HENRY WALDGRAVE STUART
§ 1. In the logic of Instrumentalism, truth has been identified with usefulness and the good with the satisfactory. Classifying critics have seen in this the damaging mark of Utilitarianism, certain of them deeming "Amerikanismus" an even shrewder and more specific diagnosis. The association of these terms together and the aptness of either to express what the critics have in mind are matters of small interest. It is of more importance to discover, behind the reproach implied, the assumptions which may have made the reproach seem pertinent. One cannot, of course, suppose it to express a sheer general aversion to the useful or an ascetic abhorrence of all satisfaction on principle. Puritanism, æstheticism, and pedantry should be last resorts in any search for an interpretative clue.
The distrust of Utilitarianism need be ascribed to none of these. It comes instead from a conception of the true Utilitarian as a dull and dogmatic being with no interests beyond the range of his own uninquiring vision, no aspiration beyond the complacent survey of his own perfections and no standards beyond the inventory of his own bourgeois tastes and prejudices. The type is indeed not yet extinct in our day: but is it plausible to charge a "new" philosophy with conspiring to perpetuate it? Is Instrumentalism only philistinism called by a more descriptive name? It professes at least to be a logic of hypothesis and experiment, whereas for the perfect philistine there are no ultimate problems and hence no logic but the logic of self-evidence. When Instrumentalism speaks of needs and interests in its analysis of truth and goodness does it then mean the needs and interests that define the individual in what is sometimes invidiously termed a "biological" sense—interests that control him before his conduct becomes in any way a problem for himself? Quite as a matter of course, just this has been the assumption. The satisfactoriness of prompt and cogent classification has had a hand in the vindication of truth's supremacy over satisfaction. In the view of instrumentalism this ready interpretation of its meaning is nothing less than the thinking of the unthinkable and the bodying-forth of what is not. The man who has solved a problem simply is not the man he was before—if his problem was a genuine one and it was he who solved it. He cannot measure and judge the outcome by his earlier demands for the very good reason that the outcome of real deliberation empties these earlier demands of their interest and authority for him.
Can the conception thus suggested of personal growth through exercise of creative or constructive intelligence be in any measure verified by a general survey of the economic side of life? Has it any important bearings upon any parts of economic theory? These are the questions to which this essay is addressed.
I
§ 2. How have the real or fancied needs of the average person of today come to be what they are? For all sorts and conditions of men, the ways and means of living have, during the past century or two—even during the past decade or two—undergone revolutionary changes. It is true that many of these changes have been relatively superficial, touching only certain externalities and entering in no important way into life's underlying and dominant motives. Others, no doubt, may fairly be held to confuse and disperse the energies of men, instead of making for wholeness, sanity and development of human interest and power. And critics of industrial and social progress who have felt the need for reservations of this sort fall easily into a certain mood of historic homesickness for the supposed "simplicity" of an earlier age. But our interest, in this discussion, is in the genesis, the actual process of becoming, of our present "standards of living," not their value as rated by any critical (or uncritical) standard. And accordingly we shall take it for a fact that on the whole the average person of today is reasonably, perhaps unreasonably, well satisfied with his telephone, his typewriter, and his motor-car; with his swift and easy journeyings over land and sea; with his increasingly scientific medical attendance and public sanitation; with his virtually free supplies of literature and information, new and old, and with his electric light or his midnight oil (triple distilled) to aid in the perusal. More than this, he is so well satisfied with all these modern inventions that, historical or æsthetical or other "holidays" apart, he would never for a moment dispense with any one of them as a matter of free choice. Grossly material and humbly instrumental though they are, these things and their like constitute the framework sustaining the whole system of spiritual functions that make up the life we live today, as a society and as individuals. And our present problem simply is the way in which they were first received by those who were to use them, and passed into their present common acceptance. To put the matter in general terms, how is it that novel means of action or enjoyment, despite their novelty, are able to command fair scrutiny and hearing and can contrive to make their way, often very speedily, into a position of importance for industry and life?
There is an easy and not unnatural way of thinking of this process as we see it going on about us that may keep us long unmindful of even the possibility of such a question. In every field of action, we habitually look back upon accomplished changes from some present well-secured vantage-point, and as we trace the steps by which they have come to pass it is almost inevitable that we should first see the sequence as an approach, direct or devious but always sure, to the stage on which we happen to have taken our stand. It seems clear to us that what we have attained is better than aught that has gone before—if it were not distinctly satisfactory on its own merits we should not now be taking it as the standpoint for a survey. But once it is so taken, our recognition of its appreciable and satisfying superiority passes over insensibly into metaphysics. What we now find good we find ourselves perceiving to have been all the while predestined in the eternal scheme of things! We pause in retrospect like the wayfarer who has reached the turning of a mountain road or the man of middle age who for the first time feels that his professional position is assured. This, we say, justifies the effort it has cost, this at last is really living! And the next step in retrospective reconstruction follows easily; this was my true goal from the first, the dim and inexpressible hope of which would not let me pause and kept me until now dissatisfied. The end was present in the beginning, provoking the first groping efforts and affording progressively the test and measure by which their results were found ever wanting.
This retrospective logic may explain the presence and perennial charm of those panoramic pages in our encyclopædias purporting to show forth the gradual perfecting of great instrumentalities upon which our modern life depends. We survey the "evolution" of printing, for example, from the wooden blocks of the Chinese or of Laurens Coster down to the Hoe press, the stereotype plate, and the linotype machine. Or we see the forms of written record from pictured papyrus, cuneiform brick, and manuscript scroll down to the printed book and the typewritten page; the means of carriage by land from the ox-cart of the patriarchs to the stage-coach, the Cannonball Limited, the motor-truck, and the twelve-cylinder touring-car. And as one contemplates these cheerfully colored exhibits there is in each case an almost irresistible suggestion of a constant and compelling need of "universal man" seeking in more and more marvellously ingenious ways an adequate expression and satisfaction. This need seems never to have lapsed or changed its nature. All along both driving power and direction, it has been the one fixed factor in a long process in which all else has been fluctuating, contingent, and imperfect—all else except the nature of the materials and the principles of mechanics, which, too, are seen in the end to have been mutely conspiring toward the result. Essential human nature, it seems clear, does not and happily cannot change. Spiritual progress, in this ultimate optimism, means simply clearer vision, completer knowledge, and a less petulant and self-assertive habit of insistence upon the details of particular purposes as individual "impulse" and "idiosyncrasy" define them. We fortunate beings of today have available, in the various departments of our life, certain instrumentalities, and to these our interests attach. These interests of ours in their proportional strength (so the argument runs) express our native and generic constitution in so far as this constitution has been able as yet to achieve outward expression and embodiment. And accordingly, in interpreting the long history of technological evolution, we take what we conceive ourselves now to be as normative and essential. We project back into the lives of primitive man, of our own racial ancestors, or of our grandfathers, the habits and requirements which we acknowledge in ourselves today and we conceive the men of the past to have been driven forward on the ways of progress by the identical discontent that would presumably beset ourselves if we were to be suddenly carried back to their scale and manner of existence.
§ 3. Whatever else may be thought of it, there is at least this to be said for the cult of historic homesickness to which reference has just been made: it happens to be at one with modern ethnology and history in suggesting that earlier cultures were on the whole not less content and self-satisfied in their condition than our own. It is primitive man, not the modern, who is slow to move and is satisfied, as a matter of course, with the manner of life in which he fancies his people to have lived from time immemorial. Change in early social groups is tragic when it is not insensible. It comes through conquest and enslavement by outsiders or through stress of the dread of these, or by gradual adaptation of custom to failing environmental resources or to increasing wealth. Assent to change is in general grudging or tacit at best and is commonly veiled by some more or less transparent fiction.
And our suspicion of fallacy lurking somewhere in the type of retrospective Idealism we have been considering is strengthened when we come to look a little closely to details. To take a commonplace example—can it be held that the difference between using a typewriter and "writing by hand" is purely and simply a matter of degree—that the machine serves the same purpose and accomplishes the same kind of result as the pen, but simply does the work more easily, rapidly, and neatly? Undoubtedly some such impression may easily be gathered from an external survey of the ways that men have used at different times for putting their ideas on record. But it ignores important aspects of the case. For one thing, the modern invention effects a saving of the writer's time which can be used in further investigation or in more careful revision or in some way wholly unrelated to literary work, and if the machine makes any part of the writer's task less irksome, or the task as a whole less engrossing, the whole matter of literary effort becomes less forbidding and its place and influence as a social or a personal function may for better or for worse be altered. The difference brought to pass transcends mere technical facility—it ramifies into a manifold of differences affecting the entire qualitative character and meaning of the literary function. And only by an arbitrary sophistication of the facts can this complexity of new outcome be thought of as implicit and dynamic in the earlier stage.
