COST, PRICE, LABOR, NATURAL WEALTH
78. The position was established in the preceding chapter that Equity in any exchange of labor or commodities—-the products of labor-—consists of the exact equality of burdens assumed by the parties to the transaction The amount of burden involved in rendering a given amount of labor, or a given commodity, is technically denominated the “COST” of that labor or commodity, and the labor or commodity which is received in return for that which is rendered is denominated the “PRICE” of it. Hence, inasmuch as it is simple Equity that these two should be the equivalents of each other, or exactly equal in the amount of burden imposed, the scientific formula is that “COST IS THE LIMIT (OR SCIENTIFIC MEASURE) OF PRICE.”
79. Cost is, then, the amount of repugnance overcome. Hence, according to this principle, the equitable price of any repugnance or endurance which it has cost to perform the labor or produce the commodity. This, again, is the same thing as labor for labor, burden for burden, or equality of burdens in exchange. Hence it implies that there is no other basis of price, no other ground for a demand for remuneration costing human endurance, than the fact of human endurance itself.
80. This proposition,--Cost the Limit of Price,--so simple, so seemingly unimportant to the casual reader, and yet so obviously true when properly apprehended, so perfectly consonant with the natural sentiment of right in every mind, will appear by its results as previously stated to be one of the most radical propositions ever made. A rigid adhesion to it in commercial relations will revolutionize nearly every species of transaction among men. It will do so beneficently, however, for all classes, so that no alarm need be felt by any. We shall begin, in this chapter, to trace out some of these results, through the various operations of the principle upon the interests of society, and to contrast them with the effects of those principles which are now efficient in the same sphere.
81. The first grand consequence resulting from the simple principle of Equity—-Cost the Limit of Price-—is, as already intimated, that whatever we possess which has cost NO human labor, which has imposed NO BURDEN in its production, which has COST nothing, although it is susceptible of being property, is, nevertheless, not a rightful subject of PRICE. All property of this kind,--whether it is equally open to the enjoyment of all mankind,--the property of the race, like air and water,--or whether it attaches more particularly to some Individual, like genius or skill, is denominated NATURAL WEALTH. The formula relating to this subject is, then, that NATURAL WEALTH BEARS NO PRICE—that is, that it cannot, of itself, be made the subject of price upon any equitable grounds whatsoever,--although the resignation of so much of it as required for one's own convenience may be the basis of price on the ground of a sacrifice endured, as will be explained in speaking of the comprehensiveness of the term Cost. (114.) Every thing valuable which is bestowed by nature without any provision on the part of mankind or the Individual is Natural Wealth, such as fire and water, light and heat, the earth, the air, the principles of science and mechanism, personal beauty, health, natural genius, talent, etc.
82. The principle stated in the preceding Number settles, scientifically and beautifully, the vexed question of the ownership of the soil. Land, in its natural state, is natural wealth, equally belonging to all the inhabitants of the earth. It stands upon the same footing as the ocean and the atmosphere. But so soon as labor is bestowed upon any portion of it, which adds to it a positive value, the labor so bestowed is the rightful subject of price, to be measured like every other species of labor, by the cost or burden assumed in performing it. Thus the equitable price for lands upon which no labor has been performed is zero; the equitable price for wild lands which have merely been surveyed and bounded is the cost of surveying and bounding them; if they have been cleared and fenced, then the equitable price is the cost of clearing and fencing in addition to that of surveying and bounding; and if, still further, they have been sloughed, cultivated, and improved, then the equitable price is the cost of as much labor as, rightly applied, would take the same lands in the natural state and bring them into the state of improvement in which they are found The reason of this latter modification is this,--that lands may have been in cultivation for hundreds of years, and labor have been bestowed upon them each year, while the cost of such labor has been annually repaid by the successive crops, except so much of the same as remains on the land in the form of permanent artificial improvement. The cost which has been already repaid ought not to be paid again, while that which remains invested, and is to be repaid out of the future crops, or other use, may be equitably demanded from the purchaser who is to receive such future benefit. If the lands have been so badly cultivated as to have deteriorated instead of improved, it would be equitable that the seller should pay to the purchaser a sum equal to the cost of bring them up to their natural state. Such cultivation is robbing the land, and incurring a debt to humanity, as if one were to find some means of training or exhausting in the atmosphere, or fouling a stream from which others must draw their supplies.
83. It is the same with the other natural elements. Water as it flows past in the stream is natural wealth, and not the subject of price. The man who should seize upon a stream of water and fence it up or turn it aside, for the purpose of levying a tribute upon those who lived below him upon the same stream, in the form of a price for their necessary supplies, would commit an obvious breach of natural law. But although water, in its natural condition, is not equitably susceptible of price, yet so soon as human labor is bestowed upon it by any person for the benefit of another, a price may be rightfully affixed to the water, to be precisely measured by the cost or burden of the labor so bestowed. Every individual has a right to appropriate so much of the common natural wealth as is requisite to the supply of his wants. So soon as I have dipped up a pitcher full of water from the spring or stream, it is no longer mere natural wealth; it is a product of my labor as well. It is thus my individual property. No one has a right to take it from me without my consent, and in case I do consent, I have an equitable and just right to demand a price equal to the burden I have assumed, which consists of the labor, the risk, or whatever else made it a burden. If I have merely dipped it up, the equitable price is a trifle probably not worth considering; but if I have carried it two miles over a burning plain, it may be considerable; and if I have run the risk of carrying it for the sake of another through the brisk fire from an enemy's battery, the risk will enter equitably into the estimate of the price. (121.) In all these cases it is not really the natural wealth itself, the land or the water, which acquires a price, but the human labor and other elements which are bestowed upon it. Nothing is properly the rightful subject of price but repugnance overcome. But as the portions of natural wealth to which human labor has thus been added are the objects which are wanted by the purchaser, and which are delivered to him when the price is paid, it is natural to speak of them as bearing the price.
