Chapter 2
There is, from the outset, one defect in the coöperation between buyer and seller, employer and laborer. The coöperation is largely unintended. Each is primarily thinking of his own advantage, rather than that of the other, or of the social whole; he is seeking it in terms of money, which as a material object must be in the pocket of one party or of the other, and is not, like friendship or beauty, sharable. Mutual benefit is the result of exchange--it need not be the motive. This benefit comes about as if it were arranged by an invisible hand, said Adam Smith. Indeed, it was long held that if one of the bargainers gained, the other must lose. And when under modern conditions labor is considered as a commodity to be bought and sold in the cheapest market by an impersonal corporate employer, there is a strong presumption against the coöperative attitude on either side.
The great problem here is, therefore: How can men be brought to seek consciously what now they unintentionally produce? How can the man whose ends are both self-centered and ignoble be changed into the man whose ends are wide and high? Something may doubtless be done by showing that a narrow selfishness is stupid. If we rule out monopoly the best way to gain great success is likely to lie through meeting needs of a great multitude; and to meet these effectively implies entering by imagination and sympathy into their situation. The business maxim of "service," the practices of refunding money if goods are unsatisfactory, of one price to all, of providing sanitary and even attractive factories and homes, and of paying a minimum wage far in excess of the market price, have often proved highly remunerative. Yet, I should not place exclusive, and perhaps not chief, reliance on these methods of appeal. They are analogous to the old maxim, honesty is the best policy; and we know too well that while this holds under certain conditions,--that is, among intelligent people, or in the long run,--it is often possible to acquire great gains by exploiting the weak, deceiving the ignorant, or perpetrating a fraud of such proportions that men forget its dishonesty in admiration at its audacity. In the end it is likely to prove that the level of economic life is to be raised not by proving that coöperation will better satisfy selfish and ignoble interests, but rather by creating new standards for measuring success, new interests in social and worthy ends, and by strengthening the appeal of duty where this conflicts with present interests. The one method stakes all on human nature as it is; the other challenges man's capacity to listen to new appeals and respond to better motives. It is, if you please, idealism; but before it is dismissed as worthless, consider what has been achieved in substituting social motives in the field of political action. There was a time when the aim in political life was undisguisedly selfish. The state, in distinction from the kinship group or the village community, was organized for power and profit. It was nearly a gigantic piratical enterprise, highly profitable to its managers. The shepherd, says Thrasymachus in Plato's dialogue, does not feed his sheep for their benefit, but for his own. Yet now, what president or minister, legislator or judge, would announce as his aim to acquire the greatest financial profit from his position? Even in autocratically governed countries, it is at least the assumption that the good of the state does not mean solely the prestige and wealth of the ruler.
A great social and political order has been built up, and we all hold that it must not be exploited for private gain. It has not been created or maintained by chance. Nor could it survive if every man sought primarily his own advantage and left the commonwealth to care for itself. Nor in a democracy would it be maintained, provided the governing class alone were disinterested, deprived of private property, and given education, as Plato suggested. The only safety is in the general and intelligent desire for the public interest and common welfare. At this moment almost unanimous acceptance of responsibility for what we believe to be the public good and the maintenance of American ideals--though it brings to each of us sacrifice and to many the full measure of devotion--bears witness to the ability of human nature to adopt as its compelling motives a high end which opposes private advantage.
Is the economic process too desperate a field for larger motives? To me it seems less desperate than the field of government in the days of autocratic kings. One great need is to substitute a different standard of success for the financial gains which have seemed the only test. Our schools of commerce are aiming to perform this service, by introducing professional standards. A physician is measured by his ability to cure the sick, an engineer by the soundness of his bridge and ship; why not measure a railroad president by his ability to supply coal in winter, to run trains on time, and decrease the cost of freight, rather than by his private accumulations? Why not measure a merchant or banker by similar tests?
Mankind has built up a great economic system. Pioneer, adventurer, inventor, scientist, laborer, organizer, all have contributed. It is as essential to human welfare as the political system, and like that system it comes to us as an inheritance. I can see no reason why it should be thought unworthy of a statesman or a judge to use the political structure for his own profit, but perfectly justifiable for a man to exploit the economic structure for private gain. This does not necessarily exclude profit as a method of paying for services, and of increasing capital needed for development, but it would seek to adjust profits to services, and treat capital, just as it regards political power, as a public trust in need of coöperative regulation and to be used for the general welfare.
