissenting individual opinions, and considerable testimony by experts, authorities, and other interested persons.
111 “Final Report of the Industrial Commission,” pp. 410, 411.
112 “Report of the Industrial Commission,” vol. IX, p. 380.
113 “Publication No. 32 of the Railroad Commission of Wisconsin,” pp. 165, 166.
114 Cf. Engels, “Socialism: Utopian and Scientific,” pp. 45, 46; and Hillquit-Ryan, “Socialism: Promise or Menace,” 103, 104, 143-145.
115 Cf. Hillquit-Ryan, op. cit., pp. 75, 76.
116 “Capital,” pp. 1-9.
117 Op. cit., p. 117; Humboldt Edition.
118 Skelton, “Socialism: A Critical Analysis,” pp. 121, 122.
119 Cf. Skelton, loc. cit.
120 The exaggerated claims made on behalf of social productivity in the matter of land values have been examined in a previous chapter. Similar exaggerations with regard to capital will be considered in chapter xii.
121 Wilhelm Liebknecht, cited in Hillquit’s “Socialism in Theory and Practice,” p. 107.
122 “Das Erfurter Program,” cited by Skelton, op. cit., p. 178.
123 Cf. Skelton, op. cit., ch. vii; Bernstein, “Evolutionary Socialism,” pp. 1-94; Simkhovitch, “Marxism vs. Socialism,” passim; Walling, “Progressivism and After,” passim; Hillquit-Ryan, op. cit., ch. iv.
124 “Income,” p. 152.
125 “The Wealth and Income of the People of the United States,” p. 132.
126 Cf. Hillquit-Ryan, op. cit., pp. 107, 136.
127 Cf. Hillquit-Ryan, op. cit., pp. 73-77; Skelton, op. cit, p. 183; Walling, “Socialism as It Is,” p. 429.
128 Cf. King, op. cit., pp. 224-226.
129 Cf. Kautsky, “The Social Revolution,” pp. 166, 167; Hillquit-Ryan, op. cit., p. 72.
130 Hillquit-Ryan, op. cit., p. 80; cf. Spargo, “Socialism,” pp. 225-227.
131 “Socialism: A Critical Analysis,” p. 219.
132 Cf. “The Panama Gateway,” by Joseph Bucklin Bishop, p. 263.
133 Hohoff, “Die Bedeutung der Marxschen Kapitalkritik”; Paderborn, 1908.
134 Pp. 64-67, 88, 89, 96.
135 Cf. Van Roey, “De Justo Auctario ex Contractu Crediti”; and Ashley, “English Economic History.”
136 Encyclical, “Vix Pervenit,” 1745.
137 Cf. St. Thomas, “Summa Theologica,” 2a 2ae, q. 78, a. 2 et 3.
138 “Secunda Secondae,” q. 77, a. 1, in corp.
139 “Theologia Moralis,” I, no. 1050.
140 “What is Capital?” p. 27.
141 “Political Economy,” p. 507.
142 “Growth of Capital,” p. 152.
143 Cf. Gonner, “Interest and Saving,” p. 73; Cassel, “The Nature and Necessity of Interest,” ch. iv.
144 New York, 1907.
145 “Principles of Economics,” II, 42.
146 Cf. Hobson, “The Economics of Distribution,” pp. 259-265.
147 Cf. Fisher, “Elementary Principles of Economics,” pp. 396, 397. However, he does not discuss in this passage the possibility of suppressing interest on productive capital by a direct method.
148 Cf. Lehmkuhl, “Theologia Moralis,” I, nos. 917, 965, 1035.
149 Vol. 3, pp. 617-629; 2d ed.
150 Ballerini-Palmieri, loc. cit.; cf. Van Roey, op. cit., pp. 73-75.
151 Cf. American Economic Review, March, 1916; p. 46.
152 “Contra Gentiles,” lib. 3, c. 123.
