THE COST PRINCIPLE

Chapter I

PRELIMINARY—THE NATURE AND NECESSITY OF A SOCIAL SCIENCE

1. The question of the proper, legitimate, and just reward of labor, and other kindred questions, are becoming confessedly of immense importance to the welfare of mankind. They demand radical, thorough, and scientific investigation. Political Economy, which has held its position for the last half century as one of the accredited sciences, is found in our day to have but a partial and imperfect application to matters really involved in the production and distribution of wealth. Its failure is in the fact that it treats wealth as if it were an abstract thing having interests of its own, apart from the well-being of the laborers who produce it. In other words, human beings, their interests and happiness, are regarded by Political Economy in no other point of view than as mere instruments in the production or service of this abstract Wealth. It does not inquire in what manner and upon what principles the accumulation and dispensation of wealth should be conducted in order to eventuate in the greatest amount of human comfort and happiness, and the most complete development of the individual man and woman. It simply concerns itself with the manner in which, and the principles in accordance with which, men and women are now employed, in producing and exchanging wealth. It is as if the whole purposes, arrangements, and order of a vast palace were viewed as mere appendages to the kitchen, or contrivances for the convenience of the servants, instead of viewing both kitchen and servants as subordinate parts of the system of life, gayety, luxury, and happiness which should appropriately inhabit the edifice, according to the design of its projectors.

2. Hence Political Economy is beginning to fall into disrepute as a science (for want of a more extended scope and a more humanitarian purpose), and is liable even to lose credit for the good it has done. The questions with which it deals can no longer be regarded as an integral statement of the subject to which they relate. They are coming to be justly estimated as a part only of a broader field or scientific investigation which has but recently been entered upon; and as being incapable of a true solution apart from their legitimate connections with the whole system of the social affairs of mankind. The subject-matter of Political Economy will, therefore, be hereafter embraced in a more comprehensive Social Science, which will treat of all the interests of man growing out of their interrelations with each other.

3. A criticism somewhat similar to that here bestowed upon Political Economy is applicable to Ethics. It has been the function of writers and preachers upon Morals, hitherto, to inculcate the duty of submitting to the exigencies of false social relations. The Science of Society teaches, on the other hand, the rectification of those relations themselves. So long as men find themselves embarrassed by complicated connections of interest, so that the consequences of their acts inevitably devolve upon others, the highest virtue consists in mutual concessions and abnegation of selfhood. Hence the necessity for Ethics, in that stage of progress, to enforce the reluctant sacrifice, by stringent appeals to the conscience. The truest condition of society, however, is that in which each individual is enabled and constrained to assume, to the greatest extent possible, the Cost or disagreeable consequences of his own acts. That condition of society can only arise from a general disintegration of interests,--from rendering the interests of all as completely individual as their persons. The Science of Society teaches the means of that individualization of interests, coupled, however, with cooperation. Hence it graduates the individual, so to speak, out of the sphere of Ethics into that of Personality,--out of the sphere of duty or submission to the wants of others, into the sphere of integral development and freedom. Hence the Science of Society may be said to absorb the Science of Ethics as it does that of Political Economy, while it teaches far more exactly the limits of right by defining the true relations of men.

4. The Science of Society labors indeed under a serious embarrassment from the fact of its comprehensiveness. The changes which the realization of the principles it unfolds would bring about in the circumstances of society make it differ from matters of ordinary science, in the fact of its immediate and complicated effects upon what may be termed the vested interests of the community. It is difficult for men to regard that as purely a question of science which they foresee is a radical reform and revolution as well. Still there are few persons who do not recognize the fact that there is some subtle and undiscovered cause of manifold evils, lying hid down in the very foundations of our existing social fabric, and which it is extremely desirable should be eradicated by some means, however much they may differ with reference to the instrumentalities through which the amelioration is to be sought for. The demand for a thorough investigation of the subject, and a settlement upon true principles of the relations of labor and capital especially, has come up during the last few years with more prominence than ever before, both in Europe and America, and has given rise to the various forms of Socialism which are now agitating the whole world. The real significance and tendency of Socialism are stated in No. I of this series of publications, entitled, “The True Constitution of Government, in the Sovereignty of the Individual, as the Final Development of Protestantism, Democracy, and Socialism.

5. Indeed, the inquiry into social evils and remedies has not been generally viewed in the light of a science at all, and Reform of all sorts has become distasteful to many among the more intellectual portion of the community, for the reason that it has not hitherto assumed a more strictly scientific aspect. Neither querulous complaints of the present condition of things, nor brilliant picturing of the imagination, nor vague aspirations after change or perfection, satisfy those whose mental constitution demands definite and tangible propositions, and inevitable logical deductions from premises first admitted or established.

6. There is another portion of the community who object to the investigation of all social questions upon nearly opposite grounds. They assume that the moral and social regeneration of mankind is not the sphere of science, but exclusively that of religion,--that the only admissible method of societary advancement is by the infusion of the religious sentiment into the hearts of men, and the rectification thereby of the affections of the individual, and through individuals of mankind at large.

7. If this proposition be reduced to this statement,--that, if the spirit of every individual n a community is right, the spirit of that community, as an aggregate, must be right likewise,--the assertion is a simple truism; but society demands a form as well as a substance, a body no less than a soul; and if that form or body be not a true outgrowth and exponent of the spirit dwelling within, it is affirming too much to say that such a society is rightly constituted. It is the province of science or the intellect to provide the form in which any desire is to be actualized. What Substance is to Form, the Love or Desire is to the intellectual conception of the modes of its realization. Religion deals with the heart or affections; in other words, with the love or desire, which makes up the substance or inherent constituent quality of actions. Science which is born of Wisdom deals with the Forms of action, and teaches that such and such only accord with a given Desire and will eventuate in its realization. The development of the Love or Desire is first in order and first in rank; that of the corresponding Wisdom is nevertheless equally indispensable to the completeness of all that is good and true, in every department of rational being.

