Selections from Equality by R. H. Tawney (originally published in 1931)
…. Most social systems need a lightning-conductor. The formula which supplies it to our own is equality of opportunity. The conception is one to which homage is paid to-day by all, including those who resist most strenuously attempts to apply it. But the rhetorical tribute which it receives appears sometimes to be paid on the understanding that it shall be content with ceremonial honours. …
The content of the idea has been determined by its history. It was formulated as a lever to overthrow legal inequality and juristic privilege, and from its infancy it has been presented in negative, rather than positive, terms. It has been interpreted rather as freedom from restraints than as the possession of powers. Thus conceived, it has at once the grandeur and the unreality of a majestic phantom. The language in which it is applauded by the powers of this world sometimes leaves it uncertain which would horrify them most, the denial of the principle or the attempt to apply it.
"The law is just. It punishes equally the rich and the poor for stealing bread." It is even generous, for it offers opportunities both to those whom the social system permits to seize them and to those whom it does not. In reality, of course, except in a sense which is purely formal, equality of opportunity is not simply a matter of legal equality. Its existence depends, not merely on the absence of disabilities, but on the presence of abilities. It obtains in so far as, and only in so far as, each member of a community, whatever his birth, or occupation, or social position, possesses in fact, and not merely in form, equal chances of using to the full his natural endowments of physique, of character, and of intelligence. In proportion as the capacities of some are sterilized or stunted by their social environment, while those of others are favoured or pampered by it, equality of opportunity becomes a graceful, but attenuated, figment. It recedes from the world of reality to that of perorations.
Mr. Keynes, in his brilliant sketch of the phase of economic history which ended in 1914, has seized on the avenues which it opened to individual advancement as its most striking feature. "The greater part of the population ... worked hard and lived at a low standard of comfort. . . . But escape was possible, for any man of capacity or character at all exceeding the average, into the middle and upper classes." He is concerned with the set of the current, not with the breakwaters that dammed, or the reefs that diverted, it. In reality, there were then, as there are now, obstacles to the easy movement of ability to new positions, which produced individual frustration of tragic dimensions, and in our own day, of course, the movement towards concentration and amalgamation has made the independent entrepreneur, who fought his way from poverty to wealth, a less plausible hero than in the age when he could be offered by moralists as a golden example to aspiring youth. But, as a picture of the ideals which ruled the nineteenth century, and of the qualities on which it reflected with pride when it had leisure for reflection, Mr. Keynes's words are apt…..
It is possible that intelligent tadpoles reconcile themselves to the inconveniences of their position, by reflecting that, though most of them will live and die as tadpoles and nothing more, the more fortunate of the species will one day shed their tails, distend their mouths and stomachs, hop nimbly on to dry land, and croak addresses to their former friends on the virtues by means of which tadpoles of character and capacity can rise to be frogs. This conception of society may be described, perhaps, as the Tadpole Philosophy, since the consolation which it offers for social evils consists in the statement that exceptional individuals can succeed in evading them. Who has not heard it suggested that the presence of opportunities, by means of which individuals can ascend and get on, relieves economic contrasts of their social poison and their personal sting? Who has not encountered the argument that there is an educational "ladder" up which talent can climb, and that its existence makes the scamped quality of our primary education -the overcrowded classes, and mean surroundings, and absence of amenities-a matter of secondary importance? And what a view of human life such an attitude implies! As though opportunities for talent to rise could be equalized in a society where the circumstances surrounding it from birth are themselves unequal! As though, if they could, it were natural and proper that the position of the mass of mankind should permanently be such that they can attain civilization only by escaping from it! As though the noblest use of exceptional powers were to scramble to shore, undeterred by the thought of drowning companions!