In the same way precisely, the motor-car, as every one knows, has "vanquished distance" and has "revolutionized suburban life." In England it is said to have made acute the issue of plural voting. In America it is hailed by the optimistic as the solution of the vexed problem of urban concentration and the decline of agriculture. Even as a means of recreation it is said by the initiated to transform the whole meaning of one's physical environment, exploiting new values in sky and air and the green earth, which pass the utmost possibilities of family "carry-all" or coach and four. Or consider the ocean steamship and its influence: today we travel freely over the world, for all manner of reasons, sufficient or otherwise. A hundred years ago distant journeyings by sea or land were arduous and full of peril, undertaken only by the most adventurous or the most curious or for urgent need. Now commodities of every sort can be transported to virtually every quarter of the globe—rails and locomotives, cement and structural steel, machinery of all kinds from the motor and the dynamo to the printing press and the cinematograph, in a word whatever is necessary to recreate the waste places of the earth and to make life in these regions humanly liveable. The sheer scale and magnitude of such operations lifts them above the level of the international trade of five hundred or even a hundred years ago. And their far-reaching results of every sort in the lives of nations and of individuals the world over can in no intelligible sense be understood as mere homogeneous multiples of what trade meant before our age of steam, iron, and electricity. Finally, we may think of modern developments in printing as compared, for example, with the state of the craft in the days when the New England Primer served to induct juvenile America into the pleasant paths of "art and literature." And it is clear that the mechanical art that makes books and reading both widely inviting and easily possible of enjoyment today is not merely a more perfect substitute for the quill and ink-horn of the mediæval scribe or even for the printing press of Caxton or of Benjamin Franklin. The enormously and variously heightened "efficiency" of the mechanical instrumentalities nowadays available has for good and for evil carried forward the whole function of printing and publication into relations and effects which are qualitatively new and beyond the possible conception of the earlier inventors and readers.
§ 4. The real evolution in such cases of the coming of a new commodity or a new instrument into common and established use is an evolution of a more radical, more distinctly epigenetic type than the pictured stories of the encyclopædia-maker serve to suggest. At each forward step the novelty makes possible not merely satisfactions more adequate as measured by existing requirements or more economical in terms of cost, but new satisfactions also for which no demand or desire before existed or could possibly exist—satisfactions which, once become habitual, make the contentment of former times in the lack of them hard to understand or credit. And indeed the story is perhaps never quite one-sided; the gain we reckon is perhaps never absolutely unmixed. There may be, perhaps must in principle be, not only gain but loss. The books we read have lost something of the charm of the illuminated manuscript; our compositors and linotypers, it may be, have forgotten something of the piety and devotion of the mediæval scribe and copyist. So everywhere in industry the machine depreciates and pushes out the skilled artisan and craftsman, summoning into his place the hired operative whose business is to feed and serve instead of to conceive and execute. For cheapness and abundance, for convenience of repair and replacement we everywhere sacrifice something of artistic quality in the instrumentalities of life and action and something of freedom and self-expression in the processes of manufacture. Thus again, to change the venue, there are those who miss in democratic government or in an ethical type of religion the poignant and exalting spiritual quality of devotion to a personal sovereign or a personal God. Whatever one's judgment may be in particular cases, there can be no reason for disputing that in epigenetic or creative evolution there is, in a sense, loss as well as gain. There is no more reason for supposing that all that was wholesome or ennobling or beautiful in an earlier function must somehow have its specific compensation in kind infallibly present in the new than for supposing that all that is desirable in the new must surely have been present discernibly or indiscernibly in the old.
If we are on the whole satisfied with the new on its intrinsic merits as a present complex fact, we have therein sufficient ground for saying that it marks a stage in progress. This, in fact, is what such a proposition means. And the old then appears more or less widely discontinuous with the new—not merely that it shows, in units of measure, less of the acceptable quality or qualities which the new fact or situation is found to possess, but that it belongs for us to a qualitatively different level and order of existence. How, we wonder, could our ancestors have found life tolerable in their undrained and imperfectly heated dwellings, without the telephone, the morning's news of the world by cable, and the phonograph? How, again, could feudal homage and fealty have ever been the foundation of social order in countries where today every elector is wont to think and to act in his public relations no longer as a subject but as a citizen. And how, in still a different sphere, could the father or the mother of a happy family of children ever have found the freedom and irresponsibility of bachelorhood endurable? Shall we say that in changes like these we have to do simply with the quantitative increase of some quality, present in small measure in the earlier stages and in larger measure in the later? Or shall we evade the issue with the general admission that of course, as every schoolboy knows, there are in this world many differences of degree that somehow "amount to differences of kind"? As a matter of fact what has happened in every case like these is an actual change of standard, a new construction in the growing system of one's norms of value and behavior. Provisionally, though hopefully, a step has been taken—a real event in personal and in social history has been given place and date. From some source beyond the scope and nature of the earlier function a suggestion or an impulsion has come by which the agent has endeavored to move forward. The change wrought is a transcendence of the earlier level of experience and valuation, not a widening and clarification of vision on that level. And the standards which govern on the new level serve not so much to condemn the old as to seal its consignment to disuse and oblivion. Least of all can a judgment or appraisal of the old from the standpoint of the new be taken for a transcript of the motives which led to the transition.
We must confine ourselves more closely, however, to the sphere of material goods and their uses. And in this sphere objection to the view proposed will run in some such terms as the following: Take our ancestors, for example, and their household arrangements to which invidious reference has been made: why should we suppose that their seeming contentment was anything more (or less) than a dignified composure in which we might well imitate them—an attitude in no way precluding a definite sense of specific discomforts and embarrassments and a distinct determination to be rid of them as soon as might be? And, in fact, if they were satisfied with what they had why did they receive the new when it was offered? If, on the other hand, they were not satisfied, how is the fact intelligible except upon the assumption that they had distinct and definite wants not yet supplied, and were wishing (but patiently) for conveniences and comforts of a sort not yet existent. And this latter hypothesis, it will be urged, is precisely what the foregoing argument has sought to discredit as an account of the moving springs in the evolution of consumption.
§ 5. Any adequate discussion of the central issue thus presented would fall into two parts. In the first place, before a consumption good can come into general acceptance and currency it must have been in some way discovered, suggested or invented, and the psychology of invention is undoubtedly a matter of very great complexity and difficulty. But for the purposes of the present inquiry all this may be passed over. The other branch of a full discussion of our problem has to do with the reception of the newly invented commodity or process into wider and wider use—and this again is a social phenomenon not less complex than the other. It is this phenomenon of increasing extension and vogue, of widening propagation from person to person, that is directly of present concern for us—and in particular the individual person's attitude toward the new thing and the nature of the interest he takes in it.
It has recently been argued by a learned and acute investigator of economic origins that "invention is the mother of necessity," and not the child.[45] Such a complete reversal of all our ordinary thought about the matter seems at first sheer paradox. What, one may ask, can ever suggest an invention and what can give it welcome and currency but an existing need—which, if it happens to be for the time being latent and unconscious, needs only the presentation of its appropriate means of satisfaction to "arouse" and "awaken" it fully into action? But this paradox as to invention is at all events not more paradoxical than the view as to the reception of new commodities and the rise of new desires that has been above suggested. What it appears to imply is in principle identical with what has seemed, from our consideration of the other aspect of the general situation, to be the simple empirical fact; neither the existence of the new commodity nor our interest in it when it is presented admits of explanation as an effect on each particular occasion of a preëxisting unsatisfied desire for it. What both sides of the problem bring to view is a certain original bent or constitutive character of human nature—a predisposition, an élan vital perhaps, which we must recognize as nothing less than perfectly general and comprehensive—finding expression in inventive effort and likewise in the readiness with which the individual meets a new commodity halfway and gives it opportunity to become for him, if it can, a new necessity and the source of a new type of satisfaction.
