The Harvest of Ruskin

by John W. Graham

Much of his attack might have taken the form of entirely sound but friendly criticism. Great play is made with a sentence of Ricardo’s:[53] “Utility is not the measure of exchangeable value, though it is absolutely essential to it.” This non-committal sentence does not carry us very far, and does not claim to be a definition, but is true as far as it goes. Ruskin makes hay of Ricardo’s statement next following, that Labour was, in primitive abstraction at any rate, the sole regulator of price. Neither he nor Ruskin had reached the modern theory of “marginal values” which solves so many ancient puzzles and misunderstandings. Price is fixed where Demand and Supply meet: and it measures two things. It represents on one side the value in use of the last article produced; and on the other the cost in labour of the production thereof. Then both sides are satisfied—the buyer and the seller. But the price does not represent the utility of the earliest articles produced—the first loaves of bread would be quite priceless,—nor the cost of the production of the first few easily grown crops. Both values are “final” or “marginal.” This simple and permanent plan of determining price, which nobody can or should alter, is, put shortly, the terrible law of supply and demand, the very heart of economic theory, about which so much indignation is wastefully expended. If Ruskin’s penetrating mind had been devoted to helpful criticism of the gaps left by the economists, they might have reached this theory much earlier. But Ruskin wrote in a state of noble rage—a bad state for the scientific temper. “Nothing in history,” he wrote, “has ever been so disgraceful to human intellect as the acceptance among us of the common doctrines of political economy as a science.”[54] This was chiefly because it was said to be a systematic disobedience to the first principles of its professed religion, because it taught “the love of money” and “mammon service”; it was “a science of becoming rich.” Once accept so terrible a misconception, and all the vials of the prophets’ wrath are not too profuse. “To this science and to this alone (the professed and organized pursuit of money) is owing all the evil of modern days. I say all.”[55] Ruskin wrote in 1865 a letter to the Daily Telegraph in which he says people cannot get servants by political economy and the law of supply and demand—as though he had said they cannot be got by physics and the law of gravitation. To see his real attitude we must add a phrase of 1883: “While I admit there is such a thing as mercantile economy, distinguished from social, I have always said that neither Mill, Fawcett nor Bastiat knew the contemptible science they professed to teach.”[56]

This attitude is pure disaster, comparable to the great odia theologica which have cursed the world. It is not necessary nor wise to take sides in an utterly baseless controversy. Let us rather examine the programme of the science.

Prof. Marshall gives the following list of the inquiries chiefly pursued by economic science[57]:—

“How does economic freedom tend, so far as its influence reaches, to arrange the demand for wealth and its production, distribution and exchange? What organization of industry and trade does economic freedom tend to bring about; what forms of division of labour; what arrangements of the money market, of wholesale and retail dealing, and what relations between employer and employed? How does it tend to adjust values, that is, the prices of material things, whether produced on the spot or brought from a distance, rents of all kinds, interest on capital and the earnings of all forms of work, including that of undertaking and managing business enterprises? How does it affect the course of foreign trade? Subject to what limitations is the price of anything a measure of its real utility? What increase of happiness is prima facie likely to result from a given increase in the wealth of any class of society? How far is the industrial efficiency of any class impaired by the insufficiency of its income? How far would an increase of the income of any class, if once effected, be likely to sustain itself through its effects in increasing their efficiency and earning power?

“How far does, as a matter of fact, the influence of economic freedom reach, or how far has it reached at any particular time, in any place, in any rank of society, or in any particular branch of industry? What other influences are most powerful there? and how is the action of all these influences combined? In particular, how far does not economic freedom tend of its own action to build up combinations and monopolies, and what are their effects? How are the various classes of society likely to be affected by its action in the long run? What will be the intermediate effects while its ultimate results are being worked out; and, account being taken of the time over which they will spread, what is the relative importance of these two classes of ultimate and intermediate effects? What will be the incidence of any system of taxes? What burdens will it impose on the community, and what revenue will it afford to the State?”

Such then, is the subject matter of economic science spread out in some detail. But behind all these there are practical questions which give the chief motive to our interest in the subject; and though not within the actual range of the science, it will be of interest to us to hear the same authority state them. They vary very much from time to time. The earlier economists were occupied with the need of removing restrictions on free commerce, and government regulation generally, and they glorified economic freedom. We ask with Marshall:

“How should we act so as to increase the good and diminish the evil influences of economic freedom, both in its ultimate results, and in the course of its progress? If the first are good and the latter evil, but those who suffer the evil do not reap the good, how far is it right that they should suffer for the benefit of others?”

“Taking it for granted that a more equal distribution of wealth is to be desired, how far would this justify changes in the institution of property, or limitations of free enterprise, even when they would be likely to diminish the aggregate of wealth? In other words, how far should an increase in the income of the poorer classes and a diminution of their work be aimed at, even if it involved some lessening of national material wealth? How far could this be done without injustice, and without slackening the energies of the leaders of progress? How ought the burdens of taxation to be distributed among the different classes of society?”

“Ought we to rest content with the existing forms of division of labour? Is it necessary that large numbers of the people should be exclusively occupied with work that has no elevating character? Is it possible to educate gradually among the great mass of workers a new capacity for the higher kinds of work, and in particular for undertaking co-operatively the management of the businesses in which they are themselves employed?”

“What are the proper relations of individual and collective action in a stage of civilization such as ours? How far ought voluntary association in its various forms, old and new, to be left to supply collective action for those purposes for which such action has special advantages? What business affairs should be undertaken by society itself acting through the Government, imperial or local? Have we, for instance, carried as far as we should the plan of collective ownership and use of open spaces, or works of art, of the means of instruction and amusement, as well as of those material requisites of a civilized life, the supply of which requires united action, such as gas and water and railways?”