8. To illustrate, let us suppose a nation overrun by foreign armies, and its very existence as an independent people threatened, while merely a feeble, heartless, and unorganized resistance is offered. A few patriotic and wise men assemble to consult upon the prospects and the necessities of their country. Immediately a dissension divides them in regard to the cause of their repeated failures to arrest the progress of the enemy. One party asserts that it is a want of military skill, that their country is entirely destitute of the knowledge of tactics and castrametation, which if understood, would be amply sufficient to enable them to display their whole strength, and to make the most desperate successful defense. The other party assumes opposite ground. They affirm that the fault is a want of patriotism among the people. They cite abundant instances to prove that the inhabitants care very little by whom they are governed; that they are, in fine, destitute of that spirit of devotion which is the essence or substance of warlike prowess. Thus divided in views, and jealous upon either side, they waste their time and grow mutually embittered toward each other. At length, after tedious discussions and a long series of acrimonious recriminations, they arrive at the solution in the fact that both parties are right. The people are both destitute of patriotic devotion and of military science. Which, then, is the first want, in order, to be supplied? Clearly the former. Still both are equally essential to the organization of a complete defense. Having accorded in this view, they first disperse themselves as missionaries over the whole country, preaching patriotism. By exciting appeals they arouse the dormant affections of the people for their fatherland, and alarm them for the safety of their wives and little ones. Their efforts are crowned with success. They witness the rising spirit of indignation against the invaders, and of martial heroism on all hands. It spreads from heart to heart,, and throbs in the bosoms of the men, and even of the women and children. At this point, a new evil displays itself. Fathers, husbands, and sons desert their ripening crops and their unprotected families, and rush together, a tumultuous, unarmed mob, clamorous for war. Confusion and distress succeed to apathy. The danger is increased rather than lessened. Famine and pestilence threaten now to be added to the fury of conquerors incensed by irritating demonstrations of a resistance powerless for defense. Then arises the demand for military science. At this point it is the part of the wise men who control the destinies of the people to abandon their missionary labor and assume the character of commanders and military engineers. Preaching is no longer in order. The men who from over-zeal persists in inflaming the minds of the populace, however well-intentioned, may prove the most deadly enemy of his country. Organization, the forming of companies, the drilling of squads, and the construction of forts are now in demand. Desire, the substance, subsists, demanding of Science the true Form of its manifestation.

9. What Patriotism is to the Science of War for the purpose of defense, the religious sentiment of Love is to the true Science of Society. The hearty recognition of human brotherhood, and the aspiration after true relations with God and man, are, at this day, widely diffused in the ranks of society. Christianity has produced its fruit in the development of right affection far beyond what the religious teachers among us are themselves disposed to credit it for. The demand is not now for more eloquence, and touching appeals, and fervent prayers to swell the heart to bursting with painful sympathies for suffering humanity. The time has come when preaching must give away to action, aspiration to realization, and amiable but fruitless sympathetic affections to fundamental investigation and scientific methods. The true preachers of the next age will be the scientific discoverers and the practical organizers of true social relations among men. The religious objection to Social Science is unphilosophical.

10. There is another form in which this objection is sometimes urged by those who claim to understand somewhat the philosophy of progress. They affirm that, if the disposition to do right exist in the Individual or in the community, that disposition will inevitably conduct to the knowledge of the right way; in other words, that Wisdom is a necessary outgrowth of Love; and hence they deduce the conclusion that we need not concern ourselves in the least about discovering the laws of a true social order. The premise of this statement is true, while the conclusion is false. Taken together, it is as if one should assert that the sense of hunger naturally impels men to find the means of subsistence, and hence that no man need trouble himself about food. Let him sit down, quietly relying upon the potency of mere hunger to provide the means of the gratification of his appetite.

11. The very fact of the Socialist agitation of our day, and the continued repetitions in every quarter of the attempt to work out the problem of universal justice and harmony, are the very outgrowth in question of the indwelling desire for truer social relations, and never could have arisen but for the previous existence of that desire. The religionist who denies or ignores this inevitable sequitur from the spirit of his own teachings, is like the insane head that first wills and then disowns the hand that performs.

Science—the rigid, exact, thorough, and inclusive Science of Society—is the only reliable guide to harmonic relations among men. Neither the ardor of piety, nor the sentiment of brotherhood, nor the desperate devotion of generous enthusiasm, nor the repressive force of a rigid morality, offers any adequate remedy for the existing evils of humanity. All these may be necessary, indispensable, nay, infinitely higher in rank or sanctity, if you will, than the other. But love must have its complement in Wisdom. To divorce them is to be guilty of “partialism,” just where it is of the utmost importance that the movement shall be integral and complete.

12. Possibly this statement may enlighten some minds in relation to the existing misunderstanding between the religionists and the Socialists. The former insist upon the spiritual element, the whole of what is requisite to a true development of society. Abstractly, the religionist may be said to be the nearest right, inasmuch as substance is prior to form; but practically, and with reference to the present wants of society, the Socialist is nearer the truth. The spiritual element exists already, at least in embryo. The aspiration after better and truer relations is swelling daily, bursting the bands of existing institutions, and demanding knowledge of the true way,--an organized body of the Christian idea of human brotherhood which the living soul may enter, and wherein it may dwell. But neither without the other is complete.

13. So powerful is becoming the sentiment of right that, unless the demand so created be followed by a complete discovery of the methods of its gratification, there is abundant danger that justice as a blind instinct may prove more destructive than organized oppression. As in the case of the misdirected or ill-directed patriotism in the illustration above, so every right sentiment and affection, without its complement of wisdom, is liable to become pernicious instead of beneficent in its action. If the love the mother bears her child leads her to feed it to excess on candies and comfits, to confine it in close, warm rooms, and guard it from contact with whatever may test and develop its powers of endurance, far better that she loved it less. She needs, in addition to love, a knowledge of Physiology. The Science of Society is to the Community what Physiology is to the Individual; or, rather, it is to the relations of the Individual with others what Physiology is to the relations of the Individual,so to speak, with himself.