From the point of view of "logic," as William James might have said, such a version of psychological fact may seem essentially self-contradictory. Unless, it may be argued, a novelty when presented excites some manner of desire for itself in the beholder, the beholder will make no effort towards it and thus take no step away from his existing system of life to a new system in which a new desire and a new commodity shall have a place. So much would seem clear enough but the question immediately follows: How can a thing that is new arouse desire? In so far as it is new it must ex vi termini be unknown and wanting definition in terms of remembered past experiences; and how can a thing unknown make that connection with the present character of the individual which must be deemed necessary to the arousal of desire in him? A new thing would seem, then, from this point of view, to be able to arouse desire only in so far as it is able to conceal or subordinate its aspects of novelty and appear as known and well-accredited—either this or there must be in the individual some definite instinctive mechanism ready to be set in action by the thing's presentment. And on neither of these suppositions can having to do with the new thing effect any fundamental or radical difference in the individual—it can serve at most only to "bring out" what was already "there" in him in a "latent" or "implicit" status. Whatever new developments of power or desire may be attained and organized into the individual's character through his commerce with the novelty must be new in only a superficial sense—they will be new only as occurrences, only as the striking of the hour by the clock and the resulting abrasion of the bell and hammer are new events. But the clock was made to strike; it is the nature of metal to wear away and likewise these changes in the individual are in deeper truth not new at all but only a disclosure of the agent's character, a further fulfilment along preëstablished and unalterable lines which all along was making headway in the agent's earlier quests and efforts and attainments.
There is a sense, no doubt, in which some such version of the facts as this is unanswerable, but controversial advantage is paid for, here as elsewhere in the logic of absolute idealism, at the cost of tangible meaning and practical importance. Just what does the contention come to? Let us say, for example, that one has learned to use a typewriter. What has happened is like an illiterate person's learning to read and write. Correspondence with one's friends begins to take on new meaning and to acquire new value; one begins to find a new pleasure and stimulation taking the place of the ineffectual drivings of an uneasy conscience. All this, let us say, has come from the moderate outlay for a superior mechanical instrument. And now let it be granted that it would not have come if the fortunate individual had not been "what he was." If it has come it is because the individual and the rest of the world were "of such a sort" that the revival and new growth of interest could take its rise with the provision of the new instrumentality. But what, precisely, does such a statement mean? What sort of verification does it admit of? What fruitful insight into the concrete facts of the case does it convey? Of what sort, prior to the event, does it show the individual to have been?
The truth is, of course, that he was of no sort, then and there and with reference to the purchase—he was of no sort decisively. He was neither purchaser nor rejector. He was neither a convinced "typist" nor piously confirmed in his predilection for writing "by hand." He was neither wholly weary of his correspondence nor fully cognizant of the importance of intercourse with his friends for his soul's good. He may have been dissatisfied and rebellious or he may have been comfortably persuaded that letter-writing, though an irksome labor, was even at that sufficiently worth while. The most that can be said is simply that he must have been willing and desirous to try the experiment for the sake of any good, imaginable or beyond present imagination, that might come of it. But being of "such a sort" as this could not prejudge the issue—although, undoubtedly, in willingness to raise an issue there lies always the possibility of change. All the plausibility of the dogma we are here considering comes from its hasty inclusion of this general attitude of constructively experimental inquiry and effort, this essential character of creative intelligence, as one among the concrete interests which constitute and define our particular problems in their inception. To say ex post facto that the individual must have been "of such a sort" as to do what he has in fact done is a purely verbal comment which, whatever may be its uses, can assuredly be of no use whatever in suggesting either solution or method for the next situation to arise. It may be comfortably reassuring afterwards, but it is an empty oracle beforehand.
§ 6. If then "logic" is unable to express the nature of our forward looking interest in the unexperienced and unpredictable, perhaps the empirical fact will speak for itself. We call things new; we recognize their novelty and their novelty excites our interest. But just as we are sometimes told that we can only know the new in terms of its resemblances to what we have known before, so it may be held that in the end we can desire it only on the like condition. Are we, then, to conclude that the seeming novelty of things new is an illusion, or shall we hold, on the contrary, that novelty need not be explained away and that a spontaneous constructive interest stands more or less constantly ready in us to go out to meet it and possess it?
Unquestionably, let us say the latter. Any new commodity will, of course, resemble in part or in a general way some old one. It is said that bath-tubs are sometimes used in "model tenements" as coal-bins. Old uses persist unchanged in the presence of new possibilities. But in general new possibilities invite interest and effort because our experimental and constructive bent contrives on the whole to make head against habituation and routine. We recognize the new as new. And if it be contended that novelty in its own right cannot be a ground of interest, that novelty must first get restatement as the old with certain "accidents" externally adhering, the answer is that the "accidents" interest us nevertheless. They may prove their right to stand as the very essence of some new "kind" that one may wish to let take form and character for him. Instead of the chips and shavings, they are in fact the raw material of the logical process. For if we can know the new as new, if we can know the "accident" as accidental in a commodity before us, the fact betrays an incipient interest in the quality or aspect that its novelty or contingency at least does not thwart. And is this quite all? Will it be disputed that a relation of a quality or feature to ourselves which we can know, name, and recognize—like "novelty"—must be known, as anything else is known, through an interest of which it is the appropriate terminus?[46]
And there is no difficulty in pointing to instances in which the character of novelty seems fundamental. Consider, for example, the interest one feels in spending a day with a friend or in making a new acquaintance or, say, in entering on the cares of parenthood. Or again, take the impulse toward research, artistic creation, or artistic study and appreciation. Or again, take the interest in topography and exploration. That there is in such phenomena as these a certain essentially and irreducibly forward look, a certain residual freedom of our interest and effort from dependence on the detail of prior experience down to date, probably few persons without ulterior philosophical prepossessions will dispute. If we call these phenomena instinctive we are using the term in a far more loose and general sense than it seems to have in the best usage of animal psychology. If we call them attitudes or dispositions, such a term has at least the negative merit of setting them apart from the class of instinctive acts, but it may carry with it a connotation of fixity and unconsciousness that after all surrenders the essential distinction. It will suffice to look at a single one of these instances.
In friendship, for example, there is undoubtedly strongly operative a desire for the mere recurrence, in our further friendly intercourse, of certain values that have become habitual and familiar. We may have long known and become attached to a friend's tones of voice, peculiarities of manner and external appearance, turns of speech and thought and the like, which we miss in absence and which give us pleasure when we meet the friend again. But if the friendship is not one of "pleasure" or "utility" simply, but of "virtue"[47] as well, there is also present on both sides a constructive or progressive or creative interest. And this interest, stated on its self-regarding and introspective side, is more than a desire for the mere grateful recurrence of the old looks and words "recoined at the old mint." It is an interest looking into the "undone vast," an interest in an indefinite prolongation, an infinite series, of joint experiences the end of which cannot and need not be foreseen and the nature of which neither can nor need be forecasted. And there is the same characteristic in all the other instances mentioned in this connection. It is not a desire for recurrent satisfactions of a determinate type, but an interest in the active development of unexperienced and indeterminate possibilities. If finally the question be pressed, how there can be an interest of this seemingly self-contradictory type in human nature, the answer can only be that we must take the facts as we find them. Is such a conception inherently more difficult than the view that all ramifications and developments of human interest are concretely predetermined and implicit a priori? To ignore or deny palpable fact because it eludes the reach of a current type of conceptual analysis is to part company with both science and philosophy. We are in fact here dealing with the essential mark and trait of what is called self-conscious process. If there are ultimates and indefinables in this world of ours, self-consciousness may as fairly claim the dignity or avow the discredit as any other of the list.
§ 7. Does our interest in economic goods on occasion exhibit the trait of which we are here speaking? Precisely this is our present contention. And yet it seems not too much to say that virtually all economic theory, whether the classical or the present dominant type that has drawn its terminology and working concepts from the ostensible psychology of the Austrian School, is founded upon the contradictory assumption. The economic interest, our desire and esteem for solid and matter-of-fact things like market commodities and standardized market services, has been conceived as nothing visionary and speculative, as no peering into the infinite or outreaching of an inexpressible discontent, but an intelligent, clear-eyed grasping and holding of known satisfactions for measured and acknowledged desires. Art and religion, friendship and love, sport and adventure, morality and legislation, these all may be fields for the free play and constructive experimentation of human faculty, but in our economic efforts and relations we are supposed to tread the solid ground of fact. Business is business. Waste not, want not. First a living, then (perhaps) a "good life."[48] And we are assured one need not recoil from the hard logic of such maxims, for they do not dispute the existence of spacious (and well-shaded) suburban regions fringing the busy areas of industry and commerce.