84. It is obvious from this application of the principle of cost, which we have seen is nothing but the scientific measure of equity, that simple equity cuts up by the roots every species of speculation in lands. It will be seen, in the next place, that it cuts up equally another species of speculation, which the world hardly suspects of being, although it is, both in principle and in its oppressive results, equally iniquitous,--that is, speculation in talent, natural skill, or genius. The definitions and principles above stated render it obvious that no man has any just or equitable right to charge a price for that which it cost nothing of human labor to create. “Freely ye have received, freely give.”
85. A superior natural tact for the performance of any function or labor renders it easier instead of harder to perform the function or labor. It makes the burden ordinarily lighter instead of heavier, and consequently, upon the Cost Principle, reduces instead of augmenting the price. I say, “ordinarily,” because the case may happen of a person having a high degree of natural ability for a particular kind of industry, and having at the same time, from some special cause, an unusual repugnance to its performance, and it must be constantly remembered that it is the degree of personal repugnance overcome which measures the price. As the rule, however, the taste or attraction for a given pursuit accompanies and corresponds to the degree of excellence in it, and in that case the remarkable result above stated flows from the principle.
86. Naturally enough, a conclusion so strikingly dissimilar to all that is now seen in practice or entertained in idea will be received at first blush with some suspicions of its soundness. It will be found, however, upon examination, that the consequences of admitting it are all beneficent and harmonious. They are, in fact, indispensable to the solution of the problem of true social relations.
87. Talent, natural skill, or genius, distinguished from each ability as is the result of labor or acquisition, is one species of natural wealth. It is not, like earth, air, and water, equally distributed by nature to all men, and cannot, therefore, be equally enjoyed by all. Those on whom it has been conferred in a high degree have a kind of enjoyment of it in the fact of its possession, which cannot be participated with others. It is the same with health or personal beauty, or a naturally graceful deportment. In this particular way, although it is natural wealth, it is individual wealth also. There are other ways, however, in which it is not individual or exclusive, but in which it may be partaken of by all around, as when we experience the pleasure of looking upon a beautiful countenance or a graceful figure, or when we enjoy the creations of another's genius, or the productions of another's natural endowments. This kind of enjoyment is bestowed by nature gratuitously, and is not confined to the individual who produces it. It is the common patrimony of mankind as much as air, earth, and water.
88. It follows from these considerations that neither the forensic talents bestowed by nature upon a Daniel Webster, nor the musical endowments of a Jenny Lind, nor the natural agility of the mountebanks, constitute any legitimate or equitable basis of price, for the simple reason that they have cost their possessors nothing, and it has already been settled that cost is the only legitimate ground of price.
89. Observe, in the first place, that I do not say that the labor which it may require on their part to exercise these natural talents is not a legitimate basis of price. On the contrary, I affirm that it is so, and that such labor is the only basis of price in the performance, and hence that the price of the performance is equitably limited by the precise amount of the labor in it, estimated according to its repugnance to the individual, relatively to other kinds of labor,--not augmented one iota on account of the extraordinary natural abilities which the performance demands. There is in that element no labor, no repugnance overcome, no cost, and consequently no basis of price.
90. Observe, in the next place, that labor expended prior to the performance, in cultivating the natural talent and fitting it for the performance, is an element of cost, a due proportion of which may be equitably charged upon each specific exhibition of the talent. This point will be more fully considered presently in treating of the constituents of cost. (121.)
91. It will be objected that under this system talent and skill receive no protection. Talent and skill are intellectual strength, and it is not strength but weakness which demands protection. Talent and skill now enable their possessors to subject the world as effectually, though its industrial relations, as prowess and physical manhood formerly enabled their possessors to do so upon the battle-fields of past history. The dominion of physical conquest is now partially becoming extinct. We are in the midst of the reign of intellectual superiority, which is far more subtle and intricate in the modes of its tyrannical action. The discovery of the true laws of social order will not be, therefore, the discovery of increased facilities for talent or intellectual power to exert itself for its own immediate and selfish aggrandizement, but the precise contrary.
92. At the same time talent and skill will always command, like physical manhood, a certain degree of homage, and secure, indirectly, more refined and yet more substantial rewards than direct appropriation would confer. In discussing the subject of price we are by no means discussing all the possible effects of performance, but only that one which forms the basis of a demand for a direct equivalent or compensation.
