Natural Law In Distribution
Epigraph to Book IV
For "Mars is a tyrant," as Timotheus expresses it; but justice, according to Pindar, "is the rightful sovereign of the world." The things which Homer tells us kings receive from Jove are not machines for taking towns or ships with brazen beaks, but law and justice; these they are to guard and cultivate. And it is not the most warlike, the most violent and sanguinary, but the justest of princes, whom he calls the disciple of Jupiter.
-- Plutarch, Demetrius
Putting this book online was underwritten by The Robert Schalkenbach Foundation, publisher of Henry George's works.
The Science of Political Economy
Book IV, The Distribution of Wealth
The Common Perception of Natural Law In Distribution
Showing the Common And Ineradicable Perception of Natural Laws of Distribution
Mill's admission of natural law in his argument that distribution is a matter of human law -- Sequence and consequence -- Human will and the will manifest in nature -- Inflexibility of natural laws of distribution -- Human will powerless to affect distribution -- This shown by attempts to affect distribution through restriction of production -- Mill's confusion and his high character.
It would seem impossible for a man of the logical acumen and training of John Stuart Mill to accept in deference to preconceived opinion, and to justify by such a transparent fallacy, such an incongruous conclusion as that while the laws of political economy relating to production are natural laws, the laws relating to distribution are human laws, without at least a glance towards the truth. And such a sidelong glance we find in the latter part of the argument which in the last chapter was given in full.
To bring this more clearly into view let me print it again, supplying the elisions in brackets, and emphasizing with italics words to which I would direct special attention:
We have here [in political economy] to consider, not the causes, but the consequences, of the [human] rules according to which wealth may be distributed. Those [consequences], at least, are as little arbitrary, and have as much the character of physical laws, as the laws of production. Human beings can control their own acts, but not the consequences of their acts either to themselves or to others. Society can subject the distribution of wealth to whatever rules it thinks best; but what practical results will flow from the operation of those rules, must be discovered, like any other physical or mental truths, by observation and reasoning.
Here we have, what would hardly be expected from the author of Mill's System of Logic, an example of that improper use of the word consequence where sequence is really meant, which I referred to in Chapter VIII of Book I.
To recall what was there said: A sequence is that which follows. To say that one thing is a sequence of another is to say that it has to its antecedent a relation of succession or coming after, but is not necessarily to say that this relation is invariable or causal. But a consequence is that which follows from. To say that one thing is a consequence of another is really to say that it has to its antecedent not merely a relation of succession, but of invariable succession -- the relation namely of effect to cause.
Our disposition to prefer the stronger word leads in common speech to the frequent use of consequence where merely sequence is really meant, or to speak of a result as the consequence of what we know can be only one of the causal elements in bringing it about. If a boy break a window-pane in throwing a stone at a cat, or a man is drowned in going in to swim, we are apt to speak of the one thing as a consequence of the other, though we know that stones are constantly thrown at cats without breaking windows and that men go in to swim without being drowned, and that the result in the particular case was not due to the human action alone, but to the concurrence with it of other causes, such as the force and direction of wind or tide, the attraction of gravitation, etc. This tendency to a loose use of the word consequence is of little or no moment in common speech, where what is really meant is well understood; but it becomes a fatal source of confusion in philosophical writing, where exactness is necessary, not merely that the writer be understood by the reader, but that he may really understand himself.
Now, what are the things which Mill here speaks of as consequences of human rules according to which wealth may be distributed: the things which (and not the causes of the human rules) we have, he says, to consider in political economy, and which he tells us have as much the character of physical laws as the laws of production, and "must be discovered, like any other physical or mental truths, by observation and reasoning"? They follow, and are thus sequences of human action, or as Mill subsequently speaks of them, "practical results," appearing as invariable uniformities in the actual outcome of man's efforts to regulate the distribution of wealth. But though sequences they clearly are not con-sequences of human action. To say that human beings can control their own acts but not what follows from those acts would be to deny the laws of causation. Since these invariable uniformities appearing in the practical results or sequences of man's action cannot be related as effects to man's action as cause, they are not properly con-sequences of man's action, but con-sequences of something independent of man's action.