14. In the same manner the knowledge on the part of the laboring classes or their friends that they are under an oppressive and exhausting system of the relations of capital and labor does not amount to a knowledge of the true system, into which, when known, it should be their object to bring themselves as rapidly as possible. To discover that true system, by any other means than by long years, perhaps long generations, of fallacious and exhausting experiments, must be the work of genius, of true science, profound fundamental investigations, or any other name you choose to bestow upon that faculty and that process by which elementary truths are evolved by contemplating the nature of a subject.

15. The Socialist agitations of the present day are, therefore, eminently dangerous, as much so as the most violent reactionist ever imagined them, unless Science intervenes to point the way to the solution. Religion, nor the dictates of a stringent morality, will ever reconcile men who have once appreciated their inherent, God-given rights, to the permanency of an unjust system by which they are deprived of them. Mere make-shifts and patched-up contrivances will not answer. False methods, such as Strikes, Trades' Unions, Combinations of Interests, and arbitrary regulations of all sorts, are but temporary palliations ending uniformly in disappointment, and often in aggravation of the evils sought to be alleviated. A distinguished writer upon these subjects says truly: “Establish tomorrow an ample and fair Scale of Prices in every employment under the sun, and two years of quiet and the ordinary mutations of Business would suffice to undermine and efface nearly the whole. No reform under the present system, but a decided step out of and above that system, is the fit and enduring remedy for the wrongs and oppressions of Labor by Capital. And this must inevitably be a work of time, of patience, of genius, of self-sacrifice, and true heroism.” In other words, it is the province of Science to discover the true principles of trade as much as it is to discover the laws of every other department of human concerns, and that discovery is an important part of the still more comprehensive Science of Society.

16. If, then, some profound philosopher, whose high authority could command universal belief, were to step forward and announce the discovery of a simple principle, which—-adopted in trade or business—-would determine with arithmetical certainty the equitable price to be charged for every hour of time bestowed upon its production and distribution, so that labor in every department should get precisely its due reward, and the existing inequalities in the distribution of wealth, and the consequent poverty and wretchedness of the masses, be speedily alleviated and finally removed; and if, in addition, the principle were such that its adoption and practical consequences did not depend upon convincing the intellects or appealing to the benevolence of the wealthy classes, but lay within the compass of the powers of the laboring men themselves; if, still further than this, the principle did not demand, as a preliminary, the extensive cooperation, the mutual and implicit confidence, the complicated arrangements, the extensive knowledge of administration, and the violent change in domestic habits, some one or other of which is involved in nearly every proposition of Socialism, and for which the laboring classes are specially disqualified; if, in one word, this simple principle furnished demonstrably, unequivocally, immediately, and practically, the means whereby the laboring classes might step out from under the present system, and place themselves in a condition of independence above that system,--would not this announcement come in good time; would it not be a supply eminently adapted to the present demand of the laboring masses in this country and elsewhere?

With some misgivings as to the prudence of asserting such a faith, in limine, I state my conviction that such a principle has been discovered and is now in the possession of a small number of persons who have been engaged in practically testing it, until its regulating and wealth-producing effects have been sufficiently, though not abundantly, demonstrated.

17. JOSIAH WARREN, formerly of Cincinnati, more recently a resident of Indiana, is, I believe, justly entitled to be considered the discoverer of the principle to which I refer, along with several others which he deems essential to the rectification of the social evils of the existing state of society.

The principle itself is one which will not probably strike the reader, when first stated, as either very profound, very practicable in its application, very important in its consequences, and perhaps not even as equitable in itself. It requires thought to be bestowed on each of these points. You will find, however, as you subject it to analysis, as you trace it into its ten thousand different application, to ownership, to rent, to wages, etc., that it places all human transactions, relating to property upon a new basis of exact justice,--that is, it has the perfect, simple, but all-prevailing character of a UNIVERSAL PRINCIPLE.

The question as to the method of commencing to put the principle in operation is a distinct one, and only needs to be considered after the principle itself is understood. I have already observed that it has been and is now being practically tested with entire success.

18. This principle, put into a formula, is thus stated: “COST IS THE LIMIT OF PRICE.”

The counter principle upon which all ownership is now maintained and all commerce transacted in the world is that “Value is the limit of price,” or, as the principle is generally stated in the cant language of trade, “A thing is worth what it will bring.” Between these two principles, so similar that the difference in the statement would hardly attract a moment's attention unless it were specially insisted upon, lies the essential difference between the whole system of civilized cannibalism by which the masses of human beings are mercilessly ground to powder for the accumulation of the wealth of the few, on the one hand, and on the other, the reign of equity, the just remuneration of labor, and the independence and elevation of all mankind.

19. There is nothing apparently more innocent, harmless, and equitable in the world than the statement that a “thing should bring what it is worth,” and yet even that statement covers the most subtle fallacy which it has ever been given to human genius to detect and expose,--a fallacy more fruitful of evil than any other which the human intellect has ever been beclouded by. (130)

20. Value has nothing whatever to do, upon scientific principles, as demonstrated by Mr. Warren, with settling the price at which any article should be sold. Cost is the only equitable limit, and by cost is meant the amount of labor bestowed on its production, that measure being again measured by the painfulness or repugnance of the labor itself.

Value is a consideration for the purchaser alone, and determines him whether he will give the amount of the cost or not. (132)

21. This statement is calculated to raise a host of objections and inquiries. If one purchaser values an article more highly than another, by what principle will he be prevented from offering a higher price? How is it possible to measure the relative painfulness or repugnance of labor? What allowance is to be made for superior skill or natural capacity? How is that to be settled? How does this principle settle the questions of interest, rent, machinery, etc.? What is the nature of the practical experiments which have already been made? Etc., etc.