153 Professor Scott Nearing estimates the annual income derived from the ownership of property in the United States; that is, land and all forms of capital, at from six to nine billion dollars. Professor W. I. King gives the combined shares of the national income received by the landowners and the capitalists at more than six and three-quarter billions in 1910. According to the Census Bulletin on the “Estimated Valuation of National Wealth,” the capital goods of the country were in 1912 approximately $175,000,000,000.00. At four per cent. this would mean an annual income of seven billion dollars. The lowest of the three estimates, six billion dollars, is equivalent to more than sixty dollars a year for every man, woman, and child in the United States. If that sum were equally distributed among the whole population, it would mean an increase of between forty and sixty per cent. in the income of the majority of workingmen’s families! Nor do present tendencies hold out any hope of an automatic reduction of the interest-burden in the future. In the opinion of Professor Scott Nearing, “the present economic tendencies will greatly increase the amount of property income paid with each passing decade.” “Income,” p. 199; New York, 1915. See especially ch. vii. According to Professor Taussig, “the absolute amount of income going to this [the capitalist] class tends to increase, and its share of the total income tends also to increase; whereas for the labourers, though their total income may increase, their share of income of society as a whole tends to decline.” “Principles of Economics,” II, 205.
154 “Lehrbuch der Nationaloekonomie,” III, 517.
155 Fay, “Co-operation at Home and Abroad,” p. 340.
156 Schloss, “Methods of Industrial Remuneration,” pp. 353, 354.
157 Cf., however, Mr. A. R. Orage’s work, “National Guilds,” London, 1914.
158 Op. cit., p. 341.
159 “Copartnership and Profit-Sharing,” p. 235.
160 “The Wealth and Income of the People of the United States,” 158, 160.
161 Idem, p. 218.
162 A very suggestive discussion of the psychology, the general principles, and the practical limitations of distributive justice, will be found in an article by Gustav Schmoller, entitled, “The Idea of Justice in Political Economy.” It is No. 113 in the Publications of the American Academy of Political and Social Science.
163 Cf. pp. 212, 213 of Castelein’s “Philosophia Moralis et Socialis.”
164 Cf. Hobson, “The Industrial System,” chapter on “Ability.”
165 Report of the Commissioner of Corporations on the Petroleum Industry, II, 40, 41.
166 Report of the Commissioner of Corporations on the Tobacco Industry, II, 26-34.
167 Report of the Commissioner of Corporations on the Steel Industry, I, 51. According to F. J. McRae, the expert accountant for the Stanley congressional investigating committee, this concern secured 40 per cent. on the cost of its property.
168 Hearings Before the Interstate Commerce Committee, U. S. Senate, Part XVI, pages 1146-1166.
169 The Journal of Political Economy, April, 1912, p. 366.
170 “Concentration and Control,” p. 20.
171 Page 621.
172 The Journal of Political Economy, April, 1912, p. 363.
173 Report on the Petroleum Industry, II, 74.
174 Report on the Tobacco Industry, II, 27.
175 Cf. Van Hise, op. cit., pp. 140, 149, 153, 159.
176 Final Report of the Industrial Commission, pp. 660-662.
177 Report on the Petroleum Industry, I, 328-332.
178 Cf. Lehmkuhl, “Theologia Moralis,” I, No. 974.
179 It may be of interest to recall the mediæval attitude toward monopolistic exactions, as summarily stated by St. Antoninus, who was archbishop of Florence in the first half of the fifteenth century: “When monopolist merchants agree together to preserve a fixed price, so as to secure an unlimited profit, they are guilty of sinful trading.” He maintained that they should not sell above the market price, and should be prevented from so doing by law. See his “Summa Theologica,” III, 8, 3, iv, and II, 1, 16, ii. Present day moral theologians lay down the same doctrine, and in addition condemn the characteristic monopolistic methods as unjust. See Tanquerey, “De Justitia,” nos. 776, 777; Lehmkuhl, “Theologia Moralis,” vol. I, no. 1119.
180 Clark, “The Problem of Monopoly,” p. 35.
181 Final Report, p. 361.
182 Report on the Petroleum Industry, pp. 22, 23.
183 “Papers and Proceedings,” pp. 158-194.
184 Op. cit., pp. 20, 251.
185 Op. cit., pp. 254-265.
186 Cf. Ripley, “Trusts, Pools, and Corporations,” pp. 207-210.
187 See Report of the Interstate Commerce Commission on these transactions.
188 Taussig, “Principles of Economics,” II, 385, 386.
189 Final Report, p. 414.
190 Final Report of the Industrial Commission, p. 413.
191 Report on the Steel Industry, p. 38.
192 Idem, p. 39.
193 Chicago Record-Herald, July 29, 1912.
194 Op. cit., p. 28.
195 Cf. Van Hise, op. cit., pp. 29, 142, 149.
196 Op. cit., II, 387, 388.
197 “Final Report,” p. 32.