Such is the assumption. We have said that it precludes the admission of speculation as an economic factor. Speculation for economic theory is a purely commercial phenomenon, a hazarding of capital on the supposition that desires will be found ready and waiting for the commodity produced—with a sufficient offering of purchasing power to afford a profit. And the "creation of demand," where this is part of the program of speculative enterprise, means the arousal of a "dormant" or implicit desire, in the sense above discussed—there is nothing, at all events, in other parts of current theory to indicate a different conception. The economist will probably contend that what the process of the creation of demand may be is not his but the psychologist's affair; that his professional concern is only whether or not the economic demand, as an objective market fact, be actually forthcoming. But what we here contend for as a fact of economic experience is a speculation that is in the nature of personal adventure and not simply an "adventuring of stock."
§ 8. For what is the nature of the economic "experience" or situation, considered as a certain type of juncture in the life of an individual? It may be shortly described as the process of determining how much of one's time, strength, or external resources of any sort shall be expended for whatever one is thinking of doing or acquiring. Two general motives enter here to govern the estimate and each may show the routine or the innovative phase. In any work there is possible, first, more or less of the workman's interest—an interest not merely in a conventional standard of excellence in the finished result but also in betterment of the standard and in a corresponding heightened excellence of technique and spirit in the execution.[49] These interests, without reference to the useful result and "for their own sake" (i.e., for the workman's sake, in ways not specifiable in advance), may command a share of one's available time, strength, and resources. In the second place, any work or effort or offer to give in exchange has a nameable result of some kind in view—a crop of wheat, a coat, a musical rendition, or the education of a child. Why are such things "produced" or sought for? Verbally and platitudinously one may answer: For the sake of the "satisfactions" they are expected to afford. But such an answer ignores the contrast of attitudes that both workmanship and productive or acquisitive effort in the ordinary sense display. As the workman may conform to his standard or may be ambitious to surpass it, so the intending consumer may be counting on known satisfactions or hoping for satisfactions of a kind that he has never known before. Both sorts of effort may be of either the routine or the innovative type. In neither workmanship nor acquisition can one fix upon routine as the "normal" type, hoping to derive or to explain away the inevitable residue of "outstanding cases." For as a matter of fact the outstanding cases prove to be our only clue to a knowledge of how routine is made.[50]
The above formula will apply, with the appropriate changes of emphasis, to buyers and sellers in an organized market, as well as to the parties to a simple transaction of barter. Two main empirical characteristics of the economic situation are suggested in putting the statement in just these terms. In the first place, the primary problem in such a situation is that of "exchange valuation," the fixation of a "subjective" (or better, a "personal") price ratio between what the agent wishes to acquire and whatever it is that he offers in exchange. The agent thus is engaged in determining what shall be the relative importance for himself of two commodities or exchangeable goods. And in the second place these goods get their values determined together and in relation to each other, never singly and with a view to subsequent comparison. These values when they have been determined will be measured in terms of marginal utility in accordance with familiar principles, but the marginal utilities that are to express the attained and accepted ratio at which exchange eventually takes place are not known quantities at all in the inception of the process of comparison. If these dogmatic statements seem to issue in hopeless paradox or worse, then let us not fear to face the paradox and fix its lines with all possible distinctness. Can a man decide to offer so much of one commodity for so much of another unless he first has settled what each is worth to him in some intelligible terms or other? And is not this latter in point of fact the real decision—at all events clearly more than half the battle? Does not the exchange ratio to which one can agree "leap to the eyes," in fact, as soon as the absolute values in the case have been once isolated and given numerical expression?
In a single word we here join issue. For the comparison in such a case is constructive comparison, not a mechanical measuring of fixed magnitudes, as the above objection tacitly assumes. And constructive comparison is essentially a transitive or inductive operation whereby the agent moves from one level to another, altering his standard of living in some more or less important way, embarking upon a new interest, entering upon the formation of a new habit or upon a new accession of power or effectiveness—making or seeking to make, in short, some transformation in his environment and in himself that shall give his life as an entire system a changed tenor and perspective. The term "constructive comparison" is thus intended, among other things, to suggest that the process is in the nature of adventure, not calculation, and, on the other hand, that though adventurous it is not sheer hazard uncontrolled. And the motive dominant throughout the process—the economic motive in its constructive phase—is neither more nor less than a supposition, on the agent's part, that there may be forthcoming for him in the given case in hand just such an "epigenetic" development of new significance and value as we have found actual history to disclose as a normal result of economic innovation. It is the gist of hedonism, in economic theory as in its other expressions, that inevitably the agent's interests and motives are restricted in every case to the precise range and scope of his existing tendencies and desires; he can be provoked to act only by the hope of just those particular future pleasures or means of pleasure which the present constitution of his nature enables him to enjoy. Idealism assumes that the emergent new interest of the present was wrapped up or "implied," in some sense, in the interests of the remote and immediate past—interests of which the agent at the time could of course be but "imperfectly" aware. Such differences as one can discern between the two interpretations seem small indeed—like many others to which idealism has been wont to point in disparagement of the hedonistic world view. For in both philosophies the agent is without initiative and effect; he is in principle but the convergence of impersonal motive powers which it is, in the one view, absurdly futile, in the other misguidedly presumptuous, to try to alter or control.
§ 9. A commodity sought or encountered may then be of interest to us for reasons of the following three general sorts. In the first place it may simply be the normal and appropriate object of some established desire of ours. We may be seeking the commodity because this desire has first become active, or encountering the commodity in the market may have suddenly awakened the desire. Illustration seems superfluous; tobacco for the habitual smoker, clothing of most sorts for the ordinary person, regular supplies of the household staples—these will suffice. This is the province within which a hedonistic account of the economic motive holds good with a cogency that anti-hedonistic criticism has not been able to dissolve. Our outlays for such things as these may as a rule be held in their due and proper relation to each other—at all events in their established or "normal" relation—simply by recalling at critical times our relative marginal likes and dislikes for them. That these likes and dislikes are not self-explanatory, that they are concrete expectations and not abstract affective elements, does not seem greatly to matter where the issue lies between maintaining or renouncing an existing schedule of consumption. And in this same classification belong also industrial and commercial expenditures of a similarly routine sort. Even where the scale of operations is being enlarged, expenditures for machines, fuel, raw materials, and labor may have been so carefully planned in advance with reference to the desired increase of output or pecuniary profit that no special problem of motivation attaches directly to them. And these outlays are so important in industry and commerce that the impression comes easily to prevail that all business undertaking, and then all consumption of finished goods, fall under the simple hedonistic type.
But if we keep to the plane of final consumption, there appears a second sort of situation. Our interest in the commodity before us may be due to a suggestion of some sort that prompts us to take a step beyond the limits that our present formed desires mark out. The suggestion may be given by adroit advertising, by fashion, by the habits of another class to which one may aspire or by a person to whom one may look as guide, philosopher, and friend. An authority of one sort or another invites or constrains us to take the merits of the article on trust. Actual trial and use may show, not so much that it can minister to a latent desire as that we have been able through its use to form a habit that constitutes a settled need.
