Chapter XLII: Book IV: , chap. 7, § 6.) (3)

[1066] “More important even than free will, whether of masters or of men, is that higher and more ancient law of natural justice which demands that wages should always be sufficient to enable the worker to lead a sober and honest life. But lest the public authority in this case, as in some other analogous cases, such as the question of the length of the working day, should unwisely intervene, and in view of the great variety of circumstances, it is better that the solution should be left in the hands of the corporations or the unions.” (Encyclical, _Rerum Novarum_, 1891.)

[1067] The Social Catholics wherever found are usually Protectionists, the reason being that they think their “corporative _régime_ could never be kept going without some protection against foreign competition,” and also because most of their adherents are drawn from the ranks of the agricultural unions. (_Programme de l’Œuvre des Cercles ouvriers_, Art. 7.)

[1068] “The so-called productivity of capital, which constitutes the greatest iniquity of profit-making society, and which is from an economical point of view the final cause of social suffering, is nothing better than a word invented to hide the real fact, namely, the appropriation of the fruits of labour by those who possess the instruments of labour.” (Loesewitz, _Législation du Travail_, in _L’Association catholique_, 1886.)

[1069] Extract from a report of a meeting of the Sillon, November 1907:

“MARC SANGNIER. The social transformation which we desire to see, comrades, will aim, not at absorbing the individual, but rather at developing him. We want the factories, the mines, and the industries in the possession, not of the State, but of groups of workers.

“AN INTERRUPTER. That is socialism.

“MARC SANGNIER. You can call it socialism if you like. It makes no difference to me. But it is not the socialism of the socialists, of the centralising socialists. We don’t want to set the proletarians free from the control of the masters to put them under the immediate control of one great master, the State; we want the proletarians themselves, acting collectively, to become their own masters.”

[1070] Milcent, in _L’Association catholique_, 1897, vol. ii, p. 58. There is a Catholic Social school which is Liberal and individualist in its tendencies, and which is represented by such writers as the late Charles Périn, professor at Louvain, author of _La Richesse_ and _La Socialisme chrétien_, and by M. Rambaud, author of _Cours d’Histoire des Doctrines_. Nor ought we to forget their connection with the development of agricultural credit banks of the Raiffeisen type which have been established in Germany, France, and Italy—although their inception in Italy is largely the work of a Jew named Wollemborg.

[1071] Such, for example, is the opinion of Nitti in his book on Catholic Socialism, and because of that rather unsatisfactory reason he only devotes a few pages to it.

[1072] There are several historical considerations that may with advantage be kept in mind in dealing with this subject, such as, for example, the notable fact that while the Catholic Church has always been opposed to usury, it was Calvin and Calvinists like Saumaise and the ancient jurist Dumoulin who first justified the practice of taking interest.

[1073] _The Christian Socialist_ was preceded by another paper called _Politics for the People_, founded in 1848, which may be taken as the birthday of the movement. In any case the date is significant in view of the contemporary revolution in France.

It is only just to note that Channing, the American pastor, who died in 1842, was one of the pioneers. His writings on social questions are still read.

Those who wish for more information either on the history or on the other aspects of Social Christianity should consult the _New Encyclopædia of Social Reform_, published in America.

[1074] The following year Charles Kingsley preached a sermon in London which caused such a sensation that the vicar of the parish felt bound to protest against its tone even during the service. In the course of the sermon Kingsley remarked that any social system which enabled capital to become the possession of a few, which robbed the masses of the land which they and their ancestors had cultivated from time immemorial, and reduced them to the condition of serfs working for daily wage or for charity, was contrary to the spirit of the Kingdom of God, as revealed in Christ. The sermon was afterwards published under the title of _The Church’s Message to the Workers_.

[1075] Maurice declared that everyone who is a Christian must also be a socialist. But the significance of the word “socialist” has changed somewhat since then. According to Maurice, “The motto of the socialist is co-operation; of the anti-socialist, competition.”

[1076] “There is no doubt about association being the form which industrial government will take in future, and I have no doubt as to its success, but a preliminary training extending possibly over a couple of generations is necessary before the worker has the requisite ability or moral strength to make use of it.” (Kingsley in 1856.)

And this is how State intervention appealed to him: “The devil is always ready to urge us to change law and government, heaven and earth even, but takes good care never to suggest that we might change ourselves.”

[1077] The official organ of the Christian Social Union, which is definitely connected with the Church of England, is the _Economic Review_, published at Oxford—not to be confused with the _Economic Journal_, which is published in London by the Royal Economic Society.

[1078] E. Gounelle, _Le Mouvement des Fraternités_.

