The Forgotten Man, and Other Essays

by William Graham Sumner

Any one who will look back upon the last twenty-five years cannot fail to notice that the changes, advances, and improvements have been numerous and various. We are accustomed to congratulate each other upon them. There can be no doubt that they must and will contribute to the welfare of the human race beyond what any one can now possibly foresee or measure. I am firmly convinced, for my opinion, that the conditions of wealth and civilization for the next quarter of a century are provided for in excess of any previous period of history, and that nothing but human folly can prevent a period of prosperity which we, even now, should regard as fabulous. We can throw it away if we are too timid, if we become frightened at the rate of our own speed, or if we mistake the phenomena of a new era for the approach of calamity, or if the nations turn back to mediæval darkness and isolation, or if we elevate the follies and ignorances of the past into elements of economic truth, or if, instead of pursuing liberty with full faith and hope, the civilized world becomes the arena of a great war of classes in which all civilization must be destroyed. But, such follies apart, the conditions of prosperity are all provided.

We must notice, however, that these innovations have fallen with great rapidity upon a vast range of industries, that they have accumulated their effects, that they have suddenly altered the currents of trade and the methods of industry, and that we have hardly learned to accommodate ourselves to one new set of circumstances before a newer change or modification has been imposed. Some inventions, of which the Bessemer steel is the most remarkable example, have revolutionized industries. Some new channels of commerce have been opened which have changed the character and methods of very important branches of commerce. We have also seen a movement of several nations to secure a gold currency, which movement fell in with a large if not extraordinary production of silver and altered the comparative demand and supply of the two metals at the same time. This movement had nothing arbitrary about it, but proceeded from sound motives and reasons in the interest of the nations which took this step. There is here no ground for condemnation or approval. Such action by sovereign nations is taken under liberty and responsibility to themselves alone, and if it is taken on a sufficiently large scale to form an event of importance to the civilized world, it must be regarded as a step in civilization. It can only be criticized by history. For the present, it is to be accepted and interpreted only as an indication that there are reasons and motives of self-interest which can lead a large part of the civilized world to this step at this time.

The last twenty-five years have also included political events which have had great effects on industry. Our Civil War caused an immense destruction of capital and left a large territory with millions of inhabitants almost entirely ruined in its industry, and with its labor system exposed to the necessity of an entire re-formation. Part of the expenditures and losses of the war were postponed and distributed by means of the paper currency which, instead of imposing industry and economy to restore the losses and waste, created the foolish belief that we could make war and get rich by it. The patriotic willingness of the nation to be taxed was abused to impose taxes for protection, not for revenue, so that the industry of the country was distorted and forced into unnatural development. The collapse of 1873, followed by a fall in prices and a general liquidation, was due to the fact that every one knew in his heart that the state of things which had existed for some years before was hollow and fictitious. Confidence failed because every one knew that there were no real grounds for confidence. The Franco-Prussian war had, also, while it lasted, produced a period of false and feverish prosperity in England. It was succeeded by great political changes in Germany which, together with the war indemnity, led to a sudden and unfounded expansion of speculation, amounting to a mania. Germany undoubtedly stands face to face with a new political and industrial future, but she has postponed it by a headlong effort to realize it at once. In France, too, the war was followed by a hasty, and, as we are told, unwise extension of permanent capital, planned to meet the extraordinary demand of an empty market. In England the prosperity of 1870–1872 has been followed as usual by developments of unsound credit, bad banking, and needless investments in worthless securities.

Here then we have, in a brief and inadequate statement, circumstances in all these great industrial nations peculiar to each, yet certainly sufficient to account for a period of reaction and distress. We have also before us great features of change in the world’s industry and commerce which must ultimately produce immeasurable advantages, but which may well, operating with local causes, produce temporary difficulty; and we have to notice also that the local causes react through the commercial and credit relations of nations to distribute the evil.

