Distributive Justice: The Right and Wrong of Our Present Distribution of Wealth

by John A. Ryan

PREFACE

Five of the nine members of the late Federal Commission on Industrial Relations united in the declaration that the first cause of industrial unrest is, "unjust distribution of wealth and income." In all probability this judgment is shared by the majority of the American people. Regarding the precise nature and extent of the injustice, however, there is no such preponderance of opinion. Even the makers of ethical and economic treatises fail to give us anything like uniform or definite pronouncements concerning the moral defects of the present distribution. While the Socialists and the Single Taxers are sufficiently positive in their statements, they form only a small portion of the total population, and include only an insignificant fraction of the recognised authorities on either ethics or economics.

The volume in hand represents an attempt to discuss systematically and comprehensively the justice of the processes by which the product of industry is distributed. Inasmuch as the product is actually apportioned among landowners, capitalists, business men, and labourers, the moral aspects of the distribution are studied with reference to these four classes. While their rights and obligations form the main subject of the book, the effort is also made to propose reforms that would remove the principal defects of the present system and bring about a larger measure of justice.

Many treatises have been written concerning the morality of one or other element or section of the distributive process; for example, wages, interest, monopoly, the land question; but, so far as the author knows, no attempt has hitherto been made to discuss the moral aspects of the entire process in all its parts. At least, no such task has been undertaken by any one who believes that the existing economic system is not inherently unjust. That the present essay in this field falls far short of adequate achievement the author fully realises, but he is sustained by the hope that it will provoke discussion, and move some more competent person to till the same field in a more thorough and fruitful way.

John A. Ryan.

The Catholic University of America,
Washington, D. C., June 14, 1916.

