The Business Man and Profits
Just remuneration for the active agents of production, whether they be directors of industry or employés, depends fundamentally upon five canons of distribution; namely, needs, efforts and sacrifices, productivity, scarcity, and human welfare. In the light of these principles it is evident that business men who use fair methods in competitive conditions, have a right to all the profits that they can obtain. On the other hand, no business man has a strict right to a minimum living profit, since that would imply an obligation on the part of consumers to support superfluous and inefficient directors of industry. Those who possess a monopoly of their products or commodities have no right to more than the prevailing or competitive rate of interest on their capital, though they have the same right as competitive business men to any surplus gains that may be due to superior efficiency. The principal unfair methods of competition; that is, discriminative underselling, exclusive-selling contracts, and discrimination in transportation, are all unjust.
The remedies for unjust profits are to be found mainly in the action of government. The State should either own and operate all natural monopolies, or so regulate their charges that the owners would obtain only the competitive rate of interest on the actual investment, and only such surplus gains as are clearly due to superior efficiency. It should prevent artificial monopolies from practising extortion toward either consumers or competitors. Should the method of dissolution prove inadequate to this end, the State ought to fix maximum prices. Inasmuch as overcapitalisation has frequently enabled monopolistic concerns to obtain unjust profits, and always presents a strong temptation in this direction, it should be legally prohibited. A considerable part of the excessive profits already accumulated can be subjected to a better distribution by progressive income and inheritance taxes. Finally, the possessors of large fortunes and incomes could help to bring about a more equitable distribution by voluntarily complying with the Christian duty of bestowing their superfluous goods upon needy persons and objects.
The Labourer and Wages
None of the theories of fair wages that have been examined under the heads of "the prevailing rate," "exchange-equivalence," or "productivity" is in full harmony with the principles of justice. The minimum of wage justice can, however, be described with sufficient definiteness and certainty. The adult male labourer has a right to a wage sufficient to provide himself and family with a decent livelihood, and the adult female has a right to remuneration that will enable her to live decently as a self supporting individual. At the basis of this right are three ethical principles: all persons are equal in their inherent claims upon the bounty of nature; this general right of access to the earth becomes concretely valid through the expenditure of useful labour; and those persons who are in control of the goods and opportunities of the earth are morally bound to permit access thereto on reasonable terms by all who are willing to work. In the case of the labourer, this right of reasonable access can be effectuated only through a living wage. The obligation of paying this wage falls upon the employer because of his function in the industrial organism. And the labourer's right to a living wage is morally superior to the employer's right to interest on his capital. Labourers who put forth unusual efforts or make unusual sacrifices have a right to a proportionate excess over living wages, and those who are exceptionally productive or exceptionally scarce have a right to the extra compensation that goes to them under the operation of competition. Labourers who are receiving the "equitable minimum" described in the last sentence have a right to still higher wages at the expense of the capitalist and the consumer, if they can secure them through the processes of competition; for the additional amount is an ethically unassigned or ownerless property which may be taken by either labourer, capitalist, or consumer, provided that there is no artificial limitation of supply.
The methods of increasing wages are mainly three: a minimum wage by law, labour unions, and co-operative enterprise. The first has been fairly well approved by experience, and is in no wise contrary to the principles of either ethics, politics, or economics. The second has likewise been vindicated in practice, though it is of only small efficacy in the case of those workers who are receiving less than living wages. The third would enable labourers to supplement their wage incomes by interest incomes, and would render our industrial system more stable by giving the workers an influential voice in the conditions of employment, and laying the foundation of that contentment and conservatism which arise naturally out of the possession of property.
As a matter of convenience, the foregoing paragraphs may be further summarised in the following abridgment: The landowner has a right to all the economic rent, modified by the right of his tenants and employés to a decent livelihood, and by the right of the State to levy taxes which do not substantially lower the value of the land. The capitalist has a right to the prevailing rate of interest, modified by the right of his employés to the "equitable minimum" of wages. The business man in competitive conditions has a right to all the profits that he can obtain, but corporations possessing a monopoly have no right to unusual gains except those due to unusual efficiency. The labourer has a right to living wages, and to as much more as he can get by competition with the other agents of production and with his fellow labourers.
Concluding Observations
No doubt many of those who have taken up this volume with the expectation of finding therein a satisfactory formula of distributive justice, and who have patiently followed the discussion to the end, are disappointed and dissatisfied at the final conclusions. Both the particular applications of the rules of justice and the proposals for reform, must have seemed complex and indefinite. They are not nearly so simple and definite as the principles of Socialism or the Single Tax. And yet, there is no escape from these limitations. Neither the principles of industrial justice nor the constitution of our socio-economic system is simple. Therefore, it is impossible to give our ethical conclusions anything like mathematical accuracy. The only claim that is made for the discussion is that the moral judgments are fairly reasonable, and the proposed remedies fairly efficacious. When both have been realised in practice, the next step in the direction of wider distributive justice will be much clearer than it is to-day.
Although the attainment of greater justice in distribution is the primary and most urgent need of our time, it is not the only one that is of great importance. No conceivable method of distributing the present national product would provide every family with the means of supporting an automobile, or any equivalent symbol of comfort. Indeed, there are indications that the present amount of product per capita cannot long be maintained without better conservation of our natural resources, the abandonment of our national habits of wastefulness, more scientific methods of soil cultivation, and vastly greater efficiency on the part of both capital and labour. Nor is this all. Neither just distribution, nor increased production, nor both combined, will insure a stable and satisfactory social order without a considerable change in human hearts and ideals. The rich must cease to put their faith in material things, and rise to a simpler and saner plane of living; the middle classes and the poor must give up their envy and snobbish imitation of the false and degrading standards of the opulent classes; and all must learn the elementary lesson that the path to achievements worth while leads through the field of hard and honest labour, not of lucky "deals" or gouging of the neighbour, and that the only life worth living is that in which one's cherished wants are few, simple, and noble. For the adoption and pursuit of these ideals the most necessary requisite is a revival of genuine religion.