[1079] Mr. Josiah Strong, director of the Institute of Social Service at New York, is the publisher of a review called _The Gospel of the Kingdom_, which has for its programme “the study of economic facts in the light of the Gospel,” and in which he maintains that “if the world is ever to be Christianised industry must be Christianised first of all.” On the question of unemployment, for example, he refers us to Matthew xx, 6, and on the still more vexed question of the closed or open shop we are referred to 1 Corinthians xii, 16, 26. We must also mention Rauschenbusch’s eloquent book, _Christianity and the Social Crisis_.

The well-known economist Professor Richard T. Ely is another of the leaders of this movement. Nor must we omit Herron, who caused some sensation by declaring that it is necessary to go well beyond collectivism, which he thinks altogether too conservative and reactionary. He adds that Karl Marx is a crusted Tory compared with Jesus, “for any one who accepts private property in any form whatsoever, even in matters of consumption, must reject Christ.”

[1080] At a conference held at Geneva in 1891. At this conference M. Stöcker defined his programme as follows: “We do not believe that we can do anything without the State, but we also believe in the spirit of association. We have told the masters that their duty is to make some sacrifice for the sake of solving the question in a way that will be agreeable to their men. We have also told the workers that they must work hard, economically, and conscientiously, even if they never obtain a better situation.”

[1081] He was formally repudiated by the Emperor in 1896 in a telegram addressed to a powerful employer, Baron Stumm.

[1082] Goehre is the author of a work entitled _Three Months in a Workshop_. The book has been a great success and has produced a crop of imitations.

[1083] Kutter’s book _Sie Mussen_ caused quite a flutter. The author attempts to show that the socialists are to-day the real disciples of Christ, but have been disowned by the Church.

[1084] For the past twenty years M. de Boyve, the leader of the co-operative movement in France, has been the president, which confirms us in the suspicion that the two schools had a common parentage, both really springing from the École de Nîmes. Periodical congresses are held in connection with it, and it also has a review called _Le Christianisme Social_.

[1085] Pastor Tomy Fallot, the initiator of this movement, indicates the path that should be followed thus: “The essential thing is to get a rough outline of that perfect type which is known as co-operation. Just now it seems the only thing that contains a prophecy of better times.” (_L’Action Bonne._) Compare this with Maurice’s formula.

“We are Social Christians because we are solidarists. In our search for solidarity we have found the Messiah and His Kingdom. Solidarity is the layman’s term, the Kingdom of God the theologian’s, but the two are the same.” (Gounelle, _L’Avant-Garde_,1907.)

[1086] This group found its earliest recruits among the young pastors who ministered in the great industrial towns (M. Wilfred Monod at Rouen and M. Gounelle at Roubaix, for example), and thus found itself in close touch with poverty, suffering, and discontent. But several laymen have also joined it, among them being a son of the economist who was regarded as the _doyen_ of the Liberal school—Frédéric Passy.

The Christian Socialist group publishes a journal of its own, entitled _L’Espoir du Monde_.

[1087] “‘For I could wish that myself were accursed from Christ for my brethren,’ writes St. Paul; in other words, ‘I do not want to be saved alone, and I shall be completely saved only when humanity as a whole has been saved.’ And so the evangelical doctrine would subordinate the full realisation of my personal salvation to the salvation of others.” (W. Monod, _La Notion apostolique du Salut_.)

[1088] Or, as he epitomises it elsewhere, “It is useless to speak of giving ourselves until we are certain that we own ourselves.”

[1089] Ruskin himself did not think that his doctrines were only of slight importance. The introduction to _Munera Pulveris_ (1862) contains the following words: “The following pages contain, I believe, the first accurate analysis of the laws of Political Economy which has been published in England.”

See also the preface to _Unto This Last_, which has for its sub-title “Four Essays on the First Principles of Political Economy.”

[1090] There are a great number of novels dealing with social questions. For the English novels bearing on this topic see M. Cazamian, _Le Roman social_.

[1091] So much was this the case with Ruskin that Mme. Brunhes has published a book called _Ruskin et la Bible_, and Tolstoy on his side has an edition of the Gospels to his credit which is said to be much nearer the original than the ordinary version of the canon.

[1092] See _Fors Clavigera_, _passim_. Tolstoy writes in a similar strain. Money is just a conventional sign giving the right or the possibility of claiming the service of others. But although money is all-powerful in the matter of exploiting the worker it is quite useless when it comes to a question of furthering his well-being. There is a curious development of this thesis in Tolstoy’s _What is to be Done?_

[1093] “All this has come of the spreading of that thrice accursed, thrice impious doctrine of the modern economist, that ‘To do the best for yourself, is finally to do the best for others.’ Friends, our great Master said not so.” (Ruskin, _Crown of Wild Olive_, Lecture II).

