Consumers and Wage-Earners: The Ethics of Buying Cheap

by J. Elliot Ross

The market price, however, makes no pretense of being determined by justice. It is the shrewdness of one man pitted against the shrewdness of another, or even the greed of one against the other's need. One wants to sell for as high a price while the other wants to buy for as low a price as he can. When there are numerous buyers and numerous sellers, all knowing their business pretty well, the result will be a close approximation to what would be a just price, if the cost to the entrepreneur producing the commodities or the person managing the distributing agency were all that should be taken into consideration. In a society where the actual producer sells directly to the Consumer, where there is no production on an enormous scale employing hundreds and thousands of hands who have no voice in fixing the price of the product, then the price reached by the higgling of the market is likely to be just.

Under the medieval system of craftsmen and one or two journeymen or apprentices who formed part of the household it was possible (by lack of competition) to maintain the rate of reward by limiting the supply. "No serious attempt was made to push trade or develop business, but only to carry on each trade according to the habitual rate of reward. According to this policy, the conditions of the producer were allowed to be the first consideration, and the consumer had to pay a price at which these conditions could be maintained."[12]

But conditions of business have changed immensely since the Middle Ages. The Industrial Revolution has brought big scale production, driving out of existence the small producer ministering directly and immediately to the wants of the community. Department stores have supplied the same principle in the distributing end of industry, and very largely replaced the small retailer. The employees of the big producer and distributor, the ones most concerned, have no voice in fixing the price of the article made or distributed by their labor. As a consequence competition will often depress the price below the point where it will yield a living wage to them. Not their rights determine this point, but what crude irresistible hunger will force them to accept. Many times it is only a difference between starving rapidly or slowly. But competition is inexorable.

It is true, that sometimes the actual producers or distributors may not be getting living wages because the entrepreneurs or the rent-or the interest-takers are absorbing too much. But ordinarily it is probable that stress of competition between capitalists and between managers will keep their shares within fairly moderate bounds. Capital competes with capital for a share in production just as one firm competes with another to secure a market for its product. Hence it may be reasonably presumed in any given case, when nothing is known to the contrary, that where the laborers are insufficiently remunerated, it is because the price obtained for their product will not cover just wages. Nor are appearances always a safe guide. A man who owns and manages a factory (thus drawing by himself alone wages of management, rent, and interest) may seem able easily to afford higher wages. Yet to divide his whole income among all his employees might give only an inappreciable increase to each.

Therefore, it would seem that the principle of the market price being just, cannot be applied strictly to-day. On the contrary, many persons are claiming that the market price fixed by competition is usually unjust. A better principle, a more fundamental principle, one that really strikes its roots down into justice itself, would be to say that a just price is one that will yield a just return to all concerned—the actual laborers who produce the commodities, the clerks in the stores that distribute them, wages of management to the entrepreneurs concerned, and interest on the capital invested.

Certainly if this be not done, the equality between the "value" of the article and the price is not preserved. And as Ballerini says, "when the equality is not preserved, so that the seller sells for more than the highest price or the buyer buys for less than the lowest ... injustice is committed."[13]

But even though the price asked were sufficient to pay the employees just wages and the entrepreneur simply refused to do it, would the Consuming Class be justified in buying the article? It is contended that they would not. For one of the duties of the seller is to give a just title. And it would seem clear that one who hires a person to make a certain article, playing upon his necessity to avoid paying what his labor is worth, has not acquired a just title to the object produced. There is something in that article for which he has not paid. Human flesh and blood that has not been compensated for have gone into its making. The seller not having a good title himself, cannot transfer such to another. Persons who buy from him do not, therefore, secure a just title, and hence, it is argued, commit a grave injustice by buying such an article.[14]

III. The third argument adduced in favor of an obligation on the part of the Consuming Class is, that the purchase of articles made under unjust conditions is co-operation in the injustice. It makes no difference whether or not the employers are formally guilty of injustice. They may be forced by the competitive system, as many contend, to underpay their workmen. Nevertheless, material injustice at least is committed, and the Consuming Class have no right to co-operate formally in what may be merely material injustice for another. Yet the Consuming Class by buying goods made under unjust conditions does co-operate, it is alleged, in three ways: (A) as the recipient of the result of the injustice; (B) by furnishing the means for the act; (C) and by counselling the action. "For a co-operator is one who at the same time with another is the cause of the injury, whether secondary or equally principal, whether positive or negative. For there is not the same manner of co-operation in all cases, but this is common to all, that one person should concur with another to commit an injury."[15]

(A) One of the ways of positively co-operating with an injustice, is by receiving the results of the injustice. Thus a thief will not steal a bulky piece of silver unless he has a fence to receive it, and the fence becomes guilty of the theft by receiving the article. So a business man will not manufacture an article and thus commit an injustice against the laborers whom he underpays, unless he is reasonably sure some one will receive this article after it is made. The persons who receive it, then, or the purchasers, it is argued, are in the position of the thief's fence: They are receiving an article that was obtained by injustice; and it matters not whether the article was stolen outright or the injustice committed in a more gentlemanly way. Nor does the fact of the manufacturer committing the injustice to increase his profits, rather than (as has been shown elsewhere) to meet a demand for cheapness on the part of the Consuming Class, alter the situation. For a thief steals for his own enrichment, not for the advantage of the recipient of the stolen goods.[16]

(B) One can co-operate in an injustice not only by receiving the results, but by furnishing the means for committing the injustice, and it is contended that the Consuming Class co-operate also in this way. Nor is this simply a different name for the co-operation just considered. For in the previous case, the Consuming Class co-operated with an act already performed in anticipation of this co-operation. Whereas in the phase now under discussion they co-operate with an act to be done in the future. A concrete example will make this clear. Mr. ---- invests $50,000 in the shoe business. After paying for his plant, raw material, and the wages of his men until he has produced marketable articles, he has practically nothing left. His continuance in business depends upon his selling these articles to gain money for current expenses. The purchasers of these goods co-operate (by receiving the articles) in the injustice under which they are assumed to have been manufactured, and also, by furnishing the necessary means, in the injustice he will commit by manufacturing more under the same conditions.