The truth that Mill vaguely perceives and confusedly states in these sentences is in direct contradiction of his assertion that the distribution of wealth is a matter of human institution solely. It is, that the distribution of wealth is not a matter of human institution solely, and does not depend upon the laws and customs of society alone; that though human beings may control their own acts towards the distribution of wealth, and frame for their action such laws as the ruling portion of the community may wish, yet the practical results will not depend on this human action alone, but on that as combined with and dominated by another more permanent and powerful element -- a something independent of human action that modifies the practical results of human action towards the distribution of wealth, as gravitation modifies the flight of a cannon ball.
Now these invariable sequences which come out in the practical results of man's action, and which we know only as effects, and cannot relate to man's action as cause, we are compelled by the mental necessity which demands a cause for every effect to refer to a causal antecedent in the nature of things, which, as explained in Book I, we call a law of nature. That is to say, invariable uniformities, modifying the effects of all human action, such as Mill confusedly recognizes in these sentences, are precisely what, apprehending them as manifestations of a higher than human will, we style laws of nature, or natural laws.
Mill's own definition of a law of nature (System of Logic, Book III, Chapter IV) is a uniformity in the course of nature, ascertained by what is regarded as a sufficient induction, and reduced to its most simple expression. Thus if observation and reasoning discover in the actual phenomena or practical results of man's action in the distribution of wealth uniformities which swerve or destroy the effect of human action not in exact conformity with them, these are the natural laws of distribution as clearly as similar sequences or uniformities which observation and reasoning discover in the phenomena of production are the natural laws of production. And what Mill is vaguely thinking of and confusedly writing about are clearly the very natural laws of distribution which he says do not exist.
In truth, the distribution of wealth is no more "a matter of human institution solely" than is the production of wealth. That human beings can control their own acts is true in one case as in the other, only in the same sense and to the same degree. Our will is free. But human will can only affect external nature by taking advantage of natural laws, which in the very name we give them carry the implication of a higher and more constant will. A boy may throw a stone or an artilleryman fire a cannon ball at the moon. If the result depended solely on the human action, both ball and stone would reach the moon. But the governance of natural law -- without conformity to which even such action as throwing a stone or firing a cannon ball cannot take place -- continuing to modify results, brings both to the ground again, the one in a few feet and the other in a few thousand feet.
And the natural laws which political economy discovers, whether we call them laws of production or laws of distribution, have the same proof, the same sanction and the same constancy as the physical laws. Human laws change, but the natural laws remain, the same yesterday, today and tomorrow, world without end; manifestations to us of a will that though we cannot obtain direct knowledge of it through the senses, we can yet see never slumbers nor sleeps and knows not change in jot or tittle.
If I can prove that this inflexibility to human effort is characteristic of the laws of distribution that political economy seeks to discover, I have proved finally and conclusively that the laws of distribution are not human laws, but natural laws. To do this it is only necessary to appeal to facts of common knowledge.
Now the three great laws of distribution, as recognized by all economists, though they are sometimes placed in different order, are the law of wages, the law of interest and the law of rent. Into these three elements or factors, the entire result of production is by natural law distributed. Now I do not of course mean to say that human law may not take from the part which under the natural law of distribution might be enjoyed by one man or set of men and give it to another, for as I have already said all wealth or any wealth from the moment it is produced is entirely at the disposition of human law, and mankind can do with it as they please. What I mean to say is that human law is utterly powerless directly to alter distribution, so that the laborer as laborer will get more wages or less wages, the capitalist as capitalist more interest or less interest, or the landowner as landowner more rent or less rent, or in any way alter the conditions of distribution fixed by natural law under existing industrial conditions. This has been tried again and again by the strongest governments, and is to some extent still being tried, but always unavailingly.
In England, as in other countries, there have been at various times attempts to regulate wages by law, sometimes to decrease them and sometimes to increase them below or above the level fixed at the time by natural law. But it was found that in the one case no law could prevent the laborer from asking and the employer from paying more than this legal rate when the natural law, or as we usually say the equation of demand and supply, made wages higher, and that no law, even when backed by grants in aid of wages, as was done in England during the beginning of this century, could in the opposite case keep wages at a higher rate. So it has proved with interest. There have been numberless attempts to keep down interest, and the State of New York retains to this day on her statute -- book a law limiting, though with considerable holes, the rate of interest to six per cent. But such laws never have succeeded and do not now succeed in keeping interest below the natural rate. Lenders receive and borrowers pay that rate in the form of sales, premiums, discounts and bonuses, where the law forbids them to do it openly. So, too, in the case of rent. The British Parliament has recently attempted to reduce agricultural rent in certain cases in Ireland by instituting officials with power to fix "fair rents" -- what should be paid by the tenant to the landlord. They have in many cases cut down the income of certain of the landlords, but they have not lessened rent. They have merely divided what before went to the landlord between him and the existing tenant, and a new tenant must pay, part in rent to the landlord, and part in tenant right to the existing tenant, as much for the use of the land as it would have commanded if this attempt to reduce rent had not been made.