93.Price is that which a party may properly demand AS HIS RIGHT, in consideration of services rendered. It relates, therefore, to exact justice between the parties, and justice has in it no touch of mercy, or gratitude, or benevolence,--no tribute of admiration, no homage. It does not exclude the exercise of those sentiments after its own demands are satisfied, but, for itself, it know nothing of that sort. Justice demands Equity, exact Equivalents, Burden for Burden; and will be satisfied with nothing else. To understand the appropriate sphere of these various affections we must individualize their functions. It is essential not only to the security of rights, but equally in order that benevolence or homage be felt and accepted as such, that the limits of each should be exactly defined. The rendition of justice is the basis, or platform, or prior condition,upon which benevolence must rest. The slave feels little or no gratitude toward his master for any act of kindness which the master may do, because he is conscious that the master is living in an unjust relation toward him, and that he owes him as matter of justice more than he grants as an indulgence. This apparent destitution of the sentiment of gratitude reacts upon the master, and he despises and depreciates the moral constitution of the slave. The fault is in the absence of the prior condition of Justice, which alone authorizes benevolence, which then inspires gratitude, and all conspire to institute and maintain friendly and harmonious relations. A charity bestowed while justice is withheld is always an insult.
94. Again, according to a law of the human mind, injustice persisted in begets aversion or hatred on the part of the perpetrator as well, toward the object of it. But justice cannot be rendered while one is ignorant of what justice is; and since no one how does not know that Cost is the Limit of Price knows what the limits of justice are, it follows that every one has been living in relations of injustice toward all around him. A partial consciousness of this truth tends still farther to inspire ill-will on the part of the governors toward the governed, of the employers toward the employed, and of masters toward slaves. Hence, it will be perceived that a denial of justice operates through two channels to prevent the natural flow of benevolence, by hindering its bestowal, at the same time that it enfeebles or destroys the appreciation of it by the recipient.
95. Still again, from ignorance of the landmarks of justice or Equity, acts are continually done under the supposition that justice demands them, and with no sentiment of benevolence, which should fall within the province of benevolence, while the same ignorance on the other hand hinders their acknowledgment as benevolent acts, and prevents, consequently, the appropriate sentiment of gratitude or reciprocal benevolence, which should be the result.
96. The magnificent testimonial bestowed by the English people upon Rowland Hill for his conception of the idea of cheap postage and his exertions in behalf of the reform had in it nothing discordant with true principles, because it was bestowed as a gratuitous homage and accepted as such. Whenever all obstructions to the natural exuberance of benevolence toward those who confer benefits upon us are removed by the establishment of equitable relations, such voluntary tributes repeated on all hands will furnish a richer inheritance for genius than the beggarly and precarious subsistence which now inures from pensions and patent-laws. The testimonial to Rowland Hill was not the price of his services, any more than a bridal present is the price of affection. Had he opened an account of debtor and creditor with the nation, and charged them a hundred thousand pounds as the price of his services, gratitude would have been extinguished by the preposterous pretension, and benevolence have been converted into aversion and disgust. The people, ignorant of the law of equivalents as a principle, would have felt it as an instinct, and have been repelled unwittingly by the reach of it. To make the higher class of services a matter of price at all somewhat depreciates their estimate. The artist and the inventor is apt to fee something akin to degradation, when forced to prefer a pecuniary demand in return for the fruits of his genius. Every genuine artist has an instinct for being an amateur performer solely. There is an intimation in this fact that in the true social order the rewards of genius will either cease to be pecuniary altogether, or, if not, that they will be wholly abandoned to the voluntary largesse of mankind. (174.)
97. The Cost principle deals wholly with price,--that is, with that to which the party rendering the service should limit his demand, if fixed by himself, not to what it is proper, or becoming, or natural that others should bestow as a gratuity, which latter is a matter solely for their consideration. This last is not his affair.
98. It is in this rigid sense that it is affirmed that Jenny Lind has no equitable right to charge more for an hour expended in singing than any other person should receive for an hour of labor equally repugnant, and which has involved equal contingencies of prior labor and the like. Even that price is then divisible among all who hear her. The refining results of this operation of the principle in diffusing the benefits of superior endowments in every sphere among the whole people will be traced out into infinite ramifications by the reader for himself.
99. The objection that men of genius, inventors, and those who exercise callings which are purely attractive, are not provided by this principle with the means of obtaining a livelihood will be answered under another head.
100. There is another subtle and plausible objection which may be urged to his position, in relation to natural genius, talent, or skill, and which demands no little rigor of attention to detect its fallacy. It may be said that Nature deals with man liberally, in proportion to his endowments; that is, that she crowns with greater exuberance of results the exertions of the strong man and the wise man than she does those of the weak and the simple-minded, and hence that there can be no essential injustice in doing precisely what Nature herself does,--that is, in maintaining so much inequality as results from giving to each an equivalent in the products of others to the products of his own powers. If, on the contrary, a man who can produce more largely and less abundant and inferior commodities, solely according to the intrinsic hardship or cost of the labor to each,--no reference whatever being had to the amount or quality of the products,--it is clear that the man of the highest capacity loses the advantage in the transaction which Nature has conferred upon him, and which seems, therefore, to be justified by the ordinances of Nature. It is clear that, if he gets in the exchange only so much of the products of the other as would have been the result of his own superior ability applied in that direction, he only gets what Nature would have given him if he had dealt directly with her. Why, then, is it not right that he should have as much advantage in the bargain as he has in the direct production?