---

CONTENTS

Preface		[vii]
Introductory Chapter: The Elements and Scope of the Problem		[xiii]
	General References	[xvii]
SECTION I THE MORALITY OF PRIVATE LANDOWNERSHIP AND RENT
CHAPTER		PAGE
I	The Landowner's Share of the National Product	[3]
	Economic Rent Always Goes to the Landowner	[4]
	Economic Rent and Commercial Rent	[5]
	The Cause of Economic Rent	[6]
II	Landownership in History	[8]
	No Private Ownership in Pre-Agricultural Conditions	[10]
	How the Change Probably Took Place	[12]
	Limited Character of Primitive Common Ownership	[14]
	Private Ownership General in Historical Times	[15]
	Conclusions from History	[17]
III	The Arguments Against Private Landownership	[19]
	Arguments by Socialists	[19]
	Henry George's Attack on the Title of First Occupancy	[21]
	His Defence of the Title of Labour	[24]
	The Right of all Men to the Bounty of the Earth	[30]
	The Alleged Right of the Community to Land Values	[39]
IV	Private Ownership the Best System of Land Tenure	[48]
	The Socialist Proposals Impracticable	[48]
	Inferiority of the Single Tax System	[51]
V	Private Landownership a Natural Right	[56]
	Three Principal Kinds of Natural Rights	[57]
	Private Landownership Indirectly Necessary for Individual Welfare	[59]
	Excessive Interpretations of the Right of Private Landownership	[61]
	The Doctrine of the Fathers and the Theologians	[62]
	The Teaching of Pope Leo XIII	[64]
VI	Limitations of the Landowner's Right to Rent	[67]
	The Tenant's Right to a Decent Livelihood	[69]
	The Labourer's Claim Upon the Rent	[71]
VII	Defects of the Existing Land System	[74]
	Landownership and Monopoly	[75]
	Excessive Gains from Private Landownership	[80]
	Exclusion from the Land	[90]
VIII	Methods of Reforming Our Land System	[94]
	The Leasing System	[95]
	Public Agricultural Lands	[97]
	Public Ownership of Urban Land	[98]
	Appropriating Future Increases of Land Value	[100]
	Some Objections to the Increment Tax	[102]
	The Morality of the Proposal	[108]
	The German and British Increment Taxes	[114]
	Transferring Other Taxes to Land	[117]
	The Morality of the Plan	[120]
	Amount of Taxes Practically Transferable	[122]
	The Social Benefits of the Plan	[127]
	A Supertax on Large Holdings	[130]
	References on Section I	[133]
SECTION II THE MORALITY OF PRIVATE CAPITAL AND INTEREST
IX	The Nature and the Rate of Interest	[137]
	Meaning of Capital and Capitalist	[137]
	Meaning of Interest	[138]
	The Rate of Interest	[141]
X	The Alleged Right of Labour to the Entire Product Of Industry	[145]
	The Labour Theory of Value	[146]
	The Right of Productivity	[149]
XI	The Socialist Scheme of Industry	[152]
	Socialist Inconsistency	[152]
	Expropriating the Capitalists	[154]
	Inefficient Industrial Leadership	[158]
	Inefficient Labour	[162]
	Attempted Replies to Objections	[162]
	Restricting Individual Liberty	[168]
XII	Alleged Intrinsic Justifications of Interest	[171]
	Attitude of the Church Toward Interest on Loans	[172]
	Interest on Productive Capital	[175]
	The Claims of Productivity	[177]
	The Claims of Service	[181]
	The Claims of Abstinence	[182]
XIII	Social and Presumptive Justifications of Interest	[187]
	Limitations of the Sacrifice Principle	[187]
	The Value of Capital in a No-Interest Régime	[188]
	Whether the Present Rate of Interest is Necessary	[191]
	Whether at Least two Per Cent. is Necessary	[193]
	Whether any Interest is Necessary	[196]
	The State is Justified in Permitting Interest	[199]
	Civil Authorisation not Sufficient for Individual Justification	[201]
	How the Interest-Taker is Justified	[204]
XIV	Co-operation a Partial Solvent of Capitalism	[210]
	Reducing the Rate of Interest	[211]
	Need for a Wider Distribution of Capital	[213]
	The Essence of Co-operative Enterprise	[214]
	Co-operative Credit Societies	[216]
	Co-operative Agricultural Societies	[217]
	Co-operative Mercantile Societies	[220]
	Co-operation in Production	[222]
	Advantages and Prospects of Co-operation	[228]
	References on Section II	[233]
SECTION III THE MORAL ASPECT OF PROFITS
XV	The Nature of Profits	[237]
	The Functions and Rewards of the Business Man	[237]
	The Amount of Profits	[239]
	Profits in a Joint-Stock Company	[241]
XVI	The Principal Canons of Distributive Justice	[243]
	The Canon of Equality	[243]
	The Canon of Needs	[244]
	The Canon of Efforts and Sacrifice	[246]
	The Canon of Productivity	[247]
	The Canon of Scarcity	[250]
	The Canon of Human Welfare	[252]
XVII	Just Profits in Conditions of Competition	[254]
	The Question of Indefinitely Large Profits	[255]
	The Question of Minimum Profits	[258]
	The Question of Superfluous Business Men	[260]
XVIII	The Moral Aspect of Monopoly	[262]
	Surplus and Excessive Profits	[263]
	The Question of Monopolistic Efficiency	[265]
	Discriminative Underselling	[267]
	Exclusive-Sales Contracts	[270]
	Discriminative Transportation Arrangements	[272]
	Natural Monopolies	[273]
	Methods of Preventing Monopolistic Injustice	[275]
	Legalised Price Agreements	[277]
XIX	The Moral Aspects of Stockwatering	[279]
	Injurious Effects of Stockwatering	[281]
	The Moral Wrong	[284]
	The "Innocent" Investor	[286]
	Magnitude of Overcapitalisation	[288]
XX	The Legal Limitation of Fortunes	[291]
	The Method of Direct Limitation	[292]
	Limitation Through Progressive Taxation	[296]
	The Proper Rate of Income and Inheritance Taxes	[299]
	Effectiveness of Such Taxation	[300]
XXI	The Duty of Distributing Superfluous Wealth	[303]
	The Question of Distributing Some	[303]
	The Question of Distributing All	[308]
	Some Objections	[311]
	A False Conception of Welfare and Superfluous Goods	[314]
	The True Conception of Welfare	[316]
	References on Section III	[318]
SECTION IV THE MORAL ASPECTS OF WAGES
XXII	Some Unacceptable Theories of Wage-Justice	[323]
	I The Prevailing-Rate Theory	[323]
	Not in Harmony with Justice	[325]
	II Exchange-Equivalence Theories	[326]
	The Rule of Equal Gains	[326]
	The Rule of Free Contract	[328]
	The Rule of Market Value	[330]
	The Mediæval Theory	[332]
	A Modern Variation of the Mediæval Theory	[337]
	III Productivity Theories	[340]
	Labour's Right to the Whole Product	[341]
	Clark's Theory of Specific Productivity	[347]
	Carver's Modified Version of Productivity	[351]
XXIII	The Minimum of Justice; a Living Wage	[356]
	The Principle of Needs	[356]
	Three Fundamental Principles	[358]
	The Right to a Decent Livelihood	[360]
	The Claim to a Decent Livelihood from a Present Occupation	[362]
	The Labourer's Right to a Living Wage	[363]
	When the Employer is Unable to Pay a Living Wage	[366]
	An Objection and Some Difficulties	[370]
	The Family Living Wage	[373]
	Other Arguments in Favour of a Living Wage	[376]
	The Money Measure of a Living Wage	[378]
XXIV	The Problem of Complete Wage Justice	[381]
	Comparative Claims of Different Labour Groups	[381]
	Wages Versus Profits	[388]
	Wages Versus Interest	[390]
	Wages Versus Prices	[393]
	Concluding Remarks	[398]
XXV	Methods of Increasing Wages	[400]
	The Minimum Wage in Operation	[400]
	The Question of Constitutionality	[405]
	The Ethical and Political Aspects	[407]
	The Economic Aspect	[408]
	Opinions of Economists	[412]
	Other Legislative Proposals	[416]
	Labour Unions	[417]
	Organisation Versus Legislation	[420]
	Participation in Capital Ownership	[423]
	References on Section IV	[425]
XXVI	Summary and Conclusion	[426]
	The Landowner and Rent	[426]
	The Capitalist and Interest	[427]
	The Business Man and Profits	[428]
	The Labourer and Wages	[430]
	Concluding Observations	[431]
	Index	[435]

---