But the war is teaching with dramatic swiftness what it might have needed decades of peace to bring home to us. We _are_ thinking of the common welfare. High prices may still be a rough guide to show men's needs, but we are learning to raise wheat because others need it--not merely because the price is high. Prices may also be a rough guide to consumption, but we are learning that eating wheat or sugar is not merely a matter of what I can afford. It is a question of whether I take wheat or sugar away from some one else who needs it--the soldier in France, the child in Belgium, the family of my less fortunate neighbor. The great argument for not interfering with private exchange in all such matters has been that if prices should by some authority be kept low in time of scarcity, men would consume the supply too rapidly; whereas if prices rise in response to scarcity, men at once begin to economize and so prevent the total exhaustion of the supply. We now reflect that if prices of milk rise it does not mean uniform economy--it means cutting off to a large degree the children of the poor and leaving relatively untouched the consumption of the well-to-do. Merely raising the _price_ of meat or wheat means taking these articles from the table of one class to leave them upon the table of another. War, requiring, as it does, the united strength and purpose of the whole people, has found this method antiquated. In Europe governments have said to their peoples: we _must_ all think of the common weal; we _must_ all share alike. In this country, the appeal of the food administrator, though largely without force of law, has been loyally answered by the great majority. It is doubtless rash to predict how much peace will retain of what war has taught, but who of us will again say so easily, "My work or leisure, my economy or my luxury, is my own affair, if I can afford it?" Who can fail to see that common welfare comes not without common intention?
The second great defect in our economic order, from the point of view of coöperation, has been the inequality of its distribution. This has been due largely to competition when parties were unequal, not merely in their ability, but in their opportunity. And the most serious, though not the most apparent, aspect of this inequality, has not been that some have more comfort or luxuries to enjoy; it is the fact that wealth means power. In so far as it can set prices on all that we eat, wear, and enjoy, it is controlling the intimate affairs of life more thoroughly than any government ever attempted. In so far as it controls natural resources, means of transportation, organization of credit, and the capital necessary for large-scale manufacturing and marketing, it can set prices. The great questions then are, as with political power: How can this great power be coöperatively used? Is it serving all or a few?
Two notable doctrines of the courts point ways for ethics. The first is that of property affected with public interest. Applied thus far by the courts to warehouses, transportation, and similar public services, what limits can we set ethically to the doctrine that power of one man over his fellows, whether through his office, or through his property, is affected with public interest?
The police power, which sets the welfare of all above private property when these conflict, is a second doctrine whose ethical import far outruns its legal applications.
Yet it is by neither of these that the most significant progress has been made toward removing that handicap of inequality which is the chief injustice of our economic system. It is by our great educational system, liberal in its provisions, generously supported by all classes, unselfishly served, opening to all doors of opportunity which once were closed to the many, the most successful department of our democratic institutions in helping and gaining confidence of all--a system of which this University of California is one of the most notable leaders and the most useful members--that fair conditions for competition and intelligent coöperation in the economic world are increasingly possible.
V
What bearing has this sketch of the significance and progress of coöperation upon the international questions which now overshadow all else? Certainly the world cannot remain as before: great powers struggling for empire; lesser powers struggling for their separate existence; great areas of backward peoples viewed as subjects for exploitation; we ourselves aloof. It must then choose between a future world order based on dominance, which means world empire; a world order based on nationalism joined with the non-social type of competition, which means, every nation the judge of its own interests, continuance of jealousies and from time to time the recurrence of war; and a world order based on nationalism plus international coöperation, "to establish justice, to provide for common defense, to promote the general welfare, and to secure the blessings of liberty to ourselves and our posterity."
It is not necessary to discuss in this country the principle of dominance and world empire. It contradicts our whole philosophy. Safety for dominance lies only in a civilization of discipline from above down, in ruthless repression of all thinking on the part of the subject class or race.