101. The objection is here strongly put in order that it may be completely disposed of. It is answered as follows:
It is the destiny of man to rise into higher relations than those which he holds with Nature. When man deals with Nature, he is dealing with an abject servant or slave. There is no equality nor reciprocity between the parties. Man is a Sovereign and Nature his minister. He extorts from her rightfully whatever she can be made to yield. The legitimate business of man is the conquest and subjugation of Nature, and the law of superior force is the legitimate law of conquest and subjugation. But so soon as man comes into relations with his fellow-man the disproportion ceases. He is then dealing with his peers. The legitimate object of the intercourse is no longer the same. It is not now conquest and subjugation, but equipoise and the freedom of all. A higher relationship intervenes, and the balance of concurrent Sovereignties can only be established and maintained by acknowledging the law of that relationship. For the strong man, physically or intellectually, to avail himself, to his private advantage, of his superior strength, as the method of his intercourse with his fellow-men, is finally to accumulate all power in the hands of the few, and in the meantime to inaugurate the reign of discord, collision and war.
102. This subtle but most important distinction is already practically acknowledged in a large circle of human affairs. The world is already sufficiently progressed, in civilized countries at least, to act upon this distinction between inanimate nature and rational beings, so far as relates to the immediate exertion of physical strength,--the simple force of bone and muscle directly applied. The strong man is not now justified by the common sense of right in seizing and appropriating the wealth of the weak simply because he can, while at the same time, when dealing with Nature, he is never reproved for compelling her to the utmost of his power over her. Right is distinguished from might with reference to men, a distinction which, as respects Nature, does not exist.
103. As relates to intellectual superiority, the same distinction is likewise already acknowledged to an indefinite and fluctuating extent. The sharper is restrained from availing himself of his quickness of wit by the intervention of stringent laws and exemplary penalties. Upon what principle is that? It is the admission that man ought not,--that it is unjust or inequitable that man should use his superior mental endowments to his own private advantage, in dealing with men, while no such restriction lies upon him when dealing with Nature. He is bound to deal with them, contrary to the fact, precisely as if they had the same amount of strength and mental power as he has himself, or, rather, as if it were not a question of strength but of right; in the same manner as, according to the canons of international law, the large and powerful State recognizes the equal sovereignty of the smallest independent community. The law of intercourse between Individual Sovereigns is the same as between the concrete Sovereignties of existing States. To commit a breach of this higher law of Sovereign peerage is to secure to the stronger party an immediate and apparent advantage, to the destruction of the less obvious but more substantial benefits resulting to both from the existence of a true social equilibrium. Such is the policy of the brigand and the pirate, who pounce upon their booty for the supply of their immediate wants,--because they can,--regardless of the fact that their practices will prove the disruption of society and end in the destruction of the very commerce upon which they prey.
104. In the intellectual sphere, the admission of this higher law has hitherto been made only up to an unascertained line. Superior talent or skill, naturally bestowed, have always been, and are still, practically recognized as giving superior right, except in the few extreme cases in which the enormity of the principle is too obvious to be overlooked, and in which the exercise of that superiority is defined by Fraud, Gambling, Swindling, or some other of the euphonious epithets by which society stigmatizes, in its ultimates, a rule of conduct which, in its more general and pervading applications, it sanctions and approves. Whenever the perception of this true law shall have been thoroughly awakened; when the public mind shall be wholly penetrated by the conviction that the employment of either physical or intellectual power, had by natural endowment, in any transaction between men, in such a manner as to gain an immediate and selfish advantage to the stronger party, is of the essential nature of fraud, swindling, and robbery,--society will rise to a new plane, and will then find a development as superior to our present civilization as that is to the savage state,--a development in which those who surrender most will as truly find their highest emolument as those who surrender least. Thus true science conducts us back, in some sense, to the sublime precept of religion: “He that would be greatest among you let him serve.”
105. So far, then, as the individual consumes directly products of his own labor, he enjoys the immediate advantage of his own talent or skill, as the strong man enjoys his strength or the beautiful woman her beauty. But the moment he proposed to exchange his labor with other human beings, it is the harmonic law that he shall renounce that advantage entirely, recognizing the full equality of the inferior party. To claim it is to introduce an element into the social relations as disturbing in its nature as it would be if the handsome woman were to claim of right superior rank by virtue of her beauty, or the strong man impunity from the law by virtue of his strength.
106. It is characteristic of the most progressed or humanized society that the strong recognizes the equality of the weak. Hence the constant advancement of woman in the relative scale of position,--the sinking of physical superiority before intellectual, and finally of intellectual before the spiritual, affectionate, and aesthetic. That sublime characteristic of the highest type of humanity is wholly wanting in the demand of the superior worker that the inferior shall make up the difference in excess of labor. It is preeminently exhibited, on the contrary, and the highest attainment of civilization achieved, when the basis of the exchange is shifted from the equality of products to the equality of burdens. The strong says to the weak, labor is painful and imposes a burden. It is not just between beings who hold human relations that you, who are weak, shall be required to endure a greater burden than I, who am strong. Hence we will exchange labor for labor, not according to its fruitfulness, but according to the repugnance which has to be overcome.