[1094] Especially in that celebrated passage: “It [Political Economy] sounds with Philosophico-Politice-Economic plummet the deep dark sea of troubles, and having taught us rightly what an infinite sea of troubles it is sums up with the practical inference and use of consolation that nothing whatever can be done in it by man, who has simply to sit still and look wistfully to ‘time and general laws,’ and thereupon without so much as recommending suicide coldly takes its leave of us.” (_Chartism._)

[1095] “If thou ask again … What is to be done? allow me to reply: By thee, for the present, almost nothing.… Thou shalt descend into thy inner man, and see if there be any traces of a _soul_ there; till then there can be nothing done!… Then shall we discern, not one thing, but, in clearer or dimmer sequence, a whole endless host of things that can be done. _Do_ the first of these.” (_Past and Present._ Book I. chap. 4.)

[1096] See particularly _Fors Clavigera_.

[1097] “Why, the four-footed worker has already got all that this two-handed one is clamouring for, and you say it is impossible.” (Carlyle, _Past and Present_, chap. 3; and see also _Chartism_, chap. 4.)

[1098] This was the ideal which he had in mind in founding the Guild of St. George. See an article by Professor Marshall, _The Social Possibilities of Economic Chivalry_, in the _Economic Journal_, March 1907. There is no reference to Ruskin in it, however.

[1099] When the Christian Socialists in 1854 organised a course of lectures for working men in London Ruskin volunteered to give a few addresses, not on social economics or on history, but on drawing.

[1100] One naturally thinks first of such industrial villages as Bournville and Port Sunlight. But in 1903 an entirely new city of this kind was begun at Letchworth, Herts. The idea has recently undergone a considerable development by a society that owes its inspiration to Ruskin.

[1101] _Story of a Horse_, in his _First Stories_ (1861).

[1102] See a book entitled _Labour_, which consists of the meditations of a _muzhik_ called Bondareff upon those words of Genesis, “In the sweat of thy face shalt thou eat bread,” followed by a long commentary by Tolstoy.

[1103] “Pleasure and pain are undoubtedly the ultimate objects of the calculus of economics. To satisfy our wants to the utmost with the least effort, to procure the greatest amount of what is desirable at the expense of the least that is undesirable, in other words, _to maximise pleasure_, is the problem of economics.” (Stanley Jevons, _Theory of Political Economy_, p. 40.)

[1104] “The errors of the Classical school are, so to speak, the ordinary diseases of the childhood of every science.” (Böhm-Bawerk, _The Austrian Economists_, in _Annals of the American Academy of Political and Social Science_, January 1891.)

[1105] _Recherches sur les Principes mathématiques de la Théorie des Richesses._

[1106] Let P = value of product and _x_, _y_, _z_ represent wages, interest, and rent respectively, then _x_ + _y_ + _z_ = P, which is insoluble.

Nor does it seem much more hopeful when written out thus:

_x_ = P - (_y_ + _z_)
_y_ = P - (_x_ + _z_)
_z_ = P - (_x_ + _y_)

[1107] “The theory of economic equilibrium is quite distinct from the theory of final utility, although the public are apt to confuse them and to think that they are both the same.” (Vilfredo Pareto, _L’Economie pure_, 1902.)

[1108] The name varies a little with different authors and in different countries. “The final degree of utility” is the term used by Jevons, “marginal utility” by the Americans, “the intensity of the last satisfied want” by Walras. Walras also speaks of it as “scarcity,” using the term in a purely subjective fashion to denote insufficiency for present need. This very plethora of terms suggests a certain haziness of conception. The term “marginal” seems clearer than the term “final,” although in some cases it may be impossible to oust the latter.

It appears that the first suggestion of final utility in the sense in which it is employed by the Psychological school is due to a French engineer of the name of Dupuit. He threw out the suggestion in two memoirs entitled _La Mesure de l’Utilité des Travaux publics_ (1844) and _L’Utilité des Voies de Communication_ (1849), both of which were published in the _Annales des Ponts et Chaussées_, although their real importance was not realised until a long time afterwards. Gossen also, whose book is referred to on p. 529, was one of the earliest to discover it.

In its present form it was first expounded by Stanley Jevons in his _Theory of Political Economy_, and by Karl Menger in his _Grundsätze der Volkswirtschaftlehre_ (1871). Walras’s conception of scarcity, which is just a parallel idea, was made public about the same time (1874). Finally Clark, the American economist, in his _Philosophy of Value_, which is of a somewhat later date (1881), seems to have arrived at a similar conclusion by an entirely different method—a remarkable example of simultaneous discoveries, which are by no means rare in the history of thought.

Despite its cosmopolitan origin, the school is generally spoken of as the Austrian school, because its most eminent representatives have for the most part been Austrians. Among these we may mention Karl Menger, already referred to, Professor Sax (_Das Wesen und die Aufgabe der Nationalökonomie_, 1884), Wieser (_Der natürliche Werth_, 1889), and of course Böhm-Bawerk (author of _Grundzüge der Theorie des wirtschaftlichen Güterwerths_, in _Jahrbücher für Nationalökonomie_, 1886, and the well-known book on capital and interest).