It is true, of course, that a community must draw on a stream of fresh talent, in order to avoid stagnation, and that, unless individuals of ability can turn their powers to account, they are embittered by a sense of defeat and frustration. The existence of opportunities to move from point to point on an economic scale, and to mount from humble origins to success and affluence, is a condition, therefore, both of social wellbeing and of individual happiness, and impediments which deny them to some, while lavishing them on others, are injurious to both. But opportunities to "rise" are not a substitute for a large measure of practical equality, nor do they make immaterial the existence of sharp disparities of income and social condition. On the contrary, it is only the presence of a high degree of practical equality which can diffuse and generalize opportunities to rise. The existence of such opportunities in fact, and not merely in form, depends, not only upon an open road, but upon an equal start. It is precisely, of course, when capacity is aided by a high level of general wellbeing in the milieu surrounding it, that its ascent is most likely to be regular and rapid, rather than fitful and intermittent.
… In the absence, in short, of a large measure of equality of circumstances, opportunities to rise must necessarily be illusory. Given such equality, opportunities to rise will look after themselves.'
If a high degree of practical equality is necessary to social well-being, because without it ability cannot find its way to its true vocation, it is necessary also for another and more fundamental reason. It is necessary because a community requires unity as well as diversity, and because, important as it is to discriminate between different powers, it is even more important to provide for common needs. Clever people, who possess exceptional gifts themselves, are naturally impressed by exceptional gifts in others, and desire, when they consider the matter at all, that society should be organized to offer a career to exceptional talent, though they rarely understand the full scope and implications of the revolution they are preaching. But, in the conditions characteristic of large-scale economic organization, in which ninety per cent. of the population are wage-earners, and not more than ten per cent. employers, farmers, independent workers or engaged in professions, it is obviously, whatever the level of individual intelligence and the degree of social fluidity, a statistical impossibility for more than a small fraction of the former to enter the ranks of the latter; and a community cannot be built upon exceptional talent alone, though it would be a poor thing without it. Social well-being does not only depend upon intelligent leadership; it also depends upon cohesion and solidarity. It implies the existence, not merely of opportunities to ascend, but of a high level of general culture, and a strong sense of common interests, and the diffusion throughout society of a conviction that civilization is not the business of an elite alone, but a common enterprise which is the concern of all. And individual happiness does not only require that men should be free to rise to new positions of comfort and distinction; it also requires that they should be able to lead a life of dignity and culture, whether they rise or not, and that, whatever their position on the economic scale may be, it shall be such as is fit to be occupied by men. ….
So the doctrine which throws all its emphasis on the importance of opening avenues to individual advancement is partial and one-sided. It is right in insisting on the necessity of opening a free career to aspiring talent; it is wrong in suggesting that opportunities to rise, which can, of their very nature, be seized only by the few, are a substitute for a general diffusion of the means of civilization, which are needed by all men, whether they rise or not, and which those who cannot climb the economic ladder, and who sometimes, indeed, do not desire to climb it, may turn to as good account as those who can. It is right in attaching a high significance to social mobility; it is wrong in implying that effective mobility can be secured merely through the absence of legal restraints, or that, if it could, economic liberty would be a sufficient prophylactic against the evils produced by social stratification. ….
The antidote which it had prescribed for economic evils had been freedom to move, freedom to rise, freedom to buy and sell and invest -- the emancipation, in short, of property and enterprise from the restraints which fettered them. But property protects those who own it, not those who do not; and enterprise opens new vistas to those who can achieve independence, not to those who are dependent on weekly wages; and the emancipation of property and enterprise produces different effects in a society where the ownership of land and capital is widely diffused, from those which are caused by it where ownership is centralized. In the former, such property is an instrument of liberation. It enables the mass of mankind to control their own lives. It is, as philosophers say, an extension of their personalities. In the latter, until it has been bridled and tamed, it is a condition of constraint, and, too often, of domination. It enables a minority of property-owners to control the lives of the unpropertied majority. And the personalities which it extends are sometimes personalities which are already too far extended, and which, for the sake both of themselves and of their fellows, it would be desirable to contract.
