Popular Science Monthly/Volume 77/July 1910/Modern Medievalism

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HISTORY moves in a spiral, not in a circle. History does not accommodatingly repeat itself; but it does pass through cycles in which new eras contain social elements and forces which approximate those of periods belonging to earlier cycles. The new is merely the old garbed in more modern attire. The United States is to-day entering upon an epoch in its history which will be marked, in the economic field, by many resemblances to the medieval period. The fundamental economic problems of medievalism clustered around just and fair prices and wages. At present the important and difficult economic problems relate to "reasonable rates," "fair prices" and "living wages." In the twentieth century when these old medieval questions clothed in a strange and youthful garb, appear in an industrial and nominally democratic country and age, the crux of the difficulty is found in the absence of a standard by means of which to measure fair prices, reasonable rates and living wages. The old and rigid status of the feudal regime has disappeared in a large measure under the pressure of the doctrines of free competition and of non-interference. Mobility, rather than fixity, is characteristic of to-day.

The nineteenth century was a unique and transitional era; it constituted the dark ages of economic history. During that eventful period, it was assumed that prices, rates and wages were fixed by the ceaseless action of free and untrameled competition. But, to-day, the existence of numerous rate and arbitration commissions is a concrete and unmistakable warning that free competition does not act at the present moment as our theorists of the past have dogmatically argued that it did. Day by day the competitive field is being gradually narrowed. A strip is securely fenced in on this side; and another portion encroached upon at an entirely different point. At the present moment great and important fields of industrial activity are clearly seen to be outside the competitive sphere. It must, however, be recognized that competition in the halcyon days of the laissez faire doctrine was not really free. It was modified and regulated by such legal conventions as private property, inheritance, laws in regard to contract, custom and a variety of other obstructions. The game of economic competition among human beings has always been played according to certain rules. But these rules change. Custom is broken down, on one hand, while monopoly encroaches upon the competitive field, on the other side.

The thinking public correctly recognizes that railway and street railway fares, gas, electric light, water, telephone and telegraph rates are not fixed by a competitive process. Insistent demand is made for fair and reasonable rates in this class of semi-public service. The labor unionist struggles for fair and living wages. Even the individualistic American farmers are earnestly striving to fix "fair" prices for their wheat, oats, corn, tobacco and other crops. Australia attempts to make the application of a protective tariff to a given establishment dependent upon the payment of "fair" wages to the employees of that concern. A Wisconsin commission is industriously placing a valuation upon the physical property of the public utilities corporations of that state, in order that "reasonable" rates may be promulgated by that official body. In this manner, the ground is being rapidly cut from under the competitive basis of price regulation. Our commercial edifice still rests on this substructure; but the foundation walls are crumbling, and ominous cracks which presage decay and demolition are appearing in the structure. Society is impregnated with the idea that competition is no longer efficient and sufficient as a guide. From all sections of the country come reports of rate commissions, boards of arbitration, gentlemen's agreements, combinations and legal actions against restraint of trade.

With the narrowing of the competitive sphere the question as to what is a just, accurate and scientific standard of measurement for wages, prices and rates becomes increasingly important; and, at the same time, it becomes more difficult to solve because the basis of competitive rates, prices and wages is being undermined. In fact, if no standard can be found, socialism or anarchy seem to be the only alternatives. Much of the discussion and theorizing as to the respective rights of labor and capital is worthless because either free competition is assumed, or reference is made to prices or wages paid in the past; or some arbitrary standard is postulated which has no reality outside the personal desires of certain individuals or classes.

No court of arbitration or board of conciliation has as yet offered any definite and scientific formula by means of which disputes as to wages or conditions of labor may be adjusted. The findings of that famous board of arbitration, the Anthracite Coal Strike Commission, merely offered a compromise; the commission did not dig down to the roots of the difficulty. Neither did an anxious public receive any exact data or the formulation of any definite method of procedure which might be used as a basis for the work of future boards. A peace was patched up, and the mines were opened. The members of the strike commission honestly and faithfully tried to take into account the physical, social and economic conditions then existing in the anthracite district. They investigated the home and working environment of the miner; his condition was compared with that of other workers. Yet after all, the principal value of this investigation consisted in emphasizing the rights of the general public. The decisions of the Interstate Commerce Commission and of the various state railway and public utilities commissions as to reasonable rates are invariably determined by reference to profits received upon investments in competitive businesses. An Ohio judge in dissolving a combination of ice dealers ordered the reestablishment of the price charged during the preceding year.

The decision of this judge bears a close resemblance to the action of the English government as to wages immediately after the black death. The present movement toward the regulation of prices, rates and wages is distinctly a reversion to conditions preceding the nineteenth century; and the importance and extent of the movement will necessitate a thorough search for a reliable and scientific standard for the determination of fair wages and fair prices. The medievalists had a very definite conception of fair price; men of to-day are not so favored. During the middle ages these problems were solved by means of the inelastic measuring rod of status, or of class demarkation. Each class in the community had its own rather definite and customary standard of living; and the summit of personal ambition was success within a limited social and economic sphere rather than that of progress from one class to the next higher. Ambition was curbed and chastened by the great fact of birth within a given social compartment. The attempt was made so to regulate prices as to maintain class immobility. With the advent of the era of competition the rigidity of class demarkation was destroyed; and a democratic form of government resting on broad suffrage requirements makes a return improbable. The modern student or statesman instead of resting his theory of fair price upon a basis of special privilege, must place it upon the firm foundation of equality of privileges, upon the abolition of artificial and inherited inequalities. This return to medievalism does not mean a return to artificial and unyielding class demarkations. Society is moving toward a point farther up on the spiral of history. The return to medievalism does mean the elimination of forced and monopoly gains; and is a natural and inevitable product of the progress toward democracy.