Lately, however, the doctrine seems to have changed its nationality and become wholly American. The American professors J. B. Clark, Patten, Irving Fisher, Carver, Fetter, etc., are assiduous students of marginal utility, applying the conception not only to problems of capital and interest, but also to the question of distribution.

[1109] To escape the confusion which would result from employing the same term in two such very different senses—a confusion that is inevitable however one may try to avoid it—Pareto has substituted the word “ophelimity,” and Gide in his _Principles_ (1883) “desirability.”

[1110] “The idea of final utility is the ‘open sesame,’ the key to the most complicated phenomena of economic life, affording a solution of its most difficult problems.” (Böhm-Bawerk, _The Austrian Economists_, in _Annals of the American Academy of Political and Social Science_, 1891.)

[1111] Condillac had already drawn attention to this fact (see p. 48), and Buffon had noted it even before that. “The poor man’s coin which goes to pay for the necessaries of life and the last coin that goes to fill the financier’s purse are in the opinion of the mathematician two units of the same order, but to the moralist the one is worth a louis, the other not a cent.” (_Essai d’Arithmétique morale._)

The connection between quantity and demand is best expressed by means of a curve either of utility or of demand (see p. 532). Along the horizontal line let the figures 1, 2, 3, 4 denote the quantities consumed, and from each of these points draw a vertical line to denote the intensity of demand for each of these quantities. The height of the ordinate decreases more or less rapidly as the quantity increases, until at last it falls to zero.

[1112] It is in cases of this kind that figures become handy. If we take two curves, an ascending one to represent the utility of each handful of salt parted with, and a descending one to represent the utility of each handful of rice acquired, the two curves must necessarily intersect, seeing that one is just the inverse of the other. The point of intersection marks the place where the utilities of the two exchanged handfuls are exactly equal.

We must be careful not to confuse matters, however. It is not suggested that the final utilities in the case of the two co-exchangers are equal. There is no common measure by which the desires of different persons can be compared, and no bridge from one to the other. What is implied is that the final utility of both commodities for the _same person_ are the same. The balance lies between two preferences of the same individual. The actual market exchange is just the resultant of all these virtual exchanges.

The Austrian school in its explanation makes use of a hypothesis known as the double limit, which does not seem to be absolutely indispensable, seeing that other economists of the same school—Walras, for example—appear to get on well enough without it. They seem to think of buyers and sellers drawn up in two rows facing one another. Every one of the sellers attributes to the object which he possesses and which he wants to sell a certain utility different from his neighbour’s. Each buyer in the same way attributes to that object which he desires to buy a degree of utility which is different from that which his neighbour puts upon it. The first exchange, which will probably have the effect of fixing the price for all the other buyers and sellers, will take place between the buyer who attributes the greatest utility to the commodity he has to sell, and who is therefore least compelled to sell, and the buyer who attributes the least utility to the commodity he wishes to buy and who is therefore least tempted to buy. At first sight it seems impossible that the party as a whole should be bound by the action of the two individuals who show the least inclination to come to terms. It would be more natural to expect the first move to take place between the seller who is forced to sell and because of his urgency is content with a price of 10_s._ per bushel, say, and the buyer who feels the strongest desire to buy and who rather than go without would be willing to give 30_s._ for it. But upon consideration it will be found that the price is indeterminate just because these two are ready to treat at any price. The most impatient individual will surely wait to see what terms the least pressed will be able to make, and it is only natural that those who are nearest one another should be the first to come together. These two co-exchangists who control the market are known as the “limiting couple.”

[1113] It was Stanley Jevons who gave it this expressive name. It is meant to imply that if two objects which fulfil very different needs, perhaps, can be interchanged, they cannot have very different values.

[1114] The law of substitution applies not merely to different objects which satisfy the same need, but also to objects which supply different needs, provided those needs are to any extent interchangeable—to tea as a substitute for wines, to coffee as a substitute for both, to travel as a substitute for the life of a country gentleman.

[1115] “The enjoyment derived from the least enjoyable unit is what we understand by final utility.” (Böhm-Bawerk, _The Austrian Economists_, in the _Annals of the American Academy of Political and Social Science_, 1891.)

[1116] The new school deduces a very curious conclusion from this law of indifference. Although there is only one price for all corn buyers, say, the final utility of the corn for each individual is by no means the same. Let us assume that the price is 20_s._, but one of the buyers, rather than go without, would possibly have given 25_s._ for it, and others might have been willing to give 24_s._, 23_s._, 22_s._, etc. Every one of those who _ex hypothesi_ only pay 20_s._ gains a surplus which Professor Marshall has called consumer’s rent (_Principles_,