22. These several questions will be specifically answered in this treatise upon “The Cost Principle,” except the last, which will be more satisfactorily replied by a work embodying the “Practical Details” of twenty-four years of continuous experiment upon the workings of this and the other principles related to it, and announced by Mr. Warren, which work Mr. Warren is now engaged himself in preparing for the press. These “Practical Details” will relate to the operations of two mercantile establishments conducted at different points, upon the Cost Principle, to the education of children, to social intercourse, and, finally, to the complex affairs of a village or town which has grown up during the last four years, under the system of “Equitable Commerce,” of which the Cost Principle is the basis. This work upon “Practical Details” will contain, I may venture to affirm, from a personal knowledge of its characters, a body of facts profoundly interesting to the philanthropic and philosophic student of human affairs. It must suffice for the present allusion to assert that there is no one of the circle of principles embraced by Mr. Warren under the general name of “Equitable Commerce,” or by myself under the name of “The Science of Society,” which has not been patiently, repeatedly, and successfully applied in practice, in a variety of modes, long before it was announced in theory,--a point in which it is thought that these principles differ materially from all the numerous speculations upon social subjects to which the attention of the public has been heretofore solicited.

23. The village to which I have referred is situated in the State of Ohio. It contains as yet only about twenty families, or one hundred inhabitants, having a present prospect of a pretty rapid increase of numbers. I will call it, for the sake of a name by which to refer to it, TRIALVILLE, stating at the same time that this is not the real name of the village, which I do not venture to give, as it might be disagreeable to some of the inhabitants to have the glare of public notoriety at so early a day upon their modest experiment. It might also subject them to visits of mere curiosity, or to letters of inquiry, which, without their consent, I have not the right to impose upon them. Another village upon the same principles is being organized in the vicinity of New York.

Under the sobriquet of TRIALVILLE I shall have occasion, however, to refer to the operations at the former of these villages, which have so far proved successful in a practical point of view that it is deemed, on the part of those most interested in this movement, to be a fitting time, now, to call the public attention more generally to the results. The publication of these treatises is in fact the beginning of that effort, which, if the intentions of those of us who are engaged in the enterprise do not fail of realization, will be more and more continuously and urgently put forth from this time forward. We believe that we have a great mission to fulfill,--a gospel of glad tidings to proclaim,--a practical and immediate solution of the whole problem of human rights and their full fruition to expound. While, therefore, we cannot and would not entirely conceal the enthusiastic feelings by which we are prompted in this effort, still, lest it may be thought that such sentiments may have usurped the province of reason, we invite the most cautious investigation and the most rigid scrutiny, not only of the principles we propound, but also of the facts of their practical working. While, therefore, I do not give the real name or exact location of our trial villages to the public at large, for the reasons I have stated, still we are anxious that all the facts relating to them shall be known, and the fullest opportunity for thorough investigation be given to all who may become in any especial degree interested in the subject. The author of this work will be gratified to communicate with all such, and to reply to such inquiries as they may desire to have answered, upon a simple statement of their interest in the subject and their wish to know more of it. The real name and location of our trial towns will be communicated to such, and every facility given for investigation.

Arrangements are contemplated for organizing other villages upon the same principles, and establishing an equitable exchange of products between them. It is not the object of the present work, however, to enter into the history or general plan of the movement, but simply to elucidate a single principle of a new science embracing the field of Ethics and Political Economy.

24. It will be appropriate, in this preliminary statement of the subject, to guard against one or two misapprehensions which may naturally enough arise from the nature of the terms employed, or from the apparently disproportionate importance attached to a simple principle of trade.

The term “Equitable Commerce” does not signify merely a new adjustment of the method of buying and selling. The term is employed, by Mr. Warren, to signify the whole of what I have preferred to denominate the Science of Society, including Ethics, Political Economy, and all else that concerns the outer relations of mankind. At the same time the mutual interchange of products is, as it were, the continent or basis upon which all other intercourse rests. Society reclines upon Industry. Without it man cannot exist. Other things may be of higher import, but it is of primary necessity. Solitary industry does not supply the wants of the individual. Hence trade or the exchange of products. With trade intercourse begins. It is the first in order of the long train of benefits which mankind mutually minister to each other. The term “commerce” is sometimes synonymous with trade or traffic, and at other times it is used in a more comprehensive sense. For that reason it has a double appropriateness to the subjects under consideration. It is employed therefore in the phrase “Equitable Commerce,” to signify, first, Commerce in the minor sense, as synonymous with “trade,” and secondly, Commerce in the major sense, as synonymous with the old English signification of the word, “conversation,”--i.e., human intercourse of all sorts,--the concrete, or tout ensemble, of human relations.

25. I will here show that these investigations take in the whole scope of Commerce in the major sense, after which I will return to the particular consideration and elucidation of the single principle, “COST IS THE LIMIT OF PRICE,” which does, indeed, chiefly or primarily relate to Commerce in the minor sense, although the modes in which it affects Commerce in the major sense are almost infinite.

26. According to Mr. Warren, the following is THE PROBLEM TO BE SOLVED in all its several branches:

1. “The proper, legitimate, and just reward of labor.”
2. “Security of person and property.”
3. “The greatest practicable amount of freedom to each individual.”
4. “Economy in the production and uses of wealth.”
5. “To open the way to each individual for the possession of land and all other natural wealth.”
6. “To make the interests of all to cooperate with and assist each other, instead of clashing with and counteracting each other.”
7. “To withdraw the elements of discord, of war, of distrust and repulsion, and to establish a prevailing spirit of peace, order, and social sympathy.”

27. And according to him, also the following PRINCIPLES are the means of the solution:

I. “INDIVIDUALITY.”
II. “THE SOVEREIGNTY OF EACH INDIVIDUAL.”
III. “COST THE LIMIT OF PRICE.”
IV. “A CIRCULATING MEDIUM, FOUNDED ON THE COST OF LABOR.”
V. “ADAPTATION OF THE SUPPLY TO THE DEMAND.”