Nor can I see any genuine alternative in what some advocate--reliance by each nation on its own military strength as the sole effective guarantee for its interests. After the military lessons of this war, the concentration of scientific, economic, and even educational attention upon military purposes would almost inevitably be vastly in excess of anything previously conceived. What limits can be set to the armies of France and Great Britain if these are to protect those countries from a German empire already double its previous extent, and taking steps to control the resources of eastern Europe and the near East? What navy could guarantee German commerce against the combined forces of Great Britain and the United States? What limits to the frightfulness yet to be discovered by chemist and bacteriologist? What guarantee against the insidious growth of a militarist attitude even in democratically minded peoples if the constant terror of war exalts military preparations to the supreme place? Something has changed the Germany of other days which many of us loved even while we shrank from its militarist masters. Is it absolutely certain that nothing can change the spirit of democratic peoples? At any rate, America, which has experimented on a larger scale with coöperation--political, economic, and religious--than any other continent, may well assert steadily and insistently that this is the more hopeful path. It may urge this upon distrustful Europe.
The obstacles to coöperation are:
1. The survival of the principle of dominance, showing itself in desire for political power and prestige, and in certain conceptions of national honor.
2. The principle of non-social competition, exhibited in part in the political policy of eliminating weaker peoples, and conspicuously in foreign trade when the use of unfair methods relies upon national power to back up its exploitation or monopoly.
3. The principle of nationalistic sentiment, itself based on coöperation, on social tradition and common ideals, but bound up so closely with political sovereignty and antagonisms as to become exclusive instead of coöperative in its attitude toward other cultures.
The principle of dominance deters from coöperation, not only the people that seeks to dominate, but peoples that fear to be dominated or to become involved in entangling alliances. Doubtless a policy of aloofness was long the safe policy for us. We could not trust political liberty to an alliance with monarchies, even as with equal right some European peoples might distrust the policies of a republic seemingly controlled by the slavery interest. At the present time one great power professes itself incredulous of the fairness of any world tribunal; smaller powers fear the commanding influence of the great; new national groups just struggling to expression fear that a league of nations would be based on present status and therefore give them no recognition, or else a measure of recognition conditioned by past injustices rather than by future aspirations and real desert. All these fears are justified in so far as the principle of dominance is still potent. The only league that can be trusted by peoples willing to live and let live, is one that is controlled by a coöperative spirit. And yet who can doubt that this spirit is spreading? Few governments are now organized on the avowed basis that military power, which embodies the spirit of dominance, should be superior to civil control, and even with them the principle of irresponsible rule, despite its reinforcement by military success, is likely to yield to the spirit of the age when once the pressure of war is removed which now holds former protesters against militarism solid in its support. For all powers that are genuine in their desire for coöperation there is overwhelming reason to try it; for only by the combined strength of those who accept this principle can liberty and justice be maintained against the aggression of powers capable of concentrating all their resources with a suddenness and ruthlessness in which dominance is probably superior.
Yet coöperation for protection of liberty and justice is liable to fall short of humanity's hopes unless liberty and justice be themselves defined in a coöperative sense. The great liberties which man has gained, as step by step he has risen from savagery, have not been chiefly the assertion of already existing powers or the striking-off of fetters forged by his fellows. They have been _additions_ to previous powers. Science, art, invention, associated life in all its forms, have opened the windows of his dwelling, have given possibilities to his choice, have given the dream and the interpretation which have set him free from his prison. The liberty to which international coöperation points is not merely self-direction or self-determination, but a larger freedom from fear, a larger freedom from suspicion, a fuller control over nature and society, a new set of ideas, which will make men free in a far larger degree than ever before.
Similarly justice needs to be coöperatively defined. A justice that looks merely to existing status will not give lasting peace. Peoples change in needs as truly as they differ in needs. But no people can be trusted to judge its own needs any more than to judge its own right. A justice which adheres rigidly to vested interests, and a justice which is based on expanding interests, are likely to be deadlocked unless a constructive spirit is brought to bear. Abstract rights to the soil, to trade, to expansion, must be subordinate to the supreme question: How can peoples live together and help instead of destroy? This can be approached only from an international point of view.
