Civilization in the United States: An inquiry by thirty Americans

by Unknown

The changes of the last four decades, which make up “The Industrial Revolution in America,” have left their mark upon the economics of the schools. If there was a time when the thought of the professed economists was a thing apart from the common sense of the age, it ended with the coming of industrialism. Differ as it may in phrase, in method, and in statement, the economics in solid and dull treatises reflects, as it has always reflected, the opinions of the laity. If there were agreement among the sorts of men who gather at ball games and in smoking cars, the books on economics would all read alike. But when the plumber differs from the banker and the scrub woman refuses to take her ideas from the coupon clipper, it is futile to expect mere economists to agree. To some, the classical doctrine still serves as a sabbatical refuge from modern problems. Others, who “specialize” in trusts, tariffs, and labour are too busy being “scientific” to formulate general opinions. Still others insist upon creating a new economics concerned with the problem of directing industrial development to appointed ends. Each of these schools has a membership large enough to allow dissension within the ranks.

The revolt against the classical economics began when it encountered modern fact. Beyond the pale of doctrine taught by certified theorists appeared studies upon corporations, international trade, railway rates, craft unionism, and other matters of the newer fact. For a time those who studied these subjects were content to describe in superficial terms the results of their observations. But as facts accumulated they provoked generalizations at variance with the accepted principles of the older competitive theory. At the same time the rise of a newer history concerned with development rather than chronology, a new ethics that recognized the existence of a social order, and a new psychology that taught that the content of men’s behaviour is poured in by the environment, together made the foundations of the older economics very insecure.

For a time this protest found expression only in critical work. The picture of an economic order as a self-regulating mechanism, peopled with folk who could not but serve the community in serving themselves became very unreal. The complexity of industrialism made it hard to believe that the individual had knowledge enough to choose best for himself. The suspicion that frequently thought follows action made it hard to continue to believe in man’s complete rationality. The idea that incomes are different because opportunities are different led to a questioning of the justice of the ratings of men in the market. The unequal division of income made impossible pecuniary calculations in which each man counted for one and only for one. With these assumptions of 19th-century economics passed “the economic man,” “the Crusoe economy,” and the last of the divine theories, that of “enlightened self-interest.” It was no longer possible to build a defence of the existing order upon “the hedonistic conception of man” as “a lightning calculator of pleasures and pains, who oscillates like a homogeneous globule of desire of happiness under the impulse of stimuli that shift him about the area, but leave him inert.”

The most immediate effect of this criticism was a change in method. The older process of juggling economic laws out of assumptions about human nature, human motives, and the beneficence of competition lost prestige. It was evident that if the system was to be appraised the facts must be had. Accordingly a veritable multitude of facts, good, bad, and mostly indifferent were treasured up. This process of garnering information soon made it evident that the facts about the relationship of industry to the welfare of the community were too varied and too numerous to be separately catalogued. Since only totals could be used, economics came to rely upon facts presented in the quantitative language of statistics.

But since facts are not possessed of the virtue of self-determination, they did not yield an opinion which was very relevant or very truthful. Their use was for the moment nothing more than a substitution of the superstition of facts for that of logic. The facts were of value, because when properly interpreted they gave the story of what the economic system had done. But without the aid of standards it was impossible to determine whether it had worked well or ill, whether it had much or little to give in return for the solicitous concern about it. It was evident that modern industrialism was developing without conscious guidance. As long as no goal was fixed it was impossible to tell whether industrial development was proceeding in the right direction. As long as we were unmindful of the kind of society we wished ours to be, we could not appraise its accomplishments. Without standards all that could be said was that the system had worked as well as it had worked and that we were as well off as we were well off. The problem, therefore, became one of judging the system on the basis of the facts by means of standards.

Thus the newer economics has been of service in stating the problem with which opinion must be concerned. The “prevailing” economic order is one of many schemes of arrangements for making industry serve the purposes of the community. The system has been slowly evolved out of the institutions of the past, is constantly being affected by circumstances, and for the future is capable of conscious modification. How well it has served its purpose cannot be attested by an abstract argument proceeding from assumptions about human nature and the cosmos. A judgment upon its relative goodness or badness requires an appraisal of the facts in terms of standards. These standards must be obtained from our notions of the kind of society we want this to be. These notions must proceed from a scientific study of the properties of things and the needs of human beings. That judgment will be one not of goodness or badness, but of the relative merits of a very human scheme of arrangements compared with its alternatives.

The economists are reluctant to pass a judgment upon the prevailing order. The relevant facts are too scanty and the standards too inexact to warrant an appraisal of the virtues and the vices of “capitalism.” They distrust the eulogies of apologists because they do not square with the known facts. They are not convinced by the reformers, because they fear that they know as little about their own schemes as they do about current arrangements. They insist that a general judgment must be a progressive affair. The system will change through gradual modification; the larger problem will be solved by attention to an endless succession of minor problems. Each of these must be met with the facts and with an ideal of what our society should be. They have too little faith in the rationality of the collect to believe that problems can be faced in battalions or that a new order can emerge as a work of creation. They have little fear for “the future of the nation,” if only problems can be intelligently handled as they emerge. Their attitude towards the present system is one, neither of acceptance nor of rejection, but of doubt and of honest inquiry. Their faith is neither in the existing order nor in a hand-me-down substitute, but in a conscious direction of the process of change.

* * * * *

This tedious narrative has failed entirely in its purpose, if it has not revealed the strength and the weakness of economic opinion in America. Its merits stand out boldly in the preceding paragraphs; its defects are too striking to be concealed. The reader has already been informed; but the writer must inform himself. The essay, therefore, will close with an explicit statement of some three of the more obvious characteristics.

First, its most striking characteristic is its volume. In quantity it contains enough verbal and intellectual ammunition to justify or to wreck a dozen contradictory economic orders. If, in an orderly way, opinion became judgment and judgment ripened into the society of to-morrow, it would stand condemned. For little of it has a practical consequence and our ways of expression are very wasteful. But it also affords a harmless outlet for the dangerous emotions aroused by the wear and tear of everyday work in a humdrum universe. And, if it is true that we are, all of us, Simians by lineage, this is by far the most important function it serves.