28. The mere reading of this program will suggest the immensity of the scope to which the subject extends. In the present volume I have selected a single principle,--the third among those above name,--and shall adhere to a pretty thorough exposition of it, rather than overload the mind of the reader by bringing into view the whole of a system, covering all possible human relations. A few minds may, from the mere statement of these principles, begin to perceive the rounded outlines of what is, as I do not hesitate to affirm, the most complete scientific statement of the problem of human society, and of the fundamental principles of social science which has ever been presented to the world. Most, however, will hardly begin to understand the universal and all-pervading potency of these few simple principles, until they find them elaborately displayed and elucidated. At present I must take the broad license of asserting that they are UNIVERSAL PRINCIPLES, and referring the reader, for what I mean by a universal principle, to what I have to say of the one which I have selected for a particular explanation,--”COST THE LIMIT OF PRICE.”

29. As a mere hint, however, in relation to the others, let us take the last, “ADAPTATION OF THE SUPPLY TO THE DEMAND.” This seems to be a formula relating merely, as, in fact, it does relate mainly, to ordinary commerce,--trade,--commerce in the minor sense. In that sense, it expresses an immense want of civilized society,--nothing less, as Carlyle has it, than a knowledge of the way of getting the supernumerary shirts into contact with the backs of the men who have none. But this same principle introduced into the parlor becomes likewise the regulator of politeness and good manners, and pertains therefore to commerce in the major sense as well. I am, for example, overflowing with immoderate zeal for the principles which I am now discussing. I broach them on every occasion. I seize every man by the button-hole, and inflict on him a lecture on the beauties of Equitable Commerce; in fine, I make myself a universal bore, as every reformer is like to be more or less. But at the moment some urbane and conservative old gentleman politely observes to me, “Sir, I perceive one of your principles is, “The Adaptation of the Supply to the Demand.” I take the hint immediately. My mouth is closed. I perceive that my lecture is not wanted,--that he does not care to interest himself in the subject. There is no demand, and I stop the supply.

But you are ready to say, Would not the same hint given in some other form stop the impertinence of over-zealous advocacy in any case? Let those answer who have been bored. But suppose it did, could it be done so gracefully, in any way, as by referring the offender to one of the very principles he is advocating, or which he professes? Again: grant that it have the effect to stop that annoyance, the hint itself is taken as an offence, and the offended man, instead of continuing the conversation upon some other subject that might be agreeable, goes off in a huff, and most probably you have made him an enemy for life. But, in my case, it will not even be necessary for the conservative old gentleman to remind me,--I shall at once recollect that another of my principles is, “THE SOVEREIGNTY OF THE INDIVIDUAL.” One of the highest exercises of that sovereignty is the choice of the subjects about which one will converse and upon which he will bestow his time; hence I recognize cordially his right to exclude my subject, and immediately, gracefully, and good-humoredly I glide off upon some other topic. Then, by a law of the human mind, which it is extremely important to understand, and practically to observe, if it be possible that there should ever arise a demand with him to hear any thing about that subject, my uniform deference for even his prejudices will hasten the time. Indeed, all conservative old gentlemen, who hate reform of all sorts as they do ratsbane, would do well to make themselves at once familiar with these principles, and to disseminate them as they means of defending themselves. Do you begin to perceive that such a mere tradesman-like formula, at first blush as “THE ADAPTATION OF THE SUPPLY TO THE DEMAND,” becomes one of the highest regulators of good manners—a part of the ethics of conversation,--of the “Equitable Commerce” of gentlemanly intercourse,--as well as what it seems to be, an important element of trade; and do you catch a glimpse of what I mean, when I say that it is a universal principle of commerce in the major sense?

30. The doctrine of INDIVIDUALITY is equally universal. I have only to say here that it means the next thing to every thing, when you come to its applications. It means, as applied to persons, that every human being has a distinct character or individuality of his own, so that any attempt to classify him with others, or to measure him by others, is a breach of his natural liberty; and, as applied to facts, that no two cases ever occurred precisely similar, and hence that no arbitrary general rule can possibly be applied to cases not yet arisen. It follows, therefore, that all laws, systems, and constitutions whatsoever must yield to the individual, or else that liberty must be infringed; or, in other words, that the Individual is above Institutions, and that no social system can claim to be the true one, which requires for its harmonious operation that the Individual shall be subjected to the system, or to any institutions whatsoever.

We are taught by it that all combinations of interest whatsoever are limitations upon the exercise of the individuality of the parties, or restrictions upon natural liberty. Hence also, by Individuality, the true practical movement begins with a complete disintegration of all amalgamated interests, such as partnerships, in a manner peculiar to itself. Hence, again, to the casual observer, this movement seems to be in exact antagonism to Association, and the views of Socialism of all the various schools. A more thorough acquaintance with the subject will show, however, that this individualizing of all interests is the analysis of society, preliminary to association as the synthesis,--as much association as is demanded by the economies, being a growth of that cooperation of interests—not combination or amalgamation—which results form the operation of the Cost Principle. (3, 37.)

31. THE SOVEREIGNTY OF THE INDIVIDUAL grows out of the more fundamental principle of INDIVIDUALITY, as stated in No. I of this series. A special occasion called for that treatise, and limited it to a particular application. The extensive nature of the subject in its numerous ramifications will demand a separate work upon Individuality and the Sovereignty of the Individual, which, while they are distinguishable as principles, stand, nevertheless, closely related to each other.

32. A CIRCULATING MEDIUM FOUNDED ON THE COST OF LABOR is, perhaps, not so properly a principle as an indispensable instrument for carrying the Cost principle into practical operation. It is a monetary system, holding to the true or equitable system of Commerce a relation quite similar to that which specie and bank notes now hold to the present false and dishonest system. The subject of equitable money will be treated of more at large in the subsequent chapters, and does not require any further explanation at this point. As such a circulating medium is one of the necessary conditions of working out the true societary results, it is classed with principles, along with the means of the solution. (69, 245.)