107. Take an illustration as between nations. A small but industrious and civilized people inhabit a country lying between the dominions of a powerful empire on one side, and hordes of treacherous savages on the other, who threaten to invade and lay waste the country. The feeble nation applies to the powerful one to extend a degree of protection over them by establishing forts upon the frontier and adding the weight of their influence in overawing the savage tribes. Assume that the cost of the aid thus rendered is equal to one million of dollars per annum, and that by estimate it saves the whole property of the weaker nation from destruction, the income upon which amounts to a hundred million of dollars. What tribute in the nature of payment shall the weaker nation render to the stronger? According to one rule, it will be an amount equal to the expenditure by the stronger. According to the other, it will be an amount equal to the whole products of the land. Is it not clear which is the humanitarian, courteous, or civilized basis of the transaction and which the barbarous one? According to the latter, the choice of the people whose safety is endangered lies between two sets of savages, each of whom will rob them equally of all they possess. Is it not clear, then, that the humanitarian basis of remuneration is not measured by the extent of the benefit conferred,--the Value,--but by the extent of the burden assumed,--the Cost. And is it not clear, again, in the case supposed, if the strong nation were still more powerful, so that the use of its name merely were a terror to its savage neighbors, and would suffice, with less extensive fortifications, as a mere demonstration of the animus to resist, or with no fortifications at all, to restrain them, that the cost of the defense would be decreased by such superiority of strength and weight of name, and that consequently the price of it should be diminished likewise, instead of being augmented thereby.
Carry out the analogy of this illustration to the case of the way in which natural talent and skill are made the basis of price in private transactions, and it will be perceived that the principle now acted on is the barbarous principle,--the principle of conquest and rapine,--the principle of an equality of benefits demanded between parties, one of whom is capable of conferring great benefits at slight cost, and the other only capable of conferring small ones at an equal or greater amount of cost,--a principle destructive of equality, equipoise, and harmony, and under the operation of which the weaker are inevitably crushed and devoured by the stronger, to the utter annihilation of all hope of realizing the higher and more beautiful phases of possible human society.
108. To illustrate still further. When a robust and hearty youth rises and stands, yielding his seat to a woman, an old man, or an invalid, he does so because, in consequence of his strength, it costs him less to stand,--it is less repugnant for him to do so than for the other. The superior power reduces the cost, and all refined and well-developed manhood admires the vindication of the principle involved, even while not understanding it as such. In this transaction there is no price demanded, but, if there were, it is obvious that the price to the robust man for yielding his advantage should be less than to the feeble, while upon the value principle it would be more. In this species of intercourse we already, then, draw the line between cultivated and advanced humanity, and barbarous or boorish humanity, precisely where these two principles diverge. With a more complete efflorescence of Humanitarian Ethics, true principle will supersede the false throughout the whole range of personal transactions. The adoption of the Cost Principle in commerce will not only insure the equitable distribution of wealth, and disperse the manifold evils which grow out of the pervading injustice of the existing system, but it will do more,--it will crown the common honors of life with a halo of mutual urbanity, and render the daily interchange of labor and of ordinary commodities a perpetual sacrament of fraternal affection.
109. It results, then, that the natural and necessary effect of the Cost Principle is to limit the relative power and advantage of the intellectually strong over the intellectually weak in the same manner as Law, Morality, Religion, Machinery, and the other appliances of civilization have already, in civilized countries, partially limited the power and neutralized the advantage of the physically strong over the physically weak, and to complete, even in the physical sphere, what Law, Morality, Religion, Machinery, technology and the other appliances of civilization have hitherto failed to accomplish, for the want of the more definite science of the subject.
110. But, in order to the general adoption of this regulating principle, is not the consent of the strong man indispensable as well as that of the weak? By what means shall he be persuaded to make the sacrifice of his superior advantage? Is not the appeal solely to his benevolence, and has not past experience demonstrated that all such appeals are nearly powerless against the controlling current of personal interests?
111. Certainly the concurrence of both the powerful and the feeble is alike requisite to the complete and general adoption of the Cost Principle, but that cannot be said to be necessary to commence its application. It has already been stated that the Cost Principle affords the means to the laboring classes, who are kept now in comparative weakness and ignorance, of stepping out from under the oppressions of capital and leaving it with no foundation on which to rest in its usurped superiority over labor. Hence the weak are enabled by it to cope with the strong, while the strong themselves will not long resist the innovation, for the reason that their own positive strength is also increased by the same means. It is only their relative superiority which is reduced by it. In other words, all classes will have their condition positively improved, the rich only a little less than the poor, so that the frightful inequalities of the present system will be obliterated and extinguished. An analogue of this effect is found in the material sphere, in the invention of gunpowder and firearms, for example. A pistol puts a small man and a large man upon the same footing of strength, or perhaps rather reverses it a little, as the large man presents a broader surface to the deadly aim. Still either party is a more powerful man with than without it. It serves to establish a balance of power, while at the same time it augments the power of both. It is the same with larger arms and larger bodies of men. Hence the pistol, the blunderbuss, and the cannonade have been among the greatest civilizers of mankind. It is the same, again, with laws and the civil state which have been instituted to equalize the diversities of strength among men by substituting arbitrary rules for physical force. Like firearms and gunpowder, they are a barbarous remedy for a more barbarous evil, and will give place, in turn, with the progress of man, to the government of mere principles, accepted into and proving operative upon the individual mind.