Thus, in conditions in which ownership is decentralized and diffused, the institution of property is a principle of unity. It confers a measure of security and independence on poor as well as on rich, and softens the harshness of economic contrasts by a common similarity of social status. But, in the conditions most characteristic of industrial societies, its effect is the opposite. It is a principle, not of unity, but of division. It sharpens the edge of economic disparities with humiliating contrasts of power and helplessness -- with differences, not merely of income, but of culture, and civilization, and manner of life. For, in such conditions, the mass of mankind are lifelong wage-earners; and, though no barriers of caste limit their opportunities, though each is free to assume the risks and responsibilities of independent enterprise, what is possible for each is not possible for all, or for the great majority.
Economic realities make short work of legal abstractions, except when they find them a convenient mask to conceal their own features. The character of a society is determined less by abstract rights than by practical powers. It depends, not upon what its members may do, if they can, but upon what they can do, if they will. All careers may be equally open to all, and the wage-earner, like the property-owner, may be free to use such powers as he possesses, in such ways as he is able, on such occasions as are open to him, to achieve such results as he is capable of achieving. But, in the absence of measures which prevent the exploitation of groups in a weak economic position by those in a strong, and make the external conditions of health and civilization a common possession, the phrase equality of opportunity is obviously a jest, to be described as amusing or heartless according to taste. It is the impertinent courtesy of an invitation offered to unwelcome guests, in the certainty that circumstances will prevent them from accepting it.
… But the most seductive of optical illusions does not last for ever. The day when a thousand donkeys could be induced to sweat by the prospect of a carrot that could be eaten by one …[is] over. The miner or railwayman or engineer may not have mastered the intricacies of the theory of chances, but he possesses enough arithmetic to understand the absurdity of staking his happiness on the possibility of his promotion, and to realize that, if he is to attain well-being at all, he must attain it, not by personal advancement, but as the result of a collective effort, the fruits of which he will share with his fellows. The inequalities which he resents are but little mitigated, therefore, by the fact that individuals who profit by them have been born in the same social stratum as himself, or that families who suffer from them in one generation may gain by them in the next.
Slavery did not become tolerable because some slaves were manumitted and became slave-owners in their turn; nor, even if it were possible for the units composing a society to be periodically reshuffled, would that make it a matter of indifference that some among them at any moment should be condemned to frustration while others were cosseted. What matters to a nation is not merely the composition and origins of its different groups, but their opportunities and circumstances. It is the powers and advantages which different classes in practice enjoy, not the social antecedents of the varying individuals by whom they may happen, from time to time, to be acquired. Till such powers and advantages have been equalized in fact, not merely in form, by the extension of communal provision and collective control, the equality established by the removal of restrictions on property and enterprise resembles that produced by turning an elephant loose in the crowd. It offers everyone, except the beast and his rider, equal opportunities of being trampled to death. Caste is deposed, but class succeeds to the vacant throne. The formal equality of rights between wage-earner and property-owner becomes the decorous drapery for a practical relationship of mastery and subordination.
THE OLD PROBLEM IN A NEW GUISE
"Thanks to capitalism", writes Professor See, in comparing the social system of the old regime with that which succeeded it, "economic divisions between men take the place of legal ones.""' The forces which cut deepest the rifts between classes in modern society are obvious and unmistakable. There is inequality of power, in virtue of which certain economic groups exercise authority over others. And there is inequality of circumstance or condition, such as arises when some social groups are deprived of the necessaries of civilization which others enjoy. The first is specially characteristic of the relations between the different classes engaged in production, and finds its most conspicuous expression in the authority wielded by those who direct industry, control economic enterprise, and administer the resources of land, capital or credit, on which the welfare of their fellows depends. The second is associated with the enjoyment and consumption of wealth, rather than with its production, and is revealed in sharp disparities, not only of income, but of environment, health and education.