198 “Progressive Taxation,” pp. 210, 211; cf. Vermeersch, “Quaestiones de Justitia,” pp. 94-126.
199 “The Gospel of Wealth,” pp. 11, 12.
200 Cf. Dr. T. S. Adams in “Papers and Proceedings of the 27th Annual Meeting of the American Economic Association,” pp. 234, sq.
201 “Summa Theologica,” 2a. 2ae., q. 66, a. 3.
202 “Patrologia Graeca,” vol. 31, cols. 275, 278.
203 “Patrologia Latina,” vol. 37, col. 1922.
204 “Patrologia Latina,” vol. 14, col. 747.
205 “Patrologia Latina,” vol. 77, col. 87. These and several other extracts of like tenor may be found in Ryan’s “Alleged Socialism of the Church Fathers,” ch. i; St. Louis, 1913.
206 Op. cit., 2a. 2ae., q. 66, a. 7.
207 Encyclical, “On the Condition of Labour,” May 15, 1891.
208 Encyclical, “On Socialism, Communism, Nihilism,” Dec. 28, 1878.
209 Op. cit., 2a. 2ae., q. 32, a. 1.
210 Idem, q. 66, a. 7.
211 A comprehensive, though brief, discussion of this question and numerous references are contained in Bouquillon, “De Virtutibus Theologicis,” pp. 332-348. When Pope Leo XIII declared that the rich are obliged to distribute “out of” their superfluity, he did not mean that they are free to give only a portion thereof. The particle “de” in his statement, “officium est de eo quod superat gratificari indigentibus,” is not correctly translated by “some.” It means rather “out of,” “from,” or “with”; so that the affluent are commanded to devote their superfluous goods indefinitely to the relief of the needy. In the Encyclical, “Quot Apostolici Muneris,” he used the expression, “gravissimo divites urget praecepto ut quod superest pauperibus tribuant,” which clearly declares the duty of distributing all.
212 “The Wealth and Income of the People of the United States,” pp. 224-226.
213 Page 47.
214 The Chicago Daily Tribune, July 17, 1915.
215 Article on “Political Economy and Ethics,” in Palgrave’s Dictionary of Political Economy.
216 “Property and Contract,” II, 603.
217 Cf. “L’Idée du Juste Salaire,” by Léon Polier, ch. iii. Paris; 1903.
218 Polier, op. cit., pp. 33, sq.; Ryan, “A Living Wage,” pp. 26, sq.
219 “Ethica,” lib. 5, tr. 2, cap. 5.
220 “Comment. ad Eth.,” XXI, 172.
221 Cf. Polier, op. cit., pp. 66-75; Ryan, op. cit, pp. 93, 94.
222 Cf. Polier, op. cit., pp. 92-95.
223 “Cours d’Économie Sociale,” pp. 598, sq.
224 Polier, op. cit., pp. 219-359; Menger, “The Right to the Whole Produce of Labour”; English Translation. London; 1899.
225 “Enquiry Concerning Political Justice.”
226 “On the Effects of Civilisation on the People of European States.”
227 “An Inquiry Into the Principles of the Distribution of Wealth Most Conducive to Human Happiness.”
228 Menger, op. cit., p. 56.
229 Op. cit., p. 51.
230 Cf. Menger, op. cit., pp. 62-73.
231 “Qu’ est-ce que la propriété ou recherches sur la principe du droit et du gouvernment.” 1840.
232 “Zur Erkentniss unserer staatswirthschaftlichen Zustande,” 1842.
233 “Das Kapital,” 1867.
234 Cf. Polier, op. cit., pp. 352, sq.
235 Cf. especially chap. xxi, “The Theory of Economic Causation.”
236 “Proceedings,” pp. 23-54.
237 “Proceedings of the 22d Annual Meeting of the American Economic Association,” pp. 160, 161.
238 Op. cit., p. 8.
239 “Essays in Social Justice”; especially ch. vii.