And, finally, in the third place, there is a more spontaneous and intrinsically personal type of interest which is very largely independent of suggestion or authority. A thing of beauty, a new author, a new acquaintance, a new sport or game, a new convenience or mechanical device may challenge one's curiosity and powers of appreciation, may seem to offer a new facility in action or some unimagined release from labor or restriction. The adventure of marriage and parenthood, the intimate attraction of great music, the mystery of an unknown language or a forbidden country, the disdainful aloofness of a mountain peak dominating a landscape are conspicuous instances inviting a more spontaneous type of constructive interest that finds abundant expression also in the more commonplace situations and emergencies of everyday life. It is sheer play upon words to speak in such cases of a pleasure of adventurousness, a pleasure of discovery, a pleasure of conquest and mastery, assigning this as the motive in order to bring these interests to the type that fits addiction to one's particular old coat or easy-chair. The specific "pleasure" alleged could not exist were the tendency not active beforehand. While the same is true in a sense for habitual concrete pleasures in relation to their corresponding habits, the irreducible difference in constructive interest as a type lies in the transition which this type of interest purposes and effects from one level of concrete or substantive desire and pleasure to another. Here one consciously looks to a result that he cannot foresee or foretell; in the other type his interest as interest goes straight to its mark, sustained by a confident forecast.[51]
§ 10. But constructive interests, whether provoked by suggestion or of the more freely imaginative type, may, as has been said, be held to lie outside the scope of economic theory. How a desire for a certain thing has come to get expression may seem quite immaterial—economically speaking. Economics has no concern with human folly as such or human imitativeness, or human aspiration high or low or any other of the multitude of motives that have to do with secular changes in the "standard of living" and in the ideals of life at large. It has no concern with anything that lies behind the fact that I am in the market with my mind made up to buy or sell a thing at a certain price. And the answer to this contention must be that it first reverses and then distorts the true perspective of our economic experience. Let it be admitted freely—indeed, let it be insisted on—that the definition of a science must be determined by the pragmatic test. If an economist elects to concern himself with the problems of what has been called the "loose mechanics of trade" there can be no question of his right to do so or of the importance of the services he may render thereby, both to theory and to practice. But on the other hand economic theory cannot be therefore, once and for all, made a matter of accounting—to the effacement of all problems and aspects of problems of which the accountant has no professional cognizance. Just this, apparently, is what it means to level down all types of interest to the hedonistic, leaving aside as "extra-economic" those that too palpably resist the operation. It is acknowledged that freshly suggested modes of consumption and ends of effort require expenditure and sacrifice no less than the habitual, that the exploration of Tibet or of the Polar Seas affects the market for supplies not less certainly than the scheduled voyages of oceanic liners. Moreover, behind these scheduled voyages there are all the varied motives that induce people to travel and the desires that lead to the shipment of goods. Shall it be said that all of these motives and desires must be traceable back to settled habits of behavior and consumption? And if this cannot be maintained is it not hazardous to assume that such general problems of economic theory as the determination of market values or of the shares in distribution require no recognition of the other empirical types of interest? These types, if they are genuine, are surely important; they may well prove to be, in many ways, fundamentally important. For a commodity that has become habitual must once have been new and untried.
§ 11. The economic demands which make up the budget of a particular person at a particular time are clearly interdependent. A man's income or the greater part of it is usually distributed among various channels of expenditure in a certain fairly constant way. In proportion to the definiteness of this distribution and the resoluteness with which it is maintained does the impression gain strength that the man is carrying out a consistent plan of some sort. Such a regular plan of expenditure may be drawn out into a schedule, setting forth the amounts required at a certain price for the unit of each kind. And such a schedule is an expression in detail, in terms of ways and means, of the type of life one has elected to lead. For virtually any income above the level of bare physical subsistence, there will be an indefinite number of alternative budgets possible. A little less may be spent for household conveniences and adornments and a little more for food. Some recreations may be sacrificed for an occasional book or magazine. One may build a house or purchase a motor-car instead of going abroad. And whichever choice is made, related expenditures must be made in consequence for which, on the assumption of a definite amount of income, compensation must be made by curtailment of outlay at other points. What seems clear in general is that one's total budget is relative to the general plan and manner of life one deems for him the best possible and that this plan, more or less definitely formulated, more or less steadily operative, is what really determines how far expenditure shall go in this direction and in that. The budget as a whole will define for the individual an equilibrium among his various recognized wants; if the work of calculating it has been carefully done there will be for the time being no tendency to change in any item.
If, then, we choose to say in such a case that the individual carries his expenditure along each line to the precise point at which the last or marginal utility enjoyed is precisely equal to the marginal utility on every other line, it seems not difficult to grasp what such a statement means. Quite harmlessly, all that it can mean is that the individual has planned precisely what he has planned and is not sorry for it, and for the time being does not think he can improve upon it. As there is one earth drawing toward its center each billiard ball of the dozen in equilibrium in a bowl, so there is behind the budget of the individual one complex personal conception of a way of life that fixes more or less certainly and clearly the kinds and intensities of his wants and assigns to each its share of purchasing power. That the units or elements in equilibrium hold their positions with reference to each other for reasons capable of separate statement for each unit seems a supposition no less impossible in the one case than in the other. To think of each kind of want in the individual's nature as holding separately in fee simple and clamoring for full and separate "satisfaction" in its separate kind, is the characteristic illusion of a purely formal type of analysis. The permanence of a budget and its carrying out no doubt require the due and precise realization of each plotted marginal utility—to go further than this along any one line would inevitably mean getting not so far along certain others, and thus a distorted and disappointing total attainment in the end. But to say that one actually plans and controls his expenditures along various lines by the ultimate aim of attaining equivalent terminal utilities on each is quite another story. It is much like saying that the square inches of canvas assigned in a picture to sky and sea and crannied wall are arranged upon the principle of identical and equal effects for artist or beholder from the last inches painted of each kind. The formula of the equality of marginal effects is no constructive principle; it is only a concise if indeed somewhat grotesque way of phrasing the essential fact that no change of the qualitative whole is going to be made, because no imperfection in it as a whole is felt.[52]
§ 12. We come, then, to the problem of the individual's encounter with a new commodity. In general, a purchase in such a case must amount to more or less of a departure from the scheme of life in force and a transition over to a different one. And a new commodity (in the sense in which the term has been used above) is apt to be initially more tempting than an addition along some line of expenditure already represented in the budget. The latter, supposing there has been no change of price and no increase of income, is usually a mere irregularity, an insurgent departure from some one specification of a total plan without preliminary compensating adjustment or appropriate change at other points. The erratic outlay, if considerable, will result in sheer disorder and extravagance—indefensible and self-condemned on the principles of the individual's own economy. But with a new commodity the case stands differently. It is more interesting to consider a really new proposal than to reopen a case once closed when no evidence distinctly new is offered. A sheer "temptation" or an isolated impulse toward new outlay along a line already measured in one's scheme has the force of habit and a presumption of un-wisdom to overcome. If the case is one not of temptation but of "being urged" one is apt to answer, "No, I can make no use of any more of that." But a new commodity has the charm of its novelty, a charm consisting in the promise, in positive fashion, of new qualitative values about which a new entire schedule will have to be organized. Partly its strength of appeal lies in its radicalism; it gains ready attention not only by its promise but by its boldness. "Preparedness" gains a more ready acclaim than better schools or the extirpation of disease. The automobile and the "moving picture" probably have a vogue today far surpassing any use of earlier "equivalents" that a mere general augmentation of incomes could have brought about. Indeed, the economic danger of the middle classes in present-day society lies not in mere occasional excess at certain points but in heedless commitment to a showy and thinned-out scheme of life in which the elements are ill-chosen and ill-proportioned and from which, as a whole, abiding satisfaction cannot be drawn. It is where real and thoroughgoing change in the manner of life is hopeless that irregular intemperance of various sorts appears to bulk relatively largest as an economic evil.
Shall we not say, however, that the superior attraction of the new in competition with established lines of expenditure only indicates the greater "satiation" of the wants the latter represent and the comparative freshness of the wants the novelty will satisfy? On the contrary the latter wants are in the full sense not yet existent, the new satisfactions are untried and unmeasured; the older wants have the advantage of position, and if satiated today, will reassert themselves with a predictable strength tomorrow. The new wants, it is true, if they are acquired, will be part of a new system, but the present fact remains that their full meaning cannot be known in advance of trial and the further outlines of the new scheme of uses and values cannot be drawn up until this meaning has been learned. If, then, the new commodity is taken, it is not because the promised satisfaction and the sum of known utilities to be sacrificed are found equal, nor again because the new commodity will fit neatly into a place in the existing schedule that can be vacated for it. This latter is the case of substitution. Such an interpretation of the facts is retrospective only; it is a formal declaration that the exchange has been deemed on the whole worth while, but the reasons for this outcome such a formula is powerless to suggest.