It is not surprising, under such a state of things, that some people should lose their heads and begin to doubt the economic doctrines which have been most thoroughly established. It belongs to the symptoms of disease to lose confidence in the laws of health and to have recourse to quack remedies. I have already observed that certain phenomena appear in every great social movement which are calculated to deceive by apparent inconsistency or divergence. Hence we have seen the economists, instead of holding together and sustaining, at the time when it was most needed, both the scientific authority and the positive truth of their doctrines, break up and run hither and thither, some of them running away altogether. Many of them seem to be terrified to find that distress and misery still remain on earth and promise to remain as long as the vices of human nature remain. Many of them are frightened at liberty, especially under the form of competition, which they elevate into a bugbear. They think that it bears harshly on the weak. They do not perceive that here “the strong” and “the weak” are terms which admit of no definition unless they are made equivalent to the industrious and the idle, the frugal and the extravagant. They do not perceive, furthermore, that if we do not like the survival of the fittest, we have only one possible alternative, and that is the survival of the unfittest. The former is the law of civilization; the latter is the law of anti-civilization. We have our choice between the two, or we can go on, as in the past, vacillating between the two, but a third plan—the socialist desideratum—a plan for nourishing the unfittest and yet advancing in civilization, no man will ever find. Some of the crude notions, however, which have been put forward surpass what might reasonably have been expected. These have attached themselves to branches of the subject which it is worth while to notice.

1. As the change in the relative value of the precious metals is by far the most difficult and most important of the features of this period, it is quite what we might have expected that the ill-trained and dilettante writers should have pounced upon it as their special prey. The dabblers in philology never attempt anything less than the problem of the origin of language. Every teacher knows that he has to guard his most enthusiastic pupils against precipitate attempts to solve the most abstruse difficulties of the science. The change in the value of the precious metals which is going on will no doubt figure in history as one of the most important events in the economic history of this century. It will undoubtedly cost much inconvenience and loss to those who are in the way of it, or who get in the way of it. It will, when the currency changes connected with it are accomplished, prove a great gain to the whole commercial world. The nations which make the change do so because it is important for their interests to do it. Now, suppose that it were possible for those who are frightened at the immediate and temporary inconveniences, to arrest the movement—the only consequence would be that they would arrest and delay the inevitable march of improvement in the industrial system.

2. The second field, which is an especial favorite with the class of writers which I have described, is that of prognostications as to what developments of the economic system lie in the future. Probably every one has notions about this and every one who has to conduct business or make investments is forced to form judgments about it. There is hardly a field of economic speculation, however, which is more barren.

3. The third field into which these writers venture by preference is that of remedies for existing troubles. The popular tide of medicine is always therapeutics, and the less one knows of anatomy and physiology the more sure he is to address himself exclusively to this department, and to rely upon empirical remedies. The same procedure is followed in social science, and it is accompanied by the same contempt for scientific doctrine and knowledge and remedies. To bring out the points which here seem to me important, it will be necessary to go back for a moment to some facts which I have already described.

One of the chief characteristics of the great improvements in industry, which have been described, is that they bring about new distributions of population. If machinery displaces laborers engaged in manufactures, these laborers are driven to small shopkeeping, if they have a little capital; or to agricultural labor, if they have no capital. Improvements in commerce will destroy a local industry and force the laborers to find a new industry or to change their abode. When forces of this character coöperate on a grand scale, they may and do produce very important redistributions of population. In like manner legislation may, as tariff legislation does, draw population to certain places, and its repeal may force them to unwelcome change. We may state the fact in this way: let us suppose that, in 1850, out of every hundred laborers in the population, the economical distribution was such that fifty should be engaged in agriculture, thirty in manufacturing, and the other twenty in other pursuits. That is to say that, with the machinery and appliances then available, thirty manufacturing laborers could use the raw materials and food produced by fifty agricultural laborers so as to occupy all to the highest advantage. Now suppose that, by improvements in the arts, twenty men could, in 1880, use to the best advantage the raw materials and food produced by sixty in agriculture. It is evident that a redistribution would be necessary by which ten should be turned from manufacturing to land. That such a change has been produced within the last thirty years and that it has reached a point at which is setting in the counter movement to the former tendency from the land to the cities and towns, seems to me certain. There are even indications of great changes going on in the matter of distribution which will correct the loss and waste involved in the old methods of distribution long before any of the fancy plans for correcting them can be realized, and which are setting free both labor and capital in that department. Now if we can economize labor and capital in manufacturing, transportation, and distribution, and turn this labor and capital back upon the soil, we must vastly increase wealth, for that movement would enlarge the stream of wealth from its very source.

Right here, however, we need to make two observations.