Inequality of power is inherent in the nature of organized society, since action is impossible, unless there is an authority to decide what action shall be taken, and to see that its decisions are applied in practice. Some measure, at least, of inequality of circumstance is not to be avoided, since functions differ, and differing functions require different scales of provision to elicit and maintain them. In practice, therefore, though inequality of power and inequality of circumstance are the fundamental evils, there are forms of each which are regarded, not merely with tolerance, but with active approval. The effect of inequality depends, in short, upon the principles upon which it reposes, the credentials to which it appeals, and the sphere of life which it embraces.
It is not difficult to state the principles which cause certain kinds of inequality to win indulgence, however difficult it may be to apply them in practice. Inequality of power is tolerated, when the power is used for a social purpose approved by the community, when it is not more extensive than that purpose requires, when its exercise is not arbitrary, but governed by settled rules, and when the commission can be revoked, if its terms are exceeded. Inequality of circumstance is regarded as reasonable, in so far as it is the necessary condition of securing the services which the community requires-in so far as, in the words of Professor Ginsberg, it is "grounded in differences in the power to contribute to, and share in, the common good".1'
No one complains that captains give orders and that the crews obey them, or that engine-drivers must work to a timetable laid down by railway-managers. For, if captains and managers command, they do so by virtue of their office, and it is by virtue of their office that their instructions are obeyed. They are not the masters, but the fellow-servants, of those whose work they direct. Their power is not conferred upon them by birth or wealth, but by the position which they occupy in the productive system, and, though their subordinates may grumble at its abuses, they do not dispute the need for its existence.
No one thinks it inequitable that, when a reasonable provision has been made for all, exceptional responsibilities should be compensated by exceptional rewards, as a recognition of the service performed and an inducement to perform it. For different kinds of energy need different conditions to evoke them, and the sentiment of justice is satisfied, not by offering to every man identical treatment, but by treating different individuals in the same way in so far as, being human, they have requirements which are the same, and in different ways in so far as, being concerned with different services, they have requirements which differ. What is repulsive is not that one man should earn more than others, for where community of environment, and a common education and habit of life, have bred a common tradition of respect and consideration, these details of the counting-house are forgotten or ignored. It is that some classes should be excluded from the heritage of civilization which others enjoy, and that the fact of human fellowship, which is ultimate and profound, should be obscured by economic contrasts, which are trivial and superficial. What is important is not that all men should receive the same pecuniary income. It is that the surplus resources of society should be so husbanded and applied that it is a matter of minor significance whether they receive it or not.
….The phenomenon which provokes exasperation, in short, is not power and inequality, but capricious inequality and irresponsible power; and in this matter the sentiments of individuals correspond, it may be observed, with the needs of society. What a community requires is that its work should be done, and done with the minimum of friction and maximum of co-operation. Gradations of authority and income derived from differences of office and function promote that end; distinctions based, not on objective facts, but on personal claims -- on birth, or wealth, or social position -- impede its attainment. They sacrifice practical realities to meaningless conventions. They stifle creative activity in an elegant drapery of irrelevant futilities. They cause the position of individuals and the relation of classes to reflect the influence, not primarily of personal quality and social needs, but of external conditions, which offer special advantages to some and impose adventitious disabilities upon others.
Such advantages and disabilities are, in some measure, inevitable. Nor need it be denied that the area of life covered by them is narrower to-day than in most past societies. It would be difficult to argue, however, that their influence on the destinies of individuals is trivial, or their effect on the temper of society other than deplorable. Dr. Irving Fisher has described the distribution of wealth as depending "on inheritance, constantly modified by thrift, ability, industry, luck and fraud"." It is needless to labour the part which social forces play in determining the condition and prospects of different groups, since it is a truism expounded at length in the pages of economists. …. The inequalities arising from the receipt by private persons of monopoly profits, urban ground-rents, mineral royalties, financial windfalls and the other surpluses accruing when the necessary costs of production and expansion have been met … resemble the predatory property of the old regime, in being a form of private taxation, the effects of which are partially corrected to-day by public taxation, but which remain mischievous. They create an inequality which, so far from arising from differences of service, is maintained in spite of them. They do not increase the real income of the nation, but diminish it. For they cause the less urgent needs of the minority to be met before the more urgent needs of the majority.