In general the new commodity and the habits it engenders could not remain without effect upon a system into which they might be mechanically introduced. Certain items in the schedule, associated in use with those dispensed with for the new, must be rendered obsolete by the change. The new interests called into play will draw to themselves and to their further development attention which may be in large measure diverted from the interests of older standing. And in the new system all interests remaining over from the old will accordingly stand in a new light and their objects will be valued, will be held important, for reasons that will need fresh statement.[53]
In similar fashion it might be argued that the commodities or uses which one sacrifices for the sake of a new venture are inevitably more than a simple deduction that curtails one's schedule in a certain kind and amount. Such a deduction or excision must leave the remaining lines of the original complex hanging at loose ends. The catching-up of these and their coördination with the new interest must in any event amount, as has been contended, to a thoroughgoing reorganization. What must really happen then, in the event of action, is in principle nothing less than the disappearance of the whole from which the sacrificed uses are dissevered. These latter, therefore, stand in the process of decision as a symbol for the existing personal economy as a whole. The old order and the new confront each other as an accepted view of fact and a plausible hypothesis everywhere confront each other and the issue for the individual is the practical issue of making the transition to a new working level. To declare that the salient elements of the confronting complexes are quantitatively equivalent is only to announce in symbolic terms that the transition has been effected, the die cast.[54]
§ 13. The statement thus given has been purposely made, for many transactions of the sort referred to, something of an over-statement. If I contemplate purchasing a typewriter or a book on an unfamiliar but inviting subject it may well seem somewhat extravagant to describe the situation as an opposition between two schemes of life. Is the issue so momentous; is the act so revolutionary? But the purpose of our over-statement was simply to make clear the type of situation without regard to the magnitudes involved. No novelty that carries one in any respect beyond the range of existing habits can be wholly without its collateral effects nor can its proximate and proper significance be measured in advance. This is in principle as true of a relatively slight innovation as of a considerable one. And our present conscious exaggeration departs less widely from the truth than the alternative usual preoccupation of economic theory with the logic of routine desire and demand. For the phenomena of routine and habit are thereby made a standard by which all others, if indeed recognized as real at all, must be judged "exceptional." And, as we shall see, to do this introduces difficulty into certain parts of substantive economic theory.
Again, objection may attach to the view that equivalence of the "salient members" of the opposing systems is only another name for the comprehensive fact of the novelty's acceptance. For if we hesitate in such a case, is this not because we judge the price too high? What can this signify but that the service or satisfaction we expect from the novelty falls short of sufficing to convince us? And unless we are dealing with measured quantities, how can we come to this conclusion? Moreover, if the novel commodity is divided into units we may take a smaller quantity when the price demanded is "high" than if the price were lower. And does this not suggest predetermined value-magnitudes as data? But if one takes thus a smaller amount, as the argument contends, it is because there is a presumption of being able to make some important total use of it and there is no general reason apparent for supposing that this will be merely a fractional part of a larger but like significance that might be hoped for from a larger quantity. And on the other hand, the prospect simply may not tempt at all; the smaller quantity may be deemed an improbable support for a really promising total program and the present program will hold its ground, not seriously shaken. The total demand of a market for a given commodity is no doubt in some sort a mathematical function of the price. The lower the price the greater in some ratio will be the number of persons who will buy and in general the greater the number of units taken by those who are already buyers. But that such a proposition admits of statistical proof from the observation of a series of price changes in a market affords no presumption concerning the nature of the reasons that move any individual person to his action. The theoretical temptation is strong, here as elsewhere, in passing from the study of markets to the personal economy of the individual forthwith to find this also a trafficking in unit-quantities and marginal satisfactions to which the concepts and notation of market analysis will readily apply.
It remains to consider certain implications of this view of economic desire and demand.
II
§ 14. It is evident that the issue finally at stake in any economic problem of constructive comparison, is an ethical issue. Two immediate alternatives are before one—to expend a sum of money in some new and interesting way, or to keep it devoted to the uses of one's established plan. Upon the choice, one recognizes, hinge consequences of larger and more comprehensive importance than the mere present enjoyment or non-enjoyment of the new commodity.[55] And these "more important" consequences are important because there appears to lie in them the possibility of a type of personal character divergent from the present type and from any present point of view incommensurable with it.[56] The ethical urgency of such a problem will impress one in the measure in which one can see that such an issue really does depend upon his present action and irretrievably depends. And we are able now to see what that economic quality is that attaches to ethical problems at a certain stage of their development and calls for a supplementary type of treatment.
Let us first consider certain types of juncture in conduct that will be recognized at once as ethical and in which any economic aspect is relatively inconspicuous. Temperance or intemperance, truth or falsehood, idleness or industry, honesty or fraud, social justice or class-interest—these will serve. What makes such problems as these ethical is their demand for creative intelligence. In each, alternative types of character or manners of life stand initially opposed. If the concrete issue is really problematical, if there is no rule that one can follow in the case with full assurance, constructive comparison, whether covertly or openly, must come into play. How long, then, will a problem of temperance or intemperance, idleness or industry, preserve its obviously ethical character without admixture? Just so long, apparently, as the modes of conduct that come into view as possible solutions are considered and valued with regard to their directly physiological and psychological consequences alone. Any given sort of conduct, that is to say, makes inevitably for the formation of certain habits of mind or muscle, weakening, or precluding the formation of, certain others. Attention is engrossed that is thereby not available elsewhere, time and strength are expended, discriminations are dulled and sharpened, sympathies and sensitivities are narrowed and broadened, every trait and bent of character is directly or indirectly affected in some way by every resolve concluded and every action embarked upon. If one moves a certain way along a certain line he can never return to the starting-point and set out unchanged along any other. If one does one thing one cannot do another. And when the sufficient reasons for this mutual exclusion lie in the structure and organization of the human mind and body our deliberation as between the two alternatives, our constructive comparison of them remains upon the ethical plane.
If one does one thing one cannot do another. If we substitute the well-worn saying "one cannot eat his cake and have it" we indicate the economic plane of constructive comparison with all needful clearness.
This is in fact the situation that has been already under discussion at such length above and the economic quality of which we are just now in quest arises from neither more nor less than the fact of our dependence in the working out of our personal problems upon limited external resources. The eventual solution sought under these circumstances remains ethical as before. But to reach it, it is necessary to bring into consideration not only such other interests and ends as the psycho-physical structure of human nature and the laws of character-development show to be involved, but a still wider range of interests less intimately or "internally" related to the focal interest of the occasion but imperatively requiring to be heard. If my acquisition of a phonograph turns upon the direct psychological bearing of the new interest upon my other interests, its probable effects whether good or bad upon my musical tastes and the diplomatic complications with my neighbors in which the possession of the instrument may involve me, the problem of its purchase remains clearly in the ethical phase. But when I count the cost in terms of sacrifices which the purchase price makes necessary, from literature down to food and fuel, and must draw this whole range of fact also into the adjustment if I can, the economic phase is reached. In principle two entire and very concrete schemes of life now stand opposed. Just what concrete sacrifices I shall make I do not know—this, in fact, is one way of stating my problem. Nor, conversely, do I know just what I shall be able to make the phonograph worth to me. It is my task to come to a conclusion in the case that shall be explicit and clear enough to enable me to judge in the event whether my expectation has been realized and I have acted wisely or unwisely. Thus a problem is economic when the fact of the limitation of my external resources must be eventually and frankly faced. The characteristic quality of a problem grown economic is a certain vexatiousness and seeming irrationality in the ill-assorted array of nevertheless indisputable interests, prosaic and ideal, that have to be reduced to order.
It is perhaps this characteristic emotional quality of economic problems that has insensibly inclined economists to favor a simpler and more clear-cut analysis. As for ethical problems—they have been left to "conscience" or to the jurisdiction of a "greatest happiness" principle in which the ordinary individual or legislator has somehow come to take an interest. That they arise and become urgent in us of course does human nature unimpeachable credit and economics must by all means wait respectfully upon their settlement. So much is conceded. But economics is economics, when all is said and done. What we mean by the economic interest is an interest in the direct and several satisfactions that a man can get from the several things he shrewdly finds it worth his while to pay for. And shrewdness means nicety of calculation, accuracy of measurement in the determination of tangible loss and gain. Here, then, is no field for ethics but a field of fact. Thus ethics on her side must also wait until the case is fully ready for her praise or blame. Such is the modus vivendi. But its simplicity is oversimple and unreal. It pictures the "economic man" as bound in the chains of a perfunctory deference that he would throw off if he could. For the theory of constructive comparison or creative intelligence, on the other hand, instead of a seeker and recipient of "psychic income" and a calculator of gain and loss, he is a personal agent maintaining continuity of action in a life of discontinuously changing levels of interest and experience. His measure of attainment lies not in an accelerating rate of "psychic income," but in an increasing sense of personal effectiveness and an increasing readiness and confidence before new junctures.