33. It is claimed that within the circle of these five principles or efficient powers is found every condition of the complex development of a true social order, or, in other words, a full and perfect solution of the social problem stated above. Is that statement of the problem sufficiently comprehensive? Does it include, either directly or consequentially, all which has ever been aimed at by social reformers of any school, and all which is requisite to the full harmony and beauty of human relations? If that be so, and if the assumption just stated be made good, both by exposition and practical results, then have we at length a theory of society strictly entitled to the appellation of a Science,--a movement, precise, definite, and consequential, adequate, on the one hand, to meet the demands of the most exacting intellect, and sufficiently beneficent, on the other, to gratify the desires of the most expansive philanthropy, while in its remoter results it promises to satiate the refined cravings of the most fastidious taste.

34. This volume treats professedly upon the Cost Principle. Still each of the principles above stated will necessarily be referred to from time to time. It will perhaps be well, therefore, that the particular discussion of the principle, which I have selected for present consideration should be prefaced by a brief statement of the interrelations and mutual dependence of these several principles upon each other.

It is especially appropriate that something should be shown which will bridge over the seeming gap between so metaphysical a statement as that of the Sovereignty of the Individual, as set forth in the preceding Number, and the merely commercial consideration of an appropriate limit of price. An integral view of the connections of the different parts of this system of principles can only be a final result of a thorough familiarity with their detailed applications and practical effects. At the same time the fact that they are connected and mutually dependent will appear upon slight examination. For the rest, I must take the license to assert, with great emphasis, the existence of so intimate a relation between them that, if any one of them is omitted, it is totally impossible to work out the proposed results. The others will remain true, but any one of them, or any four of them, are wholly inadequate to the solution. This connection may be established by beginning almost indifferently at any point in the circle. Let us assume, as a starting point, THE ADAPTATION OF THE SUPPLY TO THE DEMAND.

35. By ADAPTATION OF THE SUPPLY TO THE DEMAND is meant a sufficiency of any variety of product, present at every time and place, to meet the want for that particular product which may be felt at the same time and place. It is wholly from the defect of such arrangements, in the existing commercial system, as would secure such an adaptation of supply to demand, that society is afflicted with periodical famine or scarcity, or, on the other hand, with gluts of the market, and consequent sacrifice and general bankruptcy, and, far more important than all, because more continuous, with what is called an excess of labor in the various labor markets of the world, by which thousands of men and women able to work and willing to work are deprived of the opportunity to do so. There is no reason in the nature of the case why there should not be as accurate a knowledge in the community of the statistics of supply and demand as there is of the rise and fall of the tides, nor why that knowledge should not be applied to secure a minute, accurate, and punctual distribution of products over the face of the earth, according to the wants of various countries, neighborhoods, and individuals. The supposed excess of labor is no more an excess than congestion is an excess of blood in the human system. The scarcity of the circulating medium which is now in use, and which is requisite for the interchange of commodities, is regarded by those who have studied this subject profoundly as the principal difficulty in the way of such an adjustment, but that scarcity itself is only a specific form and instance of the general want of adaptation of supply to demand, which extends far beyond all questions of currency,--the supply of circulating medium being unequal to the demand for it, owing to the expensiveness of the substances selected for such medium, and their consequent total unfitness for the purpose.

36. It follows from what has been said that appropriate arrangements for the adaptation of supply to demand are a sine qua non of a true social order. But the existence of such arrangements is an impossibility in the midst of the prevalence of speculation. But speculation has always existed, and is inherent in the present commercial system, and consequently no adequate adjustment of supply to demand has ever been had, or can ever be had, while that system remains in operation. It is the business of speculation, and hence of the whole mercantile profession, to confuse and becloud the knowledge of the community upon this very vital point of their interests, and to derange such natural adjustment as might otherwise grow up, even in the absence of full knowledge on the subject,--to create the belief that there is excess or deficiency when there is none, and to cause such excess or deficiency in fact when there would otherwise be none, in order to buy cheap and sell dear. Speculation is not only the vital element of the existing system of Commerce, but it will always exist upon any basis of exchange short of the Cost Principle. The Cost Principle extinguishes speculation, as will be shown in the sequel, Herein, then, is the connection between these two of the five conditions of social order. (158.)

37. Let us return now to THE SOVEREIGNTY OF THE INDIVIDUAL. This has been shown in the previous work to be also a sine qua non of true human relations. The Sovereignty of the Individual, which is merely the complete enjoyment of personal liberty, the unimpeded pursuit by every individual, of his own happiness in his own way, and the development of his own inherent selfhood, is, in fact, the apex, or culminating point, of the true harmony of society. It was also demonstrated that this Sovereignty cannot possibly be indulged, without continual encroachments upon the equal Sovereignty of others, in any other mode than by a complete disintegration of interests,--a total abandonment of every species of combined or amalgamated ownership, or administration of property. Individuality of Character teaches, in this manner, that, in order to the harmonious exercise of the Sovereignty of the Individual, a disconnection of interests must be had, which is in turn nothing else than another application of the same all-pervading principle of Individuality. Such, then, is the intimate connection between Individuality and Sovereignty of the Individual. (3, 30)