112. In this manner the Cost Principle has in it the means of first compelling and then reconciling to its adoption those to whom the possession of superior intellectual powers or cunning, with the accumulations of capital, give now the ascendancy. This, however, only so far as such compulsion shall prove necessary. It is a grand mistake to assume, as the inclusive rule, that those who have the best end of the bargain in our present iniquitous social relations are averse to a reorganization upon the basis of justice. The ignorant and selfish among them are so, but it is among this superior class that the best and most devoted friends of the rights of man are likely to be found. The progress of the race has always been officered by leaders from among the Patricians. It is among those who gain the advantage, and are thrown to the surface and exposed to the blessed air and light of Heaven by the fluctuations of the turbulent ocean of human affairs, that the greatest development occurs; and along with development comes the sentiment of humanity and human brotherhood. The masses of men have seldom been indebted solely to themselves for what they have at any time gained. The most unbounded benevolence is often coupled with the possession of great wealth. But how often has the sentiment been repelled and made to recoil upon itself with disappointment and disgust at the results of its own efforts to benefit mankind! How often has the harsh lesson been taught to the rich and the good that the sentiment is powerless without the science,--that Love, without its complement in Wisdom, is blind and destructive of its own ends!
113. Hence, whenever a true science of society shall have been demonstrably discovered, when the means of permanent benefit to the race shall be unquestionable at hand, benevolent capitalists will assuredly be found in the first ranks of those who will concur to realize the higher results of human society, to which such knowledge is competent to conduct. The advanced and highly developed among men are always ready to sacrifice their relative superiority for the greater good of all, for no other reason than simply because they are men. Hence, again, although the Cost Principle is fully adequate to enable the poor, feeble, and oppressed classes to emancipate themselves from the oppressions of capital, it will, in practice, be put to no such strain. The future will show that the rich and poor will freely cooperate with hearty sincerity in the work of social regeneration, upon scientific and truly constructive principles.
114. It is proper at this point to show more explicitly the extension and comprehensiveness of the term Cost. It has been spoken of in the preceding pages chiefly as human repugnance overcome in the performance of labor. It is more accurate to define it, however, simply as human repugnance overcome in any transaction. It has both an active or positive, and a passive or negative, aspect, to which last a slight reference has already been had. (81.) The repugnance overcome in the actual performance of labor is the active phase of the subject, but there is also repugnance overcome in the mere sacrifice of surrender of any thing which we possess, and which we require at the time for our own convenience or happiness. This last is the passive aspect of Cost. Thus, for example, if I plant pictures of manufacture watches for sale, the cost, and consequently the price at which I must sell them, to deal upon the equitable principle, is the amount of labor contained in them; but, if I have in my possession—not as an article of merchandise, but for my own pleasure and convenience,--a watch or a favorite painting,--say, for example, it is a present from a friend, for which reason I attach to it a particular value,--and you, taking a fancy to it, wish to induce me to part with it, then the legitimate measure of price is the amount of sacrifice which it is to me,--in other words, the degree of repugnance which I feel to surrendering it, how much so ever that may exceed the positive Cost of the article, and whatever relation it may hold to its positive Value.
115. It is the same, as already observed, even with reference to natural wealth, in which there is no positive Cost, and so of everything which we require, in kind, for our own use. (81.) Thus, for example, although land in its wild state is not rightfully the subject of price, and although, when simply enclosed, its positive Cost is the labor of enclosing it, yet, if I have selected pleasant situation for my own habitation and culture, and am induced to part with it for the accommodation of another, the price in that case is legitimately augmented by whatever amount of repugnance I may feel to making the surrender.
116. The exact thinker will readily perceive the distinction between objects of all sorts which are required for personal convenience at the time, and surplus property or capital not needed for present use, or needed only as the means of procuring other conveniences by means of exchange,--between things properly in commerce, and things taken out of commerce by special appropriation. In the latter case the labor contained in or bestowed upon the property is the whole of its equitable price. In the former it is augmented by the amount of sacrifice experienced in parting with it, occasioned by the present need.
117. In the case of passive or negative Cost,--the mere repugnance to the surrender of what is at the time serving a personal purpose,--none but the party making the surrender can know the real extent of the sacrifice, or can judge with accuracy of the equity of the price charged. Hence, with reference to things not properly in commerce, a common average of estimate cannot be attained as in the ordinary case of exchanges. (195.) But even here the operation of the principle is quite distinct from that of value as the limit of price. The party making the surrender will satisfy his own conscience by estimating the degree of sacrifice to him, and not as under the value standard by estimating the degree of the want of the other party. In other words, whenever he has arrived at a price which he would prefer to take rather than not sell, he is restrained from going farther, without inquiring whether he has reached the highest point to which the purchaser would go. This distinction between the active Cost of the labor of production and the passive Cost of surrender is important in various ways, and especially, as we shall see, in settling the question of interest or rent on capital. (226.)
