The Older Constitutional Rights 5. Freedom from compulsory quartering of soldiers in time of peace; freedom from searches and seizures in homes and dwellings. 6. No person shall be deprived of liberty or property without due process of law. 7. Right to bear arms. New Economic and Social Rights 5. Freedom from overcrowded unsanitary houses, factories, and stores; right to tenement and factory inspection and regulation. 6. Right to full participation in economic progress and a salary or wage payment that will support a reasonable standard of living. 7. Right to aesthetic and other higher enjoyments of civilization. We must see clearly that the old legal freedom was a means to an end. When men were fighting a tyrant king or a selfish mother country they wanted "liberty" to pursue "happiness" or "freedom of speech," both of which were denied them. When their business is assailed by a combination, or their own and their children's chances of advancement are blocked by one or another cause, they demand greater "freedom of business opportunity." The obstacles to progress are different, the meaning of "liberty" changes. See also 62. Individual Enterprise under Feudalism.` 340. 228. A Program of Reform. 392. The Development of Individualism. C. Competition as an Organizing Agency GENERAL STATEMENT OF THE SERVICES OF COMPETITION What services are they which we look to competition to perform? The first of them is the determination of prices. By this determination of prices it regulates, in the second place, the amount of I Adapted by permission from John Bascom, Social Theory: A Grouping of Social Facts and Principles, pp. 148-51. (Thomas Y. Crowell & Co., 1895.) production. In the third place, by the same means, it adapts production to the wants of men, and, in the fourth place, improves it in quality. Competition determines prices. We wish the most skilful production, we wish the low prices incident to it, and these we secure by the sifting processes of an active market. Yet this regulation is not perfect. There are most undesirable and extreme fluctuations in prices, and adventitious forces find their way freely into them. The work is done; not perfectly, but we do not as yet see how it can be better done. The rise and fall of prices determine the activity we can wisely direct to each branch of business. The automatic mechanism which apportions human effort among the innumerable forms of production is set in motion by competition. Here again we make bad mistakes, and suffer the evils of over-production; but we can conceive of no oversight which would take the place of the eager, interested, universal watchfulness called out by competition. The man who makes a mistake is immediately punished, and he who is alert and astute is as quickly rewarded. Competition is also constantly operative in adapting commodities to the wants and tastes of men. The increasing suitableness of products is one of the conspicuous gains of civilization, and is due almost wholly to that eager competition which is on the alert to discover and call out a new demand. This impulse has also its evil side. Desires are evoked in a mischievous, as well as in a desirable, form, and trade, seeking immediate profit, proceeds in oversight of greater ultimate good. Yet the more substantial gains are usually found with the more sound and comprehensive purposes. Akin to this improvement in kind is the improvement in the quality of goods. Great successes are often achieved in this direction. The enterprise that shows itself in superior quality of production unites at once personal and general welfare. Nor can we otherwise give equal vigor to this spirit of improvement. Yet here, as elsewhere, our gains are accompanied with corresponding losses. Competition is responsible for those imitations and imperceptible changes which cheapen products without an equivalent reduction of prices. Each advance gives occasion to a regression by which our gains are in part stolen from us. Competition, through its service in settling price, quantity, adaptation, and quality, becomes the chief instrument in distribution. While we are by no means satisfied with the way in which products are divided among producers, we are at a loss to discover any more just principle than that involved in competition, or any practical method of distribution promoting more effectively the general purpose of social discipline. The peculiar claims urged in favor of a society organized on the competitive basis are familiar to all. Perhaps the most important of these is that men are in this manner guaranteed full enjoyment of the fruits of their labor, and on this account will be zealous in its application. Competitive society also provides for ease of movement from one grade of labor to another, or from one business to another, and thus ensures elasticity in thought and expansion of purpose as the result of the manner in which motives are applied to individual conduct. Under such conditions it is the future and not the past that claims the attention of men. It is hope and ambition, rather than fear and apprehension, that move the energies of men. We should not forget that the material progress of the nineteenth century is in large measure due to the mobility of action which the idea of equal rights before the law brought into modern life. It may, however, be remarked in passing that the energy displayed in modern society is due to the openness of opportunity in all forms of industry. Each competitor imagines himself the successful runner for the prize he seeks; but should the practical difficulties of attaining success ever come to be so great as to restrict the number of contestants, the healthful activity which now follows high anticipations would be replaced by the lethargy of hopelessness. It is a mistake to conclude that equal opportunities are surely maintained by granting equality before the law. 341. COMPETITION AND THE SURVIVAL OF FORMS OF ORGANIZATION On markets naturally restricted by the absence or imperfection of the means of communication and the guaranties of security the multiplication and development of industrial undertakings have been I Taken by permission from H. C. Adams, "The Relation of the State to Industrial Action," Publications of the American Economic Association, I (1886-87), 500-501. 