240 Op. cit., pp. 187, 188.
241 Op. cit., p. 201.
242 Cf. Skelton, “Socialism: A Critical Analysis,” p. 202; Menger, “The Right to the Whole Produce of Labour,” pp. 8, sq.
243 All the questions treated in this chapter are discussed at much greater length in the author’s work, “A Living Wage”; Macmillan; 1906.
244 See chapters xii and xiii.
245 While the statement in the text applies to all labourers of less than average ability, it obviously is applicable only to individual cases among those who are up to the average. These are the workers at the “margin” of the labour force in an establishment, those who could be discharged without causing the industry to shut down. If an employer would rather go out of business than pay a living wage to all his necessary labourers of average ability, he is morally free to do so; but he may not employ them at less than living wages in order to obtain interest on his capital.
246 One of the best statements of the evil social results of low wages will be found in Webb’s “Industrial Democracy,” vol. II, pp. 749-766.
247 See reports of these commissions in Oregon, Washington, Massachusetts, Minnesota, and California.
248 “A Living Wage,” p. 150.
249 See Bulletins of the Federal Bureau of Labour Statistics on “Retail Prices”; and Nearing, “Reducing the Cost of Living.”
250 “Summary of the Report on Condition of Woman and Child Wage Earners in the United States,” pp. 383, 384. The best intensive study of family cost of living is that published in the volume edited by Robert C. Chapin, “The Standard of Living Among Workingmen’s Families in New York City”; 1909. It led to the conclusion that anything less than eight hundred dollars was insufficient for the yearly maintenance of a husband and wife and three small children in Manhattan.
251 See articles by Hammond in the American Economic Review, June, 1913, and in the Annals of the American Academy of Political and Social Science, July, 1913; and page 62 of the Appendix to the third volume of the Report of the New York State Factory Investigating Commission.
252 See the replies of the London Board of Trade to the N. Y. Factory Investigating Commission, on pages 77, 78 of the volume cited above; and especially the two monographs by R. H. Tawney, “The Establishment of Minimum Rates in the Chain-Making Industry,” and “The Establishment of Minimum Rates in the Tailoring Industry.” London; 1914 and 1915.
253 “First Biennial Report of the Industrial Welfare Commission of Washington,” pp. 13, 15.
254 “Effect of Minimum Wage Determinations in Oregon.” Bulletin No. 176 of United States Bureau of Labour Statistics.
255 From a paper read before the National Convention of the Association of Government Labour Officials, Nashville, Tenn., June 9, 1914.
256 See Bulletins of Massachusetts Minimum Wage Commission.
257 See the excellent and varied series of papers on the subject in Orth’s “The Relation of Government to Property and Industry,” pp. 103-178. Ginn & Company; 1915.
258 The arguments for and against the constitutionality of a legal minimum wage are adequately presented in the briefs, respectively, of Louis D. Brandeis and Rome G. Brown, in the cases of Stettler vs. O’Hara and Simpson vs. O’Hara. The former is published by the National Consumers’ League, New York, and the latter by the Review Publishing Company, Minneapolis.
259 “Minimum Rates in the Tailoring Industry,” p. 161.
260 One of the best statements of the economic aspect of the minimum wage is that by Sidney Webb, in the Journal of Political Economy, Dec., 1912. Probably the most varied and comprehensive general discussion is the symposium in the Survey, Feb. 6, 1915. See especially the excellent presentation in Commons and Andrews’ “Principles of Labour Legislation,” pp. 167-200.
261 See pages 303, 304 of “A Living Wage”; Macmillan, 1906.
262 O’Grady, “A Legal Minimum Wage”; Washington, 1915.
263 “Final Report,” pp. 101, 255, 364.
264 The Quarterly Journal of Economics, May, 1916. A somewhat less unfavourable criticism is contained in the paper by Professor John Bates Clark in the Atlantic Monthly, September, 1913.
265 Page 436.
266 “The Wealth and Income of the People of the United States,” p. 129.
267 Page 437.
268 “Final Report,” p. 802. Washington, 1902.
269 See article by Professor Commons in “The New Encyclopedia of Social Reform,” p. 1233.
270 The Quarterly Journal of Economics, May, 1916, p. 502.
271 “Problems of Poverty,” p. 227. London, 1891.
272 “Minimum Rates in the Tailoring Industry,” p. 96.
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