38. But again: what is to be the consequence of this general individualization of interests? Such is, to a very great extent, the order of the actual condition of ownership and administration in our existing society, which is, nevertheless, replete with social evils. Indeed, hitherto those evils have been attributed by Social Reformers, to the prevalent individualization of interests among men, more than to any other cause. Hence they have made war upon it, and proposed combined or amalgamated interests, or extensive partnership arrangements, as the only possible means of securing attractive industry, and cooperation, and economy in the production and uses of wealth. We now assert that, in order to secure what is more important than all else, the possibility of the free exercise of Individual Sovereignty, an indispensable condition is a still greater amount than now exists of Individuality, or disconnection in the property relations of men. We affirm that nearly all that there is good in existing society results from that element. What then follows? Do we abandon the high aims of other Socialists in other respects? Is all thought of cooperation and the economies surrendered by us? Clearly they are, unless some new and hitherto undiscovered element is brought in. To go back from the present field of effort of the Social Reformers to so much of Individuality as can exist in the present order of society, and stop at that alone, is evidently to return to the present social disorder, in which it is sufficiently demonstrated by experience that the exercise of the Sovereignty of the Individual—the point we aim to secure—is itself just as impossible as the other conditions desired. But why is it impossible? For the reason that Individuality of interests, upon which that exercise rests, is itself only partially possible in a social state in which there is a general denial of equity in the distribution of wealth,--equity being what the Cost Principle alone can supply. If the woman, or the youth under age, is denied the means of acquiring an independent subsistence, by the fact that they receive less than equivalents for their industry, they are necessarily thrown into a state of dependence upon others. The exercise of their own Sovereignty, then, is obviously an impossibility for them. There are thousands of women, for example, in the higher ranks of society, who never felt the luxury in their lives of spending a shilling that they knew to be actually their own, and never applied to their fathers or husbands for money without the degrading sense of beggary. On the other hand, the husbands and fathers are involved, by the same false pecuniary relations, in an unnecessary and harassing responsibility for the conduct and expenditure of every member of their families, which is equally destructive of their own freedom, or the exercise of their own Sovereignty over themselves. It is the same in the existing relations of the poor and the rich, the hireling and the employer, the master and the slave, and in nearly all the ten thousand ramified connections of men in existing society. By refusing equity in the distribution of wealth; by reducing the earnings of women, and youths, and hired men, and slaves below equivalents; by thus grasping power over others, through the medium of an undue absorption of the products of their industry,--the members of community are brought into the relation of oppressors and oppressed, and both are together and alike involved in a common destiny of mutual restrictions, espionage, suspicions, heartburnings, open destructive collisions, and secret hostility, and each is thereby shorn of the possibility of exercising his prerogative of sovereign control over his own actions.

39. Government of all sorts is adverse to freedom. It destroys the freedom of the subject, directly, by virtue of the fact that he is a subject; and destroys equally the freedom of the governor, indirectly, by devolving on him the necessity of overlooking and attempting, hopelessly, to regulate the conduct of others,--a task never yet accomplished, and the attempt at which is sufficiently harassing to wear the life out of the most zealous advocate of order. With the greater development of the individuals to be governed the task becomes proportionally the more onerous, until, in our day, the business of governing grows vulgar from its excessive laboriousness.

40. All combinations of interest imply and involve the necessity of government, because nature demands and will have an individual lead. The denial of equity implies and involves the necessity of combination of interest, by throwing one part of the community into a state of dependence upon the other, authorizing mutual supervision and criticism, and creating mutual restriction and hostility.

41. A man of wealth is said, among us, to be a “man in independent circumstances”; but in truth the man of wealth of our day has not begun to conceive the genuine luxury of perfect freedom,--a freedom which, by immutable laws, can never be realized otherwise than by a prior performance of exact justice.

42. The principles here asserted are universal. The same causes that are upheaving the thrones of Europe are disturbing the domestic tranquility of thousands of families among us. Red Republicanism in France, African Slavery in America, and the mooted question of the rights of women are one and the same problem. It is the sole question of human liberty, or the Sovereignty of the Individual; and the sole basis upon which the exercise of that Sovereignty can rest is Equity,--the rendering to each of that which is his. The Cost Principle furnishes the law of that rendering. That, and that alone, administers Equity. Hence it places all in a condition of independence. It dissolves the relation of protectors and protected by rendering protection unnecessary. It takes away the necessity resulting from dependence for combinations of interest and government, and hence for mutual responsibility for, and interference with, each other's deportment, by devolving the Cost, or disagreeable effects, of the conduct of each upon himself,--submitting him to the government of natural consequences,--the only legitimate government. In fine, the Cost Principle in operation renders possible, harmless, and purely beneficent the universal exercise of Individual Sovereignty.

43. Hence it follows that the Cost Principle underlies Individuality, or the disconnection of interests, in the same manner as Individuality itself underlies and sustains the Sovereignty of the Individual. Hence, again the Cost Principle is the basis principle or foundation upon which the whole fabric of social harmony rests, as the Sovereignty of the Individual is, as has been said, the apex, or culminating point of the same fabric,--the end and purpose of a true social order. Herein, then, is their intimate and necessary relation to each other.

44. Without Equity as a basis on which to rest, the Sovereignty of the Individual is true still as an abstract principle, but wholly incapable of realization. The Individual Sovereign is so de jure, but not de facto. He is a Sovereign without dominion, treated as a pretender, and his claims ridiculed by the actual incumbent. The assertion of Sovereignty is a phantom and a delusion until the Sovereign comes to his own. The Cost Principle, as the essential element of Equity, gives to each his own, while nothing else can. Hence, again, the intimate and necessary relation between these two principles.

45. The doctrine of the Sovereignty of the Individual is already beginning to develop itself, originally in an abstract form, in various quarters, and to take a well-defined shape in many minds. It has been announced in substance, recently, by several able writers, not accompanied, however, by the indispensable scientific limitation,--”To be exercised at his own cost,”--without which it is a principle of anarchy and confusion, instead of order. To preach the doctrine, even with the limitation, apart from its basis in equity, is disturbing. It is the announcement to slaves of their inherent right to be free, at the same time that you leave them hopeless of the realization of freedom. It is to unfit men for their present relations while offering them no means of inaugurating truer relations. It is “to curse men's stars, and give them no sun.” As a preliminary work to the impending reconstruction, the unsettling of men's minds may be a necessity, but “transitions are painful,” and humanity demands that the interval should be shortened between inspiring a want and actualizing the conditions of its gratification.