2 Taken by permission from G. de Molinari, The Society of Tomorrow, pp. 9o, 99. (G. P. Putnam's Sons, 1904.) hindered from the earliest times. The forces and resources of a family, often of a single individual, have sufficed to found a business, and even to carry it on. These businesses, or "firms"-as they were named on attaining any real importance were directed by a proprietor possessed of the necessary capital. In certain cases he borrowed this capital at a fixed rate of interest, or on guaranteeing a certain share in prospective profits. The actual worker or labourer was usually remunerated according to a fixed, assured, and prepaid rate known as "wages." Private enterprises of this kind differed in no way from political associations or houses, in so far as the continuation or failure of both depended upon the more or less perfect conformity of their constitution and conduct to the law of the economy of power. Most industrial undertakings have been hitherto established on this basis. Competition has extended markets and improved machinery until this system proves inadequate to the needs of the more advanced industries. It is doomed to disappear, certainly to fill a quite secondary and progressively diminishing place in the mighty organism of production. Private firms are already vanishing to make room for associations or companies. A better mode of industrial organization replaces a worse, as a better mechanical process replaces an inferior one, by enabling those who use it to undersell their competitors. The immediate effect of the adoption of profit-sharing by a few establishments is to increase the reward of the laborers employed in them. This, of itself, is a powerful incentive to other workmen in the same occupation to strive to secure a like increase. If this leads to strikes, it gives to the profit-sharing establishment a relative advantage in addition to that which is inherent in the plan itself. An employer whose working force may always be depended on may undersell one whose men are watching for opportunities to increase their wages by a strike. Under present conditions profit-sharing must, in order to survive in the struggle of systems, prove superior, not to competition working smoothly and successfully, but to competition essentially vitiated and subject to incessant friction. If a corporation were to adopt the share system in dealing with its employees, and were to pay the amount given to them, in excess 1 Adapted by permission from J. B. Clark, The Philosophy of Wealth, pp. 187– 89. (Ginn & Co., 1886.) of daily wages, in the form of stock, the effect would be gradually to transmute the partial co-operation into the complete form. New establishments started on this plan have, as a rule, perished in their infancy. The survival of full co-operation, in the long rivalry of systems, depends on its power to excel other systems in the results which it ultimately yields. Failures at the outset may deter experiments in this direction and make the introduction of this method proceed slowly, but they do not change the law of survival. That is a question, not of initial risk, but of results gained by the successful experiment. If one cotton mill run on the co-operative plan shall ever surpass other mills in economy of production to an extent that will enable it to undersell their product in the market, it may ultimately compel them to adopt this method, though a score of earlier experiments have failed. The new political economy must recognize as one of its principles this special and higher competition by which systems are tested. 342. TERRITORIAL COMPETITION The competitive features in the western movement of grain to primary points is shown by the aid of the map indicating the relation between different productive areas and primary markets which compete through the railroads reaching these areas. The entire northwestern and western situation is thus presented at a glance. It reveals the fact that a given area may today be commercially tributary to Chicago, tomorrow to St. Louis, and next day to Kansas City. In other words, while, as a general thing, grain goes to a particular market there is no considerable territory that does not have the choice of two or more primary markets. A cent or two difference will turn the tide from hundreds of shipping points to other markets. EXPLANATIONS OF NUMBERS ON MAP. No. 1. Tributary, as a general rule, to Minneapolis and Duluth. If at times the Chicago market is manipulated, or extraordinary demand exists, wheat from this territory will move to Chicago. No. 2. Wheat from this location moves either to Chicago or Milwaukee. At times, however, the western portion will go to Minneapolis or 'From the Report of the Industrial Commission, 1900, VI, 47. |