CHAPTER XII
INDIVIDUAL LIBERTY AND THE ECONOMIC SYSTEM
The American doctrine of individual liberty had its origin in economic conditions widely different from those which prevail to-day. The tools of production were simple and inexpensive and their ownership widely diffused. There was no capital-owning class in the modern sense. Business was carried on upon a small scale. The individual was his own employer, or, if working for another, could look forward to the time when, by the exercise of ordinary ability and thrift, he might become an independent producer. The way was open by which every intelligent and industrious wage-earner could become his own master. Industrially society was democratic to a degree which it is difficult for us to realize at the present day. This economic independence which the industrial classes enjoyed ensured a large measure of individual liberty in spite of the fact that political control was in the hands of a class.
The degree of individual freedom and initiative which a community may enjoy is not wholly, or even mainly, a matter of constitutional forms. The actual liberty of the individual may vary greatly without any change in the legal or constitutional organization of society. A political system essentially undemocratic would be much less destructive of individual liberty in a society where the economic life was simple and ownership widely diffused than in a community possessing a wealthy capitalist class on the one hand and an army of wage-earners on the other. The political system reacts, it is true, upon the economic organization, but the influence of the latter upon the individual is more direct and immediate than that of the former. The control exerted over the individual directly by the government may, as a matter of fact, be slight in comparison with that which is exercised through the various agencies which control the economic system. But the close interdependence between the political and the business organization of society can not be overlooked. Each is limited and conditioned by the other, though constitutional forms are always largely the product and expression of economic conditions.
Individual liberty in any real sense implies much more than the restriction of governmental authority. In fact, true liberty consists, as we have seen, not in divesting the government of effective power, but in making it an instrument for the unhampered expression and prompt enforcement of public opinion. The old negative conception of liberty would in practice merely result in limiting the power of the government to control social conditions. This would not necessarily mean, however, the immunity of the individual from external control. To limit the power of the government may permit the extension over the individual of some other form of control even more irresponsible than that of the government itself—the control which inevitably results from the economic supremacy of a class who own the land and the capital.
The introduction of the factory system forced the great majority of small independent producers down into the ranks of mere wage-earners, and subjected them in their daily work to a class rule under which everything was subordinated to the controlling purpose of the employers—the desire for profits.
The significance of this change from the old handicraft system of industry to present-day capitalistic production is fully understood by all students of modern industry. Even Herbert Spencer, the great expounder of individualism, admitted that the so-called liberty of the laborer "amounts in practice to little more than the ability to exchange one slavery for another" and that "the coercion of circumstances often bears more hardly on him than the coercion of a master does on one in bondage."[180] This dependence of the laborer, however, he regarded as unfortunate, and looked forward to the gradual amelioration of present conditions through the growth of co-operation in production.
Individualism as an economic doctrine was advocated in the eighteenth century by those who believed in a larger measure of freedom for the industrial classes. The small business which was then the rule meant the wide diffusion of economic power. A laissez faire policy would have furthered the interests of that large body of small independent producers who had but little representation in and but little influence upon the government. It would have contributed materially to the progress of the democratic movement by enlarging the sphere of industrial freedom for all independent producers. It does not follow, however, that this doctrine which served a useful purpose in connection with the eighteenth-century movement to limit the power of the ruling class is sound in view of the political and economic conditions which exist to-day. The so-called industrial revolution has accomplished sweeping and far-reaching changes in economic organization. It has resulted in a transfer of industrial power from the many to the few, who now exercise in all matters relating to production an authority as absolute and irresponsible as that which the ruling class exercised in the middle of the eighteenth century over the state itself. The simple decentralized and more democratic system of production which formerly prevailed has thus been supplanted by a highly centralized and thoroughly oligarchic form of industrial organization. At the same time political development has been tending strongly in the direction of democracy. The few have been losing their hold upon the state, which has come to rest, in theory at least, upon the wall of the many. A political transformation amounting to a revolution has placed the many in the same position in relation to the government which was formerly held by the favored few.
As a result of these political and economic changes the policy of government regulation of industry is likely to be regarded by the masses with increasing favor. A society organized as a political democracy can not be expected to tolerate an industrial aristocracy. As soon, then, as the masses come to feel that they really control the political machinery, the irresponsible power which the few now exercise in the management of industry will be limited or destroyed as it has already been largely overthrown in the state itself. In fact the doctrine of laissez faire no longer expresses the generally accepted view of state functions, but merely the selfish view of that relatively small class which, though it controls the industrial system, feels the reins of political control slipping out of its hands. The limitation of governmental functions which was the rallying-cry of the liberals a century ago has thus become the motto of the present-day conservative.
The opponents of government regulation of industry claim that it will retard or arrest progress by restricting the right of individual initiative. They profess to believe that the best results for society as a whole are obtained when every corporation or industrial combination is allowed to manage its business with a free hand. It is assumed by those who advocate this policy that there is no real conflict of interests between the capitalists who control the present-day aggregations of corporate wealth and the general public. No argument is needed, however, to convince any one familiar with the facts of recent industrial development that this assumption is not true.