Along with this we have the phenomenon of non-conformity. Individuals of special natural endowment, or unusual situation, or both, depart widely from the type, and initiate new tendencies which, under favorable conditions, may grow, and modify or destroy the old type. These new movements are likely to derive more directly from human nature than the old, and it is commonly true, though not always, that non-conformity represents human-nature values in conflict with those that are more institutional. We can see this process at the present time in the church, in politics, and in the family. It is taking place no less in pecuniary relations, and our expenditure is being humanized as radically, perhaps, as anything else. Things that seemed indispensable twenty-five years ago no longer seem worth while, and claims unthought of then have become irresistible. What changes have come over the budget of the household, of philanthropy, of the state and the church, during this period!
One might say much on this topic, but it would amount simply to an exposition, in this field, of the general relation between institutions and human nature.
Without taking into account this life of the individual in the institution we can never do justice to the general sway of the market, as a historical organism, over society at large. It is, as I have suggested, a structure as imposing as the political state itself, filling the eye with the spectacle of established and unquestioned power and impressing its estimates upon every mind.
We have to recognize, then, not merely that pecuniary value is, in general, a social value which derives from the social development of the past, but that it is the outcome, more particularly, of a special phase of that development, namely, the comparatively recent growth of industry and business, including also the growth of consumption. This is the special institution from which, for better or worse, the pecuniary values of to-day draw their character, very much as ecclesiastical values draw theirs from the history of the church. The phenomena of any institution are moulded in part by the general conditions of the time, but they are moulded especially by their particular institutional antecedents, which may be somewhat incongruous with the more general conditions. If you attend a service of the Established Church you become aware of points of view which may seem to you, as a man of to-day, absurd and incomprehensible, except as you know something of their history. The same may very well be true in the pecuniary world, though we may not notice it because we are more used to it, because we are ourselves members of this church.
And the method of criticism, in the market as in the church, is to take as large a view of the institution as possible, discover in what respects it is failing to function adequately in the general life, and strive to bring about such changes as seem to be required.
It seems probable that the more we consider, in the light of an organic view of society, the practice of discussing values apart from their institutional antecedents, the more sterile, except for somewhat narrowly technical purposes, this practice will appear. Certainly it should have but a secondary place in inquiries which seek to throw light upon ethics or social policy. It is, for example, but a frail basis for a theory of distribution. The latter I take to be essentially a historical and institutional phenomenon, economic technique being for the most part only a mechanism through which social organization expresses itself. I do not question the technical value of the current treatises on distribution which more or less cut it off from its roots in the social whole, but perhaps the time is coming for a treatment which takes technical economics for granted and elucidates the larger actualities of the question.
The principle that any social institution, and consequently any system of valuation, must be administered by a class, which will largely control its operation, is rather an obvious one. It was long overlooked, however, in political theory, at least in the theory of democracy, and is still overlooked, perhaps, in economic theory. At any rate it is a fact that pecuniary valuation is by no means the work of the whole people acting homogeneously, but is subject, very much like the analogous function in politics, to concentration in a class.
Class control is exercised mainly in two ways: through control or guidance of purchasing power, and so of the demand side of the market, and through the actual administration of the business system, which gives the class in possession command of the large personal (pecuniary) values incident to this function, and the opportunity to increase these by the use, direct and indirect, of their commanding position.[[68]]
The process of definite pecuniary valuation, the price-making function, is based upon “effective demand” or the offer of money for goods; perhaps we ought to say for consumers’ goods, as the value of producers’ goods may be regarded as secondary.[[69]] It is, therefore, the immediate work of those who have money to spend. Just how far spending is concentrated in a class I cannot pretend to say, but current estimates indicate that about one-fifth of the families in the United States absorb half the total income. No doubt, however, the proportion of saving in this fifth is somewhat greater, and that of spending somewhat less, than in the rest of the population.[[70]] In this respect pecuniary value is, on the face of it, much more the work of a restricted class than political value, in determining which all voters are nominally equal. In either case, however, it would be most erroneous to suppose that value-making power can be measured in any such numerical way. There is always a psychological process of suggestion and discussion which works underneath the market transactions.
By virtue of this the power of the richer classes over values is far greater than that indicated by their relative expenditure. As people of leisure and presumptive refinement, they have prestige in forming those conventions by which expenditure is ruled. We see how cooks and shop-girls dress in imitation of society women, and how clerks mortgage their houses to buy automobiles. It is in fact notorious that the expenditure of the poor follows the fashions of the rich, unless in matters of the most direct and urgent necessity, and in no small degree even in these.