The Unsolved Riddle of Social Justice | Page 9

in accordance with natural law. Interest on capital was treated
merely as a particular case under the general theory of price. It was the
purchase price needed to call forth the "saving" (a form, so to speak, of
production) which brought the capital into the market. The "profits" of
the employer represented the necessary price paid by society for his
services, just enough and not more than enough to keep him and his
fellows in operative activity, and always tending under the happy

operation of competition to fall to the minimum consistent with social
progress.
Rent, the share of the land-owner, offered to the classicist a rather
peculiar case. There was here a physical basis of surplus over cost. But,
granted the operation of the factors and forces concerned, rent emerged
as a differential payment to the fortunate owner of the soil. It did not in
any way affect prices or wages, which were rendered neither greater
nor less thereby. The full implication of the rent doctrine and its
relation to social justice remained obscured to the eye of the classical
economist; the fixed conviction that what a man owns is his own
created a mist through which the light could not pass.
Wages, finally, were but a further case of value. There was a demand
for labor, represented by the capital waiting to remunerate it, and a
supply of labor represented by the existing and increasing working
class. Hence wages, like all other shares and factors, corresponded, so it
was argued, to social justice. Whether wages were high or low, whether
hours were long or short, at least the laborer like everybody else "got
what was coming to him." All possibility of a general increase of wages
depended on the relation of available capital to the numbers of the
working men.
Thus the system as applied to society at large could be summed up in
the consoling doctrine that every man got what he was worth, and was
worth what he got; that industry and energy brought their own reward;
that national wealth and individual welfare were one and the same; that
all that was needed for social progress was hard work, more machinery,
more saving of labor and a prudent limitation of the numbers of the
population.
The application of such a system to legislation and public policy was
obvious. It carried with it the principle of laissez-faire. The doctrine of
international free trade, albeit the most conspicuous of its applications,
was but one case under the general law. It taught that the mere
organization of labor was powerless to raise wages; that strikes were of
no avail, or could at best put a shilling into the pocket of one artisan by
taking it out of that of another; that wages and prices could not be

regulated by law; that poverty was to a large extent a biological
phenomenon representing the fierce struggle of germinating life against
the environment that throttles part of it. The poor were like the fringe of
grass that fades or dies where it meets the sand of the desert. There
could be no social remedy for poverty except the almost impossible
remedy of the limitation of life itself. Failing this the economist could
wash his hands of the poor.
These are the days of relative judgments and the classical economy,
like all else, must be viewed in the light of time and circumstance. With
all its fallacies, or rather its shortcomings, it served a magnificent
purpose. It opened a road never before trodden from social slavery
towards social freedom, from the mediæval autocratic régime of fixed
caste and hereditary status towards a régime of equal social justice. In
this sense the classical economy was but the fruition, or rather
represented the final consciousness of a process that had been going on
for centuries, since the breakdown of feudalism and the emancipation
of the serf. True, the goal has not been reached. The vision of the
universal happiness seen by the economists has proved a mirage. The
end of the road is not in sight. But it cannot be doubted that in the long
pilgrimage of mankind towards social betterment the economists
guided us in the right turning. If we turn again in a new direction, it
will at any rate not be in the direction of a return to autocratic
mediævalism.
But when all is said in favor of its historic usefulness, the failures and
the fallacies of natural liberty have now become so manifest that the
system is destined in the coming era to be revised from top to bottom.
It is to these failures and fallacies that attention will be drawn in the
next chapter.

III.--The Failures and Fallacies of Natural Liberty
THE rewards and punishments of the economic world are singularly