The possession and use of commodities are, then, not in themselves and directly economic facts at all. As material things commodities serve certain purposes and effect certain results. They are means to ends and their serving so is a matter of technology. But do I seriously want their services? This is a matter of my ethical point of view. Do I want them at the price demanded or at what price and how many? This is the economic question and it obviously is a question wholly ethical in import—more broadly and inclusively ethical, in fact, than the ethical question in its earlier and more humanly inviting form. And what we have now to see is the fact that no consideration that has a bearing upon the problem in its ethical phase can lose its importance and relevance in the subsequent phase.
There can be no restriction of the economic interest, for example, to egoism. If on general principles I would really rather use goods produced in safe and cleanly factories or produced by "union labor," there is no possible reason why this should not incline me to pay the higher prices that such goods may cost and make the needful readjustment in my budget. Is there reason why my valuation of these goods should not thus be the decisive act that takes me out of one relation to industrial workers and sets me in another—can anything else, indeed, quite so distinctly do this? For economic valuation is only the fixation of a purchase price, or an exchange relation in terms of price and quantity, upon which two schemes of life, two differing perspectives of social contact and relationship converge—the scheme of life from which I am departing and the one upon which I have resolved to make my hazard. It is this election, this transition, that the purchase price expresses—drawing all the strands of interest and action into a knot so that a single grasp may seize them. The only essential egoism in the case lies in the "subjectivism" of the fact that inevitably the emergency and the act are mine and not another's. This is the "egocentric predicament" in its ethical aspect. And the egocentric predicament proves Hobbes and La Rochefoucauld as little as it proves Berkeley or Karl Pearson. No social interest, no objective interest of any sort, is shown ungenuine by my remembering in season that if I cannot fill my coal-bin I shall freeze.[57]
§ 15. This logical and psychological continuity of the ethical and economic problems suggests certain general considerations of some practical interest. In the first place as to "egoism." I am, let us say, an employer. If I am interested in procuring just "labor," in the sense of foot-pounds of energy, then undoubtedly labor performed under safe and healthful conditions is worth no more to me than other labor (provided it does not prove more efficient). But is this attitude of interest in just foot-pounds of energy the attitude par excellence or solely entitled to be called economic? And just this may be asserted for the reason that an exclusive interest in just labor is the only interest in the case that men of business, or at least many of them, can entertain without going speedily to the wall. If, then, I do in fact pay more than I must in wages or if I expend more than a bare minimum for conveniences and safety-guards this is not because of the valuation I put upon labor, but only because I take pleasure in the contentment and well-being of others. And this is not "business" but "uplift"—or else a subtle form of emotional self-indulgence. Suppose, however, that by legislation similar working conditions have been made mandatory for the entire industry and suppose that the community approves the law, even to the extent of cheerfully paying so much of the additional cost thereby imposed as may be shifted upon them.
Shall we say that this is an ethical intrusion into the sphere of economics or shall we say that the former economic demand for labor "as such" has given place to an economic demand for labor better circumstanced or better paid? The community at all events is paying the increase of price or a part of the increase. It seems arbitrary to insist that the old price is still the economic price of the commodity and the increase only the price of a quiet conscience. The notion of a strictly economic demand for labor pure and simple seems in fact a concept of accounting. To meet the community's demand for the commodity a number of producers were required. The least capable of these could make both ends meet at the prevailing price only by ignoring all but the severely impersonal aspects of the process. Taking these costs as a base, other more capable or more fortunate producers may have been able to make additional expenditures of the sort in question, charging these perhaps to "welfare" account. The law then intervenes, making labor in effect more expensive for all by requiring the superior conveniences or by compelling employers' insurance against accidents to workmen or by enforcing outright a higher minimum wage. The old basic labor cost becomes thus obsolete. And without prejudging as to the expediency of such legislation in particular industrial or business situations may we not protest against a priori and wholesale condemnation of such legislation as merely irresponsibly "ethical" and "unscientific"? Is it not, rather, economically experimental and constructive, amounting in substance to a simple insistence that henceforth the hiring and paying of labor shall express a wider range of social interests—shall signalize a more clearly self-validating level of comprehension, on the part of employers and consumers, of the social significance of industry than the old? And may we not protest also, as a matter of sheer logic, against carrying over a producer's distinction of accounting between "labor" cost and "welfare" cost into the consumer's valuation of the article? How and to what end shall a distinction be drawn between his "esteem" for the trimmed and isolated article and his esteem for the men who made it—which, taken together, dispose him to pay a certain undivided price for it?
For the egoism of men is no fixed and unalterable fact. Taking it as a postulate, a mathematical theory of market phenomena may be erected upon it, but such a postulate is purely formal, taking no note of the reasons which at any given time lie behind the individuals' "demand" or "supply schedules." It amounts simply to an assumption that these schedules will not change during the lapse of time contemplated in the problem in hand. And it therefore cannot serve as the basis for a social science. As an actual social phenomenon egoism is merely a disclosure of a certain present narrowness and inertness in the nature of the individual which may or may not be definitive for him. It is precisely on a par with anemia, dyspepsia or fatigue, or any other like unhappy fact of personal biography.
§ 16. There is another suggestion of ethical and economic continuity that may be briefly indicated. If our view of this relation is correct, a problem, by becoming economic, may lose something in dramatic interest and grandiosity but gains in precision and complexity. In the economic phase an issue becomes sensibly crucial. It is in this phase that are chiefly developed those qualities of clear-headedness, temperateness of thought and action, and well-founded self-reliance that are the foundation of all genuine personal morality and social effectiveness. And one may question therefore the ethical consequences of such measures as old age, sickness, and industrial accident insurance or insurance against unemployment. In proportion as these measures are effective they amount to a constant virtual addition to the individual's income from year to year without corresponding effort and forethought on his part. They may accordingly be condemned as systematic pauperization—the "endowment of the unfit." There is evidently a fundamental problem here at issue, apart from all administrative difficulties. Clearly this type of criticism assumes a permanent incapacity in "human nature" or in most actual beings therewith endowed, to recognize as seriously important other interests than those upon which hinge physical life and death. The ordinary man, it is believed, is held back from moral Quixotism as from material extravagance by the fear of starvation alone; and it is assumed that there are no other interests in the "normal" man that can or ever will be so wholesomely effective to these ends. And two remarks in answer appear not without a measure of pertinence. First, if what is alleged be true (and there is evidence in Malthus' Essay and elsewhere to support it) it seems less a proof of original sin and "inperfectibility" than a reproach to a social order whose collective tenor and institutions leave the mass untouched and unawakened above the level of animal reproduction and whose inequalities of opportunity prevent awakened life from growing strong. And second, the democratic society of the future, if it exempts the individual in part or wholly from the dread of premature physical extinction must leave him on higher levels of interest similarly dependent for success or failure upon his ultimate personal discretion. And is it inconceivable that on higher levels there should ever genuinely be such a persisting type of issue for the multitude of men?[58]
§ 17. We have held constructive comparison in its economic phase to be a reciprocal evaluating of the "salient members" of two budgets. The respective budgets in such a case express in the outcome (1) the plane of life to which one is to move and (2) the plane one is forsaking. It was the salient member of the former that presented the problem at the outset. In the course of the process its associates were gathered about it in their due proportions and perspective. The salient member of the latter (i.e., whatever the purchase is to oblige one to do without), it was the business of constructive comparison to single out from among its associates and designate for sacrifice. In any case at all departing from the type of substitution pure and simple, the commodities sacrificed will come to have a certain "value in exchange" that clearly is a new fact, a new judgment, in experience. This value in exchange, this "subjective" or "personal" exchange value, may fittingly be termed a "value for transition." The transition once made, the exchange once concluded, I shall deem the motor-car, for example, that I have not bought to replace one used-up, to be worth less than the piano I have bought instead. This indeed (in no disparaging sense) is a tautology. But does this lesser relative value equal or exceed or fall short of the value the car would have had if no question of a piano had been raised at all and I had bought it in replacement of the old one as a matter of course? How can one say? The question seems unmeaning, for the levels of value referred to are different and discontinuous and the magnitudes belong to different orders. In a word, because a "value for transition" marks a resolve and succinctly describes an act, it cannot be broken in two and expressed as an equating of two magnitudes independently definable apart from the relation. The motor-car had its value as a member of the old system—the piano has its value as a member of the new. "The piano is worth more than the car"; "the car is worth less than the piano"—these are the prospective and retrospective views across a gulf that separates two "specious presents," not judgments of static inequality in terms of a common measure.