Incomes from personal work obviously stand in a different category from incomes from property. But, even in such incomes, there is normally an element which is due less to the qualities of the individual than to the overruling force of social arrangements. We are all, it is a commonplace to say, disposed to believe that our failures are due to our circumstances, and our successes to ourselves. It is natural, no doubt, for the prosperous professional or business man, who has made his way in the face of difficulties, to regard his achievements as the result of his own industry and ability. When he compares those who have succeeded in his own walk of life with those who have failed, he is impressed by the fact that the former are, on the whole, more enterprising, or forcible, or resourceful, than the latter, and he concludes that the race is to the swift and the battle to the strong. …
In so far as the individuals between whom comparison is made belong to a homogeneous group, whose members have had equal opportunities of health and education, of entering remunerative occupations, and of obtaining access to profitable financial knowledge, it is plausible, no doubt, if all questions of chance and fortune are excluded, to treat the varying positions which they ultimately occupy as the expression of differences in their personal qualities. But, the less homogeneous the group, and the greater the variety of conditions to which its members have been exposed, the more remote from reality does such an inference become. If the rules of a game give a permanent advantage to some of the players, it does not become fair merely because they are scrupulously observed by all who take part in it. When the contrast between the circumstances of different social strata is so profound as to-day, the argument-if it deserves to be called an argument-which suggests that the incomes they receive bear a close relation to their personal qualities is obviously illusory.
In reality, as has often been pointed out, explanations which are relevant as a clue to differences between the incomes of individuals in the same group lose much of their validity when applied, as they often are, to interpret differences between those of individuals in different groups. It would be as reasonable to hold that the final position of competitors in a race were an accurate indication of their physical endowments, if, while some entered fit and carefully trained, others were half-starved, were exhausted by want of sleep, and were handicapped by the starters. If the weights are unequal, it is not less important, but more important, that the scales should be true. The condition of differences of individual quality finding their appropriate expression is the application of a high degree of social art. It is such a measure of communism as is needed to ensure that inequalities of personal capacity are neither concealed nor exaggerated by inequalities which have their source in social arrangements.
While, therefore, the successful professional or business man may be justified in assuming that, if he has outdistanced his rivals, one cause is possibly his own "application, industry, and honesty," … that gratifying conclusion is less than half the truth. His talents must be somewhat extraordinary, or his experience of life unusually limited, if he has not on occasion asked himself what his position would have been if his father had been an unemployed miner or a casual labourer; …if he had been one of the million-odd children in the elementary schools of England and Wales who are suffering at any given moment from physical defects;18 and if, having been pitched into full-time industry at the age of fourteen, he had been dismissed at the age of sixteen or eighteen to make room for a cheaper competitor from the elementary school. He may quite rightly be convinced that he gets only what he is worth, and that the forces of the market would pull him up sharply if he stood out for more. What he is worth depends, however, not only upon his own powers, but upon the opportunities which his neighbours have had of developing their powers. Behind the forces of the market stand forces of another kind, which determine that the members of some social groups shall be in a position to render services which are highly remunerated because they are scarce, and to add to their incomes by the acquisition of property, whilst those belonging to others shall supply services which are cheap because they are over-supplied, but which form, nevertheless, their sole means of livelihood.