And so it has been with attempts of human law to fix and regulate prices, which involve the same great laws of distribution in combined forms. Human law is always potent to do as mankind will with what has been produced, but it cannot directly affect distribution. That it can reach only through production.
Nothing indeed could be more inconsistent with common perceptions than this notion into which the scholastic economists have fallen, that the distribution of wealth is less a matter of natural law than the production of wealth. The fact is (the reason of the fact will be considered hereafter) that the common perceptions of men recognize the immutability of the natural laws of distribution more quickly and more certainly than of the natural laws of production. If we look over the legislation by which the ruling portion of our communities have striven to affect the distribution of wealth, we shall find that (as if conscious of its hopelessness) they have seldom if ever tried directly to affect the distribution of wealth; but have tried to affect distribution indirectly through production.
An English Elizabeth or James wishes to alter the practical outcome of the distribution of wealth in favor of an Essex or Villiers, and to accomplish this imposes restrictions upon the production of gold lace or playing cards. A Russian Czar desires to alter the distribution of wealth in favor of one of his boyars, and seeks that end by making a tract of land the property of his favorite and forbidding peasants to leave it, thus preventing them from engaging in production except on his terms. Or, to come nearer the present in time and place, a Carnegie or a Wharton wishes to alter distribution in his favor so largely that he may play at building libraries and endowing schools of political economy (?); he seeks his end by getting Congress to restrict the production of iron, steel or nickel, by imposing a duty upon importation.
But it is not alone in the sentences I have reprinted that Mill shows an undefined consciousness that the laws of the distribution of wealth which it is the proper business of political economy to discover are natural laws, not human laws. Though he does not retract his statement that "the distribution of wealth depends on the laws and customs of society," and formally proceeds "to the consideration of the different modes of distributing the produce of land and labor which have been adopted in practice or may be conceived in theory," yet we find him afterwards (Book II, Chapter III, Sec. 1) speaking of laws according to which "the produce distributes itself by the spontaneous action of the interests of those concerned." If there be laws according to which produce distributes itself, they certainly cannot be human laws. King Canute, we are told, once tried by edict to turn back the tide; but who has ever dreamed that produce, whether houses or metals or wheat or hay, or even pigs or sheep, could by ukase or irade, act of Parliament or resolution of Congress, be made to distribute itself?
The truth is that in the long discussion of the distribution of wealth, which in John Stuart Mill's Principles of Political Economy succeeds to what I have quoted, he neither follows what he formally states, that distribution is a matter of human institution solely, and depends on the laws and customs of society; nor yet does he follow what he confusedly admits, that it is a matter of natural law. Passing to a consideration of the origin of private property in human law, and beginning with Communism and Socialism, the Moravians, the Rappists, the followers of Louis Blanc and Cabet, St. Simonism and Fourierism, he rambles along, mixing what properly belongs to the science of political economy with discussions of competition and custom, slavery, peasant proprietors, metayers, cottiers, the means of abolishing cottier tenancy and popular remedies for low wages, without either clearly giving the laws of distribution or saying what they are. And the reader who wishes to discover what the ablest and most systematic of scholastic economists takes to be the laws of distribution of wealth must after going through this mass of dissertation keep on through some forty chapters or 600 pages more, and finally fish them out for himself -- only to find when he gets them or thinks that he gets them, that they do not correlate with each other.
As I have said, I only speak of John Stuart Mill as the best example of what has passed as the scientific exposition of political economy. The same absence of a really scientific method -- that is to say the same want of order and precision -- will be found in the treatment of distribution in all the treatises of the school of economists, now called the Classical school, of which Mill may be deemed the culmination. And it is to be found in even worse degree in the so-called Historical and Austrian schools which have within recent years succeeded the school of Mill in all our great universities. They are indeed so far behind the predecessors at whom they affect to sneer, that they make no attempt even at order and precision. Whoever would have an economic contrast suggested to him like that of Hamlet's "Hyperion to a Satyr," let him compare John Stuart Mill's Principles of Political Economy with the most pretentious of recent "Principles of Economics."
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