46. The essential condition of freedom is disconnection—individualization—disintegration of interests. The essential condition of disconnection is that that be given to each which belongs to each. All harmonic unity is a result or growth from the prior society, of fealty and protection, and consequent mutual amalgamation or combinations of interests, is a species of amorphous conglomerate, of which the past progress of Reform has been the gradual dissolution. Reform and consequent individualization is the tendency of this age. The process thus commenced must go on to completion, until every man and every woman and, to an appropriate extent, every child, is a perfect Individual, with an interest, an administration, and a destiny solely and emphatically under his or her own control. Out of that condition of things, and concurrently with it, and just in proportion to its completeness, will grow a more intimate harmony, or, if you will, unity of sentiment, and human affections, and mutual regard, begotten purely of attraction, than can be conceived of in the midst of the mutual embarrassment and constraint of our day, and of our order of life. It is only when each individual atom of the dusky mineral is disintegrated from every other, held in complete solution, and allowed to obey, without let or hindrance, the law of its own interior impulse, that each shoots spontaneously to its own place, and that all concur in voluntary union to constitute the pellucid crystal or the sparkling diamond of the mines. So in human affairs, what is feared by the timid conservative as the dissolution of order is, in fact, merely the preliminary stage of the true harmonic Constitution of Society,--the necessary analysis to its genuine and legitimate synthesis.

47. The connection of the Cost Principle with the Adaptation of the Supply to the Demand has been already pointed out. The nature and necessity of an Equitable Money, as the instrument of working the Cost Principle, will be demonstrated, as previously stated, in a subsequent chapter. In this manner the interrelations of this circle of principles are established, not so fully as the nature of the subject demands, but as much so as the incidental character of the present notice will permit.

48. But, although it may be admitted that we gain something of freedom in the action of the Individual by avoiding combinations of interest, do we not lose, by that means, the benefits of cooperation and the economies of the large scale? This question is important, and demands a satisfactory and conclusive answer. That answer is given in the whole treatise which follows. It is admitted that heretofore no other means for securing those ends have been known. It is asserted, however, that principles are now known by which all the higher results of social harmony can be achieved without that fatal feature of combination, which has promised, but failed, to realize them. Hence we draw a new and technical distinction between Combination and Cooperation, and insist on that distinction with great rigor. We assert that the true principles of Social Science are totally averse to combinations of interest. At the same time we admit freely that any principles which should not secure the greatest conceivable amount of Cooperation would fail entirely of solving the problem in question.

49. By Combinations are meant partnership interests and community of property or administration, such as confuse, in any degree, or obliterate the lines of Individuality in the ownership or use of property.

50. By Cooperation, or cooperative relations, is meant such an arrangement of the property and industrial interests of the different Individuals of the community that each, in pursuing his own pleasure or benefit, contributes incidentally to the pleasure or benefit of the others.

51. We assume the burden of proof. We admit the obligation resting upon us to establish the position that extreme Individuality or disconnection of interests is compatible—-contrary to all previous opinion—-with as thorough and extended Cooperation as can exist in any system of Combinations whatsoever.

52. It must not be understood that disconnection of interests implies, in the slightest degree, an isolation of persons. A hundred or a thousand men may be engaged in the same shop, and still their interests be entirely individualized. Such is the case now under the present wages system. The laborers in a manufacturing establishment, for example, have no common interest, no partnership, no combined responsibilities. Their interests are completely individualized, and yet they work together. This is all right. It is not at this point that the evil lurks which the Socialist seeks, or should seek, to remedy. Besides this, these men and women now cooperate completely in their labor. They all work at distinct functions to a common end, which is Cooperation. The evil to be remedied is neither in their individuality of interests nor in any want of cooperation. It is solely in the want of mutuality in the results of that Cooperation,--in other words, in the want of Equity,--in the want of a regulating principle which would secure to each the full, legitimate results of his own labor. The difficulty is that the whole hundred, or the whole thousand men now labor and cooperate, not for their own benefit, but for the benefit of one,--the employer. Under the operation of the Cost Principle their interests will be individual as they are now; they will cooperate as they do now, or, rather, more perfectly but they will cooperate for all others, merely the equivalent and reward of his own labor.

53. I feel painfully that by attempting such a condensation of these matters I am liable to render myself woefully obscure. I will take a special occasion to show that “Equitable Commerce” is not the antagonist of any other of the great Reforms proposed, but that it comes in as the harmonizer of the whole. If it be claimed by his admirers that Fourier has shown “the what” of harmonic social relations, Warren shows “the how” to realize such relations, in which last respect Social Reformers generally have been lamentably deficient.

54. I will conclude by stating how the Cost Principle, in its operation, will address itself to the different classes of community, so that those who feel no demand need not be overburdened by the supply.

The whole community may be divided, under this system,--not according to the old classification of Political Economy into producers and non-producers,--but into those who receive more than equivalents for their labor and those who receive less than equivalents,--those who perform no productive labor and receive a living or more than that being included in the former class.

Of these classes, the latter-—all those who receive less than equivalents, including the great mass of simple operatives who have not the aid of capital—-have an immediate and pecuniary interest in at once adopting the principle.

The remaining class—-those who receive more than equivalents—-have no such interest, but contrariwise. Of these only such as are moved by consideration of benevolence or justice, or the love of order and harmony in human relations, or by the sense of insecurity even for the rich in the existing order of society, or by an appreciation of the higher gratifications of taste through the general prevalence of refinement, luxury, and wealth, have any demand for this new principle of commerce; and so soon as those with whom such considerations are not potential have read enough to know how equivalents can be measured, and that they are now on the gaining side, they will need no further supply of this reform, and the reform must go on without them, as it best may. There are only distant advantages to offer them, and as they have the immediate advantages in their own hands, they must be expected to do the best they can to retain them. The peculiarity of the movement is, however, that it does not proceed by their leave.