Such forces are partly, no doubt, beyond human control; but they are largely the result of institutions and policy. There is, for example, the unequal pressure of mere material surroundings, of housing, sanitation, and liability to disease, which decides that social groups shall differ in their ability to make the best use of their natural endowments. There is inequality of educational opportunity, which has as its effect that, while a favoured minority can cultivate their powers till manhood, the great majority of children, being compelled to compete for employment in their early adolescence, must enter occupations in which, because they are overcrowded, the remuneration is low, and later, because their remuneration has been low, must complete the vicious circle by sending their children into overcrowded occupations. There is the nepotism which allots jobs in the family business to sons and relations, and the favouritism which fills them with youths belonging to the same social class as its owners. There is inequality of access to financial information, which yields fortunes of surprising dimensions, if occasionally, also, of dubious repute, to the few who possess it. There is the influence of the institution of inheritance in heightening the effects of all other inequalities, by determining the vantage-ground upon which different groups and individuals shall stand, the range of opportunities which shall be open to them, and the degree of economic stress which they shall undergo.
…Mr. Wedgwood, … has made the economic effects of inheritance, almost for the first time, the subject of inductive investigation. The conclusion which he draws from the examination of a sample of large estates at Somerset House accords with common experience, but is not on that account the less perturbing. It is that, "on the whole, the largest fortunes belong to those with the richest parents.... In the great majority of cases the large fortunes of one generation belong to the children of those who possessed the large fortunes of the previous generation. . . . There is in our society an hereditary inequality of economic status which has survived the dissolution of the cruder forms of feudalism.""
The test of a principle is that it can be generalized, so that the advantages of applying it are not particular, but universal. Since it is impossible for every individual, as for every nation, simultaneously to be stronger than his neighbours, it is a truism that liberty, as distinct from the liberties of special persons and classes, can exist only in so far as it is limited by rules, which secure that freedom for some is not slavery for others. …
….In the political sphere, where the
danger is familiar, all civilized communities have established safeguards, by
which the advantages of differentiation of function, with the varying degrees
of power which it involves, may be preserved, and the risk that power may be
tyrannical, or perverted to private ends, averted or diminished. They have endeavoured, for example, as in
The dangers arising from inequalities of economic power have been less commonly recognized. They exist, however, whether recognized or not. For the excess or abuse of power, and its divorce from responsibility, which results in oppression, are not confined to the relations which arise between men as members of a state. …
In an industrial civilization, when its first phase is over, most economic activity is corporate activity. It is carried on, not by individuals, but by groups, which are endowed by the State with a legal status, and the larger of which, in size, complexity, specialization of functions and unity of control, resemble less the private enterprise of the past than a public department. As far as certain great industries are concerned, employment must be found in the service of these corporations, or not at all. Hence the mass of mankind pass their working lives under the direction of a hierarchy, whose heads define, as they think most profitable, the lines on which the common enterprise is to proceed, and determine, subject to the intervention of the State and voluntary organizations, the economic, and to a considerable, though diminishing, extent, the social environment of their employees. ….[T]his business oligarchy is the effective aristocracy of industrial nations, and the aristocracy of tradition and prestige, when such still exists, carries out its wishes and courts its favours. In such conditions, authority over human beings is exercised, not only through political, but through economic, organs. The problem of liberty, therefore, is necessarily concerned, not only with political, but also with economic, relations.
… [W]hatever else the idea involves, it implies at least, that no man shall be amenable to an authority which is arbitrary in its proceedings, exorbitant in its demands, or incapable of being called to account when it abuses its office for personal advantage. In so far as his livelihood is at the mercy of an irresponsible superior, whether political or economic, who can compel his reluctant obedience by force majeure, whose actions he is unable to modify or resist, save at the cost of grave personal injury to himself and his dependents, and whose favour he must court, even when he despises it, he may possess a profusion of more tangible blessings, from beer to motorbicycles, but he cannot be said to be in possession of freedom. In so far as an economic system grades mankind into groups, of which some can wield, if unconsciously, the force of economic duress for their own profit or convenience, whilst others must submit to it, its effect is that freedom itself is similarly graded. Society is divided, in its economic and social relations, into classes which are ends, and classes which are instruments. Like property, with which in the past it has been closely connected, liberty becomes the privilege of a class, not the possession of a nation…..