118. As it is the positive Cost of the labor of production, alone, which relates to things properly in commerce, it is that which is usually meant by Cost, unless the repugnance of surrender is especially mentioned in addition.
119. There is still another observation in relation to the comprehensiveness of the term Cost. Although it refers back, in its rigid technical sense, to the original labor of production, measured by its repugnance, and fixes the price in labor, still it holds good as the equitable measure of price with reference to all articles purchased with money, under the present system, and not traced back to their component, labor. Thus an article purchased for a given price in money, and sold again for the same amount of money, plus the labor of the transaction, is sold for Cost. The Cost Principle is, therefore, merely the entire abandonment of profit making, whether it relates to labor production or dealings in money. The method of keeping a shop and selling goods upon the Cost Principle, during the transition period,--that is, while the community is too small to supply all its own wants,--is to charge for each article its original money Cost with all the money charges and contingencies, in money, and the labor of buying, handling, and selling, in labor, the time occupied in the transaction being measured, by the clock and charged according to the estimated repugnance of that kind of labor. A yard of cloth is, therefore, so many cents in money and so many minutes in labor. The particulars of the management of such stores, and the immense power which they exert over the commercial habits of large districts of country within their influence, will be shown in Mr. Warren's work on Practical Details.
120. The comprehensiveness of the term Labor needs also to be defined. By Labor is meant, in the first place, not merely manual, but intellectual and oral labor as well,--whatever is done or performed by the hand, head, or tongue, and which involves repugnance or painfulness overcome,--the measure of price being based upon the well-known principle that man naturally seeks the agreeable and shuns that which is disagreeable or painful.
121. In the second place, the Labor by which price is measured is not always merely the particular performance done at the time. Whatever has required an especial skill obtained by previous labor, unproductive at the time, has its price augmented by its own due proportion of such loss, from previous necessary unproductive labor. For example, the surgeon may equitably charge for each surgical operation not only the time occupied in it, measured by its repugnance, but an aliquot portion of the time necessarily expended in acquiring the knowledge to enable him to do it in a skillful manner, according to the repugnance to him of that preliminary labor. So of every other necessary contingency,--all necessary contingencies, such as prior preparatory labor, risk incurred, etc., entering into and constituting a portion of Cost.
122. It results from what has been said that the basis of vendible property is human labor, and that the measure of such property is the amount of labor which there is, so to speak, laid up in the article owned. The article is the product of labor, and is therefore the representative of labor. Price is that which is given either for labor directly, or for property, which is the product of labor, that is, for labor indirectly, and it should therefore be a precise equivalent for that labor. The only proper ground of difference, then, between the price of side-saddle and the price of a house is the differenced in the amount of human labor which has been bestowed upon the one and upon the other. It follows, again, that the mode of arriving at the legitimate price of any article whatever is to reduce it first to labor. For example: if we take a house to pieces, we trace it back to trees growing in the woods, to clay, and sand, and lime, and iron, etc., lying in the earth. All that makes it a house, and entitles it to a price, as property, is the human labor that there is in it. That house over the way is, then, so many hours of labor at brick-making, so many hours of carpenter's work, so many of lime-burning, so many of iron-work, nail-cutting, so many at glass-blowing, so many at hauling, so many at planning, drafting, etc., etc., etc. The whole house is nothing but human labor, dried, preserved, laid away. Each of these hours of labor in different occupations may have a different degree of repugnance, so that to estimate the gross amount of labor in the house it is necessary to bring them all to a common denomination. This is done by reducing them to the standard degree of repugnance in the standard labor,--corn-raising,--which is then expressed in the standard product of that kind of labor,--namely, so many pounds of corn. Hence the price of a house, or of any other object, is said to be so many pounds, or so many hours, meaning so many pounds of corn, or so many hours of labor at corn-raising, in the same manner as we now say so many dollars and cents. By this means all price is constantly referred to labor, and rendered definite, instead of being referred to a standard which is itself continually expanding and contracting by all the contingencies of speculation or trade. (77.)
123. The first point is to obtain a standard for a single locality, after which it is quite easy to adjust the standard of other localities to it. Agricultural labor is first selected, because it is the great staple branch of human industry. The most staple article of agricultural product is then taken, which for this country and especially for the great valley of the Mississippi, is Indian corn. In another country it may be wheat or something else, although Indian corn, wherever it is produced, will be found to have more of the appropriate qualities for a standard than any other article whatsoever, being more invariable in quality, more uniform in the amount produced by the same amount of labor in a given locality, and more uniform in the extent of the demand than any other article. At a given locality, or, as I have stated, at a great variety of localities in the Western States, the standard product of Indian corn is twenty pounds to the hour's labor,--the measurement by pounds being also more inflexible or less variant than that by bulk. If, then, in some other locality,--as, for example, New England,--the product of an hour's labor devoted to raising corn is only ten pounds of corn, the equivalent of the standard hour's labor there will be ten pounds of corn, while in the West it will be twenty pounds. It is the hour's labor in that species of agriculture which is therefore the actual unit of comparison, of which the product, whatever it may be, is the local representative. And in the same manner, in another country wheat may be the standard,--as, for example, in England,--and may be reckoned at ten pounds to the hour, or whatever is found by trial to be the fact. The reduction of the standard of one locality to that of another will then be no more difficult than the reduction of different currencies to one value, as now practiced.