If the cornerstone upon which medieval writers based their doctrines regarding fair price has been removed by the increasing power of the non-privileged class; what is left upon which to build a new and democratic doctrine of fair price? In the modern formulation of the doctrine, a fair price for an article or a service is one which will give to the workers who have any useful part in getting the article into the hands of the final consumer, whether that part be in obtaining the raw material, transforming or exchanging these materials, a "fair wage." A fair price will also give to capital a "reasonable rate" of interest, and to the entrepreneur or manager—the man whose genius guides and directs the business—such a return as will keep him in the business and will call forth his best efforts. A fair price does not contain elements which go to make up monopoly profits, or to reward the efforts of unnecessary workers in the complex system of modern industry. This is the basic principle upon which the new economic edifice must be anchored. Competition has led to combination, and combination to monopoly. A theory of price is needed which preserves the economic value of combination; and, at the same time, removes the evil features of special privileges and of monopoly.

A fair wage is as yet a very elusive and indefinite concept. A fair wage for an unskilled worker would not be a fair wage for the skilled man. The needs of the man are, in the last analysis, the chief factors in determining fair wages. Subjective, rather than objective, considerations have the greatest weight in the eye of modern man. Here is a point of contrast between the modern and the medieval view point. Again, social considerations enter into the problem. How will the man make use of his income? Society desires that a large income go to the man who will make the best use of it—the use which will tend to advance the progress of humanity. A multitude of different opinions will be expressed as to the best uses of income; but certain fundamental conditions are almost universally accepted. Excessive luxury and wasteful consumption in living, in eating, in drinking and the like, are condemned at the bar of society. In general, it is for the good of society that expenditures for luxuries be sent for durable goods rather than upon highly perishable commodities. A fair price for all articles and services would tend to place wealth and income in the hands of those best fitted to handle it; those who would make the best use of it judged from the somewhat theoretical view-point of society as a whole, but not from the standpoint of any special class in the community. A fair wage in an ideal industrial organism would give to each according to his needs; and needs would be proportional to efficiency.

Distribution must now be considered from a non-competitive point of view; and the storm center of discussion will be found in the treatment of rents or monopoly gains. Wages are individual products; but interest and rents must be held to be social, or at least semi-social, products. Social evolution has, it is true, made possible the existing rates of wages; but a sharp line of demarkation may be drawn between wages on the one side, and rent and interest on the other. Individual traits and characteristics play an important part in fixing wages. On the contrary, rents accrue because of social progress, not because of individual efficiency. The man who invests capital is frequently able to gain a personally unearned income, to draw dividends, for example, upon watered stocks. But the man who furnishes his labor receives no extra or special gain. He runs no risk; but in a multitude of cases, the returns accruing to the capitalist or the promoter bear no discernible relation to the risk involved. Individuals are able magically to make capital—paper capital, but of a kind that bears interest. Labor is unable by any sleight-of-hand performance to double or treble "its equipment. A dollar may through stock watering, aided by gifts of franchises and rights of way or by special privileges, be apparently changed into two dollars and draw the income of two; but the laborer in the same business can not make it appear that he has four hands or a dual personality as a worker, and thus double his pay check. In the matter of market opportunity the opportunity is with capital, not with labor. Extra income due to special advantages is capitalized in money, not in labor power.

"Fair" interest and "fair" profits may be manipulated through capitalization of special privileges; but "fair" wages can not be so acted upon. The man stands out in the open. Fair wages are kept down because fair interest and fair profits are so elusive; and because rents are concealed under the guise of interest upon concrete capital, or of profits due to skilful management. If the capital of the country were expressed only in terms of concrete tangible goods, as is proposed by the Wisconsin law, the disproportion between fair wages and fair profits and interest would be evident. The enormous gains of monopoly would then inevitably attract such attention that they would be cut off to some extent at least, and the long distance, impersonal and indirect form of tribute taking would be reduced; although a scientific basis for determining fair wages, interest and profits may not be found.

But there are other tangible bits of evidence which bring to the nostrils of the investigator the musty smell of medievalism. A corporation furnishing a municipality with water which is supposed to be taken from artesian wells, finds it feasible and perhaps cheaper to introduce, into the water mains, without notice to the consumers of the city, polluted water from a river. As a consequence, sickness and death invade many happy homes in the little city. Another company producing a food product uses a deleterious preservative to enable it to foist a partially spoiled article upon an ignorant and unsuspecting public. Sickness, ill-health, reduced efficiency and even death follow unnoticed in the wake of the packages sent broadcast over the land. A railway company neglects to guard its street crossings or to protect its trainmen because of the additional expense connected with such improvements. Again, dead and maimed men, women and children are the direct results of the policy of the heads of the company. This disregard for employees and consumers which is by no means confined to a few isolated cases, is not unlike the nonchalance with which the knight and baron of the middle ages directed the destruction of the homes and the crops of his adversaries and competitors. The toll of the monopolist collected in prices made arbitrarily high is not very different from the toll exacted at the point of the sword by the robber baron.

In the medieval period, a multitude of evils resulted from the interference of the church in secular affairs. To-day political chicanery and corruption are the fruits of the interference of big business interests in legislative affairs. The trust has replaced the church as a dangerous meddler in political affairs. And the alliance between capital and the state is as dangerous, as reactionary and as intolerant as was the medieval alliance of church and state. Economic heresy is now almost as bitterly condemned as was religious heresy in earlier centuries.