For freedom is always relative to power, and the kind of freedom which at any moment it is most urgent to affirm depends on the nature of the power which is prevalent and established. Since political arrangements may be such as to check excesses of power, while economic arrangements permit or encourage them, a society, or a large part of it, may be both politically free and economically the opposite. It may be protected against arbitrary action by the agents of government, and be without the security against economic oppression which corresponds to civil liberty. It may possess the political institutions of an advanced democracy, and lack the will and ability to control the conduct of those powerful in its economic affairs, which is the economic analogy of political freedom.
The extension of liberty from the political to the economic sphere is evidently among the most urgent tasks of industrial societies. It is evident also, however, that, in so far as this extension takes place, the traditional antithesis between liberty and equality will no longer be valid. As long as liberty is interpreted as consisting exclusively in security against oppression by the agents of the State, or as a share in its government, it is plausible, perhaps, to dissociate it from equality; for, though experience suggests that, even in this meager and restricted sense, it is not easily maintained in the presence of extreme disparities of wealth and influence, it is possible for it to be enjoyed, in form at least, by pauper and millionaire. Such disparities, however, though they do not enable one group to become the political master of another, necessarily cause it to exercise a preponderant influence on the economic life of the rest of society.
Hence, when liberty is construed, realistically, as implying, not merely a minimum of civil and political rights, but securities that the economically weak will not be at the mercy of the economically strong, and that the control of those aspects of economic life by which all are affected will be amenable, in the last resort, to the will of all, a large measure of equality, so far from being inimical to liberty, is essential to it. In conditions which impose co-operative, rather than merely individual, effort, liberty is, in fact, equality in action, in the sense, not that all men perform identical functions or wield the same degree of power, but that all men are equally protected against the abuse of power, and equally entitled to insist that power shall be used, not for personal ends, but for the general advantage. Civil and political liberty obviously imply, not that all men shall be members of parliament, cabinet ministers, or civil servants, but the absence of such civil and political inequalities as enable one class to impose its will on another by legal coercion. It should be not less obvious that economic liberty implies, not that all men shall initiate, plan, direct, manage, or administer, but the absence of such economic inequalities as can be used as a means of economic constraint.
The danger to liberty which is caused by inequality varies with differences of economic organization and public policy. When the mass of the population are independent producers, or when, if they are dependent on great undertakings, the latter are subject to strict public control, it may be absent or remote. It is seen at its height when important departments of economic activity are the province of large organizations, which, if they do not themselves, as sometimes occurs, control the State, are sufficiently powerful to resist control by it. Among the numerous interesting phenomena which impress the foreign observer of American economic life, not the least interesting is the occasional emergence of industrial enterprises which appear to him, and, indeed, to some Americans, to have developed the characteristics, not merely of an economic undertaking, but of a kind of polity. Their rule may be a mild and benevolent paternalism, lavishing rest-rooms, schools, gymnasia, and guarantees for constitutional behaviour on care-free employees; or it may be a harsh and suspicious tyranny. But, whether as amiable as Solon, or as ferocious as Lycurgus, their features are cast in a heroic mould. Their gestures are those of the sovereigns of little commonwealths rather than of mere mundane employers.
