“ultimate” costs[1] are only vague generalities until some valid unit of measurement is available, there is, nevertheless, a most significant assumption involved in the neglect of such a charge as taxation, the cost of order, which is surely more basic than the cost of capital. If corroborative evidence is demanded to support this contention it is only necessary to fall back upon Marshall’s factor of “organization,”[2] which if expanded to its fullest meaning is obviously order, however specialized.
Curiously enough, order is taken for granted by many of the political-economists; and it is probable that this misleading assumption is another of the “dragged” remnants of autocracy in our faulted economic logic.[3]In the days of autocracy, order—of a sort—was “given” to us; but in democracy as sovereign citizens we are now compelled to supply the kind of order we prefer, at our own cost; and the assumption of any such “gift” is not only illogical but dangerous. This misconception has probably survived owing to the fact that in democracy we still utilize, as nearly as possible, autocracy’s objectionable methods of misappropriating the cost of order from the most diligent, the most involved and the most helpless; and owing to this indirection we continue to assume that order is a basic condition, the cost of which need not be calculated.[4] It is a misleading political assumption, parallel to the conception, still generally held, of our “divine right” to freedom.[5] In spite of the extreme sophistication of our modern economists, it appears that some of them still believe in fairies.
If economic value is to have any reality or precision, we must put this delusion on one side. The economist is no more justified in ignoring the basic cost of order than is the hy-
- ↑ “Outlines of Economics,” Richard T. Ely. 3rd edition, 1918, page 522. The Macmillan Co., New York.
- ↑ “Economics of Industry,” Alfred Marshall. 2nd edition, 1881, page 107. Macmillan and Co., London.
- ↑ Compare page 262.
- ↑ Jevons in his essay “On the Pressure of Taxation” (“The Principles of Economics,” page 260, Macmillan and Co., London, 1905) states as follows: “Considerations of this kind seem to show that the determination of the real incidence of taxation passes altogether beyond the powers of our present science and our present resources of statistical information.” He states it as an incurable fact: it is actually an indictment of un-scientific disorder.
- ↑ See page 20.