Is value, then, absolute or relative? Is value or price the prior notion? Was the classical English economics superficial in its predilection for the relative conception of value? Or is the reigning Austrian economics profound in its reliance upon marginal utility? By way of answer let us ask—What in our world can be more absolute a fact than a man's transition from one level of experience and action to another? Can the flight of time be stayed or turned backward? And if not can the acts by whose intrinsic uniqueness and successiveness time becomes filled for me and by which I feel time's sensible passage as swift or slow, lose their individuality? But it is not by a mere empiric temporalism alone that the sufficient absoluteness of the present act is attested. My transition from phase to phase of "finitude" is a thing so absolute that Idealism itself has deemed an Absolute indispensable to assure its safe and sane achievement. And with all Idealism's distrust of immediate experience for every evidential use, the Idealist does not scruple to cite the "higher obviousness" of personal effort, attainment, and fruition as the best of evidence for his most momentous truth of all.[59] And accordingly (in sharp descent) we need not hesitate to regard value in exchange as a primary fact in its own right, standing in no need of resolution into marginal pseudo-absolutes. A price agreed to and paid marks a real transition to another level. There are both marginal valuation and Werthaltung on this level, but they are subordinate incidents to this level's mapping and the conservation of its resources. On this level every marginal utility is relative, as we have seen, to every other through their common relation to the complex plan of organization as a whole.[60]
§ 18. In conclusion one more question closely related to the foregoing may be briefly touched upon. We have held that the individual's attitude toward a commodity is in the first instance one of putting a price-estimate upon it and only secondarily that of holding it in a provisionally settled marginal esteem. If this principle of the priority of price-estimation or exchange value is true, it seems evident that there can be no line of demarcation drawn (except for doubtfully expedient pedagogical purposes) between (1) "Subjective valuations" with which individuals are conceived to come to a market and (2) a mechanical equilibration of demand and supply which it is the distinctive and sole function of market concourse to effect. In such a view the market process in strict logic must be timeless as it is spaceless; a superposition of the two curves is effected and they are seen to cross in a common point which their shapes geometrically predetermine. Discussion, in any proper sense, can be no inherent part of a market process thus conceived. Once in the market, buyers and sellers can only declare their "subjective exchange valuations" of the commodity and await the outcome with a dispassionate certainty that whoever may gain by exchanging at the price to be determined, those who cannot exchange will at all events not lose. But considered as a typical likeness of men who have seen a thing they want and are seeking to possess it, this picture of mingled hope and resignation is not convincing. Most actual offering of goods for sale that one observes suggests less the dispassionate manner of the physiologist or psychologist taking the measure of his subject's reactions, sensibilities, and preferences than the more masterful procedure of the physician or the hypnotist who seeks to uproot or modify or reconstruct them. This is the process known in economic writing since Adam Smith as "the higgling and bargaining of the market."
In fact, the individual's ante-market valuation, when there temporarily is one, is an exchange valuation of the constructive or experimental and therefore (in any significant sense of the word) perfectly objective type, and the market process into which this enters is only a perfectly homogeneous temporal continuation of it that carries the individual forward to decisive action. There is no more reason for a separation here than for sundering the ante-experimental sketching out of an hypothesis in any branch of research from the work of putting the hypothesis to experimental test. The results of experiment may serve in a marked way in both sorts of process to elucidate or reconstruct the hypothesis.
The "higgling and bargaining of the market" has been accorded but scant attention by economists. It has apparently been regarded as a kind of irrelevance—a comedy part, at best, in the serious drama of industry and trade, never for a moment hindering the significant movement and outcome of the major action. As if to excuse the incompetence of this treatment (or as another phase of it) theory has tended to lay stress upon, and mildly to deplore, certain of the less amiable and engaging aspects of the process. The very term indeed as used by Adam Smith, imported a certain æsthetic disesteem, albeit tempered with indulgent approbation on other grounds. In Böhm-Bawerk's more modern account this approbation has given place to a neutral tolerance. A certain buyer, he says (in his discussion of simple "isolated" exchange), will give as much as thirty pounds for a horse; the horse's owner will take as little as ten pounds—these are predetermined and fixed valuations brought to the exchange negotiations and nothing that happens in the game of wits is conceived to modify them. The price will then be fixed somewhere between these limits. But how? "Here ..." we read, "is room for any amount of 'higgling.' According as in the conduct of the transaction the buyer or the seller shows the greater dexterity, cunning, obstinacy, power-of-persuasion, or such like, will the price be forced either to its lower or to its upper limit."[61] But the higgling cannot touch the underlying attitudes. Even "power of persuasion" is only one part of "skill in bargaining," with all the rest and like all the rest; if it were more than this there would be for Böhm-Bawerk no theoretically grounded price limits to define the range of accidental settlement and the whole explanation, as a theory of price, would reduce to nullity.[62]
With this, then, appears to fall away all ground for a one-sided, or even a sharply two-sided, conception of the process of fixation of market-values. A "marginal utility" theory and a "cost of production" theory of market price alike assume that the factor chosen as the ultimate determinant is a fixed fact defined by conditions which the actual spatial and temporal meeting-together of buyers and sellers in the market cannot affect. In this logical sense, the chosen determinant is in each case an ante-market or extra-market fact and the same is true of the blades of Marshall's famous pair of scissors.
The price of a certain article let us say is $5. According to the current type of analysis this is the price because, intending buyers' and sellers' valuations of the article being just what they are, it is at this figure that the largest number of exchanges can occur. Were the price higher there would be more persons willing to sell than to buy; were it lower there would be more persons willing to buy than to sell. At $5 no buyer or seller who means what he says about his valuation when he enters the market goes away disappointed or dissatisfied. With this price established all sellers whose costs of production prevent their conforming to it must drop out of the market; so must all buyers whose desire for the article does not warrant their paying so much. More fundamentally then, Why is $5 the price? Is it because intending buyers and the marginal buyer in particular do not desire the article more strongly? Or is it because conditions of production, all things considered, do not permit a lower marginal unit cost? The argument might seem hopeless. But the advantage is claimed for the principle of demand. Without demand arising out of desires expressive of wants there would simply be no value, no production, and no price. Demand evokes production and sanctions cost. But cost expended can give no value to a product that no one wants.
Does it follow, however, that the cost of a commodity in which on its general merits I have come to take a hypothetical interest can in no wise affect my actual price-offer for it? Can it contribute nothing to the preciser definition of my interest which is eventually to be expressed in a price offer? If the answer is "No, for how can this external fact affect the strength of your desire for the object?"—then the reason given begs the question at issue. Is my interest in the object an interest in the object alone? And is the cost of the object a fact for me external and indifferent? It is, at all events, not uncommon to be assured that an article "cannot be produced for less," that one or another of its elements of cost is higher than would be natural to suppose. Not always scientifically accurate, such assurances express an evident confidence that they will not be without effect upon a hesitant but fair-minded purchaser. And in other ways as well, the position of sellers in the market is not so defenseless as a strict utility theory of price conceives—apart from the standpoint of an abstract "normality" that can never contrive to get itself realized in empirical fact.[63] It is true that, in general, one tends to purchase an article of a given familiar kind where its price, all things considered, is lowest. In consequence the less "capable" producers or sellers must go to the wall. But the fact seems mainly "regulative" and of subordinate importance. Is it equally certain that as between branches of expenditure, such as clothing, food, and shelter, children, books, and "social" intercourse, the shares of income we expend upon them or the marginal prices we are content to pay express the original strength of separate and unmodified extra-market interests? On the contrary we have paid in the past what we have had to pay, what we have deemed just and reasonable, what we have been willing experimentally to hazard upon the possibility of the outlay's proving to have been worth while. In these twilight-zones of indetermination, cost as well as other factors of supply have had their opportunity. Shall we nevertheless insist that our "demands" are ideally fixed, even though in fallible human fact they are more or less indistinct, yielding and modifiable? On the contrary they are "in principle and for the most part" indeterminate and expectant of suggested experimental shaping from the supply side of the market. It is less in theory than in fact that they have a salutary tendency (none too dependable) toward rigidity.