American official documents have, on occasion, called attention to the tendency of the bare stem of business to burgeon, in a favourable environment, with almost tropical exuberance, so that it clothes itself with functions that elsewhere are regarded as belonging to political authorities. The corporations controlled by six financial groups, stated the Report of the United States Commission on Industrial Relations some twenty years ago, employ 2,651,684 wage-earners, or 440,000 per group. Some of these companies own, not merely the plant and equipment of industry, but the homes of the workers, the streets through which they pass to work, and the halls in which, if they are allowed to meet, their meetings must be held. They employ private spies and detectives, private police and, sometimes, it appears, private troops, and engage, when they deem it expedient, in private war. While organized themselves, they forbid organization among their employees, and enforce their will by evicting malcontents from their homes, and even, on occasion, by the use of armed force. In such conditions business may continue in its modesty, since its object is money, to describe itself as business; but, in fact, it is a tyranny. "The main objection to the large corporation", remarks Mr. Justice Brandeis, who, as a judge of the Supreme Court, should know the facts, "is that it makes possible-and in many cases makes inevitable-the exercise of industrial absolutism." Property in capital, thus inflated and emancipated, acquires attributes analogous to those of property in land in a feudal society. It carries with it the disposal, in fact, if not in law, of an authority which is quasi-governmental. Its owners possess what would have been called in the ages of darkness a private jurisdiction, and their relations to their dependents, though contractual in form, resemble rather those of ruler and subject than of equal parties to a commercial venture. The liberty which they defend against the encroachments of trade unionism and the State is most properly to be regarded, not as freedom, but as a franchise.'
assertion that inequality is inseparable from liberty is obviously, in such
circumstances, unreal and unconvincing; for the existence of the former is a
menace to the latter, and the latter is most likely to be secured by curtailing
the former. It is true that in
The effects of such autocracy are even graver in the sphere of economic strategy, which settles the ground upon which these tactical issues are fought out, and, in practice, not infrequently determines their decision before they arise. In such matters as the changes in organization most likely to restore prosperity to an embarrassed industry, and, therefore, to secure a tolerable livelihood to the workers engaged in it; methods of averting or meeting a depression; rationalization, the closing of plants and the concentration of production; the sale of a business on which a whole community depends or its amalgamation with a rival-not to mention the critical field of financial policy, with its possibilities, not merely of watered capital and of the squandering in dividends of resources which should be held as reserves, but of a sensational redistribution of wealth and widespread unemployment as a result of decisions taken by bankers-the diplomacy of business, like that of governments before 1914, is still commonly conducted over the heads of those most affected by it. The interests of the public, as workers and consumers, may receive consideration when these matters are determined; but the normal organization of economic life does not offer reliable guarantee that they will be considered. Nor can it plausibly be asserted that, if they are not, those aggrieved can be certain of any redress.
Power over the public is public power. It does not cease to be public merely because private persons are permitted to buy and sell, own and bequeath it, as they deem most profitable. To retort that its masters are themselves little more than half conscious instruments, whose decisions register and transmit the impact of forces that they can neither anticipate nor control, though not wholly unveracious, is, nevertheless, superficial. The question is not whether there are economic movements which elude human control, for obviously there are. It is whether the public possesses adequate guarantees that those which are controllable are controlled in the general interest, not in that of a minority. Like the gods of Homer, who were subject themselves to a fate behind the fates, but were not thereby precluded from interfering at their pleasure in the affairs of men, the potentates of the economic world exercise discretion, not, indeed, as to the situation which they will meet, but as to the manner in which they will meet it. They hold the initiative, have such freedom to manoeuvre as circumstances allow, can force an issue or postpone it, and, if open conflict seems inevitable or expedient, can choose, as best suits themselves, the ground where it shall take place.
The truth of the matter
is put by Professor Pollard in his admirable study, The Evolution of Parliament. "There is only one
solution", he writes, "of the problem of liberty, and it lies in
equality. . . . Men vary in physical strength; but so far as their social
relations go that inequality has been abolished. . . . Yet there must have been
a period in social evolution when this refusal to permit the strong man to do
what he liked with his own physical strength seemed, at least to the strong, an
outrageous interference with personal liberty. ... There is, in fact, no more
reason why a man should be allowed to use his wealth or his brain than his
physical strength as he likes. . . . The liberty of the weak depends upon the
restraint of the strong, that of the poor upon the restraint of the rich, and
that of the simpler-minded upon the restraint of the sharper. Every man should
have this liberty and no more, to do unto others as he would that they should
do unto him; upon that common foundation rest liberty, equality, and