124. There is an absolute necessity for some standard of cost, and it is not a question of principle, but of expediency, what article is adopted. It is the same necessity which is recognized at present for a standard of value, which is sought for, and by some persons erroneously supposed to be found, in money. The question may still be asked: Why not employ money as the standard with which to compare other things, and as a circulating medium, as is done now? The answer is found in the uncertain and fluctuating nature of money,--in the fact that it represents nothing definite.
125. Money has professedly two uses: (1) as a standard of value, and (2) as a circulating medium.
First, then, as a standard of value, or a measure with which to compare other values. It does not even profess to be a standard of cost. It has no relation whatever to the cost, or, in other words, to the labor which there is in the different commodities for which it is given as price, because there is no question about cost in existing commerce, the value alone being taken into account. But value is incapable of a scientific estimate, as will be more specifically shown in the next chapter. (134.) Hence it is fluctuating because it relates to nothing definite. But what are the capacities of the yard-stick itself? Is it fixed or elastic? The theory is that gold and silver are selected as standards of value because the quantity of those commodities in the world is more uniform than that of most other articles. If the fact be granted, then gold and silver have one of the fitting properties of a standard. But gold and silver are not convenient as a circulating medium. Hence paper money is assumed as a representative of specie. So far very well again. There was a time when bank-paper was an exact representation of specie, if it represented nothing else. The old bank of Amsterdam, the mother of the banking system, issued only dollar for dollar. Her bills were merely certificates of deposit for so much specie. So far, then, the yard-stick did not stretch nor contract, while the paper money was more convenient as a medium of circulation than the specie. But with the development of the banking system two, three, five, or more dollars of paper money are issued for one dollar of specie on deposit. The amount is then expanded and contracted, according to the fluctuations of trade and the judgments or speculating interests of perhaps five hundred different boards of bank directors. How is it, then, with the inflexibility of your standard? Your yard-stick is one year, one foot long, and the next year, five feet long. The problem with existing finance, then, is to measure values which are in their nature positively, incapable of measurement, by money, which is in its nature positively incapable of measuring any thing. It is therefore uncertainty x fluctuation = price.
126. There is no such thing, therefore, in money as a standard of value. As a circulating medium merely, considering no other properties nor the reasons why we should have a circulating medium at all, nothing better can be devised than paper money. It is thin, light, pliant, and convenient in all respects.
127. To make gold the standard of cost, instead of value, would be to take as much gold as is ordinarily dug in an hour in those countries where it is procured-—say California-—as the price of an hour's labor in other branches of industry equally troublesome and repugnant. This may perhaps be one dollar, which would make the price of labor a dollar an hour, and the difference between that price in this article and the usual price of labor in the same article-—which is rendered necessary now, as the means of acquiring all other commodities—-is some indication of the degree to which labor is robbed by adopting the value standard instead of the cost standard of price. But the fact is that no average of the product of gold-digging can be made. It is proverbially uncertain. The product of gold, therefore, regarded as a standard of any thing, is as nearly worthless as the product of any article can be. The demand for it in the arts is also exceptional and uncertain. Apart from the factitious demand resulting from the fact that it is made a nominal standard and a medium, it is not in any sense a staple article. It would be just as philosophical to measure all other industry by the product of the mackerel fishery, or the manufacture of rock candy or Castor oil, as it would be to measure it by gold. The result of all this investigation is therefore this: That the product of gold, and, for the same reason, that of silver, is quite unfit for the first purpose we have in view, which is to select a staple species of labor with which to compare other labor, while corn or wheat does fulfill those conditions and (2) that paper is just what is wanted as a circulating medium, provided it can be made to rest upon a proper basis, and represent what ought to be represented by a circulating medium.
128. Now, what is it which ought to be represented by a circulating medium? Clearly it is price,--the price of commodities. The pledge or promise should be exactly equivalent to, as it stands in the place of, the commodity or commodities to be given hereafter. These commodities, which the paper stands in the place of, are the price of what was received. The equitable limit of price is, we have seen, the cost of the articles received. The promise is therefore rightly the equivalent of, or goes to the extent of, the cost of the articles received. But the cost of an article is, we have seen, the labor there is in it, rightly measured. Every issue of the circulating medium should therefore be a representative of, or pledge for, a certain amount of human labor, or for some commodity which has in it an equal amount of human labor, and, to avoid all question about what commodity shall be substituted, it is proper that a staple or standard article, the cost of which all agree upon, should be selected.
We return, then, to the Labor Note as the legitimate germ of a circulating medium.