The second obstacle, unsocial competition, is for trade what dominance is in politics. It prevents that solution for many of the delicate problems of international life which coöperation through trade might otherwise afford. Exchange of goods and services by voluntary trade accomplishes what once seemed attainable only by conquest or slavery. If Germany or Japan or Italy needs iron or coal; if England needs wheat, or if the United States sugar, it is possible, or should be possible, to obtain these without owning the country in which are the mines, grain, and sugar cane. The United States needs Canada's products; it has no desire to own Canada. But in recent years the exchange of products has been subjected to a new influence. National self-interest has been added to private self-interest. This has intensified and called out many of the worst features of antagonism and inequality.
Few in this country have realized the extent to which other countries have organized their foreign commerce on national lines. We are now becoming informed as to the carefully worked-out programmes of commercial education, merchant marines, trade agreements, consular service, financial and moral support from the home government, and mutual aid among various salesmen of the same nationality living in a foreign country. We are preparing to undertake similar enterprises. We are reminded that "eighty per cent of the world's people live in the countries bordering on the Pacific Ocean, and that as a result of the rearrangement of trade routes, San Francisco's chance of becoming the greatest distributing port of the Pacific for goods _en route_ to the markets of the Orient, are now more promising than ever before." Can the United States take part in this commerce in such a way as to help, not hinder, international progress in harmony? Not unless we remember that commerce may be as predatory as armies, and that we must provide international guarantees against the exclusive types of competition which we have had to control by law in our own domestic affairs. An Indian or an African may be deprived of his possessions quite as effectively by trade as by violence. We need at least as high standards of social welfare as in domestic commerce. I cannot better present the situation than by quoting from a recent article by Mr. William Notz in the "Journal of Political Economy" (Feb. 1918):
During the past twenty-five years competition in the world markets became enormously keen. In the wild scramble for trade the standards of honest business were disregarded more and more by all the various rival nations. In the absence of any special regulation or legislation, it appeared as though a silent understanding prevailed in wide circles that foreign trade was subject to a code of business ethics widely at variance with the rules observed in domestic trade. What was frowned upon as unethical and poor business policy, if not illegal at home, was condoned and winked at or openly espoused when foreign markets formed the basis of operations and foreigners were the competitors. High-minded men of all nations have long observed with concern the growing tendency of modern international trade toward selfish exploitation, concession-hunting, cut-throat competition, and commercialistic practices of the most sordid type. Time and again complaints have been voiced, retaliatory measures threatened, and more than once serious friction has ensued.
Mr. Notz brings to our attention various efforts by official and commercial bodies looking toward remedies for such conditions and toward official recognition by all countries of unfair competition as a penal offense.
What more do we need than fair competition to constitute the coöperative international life which we dreamed yesterday and now must consider, not merely as a dream, but as the only alternative to a future of horror?
Free trade has been not unnaturally urged as at least one condition. Tariffs certainly isolate. To say to a country: "You shall manufacture nothing unless you own the raw material; you shall sell nothing unless at prices which I fix," is likely to provoke the reply: "Then I must acquire lands in which raw materials are found; I must acquire colonies which will buy my products." Trade agreements mean coöperation for those within, unless they are one-sided and made under duress; in any case they are exclusive of those without. Free trade, the open door, seems to offer a better way. But free trade in name is not free trade unless the parties are really free--free from ignorance, from pressure of want. If one party is weak and the other unscrupulous; if one competitor has a lower standard of living than the other, freedom of trade will not mean genuine coöperation. Such coöperation as means good for all requires either an equality of conditions between traders and laborers of competing nations and of nations which exchange goods, or else an international control to prevent unfair competition, exploitation of weaker peoples, and lowering of standards of living. Medical science is giving an object lesson which may well have a wide application. It is seeking to combat disease in its centers of diffusion. Instead of attempting to quarantine against the Orient, it is aiding the Orient to overcome those conditions which do harm alike to Orient and Occident. Plague, anthrax, yellow fever, cannot exist in one country without harm to all. Nor in the long run can men reach true coöperation so long as China and Africa are a prize for the exploiter rather than equals in the market. Not merely in the political sense, but in its larger meanings democracy here is not safe without democracy there. Education, and the lifting of all to a higher level, is the ultimate goal. And until education, invention, and intercommunication have done their work of elevation, international control must protect and regulate.